Exhibit (i)
PITNEY BOWES INC.
DEFERRED INCENTIVE SAVINGS PLAN
FOR THE BOARD OF DIRECTORS
Effective as of April 1, 1997
PITNEY BOWES INC.
DEFERRED INCENTIVE SAVINGS PLAN
FOR THE BOARD OF DIRECTORS
ARTICLE 1
Purpose and Effective Date
The purpose of the Pitney Bowes Inc. Deferred
Incentive Savings Plan for the Board of Directors
(hereinafter referred to as the "Plan") is to aid
Pitney Bowes Inc. in retaining and attracting capable
outside directors by providing them with savings and
tax deferral opportunities. The Plan shall be effective
for deferral elections made hereunder on or after
April 1, 1997.
ARTICLE 2
Definitions
For the purposes of this Plan, the following words
and phrases shall have the meanings indicated, unless
the context clearly indicates otherwise:
Section 2.01. Beneficiary. "Beneficiary" means
the person, persons or entity designated by the
Participant to receive any benefits payable under the
Plan pursuant to Article VIII.
Section 2.02. Board. "Board" means the Board of
Directors of Pitney Bowes Inc.
Section 2.03. Change of Control. For purposes of
this Plan, a "Change of Control" shall be deemed to
have occurred if:
(i) there is an acquisition, in any one
transaction or a series of transactions, other than
from Pitney Bowes Inc., by any individual, entity or
group (within the meaning of Section 1 3(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), of beneficial ownership
(within the meaning of Rule 13(d)(3) promulgated under
the Exchange Act) of 20% or more of either the then
outstanding shares of Common Stock or the combined
voting power of the then outstanding voting securities
of Pitney Bowes Inc. entitled to vote generally in the
election of directors, but excluding, for this purpose,
any such acquisition by Pitney Bowes Inc. or any of its
subsidiaries, or any employee benefit plan (or related
trust) of Pitney Bowes Inc. or its subsidiaries, or any
corporation with respect to which, following such
acquisition,
more than 50% of the then outstanding
shares of common stock of such corporation and the
combined voting power of the then outstanding voting
securities of such corporation entitled to vote
generally in the election of directors is then
beneficially owned, directly or indirectly, by the
individuals and entities who were the beneficial
owners, respectively, of the common stock and voting
securities of Pitney Bowes Inc. immediately prior to
such acquisition in substantially the same proportion
as their ownership, immediately prior to such
acquisition, of the then outstanding shares of Common
Stock or the combined voting power of the then
outstanding voting securities of Pitney Bowes Inc.
entitled to vote generally in the election of
directors, as the case may be; or
(ii) individuals who, as of January 1, 1997,
constitute the Board (as of such date, the
"Incumbent Board") cease for any reason to
constitute at least a majority of the Board,
provided that any individual becoming a director
subsequent to such date, whose election, or
nomination for election by Pitney Bowes'
shareholders, was approved by a vote of at least a
majority of the directors then comprising the
Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board,
but excluding, for this purpose, any such
individual whose initial assumption of office is
in connection with an actual or threatened
election contest relating to the election of the
directors of Pitney Bowes Inc. (as such terms are
used in Rule 14(a)(11) or Regulation 14A
promulgated under the Exchange Act); or
(iii) there occurs either (A) the consummation
of a reorganization, merger or consolidation, in each
case, with respect to which the individuals and
entities who were the respective beneficial owners of
the common stock and voting securities of Pitney Bowes
Inc. immediately prior to such reorganization, merger
or consolidation do not, following such reorganization,
merger or consolidation, beneficially own, directly or
indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the corporation
resulting from such reorganization, merger or
consolidation, or (B) an approval by the shareholders
of Pitney Bowes Inc. of a complete liquidation of
dissolution of Pitney Bowes Inc. or of the sale or
other disposition of all or substantially all of the
assets of Pitney Bowes Inc. Section 2.04. Committee.
"Committee" means the Nominating and Organization
Affairs Committee of the Board of Directors. Any
action authorized hereunder to be taken by the
Committee is also authorized to be taken by the Board.
Section 2.05. Common Stock. "Common Stock" means
the common stock of Pitney Bowes Inc.
Section 2.06. Company. "Company" means Pitney
Bowes Inc., its successors, and any organization into
which or with which Pitney Bowes Inc. may merge or
consolidate or to which all or substantially all of its
assets may be transferred.
Section 2.07. Deferral Account. "Deferral
Account" means the account maintained on the books of
the Committee for each Participant pursuant to Article
6.
Section 2.08. Deferral Period. "Deferral Period"
is defined in Section 4.02.
Section 2.09. Deferred Amount. "Deferred Amount"
is defined in Section 4.02.
Section 2.10. Eligible Compensation. "Eligible
Compensation" means any cash compensation payable by
the Company to a Participant for service on the Board
or any Committee thereof.
Section 2.11. Fair Market Value. "Fair Market
Value" of a share of Common Stock means the closing
price of the Common Stock on the New York Stock
Exchange on the most recent day on which the Common
Stock was so traded that precedes the date as of which
Fair Market Value is to be determined.
Section 2.12. Option. "Option" means an option
to acquire shares of Common Stock granted pursuant to
the Directors' Stock Plan or any successor thereto.
Section 2.13. Participant. "Participant" means
any director who is eligible to participate in this
Plan and who elects to participate by filing a
Participation Agreement as provided in Article 4.
Section 2.14. Participation Agreement.
"Participation Agreement" means an agreement filed by a
Participant in accordance with Article 4.
Section 2.15. Plan Year. "Plan Year" means a
twelve-month period beginning January 1 and ending the
following December 31; provided, however that the first
Plan Year shall consist of the period from April 1,
1997 through December 31, 1997.
Section 2.16. Termination of Service.
"Termination of Service" means the cessation of a
Participant's services as a director of the Company.
Section 2.17. Treasury Rate of Return. "Treasury
Rate of Return" means a rate of return equal to (i) the
annualized rate payable on United States Treasury Notes
with a five-year maturity, plus (ii) 100 basis points.
Such Treasury Rate of Return shall be determined for
each month of the Deferral Period based on the monthly
5 year Treasury rates appearing in the Wall Street
Journal, plus 100 basis points and such earnings shall
be compounded monthly.
Section 2.18. Valuation Date. Valuation Date"
means the last day of each calendar month or such other
date as the Committee in its sole discretion may
determine.
ARTICLE 3
Administration
Section 3.01. Committee. (a) This Plan shall be
administered by the Committee. A majority of the
members of the Committee shall constitute a quorum for
the transaction of business. All resolutions or other
action taken by the Committee shall be by a vote of a
majority of its members present at any meeting or,
without a meeting, by an instrument in writing signed
by all its members. Members of the Committee may
participate in a meeting of such committee by means of
a conference telephone or similar communications
equipment that enables all persons participating in the
meeting to hear each other, and such participation in a
meeting shall constitute presence in person at the
meeting.
The Committee shall be responsible for the
administration of this Plan and shall have all powers
necessary to administer this Plan, including
discretionary authority to determine eligibility for
benefits and to decide claims under the terms of this
Plan. The Committee may from time to time establish
rules for the administration of this Plan, and it shall
have the exclusive right to interpret this Plan and to
decide any matters arising in connection with the
administration and operation of this Plan. All rules,
interpretations and decisions of the Committee shall be
conclusive and binding on the Company, Participants and
Beneficiaries.
The Committee may delegate responsibility for
performing certain administrative and ministerial
functions under this Plan, including without
limitation, issues related to eligibility, investment
choices, distribution of Deferred Amounts,
determination of account balances, crediting of
hypothetical earnings and of Deferred Amounts and
debiting of hypothetical losses and of distributions,
in-service withdrawals, deferral elections and any
other duties concerning the day-to-day operation of
this Plan.
No member of the Board nor any member of the
Committee shall be liable for any act or action
hereunder, whether of omission or commission, by any
other member or employee or by any agent to whom duties
in connection with the administration of this Plan have
been delegated or for anything done or omitted to be
done in connection with this Plan. The Committee shall
keep records of all of its proceedings and shall keep
records of all payments made to Participants or
Beneficiaries and payments made for expenses or
otherwise. The Company shall, to the fullest extent
permitted by law, indemnify each director, officer or
employee of the Company (including the heirs,
executors, administrators and other personal
representatives of such person) and each member of the
Committee against expenses (including attorneys' fees),
judgments, fines, amounts paid in settlement, actually
and reasonably incurred by such person in connection
with any threatened, pending or actual suit, action or
proceeding (whether civil, criminal,
administrative or investigative in nature or otherwise) in which
such person may be involved by reason of the fact that he or
she is or was serving this Plan in any capacity at the
request of the Company.
Any expense incurred by the Company or the
Committee relative to the administration of this Plan
shall be paid by the Company.
ARTICLE 4
Participation
Section 4.01. Participation. Participation in
the Plan shall be limited to members of the Board who
(i) are not employees of the Company or meet such
eligibility criteria as the Committee shall establish
from time to time, and (ii) elect to participate in
this Plan by filing a Participation Agreement with the
Committee. A Participation Agreement must be filed
prior to the beginning of the Plan Year with respect to
services in which the Eligible Compensation relates.
Section 4.02. Participation Agreement. Subject
to Article 7, each Participation Agreement shall set
forth: (i) the amount of Eligible Compensation for the
Plan Year to which the Participation Agreement relates
that is to be deferred under the Plan (the "Deferred
Amount"), expressed as either a dollar amount or a
percentage of the total Eligible Compensation for such
Plan Year; provided, that the minimum Deferred Amount
for any Plan Year shall not be less than $2,000; (ii)
the period after which payment of the Deferred Amount
is to be made or begin to be made (the "Deferral
Period"), expressed as (A) a number of full years, not
less than three, following the end of the Plan Year to
which the Participation Agreement relates, or (B) the
period ending upon the Termination of Service of the
Participant, or (C) a period ending upon the earlier or
later of (A) or (B); and (iii) the form in which
payments are to be made, which may be a lump sum or in
equal annual installments of five, ten or fifteen
years.
Section 4.03. Changes to Participation Agreement.
A Participation Agreement may not be amended or revoked
after December 31st of the Plan Year in which it is
made, except that the Deferral Period maybe extended
and the form of payment may be altered if an amended
Participation Agreement is filed with the Committee at
least one full calendar year before the Deferral Period
(as in effect before such amendment) ends; provided,
that only one such amended Participation Agreement may
be filed with respect to each Participation Agreement.
Upon a Participant's Termination of Service, the most
recent Participation Agreement received by the
Committee prior to Termination of Service shall
supersede all previous Participation Agreements on file
with regard to Termination of Service elections and the
entire amount in the Participant's Deferral Account
shall be distributed at Termination of Service in
accordance with such elections.
ARTICLE 5
Deferred Incentive Compensation
Section 5.01. Elective Deferred Incentive
Compensation. Except as provided in Section 6.02(c),
the Deferred Amount of a Participant with respect to
each Plan Year of participation in the Plan shall be
credited by the Committee to the Participant's Deferral
Account as and when such Deferred Amount would
otherwise have been paid to the Participant. To the
extent that the Company is required to withhold any
taxes or other amounts from the Deferred Amount
pursuant to any state, Federal or local law, such
amounts shall first be taken out of compensation to the
Participant that is not deferred under this Plan, if
any.
Section 5.02. Vesting of Deferral Account.
Except as provided in Section 7.04, a Participant shall
be 100% vested in his/her Deferral Account at all
times.
ARTICLE 6
Maintenance and Investment of Accounts
Section 6.01. Maintenance of Accounts. Separate
Deferral Accounts shall be maintained for each
Participant. More than one Deferral Account may be
maintained for a Participant as necessary to reflect
(a) various investment choices and/or (b) separate
Participation Agreements specifying different Deferral
Periods and/or forms of payment. A Participant's
Deferral Account(s) shall be utilized solely as a
device for the measurement and determination of the
amounts to be paid to the Participant pursuant to this
Plan, and shall not constitute or be treated as a trust
fund of any kind. The Committee shall determine the
balance of each Deferral Account, as of each Valuation
Date, by adjusting the balance of such Deferral Account
as of the immediately preceding Valuation Date to
reflect changes in the value of the deemed investments
thereof, credits and debits pursuant to Section 5.01
and Section 6.02 and distributions pursuant to Article
7 with respect to such Deferral Account since the
preceding Valuation Date Investment Choices.
Section 6.02. Investment Choices. (a)Each
Participant shall be entitled to direct the manner in
which his/her Deferral Accounts will be deemed to be
invested, selecting among the investment choices
specified in Appendix A hereto, as amended by the
Committee from time to time, and in accordance with
such rules, regulations and procedures as the Committee
may establish from time to time.
b(i)The investment choices available for
Deferral Accounts from time to time may include a
"Phantom Share Fund." The Phantom Share Fund shall
consist of deemed investments in shares of Common
Stock. Deferred Amounts that are deemed to be
invested in the Phantom Share Fund shall be
converted into deemed shares based upon the Fair
Market Value of the Common Stock on the date(s)
the Deferred Amounts are to be credited to a
Deferral Account. The
portion of any Deferral
Account that is invested in the Phantom Share Fund
shall be credited, as of each Valuation Date, with
additional shares of Common Stock with respect to
cash dividends paid on the Common Stock with
record dates during the period beginning on the
day after the most recent preceding Valuation Date
and ending on such Valuation Date, as follows. The
credit shall be for a number of additional deemed
shares of Common Stock having a Fair Market Value,
as of the payment date for a cash dividend, equal
to the dollar amount of such cash dividend paid
with respect to a number of actual shares of
Common Stock equal to the number of deemed shares
in such Deferral Account as of such Valuation Date
minus the number of such deemed shares that were
distributed to the Participant before such
Valuation Date but after the most recent prior
Valuation Date.
(ii) When a deemed reinvestment or
a distribution of all or a portion of a Deferral
Account that is invested in the Phantom Share Fund
is to be made, the balance in such a Deferral
Account shall be determined by reference to the
Fair Market Value of the Common Stock on the most
recent Valuation Date preceding the date of such
reinvestment or distribution. Upon such a lump sum
distribution, the amounts in the Phantom Share
Fund shall be distributed in the form of cash
having a value equal to the Fair Market Value of
the deemed shares being distributed, actual shares
of Common Stock, or a combination thereof, in
accordance with the terms of the Pitney Bowes Inc.
Directors' Stock Plan (the "Stock Plan").
(iii) In the event of a stock
dividend, split-up or combination of the Common
Stock, merger, consolidation, reorganization,
recapitalization, or other change in the corporate
structure or capitalization affecting the Common
Stock, such that an adjustment is determined by
the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or
potential benefits intended to be made available
under this Plan, then the Committee may make
appropriate adjustments to the number of deemed
shares credited to any Deferral Account. The
determination of the Committee as to such
adjustments, if any, to be made shall be
conclusive.
(iv) Notwithstanding any other
provision of this Plan, the Committee may adopt
such procedures as it may determine are desirable
to ensure that, with respect to any Participant
who is subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended, the crediting of
deemed shares to, or the distribution of amounts
from, his or her Deferral Account is not deemed to
be a non-exempt purchase or sale for purposes of
such Section 16(b).
(c) The Committee may authorize Options
as an investment choice under the Plan. The terms and
conditions under which Options may be made available as an
investment choice shall be determined and
communicated by the Committee to Participants from time
to time.
Section 6.03. Statement of Accounts. The
Committee shall submit to each Participant quarterly
statements of his/her Deferral Account(s), in such form
as the Committee deems desirable, setting forth the
balance to the credit of such Participant in his/her
Deferral Account(s) as of the end of the most recently
completed quarter.
ARTICLE 7
Benefits
Section 7.01. Time and Form of Payment. At the
end of the Deferral Period for each Deferral Account,
the Company shall pay to the Participant the balance of
such Deferral Account at the time or times elected by
the Participant in the applicable Participation
Agreement; provided that if the Participant has elected
to receive payments from a Deferral Account in a lump
sum, the Company shall pay the balance in such Deferral
Account (determined as of the most recent Valuation
Date preceding the end of the Deferral Period) in a
lump sum in cash (plus any shares of Common Stock
distributed in accordance with the Stock Plan in
respect of any investment in the Phantom Share Fund) as
soon as practicable after the end of the Deferral
Period. If the Participant has elected to receive
payments from a Deferral Account in installments, the
Company shall make annual cash only payments from such
Deferral Account, each of which shall consist of an
amount equal to (i) the balance of such Deferral
Account as of the most recent Valuation Date preceding
the payment date times (ii) a fraction, the numerator
of which is one and the denominator of which is the
number of remaining installments (including the
installment being paid). The first such installment
shall be paid as soon as practicable after the end of
the Deferral Period and each subsequent installment
shall be paid on or about the anniversary of such first
payment. Each such installment shall be deemed made on
a pro rata basis from each of the different deemed
investments of the Deferral Account (if there is more
than one such deemed investment).
Section7.02. Termination of Service. If a
Participant has elected to have the balance of his/her
Deferral Account distributed upon Termination of
Service, the account balance of the Participant
(determined as of the most recent Valuation Date
preceding such Termination of Service) shall be
distributed upon Termination of Service in installments
or a lump sum in accordance with the Plan and as
elected in the Participation Agreement.
Section 7.03 . In-Service Distributions. Subject
to Section 7.02 hereof, if a Participant has elected to
defer Eligible Compensation under the Plan for a stated
number of years, the account balance of the Participant
(determined as of the most recent Valuation Date
preceding such Deferral Period) shall be distributed in
installments or a lump sum in accordance with the Plan
and as elected in the Participation Agreement.
Section 7.04. Voluntary Early Withdrawal.
Notwithstanding the provisions of Section 7.01 and any
Participation Agreement, a Participant shall be
entitled to elect to withdraw all of the balance in
his/her Deferral Account(s) in accordance with this
Section 7.04 by filing with the Committee such form, in
accordance with such procedures, as the Committee shall
determine from time to time. As soon as practicable
after receipt of such form by the Committee, the
Company shall pay an amount equal to ninety percent of
the balance in such Participant's Deferral Account(s)
(determined as of the most recent Valuation Date
preceding the date such election is filed) to the
electing Participant in a lump sum in cash, and the
Participant shall forfeit the remainder of such
Deferral Account(s). All Participation Agreements
previously filed by a Participant who elects to make a
withdrawal under this Section 7.04 shall be null and
void after such election is filed (including without
limitation Participation Agreements with respect to
Plan Years or performance periods that have not yet
been completed), and such a Participant shall not
thereafter be entitled to file any Participation
Agreements under the Plan with respect to the first
Plan Year that begins after such election is made.
Section 7.05 . Payments in Connection with Change
of Control. Notwithstanding anything contained in this
Plan to the contrary, upon a Change of Control, the
Company shall immediately pay to each Participant in a
lump sum in cash the balance in his/her Deferral
Account(s) (determined as of the most recent Valuation
Date preceding the Change of Control).
Section 7.06. Withholding of Taxes.
Notwithstanding any other provision of this Plan, the
Company shall withhold from payments made hereunder any
amounts required to be so withheld by any applicable
law or regulation.
ARTICLE 8
Beneficiary Designation
Section 8.01. Beneficiary Designation. Each
Participant shall have the right, at any time, to
designate any person, persons or entity as his
Beneficiary or Beneficiaries. A Beneficiary designation
shall be made, and may be amended, by the Participant
by filing a written designation with the Committee, on
such form and in accordance with such procedures as the
Committee shall establish from time to time.
Section 8.02. No Beneficiary Designation. If a
Participant fails to designate a Beneficiary as
provided above, or if all designated Beneficiaries
predecease the Participant, then the Participant's
Beneficiary shall be deemed to be the Participant's
estate.
ARTICLE 9
Amendment and Termination of Plan
Section 9.01. Amendment. The Board or the
Committee may at any time amend this Plan in whole or
in part, provided, however, that no amendment shall be
effective to decrease the balance in any Deferral
Account as accrued at the time of such amendment, nor
shall any amendment otherwise have a retroactive
effect.
Section 9.02. Company's Right to Terminate. The
Board or the Committee may at any time terminate the
Plan with respect to future Participation Agreements.
The Board or the Committee may also terminate the Plan
in its entirety at any time for any reason, including
without limitation if, in its judgment, the continuance
of the Plan, the tax, accounting, or other effects
thereof, or potential payments thereunder would not be
in the best interests of the Company, and upon any such
termination, the Company shall immediately pay to each
Participant in a lump sum the accrued balance in his
Deferral Account (determined as of the most recent
Valuation Date preceding the termination date).
ARTICLE 10
Miscellaneous
Section 10.01. Unfunded Plan. This Plan is
intended to be an unfunded plan. All payments pursuant
to the Plan shall be made from the general funds of the
Company and no special or separate fund shall be
established or other segregation of assets made to
assure payment. No Participant or other person shall
have under any circumstances any interest in any
particular property or assets of the Company as a
result of participating in the Plan. Notwithstanding
the foregoing, the Company may (but shall not be
obligated to) create one or more grantor trusts, the
assets of which are subject to the claims of the
Company's creditors, to assist it in accumulating funds
to pay its obligations under the Plan.
Section 10.02. Nonassignability. Except as
specifically set forth in the Plan with respect to the
designation of Beneficiaries, neither a Participant nor
any other person shall have any right to commute, sell,
assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be
unassignable and non-transferable. No part of the
amounts payable shall, prior to actual payment, be
subject to seizure or sequestration for the payment of
any debts, judgments, alimony or separate maintenance
owed by a Participant or any other person, nor be
transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or
insolvency.
Section 10.03. Validity and Severability. The
invalidity or unenforceability of any provision of this
Plan shall not affect the validity or enforceability of
any other provision of this Plan, which shall remain in
full force and effect, and any prohibition or
unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in
any other jurisdiction.
Section 10.04. Governing Law. The validity,
interpretation, construction and performance of this
Plan shall in all respects be governed by the laws of
the State of Connecticut, without reference to
principles of conflict of law, except to the extent pre-
empted by federal law.
Section 10.05. Status as a Director. This Plan
does not constitute a contract of employment or impose
on the Participant or the Company any obligation for
the Participant to remain a director of the Company or
change the policies of the Company and its affiliates
regarding termination of services as a director.
Section 10.06. Underlying Compensation
Arrangements. Nothing in this Plan shall prevent the
Company or the Board from modifying, amending or
terminating the compensation arrangements for directors
of the Company.
APPENDIX A
Effective as of January 1, 1997, the deemed
investment choices under the Plan are as follows:
Mutual Funds
Merrill Lynch Capital Funds, Inc.
Merrill Lynch Global Allocation Fund, Inc.
Merrill Lynch Basic Value Fund, Inc.
Other
Merrill Lynch Equity Index Trust
Treasury Rate of Return
Pitney Bowes Phantom Share Fund
Pitney Bowes Stock Options