Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
OSHMAN M KENNETH
  2. Issuer Name and Ticker or Trading Symbol
ECHELON CORP [ELON]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
__X__ Director __X__ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
Chairman of the Board & CEO
(Last)
(First)
(Middle)
550 MERIDIAN AVE, 
3. Date of Earliest Transaction (Month/Day/Year)
12/17/2008
(Street)

SAN JOSE, CA 95126
4. If Amendment, Date Original Filed(Month/Day/Year)
6. Individual or Joint/Group Filing(Check Applicable Line)
___ Form filed by One Reporting Person
_X_ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)
2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)
4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)
5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)
6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)
7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)
2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)
5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)
6. Date Exercisable and Expiration Date
(Month/Day/Year)
7. Title and Amount of Underlying Securities
(Instr. 3 and 4)
8. Price of Derivative Security
(Instr. 5)
9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)
10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)
11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Stock Appreciation Right $ 7.69 12/17/2008   A   125,000   12/17/2009 12/17/2010 Common Stock 125,000 (1) 125,000 D  
Employee Stock Option (Right to buy) $ 16.688 12/17/2008   D     250,000   (2) 02/23/2011 Common Stock 250,000 (1) 0 D  
Stock Appreciation Right $ 7.69 12/17/2008   A   100,000   12/17/2009 12/17/2010 Common Stock 100,000 (3) 100,000 D  
Employee Stock Option (Right to buy) $ 16.35 12/17/2008   D     200,000   (4) 02/22/2012 Common Stock 200,000 (3) 0 D  
Stock Appreciation Right $ 7.69 12/17/2008   A   120,000   12/17/2009 12/17/2010 Common Stock 120,000 (5) 120,000 D  
Employee Stock Option (Right to buy) $ 10.89 12/17/2008   D     120,000   (6) 03/17/2009 Common Stock 120,000 (5) 0 D (7)  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
OSHMAN M KENNETH
550 MERIDIAN AVE
SAN JOSE, CA 95126
  X   X   Chairman of the Board & CEO  
OSHMAN TRUST DATED 7 10 1979
C/O M KENNETH OSHMAN
ECHELON CORP., 550 MERIDIAN AVE
SAN JOSE, CA 95126
    X    
O S VENTURES
C/O M KENNETH OSHMAN
ECHELON CORP., 550 MERIDIAN AVE
SAN JOSE, CA 95126
    X    

Signatures

 /s/ Oliver R. Stanfield, attorney-in-fact for M. Kenneth Oshman   12/19/2008
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) M. Kenneth Oshman ("Oshman") agreed to cancellation of a stock option granted to him on February 23, 2001, in exchange for a stock appreciation right granted under the Echelon Corporation 1997 Stock Plan (the "Plan") having a lower per share exercise price.
(2) Cancellation of a stock option granted to Oshman under the Plan on February 23, 2001 to buy 250,000 shares of Common Stock. The stock option was originally exercisable in full as of the February 23, 2001 grant date, subject to a repurchase option in favor of the Issuer. The stock option vested as to 1/4th of the shares on February 23, 2002 and as to 1/48th of the shares on each one month anniversary thereafter; however, on September 17, 2004, vesting was accelerated in full.
(3) Oshman agreed to cancellation of a stock option granted to him on February 22, 2002, in exchange for a stock appreciation right granted under the Plan having a lower per share exercise price.
(4) Cancellation of a stock option granted to Oshman under the Plan on February 22, 2002 to buy 200,000 shares of Common Stock. The stock option was originally exercisable in full as of the February 22, 2002 grant date, subject to a repurchase option in favor of the Issuer. The option was originally exercisable as to 1/4th of the shares on February 22, 2003 and as to 1/48th of the shares on each one month anniversary thereafter; however, on September 17, 2004, vesting was accelerated in full.
(5) Oshman agreed to cancellation of a stock option granted to him on March 17, 2004, in exchange for a stock appreciation right granted under the Plan having a lower per share exercise price.
(6) Cancellation of a stock option granted to Oshman under the Plan on March 17, 2004 to buy 120,000 shares of Common Stock. The stock option was originally exercisable in full as of the March 17, 2004 grant date, subject to a repurchase option in favor of the Issuer. The option was originally exercisable as to 1/4th of the shares on March 17, 2005 and as to 1/48th of the shares on each one month anniversary thereafter; however, on September 17, 2004, vesting was accelerated in full.
(7) First of two Forms 4 filed to report Oshman transactions on December 17, 2008.

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