**Exhibit 10(p)**[THISAGREEMENT IS SUBJECT TO ARBITRATION]**EMPLOYMENT AGREEMENT**          THISEMPLOYMENT AGREEMENT (“Agreement”) is made and entered intoas of the 11th of May,1999, (“Effective Date”) by and between Interphase Corporation and its subsidiaries (the“Corporation”), and Steven P. Kovac (“Executive”).          WHEREAS, the Corporation desires to enter into an employment relationship with Executive oncertain 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 promiseshereinafter contained, do hereby agree as follows:1) Employment. The Corporation hereby employs Executiveand Executive hereby acceptsemployment on the following terms and conditions. Executive will be employed by theCorporation as the Vice President of Finance and Chief Financial Officer of the Corporation.In that capacity, Executive will be an Officer of the Corporation and will report directly tothe Chief Executive Officer of the Corporation. Executive agrees to review and comply withall policies and procedures in the Corporation’s Employee Handbook. 2) Term. Executive’s employment with the Corporationwill be “At Will”, and thus, either party may terminate the relationship at any time for any reason, subject to the terminationprovisions in paragraphs 6 and 7. Only the Chief Executive Officer of the Corporation has anyauthority to modify this Agreement or enter into any other agreement for employment for anyspecified time or to make any agreement contrary to the “At Will” relationship. Executivefurther understands that any reference to dates and/or periods of time in his Agreement,including any reference to rights Executive may have at certain specified dates after hisexecution of this Agreement, are expressly conditional upon Executive remaining in theemployment of the Corporation at the specified time or date and are in no way intended toalter the “At Will” nature of Executive’s employment. 3) Salary and Other Compensation. As compensation for the services to be renderedby Executive to the Corporation pursuant to this Agreement, Executive shall be paidthe following compensation and other benefits: a) *Salary:*$6,730.77 per pay period, of which there are 26 in eachcalendar year, less deductions as may be required by law. The Corporationreserves the right to: (i) make deductions from Executive’s pay to satisfy anyoutstanding obligations; and/or (ii) make deductions from Executive’s pay tosatisfy any losses resulting from unlawful activities. In each case,
 

 
   deductions to be made only after final adjudication by a court of competentjurisdiction.  b) *Bonus:*Executive shall be eligible for an annual bonusbased upon the Corporation’sexisting Executive Bonus Plan; the “annual bonustarget”shall be $40,000 if the Corporation satisfies the criteria for achieving said bonus as outlined in the ExecutiveBonus Plan. Executive understands and agrees that for any calendar year 1999, he shallbe eligible for a full year of his annual target bonus. The Corporation reserves theright to: (i) make deductions from Executive’s bonus to satisfy anyoutstanding obligations; and/or (ii) make deductions from Executive’s bonus tosatisfy any losses resulting from unlawful activities.  c) *Stock Options*: 1) Option Grant: The Corporation shall, in accordancewith the Corporation’sAmended and Restated Stock Option Plan, grant to Executive options to purchase100,000 shares of common stock of the Corporation which options shall vest inaccordance with sub-part 3) below. To the maximum extent permitted within themeaning of Section 422 of the Internal Revenue Code of 1986, asamended, a portion ofthe option grant will be incentive stock options with the balance being nonqualifiedstock options. Such option grant shall be in consideration of Executive’s agreementto abide by the covenant not to compete provisions and nondisclosure requirementscontained in paragraphs 4 and 5 of this Agreement. Executivecertifies that, as of theEffective Date, he has seen or been given access to the items listed on Attachment A,“List of Confidential Information”.  2) Option Price: The price at which Executive mayexercise the stockoptions will be the closing price of the Corporation’s common stock on Executive’sEffective Date. A separate stock option agreement will be prepared forExecutive covering the incentive and nonqualified stock option grants.  3) Vesting Schedule: Executive’s right to exercise the stockoptions granted to him herein will vest, provided that Executiveremains employed bythe Corporation, at the rate of 20% annually, beginning on the first date of hisemployment, provided that Executive will have no right to exercise any such optionsprior to the first anniversary of his employment with the Corporation (except asprovided in sub-part below). Subject to the provisions of sub-part (4), below,Executive must exercise his options within 10 years of the Effective Dateor Executive will lose and forever waive his rights to exercise such options.
 

 
 4) Rights Upon Termination of Employment: Notwithstandingthe other provisions of this Agreement, in the eventExecutive’s employment with the Corporation terminates for any reason(i) Executive must exercise all vested options within 90 days ofthe date oftermination, or  Executive will lose and forever waivehis rights to exercise suchof options and (ii) any options in which Executive has not vested as of the date oftermination will lapse and may not at any time be exercised by Executive.  5) Regulation of Rights: Executive must complywith all requirements regarding purchasing the Corporation’sCommon Stock andexercising stock options, including, without limitation, requirementspromulgated by the Corporation and the Securities and Exchange Commission. In thisregard, Executive must report to the Corporation any activity such as selling,purchasing or exercising the Corporation’s Common Stock and/or stock options. Anyquestions regarding reporting requirements should be directed tothe Corporation’s Chief Executive Officer.  6) Upon Acquisition of Shares by One Investor: Notwithstandingany provision herein to the contrary, if at any time during the termof this Agreementone investor (including all affiliates, as defined in Rule 405 promulgated pursuantto the Securities Act of 1933, as amended, of such investoi) accumulates 30% ormore of the out standing common stock of the Corporation all of the stockoptions (the “Executive Stock Options”) which have beengranted pursuant to the Plan,or otherwise, shall be accelerated and become immediately vested. The ExecutiveStock Options as so accelerated are hereinafter referred to as the“Advanced Options.” If any of the Executive’s Incentive Stock Options, includingthe Advanced Options that fall within the definition of the Executive’sIncentive Stock Options, which are vested are not exercised prior to theirtermination, then the Corporation shall grant a fully-vestednonqualified stock optionto the Executive for the same number of vested shares not exercised and at the sameexercise price. d) *Office Furnishings:*The Corporation agrees to provideoffice space and furnishingsto Executive commensurate with the Corporation’s décor and culture.  e) *Executive Benefit Plans:*Executive shall be allowed toparticipate, to theextent they may be eligible, in any profit sharing, retirement, insurance or otherExecutive benefit plan maintained by the Corporation. In the event Executive elects toparticipate in the Corporation’s medical, dental, vision, and life insurance plans, theCorporation will pay the entire cost of such coverage for Executive and his immediatefamily.
 

 
 f) *Vacations and Leave:*Executive shall be entitled to three (3) weeks ofvacation per year, accrued monthly, and six (6) sick days per year, and anyother paid leave benefits provided for in the Corporation’s Employee Handbook.4) Non-Disclosure of Confidential Information. Executive acknowledges thatbeginning on Effective Date, the Corporation shall provide to Executive, and he will otherwisebe making use of, acquiring, and/or adding to special training andconfidential information of aspecial and unique nature and value relating to such matters as theCorporation’s copyrights,proprietary information, trade secrets, systems, product developments, procedures, manuals,confidential reports, lists of customers (which are deemed for all purposes confidential andproprietary), as well as the nature and type of services rendered by the Corporation, theequipment and methods used and preferred by the Corporation’s customers, and the fees paid bythem. Executive further agrees that if a third party (e.g., vendors, customers andmanufacturers) contracts with the Corporation, the information obtained or received froma third party including, but not limited to, its patents, copyrights, proprietary information,trade secrets, systems, product development, procedures manuals, and confidential reports, willbe treated in the same manner and subject to the same protection as other ConfidentialTrade Secret Information (as hereinafter defined) of the Corporation.     As a material inducement to the Corporation to enter into this Agreement and to payExecutive the compensation and benefits stated herein and as a condition of employment andcontinued employment, Executive shall keep confidential all such confidential and proprietaryinformation which Executive learns or acquires as a result of his employment with theCorporation. By way of example, “Confidential Trade Secret Information” may consist of any idea,process, design, concept, formula, pattern, device, development, customer information orcompilation of information which is used in the Corporation’s business, which gives theCorporation 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 suitfor injunctive relief and specific performance in any court of competent jurisdiction.Executive agrees that damages for use of any identified Confidential Trade Secret Informationin violation of this paragraph 4 shall be 100% of the gross amount of revenue derived fromunauthorized use of such information.5) Covenants Not to Compete. Executive acknowledges that the confidentialinformation which the Corporation may provide to him under the terms of paragraph 4 ofthis Agreement is special and unique, and that the receipt of it byExecutive is of benefit andvalue to him. Executive acknowledges delivery and receipt of suchconfidential informationand specialized training contemporaneously and/or in conjunction withthe execution of thisAgreement, such confidential information and training being given and delivered to Executiveexpressly in consideration for his agreement to be bound by the provisions of this Paragraph.Executive also acknowledges that Corporation does not normally disclose such confidentialinformation and takes steps to protect it. Executive further acknowledges that the serviceshe/she is to render to the
 

 
Corporation are of a special and unusual character with a unique value to the Corporation, the lossof which cannot adequately be compensated by damages in action at law. Accordingly, and expresslyin consideration for the Corporation’s agreement in paragraph 4 of this agreement to provideconfidential information to him, Executive agrees that during the term of his employment and for aperiod of twelve (12) months from the date this Agreement is terminated, for whatever reason: a) Executive shall not, directly or indirectly, without theexpress written consentof the Corporation, solicit or induce, or attempt to solicit or induce, any employeeof the Corporation, current or future, to leave or cease their relationship with theCorporation, for any reason whatsoever, or hire any current or future employee of theCorporation.  b) Executive shall not, directly or indirectly, without theexpress written consentof the Corporation (i) engage in any business or activity thatis competitive with thebusiness of the Corporation; and/or (ii) be employed by, or provide competitiveservices or assistance to, a “Competing Business” (hereinafter defined) which wouldpotentially involve, directly or indirectly, the use and/or disclosure of theCorporation’s Confidential Trade Secret Information. For purposes of thisAgreement, a Competing Business means any person or firm that offers services orproducts that are directly competitive with those marketed, offered for saleand/or under any stage of development by the Corporation as of thedate of Executive’sseparation from employment. If Executive desires to work for a Competing Business inan area that is not competitive with the business of the Corporation, Executive mustgive written notice to the Chief Executive Officer of the Corporation and obtain hisapproval that the employment will not violate the terms and conditions ofthis paragraph 5 before beginning employment with the Competing Business.  c) Executive will not solicit or attempt to solicit the Corporation’s existingor prospective customers to purchase services or products that are competitivewith those marketed, offered for sale and/or under any stage of development by theCorporation as of the date of Executive’s separation from the Corporation. Forpurposes of this Agreement,existing customers shall mean those persons orfirms that the Corporation has made a sale to in the twelve (12) monthspreceding Executive’s separation from employment; prospectivecustomers shall meanthose persons or firms that the Corporation has solicited and/or negotiated to sellthe Corporation’s products or services to within the twelve (12) monthspreceding Executive’s separation from the Corporation.  d) In the event that any of the provisions of this paragraph 5shall be held to beinvalid or unenforceable*,*the remaining provisions thereofshall neverthelesscontinue to be valid and enforceable as though the invalid
 

 
   or unenforceable parts had not been included therein. In the event that anyprovision of this paragraph 5 relating to the time period and/or the areas ofrestriction and/or related aspects shall be declared by a court of competentjurisdiction to exceed the maximum restrictiveness such court deems reasonable andenforceable, the time period and/or areas of restriction and/or related aspects deemedreasonable and enforceable by the court shall become and thereafter be the maximumrestriction in such regard, and the restriction shall remain enforceable to the fullestextent deemed reasonable by such court.  e) Executive agrees that the appropriate remedy for any breach of thisparagraph 5 is a suit for injunctive relief and/or specific performance in any courtof competent jurisdiction. Executive agrees that the Corporation also has the rightto seek damages for any breach of this paragraph 5. The Corporation has solediscretion regarding whether to seek a remedy for breach of this paragraph in a Courtof competent jurisdiction and/or through arbitration procedures outlined in paragraph9.6) Termination. This Agreement will terminate as follows: a) *Death.*Executive’s employment hereunder shall automatically terminate uponhis death.  b) *Disability.*The Corporation may terminate the Executive’s employmenthereunder in the event of the Executive’s Disability (as hereinafter defined). Forpurposes of this Agreement, “Disability” shall mean that, as a result of theExecutive’s Incapacity due to illness or injury, Executive shall have been absentfrom his duties under this Agreement on a substantially full-time basis or a periodof three (3) or more consecutive months, and thereafter, within thirty (30) daysafter the Corporation notifies Executive in writing that it intends to replace him,Executive shall not have returned to the performance of such duties on a full-timebasis. Should Executive be diagnosed as permanently disabled by his treatingphysician, the Corporation can terminate his employment without waiting for theexpiration of the three-month period. Without limiting the foregoing, until theCorporation terminates Executive’s employment hereunder on account of Disability, theExecutive shall receive his full compensation as provided in Paragraph 3 of thisAgreement.  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 reasonupon thirty (30) days written notice to Executive.
 

 
 (2) The Corporation may terminate Executive immediately for WillfulNeglect of his duties and responsibilities. For purposes of thisAgreement, “Willful Neglect” means (a) any act or course of conduct bythe Executive constituting a criminal act or (b) an act by theExecutive that is not authorized by the Board of Directors of theCorporation, or a committee thereof, and which results in gain to or personal enrichment of the Executive at the expense of theCorporation, or (c) the commission by the Executive of an act orcourse of conduct involving moral turpitude, or (d) a breach byExecutive of either or both of Paragraphs 4 and 5 of this Agreement,or (e) the Executive’s intentional violation of reasonable writteninstructions or policies established by the Corporation’s Board ofDirectors with respect to the operation of the Corporation’s businessand affairs, or the Executive’s failure to carry out reasonablewritten instructions or policies of the Board of Directors, or amaterial breach (other than a breach of Paragraphs 4 or 5) by theExecutive of this Agreement, provided that before a termination ofthe Executive pursuant to this subsection 10(d)(i)(e) shall beconsidered for “Willful Neglect”, the Corporation’s Board of Directorsmust give the Executive written notice and (30) days to cure suchviolation or failure.7) Payment Upon Termination. Notwithstanding any otherprovision of this Agreement,payments and/or benefits to Executive upon termination shall be as follows, and only asfollows: a) *Upon Death or Disability: Executive*shall be entitled to earned, butunpaid salary, pro-rata bonus as determined by the Corporation andvested options.  b) *Upon Resignation by Executive and Upon Termination for Willful Neglect:*Executive shall be entitled to his earned, but unpaid salary and vestedoptions.  c) *Upon Termination for Other than Willful Neglect:*If the Corporationterminates Executive’s employment for any reason other than Willful Neglect, Executive will be eligible for 9 months of severance pay at hisbase salary rate, payable in 18 bi-weekly payments consistent with theCorporation’s normal payroll cycle, if and only if he executes a general releaseof all claims against the Corporation upon separation of his employment withthe Corporation. The severance payment, pro-rated bonus as determined by theCorporation, and vested options will be the only entitlements made to Executiveupon separation of his employment with the Corporation. Executive will notreceive accrued vacation or any
 

 
  other monetary payment from the Corporation. Eighty percent of this severancepayment will be allocated to Executive’s agreement to abide by the covenant notto compete provisions and nondisclosure requirements contained in paragraphs 4and 5 of this Agreement. Executive’s obligations under paragraphs 4 and 5 ofthis Agreement will continue regardless of whether Executive receives aseverance payment from the Corporation. The Executive shall not be required tomitigate the amount of any severance payment provided for in this Agreement byseeking other employment or otherwise.8) Non-Disparagement. Executive agrees that he will not disparage the Corporation, inany manner, upon separation of his employment from the Corporation. Likewise,Corporation agrees that it will not disparage the Employee, in any manner, uponseparation of his employment from the Corporation. 9) Arbitration. Subject to the provisions of paragraphs 4 and 5, Executive andCorporation agree that all Disputes, as defined in Article I of the Alternative DisputeResolution Procedure (the “ADR Procedure”), regarding the termination of employmentor other covered Dispute shall be resolved exclusively in accordance with theCorporation’s ADR Procedure. The parties, however, agree that the ADR Proceduredoes not apply to claims for unemployment compensation benefits or claims by theCorporation for injunctive relief, specific performance, and/or damages as provided forin paragraphs 4 and 5 of this Agreement. Executive represents, warrants and agreesthat (a) Executive has received, read and understands the Corporation’s ADRProcedure; (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 adverseemployment decision; (c) arbitration may be compelled and enforced under theFederal Arbitration Act; (d) any arbitration award is final and binding upon bothExecutive and the Corporation; (e) the ADR Procedure shall survive the employer-Executive relationship and applies to any Dispute whether it is asserted during or afterExecutive’s separation of employment; and (f) the ADR Procedure does not alter theparties’ “At Will” employment relationship. 10) Indemnification. The Corporation agrees to provide the Executive with coverageunder its Director’s and Officer’s liability insurance policy. The Corporation alsoagrees to indemnify and defend Executive in accordance with the Corporation’sBylaws. 11) Resignation Upon Termination. In the event of separation of Executive’s employmentwith the Corporation, Executive hereby agrees to resign from all positions held in theCorporation, 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 ofthis 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 partyor 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 Agreementshall not in any way affect the validity or enforceability of any other provision and thisAgreement shall be construed in all respects as if such invalid or unenforceableprovision had never been in the Agreement. 15) Notice. Any and all notices required or permitted herein shall be deemed delivered ifdelivered personally or if mailed by registered or certified mail to the Corporation at itsprincipal place of business and to Executive at the address hereinafter set forthfollowing Executive’s signature, or at such other address or addresses as either partymay hereafter designate in writing to the other. 16) Assignment. This Agreement, together with any amendments hereto, shall be bindingupon and shall inure to the benefit of the parties hereto and their respectivesuccessors, assigns, heirs and personal representatives, except that the rights andbenefits of either of the parties under this Agreement may not be assigned without theprior written consent of the other party. 17) Amendments. This Agreement may be amended in writing at any time by mutualconsent of the parties hereto. Any purported amendment that is not in writing andsigned by the Corporation and Executive is invalid. 18) Entire Agreement. This Agreement contains the entire agreement and understandingby and between Executive and the Corporation with respect to the employment ofExecutive, and no representations, promises, agreements, or understandings, writtenor oral, including the letter offer of employment dated May 5, 1999, relating to theemployment of Executive by the Corporation not contained herein shall be of anyforce or effect. 19) Burden and Benefit. This Agreement shall be binding upon, and shall inure to thebenefit of, the Corporation and Executive, and their respective heirs, personal andlegal representatives, successors, and assigns. 20) References to Gender and Number Terms. In construing this Agreement, feminine ornumber pronouns shall be substituted for those masculine in form and vice versa, andplural terms shall be substituted for singular and singular for plural in any place whichthe context so requires. 21) Headings. The various headings in this Agreement are inserted for convenience onlyand are not part of the Agreement.
 

 
IN WITNESSWHEREOF, the Corporation and Executive have duly executed this Agreement as ofthe Effective Date.           **INTERPHASE CORPORATION**   **STEVEN P. KOVAC**             By: /s/ Gregory B. Kalush   By: /s/ Steven P. Kovac               **GREGORY****B. KALUSH**          President and Chief Executive Officer                      Address for Notice Purposes: Address for Notice Purposes:Chief Executive Officer