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                                                                   EXHIBIT 10.26



                                 August 7, 1996



PERSONAL & CONFIDENTIAL

Dr. Menahem Nassi
c/o Cardiometrics, Inc.
645 Clyde Avenue
Mountain View, CA  94043

Re:      Amendment to Your Employment Agreement

Dear Meno:

         This letter is intended to amend certain terms of your employment
agreement with Cardiometrics, Inc., formerly a California corporation, but
currently a Delaware corporation (the "Company"), which is set forth in that
certain letter, dated as of December 13, 1990, from David Titus to you (the
"Employment Agreement"), as amended by those certain amendment letters, dated
June 26, 1991, November 26, 1991, September 4, 1992, November 1, 1992 and
October 11, 1993 from David Douglass to you, and my amendment letters to you
dated August 31, 1995 and September 1, 1995 (collectively, the "Amendments to
the Employment Agreement"):

                  Paragraph 2 of the Employment Agreement is hereby deleted and
amended in its entirety to read as follows:

                           "2. Commencing February 1, 1996, your salary as
                  President and Chief Executive Officer of the Company will be
                  at a pre-tax rate equal to $13,958.33 per month until
                  otherwise adjusted by the Compensation Committee of the Board
                  of Directors of the Company."

                  Paragraph 5 of the Employment Agreement is hereby deleted and
amended in its entirety to read as follows:

                            "5. As with all other Company employees, employment
                  with the Company is not for a specific term and can be
                  terminated by either you or the Company at any time for any
                  reason, with or without cause. However, in the event the
                  Company terminates your employment without cause (as defined
                  below), you shall be entitled to: (a) salary continuation from
                  the Company for up to twelve (12) months following the date of
                  such termination at the monthly salary rate established as of
                  (i) the date hereof, or (ii) the date upon which your
                  employment is so terminated, whichever is greater; provided,
                  however, that such salary continuation payments shall cease
                  upon your becoming employed on a full-time basis with another
                  employer; and, provided, further, however, that such salary
                  continuation payments shall be made for a period of at least
                  six (6) months from the date of such termination even if you
                  become employed by another employer within six (6) months of
                  such termination; and (b) continue to participate in the
                  Company's benefit plans for up to twelve (12) months following
                  the date of such termination; provided, however, that such
                  continued participation in the Company's benefit plans shall
                  cease upon your becoming employed on a full-time basis with
                  another employer. During any period of salary or benefits
                  continuation and as partial consideration for such
                  continuation, you agree to provide the Company with up to four
                  (4) days of consulting services per month as reasonably
                  assigned to you by the Company. The Company will reimburse you
                  for your reasonable your out-
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                  of-pocket expenses in connection with such requested
                  consulting services. Your sole compensation for providing such
                  consulting services shall be the salary and benefits
                  continuation described in this paragraph and, therefore, your
                  failure to provide such services shall result in termination
                  of such salary and benefits continuation notwithstanding any
                  other terms hereof.

                            For purposes of this employment agreement,
                  termination "without cause" shall mean termination for reasons
                  other than:

                            (i) your repeated refusal to comply with reasonable
                  directives of the Board of Directors of the Company, or your
                  gross negligence or willful misconduct in the performance of
                  duties assigned to you by the Board of Directors, or your
                  intentional conduct materially harmful to the Company's
                  business and affairs, provided that poor achievement of job
                  objective in itself shall not constitute cause for
                  termination;

                            (ii) your violation of any provision of the
                  Company's proprietary information agreement to the extent that
                  has caused material harm to the interests of the Company; or

                           (iii) your conviction of any crime involving moral
                  turpitude, fraud, or any felony."

                   Except as otherwise specifically provided herein, all of the
provisions of the Employment Agreement, as amended by the Amendments to the
Employment Agreement, shall remain in full force and effect, and the Employment
Agreement, as amended thereby and hereby, is hereby ratified and confirmed in
all respects. This letter, together with the Amendments to the Employment
Agreement and the Employment Agreement, shall be read together as one document,
and such agreements, together with your executed Proprietary Information and
Inventions Agreement shall constitute the full and entire understanding and
agreement between you and the Company with respect to your employment with the
Company.

         If this amendment letter accurately reflects the terms of your
employment with the Company, please sign and return to me the enclosed copy of
this amendment letter.

                                       Sincerely,

                                       CARDIOMETRICS, INC.


                                       /s/ H. Raymond Wallace
                                       -----------------------------------------
                                       H. Raymond Wallace
                                       On Behalf of the Compensation Committee
                                       of the Board of Directors

ACCEPTED AND AGREED


/s/ Menahem Nassi
-----------------------------
Dr. Menahem Nassi
Dated:  August 7, 1996