| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers. |
Departure of Chief Financial Officer
On June 5, 2023, Orchestra BioMed Holdings, Inc. (the “Company”)
and Mr. Michael Kaswan, the Company’s Chief Financial Officer, mutually agreed to terms pursuant to which Mr. Kaswan will
step down as the Company’s Chief Financial Officer and separate from employment effective as of June 6, 2023 (the “Separation
Effective Date”).
In connection with Mr. Kaswan’s departure, the Company and
Mr. Kaswan entered into a consulting agreement dated as of June 5, 2023 (the “Consulting Agreement”), pursuant to
which Mr. Kaswan will provide services to assist the Company in transitioning his prior duties as Chief Financial Officer to the
new Chief Financial Officer. In exchange for such services, the Company will pay Mr. Kaswan $36,180 per month for up to six months
after the Separation Effective Date. Subject to (a) the Consulting Agreement not being terminated by the Company due to Mr. Kaswan’s
breach and (b) Mr. Kaswan’s execution and non-revocation of a standard general release of all claims, the Company will
(i) pay Mr. Kaswan an additional termination payment of $108,540 and (ii) provide that Mr. Kaswan shall be deemed
to have another three months’ service for purposes of vesting of outstanding equity compensation.
The foregoing description of the Consulting Agreement does not purport
to be complete and is qualified in its entirety by reference to the complete text of the Consulting Agreement, which is filed as Exhibit 10.1
to this Current Report on Form 8-K (“Form 8-K”) and is incorporated herein by reference.
Appointment of Chief Financial Officer
In
connection with Mr. Kaswan’s departure, the board of directors of the Company (the “Board”) appointed Mr. Andrew
Taylor, age 52, as Chief Financial Officer of the Company to succeed Mr. Kaswan, effective as of the Separation Effective
Date.
Prior to his appointment as the Company’s Chief Financial Officer,
Mr. Taylor served as Chief Financial Officer of Motus GI Holdings, Inc. (Nasdaq: MOTS) (“Motus GI”) from August 2017
until June 2023. Mr. Taylor served as the CFO and President of Avertix Medical, Inc. (f/k/a Angel Medical Systems, Inc.)
from 2007 until 2017 and has served on the board of directors of Avertix Medical since 2017. Avertix Medical is a medical device company
that develops and manufactures ischemia monitoring and alerting systems. While at Avertix Medical, Mr. Taylor supervised the majority
of the operations and employees in the United States and Brazil, while also overseeing the financial planning and analysis activities,
capital raising and licensing efforts, and implementation of capital and operating budgets. From 2005 to 2007, Mr. Taylor was a Practice
Leader for AC Lordi Consulting (now part of BDO USA, LLP), where he oversaw staff providing CFO and Controller consulting services. Prior
to that, Mr. Taylor was the CFO of Safe3w, Inc. from 2001 to 2005 until its acquisition by iPass, Inc., where he led all
accounting and finance functions as well as the fundraising efforts, and negotiated the sale of the company. From 1999 to 2001, Mr. Taylor
served as the Vice President of Finance and Administration of Abridge, Inc., where he developed and managed processes for budgeting,
forecasting and cash management. Prior to that, Mr. Taylor was a Senior Finance Associate at Delta Air Lines (NYSE: DAL), from 1998
to 1999. Mr. Taylor earned a B.A. in Political Science and Economics at McGill University and his MBA in Finance at Northeastern
University, and is a CFA Program Level II Candidate.
David Hochman, the Company’s Chief Executive Officer, is currently
the Chairman of the board of directors of Motus GI, and Darren Sherman, the Company’s President and Chief Operating Officer, also
serves on the board of directors of Motus GI. During the year ended December 31, 2022 and the three months ended March 31, 2023,
the Company paid approximately $245,000 and $45,000, respectively, to Motus GI in connection with a lease agreement for the use of portions
of Motus GI’s office space in Fort Lauderdale, Florida.
In connection with Mr. Taylor’s appointment, on June 5,
2023, the Company entered into an offer letter with Mr. Taylor, effective as of June 6, 2023, setting forth the terms and conditions
of Mr. Taylor’s employment (the “Employment Agreement”).
Pursuant to the Employment Agreement, Mr. Taylor will receive
an annual base salary of $395,000. In addition, subject to achieving certain milestones determined by the Board or the Compensation Committee
of the Board, Mr. Taylor is eligible for an annual incentive-based bonus, with a target of 50% of base salary. Mr. Taylor is
also eligible to receive an initial equity grant of either 278,502 restricted stock units (“RSUs”) of the Company or non-qualified
stock options (“Options”) covering 417,544 shares of Company common stock, or a combination of RSUs and Options as mutually
agreed by the Company and Mr. Taylor whereby each RSU is considered equal to two-thirds of one Option, through participation in the
Company’s 2023 Equity Incentive Plan.
There are no arrangements or understandings between Mr. Taylor
and any other persons pursuant to which he was appointed Chief Financial Officer of the Company. There are also no family relationships
between Mr. Taylor and any director or executive officer of the Company, and he has no direct or indirect material interest in any
transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
The foregoing description of the Employment Agreement does not purport
to be complete and is qualified in its entirety by reference to the complete text of the Employment Agreement, which is filed as Exhibit 10.2
to this Form 8-K and is incorporated herein by reference.