READ-RITE CORPORATION   EXHIBIT 10.5

EMPLOYEE STOCK PURCHASE PLAN
(As amended and restated effective July 22, 1997)

1.      Establishment of Plan.  Read-Rite 
Corporation proposes to grant the opportunity to purchase the 
Company's Common Stock to employees of the Company and 
Subsidiaries (as hereinafter defined) pursuant to the Plan 
herein set forth.  For purposes of this Plan, "Parent 
Corporation" and "Subsidiary" (collectively, "Subsidiaries") 
shall have the same meanings as, respectively, "parent 
corporation" and "subsidiary corporation" in Sections 424(e) 
and 424(f) of the Internal Revenue Code of 1986, as amended 
(the "Code").  The Company intends that the Plan shall qualify 
as an "employee stock purchase plan" under Section 423 of 
the Code (including any amendments 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 such 
Section 423 shall have the same definition herein.

2.      Purposes and Share Reserve.  The purpose 
of the Plan is to provide employees of the Company and 
Subsidiaries with a convenient means to acquire an equity 
interest in the Company, to enhance such employees' sense of 
participation in the affairs of the Company and Subsidiaries, 
to provide an incentive for continued employment and to help 
such employees provide for their future financial security.  
The maximum number of shares of Common Stock which 
may be issued under the Plan shall be 1,500,000 shares of the 
Company's authorized but unissued Common Stock or 
Common Stock which are treasury shares.  In the event that 
any purchase opportunity for any reason expires or is canceled 
or terminated, the shares of Common Stock allocable to the 
unexercised portion of such purchase opportunity may again 
be subjected to a purchase opportunity.

3.      Administration and Shareholder Approval.  
The Plan is administered by the Compensation Committee 
appointed by the Board of Directors of the Company.  Subject 
to the provisions of the Plan, all questions of interpretation or 
application of the Plan shall be determined by the Compensation 
Committee, and its decisions shall be final and binding upon 
all participants.  Members of the Compensation Committee 
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 of Directors of the 
Company 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.

        The Company shall indemnify and hold harmless any 
member of the Compensation Committee or any employee to 
whom any responsibility with respect to the Plan is allocated 
or delegated, from and against any and all liabilities, costs and 
expenses, including attorney's fees, incurred by such persons 
as a result of any act, or omission to act, in connection with 
the performance of their duties, responsibilities and 
obligations under the Plan, other than such liabilities, costs 
and expenses as may result from the bad faith, criminal acts, 
or willful misconduct of such persons or to the extent such 
indemnification is prohibited by law.  The Company shall 
have the obligation to conduct the defense of such persons in 
any proceeding to which this provision applies.  If any person 
covered by this indemnification clause determines that the 
defense of the Company is inadequate, that person shall be 
entitled to retain separate legal counsel for his/her defense and 
the Company shall be obligated to pay for all reasonable legal 
fees and other court costs incurred in the course of such 
defense unless a court of competent jurisdiction finds such 
person acted in bad faith or engaged in criminal acts or willful 
misconduct.  The Company may satisfy this obligation in 
whole or in part through the purchase of a policy or policies of 
insurance, but no insurer shall have any rights against the 
Company arising out of this provision.

        Notwithstanding any other provision of the Plan to 
the contrary, any purchase opportunity granted pursuant to the 
Plan shall be subject to (i) obtaining all necessary 
governmental approvals and/or qualifications of the sale 
and/or issuance of the purchase opportunities and/or the shares 
of Common Stock and (ii) for a purchase opportunity granted 
after the date the Board of Directors of the Company has 
initially adopted or amended the Plan, obtaining any necessary 
shareholder approval of the Plan with respect to such initial 
adoption or amendment for such purchase opportunity to be 
treated as an option described in section 423 of the Code or 
the grant or exercise of such purchase opportunity to not be 
treated as a non-exempt "purchase" under Section 16(b) of the 
Securities Exchange Act of 1934, as amended.

4.      Eligibility.  Any employee of the Company 
and Subsidiaries is eligible to participate in the Plan except the 
following:

                (a)     employees who are not employed 
by the Company or Subsidiaries on the 15th day of the month 
before the beginning of a Purchase Period, with respect to that 
Purchase Period;

                (b)     employees who are customarily 
employed for less than 20 hours a week;

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

                (d)     employees who own or hold 
options to purchase or who, as a result of participation in this 
plan, would own or hold options to purchase, 5% or more of 
the Company's Common Stock within the meaning of section 
423(b)(3) of the Code.

5.      Offering Dates.  The Plan is implemented by 
sequential offerings of six months duration (the "Purchase 
Period"); however, the first Purchase Period shall have a 
twelve month duration commencing on April 1, 1992 and 
ending on March 31, 1993.  Subsequent Purchase Periods 
shall commence April 1 and October 1 of each year and end 
on September 30 and March 31, respectively, thereafter.  The 
first day of each Purchase Period shall be the "Offering Date" 
and the last day of each Purchase Period shall be the 
"Purchase Date".

        Notwithstanding the foregoing, the Compensation 
Committee may establish a different term for one or more 
Purchase Periods and/or different commencing and/or ending 
dates for such Purchase Periods.  In the event the first and/or 
last day of a Purchase Period is not a business day, the 
Company shall specify the business day that will be deemed 
the first or last day, as the case may be, of the Purchase 
Period.

6.      Participation in the Plan.  Eligible 
employees become participants in the Plan on the first 
Offering Date after satisfying the eligibility requirements by 
delivering to the Company's or Subsidiary's (whichever 
employs such employee) payroll office (the "payroll office") 
not later than the 15th day of the month before such Offering 
Date a subscription agreement authorizing payroll deductions. 
 An eligible employee who does not deliver a subscription 
agreement to the payroll office by such date after becoming 
eligible to participate in the Plan shall not participate in the 
Plan for that Purchase Period or for any subsequent Purchase 
Period unless such employee subsequently enrolls in the Plan 
by filing the subscription agreement with the payroll office 
not later than the 15th day of the month preceding a 
subsequent Offering Date.  Once an employee becomes a 
participant in the Plan, such employee will automatically 
participate in each successive offering until such time as such 
employee withdraws, or is withdrawn, from the Plan as set 
forth below, and is not required to file any additional 
subscription agreements for subsequent Purchase Periods in 
order to continue participation in the Plan.

7.      Grant of Purchase Opportunity on 
Enrollment.  Enrollment by an eligible employee in the Plan 
with respect to a Purchase Period will constitute the grant (as 
of the Offering Date) by the Company to such employee an 
opportunity to purchase shares of Common Stock from the 
Company under the Plan.  All participants granted a purchase 
opportunity under the Plan shall have the same rights and 
privileges within the meaning of Section 423(b)(5) of the 
Code.  Re-enrollment by a participant in the Plan (but not 
merely an increase or decrease in the level of payroll 
withholding) will constitute the grant by the Company to the 
participant of a purchase opportunity on the first day of the 
Offering Period with respect to which such re-enrollment 
occurs.  Any participant whose opportunity to purchase 
expires and who has not withdrawn from the Plan will 
automatically be reenrolled in the Plan and granted a new 
purchase opportunity on the first date of the next Offering 
Period.

8.      Purchase Price.  The purchase price per 
share at which a share of Common Stock will be sold in any 
Purchase 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 of the 
Common Stock on the Purchase Date.  
        For purposes of the Plan, the term "fair market value" 
shall mean for the applicable date the closing price of a share 
of the Common Stock as reported on the NASDAQ National 
Market System or, if not so reported, as reported on such other 
stock exchange or market system on which the Common 
Stock is traded as determined by the Compensation 
Committee, or as otherwise determined by the Compensation 
Committee if shares of Common Stock are not so reported.

9. Payment of Purchase Price; Changes in 
Payroll Deductions; Issuance of Shares.

(a)     Payment for the purchase price of 
the shares of Common Stock is accumulated by regular 
payroll deductions made during each Purchase Period.  The 
deductions are made as a percentage of the employee's base 
pay in one percent (1%) increments not to exceed 10%.  Base 
pay (a) shall include all salaries, commissions, and advances 
paid against future commissions, before deduction for any 
contributions to any plan maintained by the Company and 
described in Section 401(k) or Section 125 of the Code, and 
(b) shall not include over-time, bonuses, annual awards, other 
incentive payments, shift premiums, long-term disability, 
worker's compensation or any other payments not specifically 
referenced in (a).  Payroll deductions shall commence on the 
first payday following the Offering Date and shall continue to 
the end of the Purchase 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 a Purchase 
Period by filing with the payroll office a new authorization for 
payroll deductions (which must be expressed as a whole 
percentage of the employee's base pay in one percent (1%) 
increments, including zero percent (0%)).  A decrease in a 
participant's payroll deductions to zero percent (0%) during a 
Purchase Period shall not constitute the participant's 
withdrawal from such Purchase Period and the Plan unless the 
participant expressly elects such a withdrawal in writing in 
accordance with the requirements of Section 11 of the Plan.  
Such change in the rate of payroll deductions may be made at 
any time during a Purchase Period, but not more than one 
change may be made effective during any Purchase Period.  A 
participant may increase or lower the rate of payroll 
deductions for any subsequent Purchase Period by filing with 
the payroll office a new authorization for payroll deductions 
not later than the 15th day of the month before the beginning 
of such Purchase Period.

(c)     All payroll deductions made for a 
participant are credited to his/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.

(d)     On each Purchase Date, so long as 
the Plan remains in effect and provided that the participant has 
not terminated prior to a given Purchase Date, the Company 
shall apply the funds then in the participant's account to the 
purchase of whole shares of Common Stock reserved to the 
extent permitted by the Plan.  The purchase price per share 
shall be as specified in Section 8 of the Plan.  Any amount 
remaining in such participant's account representing any 
excess over the sum required to purchase whole shares shall 
be held for purchases on the next Purchase Date unless the 
remaining amount equals or exceeds the sum required to 
purchase one whole share of Common Stock at the end of the 
relevant Purchase Period, or the Plan has been oversubscribed, 
in which case such funds shall be returned to the member.  No 
Common Stock shall be purchased on behalf of any employee 
whose participation in the Plan has terminated prior to the last 
day of a Purchase Period.

(e)     Subject to the provisions of this 
Plan, as promptly as practical after the Purchase Date, the 
Company shall cause to be delivered to the participant, or the 
participant's agent, certificates representing the shares of 
Common Stock purchased by the participant.  Delivery shall 
be deemed effective for all purposes when the Company's 
stock transfer agent deposits the stock certificates in the 
United States mail addressed to the participant, or the 
participant's agent, at the address specified by the participant.  
Prior to the date of issuance of a stock certificate for the 
shares of Common Stock being purchased, a participant shall 
have no rights as a shareholder of the Company by virtue of 
participation in the Plan.

(f)     The Company may, from time to 
time, establish or change (i) a minimum required withholding 
amount for participation in any Purchase Period, 
(ii) limitations on the frequency and/or number of changes in 
the amount withheld during a Purchase Period, (iii) an 
exchange ratio applicable to amounts withheld in a currency 
other than U.S. dollars, (iv) payroll withholding in excess of 
or less than the amount designated by a participant in order to 
adjust for delays or mistakes in the Company's processing of 
subscription agreements, (v) the date(s) and manner by which 
the fair market value of the Common Stock is determined for 
purposes of the administration of the Plan, and/or (vi) such 
other limitations or procedures as deemed advisable by the 
Company in the Company's sole discretion which are 
consistent with the Plan, and Section 423 of the Code.

(g)     Any portion of a participant's 
purchase opportunity remaining unexercised after the end of 
the Purchase Period to which it relates shall expire 
immediately upon the end of such Purchase Period.

10.     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 
an Exercise Date on which the option in exercised but prior to 
delivery to such participant 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 exercise of the option. If a participant is married and 
the designated beneficiary is not the spouse, spousal consent 
shall be required for such designation to be effective.

                        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 and/or cash to the executor 
or administrator of the estate of 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 and/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.

11.     Limitation on Shares to be Purchased.  No 
employee shall be entitled to purchase Common Stock under 
the Plan at a rate which 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.  If the number of shares to 
be purchased by all employees participating in the Plan 
exceeds the number of shares available in the Plan, the 
Company will make a pro rata allocation of the remaining 
shares in as uniform a manner as shall be practical and as the 
Compensation Committee shall determine to be equitable.  
Any payroll deductions accumulated in a participant's account 
which are not used to purchase stock due to the limitations in 
this paragraph shall be returned to the participant at the end of 
the Purchase Period, unless insufficient to purchase a whole 
share of Common Stock as provided in Section 9(d) of the 
Plan, or at such other time as the Compensation Committee 
shall determine.

12.     Withdrawal.  Each participant may 
withdraw from the Plan by signing and delivering to the 
payroll office notice on a form provided for such purpose.  
Such withdrawal may be elected at any time for a Purchase 
Period prior to the Purchase Date for that Purchase Period.

        Upon withdrawal from the Plan, the accumulated 
payroll deductions shall be returned to the withdrawn 
employee and his/her interest in the Plan shall terminate.  In 
the event an employee voluntarily elects to withdraw from the 
Plan, he/she may not resume his/her participation in the Plan 
during the same Purchase Period, but he/she may participate 
in any succeeding Purchase Period under the Plan by filing a 
new authorization for payroll deductions in the same manner 
as set forth above for initial participation in the Plan.

13.     Termination of Employment.  Termination 
of a participant's employment for any reason, including 
retirement, disability or death or the failure of a participant to 
remain an eligible employee, terminates his/her participation 
in the Plan immediately.  In such event, the payroll deductions 
credited to the participant's account will be returned to 
him/her or, in the case of his/her death, to his/her legal 
representative.

14.     Repayment of Payroll Deductions Without 
Interest.  In the event an employee's interest in the Plan is 
terminated, or in the event the Plan is terminated by the Board 
of Directors of the Company, the Company shall promptly 
deliver to the employee the payroll deductions credited to 
his/her account.  No interest shall accrue on the payroll 
deductions of a participant in the Plan.

15.     Capital Changes.  In the event of changes in 
the Common Stock of the Company due to stock dividends, 
stock splits or other changes in capitalization, or in the event 
of any merger, sale or any other reorganization, appropriate 
adjustments will be made by the Company in the Plan's share 
reserve, the shares subject to purchase under a participant's 
purchase opportunity, and in the purchase price per share of 
Common Stock.

16.     Nonassignability.  No rights or accumulated 
payroll deductions of an employee under the Plan may be 
pledged, assigned or transferred for any reason and any such 
attempt may be treated by the Company as an election by such 
employee to withdraw from the Plan.

17.     Reports.  Individual accounts will be 
maintained for each participant in the Plan.  Each participant 
shall receive promptly after the end of each Purchase Period a 
report of his/her account setting forth the total payroll 
deductions accumulated, the number of shares of Common 
Stock purchased and the remaining cash balance, if any, 
carried forward to the next Purchase Period or returned to the 
participant, as the case may be.

18.     No Obligation.  Neither this Plan nor the 
grant of any opportunity to purchase 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.     Headings.  Headings have been provided for 
purposes of identification and organization only and shall not 
be treated as operative provisions of the Plan.

20.     Transfer of Control.  A "Transfer of 
Control" shall be deemed to have occurred in the event any of 
the following occurs with respect to the Company.

(a)     the direct or indirect sale or 
exchange by the shareholders of the Company of all or 
substantially all of the stock of the Company where the 
shareholders of the Company before such sale or exchange do 
not retain, directly or indirectly, at least a majority of the 
beneficial interest in the voting stock of the Company;

(b)     a merger in which the shareholders 
of the Company before such merger do not retain, directly or 
indirectly, at least a majority of the beneficial interest in the 
voting stock of the Company; or

(c)     the sale, exchange, or transfer of all 
or substantially all of the Company's assets (other than a sale, 
exchange, or transfer to one (1) or more corporations where 
the shareholders of the Company before such sale, exchange 
or transfer retain, directly or indirectly, at least a majority of 
the beneficial interest in the voting stock of the corporation(s) 
to which the assets were transferred).

        In the event of a Transfer of Control, the Board of 
Directors of the Company shall provide that purchase 
opportunities granted under the Plan shall be fully exercisable 
to the extent of each participant's account balance for the 
Purchase Period as of a date prior to the Transfer of Control.  
All purchase opportunities shall terminate effective as of the 
date of the Transfer of Control to the extent that the purchase 
opportunity is not exercised as of the date of the Transfer of 
Control.

21.     Restriction on Issuance or Transfer of 
Shares.  The issuance of shares of Common Stock under the 
Plan shall be subject to compliance with all applicable 
requirements of federal or state law with respect to such 
securities.  A purchase opportunity may be not be exercised if 
the issuance of shares of Common Stock upon such exercise 
would constitute a violation of any applicable federal or state 
securities laws or other laws or regulations.  In addition, no 
purchase opportunity may be exercised unless (i) a registration 
statement under the Securities Act of 1933, as amended, shall 
at the time of exercise of the purchase opportunity be in effect 
with respect to the shares of Common Stock issuable upon 
exercise of the purchase opportunity, or (ii) in the opinion of 
legal counsel to the Company, the shares issuable upon 
exercise of the purchase opportunity may be issued in 
accordance with the terms of an applicable exemption from 
the registration requirements of said Act.  As a condition to 
the exercise of the purchase opportunity, the Company may 
require the participant to satisfy any qualifications that may be 
necessary or appropriate, to evidence compliance with any 
applicable law or regulation, and to make any representation 
or warranty with respect thereto as may be requested by the 
Company.

        The Company may at any time place legends or other 
identifying symbols regarding any applicable federal and/or 
state securities restrictions or any provision convenient in the 
administration of the Plan on some or all of the certificates 
representing shares of Common Stock issued under the Plan.  
The participant shall, at the request of the Company, promptly 
present to the Company any and all certificates representing 
shares of Common Stock acquired under the Plan in the 
possession of the participant in order to carry out these 
provisions.

        The Company, in its absolute discretion may impose 
such restrictions on the transferability of the shares of 
Common Stock purchased under the Plan as it deems 
appropriate and any such restriction may be set forth in the 
respective subscription agreement and may be referred to on 
the certificates evidencing such shares.  The Company may 
require the employee to give the Company prompt notice of 
any disposition of shares of Common Stock acquired by 
exercise of a purchase opportunity within two years from the 
date of granting such opportunity or one year from the date of 
exercise of such opportunity.  The Company may direct that 
the certificates evidencing shares of Common Stock acquired 
under the Plan refer to such requirement to give prompt notice 
of disposition.

22.     Amendment or Termination of the Plan.  
This Plan shall continue until terminated by the Board of 
Directors of the Company or until all of the shares of 
Common Stock reserved for issuance under the Plan have 
been issued, whichever occurs first.

        The Board of Directors of the Company may at any 
time terminate the Plan, except that such termination cannot 
affect shares of Common Stock or purchase opportunities 
previously granted under the Plan, except as expressly 
permitted by the Plan.  The Board of Directors or any officer 
as may be authorized by the Board of Directors from time to 
time may at any time amend the Plan, provided that no 
amendment makes any change in shares of Common Stock or 
purchase opportunities 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 within 12 months of the adoption of such 
amendment if such amendment would authorize the sale of 
more shares than are authorized for issuance under the Plan or 
would change the designation of corporations whose 
employees may be offered purchase opportunities under the 
Plan.  In addition to the foregoing, approval of the Company's 
shareholders shall be sought for any amendment to the Plan 
for which the Board of Directors deems shareholder approval 
necessary in order to comply with Rule 16b-3.

        Notwithstanding any other provisions of the Plan to 
the contrary, in the event of an amendment to the Plan which 
affects the rights or privileges of purchase opportunities 
offered under the Plan, each participant with an outstanding 
purchase opportunity shall have the right to exercise such 
outstanding purchase opportunity on the effective date of the 
amendment and to participate in the Plan for the remaining 
term of such outstanding purchase opportunity pursuant to the 
terms and conditions of the Plan, as amended.  If in 
accordance with the preceding sentence, a participant elects to 
exercise such outstanding purchase opportunity and to 
commence participation in the Plan, as amended on the 
effective date of such amendment, the participant shall be 
deemed to have received a new purchase opportunity on such 
effective date, and such effective date shall be deemed the 
Offering Date for such new purchase opportunity.

        IN WITNESS WHEREOF, the undersigned 
Secretary of Read-Rite Corporation, a Delaware corporation, 
hereby declares that the Read-Rite Corporation Employee 
Stock Purchase Plan was adopted by the Board of Directors of 
Read-Rite Corporation at its meeting on January 30, 1992, 
readopted at its meeting on November 16, 1992, amended at 
its meeting on December 19, 1994, and further amended at its 
meetings on October 22, 1996 and July 22, 1997.



_____________________________________________
Rex S. Jackson
Vice President, General Counsel and Secretary

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