##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-K/A Amendment
No. 1
 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003
OR [  ] 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: 1-12491 LARSCOM INCORPORATED  Delaware
(State or other jurisdiction of
incorporation or organization)
    
    94-2362692
(I.R.S. Employer
Identification No.)39745 Eureka Drive
Newark, California
(Address of principal executive offices)
    
    94560
(ZIP Code)
 (510) 492-0800
(Registrants telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act:Common Stock, $.01 par value
(Title of class) 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 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 Exchange Act Rules 12b-2. Yes [  ]  No [X] The aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 30, 2003, was approximately $10,518,000. The number of the registrants shares outstanding as of March 8, 2004, was
5,100,255 shares of Common Stock. DOCUMENTS INCORPORATED BY REFERENCE: None.




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TABLE OF CONTENTS  PART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVItem 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-KSIGNATURESEXHIBIT INDEXEXHIBIT 31.1EXHIBIT 31.2    Table of Contents  EXPLANATORY NOTE Larscom Incorporated (the Company) is filing this Amendment No. 1 on
Form 10-K/A (this Amendment) to amend the Companys Annual Report on Form
10-K for the fiscal year ended December 31, 2003, as filed with the Securities
and Exchange Commission (the SEC) on March 30, 2004 (the Original 10-K).
The purpose of this Amendment is to provide the information required to be
disclosed in Items 10, 11, 12, 13 and 14 of Part III of Form 10-K that was to
be incorporated by reference from the Companys proxy statement for its 2004
Annual Meeting of Stockholders. The complete text of Items 10, 11, 12, 13 and
14 of Part III, as amended, is set forth below. 
 PART III 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Directors The Companys Certificate of Incorporation and Bylaws, as amended, provide
for a Board of Directors consisting of nine members. The name, age and certain
information regarding each director of the Company is set forth below. DirectorDirector Name
    
    Age
    
    Since
    
    Position and Current Offices with the CompanyAllen R. Adams
    
    
    54
    
    
    
    2002
    
    
    DirectorJeffrey M. Drazan
    
    
    45
    
    
    
    2003
    
    
    DirectorDonald G. Heitt
    
    
    68
    
    
    
    1996
    
    
    DirectorJohn F. Malone
    
    
    56
    
    
    
    2003
    
    
    DirectorLawrence D. Milligan
    
    
    68
    
    
    
    1998
    
    
    Director, ChairmanPhillip J. Quigley
    
    
    61
    
    
    
    2003
    
    
    DirectorDaniel Scharre
    
    
    53
    
    
    
    2001
    
    
    Director, President and Chief Executive OfficerW. Michael West
    
    
    53
    
    
    
    2003
    
    
    DirectorDesmond P. Wilson III
    
    
    39
    
    
    
    2001
    
    
    Director
 Allen R. Adamshas served as a director of the Company since July 2002.
Mr. Adams is currently the chairman and chief executive officer of Carrius
Technologies. From 2000 to 2001, Mr. Adams was the director and general
manager of the Broadband Telephony Business Unit of Cisco Systems. From July
1999 until October 2000, Mr. Adams served as chairman and chief executive
officer of IP Cell Technologies until it was acquired by Cisco in October 2000.
From 1997 to 1998, Mr. Adams was senior vice president, marketing and business
development for DSC Communications. Mr. Adams also served in a number of other
senior management positions with DSC Communications over the course of 20
years. Mr. Adams earned a BS in physics from the C.W. Post College, Long
Island University. Jeffrey M. Drazanhas served as a director of the Company since June 2003.
Mr. Drazan has been a General partner of Sierra Ventures since 1984. Donald G. Heitthas served as a director of the Company since November
1996. He served as chairman of the board of Voysys Corporation from December
1995 until his retirement in May 1998. From April 1990 to January 1996, Mr.
Heitt was the president and chief executive officer of Voysys Corporation.
Prior to 1990, Mr. Heitt served as senior vice president of Telebit
Corporation, vice president of sales and marketing and president of the
computer division of General Automation, Inc., and vice president of Honeywell
Information Systems, Inc. Mr. Heitt earned a BBA from the University of Iowa. John F. Malonehas served as a director of the Company since June 2003.
Mr. Malone has been president and chief executive officer of The Eastern
Management Group, a management-consulting firm supplying professional services
to major communications companies, since April 1979. Prior to that, Mr. Malone
worked at AT&T where he developed corporate strategy and managed sales and
marketing organizations from Ohio to New York. 2




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Lawrence D. Milliganhas served as a director of Larscom Incorporated
since November 1998 and as chairman of the board since June 1999. Mr. Milligan
is chairman of the executive committee of the Axel Johnson, Inc. Board of
Directors and was
the president and chief executive officer of that company from September
1999 until December 2001. Prior to that, Mr. Milligan held a number of senior
management positions over the course of 38 years with Procter & Gamble Co.
Before retiring from Procter & Gamble in 1998, he was the senior vice president
responsible for worldwide sales and customer development, a position he held
for eight years. Mr. Milligan is a member of the Board of Directors of Portman
Equipment Company. He graduated from Williams College and served in the United
States Marine Corps. Philip J. Quigleyhas served as a director of the Company since June 2003.
Mr. Quigley was chairman, president, and chief executive officer of Pacific
Telesis Group, a telecommunications holding company, from April 1994 until his
retirement in December 1997. Mr. Quigley previously served as president and
chief executive officer of Pacific Bell, executive vice president and chief
operating officer of PacTel Corporation, and chief executive officer of PacTel
Personal Communications. Mr. Quigley serves as a director of Wells Fargo &
Company and Nuance Communications, Inc. and as an advisory director of Thomas
Weisel Partners LLC. Daniel L. Scharrehas served as president, chief executive officer and as
a director since November 2001. Prior to joining Larscom, Mr. Scharre served
as chairman, president and chief executive officer of Adaptive Broadband Corp.,
a provider of high-speed, wireless last-mile access equipment, from April 2001
to October 2001, as president and chief executive officer from January 2001 to
April 2001, as president and chief operating officer from July 2000 to January
2001, as executive vice president from April 1998 to June 2000 and as vice
president and chief technology officer from September 1997 to April 1998.
Adaptive Broadband Corporation filed for bankruptcy in July of 2001. Prior to
his four-year tenure at Adaptive Broadband, Mr. Scharre held executive
positions at ComStream Inc., Ilex Systems, and Loral Western Development Labs,
all providers of digital telecommunications equipment and systems. Mr. Scharre
holds a BS in physics from the California Institute of Technology, a Ph.D. in
physics from the University of California, Berkeley, and an MBA from Santa
Clara University. He previously served on the faculty at Stanford University. Michael W. Westhas served as a director of the Company since June 2003.
Mr. West previously served as chief executive officer of VINA, Technologies,
Inc. from April 1, 2002 to June 5, 2003. Prior to that, he served as chairman
of the Board of Directors of VINA since June 1999. He served as executive vice
president for Lucent Technologies from September 1997 to January 1998. Mr.
West was president, chief operating officer and a director of Octel
Communications from January 1995 to August 1997, after having served as
executive vice president from September 1986 to January 1995. Mr. West held
multiple positions with Rolm Corporation from 1979 to September 1986, most
recently, as general manager of the National Sales Division. Desmond P. Wilson IIIhas served as a director of Larscom Incorporated
since September 2001. Effective January 1, 2002, Mr. Wilson assumed the
position of president and chief executive officer of Axel Johnson Inc., after
serving as executive vice president for new business development since
September 2001. Prior to that, Mr. Wilson was president of the Services
Assurance and Solutions Division of Spirent plc, a provider of
telecommunication testing equipment, from January 2001 to June 2001 and
president and chief executive officer of Hekimian Laboratories, Inc, a supplier
of automated test systems for telecommunication networks, from December 1998 to
December 2000. Mr. Wilson graduated with a BS degree in industrial engineering
and operations research from Virginia Polytechnic Institute and State
University. Audit Committee The Board of Directors has established an Audit Committee in accordance
with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended
(the Exchange Act). The Audit Committee is comprised of Messrs. Adams, Heitt
and Malone. The Board of Directors has determined that each current member of
the Audit Committee is independent as independence is currently defined in
Rules 4350(d)(2)(A)(i) and (ii) of the Nasdaq Stock Market (Nasdaq) listing
standards. In addition, the Board of Directors has determined that the Audit
Committee does not currently have an audit committee financial expert as
defined in applicable SEC rules. Prior to the acquisition of VINA
Technologies, Inc. (VINA) in June 2003, the Board of Directors was comprised
of six members. Upon the completion of the acquisition, the Board of Directors
was increased to nine members. The Board of Directors is currently evaluating
changes to its composition, including the addition of a director who meets the
Nasdaq independence requirements and the SECs audit committee financial
expert requirements. Executive Officers See Part I of the Original 10-K for certain information required by this
Item with respect to the Companys executive officers. Compliance with Section 16(a) of the Exchange Act 3




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Section 16(a) of the Exchange Act requires the Companys directors,
executive officers, and persons who own more than 10% of a registered class of
the Companys equity securities to file with the SEC reports of ownership and
changes of ownership of
the Companys Common Stock and other equity securities. Executive
officers, directors and greater than 10% stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. To the Companys knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required to be filed, during the fiscal year ended December 31,
2003, all of the Companys directors, executive officers and greater than 10%
beneficial owners complied with such Section 16(a) filing requirements. Code of Ethics The Company has adopted a Code of Ethics that applies to all executive
officers and directors of the Company. A copy of the Code of Ethics is
available without charge by writing to Larscom Incorporated, 39745 Eureka
Drive, Newark, California 94560, Attention: Secretary. 
 ITEM 11. EXECUTIVE COMPENSATION Executive Officer Compensation The following table sets forth information concerning the compensation of
(i) the Chief Executive Officer of the Company, (ii) the three other most
highly compensated executive officers of the Company serving as such on
December 31, 2003 and whose total salary for 2003 exceeded $100,000 and (iii)
one former executive officer who would have been listed but for the fact that
he was no longer serving as an executive officer on December 31, 2003
(collectively, the Named Executive Officers): Summary Compensation Table Long TermAnnual Compensation
    
    CompensationSecurities
    
    All OtherName and Principal
    
    Fiscal
    
    
    
    
    
    
    
    
    
    Underlying
    
    CompensationPosition
    
    Year
    
    Salary($)
    
    Bonus($)(1)
    
    Options (#)
    
    ($)Daniel L. Scharre
    
    
    2003
    
    
    
    350,002
    
    
    
    
    
    
    
    21,429
    
    
    
    20,663
    (2)President and Chief
    
    
    2002
    
    
    
    350,002
    
    
    
    100,542
    
    
    
    
    
    
    
    24,797
    (2)Executive Officer
    
    
    2001
    
    
    
    26,923
    
    
    
    
    
    
    
    64,286
    
    
    
    1,061
    (2)Gurdip Jande
    
    
    2003
    
    
    
    215,010
    
    
    
    
    
    
    
    4,286
    
    
    
    63,273
    (3)Vice President of
    
    
    2002
    
    
    
    186,066
    
    
    
    52,902
    
    
    
    21,429
    
    
    
    203,104
    (3)Marketing
    
    
    2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Adam Opoczynski
    
    
    2003
    
    
    
    190,008
    
    
    
    
    
    
    
    12,143
    
    
    
    73,828
    (4)Vice President of
    
    
    2002
    
    
    
    10,962
    
    
    
    
    
    
    
    
    
    
    
    988
    (4)Engineering
    
    
    2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Donald W. Morgan
    
    
    2003
    
    
    
    183,768
    
    
    
    
    
    
    
    2,857
    
    
    
    14,957
    (5)Vice President,
    
    
    2002
    
    
    
    183,768
    
    
    
    
    
    
    
    2,857
    
    
    
    19,841
    (5)Finance and Chief
    
    
    2001
    
    
    
    183,771
    
    
    
    
    
    
    
    
    
    
    
    18,878
    (5)Financial OfficerLeonard Eisenstein
    
    
    2003
    
    
    
    144,708
    (6)
    
    
    
    
    
    
    2,143
    
    
    
    72,035
    (7)Vice President of
    
    
    2002
    
    
    
    132,527
    (6)
    
    
    
    
    
    
    21,429
    
    
    
    143,957
    (7)Worldwide Sales
    
    
    2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  (1)
    
    Represents bonuses earned in the year indicated.(2)
    
    Includes matching contributions under Larscoms 401(k) plan, which Larscom made on behalf of Mr. Scharre of $7,386 and
$11,000 in 2003 and 2002, respectively, Larscom paid life insurance of $1,277, $1,797 and $138 in 2003, 2002 and 2001,
respectively and an automobile allowance of $12,000, $12,000 and $923 in 2003, 2002 and 2001, respectively. 4




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(3)
    
    Includes matching contributions under Larscoms 401(k) plan, which Larscom made on behalf of Mr. Jande of $7,399 and
$10,916 in 2003 and 2002, respectively, Larscom paid life insurance of $318 and $404 in 2003 and 2002, respectively,
income from forgiveness of a loan from Larscom (pursuant to an offer of employment) of $50,927 and $55,556 in 2003 and
2002, respectively and a moving allowance of $140,857 in 2002. Mr. Jande joined Larscom on February 11, 2002.(4)
    
    Includes Larscom paid life insurance of $1,180 and $131 in 2003 and
2002, respectively and a moving allowance of $72,648 and $857 in 2003
and 2002, respectively. Mr. Opocynski joined Larscom on December 2,
2002.(5)
    
    Includes matching contributions under Larscoms 401(k) plan, which
Larscom made on behalf of Mr. Morgan of $6,627, $11,000 and $10,089 in
2003, 2002 and 2001, respectively, Larscom paid life insurance of
$1,130, $1,641 and $1,589 in 2003, 2002 and 2001, respectively and an
automobile allowance of $7,200, in each of 2003, 2002 and 2001.(6)
    
    Includes sales commissions of $27,552 and $24,369 in 2003 and 2002,
respectively. Mr. Eisenstein resigned from Larscom on July 14, 2003.(7)
    
    Includes Larscom paid life insurance of $872, and $985 in 2003 and
2002, respectively, an automobile allowance of $5,391 and $5,465 in
2003 and 2002, respectively, severance pay of $65,772 in 2003 and a
moving allowance of $137,507 in 2002. Option Grants by the Company in Fiscal Year 2003 The following table sets forth each grant of stock options made during the
year ended December 31, 2003 to each of the Named Executive Officers. Individual Grants
    
    Potential Realizable Value% of TotalNumber of
    
    OptionsSecurities
    
    GrantedUnderlying
    
    to Employees
    
    Exercise
    
    
    
    
    
    Using Black-ScholesOptions
    
    in Fiscal
    
    Price
    
    Expiration
    
    Option PricingName
    
    Granted
    
    Year (1)
    
    ($/share)
    
    Date
    
    Model ($) (2)Daniel J. Scharre
    
    
    21,429
    
    
    
    7.6
    %
    
    
    1.960
    
    
    
    3/5/2013
    
    
    
    29,481Donald W. Morgan
    
    
    2,857
    
    
    
    1.0
    %
    
    
    1.960
    
    
    
    3/5/2013
    
    
    
    3,931Gurdip Jande
    
    
    4,286
    
    
    
    1.5
    %
    
    
    1.960
    
    
    
    3/5/2013
    
    
    
    5,897Leonard Eisenstein
    
    
    2,143
    
    
    
    0.8
    %
    
    
    4.435
    
    
    
    9/9/2013
    
    
    
    2,948Adam Opoczynski
    
    
    12,143
    
    
    
    4.3
    %
    
    
    1.960
    
    
    
    3/5/2013
    
    
    
    16,577
  (1)
    
    A total of 283,777 options were granted to employees during the year
ended December 31, 2003 under the Stock Incentive Plan.  (2)
    
    In determining the potential realizable value of the options using the
Black-Scholes option pricing model the following assumptions were made: a
risk free interest rate of 2.58%, an average expected option life of 5.0
years, an expected volatility of 90% and a zero dividend yield. 5




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Aggregated Option Exercises in Fiscal 2003 and Fiscal Year-End Option Values The following table sets forth certain information with respect to stock
options exercised by the Named Executive Officers during 2003, including the
aggregate value of gains on the date of exercise. In addition, the table sets
forth the number of shares covered by stock options as of December 31, 2003,
and the value of in-the-money stock options, which represents the spread
between the exercise price of a stock option and the market price of the shares
subject to such option on December 31, 2003. Value of UnexercisedNumber of Securities
    
    In-the-MoneyUnderlying Unexercised
    
    Options at FYShares
    
    
    
    
    
    Options at FY End (#)(2)
    
    End ($)(3)Acquired on
    
    ValueName
    
    Exercise (#)
    
    Realized ($)(1)
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableDaniel L. Scharre
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    35,715
    
    
    
    12,375
    
    
    
    37,126Donald W. Morgan
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    2,143
    
    
    
    1,649
    
    
    
    4,950Gurdip Jande
    
    
    
    
    
    
    
    
    
    
    22,500
    
    
    
    3,215
    
    
    
    2,474
    
    
    
    7,427Leonard Eisenstein
    
    
    238
    
    
    
    540
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Adam Opoczynski
    
    
    
    
    
    
    
    
    
    
    3,035
    
    
    
    9,108
    
    
    
    7,011
    
    
    
    21,039
   (1)
    
    These amounts represent the fair market value of the shares underlying
the stock options on the date of exercise less the stock option exercise
price.(2)
    
    These options were granted on various dates during fiscal years 1999
through 2003.(3)
    
    These amounts represent the difference between the exercise price of the
stock options and the closing price of $4.27 of Larscom Common Stock on
December 31, 2003 for all options held by each Named Executive Officer. Director Compensation Non-employee directors receive annual compensation consisting of (i) a
stock option to purchase 1,500 shares of Common Stock and (ii) at the election
of each non-employee director, either $16,000 in cash payments or a stock
option to purchase 3,500 shares of Common Stock. Upon joining the Board of
Directors, each non-employee director also receives a stock option to purchase
4,500 shares of Common Stock. In addition, non-employee directors who reside
outside of the local area are entitled to receive reimbursement of travel
expenses. Non-employee directors have historically received options to purchase
Common Stock pursuant to the Companys Stock Option Plan for Non-Employee
Directors (the Directors Plan) and currently receive options under the Stock
Incentive Plan (the Incentive Plan). The Directors Plan was terminated in
June 2003 and the Incentive Plan was amended to allow for grants to
non-employee directors. Non-employee director options vest and become
exercisable monthly over a three-year period from the date of grant and have a
term of ten years. During fiscal year ended December 31, 2003, a stock option
to purchase 3,714 shares of Common Stock was made to Mr. Adams at an exercise
price equal to the fair market value of the Companys Common Stock on the date
of grant. Stock options to purchase 857 shares of Common Stock were also made
to each of Mr. Pospisil (retired June 5, 2003) and Mr. Heitt at an exercise
price equal to the fair market value of the Companys Common Stock on the date
of grant. Employment Contracts, Severance and Change in Control Arrangements Daniel L. Scharre, the Companys President and Chief Executive Officer,
executed an Employment Agreement with the Company on November 26, 2001.
Pursuant to that Agreement, Mr. Scharre is entitled to an annual base salary of
$350,000, subject to annual increases; is eligible for annual bonuses, subject
to meeting performance goals, with an estimated target payout of approximately
forty-six percent (46%) of his annual base salary and is eligible for benefits
generally available to other executive officers of the Company. He also
received stock options of 64,286 shares of Common Stock at the then current
market price of $8.54 with one-sixth vesting after the first six-months from
his date of employment and one-thirty-sixth vesting thereafter in equal monthly
installments. In addition, if Mr. Scharres employment is terminated by the
Company without cause, he will be entitled to 6




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severance benefits equal to one years annual base salary and to the
continuation of other employee benefits for a period of one year following any
such termination. The Company entered into change-in-control benefit agreements with Daniel
L. Scharre, Donald W. Morgan, Adam Opoczynski, Gurdip Jande and certain other
executive officers. The agreements provide that in the event the executives
employment is terminated in certain situations within twelve months following a
change-in-control, the Company will accelerate the vesting of 50% of the
executives unvested stock options at the time of termination. If any of the
benefits to the affected executive are considered excess parachute payments
as defined in Section 280G of the Internal Revenue Code of 1986, the benefits
will be reduced to avoid such a characterization. Compensation Committee Interlocks and Insider Participation The members of the Compensation Committee of the Companys Board of
Directors prior to June 5, 2003 were Messrs. Adams, Heitt, Milligan and
Pospisil (retired June 5, 2003). Beginning June 5, 2003, the members of the
Compensation Committee are Messrs. Adams, Heitt, Milligan and Quigley. No
member of the Compensation Committee served as an officer or employee of the
Company during fiscal year 2003 and no member of the Compensation Committee or
executive officer of the Company has a relationship that would constitute an
interlocking relationship with executive officers or directors of another
entity. 
  ITEM 12.
    SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDERS MATTERS The following table sets forth as of March 30, 2004 (except as set forth
in the footnotes) certain information known to the Company with respect to the
beneficial ownership of the Companys Common Stock by (i) each beneficial owner
of more than 5% of the outstanding shares of each class of Common Stock, (ii)
each director of the Company, (iii) each Named Executive Officer and (iv) all
directors and executive officers as a group. Shares Beneficially Owned (1)Number of
    
    
    
    
    
    Percent ofCommon
    
    
    
    
    
    CommonShares
    
    Notes
    
    SharesAxel Johnson Inc.
    
    
    1,429,999
    
    
    
    (2
    )
    
    
    28.0
    %Desmond P. Wilson III
    
    
    1,429,840
    
    
    
    (3
    ) (4)
    
    
    28.0
    %Lawrence D. Milligan
    
    
    1,429,626
    
    
    
    (3
    ) (5)
    
    
    28.0
    %Jeffrey Drazan
    
    
    1,476,289
    
    
    
    (3
    ) (6)
    
    
    27.9
    %Entities affiliated with Sierra Ventures V LP
    
    
    1,419,279
    
    
    
    (8
    ) (7)
    
    
    27.8
    %Kopp Investment Advisors, Inc.
    
    
    340,356
    
    
    
    (9
    )
    
    
    6.7
    %W. Michael West
    
    
    78,813
    
    
    
    (3
    ) (10)
    
    
    1.5
    %Daniel L. Scharre
    
    
    68,070
    
    
    
    (3
    ) (11)
    
    
    1.3
    %Gurdip Jande
    
    
    24,053
    
    
    
    (3
    )
    
    
    *Donald W. Morgan
    
    
    22,514
    
    
    
    (3
    )
    
    
    *Philip J. Quigley
    
    
    13,707
    
    
    
    (3
    ) (12)
    
    
    *Donald G. Heitt
    
    
    7,879
    
    
    
    (3
    )
    
    
    *John Malone
    
    
    7,570
    
    
    
    (3
    )
    
    
    *Adam Opoczynski
    
    
    5,679
    
    
    
    (3
    )
    
    
    *Allen R. Adams
    
    
    1,309
    
    
    
    (3
    )
    
    
    *All executive officers and directors as a
group ( 12 persons)
    
    
    3,130,038
    
    
    
    
    
    
    
    71.4
    %
  *
    
    Less than 1%(1)
    
    This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the SEC.
Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, the Company believes that each
of the stockholders named in this table has sole voting and investment
power with respect to the shares indicated as beneficially owned.
Beneficial ownership includes shares of Common Stock subject to options
currently exercisable or exercisable within 60 days of the date of this
table. Applicable percentages are based on 5,100,255 shares of Common
Stock outstanding on March 30, 2004. 7




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##### Table of Contents



(2)
    
    Based on information provided in a Schedule 13D filed by Axel Johnson
Inc. with the SEC on June 19, 2003. The address for Axel Johnson Inc. is
300 Atlantic Street, Stamford, CT 06901-0350. Antonia Ax:son Johnson, by
virtue of her beneficial
ownership of all of the outstanding shares of Axel Johnson Inc., may be
deemed the beneficial owner of these shares of Common Stock.(3)
    
    Beneficial ownership as reported in the table has been determined in
accordance with SEC regulations and includes shares of our common stock
that may be issued upon the exercise of stock options that are exercisable
within 60 days of March 30, 2004 as follows: Mr. Wilson  555 shares; Mr.
Milligan  555 shares; Mr. Drazan  4,532 shares; Mr. West  555 shares;
Mr. Scharre  66,070 shares; Mr. Jande  24,053 shares; Mr. Morgan 
21,355 shares; Mr. Quigley  4,532 shares; Mr. Heitt  7,879 shares; Mr.
Malone  7,570 shares; Mr. Opoczynski  5,679 shares; Mr. Adams  1,309
            shares and all directors and executive officers as a group  144,644
            shares.(4)
    
    Includes 1,428,571 shares of common stock beneficially owned by Axel
Johnson Inc. Mr. Wilson, president and chief executive officer of Axel
Johnson Inc., disclaims beneficial ownership of the shares beneficially
owned by Axel Johnson Inc.(5)
    
    Includes 1,428,571 shares of common stock beneficially owned by Axel
Johnson Inc. Mr. Milligan, a director of Axel Johnson Inc., disclaims
beneficial ownership of the shares beneficially owned by Axel Johnson Inc.(6)
    
    Includes 4,532 shares subject to options exercisable within
60 days of March 30, 2004. Also includes 800,119 shares and
231,169 shares subject to warrants exercisable with 60 days of
March 30, 2004 held by Sierra Ventures VII, L.P. and 33,222
shares and 8,168 shares subject to warrants exercisable within
60 days of March 30, 2004 held by Sierra Ventures
Associates VII LLC, as nominee for its members. Also includes
326,390 shares held by Sierra Ventures V, L.P. and 61,601 shares held
by Sierra Ventures VI, L.P. and 2,770 shares held by SV Associates
VI, as nominee for its general partners. Jeffrey M. Drazan is a
general partner of SV Associates V, L.P., which is the general partner
of Sierra Ventures V, L.P., a general partner of SV Associates VI,
L.P. which is the general partner of Sierra Ventures VI, L.P., and is
a manger of Sierra Ventures Associates VII, LLC which is the general
partner of Sierra Ventures VII, L.P. He is also a director of Larscom.
Other than 1,796 shares owned by SV Associates VI, as nominee for its
general partners, 15,453 shares and 3,799 shares subject to warrants
exercisable with 60 days of March 30, 2004 held by Sierra
Ventures Associates VII, LLC, as nominee for its members,
Mr. Drazan disclaims beneficial ownership of the shares held by
the Sierra Ventures entities, except to the extent of his pecuniary
interest in these shares.(7)
    
    Includes 239,310 warrants to acquire common stock, which are currently
exercisable and held by entities affiliated with Sierra Ventures V LP.(8)
    
    Based on information provided in a Schedule 13D filed by Sierra Ventures
V LP with the SEC on June 12, 2003. The address for Sierra Ventures V LP
is 2884 Sand Hill Rd, Suite 100 Menlo Park, CA 94025.(9)
    
    Based on information provided in a Schedule 13G filed by Kopp Investment
Advisors, LLC with the SEC on February 2, 2004. The address for Kopp
Investment Advisors, Inc. is 7701 France Avenue South, Suite 500, Edina,
MN 55435.(10)
    
    Includes 2,849 warrants to acquire common stock which, are currently
exercisable and held by a trust, of which Mr. West and his wife are
trustees.(11)
    
    Includes 2,000 shares of common stock, which are held in a family trust,
of which Mr. Scharre and his wife are trustees.(12)
    
    Includes 5,853 shares of common stock, which are held in a family trust,
of which Mr. Quigley and his wife are trustees. Equity Compensation Plan Information The following table provides information as of December 31, 2003 with
respect to the shares of the Companys Common Stock that may be issued under
the Companys existing equity compensation plans. A
    
    B
    
    CNumber of Securities RemainingAvailable for Future IssuanceNumber of Securities to be
    
    Weighted Average
    
    Under Equity CompensationIssued upon Exercise of
    
    Exercise Price of
    
    Plans (Excluding SecuritiesPlans
    
    Outstanding Options
    
    Outstanding Options
    
    Reflected in Column A)Equity compensation plans approved
by security holders
    
    
    365,257
    
    
    $
    15.46
    
    
    
    681,846Equity compensation plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    365,257
    
    
    $
    15.46
    
    
    
    681,846
 Options from VINA merger In connection with the VINA merger on June 5, 2003 the Company assumed options
to purchase 185,434 shares of common stock at an average exercise price of
$24.29 per share under the 1996, 1998 and 2000 VINA stock option plans. These
options generally 8




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vest over a four-year period, with one-fourth vesting on the
first anniversary of the option grant and the remainder vesting monthly
thereafter. In addition, we assumed warrants to purchase 269,319 shares of
common stock at an exercise price of $26.33 per share. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Transactions with Axel Johnson and Sierra Ventures V LP On June 3, 2003, the Companys stockholders approved a proposal to
reclassify the Companys Class A and Class B Common Stock into a single class
of common stock. The old Class B Common Stock had rights of four votes per
share and was owned by one stockholder, Axel Johnson, Inc. The additional
voting rights associated with the old Class B Common Stock gave Axel Johnson
control of 82% of the voting interest prior to the merger with VINA
Technologies, Inc. (the VINA Merger). After issuance of 2,393,894 shares in
connection with the VINA Merger and the reclassification of the Class B Common
Stock into Common Stock with one vote per share, Axel Johnsons control of the
voting interest was reduced to 28%. Sierra Ventures V LP (Sierra) became owner of approximately 28% of our
Common Stock as a result of the VINA Merger and remained owner of that same
amount as of December 31, 2003. The Companys Board of Directors now includes two members from Axel
Johnson and one member from Sierra. Axel Johnson Board members were not
eligible for compensation prior to the VINA Merger. Effective upon the VINA
Merger, existing members of the Board of Directors from Axel Johnson and Sierra
are eligible to receive the same compensation as the Companys other
non-employee directors (See Item 11, Executive Compensation  Director
Compensation). (Due to)/Due from Axel Johnson Amounts (due to) or due from Axel Johnson consist of cash remittances made
by the Company to Axel Johnson from the Companys operating bank accounts
offset by cash advances to the Company from Axel Johnson for purchases of
property and equipment and fluctuating working capital needs. As of June 5,
2003, the Company began operation of its own cash network. Amounts owed to
Axel Johnson at year-end 2003 relate to remaining payments due to Axel Johnson
primarily for employee 401(k) programs and some residual medical plan payments.
Neither Axel Johnson nor the Company Incorporated has charged interest on the
balances due. The average month-end balances due from or (due to) Axel Johnson
was ($571,000) for fiscal year 2003. The following is an analysis of the
balance (due to) or due from Axel Johnson: Year endedDecember 31,2003(in thousands)Balance at beginning of year
    
    $
    (25
    )Cash remittances to Axel Johnson, net of cash
advances
    
    
    1,521Charges(from)/to Axel Johnson for:Pension and thrift plan
    
    
    (810
    )Health insurance and workers compensation
    
    
    (664
    )Administrative services
    
    
    (151
    )Property, liability and general insurance
    
    
    (6
    )Line of credit fees
    
    
    (31
    )Other (charges)/credits
    
    
    (24
    )Balance at end of year
    
    $
    (190
    )
 Employee Health and Welfare Programs We participated in various employee benefits programs sponsored by Axel
Johnson until June 5, 2003, when we established our own programs for most
benefits. Axel Johnson continued to administer a portion of our 401K program
until January 6, 2004 and retained responsibility for the Axel Johnson
Retirement Plan, a sponsored defined benefit pension plan and the
Axel Johnson, Inc. Retirement Restoration Program, an unfunded pension plan
(collectively, the Retirement Plans). Larscom had discontinued active
participation in the Retirement Plans as of March 31, 1998. Axel Johnson
retains full responsibility for funding 9




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##### Table of Contents



and administration of the Retirement
Plans. Prior to June 5, 2003, the Axel Johnson programs we participated in
included medical, dental, life insurance and workers compensation. In
general, we reimbursed Axel Johnson for our proportionate cost of these
programs based on historical experience and relative headcount. The costs
reimbursed to Axel Johnson included costs for reported claims as well as
changes in reserves for incurred but not reported claims. We recorded expenses
related to the reimbursement of these costs of approximately $664,000 in fiscal
year 2003. We believe the allocation by Axel Johnson of the proportionate cost
was reasonable, but not necessarily indicative of the costs that would have
been incurred had we maintained our own benefit plans. Administrative Services Axel Johnson provided certain functional services to us, including certain
treasury, accounting, tax, internal audit, legal and human resources services,
most of which were discontinued as of the consummation of the VINA Merger. The
costs of these services were allocated to us based on estimates by Axel Johnson
of actual costs incurred. We believe that such allocations were reasonable.
Such charges and allocations are not necessarily indicative of the costs that
would have been incurred if we had been a separate entity. The allocated costs
of these services amounted to $151,000 in fiscal year 2003. Pension Plan Effective March 31, 1998, our employees ceased to accrue benefits under,
the Axel Johnson Inc. Retirement Plan. Accrued liabilities prior to March 31,
1998 will remain in the Axel Johnson pension plan until benefits are paid to
employees upon termination or retirement in a manner prescribed by the plan.
After March 1998, our employees also ceased to accrue benefits under the Axel
Johnson Inc. Retirement Restoration Plan, for employees whose benefits under
the defined pension plan are reduced due to limitations under federal tax laws.
Upon the consummation of the VINA Merger, Axel Johnson assumed complete
responsibility for any further costs or liability for these plans. Credit Agreement The Company entered into a Credit Agreement with Axel Johnson, pursuant to
which Axel Johnson agreed to provide a revolving credit/working capital
facility to the Company in an aggregate amount of $15,000,000. The Credit
Agreement was discontinued upon the consummation of the VINA Merger. Under
terms of the Credit Agreement, the Company was required to pay a commitment fee
of 0.5% per annum on the unused portion of the Credit Agreement. No borrowings
were made under the Credit Agreement. Consulting Agreement Richard Pospisil was a member of the Board of Directors until his
resignation on June 5, 2003. Mr. Pospisil is currently acting as a consultant
to the Company under a contract, which is due to expire December 31, 2004.
Under his contract, Mr. Pospisil received compensation of $75,000 in 2003. Executive Officer Loan In connection with the January 2002 offer letter extended to the Companys
Vice President of Marketing, Gurdip Jande, the Company provided certain
relocation assistance, as well as an interest-free loan in the amount of
$100,000, to Mr. Jande. The terms of the loan call for forgiveness of the loan
over a thirty-six month period and tax equalization on the income from the
forgiveness of debt. At January 1, 2003, the aggregate amount outstanding
under the loan to Mr. Jande was $69,444. During 2003, $33,333 of the loan was
forgiven in accordance with the terms of the offer letter and included in Mr.
Jandes compensation (along with a tax equalization gross-up). The balance of
the loan at December 31, 2003 was $36,111. 10




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table presents fees for professional audit services rendered
by PricewaterhouseCoopers LLP for the audit of the Companys financial
statements for the fiscal years ended December 31, 2003 and 2002, and fees for
other services rendered by PricewaterhouseCoopers LLP during these periods. Fiscal Year EndedDecember31,
    
    December 31,2003
    
    2002Audit Fees
    
    $
    162,000
    
    
    $
    142,800Audit-Related Fees
    
    $
    117,870
    
    
    $
    10,200Tax Fees
    
    $
    16,910
    
    
    $
    20,620All Other Fees
    
    $
    
    
    
    $
    370,700
 Audit Feesrepresent fees for professional services rendered for the audit
of the consolidated financial statements of the Company and assistance with
review of documents filed with the SEC. Audit-Related Feesrepresent consultation fees regarding contemporary
audit matters. Tax Feesrepresent consultation fees regarding the Companys tax assets
and liabilities. All Other Feesrepresent consultation for reviewing possible business
combination and merger transactions. The Audit Committee has considered whether the provision of the non-audit
services is compatible with maintaining the independent auditors independence,
and has advised the Company that, in its opinion, the activities performed by
PricewaterhouseCoopers LLP on the Companys behalf are compatible with
maintaining the independence of such auditors. Audit Committee Pre-Approval Policy The Audit Committee pre-approved fees for all audit and non-audit services
provided by the independent auditors during the fiscal year ended December 31,
2003. The Audit Committee is responsible for appointing, setting compensation
and overseeing the work of the independent auditors. The Audit Committee has
established a policy regarding pre-approval of all audit and non-audit services
provided by the independent auditors. On an on-going basis, management
communicates specific projects and categories of service for which the advance
approval of the Audit Committee is requested. The Audit Committee reviews
these requests and advises management if the Audit Committee approves the
engagement of the independent auditors. On a periodic basis, management
reports to the Audit Committee regarding the actual spending for such projects
and services compared to the approved amounts. The Audit Committee has also
delegated the ability to pre-approve audit and permitted non-audit services to
the Chairman of the Audit Committee, provided that any pre-approvals by the
Chairman are reported at a subsequent Audit Committee meeting. 11




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PART IV 
 Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K  c)
    
    Exhibits ExhibitNumber
    
    Description31.1
    
    Certification of the Larscom Incorporated Chief Executive Officer, Daniel
L. Scharre, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Larscom Incorporated Chief Financial Officer, Donald
W. Morgan, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 12




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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. LARSCOM INCORPORATEDBy:
    /s/ Donald W. MorganDonald W. MorganVice President, Finance and Chief
Financial Officer
(Principal Financial Officer and Principal Accounting Officer) Date:
April 28, 2004 13




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EXHIBIT INDEX ExhibitNumber
    
    Description31.1
    
    Certification of the Larscom Incorporated Chief Executive Officer, Daniel
L. Scharre, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Larscom Incorporated Chief Financial Officer, Donald
W. Morgan, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.