Exhibit 10.23

                 SEPARATION AGREEMENT AND MUTUAL GENERAL RELEASE

                                     BETWEEN

                                  SERAFINO POSA

                                       AND

                              POLAROID CORPORATION

         This Separation Agreement and Mutual General Release (the "Agreement")
is made and entered into as of December 17, 1998, by and between SERAFINO POSA
(the "Officer") and POLAROID CORPORATION (the "Company").

                                    RECITALS

A.   The Company employs the Officer as an Executive Vice President.

B.   The Officer and the Company have mutually agreed to terminate the
     employment relationship.

C.   The Officer and the Company desire to specify the terms of the Officer's
     separation from the Company and to resolve fully and finally any and all
     claims, disputes, or disagreements that the Officer and the Company may
     have against each other.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:

1.   Resignation. Upon mutual agreement, the Officer's employment with the
     Company will terminate on or before January 15, 1999 (the "Separation
     Date").

2.   Annual Bonus Payment. The Officer will receive his 1998 bonus from the
     Polaroid Incentive Plan for Executives if a bonus is paid to active
     employees, at the rate paid to other similarly situated executives. This
     payment would be made at the time the bonus is paid for active employees.

3.   Severance Payment.

     a.   The Company shall pay the Officer a Severance Amount equal to two (2)
          times his annual base pay of $340,000, which shall begin on the day
          following the Officer's Separation Date and continue for a period of
          twenty-four (24) months thereafter.

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     b.   The Severance Amount shall be paid in a stream of payments based on
          the Officer's monthly base rate of pay in accordance with the
          Company's regular biweekly payroll schedule beginning shortly after
          his Separation Date.

     c.   The Officer shall receive his previously accrued unused vacation pay
          as soon as practicable after his Separation Date; and,

     d.   Notwithstanding the foregoing, no payment shall be due for at least
          one (1) week after the execution of this Agreement by both parties.

4.   Outplacement Counseling. Outplacement services through a contractor of the
     Officer's choice at a rate to be negotiated and agreed upon by Polaroid
     will be reimbursed by the Company until December 31, 1999, or until the
     Officer finds Employment, whichever occurs sooner.

5.   Miscellaneous Adjustments. The Company shall have the right to deduct from
     all cash payments referred to in this Agreement all amounts required by
     applicable law to be withheld and to apply any such payments to pay any
     amounts which the Officer may owe as of his Separation Date (including, but
     not limited to, items such as company store and corporate credit card
     obligations, garnishments or liens).

6.   Options. All options awarded on or before May 1, 1998, which have been
     granted to the Officer, shall fully vest upon the Officer's Separation
     Date. Consistent with a Supplemental Option Agreement which shall be
     executed herewith and govern the terms of this acceleration, the Officer
     shall have three (3) years from his Separation Date, or ten (10) years from
     the date an Option was originally granted, whichever is shorter, within
     which to exercise his Options (attached as Exhibit A).

7.   Performance Shares. A pro-rata portion of the Officer's Performance Awards
     which have been awarded will remain viable and will be awarded at the time
     such awards are made to active employees similarly situated. For this
     purpose, the pro-rata portion shall be based on the period the Officer was
     an employee during the performance period of each award divided by the
     total period of the Performance Award. These Performance Award
     distributions, as adjusted for the pro-rata period, shall be based on the
     Company's actual performance during the performance period for such award
     (two (2) and three (3) year periods respectively). No future performance
     awards shall be granted after the date of this Agreement.

8.   Medical and Dental Benefits. The Company shall continue to provide the
     Officer the subsidized medical and dental insurance that is currently being
     provided to the Officer from the Officer's Separation Date for a period of
     twenty four (24) months or until the Officer becomes eligible for
     substantially similar insurance from another employer, whichever occurs
     first.

     These benefits will be provided under the Consolidated Omnibus Budget
     Reconciliation Act of 1986 (COBRA) at the same cost active employees
     similarly situated pay for such benefits. However, the Officer will only be
     entitled to the subsidized benefit for the twenty-four (24) months
     following his Separation Date, or until he becomes eligible for
     substantially similar insurance from another employer, whichever occurs
     first. If either of these events occurs, the Company's obligation to
     provide subsidized medical and dental insurance under this paragraph
     ceases. The Officer shall be provided the right to continue COBRA by paying
     the full unsubsidized premium for the benefits, plus two percent (2%) for
     any remaining COBRA period (the COBRA period is normally eighteen (18)
     months from a separation date).

                                 -2 of 8 pages-
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9.   Financial Planning. In addition to the payments set forth above, and upon
     proper documentation that the expense has been incurred, the Company agrees
     to reimburse the Officer the amount of $5,000 for financial planning
     expenses that he incurs if such expenses are submitted for work performed
     prior to December 31, 1999.

10.  Officer's General Release. In exchange for the severance benefits just
     described, except as otherwise provided below, which the Officer
     acknowledges are in excess of what would otherwise have been due him, the
     Officer agrees to and hereby does release all claims the Officer may have
     against the Company, the Company's employee benefit plans (including any
     trusts, or insurance contracts forming part of any such plans), and its
     directors, trustees, officers, shareholders, employees, agents,
     administrators, successors and assigns, including, but not limited to, any
     claims arising out of or in connection with the Officer's employment by the
     Company or the termination of the Officer's employment. This release
     includes a waiver of any claims that the Officer may have under the Age
     Discrimination in Employment Act of 1967, as amended (29 U.S.C. [Section]
     621), except for any claims under that Act which may arise after the
     Effective Date of this Agreement.

     This release includes (but is not limited to) any pending grievances or
     claims internal or otherwise and any claims which might be brought under or
     on the basis of:

     o    any employment relations law;

     o    any state, federal or local law, regulation or executive order
          prohibiting discrimination on account of age, race, color, sex, sexual
          orientation, national origin, religion, handicap or veteran status,
          including, without limitation, the Age Discrimination in Employment
          Act of 1967, as amended (29 U.S.C. [Section] 621);

     o    common law, including, without limitation, claims arising from any
          contract or tort law;

     o    any public policy, law or equity claims for expenses, attorneys' fees,
          or other monetary or equitable relief; and

     o    any other claim arising out of the Officer's employment with the
          Company or termination of the Officer's employment with the Company,
          from his first date of employment to the Effective Date of this
          Agreement.

     This release will not preclude claims arising from workers compensation
     laws, for vested accrued benefits under the Polaroid Pension Plan or the
     Polaroid Retirement Savings Plan as determined by the plan administrators
     of such Plans.

     This Agreement is an important and binding legal document, and the Company
     therefore encourages the Officer to consider its terms carefully and to
     seek the advice of an attorney before the Officer signs it.

     By signing this Agreement, the Officer acknowledges that he has been given
     a period of at least twenty-one (21) days to consider the terms of this
     Agreement. If the Officer chooses to sign this Agreement before the end of
     the twenty-one (21) day period that the Company has set, he expressly
     waives any right to the balance of that period.

11.  General Covenants.

     a.   The Officer shall not commit any act, or in any way assist others to
          commit any action, intended to injure the Company nor shall the

                                 -3 of 8 pages-
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          Officer divulge (except as required by law) any confidential
          information or make available to any others any documents, files, or
          other papers concerning the Company, or its financial affairs.

     b.   The Officer, on behalf of himself and his spouse, attorneys acting on
          his behalf, agents, and representatives, agrees not to engage in any
          public criticism regarding his employment or the business affairs of
          Polaroid, nor to make any negative, detrimental, or derogatory
          comments concerning the Company or its parents, partners, owners, and
          affiliates, and their owners, stockholders, directors, officers,
          employees, partners, trusts, agents, attorneys, and representatives,
          past and present; the Company agrees to make no public criticism
          regarding the Officer or his employment with the Company.

     c.   The Officer shall not disclose the terms of this Agreement unless
          required to do so by law; provided, however, that the terms of this
          Agreement may be disclosed in confidence to the following: to the
          Officer's immediate family, attorneys, and tax or financial
          consultants. Before disclosing the terms of this Agreement to anyone
          as permitted under this paragraph, the Officer shall first obtain an
          agreement from the person receiving the information that he or she
          will not disclose the terms of the Agreement to any other person. The
          unauthorized disclosure of the terms of this Agreement by any person
          shall constitute a violation of this paragraph by the party who
          initially disclosed the terms of this Agreement.

12.  Mutual Agreement. The parties understand and agree that nothing contained
     in this Agreement shall constitute or be construed in any way as an
     admission of any liability whatsoever by either the Officer or the Company.

                                 -4 of 8 pages-
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13.  Non-Competition and Confidentiality.

     a.   Non-Competition. During the period in which the Officer is employed by
          the Company or any of its subsidiaries and for a period of twenty-four
          (24) months following the Separation Date, the Officer shall not
          engage in any activity or become associated with any entity or
          venture, whether as a principal, partner, employee, consultant,
          shareholder (other than as a holder of not in excess of one percent
          (1%) of the outstanding voting shares of any publicly traded company)
          or otherwise, that is in competition in any geographic area with the
          business of the Company. The intent of this Section is not to prevent
          the Officer from working, but to protect the Company and give the
          Company the opportunity to evaluate situations in certain potentially
          sensitive areas. Accordingly, the foregoing limitation on the
          Officer's activities shall not apply to the extent the Company
          consents to such activities.

     b.   Confidentiality. Without the prior written consent of the Company,
          except to the extent required by an order of a court having competent
          jurisdiction or under subpoena from an appropriate government agency,
          the Officer shall comply with the Confidentiality Agreement the
          Officer executed when hired and shall not disclose any trade secrets,
          customer lists, drawings, designs, information regarding product
          development, marketing plans, sales plans, manufacturing plans,
          management organization information (including data and other
          information relating to members of the Board and management),
          operating policies or manuals, business plans, financial records or
          other financial, commercial, business or technical information
          relating to the Company or any of its subsidiaries or information
          designated as confidential or proprietary that the Company or any of
          its subsidiaries may receive belonging to suppliers, customers or
          others, who do business with the Company or any of its subsidiaries
          (collectively, "Confidential Information") to any third person unless
          such Confidential Information has been previously disclosed to the
          public by the Company or is in the public domain (other than by reason
          of the Officer's breach of this Section 13).

     c.   Company Property. Promptly following the Officer's Separation Date,
          the Officer shall return to the Company all property of the Company,
          and all copies thereof in the Officer's possession or under his
          control.

     d.   Non-Solicitation of Employees. During the period in which the Officer
          is employed by the Company and any of its Subsidiaries and for a
          period of twenty-four (24) months following the Officer's Separation
          Date, the Officer shall not directly or indirectly induce any employee
          of the Company or any of its subsidiaries to terminate employment with
          such entity, and shall not directly or indirectly, either individually
          or as owner, agent, employee, consultant or otherwise, employ or offer
          employment to any person who is employed by the Company or a
          subsidiary.

                                 -5 of 8 pages-
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     e.   Non-Solicitation of Customers. During the period in which the Officer
          is employed by the Company or any of its subsidiaries and for a period
          of twenty-four (24) months following the Officer's Separation Date, he
          shall not solicit customers of the Company for any venture or business
          opportunity, which could directly or indirectly be considered in
          competition with the Company's business, as reasonably determined by
          the Company in its sole discretion.

     f.   Injunctive Relief with Respect to Covenants. The Officer acknowledges
          and agrees that his covenants and obligations with respect to
          non-competition, non-solicitation, confidentiality and Company
          property relate to special, unique and extraordinary matters,
          including his own skills, and that a violation of any of the terms of
          such covenants and obligations will cause the Company irreparable
          injury for which adequate remedies are not available at law.
          Therefore, in the event of a breach or threatened breach, the Officer
          agrees that the Company shall be entitled to an injunction,
          restraining order, or such other equitable relief (without the
          requirement to post bond) restraining the Officer from committing any
          violation of the covenants and obligations contained in this
          Agreement. These injunctive remedies are cumulative and are in
          addition to any other rights and remedies the Company may have at law
          or in equity.

          The Officer agrees that restraints imposed upon him pursuant to this
          section are necessary for the reasonable and proper protection of the
          Company and its subsidiaries and affiliates and that each and every
          one of the restraints is reasonable in respect to subject matter,
          length of time and geographic area. The parties further agree that, in
          the event that any provision of this Agreement shall be determined by
          any court of competent jurisdiction to be unenforceable by reason of
          its being extended over too great a time, too large a geographic area
          or too great a range of activities, such provision shall be deemed to
          be modified to permit its enforcement to the maximum extent permitted
          by law.

          The Officer agrees and convenants that he will not assert any claim in
          any forum of any type (whether by complaint, counterclaim, cross-claim
          or otherwise) or before any tribunal pursuant in which he seeks to
          have declared unenforceable, in whole or in part, any of the
          restraints imposed upon him by this section or to limit their
          enforceability in any way. The Officer further agrees that, should he
          file any such claim: (a) he will reimburse the Company for its
          reasonable costs and attorneys fees should the Company succeed in
          enforcing any such restraint in whole or in part; and (b) he will
          repay to the Company any severance paid him under this Agreement
          should the Company fail to enforce any such covenant in its entirety.

                                 -6 of 8 pages-
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          Notwithstanding the foregoing, the immediately preceding paragraph
          shall not apply when (a) the Officer has obtained written consent from
          the appropriate Company designee that a certain job or venture is not
          in violation of the Section 13, or (b) if an Arbitrator concludes that
          the activity that the Officer has undertaken does not violate the
          terms of this Section 13 as it exists when signed.

14.  Entire Agreement. This Agreement represents the sole and entire agreement
     between the parties and supersedes all prior agreements, negotiations, and
     discussions between the parties with respect to the Officer's employment
     and termination of employment with the Company and any and all other
     subject matters covered by this Agreement. Any amendment to this Agreement
     must be in writing signed by the parties or their duly authorized
     representatives and must state the intention of the parties to amend this
     Agreement.

15.  Binding Terms. This Agreement shall be binding upon the Officer and his
     spouse, heirs, administrators, representatives, executors, successors, and
     assigns and shall inure to the benefit of the Company and its parents,
     partners, owners, and affiliates, and their owners, stockholders,
     directors, officers, employees, partners, trusts, agents, attorneys,
     representatives, successors, and assigns. Each provision of this Agreement
     shall continue according to its terms. If no term is stated, then such
     provision shall remain in effect indefinitely.

16.  Governing Law. This Agreement shall be governed by, and construed in
     accordance with, the laws of the Commonwealth of Massachusetts. In the
     event that any part of this Agreement is found to be void or unenforceable,
     all other provisions of the Agreement shall remain in full force and
     effect.

17.  Disputes. Subject to Section 13(f), all claims, disputes, questions, or
     controversies arising out of or relating to this Agreement, including
     without limitation the construction or application of any of the terms,
     provisions, or conditions of this Agreement, shall, on written request of
     either party served upon the other, be submitted to final and binding
     arbitration. Such arbitration shall be compelled and enforced by any court
     of competent jurisdiction and shall be conducted according to the Model
     Employment Arbitration Procedures of the American Arbitration Association
     ("AAA"), except as otherwise provided herein. The arbitration shall be
     conducted before AAA or such other arbitration service as the parties may,
     by mutual agreement, select. The arbitrator shall be appointed by agreement
     of the parties hereto or, if no agreement can be reached, by AAA pursuant
     to its rules. Judgment on the award that the arbitrator renders may be
     entered in any court having jurisdiction over the parties. The arbitration
     shall be conducted in Boston, Massachusetts.

18.  Representation and Voluntary Execution.

     a.   The Officer represents and acknowledges that he has been advised in
          writing to consult an attorney, that he has had an adequate
          opportunity to consult and discuss all aspects of this Agreement with
          an attorney and that he has carefully read and fully understands all
          of its provisions.

     b.   The Officer represents and acknowledges that he has had an adequate
          opportunity to make whatever investigation he or his counsel may deem
          necessary or desirable in connection with the subject matters of this
          Agreement.

                                 -7 of 8 pages-
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     c.   The Officer represents and acknowledges that his decision to enter
          into this Agreement has been made voluntarily, knowingly, and without
          coercion of any kind.

19.  Execution. This Agreement may be executed in one or more counterparts, each
     of which shall be an original but all of which, together, shall be deemed
     to constitute a single document.

     If the terms of this Agreement are acceptable to the Officer, please sign
and return it as soon as possible. The Officer may revoke this Agreement at any
time during the seven (7) day period immediately following the date of his
signing. If he does not revoke this Agreement, then on the eighth (8th) day
following the date of his signing (that eighth day being the "Effective Date" of
this Agreement), this Agreement shall take effect as a legally binding agreement
between the Officer and the Company.

     IN WITNESS WHEREOF, the parties hereto have each executed this Agreement as
of the date first above written.

SERAFINO POSA                  POLAROID CORPORATION

/s/ SERAFINO POSA              By:  /s/ JOSEPH G. PARHAM, JR.
--------------------                    ---------------------------
                               Name:    JOSEPH G. PARHAM, Jr.
                               Title:   Senior Vice President, Human Resources

                                 -8 of 8 pages-
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                                  ATTACHMENT A

                          POLAROID STOCK INCENTIVE PLAN
                 SUPPLEMENT TO THE STOCK INCENTIVE AGREEMENT(S)

     This Supplemental Agreement is evidence the modifications to the Stock
Incentive Agreement(s) under the original Stock Incentive Plan and the 1993
Polaroid Stock Incentive Plan entered into between SERAFINO POSA and POLAROID
CORPORATION. The following provisions supersede corresponding provisions of the
Stock Incentive Agreement(s) under the original Stock Incentive Plan and the
1993 Stock Incentive Plan. Provisions of the original option agreement(s), which
are not specifically modified here, remain in full force and effect.

     IF YOUR EMPLOYMENT TERMINATES:

          Notwithstanding anything to the contrary in the Plan or Agreement,
     because your employment with Polaroid or one of its subsidiaries is being
     terminated, all options awarded on or before May 1, 1998 under the above
     referenced Plans shall become fully vested upon your Separation Date. In
     addition, you will have three (3) years from the date of your termination
     or ten (10) years from the date of the original grant, whichever is
     earlier, in which to exercise all options.

     If, however, for any reason your employment is not terminated under your
Severance Agreement and Mutual General Release, this Supplemental Agreement
shall become null and void and the provision captioned "If YOUR EMPLOYMENT
TERMINATES" in your original option agreement(s) shall control.

POLAROID CORPORATION

By: /s/ JOSEPH G. PARHAM, JR.
        ---------------------
              Officer

     By signing below, you acknowledge that nothing in this Supplement, original
Agreement(s), or the Plan(s) confers upon you any rights to continued employment
or limits the right of Polaroid or its subsidiaries to modify the terms of your
employment.

     I understand and agree to comply with the terms of this Supplement, the
original Agreement(s), and the Plans.

January 29, 1999                  /s/ SERAFINO POSA
----------------                      -----------------
Date                                  Serafino Posa
                                      Signature