Exhibit 10.3




                THE POLAROID BOARD OF DIRECTORS
                 -------------------------------
                        RETIREMENT PLAN
                         ---------------






                      POLAROID CORPORATION
                       --------------------

                    Cambridge, Massachusetts





                   Effective January 1, 1997



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          THE POLAROID BOARD OF DIRECTORS RETIREMENT PLAN
          -----------------------------------------------


The purpose of this Plan is to provide the non-employee members
of the Company's Board of Directors a retirement plan
commensurate with their services to the Company.


                        ARTICLE I

                       DEFINITIONS
                       -----------

1.01 Annual Retainer.  Annual Retainer shall mean one-hundred
     percent (100%) of the annual fee paid to a Participant as a
     non-employee member of the Board of Directors on the date he
     resigns as a member of the Board of Directors exclusive of
     amounts paid for attendance at Board or Committee meetings
     and for acting as a Committee chairman.

1.02 Board of Directors.  Board of Directors shall mean the Board
     of Directors of the Company.

1.03 Committee.  Committee shall mean the committee designated by
     the Chief Executive Officer of the Company and shall consist
     of not less than a chairman and at least two (2) other
     members.

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

1.05 Participant.   A Participant shall mean each non-employee
     member of the Board of Directors in service on or after
     January 1, 1990.

1.06 Plan.  Plan shall mean the Polaroid Board of Directors
     Retirement Plan as amended from time to time.

1.07 Spouse.  Spouse shall mean with respect to a deceased
     Participant, the widow or widower of such deceased
     Participant who was legally married to such Participant on
     the date of his death and who, if such death was due to
     illness rather than accident or other reason, was legally
     married to such Participant for not less than six (6) months
     immediately preceding such death.



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1.08 Retirement.  Retirement shall mean a Participant's
     retirement or termination from service as a member of the
     Board of Directors for any reason.

1.09 Service Year.  Service Year shall mean each twelve (12)
     month period completed on the anniversary date of when a
     Participant first joined the Board of Directors.


                              ARTICLE II

                       BENEFITS UNDER THE PLAN
                       -----------------------


2.01 Participant's Benefit.  Each Participant who is vested, as
     set forth in Section 2.04, shall begin receiving an annual
     lump sum payment in cash equal to his Annual Retainer in the
     year immediately following the year of his Retirement.  Such
     annual payment shall continue for the maximum period as set
     forth in Section 2.02 or for as long as the Participant and
     his Spouse lives, whichever is shorter.

2.02 Maximum Period of Annual Payments.  The maximum period of
     annual payments under this Plan shall be equal to the lesser
     of:

     (a)  the number of Service Years the Participant is a
          non-employee member of the Board of Directors prior to
          the day in which he turns age seventy-three (73); or

     (b)  the first twenty-five (25) Service Years the Participant
          serves as a non-employee member of the Board of Directors.

2.03 Exceptions of Benefit Accrual.  Notwithstanding the
     foregoing,

     (a)  the age limitation set forth in Section 2.02(a) above
          shall not apply to Participants who as of January 1,
          1990 have reached such age.

     (b)  benefit accrual for any Participant who is less than
          age sixty eight (68) effective January 1, 1997 shall
          cease.
     



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2.04 Vesting.  Each Participant who has completed five (5)
     Service Years on the Board of Directors through his date of
     Retirement shall have a non-forfeitable right to the
     benefits provided under this Plan.  A Participant who has
     not completed such service requirement on the day of his
     Retirement shall not be entitled to any of the benefits
     provided under this Plan.

2.05 Spouse's Survivor Benefit.  If a Participant dies and has
     not received all of the maximum period of annual payments as
     provided under Section 2.02 of this Plan, his Spouse, if
     any, shall continue to receive such payments until the
     earlier of:

     (a)  the maximum period of annual payments set forth in
          Section 2.02 hereof; or
 
    (b)  the death of such Spouse.


                         ARTICLE III

                          FINANCING
                          ---------

3.01 Financing.  The benefits under this Plan shall be paid out
     of the general assets of the Company.

3.02 Unsecured Interest.  No Participant or Spouse hereunder
     shall have any interest whatsoever in any specific asset of
     the Company.  To the extent that any person acquires a right
     to receive payments under this Plan, such right shall be no
     greater than the right of any unsecured general creditor of
     the Company.



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                                 ARTICLE IV

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

4.01 Plan Administration.  This Plan shall be administered by the
     Committee.  The Committee shall have the full authority and
     absolute discretion:

     (a)  To construe and interpret the Plan; and

     (b)  To make all determinations and take all other
          actions necessary or advisable for the proper
          administration of the Plan.

     All such actions and determinations shall be conclusively
binding upon all persons for all purposes.


                               ARTICLE V

                      MISCELLANEOUS PROVISIONS
                      ------------------------

5.01 Applicable Law.  This instrument shall be construed in
     accordance with and governed by the laws of the State of
     Delaware.

5.02 Taxes.  Polaroid shall have the right to deduct from any
     distributions made under this Plan, any federal, state or
     local taxes or any other amounts required by law to be
     withheld with respect to such distribution.

5.03 Expenses.  The cost of benefit payments from this Plan and
     the expenses of administering the Plan shall be borne by the
     Company.

5.04 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.

5.05 Indemnification.   No member of the Committee shall be
     liable for any action or determination taken or made in good
     faith with respect to this Plan, or any distributions under
     it.  Each member of 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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5.06 Headings Not Part of Plan.  Headings of Articles and
     Sections are inserted for convenience and reference; they
     constitute no part of this Plan.

5.07 Non-Assignability.  The interest of any Participant or
     Spouse 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.

5.08 Non-transferability.  In no event shall the Company make any
     payment under this Plan to any assignee or creditor of a
     Participant or of a Spouse, except as otherwise required by
     law.  Prior to the time of a payment hereunder, a
     Participant or a Spouse shall have no rights by way of
     anticipation or otherwise to assign or otherwise dispose of
     any interest under this Plan, nor shall rights be assigned
     or transferred by operation of law.

5.09 Other Compensation Plans.  The adoption of the Plan shall
     not affect fee or compensation schedules which presently
     exist, or which may at a later date be approved by the
     shareholders of the Company for members of the Board of
     Directors.

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

5.11 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.



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                                ARTICLE VI

              PERMANENCY OF THE PLAN AND PLAN TERMINATION
              -------------------------------------------


6.01 Effective Date.  This Plan, originally effective January 1,
     1990, amended from time to time, the most current amendment
     effective January 1, 1997.

6.02 Right to Amend, Modify or Terminate.  The Company reserves
     the right to amend, modify or terminate the Plan or payments
     thereunder at any time by action of the Committee and does
     not intend to submit any amendments or modifications to the
     Plan to stockholders of the Company for their approval.
     However, without the consent of any Participant or his
     Spouse, if applicable, no such amendment or termination
     shall reduce or diminish such person's right to receive any
     benefit accrued hereunder prior to the date of such
     amendment or termination.  Notwithstanding the foregoing,
     the Chief Executive Officer of the Company may adopt any
     amendments to the Plan that do not materially and adversely
     affect the benefits to a Participant accrued under the Plan
     and may adopt any amendments to the Plan that do not
     materially affect the cost to the Company (excluding any
     amendment that relates exclusively to himself).

     IN WITNESS WHEREOF, Polaroid has caused this instrument to
be executed this 12 day of May, 1997, effective January 1,
1997.



Attest:                            POLAROID CORPORATION



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




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