Pitney Bowes (PBI)

Deferred Compensation and Pension Benefits

We have historically provided United States executives with deferred compensation and pension benefits to be competitive in our markets. Executives have the opportunity to voluntarily defer salary, annual incentives and payouts on CIUs. Pitney Bowes also maintains a non-qualified pension restoration plan and a 401(k) restoration plan generally to compensate for Internal Revenue Service limitations. For more detailed information, see the narrative accompanying the Pension Benefits table beginning on page 49 and the Nonqualified Deferred Compensation table beginning on page 51.

Discontinued Automobile Allowance Benefit

Historically, we provided certain executives with an automobile allowance benefit to be competitive in our markets. As set forth in the “All Other Compensation” column of the “Summary Compensation Table,” on page 43, effective as of March 2006, Pitney Bowes provided annual automobile allowances in amounts ranging from $8,400 to $12,000 annually for the following executives: chairman and chief executive officer, executive vice presidents and senior vice presidents. (Our chief operating officer and our chief financial officer currently have company-leased automobiles.) Beginning in March 2007, as we have determined that this benefit is no longer important to attract and retain talent, this allowance has been eliminated for U.S. employees and replaced with a one-time, cost-neutral adjustment to base pay.