Exhibit 10.4

                             PARLEX CORPORATION

                  1996 OUTSIDE DIRECTORS' STOCK OPTION PLAN

      incorporated under the laws of the Commonwealth of Massachusetts
                     (hereinafter called the "Company")

                     STOCK OPTION NUMBER:      GRANTED:

                         FOR SHARES OF COMMON STOCK

                               AT $ PER SHARE

                                     TO:

               THIS OPTION IS EXERCISABLE ONLY WITHIN CERTAIN
                 PERIODS AND ONLY UPON THE TERMS AND SUBJECT
                     TO THE CONDITIONS SET FORTH HEREIN

      THIS MEMORANDUM WITNESSETH THAT: This option is granted under the 1996
Outside Directors' Stock Option Plan (hereinafter called the "Plan") of the
Company and is subject to the provisions thereof which are made a part
hereof by this reference. The Company hereby grants to the Outside Director
whose name is hereinabove set forth and who is sometimes hereinafter called
"the Optionee" the following option:

      ARTICLE FIRST.
      -------------

            (a)   Subject to the terms and conditions set forth herein, the
      Optionee is hereby given the right and option to purchase from the
      Company at option price per share an aggregate of number of shares
      shares of the Common Stock of the Company during certain periods
      hereinafter stated and in the manner hereinafter set forth.

            Notwithstanding any provision of this memorandum or of the Plan,
      the option to purchase hereunder is not exercisable after the
      expiration of ten years from the date this option is granted. The last
      day of said ten-year period is herein called the "specified
      termination date." The option to purchase hereunder (unless sooner
      terminated) may be exercised, in whole or in part, one year from the
      date of the grant of the Option.


<PAGE>


            (b)   All exercise periods shall end on the specified
      termination date. In the event the Optionee ceases to be a member of
      the Board of Directors of the Company for any reason other than death
      or disability, any then unexercised options granted to such Optionee
      shall, to the extent not then exercisable, immediately terminate and
      become void, and any options which are then exercisable but have not
      been exercised at the time the Optionee so ceases to be a member of
      the Board of Directors may be exercised, to the extent they are then
      exercisable, by the Optionee within a period of thirty (30) days
      following such time the Optionee so ceases to be a member of the Board
      of Directors, but in no event later than the expiration date of the
      option.

            (c)   In the event that an Optionee ceases to be a member of the
      Board of Directors of the Company by reason of his disability or
      death, any option granted to such Optionee shall be immediately and
      automatically accelerated and become fully vested and all unexercised
      options shall be exercisable by the Optionee (or by the Optionee's
      personal representative, heir or legatee, in the event of death)
      during the period ending one hundred eighty (180) days after the date
      the Optionee so ceases to be a member of the Board of Directors, but
      in no event later than the expiration date of the option.

            (d)   In the event of a Change of Control (as defined herein),
      all options outstanding (whether or not then exercisable) as of the
      date of such Change in Control shall automatically become vested and
      fully exercisable, but in no event shall they be exercised later than
      the specified expiration date of the option. For purposes of the Plan,
      the term "Change of Control" means the happening of any of the
      following: (i) when any "person," as such term is used in Sections
      13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Act")
      (other than the Company or a subsidiary or any employee benefit plan
      (including its trustee) of either the Company or a subsidiary) becomes
      the "beneficial owner" (as defined in Rule 13d-3 under the Act),
      directly or indirectly of securities of the Company representing 30
      percent or more of the combined voting power of the Company's then
      outstanding securities; or (ii) the occurrence of a transaction
      requiring stockholder approval for the acquisition of the Company by
      an entity other than the Company or its subsidiary through purchase or
      assets, or by merger, or otherwise; or (iii) if, as a result of, or in
      connection with, any tender or exchange offer, merger or other
      business combination, sale of assets or contested election, or any
      combination of the foregoing transactions, the persons who were
      directors of the Company before such transaction shall cease to
      constitute a majority of the Board of Directors of the Company or of
      any successor institution. For purposes of this Section, the term
      "person" shall exclude all persons who are currently officers or
      directors of the Company, or spouses, blood relatives or stepchildren
      of such officers or directors, and trusts for the benefit of any such
      persons, and the estates of any such persons.


<PAGE>  2


      ARTICLE SECOND.
      --------------

            (a)   This option is not transferable by the said Optionee
      otherwise than by will or the laws of descent and distribution, and is
      exercisable, during the Optionee's lifetime, only by him, and by him
      only while he is a member of the Board of Directors of the Company.

            (b)   The term "Estate" as used in this Section or elsewhere
      means the executors or administrators of the estate of the Optionee
      after his decease or other persons succeeding, to the extent permitted
      by the provisions of this option, to the rights of the Optionee after
      his decease by his will or the laws of descent and distribution, as
      the case may be.

            (c)   The term "Holder", as used in this Section and all
      subsequent provisions of this option, shall mean the Optionee and, if
      the Optionee shall have deceased, his Estate as hereinbefore defined.
      The Holder shall not, by virtue of this option, be deemed to be a
      holder of any shares purchasable hereunder or to be entitled to the
      rights or privileges of a holder of such shares unless and until they
      shall have been in fact issued to him after exercise of the option
      with respect to such shares.

            (d)   This option is subject to all laws and regulations of any
      governmental authority which may be applicable thereto and,
      notwithstanding any of the provisions hereof, the Holder agrees that
      the option granted hereby will not be exercised nor will the Company
      be obligated to issue any shares of stock hereunder if the exercise
      thereof or the issuance of such shares, as the case may be, would
      constitute a violation by the Holder or the Company of any such law or
      regulation or of any provision thereof.

      ARTICLE THIRD.
      -------------

            (a)   This option may be exercised only by delivery of written
      notice of exercise to the Company as hereinafter provided, and
      delivery of such notice shall constitute exercise thereof. Such notice
      shall state the number of shares with respect to which the option is
      being exercised, shall be accompanied by cash or a certified check for
      the option price and, unless the Company shall at the time expressly
      waive this requirement in connection with such exercise of the option,
      shall contain a statement that the option is being exercised only with
      a view to investment in, and not with a view to the disposition of,
      the shares with respect to which the option is then being exercised.
      Payment may also be in whole or in part in shares of the Common Stock
      of the Company already owned by the Optionee exercising the option,
      valued at the Market Price determined in accordance with the
      provisions of Section (b) of Article Third herein provided, however,
      that there shall be no such exercise at any one time as to fewer than
      one hundred (100) shares or all of the remaining shares then
      purchasable by the person or persons exercising the option, if fewer
      than one hundred (100) shares.


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            (b)   For purposes of this Plan, the Market Price shall be the
      closing sale price of a share of Common Stock as listed on the NASDAQ
      National Market System on the date of grant (or the last closing sale
      price of the next business day in the event there were no such trades
      on the date of grant).

            (c)   As soon as reasonably feasible after the receipt of such
      notice and payment, the Company will deliver or cause to be delivered
      to the Holder at the office of the Company, certificates for the
      number of shares with respect to which the option has been exercised,
      registered in the name of the Holder. Notwithstanding the foregoing,
      as a condition precedent to the delivery of any shares hereunder, the
      Company shall have the right to require the Holder to remit to the
      Company an amount sufficient to satisfy federal, state and local
      withholding tax requirements, if and to the extent required by law.
      The shares may be registered in the name of a person other than a
      Holder if the Holder is an Estate. Notwithstanding the foregoing, if
      any law or regulation of the Securities and Exchange Commission or
      other body having jurisdiction shall require the Company or the Holder
      to take any action in connection with the shares specified in such
      notice, then delivery of such shares to the Holder shall be deferred
      for the period necessary to take such action.

            (d)   Delivery shall be made as of the date of delivery of
      notice of exercise of the option with respect thereto, and the Holder
      shall be entitled to receive all dividends and distributions (payable
      in cash, stock, or otherwise) or the equivalent thereof payable to
      stockholders of record subsequent to delivery of notice of exercise of
      the option with respect to such shares and prior to the date of
      issuance and delivery of the shares pursuant thereto. Except as above
      provided with respect to the payment of withholding taxes, the Company
      will pay all federal original issue taxes on such issue and delivery,
      and all other fees or expenses necessarily incurred by the Company in
      connection therewith; provided, however, that all federal and state
      transfer taxes payable in respect of shares of Common Stock of the
      Company issued and delivered under this option in a name other than
      the name of the person to whom this option is granted shall, upon the
      delivery of such shares, be paid by the recipient thereof.

      ARTICLE FOURTH.
      --------------

      If any of the following events shall occur prior to the specified
termination date or other termination of this option, the aggregate number
of shares covered by this option (or the balance of the shares covered
thereby, if theretofore the option has been exercised in part) and the
purchase price payable therefor, shall in each instance be changed or
adjusted as follows:

            (a)   If the Company shall, at any time while this option is
      outstanding and prior to any termination thereof, declare and pay in
      Common Stock any dividend upon shares of its Common Stock outstanding,
      there shall in


<PAGE>  4


      any such event be added to the number of shares of Common Stock which
      might, immediately prior to such dividend, be purchased pursuant to
      this option the number of shares of Common Stock of the Company which
      the Holder would have received or become entitled to receive by way of
      such dividend if, at the date for the determination of stockholders
      entitled to receive such dividend, the Holder had been the holder of
      record of the number of shares of Common Stock then covered by this
      option; and the then option price per share shall be correspondingly
      adjusted so that the option price per share, thereafter and prior to
      any other adjustment therein pursuant to the provisions hereof, shall
      be the quotient resulting from dividing the option price per share of
      Common Stock in effect immediately prior to such stock dividend by the
      number of shares which, by virtue of the foregoing provisions of this
      paragraph, the Holder shall be entitled to purchase at the time of
      purchase for each share he was entitled to purchase immediately prior
      to such dividend. The additional shares, which are purchasable by
      reason of the foregoing provisions of this paragraph, may be purchased
      only within such period or periods as may be purchased the shares on
      account of which, by virtue of the foregoing provisions of this
      paragraph, such additional shares may be purchased.

            (b)   If the Company shall, at any time while this option is
      outstanding, reclassify the shares of its Common Stock into a greater
      or lesser number of shares of Common Stock, the number of shares which
      may, after any such reclassification, be purchased pursuant to this
      option shall be the number of shares which the Holder would have
      received or become entitled to receive upon such reclassification if
      the Holder had, prior to such reclassification, been the holder of
      record of the number of shares of Common Stock then covered by this
      option; and the option price per share shall be correspondingly
      adjusted so that, in the event of a reclassification into a greater
      number of shares, the option price per share, thereafter and prior to
      any other adjustment therein pursuant to the provisions hereof, shall
      be the quotient resulting from dividing the option price per share of
      Common Stock in effect immediately prior to such reclassification by
      the number of shares of Common Stock into which each share of such
      stock shall be reclassified, and, in the event of a reclassification
      into a lesser number of shares, the option price per share, thereafter
      and prior to any other adjustment therein pursuant to the provisions
      hereof, shall be the product resulting from multiplying the option
      price per share of Common Stock in effect immediately prior to such
      reclassification by the number of shares of Common Stock required to
      constitute one share of the reclassified number of shares. The number
      of shares which are purchasable by reason of the foregoing provisions
      of this paragraph within any specified fixed period or periods shall
      be increased or decreased in that proportion which the number of
      shares purchasable after any such reclassification bears to the number
      of shares purchasable immediately before any such reclassification.

            (c)   If, at any time while this option is outstanding, there
      shall be a reorganization or recapitalization of the Company or a
      consolidation or merger


<PAGE>  5


      of the Company into or with another company or a sale of all or
      substantially all of the assets of the Company, adequate provision
      shall be made so that, in lieu of each share of Common Stock then
      covered by this option, there shall thereafter be substituted
      hereunder during the period hereof such other share or shares of
      stock, security or securities, or assets as would have been issuable
      or payable in respect of or in exchange for such share had the Holder
      on the record date for the determination thereof been the record
      holder of such share; provided, however, that in any such event or in
      anticipation of any such event, the period or periods within which
      this option may be exercised may be accelerated by the Company by vote
      of the Board of Directors to a date not less than thirty days after
      notice of such acceleration shall have been mailed to the Holder.

            (d)   If the Company shall take any action (other than by way of
      the declaration or payment of a dividend or dividends (exclusive of
      stock dividends) thereon and other than such action as is described or
      referred to in clauses (a), (b), or (c) of this ARTICLE FOURTH hereof
      which, in the opinion of the Board of Directors, would materially
      dilute the Common Stock or other securities then covered by this
      option, the Board of Directors shall appoint a firm of independent
      public accountants (which may be the firm which regularly examines and
      reports upon the financial statements of the Company) which shall give
      their opinion as to the adjustment, if any, in the then option price
      per share required to protect against such dilution, and the option
      price per share shall thereupon become the price expressed in such
      opinion.

            (e)   No fraction of or fractional shares shall be purchasable
      or delivered upon purchase hereunder.

      Upon any adjustment required as hereinabove provided of the purchase
price or the number of shares purchasable upon the exercise of this option,
the Company agrees forthwith to deliver to the Holder a certificate, signed
by its President or Treasurer, setting forth the number of shares, and the
price per share therefor, thereafter purchasable on the exercise of this
option.

      The Company will, at all times during the term of this option, reserve
and keep available out of shares of its Common Stock authorized and unissued
such number of shares of its Common Stock as shall be sufficient to satisfy
the requirements of this option.

      This option shall be binding upon any company into which the Company
is merged or with which it is consolidated, and, unless clearly
inapplicable, references herein to the Company shall be deemed to include
any such company.

      ARTICLE FIFTH.
      -------------


<PAGE>  6


      Any notice to be given to the Company hereunder shall be deemed
sufficient if delivered in writing at the office of the Treasurer of the
Company or at such other address as the Company may hereafter designate and
shall be effective when so delivered.

      Any notice to be given to the Holder hereunder shall be deemed
sufficient if delivered in person to the Holder or at his address furnished
to the Company or when deposited in the mail addressed to the Holder at such
address and shall be effective when so delivered or when so deposited.

      ARTICLE SIXTH.
      -------------

      The Plan shall be administered by the Board of Directors (the "Board")
of the Company. The Board shall have authority, not inconsistent with the
express provisions of the Plan (a) to grant Options in accordance with the
Plan to such directors as are eligible to receive Options; (b) to prescribe
the form or forms of instruments evidencing Options and any other
instruments required under the Plan and to change such forms from time to
time; (c) to adopt, amend and rescind rules and regulations for the
administration of the Plan; and (d) to interpret the Plan and decide any
questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations of the Board shall be
conclusive and shall bind all parties.


<PAGE>  7


IN WITNESS WHEREOF, the Company has caused this option to be signed by its
duly authorized officer and its corporate seal to be hereunto affixed this
__th day of _________, _____.


ATTEST:                                PARLEX CORPORATION



__________________________________     By:________________________________
Name:                                       Name:
Title:                                      Title:


      I hereby acknowledge receipt of this Option Agreement covering my
stock option under the Parlex Corporation 1996 Outside Directors' Stock
Option Plan, and the enclosed Plan, and in connection with the grant of the
Option hereunder to me, hereby agree that the contents of this Option
Agreement and the terms and conditions of the Plan are acceptable to me and
that I shall be bound thereby.



            ___________________________      __________
                     Optionee                   Date


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