Exhibit 10.2


 


	 	Ener-Core, Inc.

                           9400 Toledo
                           Way

                           Irvine,
                           CA 92618

                           

                           949-616-3300
                           

                           949-616-3399
                           Fax










June 29, 2016


 


Stephen Markscheid


419 Washington Avenue


Wilmette, Illinois 60091 


 


Dear Stephen,


 


On behalf of Ener-Core, Inc., a Delaware
corporation (the “Company”) or its successors, I am pleased to invite you to join the Company’s Board of Directors
(the “Board”), subject to your election to the Board by the stockholders or directors, as appropriate (the date of
such election being the “Effective Date”), which we anticipate will be approximately June 29, 2016 or at which date
Ener-Core’s CFO informs the Board of Directors that all necessary paperwork and checks have been completed. You will serve
as a director from the Effective Date until the date upon which you are not re-elected or your earlier removal or resignation.


 


In consideration for your service on
the Board and subject to approval by the Board, you will be granted an option under the Company’s Stock Incentive Plan (the
“Plan”) to purchase 6,000 shares of the Company’s common stock at an exercise price of $4.31 per share.


 


We will recommend that the Board set
your vesting schedule as follows: (i) 1/4 of the total number of options will be vested after twelve months from the Effective
Date, and (ii) 1/48 of the total number of options will be vested after each month thereafter.


 


In addition to the shares granted to
you under the Company’s Stock Incentive Plan, that you will receive an annual director’s fee of $40,000 payable monthly
for your services as an independent director (“Annual Stipend”). There are no assurances that the Company will pay
you the Annual Stipend, in addition to the shares being granted to you under the Plan, however, it is the Company’s intention
to provide cash compensation to board members in the future.


 






    	 		 



     


    




 


The Company will reimburse you for all
reasonable travel expenses that you incur in connection with your attendance at meetings of the Board, in accordance with the Company’s
expense reimbursement policy as in effect from time to time. In addition, you will receive indemnification as a director of the
Company to the maximum extent extended to directors of the Company generally, as set forth in the Company’s certificate of
incorporation, bylaws, an indemnification agreement between the Company and you (which will be provided to you upon the Effective
Date), and any reasonable Director and Officer Insurance the Company may have and maintain from time to time.


 


Every January the Board’s compensation
committee will conduct an annual review of your compensation to ensure that the compensation remains adjusted to the company’s
and market conditions with final approval of any changes to the structure upon the approval of the Board and potentially a shareholder
vote.


 


In accepting this offer, you are representing
to us that (i) you do not know of any conflict which would restrict your service on the Board and (ii) you will not provide the
Company with any documents, records, or other confidential information belonging to other parties.


 


This letter sets forth the initial compensation
you will receive for your service on the Board. The Board’s compensation committee will conduct an annual review of the Board
compensation to ensure that the compensation remains adjusted to the company’s and market conditions. Nothing in this letter
should be construed as an offer of employment. If the foregoing terms are agreeable, please indicate your acceptance by signing
the letter in the space provided below and returning this letter to the Company.


 


Sincerely,




ENER-CORE, INC.


	By:	
 	 
	 	Michael J. Hammons	 



			Chairman



 


Accepted and agreed:


 





 



Stephen Markscheid



 


 



Date




 


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