Document:

Exhibit 10.1

Exhibit 10.1

CONFIDENTIAL

2010 Incentive Plan

 

 

 

CONFIDENTIAL

Somaxon Pharmaceuticals, Inc.

2010 Incentive Plan

The Somaxon Pharmaceuticals, Inc. (Somaxon) 2010 Incentive Plan (the “Plan”) is designed to offer
incentive compensation to eligible Employees by rewarding the achievement of corporate goals and
specifically measured individual goals that are consistent with and support overall corporate
goals. The Plan will create an environment which will focus Employees on the achievement of
objectives. Since cooperation between departments and Employees will be required to achieve
corporate objectives that represent a significant portion of the Plan, the Plan should help foster
improved teamwork and a more cohesive management team.

Purpose of the Plan

The Plan is designed to:

	•	 	Provide an incentive program to achieve overall corporate objectives and to enhance
shareholder value
	 
	•	 	Reward those individuals who significantly impact corporate results
	 
	•	 	Encourage increased teamwork among all disciplines within the Company
	 
	•	 	Incorporate an incentive program in the Somaxon overall compensation program to help
attract and retain Employees
	 
	•	 	Incentivize eligible Employees to remain employed by Somaxon throughout the Plan year and
until the time incentive awards are paid

Plan Governance

The Plan will be governed by the Compensation Committee of the Board of Directors. The President
and CEO of Somaxon will be responsible for administration of the Plan. The Compensation Committee
of the Board will be responsible for approving any compensation or incentive awards to officers of
the Company.

Eligibility

All full time (40 hours/week) exempt Employees Level 6 (Manager) or higher are eligible to
participate in the Plan. To receive an incentive award, a participant: (a) must have been in an
eligible position for at least three (3) consecutive months prior to the end of the Plan year and
remain employed through the end of the Plan year and until incentive awards are paid; and (b) must
not be on probation at the time bonus determinations are made.

 

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CONFIDENTIAL

Section 1: Bonus Incentive Awards (“Bonus”)

Form of Incentive Award Payments

Incentive award payments may be made in cash, through the issuance of stock or stock options, or by
a combination of cash, stock and/or stock options, at the discretion of the Company’s Compensation
Committee, subject to the approval of the Company’s Board of Directors. In the event that the
Compensation Committee and the Board of Directors elect to pay incentive awards in stock or stock
options, the Compensation Committee, in its sole discretion, will make a determination of the
number of shares of stock or stock options to be issued to each Plan participant based, in part,
upon each participant’s Corporate and Individual Performance, as described below. The issuance of
stock and stock options may also be subject to the approval of the Company’s stockholders, and any
stock options issued will be subject to the terms and conditions of the Company’s 2005 Equity
Incentive Award Plan, as amended from time to time by the Company.

Corporate and Individual Performance

Prior to the beginning of the Plan year, the President and CEO will present to the Board of
Directors a list of the overall corporate objectives for the coming year, which are subject to
approval by the Board. All participants in the Plan will then develop a list of key individual
objectives, which must be approved by the responsible Vice President and by the President and CEO.

The Plan calls for incentive awards based on the achievement of annual corporate and individual
objectives that have been approved as indicated above.

The relative weight between corporate and individual performance factors may vary based on the
individual’s level within the organization. The weighting will be reviewed annually and may be
adjusted, as necessary or appropriate. The weighting for 2010 will be as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Corporate	 	 	Individual	 
	President and CEO (Grade 12)
	 	 	100	%	 	 	 	 
	Officers and all Vice Presidents (Grade 11)
	 	 	100	%	 	 	 	 
	Executive Directors (Grades 10)
	 	 	75	%	 	 	25	%
	All Others (Grades 6-9)
	 	 	50	%	 	 	50	%

Bonus Percentage

Incentive Awards will be determined by applying a “bonus percentage” to the base salary of
participants in the Plan. The following bonus percentages will be used for this purpose:

 

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CONFIDENTIAL

	 	 	 	 	 	 	 	 	 
	Grade Level	 	Position Title	 	Bonus Percentage
	 	12	 	 	President & CEO
	 	 	50%	 
	 	11	 	 	Officers, Sr. VP, VP
	 	 	35%	 
	 	10	 	 	Executive Director
	 	 	25%	 
	 	8 - 9	 	 	Sr. Director, Director
	 	 	20%	 
	 	6 – 7	 	 	Sr. Manager, Manager
	 	 	15%	 

Performance Measurement

The following scale will be used to determine the actual award multiplier for incentive award
calculations based upon measurement of corporate and individual performance versus objectives.
Separate payment multipliers will be established for both the individual and the corporate
components of each award. The same payment multiplier for the corporate component of each
participant’s annual award shall be used for all Plan participants in any given year. The award
multiplier for the corporate component shall be determined by the Board of Directors.

	 	 	 	 	 
	 	 	Performance Category	 	Award Multiplier
	1.
	 	Performance for the year met or exceeded objectives
or was excellent in view of prevailing conditions	 	75% - 150%
	2.
	 	Performance generally met the year’s objectives or
was very acceptable in view of prevailing conditions	 	50% - 75%
	3.
	 	Performance for the year met some, but not all, objectives	 	25% - 50%
	4.
	 	Performance for the year was not acceptable in view of
prevailing conditions	 	0%

Calculation of Cash Incentive Award

The example below shows sample cash incentive award calculations under the Somaxon
Incentive Plan. First, a total bonus potential is calculated by multiplying the Employee’s base
salary by the bonus percentage. This dollar figure is then divided between its corporate component
and its individual component based on the performance factor mix for that specific position. This
calculation establishes specific dollar potential awards for the performance period for both the
individual and corporate components of the award.

At the end of the performance period, corporate and individual award multipliers will be
established using the criteria described above. The corporate award multiplier, which is based on
overall corporate performance, is used to calculate corporate performance awards for all Plan
participants. This is accomplished by multiplying the bonus percentage established for each
individual at the beginning
of the performance period by the actual corporate award multiplier. The individual award
multiplier, which is based on an individual’s performance against objectives, is used in the same
way to calculate the actual individual performance award.

 

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CONFIDENTIAL

	 	 	 	 	 	 	 
	Example:
	 	Cash Award Calculation	 	 	 	 
	 
	 	Position:	 	Manager
	 
	 	Base Salary:	 	$	100,000	 
	 
	 	Bonus percentage:	 	 	15	%
	 
	 	Potential bonus dollars:	 	$	15,000	 
	 
	 	 	 	 	 	 
	 	 	Potential bonus components (based on performance factor mix):
	 
	 	Potential corporate performance bonus (50%):	 	$	7,500	 
	 
	 	Potential individual performance bonus (50%):	 	$	7,500	 
	 
	 	 	 	 	 	 
	 
	 	Actual Cash Award Calculation	 	 	 	 

	 	 	 	 
	 	Assumed payment multipliers based on assessment of corporate and individual
performance:
	 	Corporate multiplier

	 	75%-performance generally met year’s objectives
	 	Individual multiplier

	 	125%-performance generally exceeded objectives
	 	Cash Award:
	 	 

	 	 	 	 	 	 	 	 	 	 
	 	Corporate component
	 	$	5,625	 	 	 	($7,500 x 75%)	 
	 	Individual component
	 	$	9,375	 	 	 	($7,500 x 125%)	 

Payment of the Incentive Award

Payment of incentive awards will be made as soon as practicable after the end of the Plan year but
not before the completion and issuance of the Company’s year-end audited Financial Statements.
Incentive award calculations will be based on the participant’s base salary earned during the year
ending December 31, 2010. Participants’ entitlement to an incentive award under this Plan does not
vest until the awards are actually paid.

Participants who have been in an eligible position for less than a year, but who hold an eligible
position for at least three months prior to the end of the Plan year and remain continuously
employed through the end of the Plan year, will receive a pro-rata bonus based on the portion of
the Plan year they hold an eligible position. Participants promoted during the year from one
“Bonus percentage” level to another will have their Incentive Award calculated using their base
salary earned during the year ending December 31, 2010. Providing the promotion occurred prior to
October 1, 2010, the calculation will be pro-rated, based on the number on months at each Bonus
Percentage level. If the promotion occurred after October 1, 2010, the entire calculation will be
based on the Bonus Percentage applicable prior to the promotion. Other than as stated above,
incentive awards will not be prorated for partial year service.

 

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CONFIDENTIAL

Termination

A Plan participant, whose employment terminates voluntarily prior to the payment of the incentive
awards, will not be eligible to receive an incentive award.
Continued employment until payment of the incentive award is a condition of vesting. If a
participant’s employment is terminated involuntarily during the calendar year, or prior to payment
of awards, it will be at the absolute discretion of the Company whether or not an award payment is
made.

Board of Director’s Absolute Right to Alter or Abolish the Plan

The Somaxon Board of Directors reserves the right in its absolute discretion to abolish the Plan at
any time or to alter the terms and conditions under which incentive compensation will be paid.
Such discretion may be exercised any time before, during, and after the Plan year is completed. No
participant shall have any vested right to receive any compensation hereunder until actual delivery
of such compensation.

Employment Duration/Employment Relationship

This Plan does not, and Somaxon’s policies and practices in administering this Plan do not,
constitute an express or implied contract or other agreement concerning the duration of any
participant’s employment with the Company. The employment relationship of each participant is “at
will” and may be terminated at any time by Somaxon or by the participant, with or without cause.

 

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CONFIDENTIAL

Somaxon Pharmaceuticals, Inc.

2010 Incentive Plan

This is to acknowledge that I have received a copy of the 2010 Incentive Plan.

	 	 	 	 	 	 	 
	Name:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 

	 	(print)	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	(signature)	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Please return signed copy to Matt OnaitisExhibit 10.1

EXHIBIT 10.1

[THIS AGREEMENT IS SUBJECT TO ARBITRATION]

AMENDED AND RESTATED EMPLOYMENT, CONFIDENTIALITY, AND NON-

COMPETITION AGREEMENT

THIS AGREEMENT dated and effective as of the 2nd day of April, 2010 by and between Interphase
Corporation, a Texas corporation (the “Company”) and Harold Keith Seawright (“Executive).”
The Company’s principal place of business is located at 2901 North Dallas Parkway, Suite 200,
Plano, TX 75093.

NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants and promises
hereinafter contained, do hereby agree as follows:

The Company delivers solutions for network connectivity, interworking, packet processing, LTE,
and security for key applications for the Communications, Aerospace/Defense, and Enterprise
markets. Executive desires to be employed by the Company. The Company desires to employ Executive
under the terms and conditions of this Agreement.

This Agreement sets forth the terms of Executive’s employment. The parties agree that this
Agreement is supported by valuable consideration, that mutual promises and obligations have been
undertaken by the parties to it, and that the agreement is entered into voluntarily by the parties.

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 of Business Development, Aerospace-Defense 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 (as
described in Paragraph 3(c) of this Agreement.

	 
	3.	 	 Terminable For Cause or on Account of Death or Disability. 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
Paragraphs 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 3, Executive shall be entitled only to
Executive’s base salary earned through the date of termination paid in accordance with the
Company’s normal payroll practices. No accrued but unpaid bonuses or commissions shall be
due to Executive.

	 
	4.	 	Termination Without Cause or Nonrenewal.

	 	(a)	 	In the event (i) the Company gives Executive thirty (30) days written notice of
its intention not renew a term of this Agreement pursuant to the provisions of
Paragraph 2 and at the time the term of this Agreement expires as a result of such
notice, Executive is willing and able to execute a new agreement containing terms and
conditions substantially similar to those in this Agreement and to continue to provide
services to the Company substantially similar to the services provided at the time the
term expires, or (ii) Executive is terminated during a term of this Agreement without
Cause, the Executive shall receive: (A) the balance of base salary due under this
Agreement for the balance of its term on the regular pay dates of the Company (the
“Remaining Term Payments”) and thereafter, (B) subject to the Executive’s execution of
a general release of claims and covenant not to sue in a form acceptable to the Company
(the “Release”), severance pay based on Executive’s monthly base salary at the time of
termination in an amount equal to (x) three (3) months of such monthly base salary if
Executive’s termination of employment with the Company occurs during the first year of
his employment under this Agreement or (y) six (6) months of such monthly base salary
if Executive’s termination of employment with the Company occurs after the first
anniversary of Executive’s employment commencement date with the Company under this
Agreement, payable, in each case, in bi-weekly installments in accordance with the
Company’s normal payroll practices (the “Severance Payments”). In addition, if
Executive is eligible for Severance Payments and has executed a Release, and in
connection with Executive’s termination of employment Executive is eligible for and
timely elects to continue Executive’s

 

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	 	 	 	coverage under the Company’s group health plan pursuant to Section 4980B of the
Internal Revenue Code of 1986, as amended (the “Code”) and Section 601 et.seq. of
the Employee Retirement Income Security Act of 1974, as amended (“COBRA Coverage”),
the Company will pay the premium cost for individual COBRA Coverage for Executive
for the period during which Executive is receiving Remaining Term Payments and
Severance Payments or such shorter period during which Executive continues to be
eligible for COBRA Coverage.

	 
	 	(b)	 	The Company shall begin payment of the Severance Payments on the first
regularly scheduled payroll date of the Company occurring after completion of the
Remaining Term Payments, if any; provided Executive has executed and delivered the
Release to the Company prior to such date (and not revoked the Release during the
applicable revocation period). Notwithstanding any provision in the preceding sentence
to the contrary, if the Severance Payments would be considered “non-qualified deferred
compensation” under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), the payment of Severance Payments shall commence on the first regularly
scheduled payroll date of the Company following the later of (i) sixty (60) days
following Executive’s date of termination or (ii) completion of the Remaining Term
Payments; provided Executive has executed and delivered the Release to the Company
prior to such date (and not revoked the Release during the applicable revocation
period). The form of the Release will be provided to the Executive not later than five
(5) days following Executive’s date of termination.

	 
	 	(c)	 	No accrued but unpaid bonuses or commissions shall be due to Executive under
this Paragraph 4. 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 4,
Executive shall notify the Company of such employment within ten (10) days following
the employment commencement date and any amounts received by Executive in the form of
compensation, salary, or other payments as a result of such employment shall reduce any
remaining Severance Payments or other amounts or liability owed by the Company to the
Executive under this Paragraph 4.

	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 from 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; provided, however, no such offset shall be made against any amount in excess
of $5,000 that would be considered “non-qualified deferred compensation” under Section 409A of
the Code.

 

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	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. Notwithstanding the
preceding, any changes or amendments to this Agreement shall be consistent with the provisions
of Sections 20 and 21 hereof.

	 
	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.

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:

 

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	11.	 	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;

	 
	12.	 	All confidential information obtained from third parties and customers concerning their
products, business, or equipment specifications;

	 
	13.	 	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,

	 
	14.	 	Other information designated by the Company or deemed by law to be confidential information.

	 
	15.	 	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:

	 	(a)	 	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.)

	 
	 	(b)	 	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,

	 
	 	(c)	 	In any way solicit or attempt to solicit the business or patronage of any
Customers.

	 
	 	(d)	 	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.

 

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	16.	 	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:

	 	(a)	 	The geographic territory identified on the attached Exhibit C;

	 
	 	(b)	 	The cities containing a facility or operation owned or managed by the Company;
and,

	 
	 	(c)	 	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.

	 
	17.	 	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

	18.	 	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
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.

	 
	19.	 	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.

 

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Inventions and Discoveries

	20.	 	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. Notwithstanding anything contained herein
to the contrary, nothing in this Paragraph 16 is intended to divest, transfer, abrogate or
otherwise relinquish any right, title, or interest of Executive in any patent related to image
processing for video conferencing that shall be filed with the U.S. Patent and Trademark
Office by Executive during the six month period following the Effective Date of this Agreement
and which is unrelated to business of the Company and does not result from any work performed
by Executive for the Company.

General Provisions

	21.	 	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.

	 
	22.	 	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.

	 
	23.	 	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, (f) as may be necessary or desirable in
obtaining future employment.

 

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	24.	 	Additional Termination Provisions.

	 	(a)	 	Separation from Service. Notwithstanding anything to the contrary in
this Agreement, with respect to the Severance Payments or any other amounts payable to
Executive under this Agreement in connection with a termination of Executive’s
employment that would be considered “non-qualified deferred compensation” under Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), in no event shall a
termination of employment be considered to have occurred under this Agreement unless
such termination constitutes Executive’s “separation from service” with the Company as
such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor
provision thereto (“Separation from Service”).

	 
	 	(b)	 	Section 409A Compliance. Notwithstanding anything contained in this
Agreement to the contrary, to the maximum extent permitted by applicable law, the
Remaining Term Payments and the Severance Payments payable to Executive pursuant to
Paragraph 4 shall be made in reliance upon Treasury Regulation Section
1.409A-1(b)(9)(iii) (relating to separation pay plans) or Treasury Regulation Section
1.409A-1(b)(4) (relating to short-term deferrals). However, to the extent any such
payments are treated as non-qualified deferred compensation subject to Section 409A of
the Code, and if Executive is deemed at the time of his Separation from Service to be a
“specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the
extent delayed commencement of any portion of the benefits to which Executive is
entitled under this Agreement is required in order to avoid a prohibited payment under
Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination benefits
shall not be provided to Executive prior to the earlier of (i) the expiration of the
six-month period measured from the date of Executive’s Separation from Service or (ii)
the date of Executive’s death. Upon the earlier of such dates, all payments deferred
pursuant to this Paragraph 20(b) shall be paid in a lump sum to Executive. The
determination of whether Executive is a “specified employee” for purposes of Section
409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be
made by the Company in accordance with the terms of Section 409A of the Code and
applicable guidance thereunder (including without limitation Treasury Regulation
Section 1.409A-1(i) and any successor provision thereto).

	25.	 	Section 409A; Separate Payments. This Agreement is intended to be written, administered,
interpreted and construed in a manner such that no payment or benefits provided under the
Agreement become subject to (a) the gross income inclusion set forth within Section
409A(a)(1)(A) of the Code or (b) the interest and additional tax set forth within Section
409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including, where
appropriate, the construction of defined terms to have meanings that would not cause the
imposition of Section 409A Penalties. In no event shall the

 

Page 8

 

	 	 	Company be required to provide a tax gross-up payment to Executive or otherwise reimburse
Executive with respect to Section 409A Penalties. For purposes of Section 409A of the Code
(including, without limitation, for purposes of Treasury Regulation Section
1.409A-2(b)(2)(iii)), each payment that Executive may be eligible to receive under this
Agreement shall be treated as a separate and distinct payment and shall not collectively be
treated as a single payment. Executive acknowledges and understands that neither the
Company nor any employee or agent of the Company has provided Executive any tax advice
regarding this Agreement or amounts payable under this Agreement and that the Company has
urged Executive to seek advice from Executive’s own tax advisor regarding the tax
consequences of this Agreement to Executive.

	 
	26.	 	Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the
Company, its subsidiaries, affiliates, successors, and assigns.

	 
	27.	 	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.

	 
	28.	 	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.

	 
	29.	 	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.

	 
	30.	 	Entire Agreement; Amendment. 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. This Agreement may be amended at any time by
the mutual consent of the parties hereto, with any such amendment to be invalid unless in
writing, signed by the Company and Executive; provided that any such amendment shall be
consistent with the provisions of Paragraphs 20 and 21 hereof.

	 
	31.	 	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 term or provision of this Agreement.

 

Page 9

 

	 	 	 	 	 
	 	Interphase Corporation

 	 
	 	By:  	/s/ Gregory B. Kalush	 
	 	 	Gregory B. Kalush	 
	 	 	Its: President and Chief Executive Officer 	 
	 
	 	Executive

 	 
	 	/s/ H. Keith Seawright	 
	 	Harold Keith Seawright 	 
	 	 	 
	 

 

Page 10

 

Exhibit A

Job Description

Job Title: Vice President of Business Development, Aerospace/Defense

Department: Aerospace — Defense Business Line

	 	 	 
	Reports To: President & CEO

	 	FLSA Status: Exempt
	 
	 	 
	Prepared By: G. Kalush / HR

	 	Prepared Date: October 2, 2009
	 
	 	 
	Approved By: D. Shute/G. Kalush

	 	Approved Date: 10/13/2009

SUMMARY Responsible for leading and developing the processes, policies, product and
services/programs, and strategies necessary for Interphase’s market entry and revenue growth in the
Mil/Aero market segment.

ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties may be assigned.
Management reserves the right to change these duties at any time.

Provide a specific plan within 45 days of hire on how Interphase can position itself and penetrate
the Mil/Aero market with current or new products.

Provide the Company with comprehensive insight into the Mil/Aero market and guide it’s entry in to
the Mil/Aero market segment. This includes identifying who the decision makers are, how decisions
are made, what projects are going on that we could participate in, what products and services are
needed and in what timeframe, etc. Understand the company’s current products and services and find
opportunities to:

Sell those products/services to customers in the Mil/Aero space;

Recommend and implement changes to existing products/services that will make them suitable to the
Mil/Aero space; and/or

Define new products that the company can build to address the needs of this market.

Establish and maintain key relationships with key business associates in this segment, including
various procurement organizations within the different branches of the military, prime contractors
that supply to these branches and valued added business partners to Mil/Aero customers. Also
recommend potential M&A targets as necessary to address key opportunities that Interphase does not
have an organic solution readily available for.

 

 

 

Design and implement marketing, sales and business development programs, tools, and promotional
materials, to support our entry into and growth within the Mil/Aero market. This investigation will
include the definition of new products, new applications and specific lucrative market sub-segments
that Interphase should pursue.

Will confer with CEO to establish objectives, review achievements and discuss required changes in
programs, processes, strategies to achieve the goals set for this business unit.

SUPERVISORY RESPONSIBILITIES Initially, this position will be a department of one utilizing the
current infrastructure. As the company refines it’ market entry plans, and establishes concrete
objectives, the investment in this unit will be in alignment with agreed upon plan objectives, with
increasing investment as revenue increases from Mil/Aero initiatives.

QUALIFICATIONS To perform this job successfully, an individual must be able to perform each
essential duty satisfactorily. The requirements listed below are representative of the knowledge,
skill, and/or ability required. Reasonable accommodations may be made to enable individuals with
disabilities to perform the essential functions.

Must be very knowledgeable of the Electronics segment of the Mil/Aero market segment, specifically:

	•	 	How it operates

	 
	•	 	What programs are getting funded

	 
	•	 	Where opportunities would exist for Interphase, and what potential partners
Interphase could work with to quickly gain traction

	 
	•	 	What are the contract / procurement processes must be developed to participate in
this market segment

Demonstrated working knowledge, technical experience and conversational skills related to the type
of products and technologies needed in Mil/Aero. In addition, new products to explore include
Mil/Aero specific form factors, and unique military/aerospace requirements needed to be successful
in this market. This position must understand how products/solutions must be modified in order to
offer to successful in addressing Mil/Aero customers.

Must come to the Company with a solid rolodex of potential customers within the electronic segment
of the Mil/Aero industry that can be leveraged for quick access to decision makers, potential value
added partners, and key channels necessary to quickly accelerate new business from the Mil/Aero
market segment.

 

 

 

Must be passionate about the role of creating a new business to penetrate this market segment and
confident about creating the capability for winning significant business in the industry Mil/Aero
market.

The Company is looking for a strong, assertive, hands-on leader, able to balance the strategic and
tactical priorities of a start-up business unit.

Must possess strong presentation skills and written communication abilities

Must have the ability to build close relationships with other Company managers, work well in teams,
and be trustworthy/ethical, and credible.

EDUCATION and/or EXPERIENCE

MBA or BSEE and solid technical experience in Engineering / Sales / Marketing / Business
Development.

5-10 years firsthand experience in selling and delivering products to the Electronics area of the
Government and Military.

OTHER SKILLS AND ABILITIES:

Knowledgeable in business and financial practices related to budgeting and product pricing. Must
have excellent interpersonal skills (written and verbal communication), strong leadership skills,
and the ability to inspire and motivate others to perform well, and meet company objectives.
Strong negotiation and conflict resolution skills are necessary. Ability to effectively create and
present sophisticated presentations. Will be required to participate in relevant industry forums
and/or associations on behalf of the company. Must have the ability to deal with major customers to
understand their needs and communicate them across the organization to various departments. Must
have knowledge of market and emerging technologies. Must have analytical skills, creative thinking
skills, skills in tactfully addressing various tasks, and have the ability to regularly work under
pressure or in a deadline-oriented environment.

LANGUAGE SKILLS:

Ability to read, analyze, and interpret common business documents, financial reports, and legal
documents. Must have the ability to quickly and effectively respond to common inquiries or
complaints from customers. Must have the ability to effectively present information to top
management, customers, and internal staff.

MATHEMATICAL SKILLS:

Ability to work with mathematical concepts. Ability to apply concepts such as fractions,
percentages, ratios, and proportions to practical situations.

 

 

 

REASONING ABILITY:

Excellent ability to define problems, collect data, establish facts, and draw valid conclusions.
Ability to interpret an extensive variety of technical instructions in mathematical or diagram form
and deal with several abstract and concrete variables

PHYSICAL DEMANDS:

The physical demands described here are representative of those that must be met by an employee to
successfully perform the essential functions of this job. Reasonable accommodations may be made to
enable individuals with disabilities to perform the essential functions.

While performing the duties of this job, the employee is regularly required to talk or hear. The
employee frequently is required to walk; sit; use hands to finger, handle, or feel; and reach with
hands and arms. The employee is occasionally required to stand. The employee must occasionally
lift and/or move up to 25 pounds. Specific vision abilities required by this job include close
vision, and ability to adjust focus.

WORK ENVIRONMENT The work environment characteristics described here are representative of those an
employee encounters while performing the essential functions of this job. Reasonable accommodations
may be made to enable individuals with disabilities to perform the essential functions.

This position does require regular and possibly significant travel, both national and
international. Employee must possess, or be qualified to obtain, a valid passport.

Initials                     

                    

Exhibit A

 

 

 

Exhibit B

Compensation

Base Salary. $6,915.38 per pay period ($179,800/year on an annual basis), of which there are 26 in
each calendar year, less deductions as may be required by law or authorized by Executive.

Annual Bonus. During the term of this Agreement, Executive shall be eligible for an annual bonus
under the Company’s Executive Bonus Plan, as determined by the Compensation Committee of the
Company’s Board of Directors (the “Compensation Committee”) in its sole discretion (collectively,
“Annual Bonus”). It is generally anticipated that Executive’s Annual Bonus target will be an
amount not less than $50,000. The opportunity to earn an Annual Bonus and the actual amount of the
Annual Bonus will be determined in accordance with criteria (“Bonus Criteria”) established by the
Compensation Committee and based on Executive’s achievement of specific, pre-defined business line
and corporate objectives as determined by the Compensation Committee. Bonus targets are subject to
change annually. Executive must continue to be employed by the Company through the payment date of
any such Annual Bonus as a condition to receiving the bonus.

Equity. The Company shall, according to the Company’s Long-Term Stock Incentive Plan and with the
approval of the CEO and the Compensation Committee, grant to Executive 22,500 stock options of the
Company. Executive’s right, title, and interest to any stock options conferred under the
Employment Agreement shall be controlled and governed by terms and conditions of the Company’s
Long-Term Stock Incentive Plan. The per share price will be determined as of the close of NASDAQ
trading on Executive’s first day of employment. Executive shall be eligible to participate in
equity awards as determined by the Compensation Committee under the Company’s Long-Term Stock
Incentive Plan or other equity award plan maintained by the Company during the term of this
agreement.

Sign-On Bonus — $15,000 which shall be reimbursable if executive does not complete 1 year of
employment with the Company.

Executive Benefit Plans. Based on the plans maintained by the Company from time to time during the
term of this Agreement for its similarly situated executives, and subject to change at any time,
the Executive will be provided with a comprehensive and competitive benefits package including
medical, dental, vision, life, AD&D, STD, and LTD. Executive shall be eligible to participate in
such benefit plans, according to the terms and conditions of those plans. Executive will pay same
amount as all other similarly situated executive employees for health premiums.

Severance Pay. Eligible for 3 months of monthly base salary if terminated without cause or
non-renewal within first year of employment; and 6 months of monthly base salary if terminated
without cause or non-renewal after first anniversary of employment, subject to terms and conditions
of this Agreement. Please refer to Paragraph 4, “Termination Without Cause or Nonrenewal.

Covered Parking — 1 covered parking spot at current Plano facility.

 

 

 

Executive Disability Plan. The Executive is eligible to apply through the Company for a voluntary,
individual Executive Disability Plan. If approved by the carrier for coverage, the premiums will
be paid for by the Executive.

Vacation 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
Company’s Policy Guide.

Cell Phone & Computer. Executive will be furnished with a laptop and cell phone/PDA for business
purposes.

Office Furnishings. The Company agrees to provide office space and furnishings to Executive
commensurate with the Company’s decor and culture.

Initials:                     

                     

Exhibit B

 

 

 

Exhibit C

Designated Cities — Per Paragraph 11a of Employment, Confidentiality,

and Non-Compete Agreement.

The Continental United States

Initials:                     

                     

Exhibit C

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