Item 2.05. Costs Associated with Exit or Disposal Activities.
On November 20, 2019, Neon Therapeutics, Inc. (the "Company") issued a press
release announcing that, as part of a new strategic focus, it was reducing its
workforce by approximately 24% of its current headcount. This workforce
reduction will take place primarily during the fourth quarter of 2019. At this
time, the Company will cease undertaking new additional spending commitments
related to its cancer vaccine programs, NEO-PV-01 and NEO-SV-01. The Company
will continue to conduct follow-up from its NT-002 clinical trial of NEO-PV-01
in first-line patients with untreated advanced or metastatic non-small cell lung
cancer, with plans to report clinical data from this trial in the third quarter
of 2020. The Company also plans to cease future enrollment in its NT-003 trial
in metastatic melanoma. The Company believes these actions will improve its
potential to bring value to patients, employees and shareholders.
As a result of these actions, the Company expects to incur personnel-related
restructuring charges of approximately $1.5 million in connection with one-time
employee termination costs, including severance and other benefits, which are
expected to be incurred in the fourth quarter of 2019. In addition, the Company
has committed to pay one-time employee retention costs of up to $3.4 million,
which are expected to be incurred through the third quarter of 2020. The Company
expects that the restructuring and other cost-saving efforts will result in
approximately $35.0 million in annualized cost savings. The Company may also
incur other charges or cash expenditures not currently contemplated due to
events that may occur as a result of, or associated with, the workforce
reduction or retention efforts. These estimates of the costs that the Company
expects to incur, and the timing thereof, are subject to a number of assumptions
and actual results may differ.
The Company also plans to explore strategic options to maximize shareholder
value. There can be no assurance that the exploration of strategic alternatives
will result in any transaction being entered into or consummated. The Company
has not set a timetable for completion of this review process and the Company
does not intend to comment further unless or until the Board of Directors has
approved a definitive course of action, the review process is concluded, or it
is determined that other disclosure is appropriate.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensatory Arrangements of Certain Officers
On November 18, 2019, the Board of Directors of the Company (the "Board")
approved a retention plan designed to retain the employees required to support
the refocused Company (the "Retention Plan"), which includes, among other
arrangements, the following matters:
Letter Agreements with Executives
Pursuant to the Retention Plan, the Board approved entering into letter
agreements (each, an "Executive Letter Agreement") with each of Hugh O'Dowd, the
Company's Chief Executive Officer, Yasir Al-Wakeel, the Company's Chief
Financial Officer, and Richard Gaynor, the Company's President of Research and
Development (each, an "Executive") that provide certain retention benefits and
modify certain provisions of the employment agreements previously entered into
by each of the Executives and the Company (each, an "Employment Agreement").
Under the Executive Letter Agreements, if the Company terminates the Executive's
employment without Cause (as defined in the Executive's applicable Employment
Agreement, as amended) or the Executive terminates his employment with the
Company for Good Reason (as defined in the applicable Employment Agreement, as
amended), the Company will pay the entire Severance Amount (as defined the
applicable Employment Agreement, as amended) in a one-time, lump sum payment.
All other terms and conditions of the Employment Agreements, including those
related to the Executive's eligibility for the Severance Amount, shall remain in
full force and effect.
Retention Bonus
The Board approved a retention bonus for each of the Executives, which is
included in the Executive Letter Agreements and is payable if the Executive
remains employed by the Company through and until the closing of a strategic
transaction, in the amount of 25% of the Executive's then current base salary,
less all applicable withholdings and deductions required by law, payable in one
lump sum cash payment. The Executive's eligibility for this retention bonus is
dependent on the satisfaction of the following criteria: (a) the Executive's
performance has been satisfactory, as determined in the Company's sole
discretion, through the end of the retention period; (b) the Executive is
employed by the Company on the last day of the retention period; (c) on or
before the last day of the retention period, the Executive has not given notice
of resignation of employment with the Company; and (d) on or before the last day
of the retention period, the Company has not given the Executive notice of the
intent to terminate his employment.
Restricted Unit Awards
The Board approved the grant to each of Yasir Al-Wakeel and Richard Gaynor of
restricted stock units in the amounts of 75,000 per individual ("RSU Awards"),
such RSU Awards to be deemed granted at the close of the Nasdaq Global Select
Market on November 25, 2019, and to vest, subject to the Executive's continued
service to the Company, quarterly over one year from the

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date of grant and otherwise be subject to the terms and conditions set forth in
the Company's 2018 Stock Option and Incentive Plan.
Item 7.01. Regulation FD Disclosure.
The Company from time to time presents and/or distributes to the investment
community at various industry and other conferences slide presentations to
provide updates and summaries of its business. A copy of its current corporate
slide presentation is attached to this Current Report on Form 8-K as
Exhibit 99.2. The Company undertakes no obligation to update, supplement or
amend the materials attached hereto as Exhibit 99.2.
The information contained in Item 7.01 in this Current Report on Form 8-K
(including Exhibit 99.2) shall not be deemed "filed" for purposes of Section 18
of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject
to the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933 or the Exchange Act,
except as expressly set forth by specific reference in such a filing.
Item 8.01. Other Events.
On November 20, 2019, the Company issued a press release titled "Neon
Therapeutics Announces New Strategic Focus on Novel T Cell Programs." A copy of
the press release is filed herewith as Exhibit 99.1 to this Current Report on
Form 8-K and is incorporated by reference into this Item 8.01.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.                                Description
99.1             Press release issued by Neon Therapeutics, Inc. on November 20,
               2019
99.2             Neon Therapeutics, Inc. Corporate Presentation (as of November 20,
               2019), furnished herewith

Cautionary Note Regarding Forward-Looking Statements The Company cautions you that statements included in this Current Report on Form 8-K that are not a description of historical facts are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "could," "should," "expects," "intends," "target,", "contemplates," "plans," "anticipates," "believes," "estimates," "predicts," "projects," "potential," or "continue," or the negative of these words or other similar terms or expressions that concern its expectations, strategy, plans, prospects or intentions. Such statements include, without limitation, statements regarding the Company's business strategy, structure and operations, including the Company's plans to explore strategic alternatives; the cause, size, timing and impact of the Company's reduction in workforce and related activities; the expected size of the Company's workforce following such reduction; the estimated charges and costs expected to be incurred in connection with such reduction; the financial plans and projections, including its restructuring and other cost-saving efforts and impact on cash runway; and the percent of such charges expected to result in cash expenditures. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company's actual future results may differ materially from its current expectations due to the risks and uncertainties inherent in its business. These risks include, but are not limited to: those related to the difficulties in and effect of implementing the Company's business strategy; the difficulties in and effect of implementing the Company's reduction in workforce, such as claims arising out of the reduction; the risks related to the difficulty of predicting the financial impact or timing of the Company's reduction in workforce, including the risk that the actual financial and other impacts of the reduction could vary materially from the outcomes anticipated; the risks related to our capital requirements, use of capital and unexpected expenditures, including our ability to manage operating expenses or obtain funding to support planned business activities or to explore and establish strategic alternative transactions; risks related to our ability to attract and retain personnel; and other risks set forth under the caption "Risk Factors" in the Company's most recent Annual Report on Form 10-K, as updated by the Company's other subsequently filed SEC filings. The Company assumes no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.


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