Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Chief Executive Officer Transition
On November 7, 2022, the Board of Directors (the “Board”) of Talkspace, Inc. (the “Company”) appointed Dr. Jon R. Cohen to the position of Chief Executive Officer of the Company, effective as of November 9, 2022. Mr. Cohen has served as a Class I Director since July 2022. In connection with his appointment as Chief Executive Officer, Mr. Cohen will continue to serve as a member of the Board but has stepped off the Board committees on which he was previously serving.
Mr. Cohen, age 68, has served as Executive Chairman of BioReference Laboratories and Senior Vice President of OPKO Health (NASDAQ: OPK) from 2019 until August 2022. From 2009 to 2018, Mr. Cohen served as an executive officer of Quest Diagnostics. Prior to that, Mr. Cohen served for six years as Chief Medical Officer at Northwell Health, the largest healthcare system in New York State. He served for two years as Senior Advisor to New York Governor David A. Paterson, where he was responsible for all State policy and strategic planning. Mr. Cohen does not have any family relationships with any of the Company’s directors or executive officers and is not a party to any transactions listed in Item 404(a) of Regulation S-K.
In connection with Mr. Cohen’s appointment, Mr. Douglas Braunstein, who had been serving as Interim Chief Executive Officer since November 2021, stepped down from such position as of the time at which Mr. Cohen’s appointment became effective. Mr. Braunstein will continue to serve as Chairman of the Board, a role he has held since the consummation of the Business Combination.
The Company and Mr. Cohen have into an employment letter agreement (the “Employment Agreement”), effective as of November 9, 2022. Under the Employment Agreement, Mr. Cohen is entitled to an annual base salary of $600,000, subject to increase from time to time in the discretion of the Company, and is eligible to receive an annual performance-based bonus targeted at 100% of his base salary and based on the achievement of individual and corporate objectives determined by the Company on an annual basis. For the 2023 calendar year, Mr. Cohen’s annual bonus will be guaranteed at the target level. Mr. Cohen is also eligible to participate in the Company’s standard employee benefit programs.
Pursuant to the Employment Agreement, Mr. Cohen will receive an initial equity grant (the “Initial Grant”) consisting of 1,250,000 restricted stock units and 500,000 stock options, which are expected to be granted in December 2022. 25% of the shares underlying the Initial Grant will vest on the first anniversary of November 9, 2022, and as to the remaining 75% of the shares underlying the Initial Grant, in substantially equal installments on each of the 12 quarterly anniversaries thereafter, subject to Mr. Cohen’s continued employment with the Company on the applicable vesting dates. Mr. Cohen will also receive an annual equity grant in respect of the 2023 performance cycle consisting of 1,000,000 restricted stock units and 400,000 stock options, subject to the same vesting conditions as the Initial Grant, except that the annual equity grant in respect of the 2023 performance cycle will not start to vest until March of 2024, subject to Mr. Cohen’s continued employment.
The Employment Agreement contains customary invention assignment and confidentiality provisions, as well as a 12-month post-employment non-compete and non-solicit obligation. In the event of a qualifying termination, Mr. Cohen will be entitled to receive certain severance benefits under the Company’s Executive Severance Plan as a Tier I Participant, and would receive an additional 12 months of vesting with respect to the Initial Grant, subject to his execution and non-revocation of a release of claims.
The foregoing description of the Employment Agreement is qualified in its entirety by the text of the full Employment Agreement, which is filed as Exhibit 10.1 to this Current Report.
On November 8, the Company issued a press release in connection with the announcement of the foregoing matters. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.