Exhibit 10.2(a) ECHELON CORPORATION 1997 STOCK PLAN


     Exhibit
      10.2(a)

    ECHELON
      CORPORATION

     

    1997
      STOCK PLAN

     

    STOCK
      OPTION AGREEMENT -- EARLY EXERCISE

     

    Unless
      otherwise defined herein, the terms defined in the Plan shall have the same
      defined meanings in this Option Agreement.

     

    I. NOTICE
      OF STOCK OPTION GRANT

     

             

     

     
      
        	 Optionee's
                Name and Address:	 
	 	 
	 	 


      
  

     

    You
      have
      been granted an option to purchase Common Stock of the Company, subject to
      the
      terms and conditions of the Plan and this Option Agreement, as
      follows:

     

    
      	Grant
              Number	 
	
            	 
	Date
              of
              Grant	 
	 	 
	Vesting
              Commencement Date	 
	 	 
	Exercise
              Price per Share 	$
	 	 
	Total
              Number of Shares Granted	 
	 	 
	Total
              Exercise Price	$
	 	 
	 Type
              of Option:	 ____
              Incentive Stock Option
	 	 ____ Nonstatutory Stock
              Option
	 	 
	 Term/Expiration
              Date:	 Five
              Years/_________, 20__1 


    

             


    
       

    

      

    
      
        1. 
          Or earlier, pursuant to the termination period set forth
          below.

      

      
        
        

      

       

    



    Exercise
      and Vesting Schedule:

     

    This
      Option is exercisable immediately, in whole or in part, and shall vest according
      to the following vesting schedule:

     

    One-fourth
      of the Shares subject to the Option shall vest twelve months after the Vesting
      Commencement Date and thereafter one forty-eighth (1/48th) of the Shares subject
      to the Option shall vest on each monthly anniversary of the Vesting Commencement
      Date, subject to your continuing to be a Service Provider on such
      dates.

     

    Termination
      Period:

     

    This
      Option may be exercised for thirty (30) days after Optionee ceases to be a
      Service Provider. Upon the death or Disability of the Optionee, this Option
      may
      be exercised for twelve (12) months after Optionee ceases to be a Service
      Provider. In no event shall this Option be exercised later than the
      Term/Expiration Date as provided above.

     

    II. AGREEMENT

     

    1.  Grant
      of Option.
      The
      Plan Administrator of the Company hereby grants to the Optionee named in the
      Notice of Grant attached as Part I of this Agreement (the "Optionee") an option
      (the "Option") to purchase the number of Shares, as set forth in the Notice
      of
      Grant, at the exercise price per Share set forth in the Notice of Grant (the
      "Exercise Price"), subject to the terms and conditions of the Plan, which is
      incorporated herein by reference. Subject to Section 15(c) of the Plan, in
      the
      event of a conflict between the terms and conditions of the Plan and the terms
      and conditions of this Option Agreement, the terms and conditions of the Plan
      shall prevail. 

     

    If
      designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this
      Option is intended to qualify as an Incentive Stock Option under Section 422
      of
      the Code. However, if this Option is intended to be an Incentive Stock Option,
      to the extent that it exceeds the $100,000 rule of Code Section 422(d) it shall
      be treated as a Nonstatutory Stock Option ("NSO").

     

    2.  Exercise
      of Option.
      This
      Option shall be exercisable during its term in accordance with the provisions
      of
      Section 10 of the Plan as follows:

     

    (a)  Right
      to
      Exercise.

     

    (i)  Subject
      to subsections 2(a)(ii) and 2(a)(iii) below, this Option shall be exercisable
      cumulatively according to the vesting schedule set forth in the Notice of Grant.
      Alternatively, at the election of the Optionee, this option may be exercised
      in
      whole or in part at any time as to Shares which have not yet vested. Vested
      Shares shall not be subject to a repurchase option of the Company. 

     

    (ii)  As
      a
      condition to exercising this Option for unvested Shares, the Optionee shall
      execute the Restricted Stock Purchase Agreement attached hereto as Exhibit
      A-2.

     

    (iii)  This
      Option may not be exercised for a fraction of a Share.

     

    (b)  Method
      of Exercise.
      This
      Option is exercisable by delivery of an exercise notice in the form attached
      as
Exhibit
      A-1
      (the
      "Exercise Notice") which shall state the election to exercise the Option, the
      number of Shares in respect of which the Option is being exercised (the
      "Exercised Shares"), and such other representations and agreements as may be
      required by the Company pursuant to the provisions of the Plan. The Exercise
      Notice shall be completed by the Optionee and delivered to the Chief Financial
      Officer of the Company. The Exercise Notice shall be accompanied by payment
      of
      the aggregate Exercise Price as to all Exercised Shares. This Option shall
      be
      deemed to be exercised upon receipt by the Company of such fully executed
      Exercise Notice accompanied by such aggregate Exercise Price.

     

    No
      Shares
      shall be issued pursuant to the exercise of this Option unless such issuance
      and
      exercise complies with Applicable Laws. Assuming such compliance, for income
      tax
      purposes the Exercised Shares shall be considered transferred to the Optionee
      on
      the date on which the Option is exercised with respect to such Exercised
      Shares.

     

    3.  Method
      of Payment.
      Payment
      of the aggregate Exercise Price shall be by any of the following, or a
      combination thereof, at the election of the Optionee:

     

    (a)  cash;
      or

     

    (b)  check;
      or

     

    (c)  consideration
      received by the Company under a cashless exercise program implemented by the
      Company in connection with the Plan; or

     

    (d)  surrender
      of other Shares which (i) in the case of Shares acquired upon exercise of an
      option, have been owned by the Optionee for more than six (6) months on the
      date
      of surrender, and (ii) have a Fair Market Value on the date of surrender equal
      to the aggregate Exercise Price of the Exercised Shares; or

     

    4.  Non-Transferability
      of Option.
      This
      Option may not be transferred in any manner otherwise than by will or by the
      laws of descent or distribution and may be exercised during the lifetime of
      Optionee only by Optionee. The terms of the Plan and this Option Agreement
      shall
      be binding upon the executors, administrators, heirs, successors and assigns
      of
      the Optionee.

     

    5.  Term
      of Option.
      This
      Option may be exercised only within the term set out in the Notice of Grant,
      and
      may be exercised during such term only in accordance with the Plan and the
      terms
      of this Option Agreement.

     

    6.  Tax
      Consequences.
      Some of
      the federal tax consequences relating to this Option, as of the date of this
      Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE
      TAX
      LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX
      ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

     

    (a)  Exercising
      the Option.

     

    (i)  Nonstatutory
      Stock Option.
      The
      Optionee may incur regular federal income tax liability upon exercise of a
      NSO.
      The Optionee will be treated as having received compensation income (taxable
      at
      ordinary income tax rates) equal to the excess, if any, of the Fair Market
      Value
      of the Exercised Shares on the date of exercise over their aggregate Exercise
      Price. If the Optionee is an Employee or a former Employee, the Company will
      be
      required to withhold from his or her compensation or collect from Optionee
      and
      pay to the applicable taxing authorities an amount in cash equal to a percentage
      of this compensation income at the time of exercise, and may refuse to honor
      the
      exercise and refuse to deliver Shares if such withholding amounts are not
      delivered at the time of exercise.

     

    (ii)  Incentive
      Stock Option.
      If this
      Option qualifies as an ISO, the Optionee will have no regular federal income
      tax
      liability upon its exercise, although the excess, if any, of the Fair Market
      Value of the Exercised Shares on the date of exercise over their aggregate
      Exercise Price will be treated as an adjustment to alternative minimum taxable
      income for federal tax purposes and may subject the Optionee to alternative
      minimum tax in the year of exercise. In the event that the Optionee ceases
      to be
      an Employee but remains a Service Provider, any Incentive Stock Option of the
      Optionee that remains unexercised shall cease to qualify as an Incentive Stock
      Option and will be treated for tax purposes as a Nonstatutory Stock Option
      on
      the date three (3) months and one (1) day following such change of
      status.

     

    (b)  Disposition
      of Shares.
      

     

    (i)  NSO.
      If the
      Optionee holds NSO Shares for at least one year, any gain realized on
      disposition of the Shares will be treated as long-term capital gain for federal
      income tax purposes.

     

    (ii)  ISO.
      If the
      Optionee holds ISO Shares for at least one year after exercise and two years
      after the grant date, any gain realized on disposition of the Shares will be
      treated as long-term capital gain for federal income tax purposes. If the
      Optionee disposes of ISO Shares within one year after exercise or two years
      after the grant date, any gain realized on such disposition will be treated
      as
      compensation income (taxable at ordinary income rates) to the extent of the
      excess, if any, of the lesser of (A) the difference between the Fair Market
      Value of the Shares acquired on the date of exercise and the aggregate Exercise
      Price, or (B) the difference between the sale price of such Shares and the
      aggregate Exercise Price. Any additional gain will be taxed as capital gain,
      short-term or long-term depending on the period that the ISO Shares were
      held.

     

    (c)  Notice
      of Disqualifying Disposition of ISO Shares.
      If the
      Optionee sells or otherwise disposes of any of the Shares acquired pursuant
      to
      an ISO on or before the later of (i) two years after the grant date, or (ii)
      one
      year after the exercise date, the Optionee shall immediately notify the Company
      in writing of such disposition. The Optionee agrees that he or she may be
      subject to income tax withholding by the Company on the compensation income
      recognized from such early disposition of ISO Shares by payment in cash or
      out
      of the current earnings paid to the Optionee.

     

    (d)  Section
      83(b) Election for Unvested Shares Purchased Pursuant to Options.
      With
      respect to the exercise of an Option for unvested Shares, an election may be
      filed by the Optionee with the Internal Revenue Service, within
      30 days
      of the
      purchase of the Shares, electing pursuant to Section 83(b) of the Code to be
      taxed currently on any difference between the purchase price of the Shares
      and
      their Fair Market Value on the date of purchase. In the case of a Nonstatutory
      Stock Option, this will result in a recognition of taxable income to the
      Optionee on the date of exercise, measured by the excess, if any, of the fair
      market value of the Shares, at the time the Option is exercised over the
      purchase price for the Shares. Absent such an election, taxable income will
      be
      measured and recognized by Optionee at the time or times on which the Company's
      Repurchase Option lapses. In the case of an Incentive Stock Option, such an
      election will result in a recognition of income to the Optionee for alternative
      minimum tax purposes on the date of exercise, measured by the excess, if any,
      of
      the fair market value of the Shares, at the time the option is exercised, over
      the purchase price for the Shares. Absent such an election, alternative minimum
      taxable income will be measured and recognized by Optionee at the time or times
      on which the Company's Repurchase Option lapses. Optionee is strongly encouraged
      to seek the advice of his or her own tax consultants in connection with the
      purchase of the Shares and the advisability of filing of the Election under
      Section 83(b) of the Code. A form of Election under Section 83(b) is attached
      hereto as Exhibit
      A-6
      for
      reference. 

     

    OPTIONEE
      ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S
      TO
      FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF OPTIONEE REQUESTS THE
      COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON OPTIONEE'S
      BEHALF.

     

    7.  Entire
      Agreement; Governing Law.
      The
      Plan is incorporated herein by reference. The Plan and this Option Agreement
      constitute the entire agreement of the parties with respect to the subject
      matter hereof and supersede in their entirety all prior undertakings and
      agreements of the Company and Optionee with respect to the subject matter
      hereof, and may not be modified adversely to the Optionee's interest except
      by
      means of a writing signed by the Company and Optionee. This agreement is
      governed by the internal substantive laws, but not the choice of law rules,
      of
      California.

     

    8.  NO
      GUARANTEE OF CONTINUED SERVICE.
      OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
      VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
      AT
      THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
      AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND
      AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
      VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
      PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD,
      FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR
      THE
      COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER
      AT
      ANY TIME, WITH OR WITHOUT CAUSE.

     

    By
      your
      signature and the signature of the Company's representative below, you and
      the
      Company agree that this Option is granted under and governed by the terms and
      conditions of the Plan and this Option Agreement. Optionee has reviewed the
      Plan
      and this Option Agreement in their entirety, has had an opportunity to obtain
      the advice of counsel prior to executing this Option Agreement and fully
      understands all provisions of the Plan and Option Agreement. Optionee hereby
      agrees to accept as binding, conclusive and final all decisions or
      interpretations of the Administrator upon any questions relating to the Plan
      and
      Option Agreement. Optionee further agrees to notify the Company upon any change
      in the residence address indicated below.

     

    


    OPTIONEE:     ECHELON
      CORPORATION

    


     

    Signature     By

    


    Vice
      President   

    Print
      Name     Title

    


     

    Residence
      Address:

     

     

     

    


    

      

      
         

        1
          Or
          earlier, pursuant to the termination period set forth
          below.


      

    

     

    
      
        
          

        

      

      
        EXHIBIT
          A-1

      

    

     

    1997
      STOCK PLAN

     

    EXERCISE
      NOTICE

    


    


    Echelon
      Corporation

    550
      Meridian Avenue

    San
      Jose,
      CA 95126

     

    Attention:
      Chief Financial Officer

     

    1.  Exercise
      of Option.
      Effective as of today, ___________, ____, the undersigned ("Purchaser") hereby
      elects to purchase _________ shares (the "Shares") of the Common Stock of
      Echelon Corporation (the "Company") under and pursuant to the 1997 Stock Plan
      (the "Plan") and the Stock Option Agreement -- Early Exercise dated __________,
      ____ (the "Option Agreement"). The purchase price for the Shares shall be
      $____________, as required by the Option Agreement.

     

    2.  Delivery
      of Payment.
      Purchaser herewith delivers to the Company the full purchase price for the
      Shares.

     

    3.  Representations
      of Purchaser.
      Purchaser acknowledges that Purchaser has received, read and understood the
      Plan
      and the Option Agreement and agrees to abide by and be bound by their terms
      and
      conditions. 

    4.  Rights
      as Stockholder.
      Until
      the issuance (as evidenced by the appropriate entry on the books of the Company
      or of a duly authorized transfer agent of the Company) of the Shares, no right
      to vote or receive dividends or any other rights as a shareholder shall exist
      with respect to the Optioned Stock, notwithstanding the exercise of the Option.
      The Shares so acquired shall be issued to the Optionee as soon as practicable
      after exercise of the Option. No adjustment will be made for a dividend or
      other
      right for which the record date is prior to the date of issuance, except as
      provided in Section 13 of the Plan.

     

    5.  Tax
      Consultation.
      Purchaser understands that Purchaser may suffer adverse tax consequences as
      a
      result of Purchaser's purchase or disposition of the Shares. Purchaser
      represents that Purchaser has consulted with any tax consultants Purchaser
      deems
      advisable in connection with the purchase or disposition of the Shares and
      that
      Purchaser is not relying on the Company for any tax advice.

     

    6.  Entire
      Agreement; Governing Law.
      The
      Plan and Option Agreement are incorporated herein by reference. This Agreement,
      the Plan and the Option Agreement constitute the entire agreement of the parties
      with respect to the subject matter hereof and supersede in their entirety all
      prior undertakings and agreements of the Company and Purchaser with respect
      to
      the subject matter hereof, and may not be modified adversely to the Purchaser's
      interest except by means of a writing signed by the Company and Purchaser.
      This
      agreement is governed by the internal substantive laws, but not the choice
      of
      law rules, of California.

     

    Submitted
      by:     Accepted
      by:

     

     

    PURCHASER:    ECHELON
      CORPORATION

    


    


     

    Signature     By

    


     

    Print
      Name     Its

    


     

    Address:     Address:

     

    Echelon
      Corporation

    550
      Meridian Avenue

    San
      Jose,
      CA 95126

    


     

    Date
      Received

     

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A-2

     

    1997
      STOCK PLAN

     

    RESTRICTED
      STOCK PURCHASE AGREEMENT

     

    


    THIS
      AGREEMENT is made between ____________________________________ (the "Purchaser")
      and Echelon Corporation(the "Company") as of __________________,
      _____.

     

    RECITALS

     

    (1) Pursuant
      to the exercise of the stock option (grant number ____) granted to Purchaser
      under the Company's 1997 Stock Plan (the "Plan") and pursuant to the Stock
      Option Agreement (the "Option Agreement") dated ___________, _____ by and
      between the Company and Purchaser with respect to such grant, which Plan and
      Option Agreement are hereby incorporated by reference, Purchaser has elected
      to
      purchase _________ of those shares which have not become vested under the
      vesting schedule set forth in the Option Agreement ("Unvested Shares"). The
      Unvested Shares and the shares subject to the Option Agreement which have become
      vested are sometimes collectively referred to herein as the
      "Shares".

     

    (2) As
      required by the Option Agreement, as a condition to Purchaser's election to
      exercise the option, Purchaser must execute this Restricted Stock Purchase
      Agreement, which sets forth the rights and obligations of the parties with
      respect to Shares acquired upon exercise of the Option.

     

    1.  Repurchase
      Option.

     

    (a)  If
      Purchaser's status as a Service Provider is terminated for any reason, including
      for cause, death, and disability, the Company shall have the right and option
      to
      purchase from Purchaser, or Purchaser's personal representative, as the case
      may
      be, all of the Purchaser's Unvested Shares as of the date of such termination
      at
      the price paid by the Purchaser for such Shares (the "Repurchase
      Option").

     

    (b)  Upon
      the
      occurrence of a termination, the Company may exercise its Repurchase Option
      by
      delivering personally or by registered mail, to Purchaser (or his transferee
      or
      legal representative, as the case may be), within sixty (60) days of the
      termination, a notice in writing indicating the Company's intention to exercise
      the Repurchase Option and setting forth a date for closing not later than thirty
      (30) days from the mailing of such notice. The closing shall take place at
      the
      Company's office. At the closing, the holder of the certificates for the
      Unvested Shares being transferred shall deliver the stock certificate or
      certificates evidencing the Unvested Shares, and the Company shall deliver
      the
      purchase price therefor.

     

    (c)  At
      its
      option, the Company may elect to make payment for the Unvested Shares to a
      bank
      selected by the Company. The Company shall avail itself of this option by a
      notice in writing to Purchaser stating the name and address of the bank, date
      of
      closing, and waiving the closing at the Company's office.

     

    (d)  If
      the
      Company does not elect to exercise the Repurchase Option conferred above by
      giving the requisite notice within sixty (60) days following the termination,
      the Repurchase Option shall terminate.

     

    (e)  The
      Repurchase Option shall terminate in accordance with the Vesting Schedule in
      Purchaser's Option Agreement.

     

    2.  Transferability
      of the Shares; Escrow.

     

    (a)  Purchaser
      hereby authorizes and directs the secretary of the Company, or such other person
      designated by the Company, to transfer the Unvested Shares as to which the
      Repurchase Option has been exercised from Purchaser to the Company.


     

    (b)  To
      insure
      the availability for delivery of Purchaser's Unvested Shares upon repurchase
      by
      the Company pursuant to the Repurchase Option under Section 1, Purchaser hereby
      appoints the secretary, or any other person designated by the Company as escrow
      agent, as its attorney-in-fact to sell, assign and transfer unto the Company,
      such Unvested Shares, if any, repurchased by the Company pursuant to the
      Repurchase Option and shall, upon execution of this Agreement, deliver and
      deposit with the secretary of the Company, or such other person designated
      by
      the Company, the share certificates representing the Unvested Shares, together
      with the stock assignment duly endorsed in blank, attached hereto as
Exhibit
      A-3.
      The
      Unvested Shares and stock assignment shall be held by the secretary in escrow,
      pursuant to the Joint Escrow Instructions of the Company and Purchaser attached
      as Exhibit
      A-4
      hereto,
      until the Company exercises its purchase right as provided in Section 1, until
      such Unvested Shares are vested, or until such time as this Agreement no longer
      is in effect. As a further condition to the Company's obligations under this
      Agreement, the spouse of the Purchaser, if any, shall execute and deliver to
      the
      Company the Consent of Spouse attached hereto as Exhibit
      A-5.
      Upon
      vesting of the Unvested Shares, the escrow agent shall promptly deliver to
      the
      Purchaser the certificate or certificates representing such Shares in the escrow
      agent's possession belonging to the Purchaser, and the escrow agent shall be
      discharged of all further obligations hereunder; provided, however, that the
      escrow agent shall nevertheless retain such certificate or certificates as
      escrow agent if so required pursuant to other restrictions imposed pursuant
      to
      this Agreement.

     

    (c)  The
      Company, or its designee, shall not be liable for any act it may do or omit
      to
      do with respect to holding the Shares in escrow and while acting in good faith
      and in the exercise of its judgment.

     

    (d)  Transfer
      or sale of the Shares is subject to restrictions on transfer imposed by any
      applicable state and federal securities laws. Any transferee shall hold such
      Shares subject to all the provisions hereof and the Exercise Notice executed
      by
      the Purchaser with respect to any Unvested Shares purchased by Purchaser and
      shall acknowledge the same by signing a copy of this Agreement.

     

    3.  Ownership,
      Voting Rights, Duties.
      This
      Agreement shall not affect in any way the ownership, voting rights or other
      rights or duties of Purchaser, except as specifically provided herein.


     

    4.  Legends.
      The
      share certificate evidencing the Shares issued hereunder shall be endorsed
      with
      the following legend (in addition to any legend required under applicable state
      securities laws):

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
      UPON
      TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE
      COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY
      OF
      THE COMPANY.

     

    5.  Adjustment
      for Stock Split.
      All
      references to the number of Shares and the purchase price of the Shares in
      this
      Agreement shall be appropriately adjusted to reflect any stock split, stock
      dividend or other change in the Shares which may be made by the Company after
      the date of this Agreement.

     

    6.  Notices.
      Notices
      required hereunder shall be given in person or by registered mail to the address
      of Purchaser shown on the records of the Company, and to the Company at their
      respective principal executive offices.

     

    7.  Survival
      of Terms.
      This
      Agreement shall apply to and bind Purchaser and the Company and their respective
      permitted assignees and transferees, heirs, legatees, executors, administrators
      and legal successors.

     

    8.  Section
      83(b) Election.
      Purchaser hereby acknowledges that he or she has been informed that, with
      respect to the exercise of an Option for unvested Shares, an election may be
      filed by the Purchaser with the Internal Revenue Service, within
      30 days
      of the
      purchase of the Shares, electing pursuant to Section 83(b) of the Code to be
      taxed currently on any difference between the purchase price of the Shares
      and
      their Fair Market Value on the date of purchase. In the case of a Nonstatutory
      Stock Option, this will result in a recognition of taxable income to the
      Purchaser on the date of exercise, measured by the excess, if any, of the fair
      market value of the Shares, at the time the Option is exercised over the
      purchase price for the Shares. Absent such an election, taxable income will
      be
      measured and recognized by Purchaser at the time or times on which the Company's
      Repurchase Option lapses. In the case of an Incentive Stock Option, such an
      election will result in a recognition of income to the Purchaser for alternative
      minimum tax purposes on the date of exercise, measured by the excess, if any,
      of
      the fair market value of the Shares, at the time the option is exercised, over
      the purchase price for the Shares. Absent such an election, alternative minimum
      taxable income will be measured and recognized by Purchaser at the time or
      times
      on which the Company's Repurchase Option lapses. Purchaser is strongly
      encouraged to seek the advice of his or her own tax consultants in connection
      with the purchase of the Shares and the advisability of filing of the Election
      under Section 83(b) of the Code. A form of Election under Section 83(b) is
      attached hereto as Exhibit
      A-6
      for
      reference. 

     

    PURCHASER
      ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S
      TO
      FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF PURCHASER REQUESTS THE
      COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON PURCHASER'S
      BEHALF.

     

    9.  Representations.
      Purchaser has reviewed with his own tax advisors the federal, state, local
      and
      foreign tax consequences of this investment and the transactions contemplated
      by
      this Agreement. Purchaser is relying solely on such advisors and not on any
      statements or representations of the Company or any of its agents. Purchaser
      understands that he (and not the Company) shall be responsible for his own
      tax
      liability that may arise as a result of this investment or the transactions
      contemplated by this Agreement.

     

    10.  Governing
      Law.
      This
      Agreement shall be governed by the internal substantive laws, but not the choice
      of law rules, of California.

     

    Purchaser
      represents that he has read this Agreement and is familiar with its terms and
      provisions. Purchaser hereby agrees to accept as binding, conclusive and final
      all decisions or interpretations of the Board upon any questions arising under
      this Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    


     

    IN
      WITNESS WHEREOF, this Agreement is deemed made as of the date first set forth
      above.

     

    OPTIONEE:     ECHELON
      CORPORATION

    


    


     

    Signature     By

    


     

    Print
      Name     Title

     

    


     

    Residence
      Address:

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      EXHIBIT
        A-3

    

    ASSIGNMENT
      SEPARATE FROM CERTIFICATE

    


    


    FOR
      VALUE
      RECEIVED I, __________________________, hereby sell, assign and transfer unto
       
      (__________) shares of the Common Stock of Echelon Corporation standing in
      my
      name of the books of said corporation represented by Certificate No. _____
      herewith and do hereby irrevocably constitute and appoint ___________________
      to
      transfer the said stock on the books of the within named corporation with full
      power of substitution in the premises.

     

    This
      Stock Assignment may be used only in accordance with the Restricted Stock
      Purchase Agreement (the "Agreement") between Echelon Corporation and the
      undersigned dated ______________, _____.

     

    


     

    Dated:
      _______________, _____

     

    


     

    Signature:______________________________

    


    


    


    


    


    
 

    


    


    


    


    


    INSTRUCTIONS:
      Please
      do not fill in any blanks other than the signature line. The purpose of this
      assignment is to enable the Company to exercise the Repurchase Option, as set
      forth in the Agreement, without requiring additional signatures on the part
      of
      the Purchaser.

    
      
         

      

      
         

        
          

        

      

      
         

      

    



     

    EXHIBIT
      A-4

     

    JOINT
      ESCROW INSTRUCTIONS

     

    _____________,
      _____

    


    Corporate
      Assistant Secretary

    Echelon
      Corporation

    550
      Meridian Avenue

    San
      Jose,
      CA 95126

     

    Dear
      _______________:

     

    As
      Escrow
      Agent for both Echelon Corporation, a Delaware corporation (the "Company"),
      and
      the undersigned purchaser of stock of the Company (the "Purchaser"), you are
      hereby authorized and directed to hold the documents delivered to you pursuant
      to the terms of that certain Restricted Stock Purchase Agreement ("Agreement")
      between the Company and the undersigned, in accordance with the following
      instructions:

     

     

    1.  In
      the
      event the Company and/or any assignee of the Company (referred to collectively
      as the "Company") exercises the Company's Repurchase Option set forth in the
      Agreement, the Company shall give to Purchaser and you a written notice
      specifying the number of shares of stock to be purchased, the purchase price,
      and the time for a closing hereunder at the principal office of the Company.
      Purchaser and the Company hereby irrevocably authorize and direct you to close
      the transaction contemplated by such notice in accordance with the terms of
      said
      notice.

     

    2.  At
      the
      closing, you are directed (a) to date the stock assignments necessary for the
      transfer in question, (b) to fill in the number of shares being transferred,
      and
      (c) to deliver same, together with the certificate evidencing the shares of
      stock to be transferred, to the Company or its assignee, against the
      simultaneous delivery to you of the purchase price (by cash, a check, or some
      combination thereof) for the number of shares of stock being purchased pursuant
      to the exercise of the Company's Repurchase Option.

     

    3.  Purchaser
      irrevocably authorizes the Company to deposit with you any certificates
      evidencing shares of stock to be held by you hereunder and any additions and
      substitutions to said shares as defined in the Agreement. Purchaser does hereby
      irrevocably constitute and appoint you as Purchaser's attorney-in-fact and
      agent
      for the term of this escrow to execute with respect to such securities all
      documents necessary or appropriate to make such securities negotiable and to
      complete any transaction herein contemplated, including but not limited to
      the
      filing with any applicable state blue sky authority of any required applications
      for consent to, or notice of transfer of, the securities. Subject to the
      provisions of this paragraph 3, Purchaser shall exercise all rights and
      privileges of a stockholder of the Company while the stock is held by
      you.

     

    4.  Upon
      written request of the Purchaser, but no more than once per calendar year,
      unless the Company's Repurchase Option has been exercised, you shall deliver
      to
      Purchaser a certificate or certificates representing so many shares of stock
      as
      are not then subject to the Company's Repurchase Option. Within 120 days after
      Purchaser ceases to be a Service Provider, you shall deliver to Purchaser a
      certificate or certificates representing the aggregate number of shares held
      or
      issued pursuant to the Agreement and not purchased by the Company or its
      assignees pursuant to exercise of the Company's Repurchase Option.

     

    5.  If
      at the
      time of termination of this escrow you should have in your possession any
      documents, securities, or other property belonging to Purchaser, you shall
      deliver all of the same to Purchaser and shall be discharged of all further
      obligations hereunder.

     

    6.  Your
      duties hereunder may be altered, amended, modified or revoked only by a writing
      signed by all of the parties hereto.

     

    7.  You
      shall
      be obligated only for the performance of such duties as are specifically set
      forth herein and may rely and shall be protected in relying or refraining from
      acting on any instrument reasonably believed by you to be genuine and to have
      been signed or presented by the proper party or parties. You shall not be
      personally liable for any act you may do or omit to do hereunder as Escrow
      Agent
      or as attorney-in-fact for Purchaser while acting in good faith, and any act
      done or omitted by you pursuant to the advice of your own attorneys shall be
      conclusive evidence of such good faith.

     

    8.  You
      are
      hereby expressly authorized to disregard any and all warnings given by any
      of
      the parties hereto or by any other person or corporation, excepting only orders
      or process of courts of law, and are hereby expressly authorized to comply
      with
      and obey orders, judgments or decrees of any court. In case you obey or comply
      with any such order, judgment or decree, you shall not be liable to any of
      the
      parties hereto or to any other person, firm or corporation by reason of such
      compliance, notwithstanding any such order, judgment or decree being
      subsequently reversed, modified, annulled, set aside, vacated or found to have
      been entered without jurisdiction.

     

    9.  You
      shall
      not be liable in any respect on account of the identity, authorities or rights
      of the parties executing or delivering or purporting to execute or deliver
      the
      Agreement or any documents or papers deposited or called for
      hereunder.

     

    10.  You
      shall
      not be liable for the outlawing of any rights under the statute of limitations
      with respect to these Joint Escrow Instructions or any documents deposited
      with
      you.

     

    11.  You
      shall
      be entitled to employ such legal counsel and other experts as you may deem
      necessary properly to advise you in connection with your obligations hereunder,
      may rely upon the advice of such counsel, and may pay such counsel reasonable
      compensation therefor.

     

    12.  Your
      responsibilities as Escrow Agent hereunder shall terminate if you shall cease
      to
      be an officer or agent of the Company or if you shall resign by written notice
      to each party. In the event of any such termination, the Company shall appoint
      a
      successor Escrow Agent.

     

    13.  If
      you
      reasonably require other or further instruments in connection with these Joint
      Escrow Instructions or obligations in respect hereto, the necessary parties
      hereto shall join in furnishing such instruments.

     

    14.  It
      is
      understood and agreed that should any dispute arise with respect to the delivery
      and/or ownership or right of possession of the securities held by you hereunder,
      you are authorized and directed to retain in your possession without liability
      to anyone all or any part of said securities until such disputes shall have
      been
      settled either by mutual written agreement of the parties concerned or by a
      final order, decree or judgment of a court of competent jurisdiction after
      the
      time for appeal has expired and no appeal has been perfected, but you shall
      be
      under no duty whatsoever to institute or defend any such
      proceedings.

     

    15.  Any
      notice required or permitted hereunder shall be given in writing and shall
      be
      deemed effectively given upon personal delivery or upon deposit in the United
      States Post Office, by registered or certified mail with postage and fees
      prepaid, addressed to each of the other parties thereunto entitled at the
      following addresses or at such other addresses as a party may designate by
      ten
      days' advance written notice to each of the other parties hereto.

    


    


    COMPANY:    Echelon
      Corporation

    550
      Meridian Avenue

    San
      Jose,
      CA 95126

    Attention:
      Vice President of Finance

    


    PURCHASER:         

     

     

     

     

    


    ESCROW
      AGENT:    Corporate
      Assistant Secretary

    Echelon
      Corporation

    550
      Meridian Avenue

    San
      Jose,
      CA 95126

     

    16.  By
      signing these Joint Escrow Instructions, you become a party hereto only for
      the
      purpose of said Joint Escrow Instructions; you do not become a party to the
      Agreement.

     

    17.  This
      instrument shall be binding upon and inure to the benefit of the parties hereto,
      and their respective successors and permitted assigns.

     

    18.  These
      Joint Escrow Instructions shall be governed by, and construed and enforced
      in
      accordance with, the internal substantive laws, but not the choice of law rules,
      of California.

     

    Very
      truly yours,

     

    ECHELON
      CORPORATION

    


    


     

    By

    


     

    Title

     

    


     

     

    PURCHASER:

     

     

     

    Signature

    


     

    Print
      Name

     

    ESCROW
      AGENT:

     

    


    _____________________________________

    Corporate
      Assistant Secretary

     

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


     

    EXHIBIT
      A-5

     

    CONSENT
      OF SPOUSE

     

    


    I,
      _________________________, spouse of ________________________, have read and
      approve the foregoing Restricted Stock Purchase Agreement (the "Agreement").
      In
      consideration of the Company's grant to my spouse of the right to purchase
      shares of Echelon Corporation, as set forth in the Agreement, I hereby appoint
      my spouse as my attorney-in-fact in respect to the exercise of any rights under
      the Agreement and agree to be bound by the provisions of the Agreement insofar
      as I may have any rights in said Agreement or any shares issued pursuant thereto
      under the community property laws or similar laws relating to marital property
      in effect in the state of our residence as of the date of the signing of the
      foregoing Agreement.

     

    Dated:
      _______________, _____

    


    


    


    __________________________________________

    Signature
      of Spouse

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    



    EXHIBIT
      A-6

     

    ELECTION
      UNDER SECTION 83(b)

    OF
      THE
      INTERNAL REVENUE CODE OF 1986

     

    The
      undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal
      Revenue Code of 1986, as amended, to include in taxpayer's gross income for
      the
      current taxable year the amount of any compensation taxable to taxpayer in
      connection with his or her receipt of the property described below:

     

    1. The
      name,
      address, taxpayer identification number and taxable year of the undersigned
      are
      as follows:

     

     

    NAME:   
      TAXPAYER:    SPOUSE:
      

     

    ADDRESS:  

     

    IDENTIFICATION
      NO.: TAXPAYER:    SPOUSE:
      

     

    TAXABLE
      YEAR:

     

     

    2. The
      property with respect to which the election is made is described as follows:
      ___________ shares (the "Shares") of the Common Stock of Echelon Corporation
      (the "Company").

     

    3. The
      date
      on which the property was transferred is: __________________,
      _____.

     

    4. The
      property is subject to the following restrictions:

     

    The
      Shares may be repurchased by the Company, or its assignee, upon certain events.
      This right lapses with regard to a portion of the Shares based on the continued
      performance of services by the taxpayer over time.

     

    5. The
      fair
      market value at the time of transfer, determined without regard to any
      restriction other than a restriction which by its terms will never lapse, of
      such property is:

     

    $__________________.

     

    6. The
      amount (if any) paid for such property is:

     

    $__________________.

     

    The
      undersigned has submitted a copy of this statement to the person for whom the
      services were performed in connection with the undersigned's receipt of the
      above-described property. The transferee of such property is the person
      performing the services in connection with the transfer of said
      property.

     

    The
      undersigned understands that the foregoing election may not be revoked except
      with the consent of the Commissioner.

     

    Dated:___________________,
      _______ ________________________________________________

    Taxpayer

     

    The
      undersigned spouse of taxpayer joins in this election.

     

    Dated:___________________,
      _______ ________________________________________________

    Spouse
      of
      Taxpayer