SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): December 31, 2018

 


 

CLEARSIGN COMBUSTION CORPORATION

(Exact name of registrant as specified in Charter)

 

 

Washington   001-35521   26-2056298

(State or other jurisdiction of

incorporation or organization)

  (Commission File No.)   (IRS Employee Identification No.)

 

12870 Interurban Avenue South

Seattle, Washington 98168

(Address of Principal Executive Offices)

 

206-673-4848

(Issuer Telephone number)

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2 below).

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

 

¨ Pre-commencement communications pursuant to Rule 13e-(c) under the Exchange Act (17 CFR 240.13(e)-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

¨ Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

  

 

 

 

Item 1.01 Entry into a Material Agreement.

 

To the extent required by Item 1.01, the information included at Item 5.02 is incorporated herein by reference.

 

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

 

Agreements with Stephen E. Pirnat

 

On October 1, 2018, we announced that Stephen E. Pirnat, our Chief Executive Officer and a director, intended to retire on December 31, 2018. On December 31, 2018, Mr. Pirnat retired from active service and resigned as our Chief Executive Officer and a director.

 

Also on December 31, 2018, we executed a Consulting Agreement and a Confidential Separation Agreement and General Release (“Release Agreement”) with Mr. Pirnat.

 

The Consulting Agreement has a term of two years, beginning on January 1, 2019 and ending on December 31, 2020. Pursuant to the Consulting Agreement, Mr. Pirnat agrees to provide services concerning the business and operations of the Company including, but not limited to, assistance with the transition of responsibilities to our new Chief Executive Officer and any other service previously performed by Mr. Pirnat during his tenure as the Company’s Chief Executive Officer, including any service that may relate to our reporting requirements under the Securities Exchange Act of 1934, as amended. We have agreed to pay Mr. Pirnat $1.00 for each day he provides services under the Consulting Agreement and to reimburse him for expenses incurred in providing the services.

 

In exchange for a full release of any and all claims relating to his employment that Mr. Pirnat may have against us, we have agreed to waive our right to repurchase 16,875 shares of common stock subject to an option that we issued to Mr. Pirnat on April 23, 2016 and we agreed to extend the term of all of the options held by Mr. Pirnat to December 31, 2020.

 

The above summaries are qualified in their entirety by reference to the Consulting Agreement, which is included as Exhibit 10.1, and the Release Agreement, which is included as Exhibit 10.2, to this Current Report on Form 8-K and both of which are incorporated by reference into this Item 5.02 in their entirety.

 

Appointment of Robert T. Hoffman Sr. as interim Chief Executive Officer

 

On January 1, 2019, Mr. Robert T. Hoffman Sr., Chairperson of our Board of Directors, was appointed as our interim Chief Executive Officer. Mr. Hoffman will not be compensated for his services as interim Chief Executive Officer. Mr. Hoffman, age 60, has been a member of our Board of Directors since July 20, 2018 and was appointed as the Chairperson on November 6, 2018. Mr. Hoffman is the Managing Director of Princeton Opportunity Management LLC, which he founded in February 2011. Mr. Hoffman is also the managing member of GPclirSPV LLC, which is the managing member of clirSPV LLC, our largest shareholder. Mr. Hoffman also served as the founder and managing partner of Candlewood Capital, a long/short fund which managed more than $1 billion in primarily institutional assets. He was also a Managing Director and Portfolio Manager for the Scudder Stevens and Clark Growth & Income (G&I) product, where he was responsible for all buy and sell decisions. During his tenure, G&I assets under his management expanded from approximately $1.75 billion to more than $25 billion. Mr. Hoffman was also nominated by two separate Governors to serve three terms as a member and Chairperson of the State of New Jersey Investment Council from 1990 to 2002.

 

There is no family relationship between Mr. Hoffman and our other directors and executive officers.

 

On July 20, 2018, clirSPV LLC purchased 5,213,543 shares of our common stock at a price of $2.25 per share. Other than this transaction, Mr. Hoffman has not entered into any transaction and has not currently proposed any transaction that would require disclosure pursuant to Item 404(a) of Regulation S-K.

 

 

 

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit No. Description
   
10.1 Consulting Agreement between ClearSign Combustion Corporation and Stephen E. Pirnat
10.2 Confidential Separation Agreement and General Release between ClearSign Combustion Corporation and Stephen E. Pirnat

 

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: January 7, 2019

 

    CLEARSIGN COMBUSTION CORPORATION
       
       
    By: /s/ Brian Fike
      Brian Fike
      Interim Chief Financial Office

 

 

 

 

Exhibit Index

 

Exhibit No. Description
   
10.1 Consulting Agreement between ClearSign Combustion Corporation and Stephen E. Pirnat
10.2 Confidential Separation Agreement and General Release between ClearSign Combustion Corporation and Stephen E. Pirnat

 

 

 

Exhibit 10.1

 

CONSULTING AGREEMENT

 

This Consulting Agreement (“Agreement”), made by and between Stephen E. Pirnat (the “Consultant”) and ClearSign Combustion Corporation (the “Company”) on the 31st day of December 2018, will be effective on January 1, 2019 (the “Effective Date”) and is made in reference to the following:

 

RECITALS

 

A.        The Consultant has been a member of the Company’s Board of Directors since November 2011 and the Company’s Chief Executive Officer since February 2015 and has substantial experience and knowledge regarding the Company’s business and operations.

 

B.        The Consultant’s employment agreement expires on December 31, 2018 and on that date the Consultant will retire and will resign any office he holds, including the offices of Chief Executive Officer and director.

 

C.        The Company is in the process of recruiting a successor Chief Executive Officer (the “Successor”).

 

D.        The Company wishes to retain the Consultant, and the Consultant has agreed to render services to the Company, as set forth in this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Consultant agree as follows:

 

AGREEMENT

 

1.         Term . Subject to Section 5 of this Agreement, beginning on the Effective Date and continuing through December 31, 2020 (the “Term”), the Consultant will render the Services described below to the Company on an “as needed” basis.

 

2.         Duties of Consultant . As reasonably requested by the Company through the Chairperson of the Board, the Successor or the interim Chief Financial Officer, the Consultant shall provide services concerning the business and operations of the Company including, but not limited to, assistance with the transition of responsibilities to the Successor and any other service previously performed by the Consultant during his tenure as the Company’s Chief Executive Officer, including any service that may relate to the Company’s reporting requirements under the Securities Exchange Act of 1934, as amended (collectively, the “Services”).

 

3.        Compensation . As compensation, the Company shall pay to the Consultant a fee of $1.00 for each day the Services are performed, plus expenses to be reimbursed at cost. The compensation shall be payable within 10 days of presentation of an invoice detailing days worked and expenses incurred, if any. The Consultant shall provide the invoice to the Company on any day following the last day of the month in which the Services were performed or the expenses incurred.

 

   

 

 

4.         Nondisclosure .

 

4.1       Property Belonging to Company. The Consultant shall perform the Services as a “Work for Hire,” where copyright, title, patent, ownership and other proprietary rights of all material produced shall be retained by the Company and its assignees. The Consultant acknowledges his prior execution of the Confidentiality and Proprietary Rights Agreement dated January 16, 2015, which is incorporated herein and made a part of this Agreement, and agrees that it remains in full force and effect.

 

4.2         Access to Confidential Information. The Consultant agrees that during the Term, the Consultant will have access to and become acquainted with confidential proprietary information (“Confidential Information”) which is owned by the Company and is regularly used in the operation of the Company’s business. The Consultant agrees that the term “Confidential Information” as used in this Agreement is to be broadly interpreted and includes (i) information that has, or could have, commercial value for the business in which the Company is engaged, or in which the Company may engage at a later time, and (ii) information that, if disclosed without authorization, could be detrimental to the economic interests of the Company. The Consultant agrees that the term “Confidential Information” includes, without limitation, any patent, patent application, copyright, trademark, trade name, service mark, service name, “know-how,” negative “know-how,” trade secrets, customer and supplier identities, characteristics and terms of agreements, details of customer or contracts, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans, business acquisition plans, science or technical information, ideas, discoveries, designs, computer programs (including source codes), financial forecasts, unpublished financial information, budgets, processes, procedures, formulae, improvements or other proprietary or intellectual property of the Company, whether or not in written or tangible form, and whether or not registered, and including all memoranda, notes, summaries, plans, reports, records, documents and other evidence thereof. The Consultant acknowledges that all Confidential Information, whether prepared by the Consultant or otherwise acquired by the Consultant in any other way, shall remain the exclusive property of the Company. The term “Confidential Information” does not include (i) any information known to the Consultant prior to disclosure by the Company or its representatives, (ii) any information which becomes available to the Consultant on a non-confidential basis from a source other than the Company who is not bound by a confidentiality agreement with, or any other contractual, legal or fiduciary obligation of confidentiality to, the Company or any related party with respect to such information and (iii) any information which is or becomes generally available to the public other than as a result of a disclosure by the Consultant in breach of this Agreement. In the event that the Consultant receives a request to disclose all or any part of the Confidential Information under the terms of a valid and effective subpoena or order issued by a court of competent jurisdiction the Consultant agrees to immediately notify the Company of the existence, terms and circumstances surrounding such a request. The Company agrees to assume, at its sole charge and expense, any costs that are the direct result of actions taken at the direction or request of the Company (and, if any payments are made by the Consultant, to promptly reimburse the Consultant for such payments), including any fees and disbursements to legal counsel that the Consultant incurs.

 

4.3         No Unfair Use by Consultant. The Consultant promises and agrees that the Consultant (which shall include his advisors, consultants, contractors and affiliates) shall not misuse, misappropriate, or disclose in any way to any person or entity any of the Company’s Confidential Information, either directly or indirectly, nor will the Consultant use the Confidential Information in any way or at any time except as required in the course of the Consultant’s business relationship with the Company. The Consultant agrees that the sale or unauthorized use or disclosure of any of the Company’s Confidential Information constitutes unfair competition. The Consultant promises and agrees not to engage in any unfair competition with the Company and will take measures that are appropriate to prevent his employees, contractors or affiliates from engaging in unfair competition with the Company.

 

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4.4       Obligations Survive Agreement. The Consultant’s obligations under this Section 4 shall survive the expiration or termination of this Agreement.

 

5.         Termination.

 

5.1       Automatic Termination. This Agreement terminates automatically on the death or disability of the Consultant, provided that as a result of the disability the Consultant is no longer able to perform the Services required by this Agreement for a period of at least 30 days.

 

5.2       Termination by Notice. This Agreement may be terminated by the Company upon 5 days written notice to the Consultant.

 

5.3       Return of Company Property. Upon the termination or expiration of this Agreement, the Consultant (which shall include his employees, advisors, consultants, contractors and affiliates) shall immediately transfer to the Company all files including, but not limited to, electronic files, records, documents, drawings, specifications, equipment and similar items in his possession or the possession of contractors relating to the business of the Company or its Confidential Information (including the work product of the Consultant created pursuant to this Agreement).

 

6.         Status of Consultant . The Consultant understands and agrees that he is not an employee of the Company and that he is not entitled to receive employee benefits from the Company, including, but not limited to, sick leave, vacation, retirement or death benefits. The Consultant shall be responsible for providing, at the Consultant’s expense and in the Consultant’s name, disability, worker’s compensation or other insurance as well as licenses and permits usual or necessary for conducting the Services hereunder. Furthermore, the Consultant shall pay, when and as due, any and all taxes incurred as a result of the Consultant’s compensation hereunder, including estimated taxes, and shall provide the Company with proof of said payments, upon demand. The Consultant hereby agrees to indemnify the Company for any claims, losses, costs, fees, liabilities, damages or injuries suffered by the Company arising out of the Consultant’s breach of this Section 6.

 

7.        Representations by Consultant and Indemnification by Company . The Consultant represents that the Consultant has the qualifications and ability to perform the Services in a professional manner, without the advice, control, or supervision of the Company.

 

The Company indemnified the Consultant under the Indemnification Agreement entered into in March 2012 which Indemnification Agreement is incorporated into this Agreement and made a part of it . Such indemnification shall continue in relation to all Services performed by the Consultant for the Company pursuant to this Agreement, regardless of the fact that the Consultant is no longer an officer or director of the Company. The Company will add the Consultant as an insured under its directors and officers liability insurance policy.

 

8.         Notices . Unless otherwise specifically provided in this Agreement, all notices or other communications (collectively and severally called “Notices”) required or permitted to be given under this Agreement, shall be in writing, and shall be given by: (A) personal delivery (which form of Notice shall be deemed to have been given upon delivery), (B) by telegraph or by private airborne/overnight delivery service (which forms of Notice shall be deemed to have been given upon confirmed delivery by the delivery agency), or (C) by electronic (including e-mail) or facsimile or telephonic transmission, provided the receiving party has a compatible device or confirms receipt thereof (which forms of Notice shall be deemed delivered upon confirmed transmission or confirmation of receipt). Notices shall be addressed to the addresses set forth below, or to such other address as the receiving party shall have specified most recently by like Notice, with a copy to the other party.

 

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If to the Company:

 

ClearSign Combustion Corporation

12870 Interurban Avenue South

Seattle, Washington 98168

Attn.: Chief Executive Officer

Facsimile No.:

E-Mail:

 

If to the Consultant:

 

Stephen E. Pirnat

 

 

Facsimile No.:

E-Mail:

 

9.         Choice of Law and Venue . This Agreement shall be governed according to the laws of the state of Washington. Venue for any legal or equitable action between the Company and the Consultant which relates to this Agreement shall be in the county of King in the State of Washington.

 

10.         Entire Agreement . This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the Services to be rendered by the Consultant to the Company and contains all of the covenants and agreements between the parties with respect to the Services to be rendered by the Consultant to the Company in any manner whatsoever. Each party to this agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party.

 

11.        Amendment/Waiver . Except as expressly provided otherwise herein, neither this Agreement nor any of the terms, provisions, obligations or rights contained herein, may be amended, modified, supplemented, augmented, rescinded, discharged or terminated (other than by performance), except by a written instrument or instruments signed by all of the parties to this Agreement. No waiver of any breach of any term, provision or agreement contained herein, or of the performance of any act or obligation under this Agreement, or of any extension of time for performance of any such act or obligation, or of any right granted under this Agreement, shall be effective and binding unless such waiver shall be in a written instrument or instruments signed by each party claimed to have given or consented to such waiver and each party affected by such waiver.

 

12.         Counterparts . This Agreement may be executed manually or by facsimile signature in two or more counterparts, each of which shall be deemed an original, and all of which together shall constitute but one and the same instrument.

 

13.        Arbitration/Equitable Relief . The parties hereby agree that all controversies, claims and matters of difference shall be resolved by binding arbitration before JAMS located in Seattle, Washington according to the rules and practices of JAMS from time-to-time in force; provided however that the parties hereto reserve their rights to seek and obtain injunctive or other equitable relief from a court of competent jurisdiction, without waiving the right to compel such arbitration pursuant to this Section. The arbitrator shall apply Washington law in rendering a decision. The Consultant acknowledges that irreparable injury will result to the Company from the Consultant’s violation of any of the terms of Section 4 (Nondisclosure) of this Agreement. The Consultant expressly agrees that the Company shall be entitled, in addition to damages and any other remedies provided by law, to an injunction or other equitable remedy respecting such violation or continued violation.

 

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14.        Severability . If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be determined to be invalid, illegal or unenforceable under present or future laws effective during the Term of this Agreement, then and, in that event: (A) the performance of the offending term or provision (but only to the extent its application is invalid, illegal or unenforceable) shall be excused as if it had never been incorporated into this Agreement, and, in lieu of such excused provision, there shall be added a provision as similar in terms and amount to such excused provision as may be possible and be legal, valid and enforceable, and (B) the remaining part of this Agreement (including the application of the offending term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby and shall continue in full force and effect to the fullest extent provided by law.

 

15.        Preparation of Agreement . It is acknowledged by each party that such party either had separate and independent advice of counsel or the opportunity to avail itself or himself of same. In light of these facts it is acknowledged that no party shall be construed to be solely responsible for the drafting hereof, and therefore any ambiguity shall not be construed against any party as the alleged draftsman of this Agreement.

 

16.        No Assignment of Rights or Delegation of Duties by Consultant; Company’s Right to Assign . The Consultant’s rights and benefits under this Agreement are personal to him and therefore no such right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer. The Company may assign its rights and delegate its obligations under this Agreement to any other person or entity.

 

17.        Electronically Transmitted Documents . If a copy or counterpart of this Agreement is originally executed and such copy or counterpart is thereafter transmitted electronically by facsimile or similar device, such facsimile document shall for all purposes be treated as if manually signed by the party whose facsimile signature appears.

 

WHEREFORE, the parties have executed this Agreement on the date first written above.

 

  “Consultant”
     
     
     
  By: /s/ Stephen E. Pirnat
        Stephen E. Pirnat
     
     
  “Company”
     
  ClearSign Combustion Corporation
     
     
     
  By: /s/ Robert T. Hoffman Sr.
    Robert T. Hoffman Sr.
    Chairperson of the Board

 

5  

 

 

Exhibit 10.2

 

CONFIDENTIAL SEPARATION AGREEMENT

AND

GENERAL RELEASE

 

 

 

1.        SETTLEMENT AND RELEASE

 

This SEPARATION AGREEMENT AND GENERAL RELEASE (“Agreement”) is between Stephen E. Pirnat (“Employee” or “you”) and ClearSign Combustion Corporation (“ClearSign” or “Employer”).

 

2.        RECITALS

 

a.       Employee is an employee of ClearSign pursuant to a written employment agreement dated February 3, 2015, as amended on October 30, 2017 (the “Employment Agreement”).

 

b.        The Employment Agreement will expire on December 31, 2018.

 

c.       To avoid uncertainty, Employer and Employee desire to settle fully and finally resolve all matters between them arising out of or related to Employee’s employment with, compensation during, and separation from, Employer on the terms and conditions set forth herein as of the date of this Agreement.

 

d.       This Agreement effects the settlement of any disputes between Employer and Employee to this Agreement, and nothing contained herein should be construed as an admission by Employer of any liability of any kind with respect thereto.

 

e.       Employer and Employee expressly recognize that confidentiality of the terms of this Agreement is of the essence, and is a material part of this Agreement.

 

3.        SEPARATION FROM EMPLOYMENT

 

The effective date of Employee’s termination of employment with the Employer is December 31, 2018 (the “Separation Date”).

 

4.        SEVERANCE CONSIDERATION

 

a.       As consideration for the release set forth herein, and provided that Employee does not revoke this Agreement within the revocation period referred to at Section 5(b)(iii) herein, (i) ClearSign waives its right to repurchase 16,875 shares of common stock subject to an option granted to Employee on April 23, 2016 (the “Repurchase Right”) and (ii) ClearSign extends the term of all options held by Employee through the close of business on December 31, 2020 (the “Severance Consideration”). The waiver of the Repurchase Right is a one-time waiver, is made for the purpose of providing consideration for this Agreement, is limited to the Repurchase Right expressly waived herein and should not be construed as an indication that ClearSign, in the event Employee revokes this Agreement, would be willing to agree to any future waiver related to the Severance Consideration. This Section 4a. sets forth the entire agreement between ClearSign and Employee with respect to the Severance Consideration and supersedes all prior agreements and understandings, oral or written, with respect to the Severance Consideration.

 

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Employer Initials     Employee Initials

 

 

 

 

 

b.       No other benefits will be made available to Employee after the Separation Date except as provided herein, or by applicable law.

 

c.       Employee is solely responsible for the payment of, and therefore promises to pay, any taxes, penalties, or other costs assessed that are associated with the Severance Consideration. The Released Parties, as defined in Section 5 herein, have no duty with respect to such taxes, penalties or other costs.

 

d.       Employee will be paid his wages through the Separation Date, less applicable withholdings and deductions, through ClearSign’s ordinary semi-monthly payroll system.

 

e.        Employee’s outstanding stock option agreements (the “Award Agreements”) are as summarized on Exhibit A . With the exception of the extension of the term of the options to December 31, 2020, nothing herein shall limit or modify Employee’s or ClearSign’s respective rights and obligations under the Award Agreements set forth in Exhibit A , which shall each remain in force unless any such Award Agreement expires or is terminated in accordance with its terms.

 

5.        RELEASE OF ALL CLAIMS

 

a.         CONSIDERATION FOR RELEASE

 

Employee acknowledges that Employee has received all compensation owed or to be owed to Employee for Employee’s employment through and including December 31, 2018.

 

Both parties agree that the monies and other benefits to be provided to Employee hereunder as outlined in Section 4 are in excess of compensation to which Employee would otherwise be entitled. As such, it is agreed that such monies and benefits provide full and adequate consideration for Employee’s various representations and releases contained herein.

 

b.       EMPLOYEE RELEASE

 

i.        For good and valuable consideration as described herein, the receipt and sufficiency of which are hereby acknowledged, Employee, individually and on behalf of Employee’s representatives, heirs, successors and assigns, hereby releases and absolutely forever discharges ClearSign, its predecessors, successors, parents, partners, subsidiaries, affiliates, agents, assigns, insurers, representatives, officers, directors, principals, employees, shareholders, and attorneys, from the past, present and future (collectively, the “Released Parties”), of and from any and all claims, demands, debts, liabilities, obligations, and causes of actions of every kind and nature whatsoever, whether now known or unknown, suspected or unsuspected, which Employee may have or ever had, including without limitation those arising from or relating to Employee’s employment with ClearSign, contracts with ClearSign, termination of employment with ClearSign, or Employee’s efforts to find subsequent employment. This release includes, but is not limited to, any claims, demands, causes of action, or liabilities arising under (a) Title VII of the Civil Rights Act of 1964 (race, color, religion, maternity or pregnancy, sex and national origin discrimination); (b) 42 U.S.C. §1981 (race discrimination); (c) 29 U.S.C. §§621-634 (age discrimination); (d) 29 U.S.C. §206(d)(1) (equal pay); (e) Executive Order 11246 (race, color, religion, sex and national original); (f) Executive Order 11141, (age discrimination); (g) Older Workers Benefit Protection Act of 1990 (age discrimination); (h) §503 of the Rehabilitation Act of 1973 (disabilities discrimination); (i) the Civil Rights Act of 1991 (discrimination), (j) the Age Discrimination in Employment Act of 1967 (“ADEA”); (k) the Family and Medical Leave Act; (l) Washington State Law Against Discrimination, Revised Code of Washington section 49.60; (m) claims with any division of the Washington State Department of Labor and Industries, (n) Washington Industrial Safety and Health Act; (o) Washington Family Care Act; (p-o) Seattle Municipal Code, SMC 14.04.030-0,40 (discrimination) (q) any other federal, state or local laws or regulations prohibiting employment discrimination, harassment or retaliation; and (r) any amendments or additions to any of the federal, state or local laws or regulations mentioned above. This waiver and release also includes, but is not limited to, any claims, demands, causes of action, or liabilities arising under or in relation to any oral or written representations or statements or under any state, local or federal law regulating wages, hours, compensation or employment or any claim for wrongful discharge, breach of contract, breach of the implied covenant of good faith and fair dealing, intentional or negligent infliction of emotional distress, or defamation. For the avoidance of doubt, this release is not intended to modify or terminate surviving contractual and statutory rights and obligations, as specified in Sections 4(e) and 7 herein.

 

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Employer Initials     Employee Initials

 

 

 

 

 

ii.        It is understood and agreed that this Section 5(b) is intended to be a full and final release covering all known as well as all unknown or unanticipated injuries, debts, claims or damages, of any kind, arising from acts, omissions or events prior to the Separation Date. Employee waives any and all rights or benefits which Employee may now have under the terms of any statute or law that purports to limit such a release.

 

iii.        Employee acknowledges that Employee is knowingly and voluntarily waiving and releasing any rights Employee may have under the ADEA. Employee also acknowledges that the Severance Consideration provided for in Section 4 herein is in addition to anything of value to which Employee is otherwise entitled and constitutes sufficient consideration for the waiver and release herein. Employee further acknowledges that Employee has been advised by this writing, as required by the Older Workers’ Benefit Protection Act, that: (a) Employee’s waiver and release does not apply to any rights or claims that may arise after the execution of this Agreement; (b) Employee should consult with an attorney prior to executing this Agreement; (c) Employee has twenty-one (21) days to consider this Agreement (although Employee may by Employee’s own choice execute this Agreement earlier); (d) under the ADEA, Employee has seven (7) days following the date of his execution of this Agreement by the parties to revoke the Agreement; and (e) this Agreement shall not be effective until the date upon which such revocation period has expired. If Employee has not executed this Agreement and delivered his executed signature page by hand delivery, fax or email of a PDF to ClearSign’s Chief Financial Officer and/or Chief Executive Officer by the expiration of the twenty-one (21)-day consideration period referenced in this Section 5(b)(iii), the offer of the Severance Consideration in this Agreement will expire, and Employee will have no right or claim to the Severance Consideration or any portion of the Severance Consideration. Employee may revoke this Agreement only by giving ClearSign written notice of Employee’s revocation of this Agreement, by email to the interim CFO, Brian Fike, at brian.fike@clearsign.com transmitted by the close of business on the seventh (7th) day following the date of Employee’s execution of this Agreement.

 

6.        NO OTHER ACTIONS

 

Employee represents that Employee has not filed, and will not file, any complaints, charges, or grievances against any or all of the Released Parties with any city, county, state, or federal agency or court, whether or not arising out of or related to his or her employment with, compensation during, and separation from ClearSign.

 

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Employer Initials     Employee Initials

 

 

 

 

 

7.         TRADE SECRETS, CONFIDENTIALITY, AND INDEMNIFICATION

 

Employee acknowledges that Employee previously executed the Confidentiality and Proprietary Rights Agreement (the “Confidentiality Agreement”) with ClearSign, attached hereto as Exhibit B , and that nothing herein shall limit Employee’s obligations and/or ClearSign’s rights under the Confidentiality Agreement, which shall remain in force. Additionally, Employee agrees to (a) keep confidential the terms of this Agreement, except upon order of any court, as required by law, or to the extent the terms are made public by ClearSign, including through the Form 8-K attached as Exhibit C to be filed with the Securities and Exchange Commission, and (b) comply with all terms of the Policy of Insider Trading attached as Exhibit D and rules promulgated by the Securities and Exchange Commission as those rules would continue to apply to Employee.

 

Employer and Employee acknowledge that they previously executed the Indemnification Agreement, attached hereto as Exhibit E , and that nothing herein shall limit Employer’s obligations and/or Employee’s rights under the Indemnification Agreement, which shall remain in force.

 

8.        NON-DISPARAGEMENT

 

Employee agrees not to disparage, directly or indirectly, ClearSign or any of the Released Parties.

 

9.        FULL AND INDEPENDENT KNOWLEDGE

 

Employee represents Employee has thoroughly read this Agreement, understands all its provisions, agrees to the terms, and is voluntarily entering into this Agreement.

 

10.        ARBITRATION

 

This Agreement shall be interpreted according to Washington law, in Seattle, Washington, without regard to its conflict of interest principles. Any claim or controversy arising from this Agreement shall be resolved by arbitration before a single arbitrator of JAMS in accordance with its Comprehensive Arbitration Rules and Procedures and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The single arbitrator shall be selected by mutual agreement of Employee and ClearSign. If such agreement cannot be reached the arbitrator shall be selected according to the procedures of the JAMS. The single arbitrator shall award the prevailing party all arbitration costs, arbitrator fees, reasonable attorneys’ fees and costs incurred by the prevailing party in connection with the arbitrated claims. The arbitrator shall have authority to issue any remedy or relief that a court of competent jurisdiction could award, order or grant including, without limitation, a preliminary or permanent injunction. Notwithstanding the foregoing, either party may, without inconsistency with this provision, apply to any court having jurisdiction for interim, provisional injunctive or equitable relief until the arbitration award is rendered and the controversy otherwise is resolved.

 

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11.        ATTORNEYS’ FEES

 

Each party shall bear his or its own attorneys’ fees and costs, except as otherwise provided herein.

 

12.        NON-RELEASED CLAIMS

 

This Agreement excludes, and you are not waiving, (i) any right to file, testify or otherwise cooperate in the investigation of an administrative charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board or other appropriate federal, state or local administrative or law enforcement agency, although you are waiving any right to monetary recovery related to such a charge or administrative complaint; (ii) any right to report conduct that is allegedly unlawful under federal securities laws to any government body or agency, including the right to receive awards pursuant to Section 21F of the Securities Exchange Act; (iii) claims which cannot be waived by law, such as claims for unemployment benefits; (iv) any indemnification rights you may have against ClearSign; and (v) any rights to vested benefits, such as pension or retirement benefits.

 

13.        CONSTRUCTION OF THIS AGREEMENT

 

a.       This Agreement shall be binding upon the signatories and their respective heirs, administrators, representatives, executors, successors, and assigns, and shall inure to the benefit of Released Parties, and each of them, and to their respective heirs, administrators, representatives, executors, successors, and assigns, upon whom this Agreement shall also be binding.

 

b.         Should any provision of this Agreement become legally unenforceable, no other provision of this Agreement shall be affected, and this Agreement shall be construed as if the Agreement had never included the unenforceable provision.

 

c.       The parties to this Agreement agree that any modification of this Agreement must be in writing, signed by Employee and ClearSign.

 

d.         THIS AGREEMENT, TOGETHER WITH THE EXHIBITS, SHALL BE, AND CONSTITUTE FULL, COMPLETE, UNCONDITIONAL, AND IMMEDIATE SUBSTITUTION FOR ANY AND ALL RIGHTS, CLAIMS, DEMANDS, AND CAUSES OF ACTIONS WHATSOEVER, WHICH HERETOFORE EXISTED OR MIGHT HAVE EXISTED ON BEHALF OF EMPLOYEE AGAINST ANY OR ALL OF THE RELEASED PARTIES AND THEIR RESPECTIVE SUCCESSORS, PREDECESSORS, SUBSIDIARIES, AFFILIATES, PARENTS, SHAREHOLDERS, PARTNERS, EMPLOYEES, AGENTS, REPRESENTATIVES, OFFICERS, DIRECTORS, PRINCIPALS, ASSIGNS, INSURERS AND ATTORNEYS. FURTHERMORE, THIS AGREEMENT, INCLUDING THE EXHIBITS, IS THE ONLY, SOLE, ENTIRE, AND COMPLETE AGREEMENT OF THE PARTIES RELATING IN ANY WAY TO THE SUBJECT MATTER HEREOF. NO STATEMENTS, PROMISES, OR REPRESENTATIONS HAVE BEEN MADE BY ANY PARTY TO ANY OTHER, OR RELIED UPON, AND NO CONSIDERATION HAS BEEN OFFERED, PROMISED, EXPECTED, OR HELD OUT OTHER THAN AS MAY BE EXPRESSLY PROVIDED HEREIN.

 

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e.         No provision of this Agreement shall be modified or construed by any practice that is inconsistent with such provision, and failure by any party to this Agreement to comply with any provision, or to require another party to comply with any provision, shall not affect the rights of any party thereafter to comply or require the other to comply.

 

f.         This Agreement may be executed and delivered in two or more counterparts, each of which, when so executed and delivered, shall be the original, but such counterparts together shall constitute but one and the same instrument.

 

 

 

IN WITNESS WHEREOF, the parties have executed this instrument on the dates indicated below in the County of King, State of Washington.

 

 

 

STEPHEN E. PIRNAT   CLEARSIGN COMBUSTION CORPORATION
     
     
/s/ Stephen E. Pirnat   By: /s/ Brian G. Fike
      Brian G. Fike

Dated: December 31, 2018

 

 

 

 

Its: Interim Chief Financial Officer

Dated: December 31, 2018

 

 

 

 

 

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Exhibit A

 

Outstanding Stock Option Agreements

are summarized as follows:

  

Option Award#   Strike Price     Options     Date of Award   Vesting Commencement   Vested on December 31, 2018     Original Expiration Date   Revised Expiriation Date
37   $ 5.97       100,000     2/3/2015   2/3/2015     100,000     2/3/2025   12/31/2020
39   $ 5.21       200,000     4/1/2015   4/1/2015     200,000     3/31/2025   12/31/2020
60   $ 4.21       30,000     4/23/2016   4/1/2016     13,125     3/31/2026   12/31/2020

 

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Exhibit B

 

Confidentiality and Proprietary Rights Agreement

executed by Stephen E. Pirnat on January 16, 2015

 

 

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Exhibit C

 

Form 8-K

regarding separation of Stephen E. Pirnat

and entry into a material agreement

 

 

 

 

 

 

 

 

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Exhibit D

 

Statement of ClearSign Combustion Corporation Policy

on

Insider Trading and Compliance

acknowledged by Stephen E. Pirnat on August 14, 2015

 

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Exhibit E

 

Indemnification Agreement

executed by ClearSign Combustion Corporation

and its Officer/Indemnitee, Stephen E. Pirnat,

on March 7, 2012

 

 

 

 

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