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                                                                   Exhibit 10.03

                  1987 STOCK OPTION PLAN OF NASHUA CORPORATION

1.    PURPOSE. This Plan, which shall be known as the "1987 Stock Option Plan"
      and is hereinafter referred to as "the Plan", is intended to provide an
      incentive for certain key employees of Nashua Corporation (the
      "Corporation") and its subsidiaries, to provide such employees with a
      proprietary interest or to increase their proprietary interest in the
      Corporation's success, to encourage them to remain in the employ of the
      Corporation and to assist in attracting new key employees to the
      Corporation.

      The word "Corporation" when used herein with reference to employment shall
      include subsidiaries of the Corporation. The word "subsidiary" when used
      herein shall mean any corporation a majority of the voting stock of which
      is owned or controlled, directly or indirectly, by the Corporation.

2.    ADMINISTRATION. The Plan shall be administered by a committee (the
      "Committee") consisting of at least three Directors of the Corporation
      appointed by the Board of Directors, provided that the Committee so
      appointed shall not include any individual who holds or is eligible to
      receive options under the Plan or has been eligible to receive options
      under the Plan at any time within the 12-month period immediately
      preceding the date on which he becomes a member of the Committee. A
      majority of the members of the Committee shall constitute a quorum and the
      acts of a majority of the members present at any meeting at which a quorum
      is present, or acts approved or authorized in writing by all of its
      members, shall be the acts of the Committee. The Committee shall adopt,
      amend and rescind such rules, regulations and agreement forms as the
      Committee deems advisable in the administration of the Plan and as
      hereinafter provided and construe and interpret the Plan, the rules and
      regulations adopted hereunder and all agreements made hereunder and make
      all other determinations deemed necessary or advisable by it for the
      administration of the Plan. Subject to the provisions of the Plan, the
      Committee shall have full and final authority in its discretion to
      determine the employees to be granted options.

3.    STOCK OPTION AWARDS.

      (a)   AWARDS. The Committee shall determine the number of shares of Stock
            (as defined in paragraph 4) subject to each option; the option 
            price of the shares subject to each option, which shall not
            be less than the minimum specified hereinafter; the time or times
            when each option will be granted, the time or times when each option
            will become exercisable and the duration of the exercise period; and
            shall prescribe the terms and provisions of the instruments ("Stock
            Option Agreements") evidencing options granted hereunder (which need
            not be identical). Stock options awarded under the Plan may be
            either incentive stock options within the meaning of Section 422A of
            the Internal Revenue Code as it may be amended from time to time
            ("the Code") or options which are not incentive stock options.
            Except as otherwise provided at time of grant, the Committee may
            provide that the options will become immediately exercisable if
            there is a change in control of the Corporation. For purposes of
            this Plan, a "change in control of the Corporation" means any of the
            following events:

            (i)   The acquisition, other than from the Corporation, by any
                  individual, entity or group (within the meaning of Section
                  13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
                  as amended (the "Exchange Act")) of beneficial ownership
                  (within the meaning of Rule 13d-3 promulgated under



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                  the Exchange Act) of 20% or more of either (i) the then
                  outstanding shares of common stock of the Corporation (the
                  "Outstanding Corporation Common Stock") or (ii) the combined
                  voting power of the then outstanding voting securities of the
                  Corporation entitled to vote generally in the election of
                  directors (the "Corporation Voting Securities"), PROVIDED,
                  HOWEVER, that any acquisition by (x) the Corporation or any of
                  its subsidiaries, or any employee benefit plan (or related
                  trust) sponsored or maintained by the Corporation or any of
                  its subsidiaries or (y) any corporation with respect to which,
                  following such acquisition, more than 60% of, respectively,
                  the then outstanding shares of common stock of such
                  corporation and the combined voting power of the then
                  outstanding voting securities of such corporation entitled to
                  vote generally in the election of directors is then
                  beneficially owned, directly or indirectly, by all or
                  substantially all of the individuals and entities who were the
                  beneficial owners, respectively, of the Outstanding
                  Corporation Common Stock and Corporation Voting Securities
                  immediately prior to such acquisition in substantially the
                  same proportion as their ownership, immediately prior to such
                  acquisition, of the Outstanding Corporation Common Stock and
                  Corporation Voting Securities, as the case may be, shall not
                  constitute a change in control of the Corporation; or

            (ii)  Individuals who, as of April 28, l989, constitute the Board
                  (the "Incumbent Board") cease for any reason to constitute at
                  least a majority of the Board, provided that any individual
                  becoming a director subsequent to April 28, l989 whose
                  election or nomination for election by the Corporation's
                  shareholders, was approved by a vote of at least a majority of
                  the directors then comprising the Incumbent Board shall be
                  considered as though such individual were a member of the
                  Incumbent Board, but excluding, for this purpose, any such
                  individual whose initial assumption of office is in connection
                  with an actual or threatened election contest relating to the
                  election of the Directors of the Corporation (as such terms
                  are used in Rule 14a-11 of Regulation 14A promulgated under
                  the Exchange Act); or

            (iii) Approval by the shareholders of the Corporation of a
                  reorganization, merger or consolidation (a "Business
                  Combination"), in each case, with respect to which all or
                  substantially all of the individuals and entities who were the
                  respective beneficial owners of the Outstanding Corporation
                  Common Stock and Corporation Voting Securities immediately
                  prior to such Business Combination do not, following such
                  Business Combination, beneficially own, directly or
                  indirectly, more than 60% of, respectively, the then
                  outstanding shares of common stock and the combined voting
                  power of the then outstanding voting securities entitled to
                  vote generally in the election of directors, as the case may
                  be, of the corporation resulting from such Business
                  Combination in substantially the same proportion as their
                  ownership immediately prior to such Business Combination of
                  the Outstanding Corporation Common Stock and Corporation
                  Voting Securities, as the case may be; or

            (iv)  (A) a complete liquidation or dissolution of the Corporation
                  or a (B) sale or other disposition of all or substantially all
                  of the assets of the Corporation other than to a corporation
                  with respect to which, following such sale or



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                  disposition, more than 60% of, respectively, the then
                  outstanding shares of common stock and the combined voting
                  power of the then outstanding voting securities entitled to
                  vote generally in the election of directors is then owned
                  beneficially, directly or indirectly, by all or substantially
                  all of the individuals and entities who were the beneficial
                  owners, respectively, of the Outstanding Corporation Common
                  Stock and Corporation Voting Securities immediately prior to
                  such sale or disposition in substantially the same proportion
                  as their ownership of the Outstanding Corporation Common Stock
                  and Corporation Voting Securities, as the case may be,
                  immediately prior to such sale or disposition.

            Notwithstanding any other provision of the Plan, the aggregate fair
            market value (determined at the time the option is granted) of the
            stock with respect to which incentive stock options granted after
            December 31, l986 are exercisable for the first time by any employee
            during any calendar year (under all stock option plans of the
            Corporation and its parent and subsidiary corporations) shall not
            exceed $100,000. The foregoing sentence shall be construed and
            applied in accordance with Section 422A of the Code and regulations
            thereunder.

      (b)   PRICE. In the case of each option granted under the Plan, the option
            price shall be not less than the fair market value of Stock on the
            date of grant of such option. The fair market value of Stock on such
            date shall be determined in a manner consistent with such directions
            as the Committee may from time to time issue. The date of grant of
            any option shall be the date on which the Committee authorizes such
            grant or such later date as may be designated by the Committee when
            such grant is authorized.

      (c)   TERM OF OPTIONS. Each option granted under the Plan shall be
            exercisable on such date or dates and during such period and for
            such number of shares as shall be determined pursuant to the
            provisions of the Stock Option Agreement with respect to such
            option; provided, however, that in any event no incentive stock
            option shall be exercised more than ten years from the date of grant
            of the option, and no other option shall be exercised more than ten
            years and one day from the date of grant of the option.

      (d)   NON-TRANSFERABILITY OF OPTION RIGHTS. No option shall be
            transferable by an optionee otherwise than by will or the laws of
            descent and distribution. During the lifetime of an optionee the
            option shall be exercisable only by the optionee.

      (e)   EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH. If, prior to the date
            that any option shall first be exercisable, the optionee's
            employment with the Corporation shall be terminated by the
            Corporation, with or without cause, or by the act, death, incapacity
            or retirement of the optionee, the optionee's right to exercise such
            option shall terminate and all rights thereunder shall cease.

            If, on or after the date that any option shall have first become
            exercisable, an optionee's employment with the Corporation shall be
            terminated by the Corporation or by the optionee for any reason
            except death absent a determination by the Committee to the
            contrary, the optionee shall have the right, within six months after
            such termination, to exercise such option to the extent that it or
            any installment thereof shall have accrued at the date of such
            termination of employment and shall not



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            have been exercised, subject to any other limitation on the exercise
            of such option in effect at the date of exercise.

            If an optionee shall die within such six month period, or shall die
            while in the employ of the Corporation on or after the date that the
            option shall have first become exercisable, the executor or
            administrator of the estate of the decedent or the person or persons
            to whom the option shall have been validly transferred pursuant to
            will or the laws of descent and distribution shall have the right,
            within one year from the date of the optionee's death, to exercise
            the optionee's option to the extent that it or any installment
            thereof shall have accrued at the date of termination of employment
            by death or otherwise and shall not have been exercised, subject to
            any other limitation on the exercise of such option in effect at the
            date of exercise. No transfer of an option by the optionee by will
            or by the laws of descent and distribution shall be effective to
            bind the Corporation unless the Corporation shall have been
            furnished with written notice thereof and a copy of the will and/or
            such other evidence as the Committee may deem necessary to establish
            the validity of the transfer and the acceptance by the transferee or
            transferees of the terms and conditions of such option.

            Nothing in the Plan or any Stock Option Agreement shall restrict the
            Corporation's right to terminate the employment of the optionee at
            any time with or without cause.

      (f)   PAYMENT FOR SHARES. Payment for shares of Stock purchased upon
            exercise of an option granted hereunder shall be made in full in
            cash or certified or bank or other check at the time of such
            exercise.

      (g)   ELECTION BY COMMITTEE TO SATISFY OPTIONS BY CASH PAYMENTS. At the
            time an optionee exercises a stock option, the Committee may elect
            to satisfy such option by making a cash payment to the optionee in
            an amount equal to the spread between the option price and the fair
            market value of the shares subject to such option on date of
            exercise. The Committee may not make this election, however, with
            respect to an employee who is an officer or director subject to
            Section 16(b) of the Act except during the period between the third
            and twelfth day after quarterly or annual earnings are released and
            unless the option was granted at least six months prior to exercise.
            If an election is made, the shares subject to the option will not be
            available for further awards.

            Notwithstanding the foregoing, during the sixty-day period from and
            after a change in control of the Corporation, each optionee, shall
            with respect to stock option agreements which so provide have the
            right (the "LSAR") with respect to any option other than (x) an
            incentive stock option within the meaning of Section 422A(b) of the
            Internal Revenue Code of 1986, as amended, granted prior to April
            28, 1989, and (y) an option granted to any officer or director of
            the Company (within the meaning of Section 16 of the Securities
            Exchange Act of 1934, as amended) unless such option was granted
            more than six months prior to the change in control of the
            Corporation, in lieu of the payment of the full option price for the
            shares of common stock of the Corporation ("Shares") subject to such
            option, to elect (within such sixty-day period) to surrender all or
            a part of the option to the Corporation and to receive in lieu
            thereof cash in the amount by which the fair market value per Share
            on the date of such election shall exceed the option price per Share
            under the option multiplied by the number of Shares granted under
            the option as to which a LSAR granted hereunder



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            shall have been exercised. As used in this Section 3(g), the fair
            market value of a Share on the date of exercise shall mean with
            respect to an election by an optionee to receive cash in respect of
            an option, the higher of (x) the highest reported sales price,
            regular way, of a Share on the Composite Tape for New York Stock
            Exchange Listed Stocks (the "Composite Tape") during the sixty-day
            period prior to the date of the change in control of the Corporation
            and (y) if the change in control of the Corporation is the result of
            a transaction or series of transactions described in paragraphs (i)
            or (iii) of the definition of change in control of the Corporation
            set forth in Section 3(a), the highest price per Share paid in such
            transaction or series of transactions. The Committee may, in its
            discretion, settle LSARs in Shares equal in value to the cash that
            otherwise would have been paid, if to do otherwise would render a
            transaction ineligible for pooling of interests accounting.

4.    STOCK. The shares to be awarded under the Plan shall be shares of the
      Corporation's Common Stock of the par value of $1.00 per share ("Stock"),
      and may be either authorized and unissued shares or shares held in the
      treasury of the Corporation. The total amount of Stock which may be issued
      pursuant to awards made under the Plan shall not exceed 600,000 shares.
      Such number of shares is subject to adjustment in accordance with the
      provisions of paragraph 6. Stock as to which stock options terminate or
      expire without being exercised shall be available for further awards.

5.    ELIGIBILITY. Awards may be granted hereunder only to persons who are
      employees of the Corporation or one of its subsidiaries, whether or not
      officers or members of the Board of Directors of the Corporation or any of
      its subsidiaries. No member of the Board of Directors of the Corporation
      who is not an employee of the Corporation or one of its subsidiaries and
      no member of the Committee shall be eligible to receive an award under the
      Plan.

      Any individual may hold more than one award and may at any one time and
      from time to time be granted incentive stock options and options which are
      not incentive stock options; provided that the aggregate number of shares
      of Stock which may be issued under the Plan to any one individual shall
      not exceed 60,000, subject to adjustment in accordance with the provisions
      of paragraph 6.

6.    ADJUSTMENTS FOR CHANGES IN CAPITALIZATION. In the event of any change in
      or exchange of outstanding Stock of the Corporation by reason of a stock
      dividend, recapitalization or exchange of shares, or otherwise, the class
      and aggregate number of shares as to which awards may be granted under the
      Plan and available for issue under the Plan, the total number of shares
      which may be issued to any one individual under the Plan, the class and
      number of shares subject to each outstanding award and the price per share
      in each outstanding option shall be appropriately adjusted by the
      Committee. Any such adjustment may provide for the elimination of any
      fractional share which might otherwise become subject to an award.

7.    RIGHTS AS A STOCKHOLDER. No holder of an award shall have any rights as a
      stockholder with respect to any share covered by his award until he shall
      have become the holder of record of such share, and no adjustment shall be
      made for dividends (ordinary or extraordinary, whether in cash, securities
      or other property) or distributions or other rights in respect of such
      share for which the record date is prior to the date on which he shall
      have become the holder of record thereof.



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8.    AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The Board of
      Directors at any time may terminate, and at any time and from time to
      time, and in any respect, may amend or modify, the Plan; provided,
      however, that no such action of the Board of Directors, without approval
      of the stockholders, may (a) increase the total amount of shares of Stock
      which may be issued under the Plan, or the aggregate number of shares of
      Stock which may be issued under the Plan to any one individual, except as
      contemplated in paragraph 6, (b) change the manner of determining the
      option price, (c) withdraw the administration of the Plan from the
      Committee or (d) permit any person while a member of the Committee to be
      eligible to receive an award under the Plan; and provided, further, that
      no amendment, modification or termination of the Plan shall in any manner
      affect any award theretofore granted under the Plan without the consent of
      the holder of the award.

9.    COMPLIANCE WITH LAWS. At the time of the grant, exercise or payment of any
      award, the Corporation may, if it shall deem it necessary or desirable for
      any reason connected with any law or regulation of any governmental
      authority relating to the regulation of securities, require the holder of
      the award to make such representations regarding his acquisition of the
      Stock or agree to comply with such restrictions on the transfer of the
      Stock as the Committee may specify. If such representations are required,
      no shares shall be issued to such holder unless and until the Corporation
      is satisfied as to the correctness of such representations.

      Every award shall be subject to the condition that no Stock shall be
      issued or other action taken pursuant to such award if such issue or
      action would be contrary to any enactment or regulation for the time being
      in force of the United States of America or of any other country having
      jurisdiction in relation thereto. The Corporation shall not be bound to
      take any action to obtain the consent of any governmental authority to
      such issue or to take any action to ensure that any such issue shall be in
      accordance with any such enactment or regulation if such action could in
      the opinion of the Committee be unduly onerous.

10.   FINALITY OF DETERMINATIONS. Each determination, interpretation or other
      action made or taken pursuant to the provisions of the Plan by the Board
      of Directors or the Committee shall be final and shall be binding and
      conclusive for all purposes and upon all persons, including, but without
      limitation thereto, the Corporation, the stockholders, the Committee and
      each of the members thereof, and the Directors, officers, and employees of
      the Corporation and its subsidiaries, the holders of awards under the
      Plan, and their respective successors in interest.

11.   WITHHOLDING TAXES. In the case of (a) disqualifying transfers with respect
      to incentive stock options and (b) exercises of stock options which are
      not incentive stock options, the employee or other person who received
      Stock shall be required to pay to the Corporation or a subsidiary of the
      Corporation the amount of any Federal or state taxes which the Corporation
      or such subsidiary is required to withhold with respect to such Stock.

12.   EFFECTIVE DATE AND DURATION. The Plan shall become effective on February
      27, l987, subject to approval of the shareholders of the Corporation. No
      awards shall be granted under the Plan after February 26, l997.


(As Amended 10/97)