Orchestra BioMed Holdings Inc

COMPENSATION OF EXECUTIVES AND DIRECTORS

Executive Compensation

This section discusses the material components of the executive compensation program for our “named executive officers.” For the fiscal year ended December 31, 2023, our “named executive officers” and their positions were as follows:

Unless the context otherwise requires, all references in this section to the “Company,” “Orchestra,” or “it” refer to the business of Legacy Orchestra and its subsidiaries prior to the consummation of the Business Combination and to the Company and its subsidiaries after the Business Combination. References in this section to “common stock” refer to Legacy Orchestra Common Stock before the Business Combination and Company Common Stock after the Business Combination. All share counts in this section are shown on a post-Business Combination basis.

We are an emerging growth company and a smaller reporting company. Therefore, we are be subject to reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder non-binding advisory approval of any golden parachute payments not previously approved.

Summary Compensation Table

The following table presents summary information regarding the total compensation that was awarded to, earned by or paid to Orchestra’s named executive officers for the years ended December 31, 2023 and December 31, 2022.

Notes:

forfeitures related to service-vesting conditions. See Note 11 to Orchestra’s consolidated financial statements for the fiscal years ended December 31, 2023 and 2022 included in Item 8 of this Form 10-K for a description of Orchestra’s assumptions used in the calculation.

Narrative Disclosure to Summary Compensation Table

Overview

The primary elements of compensation for Orchestra’s named executive officers are base salary, annual performance bonuses and equity awards. Orchestra’s named executive officers also participate in employee benefit plans and programs that Orchestra offers to its other employees, as described below. Orchestra’s executive compensation program is designed to attract, retain and reward key employees, to incentivize them based on the achievement of key performance goals, and to align their interests with the interests of Orchestra stockholders.

Annual Base Salary

The current salaries of Orchestra’s named executive officers are specified in their respective employment agreements, which, with respect to Messrs. Hochman and Sherman were negotiated with Orchestra’s executive officers in connection with the closing of the Business Combination. Mr. Taylor’s salary was negotiated in connection with his hiring in June 2023.

Non-Equity Incentive Compensation

Orchestra’s named executive officers are entitled to receive non-equity incentive plan bonuses pursuant to the terms of their respective employment agreements. Under the terms of these employment agreements, the amounts of these bonuses and the performance metrics and goals required to receive those bonus amounts are determined by the Orchestra Board based on appropriate comparative benchmarks.

2023

For 2023, 100% of the annual non-equity incentive plan bonuses for Messrs. Hochman and Sherman and 75% of the annual non-equity incentive plan bonus for Mr. Taylor were based on progress made relating to the following corporate goals and objectives approved by the Compensation Committee (the “2023 Corporate Goals and Objectives”):

For Mr. Taylor, 25% of his annual non-equity incentive plan bonus was based on his performance against individual performance goals and objectives.

For 2023, the target bonus for each of Messrs. Hochman and Sherman was 80% of base salary, and the target bonus for Mr. Taylor was 50% of base salary, in each case as provided in the applicable employment agreement for each of the named executive officers.

Based on the Company’s performance against each of the 2023 Corporate Goals and Objectives, the Compensation Committee determined that in the aggregate the 2023 Corporate Goals and Objectives were achieved at a 75% level, resulting in each of Messrs. Hochman and Sherman receiving bonuses at 75% of their respective target bonus levels. Based on the evaluation of Mr. Taylor’s individual performance by the Chief Executive Officer against his individual performance goals and objectives and the Company’s performance against the 2023 Corporate Goals and Objectives, Mr. Taylor was awarded a bonus at 83.3% of his target bonus level. The actual annual non-equity incentive plan cash bonuses awarded to each named executive officer for 2023 performance are set forth above in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.”

2022

For 2022, annual non-equity incentive plan bonuses for Orchestra’s named executive officers were based on progress made (i) relating financing and matters relating to potentially becoming a public company (ii) by the focal therapies group with respect to certain clinical, regulatory and other matters and (iii) by the bioelectronic therapies group with respect to entering into the Medtronic Agreement, clinical studies, product development, as well as clinical and regulatory development.

For 2022, the target bonus for each of Messrs. Hochman and Sherman was 100% of their respective base salaries. Based on Orchestra’s progress against the performance goals set by its compensation committee, the compensation committee determined to pay each of its named executive officers 100% of their target bonuses for 2022. The actual annual non-equity incentive plan cash bonuses awarded to each named executive officer for 2022 performance are set forth above in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.”

Equity-Based Incentive Awards

Orchestra’s equity-based incentive awards are designed to align its interests and the interests of its stockholders with those of its employees and consultants, including the named executive officers. The Orchestra Board is responsible for approving equity grants based on recommendations of the compensation committee. As described below, each of the named executive officers is entitled to certain equity awards pursuant to the terms of his employment agreement.

For a discussion of the equity awards granted to our named executive officers in 2022 and 2023, please see “Employment Agreements with Orchestra’s Named Executive Officers” in this Item 11.

Employment Agreements with Orchestra’s Named Executive Officers

Each of Orchestra’s named executive officers is party to an employment agreement with Orchestra’s that sets forth the terms and conditions of their employment. Each such agreement provides for “at will” employment. The material terms of the employment agreements with the named executive officers are described below.

Certain Provisions in David P. Hochman’s Employment Agreement in Existence Prior to January 26, 2023

On May 31, 2018, Orchestra entered into an employment agreement with Mr. Hochman that governed the terms of his employment with Orchestra as its Chief Executive Officer (the “Prior Hochman Agreement”) until his employment agreement was amended on January 26, 2023 in connection with the closing of the Business Combination. Pursuant to the Prior Hochman Agreement, Mr. Hochman received an annual base salary of $395,000. In addition to this base compensation, Mr. Hochman was eligible to receive a discretionary annual bonus during each fiscal year of his employment, such amount, and the performance metrics and goals required to receive such amount, to be determined by the Orchestra Board based on appropriate comparative benchmarks. The Prior Hochman Agreement also provided that he receive common stock or options to acquire common stock (at his election) in the amount of four percent of the fully-diluted shares of Orchestra Common Stock as of the date of the final closing of the private placement of Orchestra’s Series B Preferred Stock (the “Hochman Series B Grant”). In accordance with the Hochman Series B Grant, Mr. Hochman was (i) granted options to purchase 263,821 shares of common stock at an exercise price of $4.30 per share on August 7, 2018 and (ii) 46,500 shares of restricted stock on August 7, 2019, which shares were issued late due to an administrative omission (the Orchestra Board determined to vest all of these shares immediately in light of the delay in their issuance).

The final closing of Orchestra’s private placement of Series B Preferred Stock did not take place until October 18, 2018, and Mr. Hochman was granted 55,345 shares of restricted stock in August 2019 pursuant to the Hochman Series B Grant.

In addition, the Prior Hochman Agreement provided that Mr. Hochman was to receive common stock or options to acquire common stock (at his election), in an amount such that, together with the options and restricted stock issued pursuant to the Hochman Series B Grant, he would receive common stock or options to acquire common stock in an amount equal to four percent of the fully-diluted shares of common stock as of the earlier of (A) the date of the final closing of a Follow-On Offering (as such term is defined in the Investors’ Rights Agreement, dated May 31, 2018, by and among Orchestra and investors signatory thereto, as amended (the “Investors’ Rights Agreement”)) and (B) the effective date of Orchestra’s first firm commitment public offering of its common stock under the Securities Act (such earlier date, the “Follow-On Offering Date”). Orchestra’s private placement of Series B-1 Preferred Stock would have qualified as a Follow-On Offering; however, pursuant to the terms of the Investors’ Rights Agreement, the Orchestra Board and Orchestra’s stockholders waived the treatment of the Series B-1 Preferred Stock offering as a Follow-On Offering. The Series D Financing qualified as a Follow-On Offering, and, accordingly, Mr. Hochman was entitled to receive 677,890 shares of common stock or options to acquire common stock. Of this amount, Mr. Hochman received 15,500 shares of restricted stock and 546,140 options to acquire common stock in 2022 and 116,250 options to acquire common stock in 2023.

Certain Provisions in Darren R. Sherman’s Employment Agreement in Existence Prior to January 26, 2023

On May 31, 2018, Orchestra entered into an employment agreement with Mr. Sherman that governed the terms of his employment with Orchestra as its President and Chief Operating Officer (the “Prior Sherman Agreement” and, together with the Prior Hochman Agreement, the “Prior Executive Agreements”) until his employment agreement was amended on January 26, 2023. Pursuant to the Prior Sherman Agreement, Mr. Sherman received an annual base salary of $395,000. In addition to this base compensation, Mr. Sherman was eligible to receive a discretionary annual bonus during each fiscal year of his employment, such amount, and performance metrics and goals required to receive such amount, to be determined by the Orchestra Board based on appropriate comparative benchmarks. The Prior Sherman Agreement also provided that he receive common stock or options to acquire common stock (at his election) in the amount of four percent of the fully-diluted shares of common stock as of the date of the final closing of the private placement of Orchestra’s Series B Preferred Stock (the “Sherman Series B Grant”). In accordance with the Sherman Series B Grant, Mr. Sherman was granted options to purchase 310,321 shares of common stock at an exercise price of $4.30 per share on August 7, 2018. The final closing of Orchestra’s private placement of Series B Preferred Stock did not take place until October 18, 2018, and Mr. Sherman was granted 55,345 shares of restricted stock in August 2019 pursuant to the Sherman Series B Grant.

In addition, the Prior Sherman Agreement provided that he was to receive common stock or options to acquire common stock (at his election), in an amount such that, together with the options and restricted stock issued pursuant to the Sherman Series B Grant, he would have received common stock or options to acquire common stock in an amount equal to four percent of the fully-diluted shares of common stock as of the Follow-On Offering Date. Orchestra’s private placement of Series B-1 Preferred Stock would have qualified as a Follow-On Offering; however, pursuant to the terms of the Investors’ Rights Agreement, the Orchestra Board and Orchestra’s stockholders waived the treatment of the Series B-1 Preferred Stock offering as a Follow-On Offering. The Series D Financing qualified as a Follow-On Offering, and, accordingly, Mr. Sherman was entitled to receive 677,890 shares of common stock or options to acquire common stock. Of this amount, Mr. Sherman received 561,640 options to acquire common stock in 2022 and 116,250 options to acquire common stock in 2023.

Provisions Applicable to Option Awards Made Under the Prior Executive Agreements

Any option grant made under the Prior Executive Agreements has the following terms:

All options and restricted stock granted pursuant to Prior Executive Agreements vested as follows: 33% of any options or restricted stock awarded were fully vested at the time of the award and 67% vested on a quarterly basis over three years, with the first vesting date being the end of the first calendar quarter after the date of the award.

Certain Provisions in the Amended Employment Agreements of David P. Hochman and Darren R. Sherman Entered into on January 26, 2023

On January 26, 2023, Orchestra entered into employment agreements with each of Mr. Hochman and Mr. Sherman that governs the terms of their employment with Orchestra. The agreements provide that Mr. Hochman shall serve as Chief Executive Officer and Orchestra BioMed Founder and Mr. Sherman shall serve as President, Chief Operating Officer, and Orchestra BioMed Founder. Employment under the agreements is “at will” although Mr. Hochman and Mr. Sherman may be entitled to severance upon certain terminations as described below. Pursuant to the agreements, the executives receive annual base salaries ($595,000 for Mr. Hochman and $495,000 for Mr. Sherman). In addition to this base compensation, the executives are each eligible to receive a discretionary annual bonus during each fiscal year of his employment with a target amount of 80% of base salary, with the performance metrics and goals required to receive such amount to be determined by the Orchestra Board in consultation with Orchestra’s Chief Executive Officer.

The agreements also provide for a future grant of equity compensation (the “Equity Grant”) to each of the executives, to be made as soon as reasonably practicable following the beginning of Orchestra’s first open trading window, so that the executive’s long-term equity holdings in Orchestra are at least 4.6% of Common Stock in the case of Mr. Hochman and 4.3% in the case of Mr. Sherman. These percentages assume the future grant is in the form of stock options with a four-year vesting schedule commencing on January 26, 2023, the date of the closing of the Business Combination. However, the agreements contemplate that if instead the award is restricted stock units, the number of covered shares of Common Stock will be reduced by a ratio based on two shares covered by restricted stock units being equal to three shares covered by stock options and that the award will vest over a to-be-agreed vesting schedule over a minimum of three years. Pursuant to the Equity Grant, on July 20, 2023, (i) Mr. Hochman was granted options to purchase 232,500 shares of common stock at an exercise price of $7.42 per share and 465,000 restricted stock units (“RSUs”) and (ii) Mr. Sherman was granted 539,667 RSUs.

Board Membership Provisions

The employment agreements provide that so long as each of Messrs. Hochman and Sherman remain in their current positions (Chief Executive Officer for Mr. Hochman and President and Chief Operating Officer for Mr. Sherman), Orchestra shall nominate each of them to serve as a member of the Orchestra Board. Messrs. Hochman and Sherman’s service as a member of the Orchestra Board shall end upon certain specified events, including the termination of their employment and the expiration of their then current term if not reelected by Orchestra’s stockholders.

Termination and Severance Provisions

With respect to the each of Messrs. Hochman and Sherman, if Orchestra terminates his employment without Cause (as defined below), if he voluntarily resigns with Good Reason (as defined below), or in the event of his death, and subject to an effective release of claims, Orchestra will pay or provide him or his estate with continued base salary plus target bonus for 12 months (the “Severance Obligations”). In addition, in the event of a termination without Cause or resignation for Good Reason, and subject to an effective of release of claims, Orchestra will pay or provide the executive with (i) if he validly elects to continue his healthcare coverage under applicable law, reimbursement of the applicable premium for up to 12 months, (ii) an extended stock option post-termination exercise period of up to 12 months, and (iii) all equity awards held by the executive granted prior to the closing of the Business Combination will vest to the same extent such awards would have vested had the executive provided an additional 12 months of services. If the termination without Cause or resignation for Good Reason occurs within the period beginning three months prior to a Change of Control (as defined in the Company’s 2023 Equity Incentive Plan) and ending 12 months following a Change of Control, then, subject

to an effective release of claims, the continued Severance Obligations shall be increased to 150% of annual base salary and target bonus, and (ii) all unvested equity awards held by the executive shall vest in full.

In addition, upon any termination of employment, each of Messrs. Hochman and Sherman shall be entitled to payment of accrued, but unpaid, base salary and reimbursement of previously and properly incurred business expenses.

Other Change of Control Provisions Not Part of Severance

The employment agreements provide that if a Change of Control occurs and the acquirer or surviving corporation refuses to assume or substitute for the executive’s outstanding equity awards, the equity awards shall vest in full as of the date immediately preceding the Change of Control.

Definition of Cause

“Cause” means each of:

Definition of Good Reason

“Good Reason” means each of:

provided, however, that the executive must provide written notice within 60 days of the occurrence of the potential Good Reason trigger; if curable, Orchestra must fail to cure the potential Good Reason trigger within 60 days of receipt of notice, and the executive must resign within 60 days following the expiration of the 60-day cure period.

Golden Parachute Provisions

The employment agreements contain customary golden parachute provisions providing that if, in connection with a Change of Control, amounts would constitute “parachute payments” under Section 280G of the Internal Revenue Code, and be subject to an excise tax under Section 4999 of the Internal Revenue Code, amounts will either be (i) reduced, or (ii) paid in full, whichever results in the greater after tax amount to the executive.

Certain Provisions in Andrew Taylor’s Employment Agreement

On June 5, 2023, Orchestra entered into an employment letter agreement with Mr. Taylor (the “Taylor Agreement”). Pursuant to the terms of the Taylor Agreement, Mr. Taylor serves as Orchestra’s Chief Financial Officer and is entitled to an annual base salary of $395,000. In addition, pursuant to the Taylor Agreement, Mr. Taylor:

Termination and Severance Provisions

Pursuant to the Taylor Agreement, upon any termination of Mr. Taylor’s employment with the Company for any reason, he is entitled to his earned but unpaid wages, including, accrued but unpaid paid time off, reimbursable business expenses, vested benefits, and such other amounts as applicable law may require.

If Mr. Taylor’s employment is terminated without Cause or for Good Reason (each as defined below) and conditioned on, among other things, Mr. Taylor’s execution in favor of the Company (including its subsidiaries and affiliates and its and their officers, directors and employees) of a general release of all claims becoming irrevocably effective, the Company is required to pay or provide Mr. Taylor with severance consisting of (i) his continued base salary for the Severance Period (as defined below), (ii) COBRA reimbursement during the Severance Period (or, if earlier, until Mr. Taylor becomes eligible for benefits from a subsequent employer), (iii) accelerated vesting of the Taylor Initial Equity Award so that it is vested to the same extent it would be vested had Mr. Taylor’s employment continued for the duration of the Severance Period, and (iv) if a CiC Termination (as defined below), a one-time payment equal to Mr. Taylor’s then current target Annual Bonus. The Severance Period (i) during the first 18 months of employment will be nine months, and (ii) following 18 months of employment the Severance Period will increase to 12 months. Notwithstanding the foregoing, if there is a Change in Control (as defined in the 2023 Plan) within the first 18 months of Mr. Taylor’s employment, the Severance Period will increase to 12 months if the termination occurs within the period commencing three months prior to a Change in Control and ending 12 months following a Change in Control (such a termination during the first eighteen months, a “CiC Termination”).

Definition of Cause

“Cause” means each of:

Definition of Good Reason

“Good Reason” means each of:

provided, however, that Mr. Taylor must provide written notice within 60 days of the occurrence of the potential Good Reason trigger; if curable, Orchestra must fail to cure the potential Good Reason trigger within 60 days of receipt of notice, and the executive must resign within 60 days following the expiration of the 60-day cure period.

Restrictive Covenant Obligations Applicable to All Named Executive Officer Employment Agreements

Pursuant to their employment agreements, each of Orchestra’s named executive officers is subject to a one-year post-termination non-solicitation of employees covenant, in addition to his obligations, including a perpetual non-disparagement covenant, under his confidential information and intellectual property assignment agreement.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information regarding outstanding stock options and stock awards held by Orchestra’s named executive officers as of December 31, 2023. Each of the outstanding equity awards was granted pursuant to the Orchestra BioMed, Inc. 2018 Stock Incentive Plan (“2018 Plan”) or the Company’s 2023 Equity Incentive Plan (the “2023 Plan”).

Defined Contribution Plan

Orchestra currently maintains a 401(k) retirement savings plan, or the 401(k) plan, for its employees, including its named executive officers, who satisfy certain eligibility requirements. The 401(k) plan is intended to qualify as a tax-qualified plan under Section 401(k) of the Internal Revenue Code. Orchestra’s named executive officers are eligible to participate in the 401(k) plan on the same basis as its other employees. The Internal Revenue Code allows eligible

employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. Orchestra reserves the right to make discretionary matching contributions or non-elective contributions under the 401(k) plan. In 2023, Orchestra began providing a matching contribution under the 401(k) plan.

Orchestra does not maintain any defined benefit pension plans.

Nonqualified Deferred Compensation

Orchestra does not maintain any nonqualified deferred compensation plans.

Director Compensation

Legacy Orchestra has historically provided equity-based compensation to certain of its directors for the time and effort necessary to serve as a member of the Orchestra Board.

Director Compensation Table

The following table presents summary information regarding the total compensation that was awarded to, earned by or paid to Orchestra’s non-employee directors for services rendered during the year ended December 31, 2023.

(1) The amounts shown in this column represent the aggregate grant date fair value of option awards or stock awards, as applicable, granted to Orchestra’s non-employee directors computed in accordance with FASB ASC 718. Such grant-date fair value does not take into account any estimated forfeitures related to service-vesting conditions. See Note 11 to Orchestra’s consolidated audited financial statements for the fiscal years ended December 31, 2023 and 2022 included elsewhere in this Form 10-K for a description of Orchestra’s assumptions used in the calculation.

Director Compensation Policy

As of the date of this Form 10-K, our non-employee directors are entitled to the following compensation:

Cash Compensation

All annual cash compensation amounts for our non-employee directors are payable in equal quarterly installments in arrears, pro-rated for any partial months of service. Additionally, we will reimburse each non-employee director for reasonable, customary and documented travel expenses related to such director’s attendance at Board and committee meetings.

Equity Compensation

For 2023, our non-employee directors were granted, at their election, either stock options or common stock or a combination thereof with a grant date fair value of between approximately $88,000 and $148,000, depending on their elections. These awards will vest in one installment on the one year anniversary of the grant date. Under our current non-employee director compensation policy, on the date of each annual meeting of the Company’s stockholders (the “Annual Meeting”), each non-employee director automatically will be granted (i) a nonstatutory stock option (“NSO”) to purchase shares of Common Stock having a grant date fair value of $85,000, rounded down to the nearest whole share (the “Annual NSO Award”), and (ii) restricted stock units having a grant date fair value of $40,000, rounded down to the nearest whole share (the “Annual RSU Award” and, together with the Annual NSO Award, the “Annual Award”). Subject to adjustments, each Annual NSO Award and Annual RSU Award will vest in one installment on the earlier of (x) the one year anniversary of the grant date or (y) the following Annual Meeting. Each Annual NSO Award and Annual RSU Award will vest fully upon death, disability or a change in control, in each case, subject to the non-employee director’s continued service through the applicable vesting date or change in control, as applicable.

Under our current non-employee director compensation policy, upon a non-employee director’s appointment to our Board, such non-employee director automatically will be granted (i) a NSO to purchase shares of Common Stock having a grant date fair value of $85,000, rounded down to the nearest whole share (the “NSO Appointment Award”), (ii) Restricted Stock Units having a grant date fair value of $40,000, rounded down to the nearest whole share (the “RSU Appointment Award”), and (iii) to the extent applicable, a pro-rata portion of the Annual Award. Subject to adjustment, each NSO Appointment Award and RSU Appointment Award, and any pro-rata portions of the Annual Award granted to a newly appointed non-employee director, will vest in three equal, annual installments beginning with the first annual anniversary after the grant date. Each NSO Appointment Award and RSU Appointment Award will vest fully upon death, disability or a change in control, in each case, subject to the non-employee director’s continued service through the applicable vesting date or change in control, as applicable.

Each non-employee director will have a maximum annual total compensation of $500,000, including both cash and equity, except that in the initial year of service or for a non-employee chairperson of the Board or the Lead Independent Director, the maximum annual total compensation will be $750,000.