As filed with the Securities and Exchange Commission on December
                             23, 1997
                                               Registration No. 33-

-------------------------------------------------------------------
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                             FORM S-8
                      REGISTRATION STATEMENT
                               UNDER
                    THE SECURITIES ACT OF 1933

                 INFORMATION STORAGE DEVICES, INC.
      (Exact name of registrant as specified in its charter)

          California                       77-0197173
 (State or other jurisdiction           (I.R.S. employer
              of                       identification no.)
incorporation or organization)

                       2045 Hamilton Avenue
                    San Jose, California 95125
   (Address of principal executive offices, including zip code)

                    1994 EQUITY INCENTIVE PLAN
                 1994 EMPLOYEE STOCK PURCHASE PLAN
                     (Full title of the plans)

                       Felix J. Rosengarten
  Vice President, Finance and Administration and Chief Financial
                              Officer
                       2045 Hamilton Avenue
                    San Jose, California 95125
                          (408) 369-2400
   (Name, address and telephone number, including area code, of
                        agent for service)

                            Copies to:

                       Bruce W. Jenett, Esq.
                     Katharine T. Schuda, Esq.
                        John F. Platz, Esq.
                        Fenwick & West LLP
                       Two Palo Alto Square
                    Palo Alto, California 94306

                  CALCULATION OF REGISTRATION FEE

---------------------------------------------------------------------

                    Amount      Proposed     Proposed
    Title of         to be      Maximum       Maximum     Amount of
Securities to be  Registered    Offering     Aggregate   Registration
   Registered                  Price Per     Offering        Fee
                                 Share         Price
---------------------------------------------------------------------

Common Stock, no                                          
par value ...     800,000 (1) $____6.375 (2$  5,100,00   $ 1,504.50_________
                                           (2)
                                                                   

      (1)      Additional shares available for grant and not
        subject to outstanding options as of December 19, 1997
        under the Registrant's 1994 Equity Incentive Plan and 1994
        Employee Stock Purchase Plan.

      (2)  Estimated as of December 19, 1997 pursuant to Rule
        457(c) solely for the purpose of calculating the
        amount of the registration fee.

                                                                   

<PAGE>


Statement Pursuant to General Instruction E

        Pursuant  to General  Instruction  E, the  contents  of the
Registrant's  Form S-8  Registration  Statement No.  33-90824 filed
on March 31, 1995 are hereby incorporated by reference.
<TABLE>
<CAPTION>
<S>     <C>    

Item 8. Exhibits.

         4.01   Registrant's   1994  Equity   Incentive   Plan,  as
                amended, and related documents.

         4.02   Registrant's 1994 Employee Stock Purchase Plan.

         5.01   Opinion of Fenwick & West LLP.

        23.01   Consent of Fenwick & West LLP  (included in Exhibit
                5.01).

        23.02   Consent of Arthur Andersen LLP,  independent Public
                Accountants.

        24.01   Power of Attorney (see page 3).
</TABLE>
<PAGE>



                            SIGNATURES

      Pursuant to the  requirements  of the Securities Act of 1933,
the  Registrant   certifies  that  it  has  reasonable  grounds  to
believe  that it meets all of the  requirements  for filing on Form
S-8 and has duly caused this  Registration  Statement  to be signed
on its behalf by the  undersigned,  thereunto duly  authorized,  in
the  City  of  San  Jose,  State  of  California,  on the 23 day of
December 1997.



                               INFORMATION STORAGE DEVICES, INC.

 
 
                               By: /s/ Felix J. Rosengarten        
                                   Felix J. Rosengarten
                                   Vice President, Finance and
Administration
                                   and Chief Financial Officer


                         POWER OF ATTORNEY

      KNOW ALL MEN BY THESE  PRESENTS  that each  individual  whose
signature  appears below  constitutes  and appoints  David L. Angel
and Felix J.  Rosengarten,  and each of them,  his true and  lawful
attorneys-in-fact  and agents with full power of substitution,  for
him and in his name,  place and stead,  in any and all  capacities,
to  sign   any  and  all   amendments   (including   post-effective
amendments)  to this  Registration  Statement  on Form S-8,  and to
file the same  with  all  exhibits  thereto  and all  documents  in
connection   therewith,    with   the   Securities   and   Exchange
Commission,  granting unto said  attorneys-in-fact  and agents, and
each of them,  full power and  authority to do and perform each and
every  act and  thing  requisite  and  necessary  to be done in and
about the  premises,  as fully to all  intents  and  purposes as he
might or could do in person,  hereby  ratifying and  confirming all
that said  attorneys-in-fact  and agents or any of them,  or his or
their  substitute  or  substitutes,  may lawfully do or cause to be
done by virtue hereof.



      Pursuant to the  requirements  of the Securities Act of 1933,
this  Registration  Statement  has  been  signed  by the  following
persons in the capacities and on the date indicated.

<TABLE>
<CAPTION>
<S>     <C>                 <C>                       <C>  


        Signature                  Title                  Date


Principal Executive Officer:


/s/ David L. Angel           Chief Executive          December 23, 1997
David L. Angel               Officer and a Director

<PAGE>

Principal Financial Officer
  and Accounting Officer:


/s/ Felix J. Rosengarten    Vice President,Finance and     December 23, 1997
Felix J. Rosengarten        Administration and
                            Chief Financial Officer
 


Additional Directors:


/s/ Frederick B. Bamber      Director                December 23, 1997
Frederick B. Bamber


/s/ Eugene J. Flath          Director                 December 23, 1997
Eugene J. Flath


/s/ Alan V. King             Director                 December 23, 1997
Alan V. King


/s/ Eric J. Ochiltree        Director                 December 23, 1997
Eric J. Ochiltree


/s/ Frederick L. Zieber      Director                 December 23, 1997
Frederick L. Zieber
</TABLE>



<PAGE>





<TABLE>
<CAPTION>
<S>     <C>        <C>

                              Exhibit Index



    Exhibit No.                 Description

         4.01        Registrant's      1994      Equity
                     Incentive  Plan,  as amended,  and
                     related documents.

         4.02        Registrant's  1994 Employee  Stock
                     Purchase Plan.

         5.01        Opinion of Fenwick & West LLP.

        23.01        Consent  of  Fenwick  &  West  LLP
                     (included in Exhibit 5.01).


       23.02         Consent  of Arthur  Andersen  LLP,
                     independent Public Accountants.


       24.01         Power of Attorney (see page 3).

</TABLE>
<PAGE>


                                                       EXHIBIT 4.01

                 INFORMATION STORAGE DEVICES, INC.

                    1994-EQUITY-INCENTIVE-PLAN

                   As Adopted September 12, 1994
                As Amended through December 3, 1997


          1.   PURPOSE.  The  purpose  of the  Plan  is to  provide
incentives to attract,  retain and motivate  eligible persons whose
present and  potential  contributions  are important to the success
of  the  Company,  its  Parent,  Subsidiaries  and  Affiliates,  by
offering  them  an  opportunity  to  participate  in the  Company's
future  performance  through  awards of Options,  Restricted  Stock
and Stock  Bonuses.  Capitalized  terms not defined in the text are
defined in Section 23.

          2.   SHARES SUBJECT TO THE PLAN.

               2.1  Number of Shares Available.      Subject     to
Sections 2.2  and 18,  the  total  number of  Shares  reserved  and
available  for grant and  issuance  pursuant  to the Plan  shall be
2,750,000  Shares.  Any shares  issuable  upon  exercise of options
granted  pursuant to the 1987 Stock Option Plan (the "Prior  Plan")
that expire or become  unexercisable  for any reason without having
been   exercised  in  full,   shall  no  longer  be  available  for
distribution  under the Prior  Plan,  but  shall be  available  for
distribution  under this  Plan.  Subject  to  Sections 2.2  and 18,
Shares  shall  again  be  available   for  grant  and  issuance  in
connection  with  future  Awards  under  the  Plan  that:   (a) are
subject  to  issuance  upon  exercise  of an Option but cease to be
subject to such Option for any reason  other than  exercise of such
Option,  (b) are  subject  to an Award  granted  hereunder  but are
forfeited or are  repurchased  by the Company at the original issue
price,  or (c) are  subject to an Award that  otherwise  terminates
without Shares being issued.

               2.2  Adjustment of Shares.  In the  event  that  the
number  of  outstanding  Shares  is  changed  by a stock  dividend,
recapitalization,  stock split,  reverse stock split,  subdivision,
combination,  reclassification  or  similar  change in the  capital
structure  of the  Company  without  consideration,  then  (a)  the
number of Shares  reserved  for  issuance  under the Plan,  (b) the
Exercise  Prices of and  number of Shares  subject  to  outstanding
Options,   and  (c)  the   number  of  Shares   subject   to  other
outstanding  Awards shall be proportionately  adjusted,  subject to
any  required  action  by  the  Board  or the  shareholders  of the
Company and compliance with applicable  securities laws;  provided,
however,  that  fractions  of a Share shall not be issued but shall
either  be paid in cash at Fair  Market  Value or shall be  rounded
up to the nearest Share, as determined by the Committee.

          3.   ELIGIBILITY.  ISOs (as  defined  in Section 5 below)
may  be  granted   only  to  employees   (including   officers  and
directors  who are also  employees)  of the  Company or of a Parent
or  Subsidiary  of the Company.  All other Awards may be granted to
employees,    officers,   directors,    consultants,    independent
contractors  and advisors of the Company or any Parent,  Subsidiary
or   Affiliate   of  the  Company;   provided   such   consultants,
contractors   and  advisors   render  bona  fide  services  not  in
connection   with  the   offer   and  sale  of   securities   in  a
capital-raising   transaction.  No  person  shall  be  eligible  to
receive  more than  500,000  Shares at any time  during the term of
this  Plan  pursuant  to the grant of  Awards  hereunder.  A person
may be granted more than one Award under the Plan.

<PAGE>

          4.   ADMINISTRATION.

               4.1  Committee Authority.    The   Plan   shall   be
administered   by  the   Committee  or  the  Board  acting  as  the
Committee.  Subject to the general  purposes,  terms and conditions
of the Plan,  and to the  direction  of the  Board,  the  Committee
shall  have full  power to  implement  and carry out the Plan.  The
Committee shall have the authority to:

          (a)  construe   and   interpret   the  Plan,   any  Award
               Agreement  and  any  other   agreement  or  document
               executed pursuant to the Plan;

          (b)  prescribe,  amend and rescind rules and  regulations
               relating to the Plan;

          (c)  select persons to receive Awards;

          (d)  determine the form and terms of Awards;

          (e)  determine    the   number   of   Shares   or   other
               consideration subject to Awards;

          (f)  determine  whether Awards will be granted singly, in
               combination,  in tandem with, in replacement  of, or
               as  alternatives  to, other Awards under the Plan or
               any  other  incentive  or  compensation  plan of the
               Company or any Parent,  Subsidiary  or  Affiliate of
               the Company;

          (g)  grant waivers of Plan or Award conditions;

          (h)  determine  the vesting,  exercisability  and payment
               of Awards;

          (i)  correct  any  defect,   supply  any   omission,   or
               reconcile any  inconsistency  in the Plan, any Award
               or any Award Agreement;

          (j)  determine whether an Award has been earned; and

          (k)  make   all   other   determinations   necessary   or
               advisable for the administration of the Plan.

               4.2  Committee Discretion.  Any  determination  made
by the  Committee  with  respect to any Award  shall be made in its
sole  discretion  at the time of grant of the Award  or,  unless in
contravention  of any  express  term of the Plan or  Award,  at any
later time,  and such  determination  shall be final and binding on
the Company  and all persons  having an interest in any Award under
the Plan.  The  Committee  may delegate to one or more  officers of
the  Company  the  authority  to grant an Award  under  the Plan to
Participants who are not Insiders of the Company.

<PAGE>

               4.3  Composition  of  Committee.   If  two  or  more
members of the Board are Outside  Directors,  the  Committee  shall
be  comprised  of at least two  members of the  Board,  all of whom
are Outside Directors.

          5.   OPTIONS.   The   Committee   may  grant  Options  to
eligible  persons and shall  determine  whether such Options  shall
be  Incentive   Stock  Options  within  the  meaning  of  the  Code
("ISOs") or  Nonqualified  Stock Options  ("NQSOs"),  the number of
Shares  subject to the Option,  the  Exercise  Price of the Option,
the  period  during  which the  Option  may be  exercised,  and all
other  terms  and   conditions  of  the  Option,   subject  to  the
following:

               5.1  Form of Option Grant.   Each   Option   granted
under  the Plan  shall be  evidenced  by an Award  Agreement  which
shall  expressly  identify  the  Option as an ISO or NQSO  ("Stock 
Option Agreement"),   and  be  in  such  form  and   contain   such
provisions  (which  need not be the same for each  Participant)  as
the  Committee  shall from time to time  approve,  and which  shall
comply  with and be  subject  to the  terms and  conditions  of the
Plan.

               5.2  Date of Grant.  The date of grant of an  Option
shall be the date on which the  Committee  makes the  determination
to  grant  such   Option,   unless   otherwise   specified  by  the
Committee.  The  Stock  Option  Agreement  and a copy  of the  Plan
will be  delivered  to the  Participant  within a  reasonable  time
after the granting of the Option.

               5.3  Exercise Period.  Options shall be  exercisable
within the times or upon the  events  determined  by the  Committee
as set  forth in the Stock  Option  Agreement;  provided,  however,
that no Option shall be  exercisable  after the  expiration  of ten
(10)  years  from the date the  Option  is  granted,  and  provided
further  that  no  ISO  granted  to a  person  who  directly  or by
attribution   owns  more  than  ten  percent  (10%)  of  the  total
combined  voting  power of all  classes of stock of the  Company or
any      Parent     or      Subsidiary      of     the      Company
("Ten Percent Shareholder")   shall  be   exercisable   after   the
expiration  of five (5)  years  from  the date the ISO is  granted.
The  Committee  also may  provide  for the  exercise  of Options to
become  exercisable at one time or from time to time,  periodically
or  otherwise,  in  such  number  or  percentage  as the  Committee
determines.

               5.4  Exercise Price.  The  Exercise  Price  shall be
determined by the  Committee  when the Option is granted and may be
not less  than 85% of the Fair  Market  Value of the  Shares on the
date of  grant;  provided  that  (i) the  Exercise  Price of an ISO
shall  be not  less  than  100% of the  Fair  Market  Value  of the
Shares  on the date of grant  and  (ii) the  Exercise  Price of any
ISO  granted to a Ten  Percent  Shareholder  shall not be less than
110%  of the  Fair  Market  Value  of the  Shares  on the  date  of
grant.   Payment   for  the  Shares   purchased   may  be  made  in
accordance with Section 8 of the Plan.

               5.5  Method of Exercise.  Options  may be  exercised
only  by  delivery  to  the  Company  of  a  written  stock  option
exercise  agreement (the  "Exercise Agreement")  in a form approved
by  the   Committee   (which   need   not  be  the  same  for  each
Participant),  stating the number of Shares  being  purchased,  the
restrictions   imposed   on  the   Shares,   if   any,   and   such
representations and agreements regarding  Participant's  investment
intent and access to  information  and other  matters,  if any,  as
may  be  required  or  desirable  by the  Company  to  comply  with
applicable  securities  laws,  together with payment in full of the
Exercise Price for the number of Shares being purchased.

<PAGE>

               5.6  Termination.   Notwithstanding   the   exercise
periods  set forth in the Stock  Option  Agreement,  exercise of an
Option shall always be subject to the following:

          (a)  If the  Participant  is  Terminated  for any  reason
               except death or  Disability,  then  Participant  may
               exercise  such  Participant's  Options  only  to the
               extent   that   such   Options   would   have   been
               exercisable  upon the Termination Date no later than
               three  (3)  months  after the  Termination  Date (or
               such  shorter time period as may be specified in the
               Stock Option Agreement),  but in any event, no later
               than the expiration date of the Options.

          (b)  If the  Participant  is terminated  because of death
               or Disability (or the Participant  dies within three
               (3) months of such termination),  then Participant's
               Options  may be  exercised  only to the extent  that
               such  Options   would  have  been   exercisable   by
               Participant  on the  Termination  Date  and  must be
               exercised by  Participant  (or  Participant's  legal
               representative  or  authorized  assignee)  no  later
               than twelve (12) months after the  Termination  Date
               (or such  shorter time period as may be specified in
               the  Stock  Option  Agreement),  but in any event no
               later than the expiration date of the Options.

               5.7  Limitations on Exercise.   The   Committee  may
specify  a  reasonable   minimum  number  of  Shares  that  may  be
purchased  on  any  exercise  of  an  Option,  provided  that  such
minimum  number will not prevent  Participant  from  exercising the
Option  for  the  full  number  of  Shares  for  which  it is  then
exercisable.

               5.8  Limitations on ISOs.    The   aggregate    Fair
Market  Value  (determined  as of the date of grant) of Shares with
respect  to which  ISOs are  exercisable  for the  first  time by a
Participant  during any calendar  year (under the Plan or under any
other  incentive  stock option plan of the Company or any Parent or
Subsidiary  of the  Company)  shall  not  exceed  $100,000.  If the
Fair  Market  Value of Shares on the date of grant with  respect to
which  ISOs are  exercisable  for the first  time by a  Participant
during any  calendar  year  exceeds  $100,000,  the Options for the
first  $100,000  worth of  Shares  to  become  exercisable  in such
calendar  year  shall be ISOs and the  Options  for the  amount  in
excess of $100,000  that become  exercisable  in that calendar year
shall be  NQSOs.  In the  event  that  the Code or the  regulations
promulgated  thereunder  are amended  after the  Effective  Date of
the Plan to  provide  for a  different  limit  on the  Fair  Market
Value of Shares  permitted  to be subject to ISOs,  such  different
limit shall be  automatically  incorporated  herein and shall apply
to any Options granted after the effective date of such amendment.

               5.9  Modification, Extension or Renewal.         The
Committee  may  modify,  extend or renew  outstanding  Options  and
authorize  the  grant  of new  Options  in  substitution  therefor,
provided  that  any  such  action  may  not,  without  the  written
consent of Participant,  impair any of  Participant's  rights under
any  Option  previously  granted.   Any  outstanding  ISO  that  is
modified,  extended,  renewed or otherwise altered shall be treated
in accordance  with Section  424(h) of the Code.  The Committee may
reduce  the  Exercise  Price of  outstanding  Options  without  the
consent  of  Participants  affected  by a  written  notice to them;
provided,  however,  that the  Exercise  Price  may not be  reduced
below the  minimum  Exercise  Price that would be  permitted  under
Section  5.4 of the  Plan  for  Options  granted  on the  date  the
action is taken to reduce the Exercise Price.

<PAGE>

               5.10 No Disqualification.     Notwithstanding    any
other  provision in the Plan,  no term of the Plan relating to ISOs
shall  be   interpreted,   amended  or   altered,   nor  shall  any
discretion or authority  granted  under the Plan be  exercised,  so
as to  disqualify  the  Plan  under  Section  422 of the  Code  or,
without  the consent of the  Participant  affected,  to  disqualify
any ISO under Section 422 of the Code.

          6.   RESTRICTED STOCK.  A  Restricted  Stock  Award is an
offer by the  Company to sell to an  eligible  person  Shares  that
are subject to  restrictions.  The  Committee  shall  determine  to
whom an offer  will be made,  the  number of Shares  the person may
purchase,  the  price  to  be  paid  (the  "Purchase Price"),   the
restrictions  to which the Shares  shall be subject,  and all other
terms and  conditions  of the  Restricted  Stock Award,  subject to
the following:

               6.1  Form of Restricted Stock Award.  All  purchases
under a Restricted  Stock Award made  pursuant to the Plan shall be
evidenced     by    an    Award     Agreement     ("Restricted     
Stock Purchase Agreement")  that shall be in such form  (which need
not be the same for each  Participant)  as the Committee shall from
time to time  approve,  and shall comply with and be subject to the
terms and  conditions of the Plan.  The offer of  Restricted  Stock
shall be accepted by the  Participant's  execution  and delivery of
the Restricted  Stock  Purchase  Agreement and full payment for the
Shares to the  Company  within  thirty  (30) days from the date the
Restricted  Stock  Purchase  Agreement  is delivered to the person.
If such person does not  execute and deliver the  Restricted  Stock
Purchase  Agreement  along with full  payment for the Shares to the
Company  within thirty (30) days,  then the offer shall  terminate,
unless otherwise determined by the Committee.

               6.2  Purchase Price.  The  Purchase  Price of Shares
sold  pursuant to a Restricted  Stock Award shall be  determined by
the  Committee  and shall be at least 85% of the Fair Market  Value
of the Shares on the date the  Restricted  Stock  Award is granted,
except  in the  case of a sale  to a Ten  Percent  Shareholder,  in
which  case the  Purchase  Price  shall be 100% of the Fair  Market
Value.  Payment  of the  Purchase  Price may be made in  accordance
with Section 8 of the Plan.

               6.3  Restrictions.  Restricted  Stock  Awards  shall
be subject to such  restrictions  as the Committee may impose.  The
Committee  may  provide  for  the  lapse  of such  restrictions  in
installments  and may  accelerate  or waive such  restrictions,  in
whole or part,  based on length  of  service,  performance  or such
other factors or criteria as the Committee may determine.

          7.   STOCK BONUSES.

               7.1  Awards of Stock Bonuses.  A Stock  Bonus  is an
award of  Shares  (which  may  consist  of  Restricted  Stock)  for
services  rendered  to the  Company or any  Parent,  Subsidiary  or
Affiliate  of the  Company.  A Stock  Bonus may be awarded for past
services   already   rendered  to  the  Company,   or  any  Parent,
Subsidiary  or  Affiliate  of  the  Company  pursuant  to an  Award
Agreement  (the  "Stock Bonus Agreement")  that  shall  be in  such

<PAGE>

form  (which  need not be the same  for  each  Participant)  as the
Committee  shall from time to time  approve,  and shall comply with
and be subject  to the terms and  conditions  of the Plan.  A Stock
Bonus may be awarded upon  satisfaction of such  performance  goals
as are set out in advance  in the  Participant's  individual  Award
Agreement (the  "Performance Stock Bonus Agreement")  that shall be
in such form (which need not be the same for each  Participant)  as
the  Committee  shall from time to time  approve,  and shall comply
with and be  subject  to the  terms  and  conditions  of the  Plan.
Stock  Bonuses  may  vary  from   Participant  to  Participant  and
between  groups  of  Participants,   and  may  be  based  upon  the
achievement  of  the  Company,  Parent,   Subsidiary  or  Affiliate
and/or individual  performance  factors or upon such other criteria
as the Committee may determine.

               7.2  Terms of Stock Bonuses.   The  Committee  shall
determine  the number of Shares to be  awarded  to the  Participant
and whether such Shares  shall be  Restricted  Stock.  If the Stock
Bonus is being earned upon the  satisfaction  of performance  goals
pursuant  to  a  Performance   Stock  Bonus  Agreement,   then  the
Committee  shall  determine:  (a) the nature,  length and  starting
date of any  period  during  which  performance  is to be  measured
(the   "Performance Period")   for  each  Stock   Bonus;   (b)  the
performance   goals  and   criteria  to  be  used  to  measure  the
performance,  if any;  (c) the number of Shares that may be awarded
to the  Participant;  and  (d)  the  extent  to  which  such  Stock
Bonuses  have been  earned.  Performance  Periods  may  overlap and
Participants may participate  simultaneously  with respect to Stock
Bonuses  that are  subject to  different  Performance  Periods  and
different  performance  goals and  other  criteria.  The  number of
Shares  may  be  fixed  or  may  vary  in   accordance   with  such
performance  goals  and  criteria  as  may  be  determined  by  the
Committee.   The  Committee  may  adjust  the   performance   goals
applicable  to the Stock  Bonuses to take into  account  changes in
law and  accounting  or tax rules and to make such  adjustments  as
the  Committee  deems  necessary  or  appropriate  to  reflect  the
impact of extraordinary  or unusual items,  events or circumstances
to avoid windfalls or hardships.

               7.3  Form of Payment.   The  earned   portion  of  a
Stock  Bonus may be paid  currently  or on a  deferred  basis  with
such  interest or  dividend  equivalent,  if any, as the  Committee
may  determine.  Payment  may be made in the  form of  cash,  whole
Shares,  including  Restricted  Stock,  or a  combination  thereof,
either  in a  lump  sum  payment  or in  installments,  all  as the
Committee shall determine.

               7.4  Termination During Performance Period.   If   a
Participant  is  Terminated  during a  Performance  Period  for any
reason,   then  such  Participant  shall  be  entitled  to  payment
(whether in Shares,  cash or  otherwise)  with respect to the Stock
Bonus only to the extent  earned as of the date of  Termination  in
accordance with the Performance  Stock Bonus Agreement,  unless the
Committee shall determine otherwise.

          8.   PAYMENT FOR SHARE PURCHASES.

               8.1  Payment.    Payment   for   Shares    purchased
pursuant  to the  Plan  may be made in cash (by  check)  or,  where
expressly  approved for the  Participant by the Committee and where
permitted by law:

          (a)  by  cancellation  of  indebtedness of the Company to
               the Participant;
<PAGE>

          (b)  by surrender  of shares that  either:  (1) have been
               owned by  Participant  for more than six (6)  months
               and have been paid for  within  the  meaning  of SEC
               Rule 144 (and,  if such shares were  purchased  from
               the Company by use of a promissory  note,  such note
               has been  fully paid with  respect to such  shares);
               or (2) were  obtained by  Participant  in the public
               market;

          (c)  by tender of a full recourse  promissory note having
               such terms as may be approved by the  Committee  and
               bearing  interest  at a  rate  sufficient  to  avoid
               imputation of income under  Sections 483 and 1274 of
               the Code; provided,  however,  that Participants who
               are  not  employees  of  the  Company  shall  not be
               entitled to purchase  Shares with a promissory  note
               unless the note is adequately  secured by collateral
               other than the Shares;  provided,  further, that the
               portion  of the  Purchase  Price  equal  to the  par
               value of the Shares, if any, must be paid in cash.

          (d)  by  waiver  of   compensation   due  or  accrued  to
               Participant for services rendered;

          (e)  by tender of property;

          (f)  with respect only to purchases  upon  exercise of an
               Option,  and provided  that a public  market for the
               Company's stock exists:

               (1)  through  a  "same  day  sale"  commitment  from
                    Participant  and  a  broker-dealer  that  is  a
                    member   of   the   National   Association   of
                    Securities  Dealers (a  "NASD Dealer")  whereby
                    the Participant  irrevocably elects to exercise
                    the  Option and to sell a portion of the Shares
                    so  purchased  to pay for the  Exercise  Price,
                    and  whereby   the  NASD   Dealer   irrevocably
                    commits  upon receipt of such Shares to forward
                    the Exercise Price directly to the Company; or

               (2)  through a "margin"  commitment from Participant
                    and   a   NASD   Dealer   whereby   Participant
                    irrevocably  elects to exercise  the Option and
                    to pledge the Shares so  purchased  to the NASD
                    Dealer in a margin  account as  security  for a
                    loan from the NASD  Dealer in the amount of the
                    Exercise  Price,  and  whereby  the NASD Dealer
                    irrevocably   commits   upon  receipt  of  such
                    Shares to forward the Exercise  Price  directly
                    to the Company;
          or

          (g)  by any combination of the foregoing.

               8.2  Loan Guarantees.  The  Committee  may  help the
Participant   pay  for   Shares   purchased   under   the  Plan  by
authorizing  a guarantee  by the Company of a  third-party  loan to
the Participant.

<PAGE>
          9.   WITHHOLDING TAXES.

               9.1  Withholding Generally.  Whenever  Shares are to
be issued in  satisfaction  of Awards  granted under the Plan,  the
Company  may  require  the  Participant  to remit to the Company an
amount  sufficient to satisfy federal,  state and local withholding
tax  requirements  prior  to the  delivery  of any  certificate  or
certificates for such Shares.  Whenever,  under the Plan,  payments
in  satisfaction  of Awards  are to be made in cash,  such  payment
shall be net of an amount  sufficient  to satisfy  federal,  state,
and local withholding tax requirements.

               9.2  Stock Withholding.  When,  under applicable tax
laws, a Participant  incurs tax  liability in  connection  with the
exercise   or   vesting  of  any  Award  that  is  subject  to  tax
withholding  and the  Participant  is  obligated to pay the Company
the amount  required to be withheld,  the  Committee  may allow the
Participant  to satisfy the minimum  withholding  tax obligation by
electing  to have  the  Company  withhold  from  the  Shares  to be
issued  that number of Shares  having a Fair Market  Value equal to
the minimum  amount  required  to be  withheld,  determined  on the
date that the  amount of tax to be  withheld  is to be  determined.
All  elections by a  Participant  to have Shares  withheld for this
purpose  shall  be  made  in  accordance   with  the   requirements
established   by  the  Committee  and  be  in  writing  in  a  form
acceptable to the Committee.

          10.  PRIVILEGES OF STOCK OWNERSHIP.

               10.1  Voting and Dividends.   No  Participant  shall
have  any  of the  rights  of a  shareholder  with  respect  to any
Shares  until  the  Shares  are  issued to the  Participant.  After
Shares are issued to the  Participant,  the Participant  shall be a
shareholder  and have all the rights of a shareholder  with respect
to such  Shares,  including  the  right  to vote  and  receive  all
dividends  or other  distributions  made or paid  with  respect  to
such Shares;  provided,  that if such Shares are Restricted  Stock,
then any new,  additional or different  securities the  Participant
may become  entitled  to  receive  with  respect to such  Shares by
virtue of a stock  dividend,  stock  split or any  other  change in
the  corporate  or  capital  structure  of  the  Company  shall  be
subject  to  the  same   restrictions  as  the  Restricted   Stock;
provided,  further,  that the  Participant  shall  have no right to
retain such stock  dividends  or stock  distributions  with respect
to  Shares  that  are  repurchased  at the  Participant's  original
Purchase Price pursuant to Section 12.

               10.2  Financial Statements.    The   Company   shall
provide  financial  statements  to each  Participant  prior to such
Participant's  purchase  of  Shares  under  the  Plan,  and to each
Participant   annually  during  the  period  such  Participant  has
Awards  outstanding;  provided,  however,  the Company shall not be
required  to provide  such  financial  statements  to  Participants
whose  services in connection  with the Company  assure them access
to equivalent information.

          11.  TRANSFERABILITY.  Awards  granted  under  the  Plan,
and any interest  therein,  shall not be transferable or assignable
by  Participant,   and  may  not  be  made  subject  to  execution,
attachment  or similar  process,  otherwise  than by will or by the
laws  of  descent  and  distribution  or  as  consistent  with  the
specific  Plan and Award  Agreement  provisions  relating  thereto.
During  the  lifetime  of  the   Participant   an  Award  shall  be
exercisable  only  by  the  Participant,  and  any  elections  with
respect to an Award, may be made only by the Participant.

<PAGE>

          12.  RESTRICTIONS ON SHARES.  At  the  discretion  of the
Committee,   the  Company   may   reserve  to  itself   and/or  its
assignee(s)  in the Award  Agreement  (a) a right of first  refusal
to  purchase  all  Shares  that  a  Participant  (or  a  subsequent
transferee)  may propose to transfer to a third  party,  and/or (b)
a  right  to  repurchase  a  portion  of or all  Shares  held  by a
Participant  following such  Participant's  Termination at any time
within   ninety   (90)  days  after  the  later  of   Participant's
Termination  Date and the date  Participant  purchases Shares under
the   Plan,   for   cash  or   cancellation   of   purchase   money
indebtedness,  at:  (A) with  respect to Shares  that are  "Vested"
(as   defined  in  the  Award   Agreement),   the  higher  of:  (l)
Participant's  original  Purchase  Price,  or (2) the  Fair  Market
Value of such Shares on Participant's  Termination Date,  provided,
that  such  right of  repurchase  (i) must be  exercised  as to all
such  "Vested"   Shares  unless  a  Participant   consents  to  the
Company's  repurchase  of only a portion  of such  "Vested"  Shares
and (ii) terminates when the Company's  securities  become publicly
traded;  or (B) with  respect to Shares that are not  "Vested"  (as
defined  in the Award  Agreement),  at the  Participant's  original
Purchase Price.

          13.  CERTIFICATES.  All  certificates for Shares or other
securities  delivered  under  the  Plan  shall be  subject  to such
stock  transfer  orders,  legends  and  other  restrictions  as the
Committee may deem necessary or advisable,  including  restrictions
under any applicable  federal,  state or foreign securities law, or
any rules,  regulations  and other  requirements  of the SEC or any
stock  exchange  or  automated  quotation  system  upon  which  the
Shares may be listed.

          14.  ESCROW; PLEDGE OF SHARES.     To     enforce     any
restrictions on a Participant's  Shares,  the Committee may require
the Participant to deposit all  certificates  representing  Shares,
together  with  stock  powers  or  other  instruments  of  transfer
approved by the Committee,  appropriately  endorsed in blank,  with
the  Company  or an  agent  designated  by the  Company  to hold in
escrow until such restrictions  have lapsed or terminated,  and the
Committee   may  cause  a  legend  or  legends   referencing   such
restrictions  to be placed  on the  certificates.  Any  Participant
who is permitted  to execute a  promissory  note as partial or full
consideration  for the  purchase of Shares  under the Plan shall be
required  to pledge and  deposit  with the  Company  all or part of
the Shares so  purchased  as  collateral  to secure the  payment of
Participant's  obligation  to  the  Company  under  the  promissory
note; provided,  however,  that the Committee may require or accept
other or  additional  forms of  collateral to secure the payment of
such  obligation  and, in any event,  the  Company  shall have full
recourse   against  the  Participant   under  the  promissory  note
notwithstanding  any  pledge of the  Participant's  Shares or other
collateral.   In   connection   with  any  pledge  of  the  Shares,
Participant  shall be  required  to execute  and  deliver a written
pledge  agreement in such form as the Committee  shall from time to
time approve.  The Shares  purchased with the  promissory  note may
be released  from the pledge on a prorata  basis as the  promissory
note is paid.

          15.  EXCHANGE AND BUYOUT OF AWARDS.  The  Committee  may,
at any time or from time to time,  authorize the Company,  with the
consent  of the  respective  Participants,  to issue new  Awards in
exchange  for  the  surrender  and   cancellation  of  any  or  all
outstanding  Awards.  The  Committee  may at any  time  buy  from a
Participant  an Award  previously  granted  with  payment  in cash,
Shares (including  Restricted Stock) or other consideration,  based
on such terms and  conditions as the Committee and the  Participant
shall agree.

<PAGE>

          16.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.   An
Award shall not be  effective  unless  such Award is in  compliance
with all applicable  federal and state  securities  laws, rules and
regulations of any  governmental  body, and the requirements of any
stock  exchange  or  automated  quotation  system  upon  which  the
Shares  may then be  listed,  as they are in  effect on the date of
grant  of the  Award  and  also on the  date of  exercise  or other
issuance.  Notwithstanding  any other  provision  in the Plan,  the
Company shall have no  obligation to issue or deliver  certificates
for Shares  under the Plan  prior to (a)  obtaining  any  approvals
from  governmental   agencies  that  the  Company   determines  are
necessary or advisable,  and/or (b) completion of any  registration
or other  qualification  of such shares  under any state or federal
law  or  ruling  of  any   governmental   body  that  the   Company
determines  to be  necessary  or  advisable.  The Company  shall be
under no  obligation  to  register  the  Shares  with the SEC or to
effect compliance with the  registration,  qualification or listing
requirements  of any  state  securities  laws,  stock  exchange  or
automated   quotation  system,   and  the  Company  shall  have  no
liability for any inability or failure to do so.

          17.  NO OBLIGATION TO EMPLOY.  Nothing  in  the  Plan  or
any  Award  granted  under  the Plan  shall  confer or be deemed to
confer on any  Participant  any right to continue in the employ of,
or to  continue  any other  relationship  with,  the Company or any
Parent,  Subsidiary  or  Affiliate  of the  Company or limit in any
way  the  right  of  the  Company  or  any  Parent,  Subsidiary  or
Affiliate of the Company to terminate  Participant's  employment or
other relationship at any time, with or without cause.

          18.  CORPORATE TRANSACTIONS.

               18.1 Corporate  Transactions.  In  the  event  of  a
Corporate  Transaction  (as  defined  in this  Section  18.1),  the
exercisability  of each Option shall be  automatically  accelerated
so  that  each  Option  shall,  immediately  before  the  specified
effective  date  for  the  Corporate   Transaction,   become  fully
exercisable  with  respect to the total number of Shares and may be
exercised  for all or any portion of such  Shares;  provided,  that
an Option shall not be  accelerated  if and to the extent that such
Option is, in  connection  with the Corporate  Transaction,  either
to be assumed by the  successor  corporation  or parent  thereof or
to be replaced with a comparable  option to purchase  shares of the
capital  stock of the  successor  corporation  or  parent  thereof.
The  determination of  comparability  shall be made by the Board or
the  Committee,  and the  Board  or the  Committee's  determination
shall be final,  binding and conclusive.  Upon the  consummation of
a Corporate  Transaction,  all  outstanding  Options shall,  to the
extent  not  previously  exercised  or  assumed  by  the  successor
corporation or its parent, terminate and cease to be exercisable.

                    "Corporate  Transaction"  means (i) a merger or
acquisition  in  which  the  Company  is not the  surviving  entity
(except  for a  transaction  the  principal  purpose of which is to
change the State in which the  Company is  incorporated),  (ii) the
sale,  transfer or other  disposition of all or  substantially  all
of  the  assets  of  the  Company  or  (iii)  any  other  corporate
reorganization  or  business  combination  that is not  approved by
the Board and in which the  beneficial  ownership of 50% or more of
the Company's outstanding voting stock is transferred.

               18.2 Dissolution.  In  the  event  of  the  proposed
dissolution or  liquidation of the Company,  the Board shall notify
the  Optionee  at least  fifteen  (15) days prior to such  proposed
action.  To the  extent  that  Options  have  not  been  previously
exercised,  such Options will  terminate  immediately  prior to the
consummation of such proposed action.

<PAGE>

               18.3 Assumption  of  Awards  by  the  Company.   The
Company,   from  time  to  time,  also  may  substitute  or  assume
outstanding   awards  granted  by  another   company,   whether  in
connection   with  an   acquisition   of  such  other   company  or
otherwise,  by either  (a)  granting  an Option  under this Plan in
substitution of such other company's  Option,  or (b) assuming such
Option as if it had been  granted  under  this Plan if the terms of
such  assumed  Option could be applied to an Option  granted  under
this Plan.  Such  substitution  or assumption  shall be permissible
if the  holder of the  substituted  or  assumed  Option  would have
been  eligible to be granted an Option  under the Plan if the other
company had  applied  the rules of the Plan to such  grant.  In the
event the  Company  assumes an Option  granted by another  company,
the terms and  conditions  of such Option  shall  remain  unchanged
(except  that the  Exercise  Price  and the  number  and  nature of
Shares  issuable  upon exercise of any such option will be adjusted
appropriately  pursuant  to  Section  424(a) of the  Code).  In the
event  the  Company  elects  to  grant  a new  Option  rather  than
assuming an existing  option,  such new Option may be granted  with
a similarly adjusted Exercise Price.

          19.  ADOPTION AND SHAREHOLDER APPROVAL.  The  Plan  shall
become  effective on the closing of the first  registration  of the
Company's   Common   Stock  for  sale  to  the  public   under  the
Securities   Act  (the   "Effective Date").   The  Plan   shall  be
approved  by the  shareholders  of the  Company  (excluding  Shares
issued pursuant to this Plan),  consistent  with  applicable  laws,
within  twelve  (12)  months  before  or after the date the Plan is
adopted  by the  Board.  Upon the  Effective  Date,  the  Board may
grant Awards  pursuant to the Plan;  provided,  however,  that: (a)
no Option may be exercised  prior to initial  shareholder  approval
of the Plan; (b) no Option  granted  pursuant to an increase in the
number of Shares  approved  by the Board shall be  exercised  prior
to the time such  increase  has been  approved by the  shareholders
of the Company;  and (c) in the event that shareholder  approval of
the  increase  is not  obtained  within  the time  period  provided
herein,  all Awards  granted  hereunder  pursuant to such  increase
shall be  canceled,  any Shares  issued  pursuant to any Award made
pursuant to such  increase  shall be canceled  and any  purchase of
Shares hereunder pursuant to such increase shall be rescinded.

          20.  TERM OF PLAN.  The  Plan  will  terminate  ten  (10)
years  from the  date  the Plan is  adopted  by the  Board  or,  if
earlier, the date of shareholder approval.

          21.  AMENDMENT OR TERMINATION OF PLAN.  The  Board may at
any time  terminate  or amend  the Plan in any  respect,  including
without  limitation  amendment  of any form of Award  Agreement  or
instrument  to  be  executed   pursuant  to  the  Plan;   provided,
however,  that the Board  shall not,  without  the  approval of the
shareholders  of the  Company,  amend the Plan in any  manner  that
requires  such  shareholder  approval  pursuant  to the Code or the
regulations  promulgated  thereunder  as such  provisions  apply to
ISO plans.

          22.  NONEXCLUSIVITY OF THE PLAN.   Neither  the  adoption
of the  Plan  by the  Board,  the  submission  of the  Plan  to the
shareholders  of the Company for  approval,  nor any  provision  of
the Plan shall be  construed  as creating  any  limitations  on the
power  of  the  Board  to  adopt   such   additional   compensation
arrangements   as  it  may  deem  desirable,   including,   without
limitation,  the  granting of stock  options and bonuses  otherwise
than  under  the  Plan,  and  such   arrangements   may  be  either
generally applicable or applicable only in specific cases.

<PAGE>

          23.  DEFINITIONS.  As used  in the  Plan,  the  following
terms shall have the following meanings:

               "Affiliate" means any corporation that directly,  or
indirectly  through  one or  more  intermediaries,  controls  or is
controlled   by,  or  is  under  common   control   with,   another
corporation,  where "control"  (including the terms "controlled by"
and "under common  control with") means the  possession,  direct or
indirect,  of the power to cause the  direction  of the  management
and policies of the  corporation,  whether through the ownership of
voting securities, by contract or otherwise.

               "Award"  means any award  under the Plan,  including
any Option, Restricted Stock or Stock Bonus.

               "Award Agreement"   means,   with  respect  to  each
Award,  the signed  written  agreement  between the Company and the
Participant setting forth the terms and conditions of the Award.

               "Board" means the Board of Directors of the Company.

               "Code" means the Internal  Revenue Code of 1986,  as
amended.

               "Committee"  means the  committee  appointed  by the
Board to  administer  the Plan,  or if no committee  is  appointed,
the Board.

               "Company" means Information  Storage Devices,  Inc.,
a   corporation   organized   under   the  laws  of  the  State  of
California, or any successor corporation.

               "Disability"  means a disability,  whether temporary
or  permanent,  partial  or total,  within  the  meaning of Section
22(e)(3) of the Code, as determined by the Committee.

               "Exchange Act"  means the Securities Exchange Act of
1934, as amended.

               "Exercise Price"  means  the price at which a holder
of an Option may  purchase  the Shares  issuable  upon  exercise of
the Option.
<PAGE>

               "Fair Market Value"  means,  as  of  any  date,  the
value  of a share  of the  Company's  Common  Stock  determined  as
follows:

          (a)  if such  Common  Stock is then  quoted on the Nasdaq
               National  Market,  its  closing  price on the Nasdaq
               National  Market  on the last  trading  day prior to
               the date of  determination  as reported in The Wall 
               Street Journal;

          (b)  if such Common Stock is publicly  traded and is then
               listed  on  a  national  securities  exchange,   its
               closing  price on the last  trading day prior to the
               date  of  determination  on the  principal  national
               securities  exchange  on which the  Common  Stock is
               listed or  admitted  to trading as  reported in The 
               Wall Street Journal;

          (c)  if such Common  Stock is publicly  traded but is not
               quoted on the Nasdaq  National  Market nor listed or
               admitted   to  trading  on  a  national   securities
               exchange,  the  average of the closing bid and asked
               prices on the last  trading day prior to the date of
               determination  as  reported  by  The  Wall  Street  
               Journal; or

          (d)  if  none  of the  foregoing  is  applicable,  by the
               Board in good faith.

               "Insider"  means  an  officer  or  director  of  the
Company or any other person  whose  transactions  in the  Company's
Common Stock are subject to Section 16 of the Exchange Act.

               "Outside  Director"  means any  director  who is not
(a) a current  employee of the  Company or any  Parent,  Subsidiary
or Affiliate of the Company,  (b) a former  employee of the Company
or any  Parent,  Subsidiary  or  Affiliate  of the  Company  who is
receiving  compensation  for prior  services  (other than  benefits
under a  tax-qualified  pension  plan),  (c) a  current  or  former
officer of the Company or any Parent,  Subsidiary  or  Affiliate of
the Company or (d) currently  receiving  compensation  for personal
services  in any  capacity,  other  than as a  director,  from  the
Company or any Parent,  Subsidiary  or  Affiliate  of the  Company;
provided,   however,  that  at  such  time  as  the  term  "Outside
Director",  as used in Section  162(m) is  defined  in  regulations
promulgated  under Section 162(m) of the Code,  "Outside  Director"
shall have the  meaning set forth in such  regulations,  as amended
from  time to  time  and as  interpreted  by the  Internal  Revenue
Service.

               "Option"  means an award of an  option  to  purchase
Shares pursuant to Section 5.

               "Parent"  means  any  corporation  (other  than  the
Company)  in an  unbroken  chain of  corporations  ending  with the
Company,  if at the  time of the  granting  of an Award  under  the
Plan, each of such  corporations  other than the Company owns stock
possessing  50% or more of the total  combined  voting power of all
classes of stock in one of the other corporations in such chain.
<PAGE>

               "Participant"  means a person who  receives an Award
under the Plan.

               "Plan" means this Information Storage Devices,  Inc.
1994 Equity Incentive Plan, as amended from time to time.

               "Restricted Stock Award"  means an  award of  Shares
pursuant to Section 6.

               "SEC" means the Securities and Exchange Commission.

               "Securities Act"  means the  Securities Act of 1933,
as amended.

               "Shares" means shares of the Company's  Common Stock
reserved  for  issuance  under the Plan,  as  adjusted  pursuant to
Sections 2 and 15, and any successor security.

               "Stock Bonus"  means an award of Shares,  or cash in
lieu of Shares, pursuant to Section 7.

               "Subsidiary"  means any corporation  (other than the
Company) in an unbroken  chain of  corporations  beginning with the
Company  if,  at the time of  granting  of the  Award,  each of the
corporations  other  than  the  last  corporation  in the  unbroken
chain  owns  stock  possessing  50% or more of the  total  combined
voting  power  of  all  classes  of  stock  in  one  of  the  other
corporations in such chain.

               "Termination"  or "Terminated"  means,  for purposes
of the Plan with  respect to a  Participant,  that the  Participant
has  ceased  to  provide   services  as  an   employee,   director,
consultant,  independent  contractor or adviser,  to the Company or
a Parent,  Subsidiary  or Affiliate  of the Company,  except in the
case of sick leave,  military  leave, or any other leave of absence
approved  by the  Committee,  provided,  that  such  leave is for a
period of not more than ninety  (90) days,  or  reinstatement  upon
the   expiration  of  such  leave  is  guaranteed  by  contract  or
statute.  The  Committee  shall have sole  discretion  to determine
whether a  Participant  has  ceased  to  provide  services  and the
effective  date  on  which  the   Participant   ceased  to  provide
services (the "Termination Date").

<PAGE>


                                                         EXHIBIT 4.02

                  INFORMATION STORAGE DEVICES, INC.

                  1994 EMPLOYEE STOCK PURCHASE PLAN

                  As Adopted on September 12, 1994
                 As Amended through December 3, 1997


           1.   ESTABLISHMENT OF PLAN.  Information  Storage Devices,
Inc.  (the  "Company")  proposes to grant options for purchase of the
Company's  Common Stock to eligible  employees of the Company and its
Subsidiaries  (as  hereinafter  defined)  pursuant  to this  Employee
Stock  Purchase  Plan  (this  "Plan").  For  purposes  of this  Plan,
"Parent     Corporation"     and     "Subsidiary"      (collectively,
"Subsidiaries")   shall   have   the   same   meanings   as   "parent
corporation"  and  "subsidiary  corporation"  in Sections  424(e) and
424(f),  respectively,  of the  Internal  Revenue  Code of  1986,  as
amended  (the  "Code").  The  Company  intends the Plan to qualify as
an  "employee  stock  purchase  plan"  under  Section 423 of the Code
(including any amendments to or  replacements  of such Section),  and
the Plan shall be so  construed.  Any term not  expressly  defined in
the Plan but  defined  for  purposes of Section 423 of the Code shall
have the same  definition  herein.  A total of 170,000  shares of the
Company's  Common  Stock is  reserved  for  issuance  under the Plan.
Such number shall be subject to  adjustments  effected in  accordance
with Section 14 of the Plan.

           2    PURPOSE.  The  purpose  of  the  Plan  is to  provide
employees  of the Company and  Subsidiaries  designated  by the Board
of   Directors   of  the  Company   (the   "Board")  as  eligible  to
participate  in the Plan  with a  convenient  means of  acquiring  an
equity  interest  in  the  Company  through  payroll  deductions,  to
enhance  such  employees'  sense of  participation  in the affairs of
the  Company  and  Subsidiaries,  and to  provide  an  incentive  for
continued employment.

           3.   ADMINISTRATION.  This  Plan  may be  administered  by
the Board or a committee  appointed  by the Board (the  "Committee").
As  used in this  Plan,  references  to the  "Committee"  shall  mean
either  such  committee  or  the  Board  if  no  committee  has  been
established.   Subject  to  the   provisions  of  the  Plan  and  the
limitations  of Section  423 of the Code or any  successor  provision
in the Code,  all questions of  interpretation  or application of the
Plan  shall be  determined  by the Board and its  decisions  shall be
final  and  binding  upon  all  participants.  Members  of the  Board
shall receive no  compensation  for their services in connection with
the   administration  of  the  Plan,  other  than  standard  fees  as
established  from time to time by the Board for services  rendered by
Board  members  serving on Board  committees.  All expenses  incurred
in connection  with the  administration  of the Plan shall be paid by
the Company.

           4.  ELIGIBILITY.  Any  employee  of  the  Company  or  the
Subsidiaries  is eligible to  participate  in an Offering  Period (as
hereinafter defined) under the Plan except the following:

           (a)  employees  who are not  employed  by the  Company  or
Subsidiaries   fifteen  (15)  days  before  the   beginning  of  such
Offering Period;

           (b) employees who are  customarily  employed for less than
twenty (20) hours per week;
<PAGE>

           (c) employees who are  customarily  employed for less than
five (5) months in a calendar year;

           (d)  employees  who,  together with any other person whose
stock  would be  attributed  to such  employee  pursuant  to  Section
424(d) of the Code,  own stock or hold  options to purchase  stock or
who,  as a result  of being  granted  an  option  under the Plan with
respect to such Offering  Period,  would own stock or hold options to
purchase  stock  possessing  5 percent or more of the total  combined
voting  power or value of all  classes of stock of the Company or any
of its Subsidiaries.

           5.  OFFERING  DATES.  The  Offering  Periods  of the  Plan
(the  "Offering  Period")  shall be of 6 months  duration  commencing
February  1 and  August  1 of each  year  and  ending  on July 31 and
January 31  respectively,  during  which  payroll  deductions  of the
participant  are  accumulated  under this Plan. The first day of each
Offering  Period is  referred  to as the  "Offering  Date".  The last
business  day  of  each  Offering   Period  is  referred  to  as  the
"Purchase  Date".  The  Board  shall  have the  power to  change  the
duration  of  Offering  Periods  with  respect  to  future  offerings
without  shareholder  approval if such change is  announced  at least
fifteen  (15)  days  prior to the  scheduled  beginning  of the first
Offering Period to be affected.

           6.  PARTICIPATION  IN THE  PLAN.  Eligible  employees  may
become  participants  in an  Offering  Period  under  the Plan on the
first  Offering Date after  satisfying the  eligibility  requirements
by   delivering  a   subscription   agreement  to  the  Company's  or
Subsidiary's  (whichever employs such employee)  treasury  department
(the  "Treasury Department")  not  later  than  the  15th  day of the
month  before such  Offering  Date unless a later time for filing the
subscription  agreement  authorizing payroll deductions is set by the
Board for all eligible  employees  with  respect to a given  Offering
Period.  An eligible  employee  who does not  deliver a  subscription
agreement  to the  Treasury  Department  by such date after  becoming
eligible  to   participate   in  such   Offering   Period  shall  not
participate  in  that  Offering  Period  or any  subsequent  Offering
Period  unless  such  employee  enrolls  in  the  Plan  by  filing  a
subscription  agreement  with the Treasury  Department not later than
the 15th day of the  month  preceding  a  subsequent  Offering  Date.
Once an employee  becomes a participant in an Offering  Period,  such
employee  will  automatically  participate  in  the  Offering  Period
commencing  immediately  following the last day of the prior Offering
Period  unless the  employee  withdraws  from the Plan or  terminates
further  participation  in  the  Offering  Period  as  set  forth  in
Section  11  below.  Such  participant  is not  required  to file any
additional    subscription    agreement    in   order   to   continue
participation in the Plan.

           7.  GRANT  OF  OPTION  ON  ENROLLMENT.  Enrollment  by  an
eligible  employee  in the Plan with  respect to an  Offering  Period
will  constitute  the grant (as of the Offering  Date) by the Company
to such  employee of an option to purchase  on the  Purchase  Date up
to that number of shares of Common  Stock of the  Company  determined
by  dividing  the  amount  accumulated  in  such  employee's  payroll
deduction  account  during such  Offering  Period by the lower of (i)
eighty-five  percent  (85%)  of the fair  market  value of a share of
the Company's  Common Stock on the Offering Date or  (ii) eighty-five
percent  (85%) of the fair market  value of a share of the  Company's
Common  Stock  on the  Purchase  Date;  provided,  however,  that the
number  of  shares  of the  Company's  Common  Stock  subject  to any
option  granted  pursuant to this Plan shall not exceed the lesser of
(a) the  maximum  number  of  shares  set by the  Board  pursuant  to
Section 10(c) below with respect to the applicable  Offering  Period,
or (b) the maximum  number of shares which may be purchased  pursuant
to Section  10(b)  below  with  respect  to the  applicable  Offering
Period.  Fair market value of a share of the  Company's  Common Stock
shall be determined as provided in Section 8 hereof.
<PAGE>

           8.  PURCHASE  PRICE.  The  purchase  price  per  share  at
which a share of Common  Stock  will be sold in any  Offering  Period
shall be eighty-five percent (85%) of the lesser of:

           (a)  The fair market value on the Offering Date; or

           (b)  The fair market value on the Purchase Date.

           For purposes of the Plan the term "fair  market  value" on
a given  date  shall  mean the  fair  market  value of the  Company's
Common  Stock as  determined  by the  Board  in its sole  discretion,
exercised  in good faith;  provided,  however,  that where there is a
public market for the Common  Stock,  the fair market value per share
shall be the  average  of the  closing  bid and  asked  prices of the
Common   Stock  on  the  last  trading  day  prior  to  the  date  of
determination,  as reported in The Wall Street  Journal (or if not so
reported,  as otherwise reported by the Nasdaq Stock Market),  or, in
the event the Common  Stock is listed on a stock  exchange  or on the
Nasdaq  National  Market,  the fair  market  value per share shall be
the closing  price on the exchange or on the Nasdaq  National  Market
on the  last  trading  date  prior to the  date of  determination  as
reported in The Wall Street Journal.

           9.  PAYMENT  OF  PURCHASE  PRICE;   CHANGES  IN  PAYROLL  
DEDUCTIONS; ISSUANCE OF SHARES.

           (a) The  purchase  price of the shares is  accumulated  by
regular  payroll  deductions  made during each Offering  Period.  The
deductions   are   made  as  a   percentage   of  the   participant's
compensation  in one  percent  (1%)  increments  not  less  than  two
percent  (2%),  nor  greater  than ten percent  (10%),  not to exceed
$25,000  per  year  or  such  lower  limit  set  by  the   Committee.
Compensation  shall  mean all W-2  compensation,  including,  but not
limited  to  base  salary,  wages,   commissions,   overtime,   shift
premiums  and  bonuses,  plus draws  against  commissions;  provided,
however,   that  for   purposes  of   determining   a   participant's
compensation,  any election by such  participant to reduce his or her
regular cash  remuneration  under  Sections 125 or 401(k) of the Code
shall be treated as if the  participant  did not make such  election.
Payroll  deductions  shall commence on the first payday following the
Offering  Date and shall  continue to the end of the Offering  Period
unless sooner altered or terminated as provided in the Plan.

           (b) A  participant  may lower (but not  increase) the rate
of payroll  deductions  during an Offering  Period by filing with the
Treasury  Department a new authorization for payroll  deductions,  in
which case the new rate shall become  effective  for the next payroll
period  commencing  more than  fifteen  (15) days after the  Treasury
Department's  receipt of the  authorization  and shall  continue  for
the  remainder of the  Offering  Period  unless  changed as described
below.  Such  change in the rate of  payroll  deductions  may be made
at any time during an Offering  Period,  but not more than one change
may be made  effective  during any  Offering  Period.  A  participant
may  increase  or  decrease  the rate of payroll  deductions  for any
subsequent  Offering Period by filing with the Treasury  Department a
new  authorization  for  payroll  deductions  not later than the 15th
day of the month before the beginning of such Offering Period.
<PAGE>

           (c) All  payroll  deductions  made for a  participant  are
credited  to his or her  account  under  the Plan  and are  deposited
with the general  funds of the  Company.  No interest  accrues on the
payroll  deductions.  All payroll deductions  received or held by the
Company  may be used by the Company for any  corporate  purpose,  and
the  Company  shall  not  be  obligated  to  segregate  such  payroll
deductions.

           (d) On each  Purchase  Date,  so long as the Plan  remains
in effect and  provided  that the  participant  has not  submitted  a
signed  and  completed   withdrawal   form  before  that  date  which
notifies the Company  that the  participant  wishes to withdraw  from
that Offering  Period under the Plan and have all payroll  deductions
accumulated  in the account  maintained on behalf of the  participant
as of that  date  returned  to the  participant,  the  Company  shall
apply the funds then in the  participant's  account  to the  purchase
of whole shares of Common  Stock  reserved  under the option  granted
to such  participant  with  respect  to the  Offering  Period  to the
extent that such option is  exercisable  on the  Purchase  Date.  The
purchase  price per share shall be as  specified  in Section 8 of the
Plan.  Any cash  remaining  in a  participant's  account  after  such
purchase of shares  shall be refunded  to such  participant  in cash,
without  interest;  provided,  however,  that any amount remaining in
such  participant's  account  on a  Purchase  Date which is less than
the amount  necessary  to  purchase  a full share of Common  Stock of
the Company  shall be carried  forward,  without  interest,  into the
next  Offering   Period.   In  the  event  that  the  Plan  has  been
oversubscribed,  all  funds  not  used  to  purchase  shares  on  the
Purchase  Date  shall  be  returned  to  the   participant,   without
interest.  No Common Stock shall be  purchased on a Purchase  Date on
behalf  of  any  employee  whose   participation   in  the  Plan  has
terminated prior to such Purchase Date.

           (e) As promptly as  practicable  after the Purchase  Date,
the Company  shall  arrange the  delivery  to each  participant  of a
certificate  representing  the shares  purchased upon exercise of his
option.

           (f) During a participant's  lifetime,  such  participant's
option to purchase  shares  hereunder is  exercisable  only by him or
her.  The  participant  will  have no  interest  or  voting  right in
shares  covered  by his or her  option  until  such  option  has been
exercised.  Shares to be  delivered to a  participant  under the Plan
will be registered in the name of the  participant  or in the name of
the participant and his or her spouse.

           10. LIMITATIONS ON SHARES TO BE PURCHASED.  

           (a) No  employee  shall  be  entitled  to  purchase  stock
under  the  Plan at a rate  which,  when  aggregated  with his or her
rights to purchase  stock  under all other  employee  stock  purchase
plans of the  Company  or any  Subsidiary,  exceeds  $25,000  in fair
market  value,  determined  as of the  Offering  Date (or such  other
limit  as may be  imposed  by the  Code)  for each  calendar  year in
which the employee participates in the Plan.

           (b)  No  more  than  two  hundred  percent  (200%)  of the
number of shares  determined  by using  eighty-five  percent (85%) of
the fair market  value of a share of the  Company's  Common  Stock on
the  Offering  Date  as  the   denominator  may  be  purchased  by  a
participant on any single Purchase Date.
<PAGE>

           (c) No employee  shall be  entitled to purchase  more than
the Maximum  Share Amount (as defined  below) on any single  Purchase
Date.  Not less than  thirty (30) days prior to the  commencement  of
any Offering  Period,  the Board may, in its sole  discretion,  set a
maximum  number of shares  which may be  purchased by any employee at
any single  Purchase Date  (hereinafter  the "Maximum Share Amount").
In no event  shall  the  Maximum  Share  Amount  exceed  the  amounts
permitted  under Section  10(b) above.  If a new Maximum Share Amount
is set,  then  all  participants  must be  notified  of such  Maximum
Share   Amount  not  less  than   fifteen  (15)  days  prior  to  the
commencement  of the next  Offering  Period.  Once the Maximum  Share
Amount  is set,  it shall  continue  to  apply  with  respect  to all
succeeding  Purchase  Dates and Offering  Periods  unless  revised by
the Board as set forth above.

           (d)  If  the  number  of  shares  to  be  purchased  on  a
Purchase  Date by all  employees  participating  in the Plan  exceeds
the number of shares  then  available  for  issuance  under the Plan,
the Company will make a pro rata  allocation of the remaining  shares
in as  uniform  a manner  as shall be  practicable  and as the  Board
shall  determine to be  equitable.  In such event,  the Company shall
give written  notice of such  reduction of the number of shares to be
purchased under a participant's  option to each participant  affected
thereby.

           (e)   Any   payroll    deductions    accumulated    in   a
participant's  account  which are not used to  purchase  stock due to
the  limitations  in  this  Section  10  shall  be  returned  to  the
participant  as soon as  practicable  after  the end of the  Offering
Period, without interest.

           11. WITHDRAWAL.

           (a)  Each   participant  may  withdraw  from  an  Offering
Period  under the Plan by  signing  and  delivering  to the  Treasury
Department  notice  on  a  form  provided  for  such  purpose.   Such
withdrawal  may be  elected  at any time at least  fifteen  (15) days
prior to the end of an Offering Period.

           (b)  Upon   withdrawal  from  the  Plan,  the  accumulated
payroll  deductions  shall be returned to the withdrawn  participant,
without  interest,  and  his  or  her  interest  in  the  Plan  shall
terminate.   In  the  event  a  participant   voluntarily  elects  to
withdraw  from  the  Plan,  he or  she  may  not  resume  his  or her
participation  in the Plan during the same  Offering  Period,  but he
or she may  participate  in any Offering  Period under the Plan which
commences on a date  subsequent  to such  withdrawal  by filing a new
authorization  for  payroll  deductions  in the  same  manner  as set
forth above for initial participation in the Plan.

           12. TERMINATION   OF   EMPLOYMENT.    Termination   of   a
participant's   employment  for  any  reason,  including  retirement,
death  or  the  failure  of  a  participant  to  remain  an  eligible
employee,  immediately  terminates  his or her  participation  in the
Plan.  In  such  event,  the  payroll  deductions   credited  to  the
participant's  account  will be  returned  to him or her  or,  in the
case  of his  or her  death,  to  his  or her  legal  representative,
without  interest.  For  purposes  of this  Section  12, an  employee
will  not be  deemed  to have  terminated  employment  or  failed  to
remain in the  continuous  employ of the  Company in the case of sick
leave,  military  leave,  or any other  leave of absence  approved by
the  Board;  provided  that  such  leave is for a period  of not more
than ninety (90) days or  reemployment  upon the  expiration  of such
leave is guaranteed by contract or statute.

           13. RETURN  OF   PAYROLL   DEDUCTIONS.   In  the  event  a
participant's  interest  in the  Plan is  terminated  by  withdrawal,
termination  of employment or otherwise,  or in the event the Plan is
terminated by the Board,  the Company shall  promptly  deliver to the
participant  all  payroll  deductions  credited  to his  account.  No
interest  shall accrue on the payroll  deductions of a participant in
the Plan.
<PAGE>

           14. CAPITAL  CHANGES.  Subject to any  required  action by
the  shareholders  of the  Company,  the  number  of shares of Common
Stock  covered by each  option  under the Plan which has not yet been
exercised  and the number of shares of Common  Stock  which have been
authorized  for issuance  under the Plan but have not yet been placed
under option  (collectively,  the  "Reserves"),  as well as the price
per share of  Common  Stock  covered  by each  option  under the Plan
which has not yet been exercised,  shall be proportionately  adjusted
for any  increase  or  decrease  in the  number of  issued  shares of
Common Stock  resulting  from a stock split or the payment of a stock
dividend  (but only on the  Common  Stock) or any other  increase  or
decrease  in the number of shares of Common  Stock  effected  without
receipt of  consideration  by the Company;  provided,  however,  that
conversion  of any  convertible  securities  of the Company shall not
be   deemed   to   have   been   "effected    without    receipt   of
consideration".  Such  adjustment  shall be made by the Board,  whose
determination  shall be  final,  binding  and  conclusive.  Except as
expressly  provided  herein,  no issue by the  Company  of  shares of
stock of any class,  or securities  convertible  into shares of stock
of any class,  shall  affect,  and no  adjustment  by reason  thereof
shall be made  with  respect  to,  the  number  or price of shares of
Common Stock subject to an option.

           In the event of the proposed  dissolution  or  liquidation
of the  Company,  the  Offering  Period  will  terminate  immediately
prior to the consummation of such proposed  action,  unless otherwise
provided  by the Board.  The Board may,  in the  exercise of its sole
discretion  in such  instances,  declare  that the options  under the
Plan  shall  terminate  as of a date fixed by the Board and give each
participant  the  right to  exercise  his or her  option as to all of
the optioned  stock,  including  shares which would not  otherwise be
exercisable.   In  the   event   of  a   proposed   sale  of  all  or
substantially  all of the  assets of the  Company,  or the  merger of
the Company with or into another  corporation,  each option under the
Plan shall be assumed or an  equivalent  option shall be  substituted
by such  successor  corporation  or a parent  or  subsidiary  of such
successor corporation,  unless the Board determines,  in the exercise
of  its  sole   discretion   and  in  lieu  of  such   assumption  or
substitution,  that the participant  shall have the right to exercise
the option as to all of the  optioned  stock.  If the Board  makes an
option  exercisable  in lieu of  assumption  or  substitution  in the
event of a merger or sale of  assets,  the  Board  shall  notify  the
participant  that the option shall be fully  exercisable for a period
of  twenty  (20) days from the date of such  notice,  and the  option
will terminate upon the expiration of such period.

           The Board may, if it so  determines in the exercise of its
sole discretion,  also make provision for adjusting the Reserves,  as
well  as the  price  per  share  of  Common  Stock  covered  by  each
outstanding  option,  in the event that the  Company  effects  one or
more  reorganizations,  recapitalizations,  rights offerings or other
increases or  reductions of shares of its  outstanding  Common Stock,
or in the  event of the  Company  being  consolidated  with or merged
into any other corporation.

           15. NONASSIGNABILITY.     Neither    payroll    deductions
credited  to a  participant's  account  nor any rights with regard to
the  exercise  of an option or to receive  shares  under the Plan may
be assigned,  transferred,  pledged or  otherwise  disposed of in any
way (other than by will, the laws of descent and  distribution  or as
provided  in  Section  22  hereof)  by  the  participant.   Any  such
attempt at assignment,  transfer,  pledge or other  disposition shall
be without effect.
<PAGE>

           16. REPORTS.  Individual  accounts will be maintained  for
each  participant  in  the  Plan.  Each  participant   shall  receive
promptly  after  the end of each  Offering  Period a report of his or
her account setting forth the total payroll  deductions  accumulated,
the number of shares  purchased,  the per share price thereof and the
remaining  cash  balance,   if  any,  carried  forward  to  the  next
Offering Period.

           17. NOTICE OF DISPOSITION.  Each participant  shall notify
the  Company  if the  participant  disposes  of  any  of  the  shares
purchased  in any  Offering  Period  pursuant  to  this  Plan if such
disposition  occurs  within two (2) years from the  Offering  Date or
within  one (1) year  from the  Purchase  Date on which  such  shares
were  purchased  (the  "Notice Period").  Unless such  participant is
disposing  of any of such  shares  during  the  Notice  Period,  such
participant  shall keep the certificates  representing such shares in
his or her  name  (and  not in the  name  of a  nominee)  during  the
Notice  Period.  The  Company  may,  at any time  during  the  Notice
Period,  place a legend or  legends on any  certificate  representing
shares  acquired  pursuant  to  the  Plan  requesting  the  Company's
transfer  agent  to  notify  the  Company  of  any  transfer  of  the
shares.  The  obligation  of the  participant  to provide such notice
shall  continue  notwithstanding  the placement of any such legend on
the certificates.

           18. NO RIGHTS TO CONTINUED  EMPLOYMENT.  Neither this Plan
nor the grant of any option  hereunder  shall confer any right on any
employee  to remain in the employ of the  Company or any  Subsidiary,
or restrict the right of the Company or any  Subsidiary  to terminate
such employee's employment.

           19. EQUAL RIGHTS AND  PRIVILEGES.  All eligible  employees
shall have equal  rights and  privileges  with respect to the Plan so
that the Plan  qualifies as an "employee  stock purchase plan" within
the meaning of Section  423 or any  successor  provision  of the Code
and the  related  regulations.  Any  provision  of the Plan  which is
inconsistent  with  Section  423 or any  successor  provision  of the
Code shall,  without  further act or  amendment by the Company or the
Board,  be reformed to comply with the  requirements  of Section 423.
This Section 19 shall take  precedence  over all other  provisions in
the Plan.

           20. NOTICES.  All  notices  or other  communications  by a
participant  to the  Company  under  or in  connection  with the Plan
shall be deemed to have been duly  given  when  received  in the form
specified  by  the  Company  at  the  location,  or  by  the  person,
designated by the Company for the receipt thereof.

           21. TERM;  SHAREHOLDER  APPROVAL.  This Plan shall  become
effective  on the date that it is  adopted  by the  Board.  This Plan
shall be approved by the  shareholders of the Company,  in any manner
permitted by  applicable  corporate  law,  within  twelve (12) months
before  or after  the date  this Plan is  adopted  by the  Board.  No
purchase  of shares  pursuant  to the Plan shall  occur prior to such
shareholder  approval.  The Plan shall  continue until the earlier to
occur of termination  by the Board,  issuance of all of the shares of
Common Stock  reserved for issuance  under the Plan or ten (10) years
from the adoption of the Plan by the Board.
<PAGE>

           22. DESIGNATION OF BENEFICIARY.  

           (a) A  participant  may file a  written  designation  of a
beneficiary  who is to receive any shares and cash,  if any, from the
participant's   account   under   the  Plan  in  the  event  of  such
participant's  death  subsequent to the end of an Offering Period but
prior to  delivery  to him of such shares and cash.  In  addition,  a
participant  may file a written  designation of a beneficiary  who is
to receive  any cash from the  participant's  account  under the Plan
in the event of such participant's death prior to a Purchase Date.

           (b) Such  designation  of  beneficiary  may be  changed by
the  participant at any time by written  notice.  In the event of the
death of a participant  and in the absence of a  beneficiary  validly
designated  under  the  Plan  who is  living  at  the  time  of  such
participant's  death,  the Company  shall deliver such shares or cash
to the executor or  administrator  of the estate of the  participant,
or if no such executor or  administrator  has been  appointed (to the
knowledge  of the  Company),  the  Company,  in its  discretion,  may
deliver  such  shares  or  cash to the  spouse  or to any one or more
dependents  or  relatives  of  the  participant,  or  if  no  spouse,
dependent  or  relative is known to the  Company,  then to such other
person as the Company may designate.

          23.  CONDITIONS  UPON  ISSUANCE OF SHARES;  LIMITATION  ON 
SALE OF  SHARES.  Shares  shall  not be  issued  with  respect  to an
option  unless  the  exercise  of such  option and the  issuance  and
delivery  of such  shares  pursuant  thereto  shall  comply  with all
applicable  provisions  of  law,  domestic  or  foreign,   including,
without  limitation,  the  Securities  Act of 1933,  as amended,  the
Securities   Exchange  Act  of  1934,  as  amended,   the  rules  and
regulations  promulgated  thereunder,  and  the  requirements  of any
stock  exchange  upon which the shares may then be listed,  and shall
be further  subject to the  approval of counsel for the Company  with
respect to such compliance.

          24.  APPLICABLE  LAW.  The Plan  shall be  governed  by the
substantive  laws  (excluding  the  conflict  of laws  rules)  of the
State of California.

          25.  AMENDMENT OR  TERMINATION  OF THE PLAN.  The Board may
at any time  amend,  terminate  or the  extend  the term of the Plan,
except that any such  termination  cannot affect  options  previously
granted under the Plan,  nor may any amendment  make any change in an
option  previously  granted which would adversely affect the right of
any  participant,  nor may any amendment be made without  approval of
the  shareholders of the Company  obtained in accordance with Section
21  hereof  within  twelve  (12)  months  of  the  adoption  of  such
amendment  (or earlier if  required by Section 21) if such  amendment
would:

          (a)  increase  the  number  of  shares  that may be  issued
under the Plan; or

          (b) change the  designation  of the  employees (or class of
employees) eligible for participation in the Plan.

<PAGE>




                                                       EXHIBIT 5.01


                         December 16, 1997


Information Storage Devices, Inc.
2045 Hamilton Avenue
San Jose, CA  95125

Gentlemen/Ladies:

      At your request, we have examined the Registration Statement
on Form S-8 (the "Registration Statement") to be filed by you
with the Securities and Exchange Commission on or about
December 16, 1997 in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 800,000
shares of your Common Stock (the "Common Stock") to be sold by
you pursuant to the (i) stock options and/or awards granted or to
be granted by you under your 1994 Equity Incentive Plan, as
amended (the "Incentive Plan"), and your 1994 Employee Stock
Purchase Plan, as amended (the "Purchase Plan").

      As your counsel, we have examined the proceedings taken by
you in connection with (i) the amendment of the Incentive Plan
and the granting of options and/or awards thereunder, and (ii)
the amendment of the Purchase Plan.

      It is our opinion that the 800,000 shares of Common Stock
that may be issued and sold by you pursuant (i) to the stock
options and/or awards granted or to be granted under the
Incentive Plan, when issued and sold in the manner referred to in
the relevant Prospectus associated with the Registration
Statement, the Incentive Plan and accompanying stock options
and/or awards, and (ii) the Purchase Plan, when issued and sold
in the manner referred to in the relevant Prospectus associated
with the Registration Statement and the Purchase Plan, will be
legally issued, fully paid and non-assessable.

      We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to all references to
us, if any, in the Registration Statement and any amendments
thereto which have been approved by us.

                               Very truly yours,


                               /s/ Fenwick & West LLP
<PAGE>




                                                      EXHIBIT 23.02

             CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-8 Registration
Statement of our report dated January 15, 1997 included in
Information Storage Devices, Inc.'s filing on Form 10-K dated
March 21, 1997.



                                    /s/Arthur Andersen
                                    ARTHUR ANDERSEN LLP


San Jose, California
December 23, 1997
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 87723}]
{"company-data": {"conformed-name": "INFORMATION STORAGE DEVICES INC /CA/", "cik": "0000932980", "assigned-sic": "3674", "irs-number": "770197173", "state-of-incorporation": "CA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-43065", "film-number": "97743255"}, "business-address": {"street1": "2045 HAMILTON AVE", "city": "SAN JOSE", "state": "CA", "zip": "95125", "phone": "4083692400"}, "mail-address": {"street1": "2045 HAMILTON AVE", "city": "SAN JOSE", "state": "CA", "zip": "95125"}}
As filed with the Securities and Exchange Commission on December
                             23, 1997
                                               Registration No. 33-

-------------------------------------------------------------------
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                             FORM S-8
                      REGISTRATION STATEMENT
                               UNDER
                    THE SECURITIES ACT OF 1933

                 INFORMATION STORAGE DEVICES, INC.
      (Exact name of registrant as specified in its charter)

          California                       77-0197173
 (State or other jurisdiction           (I.R.S. employer
              of                       identification no.)
incorporation or organization)

                       2045 Hamilton Avenue
                    San Jose, California 95125
   (Address of principal executive offices, including zip code)

                    1994 EQUITY INCENTIVE PLAN
                 1994 EMPLOYEE STOCK PURCHASE PLAN
                     (Full title of the plans)

                       Felix J. Rosengarten
  Vice President, Finance and Administration and Chief Financial
                              Officer
                       2045 Hamilton Avenue
                    San Jose, California 95125
                          (408) 369-2400
   (Name, address and telephone number, including area code, of
                        agent for service)

                            Copies to:

                       Bruce W. Jenett, Esq.
                     Katharine T. Schuda, Esq.
                        John F. Platz, Esq.
                        Fenwick & West LLP
                       Two Palo Alto Square
                    Palo Alto, California 94306

                  CALCULATION OF REGISTRATION FEE

---------------------------------------------------------------------

                    Amount      Proposed     Proposed
    Title of         to be      Maximum       Maximum     Amount of
Securities to be  Registered    Offering     Aggregate   Registration
   Registered                  Price Per     Offering        Fee
                                 Share         Price
---------------------------------------------------------------------

Common Stock, no                                          
par value ...     800,000 (1) $____6.375 (2$  5,100,00   $ 1,504.50_________
                                           (2)
                                                                   

      (1)      Additional shares available for grant and not
        subject to outstanding options as of December 19, 1997
        under the Registrant's 1994 Equity Incentive Plan and 1994
        Employee Stock Purchase Plan.

      (2)  Estimated as of December 19, 1997 pursuant to Rule
        457(c) solely for the purpose of calculating the
        amount of the registration fee.
Statement Pursuant to General Instruction E

        Pursuant  to General  Instruction  E, the  contents  of the
Registrant's  Form S-8  Registration  Statement No.  33-90824 filed
on March 31, 1995 are hereby incorporated by reference.
Item 8. Exhibits.

         4.01   Registrant's   1994  Equity   Incentive   Plan,  as
                amended, and related documents.

         4.02   Registrant's 1994 Employee Stock Purchase Plan.

         5.01   Opinion of Fenwick & West LLP.

        23.01   Consent of Fenwick & West LLP  (included in Exhibit
                5.01).

        23.02   Consent of Arthur Andersen LLP,  independent Public
                Accountants.

        24.01   Power of Attorney (see page 3).
SIGNATURES

      Pursuant to the  requirements  of the Securities Act of 1933,
the  Registrant   certifies  that  it  has  reasonable  grounds  to
believe  that it meets all of the  requirements  for filing on Form
S-8 and has duly caused this  Registration  Statement  to be signed
on its behalf by the  undersigned,  thereunto duly  authorized,  in
the  City  of  San  Jose,  State  of  California,  on the 23 day of
December 1997.

                               INFORMATION STORAGE DEVICES, INC.

 
 
                               By: /s/ Felix J. Rosengarten        
                                   Felix J. Rosengarten
                                   Vice President, Finance and
Administration
                                   and Chief Financial Officer

                         POWER OF ATTORNEY

      KNOW ALL MEN BY THESE  PRESENTS  that each  individual  whose
signature  appears below  constitutes  and appoints  David L. Angel
and Felix J.  Rosengarten,  and each of them,  his true and  lawful
attorneys-in-fact  and agents with full power of substitution,  for
him and in his name,  place and stead,  in any and all  capacities,
to  sign   any  and  all   amendments   (including   post-effective
amendments)  to this  Registration  Statement  on Form S-8,  and to
file the same  with  all  exhibits  thereto  and all  documents  in
connection   therewith,    with   the   Securities   and   Exchange
Commission,  granting unto said  attorneys-in-fact  and agents, and
each of them,  full power and  authority to do and perform each and
every  act and  thing  requisite  and  necessary  to be done in and
about the  premises,  as fully to all  intents  and  purposes as he
might or could do in person,  hereby  ratifying and  confirming all
that said  attorneys-in-fact  and agents or any of them,  or his or
their  substitute  or  substitutes,  may lawfully do or cause to be
done by virtue hereof.

      Pursuant to the  requirements  of the Securities Act of 1933,
this  Registration  Statement  has  been  signed  by the  following
persons in the capacities and on the date indicated.
Signature                  Title                  Date

Principal Executive Officer:

/s/ David L. Angel           Chief Executive          December 23, 1997
David L. Angel               Officer and a Director
Principal Financial Officer
  and Accounting Officer:

/s/ Felix J. Rosengarten    Vice President,Finance and     December 23, 1997
Felix J. Rosengarten        Administration and
                            Chief Financial Officer
 

Additional Directors:

/s/ Frederick B. Bamber      Director                December 23, 1997
Frederick B. Bamber

/s/ Eugene J. Flath          Director                 December 23, 1997
Eugene J. Flath

/s/ Alan V. King             Director                 December 23, 1997
Alan V. King

/s/ Eric J. Ochiltree        Director                 December 23, 1997
Eric J. Ochiltree

/s/ Frederick L. Zieber      Director                 December 23, 1997
Frederick L. Zieber
Exhibit Index

    Exhibit No.                 Description

         4.01        Registrant's      1994      Equity
                     Incentive  Plan,  as amended,  and
                     related documents.

         4.02        Registrant's  1994 Employee  Stock
                     Purchase Plan.

         5.01        Opinion of Fenwick & West LLP.

        23.01        Consent  of  Fenwick  &  West  LLP
                     (included in Exhibit 5.01).

       23.02         Consent  of Arthur  Andersen  LLP,
                     independent Public Accountants.

       24.01         Power of Attorney (see page 3).
EXHIBIT 4.01

                 INFORMATION STORAGE DEVICES, INC.

                    1994-EQUITY-INCENTIVE-PLAN

                   As Adopted September 12, 1994
                As Amended through December 3, 1997

          1.   PURPOSE.  The  purpose  of the  Plan  is to  provide
incentives to attract,  retain and motivate  eligible persons whose
present and  potential  contributions  are important to the success
of  the  Company,  its  Parent,  Subsidiaries  and  Affiliates,  by
offering  them  an  opportunity  to  participate  in the  Company's
future  performance  through  awards of Options,  Restricted  Stock
and Stock  Bonuses.  Capitalized  terms not defined in the text are
defined in Section 23.

          2.   SHARES SUBJECT TO THE PLAN.

               2.1  Number of Shares Available.      Subject     to
Sections 2.2  and 18,  the  total  number of  Shares  reserved  and
available  for grant and  issuance  pursuant  to the Plan  shall be
2,750,000  Shares.  Any shares  issuable  upon  exercise of options
granted  pursuant to the 1987 Stock Option Plan (the "Prior  Plan")
that expire or become  unexercisable  for any reason without having
been   exercised  in  full,   shall  no  longer  be  available  for
distribution  under the Prior  Plan,  but  shall be  available  for
distribution  under this  Plan.  Subject  to  Sections 2.2  and 18,
Shares  shall  again  be  available   for  grant  and  issuance  in
connection  with  future  Awards  under  the  Plan  that:   (a) are
subject  to  issuance  upon  exercise  of an Option but cease to be
subject to such Option for any reason  other than  exercise of such
Option,  (b) are  subject  to an Award  granted  hereunder  but are
forfeited or are  repurchased  by the Company at the original issue
price,  or (c) are  subject to an Award that  otherwise  terminates
without Shares being issued.

               2.2  Adjustment of Shares.  In the  event  that  the
number  of  outstanding  Shares  is  changed  by a stock  dividend,
recapitalization,  stock split,  reverse stock split,  subdivision,
combination,  reclassification  or  similar  change in the  capital
structure  of the  Company  without  consideration,  then  (a)  the
number of Shares  reserved  for  issuance  under the Plan,  (b) the
Exercise  Prices of and  number of Shares  subject  to  outstanding
Options,   and  (c)  the   number  of  Shares   subject   to  other
outstanding  Awards shall be proportionately  adjusted,  subject to
any  required  action  by  the  Board  or the  shareholders  of the
Company and compliance with applicable  securities laws;  provided,
however,  that  fractions  of a Share shall not be issued but shall
either  be paid in cash at Fair  Market  Value or shall be  rounded
up to the nearest Share, as determined by the Committee.

          3.   ELIGIBILITY.  ISOs (as  defined  in Section 5 below)
may  be  granted   only  to  employees   (including   officers  and
directors  who are also  employees)  of the  Company or of a Parent
or  Subsidiary  of the Company.  All other Awards may be granted to
employees,    officers,   directors,    consultants,    independent
contractors  and advisors of the Company or any Parent,  Subsidiary
or   Affiliate   of  the  Company;   provided   such   consultants,
contractors   and  advisors   render  bona  fide  services  not  in
connection   with  the   offer   and  sale  of   securities   in  a
capital-raising   transaction.  No  person  shall  be  eligible  to
receive  more than  500,000  Shares at any time  during the term of
this  Plan  pursuant  to the grant of  Awards  hereunder.  A person
may be granted more than one Award under the Plan.
4.   ADMINISTRATION.

               4.1  Committee Authority.    The   Plan   shall   be
administered   by  the   Committee  or  the  Board  acting  as  the
Committee.  Subject to the general  purposes,  terms and conditions
of the Plan,  and to the  direction  of the  Board,  the  Committee
shall  have full  power to  implement  and carry out the Plan.  The
Committee shall have the authority to:

          (a)  construe   and   interpret   the  Plan,   any  Award
               Agreement  and  any  other   agreement  or  document
               executed pursuant to the Plan;

          (b)  prescribe,  amend and rescind rules and  regulations
               relating to the Plan;

          (c)  select persons to receive Awards;

          (d)  determine the form and terms of Awards;

          (e)  determine    the   number   of   Shares   or   other
               consideration subject to Awards;

          (f)  determine  whether Awards will be granted singly, in
               combination,  in tandem with, in replacement  of, or
               as  alternatives  to, other Awards under the Plan or
               any  other  incentive  or  compensation  plan of the
               Company or any Parent,  Subsidiary  or  Affiliate of
               the Company;

          (g)  grant waivers of Plan or Award conditions;

          (h)  determine  the vesting,  exercisability  and payment
               of Awards;

          (i)  correct  any  defect,   supply  any   omission,   or
               reconcile any  inconsistency  in the Plan, any Award
               or any Award Agreement;

          (j)  determine whether an Award has been earned; and

          (k)  make   all   other   determinations   necessary   or
               advisable for the administration of the Plan.

               4.2  Committee Discretion.  Any  determination  made
by the  Committee  with  respect to any Award  shall be made in its
sole  discretion  at the time of grant of the Award  or,  unless in
contravention  of any  express  term of the Plan or  Award,  at any
later time,  and such  determination  shall be final and binding on
the Company  and all persons  having an interest in any Award under
the Plan.  The  Committee  may delegate to one or more  officers of
the  Company  the  authority  to grant an Award  under  the Plan to
Participants who are not Insiders of the Company.
4.3  Composition  of  Committee.   If  two  or  more
members of the Board are Outside  Directors,  the  Committee  shall
be  comprised  of at least two  members of the  Board,  all of whom
are Outside Directors.

          5.   OPTIONS.   The   Committee   may  grant  Options  to
eligible  persons and shall  determine  whether such Options  shall
be  Incentive   Stock  Options  within  the  meaning  of  the  Code
("ISOs") or  Nonqualified  Stock Options  ("NQSOs"),  the number of
Shares  subject to the Option,  the  Exercise  Price of the Option,
the  period  during  which the  Option  may be  exercised,  and all
other  terms  and   conditions  of  the  Option,   subject  to  the
following:

               5.1  Form of Option Grant.   Each   Option   granted
under  the Plan  shall be  evidenced  by an Award  Agreement  which
shall  expressly  identify  the  Option as an ISO or NQSO  ("Stock 
Option Agreement"),   and  be  in  such  form  and   contain   such
provisions  (which  need not be the same for each  Participant)  as
the  Committee  shall from time to time  approve,  and which  shall
comply  with and be  subject  to the  terms and  conditions  of the
Plan.

               5.2  Date of Grant.  The date of grant of an  Option
shall be the date on which the  Committee  makes the  determination
to  grant  such   Option,   unless   otherwise   specified  by  the
Committee.  The  Stock  Option  Agreement  and a copy  of the  Plan
will be  delivered  to the  Participant  within a  reasonable  time
after the granting of the Option.

               5.3  Exercise Period.  Options shall be  exercisable
within the times or upon the  events  determined  by the  Committee
as set  forth in the Stock  Option  Agreement;  provided,  however,
that no Option shall be  exercisable  after the  expiration  of ten
(10)  years  from the date the  Option  is  granted,  and  provided
further  that  no  ISO  granted  to a  person  who  directly  or by
attribution   owns  more  than  ten  percent  (10%)  of  the  total
combined  voting  power of all  classes of stock of the  Company or
any      Parent     or      Subsidiary      of     the      Company
("Ten Percent Shareholder")   shall  be   exercisable   after   the
expiration  of five (5)  years  from  the date the ISO is  granted.
The  Committee  also may  provide  for the  exercise  of Options to
become  exercisable at one time or from time to time,  periodically
or  otherwise,  in  such  number  or  percentage  as the  Committee
determines.

               5.4  Exercise Price.  The  Exercise  Price  shall be
determined by the  Committee  when the Option is granted and may be
not less  than 85% of the Fair  Market  Value of the  Shares on the
date of  grant;  provided  that  (i) the  Exercise  Price of an ISO
shall  be not  less  than  100% of the  Fair  Market  Value  of the
Shares  on the date of grant  and  (ii) the  Exercise  Price of any
ISO  granted to a Ten  Percent  Shareholder  shall not be less than
110%  of the  Fair  Market  Value  of the  Shares  on the  date  of
grant.   Payment   for  the  Shares   purchased   may  be  made  in
accordance with Section 8 of the Plan.

               5.5  Method of Exercise.  Options  may be  exercised
only  by  delivery  to  the  Company  of  a  written  stock  option
exercise  agreement (the  "Exercise Agreement")  in a form approved
by  the   Committee   (which   need   not  be  the  same  for  each
Participant),  stating the number of Shares  being  purchased,  the
restrictions   imposed   on  the   Shares,   if   any,   and   such
representations and agreements regarding  Participant's  investment
intent and access to  information  and other  matters,  if any,  as
may  be  required  or  desirable  by the  Company  to  comply  with
applicable  securities  laws,  together with payment in full of the
Exercise Price for the number of Shares being purchased.
5.6  Termination.   Notwithstanding   the   exercise
periods  set forth in the Stock  Option  Agreement,  exercise of an
Option shall always be subject to the following:

          (a)  If the  Participant  is  Terminated  for any  reason
               except death or  Disability,  then  Participant  may
               exercise  such  Participant's  Options  only  to the
               extent   that   such   Options   would   have   been
               exercisable  upon the Termination Date no later than
               three  (3)  months  after the  Termination  Date (or
               such  shorter time period as may be specified in the
               Stock Option Agreement),  but in any event, no later
               than the expiration date of the Options.

          (b)  If the  Participant  is terminated  because of death
               or Disability (or the Participant  dies within three
               (3) months of such termination),  then Participant's
               Options  may be  exercised  only to the extent  that
               such  Options   would  have  been   exercisable   by
               Participant  on the  Termination  Date  and  must be
               exercised by  Participant  (or  Participant's  legal
               representative  or  authorized  assignee)  no  later
               than twelve (12) months after the  Termination  Date
               (or such  shorter time period as may be specified in
               the  Stock  Option  Agreement),  but in any event no
               later than the expiration date of the Options.

               5.7  Limitations on Exercise.   The   Committee  may
specify  a  reasonable   minimum  number  of  Shares  that  may  be
purchased  on  any  exercise  of  an  Option,  provided  that  such
minimum  number will not prevent  Participant  from  exercising the
Option  for  the  full  number  of  Shares  for  which  it is  then
exercisable.

               5.8  Limitations on ISOs.    The   aggregate    Fair
Market  Value  (determined  as of the date of grant) of Shares with
respect  to which  ISOs are  exercisable  for the  first  time by a
Participant  during any calendar  year (under the Plan or under any
other  incentive  stock option plan of the Company or any Parent or
Subsidiary  of the  Company)  shall  not  exceed  $100,000.  If the
Fair  Market  Value of Shares on the date of grant with  respect to
which  ISOs are  exercisable  for the first  time by a  Participant
during any  calendar  year  exceeds  $100,000,  the Options for the
first  $100,000  worth of  Shares  to  become  exercisable  in such
calendar  year  shall be ISOs and the  Options  for the  amount  in
excess of $100,000  that become  exercisable  in that calendar year
shall be  NQSOs.  In the  event  that  the Code or the  regulations
promulgated  thereunder  are amended  after the  Effective  Date of
the Plan to  provide  for a  different  limit  on the  Fair  Market
Value of Shares  permitted  to be subject to ISOs,  such  different
limit shall be  automatically  incorporated  herein and shall apply
to any Options granted after the effective date of such amendment.

               5.9  Modification, Extension or Renewal.         The
Committee  may  modify,  extend or renew  outstanding  Options  and
authorize  the  grant  of new  Options  in  substitution  therefor,
provided  that  any  such  action  may  not,  without  the  written
consent of Participant,  impair any of  Participant's  rights under
any  Option  previously  granted.   Any  outstanding  ISO  that  is
modified,  extended,  renewed or otherwise altered shall be treated
in accordance  with Section  424(h) of the Code.  The Committee may
reduce  the  Exercise  Price of  outstanding  Options  without  the
consent  of  Participants  affected  by a  written  notice to them;
provided,  however,  that the  Exercise  Price  may not be  reduced
below the  minimum  Exercise  Price that would be  permitted  under
Section  5.4 of the  Plan  for  Options  granted  on the  date  the
action is taken to reduce the Exercise Price.
5.10 No Disqualification.     Notwithstanding    any
other  provision in the Plan,  no term of the Plan relating to ISOs
shall  be   interpreted,   amended  or   altered,   nor  shall  any
discretion or authority  granted  under the Plan be  exercised,  so
as to  disqualify  the  Plan  under  Section  422 of the  Code  or,
without  the consent of the  Participant  affected,  to  disqualify
any ISO under Section 422 of the Code.

          6.   RESTRICTED STOCK.  A  Restricted  Stock  Award is an
offer by the  Company to sell to an  eligible  person  Shares  that
are subject to  restrictions.  The  Committee  shall  determine  to
whom an offer  will be made,  the  number of Shares  the person may
purchase,  the  price  to  be  paid  (the  "Purchase Price"),   the
restrictions  to which the Shares  shall be subject,  and all other
terms and  conditions  of the  Restricted  Stock Award,  subject to
the following:

               6.1  Form of Restricted Stock Award.  All  purchases
under a Restricted  Stock Award made  pursuant to the Plan shall be
evidenced     by    an    Award     Agreement     ("Restricted     
Stock Purchase Agreement")  that shall be in such form  (which need
not be the same for each  Participant)  as the Committee shall from
time to time  approve,  and shall comply with and be subject to the
terms and  conditions of the Plan.  The offer of  Restricted  Stock
shall be accepted by the  Participant's  execution  and delivery of
the Restricted  Stock  Purchase  Agreement and full payment for the
Shares to the  Company  within  thirty  (30) days from the date the
Restricted  Stock  Purchase  Agreement  is delivered to the person.
If such person does not  execute and deliver the  Restricted  Stock
Purchase  Agreement  along with full  payment for the Shares to the
Company  within thirty (30) days,  then the offer shall  terminate,
unless otherwise determined by the Committee.

               6.2  Purchase Price.  The  Purchase  Price of Shares
sold  pursuant to a Restricted  Stock Award shall be  determined by
the  Committee  and shall be at least 85% of the Fair Market  Value
of the Shares on the date the  Restricted  Stock  Award is granted,
except  in the  case of a sale  to a Ten  Percent  Shareholder,  in
which  case the  Purchase  Price  shall be 100% of the Fair  Market
Value.  Payment  of the  Purchase  Price may be made in  accordance
with Section 8 of the Plan.

               6.3  Restrictions.  Restricted  Stock  Awards  shall
be subject to such  restrictions  as the Committee may impose.  The
Committee  may  provide  for  the  lapse  of such  restrictions  in
installments  and may  accelerate  or waive such  restrictions,  in
whole or part,  based on length  of  service,  performance  or such
other factors or criteria as the Committee may determine.

          7.   STOCK BONUSES.

               7.1  Awards of Stock Bonuses.  A Stock  Bonus  is an
award of  Shares  (which  may  consist  of  Restricted  Stock)  for
services  rendered  to the  Company or any  Parent,  Subsidiary  or
Affiliate  of the  Company.  A Stock  Bonus may be awarded for past
services   already   rendered  to  the  Company,   or  any  Parent,
Subsidiary  or  Affiliate  of  the  Company  pursuant  to an  Award
Agreement  (the  "Stock Bonus Agreement")  that  shall  be in  such
form  (which  need not be the same  for  each  Participant)  as the
Committee  shall from time to time  approve,  and shall comply with
and be subject  to the terms and  conditions  of the Plan.  A Stock
Bonus may be awarded upon  satisfaction of such  performance  goals
as are set out in advance  in the  Participant's  individual  Award
Agreement (the  "Performance Stock Bonus Agreement")  that shall be
in such form (which need not be the same for each  Participant)  as
the  Committee  shall from time to time  approve,  and shall comply
with and be  subject  to the  terms  and  conditions  of the  Plan.
Stock  Bonuses  may  vary  from   Participant  to  Participant  and
between  groups  of  Participants,   and  may  be  based  upon  the
achievement  of  the  Company,  Parent,   Subsidiary  or  Affiliate
and/or individual  performance  factors or upon such other criteria
as the Committee may determine.

               7.2  Terms of Stock Bonuses.   The  Committee  shall
determine  the number of Shares to be  awarded  to the  Participant
and whether such Shares  shall be  Restricted  Stock.  If the Stock
Bonus is being earned upon the  satisfaction  of performance  goals
pursuant  to  a  Performance   Stock  Bonus  Agreement,   then  the
Committee  shall  determine:  (a) the nature,  length and  starting
date of any  period  during  which  performance  is to be  measured
(the   "Performance Period")   for  each  Stock   Bonus;   (b)  the
performance   goals  and   criteria  to  be  used  to  measure  the
performance,  if any;  (c) the number of Shares that may be awarded
to the  Participant;  and  (d)  the  extent  to  which  such  Stock
Bonuses  have been  earned.  Performance  Periods  may  overlap and
Participants may participate  simultaneously  with respect to Stock
Bonuses  that are  subject to  different  Performance  Periods  and
different  performance  goals and  other  criteria.  The  number of
Shares  may  be  fixed  or  may  vary  in   accordance   with  such
performance  goals  and  criteria  as  may  be  determined  by  the
Committee.   The  Committee  may  adjust  the   performance   goals
applicable  to the Stock  Bonuses to take into  account  changes in
law and  accounting  or tax rules and to make such  adjustments  as
the  Committee  deems  necessary  or  appropriate  to  reflect  the
impact of extraordinary  or unusual items,  events or circumstances
to avoid windfalls or hardships.

               7.3  Form of Payment.   The  earned   portion  of  a
Stock  Bonus may be paid  currently  or on a  deferred  basis  with
such  interest or  dividend  equivalent,  if any, as the  Committee
may  determine.  Payment  may be made in the  form of  cash,  whole
Shares,  including  Restricted  Stock,  or a  combination  thereof,
either  in a  lump  sum  payment  or in  installments,  all  as the
Committee shall determine.

               7.4  Termination During Performance Period.   If   a
Participant  is  Terminated  during a  Performance  Period  for any
reason,   then  such  Participant  shall  be  entitled  to  payment
(whether in Shares,  cash or  otherwise)  with respect to the Stock
Bonus only to the extent  earned as of the date of  Termination  in
accordance with the Performance  Stock Bonus Agreement,  unless the
Committee shall determine otherwise.

          8.   PAYMENT FOR SHARE PURCHASES.

               8.1  Payment.    Payment   for   Shares    purchased
pursuant  to the  Plan  may be made in cash (by  check)  or,  where
expressly  approved for the  Participant by the Committee and where
permitted by law:

          (a)  by  cancellation  of  indebtedness of the Company to
               the Participant;
(b)  by surrender  of shares that  either:  (1) have been
               owned by  Participant  for more than six (6)  months
               and have been paid for  within  the  meaning  of SEC
               Rule 144 (and,  if such shares were  purchased  from
               the Company by use of a promissory  note,  such note
               has been  fully paid with  respect to such  shares);
               or (2) were  obtained by  Participant  in the public
               market;

          (c)  by tender of a full recourse  promissory note having
               such terms as may be approved by the  Committee  and
               bearing  interest  at a  rate  sufficient  to  avoid
               imputation of income under  Sections 483 and 1274 of
               the Code; provided,  however,  that Participants who
               are  not  employees  of  the  Company  shall  not be
               entitled to purchase  Shares with a promissory  note
               unless the note is adequately  secured by collateral
               other than the Shares;  provided,  further, that the
               portion  of the  Purchase  Price  equal  to the  par
               value of the Shares, if any, must be paid in cash.

          (d)  by  waiver  of   compensation   due  or  accrued  to
               Participant for services rendered;

          (e)  by tender of property;

          (f)  with respect only to purchases  upon  exercise of an
               Option,  and provided  that a public  market for the
               Company's stock exists:

               (1)  through  a  "same  day  sale"  commitment  from
                    Participant  and  a  broker-dealer  that  is  a
                    member   of   the   National   Association   of
                    Securities  Dealers (a  "NASD Dealer")  whereby
                    the Participant  irrevocably elects to exercise
                    the  Option and to sell a portion of the Shares
                    so  purchased  to pay for the  Exercise  Price,
                    and  whereby   the  NASD   Dealer   irrevocably
                    commits  upon receipt of such Shares to forward
                    the Exercise Price directly to the Company; or

               (2)  through a "margin"  commitment from Participant
                    and   a   NASD   Dealer   whereby   Participant
                    irrevocably  elects to exercise  the Option and
                    to pledge the Shares so  purchased  to the NASD
                    Dealer in a margin  account as  security  for a
                    loan from the NASD  Dealer in the amount of the
                    Exercise  Price,  and  whereby  the NASD Dealer
                    irrevocably   commits   upon  receipt  of  such
                    Shares to forward the Exercise  Price  directly
                    to the Company;
          or

          (g)  by any combination of the foregoing.

               8.2  Loan Guarantees.  The  Committee  may  help the
Participant   pay  for   Shares   purchased   under   the  Plan  by
authorizing  a guarantee  by the Company of a  third-party  loan to
the Participant.
9.   WITHHOLDING TAXES.

               9.1  Withholding Generally.  Whenever  Shares are to
be issued in  satisfaction  of Awards  granted under the Plan,  the
Company  may  require  the  Participant  to remit to the Company an
amount  sufficient to satisfy federal,  state and local withholding
tax  requirements  prior  to the  delivery  of any  certificate  or
certificates for such Shares.  Whenever,  under the Plan,  payments
in  satisfaction  of Awards  are to be made in cash,  such  payment
shall be net of an amount  sufficient  to satisfy  federal,  state,
and local withholding tax requirements.

               9.2  Stock Withholding.  When,  under applicable tax
laws, a Participant  incurs tax  liability in  connection  with the
exercise   or   vesting  of  any  Award  that  is  subject  to  tax
withholding  and the  Participant  is  obligated to pay the Company
the amount  required to be withheld,  the  Committee  may allow the
Participant  to satisfy the minimum  withholding  tax obligation by
electing  to have  the  Company  withhold  from  the  Shares  to be
issued  that number of Shares  having a Fair Market  Value equal to
the minimum  amount  required  to be  withheld,  determined  on the
date that the  amount of tax to be  withheld  is to be  determined.
All  elections by a  Participant  to have Shares  withheld for this
purpose  shall  be  made  in  accordance   with  the   requirements
established   by  the  Committee  and  be  in  writing  in  a  form
acceptable to the Committee.

          10.  PRIVILEGES OF STOCK OWNERSHIP.

               10.1  Voting and Dividends.   No  Participant  shall
have  any  of the  rights  of a  shareholder  with  respect  to any
Shares  until  the  Shares  are  issued to the  Participant.  After
Shares are issued to the  Participant,  the Participant  shall be a
shareholder  and have all the rights of a shareholder  with respect
to such  Shares,  including  the  right  to vote  and  receive  all
dividends  or other  distributions  made or paid  with  respect  to
such Shares;  provided,  that if such Shares are Restricted  Stock,
then any new,  additional or different  securities the  Participant
may become  entitled  to  receive  with  respect to such  Shares by
virtue of a stock  dividend,  stock  split or any  other  change in
the  corporate  or  capital  structure  of  the  Company  shall  be
subject  to  the  same   restrictions  as  the  Restricted   Stock;
provided,  further,  that the  Participant  shall  have no right to
retain such stock  dividends  or stock  distributions  with respect
to  Shares  that  are  repurchased  at the  Participant's  original
Purchase Price pursuant to Section 12.

               10.2  Financial Statements.    The   Company   shall
provide  financial  statements  to each  Participant  prior to such
Participant's  purchase  of  Shares  under  the  Plan,  and to each
Participant   annually  during  the  period  such  Participant  has
Awards  outstanding;  provided,  however,  the Company shall not be
required  to provide  such  financial  statements  to  Participants
whose  services in connection  with the Company  assure them access
to equivalent information.

          11.  TRANSFERABILITY.  Awards  granted  under  the  Plan,
and any interest  therein,  shall not be transferable or assignable
by  Participant,   and  may  not  be  made  subject  to  execution,
attachment  or similar  process,  otherwise  than by will or by the
laws  of  descent  and  distribution  or  as  consistent  with  the
specific  Plan and Award  Agreement  provisions  relating  thereto.
During  the  lifetime  of  the   Participant   an  Award  shall  be
exercisable  only  by  the  Participant,  and  any  elections  with
respect to an Award, may be made only by the Participant.
12.  RESTRICTIONS ON SHARES.  At  the  discretion  of the
Committee,   the  Company   may   reserve  to  itself   and/or  its
assignee(s)  in the Award  Agreement  (a) a right of first  refusal
to  purchase  all  Shares  that  a  Participant  (or  a  subsequent
transferee)  may propose to transfer to a third  party,  and/or (b)
a  right  to  repurchase  a  portion  of or all  Shares  held  by a
Participant  following such  Participant's  Termination at any time
within   ninety   (90)  days  after  the  later  of   Participant's
Termination  Date and the date  Participant  purchases Shares under
the   Plan,   for   cash  or   cancellation   of   purchase   money
indebtedness,  at:  (A) with  respect to Shares  that are  "Vested"
(as   defined  in  the  Award   Agreement),   the  higher  of:  (l)
Participant's  original  Purchase  Price,  or (2) the  Fair  Market
Value of such Shares on Participant's  Termination Date,  provided,
that  such  right of  repurchase  (i) must be  exercised  as to all
such  "Vested"   Shares  unless  a  Participant   consents  to  the
Company's  repurchase  of only a portion  of such  "Vested"  Shares
and (ii) terminates when the Company's  securities  become publicly
traded;  or (B) with  respect to Shares that are not  "Vested"  (as
defined  in the Award  Agreement),  at the  Participant's  original
Purchase Price.

          13.  CERTIFICATES.  All  certificates for Shares or other
securities  delivered  under  the  Plan  shall be  subject  to such
stock  transfer  orders,  legends  and  other  restrictions  as the
Committee may deem necessary or advisable,  including  restrictions
under any applicable  federal,  state or foreign securities law, or
any rules,  regulations  and other  requirements  of the SEC or any
stock  exchange  or  automated  quotation  system  upon  which  the
Shares may be listed.

          14.  ESCROW; PLEDGE OF SHARES.     To     enforce     any
restrictions on a Participant's  Shares,  the Committee may require
the Participant to deposit all  certificates  representing  Shares,
together  with  stock  powers  or  other  instruments  of  transfer
approved by the Committee,  appropriately  endorsed in blank,  with
the  Company  or an  agent  designated  by the  Company  to hold in
escrow until such restrictions  have lapsed or terminated,  and the
Committee   may  cause  a  legend  or  legends   referencing   such
restrictions  to be placed  on the  certificates.  Any  Participant
who is permitted  to execute a  promissory  note as partial or full
consideration  for the  purchase of Shares  under the Plan shall be
required  to pledge and  deposit  with the  Company  all or part of
the Shares so  purchased  as  collateral  to secure the  payment of
Participant's  obligation  to  the  Company  under  the  promissory
note; provided,  however,  that the Committee may require or accept
other or  additional  forms of  collateral to secure the payment of
such  obligation  and, in any event,  the  Company  shall have full
recourse   against  the  Participant   under  the  promissory  note
notwithstanding  any  pledge of the  Participant's  Shares or other
collateral.   In   connection   with  any  pledge  of  the  Shares,
Participant  shall be  required  to execute  and  deliver a written
pledge  agreement in such form as the Committee  shall from time to
time approve.  The Shares  purchased with the  promissory  note may
be released  from the pledge on a prorata  basis as the  promissory
note is paid.

          15.  EXCHANGE AND BUYOUT OF AWARDS.  The  Committee  may,
at any time or from time to time,  authorize the Company,  with the
consent  of the  respective  Participants,  to issue new  Awards in
exchange  for  the  surrender  and   cancellation  of  any  or  all
outstanding  Awards.  The  Committee  may at any  time  buy  from a
Participant  an Award  previously  granted  with  payment  in cash,
Shares (including  Restricted Stock) or other consideration,  based
on such terms and  conditions as the Committee and the  Participant
shall agree.
16.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.   An
Award shall not be  effective  unless  such Award is in  compliance
with all applicable  federal and state  securities  laws, rules and
regulations of any  governmental  body, and the requirements of any
stock  exchange  or  automated  quotation  system  upon  which  the
Shares  may then be  listed,  as they are in  effect on the date of
grant  of the  Award  and  also on the  date of  exercise  or other
issuance.  Notwithstanding  any other  provision  in the Plan,  the
Company shall have no  obligation to issue or deliver  certificates
for Shares  under the Plan  prior to (a)  obtaining  any  approvals
from  governmental   agencies  that  the  Company   determines  are
necessary or advisable,  and/or (b) completion of any  registration
or other  qualification  of such shares  under any state or federal
law  or  ruling  of  any   governmental   body  that  the   Company
determines  to be  necessary  or  advisable.  The Company  shall be
under no  obligation  to  register  the  Shares  with the SEC or to
effect compliance with the  registration,  qualification or listing
requirements  of any  state  securities  laws,  stock  exchange  or
automated   quotation  system,   and  the  Company  shall  have  no
liability for any inability or failure to do so.

          17.  NO OBLIGATION TO EMPLOY.  Nothing  in  the  Plan  or
any  Award  granted  under  the Plan  shall  confer or be deemed to
confer on any  Participant  any right to continue in the employ of,
or to  continue  any other  relationship  with,  the Company or any
Parent,  Subsidiary  or  Affiliate  of the  Company or limit in any
way  the  right  of  the  Company  or  any  Parent,  Subsidiary  or
Affiliate of the Company to terminate  Participant's  employment or
other relationship at any time, with or without cause.

          18.  CORPORATE TRANSACTIONS.

               18.1 Corporate  Transactions.  In  the  event  of  a
Corporate  Transaction  (as  defined  in this  Section  18.1),  the
exercisability  of each Option shall be  automatically  accelerated
so  that  each  Option  shall,  immediately  before  the  specified
effective  date  for  the  Corporate   Transaction,   become  fully
exercisable  with  respect to the total number of Shares and may be
exercised  for all or any portion of such  Shares;  provided,  that
an Option shall not be  accelerated  if and to the extent that such
Option is, in  connection  with the Corporate  Transaction,  either
to be assumed by the  successor  corporation  or parent  thereof or
to be replaced with a comparable  option to purchase  shares of the
capital  stock of the  successor  corporation  or  parent  thereof.
The  determination of  comparability  shall be made by the Board or
the  Committee,  and the  Board  or the  Committee's  determination
shall be final,  binding and conclusive.  Upon the  consummation of
a Corporate  Transaction,  all  outstanding  Options shall,  to the
extent  not  previously  exercised  or  assumed  by  the  successor
corporation or its parent, terminate and cease to be exercisable.

                    "Corporate  Transaction"  means (i) a merger or
acquisition  in  which  the  Company  is not the  surviving  entity
(except  for a  transaction  the  principal  purpose of which is to
change the State in which the  Company is  incorporated),  (ii) the
sale,  transfer or other  disposition of all or  substantially  all
of  the  assets  of  the  Company  or  (iii)  any  other  corporate
reorganization  or  business  combination  that is not  approved by
the Board and in which the  beneficial  ownership of 50% or more of
the Company's outstanding voting stock is transferred.

               18.2 Dissolution.  In  the  event  of  the  proposed
dissolution or  liquidation of the Company,  the Board shall notify
the  Optionee  at least  fifteen  (15) days prior to such  proposed
action.  To the  extent  that  Options  have  not  been  previously
exercised,  such Options will  terminate  immediately  prior to the
consummation of such proposed action.
18.3 Assumption  of  Awards  by  the  Company.   The
Company,   from  time  to  time,  also  may  substitute  or  assume
outstanding   awards  granted  by  another   company,   whether  in
connection   with  an   acquisition   of  such  other   company  or
otherwise,  by either  (a)  granting  an Option  under this Plan in
substitution of such other company's  Option,  or (b) assuming such
Option as if it had been  granted  under  this Plan if the terms of
such  assumed  Option could be applied to an Option  granted  under
this Plan.  Such  substitution  or assumption  shall be permissible
if the  holder of the  substituted  or  assumed  Option  would have
been  eligible to be granted an Option  under the Plan if the other
company had  applied  the rules of the Plan to such  grant.  In the
event the  Company  assumes an Option  granted by another  company,
the terms and  conditions  of such Option  shall  remain  unchanged
(except  that the  Exercise  Price  and the  number  and  nature of
Shares  issuable  upon exercise of any such option will be adjusted
appropriately  pursuant  to  Section  424(a) of the  Code).  In the
event  the  Company  elects  to  grant  a new  Option  rather  than
assuming an existing  option,  such new Option may be granted  with
a similarly adjusted Exercise Price.

          19.  ADOPTION AND SHAREHOLDER APPROVAL.  The  Plan  shall
become  effective on the closing of the first  registration  of the
Company's   Common   Stock  for  sale  to  the  public   under  the
Securities   Act  (the   "Effective Date").   The  Plan   shall  be
approved  by the  shareholders  of the  Company  (excluding  Shares
issued pursuant to this Plan),  consistent  with  applicable  laws,
within  twelve  (12)  months  before  or after the date the Plan is
adopted  by the  Board.  Upon the  Effective  Date,  the  Board may
grant Awards  pursuant to the Plan;  provided,  however,  that: (a)
no Option may be exercised  prior to initial  shareholder  approval
of the Plan; (b) no Option  granted  pursuant to an increase in the
number of Shares  approved  by the Board shall be  exercised  prior
to the time such  increase  has been  approved by the  shareholders
of the Company;  and (c) in the event that shareholder  approval of
the  increase  is not  obtained  within  the time  period  provided
herein,  all Awards  granted  hereunder  pursuant to such  increase
shall be  canceled,  any Shares  issued  pursuant to any Award made
pursuant to such  increase  shall be canceled  and any  purchase of
Shares hereunder pursuant to such increase shall be rescinded.

          20.  TERM OF PLAN.  The  Plan  will  terminate  ten  (10)
years  from the  date  the Plan is  adopted  by the  Board  or,  if
earlier, the date of shareholder approval.

          21.  AMENDMENT OR TERMINATION OF PLAN.  The  Board may at
any time  terminate  or amend  the Plan in any  respect,  including
without  limitation  amendment  of any form of Award  Agreement  or
instrument  to  be  executed   pursuant  to  the  Plan;   provided,
however,  that the Board  shall not,  without  the  approval of the
shareholders  of the  Company,  amend the Plan in any  manner  that
requires  such  shareholder  approval  pursuant  to the Code or the
regulations  promulgated  thereunder  as such  provisions  apply to
ISO plans.

          22.  NONEXCLUSIVITY OF THE PLAN.   Neither  the  adoption
of the  Plan  by the  Board,  the  submission  of the  Plan  to the
shareholders  of the Company for  approval,  nor any  provision  of
the Plan shall be  construed  as creating  any  limitations  on the
power  of  the  Board  to  adopt   such   additional   compensation
arrangements   as  it  may  deem  desirable,   including,   without
limitation,  the  granting of stock  options and bonuses  otherwise
than  under  the  Plan,  and  such   arrangements   may  be  either
generally applicable or applicable only in specific cases.
23.  DEFINITIONS.  As used  in the  Plan,  the  following
terms shall have the following meanings:

               "Affiliate" means any corporation that directly,  or
indirectly  through  one or  more  intermediaries,  controls  or is
controlled   by,  or  is  under  common   control   with,   another
corporation,  where "control"  (including the terms "controlled by"
and "under common  control with") means the  possession,  direct or
indirect,  of the power to cause the  direction  of the  management
and policies of the  corporation,  whether through the ownership of
voting securities, by contract or otherwise.

               "Award"  means any award  under the Plan,  including
any Option, Restricted Stock or Stock Bonus.

               "Award Agreement"   means,   with  respect  to  each
Award,  the signed  written  agreement  between the Company and the
Participant setting forth the terms and conditions of the Award.

               "Board" means the Board of Directors of the Company.

               "Code" means the Internal  Revenue Code of 1986,  as
amended.

               "Committee"  means the  committee  appointed  by the
Board to  administer  the Plan,  or if no committee  is  appointed,
the Board.

               "Company" means Information  Storage Devices,  Inc.,
a   corporation   organized   under   the  laws  of  the  State  of
California, or any successor corporation.

               "Disability"  means a disability,  whether temporary
or  permanent,  partial  or total,  within  the  meaning of Section
22(e)(3) of the Code, as determined by the Committee.

               "Exchange Act"  means the Securities Exchange Act of
1934, as amended.

               "Exercise Price"  means  the price at which a holder
of an Option may  purchase  the Shares  issuable  upon  exercise of
the Option.
"Fair Market Value"  means,  as  of  any  date,  the
value  of a share  of the  Company's  Common  Stock  determined  as
follows:

          (a)  if such  Common  Stock is then  quoted on the Nasdaq
               National  Market,  its  closing  price on the Nasdaq
               National  Market  on the last  trading  day prior to
               the date of  determination  as reported in The Wall 
               Street Journal;

          (b)  if such Common Stock is publicly  traded and is then
               listed  on  a  national  securities  exchange,   its
               closing  price on the last  trading day prior to the
               date  of  determination  on the  principal  national
               securities  exchange  on which the  Common  Stock is
               listed or  admitted  to trading as  reported in The 
               Wall Street Journal;

          (c)  if such Common  Stock is publicly  traded but is not
               quoted on the Nasdaq  National  Market nor listed or
               admitted   to  trading  on  a  national   securities
               exchange,  the  average of the closing bid and asked
               prices on the last  trading day prior to the date of
               determination  as  reported  by  The  Wall  Street  
               Journal; or

          (d)  if  none  of the  foregoing  is  applicable,  by the
               Board in good faith.

               "Insider"  means  an  officer  or  director  of  the
Company or any other person  whose  transactions  in the  Company's
Common Stock are subject to Section 16 of the Exchange Act.

               "Outside  Director"  means any  director  who is not
(a) a current  employee of the  Company or any  Parent,  Subsidiary
or Affiliate of the Company,  (b) a former  employee of the Company
or any  Parent,  Subsidiary  or  Affiliate  of the  Company  who is
receiving  compensation  for prior  services  (other than  benefits
under a  tax-qualified  pension  plan),  (c) a  current  or  former
officer of the Company or any Parent,  Subsidiary  or  Affiliate of
the Company or (d) currently  receiving  compensation  for personal
services  in any  capacity,  other  than as a  director,  from  the
Company or any Parent,  Subsidiary  or  Affiliate  of the  Company;
provided,   however,  that  at  such  time  as  the  term  "Outside
Director",  as used in Section  162(m) is  defined  in  regulations
promulgated  under Section 162(m) of the Code,  "Outside  Director"
shall have the  meaning set forth in such  regulations,  as amended
from  time to  time  and as  interpreted  by the  Internal  Revenue
Service.

               "Option"  means an award of an  option  to  purchase
Shares pursuant to Section 5.

               "Parent"  means  any  corporation  (other  than  the
Company)  in an  unbroken  chain of  corporations  ending  with the
Company,  if at the  time of the  granting  of an Award  under  the
Plan, each of such  corporations  other than the Company owns stock
possessing  50% or more of the total  combined  voting power of all
classes of stock in one of the other corporations in such chain.
"Participant"  means a person who  receives an Award
under the Plan.

               "Plan" means this Information Storage Devices,  Inc.
1994 Equity Incentive Plan, as amended from time to time.

               "Restricted Stock Award"  means an  award of  Shares
pursuant to Section 6.

               "SEC" means the Securities and Exchange Commission.

               "Securities Act"  means the  Securities Act of 1933,
as amended.

               "Shares" means shares of the Company's  Common Stock
reserved  for  issuance  under the Plan,  as  adjusted  pursuant to
Sections 2 and 15, and any successor security.

               "Stock Bonus"  means an award of Shares,  or cash in
lieu of Shares, pursuant to Section 7.

               "Subsidiary"  means any corporation  (other than the
Company) in an unbroken  chain of  corporations  beginning with the
Company  if,  at the time of  granting  of the  Award,  each of the
corporations  other  than  the  last  corporation  in the  unbroken
chain  owns  stock  possessing  50% or more of the  total  combined
voting  power  of  all  classes  of  stock  in  one  of  the  other
corporations in such chain.

               "Termination"  or "Terminated"  means,  for purposes
of the Plan with  respect to a  Participant,  that the  Participant
has  ceased  to  provide   services  as  an   employee,   director,
consultant,  independent  contractor or adviser,  to the Company or
a Parent,  Subsidiary  or Affiliate  of the Company,  except in the
case of sick leave,  military  leave, or any other leave of absence
approved  by the  Committee,  provided,  that  such  leave is for a
period of not more than ninety  (90) days,  or  reinstatement  upon
the   expiration  of  such  leave  is  guaranteed  by  contract  or
statute.  The  Committee  shall have sole  discretion  to determine
whether a  Participant  has  ceased  to  provide  services  and the
effective  date  on  which  the   Participant   ceased  to  provide
services (the "Termination Date").
EXHIBIT 4.02

                  INFORMATION STORAGE DEVICES, INC.

                  1994 EMPLOYEE STOCK PURCHASE PLAN

                  As Adopted on September 12, 1994
                 As Amended through December 3, 1997

           1.   ESTABLISHMENT OF PLAN.  Information  Storage Devices,
Inc.  (the  "Company")  proposes to grant options for purchase of the
Company's  Common Stock to eligible  employees of the Company and its
Subsidiaries  (as  hereinafter  defined)  pursuant  to this  Employee
Stock  Purchase  Plan  (this  "Plan").  For  purposes  of this  Plan,
"Parent     Corporation"     and     "Subsidiary"      (collectively,
"Subsidiaries")   shall   have   the   same   meanings   as   "parent
corporation"  and  "subsidiary  corporation"  in Sections  424(e) and
424(f),  respectively,  of the  Internal  Revenue  Code of  1986,  as
amended  (the  "Code").  The  Company  intends the Plan to qualify as
an  "employee  stock  purchase  plan"  under  Section 423 of the Code
(including any amendments to or  replacements  of such Section),  and
the Plan shall be so  construed.  Any term not  expressly  defined in
the Plan but  defined  for  purposes of Section 423 of the Code shall
have the same  definition  herein.  A total of 170,000  shares of the
Company's  Common  Stock is  reserved  for  issuance  under the Plan.
Such number shall be subject to  adjustments  effected in  accordance
with Section 14 of the Plan.

           2    PURPOSE.  The  purpose  of  the  Plan  is to  provide
employees  of the Company and  Subsidiaries  designated  by the Board
of   Directors   of  the  Company   (the   "Board")  as  eligible  to
participate  in the Plan  with a  convenient  means of  acquiring  an
equity  interest  in  the  Company  through  payroll  deductions,  to
enhance  such  employees'  sense of  participation  in the affairs of
the  Company  and  Subsidiaries,  and to  provide  an  incentive  for
continued employment.

           3.   ADMINISTRATION.  This  Plan  may be  administered  by
the Board or a committee  appointed  by the Board (the  "Committee").
As  used in this  Plan,  references  to the  "Committee"  shall  mean
either  such  committee  or  the  Board  if  no  committee  has  been
established.   Subject  to  the   provisions  of  the  Plan  and  the
limitations  of Section  423 of the Code or any  successor  provision
in the Code,  all questions of  interpretation  or application of the
Plan  shall be  determined  by the Board and its  decisions  shall be
final  and  binding  upon  all  participants.  Members  of the  Board
shall receive no  compensation  for their services in connection with
the   administration  of  the  Plan,  other  than  standard  fees  as
established  from time to time by the Board for services  rendered by
Board  members  serving on Board  committees.  All expenses  incurred
in connection  with the  administration  of the Plan shall be paid by
the Company.

           4.  ELIGIBILITY.  Any  employee  of  the  Company  or  the
Subsidiaries  is eligible to  participate  in an Offering  Period (as
hereinafter defined) under the Plan except the following:

           (a)  employees  who are not  employed  by the  Company  or
Subsidiaries   fifteen  (15)  days  before  the   beginning  of  such
Offering Period;

           (b) employees who are  customarily  employed for less than
twenty (20) hours per week;
(c) employees who are  customarily  employed for less than
five (5) months in a calendar year;

           (d)  employees  who,  together with any other person whose
stock  would be  attributed  to such  employee  pursuant  to  Section
424(d) of the Code,  own stock or hold  options to purchase  stock or
who,  as a result  of being  granted  an  option  under the Plan with
respect to such Offering  Period,  would own stock or hold options to
purchase  stock  possessing  5 percent or more of the total  combined
voting  power or value of all  classes of stock of the Company or any
of its Subsidiaries.

           5.  OFFERING  DATES.  The  Offering  Periods  of the  Plan
(the  "Offering  Period")  shall be of 6 months  duration  commencing
February  1 and  August  1 of each  year  and  ending  on July 31 and
January 31  respectively,  during  which  payroll  deductions  of the
participant  are  accumulated  under this Plan. The first day of each
Offering  Period is  referred  to as the  "Offering  Date".  The last
business  day  of  each  Offering   Period  is  referred  to  as  the
"Purchase  Date".  The  Board  shall  have the  power to  change  the
duration  of  Offering  Periods  with  respect  to  future  offerings
without  shareholder  approval if such change is  announced  at least
fifteen  (15)  days  prior to the  scheduled  beginning  of the first
Offering Period to be affected.

           6.  PARTICIPATION  IN THE  PLAN.  Eligible  employees  may
become  participants  in an  Offering  Period  under  the Plan on the
first  Offering Date after  satisfying the  eligibility  requirements
by   delivering  a   subscription   agreement  to  the  Company's  or
Subsidiary's  (whichever employs such employee)  treasury  department
(the  "Treasury Department")  not  later  than  the  15th  day of the
month  before such  Offering  Date unless a later time for filing the
subscription  agreement  authorizing payroll deductions is set by the
Board for all eligible  employees  with  respect to a given  Offering
Period.  An eligible  employee  who does not  deliver a  subscription
agreement  to the  Treasury  Department  by such date after  becoming
eligible  to   participate   in  such   Offering   Period  shall  not
participate  in  that  Offering  Period  or any  subsequent  Offering
Period  unless  such  employee  enrolls  in  the  Plan  by  filing  a
subscription  agreement  with the Treasury  Department not later than
the 15th day of the  month  preceding  a  subsequent  Offering  Date.
Once an employee  becomes a participant in an Offering  Period,  such
employee  will  automatically  participate  in  the  Offering  Period
commencing  immediately  following the last day of the prior Offering
Period  unless the  employee  withdraws  from the Plan or  terminates
further  participation  in  the  Offering  Period  as  set  forth  in
Section  11  below.  Such  participant  is not  required  to file any
additional    subscription    agreement    in   order   to   continue
participation in the Plan.

           7.  GRANT  OF  OPTION  ON  ENROLLMENT.  Enrollment  by  an
eligible  employee  in the Plan with  respect to an  Offering  Period
will  constitute  the grant (as of the Offering  Date) by the Company
to such  employee of an option to purchase  on the  Purchase  Date up
to that number of shares of Common  Stock of the  Company  determined
by  dividing  the  amount  accumulated  in  such  employee's  payroll
deduction  account  during such  Offering  Period by the lower of (i)
eighty-five  percent  (85%)  of the fair  market  value of a share of
the Company's  Common Stock on the Offering Date or  (ii) eighty-five
percent  (85%) of the fair market  value of a share of the  Company's
Common  Stock  on the  Purchase  Date;  provided,  however,  that the
number  of  shares  of the  Company's  Common  Stock  subject  to any
option  granted  pursuant to this Plan shall not exceed the lesser of
(a) the  maximum  number  of  shares  set by the  Board  pursuant  to
Section 10(c) below with respect to the applicable  Offering  Period,
or (b) the maximum  number of shares which may be purchased  pursuant
to Section  10(b)  below  with  respect  to the  applicable  Offering
Period.  Fair market value of a share of the  Company's  Common Stock
shall be determined as provided in Section 8 hereof.
8.  PURCHASE  PRICE.  The  purchase  price  per  share  at
which a share of Common  Stock  will be sold in any  Offering  Period
shall be eighty-five percent (85%) of the lesser of:

           (a)  The fair market value on the Offering Date; or

           (b)  The fair market value on the Purchase Date.

           For purposes of the Plan the term "fair  market  value" on
a given  date  shall  mean the  fair  market  value of the  Company's
Common  Stock as  determined  by the  Board  in its sole  discretion,
exercised  in good faith;  provided,  however,  that where there is a
public market for the Common  Stock,  the fair market value per share
shall be the  average  of the  closing  bid and  asked  prices of the
Common   Stock  on  the  last  trading  day  prior  to  the  date  of
determination,  as reported in The Wall Street  Journal (or if not so
reported,  as otherwise reported by the Nasdaq Stock Market),  or, in
the event the Common  Stock is listed on a stock  exchange  or on the
Nasdaq  National  Market,  the fair  market  value per share shall be
the closing  price on the exchange or on the Nasdaq  National  Market
on the  last  trading  date  prior to the  date of  determination  as
reported in The Wall Street Journal.

           9.  PAYMENT  OF  PURCHASE  PRICE;   CHANGES  IN  PAYROLL  
DEDUCTIONS; ISSUANCE OF SHARES.

           (a) The  purchase  price of the shares is  accumulated  by
regular  payroll  deductions  made during each Offering  Period.  The
deductions   are   made  as  a   percentage   of  the   participant's
compensation  in one  percent  (1%)  increments  not  less  than  two
percent  (2%),  nor  greater  than ten percent  (10%),  not to exceed
$25,000  per  year  or  such  lower  limit  set  by  the   Committee.
Compensation  shall  mean all W-2  compensation,  including,  but not
limited  to  base  salary,  wages,   commissions,   overtime,   shift
premiums  and  bonuses,  plus draws  against  commissions;  provided,
however,   that  for   purposes  of   determining   a   participant's
compensation,  any election by such  participant to reduce his or her
regular cash  remuneration  under  Sections 125 or 401(k) of the Code
shall be treated as if the  participant  did not make such  election.
Payroll  deductions  shall commence on the first payday following the
Offering  Date and shall  continue to the end of the Offering  Period
unless sooner altered or terminated as provided in the Plan.

           (b) A  participant  may lower (but not  increase) the rate
of payroll  deductions  during an Offering  Period by filing with the
Treasury  Department a new authorization for payroll  deductions,  in
which case the new rate shall become  effective  for the next payroll
period  commencing  more than  fifteen  (15) days after the  Treasury
Department's  receipt of the  authorization  and shall  continue  for
the  remainder of the  Offering  Period  unless  changed as described
below.  Such  change in the rate of  payroll  deductions  may be made
at any time during an Offering  Period,  but not more than one change
may be made  effective  during any  Offering  Period.  A  participant
may  increase  or  decrease  the rate of payroll  deductions  for any
subsequent  Offering Period by filing with the Treasury  Department a
new  authorization  for  payroll  deductions  not later than the 15th
day of the month before the beginning of such Offering Period.
(c) All  payroll  deductions  made for a  participant  are
credited  to his or her  account  under  the Plan  and are  deposited
with the general  funds of the  Company.  No interest  accrues on the
payroll  deductions.  All payroll deductions  received or held by the
Company  may be used by the Company for any  corporate  purpose,  and
the  Company  shall  not  be  obligated  to  segregate  such  payroll
deductions.

           (d) On each  Purchase  Date,  so long as the Plan  remains
in effect and  provided  that the  participant  has not  submitted  a
signed  and  completed   withdrawal   form  before  that  date  which
notifies the Company  that the  participant  wishes to withdraw  from
that Offering  Period under the Plan and have all payroll  deductions
accumulated  in the account  maintained on behalf of the  participant
as of that  date  returned  to the  participant,  the  Company  shall
apply the funds then in the  participant's  account  to the  purchase
of whole shares of Common  Stock  reserved  under the option  granted
to such  participant  with  respect  to the  Offering  Period  to the
extent that such option is  exercisable  on the  Purchase  Date.  The
purchase  price per share shall be as  specified  in Section 8 of the
Plan.  Any cash  remaining  in a  participant's  account  after  such
purchase of shares  shall be refunded  to such  participant  in cash,
without  interest;  provided,  however,  that any amount remaining in
such  participant's  account  on a  Purchase  Date which is less than
the amount  necessary  to  purchase  a full share of Common  Stock of
the Company  shall be carried  forward,  without  interest,  into the
next  Offering   Period.   In  the  event  that  the  Plan  has  been
oversubscribed,  all  funds  not  used  to  purchase  shares  on  the
Purchase  Date  shall  be  returned  to  the   participant,   without
interest.  No Common Stock shall be  purchased on a Purchase  Date on
behalf  of  any  employee  whose   participation   in  the  Plan  has
terminated prior to such Purchase Date.

           (e) As promptly as  practicable  after the Purchase  Date,
the Company  shall  arrange the  delivery  to each  participant  of a
certificate  representing  the shares  purchased upon exercise of his
option.

           (f) During a participant's  lifetime,  such  participant's
option to purchase  shares  hereunder is  exercisable  only by him or
her.  The  participant  will  have no  interest  or  voting  right in
shares  covered  by his or her  option  until  such  option  has been
exercised.  Shares to be  delivered to a  participant  under the Plan
will be registered in the name of the  participant  or in the name of
the participant and his or her spouse.

           10. LIMITATIONS ON SHARES TO BE PURCHASED.  

           (a) No  employee  shall  be  entitled  to  purchase  stock
under  the  Plan at a rate  which,  when  aggregated  with his or her
rights to purchase  stock  under all other  employee  stock  purchase
plans of the  Company  or any  Subsidiary,  exceeds  $25,000  in fair
market  value,  determined  as of the  Offering  Date (or such  other
limit  as may be  imposed  by the  Code)  for each  calendar  year in
which the employee participates in the Plan.

           (b)  No  more  than  two  hundred  percent  (200%)  of the
number of shares  determined  by using  eighty-five  percent (85%) of
the fair market  value of a share of the  Company's  Common  Stock on
the  Offering  Date  as  the   denominator  may  be  purchased  by  a
participant on any single Purchase Date.
(c) No employee  shall be  entitled to purchase  more than
the Maximum  Share Amount (as defined  below) on any single  Purchase
Date.  Not less than  thirty (30) days prior to the  commencement  of
any Offering  Period,  the Board may, in its sole  discretion,  set a
maximum  number of shares  which may be  purchased by any employee at
any single  Purchase Date  (hereinafter  the "Maximum Share Amount").
In no event  shall  the  Maximum  Share  Amount  exceed  the  amounts
permitted  under Section  10(b) above.  If a new Maximum Share Amount
is set,  then  all  participants  must be  notified  of such  Maximum
Share   Amount  not  less  than   fifteen  (15)  days  prior  to  the
commencement  of the next  Offering  Period.  Once the Maximum  Share
Amount  is set,  it shall  continue  to  apply  with  respect  to all
succeeding  Purchase  Dates and Offering  Periods  unless  revised by
the Board as set forth above.

           (d)  If  the  number  of  shares  to  be  purchased  on  a
Purchase  Date by all  employees  participating  in the Plan  exceeds
the number of shares  then  available  for  issuance  under the Plan,
the Company will make a pro rata  allocation of the remaining  shares
in as  uniform  a manner  as shall be  practicable  and as the  Board
shall  determine to be  equitable.  In such event,  the Company shall
give written  notice of such  reduction of the number of shares to be
purchased under a participant's  option to each participant  affected
thereby.

           (e)   Any   payroll    deductions    accumulated    in   a
participant's  account  which are not used to  purchase  stock due to
the  limitations  in  this  Section  10  shall  be  returned  to  the
participant  as soon as  practicable  after  the end of the  Offering
Period, without interest.

           11. WITHDRAWAL.

           (a)  Each   participant  may  withdraw  from  an  Offering
Period  under the Plan by  signing  and  delivering  to the  Treasury
Department  notice  on  a  form  provided  for  such  purpose.   Such
withdrawal  may be  elected  at any time at least  fifteen  (15) days
prior to the end of an Offering Period.

           (b)  Upon   withdrawal  from  the  Plan,  the  accumulated
payroll  deductions  shall be returned to the withdrawn  participant,
without  interest,  and  his  or  her  interest  in  the  Plan  shall
terminate.   In  the  event  a  participant   voluntarily  elects  to
withdraw  from  the  Plan,  he or  she  may  not  resume  his  or her
participation  in the Plan during the same  Offering  Period,  but he
or she may  participate  in any Offering  Period under the Plan which
commences on a date  subsequent  to such  withdrawal  by filing a new
authorization  for  payroll  deductions  in the  same  manner  as set
forth above for initial participation in the Plan.

           12. TERMINATION   OF   EMPLOYMENT.    Termination   of   a
participant's   employment  for  any  reason,  including  retirement,
death  or  the  failure  of  a  participant  to  remain  an  eligible
employee,  immediately  terminates  his or her  participation  in the
Plan.  In  such  event,  the  payroll  deductions   credited  to  the
participant's  account  will be  returned  to him or her  or,  in the
case  of his  or her  death,  to  his  or her  legal  representative,
without  interest.  For  purposes  of this  Section  12, an  employee
will  not be  deemed  to have  terminated  employment  or  failed  to
remain in the  continuous  employ of the  Company in the case of sick
leave,  military  leave,  or any other  leave of absence  approved by
the  Board;  provided  that  such  leave is for a period  of not more
than ninety (90) days or  reemployment  upon the  expiration  of such
leave is guaranteed by contract or statute.

           13. RETURN  OF   PAYROLL   DEDUCTIONS.   In  the  event  a
participant's  interest  in the  Plan is  terminated  by  withdrawal,
termination  of employment or otherwise,  or in the event the Plan is
terminated by the Board,  the Company shall  promptly  deliver to the
participant  all  payroll  deductions  credited  to his  account.  No
interest  shall accrue on the payroll  deductions of a participant in
the Plan.
14. CAPITAL  CHANGES.  Subject to any  required  action by
the  shareholders  of the  Company,  the  number  of shares of Common
Stock  covered by each  option  under the Plan which has not yet been
exercised  and the number of shares of Common  Stock  which have been
authorized  for issuance  under the Plan but have not yet been placed
under option  (collectively,  the  "Reserves"),  as well as the price
per share of  Common  Stock  covered  by each  option  under the Plan
which has not yet been exercised,  shall be proportionately  adjusted
for any  increase  or  decrease  in the  number of  issued  shares of
Common Stock  resulting  from a stock split or the payment of a stock
dividend  (but only on the  Common  Stock) or any other  increase  or
decrease  in the number of shares of Common  Stock  effected  without
receipt of  consideration  by the Company;  provided,  however,  that
conversion  of any  convertible  securities  of the Company shall not
be   deemed   to   have   been   "effected    without    receipt   of
consideration".  Such  adjustment  shall be made by the Board,  whose
determination  shall be  final,  binding  and  conclusive.  Except as
expressly  provided  herein,  no issue by the  Company  of  shares of
stock of any class,  or securities  convertible  into shares of stock
of any class,  shall  affect,  and no  adjustment  by reason  thereof
shall be made  with  respect  to,  the  number  or price of shares of
Common Stock subject to an option.

           In the event of the proposed  dissolution  or  liquidation
of the  Company,  the  Offering  Period  will  terminate  immediately
prior to the consummation of such proposed  action,  unless otherwise
provided  by the Board.  The Board may,  in the  exercise of its sole
discretion  in such  instances,  declare  that the options  under the
Plan  shall  terminate  as of a date fixed by the Board and give each
participant  the  right to  exercise  his or her  option as to all of
the optioned  stock,  including  shares which would not  otherwise be
exercisable.   In  the   event   of  a   proposed   sale  of  all  or
substantially  all of the  assets of the  Company,  or the  merger of
the Company with or into another  corporation,  each option under the
Plan shall be assumed or an  equivalent  option shall be  substituted
by such  successor  corporation  or a parent  or  subsidiary  of such
successor corporation,  unless the Board determines,  in the exercise
of  its  sole   discretion   and  in  lieu  of  such   assumption  or
substitution,  that the participant  shall have the right to exercise
the option as to all of the  optioned  stock.  If the Board  makes an
option  exercisable  in lieu of  assumption  or  substitution  in the
event of a merger or sale of  assets,  the  Board  shall  notify  the
participant  that the option shall be fully  exercisable for a period
of  twenty  (20) days from the date of such  notice,  and the  option
will terminate upon the expiration of such period.

           The Board may, if it so  determines in the exercise of its
sole discretion,  also make provision for adjusting the Reserves,  as
well  as the  price  per  share  of  Common  Stock  covered  by  each
outstanding  option,  in the event that the  Company  effects  one or
more  reorganizations,  recapitalizations,  rights offerings or other
increases or  reductions of shares of its  outstanding  Common Stock,
or in the  event of the  Company  being  consolidated  with or merged
into any other corporation.

           15. NONASSIGNABILITY.     Neither    payroll    deductions
credited  to a  participant's  account  nor any rights with regard to
the  exercise  of an option or to receive  shares  under the Plan may
be assigned,  transferred,  pledged or  otherwise  disposed of in any
way (other than by will, the laws of descent and  distribution  or as
provided  in  Section  22  hereof)  by  the  participant.   Any  such
attempt at assignment,  transfer,  pledge or other  disposition shall
be without effect.
16. REPORTS.  Individual  accounts will be maintained  for
each  participant  in  the  Plan.  Each  participant   shall  receive
promptly  after  the end of each  Offering  Period a report of his or
her account setting forth the total payroll  deductions  accumulated,
the number of shares  purchased,  the per share price thereof and the
remaining  cash  balance,   if  any,  carried  forward  to  the  next
Offering Period.

           17. NOTICE OF DISPOSITION.  Each participant  shall notify
the  Company  if the  participant  disposes  of  any  of  the  shares
purchased  in any  Offering  Period  pursuant  to  this  Plan if such
disposition  occurs  within two (2) years from the  Offering  Date or
within  one (1) year  from the  Purchase  Date on which  such  shares
were  purchased  (the  "Notice Period").  Unless such  participant is
disposing  of any of such  shares  during  the  Notice  Period,  such
participant  shall keep the certificates  representing such shares in
his or her  name  (and  not in the  name  of a  nominee)  during  the
Notice  Period.  The  Company  may,  at any time  during  the  Notice
Period,  place a legend or  legends on any  certificate  representing
shares  acquired  pursuant  to  the  Plan  requesting  the  Company's
transfer  agent  to  notify  the  Company  of  any  transfer  of  the
shares.  The  obligation  of the  participant  to provide such notice
shall  continue  notwithstanding  the placement of any such legend on
the certificates.

           18. NO RIGHTS TO CONTINUED  EMPLOYMENT.  Neither this Plan
nor the grant of any option  hereunder  shall confer any right on any
employee  to remain in the employ of the  Company or any  Subsidiary,
or restrict the right of the Company or any  Subsidiary  to terminate
such employee's employment.

           19. EQUAL RIGHTS AND  PRIVILEGES.  All eligible  employees
shall have equal  rights and  privileges  with respect to the Plan so
that the Plan  qualifies as an "employee  stock purchase plan" within
the meaning of Section  423 or any  successor  provision  of the Code
and the  related  regulations.  Any  provision  of the Plan  which is
inconsistent  with  Section  423 or any  successor  provision  of the
Code shall,  without  further act or  amendment by the Company or the
Board,  be reformed to comply with the  requirements  of Section 423.
This Section 19 shall take  precedence  over all other  provisions in
the Plan.

           20. NOTICES.  All  notices  or other  communications  by a
participant  to the  Company  under  or in  connection  with the Plan
shall be deemed to have been duly  given  when  received  in the form
specified  by  the  Company  at  the  location,  or  by  the  person,
designated by the Company for the receipt thereof.

           21. TERM;  SHAREHOLDER  APPROVAL.  This Plan shall  become
effective  on the date that it is  adopted  by the  Board.  This Plan
shall be approved by the  shareholders of the Company,  in any manner
permitted by  applicable  corporate  law,  within  twelve (12) months
before  or after  the date  this Plan is  adopted  by the  Board.  No
purchase  of shares  pursuant  to the Plan shall  occur prior to such
shareholder  approval.  The Plan shall  continue until the earlier to
occur of termination  by the Board,  issuance of all of the shares of
Common Stock  reserved for issuance  under the Plan or ten (10) years
from the adoption of the Plan by the Board.
22. DESIGNATION OF BENEFICIARY.  

           (a) A  participant  may file a  written  designation  of a
beneficiary  who is to receive any shares and cash,  if any, from the
participant's   account   under   the  Plan  in  the  event  of  such
participant's  death  subsequent to the end of an Offering Period but
prior to  delivery  to him of such shares and cash.  In  addition,  a
participant  may file a written  designation of a beneficiary  who is
to receive  any cash from the  participant's  account  under the Plan
in the event of such participant's death prior to a Purchase Date.

           (b) Such  designation  of  beneficiary  may be  changed by
the  participant at any time by written  notice.  In the event of the
death of a participant  and in the absence of a  beneficiary  validly
designated  under  the  Plan  who is  living  at  the  time  of  such
participant's  death,  the Company  shall deliver such shares or cash
to the executor or  administrator  of the estate of the  participant,
or if no such executor or  administrator  has been  appointed (to the
knowledge  of the  Company),  the  Company,  in its  discretion,  may
deliver  such  shares  or  cash to the  spouse  or to any one or more
dependents  or  relatives  of  the  participant,  or  if  no  spouse,
dependent  or  relative is known to the  Company,  then to such other
person as the Company may designate.

          23.  CONDITIONS  UPON  ISSUANCE OF SHARES;  LIMITATION  ON 
SALE OF  SHARES.  Shares  shall  not be  issued  with  respect  to an
option  unless  the  exercise  of such  option and the  issuance  and
delivery  of such  shares  pursuant  thereto  shall  comply  with all
applicable  provisions  of  law,  domestic  or  foreign,   including,
without  limitation,  the  Securities  Act of 1933,  as amended,  the
Securities   Exchange  Act  of  1934,  as  amended,   the  rules  and
regulations  promulgated  thereunder,  and  the  requirements  of any
stock  exchange  upon which the shares may then be listed,  and shall
be further  subject to the  approval of counsel for the Company  with
respect to such compliance.

          24.  APPLICABLE  LAW.  The Plan  shall be  governed  by the
substantive  laws  (excluding  the  conflict  of laws  rules)  of the
State of California.

          25.  AMENDMENT OR  TERMINATION  OF THE PLAN.  The Board may
at any time  amend,  terminate  or the  extend  the term of the Plan,
except that any such  termination  cannot affect  options  previously
granted under the Plan,  nor may any amendment  make any change in an
option  previously  granted which would adversely affect the right of
any  participant,  nor may any amendment be made without  approval of
the  shareholders of the Company  obtained in accordance with Section
21  hereof  within  twelve  (12)  months  of  the  adoption  of  such
amendment  (or earlier if  required by Section 21) if such  amendment
would:

          (a)  increase  the  number  of  shares  that may be  issued
under the Plan; or

          (b) change the  designation  of the  employees (or class of
employees) eligible for participation in the Plan.
EXHIBIT 5.01

                         December 16, 1997

Information Storage Devices, Inc.
2045 Hamilton Avenue
San Jose, CA  95125

Gentlemen/Ladies:

      At your request, we have examined the Registration Statement
on Form S-8 (the "Registration Statement") to be filed by you
with the Securities and Exchange Commission on or about
December 16, 1997 in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of 800,000
shares of your Common Stock (the "Common Stock") to be sold by
you pursuant to the (i) stock options and/or awards granted or to
be granted by you under your 1994 Equity Incentive Plan, as
amended (the "Incentive Plan"), and your 1994 Employee Stock
Purchase Plan, as amended (the "Purchase Plan").

      As your counsel, we have examined the proceedings taken by
you in connection with (i) the amendment of the Incentive Plan
and the granting of options and/or awards thereunder, and (ii)
the amendment of the Purchase Plan.

      It is our opinion that the 800,000 shares of Common Stock
that may be issued and sold by you pursuant (i) to the stock
options and/or awards granted or to be granted under the
Incentive Plan, when issued and sold in the manner referred to in
the relevant Prospectus associated with the Registration
Statement, the Incentive Plan and accompanying stock options
and/or awards, and (ii) the Purchase Plan, when issued and sold
in the manner referred to in the relevant Prospectus associated
with the Registration Statement and the Purchase Plan, will be
legally issued, fully paid and non-assessable.

      We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to all references to
us, if any, in the Registration Statement and any amendments
thereto which have been approved by us.

                               Very truly yours,

                               /s/ Fenwick & West LLP
EXHIBIT 23.02

             CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-8 Registration
Statement of our report dated January 15, 1997 included in
Information Storage Devices, Inc.'s filing on Form 10-K dated
March 21, 1997.

                                    /s/Arthur Andersen
                                    ARTHUR ANDERSEN LLP

San Jose, California
December 23, 1997