ECHELON CORPORATION Performance Share Agreement

Exhbit 10.2(k)

ECHELON CORPORATION

Performance Share Agreement

Grant #__________

Echelon Corporation (the “Company”) hereby grants you, [Name] (the “Employee”), an award of Performance Shares under the Company’s 1997 Stock Plan (the “Plan”). The date of this Agreement is ______, 20___. Subject to the provisions of Appendix A (attached hereto) and of the Plan, the principal features of this award are as follows:

IMPORTANT:

Your signature below indicates your agreement and understanding that this award is subject to all of the terms and conditions contained in Appendix A and the Plan. For example, important additional information on vesting and forfeiture of the Performance Shares is contained in paragraphs 3 through 6 of Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS AGREEMENT.

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APPENDIX A

TERMS AND CONDITIONS OF PERFORMANCE SHARES

Grant #_________

1. Grant . The Company hereby grants to the Employee under the Plan [              ] Performance Shares, subject to all of the terms and conditions in this Agreement and the Plan. When the Performance Shares are paid to the Employee, par value will be deemed paid by the Employee for each Performance Share by past services rendered by the Employee, and will be subject to the appropriate tax withholdings.

2. Company’s Obligation to Pay . Each Performance Share has a value equal to the Fair Market Value of a Share on the date of grant and represents the right to receive a Share on the vesting date (or such later time indicated in this Agreement). Unless and until the Performance Shares have vested in the manner set forth in paragraphs 3, 5 or 12, the Employee will have no right to payment of such Performance Shares. Prior to actual payment of any vested Performance Shares, such Performance Shares will represent an unsecured obligation.

3. Vesting Schedule/Period of Restriction .

(a) Except as otherwise provided in paragraph 5 of this Agreement, the Performance Shares awarded by this Agreement shall vest in accordance with the vesting schedule set forth in the Notice 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, 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.

(b) For purposes of this Agreement, “Involuntary Termination” shall mean, without Employee’s express written consent: (i) a significant reduction of the Employee’s duties, authority or responsibilities, relative to the Employee’s duties, authority or responsibilities as in effect immediately prior to the Change of Control Merger; (ii) a material reduction in the total cash compensation of the Employee as in effect immediately prior to the Change of Control Merger; (iii) the relocation of the Employee to a facility or a location more than thirty (30) miles from the Employee’s then present location, without the Employee’s express written consent; or (iv) any purported termination of the Employee which is not effected for “Disability” or for “Cause” (each as defined in the Plan), or any purported termination for which the grounds relied upon are not valid.

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4. Payment after Vesting .

(a) One Share shall be issued for each Performance Share that vests. No fractional Shares shall be issued under this Agreement.

(b) Subject to paragraph 8, any Performance Shares that vest pursuant to paragraph 3 shall be paid in Shares as soon as practicable upon or following the date of vesting (the “Vesting Date”), but, except as provided in this Agreement, in no event later than two and one-half (2  ¹ / 2 ) months following the applicable Vesting Date, subject to the terms and provisions of the Plan and this Agreement.

(c) Notwithstanding anything in the Plan or this Agreement to the contrary, and subject to paragraph 8, if the vesting of the balance, or some lesser portion of the balance, of the Performance Shares is accelerated in connection with the Employee’s termination as a Service Provider, such accelerated Performance Shares will not be paid out until Employee has a “separation from service” within the meaning of Section 409A, as determined by the Company. Further, if (x) Employee is subject to U.S. income tax, and (y) Employee is a “specified employee” within the meaning of Section 409A at the time of Employee’s “separation from service” within the meaning of Section 409A (as determined by the Company), other than due to death, then the payment of such accelerated Performance Shares will not be made until the date six (6) months and one (1) day following the date of the Employee’s termination as a Service Provider (or such later date as is necessary to avoid the imposition of additional taxation under Section 409A). Notwithstanding the foregoing, any delay in payment pursuant to this paragraph 5 will cease upon the Employee’s death and such payment will be made as soon as practicable after the date of Employee’s death, subject to paragraph 8. For purposes of this Agreement, “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and any proposed, temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.

(d) If the vesting of all or a portion of the Performance Shares awarded under this Agreement accelerate pursuant to Section 11(c)(i) of the Plan in the event of a “Merger” (as defined in the Plan) that is not a “change in control” within the meaning of Section 409A, the timing of payment rules that apply to discretionary accelerations under paragraph 5 also shall apply. If the vesting of all or a portion of the Performance Shares awarded under this Agreement accelerate pursuant to Section 11(c)(i) of the Plan in the event of a “Merger” (as defined in the Plan) that is a “change in control” within the meaning of Section 409A, the timing of payment rules that apply under paragraph 4(b) also shall apply.

(e) It is the intent of this Agreement to comply with the requirements of Section 409A so that none of the Performance Shares provided under this Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.

5. Administrator Discretion .

(a) 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. If so accelerated, such Performance Shares will be considered as having vested as of the date specified by the Administrator.

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(b) If the Administrator, in its discretion, accelerates the vesting of the balance, or some lesser portion of the balance, of the Award, the payment of such accelerated Performance Shares nevertheless shall be made at the same time or times as if such Performance Shares had vested in accordance with the vesting schedule set forth in paragraph 3, including any necessary delay in payment pursuant to the application of paragraph 4(c) (whether or not the Employee remain