SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K/A





AMENDMENT
NO. 1








T
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





FOR THE
FISCAL YEAR ENDED JUNE 30, 2009





£
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





FOR THE
TRANSITION PERIOD
FROM          TO


_______________





COMMISSION
FILE NUMBER 000-30083





QUALSTAR
CORPORATION








CALIFORNIA
            95-3927330(State
      of Incorporation)
            (I.R.S.
      Employer ID No.)





3990-B
HERITAGE OAK COURT, SIMI VALLEY, CA 93063


(805)
583-7744





Securities
registered pursuant to Section 12(b) of the Act:





Title of Each Class:
            Name of Each Exchange on Which
      Registered:Common
      Stock
            The
      NASDAQ Stock Market LLC





Securities
registered pursuant to Section 12(g) of the
Act:   None





Indicate
by check mark whether the registrant is well-known seasoned issuer, as defined
in Rule 405 of the Securities Act of 1933.  Yes £     No
T





Indicate
by check mark whether the registrant is not required to file reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934.  Yes £     No
T





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports); and (2) has been subject to such filing requirements for
the past 90 days.  Yes T     No
£





Indicate
by check mark whether the registrant has submitted electronically and posted on
its website, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).  Yes £     No
£





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  £





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of  “accelerated filer,” “large accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):





Large
      accelerated filer £
            Accelerated
      filer £
            Non-accelerated
      filer £
            Smaller
      reporting company  T





Indicate
by check mark whether the registrant is a shell company (as defined in Exchange
Act Rule 12b-2).  Yes £     No
T





As of
December 31, 2008, (the last business day of the registrant’s most recently
completed second fiscal quarter), the aggregate market value of the common
equity held by non-affiliates of the registrant was approximately $15,542,000
based on the closing sales price as reported on the NASDAQ Stock Market. As of
August 26, 2009, there were 12,253,117 shares of common stock without par value
outstanding.





DOCUMENTS
INCORPORATED BY REFERENCE





None










TABLE OF CONTENTS








PART
      IIIItem
      10.
            Directors, Executive Officers and Corporate
      Governance
            3Item
      11.
            Executive Compensation
            4Item
      12.
            Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
            11Item
      13.
            Certain Relationships and Related Transactions, and Director
      Independence
            12Item
      14.
            Principal Accountant Fees and Services
            12Signatures
            14Exhibit Index
            15


2
 Table of Contents


ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE





A list of
our executive officers and biographical information appears in Part I, Item 1 of
this report under the caption “Executive Officers of the
Registrant.”  The current members of our Board of Directors and
biographical information is set forth below:





Name
            
            Age
            
            PositionWilliam
      J. Gervais
            66
            
            Chief
      Executive Officer, President and DirectorRichard
      A. Nelson
            66
            
            Vice
      President — Engineering, Secretary and DirectorStanley
      W. Corker
            58
            
            DirectorCarl
      W. Gromada
            68
            
            DirectorRobert
      A. Meyer
            64
            
            DirectorRobert
      E. Rich
            59
            
            Director





William
J. Gervais is a founder of Qualstar and has been our President and a director
since our inception in 1984, and was elected Chief Executive Officer in January
2000. From 1984 until January 2000, Mr. Gervais also served as our Chief
Financial Officer. From 1981 until 1984, Mr. Gervais was President of Northridge
Design Associates, Inc., an engineering consulting firm. Mr. Gervais was a
co-founder, and served as Engineering Manager from 1976 until 1981, of
Micropolis Corporation. Mr. Gervais earned a B.S. degree in Mechanical
Engineering from California State Polytechnic University, Pomona in
1967.





Richard
A. Nelson is a founder of Qualstar and has been our Vice President of
Engineering, Secretary and a director since our inception in 1984. From 1974 to
1984, Mr. Nelson was self-employed as an engineering consultant specializing in
microprocessor technology. Mr. Nelson earned a B.S. in Electronic Engineering
from California State Polytechnic University, Pomona in 1966.





Stanley
W. Corker has served as a director of Qualstar since January 26,
2006.  Since 1996, Mr. Corker has been the Director of Technology
Research and a partner of Emerald Asset Management, a diversified investment
management firm.  Prior to joining Emerald Asset Management, Mr.
Corker obtained over 20 years experience in the computer storage industry from
key roles in engineering and marketing at several manufacturers of tape drives,
and as an industry analyst with International Data Corporation
(IDC).  Mr. Corker received a B.S. degree in Computer Science from the
University of Essex, England in 1972, where he later conducted five years of
postgraduate research in computer networking systems.





Carl W.
Gromada has served as a director of Qualstar since March 2005.  From
2000 to the present, Mr. Gromada has been a consultant and a private investor.
From 1996 to 2000, Mr. Gromada served as Chief Executive Officer, and a member
of the board of directors of Computer Resources Unlimited, Inc., a company
involved in the design, manufacture and sale of a broad line of products for the
computer storage industry.  Mr. Gromada received a B.S. degree in
Business Administration from Temple University in 1965.





Robert A.
Meyer has served as a director of Qualstar since March 16, 2006.  Mr.
Meyer is currently retired.  From 1994 until June 2005, Mr. Meyer was
employed in various management positions by United States Filter Corporation, a
company engaged in the water treatment industry serving industrial, commercial
and residential customers.  His positions at United States Filter
Corporation included Director of Finance, Business Development from 2000 to
2002, and Vice President of Internal Audit from 2003 until he retired in June
2005.  Mr. Meyer received a B.S. degree in Accounting from C.W. Post
College in 1972, and he is a Certified Public Accountant.





Robert E.
Rich has served as a director of Qualstar since January 2000.  Mr.
Rich has been engaged in the private practice of law since 1975 and has been a
shareholder of Stradling Yocca Carlson & Rauth, legal counsel to Qualstar,
since 1984.  Mr. Rich received a B.A. degree in Economics from the
University of California, Los Angeles in 1972 and his J.D. degree from the
University of California, Los Angeles in 1975.





Directors
are elected annually and hold office until the next annual meeting of
shareholders and until their successors have been elected and
qualified.





Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Securities Exchange Act of 1934 requires Qualstar’s directors and
executive officers, and persons who own more than ten percent of Qualstar’s
common stock, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of our common
stock.  Officers, directors and greater than ten percent shareholders
are required by SEC regulations to furnish Qualstar with copies of all Section
16(a) forms they file.





To our
knowledge, based solely on a review of the copies of Section 16(a) reports
furnished to us and written representations that no other reports were required
during the fiscal year ended June 30, 2009, our officers, directors and greater
than ten percent beneficial owners complied with all Section 16(a) filing
requirements except as follows:  Nidhi H. Andalon was appointed our
Chief Financial Officer on January 19, 2009, and her initial statement of
beneficial ownership on Form 3 was not filed until February 11, 2009, which was
thirteen days after it was due.


3
 Table of Contents


Code
of Ethics





Qualstar
has adopted a written Code of Business Conduct and Ethics, which complies with
the requirements for a code of ethics pursuant to Item 406(b) of Regulation S-K
under the Securities Exchange Act of 1934, that applies to our chief executive
officer, chief financial officer, controller and persons performing similar
functions. A copy of the Code of Business Conduct and Ethics has been filed as
an exhibit to this report. A copy of the Code of Business Conduct and Ethics is
also posted on our website at www.qualstar.com. A copy of the Code of Business
Conduct and Ethics will be provided, without charge, to any shareholder who
sends a written request to the Chief Financial Officer of Qualstar at 3990-B
Heritage Oak Court, Simi Valley, California 93063.





Audit
Committee





Our Board
of Directors has a standing Audit Committee, which is comprised solely of
non-employee directors who satisfy current Nasdaq standards with respect to
independence, financial expertise and experience.  The current members
of the Audit Committee are Stanley W. Corker, Carl W. Gromada and Robert A.
Meyer, with Mr. Gromada serving as Chairman.  Our Board of Directors
has determined that both Mr. Gromada and Mr. Meyer meet the Securities and
Exchange Commission’s definition of “audit committee financial
expert.”





ITEM
11.  EXECUTIVE COMPENSATION





COMPENSATION
DISCUSSION AND ANALYSIS





This
section contains a discussion of the material elements of compensation awarded
to, earned by, or paid to our principal executive officer, our principal
financial officer, and our other executive officers who were serving as
executive officers of Qualstar at June 30, 2009.  These individuals
are identified in the Summary Compensation Table and other compensation tables
that follow this section, and are referred to throughout this report as our
“named executive officers.”





Executive
Compensation Program Objectives





Our
executive compensation program is intended to fulfill three primary
objectives:  first, to attract and retain qualified executives
required for the success of our business; second, to reward these executives for
financial and operating performance; and third, to align their interests with
those of our stockholders to create long-term stockholder value.  The
principal elements of the compensation program for our named executives include
base salary, cash bonus, and long-term incentives in the form of stock
options.





Executive
Officer Compensation Elements





Base
Salaries





Our Board
of Directors, upon the recommendation of the Compensation Committee, establishes
base salaries for our executive officers.  The Compensation Committee
considers compensation paid by companies comparable in size to Qualstar, the
experience level and past performance of the individual executives, as well as
the revenues and profitability of Qualstar.  Our goal is to provide
base salaries that are fair and competitive, but not excessive.





The table below shows the base salary
established for each of our named executive officers for fiscal years 2009 and
2010, and the percentage change compared to the prior fiscal
year.  Salary adjustments typically do not coincide with the beginning
of the fiscal year, so the amounts shown below may not be exactly the same as
those shown in the Fiscal 2009 Summary Compensation
Table.


4
 Table of Contents





Name and Principal
      Position
            
            Fiscal 2009
                Base Salary
            
            
            Percent Change versus Fiscal
      2008
                Base Salary
            
            
            Fiscal 2010
                Base Salary
            
            
            Percent Change versus Fiscal
      2009
                Base SalaryWilliam
      J. Gervais
            
            $
            175,000
            (1)
            
            
            (10.3
            %)
            
            $
            157,500
            (2)
            
            
            (10.0
            %)Chief
      Executive Officer and PresidentNidhi
      H. Andalon
            
            $
            140,000
            (3)
            
            
            12.0
            %
            
            $
            150,000
            (3)
            
            
            7.1
            %Chief
      Financial OfficerRichard
      A. Nelson
            
            $
            170,000
            
            
            ─
            
            
            $
            153,000
            (2)
            
            
            (10.0
            %)Vice
      President of EngineeringRobert
      K. Covey
            
            $
            184,000
            
            
            
            7.0
            %
            
            $
            165,600
            (2)
            
            
            (10.0
            %)Vice
      President of Marketing


__________


(1)
            Mr.
      Gervais voluntarily reduced his base salary from a rate of $195,000 to a
      rate of $175,000 per year, effective August 25,
  2008.





(2)
            As
      a cost-saving measure, the base salaries of Mr. Gervais, Mr. Nelson and
      Mr. Covey were reduced by 10% for an indefinite period, effective as of
      July 2009.





(3)
            Ms.
      Andalon’s base salary was increased to a rate of $140,000 per year upon
      her appointment as Chief Financial Officer on January 19,
      2009.  Her base salary was further increased to a rate of
      $150,000 per year, effective as of July
2009.





Cash
Bonuses





Historically,
each year the Board of Directors, upon the recommendation of the Compensation
Committee, has established a cash bonus plan for executive officers based on
Qualstar achieving stated levels of consolidated revenue and pre-tax profits for
the fiscal year, excluding the effects of acquisitions, if any, made during the
fiscal year.  However, in recent years Qualstar has not achieved the
levels of revenues or pre-tax profits required to earn even the minimum bonus
amounts under prior bonus plans.  Consequently, the Board of Directors
did not establish a bonus plan for executive officers for fiscal 2009, and has
not established a bonus plan for executive officers for fiscal
2010.





Our Board
of Directors reserves the right, however, to pay discretionary cash bonuses, if
deemed appropriate.





Equity-Based
Compensation





We use
stock option grants as a form of long-term compensation.  For the past
several years, however, our stock generally has not been actively traded and the
price per share has declined or stayed within a relatively narrow
range.  Consequently, stock options have not provided significant
compensation in recent years.  We did not grant any stock options to
our executive officers in fiscal 2009.





Our 2008
Stock Incentive Plan authorizes us to grant stock options to purchase, in the
aggregate, up to 500,000 shares of our common stock.  This plan was
adopted by our Board of Directors in November 2008 and approved by our
shareholders in March 2009, and replaces our 1998 Stock Incentive Plan, which
expired in 2008.  Under both plans, the exercise price of stock
options must be no less than the closing price of our common stock on the date
of grant.  It is our policy to grant stock options only at duly held
meetings of our Board of Directors, with an exercise price equal to the closing
price of our common stock on the date of the Board meeting.





Compensation
of our Named Executive Officers





The
amount of each component of compensation established for the named executive
officers is based on a number of factors.  These factors include
company performance, individual performance, compensation paid by companies
comparable in size to Qualstar, the recommendations of our Chief Executive
Officer, William J. Gervais, and a review of the prior compensation history of
each executive officer.  Some of these factors are discussed
above.  Other factors applicable to each named executive officer are
discussed below.


5
 Table of Contents


William
J. Gervais and Richard A. Nelson co-founded Qualstar in 1984 and they continue
to serve Qualstar full time as executive officers.  The Compensation
Committee considers both Mr. Gervais and Mr. Nelson to be largely responsible
for the success the Company has achieved, and to be two of our most important
employees.  However, Mr. Gervais and Mr. Nelson historically have
requested that their base salaries be maintained at levels the Compensation
Committee considers to be relatively low.  The reasons for this
include their belief that in the long term their individual equity ownership of
Qualstar potentially will provide greater financial returns than current
compensation.  Moreover, Mr. Gervais voluntarily reduced his salary
from a rate of $195,000 per year to a rate of $175,000 per year effective August
25, 2008 in order to reduce costs.  In order to further reduce costs,
our Board of Directors, upon the recommendation of Mr. Gervais, reduced the base
salaries of Mr. Gervais and Mr. Nelson, as well as of Mr. Covey, by 10% for an
indefinite period, effective as of July 2009.  Mr. Gervais and Mr.
Nelson also have never requested nor accepted stock option awards.





Nidhi H.
Andalon was appointed our Chief Financial Officer by our Board of Directors on
January 19, 2009. Ms. Andalon joined Qualstar’s finance department in January
2003 as a senior accountant, and was promoted to Assistant Controller in June
2004 and to Controller in October 2005.  Upon being appointed Chief
Financial Officer, our Board approved an increase in her base salary from
$125,000 to $140,000 to reflect her increased responsibilities.  In
recognition of her performance as Chief Financial Officer during her first six
months in that position, our Board approved a further increase in her base
salary to a rate of $150,000 per year, effective as of July 2009.





Mr. Covey
has been our Vice President of Marketing since 1994.  On November 5,
2008, the Board approved an increase in Mr. Covey’s base salary to $184,000 per
year, effective retroactively to July 1, 2008, to bring his compensation more in
line with market rates for persons with similar duties and responsibilities at
other companies.  However, in order to reduce costs, our Board of
Directors, upon the recommendation of Mr. Gervais, reduced the base salary of
Mr. Covey, as well as the base salaries of Mr. Gervais and Mr. Nelson, by 10%
for an indefinite period, effective as of July 2009.





Tax
Considerations





Under
Section 162(m) of the Internal Revenue Code, we generally receive a federal
income tax deduction for compensation paid to any of our named executive
officers only to the extent total compensation does not exceed $1.0 million
during any fiscal year or if it is “performance-based” under Section
162(m).  The total compensation earned by our executive officers has
always been less than $1.0 million and, consequently, the limitations imposed by
Section 162(m) have not been a factor.





COMPENSATION
COMMITTEE REPORT


The
Compensation Committee has reviewed the foregoing Compensation Discussion and
Analysis and has discussed its contents with Qualstar’s management and the Board
of Directors. Based on the review and discussions, the Compensation Committee
has recommended to the Board that the Compensation Discussion and Analysis be
included in this report.





Submitted
      by the members of the Compensation CommitteeStanley
      W. Corker (Chairman)Carl
      W. GromadaRobert
      A. Meyer





COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION





Our Board
of Directors has a standing Compensation Committee.  The members of
this committee during the fiscal year ended June 30, 2009 and presently are
Stanley W. Corker, Carl W. Gromada and Robert A. Meyer.  No executive
officer of Qualstar serves as a member of the board of directors or compensation
committee of any entity that has one or more executive officers serving on our
Board of Directors.  No member of the Compensation Committee is, or
ever has been, an employee or officer of Qualstar.





EXECUTIVE
COMPENSATION





Summary
Compensation Table





The
following tables show information about the compensation earned by our principal
executive officer, our principal financial officer, and our other executive
officers who were serving as executive officers at June 30,
2009.  These officers are referred to in this report as the “named
executive officers.”


6
 Table of Contents


Fiscal
Year 2009 Summary Compensation Table





Name and Principal
      Position
            
            Year
            
            Salary(1)
                ($)
            
            
            Bonus(1)
                ($)
            
            
            Option Awards(2)
                ($)
            
            
            All Other Compensation(3)
                ($)
            
            
            Total
                ($)William
      J. Gervais
            
            2009
            
            $
            178,838
            
            
            $
            —
            
            
            $
            —
            
            
            $
            2,254
            
            
            $
            181,092Chief
      Executive Officer and President
            
            2008
            
            
            195,000
            
            
            
            —
            
            
            
            —
            
            
            
            3,867
            
            
            
            198,8672007
            
            
            193,000
            
            
            
            —
            
            
            
            —
            
            
            
            3,868
            
            
            
            196,868Nidhi
      H. Andalon (4)
            
            2009
            
            
            130,276
            
            
            
            —
            
            
            
            3,840
            
            
            
            1,275
            
            
            
            131,550Chief
      Financial OfficerAndrew
      A. Farina (5)
            
            2009
            
            
            114,026
            
            
            
            —
            
            
            
            6,423
            
            
            
            15,334
            
            
            
            135,783Vice
      President and Chief Financial Officer
            
            2008
            
            
            169,055
            
            
            
            —
            
            
            
            15,636
            
            
            
            573
            
            
            
            185,2642007
            
            
            92,000
            
            
            
            —
            
            
            
            6,017
            
            
            
            286
            
            
            
            98,303Richard
      A. Nelson
            
            2009
            
            
            171,273
            
            
            
            —
            
            
            
            —
            
            
            
            5,730
            
            
            
            177,003Vice
      President of Engineering
            
            2008
            
            
            169,998
            
            
            
            —
            
            
            
            —
            
            
            
            6,274
            
            
            
            176,2722007
            
            
            164,000
            
            
            
            —
            
            
            
            —
            
            
            
            6,545
            
            
            
            170,545Robert
      K. Covey
            
            2009
            
            
            183,467
            
            
            
            —
            
            
            
            —
            
            
            
            5,123
            
            
            
            188,590Vice
      President of Marketing
            
            2008
            
            
            175,303
            
            
            
            —
            
            
            
            —
            
            
            
            4,445
            
            
            
            179,7482007
            
            
            171,000
            
            
            
            —
            
            
            
            —
            
            
            
            3,962
            
            
            
            174,962


____________


(1)
            The
      amounts shown in these columns reflect salary and bonuses earned by the
      named executive officers for each of the fiscal years indicated and
      include amounts which the executives elected to defer, on a discretionary
      basis, pursuant to Qualstar’s 401(k) savings
  plan.





(2)
            The
      amounts shown in this column represent the compensation expense recognized
      by Qualstar in each of the fiscal years indicated for financial statement
      reporting purposes with respect to the fair value of stock options granted
      during fiscal 2009 and in prior fiscal years.  The compensation
      expense is computed in accordance with SFAS 123R, and does not necessarily
      correspond to the actual value that will be realized by the named
      executive officers.  Stock options granted to the named
      executive officers vest over four years at the rate of 25% of the shares
      as of each anniversary of the date of grant.   Pursuant to
      SEC rules, the dollar amounts shown in the table exclude the impact of
      estimated forfeitures related to service-based vesting
      conditions.  Under SFAS 123R, the fair value of stock options is
      calculated using the closing price of Qualstar common stock on the date of
      grant.  As a result of Mr. Farina’s termination as of January
      16, 2009, he forfeited stock options for 50,000 shares.  The
      compensation expense with respect to Mr. Farina’s options that vested in
      fiscal 2009, less the reversal of amounts previously accrued relating to
      his forfeited options, resulted in  net compensation expense of
      $6,423 recognized by Qualstar in fiscal 2009.  This amount is
      included in the table above.  For additional information
      regarding the calculation of the fair value of stock options, refer to
      note 9 of the Qualstar financial statements included in Item 8 of this
      report.





(3)
            The
      amounts shown above under “All Other Compensation” represent matching
      contributions under our 401(k) plan, and premiums for disability and life
      insurance.  For Mr. Farina, the amount shown for fiscal 2009
      also includes a $15,000 severance paid upon his termination of
      employment.





(4)
            Ms.
      Andalon was appointed our Chief Financial Officer effective January 19,
      2009.





(5)
            Mr.
      Farina’s employment terminated as of January 16,
  2009.





Grants
of Plan-Based Awards





The
following table sets forth information regarding grants of awards to each named
executive officer during the year ended June 30, 2009 under our equity incentive
plan.


7
 Table of Contents


Grants
of Plan-Based Awards in Fiscal Year 2009





Name
            
            Grant Date
            
            
            All Other Option Awards: Number of Securities
      Underlying Options(1)
                (#)
            
            
            Exercise or Base Price of Option Awards ($ /
      Sh)
            
            
            Grant Date Fair Value of Stock and Option Awards(2)
                ($)William
      J. Gervais
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Nidhi
      H. Andalon
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Andrew
      A. Farina
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Richard
      A. Nelson
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Robert
      K. Covey
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —


____________


(1)
            The
      amounts shown in this column represent the number of shares of common
      stock underlying stock options granted in fiscal year 2009 to each named
      executive officer.  Stock options granted to the named executive
      officers vest over four years at the rate of 25% of the number of shares
      as of each anniversary of the date of grant, provided that the executive
      is still employed by Qualstar on the vesting
  date.





(2)
            The
      amounts shown in this column represent the full grant date fair value of
      stock options granted in fiscal year 2009, computed in accordance with
      SFAS 123R, and does not necessarily correspond to the actual value that
      will be realized by the named executive officers.  Under SFAS
      123R, the grant date fair value of stock options is calculated using the
      closing price of Qualstar common stock on the date of
      grant.  This amount is then recognized by the Company as
      compensation expense for financial statement reporting purposes ratably
      over the vesting period.  The amount recognized as compensation
      expense in fiscal 2009 is included in the Summary Compensation Table above
      in the column headed “Option Awards.”  For additional
      information regarding the calculation of the grant date fair value of
      stock options, refer to note 9 of the Qualstar financial statements
      included in Item 8 of this report.





Outstanding
Equity Awards





The
following table provides information regarding outstanding equity awards held by
each named executive officer as of June 30, 2009, including the number of
unexercised vested and unvested stock options. The vesting schedule for each
grant is shown following this table.





Outstanding
Equity Awards at 2009 Fiscal Year End





Option AwardsNumber of Securities Underlying Unexercised
      Options (#)
            
            
            Option
      Exercise Price
            
            
            Option
      ExpirationName
            
            Exercisable
            
            
            Unexercisable(1)
            
            
            ($)
            
            
            DateWilliam
      J. Gervais
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Nidhi
      H. Andalon
            
            
            12,000
            
            
            
            4,000
            
            
            $
            3.02
            
            
            06/14/2016Andrew
      A. Farina (2)
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Richard
      A. Nelson
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Robert
      K. Covey
            
            
            20,000
            
            
            
            —
            
            
            
            5.94
            
            
            01/03/2012


______________


(1)
            Stock
      options granted to the named executive officers vest over four years at
      the rate of 25% of the options as of each anniversary of the date of
      grant, provided that the executive is still employed by Qualstar on the
      vesting date.  The amounts shown in this column represent the
      remaining unvested portion of each option
grant.





(2)
            Andrew
      A. Farina’s employment terminated as of January 16,
  2009.


8
 Table of Contents


Option
Exercises





The table below sets forth information
for each named executive officer regarding the exercise of stock options during
the fiscal year ended June 30, 2009, including the aggregate value realized upon
exercise before payment of any applicable withholding taxes.





Option
Exercises in Fiscal Year 2009


Option AwardsName
            
            Number of Shares Acquired on
      Exercise
                (#)
            
            
            Value Realized on Exercise(1)
                ($)William
      J. Gervais
            
            
            —
            
            
            
            —Nidhi
      H. Andalon
            
            
            —
            
            
            
            —Andrew
      A. Farina
            
            
            —
            
            
            
            —Richard
      A. Nelson
            
            
            —
            
            
            
            —Robert
      K. Covey
            
            
            —
            
            
            
            —


_________________


(1)
            The
      value realized on exercise of option awards represents the market price
      per share of common stock on the date of exercise, less the stock option
      exercise price per share, multiplied by the number of stock options
      exercised.





Director
Compensation





Each of
our non-employee directors receives cash fees and equity-based awards as
compensation for his service on the Board of Directors and the committees of the
Board on which he is a member.  The table below sets forth cash
compensation earned by each non-employee director, and share-based compensation
expense recognized by us for each non-employee director, during the fiscal year
ended June 30, 2009.  All compensation earned by Mr. Gervais and Mr.
Nelson is reported in the Summary Compensation Table above and has been excluded
from the table below.





Fiscal
Year 2009 Director Compensation Table


Name
            
            Fees Earned or Paid in Cash(1)
                ($)
            
            
            Option Awards(2)(3)
                ($)
            
            
            Total
                ($)Stanley
      W. Corker
            
            $
            20,000
            
            
            $
            5,760
            
            
            $
            25,760Carl
      W. Gromada
            
            
            20,000
            
            
            
            5,760
            
            
            
            25,760Robert
      A. Meyer
            
            
            20,000
            
            
            
            5,760
            
            
            
            25,760Robert
      E. Rich
            
            
            13,000
            
            
            
            5,760
            
            
            
            18,760


__________________


(1)
            The
      amounts shown in this column represent the amount of cash compensation
      earned in fiscal year 2009 for service on the Board of Directors and any
      committees of the Board on which the director was a member in fiscal
      2009.





(2)
            The
      amounts shown in this column represent the compensation expense recognized
      by Qualstar in fiscal year 2009 for financial statement reporting purposes
      with respect to the fair value of stock options granted in prior fiscal
      years.  No stock options were granted to our directors during
      fiscal 2009.  The compensation expense is computed in accordance
      with SFAS 123R, and does not necessarily correspond to the actual value
      that will be realized by the directors.  Stock options granted
      to our directors vest over four years at the rate of 25% of the shares as
      of each anniversary of the date of grant.  Pursuant to SEC
      rules, the dollar amounts shown in the table exclude the impact of
      estimated forfeitures related to service-based vesting
      conditions.  Under SFAS 123R, the fair value of stock options is
      calculated using the closing price of Qualstar common stock on the date of
      grant. For additional information regarding the calculation of the fair
      value of stock options, refer to note 9 of the Qualstar financial
      statements included in Item 8 of this
report.





(3)
            As
      of June 30, 2009, each of our non-employee directors named in the above
      table held unexercised stock options for 24,000 shares of our common
      stock.


9
 Table of Contents


Each of
our non-employee directors receives $2,000 per quarter plus $1,000 for each
Board meeting attended as compensation for his service on the Board, and is
reimbursed for expenses incurred in connection with attendance at meetings of
the Board and any committees on which he serves. Directors who serve on the
Audit Committee of our Board receive an additional fee of $1,000 per quarter
plus an attendance fee of $500 per meeting if the Audit Committee meeting is
held in conjunction with a meeting of the full Board, and $1,000 per meeting if
held on a day when the full Board does not meet. Directors who serve on the
Compensation Committee of our Board receive an additional fee of $500 for
attending meetings of that committee that are held on a day when the full Board
does not meet. An attendance fee of $250 per meeting is paid for telephonic
meetings of the full Board or of a committee on which a director is a member. No
fees are paid for service on the Board to directors who are employees of
Qualstar.





Directors
are eligible to receive stock options under our 2008 Stock Incentive
Plan.  However, no stock options were granted to our non-employee
directors during the fiscal year ended June 30, 2009.





Potential
Benefits Upon or Following a Change in Control





Stock
options granted under our 2008 Stock Incentive Plan and our 1998 Stock Incentive
Plan provide that upon certain circumstances in the event of or following a
change in control of Qualstar, the unvested portion of such stock options will
accelerate and become immediately vested in full.  In general, a
change in control is deemed to occur if we were to sell substantially all of our
assets or if Qualstar were to merge into, consolidate with or enter into a
reorganization with another entity in a transaction in which Qualstar is not the
surviving corporation.





If a
change in control occurs and the acquiring entity does not assume and continue
the employee’s rights under the unvested stock options, then all unvested stock
options will accelerate and vest in full upon the occurrence of the change in
control.  If the acquiring entity does assume the employee’s rights
under the unvested stock options, but the employee’s employment subsequently is
terminated without cause, or if the employee resigns for good reason after the
change in control, then all unvested stock options held by the employee would
accelerate and vest in full as of the date of termination.





The
reasons for which an employee may voluntarily resign and trigger acceleration of
vesting include a change in the employee’s position which materially reduces his
or her duties and responsibilities or the level of management to which the
employee reports, a reduction in the employee’s level of compensation and
benefits by more than 15 percent, or a relocation of employee’s principal place
of employment by more than 30 miles without his or her consent.





The table
below sets forth information regarding the estimated amounts that each named
executive officer would have realized in the event that a change in control of
Qualstar had occurred and all of his unvested stock options had accelerated and
become immediately vested in full as of June 30, 2009.





Estimated
Benefits at 2009 Fiscal Year End in the Event of a Change in
Control


Name
            
            Option Awards(1)William
      J. Gervais
            
            —Nidhi
      H. Andalon
            
            —Andrew
      A. Farina
            
            —Richard
      A. Nelson
            
            —Robert
      K. Covey
            
            —





(1)
            The
      amounts in this column represent the aggregate gain each named executive
      officer would have realized if all unvested stock options that were held
      by him or her on June 30, 2009 accelerated and became immediately vested
      in full on that date.  The amount of gain was calculated based
      on the difference between the exercise price of each unvested option and
      the closing price of our common stock on that date, which was $2.19 per
      share.


10
 Table of Contents


ITEM
      12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS





The
following table sets forth information with respect to the beneficial ownership
of our common stock as of October 20, 2009 for:





·
            each
      person (or group of affiliated persons) who we know beneficially owns more
      than 5% of our common stock;





·
            each
      of our directors;





·
            each
      of the named executive officers;
and





·
            all
      of our directors and executive officers as a
  group.





Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and includes voting and investment power with respect to
shares.  Except as indicated by footnote, the persons named in the
table have sole voting and sole investment control with respect to all shares
beneficially owned, subject to community property laws where
applicable.  The percentage of shares beneficially owned is based on
12,253,117 shares of common stock outstanding as of October 20,
2009.  Shares of common stock subject to options currently exercisable
or exercisable within 60 days of October 20, 2009, are deemed outstanding for
computing the percentage of the person holding such options, but are not deemed
outstanding for computing the percentage of any other person.  The
address for those individuals for which an address is not otherwise indicated
is: c/o Qualstar Corporation, 3990-B Heritage Oak Court, Simi Valley, California
93063.





Common
            
            
            Options
      Exercisable Within 60
            
            
            Beneficial OwnershipName
            
            Shares Owned
            
            
            Days (1)
            
            
            Number
            
            
            PercentWilliam
      J. Gervais
            
            
            3,071,045
            
            
            
            —
            
            
            
            3,071,045
            
            
            
            25.1
            %Richard
      A. Nelson
            
            
            1,885,261
            
            
            
            —
            
            
            
            1,885,261
            
            
            
            15.4
            %Harvey
      Partners, LLC (2)
            
            
            756,000
            
            
            
            —
            
            
            
            756,000
            
            
            
            6.2
            %350
      Madison Avenue, Floor 8, New York, NY 10017Porter
      Orlin LLC (3)
            
            
            713,920
            
            
            
            —
            
            
            
            713,920
            
            
            
            5.8
            %665
      Fifth Avenue, Floor 34, New York, NY 10103Stanley
      W. Corker
            
            
            18,940
            
            
            
            18,000
            
            
            
            36,940
            
            
            
            *Carl
      Gromada
            
            
            48,271
            
            
            
            18,000
            
            
            
            66,271
            
            
            
            *Robert
      A. Meyer
            
            
            —
            
            
            
            18,000
            
            
            
            18,000
            
            
            
            *Robert
      E. Rich
            
            
            131,400
            
            
            
            18,000
            
            
            
            149,400
            
            
            
            1.2
            %Robert
      K. Covey
            
            
            48,280
            
            
            
            20,000
            
            
            
            68,280
            
            
            
            *Nidhi
      H. Andalon
            
            
            —
            
            
            
            12,000
            
            
            
            12,000
            
            
            
            *Andrew
      A. Farina
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            *All
      directors and officers as a group (10 persons)
            
            
            5,203,197
            
            
            
            104,000
            
            
            
            5,307,197
            
            
            
            42.9
            %


___________


*Less
than 1.0%





(1)
            Represents
      shares that may be acquired upon exercise of stock options which are
      either currently vested or will vest within 60 days of October 20,
      2009.





(2)
            Based
      on information contained in reports filed with the Securities and Exchange
      Commission, Harvey Partners, LLC, an investment adviser, beneficially owns
      756,000 shares as of April 3, 2009.





(3)
            Based
      on information contained in reports filed with the Securities and Exchange
      Commission, Porter Orlin LLC, an investment adviser, beneficially owns
      713,920 shares as of April 3, 2009.





Additional
Equity Compensation Plan Information





Information
regarding Qualstar’s equity compensation plans as of June 30, 2009 is included
in Item 5 of this report and is incorporated herein by
reference.


11
 Table of Contents


ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE





Transactions
with Related Persons





There are
no relationships or transactions involving any of our directors or executive
officers for which disclosure is required under the rules of the Securities and
Exchange Commission.





In
accordance with the charter of the Audit Committee of our Board of Directors,
the Audit Committee is responsible for reviewing any proposed transaction with
any related person which involves a potential conflict of interest or for which
approval is required under applicable Securities and Exchange Commission and
Nasdaq rules.  Currently, this review and approval requirement applies
to any transaction to which Qualstar will be a party, in which the amount
involved exceeds $120,000, and in which any of the following persons will have a
direct or indirect material interest: (a) any of our directors or executive
officers, (b) any nominee for election as a director, (c) any security holder
who is known to us to own of record or beneficially more than five percent of
our common stock, or (d) any member of the immediate family of any of the
persons described in the foregoing clauses (a) through (c).





In the
event that management becomes aware of any related person transaction,
management will present information regarding the proposed transaction to the
Audit Committee for review.  Approval of a transaction with a related
person requires the affirmative vote of a majority of the members of the Audit
Committee or of a majority of the members of the full Board of
Directors.  If the related person transaction involves a member or
members of the Board, approval requires a majority vote of the directors who do
not have a financial interest in the transaction.





Director
Independence





Our Board
has determined that all of our directors satisfy the current “independent
director” standards established by rules of The Nasdaq Stock Market, Inc.
(“Nasdaq”), except for William J. Gervais, who is Chief Executive Officer and
President of Qualstar, and Richard A. Nelson, who is Vice President Engineering
and Secretary of Qualstar.  Each director serving on the Audit
Committee of our Board also meets the more stringent independence requirements
established by Securities and Exchange Commission rules applicable to audit
committees.  Mr. Robert E. Rich, a member of our Board of Directors
since January 2000, is a shareholder in the law firm of Stradling Yocca Carlson
& Rauth, which has provided legal services to Qualstar since
1984.  Our Board has determined that no director has a relationship
that would interfere with the exercise of independent judgment in carrying out
his responsibilities as a director.  There are no family relationships
among any of the directors or executive officers of the Company.





ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND
SERVICES





Fees
Paid to Independent Registered Public Accountants





The
aggregate fees billed by SingerLewak LLP, our independent registered public
accounting firm for fiscal year 2009, and by Ernst & Young LLP, our
independent registered public accounting firm for fiscal year 2008, for
professional services rendered to Qualstar during the fiscal years ended June
30, 2009 and June 30, 2008, respectively, were comprised of the
following:





Fiscal
              2009
            
            
            Fiscal
              2008Audit
      Fees
            
            $
            121,091
            
            
            $
            257,040Audit-related
      fees
            
            
            —
            
            
            
            7,350Tax
      fees
            
            
            —
            
            
            
            83,938All
      other fees
            
            
            —
            
            
            
            —Total
      fees
            
            $
            121,091
            
            
            $
            348,328





Audit
fees include fees for professional services rendered in connection with the
audit of our consolidated financial statements for each year and reviews of our
unaudited consolidated quarterly financial statements, as well as fees related
to consents and reports in connection with regulatory filings for those fiscal
years.





Audit-related
fees in fiscal 2008 were primarily for general assistance in connection with the
implementation of procedures required to comply with rules and regulations
promulgated pursuant to the Sarbanes-Oxley Act of 2002.





Ernst
& Young LLP was our principal accountant for tax compliance, tax advice and
tax planning during both fiscal years 2009 and 2008.  Tax fees related
primarily to tax compliance and advisory services, and the preparation of
federal and state tax returns.  Tax fees for fiscal 2008 also include
professional services related to government audits of our federal and state tax
returns.  Tax fees billed to us by Ernst & Young LLP
during  fiscal year 2009 were $79,540.


12
 Table of Contents


Audit
Committee Pre-Approval Policies and Procedures





Our Audit
Committee’s policy is to pre-approve all audit and permissible non-audit
services provided by our independent registered public accountants in accordance
with applicable Securities and Exchange Commission rules. The Audit Committee
adopted a written pre-approval policy on June 25, 2003, and all services
performed by SingerLewak, LLP and Ernst & Young, LLP in connection with
engagements subsequent to June 25, 2003 have been pre-approved in accordance
with the Audit Committee’s pre-approval policy. The Audit Committee generally
pre-approves particular services or categories of services on a case-by-case
basis. The independent registered public accountants and management periodically
report to the Audit Committee regarding the extent of services provided by the
independent registered public accountants in accordance with these
pre-approvals, and the fees for the services performed to date.


13
 Table of Contents


SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.








QUALSTAR
      CORPORATIONDate:
      October 28, 2009
            By:
            /s/  WILLIAM J.
      GERVAISWilliam
      J. Gervais,Chief
      Executive Officer and President





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





Signature
            Title
            Date/s/  WILLIAM J.
      GERVAIS
            Chief
      Executive Officer,
            October
      28, 2009William
      J. Gervais
            President
      and Director/s/  NIDHI H.
      ANDALON
            Chief
      Financial Officer
            October
      28, 2009Nidhi
      H. Andalon
            (principal
      financial officer)/s/  RICHARD A.
      NELSON
            Vice
      President, Engineering
            October
      28, 2009Richard
      A. Nelson
            Secretary
      and Director/s/  CARL W.
      GROMADA
            Director
            October
      28, 2009Carl
      W. Gromada/s/  STANLEY W.
      CORKER
            Director
            October
      28, 2009Stanley
      W. Corker/s/  ROBERT E.
      RICH
            Director
            October
      28, 2009Robert
      E. Rich/s/  ROBERT A.
      MEYER
            Director
            October
      28, 2009Robert
      A. Meyer


14
 Table of Contents


EXHIBIT INDEX





Exhibit
              No.
            
            Description3.1(1)
            
            Restated
      Articles of Incorporation.3.2(4)
            
            Bylaws,
      as amended and restated January 14, 2000.3.3(4)
            
            Amendment
      to Bylaws, adopted December 21, 2007.10.1(1)*
            
            1998
      Stock Incentive Plan, as amended and restated.10.2(1)
            
            Form
      of Indemnification Agreement.10.3(2)
            
            Lease
      agreement between Strategic Performance Fund-II, Inc. and Qualstar
      Corporation, dated September 20, 2000.10.4
            
            Amendment
      to Lease Agreement between Strategic Performance Fund-II, Inc. and
      Qualstar Corporation, dated June 30, 2009.10.45(5)*
            
            2008
      Stock Incentive Plan14.1(3)
            
            Code
      of Business Conduct and Ethics23.1
            
            Consent
      of Independent Registered Public Accounting Firm (SingerLewak,
      LLP).23.2
            
            Consent
      of Independent Registered Public Accounting Firm (Ernst & Young,
      LLP).31.1
            
            Certification
      of Principal Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
            
            Certification
      of Principal Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
            
            Certification
      of Principal Executive Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.2
            
            Certification
      of Principal Financial Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.


____________


(1)
            Incorporated
      by reference to the designated exhibits to Qualstar’s registration
      statement on Form S-1 (Commission File No. 333-96009), declared effective
      by the Commission on June 22, 2000.





(2)
            Incorporated
      by reference to the designated exhibit to Qualstar’s Report on Form 10-Q
      for the fiscal quarter ended September 30,
2000.





(3)
            Incorporated
      by reference to the designated exhibit to Qualstar’s Report on Form 10-K
      for the fiscal year ended June 30,
2004.





(4)
            Incorporated
      by reference to the designated exhibit to Qualstar’s Report on Form 10-Q
      for the fiscal quarter ended December 31,
2007.





(5)
            Incorporated
      by reference to Exhibit 10.1 to Qualstar’s report on Form 10-Q/A for the
      fiscal quarter ended March 31, 2009





*
            Each
      of these exhibits constitutes a management contract, compensatory plan or
      arrangement required to be filed as an exhibit to this report pursuant to
      Item 15(b) of this report.






15