Echelon 2014
Performance Share Award and Agreement

Upon execution hereof, you, the Employee, and Echelon Corporation (the
“Company”) hereby agree that the Award(s) described below is (are) granted under
and governed by the aggregate terms and conditions of (i) the Company’s 1997
Stock Plan (the “Plan”), (ii) the Award(s) Summary, (iii) the Terms and
Conditions of Performance Shares attached hereto, (iv) Appendix A attached
hereto, if and as applicable, and (v) the Company’s Insider Trading Policy
(collectively, this “Agreement”), which may be amended or modified from time to
time. You acknowledge and agree that you have reviewed this Agreement, and all
components hereof, in its entirety, and have had an opportunity to obtain the
advice of counsel prior to accepting any Award(s), and fully understand all of
the provisions of all of the components hereof. You hereby agree to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to this Agreement. You further agree
promptly to notify the Company upon any change in your residence or address.
PLEASE BE SURE TO READ ALL OF THE PROVISIONS FOR YOUR COUNTRY (IF ANY) IN
APPENDIX A THAT MAY CONTAIN SPECIAL TERMS AND CONDITIONS OF THE AWARD(S)
APPLICABLE TO YOU.
_______________________
Award(s) Summary
{Name}
You have been granted the following respective award(s) (each an “Award”) under
Echelon’s 1997 Stock Plan as follows:
Award Date:                June 10, 2014
Award Type:                Performance Shares
Award Number:                XXXXXX
Number of Shares:            XXXX
Vesting Performance Criteria:        {Enter performance criteria here}
Vesting Date:                March 14, 2015 (if performance criteria have been
achieved)
___________________________________________________________________________________________
Award Date:                June 10, 2014
Award Type:                Performance Shares
Award Number:                XXXXXX
Number of Shares:            XXXX
Vesting Performance Criteria:        {Enter performance criteria here}
Vesting Date:                March 14, 2015 (if performance criteria have been
achieved)
___________________________________________________________________________________________
Award Date:                June 10, 2014
Award Type:                Performance Shares
Award Number:                XXXXXX
Number of Shares:            XXXX
Vesting Performance Criteria:        {Enter performance criteria here}
Vesting Date:                March 14, 2015 (if performance criteria have been
achieved)

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TERMS AND CONDITIONS OF PERFORMANCE SHARES
The Company hereby grants you (the “Employee”), an award (the “Award”) of
Performance Shares under the Plan, in accordance with the Award(s) Summary. Each
such Award is subject to the provisions of this Agreement, including any special
terms and conditions for the Employee’s country in Appendix A.

1.Payment. If the Performance Shares are paid out in Shares to the Employee upon
vesting, par value for the Common Stock underlying the Performance Shares will
be deemed to have been paid by the Employee’s services over the vesting period
rendered by the Employee to the Company or any of its Subsidiaries or
affiliates.

2.Company’s Obligation to Pay. Each Performance Share represents an unfunded
promise by the Company to issue one share of the Company’s Common Stock, subject
to certain restrictions and on the terms and conditions contained in this
Agreement. No fractional Shares shall be issued under this Agreement. Unless and
until the Performance Shares have vested in the manner set forth in paragraphs 3
or 4, the Employee will have no right to the payment of Shares. Prior to actual
payment of any vested Performance Shares, such Performance Shares will represent
an unsecured obligation.

3.Vesting Schedule/Period of Restriction.
(a)Except as otherwise provided in subsection (b) below or in paragraph 4 of
this Agreement, the Performance Shares awarded by this Agreement shall vest in
accordance with the vesting schedule set forth in the Award(s) Summary, subject
to the Employee’s continuing to be a Service Provider on each relevant vesting
date. Notwithstanding anything in this paragraph 3 to the contrary, and except
as otherwise provided by the Administrator or as required by local law, vesting
of the Performance Shares shall be suspended during any unpaid leave of absence
other than military leave and will resume on the date the Employee returns to
work on a regular schedule as determined by the Company; provided, however, that
no vesting credit will be awarded for the time vesting has been suspended during
such leave of absence, if permissible under local law.
(b)    Notwithstanding anything to the contrary in the vesting schedule set
forth in the Award(s) Summary, upon Employee’s Involuntary Termination due to a
Change of Control Merger that closes prior to March 14, 2015, 100% of the
outstanding and unvested Performance Shares awarded by this Agreement will vest
in full and, to the extent applicable, all performance goals or other vesting
criteria to which such Performance Shares are subject will be deemed achieved at
one hundred percent (100%) of target levels and all other terms and conditions
met. For purposes of this Agreement, “Involuntary Termination” shall mean,
without Employee’s express written consent: (i) a significant reduction of the
Employee's duties, authority or responsibilities, relative to the Employee's
duties, authority or responsibilities as in effect immediately prior to the
Change of Control Merger; (ii) a material reduction in the total cash
compensation of the Employee as in effect immediately prior to the Change of
Control Merger; (iii) the relocation of the Employee to a facility or a location
more than thirty (30) miles from the Employee's then present location, without
the Employee's express written consent; or (iv) any purported termination of the
Employee which is not effected for Disability or for Cause, or any purported
termination for which the grounds relied upon are not valid.

4.Administrator Discretion. The Administrator, in its discretion, may accelerate
the vesting of the balance, or some lesser portion of the balance, of the
Performance Shares at any time, subject to the terms of the Plan, and if
permissible under local law. If so accelerated, such Performance Shares will be
considered as having vested as of the date specified by the Administrator.

5.Payment after Vesting.
(a)Subject to paragraph 8, any Performance Shares that vest pursuant to
paragraph 3 shall be paid in Shares as soon as practicable upon or following the
date of vesting (the “Vesting Date”), but, except as provided in this Agreement,
in no event later than two and one-half (2½) months from the end of the
Company’s tax year that includes the Vesting Date, subject to the terms and
provisions of the Plan and this Agreement.
(b)Notwithstanding anything in the Plan or this Agreement to the contrary, and
subject to paragraph 8, if the vesting of the balance, or some lesser portion of
the balance, of the Performance Shares is

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accelerated in connection with the Employee’s termination as a Service Provider,
such accelerated Performance Shares will not be paid out until Employee has a
“separation from service” within the meaning of Section 409A, as determined by
the Company. Further, if (x) Participant is a “specified employee” within the
meaning of Section 409A at the time of such termination as a Service Provider
and (y) the payment of such accelerated Performance Shares will result in the
imposition of additional tax under Section 409A if paid to Participant on or
within the six (6) month period following Participant’s termination as a Service
Provider, then the payment of such accelerated Performance Shares will not be
made until the date six (6) months and one (1) day following the date of
Participant’s termination as a Service Provider, unless the Participant dies
following his or her termination as a Service Provider, in which case, the
Performance Shares will be paid in Shares to the Participant’s estate as soon as
practicable following his or her death. For purposes of this Agreement, “Section
409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and
any proposed, temporary or final Treasury Regulations and Internal Revenue
Service guidance thereunder, as each may be amended from time to time.
(c)If the vesting of all or a portion of the Performance Shares awarded under
this Agreement accelerate pursuant to Section 11(c)(i) of the Plan in the event
of a “Merger” (as defined in the Plan) that is not a “change in control” within
the meaning of Section 409A, the timing of payment rules that apply to
discretionary accelerations under paragraph 5(b) also shall apply. If the
vesting of all or a portion of the Performance Shares awarded under this
Agreement accelerate pursuant to Section 11(c)(i) of the Plan in the event of a
“Merger” (as defined in the Plan) that is a “change in control” within the
meaning of Section 409A, the timing of payment rules that apply under paragraph
5(a) also shall apply.

6.Forfeiture. Notwithstanding any contrary provision of this Agreement, the
balance of the Performance Shares that have not vested pursuant to paragraphs 3
or 4 at the time of the Employee’s termination as a Service Provider for any or
no reason will be forfeited and automatically transferred to and reacquired by
the Company at no cost to the Company. The Employee shall not be entitled to a
refund of the price paid for the Performance Shares forfeited to the Company
pursuant to this paragraph 6.

7.Death of Employee. Any distribution or delivery to be made to the Employee
under this Agreement will, if the Employee is then deceased, be made to the
administrator or executor of the Employee’s estate. Any such administrator or
executor must furnish the Company with (a) written notice of his or her status
as transferee, and (b) evidence satisfactory to the Company to establish the
validity of the transfer and compliance with any laws or regulations pertaining
to said transfer.

8.Responsibility for Taxes. The Employee acknowledges that, regardless of any
action taken by the Company or, if different, the Employee’s employer (the
“Employer”), the ultimate liability for all income tax, social insurance,
payroll tax, fringe benefits tax, payment on account or other tax-related items
related to the Employee’s participation in the Plan and legally applicable to
the Employee (“Tax-Related Items”) is and remains the Employee’s responsibility
and may exceed the amount actually withheld by the Company or the Employer. The
Employee further acknowledges that the Company and/or the Employer (a) make no
representations or undertakings regarding the treatment of any Tax-Related Items
in connection with any aspect of the Performance Shares, including, but not
limited to, the grant, vesting or settlement of the Performance Shares, the
subsequent sale of Shares acquired pursuant to such settlement and the receipt
of any dividends and/or any dividend equivalents; and (b) do not commit to and
are under no obligation to structure the terms of the Award or any aspect of the
Performance Shares to reduce or eliminate the Employee’s liability for
Tax-Related Items or achieve any particular tax result. Further, if the Employee
is subject to Tax-Related Items in more than one jurisdiction between the date
of grant and the date of any relevant taxable or tax withholding event, as
applicable, the Employee acknowledges that the Company and/or the Employer (or
former employer, as applicable) may be required to withhold or account for
Tax-Related Items in more than one jurisdiction.
Prior to any relevant taxable or tax withholding event, as applicable, the
Employee agrees to make adequate arrangements satisfactory to the Company and/or
the Employer to satisfy all Tax-Related Items. No Shares will be issued to the
Employee (or his or her estate) for Performance Shares unless and until
satisfactory arrangements (as determined by the Administrator) have been made by
the Employee with respect to the payment of any Tax-Related Items.

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In this regard, the Employee authorizes the Company and/or its agents to satisfy
the obligations with regard to all Tax-Related Items by withholding in Shares to
be issued upon settlement of the Performance Shares. If the obligation for
Tax-Related Items is satisfied by withholding a number of whole Shares as
described herein, for tax purposes, the Employee is deemed to have been issued
the full number of Shares subject to the vested Performance Shares,
notwithstanding that a number of the Shares is held back solely for the purpose
of paying the Tax-Related Items. No fractional Shares will be withheld or issued
pursuant to the grant of Performance Shares and the issuance of Shares
thereunder; any additional withholding necessary for this reason will be done by
the Company or the Subsidiary through the Employee’s paycheck or other cash
compensation paid to the Employee by the Company and/or the Subsidiary. The
Company or the Subsidiary, in its discretion, may, and with respect to its
executive officers (as determined by the Company) will withhold an amount equal
to two (2) times the Fair Market Value of a Share from the last paycheck or
other cash compensation due to the Employee prior to the vesting of the
Performance Shares.
In addition, the Employee authorizes the Company and/or the Subsidiary, in their
sole discretion, in lieu of or in addition to the foregoing and in each case to
the extent permissible under local law, to (i) sell or to arrange for the sale
of Shares received as a result of vesting/settlement of the Performance Shares
either through a voluntary sale or through a mandatory sale arranged by the
Company (on the Employee’s behalf pursuant to this authorization without further
consent), with the proceeds going toward satisfaction of the Tax-Related Items,
(ii) require the Employee to pay the Tax Related Items in cash or with a
cashier’s check or certified check, and/or (iii) withhold all applicable
Tax-Related Items legally payable by the Employee from the Employee’s wages or
other cash compensation payable to the Employee by the Company and/or the
Employer.
Regardless of the withholding method, and in all instances where required, the
Company will not withhold more than required by the applicable minimum statutory
withholding rates.
Finally, the Employee shall pay to the Company and/or the Employer any amount of
Tax-Related Items that the Company may be required to withhold as a result of
the Employee’s participation in the Plan that cannot be satisfied by one or more
of the means previously described in this paragraph 8. The Company shall not be
required to deliver any of the Shares if the Employee fails to comply with his
or her obligations in connection with the Tax-Related Items as described in this
paragraph 8.

9.Rights as Stockholder. Neither the Employee nor any person claiming under or
through the Employee will have any of the rights or privileges of a stockholder
of the Company with respect to any Shares deliverable hereunder unless and until
certificates representing such Shares (which may be in book entry form) will
have been issued, recorded on the records of the Company or its transfer agents
or registrars, and delivered to the Employee (including through electronic
delivery to a brokerage account). After such issuance, recordation and delivery,
the Employee will have all the rights of a stockholder of the Company with
respect to voting such Shares and receipt of dividends and distributions on such
Shares.

10.No Effect on Employment. Subject to any employment contract with the
Employee, the terms of such employment will be determined from time to time by
the Company, or the Employer, as the case may be, and the Company, the Employer,
or any Subsidiary or affiliate of the Company, as the case may be, will have,
and the Employee’s participation in the Plan shall not interfere with the right,
which is hereby expressly reserved, to terminate or change the terms of the
employment of the Employee. The transactions contemplated hereunder, the
Employee’s participation in the Plan and the vesting schedule set forth in the
Grant Summary do not constitute an express or implied promise of continued
employment for any period of time. The Award and the Employee’s participation in
the Plan shall not create a right to employment or be interpreted as forming an
employment or service contract with the Company, the Employer or any Subsidiary
or affiliate of the Company.
11.Nature of Grant. In accepting the Performance Shares, the Employee
acknowledges, understands and agrees that:
(a)the grant of the Performance Shares is voluntary and occasional and does not
create any contractual or other right to receive future grants of Performance
Shares, or benefits in lieu of Performance Shares even if Performance Shares
have been granted repeatedly in the past;

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(b)all decisions with respect to future awards of Performance Shares or other
grants, if any, will be at the sole discretion of the Company;
(c)the Employee’s participation in the Plan is voluntary;
(d)the Performance Shares and the Shares subject to the Performance Shares are
not part of regular or expected compensation or salary for any purpose;
(e)the Performance Shares and the Shares subject to the Performance Shares are
not intended to replace any pension rights or compensation;
(f)the Performance Shares and the Shares subject to the Performance Shares, and
the income and value of same, are not part of normal or expected compensation or
salary for any purpose, including, without limitation, calculating any
severance, termination, resignation, redundancy, dismissal, end of service
payments, bonuses, long-service awards, pension or retirement or welfare
benefits or similar payments;
(g)the future value of the underlying Shares is unknown, indeterminable and
cannot be predicted with certainty;
(h)no claim or entitlement to compensation or damages shall arise from
forfeiture of the Performance Shares resulting from the termination of the
Employee’s relationship as a Service Provider (for any reason whatsoever,
whether or not later found to be invalid or in breach of employment laws in the
jurisdiction where the Employee is employed or the terms of the Employee’s
employment or service agreement, if any), and in consideration of the Award of
Performance Shares to which the Employee is otherwise not entitled, the Employee
irrevocably agrees never to institute any claim against the Company, any of its
Subsidiaries or affiliates or the Employer, waives the Employee’s ability, if
any, to bring any such claim, and releases the Company, its Subsidiaries and
affiliates and the Employer from any such claim; if, notwithstanding the
foregoing, any such claim is allowed by a court of competent jurisdiction, then,
by participating in the Plan, the Employee shall be deemed irrevocably to have
agreed not to pursue such claim and agrees to execute any and all documents
necessary to request dismissal or withdrawal of such claim;
(i)for purposes of the Award, the Employee’s engagement as a Service Provider
will be considered terminated as of the date the Employee is no longer actively
providing services to the Company or one of its Subsidiaries or affiliates
(regardless of the reason for such termination and whether or not later found to
be invalid or in breach of employment laws in the jurisdiction where the
Employee is engaged as a Service Provider or the terms of the Employee’s
employment or service agreement, if any), and unless otherwise expressly
provided in this Agreement or determined by the Company, the Employee’s right to
vest in the Performance Shares under the Plan, if any, will terminate as of such
date and will not be extended by any notice period (e.g., the Employee’s period
of service would not include any contractual notice period or any period of
“garden leave” or similar period mandated under employment laws in the
jurisdiction where the Employee is engaged as a Service Provider or the terms of
the Employee’s employment or service agreement, if any);
(j)unless otherwise provided in the Plan or by the Company in its discretion,
the Performance Shares and the benefits evidenced by this Agreement do not
create any entitlement to have the Performance Shares or any such benefits
transferred to, or assumed by, another company nor be exchanged, cashed out or
substituted for, in connection with any corporate transaction affecting the
shares of the Company;
(k)the Employee acknowledges and agrees that neither the Company, the Employer
nor any Subsidiary or affiliate of the Company shall be liable for any foreign
exchange rate fluctuation between the Employee’s local currency and the United
States Dollar that may affect the value of the Performance Shares or of any
amounts due to the Employee pursuant to the settlement of the Performance Shares
or the subsequent sale of any Shares acquired upon settlement.
12.No Advice Regarding Grant. The Company is not providing any tax, legal or
financial advice, nor is the Company making any recommendations regarding the
Employee’s participation in the Plan, or the Employee’s acquisition or sale of
the underlying Shares. The Employee is hereby advised to consult with his or her
own personal tax, legal and financial advisors regarding his or her
participation in the Plan before taking any action related to the Plan.

13.Data Privacy. The Employee hereby explicitly and unambiguously consents to
the collection, use and transfer, in electronic or other form, of the Employee’s
personal data as described in this Agreement by and

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among, as applicable, the Employer, the Company and its Subsidiaries and
affiliates for the exclusive purpose of implementing, administering and managing
the Employee’s participation in the Plan.
The Employee understands that the Company and the Subsidiary may hold certain
personal information about the Employee, including, but not limited to, the
Employee’s name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in the Company or its Subsidiaries and
affiliates, details of all Performance Shares or any other entitlement to shares
of stock awarded, canceled, exercised, vested, unvested or outstanding in the
Employee’s favor, for the exclusive purpose of implementing, administering and
managing the Plan (“Personal Data”).
The Employee understands that Personal Data will be transferred to Morgan
Stanley Smith Barney or any other third parties assisting the Company with the
implementation, administration and management of the Plan. The Employee
understands that these recipients may be located in the Employee’s country, or
elsewhere, and that the recipient’s country (e.g., the United States) may have
different data privacy laws and protections than the Employee’s country. The
Employee understands that he or she may request a list with the names and
addresses of any potential recipients of the Personal Data by contacting the
Employee’s local human resources representative. The Employee authorizes the
Company, Morgan Stanley Smith Barney or any other third parties assisting the
Company (presently or in the future) with implementing, administering and
managing the Plan to receive, possess, use, retain and transfer the Personal
Data, in electronic or other form, for the sole purpose of implementing,
administering and managing the Employee’s participation in the Plan, including
any requisite transfer of such Personal Data as may be required to a broker or
other third party with whom the Employee may elect to deposit any Shares
received upon vesting of the Award. The Employee understands that Personal Data
will be held only as long as is necessary to implement, administer and manage
the Employee’s participation in the Plan. The Employee understands that he or
she may, at any time, view Personal Data, request additional information about
the storage and processing of Personal Data, require any necessary amendments to
Personal Data or refuse or withdraw the consents herein, without cost, by
contacting in writing the Employee’s local human resources representative.
Further, the Employee understands that he or she is providing the consents
herein on a purely voluntary basis. If the Employee does not consent, or if the
Employee later seeks to revoke his or her consent, the Employee’s employment
status or service and career with the Employer will not be adversely affected;
the only adverse consequence of refusing or withdrawing the Employee’s consent
is that the Company would not be able to grant Performance Shares or other
equity awards to the Employee or administer or maintain such awards. Therefore,
the Employee understands that refusing or withdrawing his or her consent may
affect the Employee’s ability to participate in the Plan. For more information
on the consequences of the Employee’s refusal to consent or withdrawal of
consent, the Employee understands that he or she may contact his or her local
human resources representative.

14.Address for Notices. Any notice to be given to the Company under the terms of
this Agreement will be addressed to the Company, in the care of Human Resources
Department, at Echelon Corporation, 550 Meridian Avenue, San Jose, CA 95126, or
at such other address as the Company may hereafter designate in writing.

15.Grant is Not Transferable. Except to the limited extent provided in paragraph
7 above, this grant of Performance Shares and the rights and privileges
conferred hereby may not be sold, pledged, assigned, hypothecated, transferred
or disposed of any way (whether by operation of law or otherwise) and may not be
subject to sale under execution, attachment or similar process, until you have
been issued the Shares. Upon any attempt to sell, pledge, assign, hypothecate,
transfer or otherwise dispose of this grant, or any right or privilege conferred
hereby, or upon any attempted sale under any execution, attachment or similar
process, this grant and the rights and privileges conferred hereby immediately
will become null and void.

16.Restrictions on Sale of Securities. Subject to the provisions of paragraph 18
below, the Shares issued as payment for vested Performance Shares awarded under
this Agreement will be registered under the U.S. federal securities laws and
will be freely tradable upon receipt. However, your subsequent sale of the
Shares will be

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subject to any market blackout-period that may be imposed by the Company and
must comply with the Company’s insider trading policies, and any other
applicable securities laws.

17.Binding Agreement. Subject to the limitation on the transferability of this
grant contained herein, this Agreement will be binding upon and inure to the
benefit of the heirs, legatees, legal representatives, successors and assigns of
the parties hereto, to the extent permissible under local law.

18.Compliance with Law. Notwithstanding any other provision of the Plan or this
Agreement, unless there is an available exemption from any registration,
qualification or other legal requirement applicable to the Shares, the Company
shall not be required to deliver any Shares issuable upon settlement of the
Performance Shares prior to the completion of any registration or qualification
of the Shares under any local, state, federal or foreign securities or exchange
control law or under rulings or regulations of the U.S. Securities and Exchange
Commission (“SEC”) or of any other governmental regulatory body, or prior to
obtaining any approval or other clearance from any local, state, federal or
foreign governmental agency, which registration, qualification or approval the
Company shall, in its absolute discretion, deem necessary or advisable. The
Employee understands that the Company is under no obligation to register or
qualify the shares with the SEC or any state or foreign securities commission or
to seek approval or clearance from any governmental authority for the issuance
or sale of the Shares. Further, the Employee agrees that the Company shall have
unilateral authority to amend the Plan and this Agreement without the Employee’s
consent to the extent necessary to comply with securities or other laws
applicable to issuance or distribution of shares. In addition, the Company shall
not be required to deliver any Shares issuable upon settlement of the
Performance Shares prior to the lapse of such reasonable period of time
following the date of vesting of the Performance Shares as the Administrator may
establish from time to time for reasons of administrative convenience, subject
to compliance with Section 409A.

19.Plan Governs; Hierarchy of Interpretation. This Agreement, and all of its
components, are subject to all terms and provisions of the Plan. Ambiguities, if
any, in or between any components of the Agreement will be resolved in favor of
legal compliance, as the first priority, and avoiding conflicts between terms,
as the second priority. In the event of a conflict between one or more
provisions of any of the components of this Agreement and one or more provisions
of the Plan, the provisions of the Plan will govern. In the event of a conflict
between the terms contained in the Terms and Conditions and those in Appendix A,
where applicable, Appendix A will govern. Capitalized terms used and not defined
in any other component of this Agreement will have the meaning set forth in the
Plan.

20.Captions. Captions provided herein are for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.

21.Agreement Severable. In the event that any provision in this Agreement will
be held invalid or unenforceable, such provision will be severable from, and
such invalidity or unenforceability will not be construed to have any effect on,
the remaining provisions of this Agreement.

22.Entire Agreement. The Plan, Award Summary, Terms of Conditions of Performance
Shares, Appendix A, and the Company’s Insider Trading Policy each are
incorporated herein by reference, and together constitute the entire agreement
of the parties with respect to the subject matter hereof; supersede in their
entirety all prior undertakings and agreements of the Company and the Employee
with respect to the subject matter hereof; and may not be modified adversely to
the Employee’s interest except by means of a writing signed by the Company and
the Employee. The Employee expressly warrants that he or she is not accepting
this Agreement in reliance on any promises, representations, or inducements
other than those contained herein.
23.Amendment, Suspension or Termination of the Plan. The Employee understands
that the Plan is established voluntarily by the Company, it is discretionary in
nature and may be amended, altered, suspended or terminated by the Company at
any time, to the extent permitted by the Plan.

24.Notice of Governing Law and Venue. This grant of Performance Shares and this
Agreement shall be subject to the laws, but not the choice of law rules, of the
State of California, U.S.A. For purposes of any action,

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lawsuit or other proceedings brought to enforce this Agreement, relating to it,
or arising from it, the parties hereby submit to and consent to the sole and
exclusive jurisdiction of the courts of Santa Clara County, California, or the
federal courts for the United States for the Northern District of California,
and no other courts, where this grant is made and/or to be performed.

25.Electronic Delivery and Acceptance. The Company may, in its sole discretion,
decide to deliver any documents related to current or future participation in
the Plan by electronic means. The Employee hereby consents to receive such
documents by electronic delivery and agrees to participate in the Plan through
an online or electronic system established and maintained by the Company or a
third party designated by the Company.

26.Language. If the Employee has received this Agreement, or any other document
related to the Performance Shares and/or Plan translated into a language other
than English, and if the meaning of the translated version is different than the
English version, the English version will control.

27.Appendix A. Notwithstanding any provisions in this Agreement, the Award of
Performance Shares shall be subject to any special terms and conditions set
forth in Appendix A to this Agreement for the Employee’s country. Moreover, if
the Employee relocates to one of the countries included in Appendix A, the
special terms and conditions for such country will apply to the Employee, to the
extent the Company determines that the application of such terms and conditions
is necessary or advisable for legal or administrative reasons. Appendix A
constitutes part of this Agreement.

28.Imposition of Other Requirements. The Company reserves the right to impose
other requirements on the Employee’s participation in the Plan, on the
Performance Shares and on any Shares acquired under the Plan, to the extent the
Company determines it is necessary or advisable for legal or administrative
reasons, and to require the Employee to sign any additional agreements or
undertakings that may be necessary to accomplish the foregoing.

29.Waiver. The Employee acknowledges that a waiver by the Company of breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other provision of this Agreement, or of any subsequent breach by the
Employee or any other Employee.

30.No Compensation Deferrals. Payments made pursuant to the Plan and this Award
are intended to qualify for the “short-term deferral” exemption from Section
409A. The Company reserves the right, to the extent the Company deems necessary
or advisable in its sole discretion, to unilaterally amend or modify the Plan
and/or this Agreement, including any appendices to ensure that all Performance
Share Awards are made in a manner that qualifies for exemption from or complies
with Section 409A, provided, however, that the Company makes no representation
that this Award is not subject to Section 409A nor makes any undertaking to
preclude Section 409A from applying to this Award.

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IN WITNESS WHEREOF, the Company and the Employee each have executed this
Agreement effective as of the date below.
ECHELON CORPORATION
EMPLOYEE
By:_____________________    
By:_____________________________
 
 
Its:_____________________
Print Name:_______________________
 
 
 
Address: _________________________
 
__________________________
 
 
 
Date: __________________________
 
 

                        

                    
                        
                                    
                                                                                                                                            

                                    

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APPENDIX A
ECHELON CORPORATION

Special Provisions for Performance Shares for Employees Outside the U.S.

This Appendix A includes special terms and conditions applicable to Employees in
the countries below. There are no special terms or conditions for Employees in
the United States or any other country not listed below. These terms and
conditions are in addition to those set forth in the Performance Share Agreement
including the Terms and Conditions of Performance Shares (the “Agreement”).
Capitalized terms used, but not defined herein, shall have the same meanings
assigned to them in the Plan and the Agreement. The Company reserves the right
to impose other requirements on the Employee’s participation in the Plan, on the
Performance Shares and on any Shares acquired under the Plan, to the extent the
Company determines it is necessary or advisable for legal or administrative
reasons, and to require the Employee to sign any additional agreements or
undertakings that may be necessary to accomplish the foregoing.
Please note that the information below may relate to the Employee’s exchange
control obligations in connection with the conversion of funds, selling shares
or holding of foreign securities. Compliance with such obligations is the
Employee’s responsibility and neither the Company nor the Employee’s employer
accepts any responsibility for such compliance. Also, exchange control
regulations are subject to change. As a result, the Employee should consult with
his or her advisor before converting funds and/or selling Shares acquired under
the Plan.
Australia
Performance Shares granted to Employees in Australia shall be paid in Shares
only and do not provide any right for Employees to receive a cash payment,
notwithstanding any discretion contained in the Plan, including any cash payment
in the event of a Merger or Change of Control Merger, or any provision in the
Award to the contrary.
France
Employees may hold Shares issued upon vesting of the Performance Shares outside
of France provided the Employee declares all foreign accounts, whether open,
current, or closed, in the Employee’s income tax return. The Employee must also
declare to the customs and excise authorities any cash or securities the
Employee imports or exports without the use of a financial institution when the
value of the cash or securities is equal to or exceeds €7,600 (for 2006).
Hong Kong
The contents of the Agreement have not been reviewed by any regulatory authority
in Hong Kong. The Employee is advised to exercise caution in relation to the
offer. If the Employee has any doubt about any of the contents of the Agreement
or the Plan, the Employee should obtain independent professional advice.
This offer of Performance Shares and the Shares to be used pursuant to the
Performance Shares is not a public offer of securities and is available only for
employees of the Company or any of its Subsidiaries participating in the Plan.
Italy
This offer of Performance Shares and the Shares to be issued pursuant to the
Award are not a public offer of securities and are available only for Employees
of the Company or any of its Subsidiaries participating in the Plan.
Data Privacy Disclaimer
Notwithstanding any provision of the Award, this section in Appendix A applies
with respect to data privacy in Italy.

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The Employee hereby explicitly and unambiguously consents to the collection,
use, processing and transfer, in electronic or other form, of personal data as
described in this section of this Appendix A by and among, as applicable, the
employer and the Company and any of its Subsidiaries and affiliates for the
exclusive purpose of implementing, administering and managing the Employee’s
participation in the Plan.
The Employee understands that the employer, the Company and any of its
subsidiaries and affiliates may hold certain personal information about the
Employee, including Employee’s name, home address and telephone number, date of
birth, social insurance number or other identification number, salary,
nationality, job title, any Shares or directorships held in the Company, details
of the Performance Shares or any other entitlement to Shares awarded, canceled,
exercised, vested, unvested or outstanding in Employee’s favor, for the
exclusive purpose of managing and administering the Plan (“Data”).
The Employee also understands that providing the Company with the Employee’s
Data is necessary for the performance of the Plan and that the Employee’s denial
to provide such Data would make it impossible for the Company to perform its
contractual obligations and may affect the Employee’s ability to participate in
the Plan. The Controller of personal data processing is Echelon Corporation,
with registered offices at 550 Meridian Avenue, San Jose, CA 95126, U.S.A., and,
pursuant to Legislative Decree no. 196/2003, its representative in Italy is
Echelon Italy with registered offices in Ple Biancamano Italy, 20121 Milano,
Italy. The Employee understands that the Employee’s Data will not be publicized,
but it may be transferred to Smith Barney, banks, other financial institutions
or brokers involved in the management and administration of the Plan. The
Employee further understands that the Company and/or its Subsidiaries and
affiliates will transfer Data amongst themselves as necessary for the purpose of
implementation, administration and management of Employee’s participation in the
Plan and that the Company and/or its Subsidiaries and affiliates may each
further transfer Data to third parties assisting the Company in the
implementation, administration and management of the Plan, including any
requisite transfer to Smith Barney, or another third party with whom the
Employee may elect to deposit any Shares acquired under the Plan. Such
recipients may receive, possess, use, retain and transfer the Data in electronic
or other form, for the purposes of implementing, administering and managing
Employee’s participation in the Plan. The Employee understands that these
recipients may be located in the European Economic Area, or elsewhere, such as
the U.S. or Asia. Should the Company exercise its discretion in suspending all
necessary legal obligations connected with the management and administration of
the Plan, it will delete the Employee’s Data as soon as it has accomplished all
the necessary legal obligations connected with the management and administration
of the Plan.
The Employee understands that Data processing related to the purposes specified
above shall take place under automated or nonautomated conditions, anonymously
when possible, that comply with the purposes for which Data are collected and
with confidentiality and security provisions as set forth by applicable laws and
regulations, with specific reference to Legislative Decree no. 196/2003.
The processing activity, including communication, the transfer of the Employee’s
Data abroad, including outside of the European Union, as herein specified and
pursuant to applicable laws and regulations, does not require the Employee’s
consent thereto as the processing is necessary to performance of contractual
obligations related to implementation, administration and management of the
Plan. The Employee understands that, pursuant to Section 7 of the Legislative
Decree no. 196/2003, the Employee has the right to, including but not limited
to, access, delete, update, ask for rectification of the Employee’s Data and
estop, for legitimate reason, the Data processing. Furthermore, the Employee is
aware that the Employee’s Data will not be used for direct marketing purposes.
In addition, the Data provided can be reviewed and questions or complaints can
be addressed by contacting the Employee’s human resources department.
Plan Acknowledgment
In accepting the grant of Performance Shares, the Employee acknowledges that he
or she has received a copy of the Plan, and has reviewed the Plan, the
Agreement, including Appendices, if any, in their entirety and fully understands
and accepts all provisions of the Plan and the Agreement, including Appendices,
if any.

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The Employee further acknowledges that he or she has read and specifically and
expressly approves the following clauses in the Agreement; Paragraph 4:
Administrator Discretion; Paragraph 6: Forfeiture; Paragraph 7:Death of
Employee; Paragraph 8: Withholding of Taxes; Paragraph 9: Rights as Stockholder;
Paragraph 10: No Effect on Employment; Paragraph 11: Nature of Grant; Paragraph
14: Grant is Not Transferable; Paragraph 15: Restrictions on Sale of Securities;
Paragraph 19: Administrator Authority and the Data Privacy Disclaimer above in
this section of Appendix A.
Korea
Exchange control laws require Korean residents who realize US$100,000 or more
from the sale of Shares to repatriate the proceeds to Korea within eighteen
months of the sale.
Netherlands
By accepting this Performance Share, the Employee acknowledges that: (i) the
grant is intended as an incentive for the Employee to remain employed with his
or her current employer and is not intended as remuneration for labor performed;
and (ii) the grant is not intended to replace any pension rights or
compensation.
The Employees that are residents of the Netherlands should be aware of the Dutch
insider trading rules, which may impact the sale of Shares issued pursuant to
the Performance Shares. In particular, the Employee may be prohibited from
effecting certain Share transactions if he or she has insider information
regarding the Company.
Below is a discussion of the applicable restrictions. The Employee is advised to
read the discussion carefully to determine whether the insider rules could apply
to him or her. If it is uncertain whether the insider rules apply, we recommend
that the Employee consult with his or her legal advisor. Please note that the
Company cannot be held liable if an Employee violates the Dutch insider rules.
The Employee is responsible for ensuring his or her compliance with these rules.
Prohibition Against Insider Trading
Dutch securities laws prohibit insider trading. Under Article 46 of the Act on
the Supervision of the Securities Trade 1995, anyone who has “inside
information” related to the Company is prohibited from effectuating a
transaction in securities in or from the Netherlands. “Inside information” is
knowledge of a detail concerning the issuer to which the securities relate that
is not public and which, if published, would reasonably be expected to affect
the stock price, regardless of the development of the price. The insider could
be any Employee of the Company or its Dutch Subsidiary who has inside
information as described above.
Given the broad scope of the definition of inside information, certain Employees
of the Company working at its Dutch Subsidiary may have inside information and
thus, would be prohibited from effectuating a transaction in securities in the
Netherlands at a time when they had such inside information.
By entering into the Agreement and participating in the Plan, the Employee
acknowledges having read and understood the paragraphs above and acknowledges
that it is his or her responsibility to comply with the Dutch insider trading
rules, as discussed herein.
Singapore
Securities Law Notification
The grant of the Award of Performance Shares under the Plan is being made on a
private basis and is, therefore, exempt from registration in Singapore. Shares
are traded on a U.S. exchange and the Employee is not able to resell Shares on a
Singapore exchange.
Director Notification

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If the Employee is a director, associate director or shadow director of a
Singapore Subsidiary or affiliate of the Company, the Employee is subject to
certain notification requirements under the Singapore Companies Act. Among these
requirements is an obligation to notify the Singapore Subsidiary or affiliate in
writing when the Employee receives an interest (e.g., Performance Shares,
Shares) in the Company or any related companies. Please contact the Company to
obtain a copy of the notification form. In addition, the Employee must notify
the Singapore Subsidiary or affiliate when the Employee sells Shares of the
Company or any related company (including when the Employee sells Shares
acquired pursuant to the Performance Shares). These notifications must be made
within two days of acquiring or disposing of any interest in the Company or any
related company. In addition, a notification must be made of the Employee’s
interests in the Company or any related company within two days of becoming a
director.
United Kingdom
Director Notification
If the Employee is a director or shadow director of a U.K. Subsidiary or
affiliate of the Company and the U.K. Subsidiary or affiliate is not wholly
owned by the Company, the Employee is subject to certain notification
requirements under the Companies Act. Specifically, the Employee must notify the
U.K. Subsidiary or affiliate in writing of Employee’s interest in the Company
and the number and class of shares or rights to which the interest relates
before the expiration of five days from the date on which the existence of the
interest comes to their knowledge (e.g., within five days of receiving a notice
of grant under the Plan). The Employee must also notify the U.K. Subsidiary or
affiliate when the Employee acquires Shares under the Plan upon the lapse of the
restrictions relating to the Performance Shares and again when the Employee
sells the Shares acquired. This disclosure requirement also applies to any
rights or Shares acquired by Employee’s spouse or children (under the age of
18).
Performance Shares Payable in Shares Only
Notwithstanding any provision in the Plan or the Agreement to the contrary,
Performance Shares granted to Employees who are resident and ordinarily resident
in the U.K. on the date of grant, shall be paid in Shares only and do not
provide any right for Employees to receive a cash payment.
Withholding Taxes
Paragraph 8 of the Agreement, is amended to read in full as follows:
Regardless of any action the Company or its Subsidiary takes with respect to any
or all income tax, National Insurance Contributions (“NICs”), payroll tax, or
other tax-related withholding (“Tax-Related Items”), the Employee acknowledges
and agrees that the ultimate liability for all Tax-Related Items legally due by
the Employee is and remains the Employee’s responsibility and that the Company
and/or the Subsidiary (a) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of the
Performance Shares, including the grant or vesting of the Performance Shares,
the subsequent sale of Shares acquired under the Plan and the receipt of
dividend equivalents, if any; and (b) do not commit to structure the terms of
the Award or any aspect of the Award to reduce or eliminate the Employee’s
liability for Tax-Related Items.
Prior to delivery of the Shares upon the vesting of the Performance Shares, the
Employee must pay or make adequate arrangements satisfactory to the Company
and/or its Subsidiary to satisfy all withholding obligations for Tax-Related
Items of the Company and/or its Subsidiary. No payment of Shares will be made to
the Employee (or his or her estate) for vested Performance Shares unless and
until satisfactory arrangements (as determined by the Administrator) have been
made by the Employee with respect to the payment of any Tax-Related Items which
the Company determines must be withheld or collected with respect to such
Performance Shares and such withholding for Tax-Related Items obligations has
been satisfied. If permissible under local law, the Company will withhold Shares
from the Shares issued upon vesting of the Performance Shares, provided that the
Company withholds only that number of Shares with a Fair Market Value equal to
the minimum required withholding amount for Tax-Related Items, determined on the
date that the amount for Tax-Related Items to be withheld. No fractional Shares
will be withheld or issued pursuant to the issuance of Performance Shares; any
additional withholding necessary will be

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done by the Company or the Subsidiary through the Employee’s paycheck or other
cash compensation paid to the Employee by the Company and/or the Subsidiary, if
permissible under local law. Further, the Employee agrees that the Company
and/or its Subsidiary may supplement the Share withholding through any of the
other means described in this section below. The Company or the Subsidiary, in
their discretion, may, and with respect to its executive officers (as determined
by the Company) will, if permissible under local law, withhold an amount equal
to two (2) times the Fair Market Value of a Share from the last paycheck or
other cash compensation due to the Employee prior to the vesting of the
Performance Shares. The Employee also agrees that the Company or the Subsidiary
may withhold amounts to satisfy Tax-Related Items from any paycheck or cash
compensation due to the Employee at any time. In the event the minimum
withholding requirements are not satisfied through the withholding of Shares or
through withholding from the Employee’s paycheck or other cash compensation, the
Employee authorizes the Company or the Subsidiary to arrange for the sale of
Shares to be received as a result of vesting of the Performance Shares (on the
Employee’s behalf and pursuant to the Employee’s authorization in this
Agreement), with the proceeds going toward satisfaction of the minimum
Tax-Related Items. The Employee shall pay to the Company and or the Subsidiary
any amount of Tax-Related Items that the Company may be required to withhold as
a result of the Employee’s participation in the Plan that cannot be satisfied by
one or more of the means previously described in this paragraph 8.
If the Employee fails to make satisfactory arrangements for payment of any
Tax-Related Items by the Due Date, which is ninety (90) days, or such other
period as required under U.K. law, after the event giving rise to the
Tax-Related Items, the Employee agrees that the amount of any uncollected
Tax-Related Items shall (assuming that the Employee is not an applicable
executive officer of the Company as the term is used in Section 402 of the U.S.
Sarbanes-Oxley Act of 2002) constitute a loan owed by the Employee to the
Employee’s employer, effective on the Due Date. The Employee agrees that the
loan will bear interest at the then-current HM Revenue and Customs Official Rate
and that it will be immediately due and repayable, and the Company and the
Employee’s employer may recover it any time thereafter by any of the means
referred to above.
By accepting this Award, the Employee expressly consents to the withholding or
sale of Shares and to any additional cash withholding as provided for in this
paragraph 8.
Joint Election
As a condition of the Performance Shares becoming vested and the Shares subject
to the Performance Shares being delivered to the Employee, the Employee agrees
to accept any liability for secondary Class 1 NICs (“Employer NICs”) which may
be payable by the Company or the Subsidiary with respect to the vesting of the
Performance Shares. To accomplish the foregoing, the Employee agrees to execute
a joint election between the Company and/or the Subsidiary and the Employee (the
“Election”), the form of such Election being formally approved by the HM Revenue
and Customs, and any other consent or elections required to accomplish the
transfer of the Employer NICs to the Employee. The Employee further agrees to
execute such other joint elections as may be required between the Employee and
any successor to the Company and/or the Subsidiary. If the Employee does not
enter into an Election prior to the first vesting date, or if the Election is
revoked at any time by the HM Revenue and Customs, the Performance Shares shall
cease vesting and shall become null and void without any liability to the
Company and/or the Subsidiary. The Employee further agrees that the Company
and/or the Subsidiary may collect the Employer NICs from the Employee by any of
the means set forth above.

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