was not requested to consider his or her candidacy) must comply with the procedures in Article II, Section 6 of the company’s By-laws. The By-laws are posted on the company’s Corporate Governance website.

Directors’ Compensation

Directors’ Fees. During 2003, each director who was not an employee of the company received an annual fee of $33,000 and a meeting fee of $1,100 for each board and committee meeting attended. Committee chairs received an additional $600 for each committee meeting that they chaired. Mr. Critelli received no additional compensation for serving as a director of the company. All directors are reimbursed for their out-of-pocket expenses incurred in attending board and committee meetings.

During 2003, the Governance Committee reviewed the value and components of the Directors’ Compensation Program, comparing it with the market for board of directors’ compensation. In November 2003, the Governance Committee recommended, and the board of directors approved, an increase in the cash component of the directors’ compensation. Effective as of January 1, 2004, each non-employee director will receive an annual fee of $45,000. In addition, the meeting attendance fees for each non-employee director will be $1,500 per meeting attended. Committee chairs (except for the Audit Committee chair) will receive an additional $1,500 for each committee meeting that they chair, and the Audit Committee chair will receive an additional $2,000 for each Audit Committee meeting chaired.

Directors’ Stock Plan. Under the Directors’ Stock Plan, each director who is not an employee of the company receives an annual award of 1,400 shares of restricted stock. The shares carry full voting and dividend rights but, unless certain conditions are met, may not be transferred or alienated until the later of (1) termination of service as a director, or, if earlier, the date of a change of control, and (2) the expiration of the six-month period following the grant of such shares. The Directors’ Stock Plan permits certain dispositions of stock granted under the restricted stock program provided that the director effecting the disposition had accumulated and will retain common stock equal to a minimum $350,000 in market value. Permitted dispositions are limited to (i) transfer to a family member or family trust or partnership, and (ii) donations to charity after the expiration of six months from date of grant. The original restrictions would continue to apply to the donee except that a charitable donee would not be bound by the restriction relating to termination of service from the board.

Since the approval of the Directors’ Stock Plan by stockholders in 1991, the common stock of the company has twice undergone a two-for-one split, in 1992 and 1997, respectively. In addition, the annual grant was increased in 1997 in connection with the discontinuation of the Directors’ Retirement Plan, as described below. On May 12, 2003, an aggregate of 15,400 restricted shares was awarded, with each of the eleven non-employee directors then serving receiving 1,400 shares of restricted common stock. Ownership of shares granted under the Directors’ Stock Plan is reflected in the table on page 15 showing security ownership of directors and executive officers.

Directors’ Deferred Incentive Savings Plan. The company maintains a Directors’ Deferred Incentive Savings Plan under which directors may defer all or part of the cash portion of their compensation. Deferred amounts will be notionally “invested” in any combination of several institutional investment funds. Deferral elections made with respect to the 2003 Plan year also included as an investment choice the ability to invest in options to purchase common stock of the company. The number of options granted was calculated by dividing the cash amount deferred by the individual director by the fair market value of the shares on the date of the option grant, and multiplying that quotient by two. Stock options as an investment choice under the Plan were eliminated with respect to the 2004 Plan year.

Stock options selected by directors as an investment vehicle for deferred compensation were granted through the Directors’ Stock Plan. The Directors’ Stock Plan permits the exercise of stock options granted after October 11, 1999 during the full remaining term of the option by directors who have terminated service on the board, provided that service on the board is terminated (i) after ten years of service on the board, or (ii) due to director’s death or disability, or (iii) due to the director having attained mandatory directors’ retirement age. The Directors’ Stock Plan also permits the donation of vested stock options, regardless of date of grant, to family members and family trusts or partnerships.

Directors’ Retirement Plan. The company’s Directors’ Retirement Plan was discontinued and benefits previously earned by directors were frozen as of May 12, 1997. Under this plan, there is no benefit paid to a director who served for less than five years as of May 12, 1997. A director who had met the five-year minimum vesting requirement as of May 12, 1997 will receive an annual retirement benefit calculated as 50 percent of the director’s retainer in effect as of May 12, 1997, and a director with more than five years of service at retirement will receive an additional 10 percent of such retainer for each year of service over five, to a maximum of 100 percent of such retainer for ten or more years of service. The annual retainer fee in effect as of May 12, 1997 was $30,000. The annual retirement benefit is paid for life.

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How much stock is owned by directors and executive officers?

The following table shows beneficial ownership of Pitney Bowes common stock by directors and executive officers as of March 1, 2004. The five named executive officers are the chief executive officer and the four officers who were the highest paid in 2003.

SECURITY OWNERSHIP
		Shares		Options
		Deemed to		Exercisable
Title of		be Beneficially		Within
Class of Stock	Name of Beneficial Owner	Owned(a)(b)		60 Days(c)
Common	Linda G. Alvarado	17,714		—
Common	Colin G. Campbell	14,700		—
Common	Jessica P. Einhorn	7,823		—
Common	Ernie Green	11,637		7,402
Common	Herbert L. Henkel	8,623		4,108
Common	James H. Keyes	9,400		—
Common	John S. McFarlane	7,012		869
Common	Eduardo R. Menascé	3,992		—
Common	Michael I. Roth	16,600		4,938
Common	David L. Shedlarz	6,292		—
Common	Robert E. Weissman	5,982		—
Common	Michael J. Critelli	325,831		901,429
Common	Murray D. Martin	84,619		343,391
Common	Matthew S. Kissner	46,703		363,429
Common	Bruce P. Nolop	52,063		176,446
Common	Karen M. Garrison	23,152		136,574
Common	All executive officers and directors as a group (21)	685,640		2,397,957

(a)	The shares beneficially owned by any director or executive officer, or by all directors and executive officers as a group,
	represent in each case less than one percent of the class.
(b)	Includes shares that are held indirectly through the Pitney Bowes Inc. 401(k) Plan and its related excess plan.
(c)	The director or executive officer has the right to acquire beneficial ownership of this number of shares within 60 days of
	the record date for the annual meeting (March 12, 2004) by exercising outstanding stock options.

Which stockholders own at least 5% of Pitney Bowes?

The only person or group known to the company to be the beneficial owner of more than five percent of any class of the company’s voting securities is reflected in the chart below. The following information is based solely upon Schedule 13G filed by the entity shown with the Securities and Exchange Commission as of the date appearing below.

	Amount and Nature of	Percent of
Name and Address of Beneficial Owner	Beneficial Ownership	Class
Capital Research and Management Company	13,936,500(a)	6.0%
333 South Hope Street
Los Angeles, CA 90071

(a)	As of December 31, 2003, Capital Research and Management Company, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, had sole investment power and no voting power with respect to such shares.

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Section 16(a) Beneficial Ownership Reporting Compliance

Directors and persons who are considered “officers” of the company for purposes of Section 16(a) of the Securities Exchange Act of 1934 and greater than ten percent stockholders (“Reporting Persons”) are required to file reports with the Securities and Exchange Commission showing their holdings of and transactions in the company’s securities. It is generally the practice of the company to file the forms on behalf of its Reporting Persons who are directors or officers. The company believes that all such forms have been timely filed for 2003.

Proposal 1: Election of Directors

The board of directors has twelve members. The board is divided into three classes whose terms of office end in successive years.

Mr. Campbell, Ms. Einhorn, Mr. Keyes and Mr. Shedlarz were elected last year to three-year terms expiring in 2006. Mr. Critelli, Mr. Henkel, Mr. Roth and Mr. Weissman were elected in 2002 to terms expiring in 2005.

The Governance Committee recommended to the board of directors, and the board approved, the nomination of Ms. Alvarado, Mr. Green, Mr. McFarlane and Mr. Menascé for election at this meeting to three-year terms expiring at the 2007 Annual Meeting.

Information about each nominee for director and each incumbent director, including the nominee’s or incumbent’s age as of March 1, 2004, is set forth below. Unless otherwise indicated, each nominee or incumbent has held his or her present position for at least five years.

Should you choose not to vote for a nominee, you may list on the proxy the name of the nominee for whom you choose not to vote and mark your proxy under Proposal No. 1 for all other nominees, or vote your shares by telephone or the Internet as described on the proxy voting instruction card. Should any nominee become unable to accept nomination or election as a director (which is not now anticipated), the persons named in the enclosed proxy will vote for such substitute nominee as may be selected by the board of directors, unless the size of the board is reduced.

NOMINEES FOR ELECTION TO TERMS EXPIRING AT THE 2007 ANNUAL MEETING

	Linda G. Alvarado, 52, president and chief executive officer of Alvarado Construction, Inc., a Denver-based commercial and industrial general contractor. Director since 1992. (Also a director of Lennox International, Inc., 3M Company, The Pepsi Bottling Group Inc., and Qwest Communications International, Inc.)			Ernie Green, 65, president of Ernie Green Industries, Inc., a manufacturer of automotive components. Director since 1997. (Also a director of Dayton Power & Light, Inc. and Eaton Corporation.)
	John S. McFarlane, 55, chief executive officer, since March 1, 2004, of Ascendent Telecommunications Inc., a leading developer of mobility and disaster recovery technology solutions for voice communications. Formerly president and chief executive officer of Nexsi Systems Corporation, a provider of high-performance network infrastructure solutions, 2001-2002; President, Network Service Provider Division, Sun Microsystems, Inc., 1999-2001, and president of Sun’s Solaris Software Division, 1998-1999. Director since 2000. (Also a director of Creo Inc. and Exar Corporation.) (Nexsi Systems, a private corporation, filed for protection under Chapter 7 of the U.S. Bankruptcy Laws on May 17, 2002.)			Eduardo R. Menascé, 58, president, Enterprise Solutions Group, Verizon Communications Inc. Formerly president and chief executive officer, CTI MOVIL S.A. (Argentina), a unit of GTE Corporation, 1996-2000. Director since 2001. (Also a director of KeyCorp.)

 

 

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INCUMBENT DIRECTORS WHOSE TERMS EXPIRE AT THE 2006 ANNUAL MEETING

	Colin G. Campbell, 68, chairman and president of The Colonial Williamsburg Foundation. Formerly president of Rockefeller Brothers Fund, 1988-2000. Director since 1977. (Also a director of Sysco Corporation.)			Jessica P. Einhorn, 56, Dean, Paul H. Nitze School of Advanced International Studies of the Johns Hopkins University. Formerly consultant with Clark & Weinstock, a firm specializing in strategic communications and public affairs consulting, 2000-2002; Visiting Fellow, 1998-1999, at the International Monetary Fund, and Managing Director for Finance and Resource Mobilization, 1996-1998, with The World Bank. Director since 1999.
	James H. Keyes, 63, retired chairman, Johnson Controls, Inc., a supplier of automotive systems and facility management and control. Formerly chairman, 2003, and chairman and chief executive officer, 1993-2002, Johnson Controls, Inc. Director since 1998. (Also a director of Johnson Controls, Inc., LSI Logic Corporation and Navistar International Corporation.)			David L. Shedlarz, 55, executive vice president and chief financial officer of Pfizer Inc. Formerly senior vice president and chief financial officer of Pfizer Inc., 1997-1999. Director since 2001.

INCUMBENT DIRECTORS WHOSE TERMS EXPIRE AT THE 2005 ANNUAL MEETING

	Michael J. Critelli, 55, chairman and chief executive officer of Pitney Bowes Inc. Director since 1994. (Also a director of Eaton Corporation.)			Herbert L. Henkel, 55, chairman, president and chief executive officer of Ingersoll-Rand Company, a manufacturer of industrial products and components. Formerly president and chief operating officer of Textron Inc., 1999, and executive vice president and chief operating officer, 1998-1999, Textron Inc. Director since 1999. (Also a director of Ingersoll-Rand Company Ltd., AT&T Corp. and C. R. Bard Inc.)
	Michael I. Roth, 58, chairman and chief executive officer of The MONY Group Inc. (formerly Mutual of New York). Director since 1995. (Also a director of The MONY Group and Interpublic Group of Companies Inc.)			Robert E. Weissman, 63, retired chairman, IMS Health Incorporated, a leading provider of information solutions to the pharmaceutical and healthcare industries. Formerly chairman and chief executive officer, IMS Health Incorporated, 1997-1999. Director since 2001. (Also a director of Cognizant Technology Solutions and State Street Corporation.)

 

 

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Report of the Audit Committee

The Audit Committee functions pursuant to a charter that was last amended and restated in February 2003. The Audit Committee represents and assists the board of directors in overseeing the financial reporting process and the integrity of the company’s financial statements. The committee is responsible for retaining the independent auditors and pre-approving the services they will perform, and for reviewing the performance of the independent auditors and the company’s internal audit function. The board of directors, in its business judgment, has determined that all five members of the committee are “independent,” as required by applicable listing standards of the New York Stock Exchange.

In the performance of its responsibilities, the committee has considered and discussed the audited financial statements with management and the independent auditors. The committee has also discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as currently in effect. Finally, the committee has received the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as currently in effect, and has discussed with the auditors the auditor’s independence.

Based upon the review of information received and discussions as described in this report, the committee recommended to the board that the audited financial statements be included in the company’s Annual Report on Form 10-K for the year ended December 31, 2003 to be filed with the Securities and Exchange Commission.

The Audit Committee of the Board of Directors

Michael I. Roth, Chair
Ernie Green
Herbert L. Henkel
David L. Shedlarz
Robert E. Weissman

Proposal 2: Ratification of
Independent Accountants for
2004

The Audit Committee of the board has appointed PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”) as the independent accountants for Pitney Bowes for 2004. Although not required by law, as a matter of corporate governance this matter is being submitted to the stockholders for ratification. If this proposal is not ratified at the annual meeting by the affirmative vote of a majority of the votes cast, the Audit Committee intends to reconsider its appointment of PricewaterhouseCoopers as independent accountants. PricewaterhouseCoopers has no direct or indirect financial interest in Pitney Bowes or any of its subsidiaries. A representative from PricewaterhouseCoopers will attend the annual meeting and will be available to respond to appropriate questions.

Principal Accountant Fees and Services

Aggregate fees for professional services rendered for the company by PricewaterhouseCoopers as of or for the years ended December 31, 2003 and 2002, were (in millions):

	2003		2002
Audit	$4.0		$ 3.5
Audit Related	1.2		0.8
Tax	0.6		0.5
All Other	—		5.4
Total	$5.8		$10.2

The Audit fees for the years ended December 31, 2003 and 2002, respectively, were for professional services rendered for the audits of the consolidated financial statements of the company, statutory audits, issuance of comfort letters, consents, income tax provision procedures, and assistance with review of documents filed with the Securities and Exchange Commission.

The Audit Related fees for the years ended December 31, 2003 and 2002, respectively, were for assurance and related services related to employee benefit plan audits, due diligence related to mergers and acquisitions, and consultations concerning financial accounting and reporting standards.

Tax fees for the years ended December 31, 2003 and 2002 for services related to tax compliance, including the preparation of tax returns and claims for refund, and tax compliance services for expatriate employees were $0.5 million and $0.4 million, respectively and fees for all other tax services were $0.1 million and $0.1 million, respectively.

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All Other fees as of the year ended December 31, 2002 were for services rendered for financial and non-financial information systems implementation and design services. Fees in this category include fees paid to PricewaterhouseCoopers Consulting prior to its September 30, 2002 sale to IBM Corporation.

The Audit Committee has adopted policies and procedures to pre-approve all services to be performed by PricewaterhouseCoopers. Specifically the Committee’s policy is to pre-approve the use of PricewaterhouseCoopers for audit services as well as detailed, specific types of services within the following categories of audit-related and non-audit services: merger and acquisition due diligence and audit services; employee benefit plan audits; tax services; and procedures required to meet certain regulatory requirements. The Committee will not approve any service prohibited by regulation and does not anticipate approving any service in addition to the categories described above. In each case, the Committee’s policy is to pre-approve a specific annual budget by category for such audit, audit-related and non-audit services which the company would obtain from PricewaterhouseCoopers, and has required management to report the actual fees versus budget to the Committee on a periodic basis throughout the year. In addition, any new, unbudgeted engagement for audit services or within one of the other pre-approved categories described above must be approved by the Committee.

Vote Required

Approval of the appointment of Pitney Bowes’ independent accountants requires the affirmative vote of a majority of votes cast by the holders of common stock and $2.12 preference stock of the company present or represented by proxy and entitled to vote at the annual meeting.

The board of directors recommends that stockholders vote FOR the ratification of PricewaterhouseCoopers LLP as the company’s independent accountants for 2004.

Proposal 3: Consideration of a
Stockholder Proposal

The Service Employees International Union AFL-CIO, CLC (SEIU) Master Trust, whose address is 1313 L Street, N.W., Washington, D.C. 20005, the beneficial owner, as of November 19, 2003 of 26,600 shares of common stock, has notified the company in writing that it will introduce the resolution which appears below at the annual meeting. The resolution and related statement are followed by the directors’ recommendation against the resolution and an explanation of the directors’ opposition.

“Resolved, that the shareholders of Pitney Bowes Inc. (the “Company”) hereby request that the Company prepare and submit to the shareholders of the Company a separate report, updated annually, containing the following information:

a.	Policies for political contributions made with corporate funds, political action committees sponsored by the Company, and employee political contributions solicited by senior executives of the Company. This shall include, but not be limited to, policies on contributions and donations to federal, state and local political candidates, political parties, political committees and other political entities organized and operating under 26 USC Sec. 527;
b.	An accounting of the Company’s resources, including property and personnel, contributed or donated to any of the persons and organizations described above;
c.	A business rationale for each of the Company’s political contributions or donations; and
d.	Identification of the person or persons in the Company who participated in making the decisions to contribute or donate.

Statement of Support

As shareholders, we support policies that apply transparency and accountability to corporate political giving.

There is currently no single source of information providing comprehensive disclosure to the Company’s shareholders on political contributions made with corporate funds. Without full transparency, we believe Company executives may be able to inappropriately direct corporate resources for political purposes and make decisions unilaterally without a stated business rationale for such donations.

The result is that shareholders are unaware of how and why the Company chooses to make corporate contributions and the political ends being furthered by the gift of corporate funds. Company officials may, in fact, be funding groups and candidates whose agendas are not in the best interest of the Company and its shareholders.

According to the Center for Responsive Politics, a leading campaign finance watchdog organization, our Company contributed $175,000 to major party committees and political dinners in the 2002 election cycle. However, shareholders do not know whether that is the

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full extent of the utilization of our Company’s resources for political purposes.

In our view absent a system of accountability, corporate executives will be free to use the Company’s assets in ways that could pose reputational and legal risks for the company.

For these reasons, we urge a vote FOR this resolution.”

Directors’ Statement in Opposition

The board of directors recommends a vote AGAINST the proposal. The company’s government affairs efforts are efficient, effective, and benefit the company. Preparation and submission to stockholders of a separate, annual report as outlined in the proposal will not confer any incremental benefits on the company’s investors. The critical information requested for inclusion in the report is already publicly available, but disclosure of other requested information could compromise the company’s competitive position and strategy.

The company’s efforts in the area of government affairs address matters of strategic importance to the company, and therefore benefit its stockholders. Like other responsible companies, Pitney Bowes monitors legislative and regulatory developments that may affect our business. The company employs a small professional staff for these purposes, all of whom report to the Senior Vice President and General Counsel. Preparation of the annual report requested in the proposal would require administrative effort and time, and would divert the activity of the small government affairs staff away from important strategic goals.

The company complies with Federal and state laws governing the permissibility and reporting of political contributions. Federal law prohibits the company from making, and the company does not make, direct or indirect contributions to candidates or political parties at the Federal level. In addition, many states’ laws regulate and limit such activities at the state level. The company’s financial contributions and other advocacy efforts are directed to activities designed to advance the company’s public policy objectives. The company does not donate equipment or services to political campaigns or candidates’ committees.

Pitney Bowes addresses public policy issues that impact the company, its markets, products, and services, and its employees. Its most important set of public policy issues are those that affect the U.S. Postal Service or the use of mail as a communications medium, since well over half of the company’s revenue and profit are derived from its U.S. mailing business.

The second set of public policy issues that are most important to the company are those that affect its ability to do business in Connecticut, where it has its headquarters, its key manufacturing and distribution facilities for the United States, its engineering and research and development activities, and many critical support functions. Any governmental actions that affect the company’s ability to carry out its activities in Connecticut, such as homeland security, tax, transportation and other infrastructure, or employment issues, are a key focus of the government affairs function.

Besides these issues which are of particular concern to the company, given the nature of its businesses the company has a general concern over human resources, health, pension, tax, antitrust and competition law, and securities and corporate law issues.

As authorized by law, the company sponsors a federal political action committee and a state political action committee supported solely by voluntary contributions from employees. Only management level employees are invited to contribute. The federal political action committee files publicly available reports with the Federal Election Commission (www.fec.gov) and the state political action committee files publicly available reports with the Connecticut Secretary of State (http://www.sots.state.ct.us/), each detailing its receipts and disbursements. The company’s political action committees provide support for candidates and public officials whose views are consistent with the company’s long-term legislative and regulatory interests in the areas outlined above.

The company maintains a well-defined governance structure for the management of the political action committees which it sponsors. Information pertaining to the political action committees is available to the public, including through the web addresses shown above.

Company management seeks to maximize benefits to the company and its stockholders by applying its resources in a targeted, selective fashion. Preparation of an annual report for stockholders as requested in the proposal will divert the company’s resources and will not provide significant benefits for stockholders. The board of directors therefore recommends that stockholders vote AGAINST the proposal.

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Executive Officer
Compensation

The Executive Compensation Committee (the “Committee”), which is composed of four independent directors, oversees the company’s executive compensation programs and establishes its executive compensation policies. (A description of the Committee’s duties appears on page 13.) The Committee reports on executive compensation to all of the independent directors of the board and makes recommendations to them regarding those executive compensation matters with respect to which the independent directors have final approval. (See “Report on Executive Compensation” beginning on page 25.)

Summary Compensation Table. The following table (Table I) shows all compensation paid or granted, during or with respect to the 2003 fiscal year and the two previous fiscal years, to the chief executive officer and to the four other highest paid executive officers for services rendered to the company and its subsidiaries during 2003. (Persons in this group are referred to herein individually as a  “Named Executive Officer” and collectively as the “Named Executive Officers,” and, unless otherwise noted, the titles listed are the titles held as of the end of the 2003 fiscal year.)

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TABLE I
SUMMARY COMPENSATION TABLE
												Long-Term
			Annual Compensation									Compensation
												Grants			Payouts
																					All Other
						Annual			Other Annual						LTIP			Restricted			Compen-
			Salary			Incentive			Compensation			Stock			Payouts			Stock			sation
			($)			($)(1)			($)(2)			Options			($)(3)			($)(4)			($)(5)
Name and Principal Position	Year		(000)			(000)			(000)			(#)			(000)			(000)			(000)
Michael J. Critelli	03		941.0			1,166.9			—			175,000			1,501.0			1,849.0			95.1
Chairman and Chief	02		925.0			1,202.5			—			25,000			889.0			—			93.5
Executive Officer	01		925.0			1,065.0			—			51,235			1,400.0			—			91.3
Murray D. Martin	03		634.2			456.6			95.2			75,000			711.0			1,101.0			51.2
Executive Vice President	02		575.0			431.3			—			-0	-		403.0			—			49.2
and Group President, Global	01		575.0			540.0			—			107,594			520.0			—			61.3
Mailstream Solutions(6)
Matthew S. Kissner	03		575.0			412.5			—			75,000			711.0			898.8			48.5
Executive Vice President	02		525.0			393.8			—			-0	-		403.0			—			45.9
and Group President,	01		525.0			400.0			—			122,965			520.0			—			56.4
Global Enterprise Solutions(6)
Bruce P. Nolop	03		472.1			379.9			—			45,000			410.8			699.8			39.9
Executive Vice President	02		440.0			303.6			—			14,000			403.0			—			38.1
and Chief Financial Officer	01		436.6			368.0			—			—			—			—			57.4
Karen M. Garrison	03		494.2			355.8			—			45,000			410.8			500.8			40.2
Executive Vice President(6)	02		430.0			316.7			—			17,000			248.0			—			27.3
	01		419.2			390.0			—			24,593			—			—			55.0

(1)	As discussed in more detail in the Committee’s Report on Executive Compensation, the majority of compensation for Named Executive Officers is at-risk, and is earned based on company and executive performance against pre-established strategic and financial objectives. Annual incentive compensation is a significant part of the normal at-risk compensation structure. The target annual incentive for each Named Executive Officer is aligned with the median of peer group competitive practices.
(2)	This column includes the aggregate incremental cost to the company of providing personal perquisites and benefits to the Named Executive Officers for each of the last three years. The amount reported for Mr. Martin in 2003 represents business-related travel reimbursements ($83,601) which include tax reimbursements, and certain other perquisites. The aggregate value of perquisites did not exceed the reporting threshold (the lesser of $50,000 or 10% of annual salary and bonus for the year) for any of the other Named Executive Officers.
(3)	The value shown for 2003 is the value of the payout of Cash Incentive Units (“CIUs”) granted during 2001 to each of the Named Executive Officers. Payout under the CIUs was based on the magnitude of achievement against the financial performance criteria over the three-year period ending December 31, 2003. (See footnote 1 to Table IV on page 24.)
(4)	The Named Executive Officers received restricted stock awards subject to a four-year cliff vesting period. The dollar values shown for these shares are based on the closing price of $32.10 on the grant date. The fair market value of grants as of December 31, 2003 is as follows: Mr. Critelli, $2,339,712; Mr. Martin, $1,393,266; Mr. Kissner, $1,137,360; Mr. Nolop, $885,516; and Ms. Garrison, $633,672. Regular quarterly dividends are paid on restricted stock held by these individuals.
(5)	Amounts shown for 2003 include, respectively, contributions to the Pitney Bowes 401(k) Plan (a tax-qualified plan under Internal Revenue Code Section 401(k)) and the Pitney Bowes Restoration Plan (a non-qualified deferred compensation matching program), and an allowance for financial counseling, including income taxes payable with respect to such allowance, for each of the Named Executive Officers as follows: Mr. Critelli, $8,000, $78,512, and $8,540; Mr. Martin, $8,000, $34,617, and $8,540; Mr. Kissner, $8,000, $31,340, and $9,174; Mr. Nolop, $8,000, $23,027, and $8,850; Ms. Garrison, $8,000, $24,435, and $7,723. The amounts reported in this column in the 2003 proxy statement for 2001 and 2002 differ from amounts reported in this proxy statement because certain contributions to the Pitney Bowes Restoration Plan were overstated with respect to 2002 for Mr. Kissner and Ms. Garrison, and understated with respect to 2001 for Ms. Garrison.
(6)	Messrs. Martin and Kissner and Ms. Garrison were elected to the offices shown as of February 9, 2004.

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Shown in Table II below is information regarding options granted in 2003 to the Named Executive Officers.

TABLE II
STOCK OPTION GRANTS IN 2003
									Net Potential
									Realizable Value at
									Assumed Annual Rates
									of Stock Price
			Percentage of						Appreciation for
	Options		Total Options						Option Term(2)
	Granted		Granted to		Exercise or
	in 2003		Employees		Base Price				5% ($)		10% ($)
Name	(#)		in 2003		($/Share)(1)		Expiration Date		(000)		(000)
Michael J. Critelli	175,000		5.00%		32.10		Feb. 9, 2013		3,533		8,953
Murray D. Martin	75,000		2.14%		32.10		Feb. 9, 2013		1,514		3,837
Matthew S. Kissner	75,000		2.14%		32.10		Feb. 9, 2013		1,514		3,837
Bruce P. Nolop	45,000		1.29%		32.10		Feb. 9, 2013		909		2,302
Karen M. Garrison	45,000		1.29%		32.10		Feb. 9, 2013		909		2,302

(1)	The exercise price for each option equals the market price of a share of the company’s common stock on the date of grant. The options become exercisable in installments over a three-year period: one-third after the first year, an additional one-third after the second year, and the remaining one-third after the third year.
(2)	The 5 and 10 percent growth rates, which are specified by the Securities and Exchange Commission, illustrate that the potential future value of the options to the Named Executive Officer is linked directly to the future growth of the price of the company’s common stock. Because the exercise price for options granted equaled the market price of the common stock on the date of grant, no gain to the Named Executive Officer is possible without an increase in the stock price, which would benefit the company’s stockholders. The 5 and 10 percent growth rates are intended for illustration only and are not intended to be predictive of future growth; the actual value, if any, that may be realized by any Named Executive Officer will depend on the market price of the common stock on the date of exercise.

Shown in Table III below is information regarding the exercise of options in 2003 by the Named Executive Officers and information regarding their total outstanding options as of December 31, 2003.

TABLE III
OPTIONS EXERCISED IN 2003 AND 2003 YEAR-END OPTION VALUES
					Number of
					Securities Underlying				Net Value of
	Shares				Unexercised Options				Unexercised in-the-Money
	Acquired		Net Value		at Year-End (#)(1)				Options at Year-End ($)(2)
	on Exercise		Realized
Name	(#)		($)		Exercisable		Unexercisable		Exercisable		Unexercisable
Michael J. Critelli	—		—		732,378		345,370		3,347,606		3,403,429
Murray D. Martin	19,734		227,543		257,961		161,072		1,141,927		1,461,981
Matthew S. Kissner	—		—		272,875		166,196		1,249,375		1,495,352
Bruce P. Nolop	—		—		116,668		111,289		502,693		877,623
Karen M. Garrison	—		—		91,334		93,221		459,536		798,596

(1)	These columns show the aggregate total of unexpired, unexercised options granted through 2003. The number of shares subject to the options has been adjusted to reflect the two-for-one stock split effected in 1997 and the spin-off of Imagistics International Inc. (“Imagistics”) in 2001. With the exception of the October 2000 grant, options become exercisable one-third after the first year, an additional one-third after the second year, and the remaining one-third after the third year. The options granted in October 2000 vest over a four-year period, with one-sixth of the options vesting in 2002, one-third in 2003, one-third in 2004, and the remaining one-sixth in 2005.
(2)	These values are based on $40.62 per share, the market price of a share of common stock as of December 31, 2003, net of exercise prices, which range from $24.0008 to $34.1074 per share (adjusted to reflect the 1997 stock split and the 2001 spin-off of Imagistics). In all cases, the exercise price equaled the market price of a share at the date of grant.

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Table IV, which follows, shows detailed information regarding long-term incentives (other than options) granted under the Key Employees’ Incentive Plan in 2003. Long-term incentives are contingent upon the attainment of one or more specified performance objectives. Specified payments, if any, under the terms of these incentives are paid only to the extent that the stated performance objectives are achieved.

In 2003, a committee of the board of directors, consisting solely of all independent directors, granted CIUs as long-term incentives. CIUs represent a defeasible right to receive cash, the receipt and amount of which are contingent upon the extent to which specified performance objectives are attained during the related three-year period.

TABLE IV
2003 LONG-TERM INCENTIVE GRANTS
					Estimated Future Payouts
			Performance or Other		Threshold		Target		Maximum
	Number of		Period Until
	Cash Incentive		Maturation or		CIU ($)		CIU ($)		CIU ($)
Name	Units(1)		Payout(1)		(000)		(000)		(000)
Michael J. Critelli	1,000,000		December 31, 2005		10.0		1,000		2,000
Murray D. Martin	475,000		December 31, 2005		4.75		475		950
Matthew S. Kissner	475,000		December 31, 2005		4.75		475		950
Bruce P. Nolop	400,000		December 31, 2005		4.0		400		800
Karen M. Garrison	400,000		December 31, 2005		4.0		400		800

(1)	CIUs granted under the Key Employees’ Incentive Plan (“KEIP”) represent a defeasible right to receive cash payments if certain objective corporate performance criteria are achieved over the three-year period ending December 31, 2005. CIUs that will mature on December 31, 2005 will pay $0/CIU if the threshold performance levels are not met. The CIUs will have a value of $.01 to $2.00 per unit if the threshold earnings per share and adjusted free cash flow performance criteria are met or exceeded, depending on the actual magnitude of achievement.

Executive Contracts

In December 2003, the company entered into an agreement with Karen M. Garrison as a result of Ms. Garrison’s decision to accelerate her previously planned retirement as part of the realignment of the company’s corporate structure. Under this agreement, Ms. Garrison will complete her work on the company’s real estate and facilities optimization plan and will continue to assist in the development and implementation of the company’s mail and document management strategy through July 31, 2004 (the “Separation Date”). She will continue to receive her current base salary and benefits during this period. Ms. Garrison will not be eligible for any stock options in 2004, and she will also forfeit to the company any restricted stock she holds on her Separation Date.

From August 1, 2004 through July 31, 2006, Ms. Garrison will receive severance pay of $64,583.33 per month. During this severance period, Ms. Garrison is entitled to continue her medical, prescription drug and dental benefits on the same terms and conditions as she was provided them at the time of her separation.

The company will also pay Ms. Garrison the gross amount of $360,416.67 in lieu of any 2004 incentive bonus under KEIP, or any other compensation claims. Ms. Garrison’s active participation in the Long-Term Incentive Program will cease as of her Separation Date, and she will receive a pro-rated payout of the value of previously granted CIUs based on her completed service as of the Separation Date. Payout of the CIU awards will be based on the achievement of certain performance targets specified in the original CIU awards, and any CIU awards due Ms. Garrison will be paid out in the normal course pursuant to the terms of the awards. She will also continue to have access to company-provided financial counseling services for 12 months following her Separation Date.

In addition, the agreement provides for her waiver and release of claims against the company and imposes on her restrictive covenants relating to confidentiality, non-competition, non-solicitation of key employees, non-solicitation of customers and non-disparagement of the company. If Ms. Garrison breaches any of these covenants and fails to correct the violation within 30 days, the company is entitled to cease the payment of benefits under the agreement and recover any severance benefits already paid, as well as any damages suffered by the company.

24

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Report on Executive
Compensation

Introduction

The Executive Compensation Committee (the “Committee”), consisting of four independent directors, is responsible for the company’s executive compensation policies and programs. The Committee recommends certain policies, programs and specific actions regarding the compensation of the Chief Executive Officer to all of the Independent Directors for final approval, and approves the same for eleven of the most highly compensated executives (referred to as “Key Executives”). This includes the compensation of the Named Executive Officers presented in the preceding compensation tables (see Table I through IV on pages 22 to 24 above). For executives other than Key Executives (referred to herein as “Executives”), the Committee establishes the compensation policies and programs. The Committee adopted a revised charter in 2003 which was published in the 2003 Proxy Statement and is published on the company’s Corporate Governance website at http://www.pb.com/corporategovernance.

The four main objectives of the executive compensation program are:

(1)	To align compensation policies and practices with stockholder interests;
(2)	To provide compensation that is competitive when compared to various markets in which the company competes for executive talent;
(3)	To divide total compensation between annual and long-term components with a significant long-term performance related component to drive executives to maximize both short and long-term shareholder value; and
(4)	To place a significant portion of compensation at risk if pre-established performance objectives are not achieved.

The Committee views stock ownership and equity-related compensation arrangements as key elements to focus executives on increasing shareholder value. To support this view, the company maintains a Stock Ownership Policy for its approximately 30 top executives, which requires them to own a significant amount of company stock measured by a pre-established multiple of their respective base salaries. Until such time as they are actually paid out and received, shares that the executives have the right to acquire through the exercise of stock options are not included in the calculation of stock ownership. Shares of restricted stock count toward the ownership requirement from the date of grant.

In 2003, the Committee engaged an independent compensation consultant to advise the Committee regarding current trends and competitive practices in executive compensation and to review market data and assess the competitive position of the company’s executive compensation program. The Committee reviewed materials on competitive compensation levels and practices as prepared by the company and reviewed by the company’s primary executive compensation consulting firm. The company’s compensation program was compared to compensation programs within a broad sample principally comprised of Fortune 500 companies with median revenues, market capitalization, net income and numbers of employees similar to those of the company. The Committee concluded that the company’s total compensation program continues to meet the objectives of the program.

Evaluation of Executive Performance
in 2003

The Committee does not rely solely on predetermined formulas or a limited set of criteria when it evaluates the performance of the Chairman and Chief Executive Officer and the company’s Key Executives. In 2003, the Committee considered the financial, operational and strategic merits of management’s continuing achievement of its short and long-term objectives, including:

• Improving earnings per share;
  
• Strong cash flow;
  
• Continued transformation and optimization of organizational effectiveness and productivity;
  
• Development of growth strategies and branding initiatives; and
  
• The development of talent and leadership throughout the company.
  

In making specific compensation decisions last year the Committee’s judgments were primarily based upon an assessment of each Key Executive’s leadership performance and potential to enhance long-term stockholder value. Key factors affecting the Committee’s judgments included the nature, scope and impact on the company of the Key Executive’s responsibilities, and his or her effectiveness in leading initiatives to drive the company’s key strategic imperatives: growth, talent and leadership development, and transformation. The Committee also considered the current salary, salary history, prior-year incentive and other compensation awards and the compensation levels and performances of a comparison group of major companies that are most likely to compete with the company for the services of Key Executives.

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Annual Compensation

Base Salary. In general, the company aligns base pay for Key Executives and Executives with the competitive market median for base pay. The pay review considers potential impact to the company now and in the future, level of experience, individual performance compared with annually established financial and strategic unit and individual objectives, and competitive market salary rates for similar positions.

Annual Incentive Compensation (“Annual Incentives”). All Key Executives and Executives are eligible for Annual Incentives for achieving challenging financial and strategic objectives that are established at the beginning of each year. In general, the company aligns annual incentives with the competitive market median. Annual Incentives are expressed as a percentage of base salary, with targets ranging from 35% for some Executives, and up to 100% for the Chief Executive Officer. To determine Annual Incentive awards, the Committee performs a detailed review of the company’s performance for the year compared to objectives established at the beginning of the fiscal year.

Long-Term Incentives

The company currently utilizes two principal types of long-term incentives: Cash Incentive Units (“CIUs”) and stock options. The company also utilizes a limited number of shares of restricted stock for specific strategic purposes. In general, the company aligns long-term incentives above the competitive market median. The Committee uses these performance-driven components to link executive compensation to longer term internal company performance and to external market performance of the company’s stock price.

Cash Incentive Units. CIUs are granted annually to Key Executives and Executives. Their value is based on the achievement of pre-established financial objectives over a three-year performance period. As noted in Table IV on page 24 the value of each unit will vary depending on the extent to which pre-established earnings per share and adjusted free cash flow goals are achieved.

Stock Options. Stock options are granted to Key Executives and Executives with an exercise price equal to the market price of the stock on the date of the grant. The potential future value of stock options is dependent solely upon the future increase in the price of the company’s stock. Stock option awards are based on an executive’s position level and performance and the competitive level of option grants for comparable positions. Options typically have a ten-year exercise period and typically become exercisable in installments during the first three years following the date of grant.

Restricted Stock. Restricted stock was granted to the five Named Executive Officers during 2003 as part of the company’s management development, succession, and retention planning process. The restrictions will lapse after four years based on continued service with the company. The company may make grants of restricted stock in the future with different restrictions, performance conditions, and terms as warranted by changing competitive conditions.

Compensation of the Chief Executive
Officer

The Chief Executive Officer’s compensation is based on the same compensation objectives and policies applicable to all Key Executives, and includes base salary, Annual Incentives, CIUs, stock options and restricted stock grants.

During 2003, the Committee met in executive session jointly with the Governance Committee to evaluate Mr. Critelli’s performance and met separately in executive session to decide upon his compensation. The Committee considers many factors when it evaluates his performance, including his strategic impact, leadership, and company performance compared with previously established financial and strategic objectives. The Committee reaches a consensus and recommends appropriate compensation actions to the Independent Directors for their consideration and approval.

In evaluating Mr. Critelli’s performance for 2003, the Committee considered progress on strategic objectives, the positive operating and strategic results achieved during 2003, and the company’s compound annual growth rate versus the proxy peer group, the Dow Jones Industrials Average and the S&P 500 Index over one, two and three year periods. The Committee believes that Mr. Critelli’s leadership skills contributed substantially to these results and that he continues to make significant contributions to the overall success of the company.

Based on its evaluation of his performance and review of competitive market data for total compensation, and in keeping with its increased emphasis on performance-based compensation, the Committee recommended and the Independent Directors approved the following actions. In line with the overall company direction toward slowing the rate of growth in fixed costs such as base salary, Mr. Critelli’s annual base salary was increased by 2% in 2003. Mr. Critelli’s Annual Incentive payout for 2003 performance was $1,166,891 which represents an above target level of performance. The CIU payout for the 2001-2003 cycle approved for Mr. Critelli totalled $1,501,000 ($1.58 per unit).

26

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In order to bring his total long-term incentive compensation opportunity in line with the company’s competitive philosophy, Mr. Critelli was granted stock options in February 2003 to purchase 175,000 shares of company common stock, and he was awarded 1,000,000 CIUs for the 2003-2005 cycle. In addition, in consideration of the key role Mr. Critelli has played and is expected to play in the development and execution of the company’s leadership development process, as well as his expected contributions to the long-term success of the business, the Committee recommended and the Independent Directors approved a grant of 57,600 shares of restricted stock subject to a four-year cliff vesting schedule.

Deductibility of Compensation Under
Internal Revenue Code Section 162(m)

Publicly traded corporations generally are not permitted to deduct compensation in excess of $1 million paid to certain top executives unless the compensation qualifies for an exception as “performance-based compensation.” The company generally intends to comply with the requirements for full deductibility wherever possible. The company does, however, weigh the benefits of compliance with Section 162(m) against the potential burdens of such compliance, and reserves the right to pay compensation that may not be fully deductible if it determines that it is in the company’s best interest to do so. In this regard, it is the company’s expectation that compensation under applicable incentive programs described herein will normally be performance-based compensation and thus qualify for deductibility under Section 162(m). For example, from time to time grants of restricted stock may be made that may not be fully deductible.

The Executive Compensation Committee of the Board of Directors

James H. Keyes, Chair
Colin G. Campbell
Herbert L. Henkel
Eduardo R. Menascé

Severance and Change of
Control Arrangements

The incentive plans described above (see “Executive Officer Compensation” beginning on page 20), the Pitney Bowes Severance Plan, and Senior Executive Severance Policy provide for a period of continued income and continued benefit under grants made pursuant to such incentive plans to employees who are terminated by certain actions of the company. These provisions are also intended to encourage all employees, including the Named Executive Officers, to continue to carry out their duties in the event of the possibility of a Change of Control. “Change of Control” is defined in the Severance Plan, Senior Executive Severance Policy, and in the incentive plans as the acquisition of 20 percent or more of the company’s common stock or 20 percent or more of the combined voting power of all voting securities by an individual, entity or group, or a change of more than a majority of the board other than by approval of the then-current board, or approval by the stockholders of a reorganization, merger, or dissolution of the company.

The Pitney Bowes Severance Plan as amended and restated January 1, 1999, provides for the payment of severance to employees, including the Named Executive Officers, whose employment with the company or any of its United States subsidiaries is terminated under certain circumstances (exclusive of a Change of Control). Severance will consist of a minimum of one week of pay for each full year of service (a fraction thereof for a partial year of service), with a minimum of two weeks’ pay, and a maximum of two years’ pay. The Severance Plan also provides that employees (exclusive of executives covered under the Senior Executive Severance Policy) whose employment is terminated or whose position, authority, pay or benefits are diminished within two years after a Change of Control will be entitled to severance pay on the basis of their position levels and seniority.

The Senior Executive Severance Policy, originally adopted by the board of directors in December 1995, and amended and restated as of January 1, 2000, provides for the payment of severance to certain senior executive employees, including the Named Executive Officers, whose employment with the company is terminated within two years after a Change of Control. The Senior Executive Severance Policy provides that a covered employee whose employment is terminated, whose position, authority, pay or benefits are diminished or who is relocated within two years after a Change of Control, or who voluntarily terminates employment during the 30-day period immediately following the first anniversary of the date of the Change of Control, will be entitled to, among other things, severance pay in an amount equal to a multiple of the sum of the employee’s annual base salary and highest Annual Incentive received in any of the three years preceding termination, and the continuation of certain welfare benefits for a period of time following termination of employment. The Policy provides for a multiple of three for certain senior executive employees covered by the Severance Policy, including the Named Executive Officers. The Severance Policy provides for a multiple of two for all other executives covered by the Severance Policy.

27

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The Pitney Bowes Stock Plan (the “Stock Plan”) provides that, in the event of a Change of Control, outstanding options granted under the Stock Plan to any employee will become immediately and fully exercisable. The Stock Plan also provides that, in the event of a Change of Control, other outstanding stock-based incentives granted pursuant to the Stock Plan will become fully vested, with all performance objectives deemed fully satisfied except for transfer restrictions, if any, required for exempt treatment under Section 16 of the Securities Exchange Act of 1934, as amended, or any other applicable law.

Also, the KEIP provides that in the event of a Change of Control, Executives, including the Named Executive Officers, will have a vested right to Annual Incentives with respect to the year in which such Change of Control occurs and to CIUs which are then outstanding (in amounts to be determined as specified in the plan on the basis of relevant past performance of the individual executive, of his or her division and of the company, as applicable). Such Annual Incentives and CIU payments would be made shortly after the Change of Control, discounted to present value at the prime rate then in effect.

If any of these benefits, either alone or together with any other payments or benefits provided to covered senior executive employees, including a Named Executive Officer, would constitute an “excess parachute payment” subject to the 20 percent excise tax under certain provisions of the Internal Revenue Code, the Senior Executive Severance Policy provides that an additional payment would be made to each affected covered employee so that such excise tax is reimbursed on a net after-tax basis.

It is possible that no payments will ever be made pursuant to the foregoing; therefore, it is not possible to estimate the amount of any payments that may become due to any individual under the Senior Executive Severance Policy or either of the incentive plans in the event of a Change of Control.

Pension Benefits

Effective September 1,1997, the company revised the Pension Plan such that the benefit payable under the Pension Plan is no longer a function solely of years of service and final average earnings. Under the revised formula, employees receive annual credits of a percentage of their earnings. The annual percentage ranges from 2% to 10% plus an additional 2% to 6% of such earnings in excess of the social security wage base and increases as the sum of age and years of service increases. “Earnings” for purposes of the plan, means the average of the five highest consecutive annual pay amounts during a participant’s service with the company.

In connection with the adoption of revisions to the Pension Plan, various participants, including certain of the Named Executive Officers, will be eligible for certain “grandfather” and transition provisions that are intended to avoid undue impairment of any participant’s pension as a result of the new formula. Certain long-service participants may be entitled to receive their benefit computed under the old formula, if greater than that computed under the new formula.

The annual pension benefit to which each of the Named Executive Officers would be entitled had he or she retired on December 31, 2003 (disregarding any limitation on vesting) expressed as a life annuity beginning at age 65 is as follows: Mr. Critelli: $889,354; Mr. Martin: $200,500; Mr. Kissner: $75,331; Mr. Nolop: $27,816; and Ms. Garrison: $220,898.

Stock Performance Graph

The following graph compares the most recent five-year performance of Pitney Bowes common stock with the Standard & Poor’s (“S&P^®”) 500 Composite Index, and peer group index at December 31, 2003, over the same five-year period.

The Peer Group is comprised of the following companies: Automatic Data Processing, Inc. (ADP), Bowne & Company, Diebold, Inc., DST Systems, Inc., Hewlett-Packard Company, Ikon Office Solutions, Inc., Lexmark International Inc., Moore Wallace Incorporated, Pitney Bowes Inc., The Reynolds and Reynolds Company, and Xerox Corporation.

28

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Total return for the Peer Group and the S&P 500 Composite Index is based on market capitalization, weighted for each year.

All information shown below is based upon data provided to the company by three separate independent organizations, all of which have been licensed by Standard & Poor’s Corporation to use its official total return calculation. The graph shows that on a total return basis, assuming reinvestment of all dividends, $100 invested in the company’s common stock on December 31, 1998 would have been worth $73 by December 31, 2003. By comparison, $100 invested in the S&P 500 Composite Index would have been worth $97 by December 31, 2003. An investment of $100 in the Peer Group in 1998 would have been worth $83 on December 31, 2003.

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Additional Information

Solicitation of Proxies

In addition to the use of the mails, proxies may be solicited by the directors, officers, and employees of the company without additional compensation by personal interview, by telephone, or by electronic transmission. Arrangements may also be made with brokerage firms and other custodians, nominees, and fiduciaries for the forwarding of solicitation material to the beneficial owners of Pitney Bowes common and $2.12 preference stock held of record, and the company will reimburse such brokers, custodians, nominees, and fiduciaries for reasonable out-of-pocket expenses incurred. The company has retained Georgeson Shareholder Communications Inc. to aid in the solicitation of proxies. The anticipated fee of such firm is $10,000 plus out-of-pocket costs and expenses. The cost of solicitation will be borne entirely by Pitney Bowes.

Other Matters

Management knows of no other matters which may be presented for consideration at the meeting. However, if any other matters properly come before the meeting, it is the intention of the individuals named in the enclosed proxy to vote in accordance with their judgment.

By order of the board of directors.

Amy C. Corn
Corporate Secretary

29

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DIRECTIONS:

Northbound on I-95
Please take Exit 7 (Greenwich Avenue) and proceed through the first intersection to next traffic light, where you should turn right onto Washington Boulevard. Continue through three traffic lights until you come to a stop sign. Turn left onto South Pacific Street and take immediate right onto Dyke Lane. At the end of Dyke Lane, turn left onto Elmcroft Road. Please park where indicated.

Southbound on I-95
Please take Exit 7 (Atlantic Street) and stay in the middle lane. At the fourth traffic light, turn left onto Washington Boulevard. Continue through three traffic lights until you come to a stop sign. Turn left onto South Pacific Street and take immediate right onto Dyke Lane. At the end of Dyke Lane, turn left onto Elmcroft Road. Please park where indicated.

From the Merritt Parkway
Please take Exit 34 (Long Ridge Road). Turn south onto Long Ridge Road. Follow Long Ridge Road for approximately 2 miles to Cold Spring Road and turn right onto Cold Spring Road. Bear left onto Washington Boulevard and follow to the end (approximately 2 miles under railroad and I-95). At stop sign make a left turn onto South Pacific Street and take an immediate right onto Dyke Lane. At the end of Dyke Lane, turn left onto Elmcroft Road. Please park where indicated.

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C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8540
EDISON, NJ 08818-8540

 

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Your vote is important. Please vote immediately.

Vote-by-Internet Log on to the Internet and go to http://www.eproxyvote.com/pbi

OR

Vote-by-Telephone Call toll-free 1-877-PRX-VOTE (1-877-779-8683) Outside U.S. 1-201-536-8073

If you grant a proxy over the Internet or by telephone, please do not mail in your card.

 

 

 

DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL

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X

Please mark your votes as in this example.

3509

This proxy when properly executed will be voted in the manner directed herein. If no direction is made, this proxy
will be voted FOR the election of directors and FOR Item 2 and AGAINST Item 3.

Directors Recommend a Vote FOR Items 1 and 2.
Item 1—Election of					Nominees:		Item 2–Ratification of	FOR	AGAINST	ABSTAIN
Directors.					01. Linda G. Alvarado		PricewaterhouseCoopers LLP as
		FOR	WITHHELD		02. Ernie Green		independent accountants for 2004.
					03. John S. McFarlane
	FOR			WITHHELD	04. Eduardo R. Menascé
	ALL			FROM ALL
	NOMINEES			NOMINEES
							Directors Recommend a Vote AGAINST Item 3.
								FOR	AGAINST	ABSTAIN
	For all nominees except as written above						Item 3–Stockholder proposal relating to
							political contributions.
						Mark box at right if you plan to attend the Annual Meeting.
						Discontinue Annual Report Mailing for this Account.
						PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY!
						This proxy revokes all prior dated proxies.The signer hereby acknowledges receipt of Pitney Bowes’ Proxy Statement dated March 25, 2004.
						NOTE: Please sign exactly as name appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.

Signature: ________________________________  Date: _____________  Signature: ________________________________  Date: _____________

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Bring this ticket with you if attending the meeting	Monday, May 10, 2004
ADMISSION TICKET	9:00 a.m., local time
Annual Meeting of Stockholders	Pitney Bowes World Headquarters
of Pitney Bowes Inc.	One Elmcroft Road
	Stamford, Connecticut 06926-0700

 

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Dear Stockholder:      You can grant a proxy with respect to your shares through the Internet, by telephone or you can mail in the proxy card. If you grant a proxy by Internet or by telephone, you need not return the proxy card.
	1.	To grant a proxy over the Internet:
		•	Log on to the Internet and go to the web site http://www.eproxyvote.com/pbi
	2.	To grant a proxy over the telephone 24 hours a day, 7 days a week:
		•	On a touch-tone telephone call 1-877-PRX-VOTE (1-877-779-8683) from the U.S. and Canada.
		•	Outside the U.S. call 1-201-536-8073.
Your telephone or Internet proxy authorizes the named proxies in the same manner as if you marked, signed, dated and returned the proxy card.       If you choose to grant a proxy with respect to your shares via telephone or Internet, there is no need for you to mail back your proxy card. Your vote is important. Thank you for voting.

DETACH HERE

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P R O X Y

PROXY PROXY SOLICITED ON BEHALF OF PITNEY BOWES BOARD OF DIRECTORS DIRECTION TO MERRILL LYNCH TRUST COMPANY, TRUSTEE Annual Meeting of Stockholders May 10, 2004 Michael J. Critelli, Bruce P. Nolop, Amy C. Corn, or any of them, with power of substitution, are hereby appointed proxies of the undersigned to vote all common stock and $2.12 convertible preference stock of Pitney Bowes Inc. owned by the undersigned at the annual meeting of stockholders to be held in Stamford, Connecticut, on May 10, 2004, including any continuation of the meeting caused by any adjournment, or any postponement of the meeting, upon such business as may properly come before the meeting, including the items as specified on the reverse side. The undersigned, if a participant in the Pitney Bowes Inc. Deferred Investment Plan (the “Plan”), directs Merrill Lynch Trust Company, Trustee, to vote all Pitney Bowes common stock allocated to his or her account, as indicated on the reverse side, at the annual meeting of stockholders to be held in Stamford, Connecticut, on May 10, 2004, including any continuation of the meeting caused by any adjournment, or any postponement of the meeting, upon such business as may properly come before the meeting, including items as specified on the reverse side. All shares of $2.12 convertible preference stock and common stock registered in your name, held for your benefit in the dividend reinvestment plan and/or held for your benefit in the Deferred Investment Plan are shown on this card. The shares represented hereby will be voted in accordance with the directions given by the stockholder. If a properly signed proxy is returned without choices marked, and if not otherwise directed, the shares represented by this proxy registered in your name and/or held for your benefit in the dividend reinvestment plan will be voted FOR Items 1 and 2 and AGAINST Item 3. If a properly signed direction card regarding Deferred Investment Plan shares is returned without choices marked, and if not otherwise directed, the shares represented by the voting direction card will be voted, with respect to Items 1 through 3, in the same proportion indicated by the voting instructions given by participants in the Plan. In their discretion, the Proxies and/or the Trustee, as the case may be, are authorized to vote upon such other business as may properly come before the meeting, including any continuation of the meeting caused by any adjournment, or any postponement of the meeting. Please mark, date and sign, and return promptly this proxy in the enclosed envelope, which requires no postage if mailed in the U.S., or grant your proxy via telephone or Internet as described above.

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