Exhibit 10.2


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT
(“Agreement”) is made and shall be effective as of August 3, 2015 (the “Effective Date”),
by and between CAPRICOR, INC., a Delaware corporation, whose offices are located at 8840 Wilshire Blvd., 2nd Floor, Beverly
Hills, California 90211 (the “Company”), and DEBORAH V. DAVIS ASCHEIM, MD, whose address is (“Employee”).


 


A.   The Company
is engaged in the business of developing and commercializing novel therapies for the treatment of diseases and desires to assure
itself of the services of Employee by engaging Employee to perform services under the terms of this Agreement;


 


B.   Employee
is a cardiologist with extensive expertise in the planning and execution of clinical trials and Employee desires to provide services
to the Company on the terms herein provided; and


 


C.   The parties now desire to enter into an Employment Agreement which shall set forth the full terms and conditions of Employee’s
employment.


 


NOW, THEREFORE,
in consideration of the mutual covenants, promises, and agreements set forth herein and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby mutually agree as follows:


 


1.          EMPLOYMENT.
The Company hereby agrees to employ Employee, and Employee hereby agrees to accept employment with the Company, upon the terms
and conditions herein set forth. Employee’s start date shall be on or about July 27, 2015, as determined by Employee.


 


2.          DUTIES
AND POWERS OF EMPLOYEE


 


2.1     Duties
of Employee. Employee shall serve as the Company’s Chief Medical Officer reporting directly to the Chief Executive
Officer or to such other person designated from time to time by the Chief Executive Officer. In that capacity, Employee shall do
and perform all services, acts or things necessary or advisable to manage the Company’s medical and clinical operations.
Employee’s responsibilities shall include, without limitation, performing those Services set forth on Exhibit A,
attached hereto and incorporated herein, which may be amended from time at the discretion of the Chief Executive Officer (collectively,
the “Services”) so long as such amended duties are consistent with duties customarily performed by a Chief Medical
Officer. Except as otherwise specifically set forth in this Agreement, during the duration of her employment, and except for periods
of illness, vacation, or reasonable leaves of absence, Employee shall devote her full time and attention to the business and affairs
of the Company, as such business and affairs now exist and as they hereafter may be changed or added to, under and pursuant to
the general direction of the Company’s Board of Directors (the “Board”).


 




    	 	1	 



     


    

 


2.2     Place
of Performance. Employee shall perform her duties from the Company’s offices located in Beverly Hills, California
unless otherwise specifically authorized in writing or otherwise required in the performance of her duties.  


 


2.3     Other
Activities.


 


(a)    During the
continuation of her employment hereunder, Employee shall not provide any work or services to any other person or organization without
the prior written consent of the Chief Executive Officer, which consent may be withheld in the Chief Executive Officer’s
sole and absolute discretion. Nothing contained herein shall prohibit Employee from making passive personal investments in publicly
traded companies so long as Employee’s investment does not constitute an equity position greater than five percent (5%) of
such company’s outstanding securities.


 


(b)    The Company
acknowledges that Employee is currently providing clinical services to one or more medical institutions in connection with clinical
trials being conducted pursuant to certain grants that have previously been awarded. The Company agrees that notwithstanding any
other provision contained herein, Employee shall have the right to commit a limited portion of her work time to the performance
of such clinical services, provided that (i) such services rendered by Employee do not interfere with the performance of Employee’s
responsibilities to the Company, and (ii) the clinical trials do not pose an actual or potential conflict of interest and are not
competitive, directly or indirectly, with the business of the Company. A list of the trials with which Employee is currently involved
is attached hereto as Exhibit B. Such Exhibit B shall be updated regularly by Employee. If Capricor determines
that the conditions set for in subsection (1) or (2) above, are not satisfied, Capricor may request that Employee cease her involvement
with such trials or the Company may terminate this Agreement in accordance with Section 7.2 below.


 


(c)    In addition
to the foregoing, Employee shall have the right to participate on one or more Boards of other organizations provided that (i) such
participation does not pose an actual or potential conflict of interest with the Company; (ii) the organizations are not
competitive, directly or indirectly, with the business of the Company; and (iii) such Board service does not materially interfere
with the performance of Employee’s responsibilities to the Company. The Board positions currently held by Employee are set
forth on Exhibit B which shall be updated regularly by Employee.


 


2.4       Company
Policies. By execution of this Agreement, Employee is agreeing to comply with all Company policies, procedures and standards
of conduct that are currently in effect or that may be established or modified by the Company from time to time.


 


3.         COMPENSATION


 


3.1       Base
Salary. In consideration of the Services to be provided by Employee during her employment hereunder, Employee shall receive
a base salary of two hundred fifty thousand dollars ($250,000) per annum (the “Base Salary”), which sum shall
be payable in semi-monthly installments consistent with Company pay practices..


 




    	 	2	 



     


    

 


3.2      Grant
of Stock Options. As further consideration for the Services to be provided by Employee hereunder, subject to the approval
of the Company’s Board, Employee shall be granted a stock option under Capricor Therapeutics’ 2012 Restated Equity
Incentive Plan (the “Stock Plan”) to purchase an aggregate of 100,000 shares of Common Stock of Capricor Therapeutics,
Inc. (the “Option Shares”). If granted, 25% of the Option Shares shall vest on the first anniversary of the
first day of the month following the date of grant (“Grant Date”) and the remainder will vest at the rate of
1/36 per month on the first day of each succeeding month thereafter over a three-year period. The exercise price for the Option
Shares shall be not less than the fair market value of the shares on the Grant Date which will be determined by the closing price
of the Common Stock on the Grant Date. The Option Shares shall be further subject to the provisions of the Stock Plan and the applicable
Stock Option Agreement to be executed by the Capricor Therapeutics and Employee.


 


3.3       Additional
Compensation. Along with other Executives of the Company, Employee shall be considered for Base Salary increases, bonuses
or additional stock options, the granting of which shall be determined in the sole discretion of the Company’s Compensation
Committee and Board of Directors taking into consideration Employee’s performance and the performance of the Company as a
whole.


 


3.4     Deduction
of Taxes. The Company shall have the right to deduct or withhold from the compensation due to Employee hereunder any and
all sums required for Federal Income and Social Security taxes and all other federal, state or local taxes now applicable or that
may be enacted and become applicable in the future.


 


4.         OTHER
BENEFITS


 


4.1       Insurance.
Commencing on the first day of the month following the thirty (30) day period after the commencement of employment and so long
as Employee remains employed by the Company, Employee shall be entitled to participate in the medical, dental and vision insurance
plans which are from time to time made available to other employees of the Company in accordance with the Company’s policies
then in effect. The right to receive such insurance benefits shall vest if and only if any of the foregoing types of insurance
plans are adopted and maintained by the Company. In addition, commencing in the second year of Employee’s employment, the
sum of one thousand dollars ($1,000) shall be deposited into a flexible spending account each year earmarked for Employee’s
benefit to be used only for qualified medical expenses. If Employee’s employment is terminated for whatever reason before
such sum is expended by her, any remaining balance will be cancelled upon termination of employment. The insurance provided to
Employee shall be consistent with that afforded to other C-level executives of the Company.


 




    	 	3	 



     


    

 


4.2      Paid
Time Off and Sick Pay.


 


(a)    Paid
Time Off. Employee shall be entitled to a maximum of twenty (20) working days’ off during each one-year period
of this Agreement without loss of compensation, to be taken at a time or times mutually agreed upon by the Company and Employee.
Paid time off days may be taken only at such times as are mutually convenient for the Company and Employee. Employee acknowledges
that all matters regarding paid time off will be subject to the Company’s written policy with respect thereto, a copy of
which shall be provided to Employee upon commencement of her employment.


 


(b)    Sick
Days. Commencing after the first sixty (60) calendar days of Employee’s employment, Employee shall be entitled
to take a maximum of four (4) sick days per calendar year without loss of compensation. Employee acknowledges that all matters
regarding sick leave will be subject to the Company’s written policy with respect thereto, a copy of which shall be provided
to Employee upon commencement of her employment.


 


4.3      Business
Expenses. The Company shall reimburse Employee monthly for all reasonable business expenses incurred by Employee in performing
the Services hereunder, including, without limitation: (a) expenses incurred for business travel; (b) meals, lodging, and ground
transportation expenses incurred during business travel; (c) pre-approved promotional expenses; (d) long distance telephone charges;
and (e) any other expenses which the Company determines is necessary in connection with the performance of Employee’s Services
hereunder. Each such expense shall be reimbursable only if it is of such a nature qualifying it as a proper deduction on the federal
and state income tax returns of the Company and has been pre-approved in writing by the Company. Employee shall furnish to the
Company adequate records, receipts and other documentary evidence required by federal and state statutes and regulations issued
by the appropriate taxing authorities for the substantiation of that expenditure as an income tax deduction. Notwithstanding the
foregoing, Employee shall not be required to obtain prior written approval for expenditures under the sum of $500. All travel shall
be in accordance with the Company’s Travel Policy applicable to other C-level executives of the Company.


 


4.4    Sarbanes-Oxley
Act of 2002. Notwithstanding anything herein to the contrary, if the Company determines, in its good faith judgment, that
any provision of this Agreement is likely to be interpreted as a personal loan prohibited by the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated thereunder (the “Act”), then such provision shall be modified as necessary
or appropriate so as to not violate the Act and if this cannot be accomplished, then the Company shall use its reasonable efforts
to provide Employee with similar, but lawful, substitute benefits at a cost to the Company not to significantly exceed the amount
the Company would have otherwise paid to provide such benefit(s) to Employee.


 




    	 	4	 



     


    

 


4.5    Modification
of Benefits. The Company reserves the right from time to time to alter, modify or eliminate benefits offered to
it employees under any of the Company’s policies or plans.


 


5.          OBLIGATIONS
OF EMPLOYEE


 


5.1    Confidential
and Proprietary Information. Employee acknowledges and agrees that she has been given, and during the continuance of this
Agreement and in the course of discharging her duties hereunder she will have access to and become acquainted with, information
and know-how concerning the operation, products and processes of the Company which are confidential and/or proprietary to the Company
(and/or its licensors and affiliates). As a condition of Employee’s employment, Employee agrees to execute an At-Will
Employment, Confidential Information, and Invention Assignment Agreement (the “Proprietary Rights Agreement”)
which, among other things, shall set forth Employee’s obligations with respect to the Company’s confidential and proprietary
information. An executed copy of the Proprietary Rights Agreement shall be attached hereto as Exhibit C and incorporated
herein by reference.


 


5.2    Non-Competition
and Non-Solicitation By Employee. Employee acknowledges and agrees that her duty of loyalty to the Company is of paramount
importance.  As a condition of Employee’s employment, Employee acknowledges and agrees to abide by the provisions
regarding non-competition and non-solicitation set forth in the Proprietary Rights Agreement attached hereto as Exhibit C.


 


5.3    Equitable
Remedies. In the event of a breach or threatened breach of the provisions of Section 5 of this Agreement, including its
subsections, the Company shall be entitled to an injunction enjoining Employee from such breach, but nothing herein shall be construed
as prohibiting the Company from pursuing in addition any other remedies available for such breach or threatened breach.


 


6.          COMPLIANCE
AND REPRESENTATIONS; ETHICAL CONDUCT


 


6.1    Ethical
Conduct. It is the policy of Capricor to conduct its business at all times
in accordance with the highest standards of corporate, business and medical ethics. Employee agrees to comply with those standards
as more particularly set forth in the Company’s Code of Conduct and Ethics in all matters relating to the Services and all
other performance under or pursuant to this Agreement. 


 


6.2     Compliance
with Laws. In the performance of the Services hereunder, Employee will comply with all applicable laws, rules and regulations
of any government or governmental body or board having jurisdiction and all professional standards and guidelines or any code of
conduct which may be applicable to persons involved in the conduct of clinical trials.


 




    	 	5	 



     


    

 


6.3    No
Improper Payments. Employee agrees that she will not, either on her own behalf or on behalf of the Company, make any improper
payment or make any donation, or give anything of value, either directly or indirectly, to an official of any government for the
purpose of improperly influencing an act or decision of the official in his or her official capacity or inducing the official to
use his or her influence to assist Employee or the Company in obtaining or maintaining business or for any other improper purpose
prohibited by applicable law or the public policies of the U.S. or any country in which the Company’s clinical trials are
conducted.


 


6.4    No
Political Payments. Employee shall not, in the name, on behalf or for the benefit of the Company or any of its affiliates
or in respect any clinical trial which it is conducting, offer, pay, give, promise to pay or give, or authorize the payment or
gift of money or anything of value to any official, political party (or employee of a customer) or to any other person at the request,
suggestion or direction of any official, political party (or employee of a customer) or when all or a portion of such money or
thing of value will be offered, given or promised, directly or indirectly, to any such person for the purpose of improperly obtaining
or retaining business or favorable governmental action.


 


6.5    No
Debarment. Employee represents that as of the time of the signing of this Agreement, she has not been debarred in the conduct
of clinical trials and she will not knowingly use the services of any debarred person in connection with any work on any clinical
trial conducted by the Company. If at any time after execution of this Agreement and continuing for a period of one (1) year after
the termination hereof, Employee becomes aware that she or any person utilized for the conduct of any of the Company’s clinical
trials is, or is knowingly in the process of being debarred, Employee shall so notify the Company in writing immediately.


 


7.          TERMINATION
OF EMPLOYMENT


 


7.1    At-Will
Employment. The employment of Employee shall commence on the Effective Date and shall continue in effect until the termination
hereof by either party. The employment of Employee is “At-Will” and may be terminated at the will of either the Company
or Employee, with or without cause or notice.


 


7.2    Payments
Due Upon Termination. Upon termination of Employee’s employment, the Company shall pay to Employee on such date required
by applicable law, a lump sum amount in cash equal to Employee’s Base Salary and other payments due through the date of termination
to the extent not theretofore paid. In the event Employee is terminated within the first 12-month period of this Agreement without
Cause, twenty-five percent (25%) of the option shares granted pursuant to Section 3.2 above shall be deemed vested immediately
prior to such termination. For purposes hereof, “Cause” shall be defined as: (i) 
the commission of an act of fraud or dishonesty by Employee; (ii) the unauthorized use or disclosure of Confidential Information
by Employee; (iii) the willful or habitual neglect by Employee in the performance of the Services; (iv) the debarment of Employee
or the commencement of debarment proceedings against Employee; (v) the conviction of Employee of a felony or other crime involving
moral turpitude; (vi) any other conduct by Employee which is injurious to the business or reputation of the Company; or (vii) the
failure of any of the conditions set forth in Section 2.3 above, and the failure to cure the same within seven (7) days after notice
from the Company


 




    	 	6	 



     


    

 


8.          GENERAL
PROVISIONS


 


8.1    Notices.
Any notices to be given by either party to the other may be effected either by personal delivery in writing, by facsimile or electronic
transmission or by mail, registered or certified, postage prepaid. Mailed notices shall be addressed to the parties at the addresses
appearing in the introductory paragraph of this Agreement or such other address on file for Employee in Employee’s personnel
records, but each party may change its address by written notice in accordance with this section. Notices personally delivered
or sent by facsimile transmission shall be deemed communicated as of the date of actual receipt; mailed notices shall be deemed
communicated two (2) days after the date on which they are mailed. With respect to any notice given to Employee, a copy shall also
be delivered to Mark S. Mingelgreen, Peyser & Alexander Management, Inc., 500 Fifth Avenue, Suite 2700, New York, NY 10110.


 


8.2    Entire
Agreement. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties with
respect to the employment of Employee by the Company, excluding any Nondisclosure Agreement previously signed by Employee, the
Proprietary Rights Agreement, the written policies adopted by the Company from time to time, and a Dispute Resolution and Mutually
Binding Arbitration Agreement to be executed by the parties contemporaneous herewith, and contains all of the covenants and agreements
between the parties with respect to that employment in any manner whatsoever. Each party acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, other than those set forth herein, have been made by any party, or anyone
acting on behalf of any party, and that no other agreement, statement, or promise between the parties not contained in this Agreement
shall be valid or binding on the parties. Any modification of this Agreement will be effective only if it is in writing signed
by the party to be charged.


 


8.3    Severability.
 If any one or more provisions in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable,
such provision shall be judicially modified accordingly to make such provision enforceable and if not possible to reasonably
do so, such provision shall be deemed excluded from this Agreement. In such case, the balance of this Agreement shall be interpreted
as if such provision were so excluded and shall be enforceable in accordance with its terms.


 




    	 	7	 



     


    

 


8.4    Waiver.
The failure of either party to insist on strict compliance with any of the terms, covenants, or conditions of this Agreement by
the other party shall not be deemed a waiver of that term, covenant, or condition, nor shall any waiver or relinquishment of any
right or power at any one time or times be deemed a waiver or relinquishment of that right or power for all or any other times.


 


8.5    Governing
Law. This Agreement and each of its provisions shall be governed by and construed in accordance with the laws of the State
of California (without regard to its conflict of law principles), except that the laws of the State of Delaware shall govern all
matters as to the Stock Plan and Stock Option Agreement.


 


8.6     Agreement
Binding. This Agreement shall inure to the benefit of and be binding upon the Company and its affiliates, successors and
assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform it as if no such succession had taken place.


 


8.7     Survival.
Notwithstanding any provision of this Agreement to the contrary, the provisions of Sections 5, 6 and 8 (and each of their subsections)
shall survive the expiration or termination of this Agreement as necessary to give full effect to all of the provisions contained
herein.


 


8.8     Headings
and Captions. Section headings and captions used in this Agreement are for reference only and shall not affect the construction
of this Agreement.


 


IN WITNESS WHEREOF,
the parties have caused this Agreement to be executed as of the Effective Date.


  


	Capricor, Inc.	 	Employee:
	 	 	 
	By:	/s/ Karen Krasney	 	/s/ Deborah V. Davis Ascheim
	 	 	 	Deborah V. Davis Ascheim, MD
	 	 	 	 
	Name:	Karen Krasney	 	 
	 	 	 	 
	Title:	EVP, General Counsel	 	 


 




    	 	8