<PAGE>
                          UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                       Washington, DC 20549

                             FORM 10-K

(Mark One)
/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
     SECURITIES EXCHANGE ACT OF 1934

     For the fiscal year ended December 31, 1996

                                OR 

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF  
     THE SECURITIES EXCHANGE ACT OF 1934

     For the transition period from          to
                                    --------    --------              

                 Commission file number: 0-27744


                            PCD Inc.
     (Exact name of registrant as specified in its charter)

          Massachusetts                     04-2604950    
(State or other jurisdiction             (I.R.S. Employer
 of incorporation or organization)       Identification No.)

                       2 Technology Drive
                         Centennial Park
                     Peabody, Massachusetts        
            (Address of principal executive offices)

                           01960-7977
                           (Zip Code)

Registrant's telephone number, including area code: 508-532-8800

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes   X     No
                                        -----      -----    

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K is not contained herein, and will not be contained, to the 
best of registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to this
 Form 10-K. / /

The aggregate market value of the registrant's Common Stock held by 
non-affiliates of the registrant was approximately $90,554,645 as of February 
26, 1997, based upon the closing sale price on Nasdaq for that date.

There were 5,889,733 shares of the registrant's Common Stock, $0.01 par value, 
issued and outstanding as of February 26, 1997.


               DOCUMENTS INCORPORATED BY REFERENCE

Certain of the information called for by Parts I through IV of this report on 
Form 10-K is incorporated by reference from certain portions of the Proxy 
Statement of the registrant to be filed pursuant to Regulation 14A and to be 
sent to stockholders in connection with the Annual Meeting of Stockholders to 
be held on May 9, 1997.  Such Proxy Statement, except for the parts therein 
that have been specifically incorporated herein by reference, shall not be 
deemed "filed" as part of this report on Form 10-K.













































<PAGE>
                             PART I

ITEM 1. BUSINESS

FORWARD LOOKING INFORMATION

   Statements in this report concerning the Company's future revenues, 
profitability, financial resources, product mix, market demand and product 
development and other statements in this report concerning the future results 
of operations, financial condition and business of the Company are 
forward-looking statements made pursuant to the safe harbor provisions of the 
Securities Exchange Act of 1934, as amended.  The Company's actual results in 
the future may differ materially from those projected in the forward-looking 
statements due to risks and uncertainties that exist in the Company's 
operations and business environment including, but not limited to:

   DEPENDENCE ON PRINCIPAL CUSTOMERS.  Altera Corporation ("Altera"), a 
provider of high performance, high density programmable-logic devices, has 
been the Company's largest customer since 1994. Altera accounted for 17.4%, 
16.6% and 15.3% of the Company's net sales for the years ended December 31, 
1996, 1995 and 1994, respectively. Substantially all of the Company's sales of 
production/PLD sockets (formerly known as programmable-logic interconnect 
sockets or "PLIS") during this period have been to Altera.  The Company has no 
agreement with Altera providing minimum purchase obligations, and there is no 
assurance that Altera will purchase the Company's products beyond those 
covered by released purchase orders. The loss of, or significant decrease in, 
business from Altera for any reason would have a material adverse effect on 
the financial condition, results of operations and business of the Company.

   DEPENDENCE ON SEMICONDUCTOR INDUSTRY.  The Company's burn-in sockets and 
production/PLD sockets are used by either producers or testers of integrated 
circuits ("ICs") and OEMs. For the year ended December 31, 1996, the Company 
derived 37.6% of its net sales from these products. The Company's future 
success will depend in significant part on the vitality of the related IC 
package industry. Historically, this industry has been driven by both the 
technology requirements and unit demands of the semiconductor industry. 
Depressed general economic conditions and cyclical downturns in the IC 
industry have had an adverse economic effect on the IC package industry and 
the related burn-in socket and production/PLD markets. In addition, the 
product cycle of existing IC package designs and the timing of new IC package 
development and introduction can affect the demand for burn-in sockets and 
production/PLD sockets. Reduced demand for ICs and their related packages 
would have a material adverse effect on the financial condition, results of 
operations and business of the Company.

   FLUCTUATIONS IN OPERATING RESULTS.  The variability of the level and timing 
of orders from, and shipments to, major customers may result in significant 
fluctuations in the Company's 

                         PAGE 2 OF 52
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quarterly results of operations. The Company generally does not obtain 
long-term purchase orders or commitments but instead seeks to work closely 
with its customers to anticipate the volume of future orders. Generally, 
customers may cancel, reduce or delay purchase orders and commitments without 
penalty. Cancellations, reductions or delays in orders by a customer or groups 
of customers could have a material adverse effect on the financial condition, 
results of operations and business of the Company. In addition to the 
variability resulting from the short-term nature of its customers' 
commitments, other factors have contributed, and may in the future contribute, 
to such fluctuations. These factors may include, among other things, 
customers' announcement and introduction of new products or new generations of 
products, evolutions in the life cycles of customers' products, timing of 
expenditures in anticipation of future orders, effectiveness in managing 
manufacturing processes, changes in cost and availability of labor and 
components, shifts in the Company's product mix and changes or anticipated 
changes in economic conditions. In addition, it is not uncommon in the 
electronic connector industry for results of operations to display a seasonal 
pattern of declining revenues in the third quarter of the calendar year. 
Although the Company's results of operations did not display this pattern in 
the years ended December 31,  1995 and 1994, it did occur in 1996 and it is 
likely that this pattern will present itself in the future. Because the 
Company's operating expenses are based on anticipated revenue levels and a 
high percentage of the Company's operating expenses are relatively fixed, any 
unanticipated shortfall in revenue in a quarter may have a material adverse 
impact on the Company's results of operations for the quarter. Results of 
operations for any period should not be considered indicative of the results 
to be anticipated for any future period.

   TECHNOLOGICAL EVOLUTION.  The rapid technological evolution of the 
electronics industry requires the Company to anticipate and respond rapidly to 
changes in industry standards and customer needs and to develop and introduce 
new and enhanced products on a timely and cost-effective basis. In particular, 
the Company must target its development of burn-in and production/PLD sockets 
based on which next generation IC package designs the Company expects to be 
successful. The Company must manage transitions from products using present 
technology to those that utilize next generation technology in order to 
maintain or increase sales and profitability, minimize disruptions in customer 
orders and avoid excess inventory of products that are less responsive to 
customer demand. The failure of the Company to respond to changes in industry 
standards and customer needs, develop and introduce new products and manage 
product transitions would have a material adverse effect on the financial 
condition, results of operations and business of the Company.

   MANAGEMENT OF GROWTH.  The Company has grown rapidly in recent years. A 
continuing period of rapid growth could place a significant strain on the 
Company's management, operations and other resources. The Company's ability to 
manage its growth will 

                         PAGE 3 OF 52
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require it to continue to invest in its operational, financial and management 
information systems, and to attract, retain, motivate and effectively manage 
its employees.  The inability of the Company's management to manage growth 
effectively would have a material adverse effect on the financial condition, 
results of operation and business of the Company.

   PROPRIETARY TECHNOLOGY AND PRODUCT PROTECTION.  The Company's success 
depends in part on its ability to maintain the proprietary and confidential 
aspects of its products as they are released. The Company seeks to use a 
combination of patents and other means to establish and protect its 
proprietary rights. There can, however, be no assurance that the precautions 
taken by the Company will be adequate to protect the Company's technology. In 
addition, many of the Company's competitors have obtained or developed, and 
may be expected to obtain or develop in the future, patents or other 
proprietary rights that cover or affect products that perform functions 
similar to those performed by products offered by the Company. There can be no 
assurance that, in the future, the Company's products will not be held to 
infringe patent claims of its competitors, or that the Company is aware of all 
patents containing claims that may pose a risk of infringement by its 
products. The inability of the Company for any reason to protect existing 
technology or otherwise acquire such technology could prevent distribution of 
the Company's products, having a material adverse effect on the financial 
condition, results of operations and business of the Company.

   PATENT LITIGATION.  The Company became aware of patent infringement actions 
brought by Wayne K. Pfaff, an individual residing in Texas ("Pfaff"), against 
Wells Electronics, Inc., a burn-in connector manufacturer unrelated to the 
Company that offers certain products in competition with the Company's 
products. One of these actions is still pending. On August 21, 1995, the 
Company's wholly-owned subsidiary, CTi Technologies, Inc. ("CTi"), filed an 
action against Pfaff and Plastronics Socket Company, Inc., a corporation 
affiliated with Pfaff, seeking a declaratory judgment to the effect that two 
United States patents issued to Pfaff are invalid and are not infringed by 
CTi. Pfaff has filed a counterclaim alleging that CTi infringes Pfaff's patent 
that relate to certain burn-in sockets for leadless IC packages and has 
requested an award of damages.  Pfaff has also sought a permanent injunction 
against further infringement by CTi of the above referenced patent.  Pfaff may 
also, at any time, seek an injunction against the manufacture and sale in the 
United States of certain CTi products. There can be no assurance that this 
litigation will be resolved without material adverse effect on the financial 
condition, results of operations and business of the Company.

   COMPETITION.  The electronic connector industry is highly competitive and 
fragmented, with over 1,500 manufacturers worldwide. The Company believes that 
competition in its targeted segments is primarily based on design, 
responsiveness, quality, 
 

                        PAGE 4 OF 52
<PAGE>
price, reputation and reliability. The Company's significant competitors are 
much larger and have substantially broader product lines and greater financial 
resources than the Company. There can be no assurance that the Company will 
compete successfully, and any failure to compete successfully would have a 
material adverse effect on the financial condition, results of operations and 
business of the Company.

   CONTROL BY EXISTING STOCKHOLDERS.  The current officers, directors and 
principal stockholders of the Company beneficially own approximately 54.6% of 
the outstanding shares of the Common Stock of the Company as of December 31, 
1996. Accordingly, such persons, if they act together, will have effective 
control over the Company through their ability to control the election of 
directors and all other matters that require action by the Company's 
stockholders, irrespective of how other stockholders may vote. Such persons 
could prevent or delay a change in control of the Company which may be favored 
by a majority of the remaining stockholders. Such ability to prevent or delay 
such a change in control of the Company also may have an adverse effect on the 
market price of the Company's Common Stock. 

   DEPENDENCE ON KEY PERSONNEL.  The Company is largely dependent upon the 
skills and efforts of John L. Dwight, Jr., its Chairman of the Board, Chief 
Executive Officer and President, Jeffrey A. Farnsworth, its Vice President and 
General Manager -- CTi, and other officers and key employees. The Company does 
not have employment agreements with any of its officers or key employees 
providing for their employment for any specific term. The loss of key 
personnel or the inability to hire or retain qualified personnel could have a 
material adverse effect on the financial condition, results of operations and 
business of the Company.

   DEPENDENCE UPON INDEPENDENT DISTRIBUTORS.  Sales through such distributors 
accounted for 28.1%, 35.7% and 37.4% of the Company's net sales for the years 
ended December 31, 1996, 1995 and 1994, respectively. The Company's agreements 
with its independent distributors are nonexclusive and may be terminated by 
either party upon 30 days written notice, provided that if the Company 
terminates the agreement with an independent distributor, the Company will be 
obligated to purchase certain of such distributor's pre-designated unsold 
inventory shipped by the Company within an agreed-upon period prior to the 
effective date of such termination. The Company's distributors are not within 
the control of the Company, are not obligated to purchase products from the 
Company, and may also sell other lines of products. There can be no assurance 
that these distributors will continue their current relationships with the 
Company or that they will not give higher priority to the sale of other 
products, which could include products of competitors. A reduction in sales 
efforts or discontinuance of sales of the Company's products by its 
distributors could lead to reduced sales and could materially adversely affect 
the Company's business, results of operations and financial condition. The 
Company grants to its distributors  limited inventory return and stock 
rotation rights. The Company 

                        PAGE 5 OF 52
<PAGE>
has not historically experienced any significant product returns, and the 
Company is not aware of any factor that is likely to cause this pattern to 
change. However, in the event the Company's distributors were to increase 
their general levels of inventory of the Company's products, the Company could 
face an increased risk of product returns from its distributors. There can be 
no assurance that the Company's historical return rate will remain at a low 
level in the future or that such product returns will not have a material 
adverse effect on the Company's financial condition, results of operations and 
business.

   PRODUCT LIABILITY.  The Company's products provide electrical connections 
between various electrical and electronic components. Any failure by the 
Company's products could result in claims against the Company. Except with 
respect to avionics products, the Company does not maintain insurance to 
protect against possible claims associated with the use of its products. A 
successful claim brought against the Company could have a material adverse 
effect on the financial condition, results of operations and business of the 
Company. Even unsuccessful claims could result in the Company's expenditure of 
funds in litigation and management time and resources. There can be no 
assurance that the Company will not be subject to product liability claims.

   ENVIRONMENTAL COMPLIANCE.  The Company is subject to a wide range of 
environmental laws and regulations relating to the use, storage, discharge and 
disposal of hazardous chemicals used during its manufacturing process. A 
failure by the Company to comply with present or future laws and regulations 
could subject it to future liabilities or the suspension of production. Such 
laws and regulations could also restrict the Company's ability to expand its 
facilities or could require the Company to acquire costly equipment or incur 
other significant expenses.


GENERAL

   PCD Inc. designs, manufactures and markets electronic connectors to defined 
niche markets in semiconductor, industrial equipment, and avionic industries 
worldwide. Headquartered in Peabody, Massachusetts, PCD focuses on four 
distinct product categories: industrial terminal blocks, avionic control 
connectors, burn-in sockets, and production/PLD sockets.  The Company employs 
a carefully targeted approach to product development and marketing, focusing 
on the key segments of each market which meet its growth and profit 
objectives.  Looking forward, the Company intends to use this strategy to 
further develop its product base in existing markets as well as to identify 
and expand into additional select electronic connector market.
 
   Industrial terminal blocks are used in industrial equipment systems that 
require input/output ("I/O") connectors to link the rugged electrical 
environment of operating equipment to the


                        PAGE 6 OF 52
<PAGE>
electrical environment of controllers and sensors.

   Avionic control connectors perform the same function as industrial 
connectors, but are designed and built to operate in the harsher environment 
and meet more critical performance requirements of avionics applications.

   Burn-in sockets, targeted at the semiconductor market, are 
specially-designed devices that connect ICs to printed circuit boards during 
burn-in, a testing process that is a critical step in the production of ICs.

   Production/PLD sockets target broader applications within the semiconductor 
market.  They are used to facilitate the handling and programming of high 
performance, high density programmable-logic devices and interconnect ball 
grid array ("BGA") packages to printed circuit boards in production 
applications.

   The Company believes it is benefitting from four trends affecting the 
electronics industry: (i) the increasing complexity of ICs and evolution of IC 
package designs, which favor growth in PCD's burn-in socket market; (ii) time 
to market pressures and the resulting growth in programmable-logic devices 
("PLD"), which foster greater demand in PCD's production/PLD socket market; 
(iii) the growing use of increasingly complex electronic controllers and 
sensors in industrial and avionics applications, which benefits PCD's 
industrial equipment and avionics markets; and (iv) the resurgence in the 
demand for both regional and large transport commercial aircraft.



BACKGROUND

   Electronic connectors are essential and pervasive links within all 
electronic systems and are found in virtually every product utilizing 
electronics, including computers and peripherals, VCRs, appliances, airplanes, 
automobiles, medical instruments, cellular telephones and controllers of 
industrial equipment. Electronic connectors enable an electrical current or 
signal to pass from one part of an electronic system to another part of the 
system by linking wires, cables, printed circuit boards and other electronic 
components to each other and to related equipment within the system.

   The electrical and electronic systems which utilize these connectors have 
become increasingly widespread and complex, in part, as a result of increased 
automation of business systems and manufacturing equipment. Consequently, the 
electronic connector industry has grown in size and electronic connectors have 
become more sophisticated.

   The growth in the electronics industry has resulted in equipment 
manufacturers placing greater demands for service and product complexity on 
the manufacturers of component parts, 

                         PAGE 7 OF 52
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including electronic connectors. Demand for smaller yet more powerful products 
has resulted in continued improvements in electronic systems in general and 
electronic connectors in particular. Product cycles continue to shorten and, 
as equipment manufacturers seek to reduce inventory and contend with pressures 
to keep up with new product innovations, time to market becomes increasingly 
important. The growing demands for electronic connector complexity, coupled 
with reduced product development cycles and delivery lead times, create a need 
for closer cooperation between connector suppliers and equipment 
manufacturers, often leading to new connector requirements and market 
opportunities.

   The electronic connector market is both large and broad. Bishop & 
Associates, a leading electronic connector industry market research firm, 
projects the total 1997 worldwide market at $21.7 billion. Market 
fragmentation is evidenced by the fact that  an industry market analyst cites 
over 1,500 total suppliers. While many of these companies produce connectors 
which are relatively standard and often produced in large quantities, a 
substantial portion of the industry is comprised of companies which produce 
both proprietary and standard products in relatively low volumes for 
specialized applications. An industry analyst has identified over 900 separate 
electronic connector product lines presently offered in the marketplace.

   The following table sets forth the relative percentages of the Company's 
total net sales attributable to the Company's product categories for the 
periods indicated:
<TABLE>
<CAPTION>
                                      Years Ended December 31,
                                      ------------------------ 
                                       1996     1995     1994
                                      ------   ------   ------ 
<S>                                  <C>      <C>      <C>
Product Categories
------------------
Industrial terminal blocks             22.5%    16.5%    25.0%
Avionics terminal blocks and sockets   39.9     30.8     39.9
Burn-in sockets                        20.2     35.7     19.8 
Production/PLD sockets                 17.4     17.0     15.3
                                      -----    -----    ----- 
     Total                            100.0%   100.0%   100.0% 
                                      =====    =====    ===== 
</TABLE>

   The Company markets its products on a worldwide basis and currently sells 
to its customers directly or through U.S. and foreign distributors in major 
electronics markets.  International sales, which consist of export sales and 
sales to foreign customers through U.S. distributors, were 22.1%, 28.0%, and 
12.5% in the years ended December 31, 1996, 1995 and 1994 respectively.

   PCD focuses its products and sales efforts in the selected key markets 
listed below.
       
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   INDUSTRIAL EQUIPMENT MARKET:  The industrial equipment market is comprised 
of a broad range of control, measurement and manufacturing equipment. Terminal 
blocks are most commonly used in this equipment to provide an electrical link 
between discrete functions, such as monitoring and measuring, and controlling 
devices, such as programmable-logic controllers ("PLCs"), stand-alone PCs and 
single function controllers. The use of terminal blocks has increased as 
electronic controllers and sensors in the industrial environment have evolved 
to control more complex, multi-function activities. In addition to increasing 
in number, these controllers and their connectors are becoming smaller and are 
being configured in increasing variations.

   PCD is benefitting from the proliferation of factory automation and the 
embedded electronics which control manufacturing processes. This trend has 
spurred demand not only for increased unit volume of terminal blocks but also 
for connectors with higher density and greater diversity of configurations.

AVIONICS MARKET:  The avionics market requires a diverse range of electronic 
connectors that are designed and manufactured specifically for avionics 
applications. Over the last few years, commercial aircraft applications have 
represented an increasingly important part of this market. The Company 
participates in selected areas of this market with terminal blocks and sockets 
that perform the same function as its industrial connectors but are designed 
to operate in the harsher environment and meet the more critical performance 
requirements of avionics applications.

BURN-IN MARKET:  The burn-in process seeks to uncover latent defects by 
exposing an Integrated Circuit to controlled stresses which simulate the first 
several hundred hours of operation.  During the test, the IC is secured in a 
burn-in socket, a high temperature electro-mechanical interconnect device, 
which is a permanent fixture on the burn-in printed circuit board.   After the 
test is completed, the IC must be removed from the socket.  PCD's sockets are 
designed to withstand elevated temperature and to permit easy 
insertion/removal of the IC before and after the test.

   The market strategy for PCD's burn-in sockets focuses on aggressive product 
development and penetration of worldwide markets.  The Company's product 
development is directed at surface-mount,  high lead count packages.  The 
primary product direction has been in quad flat pack ("QFP") burn-in sockets.  
In 1996, a total of 10 new QFP product configurations were added.  PCD now has 
one of the largest offerings of this product worldwide with more than 50 
different configurations.  

   PCD's Ball Grid Array burn-in socket was introduced in late 1996.  This 
product uses state-of-the-art, open top socket technology and provides end 
users with the industry's lowest applied cost.  The industry's BGA package is 
a high-density array using solder balls for its interconnect point instead of 
the traditional perimeter-leaded interconnect.  This package, which is still 
in its introductory phase, is meeting with wide 
 
                        PAGE 9 OF 52
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acceptance throughout the semiconductor industry.  Typical applications where 
this industry package is most competitive are surface-mount devices of  more 
than 100 leads where data transmission speed and package size are important 
considerations.  It is the Company's strategy to greatly expand its offering 
of BGA burn-in sockets in 1997 in the event that the expected customer demand 
materializes.

PRODUCTION/PLD MARKET:  Production sockets are used by OEMs to achieve 
flexibility in the assembly process, facilitate  upgrades by the end customer 
and reduce integrated circuit inventories and related expenses.  The current 
North American market for  production sockets is more than $400 million. 

   PCD's strategy in this market is to leverage the knowledge gained in 
developing burn-in sockets by transferring it into production sockets for 
specific niches.  Production sockets differ from their burn-in counterparts in 
that they are used in far greater quantities, have a lower selling price and 
are constructed of lower temperature materials.  Our initial product in this 
market is a socket/carrier system used by Altera in conjunction with their 
complex programmable-logic devices.

   The Altera carrier/socket system is used for the handling, programming and 
onboard electrical and mechanical prototyping of PLDs. The system consists of 
a carrier,  programming socket,  and  development socket. The demand for these 
products experienced significant fluctuations during 1996, but for the year 
achieved single-digit growth.

   A production BGA socket, which uses the same basic technology as the 
burn-in BGA socket, was introduced in early 1997.  The patented, surface mount 
production BGA socket has a low profile design and features zero insertion 
force for ease of use.  This design will accommodate the majority of package 
configurations available in the market today.

STRATEGY

   The Company's strategy is to identify and expand into selected electronic 
connector markets where it can establish a position of leadership. The Company 
intends to expand its presence in the markets in which it participates through 
internal investment in product development and possible strategic acquisitions 
of established manufacturers.  The elements of the Company's strategy are:

   -SELECTION OF KEY MARKETS:  The Company actively identifies and pursues 
areas of the electronic connector market which have the following 
characteristics: demand for electronic connectors with relatively high 
engineering content, high degree of customer interface, changing technology, 
significant growth opportunities and a market size appropriate to the 
Company's resources. Strategic market selection has contributed to the 
Company's compound growth rate in sales of 28% since 1994.

   - AGGRESSIVE PRODUCT DEVELOPMENT WITH MARKET LEADERS:  The Company seeks to 
anticipate evolving market requirements and 

                        PAGE 10 OF 52
<PAGE>
capitalize on its design capabilities to rapidly develop products to meet 
those needs. The Company works directly with customers, typically the market 
leaders, early in the design stage of their new product development to create 
proprietary products with industry-wide potential. In order to rapidly exploit 
new product opportunities and reduce product development lead time, the 
Company has introduced concurrent engineering, solid model design capability 
and the use of computer-generated prototype models in its development efforts. 
The Company realized approximately 43% of its net sales in 1996 from products 
introduced in the last five years.

   - CUSTOMER RESPONSIVENESS/SHORT DELIVERY CYCLE:  The Company believes that 
responding quickly to customers is a critical competitive factor in the 
markets in which it participates. Increasing emphasis on inventory reduction 
and shorter, more frequent production runs has reduced the delivery lead times 
required by customers. The Company believes it generally has the shortest lead 
times in the markets it serves, and its strategy is to maintain and leverage 
its leadership position.  Across all our markets, PCD's on-time percentage 
increased to a record 95%.

   - BEST COST, HIGH QUALITY PRODUCTION:  In the markets in which the Company 
competes, high quality is a prerequisite. The Company's goal is to be the best 
cost producer in each of these markets while maintaining high quality. The 
Company strives for continuous cost reduction and monitors its progress 
closely throughout the year. As part of this program, engineering and 
manufacturing work closely together from the inception of all new product 
programs. As a result, gross profit as a percentage of sales for 1996 was 
46.2%.

   - PENETRATION OF WORLDWIDE MARKETS:  The Company has recently placed 
greater emphasis on marketing its products on a worldwide basis and currently 
sells to its foreign customers directly and through U.S. and foreign 
distributors.  As a result, 22% of sales in 1996 were for customers outside 
the United States.

     
PRODUCTS AND APPLICATIONS

   The Company markets electronic connector products in four product 
categories, each targeting a specific market. These product categories are: 
industrial terminal blocks, avionic control connectors, burn-in sockets, and 
production/PLD sockets. The products offered within each product category can 
be characterized as either proprietary, application-specific or industry 
standard, as described below.

   Proprietary connectors are unique Company designs, but are introduced and 
sold to a broad market rather than a single customer.

   Application-specific connectors are products which are designed and 
developed for a specific application, normally for one customer. They can also 
subsequently be developed into proprietary product lines.


                         PAGE 11 OF 52
<PAGE>
   Industry standard connectors are normally produced in accordance with a 
relatively detailed industry or military design and performance 
specifications, and sold to the broad market to which those specifications 
relate.

  The Company markets over 3,500 products in a wide variety of product lines.  
The Company introduced three important product lines: FlexiPlug™, BGA 
burn-in socket, and BGA production sockets.

INDUSTRIAL TERMINAL BLOCKS

   Terminal blocks are most commonly used in industrial equipment to provide 
an electrical link between discrete functions, such as monitoring and 
measuring, and a controlling device. The Company's terminal blocks are 
targeted at the industrial and process control markets and such affiliated 
markets and applications as environmental control systems, food and beverage 
preparation, motor controls, machine tools, robotics, instrumentation and test 
equipment.

   Terminal blocks are used in applications where I/O power or signal wires 
are fed into a PLC or similar (and often simpler) control system, and a 
connector is required to interface between the electrical environment of 
relatively heavy wires and the electronic environment of controllers and 
sensors. The Company's terminal blocks connect to and capture the wires in 
screw-clamp terminations, and interface with printed circuit boards in a 
variety of manners. The Company concentrates on five major product lines 
within this market: pluggable terminal blocks, fixed mount terminal blocks, 
edgecard terminal blocks, high density terminal blocks and 
application-specific terminal blocks. Application-specific terminal blocks are 
developed for customers who are of strategic importance to the Company, 
represent significant potential volume and are recognized market leaders.

AVIONICS TERMINAL BLOCKS AND SOCKETS

   Avionics terminal blocks perform the same function as industrial terminal 
blocks, linking discrete wires that are individually terminated to a 
connector. However, avionics terminal blocks are designed to withstand the 
harsher environment and far more critical operating requirements to which they 
are subject. The primary differences are that: contacts are gold plated; wires 
are terminated by the crimped (metal deformation) technique rather than screw 
clamps; and individual wires are installed and removed from the connector 
through use of spring actuated locking devices. The avionics connectors are 
normally completely environmentally sealed through use of a silicon elastomer 
sealing grommet or are designed to operate in a sealed compartment.

   The Company concentrates on three major product lines in the avionics 
market:
 
   RELAY SOCKETS:  Relay sockets are used throughout aircrafts as a means to 
facilitate installation, repair and maintenance of electro-mechanical relays 
which are utilized for a wide variety of control purposes ranging from main 
control circuits to landing gear.
                         PAGE 12 OF 52
<PAGE>
   JUNCTION MODULES:  Junction modules are environmentally sealed, airborne 
terminal blocks.

   APPLICATION-SPECIFIC AVIONICS CONNECTORS:  Application-specific junction 
modules have been developed in conjunction with Boeing Commercial Aircraft for 
use on the 737-747-757-767 series of commercial aircraft; and with Douglas 
Aircraft Company for the MD11 and C17 aircraft. Application-specific relay 
sockets are marketed  to Boeing subcontractors for the 777 commercial aircraft 
program and to Douglas for the MD11 and C17 aircraft. 

BURN-IN SOCKETS

   Burn-in testing attempts to uncover latent defects by exposing an IC to 
controlled stresses which simulate the first several hundred hours of 
operation. During the test, the IC is secured in a socket, an 
electro-mechanical interconnect, which is a permanent fixture on the burn-in 
printed circuit board. After the test is completed, the IC must be removed 
from the socket. The socket is designed to permit easy insertion and removal 
of the IC before and after the test.

   ICs are generally encased in a plastic or ceramic package to protect the 
device and facilitate its connection with other system components. The IC 
package industry offers a wide variety of evolving package designs. New 
package designs are driven by the need to accommodate the increasing 
complexity and higher lead counts of ICs. Each unique IC package configuration 
requires a burn-in socket that corresponds to the package's specific 
characteristics. One of the most prevalent packages is the quad flat pack.

   QUAD FLAT PACK SOCKETS:  The QFP is a plastic package with leads on four 
sides. It is used for high lead count surface mount applications and is 
characterized by lead counts typically ranging between 44 and 304 leads. The 
QFP is currently a predominant and rapidly growing technology for packaging of 
leading edge ICs used in microprocessor, communication and memory 
applications.

   In 1992, the Company introduced a burn-in socket targeted at a leading edge 
package known as the thin quad flat pack ("TQFP").  The Company built on its 
success with TQFP sockets by introducing a QFP socket in 1993. The Company 
currently produces over 50 distinct sockets to accommodate a wide variety of 
QFP packages.

   Industry analysts estimate the QFP package has in excess of 20% of the 
surface mount market. Further, these analysts project that as pin counts 
increase, the market for QFP packages should grow at annual growth rates in 
excess of 20% over the next five years. The Company believes that its broad 
product line, superior customer support, just-in-time manufacturing and 
flexible, cost effective design capacity positions it favorably to participate 
in this projected growth.

   SMART POWER SOCKETS:  Smart power devices have both logic and discrete 
functions on the same silicon die, and are widely used in automotive (antilock 
braking systems, airbags), major appliance and electric power conditioning 
applications. Due to 
                        PAGE 13 OF 52
<PAGE>
the critical nature of their end use environment, smart power devices are 
required to be highly dependable and the majority undergo extended production 
burn-in testing prior to being used by the end customer.

   The Company believes it currently has the industry's most extensive smart 
power socket product line, which includes sockets for both through hole and 
surface mount package applications. In addition, the Company provides the 
industry's only family of zero insertion force smart power sockets. These are 
used in volume on fully automated IC assembly lines. The Company also sells 
sockets for more mature single function devices.

   BALL GRID ARRAY SOCKETS:  The BGA is a high density array package using 
solder balls for its interconnect point instead of the traditional 
perimeter-leaded interconnect.  The BGA package is in the introductory phase 
and is meeting with wide acceptance throughout the semiconductor industry.  
The typical applications where it is most competitive are surface mount 
packages over 100 leads where data transmission speed and package size and 
weight are important considerations.  During the fourth quarter of 1996, the 
Company introduced and shipped the first in a series of top loaded burn-in 
sockets which accept the BGA package.

   Industry analysts estimate that the BGA package will grow at a compound 
growth rate of 66% through the year 2000 and that it will surpass the present 
commonly used pin grid array package ("PGA") in total unit volume by 1998. 

PRODUCTION/PLD SOCKETS

   With the introduction of the production BGA socket in early 1997, the 
Company has expanded its product offering of production/PLD sockets.  Burn-in 
sockets are used to test and verify the IC, whereas the production sockets are 
used by the manufacturer as a means of attaching the IC to the printed 
circuit.  Production sockets differ from burn-in in that they are used in far 
higher volume, have a lower selling price and are construed of different 
materials.  They do not have to withstand the high temperatures or high number 
of insertions or withdrawals of the burn-in sockets.  The main reasons that 
these types of sockets are used by the manufacturer is flexibility in the 
assembly process, ease of replacement by the end customer, reduction in 
inventory of expensive IC components and protection against thermal mismatch.

   The market potential for this product is a multiple of the market potential 
of the burn-in socket.  Although the Company believes it has a superior 
technical product, it has no experience in distributing this type of product 
and the present sales and marketing resources will not be adequate to make a 
major success of this product.

   The Company jointly developed, manufactures, and is the sole supplier of 
application-specific production/PLD sockets for Altera, a producer of high 
performance, high density programmable-logic devices. Substantially all of the 
Company's     
                     PAGE 14 OF 52
<PAGE>
sales of production/PLD sockets have been to Altera. This product line 
consists of device carriers, programming sockets and development sockets for 
five different device configurations.

   DEVICE CARRIER:  One of the major means of packaging Altera's high 
performance, high density programmable-logic device is the QFP. The molded 
plastic carrier sheaths the QFP packaged device completely, supporting and 
segregating each lead in a separate molded cavity. The carrier fits over the 
device, protecting the leads, and provides a means to interconnect to a 
programming socket.

   PROGRAMMING SOCKET:  The programming socket is a zero insertion force 
socket which accepts the carrier-protected QFP programmable logic device. Once 
it is placed in the programming socket, the device can be electronically 
reconfigured.

   DEVELOPMENT SOCKET:  After the device has been programmed, the carrier is 
inserted into a development socket. A development socket is a 
surface-mountable socket that can be mounted on either a pre-production or a 
production board. A unique feature of the development socket is that the 
socket and the QFP device have identical footprints. This feature allows a 
seamless transfer from prototype to production without requiring costly and 
time intensive re-design of the printed circuit board.



CUSTOMERS

   In 1996, the Company's products were sold to over 1,000 customers in a wide 
range of industries and applications in its target markets. Roughly 40% of 
these customers are serviced by  the Company on a direct basis, and the 
balance are handled through a combination of direct sales and a U.S. and 
international network of authorized stocking distributors.  One customer 
accounted for approximately 17.4%, 16.6% and 15.3% of the Company's net sales 
in 1996, 1995 and 1994, respectively.  A second customer accounted for 
approximately 13.4% and 10.3% of the Company's sales in 1995 and 1994, 
respectively.  International sales increased to 22.1% in 1996 from 12.5% in 
1994.


SALES AND MARKETING

   The Company distributes its products through a combination of its own 
dedicated direct sales forces, a worldwide network of manufacturers 
representatives and authorized distributors.  The Company maintains separate 
sales forces for the burn-in and production/PLD markets, and for the 
industrial equipment and avionics markets.  The Company generally uses its 
direct sales forces and manufacturer representatives for large customers, new 
product introductions and application-specific products and uses its 
authorized distributors for smaller and medium-sized customers of standard and 
proprietary products.  The Company's sales and marketing program is focused on 
maintaining and achieving close working relationships with its customers early 
in
                         PAGE 15 OF 52
<PAGE>
the design phase of the customer's own product development.


COMPETITION

   The markets in which PCD operates are highly competitive, and the Company 
faces competition from a number of different manufacturers. The principal 
competitive factors effecting the market for the Company's products include 
design, responsiveness, quality, price, reputation and reliability. The 
Company believes that it competes favorably on these factors.

  Generally, the electronic connector industry is competitive and fragmented, 
with over 1,500 manufacturers worldwide. Competition among manufacturers of 
application-specific connectors in the industrial terminal blocks market is 
particularly fragmented and depends greatly on the customer, market and 
specific nature of the requirement. Competition is similarly fragmented in the 
avionics market, but there are fewer competitors due to the demanding nature 
of the military and customer specifications which control much of the markets 
and the cost and time required to tool and qualify military standard parts. 
Competition in the burn-in market, however, is highly concentrated among a 
small number of significant competitors. The production/PLD market consists of 
two products; the sockets PCD produces exclusively for Altera and their 
franchised distributors for which there is no known competition and the BGA 
production sockets which are in  a new and evolving market.  At this time 
there are a number of companies that are attempting to enter the production 
socket market, however, there is no clearly identified competitor.  In each of 
the markets in which the Company participates, the Company's significant 
competitors are much larger and have substantially broader product lines and 
greater financial resources than the Company. There can be no assurance that 
the Company will compete successfully, and any failure to compete successfully 
could have a material adverse effect on the financial condition, results of 
operations and business of the Company.


BACKLOG

   The Company defines its backlog as of any date as orders that are scheduled 
for delivery within 12 months from such date. The Company estimates that its 
backlog of unfilled orders was approximately $7.3 million and $6.2 million at 
December 31, 1996 and 1995, respectively. The level and timing of orders 
placed by the Company's customers vary due to customer attempts to manage 
inventory, changes in manufacturing strategy and variations in demand for 
customer products due to, among other things, introductions of new products, 
product life cycles, competitive conditions or general economic conditions. 
The Company generally does not obtain long-term purchase orders or commitments 
but instead seeks to work closely with its customers to anticipate the volume 
of future orders. Based on anticipated future volumes, the Company makes other 
significant decisions regarding the level of business it will accept, the 
timing of production and the       
                          PAGE 16 OF 52
<PAGE>
levels and utilization of personnel and other resources. A variety of 
conditions, both specific to the individual customer and generally affecting 
the customer's industry, may cause customers to cancel, reduce or delay 
purchase orders that were either previously made or anticipated. Generally, 
customers may cancel, reduce or delay purchase orders and commitments without 
penalty. For these reasons, backlog may not be indicative of future demand or 
results of operations.

MANUFACTURING AND ENGINEERING

   The Company is vertically integrated from the initial concept stage through 
final design and manufacturing with regard to the key production processes 
which the Company believes are critical to product performance and service.  
These processes include precision stamping, plastic injection molding and 
automated assembly.  The Company believes that this vertical integration 
allows the Company to respond to customers quickly, control quality and reduce 
the time to market for new product development.

   The Company seeks to reduce costs in its manufacturing fabrication and 
assembly operations through formalized cost savings programs.  Complementary 
programs are dedicated to maximizing the return on capital investments and 
reducing overhead expense.

   The Company believes it is a leader in its target markets in delivery 
responsiveness.  The introduction of just-in-time "JIT" manufacturing, 
inventory control techniques and quick-change, in-house production tooling 
have substantially reduced delivery lead times.  Production cells operate 
under a JIT pull system, with customer orders assembled as received.  An 
additional advantage of JIT manufacturing is the almost complete elimination 
of rework.  Shop floor orders are not handled in bulk and are relatively 
small, and problems are resolved as they occur, rather than through an 
extended production run.

   In late 1994, the Company transferred a portion (approximately 4% by 
revenue volume of product in 1996 and 6% in 1995) of its labor-intensive 
product assembly to a U.S. based subcontractor with a manufacturing facility 
in Mexico.  This arrangement is terminable by the Company upon 90 days written 
notice to the subcontractor, and by the subcontractor upon 180 days written 
notice to the Company.  In either event, the Company is not required to pay 
penalties or significant termination costs and could transfer such product 
assembly to another subcontractor with a manufacturing facility in Mexico, or 
back to the United States or elsewhere.      


PRODUCT DEVELOPMENT

   The Company markets over 3,500 products in a wide variety of product 
lines.  The Company's product development strategy is to continually innovate 
and introduce new products in markets where 
                        PAGE 17 OF 52
<PAGE>
the Company has already established a leadership position and to develop next 
generation products for other markets in which the Company wishes to 
participate.  The Company realized approximately 43% of its net sales in 1996 
from products introduced in the last five years.

   The Company seeks to broaden its product lines and to expand its technical 
capabilities in order to meet its customers' anticipated needs.  Generally, 
the Company's product development strategy is to work closely with its 
customers to develop highly engineered products that continue to meet the 
customer's changing needs. 

   Among the Company's current product development projects are those which 
target new package device designs such as ball grid arrays in the burn-in 
sockets and production/PLD market. 

INTELLECTUAL PROPERTY

   The Company seeks to use a combination of patents and other means to 
establish and protect its intellectual property rights in various products. In 
some cases, including the production/PLD sockets for Altera's initial two 
device configurations, such intellectual property rights are owned jointly 
with co-developers. The Company intends to vigorously defend its intellectual 
property rights against infringement or misappropriation. Due to the nature of 
its products, the Company believes that intellectual property protection is 
less significant than the Company's ability to further develop, enhance and 
modify its current products. The Company believes that its products do not 
infringe on the intellectual property rights of others. However, many of the 
Company's competitors have obtained or developed, and may be expected to 
obtain or develop in the future, patents or other proprietary rights that 
cover or affect products that perform functions similar to those performed by 
products offered by the Company. There can be no assurance that, in the 
future, the Company's products will not be held to infringe patent claims of 
its competitors, or that the Company is aware of all patents containing claims 
that may pose a risk of infringement by its products.
 

EMPLOYEES

   As of December 31, 1996, the Company had 174 employees and 10 contract 
workers. The Company's 184 employees and contract workers include 159 in 
manufacturing and engineering, 15 in sales and marketing and 10 in 
administration. None of the Company's employees or contract workers are 
represented by a union or other collective bargaining group. The Company 
believes that its relations with its work force are good.



                        PAGE 18 OF 52
<PAGE>
ENVIRONMENTAL

     The Company is subject to a wide range of environmental laws and 
regulations relating to the use, storage, discharge and disposal of hazardous 
chemicals used during its manufacturing process.  A failure by the Company to 
comply with present or future laws and regulations could also restrict the 
Company's ability to expand its facilities or could require the Company to 
acquire costly equipment or incur other significant expenses. 


ITEM 2. PROPERTIES

  PCD, headquartered in Peabody, Massachusetts, operates leased production 
facilities in Peabody, Massachusetts (50,000 square feet) and in Phoenix, 
Arizona (24,000 square feet).  In October 1996 the Company signed the Third 
Amendment to the Peabody Lease Agreement whereby PCD will lease an additional 
10,000 square feet effective December 1, 1997.
 
   The Phoenix facility is responsible for assembly and quality assurance 
functions relating to burn-in sockets and production/PLD sockets, as well as 
related product design and development. The Peabody facility is responsible 
for assembly, manufacturing automation development and quality assurance 
functions relating to industrial terminal blocks and avionics terminal blocks 
and sockets, as well as related product design and development. Stamping and 
molding fabrication of components for both facilities is handled at the 
Peabody facility. The Company believes that its facilities are adequate for 
its operations in the foreseeable future.






















                        PAGE 19 OF 52
<PAGE>
ITEM 2A. EXECUTIVE OFFICERS OF THE REGISTRANT.

     The executive officers of the Company, and their ages as of
     of December 31, 1996, are as follows:
<TABLE>
<CAPTION>
                Name       Age  Position
   <S>                     <C> <C>         
    John L. Dwight, Jr.     52  Chairman of the Board,
                                Chief Executive Officer,
                                President and Director
    Michael S. Cantor       60  Vice President,
                                 Sales and Marketing
    Jeffrey A. Farnsworth   50  Vice President and
                                 General Manager -- CTi
    C. Russel Hansen, Jr.   50  Vice President, General Counsel
    Mary L. Mandarino       42  Vice President,
                                Finance and Administration,
                                Chief Financial Officer and
                                Treasurer
    Roddy J. Powers         53  Vice President, Operations
                    
</TABLE>
   Mr. Dwight has served as Chairman of the Board, Chief Executive Officer, 
President and a director of the Company since November 1980, when Mr. Dwight 
purchased a controlling interest in PCD. Mr. Dwight was previously Vice 
President -- International of Burndy Corporation, an electronic connector 
manufacturer. Mr. Dwight has 26 years of management and operating experience 
in the connector industry.

   Mr. Cantor has served as Vice President, Sales and Marketing since 1988. 
Mr. Cantor joined the Company in 1983 and has held various positions in 
management. From 1980 to 1983, Mr. Cantor was President -- U.S. Operations for 
Balteau S.A. and from 1972 to 1980, Director of Regional Operations at Burndy 
Corporation. Mr. Cantor has 35 years of experience in the connector industry.

   Mr. Farnsworth has served as Vice President and the General Manager -- CTi 
since 1993. Mr. Farnsworth was a founder of Component Technologies, Inc. in 
1983, and remained with the Company, in various positions in sales and 
marketing, following the acquisition of Component Technologies, Inc. by the 
Company in 1988. Mr. Farnsworth has 21 years of experience in the connector 
industry.

   Mr. Hansen has been Vice President and General Counsel of the Company since 
July 1996 and of BGS Systems, Inc. for more than five years.  A graduate of 
Harvard College and Harvard Law School and a former Senior Partner at Hale and 
Dorr,  Mr. Hansen has also been Chairman of The Governance Institute since 
1996 and Editor-Publisher of Van Rensselaer Press since 1995.



                         PAGE 20 OF 52
<PAGE>
   Ms. Mandarino has served as Vice President, Finance and Administration, 
Chief Financial Officer and Treasurer since 1989. Ms. Mandarino joined the 
Company in 1986 and has held several positions of increasing responsibility in 
finance. Prior to joining PCD, Ms. Mandarino held various financial positions 
with American Brands and Dresser Industries.
 
   Mr. Powers has served as Vice President, Operations since he joined the 
Company in 1983.  Previously, he was the General Manager of the Incon Division 
of Transitron, which was acquired by PCD.

   Each officer serves at the discretion of the Board of Directors. There are 
no family relationships among any of the  directors and executive officers of 
the Company.

ITEM 3. LEGAL PROCEEDINGS

   On August 21, 1995, the Company's wholly-owned subsidiary, CTi 
Technologies, Inc. ("CTi"), filed an action in the United States District 
Court for the District of Arizona seeking a declaratory judgment against Wayne 
K. Pfaff, an individual residing in Texas ("Pfaff"), and Plastronics Socket 
Company, Inc., a corporation affiliated with Pfaff, alleging and seeking a 
declaratory judgment that two United States patents issued to Pfaff and 
relating to certain burn-in sockets for "leadless" IC packages (the "Pfaff 
Leadless Patent") and ball grid array ("BGA") IC packages (the "Pfaff BGA 
Patent") (collectively, the "Pfaff Patents") are invalid and are not infringed 
by CTi, the products  of which include burn-in sockets for certain "leaded" 
packages (including Quad Flat Paks)(the "CTi Leaded Products") and BGA 
packages (the "CTi BGA Products")(collectively, the "CTi Products"). Pfaff has 
filed a counterclaim alleging that CTi infringes the "Pfaff Leadless Patent" 
and has requested an award of damages; the counterclaim does not allege 
infringement of the  Pfaff BGA Patent. Pfaff has also sought a permanent 
injunction against further infringement by CTi of the Pfaff Leadless Patent.

   The Company understands that Pfaff has been issued patents for the 
inventions covered by the Pfaff Leadless Patents in Germany, France, Great 
Britain, Japan and Malaysia (together with the United States, the 
"Territory").  Revenue from sales of CTi Leaded Products in the Territory in 
1996 and 1995 was approximately $1.9 million and $5.8 million, respectively, 
which represented approximately 7% and 23% of the Company's net sales in 1996 
and 1995, respectively.  The CTi BGA Products will not make a significant 
contribution to revenues of the Company until years subsequent to 1996.  The 
Pfaff Leadless Patent has been the subject of earlier litigation initiated by 
Pfaff against a burn-in connector manufacturer unrelated to the Company, Wells 
Electronics, Inc. ("Wells"), in which Pfaff alleged that the 

                        PAGE 21 OF 52
<PAGE>
manufacture and sale of a wide range of Wells products infringed the Pfaff 
Leadless Patent. Included among the Wells products covered by the Pfaff 
litigation was a group of burn-in sockets produced by Wells for certain leaded 
packages (the "Wells Leaded Products"). The Wells Leaded Products compete 
directly with CTi Leaded Products and accept similar IC packages. The Company 
believes that Pfaff may assert in CTi's litigation with Pfaff that Wells 
Leaded Products are similar in design to CTi Leaded Products. In October 1995, 
the United States District Court for the Northern District of Texas (the 
"Texas Court") found certain claims in the Pfaff Leadless Patent to be 
invalid, but found other claims in the patent not to be invalid and to be 
infringed by certain Wells products, including the Wells Leaded Products. On 
December 19, 1995, the Texas Court issued a permanent injunction against the 
manufacture and sale by Wells of the  products found to be infringing. In 
January 1996, the United States Court of Appeals (Federal Circuit) stayed the 
injunction, pending appeal, based on its finding that Wells had demonstrated  
that it is likely to succeed in its contention that the Pfaff Leadless Patent 
is invalid. In that appeal, the Federal Circuit Court of Appeals heard oral 
argument in October 1996, but has not issued a decision.  The Pfaff BGA Patent 
was not involved in the Pfaff/Wells litigation.

   The CTi-Pfaff action in the District of Arizona has been stayed pending the 
outcome of the appeal from the Pfaff-Wells case.  Should the Pfaff Leadless 
Patent be found invalid in that appeal then Pfaff will be unable to assert 
that patent against CTi.  Should the Federal Circuit Court of Appeals find the 
patent not to be invalid, then the litigation in the District of Arizona will 
go forward to determine whether or not the CTi Leaded Products infringe the 
Pfaff patent.  The Company believes, based on the advice of counsel, that CTi 
has meritorious defenses against any claim that CTi Products infringe the 
Pfaff Patents, and CTi intends to prosecute and defend vigorously its position 
in its declaratory judgment action and any related or subsequent litigation. 
Although Wells invoked similar defenses on the Pfaff Leadless Patent in its 
lawsuit with Pfaff, the Company believes that CTi will be better positioned to 
present these defenses. There can be no assurance, however, that the Company 
or CTi will  prevail in pending or any future litigation with Pfaff, and an 
adverse outcome could have a material adverse effect on the financial 
condition, results of operations and business of the Company. Such adverse 
effect could include, without limitation, the requirement that CTi pay 
substantial damages for past infringement and an injunction against the 
manufacture or sale in the United States of such products as are found to be 
infringing.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
      
         NONE


                         PAGE 22 OF 52
<PAGE>
                             PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED               
STOCKHOLDER MATTERS.

   On March 26, 1996, the Securities and Exchange Commission declared 
effective the Company's registration statement relating to the initial public 
offering of 2,113,280 shares of common stock, of which, 1,100,000 shares were 
sold by the Company, at an offering price of $11.00 per share.  The Company's 
Common Stock is traded on the Nasdaq National Market tier of The Nasdaq Stock 
Market under the Symbol "PCDI".  The following table sets forth on a per share 
basis the high and low sales prices for the Common Stock for 1996.
<TABLE>
<CAPTION>
                                              HIGH      LOW  
                                             ------   ------
                                             <C>      <C>
    <S>  
     First Quarter.........................   12-1/2   11
     Second Quarter........................   16       11-1/4
     Third Quarter.........................   13-3/4   10-1/8
     Fourth Quarter........................   13-7/8   10

</TABLE>
   As of March 19, 1997, there were approximately 1,557 holders of record of 
the Company's Common Stock.  
      
   The Company has never declared or paid any cash dividends on the Common 
Stock. The Company currently intends to retain future earnings, if any, to 
fund the development and growth of its business and does not anticipate paying 
any cash dividends on the Common Stock in the foreseeable future.
     
   The Company has revolving lines of credit with a bank, renewable on June 
30, 1997, under which there currently are no outstanding borrowings. However, 
there are no provisions of the lines that would prohibit or effectively 
restrict the payment of cash dividends, even if the Company borrowed funds 
under the lines.

   On July 2, 1996, the Company filed registration statements on Form S-8 for 
the 1992 Stock Option Plan, the 1996 Stock Plan and the PCD 1996 Eligible 
Directors Stock Plan.

   In 1996, the Company issued the following securities that were not 
registered under the Securities Act:

   On February 3, 1996, the Company issued 12,000 shares of Common Stock to an 
employee who was not an executive officer of the Company, upon exercise of 
stock options previously granted, at an exercise price of $1.15 per share.

   On April 12, 1996, the Company issued 10,000 shares of Common Stock to an 
employee who is an executive officer of the Company, upon exercise of stock 
options previously granted, at an exercise price of $1.15 per share.

   On May 2, 1996, the Company issued 4,800 shares of Common 
Stock to an employee who is an executive officer of the Company, upon exercise 
of stock options previously granted, at an exercise price of $1.15 per share.
                         PAGE 23 OF 52
<PAGE>
   No underwriters were engaged in connection with the foregoing sales of 
securities.  Such sales were made in reliance upon the exemption from 
registration set forth in Section 4(2) of the Securities Act or Rule 701 
promulgated thereunder.

ITEM 6. SELECTED FINANCIAL DATA
        (dollars in thousands, except per share data)      
<TABLE>
<CAPTION>
                                          Years Ended December 31,
                               -------------------------------------------
                                 1996     1995     1994     1993     1992
                               -------  -------  -------  --------  ------
                              <C>      <C>      <C>      <C>       <C>
<S>
CONSOLIDATED
 STATEMENT OF INCOME DATA:
Net sales....................  $26,857  $25,616  $15,850  $12,691  $11,081
Cost of sales........... ....   14,457   13,477    9,834    8,494    7,848
                               -------  -------  -------  -------  -------
Gross profit.................   12,400   12,139    6,016    4,197    3,233
Operating expenses...........    5,445    5,667    3,859    3,330    2,908
                               -------  -------  -------  -------  -------
Income from operations.......    6,955    6,472    2,157      867      325
Other income, net............      725      112       23        1      120
                               -------  -------  -------  -------  -------
Income before income taxes...    7,680    6,584    2,180      868      445
Provision for income taxes...    2,895    2,721      879      361      173
                               -------  -------  -------  -------  -------
Net income...................  $ 4,785  $ 3,863  $ 1,301  $   507  $   272
                               =======  =======  =======  =======  =======
Net income per share.........  $  0.76  $  0.74  $  0.28  $  0.11  $  0.05
                               =======  =======  =======  =======  =======
Weighted average number of
 common and common equivalent                       
 shares outstanding..........    6,257    5,201    4,631    4,637    5,044
                               =======  =======  =======  =======  =======
</TABLE>            

<TABLE>
<CAPTION>
                                               December 31,
                               -------------------------------------------
                                 1996     1995     1994     1993     1992
                               -------  -------  -------  --------  ------
                              <C>      <C>      <C>      <C>      <C>
<S>
CONSOLIDATED
 BALANCE SHEET DATA:
Working capital..............  $23,054  $ 7,671  $ 5,089  $ 4,249  $ 4,471
Total assets.................   32,456   15,929   10,783    8,945    8,665
Long-term debt, 
 net of current maturities...        -        -        -       37      127
Stockholders' equity.........   28,706   12,812    8,774    7,473    7,291

</TABLE>
                         PAGE 24 OF 52
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                  
CONDITION AND RESULTS OF OPERATIONS.

RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated 
financial statements and related notes included elsewhere herein.  The table 
below sets forth operating results expressed as a percentage of net sales for 
the periods indicated:
<TABLE>
<CAPTION>
                                  Year Ended  December 31,
                                  ------------------------  
                                   1996     1995     1994
                                  ------   ------   ------
                                 <C>      <C>      <C>
    <S>
     Net sales..................  100.0%   100.0%   100.0%
     Cost of sales..............   53.8     52.6     62.0
                                  -----    -----    ----- 
     Gross profit...............   46.2     47.4     38.0
     Operating expenses.........   20.3     22.1     24.3
                                  -----    -----    -----
     Income from operations.....   25.9     25.3     13.7
     Other income, net              2.7      0.4      0.1
                                  -----    -----    -----
     Income before income taxes.   28.6     25.7     13.8
     Provision for income taxes.   10.8     10.6      5.5
                                  -----    -----    -----
     Net income.................   17.8%    15.1%     8.3%
                                  =====    =====    =====
</TABLE>
NET SALES.   Net sales increased 4.8% to $26.9 million in 1996 compared to 
$25.6 million in 1995 and $15.9 million in 1994.  The growth of net sales in 
1996 was attributable to overall market growth and increased penetration of 
the Company's products in three of its four product categories: industrial 
terminal blocks, avionic terminal blocks and relay sockets, and production/PLD 
sockets.  The greatest portion of this growth was derived from higher volume 
in the industrial terminal block and avionics terminal block and relay socket 
product categories.   Production/PLD products increased only slightly, 
however, in line with the Company's internal projections.  The burn-in socket 
product line, which services the semiconductor market, declined due to the 
volatility within that market.  In 1995, the increase in net sales was 
attributable to growth in market demand for the Company's products across all 
of the Company's product lines. 

   International sales, which consist of export sales and sales to foreign 
customers through U.S. distributors, was 22.1% of net sales in 1996, a change 
from 28.0% and 12.5% in 1995 and 1994, respectively.  The lower international 
sales volume was the result of weaker demand in those segments of the global 
semiconductor market serviced by the Company's key customers.

                         PAGE 25 OF 52
<PAGE>
   Net sales in past periods may not be indicative of net sales in the future, 
which may be affected by other business environment and risk factors as well 
as other factors included elsewhere herein.

GROSS PROFIT.   Gross profit was $12.4 million or 46.2% of net sales in 1996, 
compared to $12.1 million or 47.4% of net sales and $6.0 million or 38.0% of 
net sales in 1995 and 1994, respectively.  The decline in gross profit 
percentage in 1996 was affected by two primary factors: a product mix shift 
from burn-in sockets to industrial terminal blocks and avionics terminal 
blocks and relay sockets, and a one-time expense for a design change to a 
nonstandard product in the burn-in socket category.   The decline was 
partially offset by increased manufacturing and labor efficiencies resulting 
from higher sales volume and the best cost producer program.  The gross profit 
percentage increase in 1995 compared to 1994 was attributable to several 
factors: (i) product mix, which included increased sales of the Company's 
higher margin burn-in sockets and production/PLD sockets; (ii) improved 
pricing on selected avionics products; (iii) increased manufacturing, labor 
and capacity efficiencies resulting from higher sales volume and (iv) cost 
reduction programs.


OPERATING EXPENSES.   Operating expenses include selling, general and 
administrative expenses and costs of product development.  As a percentage of 
net sales, operating expenses decreased to 20.3% in 1996 from 22.1% and 24.3% 
in 1995 and 1994, respectively, which was a decrease to $5.4 million in 1996 
from $5.7 million in 1995 and an increase from $3.9 million in 1994.  The 
reduction of operating expenses in 1996 compared to 1995 is a result of having 
recorded in 1995 professional fees associated with pending patent litigation 
offset by costs associated with our status as a publicly-traded company.

OTHER INCOME AND EXPENSE, NET.   Interest income was approximately $725,000 or 
2.7% of net sales in 1996 compared to $112,000 in 1995 and $23,000 in 1994.  
The increase in interest income in 1996 was mainly the result of interest 
income earned on the proceeds of the Company's public stock offering.

INCOME TAXES.   The Company's effective tax rate was 37.7%, 41.3%, and 40.3% 
in 1996, 1995, and 1994, respectively.  The change in effective rate for 
income taxes is due to the application of the appropriate effective tax rates 
for each of the state tax jurisdictions in which the Company operates.  In 
addition, the Company established a wholly-owned subsidiary which is engaged 
in holding PCD securities.  This corporate structure allows for favorable tax 
treatment of passive income in the Commonwealth of Massachusetts. 





                         PAGE 26 OF 52
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES.

   As of December 31, 1996 and December 31, 1995, the combined cash and cash 
equivalent balances were $20.5 million and $4.0  million, respectively.  Cash 
provided by operating activities in 1996 was $7.8 million, compared to $5.5 
million in 1995.  Increases in cash provided by operating activities were 
primarily due to increases in net income, depreciation and the tax benefit 
from stock options exercised. Cash used in investing activities was $1.9 
million and $2.5 million in 1996 and 1995, respectively, which consisted 
primarily of purchases of tooling and equipment required to support the 
Company's business.  Cash provided by financing activities in 1996 was $10.7 
million which primarily consisted of the net proceeds of $10.5 million from 
the issuance of common stock relating to the Company's public stock 
offering.   

   The Company believes that funds generated from operating activities in 
combination with existing cash balances will be sufficient to meet the 
Company's cash requirements at least through 1997.  The Company expects to use 
the net proceeds for working capital and other general corporate purposes.  
The company considers, on a continuing basis, potential acquisitions of 
products and businesses complementary to the Company's current business, and 
the Company's capital needs may change depending on the timing of any such 
acquisitions. 


INFLATION AND COSTS.  The cost of the Company's products is influenced by the 
cost of a wide variety of raw materials, including gold used in plating, 
copper and brass used for contacts, and plastic material used in molding 
connector components.  In the past, increases in the cost of raw materials, 
labor and services have been offset by price increases, productivity 
improvements and cost saving programs.




















                         PAGE 27 OF 52
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                             PCD Inc.
            INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

<TABLE>
<CAPTION>
                                                         Page
                                                         ---- 
                                                          <C>
<S>
Report of Independent Accountants                          29
Consolidated Balance Sheets - December 31, 1996 and 1995   30
Consolidated Statements of Income for the
 Years ended December 31, 1996, 1995 and 1994              31
Consolidated Statements of Stockholders' Equity
 for the Years ended 1996, 1995 and 1994                   32-33
Consolidated Statements of Cash Flows
 for the Years ended 1996, 1995 and 1994                   34
Notes to Consolidated Financial Statements                 35-48 
                              

   All schedules called for under Regulation S-X are not submitted because 
they are not applicable or not required or because the information is included 
in the financial statements or notes thereto.    
</TABLE>


























                         PAGE 28 OF 52
<PAGE>








                 REPORT OF INDEPENDENT ACCOUNTANTS




To the Board of Directors and Stockholders of PCD Inc.:


   We have audited the accompanying consolidated balance sheets of PCD Inc. as 
of December 31, 1996 and 1995 and the related consolidated statements of 
income, stockholders' equity, and cash flows for each of the three years in 
the period ended December 31, 1996.  These financial statements are the 
responsibility of the Company's management. Our responsibility is to express 
an opinion on these financial statements based on our audits.

   We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the financial statements.  An audit 
also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statement presentation. We believe that our audits provide a reasonable basis 
for our opinion.

   In our opinion, the financial statements referred to above present fairly, 
in all material respects, the consolidated financial position of PCD Inc. as 
of December 31, 1996 and 1995, and the consolidated results of its operations 
and its cash flows for each of the three years in the period ended December 
31, 1996, in conformity with generally accepted accounting principles.



Boston, Massachusetts
January 27, 1997







                         PAGE 29 OF 52
<PAGE>
PCD Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
                                                December   31,
                                                --------------    
                                                 1996    1995
                                                ------  ------
                                              <C>     <C>
<S>
ASSETS
Current assets:
  Cash and cash equivalents................... $20,529 $ 3,958
  Accounts receivable - trade (less allowance
        for uncollectible accounts of $232 in
        1996 and $192 in 1995)................   3,578   3,564
  Inventory...................................   2,608   2,867
  Prepaid expenses and other current assets...      89     399
                                               ------- -------
    Total current assets......................  26,804  10,788

Equipment and improvements, net...............   5,337   4,931
Deferred tax asset............................      82       2
Other assets..................................     233     208
                                               ------- -------
Total assets.................................. $32,456 $15,929
                                               ======= ======= 


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable - trade.................... $   627 $   686 
  Accrued liabilities.........................   3,123   2,431
                                               ------- ------- 
Total current liabilities.....................   3,750   3,117 



Commitments and contingencies (Note 8)........                



Stockholders' equity:
Preferred stock - $0.10 par value;
  1,000,000 shares authorized; no shares issued 
Common stock - $0.01 par value;
  authorized 25,000,000 shares, 5,854,733
  shares issued in 1996 and 4,987,032 shares
  issued in 1995...............................      59      50 
Additional paid-in capital.....................  14,838   4,124 
Retained earnings..............................  13,906   9,121
Deferred compensation..........................     (97)   (155)
Treasury stock.................................       -    (328)
                                                ------- ------- 
Total stockholders' equity.....................  28,706  12,812
                                                ------- -------
Total liabilities and stockholders' equity      $32,456 $15,929
                                                ======= =======
</TABLE>
        The accompanying notes are an integral part of the
                 consolidated financial statements.
                         PAGE 30 OF 52
<PAGE>
                              PCD Inc.
                 CONSOLIDATED STATEMENTS OF INCOME
             (In thousands, except per share amounts)


<TABLE>
<CAPTION>

                                    Years ended December 31,
                                 ------------------------------ 
                                   1996       1995       1994
                                 --------   --------   --------
                                 <C>        <C>        <C>       
<S>
Net sales......................   $26,857    $25,616    $15,850
Cost of sales..................    14,457     13,477      9,834
                                  -------    -------    -------
Gross profit...................    12,400     12,139      6,016
Operating expenses.............     5,445      5,667      3,859
                                  -------    -------    -------

Income from operations.........     6,955      6,472      2,157

Other income...................         -         20         22

Interest income................       734        105         17

Interest expense...............        (9)       (13)       (16)
                                  -------    -------    -------
Income before income taxes.....     7,680      6,584      2,180

Provision for income taxes.....     2,895      2,721        879
                                  -------    -------    -------
Net income.....................   $ 4,785    $ 3,863    $ 1,301
                                  =======    =======    =======

Net income per share...........   $  0.76    $  0.74    $  0.28
                                  =======    =======    =======


Weighted average number
 of common and common
 equivalent shares outstanding      6,257      5,201      4,631
                                  =======    =======    =======
 

</TABLE>





         The accompanying notes are an integral part of the
                 consolidated financial statements.

                         PAGE 31 OF 52
<PAGE>
PCD Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share amounts)
<TABLE>
<CAPTION>
                        Common Stock     Additional
                      ----------------    Paid-in     Retained     Deferred 
                      Shares Par Value    Capital     Earnings   Compensation
                      ------ ---------    ----------  --------   ------------
<S>                <C>           <C>      <C>        <C>           <C>       
Balance, 
December 31, 1993   4,951,032     $50      $ 3,794    $ 3,957             

Net income                                              1,301             
                    ---------     ---      -------     ------        ------   
Balance, 
December 31, 1994   4,951,032      50        3,794      5,258             

Exercise of
 stock options         36,000                   41

Issuance of
 stock options                                 239                   $(239)

Tax benefit from
 non-qualified
 stock options
 exercised                                      50                    

Amortization
 of deferred
 compensation                                                           84    
                         
Net income                                              3,863
                    ---------   ---       -------     -------       ------    
Balance,
December 31, 1995   4,987,032    50         4,124       9.121         (155)

Public stock
 offering, net      1,100,000    11        10,490                         

Exercise of
 stock options       157,701      2           192                    

Retired
 treasury shares    (390,000)    (4)         (324)                        
Tax benefit from
 stock options
 exercised                                    356                          

Amortization of
 deferred
 compensation                                                          58

Net income                                             4,785          
                   ---------    ---       -------    -------       ------
Balance,
December 31, 1996  5,854,733    $59       $14,838    $13,906        $ (97) 
                   =========    ===       =======    =======       ====== 
</TABLE>
         The accompanying notes are an integral part of the
                 consolidated financial statements.
                         PAGE 32 OF 52
<PAGE>
PCD Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)
(In thousands, except share amounts)
<TABLE>
<CAPTION>
                          Treasury Stock       Total   
                          --------------   Stockholders'
                          Shares  Amount       Equity
                          ------- ------   -------------
<S>                      <C>      <C>        <C>
Balance, 
December 31, 1993         390,000  $(328)     $ 7,473

Net income                                      1,301
                          -------  -----      -------
Balance, 
December 31, 1994         390,000   (328)       8,774

Exercise of
 stock options                                     41

Issuance of
 stock options    

Tax benefit from
 non-qualified
 stock options    
 exercised                                         50

Amortization
 of deferred
 compensation                                      84
                         
Net income                                      3,863
                          ------- ------      -------
Balance,
December 31, 1995         390,000   (328)      12,812

Public stock
 offering, net                                 10,501     

Exercise of
 stock options                                    194

Retired
 treasury shares         (390,000)   328     
Tax benefit from
 stock options
 exercised                                        356      

Amortization of
 deferred
 compensation                                      58

Net income                                      4,785
                           ------- ------     -------
Balance,
December 31, 1996                             $28,706 
                                              =======
</TABLE>
         The accompanying notes are an integral part of the
                 consolidated financial statements.
                         PAGE 33 OF 52
<PAGE>
PCD Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
                                                     Years ended December 31,
                                                     ------------------------
                                                      1996     1995     1994
                                                     ------   ------   ------ 
<S>                                                    <C>     <C>     <C>
Cash flows from operating activities:
Net income.........................................  $4,785  $3,863  $1,301 
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation...................................   1,389   1,026     985 
    Loss on disposition of
     equipment and improvements....................     107     261       - 
    Allowance for uncollectible accounts...........      40      76      33 
    Amortization of deferred compensation..........      58      84       - 
    Tax benefit from stock options exercised.......     356      50       -
    Provision for deferred taxes...................     (80)   (192)     33 
    Changes in operating assets and liabilities:
      Increase in accounts receivable..............     (54)   (623) (1,065)
      Decrease (increase) in inventory.............     259    (256)     58 
      Decrease (increase) in prepaid
        expenses and other current assets..........     310     (48)   (295)
      Increase in other assets.....................     (25)    (45)    (26)
      Increase(decrease)in accounts payable........     (59)    205     163 
      Increase in accrued liabilities..............     692   1,130     431
                                                    -------  ------  ------
           Total adjustments.......................   2,993   1,668     317
                                                    -------  ------  ------ 
  Net cash provided by operating activities........   7,778   5,531   1,618
                                                    -------  ------  ------ 

Cash flows from investing activities:
Capital expenditures...............................  (1,902) (2,505) (1,416)
                                                    -------  ------  ------
  Net cash used in investing activities............  (1,902) (2,505) (1,416)
                                                    -------  ------  ------ 
Cash flows from financing activities:
Exercise of common stock options...................     194      41       - 
Proceeds from issuance of common stock, net........  10,501       -       -
Principal payments under long-term debt obligations       -     (37)    (90)
                                                    -------  ------  ------ 
Net cash (used in) provided by financing activities  10,695       4     (90)
                                                    -------  ------  ------ 
Net increase in cash...............................  16,571   3,030     112
Cash and cash equivalents at beginning of year.....   3,958     928     816
                                                    -------  ------  ------
Cash and cash equivalents at end of year........... $20,529  $3,958  $  928
                                                    =======  ======  ====== 

Supplemental disclosures of cash flow information:
   Cash paid during the year for:
     Interest...................................... $     9  $   13  $   16
                                                    =======  ======  ====== 
     Income taxes.................................. $ 2,452  $2,553  $  837
                                                    =======  ======  ======
</TABLE>
         The accompanying notes are an integral part of the
                 consolidated financial statements.
                         
                         PAGE 34 OF 52
<PAGE>
                              PCD Inc.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     

1. Nature of Business:

      PCD Inc. is engaged principally in designing, manufacturing
   and marketing electronic connectors to defined niche markets
   in the semiconductor, industrial equipment and avionics
   industries worldwide.  Electronic connectors are used in 
   virtually all electronic systems, including data
   communications, telecommunications, computers and computer
   peripherals, industrial controls, avionics and test and
   measurement instrumentation.
 

2. Summary of Significant Accounting Policies:
   
   BASIS OF CONSOLIDATION

      The consolidated financial statements include the accounts
   of the Company and its wholly-owned subsidiaries. All
   significant intercompany balances and transactions have been
   eliminated.

   REVENUE RECOGNITION
  
      Revenue is recognized upon shipment to customers.

   CASH AND CASH EQUIVALENTS

      The Company considers all highly liquid debt instruments
   purchased with an original maturity of three months or fewer
   to be cash equivalents.  The Company invests excess cash in a
   money market fund and indirect obligations of the United
   States government.  Approximately $16.1 million and $0.2
   million of cash and cash equivalents is invested at December
   31, 1996 and 1995.  The Company classifies its investments as
   available for sale; however at December 31, 1996 and 1995,
   cost approximates market.

   CONCENTRATIONS OF CREDIT RISK AND ESTIMATES

      Financial instruments which potentially subject the Company
   to concentrations of credit risk consist principally of cash
   investments and trade receivables. The Company invests
   primarily in high quality securities with short maturities
   that are managed by financial institutions with strong credit
   ratings.  Accordingly, these investments are subject to
   minimal credit and market risk.  Concentration of credit risk
   with respect to trade receivables is limited due to the large
   number of customers comprising the Company's customer base,
   and their dispersion across different geographies.  The
   Company provides credit to customers in the normal course of
   business.  Collateral is not required for trade receivables,
   but ongoing credit evaluations of customer's financial
   condition are performed.  Additionally, the Company maintains
   reserves for potential credit losses.  As of December 31, 1996
   and 1995, the Company had no significant concentrations of
   credit risk.
                         PAGE 35 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
   
      The preparation of financial statements in conformity with
   generally accepted accounting principles requires management
   to make estimates and assumptions that affect the reported
   amounts of assets and liabilities and disclosure of contingent
   assets and liabilities at the date of the financial statements
   and the reported amounts of revenues and expenses during the
   reporting period.  Actual results could differ from those
   estimates.  The most significant estimates included in these
   financial statements are allowances for uncollectible accounts
   and allowances for inventory valuation.

   INVENTORY

      Inventories are stated at the lower of cost, determined on
   a first-in, first-out method, or market value.

   RESEARCH AND DEVELOPMENT

      Research and development costs are charged to expense as
   incurred.

   NET INCOME PER COMMON SHARE
     
      Net income per common share is computed using the weighted
   average number of shares of common stock outstanding and
   common equivalent shares outstanding.  Common equivalent      
   shares are included in the per share calculation where the
   effect of their inclusion would be dilutive. Pursuant to
   Securities and Exchange Commission Staff Accounting Bulletin
   No. 83, common and common equivalent shares issued during the
   twelve month period preceding the date of the initial filing
   (February 12, 1996) of the registration statement relating to
   the Company's initial public offering have been included in
   the calculation using the treasury stock method and the
   public offering price ($11 per share), as if they were
   outstanding for all periods prior to January 1, 1996.  Fully
   diluted net income per common share is not materially
   different from the reported primary net income per share.

   EQUIPMENT AND IMPROVEMENTS

      Equipment and improvements are recorded at cost.
   Maintenance and repairs which neither materially add to the
   value of the property nor appreciably prolong its life are
   charged to expense as incurred. Upon retirement or other
   disposition, the cost and related accumulated depreciation are
   eliminated from the accounts and the resulting gain or loss is
   included in the results of operations.

      Depreciation of equipment and improvements is computed
   using the straight-line method over the estimated useful lives
   of the assets as follows:

                         PAGE 36 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

<TABLE>
<CAPTION>
                                         Estimated Useful
                                          Life in Years
                                         ---------------- 
                                              <C>
       <S>
        Tools, dies and molds                    5
        Machinery and equipment                 10
        Office furniture and fixtures            5
        Transportation equipment                 4
        Leasehold improvements           Shorter of lease 
                                        term or useful life

</TABLE>


   INCOME TAXES

      The Company utilizes the asset and liability approach of
   accounting for income taxes.  Under the asset and liability
   approach, deferred taxes are determined based on the
   difference between the financial statement and tax bases of
   assets and liabilities using enacted tax rates in effect in
   the years in which the differences are expected to reverse.
   Deferred tax expense (benefit) represents the change in the
   deferred tax asset/liability balance. Tax credits are treated
   as reductions of income taxes in the year in which the credits
   become available for tax purposes.

3. INVENTORY:

   Inventory consisted of the following at December 31:
<TABLE>
<CAPTION>
                                                1996     1995
                                               ------   ------
                                                (in thousands)
            <S>                               <C>      <C>
             Raw materials and
              finished subassemblies           $1,908   $1,945
             Work in process                      226      260
             Finished goods                       474      662
                                               ------   ------
                                       Total   $2,608   $2,867
                                               ======   ======
</TABLE>
 




                        PAGE 37 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


4. EQUIPMENT AND IMPROVEMENTS:

      Equipment and improvements consisted of the following at
   December 31:
<TABLE>
<CAPTION>
                                               1996     1995
                                              ------   ------
                                               (in thousands)
       <S>                                   <C>      <C>
        Tools, dies and molds                 $5,192   $4,202
        Machinery and equipment                2,586    2,230
        Office furniture and fixtures          1,025    1,191
        Transportation equipment                 168      149
        Leasehold improvements                   493      468
                                              ------   ------
                                               9,464    8,240
        Less accumulated depreciation          4,379    3,749
                                              ------   ------
                                               5,085    4,491
     Capital expenditures in progress            252      440
                                              ------   ------
       Property and improvements, net         $5,337   $4,931
                                              ======   ======
</TABLE>


5. ACCRUED LIABILITIES:

      Accrued liabilities consisted of the following at December
   31,
<TABLE>
<CAPTION>

                                               1996     1995
                                              ------   ------
                                               (in thousands)
           <S>                               <C>      <C>
            Compensation and benefits         $  760   $  721
            Professional fees                  1,002      733
            Other                              1,361      977
                                              ------   ------
                                     Total    $3,123   $2,431
                                              ======   ======
</TABLE>
6.  DEBT:

       The Company has revolving lines of credit with a bank,
    renewable on June 30, 1997, whereby it may borrow up to an
    aggregate of $5,250,000 with interest payable monthly at the
    bank's base lending rate.  There were no outstanding
    borrowings under the lines as of December 31, 1996 or 1995.
    The Company made the final payment on a term loan in May,
    1995.
                        PAGE 38 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


 7. INCOME TAXES:

      The provision (benefit) for income taxes for the years
   ended December 31, 1996, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
                                        1996    1995   1994
                                       ------  ------  ----
                                           (in thousands) 
          <S>                         <C>     <C>     <C>
           Current 
                     Federal           $2,504  $2,466  $713 
                     State                471     447   133
                                       ------  ------  ---- 
                     Total current      2,975   2,913   846 
                                       ------  ------  ----

           Deferred 
                     Federal              (62)   (174)   26 
                     State                (18)    (18)    7 
                                       ------  ------  ----
                     Total deferred       (80)   (192)   33 
                                       ------  ------  ----
                                       $2,895  $2,721  $879
                                       ======  ======  ====
</TABLE>
      The components of the net deferred tax asset consisted of
   the following at December 31, 1996 and 1995:
<TABLE>
<CAPTION>
                                                  1996    1995
                                                  ----    ----
                                                 (in thousands)
   <S>                                           <C>     <C>
     Deferred tax assets (liabilities):
       Difference in accounting for inventory     $195    $ 85 
       Accounts receivable allowances               90      72 
       Vacation and other accruals                 297     266 
       Difference in depreciation methods         (500)   (421)
                                                  ----    ----
         Net deferred tax asset                   $ 82    $  2
                                                  ====    ==== 

</TABLE>
      The analysis of the variance of income taxes as reported 
   from income taxes compiled at the U.S. statutory federal
   income tax rate for continuing operations is as follows:



                        PAGE 39 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

<TABLE>
<CAPTION>
                                                     1996    1995    1994
                                                     ----    ----    ----
                                                        (in thousands)
   <S>                                             <C>     <C>      <C>
    Income taxes at U.S. statutory rate of 34%      $2,611  $2,239   $741 
    State income taxes                                 300     284     92
    Other, net                                         (16)    198     46
                                                    ------  ------   ----
                                                    $2,895  $2,721   $879
                                                    ======  ======   ==== 

</TABLE>


8. COMMITMENTS AND CONTINGENCIES:

   Litigation:

      On August 21, 1995, the Company's wholly-owned subsidiary,
   CTi Technologies, Inc. ("CTi"), filed an action in the United
   States District Court for the District of Arizona seeking a
   declaratory judgment against Wayne K. Pfaff, an individual
   residing in Texas ("Pfaff"), and Plastronics Socket Company,
   Inc., a corporation affiliated with Pfaff, alleging and
   seeking a declaratory judgment that two United States patents
   issued to Pfaff and relating to certain burn-in sockets for
   "leadless" IC packages (the "Pfaff Leadless Patent") and ball
   grid array ("BGA") IC packages (the "Pfaff BGA Patent")
   (collectively, the "Pfaff Patents") are invalid and are not
   infringed by CTi, the products of which include burn-in
   sockets for certain "leaded" packages (including Quad Flat
   Paks)(the "CTi Leaded Products") and BGA packages (the "CTi
   BGA Products")(collectively, the "CTi Products"). Pfaff has
   filed a counterclaim alleging that CTi infringes the Pfaff
   Leadless Patent and has requested an award of damages; the
   counterclaim does not allege infringement of the Pfaff BGA
   Patent. Pfaff has also sought a permanent injunction against
   further infringement by CTi of the Pfaff Leadless Patent.

      The Company understands that Pfaff has been issued patents
   for the inventions covered by the Pfaff Leadless Patents in
   Germany, France, Great Britain, Japan and Malaysia (together
   with the United States, the "Territory").  Revenue from sales
   of CTi Leaded Products in the Territory in 1996 and 1995 was
   approximately $1.9 million and $5.8 million, respectively,
   which represented approximately 7% and 23% of the Company's
   net sales in 1996 and 1995, respectively.  The CTi BGA
   Products will not make a significant contribution to revenues
   of the Company until years subsequent to 1996.  The Pfaff
       
                           PAGE 40 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


   Leadless Patent has been the subject of earlier litigation
   initiated by Pfaff against a burn-in connector manufacturer
   unrelated to the Company, Wells Electronics, Inc. ("Wells"),
   in which Pfaff alleged that the manufacture and sale of a wide
   range of Wells products infringed the Pfaff Leadless Patent.
   Included among the Wells products covered by the Pfaff
   litigation was a group of burn-in sockets produced by Wells
   for certain leaded packages (the "Wells Leaded Products"). The
   Wells Leaded Products compete directly with CTi Leaded
   Products and accept similar IC packages. The Company believes
   that Pfaff may assert in CTi's litigation with Pfaff that
   Wells Leaded Products are similar in design to CTi Leaded
   Products. In October 1995, the United States District Court
   for the Northern District of Texas (the "Texas Court") found
   certain claims in the Pfaff Leadless Patent to be invalid, but
   found other claims in the patent not to be invalid and to be
   infringed by certain Wells products, including the Wells
   Leaded Products. On December 19, 1995, the Texas Court issued
   a permanent injunction against the manufacture and sale by
   Wells of the products found to be infringing. In January 1996,
   the United States Court of Appeals (Federal Circuit) stayed
   the injunction, pending appeal, based on its finding that
   Wells had demonstrated that it is likely to succeed in its
   contention that the Pfaff Leadless Patent is invalid. In that
   appeal, the Federal Circuit Court of Appeals heard oral
   argument in October 1996, but has not issued a decision.  The
   Pfaff BGA Patent was not involved in the Pfaff/Wells
   litigation.

      The CTi-Pfaff action in the District of Arizona has been
   stayed pending the outcome of the appeal from the Pfaff-Wells
   case.  Should the Pfaff Leadless Patent be found invalid in
   that appeal then Pfaff will be unable to assert that patent
   against CTi.  Should the Federal Circuit Court of Appeals find
   the patent not to be invalid, then the litigation in the
   District of Arizona will go forward to determine whether or
   not the CTi Leaded Products infringe the Pfaff patent.  The
   Company believes, based on the advice of counsel, that CTi has
   meritorious defenses against any claim that CTi Products
   infringe the Pfaff Patents, and CTi intends to prosecute and
   defend vigorously its position in its declaratory judgment
   action and any related or subsequent litigation. Although
   Wells invoked similar defenses on the Pfaff Leadless Patent in
   its lawsuit with Pfaff, the Company believes that CTi will be
   better positioned to present these defenses. There can be no

                        PAGE 41 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued  

   assurance, however, that the Company or CTi will prevail in
   pending or any future litigation with Pfaff, and an adverse
   outcome could have a material adverse effect on the financial
   condition, results of operations and business of the Company.
   Such adverse effect could include, without limitation, the
   requirement that CTi pay substantial damages for past 
   infringement and an injunction against the manufacture or sale
   in the United States of such products as are found to be
   infringing.


   Leases:

      The Company leases office and production facilities in
   Peabody, Massachusetts and Phoenix, Arizona, with rentals
   subject to escalation in real estate taxes and operating
   expenses.  Rental expense for the years ended December 31,
   1996, 1995 and 1994 was $498,000, $500,000, and $506,000
   respectively.

       Minimum future rental commitments under leases with
    remaining terms in excess of one year are approximately as
    follows:

<TABLE>
<CAPTION>
        Year Ended
         December 31,                            Amount
        -------------                           -------- 
                                             <C>
            <S>
             1997                               $474,200
             1998                                552,500
             1999                                560,000
             2000                                572,000
             2001 and thereafter               1,574,000
</TABLE>


9. STOCKHOLDERS' EQUITY:

   Preferred Stock

      The Board of Directors is authorized, subject to any
   limitations prescribed by law, from time to time to issue up
   to an aggregate of 1,000,000 shares of Preferred Stock, $0.10
   par value per share, with such powers, designations,
   preferences and relative, participating, optional or other
   special rights and such qualifications, limitations or
   restrictions thereof, as shall be determined by the Board of
   Directors in a resolution or resolutions providing for the
   issuance of such Preferred Stock.
                        PAGE 42 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
 
   Common Stock

      In February 1996, the stockholders approved an increase in
   the authorized common stock of the Company to 25,000,000
   shares, $0.01 par value per share and the stockholders
   approved a twelve-for-one stock split effected in the form of
   a stock dividend.  All references to the number of shares and
   per share amounts have been restated to reflect the split.

   Treasury Stock

      On January 30, 1996, the Board of Directors approved a
   resolution to restore any and all shares of common stock of
   the Company which had been repurchased by the Company to the
   status of authorized but unissued shares.

   STOCK OPTIONS:

        DIRECTORS STOCK PLAN

      The Company's 1996 Eligible Directors Stock Plan (the
   "Directors Stock Plan") was approved by the Board of Directors
   on January 30, 1996 and thereafter by the Company's
   stockholders.  Under the Directors Stock Plan, commencing with
   the 1997 annual meeting of stockholders, each director who is
   not an officer or employee of the Company or any subsidiary of
   the Company (an "outside director") who has not previously
   been granted an option to purchase shares of Common Stock will
   be granted, on the thirtieth day after such meeting, an option
   to purchase 3,000 shares of Common Stock at an exercise price
   equal to the fair market value on the date of grant.  In
   addition, on the thirtieth day after such meeting, each
   outside director will be granted an option at each annual
   meeting of stockholders to purchase 1,500 shares of Common
   Stock at an exercise price equal to the fair market value on
   the date of grant.  A total of 36,000 shares of Common Stock
   are available for awards under the Directors Stock Plan.
   Subsequent to the end of the year, the Board of Directors
   amended the Directors Stock Plan to allow for each option to
   vest 6 months after, and expire 10 years from, the date of
   grant of such option. No options may be granted under the
   Directors Stock Plan after January 29, 2006. 

   1996 STOCK PLAN

      The Company's 1996 Stock Plan was approved by the Board of
   Directors on January 30, 1996, and  thereafter by the
   Company's stockholders.  The 1996 Stock Plan provides for the
   grant or award of stock options, restricted stock and other
   performance awards which may or may not be denominated in 



                        PAGE 43 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


   shares of Common Stock or other securities (collectively, the
   "Awards").  Stock options granted under 1996 Stock Plan may be
   either incentive stock options or non-qualified options.  The
   1996 Stock Plan is administered by the Compensation Committee.
   Subject to the provisions of the 1996 Stock Plan, the          
   Committee has the authority to designate participants,      
   determine the types of Awards to be granted, the number of
   shares to be covered by each Award, the time at which each
   Award is exercisable or may be settled, the method of payment
   and any other terms and conditions of the Awards.  While the
   Committee determines the prices at which options and other
   Awards may be exercised under the 1996 Stock Plan, the
   exercise price of an option shall be at least 100% of the fair
   market value (as determined under the terms of the 1996 Stock
   Plan) of a share of Common Stock on the date of grant.  The
   aggregate number of shares of Common Stock available for
   awards under the Plan is 324,000.  No option shall be
   exercisable with respect to any shares later than 10 years
   after the date of grant of such options or 5 years in the case
   of incentive options granted to the owner of stock possessing
   more than 10% of the value of all classes of stock of the
   Company.  Vesting is determined in the sole discretion of the
   Compensation Committee of the Board of Directors.  In
   connection with the Committee's grants to date, it has fixed 
   vesting in four approximately equal annual installments, the
   first of which vests on the date of grant.  No awards
   may be made under the 1996 Stock Plan after January 29, 2006.
  
   1992 STOCK OPTION PLAN

      The Company's 1992 Stock Option Plan as amended on January
   30, 1996 provides for the grant or award of stock options,
   which may be either incentive stock options or non-qualified
   stock options to key employees and directors.  The aggregate
   number of shares of Common Stock reserved for issuance under
   the 1992 Stock Plan is 954,000 shares. No option will be
   exercisable with respect to any shares later than 10 years
   after the date of grant of such options or 5 years in the case
   of incentive options granted to the owner of stock possessing
   more than 10% of the value of all classes of stock of the
   Company.  Vesting is determined in the sole discretion of the
   Compensation Committee of the Board of Directors.  In
   connection with Committee's grants to date, it has fixed
   vesting in four approximately equal annual installments, the
   first of which vests on the date of grant.  The Compensation
   Committee administers the 1992 Stock Option Plan.


                        PAGE 44 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued   


      The following table summarizes the transactions from these
   plans:
<TABLE>
<CAPTION>
                                                                 Weighted
                                                                 exercise
                                                    Options    average price
                                                    -------    -------------
     <S>                                           <C>            <C>
      Options outstanding at December 31, 1993      954,000        $ 1.15
                          Options canceled         (132,000)         1.15
                          Options granted            24,000          1.15
                                                    -------
      Options outstanding at December 31, 1994      846,000          1.15
                          Options exercised         (36,000)         1.15
                          Options granted           144,000          1.68
                                                    -------  
      Options outstanding at December 31, 1995      954,000          1.23
                          Options exercised        (157,701)         1.22
                          Options granted            15,000         12.00
                                                    -------  
      Options outstanding at December 31, 1996      811,299          1.43
                                                    =======   
</TABLE>
  
      Summarized information about stock options outstanding at
   December 31, 1996 is as follows:
<TABLE>
<CAPTION>
                                                             Exercisable
                                    Weighted             ------------------- 
                                    average    Weighted             Weighted
                      Number of    remaining   average              average
         Range of      options    contractual  exercise  Number of  exercise
     exercise prices outstanding     life       price     options    price
     --------------- -----------  -----------  --------  ---------  --------
     <C>              <C>            <C>       <C>       <C>        <C>
      $ 1.15           672,299        5.7       $ 1.15    666,299    $ 1.15
        1.54-2.08      124,000        8.4         1.66     70,000      1.62
       12.00            15,000        9.5        12.00      3,750     12.00

</TABLE>

      For the years ended December 31, 1996, 1995 and 1994, 
   options to purchase 740,049 shares, 825,000 shares and 753,000
   shares of Common Stock, respectively, were exercisable with 
   the remaining options becoming exercisable at various dates
   through December 31, 1998.  The Company has recorded deferred
   compensation of $239,000 for the difference between fair value
   and exercise price for options granted in 1995 and such
   deferred compensation is being amortized over the option 
   vesting period.
                        PAGE 45 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued     


      Generally, when shares acquired pursuant to the exercise of
   incentive stock options are sold within one year of exercise
   or within two years from the date of grant, the Company
   derives a tax deduction measured by the amount that the fair
   market value exceeds the option price at the date the options
   are exercised.  When non-qualified stock options are
   exercised, the Company derives a tax deduction measured by the
   amount that the fair market value exceeds the option price at
   the date the options are exercised.

   SUPPLEMENTAL DISCLOSURE FOR STOCK BASED COMPENSATION:

      The Company has three stock-based compensation plans, which
   are described above.  In October 1995, the FASB issued SFAS
   123, "Accounting for Stock-Based Compensation."  SFAS 123 is
   effective for periods beginning after December 15, 1995.  SFAS
   123 requires that companies either recognize compensation
   expense for grants of stock, stock options, and other equity
   instruments based on fair value, or provide pro forma
   disclosure of net income and earnings per share in the notes
   to the financial statements.  The Company adopted the
   disclosure provisions of SFAS 123 in 1996 and has applied APB
   Opinion 25 and related Interpretations in accounting for its
   plans.  Accordingly, no compensation cost has been recognized
   for its stock option plans.  Had compensation cost for the
   Company's stock-based compensation plans been determined based
   on the fair value at the grant dates as calculated in
   accordance with SFAS 123, the Company's net income and
   earnings per share for the years ended December 31, 1996 and
   1995 would have been reduced to the pro forma amounts
   indicated below:
   <TABLE>
   <CAPTION>
                         1996                      1995
                ----------------------    ----------------------
                            Net income                Net income
                Net income   per share    Net income   per share
                ----------  ----------    ----------  ----------
  <S>            <C>          <C>          <C>          <C>
   As Reported    $4,785       $0.76        $3,863       $0.74
   Pro Forma       4,665        0.75         3,772        0.73
   </TABLE>

      The fair value of each stock option is estimated on the
   date of grant using the Black-Scholes option pricing model
   with the following weighted-average assumptions:


                        PAGE 46 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

   <TABLE>
   <CAPTION>
                                         1996     1995
                                         ----     ---- 
        <S>                             <C>      <C>
         Dividend yield                  none     none
         Expected volatility             45.0%     0.0%
         Risk free interest rate         7.27%    7.13%
         Expected life (years)           10.0     10.0

   </TABLE>

   Weighted average fair value of options granted at fair value
   at date of grant:

        1996                             $7.83
                                         ===== 

   Weighted average fair value of options granted below fair
   value at date of grant:

        1995                                      $2.53
                                                  ===== 

      The effect of applying SFAS 123 in this pro forma
   disclosure are not indicative of future amounts.  The SFAS
   does not apply to awards made prior to 1995.  Additional
   awards in future years are anticipated.


10. PROFIT SHARING PLAN:
 
      Effective May 1, 1992, the Company adopted a Plan pursuant
   to Section 401 of the Internal Revenue Code, whereby employees
   may contribute a percentage of compensation, but not in excess
   of the maximum allowed under the Code.  Employees are eligible
   for participation at the beginning of the calendar quarter
   following their one year anniversary. The Company makes
   matching contributions of fifty percent of employee
   contributions up to 6% of employee compensation, however, the
   Company's total contribution may not exceed 15% of the prior 
   year's pre-tax income. 

      The Company's matching contributions were approximately
   $80,000, $82,000 and $72,000 for the years ended December 31,
   1996, 1995, and 1994, respectively.



                        PAGE 47 OF 52
<PAGE>
                             PCD Inc.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued


11. SIGNIFICANT CUSTOMERS AND EXPORT SALES: 

       One customer accounted for approximately 17.4%, 16.6% and
    15.3% of the Company's sales in 1996, 1995 and 1994,
    respectively.  A second customer accounted for approximately
    13.4% and 10.3% of the Company's sales in 1995 and 1994,
    respectively. The Company had export sales of approximately
    $2,975,000, $3,022,000 and $1,155,000 in 1996, 1995 and 1994,
    respectively.  All export sales are in U.S. dollars.


12. SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED):

<TABLE>
<CAPTION>
    (in thousands, except per share data)
    ------------------------------------------------------------------------- 
                                        For the Three Months Ended
    ------------------------------------------------------------------------- 
                                  Mar 31,    Jun 29,    Sep 28,    Dec 31,
    ------------------------------------------------------------------------- 
   <S>                           <C>        <C>        <C>        <C>
    1996
    ----
    Net sales                     $7,087     $7,223     $6,222     $6,325
    Gross profit                   3,235      3,222      2,725      3,218
    Net income                     1,130      1,348      1,068      1,239
    Net income per share           $0.21      $0.21      $0.16      $0.19
    ------------------------------------------------------------------------- 
                                   Apr 1,     Jul 1,    Sep 30,    Dec 31,
    ------------------------------------------------------------------------- 
    1995
    ----
    Net sales                     $6,022     $6,260     $6,609     $6,725
    Gross profit                   2,802      2,921      3,236      3,180
    Net income                       984      1,010        978        891
    Net income per share           $0.20      $0.20      $0.18      $0.17
</TABLE>


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE.

         Not applicable.  




                         PAGE 48 OF 52                 
<PAGE>
PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

   Pursuant to Instruction G(3) to Form 10-K, the information required with 
respect to the Directors of the Registrant is incorporated by reference from 
the Company's definitive proxy statement which is expected to be filed 
pursuant to Regulation 14A on or before April 30, 1997.

   The information required by Item 10 with respect to the Executive Officers 
of the Registrant has been included in Part I of this Form 10-K in reliance 
with General Instruction G(3) of Form 10-K and Instruction 3 to Item 401(b) of 
Regulation S-K.


ITEM 11.  EXECUTIVE COMPENSATION

   Pursuant to Instruction G(3) to Form 10-K, the information required in Item 
11 is incorporated by reference from the Company's definitive proxy statement 
which is expected to be filed pursuant to Regulation 14A on or before April 
30, 1997.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

   Pursuant to Instruction G(3) to Form 10-K, the information required in Item 
11 is incorporated by reference from the Company's definitive proxy statement 
which is expected to be filed pursuant to Regulation 14A on or before April 
30, 1997.
  


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   Pursuant to Instruction G(3) to Form 10-K, the information required in Item 
11 is incorporated by reference from the Company's definitive proxy statement 
which is expected to be filed pursuant to Regulation 14A on or before April 
30, 1997.

   Since January 1, 1996, two subsidiaries of Emerson Electric Co., which 
currently owns 32.3% of the outstanding Common Stock of the Company, have 
purchased or ordered from the Company, or a distributor of the Company's 
products, certain of the Company's industrial terminal block products for an 
aggregate purchase price of approximately $82,700.  Such products were sold by 
the Company on the Company's customary pricing and other terms.  





                         PAGE 49 OF 52                 
<PAGE>
                                PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
          REPORTS ON FORM 8-K.

      A.  List of Documents filed as part of this report

          1. Financial Statements

             Report of Independent Accountants
             Consolidated Balance Sheets
             Consolidated Statements of Income
             Consolidated Statements of Stockholders' Equity
             Consolidated Statements of Cash Flows
             Notes to Consolidated Financial Statements

          2. Financial Statement Schedule

                All financial statements and schedules have
             been omitted because the required information is
             included in the consolidated financial statements or
             the notes thereto, or is not applicable or required.

         3. Listing of Exhibits

           (3.2)  Restated Articles of Organization of the
                  Registrant (Incorporated by reference to
                  to Exhibit 3.2 to Form S-1 Registration
                  Statement No. 333-1266).
           (3.4)  By-laws of Registrant effective March 26, 1996.
                  (Incorporated by reference to Exhibit 3.4 to
                  Form S-1 Registration Statement No. 333-1266).
           (4.1)  Articles 3,4,5 and 6 of the Restated Articles
                  of Organization of Registrant(Included in
                  Exhibit 3.2)
           (4.2)  Specimen Stock Certificate (Incorporated by
                  reference to Exhibit 4.2 to Form S-1
                  Registration Statement No. 333-1266).
          (10.1)  Lease dated June 29, 1987, between Centennial
                  Park Associates Realty Trust II and the Company
                  for premises located at Two Technology Drive,
                  Centennial Park, Peabody, Massachusetts
                  (Incorporated by reference to Exhibit 10.1 to
                  Form S-1 Registration Statement No. 333-1266).
          (10.2)  Lease dated May 1995, between CMD Southwest
                  Four and CTi Technologies, Inc. for premises
                  located at 2102 W. Quail Avenue, Phoenix,
                  Arizona. (Incorporated by reference to Exhibit
                  10.2 to Form S-1 Registration Statement No.
                  333-1266).


                        PAGE 50 OF 52                 
<PAGE>

          (10.3)  Registrant's 1992 Stock Option Plan and related
                  forms of stock option agreement (Incorporated
                  by reference to Exhibit 10.3 to Form S-1
                  Registration Statement No. 333-1266).
          (10.4)  Registrant's 1996 Stock Plan (Incorporated by
                  reference to Exhibit 10.4 to Form S-1
                  Registration Statement No. 333-1266).
          (10.5)  Registrant's 1996 Eligible Directors Stock Plan
                  (Incorporated by reference to Exhibit 10.5 to
                  Form S-1 Registration Statement No. 333-1266).
          (10.6)  April 2, 1985 Stock Purchase Agreement and
                  Amendment to Stock Purchase Agreement dated
                  March 31, 1983. (Incorporated by reference to
                  Exhibit 10.6 to Form S-1 Registration Statement
                  No. 333-1266).
          (10.7)  Credit Agreement dated as of October 1, 1996
                  between the Company and Eastern Bank.
          (10.8)  Third amendment to lease agreement dated as of
                  June 25, 1996 between the Company and
                  Centennial Park Associates Partnership III.
          (10.9)  Form of option agreements for the 1996 Stock
                  Plan.
          (10.10) Form of option agreement for the Directors
                  Stock Plan.
          (10.11) Powers of Attorney.
          (11.1)  Statement RE Computation of Earnings per Share.
          (21.1)  Subsidiaries of the Registrant.
          (23.1)  Consent of Coopers & Lybrand L.L.P.,
                  independent accountants.
          (27.1)  Financial Data Schedule for the period ended
                  December 31, 1996.

      B. Reports on Form 8-K.

            There were no Current Reports on Form 8-K filed by
         the Company during the fourth quarter of 1996.
       














                         PAGE 51 OF 52                 
<PAGE>
                              SIGNATURES


   Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereto duly authorized.

                                PCD Inc.

Dated: March 28, 1997           BY:  /s/ John L. Dwight, Jr.
                                   --------------------------- 
                                   John L. Dwight, Jr.
                                   Chairman of the Board,
                                   Chief Executive Officer,
                                   and President

Dated: March 28, 1997          BY:  /s/ Mary L. Mandarino
                                   --------------------------- 
                                   Mary L. Mandarino
                                   Vice President - Finance
                                   and Administration
                                   Chief Financial Officer,
                                   and Treasurer (principal
                                   financial and accounting
                                   officer)


     Pursuant to the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Dated: March 28, 1997                 /s/ John L. Dwight, Jr.
                                   ------------------------------ 
                                   John L. Dwight, Jr.
                                   Director

Dated: March 28, 1997               /s/ C. Russel Hansen, Jr. for
                                   ------------------------------ 
                                   Bruce E. Elmblad
                                   Director

Dated: March 28, 1997               /s/ C. Russel Hansen, Jr. for
                                   ------------------------------ 
                                   Harold F. Faught
                                   Director

Dated: March 28, 1997               /s/ C. Russel Hansen, Jr. for
                                   ------------------------------ 
                                   C. Wayne Griffith
                                   Director

Dated: March 28, 1997               /s/ C. Russel Hansen, Jr. for
                                   ------------------------------ 
                                   Theodore C. York
                                   Director
       
                       PAGE 52 OF 52

<PAGE>
                            EXHIBIT INDEX

Exhibit No.                    Description
-----------     -----------------------------------------
    10.7        Credit Agreement dated as of October 1, 1996
                between the Company and Eastern Bank.
    10.8        Third amendment to lease agreement dated as of
                June 25, 1996 between the Company and
                Centennial Park Associates Partnership III
    10.9        Form of option agreements for the 1996 Stock Plan
    10.10       Form of option agreement for the Directors Stock
                Plan
    10.11       Powers of Attorney
    11.1        Statement RE: Computation of Earnings per Share
    21.1        Subsidiaries of the Registrant
    23.1        Consent of Coopers & Lybrand L.L.P., independent
                accountants.
    27.1        Financial Data Schedule for the period ended
                December 31, 1996.


































<EXHIBIT>
                                                    EXHIBIT 10.7
<PAGE>




                         Credit Agreement



                             between




                            PCD Inc.


                              and


                          EASTERN BANK




                  Dated as of October 1, 1996






























<PAGE>
                        TABLE OF CONTENTS

ARTICLE 1. -  DEFINITIONS.....................................  1

1.1.  Defined Terms...........................................  1
1.2.  Accounting and Banking Terms............................  1

ARTICLE 2. - PCD LOANS........................................  1

2.1.  PCD Revolving Credit Commitment.........................  1
2.2.  Procedure for Revolving Credit Borrowings...............  1
2.3.  Interest on PCD Revolving Credit Loans..................  2
2.4.  Mandatory Prepayment....................................  2
2.5.  PCD Revolving Credit Note and Records...................  2
2.6.  PCD Revolving Credit Loan Proceeds......................  2
2.7.  Calculation of Interest.................................  2
2.8.  Default Rate............................................  3
2.9.  Interest Limitation.....................................  3
2.10. Late Payment Charge.....................................  3
2.11. Payments................................................  3
2.12. Termination of PCD Credit Commitment....................  3
2.13. Revolving Credit Commitment to CTi......................  3
2.14. Procedure for Revolving Credit Borrowings...............  4
2.15. Interest on CTi Revolving Credit Loans..................  4
2.16. Mandatory Prepayment....................................  4
2.17. CTi Revolving Credit Note and Records...................  4
2.18. CTi Revolving Credit Loan Proceeds......................  5
2.19. Calculation of Interest.................................  5
2.20. Default Rate............................................  5
2.21. Interest Limitation.....................................  5
2.22. Late Payment Charge.....................................  5
2.23. Payments................................................  5
2.24. Termination of Credit Commitment........................  6

ARTICLE 3. - REPRESENTATIONS AND WARRANTIES

3.0.  Financial Condition.....................................  6
3.1.  No Change...............................................  6
3.2.  Organization, Existence, Good Standing..................  6
3.3.  Subsidiaries; Capitalization............................  7
3.4.  Power and Authority.....................................  7
3.5.  Legal, Valid, Binding Obligation........................  7
3.6.  Consents................................................  7
3.7.  No Legal Bar............................................  7
3.8.  No Litigation...........................................  7
3.9.  No Default..............................................  8
3.10. Assets, No Liens; Intellectual Property.................  8
3.11. No Burdensome Restrictions..............................  8
3.12. Taxes...................................................  8
3.13. Regulation U, Etc.......................................  8
3.14. ERISA...................................................  9
3.15. Investment Company Act, Etc.............................  9
3.16. Indebtedness............................................  9
3.17. Contingent Liabilities..................................  9
<PAGE>
3.18. Chief Place of Business; Locations of Collateral........  9
3.19. Laws Including Environmental and Safety Matters......... 10
3.20. Negative Pledges........................................ 10
3.21. Full Disclosure......................................... 10

ARTICLE 4. - AFFIRMATIVE COVENANTS............................ 10

4.1.  Financial Statements and Other Documents................ 10
4.2.  Existence; Compliance with Laws; Etc.................... 11
4.3   Business................................................ 12
4.4.  Maintain Property....................................... 12
4.5.  Insurance............................................... 12
4.6.  Record keeping; Rights of Inspection.................... 12
4.7.  Notice of Material Events............................... 12
4.8.  Deposit Accounts........................................ 13

ARTICLE 5. - NEGATIVE COVENANTS............................... 13

5.1.  Indebtedness............................................ 13
5.2.  Contingent Liabilities.................................. 14
5.3.  Limitation on Liens..................................... 14
5.4.  Prohibition of Fundamental Changes...................... 14
5.5   Investments and Loans................................... 15
5.8.  Transactions with Affiliates............................ 15
5.9.  Negative Pledge......................................... 15
5.8.  Change of Senior Management............................. 15

ARTICLE 6. - CONDITIONS PRECEDENT............................. 15

6.1.  Conditions of Initial Extension of Credit............... 15
6.2.  Conditions of All Loans................................. 17

ARTICLE 7. - EVENTS OF DEFAULT................................ 18

7.1.  Events of Default....................................... 18
7.2.  Lender's Remedies....................................... 20
7.3.  Cross Default........................................... 20
7.4.  Setoff.................................................. 20

ARTICLE 8. - MISCELLANEOUS.................................... 20

8.1.  Notices................................................. 20
8.2.  No Waiver of Rights..................................... 21
8.3.  Cumulative Remedies..................................... 22
8.4.  Successors.............................................. 22
8.5.  Governing Law........................................... 22
8.6.  Submission to Jurisdiction; Waiver of Trial by Jury..... 22
8.7.  Complete Agreement, Amendments.......................... 23 
8.8.  Expenses................................................ 23
8.9.  Indemnification......................................... 23
8.11. Survival of Agreements.................................. 23
8.12. Severability............................................ 24
8.13. Descriptive Headings.................................... 24
8.14. Counterparts............................................ 24

SCHEDULES AND EXHIBITS

Schedule 3.0   (Financial Statements of Borrower)


<PAGE>
Schedule 3.2   (Foreign Qualifications - List of States)
Schedule 3.3   (Subsidiaries and Investments/+5% Shareholders)
Schedule 3.8   (Litigation)
Schedule 5.1   (Disclosed Indebtedness)
Schedule 5.3   (Disclosed Liens)
Exhibit A - PCD Revolving Credit Note
Exhibit B - CTi Revolving Credit Note






































<PAGE>
                        CREDIT AGREEMENT

     CREDIT AGREEMENT dated as of October 1, 1996 between PCD INC., a 
Massachusetts corporation ("Borrower"), CTi TECHNOLOGIES, INC., a 
Massachusetts corporation, which is a wholly owned subsidiary of the Borrower 
("CTi"), and EASTERN BANK, a Massachusetts banking corporation ("Lender").

     WHEREAS, Borrower has requested that Lender provide it and CTi with 
revolving lines of credit;

     WHEREAS, Lender is willing, on the terms and subject to the conditions in 
this Agreement, to make a revolving line of credit available to Borrower and 
CTi;

     NOW, THEREFORE, in consideration of the mutual promises contained herein 
and other good and valuable consideration, the receipt and sufficiency of 
which are acknowledged, Lender, Borrower and CTi agree as follows.

                    ARTICLE 1. -  DEFINITIONS

     1.1.  DEFINED TERMS.  Unless otherwise defined herein, the capitalized 
terms, as used in this Agreement, shall have the meanings as set forth on 
Schedule 1 hereto.

     1.2.  ACCOUNTING AND BANKING TERMS.  All accounting and banking terms not 
specifically defined herein shall be construed, in the case of accounting 
terms, in accordance with GAAP consistently applied and, in the case of 
banking terms, in accordance with general practice among commercial banks in 
Boston, Massachusetts.

                ARTICLE 2. - LOANS TO PCD AND CTi 

     2.1.  PCD REVOLVING CREDIT COMMITMENT.  Subject to the terms and 
conditions hereof, Lender agrees to make revolving credit loans to Borrower 
from time to time during the Commitment Period, provided, however, that the 
aggregate principal amount of all outstanding PCD Revolving Credit Loans does 
not exceed $5,000,000.00 (the "PCD Revolving Credit Limit").  The PCD 
Revolving Credit Loans may be repaid by Borrower at any time, without penalty 
or premium and reborrowed only during the Commitment Period, and shall be due 
and payable on the first to occur of the Termination Date or demand by Lender.

     2.2.  PROCEDURE FOR REVOLVING CREDIT BORROWINGS.  Subject to the terms 
and conditions hereof, Borrower may borrow under the PCD Revolving Credit 
Commitment during the PCD Revolving Credit Commitment Period on any Business 
Day.  Borrower may request PCD Revolving Credit Loans, from time to time, by 
submitting irrevocable Loan requests in such form and manner as Lender may 
require or permit (including, without limitation, telephone requests), 
specifying the amount to be borrowed, the requested Borrowing Date, and the 
manner in which Borrower would like the proceeds of such Loan disbursed.  A 
PCD Revolving Credit Loan

                               -1-
<PAGE>
request must be properly made and received by Lender prior to  12:00 noon 
(Eastern Time) on a Business Day for Lender to make a PCD Revolving Credit 
Loan on the same Business Day.  Lender may require telephone requests to be 
confirmed promptly in writing and Borrower shall indemnify and hold Lender 
harmless for any action, including the making of any Loan or any loss or 
expenses taken or incurred by Lender in reliance upon any such telephone 
request.  Except as otherwise agreed by Lender, the proceeds of all PCD 
Revolving Credit Loans will be made available to Borrower by Lender by 
crediting Borrower's deposit account with Lender. 

     2.3.  INTEREST ON PCD REVOLVING CREDIT LOANS.  The Borrower shall pay 
interest on the unpaid principal amount of each PCD Revolving Credit Loan 
outstanding at any time, and from time to time, for the period from the 
Borrowing Date at a fluctuating rate per annum equal to the Base Rate.  
Interest on all PCD Revolving Credit Loans shall be payable in arrears on the 
first (1st) Business Day of each month commencing on the first such day to 
occur after the date of this Agreement, and monthly thereafter until the PCD 
Revolving Credit Loans are fully paid.

     2.4.  MANDATORY PREPAYMENT.  If at any time the aggregate unpaid 
principal amount of the PCD Revolving Credit Loans exceeds the amount 
permitted under Section 2.1 Borrower shall immediately prepay an amount at 
least equal to such excess, together with accrued interest on the amount 
prepaid to the date of prepayment. 

     2.5.  PCD REVOLVING CREDIT NOTE AND RECORDS.  The PCD Revolving Credit 
Loans shall be evidenced by the PCD Revolving Credit Note.  Lender shall 
maintain records of each (i) PCD Revolving Credit Loan and (ii) payments of 
principal and interest and shall furnish periodic reports to Borrower showing 
the outstanding principal balance of the PCD Revolving Credit Loans.  The 
Lender's records shall constitute prima facie evidence of the accuracy of the 
information recorded therein and in the event that Borrower fails to object, 
within thirty (30) days of receipt of Lender's periodic reports to Borrower 
with respect to PCD Revolving Credit Loans, the information in such reports 
shall be conclusive and binding as against Borrower; provided, however, that 
any failure by Lender to maintain such records or furnish such reports shall 
not affect the obligations of Borrower under the PCD Revolving Credit Note or 
this Agreement.

     2.6.  PCD REVOLVING CREDIT LOAN PROCEEDS.  Borrower shall use the 
proceeds of the PCD Revolving Credit Loans for its working capital purposes.

     2.7.  CALCULATION OF INTEREST.  Interest and fees shall be calculated on 
the basis of a 360-day year for the actual days elapsed, from and including 
the date of such Loan to but excluding the date of any repayment.  Any change 
in rate resulting from a change in the Base Rate shall become effective as of 
the day on which such change in the Base Rate becomes effective.

     2.8.  DEFAULT RATE.  Notwithstanding anything to the contrary contained 
herein, after maturity (whether at the stated maturity, upon demand or an 
Event of Default or otherwise),  interest shall be payable on the unpaid 
principal balance of the PCD Revolving Credit Loans and on all other 
obligations of the Borrower to the Lender at a fluctuating rate per annum 
equal to the Base Rate plus three percent (3%), until fully paid.

                               -2-
<PAGE>
     2.9.  INTEREST LIMITATION.  No provision of this Agreement or the Note 
shall require the payment, or permit the collection, of interest in excess of 
the highest rate permitted by applicable law.  To the extent that any interest 
received by Lender exceeds the maximum amount permitted, such payment shall be 
credited to unpaid principal, provided, however, that any excess amount 
remaining after full payment of principal shall be refunded to Borrower.  

     2.10. LATE PAYMENT CHARGE.  Any payment of principal or interest not paid 
by Borrower within ten (10) days after the date such payment is due shall be 
subject to a late charge equal to three percent (3%) of the amount overdue.

     2.11. PAYMENTS.  All payments (including prepayments) made by Borrower 
hereunder or under the PCD Note shall be made in immediately available funds 
not later than 1:00 p.m., (Eastern time), on the due date at Lender's office 
located at 605 Broadway, Saugus, MA  01906 (or at such other office as Lender 
may specify to Borrower in writing).  If any payment becomes due and payable 
on a day other than a Business Day, such payment shall be extended to the next 
succeeding Business Day and, with respect to payments of principal, interest 
thereon shall be payable at the applicable rate during such extension.  All 
payments shall be made without setoff or counterclaim and free and clear of, 
and without deduction for, any charge of any kind.  All payments received by 
Lender after 1:00 p.m. on any Business Day shall not be deemed received until 
the next Business Day.  On the date any payment of principal or interest is 
due on account of the PCD Loans, Lender may, but shall not be obligated to, 
effect payment by debiting Borrower's deposit accounts with Lender in an 
amount equal to all or any portion of such payment due.

     2.12. TERMINATION OF PCD CREDIT COMMITMENT.  To terminate the PCD 
Revolving Credit Commitment, Borrower shall give Lender not less than five (5) 
Business Days prior written notice and on the termination date prepay in full 
all Loans together with accrued interest, fees, and charges thereon to the 
date of prepayment.  The PCD Revolving Credit Commitment may be terminated by 
Lender or shall terminate automatically as set forth in Article 7.

     2.13. REVOLVING CREDIT COMMITMENT TO CTi.  Subject to the terms and 
conditions hereof, Lender agrees to make Revolving Credit Loans to CTi from 
time to time during the Commitment Period, provided, however, that the 
aggregate principal amount of all outstanding CTi Revolving Credit Loans does 
not exceed $250,000 (the "CTi Revolving Credit Limit").  The CTi Revolving 
Credit Loans may be repaid by CTi at any time, without penalty or premium and 
reborrowed only during the Commitment Period, and shall be due and payable on 
the first to occur of the CTi Termination Date or a demand by Lender.  The 
Borrower shall guaranty the prompt payment of all CTi Revolving Credit Loans.

     2.14. PROCEDURE FOR REVOLVING CREDIT BORROWINGS.  Subject to the terms 
and conditions hereof, CTi may borrow under the CTi Revolving Credit 
Commitment during the CTi Revolving Credit Commitment Period on any Business 
Day.  CTi may request CTi Revolving Credit Loans, from time to time, by 
submitting irrevocable Loan requests in such form and manner as Lender may 
require or permit (including, without limitation, telephone requests), 
specifying the amount to be borrowed, the requested 

                               -3-
<PAGE>
Borrowing Date, and the manner in which CTi would like the proceeds of such 
Loan disbursed.  A CTi Revolving Credit Loan request must be properly made and 
received by Lender prior to 12:00 noon (Eastern Time) on a Business Day for 
Lender to make a CTi Revolving Credit Loan on the same Business Day.  Lender 
may require telephone requests to be confirmed promptly in writing and CTi 
shall indemnify and hold Lender harmless for any action, including the making 
of any Loan or any loss or expenses taken or incurred by Lender in reliance 
upon any such telephone request.  Except as otherwise agreed by Lender, the 
proceeds of all CTi Revolving Credit Loans will be made available to CTi by 
Lender by crediting CTi's deposit account with Lender. 

     2.15. INTEREST ON CTi REVOLVING CREDIT LOANS.  CTi shall pay interest on 
the unpaid principal amount of each CTi Revolving Credit Loan outstanding at 
any time, and from time to time, for the period from the Borrowing Date at a 
fluctuating rate per annum equal to the Base Rate.  Interest on all Cti 
Revolving Credit Loans shall be payable in arrears on the first (1st) Business 
Day of each month commencing on the first such day to occur after the date of 
this Agreement, and monthly thereafter until the CTi Revolving Credit Loans 
are fully paid.

     2.16. MANDATORY PREPAYMENT.  If at any time the aggregate unpaid 
principal amount of the CTi Revolving Credit Loans exceeds the amount 
permitted under Section 2.1 CTi shall immediately prepay an amount at least 
equal to such excess, together with accrued interest on the amount prepaid to 
the date of prepayment. 

     2.17. CTi REVOLVING CREDIT NOTE AND RECORDS.  The CTi Revolving Credit 
Loans shall be evidenced by the CTi Revolving Credit Note.  Lender shall 
maintain records of each (i) CTi Revolving Credit Loan and (ii) payments of 
principal and interest and shall furnish periodic reports to CTi showing the 
outstanding principal balance of the CTi Revolving Credit Loans.  The Lender's 
records shall constitute prima facie evidence of the accuracy of the 
information recorded therein and in the event that CTi fails to object, within 
thirty (30) days of receipt of Lender's periodic reports to CTi with respect 
to CTi Revolving Credit Loans, the information in such reports shall be 
conclusive and binding as against CTi; provided, however, that any failure by 
Lender to maintain such records or furnish such reports shall not affect the 
obligations of CTi under the CTi Revolving Credit Note or this Agreement.

     2.18. CTi REVOLVING CREDIT LOAN PROCEEDS.  CTi shall use the proceeds of 
the CTi Revolving Credit Loans for its working capital purposes.

     2.19. CALCULATION OF INTEREST.  Interest and fees shall be calculated on 
the basis of a 360-day year for the actual days elapsed, from and including 
the date of such Loan to but excluding the date of any repayment.  Any change 
in rate resulting from a change in the Base Rate shall become effective as of 
the day on which such change in the Base Rate becomes effective.

     2.20. DEFAULT RATE.  Notwithstanding anything to the contrary contained 
herein, after maturity (whether at the stated maturity, upon demand or an 
Event of Default or otherwise), interest shall be payable on the unpaid 
principal balance of the CTi Revolving Credit Loans and on all other 
obligations of the 
                               -4-
<PAGE>
CTi to the Lender at a fluctuating rate per annum equal to the Base Rate plus 
three percent (3%), until fully paid.

     2.21. INTEREST LIMITATION.  No provision of this Agreement or the CTi 
Note shall require the payment, or permit the collection, of interest in 
excess of the highest rate permitted by applicable law.  To the extent that 
any interest received by Lender exceeds the maximum amount permitted, such 
payment shall be credited to unpaid principal, provided, however, that any 
excess amount remaining after full payment of principal shall be refunded to 
CTi.  

     2.22. LATE PAYMENT CHARGE.  Any payment of principal or interest not paid 
by CTi within ten (10) days after the date such payment is due shall be 
subject to a late charge equal to three percent (3%) of the amount overdue.

     2.23. PAYMENTS.  All payments (including prepayments) made by CTi 
hereunder or under the CTi Note shall be made in immediately available funds 
not later than 1:00 p.m., (Eastern time), on the due date at Lender's office 
located at 605 Broadway, Saugus, MA  01906 (or at such other office as Lender 
may specify to CTi in writing).   If any payment becomes due and payable on a 
day other than a Business Day, such payment shall be extended to the next 
succeeding Business Day and, with respect to payments of principal, interest 
thereon shall be payable at the applicable rate during such extension.  All 
payments shall be made without setoff or counterclaim and free and clear of, 
and without deduction for, any charge of any kind.  All payments received by 
Lender after 1:00 p.m. on any Business Day shall not be deemed received until 
the next Business Day.  On the date any payment of principal or interest is 
due on account of the CTi Loans, Lender may, but shall not be obligated to, 
effect payment by debiting CTi's deposit accounts with Lender in an amount 
equal to all or any portion of such payment due.

     2.24. TERMINATION OF CREDIT COMMITMENT.  To terminate the CTi Revolving 
Credit Commitment, CTi shall give Lender not less than five (5) Business Days 
prior written notice and on the termination date prepay in full all Loans 
together with accrued interest, fees, and charges thereon to the date of 
prepayment.  The CTi Revolving Credit Commitment may be terminated by Lender 
or shall terminate automatically as set forth in Article 7.


           ARTICLE 3. - REPRESENTATIONS AND WARRANTIES

     In order to induce Lender to enter into this Agreement and to make the 
Revolving Credit Loans, Borrower represents and warrants to Lender, except as 
otherwise set forth in a schedule attached hereto and made a part hereof, 
that:

     3.0.  FINANCIAL CONDITION.
          (a)  The Financial Statements previously delivered to Lender and 
attached hereto as Schedule 3.0 present fairly the financial position of 
Borrower and its Subsidiaries on a consolidated basis as of the dates thereof 
and its and their results of operations, shareholders' equity and cash flows 
for the periods then ended.  All Financial Statements and information, 
including any related schedules and notes, and any other financial information 
or statements furnished in accordance 

                              -5-
<PAGE>
herewith, have been prepared in accordance with GAAP, except as otherwise 
disclosed therein, subject only in the case of unaudited interim Financial 
Statements to normal year-end audit adjustments and the absence of footnotes.  
In the case of each Revolving Credit Loan, the representations and warranties 
in this Section shall be deemed to have been made in respect of the then most 
recent Financial Statements of Borrower furnished to Lender.
          (b)  The Borrower and its Subsidiaries are each, and collectively as 
a whole, Solvent.

     3.1.  NO CHANGE.  There has been no Material Adverse Change since the 
Financial Statements dated as of December 31, 1995.

     3.2.  ORGANIZATION, EXISTENCE, GOOD STANDING.  Borrower (i) is duly 
organized, validly existing and in good standing as a corporation under the 
laws of the Commonwealth of Massachusetts, (ii) has obtained all licenses, 
permits, approvals and consents and has filed all registrations necessary for 
the lawful operation of its business, (iii) has the corporate power and 
authority and the legal right to own, lease and operate its property and to 
conduct the business in which it is currently engaged, and (iv) is duly 
qualified to do business and is in good standing as a foreign corporation 
under the laws of each jurisdiction where its ownership, lease or operation of 
property or the conduct of its business requires such qualification, except 
where the failure to be so qualified would not have a Material Adverse 
Effect.  Schedule 3.2 lists all states where Borrower is qualified or 
authorized as a foreign corporation.

     3.3.  SUBSIDIARIES; CAPITALIZATION.  Except as set forth on Schedule 3.3, 
Borrower has no Subsidiaries or Investments in any other Person.  The 
authorized capitalization, the number of shares of each class of capital stock 
issued and outstanding of Borrower and each of the record holders holding more 
than 5% of the issued and outstanding shares of the Borrower are set forth 
on Schedule 3.3.  All outstanding shares of Borrower's stock have been duly 
authorized, validly issued, and are fully paid and non-assessable.

     3.4.  POWER AND AUTHORITY.  Borrower and CTi have (i) full corporate 
power, authority and legal right to execute, deliver and perform their 
obligations under the Loan Documents to which they are a party and to borrow 
hereunder, (ii) taken all necessary actions to authorize the execution, 
delivery and performance by them of each Loan Document to which each is a 
party and to authorize their borrowings hereunder, and (iii) caused to be duly 
executed and delivered on behalf of the Borrower and CTi each of the Loan 
Documents to which Borrower and CTi is a party.

     3.5.  LEGAL, VALID, BINDING OBLIGATION.  Each of the Loan Documents and 
each agreement, certificate, document, instrument or other paper delivered 
pursuant thereto, to which Borrower and CTi are parties, constitutes the 
legal, valid, and binding obligation of Borrower and CTi enforceable against 
Borrower and CTi in accordance with its terms.

     3.6.  CONSENTS.  No consent, permit, license, approval or authorization 
of, or registration, declaration or filing with or notice to, any governmental 
authority, bureau or agency or any 

                               -6-
<PAGE>
other Person is required in connection with the execution, delivery or 
performance by Borrower, or CTi, or the validity or enforceability against 
Borrower, or CTi, of any Loan Document to which either of them is a party, 
except for the consents and approvals which have been obtained.

     3.7.  NO LEGAL BAR.  The execution, delivery and performance by Borrower 
and CTi of the Loan Documents, and each agreement, certificate, document, 
instrument or other paper delivered pursuant thereto, to which Borrower and 
CTi are parties, does not and will not conflict with or cause a breach of any 
provision of any existing law, rule or regulation, order, judgment, award or 
decree of any court, arbitrator or governmental authority, bureau or agency, 
or of the charter documents or Bylaws of, or any security issued by, Borrower 
or CTi or of any material mortgage, deed of trust, indenture, lease, contract 
or other agreement or undertaking to which Borrower or CTi is a party or by 
which any of their properties may be bound, and will not result in the 
creation or imposition of any Lien on any of their revenues or properties, 
except in favor of Lender.

     3.8.  NO LITIGATION.  Except as set forth on Schedule 3.8, no litigation, 
investigation or other proceeding of or before any court, arbitrator or 
governmental authority is currently pending nor, to the knowledge of Borrower 
or CTi threatened against Borrower or CTi or their properties, or the revenues 
of Borrower's Subsidiaries which, if adversely determined, could reasonably be 
expected to have a Material Adverse Effect.

     3.9.  NO DEFAULT.  Neither Borrower nor any of its Subsidiaries is in 
default in any respect in the payment or performance of any of its obligations 
for monies borrowed or under any mortgage, deed of trust, indenture, lease, 
contract or other agreement or undertaking to which it is a party or by which 
it or any of its property may be bound or affected and no Default or Event of 
Default has occurred and is continuing.  Neither Borrower nor any of its 
Subsidiaries is in default under any order, award or decree of any court, 
arbitrator or governmental authority binding upon or affecting it or by which 
any of its property may be bound or affected, and no such order, award or 
decree has or could reasonably be expected to have a Material Adverse Effect.

     3.10. ASSETS, NO LIENS; INTELLECTUAL PROPERTY.  Borrower and its 
Subsidiaries have good and marketable title to, or valid leasehold interest 
in, all of their real property and good title to all its personal property, 
including assets carried on its books and reflected in the Financial 
Statements, subject to no Liens except for (i) Liens permitted under Section 
5.3 hereof, or (ii) assets sold or otherwise disposed of in the ordinary 
course of its business.  Borrower and its Subsidiaries own or license all 
Intellectual Property necessary for the conduct of their businesses and no 
claims, suit or proceedings are pending or threatened which would reasonably 
be expected to impair in any material respect Borrower's and its Subsidiaries 
rights in any such Intellectual Property.

     3.11. NO BURDENSOME RESTRICTIONS.  Neither Borrower nor any of its 
Subsidiaries is a party to or bound by any contract, agreement or instrument 
or subject to any corporate restriction 

                               -7-
<PAGE>
(including any restriction set forth in its charter or Bylaws) that would have 
a Material Adverse Effect.

     3.12. TAXES.  All federal, state, local and other tax reports and returns 
which are required to be filed by Borrower and its Subsidiaries have been 
filed, except where extensions have been properly obtained, and Borrower and 
its Subsidiaries have paid or made adequate provision for all taxes, interest 
and penalties shown to be due and payable on such returns or on any 
assessments made against them or any of their properties and all other taxes, 
fees or other charges imposed on them or any of their properties by any 
governmental authority, including, without limitation, all payroll withholding 
taxes, have been paid and no tax liens have been filed and no claims are being 
asserted with respect to any such taxes, fees or other charges.

     3.13. REGULATION U, ETC.  Neither Borrower nor any of its Subsidiaries is 
engaged and will not engage, principally or as one of its important 
activities, in the business of extending credit for the purpose of 
"purchasing" or "carrying" any "margin stock" (within the respective meanings 
of each of the quoted terms under Regulations U, T, G or X of the Board of 
Governors of the Federal Reserve System and any successors thereto as now and 
from time to time hereafter in effect), and no part of the proceeds of any 
Loan hereunder will be used for "purchasing" or "carrying" any "margin stock" 
as so defined or for any purpose which violates, or which would be 
inconsistent with, the provisions of Regulation U or Regulation G of the 
Federal Reserve Board.

     3.14. ERISA.  The Borrower, all Commonly Controlled Entities, and all 
their Plans are and have been in substantial compliance with the provisions of 
ERISA, the qualification requirements of IRC Section 401(a), and the published 
interpretations thereunder.  No notice of intent to terminate a Plan has been 
filed under Section 4041 of ERISA, nor has any Plan been terminated under 
Section 4041(e) of ERISA which resulted in substantial liability to Borrower 
or any of its Commonly Controlled Entities.  The PBGC has not instituted 
proceedings to terminate, or appoint a trustee to administer, a Plan and no 
event has occurred or condition exists which might constitute grounds under 
Section 4042 of ERISA for the termination of, or the appointment of a trustee 
to administer, any Plan.  Neither Borrower nor any Commonly Controlled 
Entities would be liable for any amount pursuant to Sections 4063 or 4064 of 
ERISA if all Plans terminated as of the most recent valuation dates of such 
Plans.  Neither Borrower nor any Commonly Controlled Entities have: withdrawn 
from a Multiemployer Plan during a plan year for which it was a substantial 
employer, as defined in Section 4001(a)(2) of ERISA; or failed to make a 
payment to a Plan required under Section 302(f)(1) of ERISA such that security 
would have to be provided pursuant to Section 307 of ERISA.  No lien upon the 
assets of Borrower has arisen with respect to a Plan.  To the best knowledge 
of Borrower, no prohibited transaction or Reportable Event has occurred with 
respect to a Plan.  Borrower and each Commonly Controlled Entities have made 
all contributions required to be made by them to any Plan or Multiemployer 
Plan when due.  There is no accumulated funding deficiency in any Plan, 
whether or not waived.

     3.15. INVESTMENT COMPANY ACT, ETC.  Borrower is not an "investment 
company" registered or required to be registered under the Investment Company 
Act of 1940, or a company 

                               -8-
<PAGE>
"controlled" (within the meaning of such Investment Company Act) by such an 
"investment company".  Borrower is not subject to regulation under the Public 
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate 
Commerce Act or to any other federal or state statute or regulation limiting 
its ability to incur indebtedness for money borrowed.

     3.16. INDEBTEDNESS.  Borrower and its Subsidiaries have no Indebtedness 
of any type except Indebtedness incurred under this Agreement and that which 
is permitted under Section 5.1 of this Agreement.

     3.17. CONTINGENT LIABILITIES.  Except as set forth in the notes to the 
Financial Statements, Borrower and its Subsidiaries have no material 
Contingent Liabilities.

     3.18. CHIEF PLACE OF BUSINESS; LOCATIONS OF COLLATERAL.  The chief 
executive office of Borrower is located at 2 Technology Drive, Peabody, MA 
01960 and all books and records of Borrower are located at that address.

    3.19. LAWS INCLUDING ENVIRONMENTAL AND SAFETY MATTERS.  Borrower and its 
Subsidiaries are in compliance in all material respects with all laws, rules 
and regulations, orders of court or other governmental bodies, applicable to 
it including, without limitation, all environmental, health and safety 
statutes and  regulations and specifically the Federal Resource Conservation 
and Recovery Act, the Federal Comprehensive Environmental Response, 
Compensation and Liability Act, the Federal Clean Water Act, the Clean Air 
Act, the requirements and regulations of the Nuclear Regulatory Commission, 
and the Federal Occupational Safety and Health Act.  Borrower is not subject 
to any judicial or administrative proceedings alleging the violation of any 
applicable law or regulation which could reasonably be expected to have a 
Material Adverse Effect.  Borrower is not the subject of any federal, state or 
local investigation regarding, among other matters, the release of any 
Hazardous Material into the environment, the results of which could reasonably 
be expected to have a Material Adverse Effect.  Borrower has not filed any 
notice under any applicable law indicating past or present treatment, storage, 
disposal, generation, transportation or reporting a spill or release into the 
environment of any Hazardous Material which could reasonably be expected to 
have a Material Adverse Effect.  Borrower has not placed or disposed of, used, 
generated or transported any Hazardous Material in violation of any applicable 
law or regulation, upon or over any real property owned or leased by Borrower 
and Borrower has no knowledge of such Hazardous Material on such real 
property.

     3.20.  NEGATIVE PLEDGES.  Neither Borrower nor any of its Subsidiaries is 
a party to or bound by any agreement, indenture, or other instrument which 
prohibits the creation, incurrence or allowance to exist of any mortgage, deed 
of trust, pledge, lien, security interest or other encumbrance or conveyance 
upon any of Borrower&WP1-9;s property.

     3.21.  FULL DISCLOSURE.  The Financial Statements referred to in Section 
3.1, Schedules hereto, the Loan Documents and any list, certificate, written 
statement, instrument, paper or other information furnished by Borrower to 
Lender in connection with the Loan Documents do not contain any untrue 
statement of a material fact or omit to state any material fact necessary to 

                               -9-
<PAGE>
make the statements contained therein and herein, in light of the 
circumstances in which they are made, not misleading.


             ARTICLE 4. - AFFIRMATIVE COVENANTS

     Borrower covenants and agrees that so long as the Revolving Credit 
Commitment remains in effect, the Note remains outstanding and unpaid, in 
whole or in part, or any other amount is owing to Lender hereunder:

     4.1.  FINANCIAL STATEMENTS AND OTHER DOCUMENTS.  Borrower shall furnish 
or cause to be furnished to Lender:

          (a)  ANNUAL STATEMENTS.  As soon as available, but in any event not 
later than one hundred twenty (120) days after the last day of each fiscal 
year of Borrower, audited Financial Statements of Borrower for such fiscal 
year, as prepared by the Borrower's independent accounting firm (which shall 
be reasonably satisfactory to Lender), together with the audit report of 
such    independent accounting firm which shall not be qualified in any manner 
(except for a qualification for a change in accounting principles in which the 
accounting firm concurs);

          (b)  QUARTERLY STATEMENTS.  As soon as available, but in any event 
not later than thirty (30) days after the last day of each fiscal quarter of 
Borrower, Financial Statements internally prepared by management of Borrower 
for such quarter;

          (c)  QUARTERLY ACCOUNTS RECEIVABLE AGINGS.  As soon as available, 
but in any event not later than thirty (30) days after the last day of each 
fiscal quarter of Borrower, an accounts receivable aging report as of the end 
of such quarter;

          (d)  MANAGEMENT LETTER.  As soon as available, but in any event not 
later than one hundred twenty (120) days after the last day of each fiscal 
year of Borrower, copies of any written recommendations concerning the 
management, finances, financial controls, or operations of Borrower received 
from Borrower's independent public accountants; and

          (e)  OTHER INFORMATION.  Such other financial and other information 
concerning the affairs of Borrower as Lender may from time to time reasonably 
request.

     4.2.  EXISTENCE; COMPLIANCE WITH LAWS; ETC.  Borrower shall:

          (a)  CORPORATE EXISTENCE.  Preserve and keep in full force and 
effect its corporate existence and all franchises, licenses and permits 
material to the proper conduct of its business;

          (b)  COMPLIANCE WITH APPLICABLE LAWS.  Comply and cause its 
Subsidiaries to comply with all applicable laws and duly observe all valid 
requirements of governmental authorities the breach of which could reasonably 
be expected to have a Material Adverse Effect, except when contested with due 
diligence, in good 

                               -10-
<PAGE>
faith and in proper proceedings.  Without limitation of the foregoing, 
Borrower shall file or cause to be filed all tax returns and reports which are 
required by law to be filed by it, and pay and discharge, or cause to be paid 
and discharged, when due, all taxes, assessments and other governmental 
charges and levies imposed upon it or any of its property or any part thereof, 
or upon the income or profits therefrom, including, without limitation, 
payroll withholding taxes, as well as all claims for labor, materials or 
supplies which, if unpaid, might become a Lien upon any of its property 
(unless and to the extent only that any such item is being contested in good 
faith by appropriate proceedings and no Lien has been obtained).   Borrower 
shall also pay all of its other Indebtedness and obligations promptly and in 
accordance with normal terms and trade practices.

     4.3  BUSINESS.  Borrower shall and shall cause each of its Subsidiaries 
to engage primarily in the business of designing and manufacturing electronic 
connectors for computers.

     4.4.  MAINTAIN PROPERTY.  Borrower shall keep and maintain all property 
useful and necessary in its business in good operating condition and repair, 
ordinary wear and tear excepted.

     4.5.  INSURANCE.  Borrower shall keep adequately insured by financially 
sound and responsible insurers (a) all property owned or leased by it and all 
property of an insurable nature, such insurance to be in at least such amounts 
and covering loss or damage from at least such risks and hazards (including, 
without limitation, business interruption insurance and use and occupancy 
insurance) as are usually insured against in the same geographic areas by 
companies engaged in similar businesses and reasonably acceptable to Lender, 
and (b) all liabilities of Borrower for damage to property, death or bodily 
injury, including without limitation insurance required under all applicable 
workman's compensation laws, and insurance for such liabilities resulting 
from, caused by or arising out of any product sold by any predecessor of 
Borrower or by Borrower, all such insurance to be in at least such amounts as 
are usually insurance against by companies engaged in the same or similar 
businesses and reasonably acceptable to Lender.  The Lender shall be named the 
sole loss payee and an additional insured under such policies and all such 
policies shall provide that no termination or nonrenewal shall be effective 
unless Lender is given thirty (30) days prior written notice.

     4.6.  RECORDKEEPING; RIGHTS OF INSPECTION.  Borrower shall (i) keep 
proper books of record and account in which full, true and correct entries, in 
conformity with GAAP, are made of all dealings and transactions in relation to 
its property, business and activities; (ii) permit Persons authorized by 
Lender to visit and inspect its property, to inspect its books of record and 
account and to make photocopies thereof, to review its accounts and to discuss 
the affairs, finances and accounts of Borrower with its officers and 
independent public accountants, all upon reasonable notice and at such times 
during normal business hours and as often as Lender may reasonably request; 
and (iii) permit Lender to perform field examinations and audits of such books 
and records of account, all upon reasonable notice and at such times during 
normal business hours and as often as Lender may reasonably request.

     4.7.  NOTICE OF MATERIAL EVENTS.  Borrower will, promptly upon any 
officer of Borrower obtaining knowledge thereof, give notice to Lender of (i) 
any Default or Event of Default; (ii) any 

                               -11-
<PAGE>
material casualty, loss or depreciation to any inventory or other property of 
Borrower or any other force majeure, or any litigation, investigation or other 
proceeding against or involving Borrower the result of any of which might have 
a Material Adverse Effect; (iii) any litigation, investigation, other 
proceeding or dispute affecting Borrower (A) which relates, in whole or in 
part, to any of the transactions contemplated by any of the Loan Documents, 
(B) which involves an amount in excess of Fifty Thousand Dollars ($50,000), or 
(C) which may exist between Borrower and any governmental body; (iv) any 
Reportable Event in respect of any Plan or any other event or change in a Plan 
which might have a Material Adverse Effect or (v) any  release of any 
Hazardous Materials at any location owned or leased by Borrower or any 
investigation or proceeding by any governmental body alleging or relating to 
the violation by Borrower of any law or regulation.  Borrower will furnish to 
Lender from time to time all information which Lender shall reasonably request 
with respect to the status of any litigation, investigation, other proceeding 
or dispute to which Borrower is a party.

     4.8.  DEPOSIT ACCOUNTS.  Borrower shall maintain with Lender deposit 
accounts or accounts to be used as its principal depository and operating 
account(s) and utilize the cash management services of Lender to be provided 
by Lender at competitive rates. 


                 ARTICLE 5. - NEGATIVE COVENANTS

     Borrower covenants and agrees that, so long as any Revolving Credit 
Commitment is in effect, the Notes remain outstanding and unpaid, in whole or 
in part, or any other amount is owing Lender hereunder, Borrower will not, 
directly or indirectly, and Borrower will not permit any of its Subsidiaries 
to:

     5.1.  INDEBTEDNESS.  Create, incur, assume or allow to exist any 
Indebtedness, except:

          (a)  LOAN DOCUMENT INDEBTEDNESS.  Indebtedness evidenced by the 
Notes and any other Indebtedness owing to or held by Lender arising under any 
of the Loan Documents;

          (b)  DISCLOSED INDEBTEDNESS.  Indebtedness of Borrower existing on 
the Initial Borrowing Date and disclosed in Schedule 5.1; provided, however, 
that none of such Indebtedness shall be renewed, extended or otherwise 
modified in any material respect and may be extended by Borrower only on 
substantially the same terms and conditions as in effect on the date hereof;

          (c)  UNSECURED CURRENT LIABILITIES.  Unsecured current liabilities 
(not the result of borrowing) incurred in the ordinary course of business 
which are not evidenced by notes or instruments and which are not more than 
thirty (30) days overdue from the original due dates thereof (unless and to 
the extent only that any such liability is contested by Borrower in good faith 
by appropriate proceedings and adequate reserves have been set aside with 
respect thereto in accordance with GAAP);

          (d)  CAPITAL LEASES AND PURCHASE MONEY FINANCINGS. Capital Leases 
and purchase money financings incurred by Borrower for the lease or purchase 
of Capital Equipment (and Borrower 


                               -12-
<PAGE>
agrees to furnish copies of the documentation for its outstanding Capital 
Leases and purchase money financings to Lender upon reasonable request);

          (e)  INTERCOMPANY OBLIGATIONS.  Indebtedness of any wholly owned 
Subsidiary to Borrower; and

          (f)  APPROVED INDEBTEDNESS.  Indebtedness for borrowed money 
incurred after the Initial Borrowing Date with prior notice to and the written 
consent of Lender.

     5.2.  CONTINGENT LIABILITIES.  Except for Contingent Liabilities existing 
on the Initial Borrowing Date and disclosed on the Financial Statements, 
create, incur, assume or allow to exist any Contingent Liabilities except for 
Contingent Liabilities arising out of the endorsement of instruments for 
deposit or collection in the ordinary course of business.

     5.3.  LIMITATION ON LIENS.  Create, incur, assume or allow to exist, any 
Lien upon any of its property, income or profits, whether now owned or held or 
hereafter acquired, including attachment, levy, garnishment or other judicial 
process relating to such property, except:

          (a)  TAXES.  Liens for taxes not yet due;

          (b)  CARRIERS'; WAREHOUSEMEN'S; MECHANICS' ETC.  Carriers', 
warehousemen's, mechanics', landlords', materialmen's, repairmen's, workmen's 
or other like Liens arising in the ordinary course of business with respect to 
obligations which are not yet due;

          (c)  SOCIAL SECURITY.  Pledges, deposits in connection with workers' 
compensation, unemployment insurance and other social security legislation 
made in the ordinary course of business;

          (d)  EASEMENTS, RESTRICTIONS, ETC.  Easements, rights of way, 
covenants, consents, reservations, encroachments, variations, and other 
restrictions of record, with respect to Borrower's real property which do not 
interfere materially with the conduct of Borrower's businesses, and do not 
detract materially from the value of such property or impair Borrower's use 
thereof; 

          (e)  CAPITAL LEASES.  Liens incurred in respect of Capital Leases or 
purchase money financings permitted under Section 5.1; provided however, that 
the Lien granted in respect of any Capital Lease or purchase money financings 
shall only cover the Capital Equipment subject to such lease or financing and 
secure only the Indebtedness incurred in respect of the purchase thereof and 
so long as such Indebtedness is only secured by such Lien; and

          (f)  DISCLOSED LIENS.  Liens existing on the Initial Borrowing Date, 
disclosed on Schedule 5.3.


                                 -13-
<PAGE>
     5.4.  PROHIBITION OF FUNDAMENTAL CHANGES.  (a)Enter into any transaction 
of merger or consolidation or amalgamation other than such that pursuant to 
which Borrower is the surviving corporation; (b)liquidate, wind-up or dissolve 
itself (or allow any such liquidation or dissolution of a Subsidiary); 
(c)convey, sell, issue, exchange, lease, assign, transfer or otherwise dispose 
of all or any material portion of its business or  property (other than sales 
of inventory in the ordinary course of business and obsolete equipment or 
equipment no longer used or useful in the business of Borrower); (d) change 
its name or the location of its chief executive office or the location of any 
Collateral except on thirty (30) days prior written notice to Lender.  

     5.5  INVESTMENTS AND LOANS.  This Section is intentionally deleted.

     5.6.  TRANSACTIONS WITH AFFILIATES.  Enter into or be a party to any 
agreement or transaction with any Affiliate, except in the ordinary course of 
Borrower's business and pursuant to reasonable requirements of Borrower's 
business and upon fair and reasonable terms and conditions which are fully 
disclosed to Lender and are no less favorable to Borrower than would obtain in 
a comparable arm's length transaction with a Person not an Affiliate of 
Borrower.

     5.7.  NEGATIVE PLEDGE.  Directly or indirectly, enter into any agreement, 
indenture, or other instrument which prohibits the creation, incurrence or 
allowance to exist of any mortgage, deed of trust, pledge, lien, security 
interest or other encumbrance or conveyance upon any of Borrower's property.

     5.8  CHANGE OF SENIOR MANAGEMENT.  Change its Chief Executive Officer 
without giving the Lender written notice thereof.

                ARTICLE 6. - CONDITIONS PRECEDENT

     6.1.  CONDITIONS OF INITIAL EXTENSION OF CREDIT.  The obligation of 
Lender to make a Revolving Credit Loan on the Initial Borrowing Date is 
subject to the satisfaction of the condition precedent that Lender shall have 
received on or before such date, the following items in form and substance 
satisfactory to Lender and its counsel executed where appropriate by a duly 
authorized officer of Borrower.

LOAN DOCUMENTS:

          (a)  CREDIT AGREEMENT.  This Agreement;

          (b)  PCD REVOLVING CREDIT NOTE.  The PCD Revolving Credit Note;

         (c)  CTi  REVOLVING CREDIT NOTE.  The $250,000 Note of even date 
given by CTi Technologies Inc. to Lender ("CTi Note");

          (d)  GUARANTY.  Borrower's Guaranty of the CTi Note.

CORPORATE DOCUMENTS:

                              -14-
<PAGE>
          (g)  CORPORATE RESOLUTIONS.  Copies of resolutions of the Board of 
Directors of Borrower, and CTi authorizing the execution, delivery and 
performance of the Loan Documents to which Borrower and CTi are a party, and 
the transactions contemplated thereby, certified as of the Initial Borrowing 
Date by the Secretary/Clerk or Assistant Secretary/Clerk of Borrower and CTi 
(which certificate shall state that such resolutions have not been amended, 
modified, revoked or rescinded as of such date);

          (h)  CORPORATE INCUMBENCY CERTIFICATE.  Certificate of the 
Secretary/Clerk or Assistant Secretary/Clerk of Borrower and CTi, dated as of 
the Initial Borrowing Date, certifying the names and titles of the officers 
authorized to execute the Loan Documents to which Borrower and CTi are a party 
and any other documents related to any thereof, together with specimen 
signatures of such officers;

          (i)  CHARTER DOCUMENTS.  Copies of (i) the charter documents and all 
amendments thereto of Borrower and CTi, currently certified by the relevant 
governmental filing authority, and (ii) the By-Laws of Borrower and CTi 
certified as of the Initial Borrowing Date by the Secretary/Clerk or Assistant 
Secretary/Clerk of the Borrower and CTi;

          (j)  LEGAL GOOD STANDING CERTIFICATES.  For Borrower and CTi, a 
certificate of legal existence and good standing issued by the Secretary of 
State of the state of Borrower's and CTi's incorporation, and a certificate of 
foreign qualification and good standing issued by the Secretary of State of 
each state of foreign qualification or authorization, all of which shall be 
dated currently;

          (k)  TAX GOOD STANDING CERTIFICATES.  For Borrower and CTi, a 
certificate of tax good standing currently dated from each jurisdiction in 
which such party is obliged to file tax returns and pay taxes (or, to the 
extent any such certificates are unobtainable, because it is not the practice 
of the taxing authority to issue such certificate, or because of time delays 
in the issuance of such certificate attributable to such taxing authority, a 
letter from Borrower's and CTi's chief financial officer setting forth the 
nature of the tax obligation and the relevant jurisdiction, and certifying 
that all required returns have been duly filed and all required taxes shown 
thereon paid;

MISCELLANEOUS DOCUMENTS:

          (l)  LEGAL OPINION.  A written opinion of counsel for Borrower in 
form and content satisfactory to Lender, dated the Initial Borrowing Date, 
addressed to Lender and covering such matters related to the Borrower and CTi 
and the transactions contemplated hereby as Lender may reasonably request;  

          (m)  LIEN SEARCH.  Search reports certified by a party acceptable to 
Lender, dated a date reasonably close to the Initial Borrowing Date, 
confirming the absence of any security interests, tax liens or other Liens 
made against Borrower and CTi, or any of their assets, wherever located; 
         
                              -15-     
 <PAGE>
          (n)  CONSENTS.  Copies of all consents or approvals of any Person 
that may be required in connection with the transactions contemplated by the 
Loan Documents;

          (o)  FEES.  Payment of the estimated fees and disbursements of 
Lender's counsel in connection with the Loan Documents and the transactions 
contemplated hereby;

          (p)  CASUALTY AND LIABILITY INSURANCE.  Certificates of insurance in 
respect of insurance required by the provisions of Section 4.5 of this 
Agreement; and

          (q)  ADDITIONAL CLOSING AGENDA ITEMS.  Fulfillment, to Lender's 
satisfaction, of each of the additional items set forth on the closing Agenda 
for this transaction.

          (r)  DISBURSEMENT INSTRUCTIONS.  The Borrower's and CTi's 
instructions for wire transfer of the proceeds of its initial borrowing.

     6.2.  CONDITIONS OF ALL LOANS.  The Lender's obligation to make any 
Revolving Credit Loan is subject to the fulfillment of the following 
additional conditions precedent:

          (a)  REPRESENTATIONS. The representations and warranties made by any 
party to any Loan Document (other than Lender) in any Loan Document or in any 
certificate, document or financial or other statement furnished at any time 
under or in connection therewith shall be true and correct on and as of the 
Borrowing Date for such Loan as if made on and as of such date;

          (b)  NO DEFAULT.  No Default or Event of Default shall have occurred 
and be continuing on the Borrowing Date for such Loan either before or after 
giving effect to the Loan made on such date;

          (c)  NO MATERIAL ADVERSE EFFECT.  There shall have occurred no event 
or change in circumstances having a Material Adverse Effect;

          (d)  CREDIT LIMIT COMPLIANCE.  The aggregate unpaid principal amount 
of the Revolving Credit Loans outstanding on any Borrowing Date shall not 
exceed the amounts permitted under Section 2.1 and 2.13 on such date; and

          (e)  ADDITIONAL MATTERS.  Lender shall have received such other 
documents, statements, certificates, information and evidence including a 
Compliance Certificate as Lender may reasonably request.  All documents and 
legal matters in connection with the transactions contemplated by this 
Agreement shall be reasonably satisfactory in form and content to Lender and 
its counsel, and all actions required to be taken on or before the Borrowing 
Date for such Loan shall have been taken.

     Each request for a Revolving Credit Loan by Borrower or CTi hereunder 
shall constitute a representation and warranty by Borrower and CTi as of the 
date of such request or application that the conditions contained in 
paragraphs (a) through (e) of this Section 6.2 have been satisfied.


                              -16-
<PAGE>

                  ARTICLE 7. - EVENTS OF DEFAULT


     7.1.  EVENTS OF DEFAULT.  Borrower acknowledges and agrees that all Loans 
hereunder are and shall at all times be payable ON DEMAND by Lender.  If any 
of the events set forth below shall occur and be continuing, the Lender may, 
but shall not be obligated to, make such demand; such events are set forth 
only for illustrating certain circumstances in which the Lender may, but shall 
not be obligated to make such demand.  Such circumstances are not exclusive 
and shall not limit the Lender's right of demand in any other circumstances.  
The occurrence of any of the following shall constitute an Event of Default: 

          (a)  FAILURE OF PAYMENT.  If Borrower or CTi fails to pay any 
principal, interest or other amount due, under this Agreement or with respect 
to any Loan on the date due (whether on a scheduled payment date or otherwise) 
and in the manner provided herein;

          (b)  MISSTATEMENTS.  If any representation, warranty or other 
statement made herein or in any other Loan Document or otherwise in writing by 
or on behalf of Borrower or CTi in connection herewith proves to be or to have 
been incorrect or misleading in any material respect as of the date at which 
it is made or deemed to be made;

          (c)  PERFORMANCE OF OTHER COVENANTS.  If Borrower defaults in the 
due performance or observance of (i) any covenant contained in Sections 4.1, 
4.2, 4.5 or in Article 5 or (ii) any other covenant, condition or provision to 
be performed or observed by it hereunder or under any of the Loan Documents 
(other than a payment or covenant default the performance or observance of 
which is dealt with specifically elsewhere in this Section 7.1) and the breach 
of such other provision is not cured to Lender&WP1-9;s satisfaction within ten 
(10) days after the sooner to occur of Borrower&WP1-9;s receipt of notice of 
such breach from Lender or the date on which such failure or neglect first 
becomes known to any officer of Borrower.

          (d)  OTHER INDEBTEDNESS.  If Borrower or CTi defaults, which default 
continues after any applicable grace or cure period, in any payment of 
principal of or interest on any Indebtedness for borrowed money including, 
without limitation, on any Capital Lease or any other default occurs with 
respect to any Indebtedness for borrowed money giving the holder thereof the 
right to accelerate the payment thereof or require such Indebtedness to be 
paid before its stated maturity or before any regularly scheduled date of 
prepayment;

          (e)  MATERIAL CONTRACTS.  Any default occurs under any material 
contract of Borrower which default gives any other party to such contract the 
right to terminate such contract or exercise remedies and such termination or 
remedies are reasonably likely to have a Material Adverse Effect;

          (f)  JUDGMENTS.  If Borrower permits any judgment against it in 
excess of $100,000 to remain undischarged for a period of more than thirty 
(30) days unless during such period such judgment is effectively stayed or 
bonded, on appeal or otherwise;

                               -17-
<PAGE>
          (g)  LEVY, ATTACHMENTS.  If any levy, seizure, attachment, execution 
or similar process shall be issued on any of the Borrower's or any 
Subsidiaries' cash, accounts or any material property;

          (h)  VOLUNTARY BANKRUPTCY.  If Borrower or any of its Subsidiaries 
(i) commences a voluntary case under the Bankruptcy Code (as now or hereafter 
in effect); or (ii) files a petition or commences any case, proceeding, or 
action in bankruptcy or seeking reorganization, liquidation, dissolution, 
winding-up, arrangement, composition, readjustment of its debts or any other 
relief under any other bankruptcy, insolvency, reorganization, liquidation, 
dissolution, arrangement, composition, readjustment of debt or similar act or 
law of any jurisdiction, now or hereafter existing; or (iii) takes any action 
indicating its consent to, approval of, or acquiescence in, any such case, 
proceeding or other action; or (iv) applies for a receiver, trustee or 
custodian of it or for all or a substantial part of its property; or (v) makes 
an assignment for the benefit of creditors; or (vi) is unable to pay its debts 
as they mature or admits in writing such inability; or (vii) is adjudicated 
insolvent or bankrupt; 

          (i)  INVOLUNTARY BANKRUPTCY.  (i) If there is commenced against 
Borrower or any of its Subsidiaries (1) an involuntary case under the 
Bankruptcy Code (as now or hereafter in effect); or (2) any case or proceeding 
or any other action in bankruptcy or seeking reorganization, liquidation, 
dissolution, winding-up, arrangement, composition, readjustment of its debts 
or any other relief under any other bankruptcy, insolvency, reorganization, 
liquidation, dissolution, arrangement, composition, readjustment of debt or 
similar act or law of any jurisdiction, now or hereafter existing, or seeking 
appointment of a receiver, trustee or custodian of Borrower or any of its 
Subsidiaries or for all or a substantial part of its property, and any of the 
foregoing cases, proceedings, or actions is not dismissed within sixty (60) 
days; or (ii) if an order, judgment or decree approving any of the foregoing 
is entered or a warrant of attachment, execution or similar process against 
any substantial part of the property of Borrower or any of its Subsidiaries is 
issued, and such order, judgment, decree, warrant, execution or similar 
process is not vacated or stayed within sixty (60) days; or (iii) if an order 
for relief under the Bankruptcy Code (as now or hereafter in effect) is 
entered against Borrower or any of its Subsidiaries; or

          (j)  CRIMINAL PROCEEDINGS.  If there is an indictment or threatened 
indictment of Borrower under any criminal statute, or commencement or 
threatened commencement of criminal proceedings against Borrower, pursuant to 
which statute or proceedings the penalties or remedies sought or available 
include forfeiture of any material property of Borrower; or

          (k)  MATERIAL ADVERSE CHANGE.  There is a material adverse change in 
the financial condition, business, affairs or control of the Borrower since 
the date of its last financial statement most recently delivered to the Lender 
in accordance the requirement of Section 4.1 hereof.

     7.2.  LENDER'S REMEDIES.  Upon the occurrence of any such Event of 
Default, Lender may, at Lender&WP1-9;s option, immediately exercise one or 
more of the following rights: (a) declare all obligations of Borrower and/or 
CTi to Lender, including, without limitation, the Revolving Credit Commitments 
to be terminated, whereupon such obligations shall immediately terminate; and 
(b) declare all obligations of Borrower and CTi

                              -18-
<PAGE>
to Lender, including, without limitation, the Loans and all other amounts 
owing under this Agreement and the Notes to be immediately due and payable, 
whereupon they shall immediately become due and payable without presentment, 
demand, protest or notice of any kind, all of which are hereby expressly 
waived; provided, however, that upon the occurrence of any such Event of 
Default specified in Sections 7.1(h) or 7.1(i), the Revolving Credit 
Commitments shall immediately terminate and all obligations of Borrower and 
CTi to Lender, including, without limitation, Loans and all other amounts 
owing under this Agreement, and the Notes shall immediately become due and 
payable without presentment, further demand, protest or notice of any kind, 
all of which are hereby expressly waived.

     7.3.  CROSS DEFAULT  It is agreed by Borrower that any Event of Default 
under this Agreement will constitute an event of default under all Loans and 
all of the Loan Documents and all other agreements and evidences of 
Indebtedness between Borrower and CTi and Lender, whether now existing or 
hereafter executed and whether or not such is an event of default therein.


     7.4.  SETOFF.  In addition to any rights and remedies of Lender provided 
by law, Lender shall have the right, (a) upon and during the continuance of an 
Event of Default or (b) at any time, whether or not an Event of Default has 
occurred and is continuing, in the event of any attachment, trustee process, 
garnishment, or other levy or lien is, or is sought to be imposed, on any 
cash, accounts or any material property of Borrower and CTi, and without prior 
notice to Borrower or CTi, any such notice being expressly waived by Borrower 
and CTi to the extent permitted by applicable law, and regardless of the 
adequacy of any collateral, to set off and apply against any indebtedness, 
whether matured or unmatured, of Borrower and CTi to Lender, any amount owing 
or otherwise available under any applicable agreement or contract (including 
without limitation all deposits maintained at Lender, whether general or 
special, time or demand, provisional or final, joint or otherwise) from Lender 
to Borrower and CTi, and such right of setoff may be exercised by Lender 
against Borrower and CTi or against any bankruptcy trustee, 
debtor-in-possession, assignee for the benefit of creditors, receiver, or 
execution, judgment or attachment creditor of Borrower and CTi, or against 
anyone else claiming through or against Borrower or CTi, or such Person.


                   ARTICLE 8. - MISCELLANEOUS

     8.1.  NOTICES.  Except as otherwise specified herein, all notices to or 
upon the parties hereto shall be in writing (including teletransmissions), 
shall be given or made to the party to which such notice is required or 
permitted to be given or made under this Agreement at the address or telex or 
telecopier number set forth below or at such other address or telex or 
telecopier number as any party hereto may hereafter specify to the others in 
writing, and (unless otherwise specified herein) shall be deemed delivered on 
receipt, if teletransmitted or delivered by hand, or three (3) Business Days 
after mailing, and all mailed notices shall be by registered or certified 
mail, postage prepaid:

                If to Borrower or CTi to:

                               -19-
<PAGE>

                PCD Inc.
                2 Technology Drive
                Peabody, MA  01960
                Attention:  Mr. John Dwight
               (Facsimile No. 508-532-6800) 

                With a copy to:

                c/o C. Russel Hansen, Jr., Esquire
                General Counsel
                PCD Inc.
                2 Technology Drive
                Peabody, MA  01960
               (Facsimile No. 508-532-6800) 


                If to Lender to:

                Eastern Bank
                605 Broadway
                Saugus, MA  01906
                Attention:  Mr. John P. Farmer, Vice President 
               (Facsimile No. 617-231-4858)

                With a copy to:

                Jeffrey M. Freedman, Esquire
                Brown, Rudnick, Freed & Gesmer
                One Financial Center
                Boston, MA  02111
               (Facsimile No. 617-856-8201)

     8.2.  NO WAIVER OF RIGHTS.  No failure to exercise nor any delay in 
exercising, on the part of Lender, any right, remedy, power or privilege under 
the Loan Documents shall operate as a waiver thereof; nor shall any single or 
partial exercise of any right, remedy, power, or privilege operate as a waiver 
of any further or complete exercise thereof.  No waiver shall be effective 
unless in writing.  No waiver or condonation of any breach on one occasion 
shall be deemed a waiver or condonation on any other occasion.  

     8.3.  CUMULATIVE REMEDIES.  Each of the Loan Documents and the 
obligations of Borrower thereunder are in addition to and not in substitution 
for any other obligations or security interests now or hereafter held by 
Lender and shall not operate as a merger of any contract or debt or suspend 
the fulfillment of or affect the rights, remedies, powers, or privileges of 
Lender in respect of any obligation or other security interest held by it for 
the fulfillment thereof.  The rights and remedies provided in the Loan 
Documents are cumulative and not exclusive of any other rights or remedies 
provided by law.  

                              -20-
<PAGE>
     8.4.  SUCCESSORS.  This Agreement shall be binding upon and inure to the 
benefit of Borrower, CTi, Lender and all future holders of the Notes, and 
their respective successors and assigns, except that Borrower and CTi may not 
assign or transfer their rights or obligations hereunder without the prior 
written consent of Lender.  Borrower and CTi acknowledge that Lender may, from 
time to time, sell participation interests in the Loans and Borrower's other 
obligations hereunder, to third parties, on such terms and conditions as 
Lender may determine, and Borrower and CTi specifically consent thereto.  
Lender also may from time to time assign its rights and delegate its 
obligations, including its obligation to make part or all of the Loans or 
grant part or all of any other financial accommodation under this Agreement, 
in which event Borrower and CTi shall only have recourse to the 
assignee for the performance of Lender's obligations that have been so 
delegated.  For these purposes Lender may disclose to an intended or actual 
participant or assignee all or any information supplied to Lender by or on 
behalf of Borrower or Cti.

     8.5.  GOVERNING LAW.  This Agreement, the Note and other Loan Documents 
shall be governed by, and construed and interpreted in accordance with, the 
laws of the Commonwealth of Massachusetts.

     8.6.  SUBMISSION TO JURISDICTION; WAIVER OF TRIAL BY JURY.

          (a)  For purposes of any action or proceeding involving the Loan 
Documents or any other agreement or document referred to therein, Borrower and 
CTi hereby submit to the jurisdiction of all federal and state courts located 
in the Commonwealth of Massachusetts and consent that any order, process, 
notice of motion or other application to or by any of said courts or a judge 
thereof may be served within or without such court's jurisdiction by 
registered mail or by personal service, provided a reasonable time for 
appearance is allowed (but not less than the time otherwise afforded by any 
law or rule).

          (b)  THE BORROWER, CTi AND LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY 
AND INTENTIONALLY WAIVE (TO THE EXTENT PERMITTED BY APPLICABLE LAW) (i) ANY 
RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING 
TO THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT OR ANY OTHER AGREEMENT OR 
DOCUMENT REFERRED TO HEREIN OR THEREIN AND AGREES THAT ANY SUCH DISPUTE SHALL 
BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY; AND (ii) ANY RIGHT TO CONTEST 
THE APPROPRIATENESS OF ANY ACTION BROUGHT WITHIN THE JURISDICTION MENTIONED IN 
PARAGRAPH (a) OF THIS SECTION BASED ON LACK OF PERSONAL JURISDICTION, IMPROPER 
VENUE, OR FORUM NON CONVENIENS.

     8.7.  COMPLETE AGREEMENT, AMENDMENTS.  This Agreement, together with the 
Notes and other Loan Documents contains the entire agreement between the 
parties with respect to the transactions contemplated hereby, and supersedes 
all negotiations, presentations, warranties, commitments, offers, contracts 
and writings prior to the date hereof relating to the subject matter.  This 
Agreement may only be amended, modified, 

                              -21-
<PAGE>
waived, discharged or terminated by a writing signed by the party to be 
charged with such amendment, modification, waiver, discharge or termination.

     8.8.  EXPENSES.  The Borrower shall pay on demand, regardless of whether 
any Default or Event of Default has occurred or whether any proceeding to 
enforce any Loan Document has been commenced, all out-of-pocket expenses 
(including, without limitation, the reasonable fees and disbursements of 
counsel to Lender) incurred by Lender in connection with (a) the 
administration, filing or recording of the Loan Documents, and any future 
requests for amendments or waivers of the Loan Documents (whether or not the 
transactions contemplated thereby shall be consummated), (b) the collection of 
the Loans and any and all other obligations of Borrower to Lender whether now 
existing or hereafter arising, or with the preservation, exercise or 
enforcement of Lender's rights and remedies under or in connection with the 
Loan Documents, including, without limitation, any and all expenses incurred 
by Lender in or in connection with any case commenced by or against Borrower 
under the Bankruptcy Code, and (c) any claim or liability for any stamp, 
excise or other similar taxes and any penalties or interest with respect 
thereto that may be levied, collected, withheld or assessed by any 
jurisdiction in connection with the execution and delivery of the Loan 
Documents or any modification thereof.  This covenant shall survive payment of 
the Loans and termination of this Agreement.  Borrower hereby authorizes 
Lender to make Loans to pay any amount owed by Borrower under this Section or 
to debit Borrower's deposit accounts if Borrower fails to pay such amount 
promptly after demand.  

     8.9.  INDEMNIFICATION.  Borrower and CTi agree to indemnify and hold 
Lender harmless from and against any and all loss, liability, obligations, 
damages, penalties, judgments, actions, claims, costs and expenses (including, 
without limitation, attorneys&WP1-9; fees and disbursements) now or in the 
future incurred by or asserted against Lender by any Person arising out of or 
in connection with any past, present, or future action or inaction by Lender, 
Borrower or CTi in connection with any Loan Document, or any transaction 
contemplated thereby, except any action or inaction arising out of Lender's 
gross negligence or willful misconduct.

     8.10. SURVIVAL OF AGREEMENTS.  All covenants, agreements, representations 
and warranties made herein and in the certificates delivered pursuant hereto 
shall survive the making of Loans and the execution and delivery to Lender of 
the Notes and shall continue in full force and effect so long as the Notes are 
outstanding and unpaid or this Agreement remains in effect.  All agreements, 
obligations and liabilities of Borrower and CTi under this Agreement 
concerning the payment of money to Lender, other than the obligation to pay 
principal of and interest on Loans, shall survive the payment in full of Loans 
and termination of this Agreement.

     8.11. SEVERABILITY.  Any provision hereof that is prohibited or 
unenforceable in any jurisdiction shall, as to such jurisdiction, be 
ineffective to the extent of such prohibition or unenforceability without 
invalidating the remaining provisions hereof, and any such prohibition or 
unenforceability in any jurisdiction shall not invalidate or render 
unenforceable such provision in any other jurisdiction.

                               -22-
<PAGE>
     8.12. DESCRIPTIVE HEADINGS.  The Table of Contents and the captions in 
this Agreement are for convenience of reference only and shall not define or 
limit the provisions hereof.

     8.13. COUNTERPARTS.  This Agreement may be executed by one or more of the 
parties on any number of separate counterparts, and all of said counterparts 
taken together shall be deemed to constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
executed under seal by their respective duly authorized officers as of the 
date first written above.


WITNESS:                   PCD Inc.


/s/ Lorraine M. Bailey     By: /s/ John L. Dwight, Jr.
----------------------     ---------------------------
                           Name: John L. Dwight, Jr.
                           Title: President

WITNESS:                   CTi Technologies, Inc.

/s/ Lorraine M. Bailey    By: /s/ John L. Dwight, Jr.
----------------------    ---------------------------
                          Name: John L. Dwight, Jr.
                          Title: President

                          Eastern Bank


                          By: /s/ John P. Farmer    
----------------------    ---------------------------
                          Name:  John P. Farmer
                          Title: Vice President





























                             -23-    
<PAGE>
                            SCHEDULE 1

                           Definitions


     "Affiliate" - as to any Person (a) any other Person which, directly or 
indirectly, is in control of, is controlled by, or is under common control 
with such Person, or (b) any other Person who is an officer or director of 
such Person, or (c) any Person described in clause (a) above (other than any 
Subsidiary all of the capital stock of which is owned by Borrower).

     "Bankruptcy Code" - The Bankruptcy Reform Act of 1978, as heretofore and 
hereafter amended, and codified as 11 U.S.C. Section 101, et seq. 

     "Borrowing Date" - the Business Day on which any Loan is made.

     "Business Day" - any day on which commercial banks are open for business 
in Boston, Massachusetts.

     "Capital Equipment" - equipment that in accordance with GAAP is required 
or permitted to be depreciated or amortized on Borrower's balance sheet.

     "Capital Expenditures" - for any period, the sum of (i) all expenditures 
that, in accordance with GAAP, are required to be included in land, property, 
plant or equipment or similar fixed asset account (whether involving real or 
personal property) and (ii) Capital Lease Obligations incurred during such 
period (excluding renewals of Capital Leases).

     "Capital Lease" - any capital lease, conditional sales contract or other 
title retention agreement relating to the acquisition of Capital Equipment.

     "Capital Lease Obligations" - the aggregate capitalized amount of the 
obligations of Borrower under all Capital Leases.

     "Cash Equivalents" - (a) securities with maturities of 180 days or less 
from the date of acquisition issued or fully guaranteed or insured as to 
payment of principal and interest by the United States or any agency thereof, 
(b) certificates of deposit with maturities of 365 days or less from the date 
of acquisition issued by Lender or any domestic commercial bank having capital 
and surplus reasonably acceptable to Lender and (c) commercial paper of a 
domestic issuer rated at least either A-2 by Standard & Poor's or B-2 by 
Moody's Investors Service with maturities of 180 days or less from the date of 
acquisition.





                              -24- 
<PAGE>
     "COBRA" - the Consolidated Omnibus Budget Reconciliatory Act of 1985, as 
amended, including the sections of the IRC affected by it and all regulations 
promulgated under such Act or the IRC.

     "Collateral" - has the meaning given such term in the Security Agreement.

     "Commitment Period" - the period from and including the Initial Borrowing 
Date to and including the Termination Date.

     "Commonly Controlled Entity" - an entity, whether or not incorporated, 
which is under common control with Borrower within the meaning of Section 
414(b) or (c) of the IRC.

     "Contingent Liability" - any obligation of Borrower or CTi guaranteeing 
or in effect guaranteeing any Indebtedness, leases, dividends or other 
obligations ("primary obligations") of any other Person (the "primary 
obligor") in any manner, whether directly or indirectly.

     "CTi Revolving Credit Commitment" - the commitment by the Lender to make 
CTi Revolving Credit Loans pursuant to SeCTion 2.13.

     "CTi Revolving Credit Loan" - any loan made pursuant to Section 2.13.

     "CTi Revolving Credit Limit" - Two Hundred Fifty Thousand Dollars 
($250,000.00).

     "CTi Revolving Credit Note" - a promissory note of CTi made to evidence 
the CTi Revolving Credit Loans, in the form of Exhibit B, as it may be 
amended, supplemented or otherwise modified from time to time.

     "CTi Termination Date" - the earlier of (a) June 30, 1997 and (b) the 
date the Lender's commitment to make CTi Loans is terminated pursuant to 
Section 7.2 of Article 7.

     "Default" - any event specified in Article 7, whether or not any 
requirement for the giving of notice or lapse of time or any other condition 
has been satisfied.

     "Dividends" means, for any applicable period, the aggregate of all 
amounts paid or payable (without duplication) as dividends (exclusive of 
dividends payable solely in capital stock of Borrower), distributions or owner 
withdrawals with respect to Borrower's shares of capital stock, whether now or 
hereafter outstanding and includes any purchase, redemption or other 
retirement of any shares of the Borrower's stock, directly or indirectly.

     "Dollars" and "$" - lawful money of the United States. Any reference to 
payment means payment in immediately available Dollar funds.

     "ERISA" - the Employee Retirement Income Security Act of 1974, as amended 
from time to time, including all regulations promulgated under such Act.
                              -25-

 <PAGE>
    "Earnings" - for any period, the net income from continuing operations (or 
deficit) of the Borrower determined in accordance with GAAP excluding all 
extraordinary and nonrecurring gains.

     "Event of Default" - any event specified in Article 7, provided that any 
requirement for the giving of notice or lapse of time or any other condition 
has been satisfied.

     "Financial Statements" - financial statements of Borrower and its 
Subsidiaries, on a consolidated basis, prepared on a consistent basis in 
accordance with GAAP and containing balance sheets, statements of income and 
retained earnings and statements of cash flow.  Financial Statements for a 
fiscal year shall contain an audit report without qualification (except for 
changes in GAAP with which such accountants concur) by independent certified 
public accountants selected by Borrower and acceptable to Lender.  Financial 
Statements for a quarter shall be certified by the chief financial officer of 
Borrower as prepared in accordance with GAAP except for year-end adjustments 
and except that such interim statements need not contain footnotes.

     "GAAP" - those generally accepted accounting principles set forth in 
Statements of the Financial Accounting Standards Board and in Opinions of the 
Accounting Principles Board of the American Institute of Certified Public 
Accountants or which have other substantial authoritative support in the 
United States and are applicable in the circumstances, as applied on a 
consistent basis.  As used in the preceding sentence "consistent basis" shall 
mean that the accounting principles observed in the current period are 
comparable in all material respects to those applied in the preceding period.

     "Hazardous Material" - any hazardous waste, toxic substance hazardous 
chemical, radioactive material, hazardous material, oil or gasoline, under any 
applicable federal or state statute, county or municipal law or ordinance, 
including (without limitation) any substance defined as a "hazardous 
substance" or "toxic substance" (or comparable term) in the Comprehensive 
Environmental Response, Compensation and Liability Act, as amended (42 U.S.C. 
9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. 1802), 
or the Resource Conservation and Recovery Act (42 U.S.C. 6901, et seq.).

     "Indebtedness" - with respect to any Person, any item that would properly 
be included as a liability on the liability side of a balance sheet of such 
Person as of any date as of which Indebtedness is to be determined and 
includes (but is not limited to) (a) all obligations for borrowed money 
including all Loans, (b) all obligations evidenced by bonds, debentures, 
notes 
or other similar instruments, (c) all obligations to pay the deferred purchase 
price of property or services, (d) all Capital Lease Obligations and (e) all 
obligations in respect of advances made or to be made under letters of credit 
issued for such Person's account and in respect of acceptances of drafts 
drawn 
by such Person.

     "Initial Borrowing Date" - the date of this Agreement.
                              -26-
<PAGE>
     "Intellectual Property" - shall mean "Intellectual Property," as defined 
in Section 101(60) of the Bankruptcy Code, now or hereafter owned by Borrower, 
together with all of the following property now or hereafter owned by 
Borrower:  all domestic and foreign patents and patent applications; 
inventions, discoveries and improvements, whether or not patentable; 
trademarks, trademark applications and registrations; service marks, service 
mark applications and registrations; copyrights, copyright applications and 
registrations; all licenses therefor; trade secrets and all other proprietary 
information.

     "Investment" - any transfers of property to, contribution to capital of, 
acquisition of stock, other securities or evidences of indebtedness of, 
acquisition of businesses or acquisition of property of any Person, other than 
in the ordinary course of business.

     "IRC" - the Internal Revenue Code of 1986, as amended from time to time 
and including all regulations promulgated thereunder.

     "Lien" - any mortgage, deed of trust, pledge, hypothecation, assignment, 
deposit arrangement, encumbrance (including, without limitation, any easement, 
right-of-way, zoning or similar restriction or title defect), lien (statutory 
or other) or preference, priority or other security agreement or preferential 
arrangement of any kind or nature whatsoever (including, without limitation, 
any conditional sale or other title retention agreement, any financing lease 
having substantially the same economic effect as any of the foregoing and the 
filing of any financing statement under the UCC or comparable law of any 
jurisdiction).

     "Loans" - the PCD Revolving Credit Loan and the CTi Revolving Credit 
Loan;

     "Loan Documents" - this Agreement, the PCD Revolving Credit Note, the CTi 
Revolving Credit Note, and all other instruments and documents executed in 
connection with the indebtedness covered hereby and thereby.

     "Material Adverse Change" means a material adverse change, as reasonably 
determined by the Lender, in the property, business (including its prospects), 
operations, financial conditions, liabilities or capitalization of Borrower 
and its Subsidiaries (taken as a whole).

     "Material Adverse Effect" - means a material adverse effect, as 
reasonably determined by the Lender, on (a) the property, business (including 
its prospects), operations, financial conditions, liabilities or 
capitalization of Borrower and its Subsidiaries (taken as a whole); or (b) the 
validity or enforceability of any of the Loan Documents.

     "Multiemployer Plan" - a Plan which is a multiemployer plan as defined in 
Section 3(37)(A) of ERISA or Section 414(f) of the IRC.

     "Notes" - the PCD Revolving Credit Note and the CTi Revolving Credit 
Note.

     "Obligations" means all loans, advances, interest, fees, debts, 
guaranties, liabilities, obligations (including without limitation the Loans 
and contingent obligations under guarantees), agreements, undertakings, 
covenants and duties owing or to be performed or observed by Borrowers to or 
in favor of Lender, of every kind and description (whether or not evidenced by 
any note or other instrument; for the payment of money; 

                             -27-
<PAGE>
arising out of the Loans, this Agreement or any other agreement between Lender 
and Borrowers or any other instrument of Borrowers in favor of Lender; arising 
out of or relating or similar to transactions described herein; or 
contemplated as of the Closing Date), direct or indirect, absolute or 
contingent, due or to become due, now existing or hereafter arising, including
without limitation all interest, fees, charges, and amounts chargeable to 
Borrowers under this Agreement.

     "PBGC" - the Pension Benefit Guaranty Corporation established pursuant to 
Subtitle A of Title IV of ERISA.

     "PCD Revolving Credit Commitment" - the commitment by the Lender to make 
PCD Revolving Credit Loans pursuant to Section 2.1.

     "PCD Revolving Credit Limit" - Five Million Dollars ($5,000,000).

     "PCD Revolving Credit Loan" - any loan made pursuant to Section 2.1.

     "PCD Revolving Credit Note" - a promissory note of Borrower made to 
evidence the PCD Revolving Credit Loans, in the form of Exhibit A, as it may 
be amended, supplemented or otherwise modified, from time to time.

     "PCD Termination Date" - the earlier of (a) June 30, 1997 and (b) the 
date the Lender's commitment to make PCD Loans is terminated pursuant to 
Section 7.2 of Article 7.

     "Person" - an individual, partnership, corporation, business trust, joint 
stock company, trust, unincorporated association, joint venture, governmental 
authority or other entity of whatever nature.

     "Plan" - any pension plan, as defined in Section 3(2) of ERISA and any 
welfare plan, as defined in Section 3(1) of ERISA, which is sponsored, 
maintained or contributed to by Borrower or any Commonly Controlled Entity, or 
in respect of which Borrower 
or a Commonly Controlled Entity is an "employer" as defined in Section 3(5) of 
ERISA.

     "Base Rate" - for any day the rate on such day announced by Lender as its 
Base Rate.  The Base Rate is a reference rate and does not necessarily 
represent the lowest or best rate charged to any customer.

     "Reportable Event" - any of the events set forth in Section 4043(b) of 
ERISA.

     "Revolving Credit Commitment" - the commitment by Lender to make the PCD 
Credit Loan and the CTi Credit Loan.

     "Revolving Credit Loans" - any loan made pursuant to Section 2.1 and 
2.13.

     "Solvent" - as to any Person, such Person (i) owns Property the fair 
market value of which is greater than the amount required to pay all 
Indebtedness, (ii) owns Property the present fair salable value of which is 
greater than the amount that will be required to pay the probable liability of 
such Person on its existing Indebtedness as such becomes absolute and matured, 
(iii) is able to pay all its Indebtedness as such Indebtedness matures and 
(iv) has capital sufficient to carry on its business and 

                              -28-
<PAGE>
transactions and all business and transactions in which it is about to engage.

     "Subordinated Debt" - any indebtedness that is subordinated as to payment 
and as to Lien (if any) to the prior payment in full of the obligations of 
Borrower to Lender and to the Liens granted by Borrower to Lender.

     "Subsidiary" - with respect to any Person, any corporation, partnership, 
trust or other organization, whether or not incorporated, the majority of the 
voting stock or voting rights of which is owned or controlled, directly or 
indirectly, by such Person.

     "Termination Date" - the earlier of (a) June 30, 1997, and (b) the date 
the Lender's commitment to make Loans is terminated pursuant to Section 7.2 of 
Article 7.

     "UCC" - the Uniform Commercial Code as it may from time to time be in 
effect in the Commonwealth of Massachusetts.


                             -29-    

<PAGE>
                            PCD Inc.
                      Borrower's Documents

Schedule 3.2 - List of states where Borrower is qualified as a foreign 
corporation.

     Massachusetts
     Arizona

<PAGE>
                            PCD Inc.
                      Borrower's Documents

Schedule 3.3 - List of subsidiaries

     PCD Inc.
     CTi Technologies, Inc.
     PCD Securities Corp.

<PAGE>
                            PCD Inc.
                      Borrower's Documents

Schedule 3.8 - Schedule of Litigation

     On August 21, 1995, the Company's wholly-owned subsidiary, CTi 
Technologies, Inc. ("CTi"), filed an action in the United States District 
Court for the District of Arizona seeking a declaratory judgement against 
Wayne K. Pfaff, an individual resident in Texas ("Pfaff"), and Plastronics 
Socket Company, Inc., a corporation affiliated with Pfaff, alleging and 
seeking a declaratory judgement that two United State patents issued to Pfaff 
and relating to certain burn-in sockets for "leadless" IC packages (the "Pfaff 
Leadless Patent") and ball grid array ("BGA") IC packages (the "Pfaff BGA 
Patent")(collectively, the "Pfaff Patents") are invalid and are not infringed 
by CTi, the products of which include burn-in sockets for certain "leaded" 
packages (including Quad Flat Paks)(the "CTi Products") and BGA packages (the 
"CTi BGA Products")(collectively, the "CTi Products).  Pfaff has filed a 
counterclaim alleging that CTi infringes the "Pfaff Leadless Patent" and has 
requested an award of damages; the counterclaim does not allege infringement 
of the Pfaff BGA Patent.  Pfaff has also sought a permanent injunction against 
further infringement by CTi of the Pfaff Leadless Patent.

     The Company understands that Pfaff has been issued patents for the 
inventions covered by the Pfaff Leadless Patents in Germany, France, Great 
Britain, Japan and Malaysia (together with the United Sates, the 
"Territory").  Revenue from sales of CTi Leaded Products in the Territory in 
1995 was approximately $5.8 million, which represented approximately 23% of 
the Company's net sales in 1995.  Due to a shift in customer base, the Company 
expects that net sales of CTi Leaded Products in the Territory, both in 
percentage terms and absolute amount, will decline significantly in 1996 and 
beyond.  The CTi BGA Products are not expected to make a significant 
contribution to revenues of the Company until years subsequent to 1996.

     The Pfaff Leadless Patent has been the subject of earlier litigation 
initiated by Pfaff against a burn-in connector manufacturer unrelated to the 
Company, Wells Electronics, Inc. ("Wells"), in which Pfaff alleged that the 
manufacture and sale of a wide range of Wells products infringed the Pfaff 
Leadless Patent.  Included among the Wells products covered by the Pfaff 
litigation was a group of burn-in sockets produced by Wells for certain leaded 
packages (the "Wells Leaded Products").  The Wells Leaded Products compete 
directly with CTi Leaded Products and accept similar IC packages.  The Company 
believes that Pfaff may assert in CTi's litigation with Pfaff that Wells 
Leaded Products are similar in design to CTi Leaded Products.  In October 
1995, the United States District Court for the Northern District of Texas (the 
"Texas Court") found certain claims in the Pfaff Leadless Patent to be 
invalid, but found other claims in the patent not to be invalid and to be 
infringed by certain Wells products, including the Wells Leaded Products.  On 
December 19, 1995, the Texas Court issued a permanent injunction against the 
manufacture and sale by Wells of the products found to be infringing.  In 
January 1996, the United States Court of Appeals (Federal Circuit) stayed the 
injunction, pending appeal, based on its finding that Wells had demonstrated 
that it is likely to succeed in its contention that the Pfaff Leadless Patent 
is invalid.
<PAGE>
The Pfaff BGA Patent was not involved in the Pfaff/Wells litigation.

     The company, believes, based on the advice of counsel, that CTi has 
meritorious defenses against any claim that CTi Products infringe the Pfaff 
Patents, and CTI intends to prosecute and defend vigorously its position in 
its declaratory judgment action and any related or subsequent litigation.  
Although Wells invoked similar defenses on the Pfaff Leadless Patent in its 
lawsuit with Pfaff, the Company believes that CTI will prevail in pending or 
any future litigation with Pfaff, and an adverse outcome could have a material 
adverse effect on the financial condition, results of operations and business 
of the Company.  Such adverse effect could include, without limitation, the 
requirement that CTi pay substantial damages for past infringement and an 
injunction against the manufacture or sale in the United States of such 
products as are found to be infringing.

<PAGE>

                            PCD Inc.
                      Borrower's Documents


Schedule 5.1 - Disclosed Existing Indebtedness

     At this time, the Company has no existing indebtedness

<PAGE>
                            PCD Inc.
                      Borrower's Documents


Schedule 5.1 - Disclosed Liens

     At this time, the Company knows of no Liens.










<EXHIBIT>
                                                   EXHIBIT 10.8
<PAGE>

                   THIRD AMENDMENT TO LEASE AGREEMENT
                          DATED JUNE 25, 1996
                   

   This Third Amendment made as of the 25th day of June, 1996 by and between 
CENTENNIAL PARK ASSOCIATES LIMITED PARTNERSHIP III, a Massachusetts limited 
partnership, as Landlord, and PCD INC. (formerly Precision Connector Designs, 
Inc.), a Massachusetts corporation, as Tenant.

   Reference is made to a Lease between the Trustees of Centennial Park 
Associates Realty Trust II, Landlord's predecessor in title to the subject 
property, and Tenant dated June 29, 1987 (the "Original Lease"), as amended by 
a First Amendment between said Trustees and Tenant dated August 22, 1989 (the 
"First Amendment"), and by a Second Amendment between Landlord and Tenant 
dated July 15, 1993 (the "Second Amendment", and the Original Lease as amended 
by the First Amendment and the Second Amendment, the "Lease") for 
approximately 50,263 square feet of space (the "Demised Premises") in 
thebuilding commonly known as and numbered Two Technology Drive, Peabody, 
Massachusetts (the "Building"), all as more particularly described in the 
Lease.  A Notice of the Lease is recorded with Essex South Registry of Deeds 
in Book 10624, Page 38.  A Notice of Amended Lease taking account of the First 
Amendment and the Second Amendment is recorded with said Registry in Book 
12045, Page 141.  The Term of the Lease is currently scheduled to expire on 
August 31, 1998.  All capitalized terms used in this Amendment which are not 
defined herein and which are not otherwise proper nouns shall be defined as 
set forth in the Lease.

   WHEREAS, the Demised Premises under the Lease originally consisted of 
40,000 square feet in the Building;

   WHEREAS, the Second Amendment added Additional Space A containing 4,994 
square feet and Additional Space B containing 5,269 square feet to the Demised 
Premises, increasing the size of the Demised Premises to the current 50,263 
square feet;

   WHEREAS, the area in the Building shown as Additional Space C on Exhibit AA 
attached hereto, containing approximately 10,000 square feet and being the 
balance of the Building not presently included in the Demised Premises 
("Additional Space C"), is expected to become available on December 1, 1997 
upon the expiration of the current lease of such space between Landlord and 
Analogic Corporation;

   WHEREAS, Landlord and Tenant wish to add Additional Space C to the Demised 
Premises when it becomes available;

   WHEREAS, Landlord and Tenant further wish to extend the Term of the Lease 
for five (5) years beyond the current expiration date;

                             PAGE 1 OF 6
<PAGE>
   WHEREAS, Landlord and Tenant have agreed to modify the Basic Annual Rent 
under the Lease for the period from July 1, 1996 through August 31, 1998 (the 
currently scheduled Term expiration date);

   WHEREAS, Landlord and Tenant have further agreed upon the Basic Annual Rent 
to apply during the additional five years being added to the Term by this 
Amendment;

   WHEREAS, after Additional Space C becomes a part of the Demised Premises 
Tenant intends to make certain additions to the HVAC equipment (as 
distinguished from HVAC distribution) to service 10,000 square feet of the 
Demised Premises, and Landlord has agreed to provide Tenant with a reduction 
of Basic Annual Rent for the cost to Tenant of said improvements; and

   WHEREAS, Centennial Park Associates, Inc. has succeeded Stanton L. Black as 
General Partner of Centennial Park Associates Limited Partnership III and is 
accordingly executing this Amendment on behalf of said limited partnership in 
place of said Black, who executed the aforesaid Second Amendment.

   NOW THEREFORE, for good and valuable consideration, the receipt of which is 
hereby acknowledged, and also in consideration of the mutual covenants and 
conditions set forth below, Landlord and Tenant now hereby further amend the 
Lease as follows:

   1.  CLARIFICATION OF DEFINITION OF "BUILDING".  The Original Lease made a 
distinction between a 40,000 square foot structure defined as the "Building" 
and an attached but distinct 20,000 square foot structure defined as the 
"Expansion Space", all constructed by Landlord.  The original Demised Premises 
comprised the Building.  What later became Additional Space A and Additional 
Space B under the Second Amendment and what has now become Additional Space C 
under this Amendment are located in and together comprise the entire Expansion 
Space.  The distinction between the Building and the Expansion Space was 
previously relevant because the original Demised Premises was limited to the 
Building.  However, since the Second Amendment added portions of the Expansion 
Space to the Demised Premises and since this Amendment is adding the balance 
of such space, the term "Building" as used in the Lease shall henceforth mean 
both the Building and the Expansion Space together, i.e. the entire 60,000 
square foot structure currently on the Lot.

   2.  EXPANSION OF DEMISED PREMISES.  Effective December 1, 1997, the Demised 
Premises shall be expanded to include Additional Space C. Accordingly, 
beginning on said date and continuing through the end of the Lease Term (as 
extended hereby), the Demised Premises shall contain 60,000 square feet (the 
50,263 square feet currently in the Demised Premises plus the approximately 
10,000 square feet in Additional Space C, Landlord and Tenant hereby agreeing 
to round off the area of the Demised Premises at 60,000 square feet and to use 
such figure for all relevant calculations) and comprise all of the rentable 
space currently in the Building.  All of the terms and conditions of the Lease 
(as amended hereby) shall apply to Additional Space C,           
                       PAGE 2 OF 6
<PAGE>
just as they apply to the rest of the Demised Premises.  The Demised Premises 
shall at all times include the rights with respect to the Lot set forth in the 
Lease.

   3.  EXTENSION OF TERM.  The Term of the Lease is hereby extended for five 
(5) years past the currently scheduled expiration date of August 31, 1998, so 
that it shall now instead expire on August 31, 2003. 


   4.  ADJUSTMENT OF BASIC ANNUAL RENT.  The amounts payable as Basic Annual 
Rent under the Lease for the period July 1, 1996 through the end of the Term 
(as extended hereby) shall be as set forth in the rent schedule attached 
hereto as Exhibit BB.  The Basic Annual Rent set forth in said Exhibit BB 
shall supersede and replace the Basic Annual Rent presently set forth in the 
Lease for such period.  There shall be no increases to the Basic Annual Rent 
for any changes in the Cost of Living or the Consumer Price Index.

   5.  ADJUSTMENT OF PRO RATE SHARES.  Beginning December 1, 1997 and 
continuing for the balance of the Term (as extended hereby), Tenant's pro rata 
share with respect to the items below shall be as follows:

      (a)  REAL ESTATE TAXES:  Tenant's pro rata share of real estate taxes on 
the Building and Lot payable by Tenant under to Sections 5.1 and 13.2 of the 
Lease shall be 100%.

      (b)  CERTAIN REIMBURSABLE EXPENSES:  In the event that Tenant should be 
obligated to reimburse Landlord for any services or work, such as snowplowing, 
pursuant to Section 5.2(a) of the Lease, then in determining the fraction 
allocable to Tenant in accordance with said Section (i) the numerator shall be 
60,000 square feet and (ii) the denominator shall be the total rentable floor 
area of all buildings having the benefit of such services.

   6. DELIVERY OF ADDITIONAL SPACE C.  Landlord shall deliver Additional Space 
C to Tenant free and clear of all other tenants and occupants, with all of any 
previous tenant's or occupant's property removed and otherwise in the same 
condition as such space is on the date hereof, reasonable wear and tear 
excepted, by December 1, 1997.  If for any reason Landlord shall fail to do 
so, then (a) Landlord shall make best efforts to remove any prior tenant or 
occupant from Additional Space C, to put such space in the required condition 
and to deliver such space to Tenant as soon as after said date as possible, 
(b) the Basic Annual Rent set forth in Section 4 and Exhibit BB hereof, 
Tenant's pro rata cost shares set forth in Section 5 hereof and any other 
charges due from Tenant under the Lease shall be reduced by the proportionate 
amount allocable to Additional Space C for the period from December 1, 1997 
until Landlord so delivers such space, (c) Tenant shall not have any other 
obligations with respect to Additional Space C until Landlord so delivers such 
space and (d) Tenant shall have the right to enforce Landlord's obligation so 
to deliver Additional Space C by appropriate action or actions against 
Landlord in equity.  Tenant shall not under any circumstances have any 
obligations with respect to Additional  
                             PAGE 3 OF 6 
<PAGE>
Space C until such time as such space is delivered by Landlord and added to 
the Demised Premises as provided herein. Notwithstanding that Landlord is to 
deliver Additional Space C "in the same condition as such space is in on the 
date hereof", Landlord shall still perform the same ongoing maintenance, 
repairs, work and obligations with respect to such space as Landlord is 
required to perform with respect to the rest of the Building under the terms 
of the Lease.

   7.  REDUCTION IN BASIC ANNUAL RENT.  If Tenant installs additional HVAC 
equipment to serve Additional Space C or any other 10,000 square foot area of 
the Demised Premises, then provided that said improvements are completed and 
reasonable evidence of the completion and cost of the improvements is 
submitted to Landlord by the later of (a) December 1, 1998 or (b) one year 
after the date that Landlord delivers Additional Space C to Tenant, the Basic 
Annual Rent otherwise due from Tenant shall be reduced, beginning with the 
first monthly payment due after such improvements have been substantially 
completed and continuing for the balance of the Term (as extended hereby), by 
an amount per month equal to (x) the cost of such improvements up to a maximum 
of $60,000, divided by (y) the number of months remaining in the Term at the 
time such reduction commences.  Such reduction shall be in addition to the 
adjustments to Basic Annual Rent effected by Section 4 and Exhibit BB hereto.

   8.  HAZARDOUS MATERIALS.  Tenant shall not in any manner be liable for, 
required to clean up, responsible for compliance with applicable laws and 
regulations regarding, obligated to pay or bear any costs or expenses with 
respect to, nor in any other manner be responsible for any hazardous materials 
(as defined in Section 9.2(b) of the Lease and further including oil, 
petroleum products, asbestos, urea formaldehyde foam insulation, materials 
containing lead, radon and flammable, combustible or explosive materials) 
left, abandoned, brought, generated, stored, used, located, installed, 
disposed of, spilled, released, emitted or discharged on, in or from 
Additional Space C by any prior tenant or occupant, Landlord or anyone besides 
Tenant or Tenant's employees, servants, agents, contractors, licensees, 
customers and invitees (each a "Tenant Party" and collectively the "Tenant 
Parties").  Without limiting the foregoing, Tenant may at the time Landlord 
delivers Additional Space C have such space and the Building and Lot inspected 
and tested by a qualified environmental firm.  If such inspection and testing 
reveals the presence of any hazardous materials (other than hazardous 
materials released or discharged by Tenant or a Tenant Party), then Tenant may 
by written notice to Landlord refuse to accept delivery of Additional Space C, 
in which event (a) such space shall not be added to the Demised Premises, (b) 
the Basic Annual Rent set forth in Section 4 and Exhibit BB hereof, Tenant's 
pro-rata cost shares set forth in Section 5 hereof and any other charges due 
from Tenant under Lease shall be reduced by the proportionate amount allocable 
to Additional Space C for the balance of the Term (as extended hereby) and 
(c)Tenant shall not have any obligations with respect to Additional Space C. 
Nothing in this Section 8 shall be deemed to limit Paragraph 10 of the Second 
Amendment.


                              PAGE 4 OF 6
<PAGE>
   9.  LANDLORD'S CONSENT TO INSTALLMENTS, ALTERATIONS AND ADDITIONS. Should 
Landlord's consent be required under Section 9.2(c) of the Lease for any 
installations, alterations or additions which Tenant may propose to make to 
Additional Space C, Landlord shall not unreasonably withhold or delay such 
consent. 
     
   10.  NOTICE OF AMENDED LEASE.  At the request of either party, Landlord and 
Tenant shall mutually execute and deliver a further Notice of Amended Lease 
pursuant to Massachusetts General Laws Chapter 183, Section 4 with respect to 
this Amendment, and shall record such notice in Essex South Registry of 
Deeds.  In all other respects, the Lease is hereby ratified, confirmed and, 
approved and shall continue in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have executed these presents as a 
sealed instrument as of the day and year first above written.

                         LANDLORD:
                         
                         CENTENNIAL PARK ASSOCIATES
                         LIMITED PARTNERSHIP III

                         By its General Partner:

                         CENTENNIAL PARK ASSOCIATES, INC.,
                         


                         By:   /s/ Morton E. Ruderman
                            -----------------------------  
                            Morton E. Ruderman, President


                         TENANT:

                         PCD INC.


                         By:   /s/ John L. Dwight
                            ----------------------------- 
                            John L. Dwight, President

















                              PAGE 5 OF 6
<PAGE>

                           EXHIBIT BB
                                
                To Lease between Centennial Park
             Associates Limited Partnership III and
                            PCD Inc.
                                
                       Basic Annual Rent
                       -----------------
                 July 1, 1996 - August 31, 2003
                 ------------------------------ 
<TABLE>
<CAPTION>


                                 Annual     Annual
                Square Footage  Rate Per    Rental      Monthly
     Period       In Premises  Square Foot   Rate         Rent
--------------- -------------- ----------- ----------- --------- 
  
                    <C>           <C>     <C>         <C>
<S>
 7/1/96-8/31/96      50,263        $7.10   $356,867.30 $29,738.94
 9/1/96-8/31/97      50,263        $7.20   $361,893.60 $30,157.80
9/1/97-11/30/97      50,263        $7.30   $366,919.90 $30,576.66
12/1/97-8/31/98      60,000        $7.30   $438,000.00 $36,500.00
 9/1/98-8/31/99      60,000        $7.40   $444,000.00 $37,000.00
 9/1/99-8/31/00      60,000        $7.50   $450,000.00 $37,500.00
 9/1/00-8/31/01      60,000        $7.60   $456,000.00 $38,000.00
 9/1/01-8/31/02      60,000        $7.70   $462,000.00 $38,500.00
 9/1/02-8/31/03      60,000        $7.80   $468,000.00 $39,000.00 

</TABLE>


























                              PAGE 6 OF 6
<EXHIBIT>
                                                    EXHIBIT 10.9
<PAGE>


______________________________
Name of Optionee


                             PCD INC.

                 INCENTIVE STOCK OPTION AGREEMENT
                      (PCD 1996 Stock Plan)


   THIS AGREEMENT is entered into by and between PCD Inc., a Massachusetts 
corporation with its principal office at Two Technology Drive, Centennial 
Park, Peabody, Massachusetts  01960-7977 (hereinafter the "Company"), and the 
undersigned employee of the Company (hereinafter the "Optionee").

        WHEREAS, the Optionee renders important services to the Company, and 
the Company desires to grant an incentive stock option to the Optionee;

        NOW, THEREFORE, in consideration of the foregoing and the mutual 
agreements herein contained, the parties hereto hereby agree as follows:


1.  GRANT, EXERCISABILITY AND TERM OF OPTION.

   (a)  The Company hereby grants to the Optionee pursuant to the PCD 1996 
Stock Plan (the "Plan") the option to purchase from the Company upon the terms 
and conditions hereinafter set forth the number of shares ("Shares") of the 
$0.01 par value common stock ("Common Stock") of the Company set forth on the 
signature page below at the purchase price per Share so set forth (the "Option 
Price").  The date of grant of this option is the date set forth at the 
execution page of this Agreement as the "Option Date."

   (b)  Subject to the provisions of Section 5 hereof, this option is 
exercisable in full or in part and shall remain exercisable until it expires 
on the tenth anniversary of the Option Date, unless the option is sooner 
terminated as hereinafter specified.  Only whole Shares may be purchased 
pursuant to this option.

2.  CONDITIONS AND LIMITATIONS.

   (a)  The option is granted on the condition that the purchase of shares 
hereunder shall be for investment purposes and not with a view to resale or 
distribution, except that such condition shall be inoperative if the offering 
of Shares subject to the 

                                1
<PAGE>
option is registered under the Securities Act of 1933, as amended, or if in 
the opinion of counsel for the Company such Shares may be resold without 
registration.  At the time of the exercise of the option or any installment 
thereof, the Optionee will execute such further agreements as the Company may 
require to implement the foregoing condition and to acknowledge the Optionee's 
familiarity with restrictions on the resale of the Shares under applicable 
securities laws, and the Company may stamp such legend on the certificate 
representing the Shares as may be necessary or appropriate in light of the 
foregoing condition.

   (b)  The Company will furnish upon request of the Optionee copies of the 
articles of organization of the Company, as amended, and by-laws of the 
Company, as amended, and such publicly available financial and other 
information concerning the Company and its business and prospects as may be 
reasonably requested by the Optionee in connection with exercise of this 
option.

   (c)  The option shall not be transferable otherwise than by will or by the 
laws of descent and distribution, and except as provided in Section 4 the 
option shall be exercisable during the lifetime of the Optionee by the 
Optionee only. Notwithstanding the foregoing, however, if the Optionee is 
determined to be mentally incompetent and a guardian or conservator (or other 
similar person) is appointed by a court of competent jurisdiction to manage 
the Optionee's affairs, the guardian or conservator (or other similar person) 
may exercise the option on behalf of the Optionee, provided that such exercise 
is made within the time limits prescribed herein.

   (d)  The option granted in this Agreement is subject to the terms, 
conditions and definitions of the Plan, a copy of which is attached hereto.  
To the extent that the terms, conditions and definitions of this Agreement are 
inconsistent with those of the Plan, those of this Agreement shall govern.  
The Optionee hereby accepts this option subject to all such provisions of the 
Plan and agrees that all decisions under, and interpretations of, such 
provisions of the Plan by the Board of Directors of the Company (the "Board") 
or the Committee, as defined in the Plan, shall be final, binding and 
conclusive upon the Optionee and his or her heirs.

   (e)  In the event that the Company, upon the advice of counsel, deems it 
necessary to list upon official notice of issuance any shares to be issued 
pursuant to the Plan on a national securities exchange or to register under 
the Securities Act of 1933 or other applicable federal or state statute any 
shares to be issued pursuant to the Plan, or to qualify any such shares for 
exemption from the registration requirements of the 

                                2
<PAGE>
Securities Act of 1933 under the rules and regulations of the Securities and 
Exchange Commission or for similar exemption under state law, then the Company 
shall notify the Optionee to that effect and no Shares shall be issued until 
such registration, listing or  exemption has been obtained.  The Company shall 
make prompt application for any such registration, listing or exemption 
pursuant to federal or state law or rules of such securities exchange which it 
deems necessary and shall make reasonable efforts to cause such registration, 
listing, or exemption to become and remain effective.


3.  EXERCISE OF OPTION; WITHHOLDING TAXES.

   (a)  Written notice of the exercise of the option or any installment 
thereof shall be given to the Company specifying the number of shares for 
which the option is exercised and accompanied by payment in full of the Option 
Price.  Payment shall be made (a) in cash, (b) by check, (c) by Immediate 
Sales Proceeds, as defined below, (d) by delivery and assignment to the 
Company of shares of Company stock (provided that such shares have been held 
by the Optionee for at least 6 months before such delivery) owned by the 
Optionee (which shares have a Market Price not less than the Option Price), or 
(e) by any combination of the foregoing.  As used herein, "Market Price" shall 
mean the closing price of the Common Stock as reported on the Nasdaq National 
Market for the relevant date (or, if such date is not a trading date or if no 
trades took place on such date, then such closing price for the last previous 
trading date or the last previous date on which a trade occurred, as the case 
may be); provided that if the Common Stock is no longer traded on the Nasdaq 
National Market on the relevant date, then the Market Price as of such date 
shall be determined by the Committee.  Notwithstanding the foregoing, this 
option may not be exercised by delivery and assignment to the Company of 
shares of Company stock to the extent that such delivery and assignment would 
constitute a violation of the provisions of any law, or related regulation or 
rule, or any agreement or Company policy, restricting the transfer or 
redemption of the Company's stock.  As used herein, the term "Immediate Sales 
Proceeds" shall mean the assignment in form acceptable to the Company of the 
proceeds of a sale of the Shares acquired on the exercise of this option 
pursuant to a procedure approved by the Company.  The Company reserves the 
right to decline to approve any such procedure in the Company's sole and absolut
e discretion.

   (b) The Company's obligation to deliver Shares upon exercise of an option 
shall be subject to the Optionee's satisfaction of all applicable federal, 
state and local income and employment tax withholding obligations.  Without 
limiting the generality of the foregoing, the Company shall have the right to 
deduct from 

                                3
<PAGE>
payments of any kind otherwise due to the Optionee any federal, state or local 
taxes of any kind required by law to be withheld with respect to any Shares 
issued upon exercise of the option.   


4.  TERMINATION OF OPTION.

  In the event that the Optionee ceases to be employed by the Company or any 
parent or subsidiary of the Company (collectively, the "Company Group") at any 
time prior to the exercise of this option in full, this option shall terminate 
according to the following provisions:

   (a) if the Optionee ceases to be employed for any reason other than death 
or disability (as defined in Section 22(e)(3) of the Internal Revenue Code of 
1986, as amended (the "Code")), the Optionee may at any time within a period 
of one (1) month after the date of such cessation of employment exercise the 
option to the extent that the option was exercisable on the date of such 
cessation;

   (b) if the Optionee ceases to be employed because of disability (as defined 
in Section 22(e)(3) of the Code), the Optionee may at any time within a period 
of six months after the date of such cessation of employment exercise the 
option to the extent that the option was exercisable on the date of such 
cessation; and

   (c) if the Optionee ceases to be employed because of death, the option, to 
the extent that the Optionee was entitled to exercise it on the date of death, 
may be exercised within a period of six months after the Optionee's death by 
the person or persons to whom the Optionee's rights under the option shall 
pass by will or by the laws of descent and distribution; provided, however, 
that this option may not be exercised to any extent by anyone after the date 
of its expiration.


5.  EXERCISABILITY OF OPTION.

   So long as Optionee remains an employee of the Company, this Option may be 
exercised only as follows:

[to be completed]

less the number of Shares as to which this Option has been exercised.





                                4
<PAGE>
6.  "MARKET STAND OFF" AGREEMENT.

   (a) The Optionee, if requested by the Company or any managing underwriter 
of the Company's securities, shall agree not to sell or otherwise transfer or 
dispose of any Shares of the Company held by the Optionee during the period up 
to 180 days, as requested by the Company or such underwriter, following the 
effective date of a registration statement of the Company filed under the 
Securities Act of 1933 (except for any Company securities held by the Optionee 
sold pursuant to such registration statement).  Such agreement shall be in 
writing in form satisfactory to the Company or such underwriter.  The Company 
may impose stop-transfer instructions with respect to the Shares subject to 
the foregoing restriction until the end of such period.  

   (b) The provisions contained in this Section 6 shall not apply to any 
transfer of Shares to or in trust for the sole benefit of the Optionee, or any 
member of the immediate family of the Optionee, including for this purpose the 
undersigned's spouse, parents, parents-in-law, issue, nephews, nieces, 
brothers, brothers-in-law, sisters, sisters-in-law, children-in-law and 
grandchildren-in-law, provided that such transferee agrees in writing to be 
subject to the terms of Section 6. 


7.  NOTICE OF DISPOSITION OF SHARES.

   The Optionee hereby agrees to notify the Company promptly if the Optionee 
disposes of any Shares within one (1) year after the date the Optionee 
exercises all or part of this option or within two (2) years after the Option 
Date.  At any time during the one or two year periods set forth above, the 
Company may place a legend on any certificate representing Shares requesting 
the transfer agent for the Company's stock to notify the Company of any such 
transfer, and the Optionee hereby authorizes such transfer agent so to notify 
the Company (whether or not such Optionee's stock certificates have been so 
legended).  The obligation of the Optionee to notify the Company of any such 
transfer shall continue notwithstanding that a legend has been placed on the 
certificate pursuant to the preceding sentence.  Optionees are urged to review 
the  description of the Plan provided by the Company for a more detailed 
discussion of the Federal tax consequences of such a disposition under current 
law.  Additionally, if the Optionee is subject to Section 16(b) of the 
Securities Exchange Act of 1934, as amended, or the rules and regulations 
promulgated thereunder, any disposition by the Optionee of the Optioned Shares 
purchased under the Option within six months of the date of grant may deprive 
the Optionee of the protection from 16(b) liability which the provisions of 
the Plan seek to provide.

                                5
<PAGE>
8.  $100,000 LIMITATION.

   Under Section 422 of the Code, the aggregate Market Price of the shares 
with respect to which incentive stock options granted by any member of the 
Company Group first become exercisable by an employee during any calendar year 
cannot exceed $100,000 (the "$100,000 limitation").  To the extent, if any, 
that the $100,000 limitation is exceeded by reason of the grant of this 
option, this option shall be deemed, to the maximum extent possible, if any, 
to be an incentive stock option, and the portion of this option that is 
exercisable for shares in excess of the $100,000 limitation shall be treated 
as a non-qualified option pursuant to Section 422(d) of the Code.

9.  NOTICES.

   All notices or demands given pursuant to this Agreement shall be in writing 
and shall be deemed to have been sufficiently given if delivered by hand or 
sent by certified or registered mail, postage prepaid, addressed to the 
Company at its principal office or to the Optionee (or the Optionee's legal 
representatives) at the address stated in the Optionee's (or their) notice or 
at the Optionee's address appearing on the books of the Company. 


10. NO EMPLOYMENT COMMITMENT; TAX TREATMENT.

   Nothing herein contained shall be deemed to be or constitute an agreement 
or commitment by the Company or any other member of the Company Group to 
continue the Optionee in its employ.  Although the option granted hereunder is 
intended to qualify as an incentive stock option under Section 422 of the 
Code, the Company makes no representation about the tax treatment to the 
Optionee with respect to receipt or exercise of the option or acquiring, 
holding or disposing of the Shares, and the Optionee represents that the 
Optionee has had the opportunity to discuss such treatment (including the 
possible application of Section 83 of the Code) with the Optionee's tax 
adviser.  The Optionee shall have no rights as a stockholder with respect to 
the shares subject to the option until the exercise of the option and the 
issuance of a stock certificate for the Shares with respect to which the 
option shall have been exercised.

11. ADJUSTMENTS.

   Upon the occurrence of any of the following events, after the Option Date,  
a Optionee's rights with respect to this Option shall be adjusted as 
hereinafter provided:

   (a) STOCK DIVIDENDS AND STOCK SPLITS.  If the shares of Common Stock shall 
be subdivided or combined into a greater or smaller 
                                6

<PAGE>
number of shares or if the Company shall issue any shares of Common Stock as a 
stock dividend on its outstanding Common Stock, the number of shares of Common 
Stock deliverable upon the exercise of this Option shall be appropriately 
increased or decreased proportionately, and appropriate adjustments shall be 
made in the purchase price per share to reflect such subdivision, combination 
or stock dividend.

   (b) CONSOLIDATIONS OR MERGERS.  If the Company is to be consolidated with 
or acquired by another entity in a merger or other reorganization in which the 
holders of the outstanding voting stock of the Company immediately preceding 
the consummation of such event, shall, immediately following such event, hold, 
as a group, less than a majority of the voting securities of the surviving or 
successor entity, or in the event of a sale of all or substantially all of the 
Company's assets or otherwise (each, an "Acquisition"), the Committee or the 
board of directors of any entity assuming the obligations of the Company 
hereunder (the "Successor Board"), shall, as to this Option, if still 
outstanding, either (i) make appropriate provision for the continuation of 
this Option by substituting on an equitable basis for the shares then subject 
to this Option either (a) the consideration payable with respect to the 
outstanding shares of Common Stock in connection with the Acquisition, (b) 
shares of stock of the surviving or successor corporation or (c) such other 
securities as the Successor Board deems appropriate, the fair market value of 
which shall not materially exceed the fair market value of the shares of 
Common Stock subject to this Option immediately preceding the Acquisition; or 
(ii) upon written notice to the Optionee, provide that this Option must be 
exercised, to the extent then exercisable or to be exercisable as a result of 
the Acquisition, within a specified number of days of the date of such notice, 
at the end of which period this Option shall terminate; or (iii) terminate 
this Option in exchange for a cash payment equal to the excess of the fair 
market value of the shares subject to this Option (to the extent then exercisabl
e or to be exercisable as a result of the Acquisition) over the exercise price 
thereof.

   (c) RECAPITALIZATION OR REORGANIZATION.  In the event of a recapitalization 
or reorganization of the Company (other than a transaction described in 
subparagraph (b) above) pursuant to which securities of the Company or of 
another corporation are issued with respect to the outstanding shares of 
Common Stock, the Optionee upon exercising this Option shall be entitled to 
receive for the purchase price paid upon such exercise the securities he or 
she would have received if he or she had exercised such this Option prior to 
such recapitalization or reorganization.



                                7

<PAGE>
   (d) MODIFICATION OF INCENTIVE STOCK OPTIONS.  Notwithstanding the 
foregoing, any adjustments made pursuant to subparagraphs (a), (b) or (c) with 
respect to this Option shall be made only after the Committee, after 
consulting with counsel for the Company, determines whether such adjustments 
would constitute a "modification" (as that term in defined in Section 424 of 
the Code) of such this Option or would cause any adverse tax consequences for 
the Optionee.  If the Committee determines that such adjustments made with 
respect to this Option would constitute a modification of this Option or would 
cause adverse tax consequences to the holders, it may refrain from making such 
adjustments.

   (e) DISSOLUTION OR LIQUIDATION.  In the event of the proposed dissolution 
or liquidation of the Company, this Option will terminate immediately prior to 
the consummation of such proposed action or at such other time and subject to 
such other conditions as shall be determined by the Committee.


12. MISCELLANEOUS.

   This Agreement shall be governed by, and construed and enforced in 
accordance with, the laws of the Commonwealth of Massachusetts.  This 
Agreement shall be binding upon and inure to the benefit of the heirs and 
legal representatives of the Optionee and the successors and assigns of the 
Company, but shall not be assigned by the Optionee at any time without the 
prior written permission of the Company, and any such attempted assignment 
shall be void.

   IN WITNESS WHEREOF the parties have executed this Stock Option Agreement as 
of the Option Date. 



_____________________________
Signature of Optionee


_____________________________
Print Name of Optionee


________________________________________________________________
Address

_____________________________
Option Date




                                8

<PAGE>



_____________________________
Vesting Commencement Date

_____________________________
No. of Shares

_____________________________ 
Option Price  


   Accepted, as the issuer of the Shares, in accordance with the terms of the 
foregoing Option Agreement as of the foregoing Option Date.

                             PCD INC.


                             By: ______________________________
                                 President




























                                9

<PAGE>



______________________________
Name of Optionee


                             PCD INC.

               NON-QUALIFIED STOCK OPTION AGREEMENT
                      (PCD 1996 Stock Plan)


   THIS AGREEMENT is entered into by and between PCD Inc., a Massachusetts 
corporation with its principal office at Two Technology Drive, Centennial 
Park, Peabody, Massachusetts 01960-7977 (hereinafter the "Company"), and the 
undersigned consultant of the Company (hereinafter the "Optionee").

   WHEREAS, the Optionee renders important services to the Company (such 
services to be collectively herein referred to as "Service"), and the Company 
desires to grant a non-qualified stock option to the Optionee;

   NOW, THEREFORE, in consideration of the foregoing and the mutual agreements 
herein contained, the parties hereto hereby agree as follows:


1.  GRANT, EXERCISABILITY AND TERM OF OPTION.

   (a)  The Company hereby grants to the Optionee pursuant to the PCD 1996 
Stock Plan (the "Plan") the option to purchase from the Company upon the terms 
and conditions hereinafter set forth the number of shares ("Shares") of the 
$0.01 par value common stock ("Common Stock") of the Company set forth on the 
signature page below at the purchase price per Share so set forth (the "Option 
Price").  The date of grant of this option is the date set forth at the 
execution page of this Agreement as the "Option Date."

   (b)  Subject to the provisions of Section 5 hereof, this option is 
exercisable in full or in part and shall remain exercisable until it expires 
on the tenth anniversary of the Option Date, unless the option is sooner 
terminated as hereinafter specified.  Only whole Shares may be purchased 
pursuant to this option.


2.  CONDITIONS AND LIMITATIONS.



                                1
<PAGE>
   (a)  The option is granted on the condition that the purchase of shares 
hereunder shall be for investment purposes and not with a view to resale or 
distribution, except that such condition shall be inoperative if the offering 
of Shares subject to the option is registered under the Securities Act of 
1933, as amended, or if in the opinion of counsel for the Company such Shares 
may be resold without registration.  At the time of the exercise of the option 
or any installment thereof, the Optionee will execute such further agreements 
as the Company may require to implement the foregoing condition and to 
acknowledge the Optionee's familiarity with restrictions on the resale of the 
Shares under applicable securities laws, and the Company may stamp such legend 
on the certificate representing the Shares as may be necessary or appropriate 
in light of the foregoing condition.

   (b)  The Company will furnish upon request of the Optionee copies of the 
articles of organization of the Company, as amended, and by-laws of the 
Company, as amended, and such publicly available financial and other 
information concerning the Company and its business and prospects as may be 
reasonably requested by the Optionee in connection with exercise of this 
option.

   (c)  The option shall not be transferable otherwise than by will or by the 
laws of descent and distribution, and except as provided in Section 4 the 
option shall be exercisable during the lifetime of the Optionee by the 
Optionee only. Notwithstanding the foregoing, however, if the Optionee is 
determined to be mentally incompetent and a guardian or conservator (or other 
similar person) is appointed by a court of competent jurisdiction to manage 
the Optionee's affairs, the guardian or conservator (or other similar person) 
may exercise the option on behalf of the Optionee, provided that such exercise 
is made within the time limits prescribed herein.

   (d)  The option granted in this Agreement is subject to the terms, 
conditions and definitions of the Plan, a copy of which is attached hereto.  
To the extent that the terms, conditions and definitions of this Agreement are 
inconsistent with those of the Plan, those of this Agreement shall govern.  
The Optionee hereby accepts this option subject to all such provisions of the 
Plan and agrees that all decisions under, and interpretations of, such 
provisions of the Plan by the Board of Directors of the Company (the "Board") 
or the Committee, as defined in the Plan, shall be final, binding and 
conclusive upon the Optionee and his or her heirs.

   (e)  In the event that the Company, upon the advice of counsel, deems it 
necessary to list upon official notice of issuance any shares to be issued 
pursuant to the Plan on a 


                                2
<PAGE>
national securities exchange or to register under the Securities Act of 1933 
or other applicable federal or state statute any shares to be issued pursuant 
to the Plan, or to qualify any such shares for exemption from the registration 
requirements of the Securities Act of 1933 under the rules and regulations of 
the Securities and Exchange Commission or for similar exemption under state 
law, then the Company shall notify the Optionee to that effect and no Shares 
shall be issued until such registration, listing or exemption has been 
obtained.  The Company shall make prompt application for any such 
registration, listing or exemption pursuant to federal or state law or rules 
of such securities exchange which it deems necessary and shall make reasonable 
efforts to cause such registration, listing, or exemption to become and remain 
effective.


3.  EXERCISE OF OPTION; WITHHOLDING TAXES.

   (a)  Written notice of the exercise of the option or any installment 
thereof shall be given to the Company specifying the number of shares for 
which the option is exercised and accompanied by payment in full of the Option 
Price.  Payment shall be made (a) in cash, (b) by check, (c) by Immediate 
Sales Proceeds, as defined below, (d) by delivery and assignment to the 
Company of shares of Company stock (provided that such shares have been held 
by the Optionee for at least 6 months before such delivery) owned by the 
Optionee (which shares have a Market Price not less than the Option Price), or 
(e) by any combination of the foregoing.  As used herein, "Market Price" shall 
mean the closing price of the Common Stock as reported on the Nasdaq National 
Market for the relevant date (or, if such date is not a trading date or if no 
trades took place on such date, then such closing price for the last previous 
trading date or the last previous date on which a trade occurred, as the case 
may be); provided that if the Common Stock is no longer traded on the Nasdaq 
National Market on the relevant date, then the Market Price as of such date 
shall be determined by the Committee.  Notwithstanding the foregoing, this 
option may not be exercised by delivery and assignment to the Company of 
shares of Company stock to the extent that such delivery and assignment would 
constitute a violation of the provisions of any law, or related regulation or 
rule, or any agreement or Company policy, restricting the transfer or 
redemption of the Company's stock.  As used herein, the term "Immediate Sales 
Proceeds" shall mean the assignment in form acceptable to the Company of the 
proceeds of a sale of the Shares acquired on the exercise of this option 
pursuant to a procedure approved by the Company.  The Company reserves the 
right to decline to approve any such procedure in the Company's sole and 
absolute discretion.

   (b)  The Company's obligation to deliver Shares upon exercise 


                                3
<PAGE>
of an option shall be subject to the Optionee's satisfaction of all applicable 
federal, state and local income and employment tax withholding obligations.  
Without limiting the generality of the foregoing, the Company shall have the 
right to deduct from payments of any kind otherwise due to the Optionee any 
federal, state or local taxes of any kind required by law to be withheld with 
respect to any Shares issued upon exercise of the option.   

4.   TERMINATION OF OPTION.

   In the event that the Optionee ceases to perform Service at any time prior 
to the exercise of this option in full, this option shall terminate according 
to the following provisions:

   (a)  If the Optionee ceases to perform Service for any reason other than 
death or disability (as defined in Section 22(e)(3) of the Internal Revenue 
Code of 1986, as amended (the "Code")), the Optionee may at any time within a 
period of one (1) month after the date of such cessation of employment 
exercise the option to the extent that the option was exercisable on the date 
of such cessation;

   (b)  If the Optionee ceases to perform Service because of disability (as 
defined in Section 22(e)(3) of the Code), the Optionee may at any time within 
a period of six months after the date of such cessation of employment exercise 
the option to the extent that the option was exercisable on the date of such 
cessation; and

   (c)  If the Optionee ceases to perform Service because of death, the 
option, to the extent that the Optionee was entitled to exercise it on the 
date of death, may be exercised within a period of six months after the 
Optionee's death by the person or persons to whom the Optionee's rights under 
the option shall pass by will or by the laws of descent and distribution; 
provided, however, that this option may not be exercised to any extent by 
anyone after the date of its expiration.


5.   EXERCISABILITY OF OPTION.

   So long as Optionee performs Service, this Option may be exercised only as 
follows:

[to be completed]

less the number of Shares as to which this Option has been exercised.




                                4

<PAGE>
6.   "MARKET STAND OFF" AGREEMENT.

   (a)  The Optionee, if requested by the Company or any managing underwriter 
of the Company's securities, shall agree not to sell or otherwise transfer or 
dispose of any Shares of the Company held by the Optionee during the period up 
to 180 days, as requested by the Company or such underwriter, following the 
effective date of a registration statement of the Company filed under the 
Securities Act of 1933 (except for any Company securities held by the Optionee 
sold pursuant to such registration statement).  Such agreement shall be in 
writing in form satisfactory to the Company or such underwriter.  The Company 
may impose stop-transfer instructions with respect to the Shares subject to 
the foregoing restriction until the end of such period.  

   (b)  The provisions contained in this Section 6 shall not apply to any 
transfer of Shares to or in trust for the sole benefit of the Optionee, or any 
member of the immediate family of the Optionee, including for this purpose the 
undersigned's spouse, parents, parents-in-law, issue, nephews, nieces, 
brothers, brothers-in-law, sisters, sisters-in-law, children-in-law and 
grandchildren-in-law, provided that such transferee agrees in writing to be 
subject to the terms of this Section 6. 


7.   NOTICES.

   All notices or demands given pursuant to this Agreement shall be in writing 
and shall be deemed to have been sufficiently given if delivered by hand or 
sent by certified or registered mail, postage prepaid, addressed to the 
Company at its principal office or to the Optionee (or the Optionee's legal 
representatives) at the address stated in the Optionee's (or their) notice or 
at the Optionee's address appearing on the books of the Company. 


8.   NO SERVICE COMMITMENT; TAX TREATMENT.

   Nothing herein contained shall be deemed to be or constitute an agreement 
or commitment by the Company or any other member of the Company Group to 
continue the Optionee in Service. The option granted hereunder is not intended 
to qualify as an incentive stock option under Section 422 of the Code, and the 
Company makes no representation about the tax treatment to the Optionee with 
respect to receipt or exercise of the option or acquiring, holding or 
disposing of the Shares.  The Optionee represents that the Optionee has had 
the opportunity to discuss such treatment with the Optionee's tax adviser.  
The Optionee shall have no rights as a stockholder with respect to the shares 
subject to the option until the exercise of the option and the issuance of a 

                                5

<PAGE>
stock certificate for the Shares with respect to which the option shall have 
been exercised.

9.   ADJUSTMENTS.

   Upon the occurrence of any of the following events, after the Option Date,  
a Optionee's rights with respect to this Option shall be adjusted as 
hereinafter provided:

   (a)   STOCK DIVIDENDS AND STOCK SPLITS.  If the shares of Common Stock 
shall be subdivided or combined into a greater or smaller number of shares or 
if the Company shall issue any shares of Common Stock as a stock dividend on 
its outstanding Common Stock, the number of shares of Common Stock deliverable 
upon the exercise of this Option shall be appropriately increased or decreased 
proportionately, and appropriate adjustments shall be made in the purchase 
price per share to reflect such subdivision, combination or stock dividend.

   (b) CONSOLIDATIONS OR MERGERS.  If the Company is to be consolidated with 
or acquired by another entity in a merger or other reorganization in which the 
holders of the outstanding voting stock of the Company immediately preceding 
the consummation of such event, shall, immediately following such event, hold, 
as a group, less than a majority of the voting securities of the surviving or 
successor entity, or in the event of a sale of all or substantially all of the 
Company's assets or otherwise (each, an "Acquisition"), the Committee or the 
board of directors of any entity assuming the obligations of the Company 
hereunder (the "Successor Board"), shall, as to this Option, if still 
outstanding, either (i) make appropriate provision for the continuation of 
this Option by substituting on an equitable basis for the shares then subject 
to this Option either (a) the consideration payable with respect to the 
outstanding shares of Common Stock in connection with the Acquisition, (b) 
shares of stock of the surviving or successor corporation or (c) such other 
securities as the Successor Board deems appropriate, the fair market value of 
which shall not materially exceed the fair market value of the shares of 
Common Stock subject to this Option immediately preceding the Acquisition; or 
(ii) upon written notice to the Optionee, provide that this Option must be 
exercised, to the extent then exercisable or to be exercisable as a result of 
the Acquisition, within a specified number of days of the date of such notice, 
at the end of which period this Option shall terminate; or (iii) terminate 
this Option in exchange for a cash payment equal to the excess of the fair 
market value of the shares subject to this Option (to the extent then 
exercisable or to be exercisable as a result of the Acquisition) over the 
exercise price thereof.

   (c) RECAPITALIZATION OR REORGANIZATION.  In the event of a 

                                6

<PAGE>
recapitalization or reorganization of the Company (other than a transaction 
described in subparagraph (b) above) pursuant to which securities of the 
Company or of another corporation are issued with respect to the outstanding 
shares of Common Stock, the Optionee upon exercising this Option shall be 
entitled to receive for the purchase price paid upon such exercise the 
securities he or she would have received if he or she had exercised such this 
Option prior to such recapitalization or reorganization.

   (d) DISSOLUTION OR LIQUIDATION.  In the event of the proposed dissolution 
or liquidation of the Company, this Option will terminate immediately prior to 
the consummation of such proposed action or at such other time and subject to 
such other conditions as shall be determined by the Committee.


10.   MISCELLANEOUS.

   This Agreement shall be governed by, and construed and enforced in 
accordance with, the laws of the Commonwealth of Massachusetts.  This 
Agreement shall be binding upon and inure to the benefit of the heirs and 
legal representatives of the Optionee and the successors and assigns of the 
Company, but shall not be assigned by the Optionee at any time without the 
prior written permission of the Company, and any such attempted assignment 
shall be void.

   IN WITNESS WHEREOF the parties have executed this Stock Option Agreement as 
of the Option Date. 


______________________________
Signature of Optionee


______________________________                                
Print Name of Optionee


_______________________________________________________________
Address


______________________________
Option Date

______________________________
Vesting Commencement




                                7
<PAGE>


______________________________
Date

______________________________
No. of Shares

______________________________
Option Price


   Accepted, as the issuer of the Shares, in accordance with the terms of the 
foregoing Option Agreement as of the foregoing Option Date.

                              PCD INC.


                              By: ______________________________
                                  President






























                                8


<EXHIBIT>
                                                    EXHIBIT 10.10
<PAGE>


______________________________
Name of Optionee


                             PCD INC.

                ELIGIBLE DIRECTOR OPTION AGREEMENT


   THIS AGREEMENT is entered into by and between PCD Inc., a Massachusetts 
corporation with its principal office at Two Technology Drive, Centennial 
Park, Peabody, Massachusetts 01960-7977 (hereinafter the "Company"), and the 
undersigned non-employee director of the Company (hereinafter the "Optionee").

   WHEREAS, the Optionee renders important services to the Company (such 
services to be collectively herein referred to as "Service"), and the Company 
desires to grant a non-qualified stock option to the Optionee;

   NOW, THEREFORE, in consideration of the foregoing and the mutual agreements 
herein contained, the parties hereto hereby agree as follows:


1.  GRANT, EXERCISABILITY AND TERM OF OPTION.

   (a)  The Company hereby grants to the Optionee pursuant to the PCD 1996 
Eligible Directors Stock Plan (the "Plan") the option to purchase from the 
Company upon the terms and conditions hereinafter set forth the number of 
shares ("Shares") of the $0.01 par value common stock ("Common Stock") of the 
Company set forth on the signature page below at the purchase price per Share 
so set forth (the "Option Price").  The date of grant of this option is the 
date set forth at the execution page of this Agreement as the "Option Date."

   (b)  Subject to the provisions of Section 5 hereof, this option is 
exercisable in full or in part and shall remain exercisable until it expires 
on the tenth anniversary of the Option Date, unless the option is sooner 
terminated as hereinafter specified.  Only whole Shares may be purchased 
pursuant to this option.


2.  CONDITIONS AND LIMITATIONS.

   (a)  The option is granted on the condition that the purchase of shares 
hereunder shall be for investment purposes and not with 

                                1

<PAGE>
a view to resale or distribution, except that such condition shall be 
inoperative if the offering of Shares subject to the option is registered 
under the Securities Act of 1933, as amended, or if in the opinion of counsel 
for the Company such Shares may be resold without registration.  At the time 
of the exercise of the option or any installment thereof, the Optionee will 
execute such further agreements as the Company may require to implement the 
foregoing condition and to acknowledge the Optionee's familiarity with 
restrictions on the resale of the Shares under applicable securities laws, and 
the Company may stamp such legend on the certificate representing the Shares 
as may be necessary or appropriate in light of the foregoing condition.

   (b)  The Company will furnish upon request of the Optionee copies of the 
articles of organization of the Company, as amended, and by-laws of the 
Company, as amended, and such publicly available financial and other 
information concerning the Company and its business and prospects as may be 
reasonably requested by the Optionee in connection with exercise of this 
option.

   (c)  The option shall not be transferable otherwise than by will or by the 
laws of descent and distribution, and except as provided in Section 4 the 
option shall be exercisable during the lifetime of the Optionee by the 
Optionee only.  Notwithstanding the foregoing, however, if the Optionee is 
determined to be mentally incompetent and a guardian or conservator (or other 
similar person) is appointed by a court of competent jurisdiction to manage 
the Optionee's affairs, the guardian or conservator (or other similar person) 
may exercise the option on behalf of the Optionee, provided that such exercise 
is made within the time limits prescribed herein.

   (d)  The option granted in this Agreement is subject to the terms, 
conditions and definitions of the Plan, a copy of which is attached hereto.  
To the extent that the terms, conditions and definitions of this Agreement are 
inconsistent with those of the Plan, those of this Agreement shall govern.  
The Optionee hereby accepts this option subject to all such provisions of the 
Plan and agrees that all decisions under, and interpretations of, such 
provisions of the Plan by the Board of Directors of the Company (the "Board") 
or the Committee, as defined in the Plan, shall be final, binding and 
conclusive upon the Optionee and his or her heirs.

   (e)  In the event that the Company, upon the advice of counsel, deems it 
necessary to list upon official notice of issuance any shares to be issued 
pursuant to the Plan on a national securities exchange or to register under 
the Securities Act of 1933 or other applicable federal or state statute 
any       

                                2
<PAGE>
shares to be issued pursuant to the Plan, or to qualify any such shares for 
exemption from the registration requirements of the Securities Act of 1933 
under the rules and regulations of the Securities and Exchange Commission or 
for similar exemption under state law, then the Company shall notify the 
Optionee to that effect and no Shares shall be issued until such registration, 
listing or  exemption has been obtained.  The Company shall make prompt 
application for any such registration, listing or exemption pursuant to 
federal or state law or rules of such securities exchange which it deems 
necessary and shall make reasonable efforts to cause such registration, 
listing, or exemption to become and remain effective.


3.  EXERCISE OF OPTION; WITHHOLDING TAXES.

   (a)  Written notice of the exercise of the option or any installment 
thereof shall be given to the Company specifying the number of shares for 
which the option is exercised and accompanied by payment in full of the Option 
Price.  Payment shall be made (a) in cash, (b) by check, (c) by Immediate 
Sales Proceeds, as defined below, (d) by delivery and assignment to the 
Company of shares of Company stock (provided that such shares have been held 
by the Optionee for at least 6 months before such delivery) owned by the 
Optionee (which shares have a Market Price not less than the Option Price), or 
(e) by any combination of the foregoing.  As used herein, "Market Price" shall 
mean the closing price of the Common Stock as reported on the Nasdaq National 
Market for the relevant date (or, if such date is not a trading date or if no 
trades took place on such date, then such closing price for the last previous 
trading date or the last previous date on which a trade occurred, as the case 
may be); provided that if the Common Stock is no longer traded on the Nasdaq 
National Market on the relevant date, then the Market Price as of such date 
shall be determined by the Committee.  Notwithstanding the foregoing, this 
option may not be exercised by delivery and assignment to the Company of 
shares of Company stock to the extent that such delivery and assignment would 
constitute a violation of the provisions of any law, or related regulation or 
rule, or any agreement or Company policy, restricting the transfer or 
redemption of the Company's stock.  As used herein, the term "Immediate Sales 
Proceeds" shall mean the assignment in form acceptable to the Company of the 
proceeds of a sale of the Shares acquired on the exercise of this option 
pursuant to a procedure approved by the Company.  The Company reserves the 
right to decline to approve any such procedure in the Company's sole and 
absolute discretion.

   (b)  The Company's obligation to deliver Shares upon exercise of an option 
shall be subject to the Optionee's satisfaction of all applicable federal, 
state and local income and employment tax  

                               3

<PAGE> 
withholding obligations.  Without limiting the generality of the foregoing, 
the Company shall have the right to deduct from payments of any kind otherwise 
due to the Optionee any federal, state or local taxes of any kind required by 
law to be withheld with respect to any Shares issued upon exercise of the 
option.   


4.   TERMINATION OF OPTION.


   In the event that the Optionee ceases to be a director at any time prior to 
the exercise of this option in full, this option shall terminate according to 
the following provisions:

   (a)  If the Optionee ceases be a director for any reason other than death 
or disability (as defined in Section 22(e)(3) of the Internal Revenue Code of 
1986, as amended (the "Code")), the Optionee may at any time within a period 
of twelve months after the date of such cessation of service as a director 
exercise the option to the extent that the option was exercisable on the date 
of such cessation;

   (b)  If the Optionee ceases to be a director because of disability (as 
defined in Section 22(e)(3) of the Code), the Optionee may at any time within 
a period of twelve months after the date of such cessation of service as a 
director exercise the option to the extent that the option was exercisable on 
the date of such cessation; and

   (c)  If the Optionee ceases to be a director because of death, the option, 
to the extent that the Optionee was entitled to exercise it on the date of 
death, may be exercised within a period of twelve months after the Optionee's 
death by the person or persons to whom the Optionee's rights under the option 
shall pass by will or by the laws of descent and distribution; provided, 
however, that this option may not be exercised to any extent by anyone after 
the date of its expiration.


5.   EXERCISABILITY OF OPTION.

   So long as Optionee is an Eligible Director, this Option may be exercised 
only as follows:

[to be completed]

less the number of Shares as to which this Option has been exercised.




                               4
<PAGE>
6.   "MARKET STAND OFF" AGREEMENT.

   (a)  The Optionee, if requested by the Company or any managing underwriter 
of the Company's securities, shall agree not to sell or otherwise transfer or 
dispose of any Shares of the Company held by the Optionee during the period up 
to 180 days, as requested by the Company or such underwriter, following the 
effective date of a registration statement of the Company filed under the 
Securities Act of 1933 (except for any Company securities held by the Optionee 
sold pursuant to such registration statement).  Such agreement shall be in 
writing in form satisfactory to the Company or such underwriter.  The Company 
may impose stop-transfer instructions with respect to the Shares subject to 
the foregoing restriction until the end of such period.  

   (b)  The provisions contained in this Section 6 shall not apply to any 
transfer of Shares to or in trust for the sole benefit of the Optionee, or any 
member of the immediate family of the Optionee, including for this purpose the 
undersigned's spouse, parents, parents-in-law, issue, nephews, nieces, 
brothers, brothers-in-law, sisters, sisters-in-law, children-in-law and 
grandchildren-in-law, provided that such transferee agrees in writing to be 
subject to the terms of this Section 6. 


7.   NOTICES.

   All notices or demands given pursuant to this Agreement shall be in writing 
and shall be deemed to have been sufficiently given if delivered by hand or 
sent by certified or registered mail, postage prepaid, addressed to the 
Company at its principal office or to the Optionee (or the Optionee's legal 
representatives) at the address stated in the Optionee's (or their) notice or 
at the Optionee's address appearing on the books of the Company. 


8.   NO SERVICE COMMITMENT; TAX TREATMENT.

   Nothing herein contained shall entitle the Optionee to remain a director of 
PCD or an Eligible Director under the plan. The option granted hereunder is 
not intended to qualify as an incentive stock option under Section 422 of the 
Code, and the Company makes no representation about the tax treatment to the 
Optionee with respect to receipt or exercise of the option or acquiring, 
holding or disposing of the Shares.  The Optionee represents that the Optionee 
has had the opportunity to discuss such treatment with the Optionee's tax 
adviser.  The Optionee shall have no rights as a stockholder with respect to 
the shares subject to the option until the exercise of the option and the 
issuance of a stock certificate for the Shares with respect to which the 
option shall have been exercised.


                               5
<PAGE>
9.   ADJUSTMENTS.

   Upon the occurrence of any of the following events, after the Option Date, 
a Eligible Director's rights with respect to this Option shall be adjusted as 
hereinafter provided:

   (a) STOCK DIVIDENDS AND STOCK SPLITS.  If the shares of Common Stock shall 
be subdivided or combined into a greater or smaller number of shares or if the 
Company shall issue any shares of Common Stock as a stock dividend on its 
outstanding Common Stock, the number of shares of Common Stock deliverable 
upon the exercise of this Option shall be appropriately increased or decreased 
proportionately, and appropriate adjustments shall be made in the purchase 
price per share to reflect such subdivision, combination or stock dividend.

   (b)  CONSOLIDATIONS OR MERGERS.  If the Company is to be consolidated with 
or acquired by another entity in a merger or other reorganization in which the 
holders of the outstanding voting stock of the Company immediately preceding 
the consummation of such event, shall, immediately following such event, hold, 
as a group, less than a majority of the voting securities of the surviving or 
successor entity, or in the event of a sale of all or substantially all of the 
Company's assets or otherwise (each, an "Acquisition"), the Committee or the 
board of directors of any entity assuming the obligations of the Company 
hereunder (the "Successor Board"), shall, as to this Option, if still 
outstanding, either (i) make appropriate provision for the continuation of 
this Option by substituting on an equitable basis for the shares then subject 
to this Option either (a) the consideration payable with respect to the 
outstanding shares of Common Stock in connection with the Acquisition, (b) 
shares of stock of the surviving or successor corporation or (c) such other 
securities as the Successor Board deems appropriate, the fair market value of 
which shall not materially exceed the fair market value of the shares of 
Common Stock subject to this Option immediately preceding the Acquisition; or 
(ii) upon written notice to the Optionee, provide that this Option must be 
exercised, to the extent then exercisable or to be exercisable as a result of 
the Acquisition, within a specified number of days of the date of such notice, 
at the end of which period this Option shall terminate; or (iii) terminate 
this Option in exchange for a cash payment equal to the excess of the fair 
market value of the shares subject to this Option (to the extent then 
exercisable or to be exercisable as a result of the Acquisition) over the 
exercise price thereof.

   (c) RECAPITALIZATION OR REORGANIZATION.  In the event of a recapitalization 
or reorganization of the Company (other than a transaction described in 
subparagraph (b) above) pursuant to which securities of the Company or of 
another corporation are issued with respect to the outstanding shares of 
Common Stock,     

                                6
<PAGE>
the Optionee upon exercising this Option shall be entitled to receive for the 
purchase price paid upon such exercise the securities he or she would have 
received if he or she had exercised such this Option prior to such 
recapitalization or reorganization.

   (d) DISSOLUTION OR LIQUIDATION.  In the event of the proposed dissolution 
or liquidation of the Company, this Option will terminate immediately prior to 
the consummation of such proposed action or at such other time and subject to 
such other conditions as shall be determined by the Committee.


10.  MISCELLANEOUS.

   This Agreement shall be governed by, and construed and enforced in 
accordance with, the laws of the Commonwealth of Massachusetts.  This 
Agreement shall be binding upon and inure to the benefit of the heirs and 
legal representatives of the Optionee and the successors and assigns of the 
Company, but shall not be assigned by the Optionee at any time without the 
prior written permission of the Company, and any such attempted assignment 
shall be void.

   IN WITNESS WHEREOF the parties have executed this Stock Option Agreement as 
of the Option Date. 


______________________________ 
Signature of Optionee


______________________________
Print Name of Optionee


_______________________________________________________________
Address


______________________________ 
Option Date


______________________________
Vesting Commencement


______________________________
Date



                                7

<PAGE>



_____________________________
No. of Shares


_____________________________
Option Price



   Accepted, as the issuer of the Shares, in accordance with the terms of the 
foregoing Option Agreement as of the foregoing Option Date.

                               PCD INC.


                               By: _________________________
                                   President






























                                8

<EXHIBIT>
                                                    EXHIBIT 10.11
<PAGE>
                        POWER OF ATTORNEY

       Securities Act and Securities Exchange Act Filings

      Know all by these presents, that the undersigned (in his capacity as 
director) hereby constitutes and appoints C. Russel Hansen, Jr. signing 
singly, his true and lawful attorney-in-fact to:

(1)   execute for and on behalf of the undersigned (i) Forms 3,
      4, 5, 13-D and/or 13-G and Annual Reports on Form 10-K and
      Amendments thereto in accordance with the Securities
      Exchange Act of 1934 and (ii) Registration Statements on
      Form S-8 under the Securities Act of 1933 and the rules
      thereunder;

(2)   do and perform any and all acts for and on behalf of the
      undersigned which may be necessary or desirable to complete
      the execution of any such Form 3, 4, 5, 13-D, 13-G, 10-K or
      S-8 and the timely filing of such form with the United
      States Securities and Exchange Commission and any other
      authority; and

(3)   take any other action of any type whatsoever in connection
      with the foregoing which, in the opinion of such attorney-
      in-fact, may be of benefit to, in the best interest of, or
      legally required by, the undersigned, it being understood
      that the documents executed by such attorney-in-fact on
      behalf of the undersigned pursuant to this Power of
      Attorney shall be in such form and shall contain such terms
      and condition as such attorney-in-fact may approve in his
      discretion.

      The undersigned hereby grants to such attorney-in-fact full power and 
authority to do and perform all and every act and thing whatsoever requisite, 
necessary and proper to be done in the exercise of any of the rights and 
powers herein granted, as fully to all intents and purposes as such 
attorney-in-fact might or could do if personally present, with full power of 
substitution or revocation, hereby ratifying and confirming all that such 
attorney-in-fact, or his substitute or substitutes, shall lawfully do or cause 
to be done by virtue of this power of attorney and the rights and powers 
herein granted.  The undersigned acknowledges that the foregoing 
attorney-in-fact, in serving in such capacity at the request of the 
undersigned, is not assuming any of the undersigned's responsibilities to 
comply with the Securities Act of 1933 or the Securities Exchange Act of 1934.

      IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to 
be executed as of this 24th day of March, 1997.
 
                                           /s/ C. Wayne Griffith
                                           ---------------------- 
                                                C. WAYNE GRIFFITH

<PAGE>
                        POWER OF ATTORNEY

       Securities Act and Securities Exchange Act Filings

      Know all by these presents, that the undersigned (in his capacity as 
director) hereby constitutes and appoints C. Russel Hansen, Jr. signing 
singly, his true and lawful attorney-in-fact to:

(1)   execute for and on behalf of the undersigned (i) Forms 3,
      4, 5, 13-D and/or 13-G and Annual Reports on Form 10-K and
      Amendments thereto in accordance with the Securities
      Exchange Act of 1934 and (ii) Registration Statements on
      Form S-8 under the Securities Act of 1933 and the rules
      thereunder;

(2)   do and perform any and all acts for and on behalf of the
      undersigned which may be necessary or desirable to complete 
      the execution of any such Form 3, 4, 5, 13-D, 13-G, 10-K or
      S-8 and the timely filing of such form with the United
      States Securities and Exchange Commission and any other
      authority; and

(3)   take any other action of any type whatsoever in connection
      with the foregoing which, in the opinion of such attorney-
      in-fact, may be of benefit to, in the best interest of, or
      legally required by, the undersigned, it being understood
      that the documents executed by such attorney-in-fact on
      behalf of the undersigned pursuant to this Power of
      Attorney shall be in such form and shall contain such terms
      and condition as such attorney-in-fact may approve in his
      discretion.

      The undersigned hereby grants to such attorney-in-fact full power and 
authority to do and perform all and every act and thing whatsoever requisite, 
necessary and proper to be done in the exercise of any of the rights and 
powers herein granted, as fully to all intents and purposes as such 
attorney-in-fact might or could do if personally present, with full power of 
substitution or revocation, hereby ratifying and confirming all that such 
attorney-in-fact, or his substitute or substitutes, shall lawfully do or cause 
to be done by virtue of this power of attorney and the rights and powers 
herein granted.  The undersigned acknowledges that the foregoing 
attorney-in-fact, in serving in such capacity at the request of the 
undersigned, is not assuming any of the undersigned's responsibilities to 
comply with the Securities Act of 1933 or the Securities Exchange Act of 1934.

      IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to 
be executed as of this 14th day of March, 1997.
 
                                           /s/ Bruce E. Elmblad
                                           ---------------------- 
                                                 BRUCE E. ELMBLAD
<PAGE>
                        POWER OF ATTORNEY

       Securities Act and Securities Exchange Act Filings

      Know all by these presents, that the undersigned (in his capacity as 
director) hereby constitutes and appoints C. Russel Hansen, Jr. signing 
singly, his true and lawful attorney-in-fact to:

(1)   execute for and on behalf of the undersigned (i) Forms 3,
      4, 5, 13-D and/or 13-G and Annual Reports on Form 10-K and
      Amendments thereto in accordance with the Securities
      Exchange Act of 1934 and (ii) Registration Statements on
      Form S-8 under the Securities Act of 1933 and the rules
      thereunder;

(2)   do and perform any and all acts for and on behalf of the
      undersigned which may be necessary or desirable to complete
      the execution of any such Form 3, 4, 5, 13-D, 13-G, 10-K or
      S-8 and the timely filing of such form with the United
      States Securities and Exchange Commission and any other
      authority; and

(3)   take any other action of any type whatsoever in connection
      with the foregoing which, in the opinion of such attorney-
      in-fact, may be of benefit to, in the best interest of, or
      legally required by, the undersigned, it being understood
      that the documents executed by such attorney-in-fact on
      behalf of the undersigned pursuant to this Power of
      Attorney shall be in such form and shall contain such terms
      and condition as such attorney-in-fact may approve in his
      discretion.

      The undersigned hereby grants to such attorney-in-fact full power and 
authority to do and perform all and every act and thing whatsoever requisite, 
necessary and proper to be done in the exercise of any of the rights and 
powers herein granted, as fully to all intents and purposes as such 
attorney-in-fact might or could do if personally present, with full power of 
substitution or revocation, hereby ratifying and confirming all that such 
attorney-in-fact, or his substitute or substitutes, shall lawfully do or cause 
to be done by virtue of this power of attorney and the rights and powers 
herein granted.  The undersigned acknowledges that the foregoing 
attorney-in-fact, in serving in such capacity at the request of the 
undersigned, is not assuming any of the undersigned's responsibilities to 
comply with the Securities Act of 1933 or the Securities Exchange Act of 1934.

      IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to 
be executed as of this 13th day of March, 1997.
 
                                           /s/ Harold F. Faught
                                           ---------------------- 
                                               Harold F. Faught

<PAGE>
                        POWER OF ATTORNEY

       Securities Act and Securities Exchange Act Filings

      Know all by these presents, that the undersigned (in his capacity as 
director) hereby constitutes and appoints C. Russel Hansen, Jr. signing 
singly, his true and lawful attorney-in-fact to:

(1)   execute for and on behalf of the undersigned (i) Forms 3,
      4, 5, 13-D and/or 13-G and Annual Reports on Form 10-K and
      Amendments thereto in accordance with the Securities
      Exchange Act of 1934 and (ii) Registration Statements on
      Form S-8 under the Securities Act of 1933 and the rules
      thereunder;

(2)   do and perform any and all acts for and on behalf of the
      undersigned which may be necessary or desirable to complete
      the execution of any such Form 3, 4, 5, 13-D, 13-G, 10-K or
      S-8 and the timely filing of such form with the United
      States Securities and Exchange Commission and any other
      authority; and

(3)   take any other action of any type whatsoever in connection
      with the foregoing which, in the opinion of such attorney-
      in-fact, may be of benefit to, in the best interest of, or
      legally required by, the undersigned, it being understood
      that the documents executed by such attorney-in-fact on
      behalf of the undersigned pursuant to this Power of
      Attorney shall be in such form and shall contain such terms
      and condition as such attorney-in-fact may approve in his
      discretion.

      The undersigned hereby grants to such attorney-in-fact full power and 
authority to do and perform all and every act and thing whatsoever requisite, 
necessary and proper to be done in the exercise of any of the rights and 
powers herein granted, as fully to all intents and purposes as such 
attorney-in-fact might or could do if personally present, with full power of 
substitution or revocation, hereby ratifying and confirming all that such 
attorney-in-fact, or his substitute or substitutes, shall lawfully do or cause 
to be done by virtue of this power of attorney and the rights and powers 
herein granted.  The undersigned acknowledges that the foregoing 
attorney-in-fact, in serving in such capacity at the request of the 
undersigned, is not assuming any of the undersigned's responsibilities to 
comply with the Securities Act of 1933 or the Securities Exchange Act of 1934.

      IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to 
be executed as of this 13th day of March, 1997.
 
                                           /s/ Theodore C. York
                                           ---------------------- 
                                               Theodore C. York
<EXHIBIT>
                                                    EXHIBIT 11.1
<TABLE>
<CAPTION>                                                       
                            PCD Inc.
       STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE (1)

                                               Primary    Fully
                                                Shares   Diluted
                                              --------- ---------
<S>                                          <C>       <C>
For the year ended December 31, 1996                             
  Common stock outstanding,
    beginning of the period.................. 4,597,032 4,597,032
  Weighted average common stock issued
    during the period........................   883,713   883,713
  Dilutive effect of common stock equivalents   776,107   776,107 
                                              --------- ---------
  Weighted average number of common and
    common equivalent shares outstanding..... 6,256,852 6,256,852
                                              ========= =========
  Net income per share....................... $    0.76 $    0.76
                                              ========= =========
For the year ended December 31, 1995
  Common stock outstanding,
    beginning of the period.................. 4,561,032 4,561,032
  Cheap stock outstanding during the period(2)   70,364    70,364
  Weighted average common stock issued
    during the period........................     9,000     9,000
  Dilutive effect of common stock equivalents   560,728   560,728
                                              --------- ---------
  Weighted average number of common and
    common equivalent shares outstanding..... 5,201,124 5,201,124
                                              ========= =========
  Net income per share....................... $    0.74 $    0.74
                                              ========= =========
For the year ended December 31, 1994
  Common stock outstanding,
    beginning of the period.................. 4,561,032 4,561,032
  Cheap stock outstanding during the period(2)   70,364    70,364
  Weighted average common stock issued
    during the period........................         -         -
  Dilutive effect of common stock equivalents         -         -
                                              --------- ---------
  Weighted average number of common and
    common equivalent shares outstanding..... 4,631,396 4,631,396
                                              ========= =========
  Net income per share....................... $    0.28 $    0.28
                                              ========= =========
-------------- 
</TABLE>
(1) All common and common equivalent shares have been restated to reflect a 
12-for-1 stock split of the Company's common stock effected in February 1996.

(2) In accordance with the Securities and Exchange Commission Staff Accounting 
Bulletin No. 83, issuance of common stock and common stock equivalents during 
the twelve month period preceding the date of the initial filing on February 
12, 1996, of the registration statement relating to the Company's initial 
public offering have been included in the calculation using the treasury stock 
method at the public offering price ($11 per share), as if they were 
outstanding for all periods prior to January 1, 1996.
<EXHIBIT>
                                                    EXHIBIT 21.1

                 SUBSIDIARIES OF THE REGISTRANT

PCD Inc.
CTi Technologies, Inc.
PCD Securities Corp.














































<EXHIBIT>
                                                    EXHIBIT 23.1


                CONSENT OF INDEPENDENT ACCOUNTANTS

     We consent to the incorporation by reference in the Registration 
Statements of PCD Inc. on Form S-8 (File Nos. 333-07393, 333-07403 and 
333-07405) of our report dated January 27, 1997, on our audits of the 
consolidated financial statements as of December 31, 1996 and 1995 and for the 
years ended December 31, 1996, 1995 and 1994 which report is included in this 
Annual Report on Form 10-K.

                                    Coopers & Lybrand L.L.P.




March 24, 1997