ECHELON CORPORATION
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.
| 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.
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:
(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.
(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.
(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
000
Xxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
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
000
Xxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
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 __________________,
_____.
(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.
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
000
Xxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
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
000
Xxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Vice President of Finance
PURCHASER:
ESCROW
AGENT: Corporate
Assistant Secretary
Echelon
Corporation
000
Xxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
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