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                                                            Exhibit 4.1
                                                            -----------


                           THE L.S. STARRETT COMPANY

                      1997 EMPLOYEES' STOCK PURCHASE PLAN


Section 1.  Purpose and Scope of Plan.
            --------------------------

     The L.S. Starrett Company 1997 Employees' Stock Purchase Plan (the "Plan")
is intended to provide a convenient means by which eligible employees of The
L.S. Starrett Company (the "Company") and of such subsidiaries of the Company as
the Board of Directors of the Company may from time to time designate
("participating subsidiaries") may save regularly through voluntary, systematic
payroll deductions and use such savings to purchase shares of stock of the
Company ("Stock") at an option price, and thereby acquire an interest in the
future of the Company.  For all purposes of the Plan, the term "Stock" shall
include Class A Common Stock of the Company and, to such extent (if any) as the
Board of Directors of the Company may determine consistent with the purposes of
the Plan, Class B Common Stock of the Company.  The purpose of the Plan is to
help provide personnel a nest egg for retirement.  The Plan is not intended to
be used as a buy and sell plan while the participant is actively employed.  The
Plan allows each participant to acquire shares of Stock at a favorable price to
accomplish this purpose.

     For these purposes, the Company has established this Plan under which it
will issue an aggregate of not more than 800,000 shares of Stock pursuant to the
exercise of options granted only to employees who meet the eligibility
requirements set forth in Section 2 hereof. Said options shall, subject to the
Company's right to discontinue the Plan at its discretion at any time, be
granted by the Company from time to time over a five-year period commencing with
the effective date of the Plan as specified in Section 20 hereof.

     For purposes of the Plan, the term "subsidiary" shall mean a "subsidiary
corporation" within the meaning of Section 424(f) of the Internal Revenue Code
of 1986, as it may from time to time be amended (the "Code").

Section 2.  Eligible Employees.
            -------------------

     Each employee (including employee-directors) who, on a date of grant of an
option hereunder, has six months or more continuous service in the employ of the
Company or a participating subsidiary shall be eligible to participate in the
Plan.

Section 3.  Term of Options.
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     Subject to Section 12 hereof, each option for the purchase of Stock
hereunder shall, unless exercised in accordance with Section 9, expire two years
from the date of its grant.

Section 4.  Purchase Price.
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     The purchase price of the Stock issued pursuant to the exercise of an
option granted under the Plan shall be 85% of the fair market value of the Stock
at (i) the time of grant of the option or (ii) the time at which such option is
exercised, whichever is less. The fair market value of the Stock shall be
determined by the Company.

Section 5.  Number of Shares.
            -----------------

     Pursuant to any offering made by the Company, the Company shall grant to an
eligible employee an option to purchase such number of shares of Stock as the
employee may request but no employee shall be granted options permitting him to
purchase more than 9,600 shares under the Plan.  All such requests shall be
subject to adjustment
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by the Company, which reserves the right to reduce on a
substantially proportionate basis the number of shares which all employees have
requested to purchase in the event that the number of shares of Stock then
available under the Plan is insufficient to grant the total number of shares
provided in such requests.

Section 6.  Method of Participation.
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     Upon notice of the Company's intention to grant options pursuant to the
Plan, each employee who will be eligible on the date of grant shall, within the
time and in the manner specified in said notice, inform the Company of the
number of shares of Stock for which he wishes to receive an option pursuant
thereto.  Thereafter, the Company shall grant each such employee an option in
writing which shall include provisions as to the date of grant of the option,
the option price, the number of shares of Stock subject to such option, the date
such option shall be exercisable, and the date such option will expire.

Section 7.  Method of Payment.
            -----------------

     An employee who wishes to accept the terms of an option granted hereunder
shall execute and deliver to the Company a payroll deduction authorization
providing for the accumulation of savings equal to the total purchase price for
the Stock subject to such option (determined by reference to its value on the
date of grant) by means of substantially equal payroll deductions over the term
of the option.

     Any employee who voluntarily terminates or withdraws his payroll deduction
authorization shall be deemed to have cancelled his option and the provisions of
Section 11 shall apply.  If an employee's payroll deductions are temporarily
discontinued because of leave of absence or temporary disability, such employee
shall have the right at any time prior to the expiration of the option to pay in
cash the amount by which the full purchase price of the number of shares he
wishes to purchase under the option exceeds the amount paid in by payroll
deductions.

     Notwithstanding anything herein to the contrary, an employee may make
advance cash payments at any time and in any amounts.

Section 8.  Rights as a Shareholder.
            ------------------------

     An employee shall not have any of the rights and privileges of a
shareholder of the Company and shall not receive any dividends in respect to any
shares of Stock subject to an option hereunder, unless and until he has been
issued certificates representing such shares.

Section 9.  Exercise of Options.
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     Any option granted under the Plan shall be exercised by written notice
filed with the Company at such time and in such form as the Company may
prescribe.  Such notice of exercise shall specify the number of shares for which
such option is exercised and shall include a representation that the Stock to be
issued pursuant to such exercise is being acquired for investment and not with
any existing intention to resell said Stock.

     As soon as practicable after receipt of such notice of exercise, the
Company shall apply the employee's accumulated savings and any additional cash
contributions under the Plan to the purchase price of the shares under the
option so exercised, shall issue and deliver certificates for said shares to the
employee and shall return to him the balance, if any, of payments made by him
and interest thereon in excess of the total purchase price of the shares so
issued.

     Notwithstanding anything herein to the contrary, the Company's obligation
to issue and deliver shares of Stock under the Plan shall be subject to the
approval of any governmental authority required in connection with the
authorization, issuance, sale or transfer of said shares and to any requirements
of the New York Stock Exchange applicable thereto.
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Section 10.  Interest.
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     Interest shall be payable on any savings and any additional cash
contributions accumulated under the Plan by an employee.  Such interest shall be
computed in such reasonable manner and at such reasonable rate as the Company
shall determine.

Section 11.  Right to Cancel.
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     An employee who holds an option under the Plan may at any time prior to his
exercise thereof cancel all or any part of his option by filing a notice in
writing with the Company.  In the event that an employee holds more than one
option, he may cancel any or all options so held; provided, however, that such
employee must cancel said options in reverse chronological order of their dates
of grant. Upon such cancellation, all payments made by the employee in respect
to the cancelled portion of such option shall be returned to him with interest.

Section 12.  Termination of Employment.
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     In the event an employee holds any option hereunder at the time his service
with the Company and its Subsidiaries is terminated by his retirement with the
consent of the employer within three months of the time such option becomes
exercisable, or by his death whenever occurring, such employee or his legal
representative may, by a writing delivered to the Company on or before the date
such option is exercisable, elect either to (i) cancel any such option and
receive in cash, with interest, the total amount of any savings and additional
contributions accumulated in respect to such option, or (ii) pay to the Company
the amount, if any, which is necessary to complete payment for the shares of
Stock under option.  In the event such employee or his legal representative does
not file a written election upon such termination any outstanding option shall
be treated as if an election had been filed pursuant to subparagraph (i) above.

     Upon the termination of an employee's service with the Company and its
subsidiaries for any other reason, any option held by him under the Plan shall
terminate and all savings and additional contributions accumulated by the
employee in respect thereto shall be returned to him with interest, and he shall
have no further rights under the Plan.

Section 13.  Employee's Rights Not Transferable.
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     All employees granted options under the Plan shall have the same rights and
privileges, and each employee's rights and privileges under the Plan shall be
exercisable during his lifetime only by him and shall not be sold, pledged,
assigned, or transferred in any manner other than by will or the laws of descent
and distribution.  In the event any employee violates the terms of this Section,
any options held by him may be terminated by the Company and upon return to the
employee of any savings and additional contributions accumulated by him in
respect thereto, all his rights under the Plan shall terminate.

Section 14.  Employment Rights.
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     Nothing contained in the provisions of the Plan shall be construed to give
to any employee the right to be retained in the employ of the Company or any
subsidiary or to interfere with the right of the Company or any subsidiary to
discharge any employee at any time; nor shall it be construed to give the
Company or any subsidiary the right to require any employee to remain in its
employ or to interfere with an employee's right to terminate his employment at
any time.

Section 15.  Change in Capitalization.
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     In the event of any change in the outstanding Stock of the Company by
reason of a stock dividend, split-up, recapitalization, merger, consolidation or
other reorganization, the aggregate number and class of shares available under
the Plan and the number and class of shares under option but not exercised and
the option price shall be appropriately adjusted; provided, however, that no
such adjustment shall be made unless the Company shall be
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satisfied that it will not constitute a modification of the options granted
under the Plan or otherwise disqualify the Plan as an employee stock purchase
plan under the provisions of Section 423 of the Code.

Section 16.  Administration of Plan.
             -----------------------

     The Plan shall be administered by the Company, which shall have the right
to determine any questions that may arise regarding the interpretation and
application of the provisions of the Plan and to make, administer and interpret
such rules and regulations as it shall deem necessary or advisable.

Section 17.  Amendment and Termination of Plan.
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     The Company reserves the right at any time or times to amend the Plan to
any extent and in any manner it may deem advisable by vote of its Board of
Directors; provided, however, that any amendment relating to the aggregate
number of shares which may be issued under the Plan (other than an adjustment
provided for in Section 15 hereof) or the employees (or class of employees) to
receive options under the Plan shall not have any force or effect unless it
shall have been approved within 12 months before or after its adoption by a
majority of the holders of voting stock of the Company voting in person or by
proxy at a duly held meeting.

     The Company expects the Plan to remain in effect for the period specified
in Section 1, but expressly reserves the right to withdraw, suspend or terminate
the Plan prior to its normal expiration date.  In the event of such termination,
the rights and privileges of each employee or other holder of any option
hereunder shall not be affected.

Section 18.  Approval of Stockholders.
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     The Plan shall not have any force or effect unless it shall have been
approved within 12 months before or after its adoption by the Board of Directors
by a majority of the votes cast at a duly held stockholders' meeting at which a
quorum representing a majority of all outstanding Stock is, either in person or
by proxy, present and voting on the Plan.

Section 19.  Compliance with Code.
             ---------------------

     Notwithstanding any other provisions of the Plan:

     No option shall be granted hereunder which could cause the Plan or any
other options issued hereunder to fail to qualify under Section 423 of the Code.
Without limiting the foregoing, all employees granted options under the Plan
shall have the same rights and privileges, subject to and consistent with the
provisions of Section 423(b)(5) of the Code.

     Any director of the Company or of a subsidiary who is not an employee of
the Company or of a subsidiary, and any employee who immediately after the grant
of an option to him is determined (in accordance with the provisions of Sections
423 and 424(d) of the Code) to own Stock possessing 5% or more of the total
combined voting power or value of all classes of Stock of the Company or of its
parent or subsidiary corporations, as defined in Section 424 of the Code, shall
not be eligible to purchase Stock pursuant to the Plan.

     No employee shall be granted an option under the Plan that would permit his
rights to purchase shares of Stock under all employee stock purchase plans of
the Company and its parent and subsidiary corporations, as defined in Section
424 of the Code, to accrue at a rate that exceeds $25,000 in fair market value
of such Stock (determined at the time the option is granted) for each calendar
year during which any such option granted to such employee is outstanding at any
time.

Section 20.  Effective Date.
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     The effective date of the Plan shall be September 17, 1997.