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                   EXECUTIVE BENEFITS AGREEMENT                    EXHIBIT 10.17

         THIS EXECUTIVE BENEFITS AGREEMENT (this "Agreement") is entered into by
and between LARSCOM CORPORATION, a Delaware corporation (the "Company") and
Daniel Scharre ("Executive"), effective February 10, 2004. This Agreement is
intended to provide Executive with the benefit described herein upon the
occurrence of specific events. Certain capitalized terms used in this Agreement
are defined in Article 2.

         The Company and Executive hereby agree as follows:

                                   ARTICLE 1

                               SEVERANCE BENEFITS

         1.1      SEVERANCE BENEFITS. Subject to Section 1.3 below, if
Executive's employment terminates due to an Involuntary Termination Without
Cause or a Constructive Termination (each, a "Covered Termination"), the vesting
and exercisability of fifty percent (50%) of the Executive's stock options that
are unvested at the time of the Covered Termination shall accelerate and
immediately become vested and exercisable as of such date, and such options
shall be exercisable for a period of twelve (12) months following such date but
in no case beyond the relevant expiration dates of such options.

         1.2      TAX CONSEQUENCES. Executive acknowledges that he has been
advised by the Company to consult with a tax advisor or attorney with respect to
the tax consequences, if any, of these amendments to his stock option grants.

         1.3      CERTAIN REDUCTIONS IN PAYMENTS.

                  (a)      Anything in this Agreement to the contrary
notwithstanding, in the event that any benefits provided by the Company to or
for the benefit of Executive (whether provided or to be provided pursuant to the
terms of this Agreement or any other agreement by and between Executive and the
Company, including, but not limited to, the Executive's Employment Agreement,
dated November 26, 2001 (the "Employment Agreement")) (the "Benefits") would (i)
constitute a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986 ("the Code") and (ii) but for this Section 1.3, be
subject to the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then, in accordance with this Section 1.3, the Benefits shall be reduced
to the maximum amount that would result in no portion of the Benefits being
subject to the Excise Tax, but only if and to the extent that such a reduction
would result in Executive's receipt of a net amount that is greater than the net
amount Executive would receive (after application of the Excise Tax) if no
reduction is made. The amount of required reduction, if any, shall be the
smallest amount so that the Executive's net proceeds with respect to the
Benefits (after taking into account payment of any Excise Tax and all federal,
state and local income, employment or other taxes) shall be maximized. If the
Excise Tax is not eliminated pursuant to this Section 1.3, Executive shall pay
the Excise Tax.

                  (b)      All determinations required to be made under this
Section 1.3 shall be made by independent auditors selected by the Company (which
independent auditors may

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include the Company's independent auditors). Such auditors shall provide
detailed supporting calculations both to the Company and Executive. Any such
reasonable determination by the Company's independent auditors shall be binding
upon the Company and Executive. The Executive shall determine which and how much
of the Benefits shall be eliminated or reduced consistent with the requirements
of this Section 1.3, provided that, if Executive does not make such
determination within ten (10) business days of the receipt of the calculations
made by the Company's independent auditors, the Company shall elect which and
how much of the Benefits shall be eliminated or reduced consistent with the
requirements of this Section 1.3, and then the Company shall notify Executive
promptly of such election. Upon such determination, the Benefits (as adjusted
pursuant to this Article 1) shall be provided to or for the benefit of the
Executive.

                                   ARTICLE 2

                                   DEFINITIONS

         For purposes of this Agreement, the following terms are defined as
follows:

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

                  2.2      "CAUSE" means termination of Executive's employment
with the Company for any of the following reasons as determined in good faith by
the Board:

                           (a)      a formal charge of the commission of a
felony, or being convicted of a misdemeanor involving moral turpitude;

                           (b)      demonstrable embezzlement, theft, fraud or
dishonesty;

                           (c)      use of alcohol, drugs or any illegal
substance in such a manner as to interfere with the performance of Executive's
duties;

                           (d)      intentional, reckless or grossly negligent
action materially detrimental to the best interest of the Company, including any
misappropriation or unauthorized use of Company property or improper use or
disclosure of confidential information (but excluding any good faith exercise of
business judgment);

                           (e)      intentional failure to perform, or neglect
of or inattention to, Executive's material duties if such failure has continued
for fifteen (15) days after Executive has been notified in writing by the
Company of the nature of Executive's failure to perform (provided, that poor
performance by the Company shall not itself be deemed to constitute poor
performance by Executive);

                           (f)      chronic absence from work for reasons other
than illness or permitted paid-time-off; or

                           (g)      violation of policies in the Company's
official Employee Handbook, as it may be amended from time to time, or policies
or directives of the Board.

                                       2.

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         2.3      "CONSTRUCTIVE TERMINATION" means that Executive voluntarily
terminates employment after any of the following are undertaken without
Executive's express written consent:

                  (a)      the assignment to Executive of any duties or
responsibilities which result in a diminution or adverse change of Executive's
position, status or circumstances of employment, including a change in
Executive's title or reporting relationship;

                  (b)      a material reduction by the Company in Executive's
base pay;

                  (c)      a relocation of Executive's business office to a
location outside of the Silicon Valley/San Francisco Bay area, except for
required travel by Executive on the Company's business to an extent
substantially consistent with Executive's business travel obligations;

                  (d)      any breach by the Company of any provision of this
Agreement or any other material agreement between Executive and the Company
concerning Executive's employment; or

                  (e)      any failure by the Company to obtain the assumption
of this Agreement by any successor or assign of the Company.

         2.4      "INVOLUNTARY TERMINATION WITHOUT CAUSE" means Executive's
dismissal or discharge other than for Cause. The termination of Executive's
employment as a result of Executive's death or disability will not be deemed to
be an Involuntary Termination Without Cause.

                                   ARTICLE 3

                               GENERAL PROVISIONS

         3.1      EMPLOYMENT STATUS. This Agreement does not constitute a
contract of employment or impose upon Executive any obligation to remain as an
employee, or impose on the Company any obligation (i) to retain Executive as an
employee, (ii) to change the status of Executive as an at-will employee, or
(iii) to change the Company's policies regarding termination of employment.

         3.2      NOTICES. Any notices provided hereunder must be in writing,
and such notices or any other written communication shall be deemed effective
upon the earlier of personal delivery (including personal delivery by facsimile)
or the third day after mailing by first class mail, to the Company at its
primary office location and to Executive at Executive's address as listed in the
Company's payroll records. Any payments made by the Company to Executive under
the terms of this Agreement shall be delivered to Executive either in person or
at the address as listed in the Company's payroll records.

         3.3      SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any

                                       3.

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applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provisions had never been contained
herein.

         3.4      WAIVER. If either party should waive any breach of any
provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.

         3.5      COMPLETE AGREEMENT. This Agreement and the Employment
Agreement constitute the entire agreement between Executive and the Company and
is the complete, final, and exclusive embodiment of their agreement with regard
to this subject matter, wholly superseding all written and oral agreements with
respect to payments and benefits to Executive in the event of employment
termination. In the event of any conflict between the provisions of this
Agreement and those of the Employment Agreement, the provisions of this
Agreement shall control. This Agreement is entered into without reliance on any
promise or representation other than those expressly contained herein.

         3.6      DURATION OF AGREEMENT. This Agreement shall terminate upon the
date of Executive's termination of employment with the Company. Notwithstanding
the foregoing, this Agreement shall not terminate or expire with respect to
Executive if Executive becomes entitled to receive the benefit set forth in
Section 1.1 until Executive shall have received such benefit in full.

         3.7      AMENDMENT OR TERMINATION OF AGREEMENT. Notwithstanding
anything in Section 3.6 to the contrary, this Agreement may be changed or
terminated upon the mutual written consent of the Company and Executive.

         3.8      COUNTERPARTS. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.

         3.9      HEADINGS. The headings of the Articles and Sections hereof are
inserted for convenience only and shall not be deemed to constitute a part
hereof or to affect the meaning thereof.

         3.10     SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any duties hereunder and may not assign any
rights hereunder without the written consent of the Company, which consent shall
not be withheld unreasonably.

         3.11     CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of the
State of California, without regard to such state's conflict of laws rules.

                                       4.

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         3.12     NON-PUBLICATION. The parties mutually agree not to disclose
publicly the terms of this Agreement except to the extent that disclosure is
mandated by applicable law or to respective advisors (e.g., attorneys,
accountants).

         3.13     CONSTRUCTION OF AGREEMENT. In the event of a conflict between
the text of the Agreement and any summary, description or other information
regarding the Agreement, the text of the Agreement shall control.

                         [Signatures on following page.]

                                       5.

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         The parties have executed this Agreement on the day and year written
above.

LARSCOM INCORPORATED                             DANIEL SCHARRE

By: /s/ Donald W. Morgan                         /s/ Daniel Scharre
    ---------------------------------            -------------------------------
Name:  Donald W. Morgan

Title: CFO

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