You can have parameters just like regular templates.

xsl:param and xsl:with-param work the same.

Example:

<xsl:template name="frog">
<xsl:param name="color"/>
<frog color="{$color}"/>
</xsl:template>

<xsl:template name="animal[@type='frog']">
<xsl:call-template name="frog">
<xsl:with-param name="color" select="@color"/>
</xsl:call-template>
</xsl:template>