Exhibit 10.2



                                
           THE POLAROID BOARD OF DIRECTORS STOCK PLAN
           ------------------------------------------
                                
                                
                                
                                
                                
                                
                                
                      POLAROID CORPORATION
                      --------------------
                                
                                
                    Cambridge, Massachusetts
                                
                                
                                
                                
                    Effective January 1, 1997
                                
                                
                                
                                
 <PAGE>
                                
                                
           THE POLAROID BOARD OF DIRECTORS STOCK PLAN
           ------------------------------------------
                                
     The purpose of the Plan is to advance the interests of the
Company and its shareholders by affording non-employee members of
its Board of Directors an opportunity to increase their
proprietary interest in the Company by the grant of Awards under
the terms set forth herein.  The Company believes that this Plan
can give an incentive to its non-employee members of the Board to
increase revenues and profits.

                            ARTICLE I
                                
                           DEFINITIONS
                           -----------
                                
                                
1.01 Award.  Award shall mean an incentive award granted under
     the Plan, whether in the form of Options, Stock Appreciation
     Rights, Restricted Stock or any other form of consideration
     (which may provide for settlement in shares of Stock, cash
     and/or a combination thereof) determined by the Committee to
     be consistent with the purposes of the Plan, including but
     not limited to restricted units, phantom stock, performance
     awards, performance units, performance shares, stock
     appreciation shares, limited stock appreciation rights,
     stock acquisition rights, valuation protection rights,
     reload options or any other type of award or combination or
     derivative of various types of awards.
     
1.02 Board or Board of Directors.  Board or Board of Directors
     shall mean the Board of Directors of the Company.

1.03 Code.  Code shall mean the Internal Revenue Code of 1986, as
     amended, unless otherwise specifically provided herein.

1.04 Committee.  Committee shall mean a Committee of the Board
     consisting of members of the Board of Directors who are Non-
     Employee Directors as defined in Rule 16b-3 (b) (3)
     promulgated under the Exchange Act.



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1.05 Company.  Company shall mean Polaroid Corporation, a
     Delaware corporation, and any successor thereof.

1.06 Exchange Act.  Exchange Act shall mean the Securities
     Exchange Act of 1934, as amended.

1.07 Fair Market Value.  Fair Market Value of the Stock shall
     mean the last sale price at which Stock is traded on any
     given date or, if no Stock is traded on such date, the most
     recent prior date on which Stock was traded, as reflected in
     the New York Stock Exchange Composite Transactions Index.

1.08 Option.  Option shall mean an option granted by the Company
     to purchase Stock pursuant to the provisions of this Plan
     and the Agreement executed pursuant hereto.

1.09 Option Price.  Option Price shall mean the price per
     share of Stock purchasable under an Option.  The Option
     Price shall be determined by the Committee at the time of
     grant but shall not be less than the Fair Market Value on
     the Date of Grant.

1.10 Participant.  Participant shall mean a non-employee member
     of the Board, or a former non-employee member of the Board
     who has received an Award granted by the Committee
     hereunder.

1.11 Plan.  Plan shall mean the Board of Directors Stock Plan.

1.12 Restricted Stock Awards.  A Restricted Stock Award shall
     mean a grant made by the Committee entitling the Participant
     to acquire, at no cost or for a purchase price determined by
     the Committee at the time of grant, shares of Stock subject
     to such restrictions and conditions as the Committee may
     determine at the time of grant ("Restricted Stock").



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1.13 Securities Act.  Securities Act shall mean the Securities
     Act of 1933, as amended from time to time.

1.14 Stock.  Stock shall mean common stock, par value $1 per
     share, issued by the Company.

1.15 Stock Appreciation Right.  A Stock Appreciation Right shall
     mean a grant entitling the Participant to receive an amount
     in cash or shares of Stock or a combination thereof having a
     value equal to (or if the Committee shall so determine at
     the time of a grant, less than) the excess of the Fair
     Market Value of a share of Stock on the date of exercise
     over the Fair Market Value of a share of Stock on the date
     of grant (or over the Option Price, if the Stock
     Appreciation Right was granted in tandem with an Option)
     multiplied by the number of shares with respect to which the
     Stock Appreciation Right shall have been exercised, with the
     Committee having sole discretion to determine the form of
     payment.  A Stock Appreciation Right is further defined in
     Article V hereof.

1.16 Stock Incentive Agreement or Agreement.  Stock Incentive
     Agreement or Agreement shall mean the agreement as described
     in Section 3.04 of the Plan between the Company and the
     Participant under which such Participant receives an Award
     pursuant to this Plan.


1.17 Unrestricted Stock Awards.  An Unrestricted Stock
     Award shall mean a grant made by the Committee entitling the
     Participant to acquire, at no cost or for a purchase price
     determined by the Committee at the time of grant, share of Stock
     free from any restrictions imposed under the Plan ("Unrestricted
     Stock").




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                           ARTICLE II

                          PARTICIPATION
                          -------------

2.01 Participation. An Award under this Plan may be made by the
     Committee to non-employee members of the Board of Directors.


                           ARTICLE III

               SHARES OF STOCK SUBJECT TO THE PLAN
               -----------------------------------

3.01 Limitations .
          a)   Subject to adjustments pursuant to the provisions
               of Section 3.03 hereof, the number of shares of Stock
               or Stock equivalents which may be granted hereunder to
               Participants under all forms of Awards shall not exceed
               300,000 shares plus the number of shares available
               for grant under the Polaroid Board of Directors Stock
               Option Plan approved by the Company's shareholders in
               1990 (the "1990 Plan).  No grants will be made under
               the 1990 Plan after this Plan is approved by the
               Shareholders.
          b)   For purposes of this Section 3.01, the shares of
               Stock that shall be counted toward such limitation
               shall include all Stock:
               1)   Issued or issuable pursuant to Options that have
                    been or may be exercised;
               2)   Subject to Stock Appreciation Rights that have
                    been or may be exercised (other than Stock
                    Appreciation Rights granted in tandem with
                    outstanding Options or any limited stock
                    appreciation rights deemed to be granted pursuant
                    to Article XI); and,
               3)   Issued as, or subject to issuance as Restricted
                    Stock or Unrestricted Stock.
          c)   Shares of Stock subject to grants under this Plan
               shall be authorized and unissued shares of Stock or
               treasury stock.



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3.02 Availability of Shares Once Issued Under the Plan.  Once
     Awards have lapsed, terminated or have been forfeited, the
     Committee shall have the sole discretion to issue a new
     grant to any Participant, covering the number of shares to
     which such lapsed, terminated or forfeited grant related.

3.03 Adjustments To Awards Once Issued.  In the event that the
     outstanding shares of Stock are changed into or exchanged
     for a different number or kind of shares or other securities
     of the Company or of another corporation by reason of
     merger, consolidation, other reorganization,
     recapitalization, reclassification, combination of shares,
     stock split-up, or stock dividend, the Committee shall make
     such corresponding adjustments, if any, as deemed
     appropriate in its sole discretion.  The Committee may
     adjust the number and kind of shares which may be granted
     under the Plan,  and the number, the Option Price, and the
     kind of shares or property subject to each outstanding
     grant.  The adjustment by the Committee shall be final,
     binding and conclusive.  Notwithstanding the foregoing, no
     fractional shares of Stock shall be issued under the Plan as
     a result of such adjustment, but the Committee in its
     discretion may make a cash payment in lieu of fractional
     shares.

3.04 Grants and Agreement.  Each grant of an Award under this
     Plan shall be evidenced by a written Stock Incentive
     Agreement dated as of the date of the grant and executed by
     the Company and the Participant.  This Agreement shall set
     forth the terms and conditions of such Award, as may be
     determined by the Committee consistent with this Plan.


                           ARTICLE IV

                             OPTIONS
                             -------
                                
4.01 Option Exercise.  Subject to Federal and State statutes then
     applicable, the terms and procedures by which an Option may
     be exercised shall be set forth in the Participant's
     Agreement or in procedures established by the Committee.
     The Committee may permit payment of the Option Price to be
     made through the tender of cash or securities, the
     withholding of Stock or cash to be received through Awards,
     brokers' cashless exercise arrangement, or any other
     arrangement satisfactory to the Committee.



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4.02 Options.  The Committee may grant Options to any Participant
     in such amount and at such Option Price determined at the
     discretion of the Committee.  Options granted under the Plan
     are not intended to be "Incentive Stock Options" within the
     meaning of Section 422 of the Code..

4.03 Vesting of Options.  The Stock Incentive Agreement shall
     specify the date or dates on which the Participant may begin
     to exercise all or a portion of his Option.  Subsequent to
     such date or dates, the option shall be deemed "vested."
     Notwithstanding the terms of any Stock Incentive Agreement,
     the Committee at any time may accelerate such date or dates
     and otherwise waive or amend any conditions of the grant of
     an Option subject to the other terms of the Plan.

     A Participant's subsequent transfer or disposition of any
     Stock secured through the grant shall be subject to any
     Federal and State laws then applicable, specifically
     securities laws.



                            ARTICLE V

                    STOCK APPRECIATION RIGHTS
                    -------------------------

5.01 Grant and Exercise of Stock Appreciation Rights.  Stock
     Appreciation Rights may be granted to Participants by the
     Committee in tandem with, or independently of, any Option
     granted pursuant to Article IV of this Plan, either at or
     after the time of the grant of such Option.



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     A Stock Appreciation Right, or applicable portion thereof
     granted in tandem with an Option, shall terminate and no
     longer be exercisable upon the termination or exercise of
     the related Option.  However, if a Stock Appreciation Right
     is granted with respect to less than the full number of
     shares covered by a related Option, such Stock Appreciation
     Right shall terminate only if and to the extent that the
     number of shares covered by the exercise or termination of
     the related Option exceeds the number of shares not covered
     by such Stock Appreciation Right.

5.02 Terms and Conditions of Stock Appreciation Rights.  Stock
     Appreciation Rights shall be subject to such terms and
     conditions as shall be determined from time to time by the
     Committee and embodied in the Agreements and in procedures
     established by the Committee.  The Committee at any time may
     accelerate the exercisability of any Stock Appreciation
     Right and otherwise waive or amend any conditions of the
     grant of a Stock Appreciation Right.


                           ARTICLE VI

                     RESTRICTED STOCK AWARDS
                     -----------------------

6.01 Grant of Restricted Stock Award.  The Committee may grant a
     Restricted Stock Award to any Participant at no cost or for
     a purchase price determined by the Committee at the time of
     grant.  The Restricted Stock shall be subject to such
     restrictions and conditions as determined by the Committee
     and embodied in the Agreement.

6.02 Agreement.  If the purchase of Restricted Stock is required
     by the Agreement, a Participant who is granted a Restricted
     Stock Award shall not have any rights with respect to such
     grant unless the Participant shall have accepted the grant
     within 60 days (or such shorter time as the Committee may
     specify) following the date of the grant by making payment
     to the Company by certified or bank check or other
     instrument acceptable to the Committee in an amount equal to
     the specified purchase price, if any, of the shares covered
     by the grant and by executing and delivering to the Company
     an Agreement in such form as the Committee shall determine.



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6.03 Rights as a Shareholder.  After the Restricted Stock has
     been recorded in the stock ledger of the Company and:

     a)   Upon complying with Section 6.02 above, if payment of
          purchase price is required by the Agreement; or,

     b)   Immediately, if no purchase price is required by
          the Agreement, a Participant shall have all the rights
          of a shareholder with respect to such Restricted Stock
          including voting and dividend rights, subject to non-
          transferability restrictions and Company repurchase or
          forfeiture rights described in this Section and Section
          6.04, and subject to such other conditions (including
          but not limited to condition on voting and dividend
          rights) as are contained in the Agreement.  Unless the
          Committee shall otherwise determine, certificates
          evidencing shares of Restricted Stock shall remain in
          the possession of the Company until such shares are
          vested as provided in Section 6.05 below and the
          Agreement.

6.04 Restrictions.  Shares of Restricted Stock may not be sold,
     assigned, transferred, pledged, or otherwise encumbered or
     disposed of except as specifically provided herein.
     Restrictions on shares of Restricted Stock shall be set
     forth in a Stock Incentive Agreement and may include such
     vesting restrictions as the Committee shall determine,
     including but not limited to restrictions related to timing,
     profitability of the Company, and growth of the share price.
     In the event of a Participant's ceases to serve on the Board
     for any reason (including death) prior to the date shares of
     Restricted Stock awarded to such Participant become vested,
     the Company shall have the right, at the discretion of the
     Committee, to repurchase such shares at their purchase
     price, or to require forfeiture of such shares to the
     Company if acquired at no cost, from such Participant or
     Participant's legal representative.



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6.05 Vesting of Restricted Stock.  The Committee at the time of
     grant shall specify the date or dates (which may depend upon
     or be related to the attainment of performance goals and
     other conditions) on which the restrictions imposed upon the
     Restricted Stock and the Company's right of repurchase or
     forfeiture shall lapse.  Subsequent to such date or dates,
     the shares on which all restrictions have lapsed shall no
     longer be Restricted Stock and shall be deemed "vested."
     The Committee at any time may accelerate such date or dates
     and otherwise waive or amend any conditions of the grant.  A
     Participant may transfer or dispose of any Restricted Stock
     that has vested, subject to any Federal and State laws then
     applicable, specifically securities laws.

                           ARTICLE VII

                    UNRESTRICTED STOCK AWARDS
                    -------------------------

7.01 Grant or Sale of Unrestricted Stock.  The Committee may
     grant (or sell at a purchase price determined by the
     Committee) an Unrestricted Stock Award to any Participant
     pursuant to which such Participant may receive shares of
     Unrestricted Stock free of any restrictions under the Plan.
     Unrestricted Stock Awards may be granted or sold as
     described in the preceding sentence in respect of past
     services or other valid consideration, or in lieu of any
     cash compensation due to such Participant.

7.02 Elections to Receive Unrestricted Stock in Lieu of
     Compensation.  Upon the request of a Participant and with
     the consent of the Committee, each such Participant may,
     pursuant to an advance written election delivered to the
     Company no later than the date specified by the Committee,
     receive a portion of the cash compensation otherwise due to
     such Participant in the form of shares of Unrestricted Stock
     either currently or on a deferred basis.



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7.03 Restrictions on Transfers.  The right to receive shares of
     Unrestricted Stock on a deferred basis may not be sold,
     assigned, transferred, pledged or otherwise encumbered,
     other than by will or the laws of descent and distribution.
                                

                          ARTICLE VIII

                       STOCK CERTIFICATES
                       ------------------

8.01 Stock Certificates.  The Company shall not be required to
     issue or deliver any certificate for shares of Stock under
     this Plan or of any portion thereof prior to fulfillment of
     all of the following conditions:
 
     a)   The admission of such shares to listing on all
          stock exchanges on which the Stock is then listed, if
          any;
     b)   The completion of any registration or other
          qualification of such shares under any Federal or State
          law, under the rulings or regulations of the Securities
          and Exchange Commission, or under any other
          governmental regulatory agency which the Committee
          shall in its sole discretion determine to be necessary
          or advisable;
     c)   The obtaining of any approval or other clearance from
          any Federal or State governmental agency which the
          Committee shall in its sole discretion determine to be
          necessary or advisable; and,
          d)   The lapse of such reasonable period of time
          following the exercise of the grant as the Committee
          from time to time may establish for reasons of
          administrative convenience.

     If these conditions are not satisfied, the Participant may
     lose his rights to such Stock as determined by the
     Committee.



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                           ARTICLE IX

                            DIVIDENDS
                            ---------

9.01 Dividends.  At the time of each grant of an Award the
     Committee may, in its sole discretion, determine whether the
     grant shall provide a dividend or a dividend equivalent and
     the terms and conditions under which any such dividend or
     dividend equivalent is to be provided, including but not
     limited to permitting or requiring immediate payment,
     deferral or investment of dividends or dividend equivalents.


                            ARTICLE X

                       PLAN ADMINISTRATION
                       -------------------

10.01     Plan Administration.  The Plan and all Agreements shall
     be administered, and all grants under this Plan shall be
     awarded, by the Committee.  The Committee shall have full
     authority and absolute sole discretion:
     a)   To determine, consistent with the provisions of
          this Plan, which of the non-employee members of the
          Board shall be granted Awards the form and terms of
          such Awards including forms of Awards not specifically
          described in Articles IV, V, VI and VII above; the form
          and terms of such Awards; the timing of such grants;
          the number of shares subject to each Award and the
          Option Price of Stock covered by each Option (if
          applicable); and the period over which the Awards shall
          become and remain exercisable (if applicable);
     b)   To determine the terms and provisions of each
          respective Stock Incentive Agreement, which need not be
          identical;
     c)   To make all other determinations and take all other
          actions deemed necessary or advisable for the proper
          administration of the Plan;
     d)   To adopt, alter, and repeal such rules, guidelines, and
          practices for administration of the Plan and for its
          own acts and proceedings as it shall deem advisable;
     e)   To construe and interpret the terms and provisions of
          the Plan and any Award (including related Agreements);
     f)   To decide all disputes arising in connection with the
          Plan; and,
     g)   To otherwise supervise the administration of the Plan.



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                           ARTICLE XI

                    MISCELLANEOUS PROVISIONS
                    ------------------------
                                
11.01     Applicable Law.  To the extent that state law shall not
     have been preempted by any laws of the United States, the
     Plan shall be construed, regulated, interpreted and
     administered according to the laws of the State of Delaware.

11.02     Expenses.  The expenses of administering the Plan shall
     be borne by the Company.

11.03     Gender and Number.  Unless the context clearly requires
     otherwise, the masculine pronoun whenever used shall include
     the feminine and neuter pronoun, the singular shall include
     the plural, and vice versa.

11.04     Headings Not Part of the Plan.  Headings of Articles
     and Sections are inserted for convenience and reference;
     they constitute no part of this Plan.

11.05     Indemnification.  No member of the Board of Directors
     or the Committee shall be liable for any action or
     determination taken or made in good faith with respect to
     this Plan nor shall any member of the Board of Directors or
     the Committee be liable for any Agreement issued pursuant to
     this Plan or any grants under this Plan.  Each member of the
     Board of Directors and the Committee shall be indemnified by
     the Company against any losses incurred in such
     administration of the Plan, unless his action constitutes
     serious and willful misconduct.



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11.06     Limitation of Rights.  Neither the adoption and
     maintenance of the Plan or Agreement nor anything contained
     herein, with respect to any Participant, shall be deemed to
     create any contract or other right or interest under the
     Plan, or in any funds hereunder, other than as specifically
     provided in the Plan and the Agreement.

11.07     No Distribution Until Compliance with Legal
     Requirements.  The Committee may require each Participant
     acquiring shares pursuant to a grant to represent to and
     agree with the Company in writing that such Participant is
     acquiring the shares without a view to distribution thereof.
     No shares of Stock shall be issued pursuant to a grant until
     all applicable securities laws and other legal and stock
     exchange requirements have been satisfied.  The Committee
     may require the placing of such stop-orders and restrictive
     legends on certificates for Stock and grants as it deems
     appropriate.

11.08     Non-Assignability.  Except as provided in Section
     11.09, a Participant's interest under this Plan shall not be
     subject at any time, or in any manner, to alienation, sale,
     transfer, assignment, pledge, attachment, garnishment or
     encumbrance of any kind and any attempt to deliver, sell,
     transfer, assign, pledge, attach, garnish or otherwise
     encumber such interest shall be void and any interest so
     encumbered will terminate.

11.09     Nontransferability.  An Award (other than any
     Unrestricted Stock Award or any Award of Restricted Stock
     after the restrictions relating thereto shall have lapsed)
     shall not be transferable by the Participant other than by
     will or the laws of descent and distribution.  During the
     lifetime of the Participant, such Award shall be exercisable
     or perfected only by the Participant in accordance with the
     terms of this Plan and the Agreement.  Notwithstanding the
     foregoing and anything to the contrary elsewhere herein, the
     Committee may permit a Participant to transfer, without
     consideration for the transfer, Awards to members of the
     Participant's immediate family, to trusts for the benefit of
     such family members, to partnerships in which such family
     members are the only partners, or to charitable
     organizations, provided that the transferee agrees in
     writing with the Company to be bound by all of the terms and
     conditions of this Plan and the applicable Agreement.



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11.10     Other Compensation Plans.  The adoption of the Plan
     shall not affect any other existing or future incentive or
     compensation plans for directors, officers or employees of
     the Company or its subsidiaries.  Moreover, the adoption of
     this Plan shall not preclude the Company or its subsidiaries
     from:

     a)   Establishing any other forms of incentive or other
          compensation for directors, officers or employees of
          the Company or its subsidiaries; or,
     b)   Assuming any forms of incentives or other
          compensation of any person or entity in connection with
          the acquisition of the business or assets, in whole or
          in part, of any person or entity.

11.11     Plan Binding on Successors.  This Plan shall be binding
     upon the successors and assigns of the Company.

11.12     Tax Withholding.  Each Participant shall, no later than
     the date as of which the value of a grant or of any Stock or
     other amount received thereunder first becomes includable in
     the gross income of the Participant for Federal income tax
     purposes, pay to the Company, or make arrangements
     satisfactory to the Committee regarding payment of any
     Federal, State, or local taxes of any kind required by law
     to be withheld with respect to such income.  The Committee
     may permit payment of such taxes to be made through the
     tender of cash or securities, the withholding of Stock or
     cash to be received through Awards or any other arrangement
     satisfactory to the Committee.  The Company and its
     subsidiaries shall, to the extent permitted by law, have the
     right to deduct any such taxes from any payment of any kind
     otherwise due to the Participant.

11.13     Non-Contravention of Securities Laws.  Notwithstanding
     anything to the contrary expressed in this Plan, any
     provisions hereof that vary from or conflict with any
     applicable Federal or State securities laws (including any
     regulations promulgated thereunder) shall be deemed to be
     modified to conform to and comply with such laws.



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11.14     Unenforceability of a Particular Provision.  The
     unenforceability of any particular provision of this
     document shall not affect the other provisions and the
     document shall be construed in all respects as if such
     unenforceable provision were omitted.


                           ARTICLE XII

                        CHANGE OF CONTROL
                       ------------------
                                
12.01     Acceleration.  Unless the Committee shall otherwise
     expressly provide in the Agreement relating to an Award:
     a)   Upon the occurrence of a Trigger Date (as hereinafter
          defined):
          1)   In the case of Options and Stock
               Appreciation Rights, each such Option and Stock
               Appreciation Right shall automatically become
               fully exercisable;
          2)   Restrictions and conditions applicable
               to Restricted Stock shall automatically be deemed
               waived, and the recipients of such grants shall
               become entitled to receipt of the Stock subject to
               such grants; and,
          3)   In the case of any other Award, the
               occurrence of such Trigger Date shall have such
               effect on such Award as may be provided in the
               Agreement related thereto or in the Committee's
               procedures; and,
     b)   The Committee may at any time accelerate the
          exercisability of any Awards (if applicable) and may
          waive restrictions and conditions on Awards (if
          applicable) to the extent it shall in its sole
          discretion determine.

12.02     Special Rights.  Anything in this Plan and the 1990
     Plan to the contrary notwithstanding, but subject to Section
     12.04, during the 90-day period from and after a Trigger
     Date (the "Change of Control Exercise Period") a Participant
     (other than a Participant who initiated the event that
     resulted in the occurrence of such Trigger Date in a
     capacity other than as an officer or director of the
     Company) shall have the following rights, unless the
     Committee shall otherwise expressly provide in the Agreement
     relating to an Award:



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     a)   With respect to any Option or 1990 Plan Option (or
          portion thereof) granted to such Participant and
          unaccompanied by a Stock Appreciation Right, such
          Participant shall have the right (by giving written
          notice to the Company) to elect (within the Change of
          Control Exercise Period) to surrender all or a portion
          of such Option or 1990 Plan Option (as the case may be)
          to the Company and to receive in cash, for each share
          of Stock in respect of which such Option or 1990 Plan
          Option (as the case may be) is surrendered, an amount
          equal to the amount by which the Event Price exceeds
          the Option Price (as such term is defined in the 1990
          Plan in the case of a 1990 Plan Option) for such share;
     b)   With respect to any Stock Appreciation Right
          granted to such Participant, such Participant shall
          have the right (by giving written notice to the
          Company) to elect (within the Change of Control
          Exercise Period) to surrender such Stock Appreciation
          Right to the Company and to receive in cash an amount
          equal to the amount such Participant would have
          received if such Stock Appreciation Right had been
          exercised and the Fair Market Value of a share of Stock
          on the date of exercise had been the Event Price;
     c)   With respect to any Restricted Stock granted to
          such Participant in respect of which such Participant
          has paid the required purchase price (if any), such
          Participant shall have the right (by giving written
          notice to the Company) to elect (within the Change of
          Control Exercise Period) to surrender all or a portion
          of such Restricted Stock to the Company and receive in
          lieu thereof a cash payment equal to the Event Price
          for each share of Restricted Stock so surrendered; and,
     d)   With respect to any other type of Award granted to
          such Participant, such Participant shall have the right
          to take such action or make such election as may be
          permitted upon a Trigger Date in the Agreement relating
          to such Award or in the Committee's procedures.



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12.03     Special Merger Provisions.  Anything in this Plan and
     the 1990 Plan to the contrary notwithstanding (other than
     Section 12.02 of this Plan shall control in the event of any
     conflict with this Section 12.03), upon consummation of a
     consolidation or merger or sale of all or substantially all
     of the assets of the Company in which outstanding shares of
     Stock are exchanged for securities, cash or other property
     of an unrelated corporation or business entity or in the
     event of liquidation of the Company (in each case, a
     "Transaction"), all outstanding Options (including under the
     1990 Plan) shall become fully vested and exercisable and the
     Board or the board of directors of any corporation assuming
     the obligation of the Company, may, in its discretion, take
     any one or more of the following actions, as to outstanding
     Options:

     a)   provide that such Options shall be assumed or equivalent
          options shall be substituted, by the acquiring or succeeding
          corporation (or an affiliate thereof),
     b)   upon written notice to the Optionees, provide that all
          unexercised Options will terminate immediately prior to the
          consummation of the Transaction unless exercised by the Optionee
          within a specified period following the date of such notice,
          and/or
     c)   in the event of a business combination under the terms of
          which holders of the Stock of the Company will receive upon 
          consummation thereof a cash payment for each share surrendered in 
          the business combination, make or provide for a cash payment to
          the Optionees equal to the difference between:

          i)   the value (as determined by the Committee) of the
               consideration payable per share of Stock pursuant to the business
               combination (the "Merger Price") times the number of shares of
               Stock subject to such outstanding Options (to the extent then
               exercisable at prices not in excess of the Merger Price) and
          ii)  the aggregate exercise price of all such outstanding Options
               in exchange for the termination of such Options
               In the event Options will terminate upon the
               consummation of the Transaction, each Optionee shall be
               permitted, within a specified period determined by the
               Committee, to exercise all outstanding Options held by
               such Optionee that are then exercisable; and, subject
               to the consummation of the Transaction, all Options
               that would become fully vested and exercisable solely
               as a result of the Transaction.



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<PAGE>



          
12.04     Limitation on Special Rights.  If a Participant is
     subject to the restrictions of Section 16(b) of the Exchange
     Act and has been granted (or is deemed to have been granted)
     an Award under this Plan during the six months prior to a
     Trigger Date, then the Change of Control Exercise Period
     referred to in Section 12.02 shall, in respect of such
     Award, begin on the Trigger Date and end 90 days after the
     date six months after the later of the Approval Date or the
     date such Award was granted.  If a Trigger Date occurs prior
     to six months after the Approval Date, then the Change of
     Control Exercise Period referred to in Section 12.02 shall,
     in respect of 1990 Plan Options, begin on the Trigger Date
     and end 90 days after the date six months after the Approval
     Date.  The Committee may at any time prior to the occurrence
     of a Trigger Date provide that any or all of the exercises,
     surrenders, elections and other actions that may be taken by
     Participants pursuant to Section 12.02 shall occur
     automatically with respect to Participants (or particular
     categories of Participants) subject to Section 16(b) of the
     Exchange Act.

12.05     Termination of Participant; Modification of the Plan.
     The rights of a Participant under Section 12.02 with respect
     to Awards or 1990 Plan Options may be exercised during the
     Change of Control Exercise Period referred to therein (or,
     if applicable, in Section 12.04) notwithstanding the
     termination of the Participant's employment by the Company,
     unless provided otherwise in the Agreement relating to such
     Award.  Anything in this Plan to the contrary
     notwithstanding, no termination, amendment or modification
     of this Plan after the occurrence of a Trigger Date shall in
     any manner adversely affect any Participant's rights under
     this Article XII in respect of such Trigger Date without the
     written consent of the affected Participant.



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<PAGE>




12.06     Event Price.  In connection with a Trigger Date and an
     exercise, surrender, election or other action contemplated
     by Section 12.02 with respect to an Award or a 1990 Plan
     Option, Event Price shall mean a price per share of Stock
     equal to the higher of:

     a)   The highest Fair Market Value of the Stock during
          the period beginning 90 days prior to such Trigger Date
          and ending on and including the last trading day prior
          to such exercise, surrender, election or other action;
          or,
     b)   Whichever of the following is applicable (or the
          highest if more than one is applicable):

          1)   The highest per share price paid or to
               be paid in any tender or exchange offer which is
               in effect at any time during such period referred
               to in clause (A);
          2)   The fixed or formula price for the
               acquisition of shares of Stock in a merger or
               similar agreement approved by the Company's
               stockholders or the Board, if such price is
               determinable on the date of such exercise,
               surrender, election or other action; and/or,
          3)   The highest price per share paid or to
               be paid to any stockholder of the Company in a
               transaction or group of transactions (including
               any tender or exchange offer) giving rise to the
               occurrence of such Trigger Date;
 
          provided, however, that a Participant may at the time
          of an election pursuant to Section 12.02 request that
          certain of the foregoing parameters be disregarded
          (which may include shortening applicable time periods)
          in determining the Event Price applicable to one or
          more of the Awards held by such Participant, so long as
          disregarding such parameters does not increase the
          Event Price and the Committee may grant such a waiver.
          
          Any securities or property which are part or all of the
          consideration paid or to be paid for shares of Stock in
          connection with any event contemplated by clauses (b)
          (1), (2), and (3) above shall be valued in determining
          the Event Price at the higher of (x) the valuation
          placed on such securities or property by the person or
          entity which paid or is to pay such price or (y) the
          valuation placed on such securities or property by the
          Committee.



                            -19-
<PAGE>




12.07     Trigger Date.  Trigger Date shall have the meaning
     assigned to such term in the Polaroid Extended Severance
     Plan adopted by the Company effective July 28, 1987 and
     amended from time to time, and as it may be further amended
     from time to time.

12.08     1990 Plan Options.  1990 Plan Options shall mean
     "Options", as such term is defined in the 1990 Plan.


                          ARTICLE XIII

           PERMANENCY OF THE PLAN AND PLAN TERMINATION
           -------------------------------------------
                                
13.01     Effective Date.  This Plan became effective as of
     January 1, 1997, upon a resolution by the Board of Directors
     for its adoption, subject to the approval of the
     shareholders within 1997.

13.02     Termination, Amendment, and Modification of the Plan.
     The Board of Directors may at any time terminate or suspend,
     and may at any time and from time to time and in any respect
     amend or modify, the Plan; provided, however, that no such
     action of the Board of Directors without approval of the
     shareholders of the Company may increase the total number of
     shares of Stock subject to the Plan except as contemplated
     in Section 3.03 hereof.
     IN WITNESS WHEREOF, this Plan is hereby adopted effective
January 1, 1997 and executed this 27th day of March, 1997.


Attest:                          POLAROID CORPORATION

/s/ Louise L. Cavanaugh          By: /s/ Gary T. DiCamillo
-----------------------          --------------------------
                                  Chief Executive Officer


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