Exhibit 10.12

 

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[Date]

 

[Name]

[Address]

 

Dear [First Name],

 

As you are aware, Turnstone Systems, Inc. (“Turnstone”) has announced that it is
exploring strategic alternatives, including a possible merger, sale and/or
dissolution of Turnstone. Turnstone would appreciate your continued services
during the Transition Period (as defined below), and offers you certain
compensation incentives in exchange for your continued employment and agreement
to execute a general release of claims, as explained further below:

 

Employment Terms.

 

(a)   The Transition Period shall be from January 9, 2003 until the earlier of
(i) the termination of your employment by Turnstone without cause; (ii) the
closing of a merger or sale involving a change of control of Turnstone or (ii)
October 9, 2003 (the “Transition Period”).

 

(b)   During the Transition Period you will continue to be an at-will employee
of Turnstone. Your employment relationship may be terminated at any time, for
any reason, with or without cause, with or without notice, at your option or
Turnstone’s option.

 

(c)   A retention bonus will accrue at a rate equal to 100% of your current
hourly base salary (the “Retention Bonus”) for every Company business day during
the Transition Period that you remain employed with Turnstone and are not on an
unpaid leave of absence or unpaid time off. You shall be entitled to receive the
Retention Bonus, less applicable withholdings, in a lump sum payment at the end
of the Transition Period. You shall also be entitled to receive a severance
payment equal to three months of your base salary, less applicable withholdings,
in the event your employment is terminated without cause by Turnstone during the
Transition Period.

 

(d)   If you terminate your employment prior to the end of the Transition Period
or Turnstone terminates your employment prior to the end of the Transition
period with cause, you will not receive any portion of the Retention Bonus.

 

Turnstone System, Inc.

2220 Central Expressway

Santa Clara, CA 95050

Tel: 408-907-1400

Fax: 408-907-1401

www.turnstone.com

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(e)   As further consideration for payment to you of the Retention Bonus, you
agree to execute a general release of any claims against Turnstone at the end of
the Transition Period. You understand and agree that Turnstone may withhold
payment of the Retention Bonus to you until after the effective date of the
general release of claims.

 

Effective Date

 

You have until [Date] to accept the terms of this Agreement, although you may
accept it prior to that date. Nothing in this Agreement is intended to create
any rights to employment or employee benefits except as expressly set forth in
this Agreement. This Agreement represents the entire agreement and understanding
between you and Turnstone concerning your transitional employment with
Turnstone. This Agreement may only be amended in writing by Turnstone.

 

To accept the Agreement, please date and sign this letter and return it to
Turnstone. (An extra copy for your files is enclosed).

 

Turnstone appreciates your contribution in anticipation of and during the
Transition Period.

 

Sincerely,

 

I have read, understand and agree to the terms set forth above.

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Richard N. Tinsley

President and CEO

 

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[Name]

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Date

 

Turnstone System, Inc.

2220 Central Expressway

Santa Clara, CA 95050

Tel: 408-907-1400

Fax: 408-907-1401

www.turnstone.com