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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-K/A
AMENDMENT NO. 1



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x
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OF 1934
OR 15(d) OF THE SECURITIES EXCHANGE
ACTFor the fiscal year ended June 30, 2003


OR

o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934For the transition period from ____________ to ____________


Commission File Number: 000-30083

QUALSTAR CORPORATION




(Exact name of Registrant as specified in its charter)


California
    
    95-3927330(State of Incorporation)
    
    (I.R.S. Employer Identification No.)


3990-B Heritage Oak Court, Simi Valley, CA 93063




(Address of principal executive offices, including zip code)


Registrants telephone number, including area code: (805) 583-7744

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

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

Common Stock, without par value

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 [ X ] No [   ]

Indicate by a 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. [ X ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [   ] No [ X ].

As of September 24, 2003, the aggregate market value of the common equity
held by non-affiliates of the registrant was approximately $37,091,000.

The total number of shares of common stock outstanding at September 24, 2003 was 12,639,609.

DOCUMENTS INCORPORATED BY REFERENCE

None





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TABLE OF CONTENTS



|              |                                                                                                         |  |  |  |  |  |  | 
|------------- | ------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART III     
|              | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                            
|              | ITEM 11. EXECUTIVE COMPENSATION                                                                        
|              | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|              | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                
|EXHIBIT INDEX
|EXHIBIT 31.1 
|EXHIBIT 31.2 



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PART III




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information regarding executive officers of the Company is included in
Part I of this report under the heading Management. Information regarding
the directors of the Company is set forth below.

Name
    
    Age
    
    PositionWilliam J. Gervais
    
    
    60
    
    
    Chief Executive Officer, President and DirectorRichard A. Nelson
    
    
    60
    
    
    Vice President  Engineering, Secretary and DirectorBruce E. Gladstone
    
    
    68
    
    
    DirectorRobert E. Rich
    
    
    53
    
    
    DirectorTrude C. Taylor
    
    
    81
    
    
    DirectorRobert T. Webber
    
    
    62
    
    
    Director


William J. Gervaisis a founder of Qualstar, 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, a former manufacturer of hard disk drives. Mr. Gervais
earned a B.S. degree in Mechanical Engineering from California State
Polytechnic University in 1967.

Richard A. Nelsonis 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 in 1966.

Bruce E. Gladstonehas been a director of Qualstar since 1994. From
April 2000 until March 2003, Mr. Gladstone served as Executive Vice President
of 2KSounds, Inc., a company engaged in the production and distribution of
music. In 1997, Mr. Gladstone was a co-founder of ComCore Semiconductor, a
fabless semiconductor company, and served as its Vice President and as a
director from 1997 until its sale in 1998. From 1996 until 1997, Mr. Gladstone
was a consultant in the area of high technology startup companies. In 1990,
Mr. Gladstone co-founded Chronology Corporation, a company that provides tools
for electronic engineers, and served as an executive officer and director from
1990 until 1995. During the period 1974 through 1990, Mr. Gladstone founded
and served as chief executive officer and president of three companies
providing electronic engineering and software development tools. Mr. Gladstone
began his career in electrical engineering and received B.S. and M.S. degrees
in Engineering from the University of California, Los Angeles in 1957 and 1962.

Robert E. Richhas 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.

Trude C. Taylorserved as a director of Qualstar from October 1989 until
December 1995, and rejoined our board in January 2000. Since 1984, Mr. Taylor
has been a principal of TC Associates, a private investment firm. Mr. Taylor
served as Chairman of the Board, Chief Executive Officer and a director of
Zehntel Corporation, an automatic electronic test equipment manufacturer, from
1984 until 1988. Mr. Taylor was a founder and served as Chief Executive
Officer, President and a director of EM&M Corporation, a computer components
and memory products company, from 1961 until 1984, and served as its Chairman
of the Board from 1984 until 1986. Mr. Taylor

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served on the board of directors of Xylan Corporation until it was
acquired by Alcatel S.A. in 1999, and currently serves on the board of
directors of Plantronics, Inc. Mr. Taylor also serves as a trustee of Harvey
Mudd College, and as an arbitrator for the New York Stock Exchange and the
National Association of Securities Dealers, Inc. Mr. Taylor received a B.S.
degree in Mechanical Engineering from the University of California, Los Angeles
in 1949, and an M.B.A. degree from Harvard University in 1951.

Robert T. Webberhas served as a director of Qualstar since January 2000.
Prior to his retirement in 1999, Mr. Webber was employed for 32 years by
Lockheed-Martin Skunk Works and its predecessors, where he served in various
positions, most recently as Chief Engineer and Division Manager for the Systems
Requirements & Analysis Division. Mr. Webber currently serves on the executive
board of the National Defense Industrial Associations Combat Survivability
Division, a professional trade association. Mr. Webber received a B.S. degree
in Engineering from the University of California, Los Angeles in 1963 and an
M.B.A. degree from Pepperdine University in 1971.

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

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Qualstars executive officers and directors, and persons who beneficially own
more than ten percent of Qualstars common stock, to file initial reports of
ownership and reports of changes in ownership with the SEC and the National
Association of Securities Dealers, Inc. Executive officers, directors and
persons who beneficially own more than ten percent of Qualstars common stock
are required by SEC regulations to furnish Qualstar with copies of all Section
16(a) forms they file.

Based solely upon our review of the copies of reporting forms furnished to
Qualstar, and written representations that no other reports were required, we
believe that all filing requirements under Section 16(a) of the Securities
Exchange Act of 1934 applicable to directors, officers and any persons holding
more than ten percent of Qualstars common stock with respect to the fiscal
year ended June 30, 2003, were satisfied on a timely basis.

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ITEM 11. EXECUTIVE COMPENSATION

The following table summarizes all compensation earned by our Chief
Executive Officer and the four other most highly compensated executive officers
whose total salary and bonus exceeded $100,000 for services rendered in all
capacities to us during the fiscal year ended June 30, 2003. These individuals
are referred to as our named executive officers in other parts of this report.
The amounts shown below under All Other Compensation represent matching
contributions under our 401(k) plan.

Summary Compensation Table

Annual Compensation
    
    Long Term Compensation AwardsName and Principal Position
    
    Year
    
    Salary ($)
    
    Bonus ($)
    
    Securities Underlying Options (#)
    
    All Other Compensation ($)William J. Gervais
    
    
    2003
    
    
    $
    180,600
    
    
    
    
    
    
    
    
    
    
    
    Chief Executive Officer
    
    
    2002
    
    
    
    160,300
    
    
    
    
    
    
    
    
    
    
    
    and President
    
    
    2001
    
    
    
    148,000
    
    
    
    
    
    
    
    
    
    
    
    Thomas J. Studebaker (1)
    
    
    2003
    
    
    
    187,000
    
    
    
    
    
    
    
    40,000
    
    
    $
    650Vice President of Advanced
    
    
    2002
    
    
    
    43,200
    
    
    
    
    
    
    
    
    
    
    
    DevelopmentRobert K. Covey
    
    
    2003
    
    
    
    162,600
    
    
    
    
    
    
    
    
    
    
    
    1,600Vice President of Marketing
    
    
    2002
    
    
    
    158,300
    
    
    
    
    
    
    
    20,000
    
    
    
    1,6002001
    
    
    
    152,000
    
    
    
    
    
    
    
    
    
    
    
    1,700David L. Griffith (2)
    
    
    2003
    
    
    
    160,600
    
    
    
    
    
    
    
    
    
    
    
    Vice President of Operations
    
    
    2002
    
    
    
    110,100
    
    
    
    
    
    
    
    80,000
    
    
    
    Mark R. Gilmore (3)
    
    
    2003
    
    
    
    134,000
    
    
    
    10,000
    
    
    
    
    
    
    
    1,900Vice President of Sales
    
    
    2002
    
    
    
    92,500
    
    
    
    
    
    
    
    40,000
    
    
    
    




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|(1) |  | Thomas J. Studebaker became our V.P. of Advanced Development in
April 2002.
|--- |  | ---------------------------------------------------------------------------
|   
|(2) |  | David L. Griffith became our V.P. of Operations in October 2001.           
|   
|(3) |  | Mark R. Gilmore became our Vice President of Sales in January 2002.        

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Option Grants in Last Fiscal Year

The following table sets forth certain information concerning grants of
options to each of the named executive officers during the year ended June 30,
2003. In addition, in accordance with the rules and regulations of the
Securities and Exchange Commission, the following table sets forth the
hypothetical gains or option spreads that would exist for the options. Such
gains are based on assumed rates of annual compound stock appreciation of 5%
and 10% from the date on which the options were granted over the full term of
the options. The rates do not represent Qualstars estimate or projection of
future common stock prices, and no assurance can be given that any appreciation
will occur or that the rates of annual compound stock appreciation assumed for
the purposes of the following table will be achieved.

Potential Realizable ValuePercent of
    
    
    
    
    
    
    
    
    
    At Assumed Annual RatesTotal Options
    
    
    
    
    
    
    
    
    
    of Stock Price AppreciationOptions
    
    Granted to
    
    Exercise
    
    
    
    
    
    forGranted
    
    Employees in
    
    Price
    
    Expiration
    
    Option Term(2)Name
    
    (# of Shares)(1)
    
    Fiscal Year
    
    ($/Share)
    
    Date
    
    5%($)
    
    10%($)William J. Gervais
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Thomas J. Studebaker
    
    
    40,000
    
    
    
    24.0
    %
    
    
    5.74
    
    
    
    5/14/012
    
    
    
    204,794
    
    
    
    426,323Robert K. Covey
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    David L Griffith
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mark R. Gilmore
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    




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|(1) |  | The per share exercise price of all options granted is the fair market
value of Qualstars common stock on the date of grant. Options have a
term of 10 years and become exercisable in four equal annual installments
commencing one year after the grant date.                                                          
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The potential realizable value is calculated from the exercise price per
share, assuming the market price of Qualstars common stock appreciates in
value at the stated percentage rate from the date of grant to the
expiration date. Actual gains, if any, are dependent on the future market
price of the common stock.

Options Exercised and Fiscal Year-End Values

The following table sets forth information regarding options exercised by
our named executive officers during the fiscal year ended June 30, 2003, the
number of shares covered by both exercisable and unexecisable options as of
June 30, 2003, and the value of unexercised in-the-money options held by our
named executive officers as of June 30, 2003.

Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values

Number of
    
    
    
    
    
    Number of Securities
    
    Value of UnexercisedShares
    
    
    
    
    
    Underlying Unexercised
    
    In-the-Money Options atAcquired
    
    Value
    
    Options at June 30, 2003
    
    June 30, 2003(1)Name
    
    on Exercise
    
    Realized
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableWilliam J. Gervais
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Thomas J. Studebaker
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    30,000
    
    
    
    
    
    
    
    Robert K. Covey
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    15,000
    
    
    
    
    
    
    
    David L. Griffith
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    60,000
    
    
    
    22,600
    
    
    
    67,800Mark R. Gilmore
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    30,000
    
    
    
    
    
    
    
    




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|(1) |  | Represents the closing sale price of our common stock on June 30, 2003
($5.50), less the exercise price per share, multiplied by the number of
shares subject to the options held by the named executive officer.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Compensation of Directors

Each of our non-employee directors receives $2,000 per quarter as
compensation for his service on the Board, and is reimbursed for expenses
incurred in connection with attendance at Board meetings. Non-employee
directors who serve on a committee of the Board also receive $500 for each
committee meeting attended, excluding telephonic meetings, that is held on a
day when the full Board is not also meeting. Directors are eligible to receive
options and rights to purchase restricted stock under our 1998 Stock Incentive
Plan. In January 2000, we granted to each of our four non-employee directors
the right to purchase 54,000 shares of restricted stock at a price of $2.78 per
share, which each director purchased with a full-recourse promissory note. We
have the right to repurchase a directors restricted shares at the original
purchase price upon termination of his service for any reason. Our repurchase
right lapses and the directors shares vest at the rate of 25% per year of
service following the date of grant.

Compensation Committee Interlocks and Insider Participation in Compensation
Decisions

During the fiscal year ended June 30, 2003, the members of the
Compensation Committee of our Board of Directors were Bruce E. Gladstone, Trude
C. Taylor and Robert T. Webber. No executive officer 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.

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|         |                                                                                               
|-------- | ----------------------------------------------------------------------------------------------
|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 September 30, 2003 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.
Shares of common stock subject to options currently exercisable or exercisable
within 60 days of September 30, 2003, 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, CA 93063.

Shares Beneficially
    
    Percent of SharesName of Beneficial Owner
    
    Owned
    
    OutstandingWilliam J. Gervais
    
    
    2,881,350
    
    
    
    22.8
    %Richard A. Nelson
    
    
    1,997,750
    
    
    
    15.8
    %Robert K. Covey (1)
    
    
    157,400
    
    
    
    1.2
    %Bruce E. Gladstone (2)
    
    
    54,000
    
    
    
    0.4
    %Robert E. Rich (2)
    
    
    131,400
    
    
    
    1.0
    %Trude C. Taylor (2)
    
    
    201,920
    
    
    
    1.6
    %Robert T. Webber (2)
    
    
    88,000
    
    
    
    0.7
    %Thomas
J. Studebaker (3)
    
    
    10,000
    
    
    
    0.1
    %David
L. Griffith (4)
    
    
    20,000
    
    
    
    0.2
    %Mark
R. Gilmore (3)
    
    
    10,000
    
    
    
    0.1
    %All directors and officers as a group (11 persons) (5)
    
    
    5,551,820
    
    
    
    43.8
    %




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|(1) |  | Includes 5,000 shares subject to stock options that are currently
exercisable or exercisable within 60 days of September 30, 2003.                                                                                                                                                                                 
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes 13,500 shares that we have the right to repurchase if the
shareholders service on our board of directors terminates. Our
repurchase right lapses as to 13,500 shares for each year of service on
the board and will fully lapse as of January 14, 2004.                                                  
|   
|(3) |  | Includes 10,000 shares subject to
stock options that are currently exercisable or exercisable within 60
days of September 30, 2003.                                                                                                                                                                                
|   
|(4) |  | Includes 20,000 shares subject to
stock options that are currently exercisable or exercisable within 60
days of September 30, 2003.                                                                                                                                                                                
|   
|(5) |  | Includes 45,000 shares subject to stock options that are currently
exercisable or exercisable within 60 days of September 30, 2003, and an
aggregate of 54,000 shares subject to a right of repurchase in favor of
Qualstar which lapses as to 54,000 shares each year and will fully lapse
as of January 14, 2004.

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Additional Equity Compensation Plan Information

The following table provides additional information regarding Qualstars equity compensation
plans as of June 30, 2003:

Number of securitiesremaining available forNumber of securities to
    
    Weighted-average
    
    future issuance underbe issued upon exercise
    
    exercise price of
    
    equity compensation plansof outstanding options,
    
    outstanding options,
    
    (excluding securitiesPlan category
    
    warrants and rights
    
    warrants and rights
    
    reflected in column (a))(a)
    
    
    
    (b)
    
    
    
    (c)Equity compensation
plans approved by
security holders(1)
    
    
    480,500
    
    
    $
    5.27
    
    
    
    375,175Equity compensation
plans not approved by
security holders
    
    
    
    
    
    
    
    
    
    
    Totals
    
    
    480,500
    
    
    $
    5.27
    
    
    
    375,175




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|(1) |  | Includes shares subject to stock options granted under the 1998 Stock
Incentive Plan, and shares available for additional option grants under
that plan, as of June 30, 2003.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------




ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In January 2000 each of our four non-employee directors purchased 54,000
shares of restricted stock pursuant to our 1998 Stock Incentive Plan at a price
of $2.78 per share, which was the fair market value of our stock on the date of
grant as determined by our board of directors. Each director paid for his
shares with a full-recourse promissory note in the amount of $150,000, secured
by a pledge of the purchased shares. Payments of principal on the notes are due
in four equal annual installments commencing on the second anniversary of the
date of the note. Interest on the notes accrues at the rate of 6.21%, and is
payable annually. As of September 30, 2003, the remaining principle balances
owed under these promissory notes were $37,500 by Mr. Gladstone, $0 by Mr.
Rich, $37,500 by Mr. Taylor, and $75,000 by Mr. Webber.

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SIGNATURES

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

Dated: October 28, 2003
    
    QUALSTAR CORPORATIONBy:
    
    /s/ William J. GervaisWilliam J. GervaisChief Executive Officer and President


Pursuant to the requirements of the Securities Exchange Act of 1934, this
amendment on Form 10K/A has been signed below by the following persons in the
capacities and on the dates indicated.

SIGNATURE
    
    TITLE
    
    DATE/s/ William J. GervaisWilliam J. Gervais
    
    Chief Executive Officer, President and Director
(principal executive officer)
    
    October 28, 2003/s/ Richard A. NelsonRichard A. Nelson
    
    Vice President of Engineering, Secretary and Director
    
    October 28, 2003/s/ Frederic T. BoyerFrederic T. Boyer
    
    Vice President and Chief Financial Officer
(principal financial and accounting officer)
    
    October 28, 2003/s/ Bruce E. GladstoneBruce E. Gladstone
    
    Director
    
    October 28, 2003/s/ Trude C. TaylorTrude C. Taylor
    
    Director
    
    October 28, 2003/s/ Robert E. RichRobert E. Rich
    
    Director
    
    October 28, 2003/s/ Robert T. WebberRobert T. Webber
    
    Director
    
    October 28, 2003


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EXHIBIT INDEX

Exhibit No.
    
    Description31.1
    
    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.


10