Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.  )

Filed by the Registrantþ
Filed by a Party other than the Registranto

Check the appropriate box:

Payment of Filing Fee (Check the appropriate box):

To the Holders of Common Stock of

  Interphase Corporation:

          NOTICE IS HEREBY GIVENthat the annual meeting of shareholders of Interphase Corporation, a Texas corporation (the “Company”), will be held on May 6, 20094, 2011 at 9:00 a.m. local time at the Embassy Suites Hotel at 7600 John Q. Hammons Drive, Frisco, Texas, for the following purposes:

          It is desirable that as large a proportion as possible of the shareholders’ interests be represented at the meeting. Whether or not you plan to be present at the meeting, you are requestedurged to sign the enclosed proxy and return it promptly in the enclosed envelope.

          Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 6, 2009.4, 2011. This Proxy Statement and Annual Report on Form 10-K are available online atwww.proxydoc.com/www.proxydocs.com/inph.

          This Proxy Statement is furnished to shareholders of Interphase Corporation, a Texas corporation (the “Company”), in connection with the solicitation of proxies by the Board of Directors of the Company (the “Board of Directors” or the “Board”) for use at the annual meeting of shareholders to be held on May 6, 2009.4, 2011. Proxies in the form enclosed will be voted at the meeting if properly executed, returned to the Company prior to the meeting, and not revoked. The proxy may be revoked at any time before it is voted by giving written notice to the Secretary of the Company. This proxy statement is first being mailed to shareholders on or about March 27, 2009.April 1, 2011. This proxy statement and the Company’s 20082010 annual report are available online atwww.proxydocs.com/inph.

          The accompanying proxy is being solicited by the Board of Directors of the Company. The cost of soliciting the proxies and the annual meeting will be borne entirely by the Company. In addition to the use of the mail, proxies may be solicited by personal interview, telephone, and facsimile transmission by directors and officers and employees of the Company. Arrangements may also be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation material to the beneficial owners of shares of Common Stock, $.10 par value (“Common Stock”), held of record by such persons, and the Company may reimburse them for reasonable out-of-pocket expenses they incur in connection with forwarding the solicitation material. The Company may also engage a solicitor or other third-party firm to assist in the distribution and solicitation of proxies.

          The record date for shareholders entitled to notice of and to vote at the annual meeting is March 13, 2009.16, 2011. At the close of business on that date, the Company had issued, outstanding and entitled to be voted at the meeting 6,905,9946,773,296 shares of Common Stock.

          The accompanying proxy, unless the shareholder otherwise specifies in the proxy, will be voted for FORthe election as directors of the Company of the six persons named under the caption “Election of Directors”, FOR,the ratification of the appointment of Grant Thornton LLP as our independent registered

public accounting firm for the year ending December 31, 2011 and, in the discretion of the proxy holder, with respect to such other business as may properly come before the meeting.

          Where shareholders have appropriately specified how their proxies are to be voted, they will be voted accordingly. If any other matter or business is brought before the meeting, the proxy holders may vote the proxies at their discretion. The directors doBoard does not know of any such other matter or business.

Prior to DSC, Mr. Kalush was with IBM Corporation from 1978 to 1994. During that time his positions included Chief Financial Officer and Operations Executive for the Skill Dynamics Business Unit, Director of Finance, Planning and Administration for the Southwest Area, and Division Director of Finance and Operations for the Data Systems Division.

          Mr. Kalush’s depth of experience in leading Interphase as CEO and Chairman of the Board, his responsibilities for the strategic direction and management of Interphase’s day-to-day operations, and his experience as the former Chief Financial Officer of Interphase and other executive general management experiences in the telecommunications and enterprise computing technology sector bring a broad array of industry experience and institutional knowledge to the Board.

Paul N. Hug, 65,67, was elected a director in 1984. He has been a certified public accountant engaged in public accounting practice as owner of Paul Hug & Co. CPAs since 1980. Mr. Hug is a member of the Compensation Committee, the Nominating and Governance Committee and is Chairman of the Audit Committee of the Board of Directors.

          Mr. Hug is an experienced financial professional with the skills necessary to lead our Audit Committee. His experiences in handling complex financial issues make him a valuable asset, both on our Board of Directors and as the Chairman of our Audit Committee. Mr. Hug qualifies as an “audit committee financial expert” under the guidelines of the Securities and Exchange Commission (“SEC”).

Michael J. Myers, 62,64, was elected a director in 2002. From 2002 until his retirement in 2006, Mr. Myers served as President and CEO of Coppercom Inc., a provider of networking equipment for telecommunications operators. Mr. Myers served as the President of the Broadband Systems Division of Alcatel from 2000 to 2002 and as Group Vice President for Alcatel’s Networking Systems Group from 1998 to 2000. Prior to 1998, Mr. Myers worked for DSC Communications Corporation, serving as its Executive Vice President and Chief Operating Officer from 1997 to 1998, at its DSC Denmark A/S subsidiary, and as a Group Vice President for its transmission business in 1997. Mr. Myers also had prior experience with Nortel Networks, NCR, and General Motors Corporation. Mr. Myers is Chairman of the Compensation Committee and a member of the Nominating and Governance Committee and the Audit Committee of the Board of Directors.

          As a former chief executive officer and senior executive with both general management and finance expertise as well as significant international experience across a variety of industry sectors, including telecommunications, computing and automotive, Mr. Myers contributes valuable insight to the Board in the areas of general management, financial acumen, strategic insight and governance.

Kenneth V. Spenser, 60,62, was elected a director in 2002. Mr. Spenser is currently the Chief Executive Officer for Entivity Holdings. Mr. Spenser served as President, Chief Executive Officer and Chairman of the Board for Entivity, Inc. or its predecessors from 1997 to 2004. Entivity is a leading provider of PC-based control systems to the automation marketplace. In 2007, Mr. Spenser became President of

          Christopher B. Strunk, 60,62, was elected a director in 2007. Prior to his retirement in 2004, Mr. Strunk served as Senior Vice President, North American Sales for Alcatel, from 2002 to 2004. He was Vice President Sales-Bell Atlantic/Verizon for Alcatel from 1998 to 2002. Prior to 1998, Mr. Strunk was Regional Vice President-Sales for DSC Communications Corporation. Mr. Strunk also had prior experience with Granger Associates, AT&T, Bell of Pennsylvania and Diamond State Telephone. Mr. Strunk is a member of the Compensation Committee and the Nominating and Governance Committee.

          As a senior executive with significant sales experience in the telecommunications industry, Mr. Strunk contributes valuable insight about the telecom market and customer trends to the Board.

S.Thomas Thawley, 68,70, is a co-founder of the Company and has served as Secretary and a director of the Company since its inceptionincorporation in 1977. Mr. Thawley was elected Vice Chairman in May 2000 and is the Chairman of the Nominating and Governance Committee of the Board of Directors.

          The Board of Directors has established four committees, the Audit Committee, the Compensation Committee, the Nominating and Governance Committee and the New Employee and Retention Stock Award Committee. During 2008,2010, the Audit Committee was composed of Mr. Hug Chairman,(Chairman), Mr. Myers, and Mr. Spenser. The Audit Committee met seven times during 2008.2010. The Audit Committee’s responsibilities are described in the Audit Committee Charter, which is available on the Company’s website atwww.interphase.comincluded as an exhibit to this proxy statement (See Exhibit A). During 2008,2010, the Compensation Committee was composed of Mr. Myers Chairman,(Chairman), Mr. Hug, and Mr. Strunk. The Compensation Committee met sixfour times during 20082010 and reviewed the executive compensation plan of the Company in light of industry practices and circumstances unique to the Company. The Compensation Committee has overall responsibility for ourthe Company’s executive compensation policies as provided in a written charter adopted by the Board of Directors, which is available on the Company’s website atwww.interphase.com. During 2008,2010, the Nominating and Governance Committee was composed of Mr. Thawley Chairman,(Chairman), Mr. Hug, Mr. Myers, Mr. Spenser, and Mr. Strunk. The Nominating and Governance Committee is responsible for considering and approving nominees for election as director and performing the other responsibilities set forth in its charter, which is available on the Company’s website atwww.interphase.com. The Nominating and Governance Committee met four times during 2008.2010. In 2008,2010, the New Employee and Retention Stock Award Committee was composed of one member, Mr. Kalush. The New Employee and Retention Stock Award Committee has the authority to grant stock options and restricted stock under the 2004 Long-Term Stock Incentive Plan to newly hired employees of the Company and, for retention purposes, to existing employees of the Company. The New Employee and Retention Stock Award Committee met two times during 2010.

          The Board of Directors held eightseven meetings during the year ended December 31, 2008.2010. None of the directors attended fewer than 75% of the meetings of the Board of Directors and its committees on which such director served.

          The Company encourages boardBoard members and nominees for director to attend the annual meeting of shareholders. All current boardBoard members attended the Company’s 20082010 annual meeting of shareholders.

     The following table sets forth the compensation amounts paid to our non-employee directors, who during 20082010 were Mr. Hug, Mr. Myers, Mr. Spenser, Mr. Strunk, and Mr. Thawley.

          The Board of Directors has determined that Mr. Hug meets the SEC criteria of an “audit committee financial expert.” Mr. Hug has been a certified public accountant engaged in public accounting practice as owner of Paul Hug & Co. CPAs since 1980, and as such, has participated in dealing with accounting, auditing, internal control, and risk management issues.

          We have discussed with theGrant Thornton LLP (“Grant Thornton”), our independent auditorsaccountants, the matters required to be discussed by Statement on Auditing Standards No. 61 “Communication with Audit Committees,” as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the Auditing StandardsPublic Company Accounting Oversight Board of the American Institute of Certified Public Accountants.in Rule 2300T.

          We have received and reviewed the written disclosures and the letter from the independent auditorsGrant Thornton as required by Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees”, as amended, by the Independence Standards Board, and have discussed with Grant Thornton its independence with respect to the auditors the auditors’ independence.Company.

          Based on the reviews and discussions referred to above, we recommend to the Board of Directors that the financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.2010.

          The members of the Nominating and Governance Committee are Mr. Thawley Chairman,(Chairman), Mr. Hug, Mr. Myers, Mr. Spenser and Mr. Strunk. All members of the Committee meet the independence requirements of the NASDAQ Global Market.

          The responsibilities of the Nominating and Governance Committee are to identify individuals qualified to serve as Directorsdirectors of the Company (“Directors”) consistent with criteria developed by the Nominating and Governance Committee and approved by the Board. The Nominating and Governance Committee shall recommend that the Board select the Directorrecommends nominees for election as Directors at the nextCompany’s annual meetingmeetings of shareholders; developdevelops and recommendrecommends to the Board corporate governance principles applicable to the Company; and overseeoversees the evaluation of the Board and the Company by the Directors. The Company has adopted a Nominating and Governance Committee Charter, which is available on the Company’s website atwww.interphase.com.

and Governance Committee shall consider a number of factors when identifying potential nominees, including: applicable requirements of law and of the NASDAQ Global Market, independence from management, diversity, relevant business experience, good business judgment, specific expertise, strength of character, integrity and reputation, existing commitments to other businesses, potential conflicts of interest with other pursuits, legal restraints, corporate governance background, financial and accounting background and education, executive compensation background, and other factors deemed appropriate in adding value to the composition of the existing Board of Directors and its size and structure.

          In all cases, Directors should have expertise that will be useful to the Company, and should possess the highest personal and professional integrity and ethics, and be willing and able to devote the required time to properly serve the Company.

          The Nominating and Governance Committee may use a variety of means to identify potential nominees, including recommendations from the Chairman, other Directors or others associated with the Company or with the help of executive search firms (which receive a fee for their services).

          The Nominating and Governance Committee will consider candidates for Director suggested by shareholders applying the criteria for candidates described above and considering the additional information set forth below.

          Shareholders wishing to suggest a candidate for Director should write to our Secretary and include:

     The current executive officers of the Company, their respective ages, positions held and tenure as officers are listed below:

          Randall E. McComasjoined the Company in February 2002 as Vice President of Global Sales and Marketing, a position he held until May 2005, when he became Vice President of Global Sales and Customer Support. Prior to joining Interphase, Mr. McComas served as General Manager of Business Development, a position he held since 1998, for Scient, an enterprise organizational consulting firm. In that position Mr. McComas was responsible for overseeing all industry business units and delivery units for Scient, including sales and marketing. Prior to 1998, Mr. McComas was Vice President and General Manager of Telecommunications for Scient, managing the global telecom and utilities business units for that company. Mr. McComas also spent 15 years at IBM Corporation, where he held various positions in the telecom and media industries, including Vice President of Telecommunications for IBM’s global telecom and media business, and Vice President of Marketing and Strategy, managing IBM’s worldwide telecom business, including the wireline and wireless carriers.

          Deborah A. Shutejoined the Company in January 1999, as Director of Human Resources. In November 1999, Ms. Shute became Vice President of Human Resources. In January 2001, Ms. Shute became Vice President of Human Resources and Administration. Prior to joining Interphase, Ms. Shute was Senior Director of Human Resources for Packard Bell NEC in Sacramento, California.

     Each executive officer has an employment agreement that defines the terms and conditions of his or her employment at the Company. In some cases, the employment agreement may be supplemented by certain current stock option agreements and/or restricted stock agreements. In all cases, the summaries set forth below are qualified in their entirety by the terms of the employment agreements and stocksuch stock-compensation agreements.

          Gregory B. Kalush.The Board of Directors approved Mr. Kalush’s current amended and restated employment agreement, effective December 30, 2008, pursuant to which the Company employs Mr.

general release of claims, then Mr. Kalush will be entitled to receive (a) severance payments in the amount of three (3) years base salary, (b) health coverage premiums for up to 18 months paid for Mr. Kalush and his dependents as long as they are qualified and eligible for COBRA coverage, and for(c) regarding vested stock options with a strike price greater than the fair market value on the date of termination, aan exercise period of equal to the shorter of three (3) years from the date of termination or the original expiration date of the option. If the Company terminates Mr. Kalush’s employment agreement by reason of disability, and subject to Mr. Kalush’s execution of a general release of claims, then Mr. Kalush will be entitled to receive (i) compensation in the amount of two (2) years base salary, (ii) payment of two (2) years of his annual bonus calculated based on the greater of the prior fiscal year’s Executive Bonus Plan payment or 100% of the Executive’s Bonus Plan target for the year in which Mr. Kalush’s employment terminates, (iii) health coverage premiums for up to 18 months paid for Mr. Kalush and (iii)his dependents as long as they are qualified and eligible for COBRA coverage, and (iv) regarding vested stock options with a strike price greater than the fair market value on the date of termination, an additionalexercise period of upequal to the shorter of three (3) years to exercise his vested stock options.from the date of termination or the original expiration date of the option. If Mr. Kalush dies, then Mr. Kalush’s estate will be entitled to (i)(A) a $1.0 million death benefit payable to Mr. Kalush’s designated beneficiary under a life insurance policy with company-paidCompany-paid premiums, and (ii) for(B) regarding vested stock options with a strike price greater than the fair market value on the date of his death, aan exercise period of equal to the shorter of three (3) years from the date of termination or the original expiration date of the option. If Mr. Kalush becomes employed during the period he is eligible to receive post-employment payments, then payments made as a result of such employment shall reduce any remaining severance payments or other amounts or liability owed by the Company to Mr. Kalush. Additionally, Mr. Kalush’s employment agreement permits the Company to terminate Mr. Kalush without further compensation for overt misconduct.

          Mr. Kalush’s employment agreement provides for the non-disclosure of confidential information. Remedies for breach of this provision include damages, injunctive relief and specific performance. The damages for use of any identified Confidential Trade Secret Information (defined therein) in violation of this provision shall be 100% of the gross amount of revenue derived or resulting from unauthorized use of such information. Mr. Kalush’s employment agreement also provides for covenants not to compete and not to solicit employees during and for two years after employment. Remedies for breach of these covenants include damages, injunctive relief and/or specific performance. Damages for breach of these covenants shall be 100% of the gross amount of revenue derived or resulting from the breach.

Thomas N. Tipton Jr.The Board of Directors approved Mr. Tipton’s current amended and restated employment agreement, effective December 30, 2008, pursuant to which the Company employs Mr. Tipton as its Chief Financial Officer and Vice President of Finance, at a base salary of at least $185,000 per year.year plus an annual bonus opportunity based upon his annual bonus target established by the Compensation Committee. His current base salary is $195,000.$202,500. The employment agreement automatically renews for successive six month periods, unless either Mr. Tipton or the Company gives written notice to the other 30 days prior to the expiration of the then-current term that the agreement will not be renewed, or Mr. Tipton is terminated for cause. In addition, in accordance with his prior

Marc E. DeVinney.The Board of Directors approved Mr. DeVinney’s current amended and restated employment agreement, effective December 30, 2008, pursuant to which the Company employs Mr. Tipton (i) received in December 2005, 10,000 sharesDeVinney, at a base salary of restricted stock under the Company’s 2004 Long-Term Stock Incentive Plan, and (ii) is entitled toat least $175,000 per year plus an annual bonus opportunity based upon his annual bonus target established by the Compensation Committee. His current base salary is $182,000. The employment agreement automatically renews for successive six month periods, unless either Mr. DeVinney or the Company gives written notice to the other 30 days prior to the expiration of the then-current term that the agreement will not be renewed, or Mr. DeVinney is terminated for cause.

          Randall E. McComas.The Board of Directors approved Mr. McComas’ current amended and restated employment agreement, effective December 30, 2008, pursuant to which the Company employs Mr. McComas, at a base salary of at least $235,000 per year.year plus an annual bonus opportunity based upon his annual bonus target established by the Compensation Committee. His current base salary is $240,000. The employment agreement automatically renews for successive six month periods, unless either Mr. McComas or the Company gives written notice to the other 30 days prior to the expiration of the then-current term that the agreement will not be renewed, or Mr. McComas is terminated for cause. In addition, in accordance with his prior employment agreement, Mr. McComas (i) received in February 2002, a non-

     Our compensation programs must be competitive with other programs for similarly placed executives at companies within the telecom and general technology industries. Independent compensation consultants are periodically retained for advice and guidance in assessing whether our executive compensation program is competitive. Executive compensation programs impact all employees by setting general levels of compensation and by helping to create an environment of strategic priorities, incentives, and expectations. Because we believe the performance of every employee is important to our success, we are mindful of the effect executive compensation and incentive programs have on all of our employees.

     The guiding principles of our compensation programs are:

     To this end, we measure the success of our compensation programs by:

     To promote the objectives of our compensation programs, our compensation programs consist of the following principal elements:

     The use of these programs enables us to reinforce our “pay for performance” philosophy, as well as strengthens our ability to attract and retain highly qualified executives. We believe that this combination of programs provides an appropriate mix of fixed and variable pay, balances short-term operational performance with long-term shareholder value, and encourages executive recruitment and retention. Additionally, the Compensation Committee maintains flexibility, enabling management and the Board to make decisions regarding executive compensation based on the needs of the business and to recognize different levels of individual contribution.

executive officers Mr. Kalush and paid in February afterMr. Solomon, the audit2010 bonus was based entirely on Company revenue targets. For other executives, including the named executive officers Mr. Tipton, Mr. McComas and Mr. DeVinney, 70% of the Company’s2010 bonus was based on Company revenue targets and 30% was based on specific financial results is substantially completed and business targets related to specific product lines for which the fourth quarter and full year financial results have been reported to the public. For 2008, executive bonuses were based upon the achievement of certain minimum revenue and net income targets. The revenue achievement accounts for 60% ofwas responsible. Only the bonus calculation whileportion based on Company revenue targets could have resulted in bonus payments in excess of 100% payout if the net income achievement accounts for 40%. A certain percentage achievement in the revenue portion will result in a specified percentage payout of the 60%targets were exceeded. The portion of the bonus and likewise for the net income portion.based on product line targets could not have resulted in bonus payments in excess of 100% payout, regardless of performance. The table below shows the percentage achievement and the resulting payout percentages based on Company revenue targets for the 20082010 bonus plan.

     Determination of equity grant amounts is not made in accordance with a strict formula, but rather is based on objective data synthesized to competitive ranges and to internal policies and practices, including an overall review of both individual and corporate performance and the value of equity grants of comparable executives at comparable companies performedascertained by outsideindependent executive compensation consultants hired by the Compensation Committee. Equity grants may also be made to new executives upon commencement of employment and, on occasion, to executives in connection with a significant change in job responsibility. We have not granted stock options in recent years, but rather have granted restricted stock and performance-based restricted stock.

          The Compensation Committee generally sets the compensation of the executives at levels that are competitive with similarly situated technology companies. When setting the compensation of each of the executives, the Compensation Committee considers all of the factors set forth above, but does not assign any specific weighting or apply any formula to these factors. The Compensation Committee gives consideration to the recommendations of the President and Chief Executive Officer and may accept or

The following table sets forth information as of December 31, 20082010 regarding outstanding equity-based awards, including the potential dollar amounts realizable with respect to each award.

          The following table sets forth the dollar amounts realized pursuant to the vesting or exercise of equity-based awards during the latest fiscal year.2010.

employment agreementagreements or stock agreementand other agreements and are qualified by reference to the provisions of such agreements.

     Gregory B. Kalush.Mr. Kalush’s employment agreement provides for the following termination and severance arrangements: