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                                                                  Exhibit 10.3


                           SYNTA PHARMACEUTICALS CORP.
                          DIRECTOR COMPENSATION POLICY

         The Board of Directors of Synta Pharmaceuticals Corp. (the "Company")
has approved the following policy which establishes compensation to be paid to
non-employee directors of the Company, effective January 1, 2005, to provide an
inducement to obtain and retain the services of qualified persons to serve as
members of the Company's Board of Directors. Each such director will receive as
compensation for his or her services (i) a stock option grant upon his or her
initial appointment or election to the Board of Directors of the Company and
(ii) an annual fee payable in cash and/or stock, all as further set forth
herein.

APPLICABLE PERSONS

         This Policy shall apply to each director of the Company who (a) is not
an employee of the Company or any Affiliate and (b) does not receive
compensation as a consultant to the Company or any Affiliate unless such
compensation is received solely for services provided as a member of the
Scientific Advisory Board (each, an "Outside Director"). Affiliate shall mean a
corporation which is a direct or indirect parent or subsidiary of the Company,
as determined pursuant to Section 424 of the Internal Revenue Code of 1986, as
amended.

STOCK OPTION GRANT UPON INITIAL APPOINTMENT OR ELECTION AS A DIRECTOR

         NUMBER OF SHARES

         Each new Outside Director on the date of his or her initial appointment
or election to the Board of Directors, shall be granted a non-qualified stock
option to purchase 60,000 shares of the Company's common stock under the
Company's then applicable stockholder-approved stock plan (the "Stock Plan"),
subject to automatic adjustment in the event of any stock split or other
recapitalization affecting the Company's common stock.

         VESTING PROVISION

         Such option shall vest as to 25% of such grant on the first anniversary
of the date of grant of the option and as to an additional 6.25% of such grant
at the end of each successive three-month period thereafter continuing until the
fourth anniversary of the date of grant, provided such Outside Director
continues to serve as a member of the Board of Directors. However, in the event
of termination of service of an Outside Director, such option shall vest to the
extent of a pro rata portion through the Outside Director's last day of service
based on the number of days accrued in the applicable period prior to his or her
termination of service.


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         EXERCISE PRICE AND TERM OF OPTION

         Each option granted shall have an exercise price per share equal to the
Fair Market Value (as defined in the Stock Plan) of the shares of common stock
of the Company on the date of grant of the option, have a term of ten years and
shall be subject to the terms and conditions of the Stock Plan. Each such option
grant shall be evidenced by the issuance of a non-qualified stock option
agreement.

         EARLY TERMINATION OF OPTION UPON TERMINATION OF SERVICE

         If an Outside Director:

         a.       ceases to be a member of the Board of Directors for any reason
                  other than death or disability, any then vested and
                  unexercised options granted to such Outside Director may be
                  exercised by the director within a period of three months
                  after the date the director ceases to be a member of the Board
                  of Directors and in no event later than the expiration date of
                  the option; or

         b.       ceases to be a member of the Board of Directors by reason of
                  his or her death or disability, any then vested and
                  unexercised options granted to such director may be exercised
                  by the director (or by the director's personal representative,
                  or the director's survivors) within a period of one year after
                  the date the director ceases to be a member of the Board of
                  Directors and in no event later than the expiration date of
                  the option.

ANNUAL FEE

         Each Outside Director shall be compensated on an annual basis for
providing services to the Company. Except as otherwise set forth in this Policy,
director compensation shall be paid for the period from July 1 through June 30
of each year. Each Outside Director shall receive compensation consisting of one
of the following combinations of cash and/or a grant of common stock, subject to
certain contractual restrictions, under the Stock Plan, at the election of each
Outside Director, as follows:

o        $40,000 cash,

o        $30,000 cash and such number of shares of the Company's common stock as
         is equal to $10,000 on the date of grant of the shares,

o        $20,000 cash and such number of shares of the Company's common stock as
         is equal to $20,000 on the date of grant of the shares,

o        $10,000 cash and such number of shares of the Company's common stock as
         is equal to $30,000 on the date of grant of the shares, or

o        such number of shares of the Company's common stock as is equal to
         $40,000 on the date of the grant of the shares.

         The number of shares to be received by an Outside Director shall be
calculated by dividing the total dollar amount that the Outside Director has
elected to be paid in shares of common stock by the Fair Market Value (as
defined in the Stock Plan) of the shares of common


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stock of the Company on the last business day prior to the date of grant of the
shares (rounded down to the nearest whole number so that no fractional shares
shall be issued).

         ELECTION

         Each Outside Director shall make an election on the form provided by
the Company, indicating the combination of his or her annual compensation, prior
to each annual meeting of stockholders. If the Company does not schedule an
annual meeting of stockholders to be held on or before June 30th of any year,
each Outside Director shall make his or her election by June 15th of the
applicable year.

         CASH PAYMENTS

         Any cash portion to be paid to an Outside Director shall be paid
quarterly in arrears as of the last day of each calendar quarter. If an Outside
Director dies, resigns or is removed during any quarter, he or she shall be
entitled to a cash payment on a pro rata basis through his or her last day of
service.

         RESTRICTED STOCK GRANTS

         Shares of common stock shall be granted at the first meeting of the
Board of Directors following each annual stockholders meeting, or if no such
meeting of the Board of Directors shall occur before June 30 of the applicable
year, by unanimous written consent dated June 30 of that year. The shares shall
be subject to a lapsing repurchase right such that the shares shall be subject
to forfeiture to the Company if such Outside Director does not continue to serve
as a member of the Board of Directors as of the end of the applicable quarter as
follows: the repurchase right shall lapse as to 25% of each such grant on each
of September 30, December 31, March 31 and June 30 thereafter, provided such
Outside Director continues to serve as a member of the Board of Directors as of
the applicable date.

         INITIAL ANNUAL FEE UPON INSTITUTION OF POLICY

         On the date of adoption of this Policy, each Outside Director then
serving shall be entitled to receive compensation prorated for the period from
January 1, 2005 through June 30, 2005. Each Outside Director shall make an
election on or before January 14, 2005 as to the combination of cash and/or
stock to be received. The Board of Directors shall, by unanimous written consent
dated January 18, 2005, grant any shares to be issued as part of such
compensation. The shares to be issued shall be subject to a lapsing repurchase
right such that the Company's repurchase right shall lapse as to 50% of each
such grant on each of March 31, 2005 and June 30, 2005, provided such Outside
Director continues to serve as a member of the Board of Directors as of the
applicable date.

         INITIAL ANNUAL FEE FOR NEWLY APPOINTED OR ELECTED DIRECTORS

         Each Outside Director who is first appointed or elected to the Board of
Directors after the date of the adoption of this Policy shall receive his or her
first year's annual fee prorated in accordance with the terms of this Policy
from the beginning of the next calendar quarter after his or her initial
appointment or election through the following June 30. Each such Outside
Director


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shall make an election prior to the beginning of the next calendar quarter after
his or her initial appointment or election as to the combination of cash and/or
stock. The Board of Directors shall, by unanimous written consent dated the date
of the first day of such quarter, grant any shares to be issued to such Outside
Director as part of such compensation. Any such shares shall be subject to a pro
rata lapsing repurchase right as of the last day of each quarter remaining in
such initial period, provided such Outside Director continues to serve as a
member of the Board of Directors as of the end of the applicable quarter.

         PURCHASE PRICE AND OTHER PROVISIONS APPLICABLE TO ALL STOCK GRANTS

         Shares granted shall have a purchase price equal to the par value of
the common stock on the date of grant and shall be subject to the terms and
conditions of the Stock Plan. The terms of such grant shall be evidenced by a
restricted stock agreement to be entered into between the Company and the
Outside Director. In addition, in the event of termination of service of an
Outside Director, the Company's lapsing repurchase right shall be deemed to have
lapsed to the extent of a pro rata portion of the shares through the Outside
Director's last day of service based on the number of days accrued in the
applicable period prior to his or her termination of service.

BOARD COMMITTEE COMPENSATION

         Each Outside Director shall also receive an annual fee of $5,000 for
each Committee of the Board of Directors on which such individual serves.
However, the Chairman of each Committee, other than the Audit Committee, shall
receive an annual fee of $10,000, and the Chairman of the Audit Committee shall
receive an annual fee of $15,000 for services as Chairman. Payment shall
commence effective January 1, 2005 and shall be made quarterly in arrears on the
last day of each calendar quarter and upon death, resignation or removal,
payment shall be made pro rata through the last day of service.

EXPENSES

         Upon presentation of documentation of such expenses reasonably
satisfactory to the Company, each Outside Director shall be reimbursed for his
or her reasonable out-of-pocket business expenses incurred in connection with
attending meetings of the Board of Directors, Committees thereof or in
connection with other Board related business.

AMENDMENTS

         The Board of Directors shall review this Policy from time to time to
assess whether any amendments in the type and amount of compensation provided
herein should be adjusted in order to fulfill the objectives of this Policy.


DATED:  January 11, 2005