Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 28, 2012, ClearSign Combustion Corporation (the "Company") issued 62,500 shares of the Company's common stock (the "Shares"), having a value of $4.72 per share, to James N. Harmon, the Company's Chief Financial Officer (the "Award"). The Award was made from the Company's 2011 Equity Incentive Plan (the "Plan"). Sixty thousand of the Shares are subject to the Company's right of repurchase on at a price of $0.0001 per share upon the termination of Mr. Harmon's employment or other circumstances designated in the Award agreement. These repurchase rights expire at the rate of 4,000 shares per calendar quarter, beginning on March 31, 2013 and ending on September 30, 2016.

In September 2011 the Company issued an award of 75,000 shares of common stock (the "2011 Shares") from the Plan to Mr. Harmon (the "2011 Award"). All of the 2011 Shares were subject to a right of repurchase by the Company at a price of $0.0001 per share upon the termination of Mr. Harmon's employment or other circumstances designated in the 2011 Award agreement. The right of repurchase over the 2011 Shares was to expire ratably and on a quarterly basis over the period beginning on October 1, 2012 and ending on June 30, 2015. On December 28, 2012, the Company amended the 2011 Award, reducing the number of shares subject to the 2011 Award from 75,000 shares of common stock to 12,500 shares of common stock, all of which are fully vested and no longer subject to a repurchase right in favor of the Company.