Executive Compensation Committee Charter

 

Purpose of Committee

The purpose of the Executive Compensation Committee (the "Committee") of the Board of Directors (the "Board") of Pitney Bowes Inc. (the "Company") is to have direct responsibility for the compensation of the CEO, COO and other members of the Company’s senior management (as determined by the Committee) and for producing an annual report on executive compensation for inclusion in the Company’s proxy statement, in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"), and to review and approve allocations of shares in the Company’s employee stock plans in connection with the granting of stock options and other stock awards.

Committee Structure and Operations

The Committee shall be composed of a minimum of three Directors, with all members of the Committee to be independent, according to independence standards established by the Board, consistent with applicable statutes, regulations, and listing standards of the New York Stock Exchange. The Board shall appoint members of the Committee annually, including a Director to serve as Committee Chair, after consideration of nominations by the Governance Committee.

The Committee shall meet at least four times per year, with additional meetings to occur as deemed necessary or desirable by the Committee or the Committee Chair. A majority of the members of the Committee shall constitute a quorum for the Committee to act in the discharge of its duties.

Committee Duties and Responsibilities

The following are the duties and responsibilities of the Committee:

1. In consultation with senior management, the Committee shall establish the Company’s executive compensation philosophy, and oversee the development and implementation of compensation programs that (a) support the Company’s overall strategy and objectives; (b) attract and retain key executives; and (c) link total compensation to financial performance and attainment of strategic objectives.

2. Review and approve corporate goals and objectives relevant to the compensation of the CEO, COO and other members of senior management, and annually evaluate such individuals'  performance in light of those goals and objectives. The Committee shall evaluate the compensation levels and payouts against, among other factors,  (1) pre-established measurable performance goals and objectives and (2) an appropriate comparative group. In determining the long-term incentive component of CEO compensation or COO compensation, the Committee shall consider, among other factors, the Company’s performance and relative shareholder return, and the awards given to the executive in past years.

3. On an annual basis, review the performance and development of the CEO at a joint meeting with the Governance Committee, at which the chair of the Governance Committee presides, in preparation for a full Board review of such matters.

4. Review all elements of CEO and COO compensation annually at a meeting in executive session, and, together with the other independent Directors of the full Board, determine and approve such executives' compensation based on this review.

5. Review the competitive position of, and approve and recommend changes to, the plans, systems, and practices of the Company relating to total compensation programs applicable to the senior management of the Company.

6. In consultation with management, oversee regulatory compliance with respect to compensation matters, including overseeing the Company’s policies on structuring compensation programs to preserve tax deductibility, and, as and when required, establishing performance goals and certifying that performance goals have been attained for purposes of Section 162(m) of the Internal Revenue Code.

7. Review and approve any executive severance arrangements for Executive Officers of the Company.

8. Review and approve stock ownership guidelines for senior management.

9. Prepare and issue the evaluations and reports required under "Committee Reports" below.

10. Make recommendations to the Board regarding material changes to equity-based plans, and review and approve allocations of shares of Company common stock in connection with stock option grants under the Company’s stock plan and Employee Stock Purchase Plan.

11. Any other duties or responsibilities expressly delegated to the Committee by the Board from time to time relating to the Company’s compensation programs.

Committee Reports

The Committee shall produce the following reports and provide them to the Board:

1. An annual Report of the Executive Compensation Committee for inclusion in the Company’s annual proxy statement in accordance with applicable rules and regulations.

2. An annual performance evaluation of the Committee. The performance evaluation should also recommend to the Governance Committee whether any improvements to this charter are deemed necessary or desirable. The performance evaluation by the Committee shall be conducted in such manner as the Committee deems appropriate. The report to the Board may take the form of an oral report by the Committee Chair or any other member of the Committee designated by the Committee to make this report.

3. A summary of the actions taken at each Committee meeting, which shall be presented by the Committee Chair to the Board at the next Board meeting.

Resources and Authority of the Committee

The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate and approve the fees and other retention terms of special counsel or other experts or consultants, as it deems appropriate, without seeking approval of the Board or management. With respect to compensation consultants retained to assist in the evaluation of CEO, COO, or other  senior executive compensation, this authority shall be vested solely in the Committee.

February 2006