Document:

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                                                                   EXHIBIT 10.12

December 12, 1997

Mr. Hugh C. Martin
660 Milverton Road
Los Altos, CA 94022

Dear Hugh:

On behalf of Optical Networks, Inc., I am pleased to offer you the position of
President and Chief Executive Officer of the Company.  In this position, you
will report to, as well as be a member of, the Board of Directors.

You will receive a starting base salary of $16,667 per month, which is
equivalent to $200,000 per year, subject to federal, state and other applicable
taxes and payable monthly.  Your base salary will be reviewed on an annual basis
by the Board of Directors or its Compensation Committee.

You will be eligible to earn an annual performance bonus of up to 25% of your
base salary.  For 1998, your bonus will be guaranteed at $50,000 and paid
monthly.  The details of this bonus for future years, as well as additional
incentives for 1998 will be jointly worked out between you and the Board and
agreed to within 60 days of your joining the Company.

At the Company's Board of Directors meeting following the start of your
employment, the Board will grant you a stock award to purchase an amount of
common stock equal to 8 1/2% of the Company's total capital stock, post
financing, calculated on a fully diluted basis (the "Standard Shares").  The
purchase price for the Standard Shares will be the then-current fair market
value of the Company Common Stock, which is anticipated to be $.04.  This stock
award will be evidenced by a Restricted Stock Purchase Agreement, the form of
which shall be provided to you prior to your employment.  The Standard Shares
shall be subject to the right of repurchase, at the original purchase price,
which shall lapse as follows: the Company's repurchase right will lapse with
respect to twenty-five percent (25%) of the Standard Shares twelve (12) months
from the commencement date of your employment with the Company and will lapse at
a rate of 1/48th  of the Standard Shares each month thereafter.  You will have
the right to make an election under Section 83(b) of the Internal Revenue Code
in conjunction with the purchase of the Standard Shares.

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Offer letter
Hugh C. Martin
Page 2

Also at the Company's Board of Directors meeting following the start of your
employment, the Board will grant you a stock award to purchase an amount of
common stock equal to 1 1/2% of the Company's total capital stock, post
financing, calculated on a fully diluted basis (the "Incentive Bonus Shares").
The purchase price for the Incentive Bonus Shares will be the then-current fair
market value of the Company Common Stock, which is anticipated to be $.04.  This
stock award will also be evidenced by a Restricted Stock Purchase Agreement, the
form of which shall be provided to you prior to your employment.  The Incentive
Bonus Shares shall be subject to the right of repurchase, at the original
purchase price, which shall lapse as follows: the Company's repurchase right
will lapse with respect to fifty percent (50%) of the Incentive Bonus Shares
upon the attainment of 1998 milestones and will lapse with respect to the
remaining fifty percent (50%) upon the attainment of 1999 milestones, provided
that you remain employed by the company at the time such milestones are
achieved.. The applicable milestones will be agreed to between you and the Board
of Directors as part of your planning cycle. You will have the right to make an
election under Section 83(b) of the Internal Revenue Code in conjunction with
the purchase of the Incentive Bonus Shares.

In the event that the Company is acquired by, or merged into another company (a
"Transaction"), the Company will waive the Company's right of repurchase with
respect to fifty percent (50%) of the Standard Shares and Incentive Bonus Shares
which were subject to the Company's repurchase right as of the effective date of
the Transaction.

You shall have the right to purchase the Standard Shares and Incentive Bonus
Shares either by cash payment or with a promissory note, which shall bear
interest at the lowest legal rate (the "Note").  The Note shall be in a form and
on terms, which are acceptable to the Company and to you.  The Note will be that
which is attached to this letter.  At your option, subject to California
Corporation Code, section 500, the Note may be repaid with shares of the
Company's common stock, which have a fair market value equal to the outstanding
payments which are due at the time of payment.

As a condition of your employment, you will be required to sign Optical
Network's Proprietary Information Agreement.

The benefits package offered to you by the Company, which may be change from
time to time as changed with respect to other employees, is summarized below.

Medical Insurance: The Company will pay the full cost of enrolling you and your
dependents in the group medical plan which is currently with the Aetna Life
Insurance Company.

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Offer letter
Hugh C. Martin
Page 3

Dental Insurance: The Company will pay the full cost of dental coverage for you
and your dependents.

Term Life Insurance: Term life insurance is offered to each employee in the
amount of one year's salary.

Vacation: You will be entitled to 15 days of paid vacation per year.  This will
accrue from the start of your employment and you will be eligible to take
vacation after six months of employment.

Workman's Compensation, Disability Insurance, and Social Security Payments:
State and Federally mandated insurance premiums are paid by the Company with
customary withholding from the employee's gross salary.

Sick Leave: Sick leave is paid for days actual sick, up to a maximum of 10 days
per year.

Optical Networks Profit Sharing and 401k Savings Plan: The profit sharing is an
arbitrary year-end tax deferred bonus (subject to Optical Networks profits). The
401k plan enables you to defer paying tax on contributions to the 401k up to the
prescribed limit (currently $8,996) and an Optical Networks matching
contribution of up to 2% of your salary. Should you elect to participate in
these plans the amount of tax deferred income would be counted as part of your
total compensation.

This is an offer for "at will" employment, and does not constitute an offer or
guarantee of employment for any period of time: Your employment and compensation
can be terminated at any time (either by you unilaterally, or by the Company
unilaterally, in each case without notice) for any or no reason, subject to the
terms hereof, and your rights to compensation and benefits thereunder would
terminate as well.  This letter constitutes the full and entire understanding
and agreement between the parties with respect to the subject matter hereof, and
supersedes any prior discussions and letters, with the exceptions of (I) your
restricted stock purchase agreement which will define the terms of your stock
purchase, (II) the employee Proprietary Information Agreement, and (III) the
provisions of the benefits plans, which govern the benefit described above.

This offer is contingent on satisfactory reference checks and obtaining venture
capital funding, and is effective through December, 17, 1997.  It will expire if
not accepted in writing by that date.

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I would like to add, Hugh, that the Board of Optical Networks considers that you
would be a most valuable addition to our staff.  Your proven management ability
and track record in assessing markets I believe can make a significant impact at
this time on the growth and success of Optical Networks.  We look forward to you
becoming CEO of Optical Networks, and believe that this position will offer you
both a demanding set of responsibilities and an outstanding opportunity for
substantial personal rewards.

                              Sincerely,

                              /s/ Joseph Goodman
                              Joseph Goodman
                              Chairman of the Board

                              /s/ James S. Tyler
                              James S. Tyler
                              President & CEO

Agreed to and Accepted by: : /s/ Hugh C. Martin              Date:  12/16/97
                            -------------------------------        -----------
Start Date: 1/5/98
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                                                                   EXHIBIT 10.13

February 4, 1998

Terrence J.  Schmid
10 Avocet Drive, #206
Redwood Shores, CA 94065

Dear Terry:

On behalf of Optical Networks, Inc., I am pleased to offer you the position of
Vice President of Finance and Administration and Chief Financial Officer of the
Company.  In this position, you will report to the President and CEO, Hugh
Martin.

You will receive a starting base salary of $11,667 per month, which is
equivalent to $140,000 per year, subject to federal, state and other applicable
taxes and payable monthly.

You will be eligible to earn an annual performance bonus of up to 15% of your
base salary.  For 1998, your bonus will be guaranteed at $20,000 and paid
monthly.

At the Company's Board of Directors meeting following the start of your
employment, the Board will grant you a stock award to purchase 400,000 shares of
the Company's capital stock (the "Shares").  The purchase price for the Shares
will be the then-current fair market value of the Company Common Stock, which is
anticipated to be $0.10.  This stock award will be evidenced by a Restricted
Stock Purchase Agreement, the form of which shall be provided to you prior to
your employment.  The Shares shall be subject to the right of repurchase, at the
original purchase price, which shall lapse as follows:  the Company's repurchase
right will lapse with respect to twenty-five percent (25%) of the Shares twelve
(12) months from the commencement date of your employment with the Company and
will lapse at a rate of 1/48th of the Shares each month thereafter.  You will
have the right to make an election under Section 83(b) of the Internal Revenue
Code in conjunction with the purchase of the Shares.

In the event that the Company is acquired by or merged into another company (a
"Transaction"), the Company will waive the Company's right of repurchase with
respect to fifty percent (50%) of the Shares which were subject to the Company's
repurchase right as of the effective date of the Transaction.

<PAGE>

February 4, 1998
Terrence J. Schmid
Page 2

You shall have the right to purchase the Shares either by cash payment or with a
promissory note, which shall bear interest at the lowest legal rate (the
"Note").  The Note shall be in a form and on terms, which are acceptable to the
Company and to you.  The Note will be that which is attached to this letter.  At
your option, subject to California Corporation Code, section 500, the Note may
be repaid with shares of the Company's common stock, which have a fair market
value equal to the outstanding payments which are due at the time of payment.

As a condition of your employment, you will be required to sign Optical
Networks' Proprietary Information Agreement.

The benefits package offered to you by the Company is summarized below:

Medical Insurance: The Company will pay the full cost of enrolling you in the
group medical plan which is currently with the Aetna Life Insurance Company.

Dental Insurance: The Company will pay the full cost of dental coverage for you.

Term Life Insurance: Term life insurance is offered to each employee in the
amount on one year's salary.

Vacation: You will be entitled to 15 days of paid vacation per year.  This will
accrue from the start of your employment and you will be eligible to take
vacation after six months of employment.

Workman's Compensation, Disability Insurance, and Social Security Payments:
State and Federally mandated insurance premiums are paid by the Company with
customary withholding from the employee's gross salary.

Sick Leave: Sick leave is paid for days actual sick, up to a maximum of 10 days
per year.

This is an offer for "at will" employment, and does not constitute an offer or
guarantee of employment for any period of time.  Your employment and
compensation can be terminated at any time (either by you unilaterally, or by
the Company unilaterally, in each case without notice) for any or no reason,
subject to the terms hereof, and your rights to compensation and benefits
thereunder would terminate as well.  This letter constitutes the full and entire
understanding and agreement between the parties with respect to the subject
matter hereof, and supersedes any prior discussions and letters, with the
exceptions of (I) your restricted stock purchase agreement which will define the
terms of your stock purchase, (II) the employee Proprietary Information
Agreement, and (III) the provisions of the benefits plans, which govern the
benefits described above.

This offer is contingent on satisfactory reference checks and is effective
through February 6, 1998.  It will expire if not accepted in writing by that
date.
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February 4, 1998
Terrence J. Schmid
Page 3

I would like to add, Terry, that both the Board of Optical Networks and I
consider that you would be a most valuable addition to our staff.  We look
forward to you becoming CFO of Optical Networks, and believe that this position
will offer you both a demanding set of responsibilities and an outstanding
opportunity for substantial personal rewards.

Sincerely,
/s/ Hugh C. Martin
Hugh C. Martin
President and CEO

Agreed to and Accepted by: /s/ Terrence J. Schmid            Date: 2/4/98
                          ----------------------------            --------------

Start Date: 2/16/98
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