Exhibit 10.5

 

Homology Medicines, Inc.

 

Non-Employee Director Compensation Program

 

Non-employee members of the board of directors (the “Board”) of Homology
Medicines, Inc. (the “Company”) shall receive cash and equity compensation as
set forth in this Non-Employee Director Compensation Program (this “Program”),
as amended and restated by the Board effective January 1, 2020 (the “Effective
Date”).  The cash and equity compensation described in this Program shall be
paid or be made, as applicable, automatically and without further action of the
Board, to each member of the Board who is not an employee of the Company or any
parent or subsidiary of the Company (each, a “Non-Employee Director”) who is
entitled to receive such cash or equity compensation, unless such Non-Employee
Director declines the receipt of such cash or equity compensation by written
notice to the Company.  This Program shall remain in effect until it is revised
or rescinded by further action of the Board.  This Program may be amended,
modified or terminated by the Board at any time in its sole discretion. The
terms and conditions of this Program shall supersede any prior cash and/or
equity compensation arrangements for service as a member of the Board between
the Company and any of its Non-Employee Directors.  No Non-Employee Director
shall have any rights hereunder, except with respect to stock options granted
pursuant to the Program.

I.Cash Compensation

A.Annual Retainers.  Each Non-Employee Director shall receive an annual retainer
of $40,000 for service on the Board (the Annual Retainer”).  

B. Additional Annual Retainers.  In addition, each Non-Employee Director shall
receive the following annual retainers (each, a “Committee Member Retainer”):

1. Chairman of the Board or Lead Independent Director.  A Non-Employee Director
serving as Chairman of the Board or Lead Independent Director shall receive an
additional annual retainer of $35,000 for such service.

2. Audit Committee.  A Non-Employee Director serving as Chairperson of the Audit
Committee shall receive an additional annual retainer of $15,000 for such
service. A Non-Employee Director serving as a member other than the Chairperson
of the Audit Committee shall receive an additional annual retainer of $7,500 for
such service.

3.Compensation Committee.  A Non-Employee Director serving as Chairperson of the
Compensation Committee shall receive an additional annual retainer of $10,000
for such service. A Non-Employee Director serving as a member other than the
Chairperson of the Compensation Committee shall receive an additional annual
retainer of $5,000 for such service.

4. Nominating and Corporate Governance Committee.  A Non-Employee Director
serving as Chairperson of the Nominating and Corporate Governance Committee
shall receive an additional annual retainer of $8,000 for such service. A
Non-Employee

 

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Director serving as a member other than the Chairperson of the Nominating and
Corporate Governance Committee shall receive an additional annual retainer of
$4,000 for such service.

C.Payment of Retainers.  The Annual Retainer and Committee Member Retainer shall
be earned on a quarterly basis based on a calendar quarter and shall be paid in
cash by the Company in arrears not later than the fifteenth day following the
end of each calendar quarter.  In the event a Non-Employee Director does not
serve as a Non-Employee Director, or in the applicable positions described in
Section I(B), for an entire calendar quarter, the retainer paid to such
Non-Employee Director shall be prorated for the portion of such calendar quarter
actually served as a Non-Employee Director, or in such position, as applicable.

 

II.Equity Compensation

Non-Employee Directors shall be granted the equity awards described below.  The
awards described below shall be granted under and shall be subject to the terms
and provisions of the Company’s 2018 Incentive Award Plan or any other
applicable Company equity incentive plan then-maintained by the Company (the
“Equity Plan”) and shall be granted subject to award agreements, including
attached exhibits, in substantially the form previously approved by the
Board.  All applicable terms of the Equity Plan apply to this Program as if
fully set forth herein, and all grants of stock options hereby are subject in
all respects to the terms of the Equity Plan and the applicable award
agreement.  For the avoidance of doubt, the share numbers in Sections II(A) and
II(B) shall be subject to adjustment as provided in the Equity Plan, including
without limitation with respect to any stock dividend, stock split, reverse
stock split or other similar event affecting the Company’s common stock that is
effected prior to the Effective Date.

A.Initial Awards.  Each Non-Employee Director who is initially elected or
appointed to the Board after the Effective Date shall receive an option to
purchase 36,000 shares of the Company’s common stock on the date of such initial
election or appointment. The awards described in this Section II(A) shall be
referred to as “Initial Awards.”  No Non-Employee Director shall be granted more
than one Initial Award.

B.Subsequent Awards.  A Non-Employee Director who (i) has been serving as a
Non-Employee Director on the Board for at least six months as of the date of any
annual meeting of the Company’s stockholders after the Effective Date and (ii)
will continue to serve as a Non-Employee Director immediately following such
meeting, shall be automatically granted an option to purchase 18,000 shares of
the Company’s common stock on the date of such annual meeting.  The awards
described in this Section II(B) shall be referred to as “Subsequent
Awards.”  For the avoidance of doubt, a Non-Employee Director elected for the
first time to the Board at an annual meeting of the Company’s stockholders shall
only receive an Initial Award in connection with such election, and shall not
receive any Subsequent Award on the date of such meeting as well.  

 

C.Termination of Employment of Employee Directors.  Members of the Board who are
employees of the Company or any parent or subsidiary of the Company who
subsequently terminate their employment with the Company and any parent or
subsidiary of the Company and remain on the Board will not receive an Initial
Award pursuant to Section II(A) above, but to the extent that they are otherwise
entitled, will receive, after termination of employment with the

 

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Company and any parent or subsidiary of the Company, Subsequent Awards as
described in Section II(B) above.  

D.Terms of Awards Granted to Non-Employee Directors

1.  Exercise Price.  The per share exercise price of each option granted to a
Non-Employee Director shall equal the Fair Market Value (as defined in the
Equity Plan) of a share of the Company’s common stock on the date the option is
granted.

2.Vesting.  Each Initial Award shall vest and become exercisable in three
substantially equal annual installments following the date of grant, such that
the Initial Award shall be fully vested on the third anniversary of the date of
grant, subject to the Non-Employee Director continuing in service as a
Non-Employee Director through each such vesting date.  Each Subsequent Award
shall vest and become exercisable on the earlier of the first anniversary of the
date of grant or the day immediately prior to the date of the next annual
meeting of the Company’s stockholders occurring after the date of grant, in
either case subject to the Non-Employee Director continuing in service on the
Board as a Non-Employee Director through each such vesting date.  Unless the
Board otherwise determines, any portion of an Initial Award or Subsequent Award
which is unvested or unexercisable at the time of a Non-Employee Director’s
termination of service on the Board as a Non-Employee Director shall be
immediately forfeited upon such termination of service and shall not thereafter
become vested and exercisable.  All of a Non-Employee Director’s Initial Awards
and Subsequent Awards shall vest in full immediately prior to the occurrence of
a Change in Control (as defined in the Equity Plan), to the extent outstanding
at such time.

3.Term.  The maximum term of each stock option granted to a Non-Employee
Director hereunder shall be ten (10) years from the date the option is granted.

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