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                                                                  Exhibit 10.1

                           SYNTA PHARMACEUTICALS CORP.

                                 2001 STOCK PLAN

1.       DEFINITIONS.

         Unless otherwise specified or unless the context otherwise requires,
         the following terms, as used in this Synta Pharmaceuticals Corp. 2001
         Stock Plan, have the following meanings:

                  ADMINISTRATOR means the Board of Directors, unless it has
                  delegated power to act on its behalf to the Committee, in
                  which case the Administrator means the Committee.

                  AFFILIATE means a corporation which, for purposes of Section
                  424 of the Code, is a parent or subsidiary of the Company,
                  direct or indirect.

                  BOARD OF DIRECTORS means the Board of Directors of the
                  Company.

                  CODE means the United States Internal Revenue Code of 1986, as
                  amended.

                  COMMITTEE means the committee of the Board of Directors to
                  which the Board of Directors has delegated power to act under
                  or pursuant to the provisions of the Plan.

                  COMMON STOCK means shares of the Company's common stock,
                  $.0001 par value per share.

                  COMPANY means Synta Pharmaceuticals Corp., a Delaware
                  corporation.

                  DISABILITY or DISABLED means permanent and total disability as
                  defined in Section 22(e)(3) of the Code.

                  FAIR MARKET VALUE of a Share of Common Stock means:

                  (1) If the Common Stock is listed on a national securities
                  exchange or traded in the over-the-counter market and sales
                  prices are regularly reported for the Common Stock, the
                  closing or last price of the Common Stock on the composite
                  tape or other comparable reporting system for the trading day
                  immediately preceding the applicable date;

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                  (2) If the Common Stock is not traded on a national securities
                  exchange but is traded on the over-the-counter market, if
                  sales prices are not regularly reported for the Common Stock
                  for the trading day referred to in clause (1), and if bid and
                  asked prices for the Common Stock are regularly reported, the
                  mean between the bid and the asked price for the Common Stock
                  at the close of trading in the over-the-counter market for the
                  trading day on which Common Stock was traded immediately
                  preceding the applicable date; and

                  (3) If the Common Stock is neither listed on a national
                  securities exchange nor traded in the over-the-counter market,
                  such value as the Administrator, in good faith, shall
                  determine.

                  ISO means an option meant to qualify as an incentive stock
                  option under Section 422 of the Code.

                  KEY EMPLOYEE means an employee of the Company or of an
                  Affiliate (including, without limitation, an employee who is
                  also serving as an officer or director of the Company or of an
                  Affiliate), designated by the Administrator to be eligible to
                  be granted one or more Stock Rights under the Plan.

                  NON-QUALIFIED OPTION means an option which is not intended to
                  qualify as an ISO.

                  OPTION means an ISO or Non-Qualified Option granted under the
                  Plan.

                  OPTION AGREEMENT means an agreement between the Company and a
                  Participant delivered pursuant to the Plan, in such form as
                  the Administrator shall approve.

                  PARTICIPANT means a Key Employee, director or consultant to
                  whom one or more Stock Rights are granted under the Plan. As
                  used herein, "Participant" shall include "Participant's
                  Survivors" where the context requires.

                  PLAN means this Synta Pharmaceuticals Corp. 2001 Stock Plan.

                  SHARES means shares of the Common Stock as to which Stock
                  Rights have been or may be granted under the Plan or any
                  shares of capital stock into which the Shares are changed or
                  for which they are exchanged within the provisions of
                  Paragraph 3 of the Plan. The Shares issued under the Plan may
                  be authorized and unissued shares or shares held by the
                  Company in its treasury, or both.

                  STOCK GRANT means a grant by the Company of Shares under the
                  Plan.

                  STOCK GRANT AGREEMENT means an agreement between the Company
                  and a Participant delivered pursuant to the Plan, in such form
                  as the Administrator shall approve.

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                  STOCK RIGHT means a right to Shares of the Company granted
                  pursuant to the Plan -- an ISO, a Non-Qualified Option or a
                  Stock Grant.

                  SURVIVORS means a deceased Participant's legal representatives
                  or any person or persons who acquired the Participant's rights
                  to a Stock Right by will or by the laws of descent and
                  distribution.

2.       PURPOSES OF THE PLAN.

         The Plan is intended to encourage ownership of Shares by Key Employees
and directors of and certain consultants to the Company in order to attract such
people, to induce them to work for the benefit of the Company or of an Affiliate
and to provide additional incentive for them to promote the success of the
Company or of an Affiliate. The Plan provides for the granting of ISOs,
Non-Qualified Options and Stock Grants.

3.       SHARES SUBJECT TO THE PLAN.

         The number of Shares which may be issued from time to time pursuant to
this Plan shall be 15,000,000, or the equivalent of such number of Shares after
the Administrator, in its sole discretion, has interpreted the effect of any
stock split, stock dividend, combination, recapitalization or similar
transaction in accordance with Paragraph 23 of the Plan.

         If an Option ceases to be outstanding, in whole or in part, or if the
Company shall reacquire any Shares issued pursuant to a Stock Grant, the Shares
which were subject to such Option and any Shares so reacquired by the Company
shall be available for the granting of other Stock Rights under the Plan. Any
Option shall be treated as outstanding until such Option is exercised in full,
or terminates or expires under the provisions of the Plan, or by agreement of
the parties to the pertinent Option Agreement.

4.       ADMINISTRATION OF THE PLAN.

         The Administrator of the Plan will be the Board of Directors, except to
the extent the Board of Directors delegates its authority to the Committee, in
which case the Committee shall be the Administrator. Subject to the provisions
of the Plan, the Administrator is authorized to:

         a.       Interpret the provisions of the Plan or of any Option or Stock
                  Grant and to make all rules and determinations which it deems
                  necessary or advisable for the administration of the Plan;

         b.       Determine which employees of the Company or of an Affiliate
                  shall be designated as Key Employees and which of the Key
                  Employees, directors and consultants shall be granted Stock
                  Rights; and

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         c.       Determine the number of Shares for which Stock Rights shall be
                  granted.

         d.       Specify the terms and conditions upon which Stock Rights may
                  be granted;

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is the Committee.

5.       ELIGIBILITY FOR PARTICIPATION.

         The Administrator will, in its sole discretion, name the Participants
in the Plan, provided, however, that each Participant must be a Key Employee,
director or consultant of the Company or of an Affiliate at the time a Stock
Right is granted. Notwithstanding the foregoing, the Administrator may authorize
the grant of a Stock Right to a person not then an employee, director or
consultant of the Company or of an Affiliate; provided, however, that the actual
grant of such Stock Right shall be conditioned upon such person becoming
eligible to become a Participant at or prior to the time of the delivery of the
Agreement evidencing such Stock Right. ISOs may be granted only to Key
Employees. Non-Qualified Options and Stock Grants may be granted to any Key
Employee, director or consultant of the Company or an Affiliate. The granting of
any Stock Right to any individual shall neither entitle that individual to, nor
disqualify him or her from, participation in any other grant of Stock Rights.

6.       TERMS AND CONDITIONS OF OPTIONS.

         Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such terms and conditions, consistent with the terms and
conditions specifically required under this Plan, as the Administrator may deem
appropriate including, without limitation, subsequent approval by the
shareholders of the Company of this Plan or any amendments thereto.

         A.       NON-QUALIFIED OPTIONS: Each Option intended to be a
                  Non-Qualified Option shall be subject to the terms and
                  conditions which the Administrator determines to be
                  appropriate and in the best interest of the Company, subject
                  to the following minimum standards for any such Non-Qualified
                  Option:

                  a.       OPTION PRICE: Each Option Agreement shall state the
                           option price (per share) of the Shares covered by
                           each Option, which option price shall be determined
                           by the Administrator but shall not be less than the
                           par value per share of Common Stock.

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                  b.       NUMBER OF SHARES: Each Option Agreement shall state
                           the number of Shares to which it pertains.

                  c.       OPTION PERIODS: Each Option Agreement shall state the
                           date or dates on which it first is exercisable and
                           the date after which it may no longer be exercised,
                           and may provide that the Option rights accrue or
                           become exercisable in installments over a period of
                           months or years, or upon the occurrence of certain
                           conditions or the attainment of stated goals or
                           events.

                  d.       OPTION CONDITIONS: Exercise of any Option may be
                           conditioned upon the Participant's execution of a
                           Share purchase agreement in form satisfactory to the
                           Administrator providing for certain protections for
                           the Company and its other shareholders, including
                           requirements that:

                           i.       The Participant's or the Participant's
                                    Survivors' right to sell or transfer the
                                    Shares may be restricted; and

                           ii.      The Participant or the Participant's
                                    Survivors may be required to execute letters
                                    of investment intent and must also
                                    acknowledge that the Shares will bear
                                    legends noting any applicable restrictions.

                  e.       DIRECTORS' OPTIONS. Each director of the Company who
                           is not an employee of the Company or any Affiliate,
                           upon first being elected or appointed to the Board of
                           Directors, and upon every fourth anniversary thereof
                           provided that on such dates such director has been in
                           the continued and uninterrupted service as a director
                           of the Company or the Affiliate since his or her
                           election or appointment and is a director and is not
                           an employee or consultant of the Company or the
                           Affiliate at such time, may, within the discretion of
                           the Board of Directors, be granted a Non-Qualified
                           Option to purchase such number of shares as
                           determined by the Board of Directors. Such Option may
                           be granted to a director on such date as he or she
                           was appointed to be a director, and upon every fourth
                           anniversary thereof provided that on such date such
                           director has been in the continued and uninterrupted
                           service as a director of the Company or the Affiliate
                           since his or her initial appointment as a director,
                           and is a director and is not an employee or
                           consultant of the Company or the Affiliate at such
                           time. Each such Option shall (i) have an exercise
                           price equal to the Fair Market Value (per share) of
                           the Shares on the date of grant of the Option, (ii)
                           have a term of ten (10) years, and (iii) provided
                           that the grantee of the Option still serves as a
                           director of the Company or the Affiliate, become
                           cumulatively exercisable as follows: 25% upon the
                           first anniversary of the date of the grant of the
                           Option, and 6.25% upon the expiration of each
                           successive quarter thereafter. Any director entitled
                           to receive an Option grant under this subparagraph
                           may elect to decline the Option.

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         Except as otherwise provided in the pertinent Option Agreement, if a
         director who receives Options pursuant to this subparagraph:

                           a.       ceases to be a member of the Board of
                                    Directors for any reason other than death or
                                    Disability, any unexercised Options granted
                                    to such director may be exercised by the
                                    director within a period of ninety (90) days
                                    after the date the director ceases to be a
                                    member of the Board of Directors, but only
                                    to the extent of the number of Shares with
                                    respect to which the Options are exercisable
                                    on 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 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 hundred eighty (180)
                                    days after the date the director ceases to
                                    be a member of the Board of Directors, but
                                    only to the extent of the number of Shares
                                    with respect to which the Options are
                                    exercisable on 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.

         B.       ISOs: Each Option intended to be an ISO shall be issued only
                  to a Key Employee and be subject to the following terms and
                  conditions, with such additional restrictions or changes as
                  the Administrator determines are appropriate but not in
                  conflict with Section 422 of the Code and relevant regulations
                  and rulings of the Internal Revenue Service:

                  a.       MINIMUM STANDARDS: The ISO shall meet the minimum
                           standards required of Non-Qualified Options, as
                           described in Paragraph 6(A) above, except clauses (a)
                           and (e) thereunder.

                  b.       OPTION PRICE: Immediately before the Option is
                           granted, if the Participant owns, directly or by
                           reason of the applicable attribution rules in Section
                           424(d) of the Code:

                           i.       Ten percent (10%) OR LESS of the total
                                    combined voting power of all classes of
                                    stock of the Company or an Affiliate, the
                                    Option price per share of the Shares covered
                                    by each Option shall not be less than one
                                    hundred percent (100%) of the Fair Market
                                    Value per share of the Shares on the date of
                                    the grant of the Option.

                           ii.      More than ten percent (10%) of the total
                                    combined voting power of all classes of
                                    stock of the Company or an Affiliate, the
                                    Option

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                                    price per share of the Shares covered by
                                    each Option shall not be less than one
                                    hundred ten percent (110%) of the said Fair
                                    Market Value on the date of grant.

                  c.       TERM OF OPTION:  For Participants who own

                           i.       Ten percent (10%) OR LESS of the total
                                    combined voting power of all classes of
                                    stock of the Company or an Affiliate, each
                                    Option shall terminate not more than ten
                                    (10) years from the date of the grant or at
                                    such earlier time as the Option Agreement
                                    may provide.

                           ii.      More than ten percent (10%) of the total
                                    combined voting power of all classes of
                                    stock of the Company or an Affiliate, each
                                    Option shall terminate not more than five
                                    (5) years from the date of the grant or at
                                    such earlier time as the Option Agreement
                                    may provide.

                  d.       LIMITATION ON YEARLY EXERCISE: The Option Agreements
                           shall restrict the amount of Options which may be
                           exercisable in any calendar year (under this or any
                           other ISO plan of the Company or an Affiliate) so
                           that the aggregate Fair Market Value (determined at
                           the time each ISO is granted) of the stock with
                           respect to which ISOs are exercisable for the first
                           time by the Participant in any calendar year does not
                           exceed one hundred thousand dollars ($100,000),
                           provided that this subparagraph (d) shall have no
                           force or effect if its inclusion in the Plan is not
                           necessary for Options issued as ISOs to qualify as
                           ISOs pursuant to Section 422(d) of the Code.

7.       TERMS AND CONDITIONS OF STOCK GRANTS.

         Each offer of a Stock Grant to a Participant shall state the date prior
to which the Stock Grant must be accepted by the Participant, and the principal
terms of each Stock Grant shall be set forth in a Stock Grant Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Stock Grant Agreement shall be in a form
approved by the Administrator and shall contain terms and conditions which the
Administrator determines to be appropriate and in the best interest of the
Company, subject to the following minimum standards:

         (a)      Each Stock Grant Agreement shall state the purchase price (per
                  share), if any, of the Shares covered by each Stock Grant,
                  which purchase price shall be determined by the Administrator
                  but shall not be less than the minimum consideration required
                  by the Delaware General Corporation Law on the date of the
                  grant of the Stock Grant;

         (b)      Each Stock Grant Agreement shall state the number of Shares to
                  which the Stock Grant pertains; and

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         (c)      Each Stock Grant Agreement shall include the terms of any
                  right of the Company to reacquire the Shares subject to the
                  Stock Grant, including the time and events upon which such
                  rights shall accrue and the purchase price therefor, if any.

8.       EXERCISE OF OPTIONS AND ISSUE OF SHARES.

         An Option (or any part or installment thereof) shall be exercised by
giving written notice to the Company at its principal executive office address,
together with provision for payment of the full purchase price in accordance
with this Paragraph for the Shares as to which the Option is being exercised,
and upon compliance with any other condition(s) set forth in the Option
Agreement. Such written notice shall be signed by the person exercising the
Option, shall state the number of Shares with respect to which the Option is
being exercised and shall contain any representation required by the Plan or the
Option Agreement. Payment of the purchase price for the Shares as to which such
Option is being exercised shall be made (a) in United States dollars in cash or
by check, or (b) at the discretion of the Administrator, through delivery of
shares of Common Stock having a Fair Market Value equal as of the date of the
exercise to the cash exercise price of the Option, or (c) at the discretion of
the Administrator, by having the Company retain from the shares otherwise
issuable upon exercise of the Option, a number of shares having a Fair Market
Value equal as of the date of exercise to the exercise price of the Option, or
(d) at the discretion of the Administrator, by delivery of the grantee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the applicable Federal rate, as defined in Section 1274(d) of
the Code, or (e) at the discretion of the Administrator, in accordance with a
cashless exercise program established with a securities brokerage firm, and
approved by the Administrator, or (f) at the discretion of the Administrator, by
any combination of (a), (b), (c), (d) and (e) above. Notwithstanding the
foregoing, the Administrator shall accept only such payment on exercise of an
ISO as is permitted by Section 422 of the Code.

         The Company shall then reasonably promptly deliver the Shares as to
which such Option was exercised to the Participant (or to the Participant's
Survivors, as the case may be). In determining what constitutes "reasonably
promptly," it is expressly understood that the issuance and delivery of the
Shares may be delayed by the Company in order to comply with any law or
regulation (including, without limitation, state securities or "blue sky" laws)
which requires the Company to take any action with respect to the Shares prior
to their issuance. The Shares shall, upon delivery, be evidenced by an
appropriate certificate or certificates for fully paid, non-assessable Shares.

         The Administrator shall have the right to accelerate the date of
exercise of any installment of any Option; provided that the Administrator shall
not accelerate the exercise date of any installment of any Option granted to any
Key Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 26) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph
6.B.d.

         The Administrator may, in its discretion, amend any term or condition
of an outstanding Option provided (i) such term or condition as amended is
permitted by the Plan, (ii) any such

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amendment shall be made only with the consent of the Participant to whom the
Option was granted, or in the event of the death of the Participant, the
Participant's Survivors, if the amendment is adverse to the Participant, and
(iii) any such amendment of any ISO shall be made only after the Administrator,
after consulting the counsel for the Company, determines whether such amendment
would constitute a modification (as that term is defined in Section 424(h) of
the Code) of any Option which is an ISO or would cause any adverse tax
consequences for the holder of such ISO.

9.       ACCEPTANCE OF STOCK GRANT AND ISSUE OF SHARES.

         A Stock Grant (or any part or installment thereof) shall be accepted by
executing the Stock Grant Agreement and delivering it to the Company at its
principal office address, together with provision for payment of the full
purchase price, if any, in accordance with this Paragraph for the Shares as to
which such Stock Grant is being accepted, and upon compliance with any other
conditions set forth in the Stock Grant Agreement. Payment of the purchase price
for the Shares as to which such Stock Grant is being accepted shall be made (a)
in United States dollars in cash or by check, or (b) at the discretion of the
Administrator, through delivery of shares of Common Stock having a fair market
value equal as of the date of acceptance of the Stock Grant to the purchase
price of the Stock Grant determined in good faith by the Administrator, or (c)
at the discretion of the Administrator, by delivery of the grantee's personal
recourse note bearing interest payable not less than annually at no less than
100% of the applicable Federal rate, as defined in Section 1274(d) of the Code,
or (d) at the discretion of the Administrator, by any combination of (a), (b)
and (c) above.

         The Company shall then reasonably promptly deliver the Shares as to
which such Stock Grant was accepted to the Participant (or to the Participant's
Survivors, as the case may be), subject to any escrow provision set forth in the
Stock Grant Agreement. In determining what constitutes "reasonably promptly," it
is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or "blue sky" laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.

         The Administrator may, in its discretion, amend any term or condition
of an outstanding Stock Grant or Stock Grant Agreement provided (i) such term or
condition as amended is permitted by the Plan, and (ii) any such amendment shall
be made only with the consent of the Participant to whom the Stock Grant was
made, if the amendment is adverse to the Participant.

10.      RIGHTS AS A SHAREHOLDER.

         No Participant to whom a Stock Right has been granted shall have rights
as a shareholder with respect to any Shares covered by such Stock Right, except
after due exercise of the Option or acceptance of the Stock Grant and tender of
the full purchase price, if any, for the Shares being purchased pursuant to such
exercise or acceptance and registration of the Shares in the Company's share
register in the name of the Participant.

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11.      ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.

         By its terms, a Stock Right granted to a Participant shall not be
transferable by the Participant other than (i) by will or by the laws of descent
and distribution, or (ii) as otherwise determined by the Administrator and set
forth in the applicable Option Agreement or Stock Grant Agreement. The
designation of a beneficiary of a Stock Right by a Participant, with the prior
approval of the Administrator and in such form as the Administrator shall
prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except
as provided above, a Stock Right shall only be exercisable or may only be
accepted, during the Participant's lifetime, by such Participant (or by his or
her legal representative) and shall not be assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Stock Right or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon a Stock Right, shall be null and void.

12.      EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR
         DEATH OR DISABILITY.

         Except as otherwise provided in the pertinent Option Agreement in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised an Option, the following rules apply:

         a.       A Participant who ceases to be an employee, director or
                  consultant of the Company or of an Affiliate (for any reason
                  other than termination "for cause", Disability, or death for
                  which events there are special rules in Paragraphs 13, 14, and
                  15, respectively), may exercise any Option granted to him or
                  her to the extent that the Option is exercisable on the date
                  of such termination of service, but only within such term as
                  the Administrator has designated in the pertinent Option
                  Agreement.

         b.       Except as provided in Subparagraph (c) below, or Paragraph 14
                  or 15, in no event may an Option Agreement provide, if an
                  Option is intended to be an ISO, that the time for exercise be
                  later than three (3) months after the Participant's
                  termination of employment.

         c.       The provisions of this Paragraph, and not the provisions of
                  Paragraph 14 or 15, shall apply to a Participant who
                  subsequently becomes Disabled or dies after the termination of
                  employment, director status or consultancy, provided, however,
                  in the case of a Participant's Disability or death within
                  three (3) months after the termination of employment, director
                  status or consultancy, the Participant or the Participant's
                  Survivors may exercise the Option within one (1) year after
                  the date

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                  of the Participant's termination of employment, but in no
                  event after the date of expiration of the term of the Option.

         d.       Notwithstanding anything herein to the contrary, if subsequent
                  to a Participant's termination of employment, termination of
                  director status or termination of consultancy, but prior to
                  the exercise of an Option, the Board of Directors determines
                  that, either prior or subsequent to the Participant's
                  termination, the Participant engaged in conduct which would
                  constitute "cause", then such Participant shall forthwith
                  cease to have any right to exercise any Option.

         e.       A Participant to whom an Option has been granted under the
                  Plan who is absent from work with the Company or with an
                  Affiliate because of temporary disability (any disability
                  other than a Disability as defined in Paragraph 1 hereof), or
                  who is on leave of absence for any purpose, shall not, during
                  the period of any such absence, be deemed, by virtue of such
                  absence alone, to have terminated such Participant's
                  employment, director status or consultancy with the Company or
                  with an Affiliate, except as the Administrator may otherwise
                  expressly provide.

         f.       Except as required by law or as set forth in the pertinent
                  Option Agreement, Options granted under the Plan shall not be
                  affected by any change of a Participant's status within or
                  among the Company and any Affiliates, so long as the
                  Participant continues to be an employee, director or
                  consultant of the Company or any Affiliate.

13.      EFFECT ON OPTIONS OF TERMINATION OF SERVICE "FOR CAUSE".

         Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause" prior to the time that all his or her outstanding Options have been
exercised:

         a.       All outstanding and unexercised Options as of the time the
                  Participant is notified his or her service is terminated "for
                  cause" will immediately be forfeited.

         b.       For purposes of this Plan, "cause" shall include (and is not
                  limited to) dishonesty with respect to the Company or any
                  Affiliate, insubordination, substantial malfeasance or
                  non-feasance of duty, unauthorized disclosure of confidential
                  information, and conduct substantially prejudicial to the
                  business of the Company or any Affiliate. The determination of
                  the Administrator as to the existence of "cause" will be
                  conclusive on the Participant and the Company.

         c.       "Cause" is not limited to events which have occurred prior to
                  a Participant's termination of service, nor is it necessary
                  that the Administrator's finding of "cause" occur prior to
                  termination. If the Administrator determines, subsequent to a
                  Participant's termination of service but prior to the exercise
                  of an Option, that

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                  either prior or subsequent to the Participant's termination
                  the Participant engaged in conduct which would constitute
                  "cause", then the right to exercise any Option is forfeited.

         d.       Any definition in an agreement between the Participant and the
                  Company or an Affiliate, which contains a conflicting
                  definition of "cause" for termination and which is in effect
                  at the time of such termination, shall supersede the
                  definition in this Plan with respect to such Participant.

14.      EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.

         Except as otherwise provided in the pertinent Option Agreement, a
Participant who ceases to be an employee, director or consultant of the Company
or of an Affiliate by reason of Disability may exercise any Option granted to
such Participant:

         a.       To the extent exercisable but not exercised on the date of
                  Disability; and

         b.       In the event rights to exercise the Option accrue
                  periodically, to the extent of a pro rata portion of any
                  additional rights as would have accrued had the Participant
                  not become Disabled prior to the end of the accrual period
                  which next ends following the date of Disability. The
                  proration shall be based upon the number of days of such
                  accrual period prior to the date of Disability.

         A Disabled Participant may exercise such rights only within the period
ending one (1) year after the date of the Participant's termination of
employment, directorship or consultancy, as the case may be, notwithstanding
that the Participant might have been able to exercise the Option as to some or
all of the Shares on a later date if the Participant had not become Disabled and
had continued to be an employee, director or consultant or, if earlier, within
the originally prescribed term of the Option.

         The Administrator shall make the determination both of whether
Disability has occurred and the date of its occurrence (unless a procedure for
such determination is set forth in another agreement between the Company and
such Participant, in which case such procedure shall be used for such
determination). If requested, the Participant shall be examined by a physician
selected or approved by the Administrator, the cost of which examination shall
be paid for by the Company.

15.      EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

         Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant while the Participant is an employee,
director or consultant of the Company or of an Affiliate, such Option may be
exercised by the Participant's Survivors:

                                       12
<Page>

         a.       To the extent exercisable but not exercised on the date of
                  death; and

         b.       In the event rights to exercise the Option accrue
                  periodically, to the extent of a pro rata portion of any
                  additional rights which would have accrued had the Participant
                  not died prior to the end of the accrual period which next
                  ends following the date of death. The proration shall be based
                  upon the number of days of such accrual period prior to the
                  Participant's death.

         If the Participant's Survivors wish to exercise the Option, they must
take all necessary steps to exercise the Option within one (1) year after the
date of death of such Participant, notwithstanding that the decedent might have
been able to exercise the Option as to some or all of the Shares on a later date
if he or she had not died and had continued to be an employee, director or
consultant or, if earlier, within the originally prescribed term of the Option.

16.      EFFECT OF TERMINATION OF SERVICE ON STOCK GRANTS.

         In the event of a termination of service (whether as an employee,
director or consultant) with the Company or an Affiliate for any reason before
the Participant has accepted a Stock Grant, such offer shall terminate.

         For purposes of this Paragraph 16 and Paragraph 17 below, a Participant
to whom a Stock Grant has been offered under the Plan who is absent from work
with the Company or with an Affiliate because of temporary disability (any
disability other than a permanent and total Disability as defined in Paragraph 1
hereof), or who is on leave of absence for any purpose, shall not, during the
period of any such absence, be deemed, by virtue of such absence alone, to have
terminated such Participant's employment, director status or consultancy with
the Company or with an Affiliate, except as the Administrator may otherwise
expressly provide.

         In addition, for purposes of this Paragraph 16 and Paragraph 17 below,
any change of employment or other service within or among the Company and any
Affiliates shall not be treated as a termination of employment, director status
or consultancy so long as the Participant continues to be an employee, director
or consultant of the Company or any Affiliate.

17.      EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE"
         OR DEATH OR DISABILITY.

         Except as otherwise provided in the pertinent Stock Grant Agreement, in
the event of a termination of service (whether as an employee, director or
consultant), other than termination "for cause," Disability, or death for which
events there are special rules in Paragraphs 18, 19, and 20, respectively,
before all Company rights of repurchase shall have lapsed, then the Company
shall have the right to repurchase that number of Shares subject to a Stock
Grant as to which the Company's repurchase rights have not lapsed.

                                       13
<Page>

18.      EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE "FOR CAUSE".

         Except as otherwise provided in the pertinent Stock Grant Agreement,
the following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause":

         a.       All Shares subject to any Stock Grant shall be immediately
                  subject to repurchase by the Company at the purchase price, if
                  any, thereof.

         b.       For purposes of this Plan, "cause" shall include (and is not
                  limited to) dishonesty with respect to the employer,
                  insubordination, substantial malfeasance or non-feasance of
                  duty, unauthorized disclosure of confidential information, and
                  conduct substantially prejudicial to the business of the
                  Company or any Affiliate. The determination of the
                  Administrator as to the existence of "cause" will be
                  conclusive on the Participant and the Company.

         c.       "Cause" is not limited to events which have occurred prior to
                  a Participant's termination of service, nor is it necessary
                  that the Administrator's finding of "cause" occur prior to
                  termination. If the Administrator determines, subsequent to a
                  Participant's termination of service, that either prior or
                  subsequent to the Participant's termination the Participant
                  engaged in conduct which would constitute "cause," then the
                  Company's right to repurchase all of such Participant's Shares
                  shall apply.

         d.       Any definition in an agreement between the Participant and the
                  Company or an Affiliate, which contains a conflicting
                  definition of "cause" for termination and which is in effect
                  at the time of such termination, shall supersede the
                  definition in this Plan with respect to such Participant.

19.      EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.

         Except as otherwise provided in the pertinent Stock Grant Agreement,
the following rules apply if a Participant ceases to be an employee, director or
consultant of the Company or of an Affiliate by reason of Disability: to the
extent the Company's rights of repurchase have not lapsed on the date of
Disability, they shall be exercisable; provided, however, that in the event such
rights of repurchase lapse periodically, such rights shall lapse to the extent
of a pro rata portion of the Shares subject to such Stock Grant as would have
lapsed had the Participant not become Disabled prior to the end of the vesting
period which next ends following the date of Disability. The proration shall be
based upon the number of days of such vesting period prior to the date of
Disability.

         The Administrator shall make the determination both of whether
Disability has occurred and the date of its occurrence (unless a procedure for
such determination is set forth in another agreement between the Company and
such Participant, in which case such procedure shall be

                                       14
<Page>

used for such determination). If requested, the Participant shall be examined by
a physician selected or approved by the Administrator, the cost of which
examination shall be paid for by the Company.

20.      EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR
         CONSULTANT.

         Except as otherwise provided in the pertinent Stock Grant Agreement,
the following rules apply in the event of the death of a Participant while the
Participant is an employee, director or consultant of the Company or of an
Affiliate: to the extent the Company's rights of repurchase have not lapsed on
the date of death, they shall be exercisable; provided, however, that in the
event such rights of repurchase lapse periodically, such rights shall lapse to
the extent of a pro rata portion of the Shares subject to such Stock Grant as
would have lapsed had the Participant not died prior to the end of the vesting
period which next ends following the date of death. The proration shall be based
upon the number of days of such vesting period prior to the Participant's death.

21.      PURCHASE FOR INVESTMENT.

         Unless the offering and sale of the Shares to be issued upon the
particular exercise or acceptance of a Stock Right shall have been effectively
registered under the Securities Act of 1933, as now in force or hereafter
amended (the "1933 Act"), the Company shall be under no obligation to issue the
Shares covered by such exercise unless and until the following conditions have
been fulfilled:

         a.       The person(s) who exercise(s) or accept(s) such Stock Right
                  shall warrant to the Company, prior to the receipt of such
                  Shares, that such person(s) are acquiring such Shares for
                  their own respective accounts, for investment, and not with a
                  view to, or for sale in connection with, the distribution of
                  any such Shares, in which event the person(s) acquiring such
                  Shares shall be bound by the provisions of the following
                  legend which shall be endorsed upon the certificate(s)
                  evidencing their Shares issued pursuant to such exercise or
                  such grant:

                           "The shares represented by this certificate have been
                           taken for investment and they may not be sold or
                           otherwise transferred by any person, including a
                           pledgee, unless (1) either (a) a Registration
                           Statement with respect to such shares shall be
                           effective under the Securities Act of 1933, as
                           amended, or (b) the Company shall have received an
                           opinion of counsel satisfactory to it that an
                           exemption from registration under such Act is then
                           available, and (2) there shall have been compliance
                           with all applicable state securities laws."

                                       15
<Page>

         b.       At the discretion of the Administrator, the Company shall have
                  received an opinion of its counsel that the Shares may be
                  issued upon such particular exercise or acceptance in
                  compliance with the 1933 Act without registration thereunder.

22.      DISSOLUTION OR LIQUIDATION OF THE COMPANY.

         Upon the dissolution or liquidation of the Company, all Options granted
under this Plan which as of such date shall not have been exercised and all
Stock Grants which have not been accepted will terminate and become null and
void; provided, however, that if the rights of a Participant or a Participant's
Survivors have not otherwise terminated and expired, the Participant or the
Participant's Survivors will have the right immediately prior to such
dissolution or liquidation to exercise or accept any Stock Right to the extent
that the Stock Right is exercisable or subject to acceptance as of the date
immediately prior to such dissolution or liquidation.

23.      ADJUSTMENTS.

         Upon the occurrence of any of the following events, a Participant's
rights with respect to any Stock Right granted to him or her hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
pertinent Option Agreement or Stock Grant Agreement:

         A. STOCK DIVIDENDS AND STOCK SPLITS. If (i) the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) additional shares or new or different shares
or other securities of the Company or other non-cash assets are distributed with
respect to such shares of Common Stock, the number of shares of Common Stock
deliverable upon the exercise or acceptance of such Stock Right may be
appropriately increased or decreased proportionately, and appropriate
adjustments may be made in the purchase price per share to reflect such events.

         B. CONSOLIDATIONS OR MERGERS. If the Company is to be consolidated with
or acquired by another entity in a merger, sale of all or substantially all of
the Company's assets or otherwise (an "Acquisition"), the Administrator or the
board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board"), shall, as to outstanding Options, either (i)
make appropriate provision for the continuation of such Options by substituting
on an equitable basis for the Shares then subject to such Options either the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition or securities of any successor or acquiring
entity; or (ii) upon written notice to the Participants, provide that all
Options must be exercised (either to the extent then exercisable or, at the
discretion of the Administrator, all Options being made fully exercisable for
purposes of this Subparagraph) at the end of which period the Options shall
terminate; or (iii) terminate all Options in exchange for a cash payment equal
to the excess of the Fair Market Value of the Shares subject to such Options
(either to the extent then exercisable or, at the discretion of the

                                       16
<Page>

Administrator, all Options being made fully exercisable for purposes of this
Subparagraph) over the exercise price thereof.

         With respect to outstanding Stock Grants, the Administrator or the
Successor Board, shall either (i) make appropriate provisions for the
continuation of such Stock Grants by substituting on an equitable basis for the
Shares then subject to such Stock Grants either the consideration payable with
respect to the outstanding Shares of Common Stock in connection with the
Acquisition or securities of any successor or acquiring entity; or (ii) upon
written notice to the Participants, provide that all Stock Grants must be
accepted (to the extent then subject to acceptance) within a specified number of
days of the date of such notice, at the end of which period the offer of the
Stock Grants shall terminate; or (iii) terminate all Stock Grants in exchange
for a cash payment equal to the excess of the Fair Market Value of the Shares
subject to such Stock Grants over the purchase price thereof, if any. In
addition, in the event of an Acquisition, the Administrator may waive any or all
Company repurchase rights with respect to outstanding Stock Grants.

         C. RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in Subparagraph B above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, a Participant upon exercising or accepting a Stock Right shall be
entitled to receive for the purchase price, if any, paid upon such exercise or
acceptance the securities which would have been received if such Stock Right had
been exercised or accepted prior to such recapitalization or reorganization.

         D. MODIFICATION OF ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to Subparagraph A, B or C with respect to ISOs shall be made only
after the Administrator, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs, it may refrain from making such adjustments, unless
the holder of an ISO specifically requests in writing that such adjustment be
made and such writing indicates that the holder has full knowledge of the
consequences of such "modification" on his or her income tax treatment with
respect to the ISO.

24.      ISSUANCES OF SECURITIES.

         Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Stock Rights. Except as
expressly provided herein, no adjustments shall be made for dividends paid in
cash or in property (including without limitation, securities) of the Company
prior to any issuance of Shares pursuant to a Stock Right.

                                       17
<Page>

25.      FRACTIONAL SHARES.

         No fractional shares shall be issued under the Plan and the person
exercising a Stock Right shall receive from the Company cash in lieu of such
fractional shares equal to the Fair Market Value thereof.

26.      CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.

         The Administrator, at the written request of any Participant, may in
its discretion take such actions as may be necessary to convert such
Participant's ISOs (or any portions thereof) that have not been exercised on the
date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the Participant is an employee of
the Company or an Affiliate at the time of such conversion. Such actions may
include, but not be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such Options. At the time of
such conversion, the Administrator (with the consent of the Participant) may
impose such conditions on the exercise of the resulting Non-Qualified Options as
the Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.

27.      WITHHOLDING.

         In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or governmental regulation to be withheld
from the Participant's salary, wages or other remuneration in connection with
the exercise or acceptance of a Stock Right or in connection with a
Disqualifying Disposition (as defined in Paragraph 28) or upon the lapsing of
any right of repurchase, the Company may withhold from the Participant's
compensation, if any, or may require that the Participant advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the
Participant, the statutory minimum amount of such withholdings unless a
different withholding arrangement, including the use of shares of the Company's
Common Stock or a promissory note, is authorized by the Administrator (and
permitted by law). For purposes hereof, the fair market value of the shares
withheld for purposes of payroll withholding shall be determined in the manner
provided in Paragraph 1 above, as of the most recent practicable date prior to
the date of exercise. If the fair market value of the shares withheld is less
than the amount of payroll withholdings required, the Participant may be
required to advance the difference in cash to the Company or the Affiliate
employer. The Administrator in its discretion may condition the exercise of an
Option for less than the then Fair Market Value on the Participant's payment of
such additional withholding.

                                       18
<Page>

28.      NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

         Each Key Employee who receives an ISO must agree to notify the Company
in writing immediately after the Key Employee makes a "Disqualifying
Disposition" of any shares acquired pursuant to the exercise of an ISO. A
Disqualifying Disposition is any disposition (including any sale) of such shares
before the later of (a) two years after the date the Key Employee was granted
the ISO, or (b) one year after the date the Key Employee acquired Shares by
exercising the ISO. If the Key Employee has died before such stock is sold,
these holding period requirements do not apply and no Disqualifying Disposition
can occur thereafter.

29.      TERMINATION OF THE PLAN.

         The Plan will terminate on the date which is ten (10) years from the
EARLIER of the date of its adoption and the date of its approval by the
shareholders of the Company. The Plan may be terminated at an earlier date by
vote of the shareholders of the Company; provided, however, that any such
earlier termination shall not affect any Option Agreements or Stock Grant
Agreements executed prior to the effective date of such termination.

30.      AMENDMENT OF THE PLAN AND AGREEMENTS.

         The Plan may be amended by the shareholders of the Company. The Plan
may also be amended by the Administrator, including, without limitation, to the
extent necessary to qualify any or all outstanding Stock Rights granted under
the Plan or Stock Rights to be granted under the Plan for favorable federal
income tax treatment (including deferral of taxation upon exercise) as may be
afforded incentive stock options under Section 422 of the Code, and to the
extent necessary to qualify the shares issuable upon exercise or acceptance of
any outstanding Stock Rights granted, or Stock Rights to be granted, under the
Plan for listing on any national securities exchange or quotation in any
national automated quotation system of securities dealers. Any amendment
approved by the Administrator which the Administrator determines is of a scope
that requires shareholder approval shall be subject to obtaining such
shareholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, adversely affect his or her rights under a
Stock Right previously granted to him or her. With the consent of the
Participant affected, the Administrator may amend outstanding Option Agreements
and Stock Grant Agreements in a manner which may be adverse to the Participant
but which is not inconsistent with the Plan. In the discretion of the
Administrator, outstanding Option Agreements and Stock Grant Agreements may be
amended by the Administrator in a manner which is not adverse to the
Participant.

31.      EMPLOYMENT OR OTHER RELATIONSHIP.

         Nothing in this Plan or any Option Agreement or Stock Grant Agreement
shall be deemed to prevent the Company or an Affiliate from terminating the
employment, consultancy

                                       19
<Page>

or director status of a Participant, nor to prevent a Participant from
terminating his or her own employment, consultancy or director status or to give
any Participant a right to be retained in employment or other service by the
Company or any Affiliate for any period of time.

32.      GOVERNING LAW.

         This Plan shall be construed and enforced in accordance with the law of
the State of Delaware.

                                       20<Page>

                                                                  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.

<Page>

         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

<Page>

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

<Page>

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]