Pitney Bowes (PBI)

Option Awards

• The “Option Awards” column in the “Summary Compensation Table” represents the SFAS 123(R) expense for 2007 and 2006 for all unvested options; the “All Other Option Awards” column in the “Grants of Plan-Based Awards in 2007” table represents the number of options awarded during 2007.

• The aggregate number of shares subject to stock options granted to each named officer during 2007 is shown in the “Grants of Plan-Based Awards in 2007” table. Mr. Martin and Mr. Critelli each received 2,202 incentive stock options (ISOs) which will vest on the fourth anniversary of the date of grant, March 16, 2007. The remaining named officers other than Mr. Keddy received 2,082 incentive stock options (ISOs) which will vest on the fourth anniversary of the date of grant, February 12, 2007. In addition, the remaining awards are nonqualified stock options and will generally vest in equal installments over a four-year period beginning on the first anniversary of the date of grant.

Option Awards

• The Option Awards column in the Summary Compensation Table represents the SFAS
  123(R) expense for 2006 for all unvestedoptions; the Option Awards column in theGrants of Plan-Based Awards in 2006 tablerepresents the number of options awardedduring 2006.
• The aggregate number of shares granted to each named executive officer during 2006 is shown in the Grants of Plan-Based Awards in 2006 table. Each named executive officer other than Mr. Keddy received 2,346 incentive stock options (ISOs) which will vest on the fourth anniversary of the date of grant. In addition, the remaining awards are nonqualified stock options and will generally vest in equal installments over a four-year period beginning on the first anniversary of the date of grant.