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Exhibit 10
(o)
 
  EMPLOYMENT,
CONFIDENTIALITY, AND NON-COMPETITION AGREEMENT
 Prasad Kallur
 Background Statement
   Statement of Agreement
 1.
    
    Duties.Executive shall devote Executives best efforts to the business of the
Company. Executive shall perform such duties and responsibilities
customary to the position of Vice
President ofStrategic Marketing, including those described on
Exhibit A to this Agreement.
Executive shall also perform those duties assigned by the Company from time to time.
 2.
    
    Terms.The initial term of employment under this Agreement shall terminate six (6)
months after the date of this Agreement. The initial term of this Agreement shall automatically
renew for successive six (6) month periods, referred to as successor terms, unless either party
gives thirty (30) days written notice of its intention not to renew prior to the expiration of the
initial or any successor term or Executive is terminated for cause.
 
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3.
    
    Terminable Only For Cause.This Agreement may be terminated by the Company prior to
the expiration of the initial term or any successor term as follows:
 (a)
    
    Due to the death of Executive;(b)
    
    Due to a physical or mental disability which prevents Executive from performing the
essential functions of his full duties for a period of ninety (90) consecutive days during the term
of this Agreement, as determined in good faith by a physician reasonably acceptable to the Company;
or,(c)
    
    For Cause, which is (i) fraud, misappropriation, embezzlement, dishonesty, or other act
of material misconduct against the Company or any affiliate of the Company; (ii) failure to perform
specific and lawful directives of Executives superiors; (iii) violation of any rules or regulations
of any governmental or regulatory body, which is materially injurious to the financial condition of
the Company; (iv) conviction of or plea of guilty or nolo contendere to a felony; (v) violation of
the provisions of 8, 9, 10, 11,13, or 16; or, (vi) substantial failure to perform the duties and
responsibilities of Executive under this Agreement.In the event of termination under this paragraph, Executive shall be entitled only to Executives
base salary earned through the date of termination. No accrued but unpaid bonuses or commissions
shall be due to Executive.
 4.
    
    Termination Without Cause or Nonrenewal.In the event the Company gives Executive thirty
days written notice of its intention not renew a term of this Agreement, or if Executive is
terminated without cause after the expiration of the initial term, the Executive shall receive an
amount equal to six-months severance pay based on the Executives base salary at the time of
termination, payable in bi-monthly or bi-weekly installments as dictated by the regular pay dates
of the Company. No accrued but unpaid bonuses or commissions shall be due to Executive under this
Paragraph. No other severance payment or benefits shall be due Executive other than those provided
for under this Agreement. Notwithstanding anything stated herein to the contrary, in the event
Executive becomes employed during the period in which the Executive is eligible to receive
post-employment payments under this Paragraph, any amounts received by Executive in the form of
compensation, salary, or other payments shall be offset or shall reduce any amounts or liability
owed by the Company to the Executive under this Paragraph.
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5.
    
    Compensation.Employer shall pay and provide benefits to Executive according to the
provisions of Executives compensation plan described in the
attached Exhibit B. Executives
compensation plan shall be reviewed on a periodic basis. The Company reserves the right, and
Executive hereby authorizes Company. to make deductions front Executives pay or bonuses to satisfy
any outstanding obligations of Executive to the Company. The Company may offset against the final
payment of wages or bonuses owed to Executive any amounts due the Company from Executive.6.
    
    Changes in Position, Location, or Compensation.If the Company transfers,
promotes, or reassigns Executive to another position, or geographic area, or both parties
agree to a change in compensation or benefits during a term of this Agreement or upon the renewal
of a term of this Agreement, an updated employment agreement may be substituted by agreement of the
parties but is not required. Mutually-agreeable changes in compensation or benefits shall be
effected by amendment to and incorporation of a modified
Exhibit B, initialed by the parties or
their authorized representative. All provisions, promises, terms or conditions not modified by an
amendment of Exhibits
 AC shall remain in effect and shall not be deemed revoked or modified beyond
the changes set forth in one or more amended Exhibits.7.
    
    Executive Representation/Warranty.Executive represents that Executive is not a party to
any agreement with a third party, or limited by a court order, containing a non-competition
provision or other restriction which would preclude Executives employment with Company or any of
the services which Executive will provide on the Companys behalf.8.
    
    Duty of Loyalty.Executive acknowledges the common law duties of reasonable care,
loyalty, and honesty which arise out of the principal/agent relationship of the parties. While
employed and thereafter for whatever term the law may impose, Executive shall not engage in any
activity to the detriment of the Company. By way of illustration and not as a limitation,
Executive shall not discuss with any customer or potential customer of the Company any plans by
Executive or any other Executives of the Company to leave the employment of the Company and compete
with the Company.9.
    
    Company Documents.Executive agrees and acknowledges that Executive holds as the
Companys property all memoranda, books, papers, letters, and other data, including duplicates,
relating to the Companys business and affairs (Company Documents). This includes Company
Documents created or used by Executive or otherwise coming into Executives possession in
connection with the performance of Executives job duties. All Company Documents in the possession,
custody, or control of Executive shall be returned to the Company at the time of termination of
employment.
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Confidential
Information and Non-Competition
 10.
    
    In exchange for the mutual promises and obligations contained
in this Agreement, and
contemporaneous with its execution or soon thereafter, Employer promises to deliver to Executive or
permit Executive to acquire, be exposed to, and/or have access to material, data, and information
of the Company and/or its customers or clients that is confidential, proprietary and/or a trade
secret (Confidential Information). At all times, both during and after the termination of
employment, the Executive shall keep and retain in confidence and shall not disclose, except as
required in the course of the Executives employment with the Company, to any person, firm or
corporation, or use for the Executives own purposes, any
Confidential Information. For the
purposes of this paragraph, such information shall include, but is not limited to:
 1.
    
    The Companys standard operating procedures, processes, formulae, know-how, scientific,
technical, or product information, whether patentable or not, which is of value to the Company and
not generally known by the Companys competitors;2.
    
    All confidential information obtained from third parties and customers concerning their
products, business, or equipment specifications;3.
    
    Confidential business information of the Company, including, but not limited to,
marketing and business plans, strategies, projections, business opportunities, client identities or
lists, sales and cost information, internal financial statements or reports, profit, loss, or
margin information, customer price information; and,4.
    
    Other information designated by the Company or deemed by law to be confidential
information.
 11.
    
    Non-Competition.In consideration of the mutual promises contained in this Agreement,
the sufficiency of which is acknowledged by the parties, Executive agrees that during the term of
his employment and for a period of twelve (12) calendar months after termination of employment from
the Company (whether voluntary or involuntary), Executive shall not, directly or indirectly, either
as principal, agent, manager, employee, partner, shareholder, director, officer, consultant or
otherwise:
 1.
    
    Become associated or affiliated with, employed by, or financially interested in any
business operation which competes in the business currently engaged in by Company. (The phrase
business currently engaged in by the Company includes, but is not limited to, the type of
activities in which the Company was engaged during Executives tenure, such as designs and delivers
high performance connectivity adapters for computer and telecommunication networks.)
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2.
    
    Solicit or attempt to solicit the business or patronage of any person, firm,
corporation, partnership, association, department of government or other entity with whom the
Company has had any contact during a period of twelve (12) calendar months preceding the date of
this Agreement (Customers), or otherwise induce such Customers to reduce, terminate, restrict or
otherwise alter business relationships with the Company in any fashion; or,3.
    
    In any way solicit or attempt to solicit the business or patronage of any Customers.4.
    
    The parties intend the above restrictions on competition to be completely severable and
independent, and any invalidity or unenforceability of any one or
more such restrictions shall not render invalid or unenforceable any
one or more restrictions.
 12.
    
    Limitations on Scope.In recognition of the broad geographic scope of the Companys
business and the ease of competing with the Company in any part of the United States, the
restrictions on competition set forth herein are intended to cover the following geographic areas:
 1.
    
    The geographic territory identified on the attached
Exhibit C;2.
    
    The cities containing a facility or operation owned or managed by the Company; and,3.
    
    A fifty (50) mile radius outside the boundary limits of each such city.The parties intend the above geographical areas to be completely severable and independent, and any
invalidity or unenforceability of this Agreement with respect to any one area shall not render this
Agreement unenforceable as applied to any one or more of the other areas.
 13.
    
    Non-Solicitation of Employees.During employment and for a period of twelve (12) months
after termination, Executive agrees not to hire, employ, solicit, divert, recruit, or attempt to
induce, directly or indirectly, any existing or future employee of the Company to leave their
position with the Company or to become associated with a competing business.
 Remedies for Breach
 14.
    
    Companys Right to Obtain an Injunction.Executive acknowledges that the Company will
have no adequate means of protecting its rights under Paragraphs 10, 11, 12, or 13 of this
Agreement other than be securing an injunction (a court order prohibiting the Executive from
violating the Agreement). Accordingly, the Executive agrees that the Company is entitled to enforce
this Agreement by obtaining a temporary, preliminary, and permanent injunction and any other
appropriate equitable relief. Executive acknowledges that the Companys recovery of damages will
not be an adequate means to redress a breach of this Agreement. Nothing
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contained in this paragraph, however, shall prohibit the Company from pursuing any remedies in
addition to injunctive relief, including recovery of damages. Executive expressly acknowledges that
the Company has sole discretion regarding whether to seek a remedy for breaches of Paragraphs 10,
11, 12,or 13 in a court of competent jurisdiction or by arbitration procedures outlined in
paragraph 15.15.
    
    Arbitration.Executive and the Company agree that any unresolved dispute or controversy
involving a claim for monetary damages and/or declaratory or injunctive relief arising under or in
connection with this Agreement shall be settled exclusively by arbitration, conducted before a
single arbitrator in Dallas, Texas, according to the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrators award in any court having jurisdiction.
The direct expense of any arbitration proceeding shall be borne by the Company. Notwithstanding the
foregoing, nothing in this Paragraph is intended to subject a claim by either party arising under
Paragraphs 10, 11, 12, or 13 to mandatory arbitration. Any claim arising under Paragraphs 10, 11,
12, or 13 shall be litigated in the courts of the relevant jurisdiction and venue.
 Inventions and Discoveries
 16.
    
    Discoveries, Inventions, & Copyrights.Executive shall disclose promptly to the Company
any and all conceptions and ideas for inventions, improvements, and valuable discoveries, whether
patentable or not, which are conceived or made by the Executive, solely or jointly, during
Executives term of employment and which pertain to the business activities of the Company.
Executive hereby assigns and agrees to assign all his interest therein to the Company or to its
nominee. Whenever requested to do so by the Company, Executive shall execute any and all
applications, assignments, or other instruments which the Company shall deem necessary to apply for
and obtain Letters of Patent of the United States or any foreign country or to otherwise protect
the Companys interest therein.General Provisions17.
    
    Condition to Seeking Subsequent Employment.Executive agrees to show a copy of this Agreement
to any Competitor with whom Executive interviews during the Executives employment with the Company
or with whom the Executive interviews within twelve (12) months following the effective date of the
termination of the Executives employment with the Company.18.
    
    Attorneys Fees.If any party shall obtain a final judgment of a court of competent
jurisdiction, subject to no further appeal, pursuant to which any other party shall be determined
to have breached its obligations hereunder or made any misrepresentations, such prevailing party
shall be entitled to recover, in addition to any award of damages, reasonable attorneys fees,
costs, and expenses incurred by such party in obtaining such judgment.
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19.
    
    Non-Disparagement and Confidentiality.Except as may be required by law or as consented
to in writing by an authorized officer or agent of the Company. Executive agrees not to make any
statements whatsoever, directly or indirectly, written or oral, which could reasonably become
public, which could be interpreted as embarrassing, disparaging, prejudicial, or in any way
detrimental or inimical to the interests of the Company. Furthermore, Executive agrees to hold
confidential and not to disclose, make public, or to communicate orally or in writing to any person
or entity (other than Executives significant other and immediate family), directly or indirectly,
the terms of this Agreement or any matters set forth herein, except only: (a) as may be compelled
by court orders; (b) as may be necessary to enforce the terms of this Agreement; (c) to legal,
accounting, and financial advisors; (d) as may be necessary in connection with the application for
or obtaining loans or credit; (e) as may be necessary to comply with applicable laws and government
regulations; or, (e) as may be necessary or desirable in obtaining future employment.20.
    
    Successors and Assigns.This Agreement shall be binding upon and inure to the benefit of
the Company, its subsidiaries, affiliates, successors, and assigns.21.
    
    Nonwaiver.Any waiver by the Company of a breach of any provision of this Agreement must
be in writing and signed by the Company to be effective. Any waiver by the Company of a breach of
any provision of this Agreement shall not operate or be construed as a waiver by the Company of any
different or subsequent breach of this Agreement by Executive.22.
    
    Applicable Law.This Agreement shall be construed in accordance with and governed by the
laws of the State of Texas, without giving effect to the conflict of
laws provisions thereof.23.
    
    Forum Selection Clause.Any and all causes of action for equitable relief relating to
the enforcement of this Agreement and not otherwise subject to the mandatory arbitration provisions
of Paragraph 15 may, in the Employers sole discretion, be brought in the United States District
Court for the Northern District of Texas or the Dallas County
District of the Texas State Courts.
The parties agree that the provisions of this paragraph benefit both
Employer and Executive. Any
and all causes of action by and between Employer and Executive can be quickly and efficiently
resolved in the agreed-upon forum, which will not unduly burden either Employer or Executive, and
which will substantially aid Employer and Executive in providing the opportunity for uniform
treatment with respect to any issues relating to the covenants contained in this Agreement.24.
    
    Entire Agreement.This Agreement represents the entire agreement between the Company and
the Executive with respect to the subject matter hereof, supersedes all prior agreements dealing
with the same subject matter, and may not be changed except in a writing signed by the party
against whom enforcement of the Agreement, as so changed, is sought.25.
    
    Severability.The invalidity of any term or provision of this Agreement, including any
term or provision of paragraphs 10, 11, 12, or 13 shall not invalidate or otherwise affect any
other
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term or provision of this Agreement.26.
    
    This agreement shall be effective May 23, 2005.
 Interphase CorporationBy:
    
    /s/ Gregory B. KalushGregory B. KalushIts:
    
    President and Chief Executive OfficerExecutive/s/ Prasad KallurPrasad Kallur
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Exhibit A
 
 Job Description
 Job Title: Vice President, Strategic Marketing
    
    Department: MarketingReports To: CEO & President
    
    FLSA Status:ExemptPrepared By: D. Shute
    
    Approved By: CEO & HRPrepared Date: 4/27/05
    
    Approved Date:
  SUMMARY
  ESSENTIAL DUTIES AND RESPONSIBILITIES
 1.
    
    Leads Strategic Marketing.
    
    Significantly contributes to setting the short-term and long-term vision and mission of
the organization, identifying objectives and developing strategies and tactics to link
those objectives to corporate goals.
    
    Personally ensures Interphase Executive team is aware of
current and leading-edge
market & customer trends in a timely fashion, and participates in business
development analysis and decision-making.
    
    Triangulates customer trends and market trends for
recommendations for corporate
strategy.
    
    Reviews and recommends alternative markets and segments.
    
    Determines where the current products could compete
    
    Understands what it takes to displace competition in the
current and alternative markets.2.
    
    Product Line Management
    
    Reviews Product Application in Existing Network Elements
    
    As technology evolves what can Interphase do to extend the lifecycle?
    
    Are there regulatory issues that may extend the lifecycle?
    
    Are there marketing communications avenues with certain channels that will extend the life?




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
    
    Manages Product Positioning for Current Product Lines.
    
    Analyze market trends for current products, including the
following: Where current customers are using the products, the pricing elasticity of the current products, the features required to
extend the product lifecycle, the packaging required to create
mid-life kickers of the product, the options to extend the product lifecycle, future technology trends and their impact, and competitive positioning.
    
    Recommends Actions to Increase the Lifecycle or Revenue,
including pricing, bundling, partners, channels, and marketing communications strategies.3.
    
    Manages Marketing Communications & Administration.
    
    Responsible for all marketing activities associated with
sales support and product/company promotion.
    
    Focuses on existing product lines to determine the roadmap for the product line.
    
    Determines how Interphase can extend the line as well as computing the lifecycle.
    
    Provides measurement against competition and market share.
    
    Oversees RFI/RFQ/RFP response and contract management for the product line.4.
    
    In conjunction with Sales and Finance, develops competitive pricing strategies.5.
    
    Responsible for ensuring the company satisfactorily maintains
its ISO:9000 and TL9000 quality certifications. Reviews
and analyses of activities, costs, operations, and
forecast data to determine department progress toward stated goals and objectives.6.
    
    Confers with Chief Executive Officer to review achievements and discuss required changes in goals or objectives
resulting from current status and conditions.7.
    
    Establishes and implements promotional and advertising programs.8.
    
    Responsible for creating and maintaining a best-in-class marketing organization consisting of
quality people, processes, programs, and products.9.
    
    Ensures effective communication, coordination, processes, and procedures between all
cross-functional areas in the company, particularly between Marketing, Sales, and Engineering.10.
    
    Conveys initiatives, goals and values throughout the organization, and ensure management team
does as well.11.
    
    Ensures key departmental metrics are established and performance to goals are tracked and
reported on.12.
    
    Responsible for participating in the companys annual
planning process, including strategic decision making on future
direction of company, developing functional operational plan,
establishing budgets, etc.




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13.
    
    Significantly assists with development and maintenance of the companys Product Roadmap.14.
    
    Ensures adequate training of managers and other marketing
employees in related processes to accepted industry standards and applicable laws.15.
    
    Provides tactical initiatives and solutions to the manufacturing processes to ensure
the ability to manufacture the advanced technology of LAN, SAN and WAN products.16.
    
    Maintains concise communications with the executive team to provide timely status and important
issues for their review and recommendations.17.
    
    Participates in contract reviews, customer audits, as well as ISO audits, providing
management responsibility representation and manufacturing process review.
 SUPERVISORY
RESPONSIBILITIES
  QUALIFICATIONS
 EDUCATION
and/or EXPERIENCE




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LANGUAGE
SKILLS
  OTHER
SKILLS AND ABILITIES
  MATHEMATICAL
SKILLS
  REASONING
ABILITY
  OTHER
QUALIFICATIONS




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PHYSICAL
DEMANDS
   WORK
ENVIRONMENT
 Initials
    
    /s/ PRK/s/ GBK




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Exhibit B
 Compensation
 Base
salary. $6,730.77 $175,000
 Key Talent Bonus. $40,000
 Equity. 18,000
 Relocation
Bonus. $50,000 lump sum st
 Temporary Living Expenses. furnished, one-bedroom corporate apartment rental car, reimbursement for
airfare
 Executive Benefit Plans. medical, dental, vision, life, AD&D, STD, LTD, 401k
 Initials
    
    /s/ PRK/s/ GBK




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Severance Pay . 6 months
 Executive
Disability Plan. Disability
 Vacation and Leave. three (3) weeks of vacation per year, six (6) sick days per year,
 Cell
Phone & Computer. laptop and cell phone/PDA
 Office
Furnishings. office space and furnishings
 Initials
    
    /s/ PRK/s/ GBK




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Exhibit C
 Designated
Cities 

    Per Paragraph 11a of
Employment, Confidentiality, and Non-Compete Agreement.
  Initials
    
    /s/ PRK/s/ GBK