Document:

Exhibit 10.2(e) ECHELON CORPORATION PERFORMANCE SHARE AGREEMENT FOR NON-U.S.
      EMPLOYEES

    Exhibit
      10.2(e)

    ECHELON
      CORPORATION

     

    Performance
      Share Agreement

    for
      Non-U.S. Employees

     

     

    TERMS
      AND CONDITIONS OF PERFORMANCE SHARES

     

    By
      executing the Grant Acceptance process and using the services on this Smith
      Barney Benefit Access® website, you, the Employee and Echelon Corporation (the
“Company”) agree that this Award is granted under and governed by the terms and
      conditions of the Company’s 1997 Plan (the “Plan”) and the Terms and Conditions
      of Performance Shares (the “Agreement”), which may be amended or modified from
      time to time. Employee has reviewed the Plan and this Agreement in its entirety,
      has had an opportunity to obtain the advice of counsel prior to accepting this
      Award and fully understands provisions of the Plan and this Agreement. Employee
      hereby agrees to accept as binding, conclusive and final all decisions or
      interpretations of the Administrator upon any questions relating to the Plan
      and
      this Agreement. Employee further agrees to promptly notify the Company upon
      any
      change in the Employee’s residence address. [PLEASE BE SURE TO READ ALL OF THE
      TERMS AND CONDITIONS (IF ANY) AND APPENDICES, (IF ANY) FOR YOUR COUNTRY, THAT
      CONTAIN THE SPECIFIC TERMS AND CONDITIONS OF THIS AWARD.]

     

    ____________________

     

    The
      Company hereby grants you, the Employee, an award (the “Award”) of Performance
      Shares under the Plan. The Award is subject to the provisions of the Plan and
      the Agreement, including Appendices, if any, for the Employee’s country.

     

    1. Grant.
      The
      Company hereby grants Performance Shares to the Employee under the Plan subject
      to all of the terms and conditions in the Plan and this Agreement, including
      Appendices, if any, for the Employee’s country. 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 its Subsidiary.

     

    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. 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.
      Except
      as otherwise provided 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 Summary of Grant, 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.

     

    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.
      Any
      Performance Shares that vest in accordance with paragraphs 3 or 4 will be paid
      to the Employee (or in the event of the Employee’s death, to his or her estate)
      in Shares which have an aggregate Fair Market Value equal to the value of the
      earned Performance Shares at vesting as soon as practicable following the date
      of vesting, subject to paragraph 8. 

     

    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. Withholding
      of Taxes.
      Regardless of any action the Company or its Subsidiary takes with respect to
      any
      or all income tax, social insurance, 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.

     

    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 obligations of the Company and/or the Subsidiary with respect to the
      issuance of such Shares. 

     

    In
      this
      regard, the Employee authorizes the Company and/or its Subsidiary to withhold
      Shares from 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 is to be determined. If the Company or
      the
      Employer satisfies the obligation for Tax-Related Items by withholding a number
      of whole Shares as described herein, the Employee is deemed to have been issued
      the full number of Shares subject to the Award of Performance Shares,
      notwithstanding that a number of the Shares is held back solely for the purpose
      of paying the Tax-Related Items due as a result of the vesting of the
      Performance Shares. 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 the event that the cash amounts withheld by the Company or the Subsidiary
      exceed the Tax-Related Items that are due after the automatic withholding of
      whole Shares, the Company or the Subsidiary will reimburse the Employee for
      the
      excess amounts. 

     

    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 of the Performance Shares (on the
      Employee’s behalf and at the Employee’s discretion pursuant to the Employee’s
      authorization in this Agreement), 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 or
      its
      Subsidiary.

     

    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.

     

    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 Subsidiary employing
      the
      Employee, as the case may be, and the Company, or the Subsidiary, 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 at any time for any reason
      whatsoever, with or without good cause. The transactions contemplated hereunder,
      the Employee’s participation in the Plan and the vesting schedule set forth in
      the Summary of Grant do not constitute an express or implied promise of
      continued employment for any period of time. In the event that the Employee
      is
      not an employee of the Company, the grant will not be interpreted to form an
      employment contract with the Employee’s employer or any Subsidiary or affiliate
      of the Company.

     

    11. Nature
      of Grant.
      In
      accepting the Performance Shares, the Employee acknowledges 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; 

     

    (b) all
      decisions with respect to future Awards of Performance Shares, if any, will
      be
      at the sole discretion of the Company; 

     

    (c) the
      Employee’s participation in the Plan is voluntary; 

     

    (d) Performance
      Shares are extraordinary items that do not constitute regular compensation
      for
      services rendered to the Company or its Subsidiary, and that is outside the
      scope of the Employee’s employment contract, if any; 

     

    (e) the
      Award
      is not part of normal or expected compensation or salary for any purposes,
      including, but not limited to, calculating any severance, resignation,
      redundancy or end of service payments, bonuses, long-service awards, pension
      or
      retirement or welfare benefits or similar payments and in no event should be
      considered as compensation for, or relating in any way to, past services for
      the
      Company or its Subsidiary; 

     

    (f) the
      future value of the underlying Shares is unknown and cannot be predicted with
      certainty; 

     

    (g) in
      consideration of the Award, no claim or entitlement to compensation or damages
      shall arise from termination of the Award or any diminution in value of the
      Performance Shares or Shares received when the Performance Shares vest resulting
      from termination of employment by the Company or its Subsidiary (for any reason
      whatsoever and whether or not in breach of local labor laws), and the Employee
      irrevocably releases the Company and/or its Subsidiary from any such claim
      that
      may arise; if, notwithstanding the foregoing, any such claim is found by a
      court
      of competent jurisdiction to have arisen, then, by signing this Agreement,
      the
      Employee shall be deemed irrevocably to have waived his or her entitlement
      to
      pursue such claim; 

     

    (h) in
      the
      event of involuntary termination of the Employee’s employment (whether or not in
      breach of local labor laws), the Employee’s right to receive Performance Shares
      and vest under the Plan, if any, will terminate effective as of the date that
      the Employee is no longer actively employed and will not be extended by any
      notice period mandated under local law (e.g.,
      active
      employment would not include a period of “garden leave” or similar period
      pursuant to local law); the Committee shall have the exclusive discretion to
      determine when the Employee is no longer actively employed for purposes of
      the
      Award; 

     

    (i) 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; and

     

    (j) the
      Employee is hereby advised to consult with his or her own personal tax, legal
      and financial advisors regarding the Employee’s participation in the Plan before
      taking any action related to the Plan.

     

    12. 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 among, as applicable, the Employee’s
      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
      may be transferred to any third parties assisting in the implementation,
      administration and management of the Plan, that these recipients may be located
      in the Employee’s country, or elsewhere, and that the recipient’s country 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
      recipients to receive, possess, use, retain and transfer the Personal Data,
      in
      electronic or other form, for the purposes 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. The Employee
      understands that refusal or withdrawal of consent may affect the Employee’s
      ability to realize benefits from the Award. 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.

     

    13. Address
      for Notices.
      Any
      notice to be given to the Company under the terms of this Agreement will be
      addressed to the Company, in 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.

     

    14. 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. 

     

    15. Restrictions
      on Sale of Securities.
      Subject
      to the provisions of paragraph 17 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 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.

     

    16. 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.

     

    17. Additional
      Conditions to Issuance of Certificates for Shares.
      The
      Company shall not be required to issue any certificate or certificates for
      Shares hereunder prior to fulfillment of all the following conditions:
      (a) the admission of such Shares to listing on all stock exchanges on which
      such class of stock is then listed; (b) the completion of any registration
      or other qualification of such Shares under any state, federal, or local law
      or
      under the rulings or regulations of the U.S. Securities and Exchange Commission
      or any other governmental regulatory body, which the Administrator shall, in
      its
      absolute discretion, deem necessary or advisable; (c) the obtaining of any
      approval or other clearance from any governmental agency, which the
      Administrator shall, in its absolute discretion, determine to be necessary
      or
      advisable; and (d) 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.

     

    18. Plan
      Governs.
      This
      Agreement is subject to all terms and provisions of the Plan. In the event
      of a
      conflict between one or more provisions of this Agreement and one or more
      provisions of the Plan, the provisions of the Plan will govern. Capitalized
      terms used and not defined in this Agreement will have the meaning set forth
      in
      the Plan.

     

    19. Administrator
      Authority.
      The
      Administrator will have the power to interpret the Plan and this Agreement
      and
      to adopt such rules for the administration, interpretation and application
      of
      the Plan as are consistent therewith and to interpret or revoke any such rules
      (including, but not limited to, the determination of whether or not any
      Performance Shares have vested). All actions taken and all interpretations
      and
      determinations made by the Administrator in good faith will be final and binding
      upon the Employee, the Company and all other interested persons. No member
      of
      the Administrator will be personally liable for any action, determination or
      interpretation made in good faith with respect to the Plan or this Agreement.
      

     

    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. Modifications
      to the Agreement.
      This
      Agreement constitutes the entire understanding of the parties on the subjects
      covered. 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. Modifications to this Agreement can be made only
      in
      an express written contract executed by a duly authorized officer of the
      Company.

     

    23. Amendment,
      Suspension or Termination of the Plan.
      The
      Employee understands that the Plan is discretionary in nature and may be
      amended, altered, suspended or terminated by the Company at any
      time.

     

    24. Notice
      of Governing Law.
      This
      grant of Performance Shares and the provisions of this Agreement, including
      Appendices, if any, for the Employee’s country, shall be governed by, and
      construed in accordance with, the laws of the State of California without regard
      to principles of conflict of laws.

     

    25. Electronic
      Delivery.
      The
      Company may, in its sole discretion, decide to deliver any documents related
      to
      the Performance Shares granted under and participation in the Plan or future
      Awards that may be granted under the Plan by electronic means or to request
      the
      Employee’s consent to participate in the Plan by electronic means. The Employee
      hereby consents to receive such documents by electronic delivery and, if
      requested, to agree to participate in the Plan through an on-line or electronic
      system established and maintained by the Company or another third party
      designated by the Company.

     

    26. Language.
      If the
      Employee has received this Agreement, including Appendix A and Appendix B (if
      any), or any other document related to the Plan translated into a language
      other
      than English, and if the translated version is different than the English
      version, the English version will control.

     

    27. 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 of the Code. 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 Appendix A and Appendix B (if any) to ensure that all
      Performance Share Awards are made in a manner that qualifies for exemption
      from
      or complies with Section 409A of the Code, provided, however, that the Company
      makes no representation that this Award is not subject to Section 409A of the
      Code nor makes any undertaking to preclude Section 409A of the Code from
      applying to this Award.Exhibit 10.2(f) ECHELON CORPORATION PERFORMANCE SHARE AGREEMENT FOR NON-U.S.
      EMPLOYEES

    Exhibit
      10.2(f)

    
ECHELON
      CORPORATION

     

    Performance
      Share Agreement

    for
      Non-U.S. Employees

     

    TERMS
      AND CONDITIONS OF PERFORMANCE SHARES

     

    By
      executing the Grant Acceptance process and using the services on this Smith
      Barney Benefit Access® website, you, the Employee and Echelon Corporation (the
“Company”) agree that this Award is granted under and governed by the terms and
      conditions of the Company’s 1997 Plan (the “Plan”) and the Terms and Conditions
      of Performance Shares (the “Agreement”), which may be amended or modified from
      time to time. Employee has reviewed the Plan and this Agreement in its entirety,
      has had an opportunity to obtain the advice of counsel prior to accepting this
      Award and fully understands provisions of the Plan and this Agreement. Employee
      hereby agrees to accept as binding, conclusive and final all decisions or
      interpretations of the Administrator upon any questions relating to the Plan
      and
      this Agreement. Employee further agrees to promptly notify the Company upon
      any
      change in the Employee’s residence address. [PLEASE BE SURE TO READ ALL OF THE
      TERMS AND CONDITIONS (IF ANY) AND APPENDICES, (IF ANY) FOR YOUR COUNTRY, THAT
      CONTAIN THE SPECIFIC TERMS AND CONDITIONS OF THIS AWARD.]

     

    ____________________

     

    The
      Company hereby grants you, the Employee, an award (the “Award”) of Performance
      Shares under the Plan. The Award is subject to the provisions of the Plan and
      the Agreement, including Appendices, if any, for the Employee’s country.

     

    1. Grant.
      The
      Company hereby grants Performance Shares to the Employee under the Plan subject
      to all of the terms and conditions in the Plan and this Agreement, including
      Appendices, if any, for the Employee’s country. 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 its Subsidiary.

     

    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. 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.
      Except
      as otherwise provided in paragraph 4 of
      this
      Agreement, the Performance Shares awarded by this Agreement shall vest in
      accordance with the vesting schedule set forth in Exhibit A, 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.

     

    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.
      Any
      Performance Shares that vest in accordance with paragraphs 3 or 4 will be paid
      to the Employee (or in the event of the Employee’s death, to his or her estate)
      in Shares which have an aggregate Fair Market Value equal to the value of the
      earned Performance Shares at vesting as soon as practicable following the date
      of vesting, subject to paragraph 8. 

     

    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. Withholding
      of Taxes.
      Regardless of any action the Company or its Subsidiary takes with respect to
      any
      or all income tax, social insurance, 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.

     

    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 obligations of the Company and/or the Subsidiary with respect to the
      issuance of such Shares. 

     

    In
      this
      regard, the Employee authorizes the Company and/or its Subsidiary to withhold
      Shares from 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 is to be determined. If the Company or
      the
      Employer satisfies the obligation for Tax-Related Items by withholding a number
      of whole Shares as described herein, the Employee is deemed to have been issued
      the full number of Shares subject to the Award of Performance Shares,
      notwithstanding that a number of the Shares is held back solely for the purpose
      of paying the Tax-Related Items due as a result of the vesting of the
      Performance Shares. 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 the event that the cash amounts withheld by the Company or the Subsidiary
      exceed the Tax-Related Items that are due after the automatic withholding of
      whole Shares, the Company or the Subsidiary will reimburse the Employee for
      the
      excess amounts. 

     

    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 of the Performance Shares (on the
      Employee’s behalf and at the Employee’s discretion pursuant to the Employee’s
      authorization in this Agreement), 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 or
      its
      Subsidiary.

     

    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.

     

    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 Subsidiary employing
      the
      Employee, as the case may be, and the Company, or the Subsidiary, 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 at any time for any reason
      whatsoever, with or without good cause. The transactions contemplated hereunder,
      the Employee’s participation in the Plan and the vesting schedule set forth in
      the Summary of Grant do not constitute an express or implied promise of
      continued employment for any period of time. In the event that the Employee
      is
      not an employee of the Company, the grant will not be interpreted to form an
      employment contract with the Employee’s employer or any Subsidiary or affiliate
      of the Company.

     

    11. Nature
      of Grant.
      In
      accepting the Performance Shares, the Employee acknowledges 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; 

     

    (b) all
      decisions with respect to future Awards of Performance Shares, if any, will
      be
      at the sole discretion of the Company; 

     

    (c) the
      Employee’s participation in the Plan is voluntary; 

     

    (d) Performance
      Shares are extraordinary items that do not constitute regular compensation
      for
      services rendered to the Company or its Subsidiary, and that is outside the
      scope of the Employee’s employment contract, if any; 

     

    (e) the
      Award
      is not part of normal or expected compensation or salary for any purposes,
      including, but not limited to, calculating any severance, resignation,
      redundancy or end of service payments, bonuses, long-service awards, pension
      or
      retirement or welfare benefits or similar payments and in no event should be
      considered as compensation for, or relating in any way to, past services for
      the
      Company or its Subsidiary; 

     

    (f) the
      future value of the underlying Shares is unknown and cannot be predicted with
      certainty; 

     

    (g) in
      consideration of the Award, no claim or entitlement to compensation or damages
      shall arise from termination of the Award or any diminution in value of the
      Performance Shares or Shares received when the Performance Shares vest resulting
      from termination of employment by the Company or its Subsidiary (for any reason
      whatsoever and whether or not in breach of local labor laws), and the Employee
      irrevocably releases the Company and/or its Subsidiary from any such claim
      that
      may arise; if, notwithstanding the foregoing, any such claim is found by a
      court
      of competent jurisdiction to have arisen, then, by signing this Agreement,
      the
      Employee shall be deemed irrevocably to have waived his or her entitlement
      to
      pursue such claim; 

     

    (h) in
      the
      event of involuntary termination of the Employee’s employment (whether or not in
      breach of local labor laws), the Employee’s right to receive Performance Shares
      and vest under the Plan, if any, will terminate effective as of the date that
      the Employee is no longer actively employed and will not be extended by any
      notice period mandated under local law (e.g.,
      active
      employment would not include a period of “garden leave” or similar period
      pursuant to local law); the Committee shall have the exclusive discretion to
      determine when the Employee is no longer actively employed for purposes of
      the
      Award; 

     

    (i) 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; and

     

    (j) the
      Employee is hereby advised to consult with his or her own personal tax, legal
      and financial advisors regarding the Employee’s participation in the Plan before
      taking any action related to the Plan.

     

    12. 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 among, as applicable, the Employee’s
      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
      may be transferred to any third parties assisting in the implementation,
      administration and management of the Plan, that these recipients may be located
      in the Employee’s country, or elsewhere, and that the recipient’s country 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
      recipients to receive, possess, use, retain and transfer the Personal Data,
      in
      electronic or other form, for the purposes 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. The Employee
      understands that refusal or withdrawal of consent may affect the Employee’s
      ability to realize benefits from the Award. 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.

     

    13. Address
      for Notices.
      Any
      notice to be given to the Company under the terms of this Agreement will be
      addressed to the Company, in 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.

     

    14. 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. 

     

    15. Restrictions
      on Sale of Securities.
      Subject
      to the provisions of paragraph 17 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 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.

     

    16. 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.

     

    17. Additional
      Conditions to Issuance of Certificates for Shares.
      The
      Company shall not be required to issue any certificate or certificates for
      Shares hereunder prior to fulfillment of all the following conditions:
      (a) the admission of such Shares to listing on all stock exchanges on which
      such class of stock is then listed; (b) the completion of any registration
      or other qualification of such Shares under any state, federal, or local law
      or
      under the rulings or regulations of the U.S. Securities and Exchange Commission
      or any other governmental regulatory body, which the Administrator shall, in
      its
      absolute discretion, deem necessary or advisable; (c) the obtaining of any
      approval or other clearance from any governmental agency, which the
      Administrator shall, in its absolute discretion, determine to be necessary
      or
      advisable; and (d) 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.

     

    18. Plan
      Governs.
      This
      Agreement is subject to all terms and provisions of the Plan. In the event
      of a
      conflict between one or more provisions of this Agreement and one or more
      provisions of the Plan, the provisions of the Plan will govern. Capitalized
      terms used and not defined in this Agreement will have the meaning set forth
      in
      the Plan.

     

    19. Administrator
      Authority.
      The
      Administrator will have the power to interpret the Plan and this Agreement
      and
      to adopt such rules for the administration, interpretation and application
      of
      the Plan as are consistent therewith and to interpret or revoke any such rules
      (including, but not limited to, the determination of whether or not any
      Performance Shares have vested). All actions taken and all interpretations
      and
      determinations made by the Administrator in good faith will be final and binding
      upon the Employee, the Company and all other interested persons. No member
      of
      the Administrator will be personally liable for any action, determination or
      interpretation made in good faith with respect to the Plan or this Agreement.
      

     

    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. Modifications
      to the Agreement.
      This
      Agreement constitutes the entire understanding of the parties on the subjects
      covered. 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. Modifications to this Agreement can be made only
      in
      an express written contract executed by a duly authorized officer of the
      Company.

     

    23. Amendment,
      Suspension or Termination of the Plan.
      The
      Employee understands that the Plan is discretionary in nature and may be
      amended, altered, suspended or terminated by the Company at any
      time.

     

    24. Notice
      of Governing Law.
      This
      grant of Performance Shares and the provisions of this Agreement, including
      Appendices, if any, for the Employee’s country, shall be governed by, and
      construed in accordance with, the laws of the State of California without regard
      to principles of conflict of laws.

     

    25. Electronic
      Delivery.
      The
      Company may, in its sole discretion, decide to deliver any documents related
      to
      the Performance Shares granted under and participation in the Plan or future
      Awards that may be granted under the Plan by electronic means or to request
      the
      Employee’s consent to participate in the Plan by electronic means. The Employee
      hereby consents to receive such documents by electronic delivery and, if
      requested, to agree to participate in the Plan through an on-line or electronic
      system established and maintained by the Company or another third party
      designated by the Company.

     

    26. Language.
      If the
      Employee has received this Agreement, including Appendix A and Appendix B (if
      any), or any other document related to the Plan translated into a language
      other
      than English, and if the translated version is different than the English
      version, the English version will control.

     

    27. 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 of the Code. 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 Appendix A and Appendix B (if any) to ensure that all
      Performance Share Awards are made in a manner that qualifies for exemption
      from
      or complies with Section 409A of the Code, provided, however, that the Company
      makes no representation that this Award is not subject to Section 409A of the
      Code nor makes any undertaking to preclude Section 409A of the Code from
      applying to this Award.

    
      
         

      

      
         

        
        

      

      
         

      

    

     

    Exhibit
      A

     

    

     

    Vesting
      of this Award is subject to specific performance requirements of the Company.
      The performance requirement is such that within three years from the date of
      grant, the Company must have achieved (calculated as of the date of announcement
      of its quarterly earnings) at least two (2) consecutive quarters of
      profitability, calculated on a non-GAPP basis excluding equity compensation
      or
      any other extraordinary expense, as reasonably determined by the Compensation
      Committee of the Board of Directors. If the performance criterion is not met
      during that three year period, then the Performance Shares will not vest and
      shall be returned to the Plan. If all or substantially all of the stock or
      assets of the Company are acquired, then the performance requirement will
      automatically be eliminated and the Performance Shares shall vest.

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