Exhibit 10(m)
[THIS AGREEMENT IS SUBJECT TO ARBITRATION]
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the
24th day of November, 1999, (“Effective Date”) by and between Interphase
Corporation and its subsidiaries (the “Corporation”), and Deborah A. Shute
(“Executive”).
     WHEREAS, the Corporation desires to enter into an employment agreement with
Executive on certain terms and conditions as set forth herein; and
     WHEREAS, Executive is willing to accept such employment on such terms; and
     NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants and promises hereinafter contained, do hereby agree as follows:

1.   Employment. The Corporation hereby employs Executive and Executive hereby
accepts employment on the following terms and conditions. Executive will be
employed by the Corporation as the Vice President of Human Resources. In that
capacity, Executive will report directly to the Chief Executive Officer of the
Corporation. Executive agrees to review and comply with all policies and
procedures in the Corporation’s Employee Handbook.   2.   Term. Executive’s
employment with the Corporation will be “At Will”, and thus, either party may
terminate the relationship at any time for any reason, subject to the
termination provisions in paragraphs 6 and 7. Executive further understands that
any reference to dates and/or periods of time in this Agreement, including any
reference to rights Executive may have at certain specified dates after her
execution of this Agreement, are expressly conditional upon Executive remaining
in the employment of the Corporation at the specified time or date and are in no
way intended to alter the “At Will” nature of Executive’s employment.   3.  
Salary and Other Compensation. As compensation for the services to be rendered
by Executive to the Corporation pursuant to this Agreement, Executive shall be
paid the following compensation and other benefits:

  a)   Salary: $5,000.00 per pay period, of which there are 26 in each calendar
year, less deductions as may be required by law. The Corporation reserves the
right to: (i) make deductions from Executive’s pay to satisfy any outstanding
obligations; and/or (ii) make deductions from Executive’s pay to satisfy any
losses resulting from unlawful activities. In each case, deductions to be made
only after final adjudication by a court of competent jurisdiction.     b)  
Bonus: Executive shall be eligible for an annual bonus based upon the
Corporation’s existing Executive Bonus Plan. The maximum annual bonus potential
shall be $30,000 if the Corporation and Executive satisfy the criteria for

 

--------------------------------------------------------------------------------

 

      achieving said bonus as outlined in the Executive Bonus Plan. The
Corporation reserves the right to: (i) make deductions from Executive’s bonus to
satisfy any outstanding obligations; and/or (ii) make deductions from
Executive’s bonus to satisfy any losses resulting from unlawful activities.

  c)   Office Furnishings: The Corporation agrees to provide office space and
furnishings to Executive commensurate with the Corporation’s décor and culture.
    d)   Executive Benefit Plans: Executive shall be allowed to participate, to
the extent they may be eligible, in any profit sharing, retirement, insurance or
other Executive benefit plan maintained by the Corporation. In the event
Executive elects to participate in the Corporation’s medical, dental, vision,
and life insurance plans, the Corporation will pay the entire cost of such
coverage for Executive and her immediate family.     e)   Vacations and Leave:
Executive shall be entitled to three (3) weeks of vacation per year, accrued
monthly, and six (6) sick days per year, and any other paid leave benefits
provided for in the Corporation’s Employee Handbook.

4.   Non-Disclosure of Confidential Information. Executive acknowledges that
beginning on Effective Date, the Corporation has and shall continue to provide
to Executive, and she will otherwise be making use of, acquiring, and/or adding
to special training and confidential information of a special and unique nature
and value relating to such matters as the Corporation’s copyrights, proprietary
information, trade secrets, systems, product developments, procedures, manuals,
confidential reports, lists of customers (which are deemed for all purposes
confidential and proprietary), as well as the nature and type of services
rendered by the Corporation, the equipment and methods used and preferred by the
Corporation’s customers, and the fees paid by them. Executive further agrees
that if a third party (e.g., vendors, customers and manufacturers) contracts
with the Corporation, the information obtained or received from a third party
including, but not limited to, its patents, copyrights, proprietary information,
trade secrets, systems, product development, procedures, manuals, and
confidential reports, will be treated in the same manner and subject to the same
protection as other Confidential Trade Secret Information (as hereinafter
defined) of the Corporation.             As a material inducement to the
Corporation to enter into this Agreement and to pay Executive the compensation
and benefits stated herein and as a condition of employment and continued
employment, Executive shall keep confidential all such confidential and
proprietary information which Executive has learned or learns or acquires as a
result of her employment with the Corporation. By way of example, “Confidential
Trade Secret Information” may consist of any idea, process, design, concept,
formula, pattern, device, development, customer information or compilation of
information which is used in the Corporation’s business, which gives the
Corporation an advantage over a competitor who does not know or use it.      
      Executive agrees that the appropriate remedy for any breach of this
paragraph 4 is a suit for injunctive relief and specific performance in any
court of competent jurisdiction. Executive agrees that damages for use of any
identified Confidential Trade Secret Information in violation

 

--------------------------------------------------------------------------------

 

    of this paragraph 4 shall be 100% of the gross amount of revenue derived
from unauthorized use of such information.

5.   Covenants Not to Compete. Executive acknowledges that the confidential
information which the Corporation shall provide to her under the terms of
paragraph 4 of this Agreement is special and unique, and that the receipt of it
by Executive is of benefit and value to her. Executive acknowledges delivery and
receipt of such confidential information and specialized training
contemporaneously and/or in conjunction with the execution of this Agreement,
such confidential information and training being given and delivered to
Executive expressly in consideration for her agreement to be bound by the
provisions of this Paragraph. Executive also acknowledges that Corporation does
not normally disclose such confidential information and takes steps to protect
it. Executive further acknowledges that the services he/she is to render to the
Corporation are of a special and unusual character with a unique value to the
Corporation, the loss of which cannot adequately be compensated by damages in
action at law. Accordingly, and expressly in consideration for the Corporation’s
agreement in paragraph 4 of this Agreement to provide confidential information
to her, Executive agrees that during the term of her employment and for a period
of twelve (12) months from the date this Agreement is terminated, for whatever
reason:

  a)   Executive shall not, directly or indirectly, without the express written
consent of the Corporation, solicit or induce, or attempt to solicit or induce,
any employee of the Corporation, current or future, to leave or cease their
relationship with the Corporation, for any reason whatsoever, or hire any
current or future employee of the Corporation.     b)   Executive shall not,
directly or indirectly, without the express written consent of the Corporation:
(i) engage in any business or activity that is competitive with the business of
the Corporation; and/or (ii) be employed by, or provide competitive services or
assistance to, a “Competing Business” (hereinafter defined) which would
potentially involve, directly or indirectly, the use and/or disclosure of the
Corporation’s Confidential Trade Secret Information. For purposes of this
Agreement, a Competing Business means any person or firm that offers services or
products that are directly competitive with those marketed, offered for sale
and/or under any stage of development by the Corporation as of the date of
Executive’s separation from employment. If Executive desires to work for a
Competing Business in an area that is not competitive with the business of the
Corporation, Executive must give written notice to the Chief Executive Officer
of the Corporation and obtain her approval that the employment will not violate
the terms and conditions of this paragraph 5 before beginning employment with
the Competing Business.     c)   Executive will not solicit or attempt to
solicit the Corporation’s existing or prospective customers to purchase services
or products that are competitive with those marketed, offered for sale and/or
under any stage of development by the Corporation as of the date of Executive’s
separation from the Corporation. For purposes of this Agreement, existing
customers shall mean those persons or firms

 

--------------------------------------------------------------------------------

 

      that the Corporation has made a sale to in the twelve (12) months
preceding Executive’s separation from employment; prospective customers shall
mean those persons or firms that the Corporation has solicited and/or negotiated
to sell the Corporation’s products or services to within the twelve (12) months
preceding Executive’s separation from the Corporation.

  d)   In the event that any of the provisions of this paragraph 5 shall be held
to be invalid or unenforceable, the remaining provisions thereof shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event that any
provision of this paragraph 5 relating to the time period and/or the areas of
restriction and/or related aspects shall be declared by a court of competent
jurisdiction to exceed the maximum restrictiveness such court deems reasonable
and enforceable, the time period and/or areas of restriction and/or related
aspects deemed reasonable and enforceable by the court shall become and
thereafter be the maximum restriction in such regard, and the restriction shall
remain enforceable to the fullest extent deemed reasonable by such court.     e)
  Executive agrees that the appropriate remedy for any breach of this paragraph
5 is a suit for injunctive relief and/or specific performance in any court of
competent jurisdiction. Executive agrees that the Corporation also has the right
to seek damages for any breach of this paragraph 5. The Corporation has sole
discretion regarding whether to seek a remedy for breach of this paragraph in a
Court of competent jurisdiction and/or through arbitration procedures outlined
in paragraph 9.

6.   Termination. This Agreement will terminate as follows:

  a)   Death. Executive’s employment hereunder shall automatically terminate
upon her death.     b)   Disability. The Corporation may terminate the
Executive’s employment hereunder in the event of the Executive’s Disability (as
hereinafter defined). For purposes of this Agreement, “Disability” shall mean
that, as a result of the Executive’s incapacity due to illness or injury,
Executive shall have been absent from her duties under this Agreement on a
substantially full-time basis for a period of three (3) or more consecutive
months, and thereafter, within thirty (30) days after the Corporation notifies
Executive in writing that it intends to replace her, Executive shall not have
returned to the performance of such duties on a full-time basis. Should
Executive be diagnosed as permanently disabled by her treating physician, the
Corporation can terminate her employment without waiting for the expiration of
the three-month period. Without limiting the foregoing, until the Corporation
terminates Executive’s employment hereunder on account of Disability, the
Executive shall receive her full compensation as provided in Paragraph 3 of this
Agreement.

 

--------------------------------------------------------------------------------

 

  c)   By Executive. Executive may resign at any time upon thirty (30) days
notice to the Chief Executive Officer of the Corporation.     d)   By the
Corporation.

  (1)   The Corporation may terminate Executive for any reason or no reason upon
thirty (30) days written notice to Executive.     (2)   The Corporation may
terminate Executive immediately for Willful Neglect of her duties and
responsibilities. For purposes of this Agreement, “Willful Neglect” means
(a) any act or course of conduct by the Executive constituting a criminal act or
(b) an act by the Executive that is not authorized by the Board of Directors of
the Corporation, or a committee thereof, and which results in gain to or
personal enrichment of the Executive at the expense of the Corporation, or
(c) the commission by the Executive of an act or course of conduct involving
moral turpitude, or (d) a breach by Executive of either or both of Paragraphs 4
and 5 of this Agreement, or (e) the Executive’s intentional violation of
reasonable written instructions or policies established by the Corporation’s
Board of Directors with respect to the operation of the Corporation’s business
and affairs, or the Executive’s failure to carry out reasonable written
instructions or policies of the Board of Directors, or a material breach (other
than a breach of Paragraphs 4 or 5) by the Executive of this Agreement, provided
that before a termination of the Executive pursuant to this subsection
10(d)(i)(e) shall be considered for “Willful Neglect”, the Corporation’s Board
of Directors must give the Executive written notice and (30) days to cure such
violation or failure.

7.   Payment Upon Termination. Notwithstanding any other provision of this
Agreement, payments and/or benefits to Executive upon termination shall be as
follows, and only as follows:

  a)   Upon Death or Disability: Executive shall be entitled to earned, but
unpaid salary, pro-rata bonus as determined by the Corporation and vested
options.     b)   Upon Resignation by Executive and Upon Termination for Willful
Neglect: Executive shall be entitled to her earned, but unpaid salary and vested
options.     c)   Upon Termination for Other than Willful Neglect: If the
Corporation terminates Executive’s employment for any reason other than Willful
Neglect, Executive will be eligible for 6 months of severance pay at her base
salary rate, payable in 13 bi-weekly payments consistent with the Corporation’s
normal payroll cycle, if and only if she executes a general release of all
claims against the Corporation upon separation of her employment with the
Corporation. The severance payment, pro-rated bonus as determined by the
Corporation, vested options, and

 

--------------------------------------------------------------------------------

 

      accrued vacation will be the only entitlements made to Executive upon
separation of her employment with the Corporation. Executive will receive no
other monetary payment from the Corporation. Eighty percent of this severance
payment will be allocated to Executive’s agreement to abide by the covenant not
to compete provisions and nondisclosure requirements contained in paragraphs 4
and 5 of this Agreement. Executive’s obligations under paragraphs 4 and 5 of
this Agreement will continue regardless of whether Executive receives a
severance payment from the Corporation. To the extent possible, the Executive
shall be required to mitigate the amount of any severance payment provided for
in this Agreement by seeking other employment or otherwise.     d)   Any amounts
of money owed by Executive to the Corporation at the time of termination shall
be offset against any wages owed by Corporation to Executive.

8.   Non-Disparagement. Executive agrees that she will not disparage the
Corporation, in any manner, upon separation of her employment from the
Corporation. Likewise, Corporation agrees that it will not disparage the
Employee, in any manner, upon separation of her employment from the Corporation.
  9.   Arbitration. Except for the provisions of paragraphs 4 and 5, Executive
and Corporation agree that all Disputes, as defined in Article I of the
Alternative Dispute Resolution Procedure (the “ADR Procedure”), regarding the
termination of employment or other covered Dispute shall be resolved exclusively
in accordance with the Corporation’s ADR Procedure. The parties, however, agree
that the ADR Procedure does not apply to claims for unemployment compensation
benefits or claims by the Corporation for injunctive relief, specific
performance, and/or damages as provided for in paragraphs 4 and 5 of this
Agreement. Executive represents, warrants and agrees that (a) Executive has
received, read and understands the Corporation’s ADR Procedure; (b) Executive
must file a claim under the ADR Procedure within one-hundred and eighty
(180) days of being notified of the termination or other adverse employment
decision; (c) arbitration may be compelled and enforced under the Federal
Arbitration Act; (d) any arbitration award is final and binding upon both
Executive and the Corporation; (e) the ADR Procedure shall survive the
employer-Executive relationship and applies to any Dispute whether it is
asserted during or after Executive’s separation of employment; and (f) the ADR
Procedure does not alter the parties’ ““At Will”” employment relationship.   10.
  Indemnification. If applicable, the Corporation agrees to provide the
Executive with coverage under its Director’s and Officer’s liability insurance
policy. The Corporation also agrees to indemnify and defend Executive in
accordance with the Corporation’s Bylaws.   11.   Resignation Upon Termination.
In the event of separation of Executive’s employment with the Corporation,
Executive hereby agrees to resign from all positions held in the Corporation,
including, without limitation, any position of director, officer, agent,
trustee, or consultant of the Corporation.   12.   Waiver. A party’s failure to
insist on compliance or enforcement of any provision of this Agreement, shall
not affect the validity or enforceability or constitute a waiver of future

 

--------------------------------------------------------------------------------

 

    enforcement of that provision or of any other provision of this Agreement by
that party or any other party.

13.   Governing Law. This Agreement shall in all respects be subject to, and
governed by, the laws of the State of Texas.   14.   Severability. The
invalidity or unenforceability of any provision in the Agreement shall not in
any way affect the validity or enforceability of any other provision and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provision had never been in the Agreement.   15.   Notice. Any and all notices
required or permitted herein shall be deemed delivered if delivered personally
or if mailed by registered or certified mail to the Corporation at its principal
place of business and to Executive at the address hereinafter set forth
following Executive’s signature, or at such other address or addresses as either
party may hereafter designate in writing to the other.   16.   Assignment. This
Agreement, together with any amendments hereto, shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors,
assigns, heirs and personal representatives, except that the rights and benefits
of either of the parties under this Agreement may not be assigned without the
prior written consent of the other party.   17.   Amendments. This Agreement may
be amended in writing at any time by mutual consent of the parties hereto. Any
purported amendment that is not in writing and signed by the Corporation and
Executive is invalid.   18.   Entire Agreement. This Agreement contains the
entire agreement and understanding by and between Executive and the Corporation
with respect to the employment of Executive, and no representations, promises,
agreements, or understandings, written or oral, relating to the employment of
Executive by the Corporation not contained herein shall be of any force or
effect.   19.   Burden and Benefit. This Agreement shall be binding upon, and
shall inure to the benefit of, the Corporation and Executive, and their
respective heirs, personal and legal representatives, successors, and assigns.  
20.   References to Gender and Number Terms. In construing this Agreement,
feminine or number pronouns shall be substituted for those masculine in form and
vice versa, and plural terms shall be substituted for singular and singular for
plural in any place which the context so requires.   21.   Headings. The various
headings in this Agreement are inserted for convenience only and are not part of
the Agreement.

IN WITNESS WHEREOF, the Corporation and Executive have duly executed this
Agreement as of the Effective Date.

 

--------------------------------------------------------------------------------

 

     
INTERPHASE CORPORATION
  EXECUTIVE  
By: /s/ Gregory B. Kalush
  By: /s/ Deborah A. Shute
GREGORY B. KALUSH
  DEBORAH A. SHUTE
President &
  Vice President, Human Resources
Chief Executive Officer
   
 
   
Address for Notice Purposes:
  Address for Notice Purposes:

Chief Executive Officer
Interphase Corporation
13800 Senlac Road
Dallas, Texas 75234

 

--------------------------------------------------------------------------------

 

ATTACHMENT A
List of Confidential Information

•   Overall corporate strategy   •   Annual Business Plan, Revenue, Expense and
Earnings Projections   •   Annual Budgets, Margin Analyses   •   Product
Strategy including Marketing Plans and Product Roadmaps   •   Customer and
Supplier Lists   •   Pricing Strategy   •   Bills of Materials   •   Telephone
Listing of Current Employees