EMPLOYMENT AGREEMENT
     This Employment Agreement (this “Agreement”) is made and entered into as of
April 12, 2007 (the “Effective Date”) by and between GTx, Inc., located at 3
North Dunlap, 3rd Floor, Memphis, Tennessee 38163 (the “Employer”), and JAMES T.
DALTON (the “Employee”), residing at 4180 Greensview Road, Upper Arlington, Ohio
43220.
     WHEREAS, Employee was previously a tenured professor of The Ohio State
University (“OSU”) and an employee of the Employer;
     WHEREAS, the Employer now desires to retain full time the services of
Employee as Vice President, Preclinical Research & Development;
     WHEREAS, Employee has represented to Employer that he has relinquished his
tenure at OSU, and he and OSU have agreed that he will continue as an untenured
professor working part time for the institution;
     WHEREAS, the Employer and the Employee desire to enter into this Agreement
to set forth terms and conditions of the employment relationship between the
Employer and the Employee;
     WHEREAS, during the course of Employee’s employment with the Employer, the
Employer will train and continue to train Employee and to impart to Employee
proprietary, confidential, and/or trade secret information, data and/or
materials of the Employer;
     WHEREAS, the Employer has a vital interest in maintaining its confidential
information and trade secrets, as well as rights to inventions, since doing so
allows the Employer to compete fairly and enhances the value of the Employer to
shareholders and job security for employees; and
     WHEREAS, the Employer desires to procure the services of Employee, and
Employee is willing to be employed and continue to be employed with the Employer
upon the terms and subject to the conditions set forth in this Agreement;
     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the employment and continued employment of Employee
in accordance with the terms and conditions of this Agreement, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties, intending to be legally bound, agree and covenant as
follows:
     1. DEFINITIONS
     For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1.

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     “Agreement” has the meaning set forth in first paragraph of this Agreement.
     “Basic Compensation” means Salary and Benefits.
     “Benefits” means as defined in Section 3.1(b).
     “Board of Directors” means the Board of Directors of the Employer.
     “CEO” has the meaning set forth in Section 2.2.
     “Change of Control” means any of the following events: (a) the sale or
other disposition of all or substantially all of the assets of Employer in a
single transaction or in a series of transactions (including, without
limitation, any liquidation or dissolution of Employer); (b) any Person or group
becomes the beneficial owner, directly, or indirectly, of securities of the
Employer representing more than fifty percent (50%) of the combined voting power
of the Employer’s then outstanding securities other than by virtue of a merger,
consolidation or similar transaction. For such purposes, “voting stock” shall
mean the capital stock of Employer of any class or classes, the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for the
election of members of the Board of Directors (or Persons performing similar
functions) of Employer; or (c) a merger or consolidation of Employer with or
into any other entity, if immediately after giving effect to such transaction
more than fifty percent (50%) of the issued and outstanding voting stock of the
surviving entity of such transaction is held by persons who were not holders
(taking into account their individual and affiliated holdings) as of the
Effective Date of at least twenty percent (20%) of the voting stock of Employer.
A Change of Control shall not include: (1) any transfer or issuance of stock of
Employer to one or more of Employer’s lenders (or to any agents or
representatives thereof) in exchange for debt of Employer owed to any such
lenders; (2) any transfer of stock of Employer to or by any person or entity,
including but not limited to one or more of the Employer’s lenders (or to any
agents or representatives thereof), pursuant to the terms of any pledge of said
stock as collateral for any loans or financial accommodations to Employer and/or
its subsidiaries; (3) any transfer or issuance to any person or entity,
including but not limited to one or more of Employer’s lenders (or to any agents
or representatives thereof), in connection with the workout or restructuring of
Employer’s debts to any one of Employer’s lenders, including but not limited to
the issuance of new stock in exchange for any equity contribution to Employer in
connection with the workout or restructuring of such debt; (4) any transfer of
stock by a stockholder of Employer which is a partnership or corporation to the
partners or stockholders in such stockholder or any transfer of stock by a
stockholder of Employer to an entity affiliated with such stockholder or the
immediate family of such stockholder or a trust or similar entity for the
benefit of such family members; or (5) any transfer or issuance of stock in
connection with an offering of the Employer’s stock in a registered public
transaction not including a transaction described in Rule 145, promulgated under
the Securities Act of 1933, as amended, provided that the Employer’s officers
and Board of Directors shall not materially change as a result thereof.
     “Change of Control Termination” means (i) a Termination Without Cause of
the Employee’s employment by the Employer within six (6) months after a Change
of Control or (ii) the Employee’s resignation for Good Reason within six
(6) months after a Change of Control.

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     “Competing Business” means any individual or entity, other than the
Employer, that is engaging in, or proposes to engage in, the development,
manufacture, distribution or sale of a Competing Product in any country in North
America, South America, Europe and Eastern Europe, and in the countries of
Russia, Australia, Japan, China, Taiwan, South Korea and India (the
“Territory”); provided; however that (i) an entity that develops, manufactures,
distributes or sells a Competing Product in a separate business unit than the
business unit in which Employee is then employed shall not be deemed a Competing
Business unless Employee provides Confidential Information and/or Proprietary
Information to the business unit that is engaging in or proposes to engage in
the development, manufacture, distribution or sale of a Competing Product; and
(ii) nothing in this Agreement shall prevent Employee from conducting research
at OSU for non-commercial purposes utilizing institutional or governmental grant
funds in areas relating to any Competing Product as long as such non-commercial
research is conducted in accordance with those certain Inter-Institutional
Agreements executed between OSU and the University of Tennessee Research
Foundation (“UTRF”) as of December 22, 2004 (the “IIAs”).
     “Competing Product” means any pharmaceutical or other compound,
composition, formulation, method, process, product or material that is
competitive with any product of Employer under development, manufacture,
distribution or commercialization at any time from and after January 1, 2005
(the date of Employee’s initial employment agreement with Employer) through the
date of termination of Employee’s employment, including, without limitation,
small molecules that selectively target the androgen receptors or estrogen
receptors and other hormone receptors for purposes of treating, diagnosing, or
imaging humans in health and disease. The parties agree that the four areas of
research that are described in Section 2.3 hereof as areas where Employee shall
be overseeing the ongoing work by graduate students at OSU during the term of
this Agreement shall not be deemed to be Competing Product.
     “Confidential Information and/or Proprietary Information” means any and
all:
     (a) information disclosed to Employee or known by Employee as a consequence
of, or through, Employee’s employment with the Employer or pursuant to the
Employee’s prior relationship with Employer either through his employment with
OSU or under the Consulting Agreement (including information conceived,
originated, discovered, or developed in whole or in part by Employee), not
generally known in the relevant trade or industry, about the Employer’s
business, products, processes, and services; and trade secrets concerning the
business and affairs of the Employer, product specifications, data, know-how,
formulae, compositions, research, processes, designs, sketches, photographs,
graphs, drawings, samples, inventions and ideas, past, current, and planned
research and development, current and planned manufacturing or distribution
methods and processes, customer lists, current and anticipated customer
requirements, price lists, market studies, business plans, computer software and
programs (including object code and source code), computer software and database
technologies, systems, structures, and architectures (and related formulae,
compositions, processes, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information); and any other
information, however documented, that is a trade secret within the meaning of
Tenn. Code §39-14-138; and
     (b) information concerning the business and affairs of the Employer (which
includes historical financial statements, financial projections and budgets,
historical and projected sales,

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capital spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials), however documented; and
     (c) intellectual property, inventions, methods, processes, techniques,
computer programs, devices, products, services, compounds, gene therapy
products, pharmaceuticals, substances, vectors, enzymes, genes, concepts,
discoveries, improvements, and designs, whether or not patenable in the United
States or foreign countries, any trade secrets, information, procedures,
technologies, data, results, conclusions, know-how or show-how and business
information; and
     (d) notes, analysis, compilations, studies, summaries, and other material
prepared by or for the Employer containing or based, in whole or in part, on any
information included in the foregoing.
     “Effective Date” means the date stated in the first paragraph of the
Agreement.
     “Employee” has the meaning stated in the first paragraph of this Agreement.
     “Employee Invention” means any idea, invention, technique, modification,
process, improvement (whether patentable or not), industrial design (whether
registerable or not), work of authorship (whether or not copyright protection
may be obtained for it), design, copyrightable work, discovery, trademark,
copyright, trade secret, formula, device, method, compound, gene, prodrug,
pharmaceutical, structure, product concept, marketing plan, strategy, customer
list, technique, blueprint, sketch, record, note, drawing, know-how, data,
patent application, continuation application, continuation-in-part application,
file wrapper continuation application or divisional application, created,
conceived, or developed by the Employee, either solely or in conjunction with
others, during the Employee’s employment, or a period that includes a portion of
the Employee’s employment, that relates in any way to, or is useful in any
manner in, the business then being conducted or proposed to be conducted by the
Employer, and any such item created by the Employee, either solely or in
conjunction with others, following termination of the Employee’s employment with
the Employer, that is based upon or uses Confidential Information and/or
Proprietary Information.
     “Employer” means GTx, Inc., its successors and assigns, and any of its
current or future subsidiaries, or organizations controlled by, controlling, or
under common control with it.
     “Good Reason” means any of the following:
          (a) an adverse change in the Employee’s status, position or
responsibilities (including reporting responsibilities) which, without
Employee’s consent, represents a material reduction in or material demotion of
the Employee’s status, position or responsibilities or the assignment to the
Employee of any duties or responsibilities which are materially inconsistent
with such status, position or responsibilities;
          (b) a reduction in the then current Salary or modifying, suspending,
discontinuing, or terminating any Benefit in a manner which materially and
adversely affects Employee;

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          (c) following a Change of Control, the relocation of the Employer’s
principal Employee offices to a location outside a thirty-mile radius of where
the Employee is then permanently residing (the “Employee’s Residence”) or the
Employer’s requiring the Employee to be based at any place other than a location
within a thirty-mile radius of Employee’s Residence, except for reasonably
required travel on the Employer’s business; or
          (d) following a Change of Control, the failure of the Employer to
obtain an agreement reasonably satisfactory to Employee from any successor or
assign of the Employer to assume and agree to perform this Agreement.
     “Person” means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, or governmental body.
     “Proprietary Items” means any Proprietary and/or Confidential Information
embodied in any document, record, recording, electronic media, formulae,
notebook, plan, model, component, device, or computer software or code, whether
embodied in a disk or in any other form.
     “Salary” means as defined in Section 3.1(a).
     “Termination With Cause” means the termination of the Employee’s employment
by act of the Board for any of the following reasons:
          (a) the Employee’s conviction for a felony;
          (b) the Employee’s theft, embezzlement, misappropriation of or
intentional infliction of material damage to the Employer’s property or business
opportunities;
          (c) the Employee’s breach of the provisions contained in Section 7 or
Section 8 of this Agreement; or
          (d) the Employee’s ongoing willful neglect of or failure to perform
his duties hereunder or his ongoing willful failure or refusal to follow any
reasonable, unambiguous duly adopted written direction of the CEO that is not
inconsistent with the description of the Employee’s duties set forth in
Section 2.3, if such willful neglect or failure is materially damaging or
materially detrimental to the business and operations of the Employer; provided
that Employee shall have received written notice of such failure and shall have
continued to engage in such failure after 30 days following receipt of such
notice from the CEO, which notice specifically identifies the manner in which
the CEO believes that Employee has engaged in such failure. For purposes of this
subsection, no act, or failure to act, shall be deemed “willful” unless done, or
omitted to be done, by Employee not in good faith, and without reasonable belief
that such action or omission was in the best interest of the Employer.

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     “Termination Without Cause” means the termination of the Employee’s
employment by the Employer for any reason other than Termination With Cause, or
termination by the Employer due to Employee’s death or disability.
     2. EMPLOYMENT TERMS AND DUTIES
          2.1 Employment
          The Employer hereby employs the Employee, and the Employee hereby
accepts employment by the Employer, upon the terms and conditions set forth in
this Agreement.
          2.2 Term
          Either the Employee or the Employer may terminate this Agreement at
any time and the Employee’s employment and compensation with or without cause or
notice, at any time, at either the Employer’s or the Employee’s option. No
company officer or manager has the authority to enter into any other agreement
for employment for a specified period of time, or to modify or to make any
agreement contrary to the foregoing, except by written amendment to this
Agreement, dated and signed by the Chief Executive Officer (“CEO”) or the
President of the Employer.
          2.3 Duties
          The Employee will have such duties as are assigned or delegated to the
Employee by the Board of Directors, CEO or the President, and will initially
serve as Vice President, Preclinical Research & Development for the Employer.
During the term of this Agreement, the Employee will devote 100% of his full
time, attention, skill and energy to the business of the Employer, which will
include Employee spending at least 50% of his annual work time at the offices of
Employer in Memphis, Tennessee. Additionally, Employee agrees that he will use
his best efforts to promote the success of the Employer’s business, and will
cooperate fully with the Board of Directors, CEO and the President in the
advancement of the best interest of the Employer. Employee commits that, without
first obtaining the prior written approval of Employer, he will refrain from
publishing, and he will not allow those working for him to publish, any
abstracts, articles or other publications arising from research conducted for or
on behalf of Employer that pertain to Employer’s products or business, including
specifically compounds that are being tested from time to time by Employer and
any developmental work or other services that are being undertaken by Employee
for Employer, except as may be approved in accordance with the policies of
Employer. If Employee or any OSU employee under his direction continues to work
on compounds, products or other inventions that are included within the scope of
the IIAs or covered under a separate license agreement between OSU and Employer,
Employee agrees to make available to GTx all notebooks and other evidences of
research and inventions pertaining to such compounds, products and inventions,
which are maintained at OSU, any time upon request by Employer, subject to rule,
regulations and procedures of OSU. Additionally, Employee agrees to provide
Employer regular verbal (and at such other times as Employer may reasonably
request, written) reports containing the data and results of his efforts and the
efforts of all others working under Employee’s supervisions or control in
Preclinical Research and Development.

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          Employee agrees that his only other non-Employer duties will be
limited to his overseeing approximately 7 graduate students currently enrolled
at OSU who are working in the following areas of research and development:
     1. Cytotoxic phospholipids, bis-indoles, thiazolidines, and calpain
inhibitors for cancer;
     2. Imidazoline and amidine-based peptidomimetics for leukemia;
     3. Dianitroanilines for cancer ortuberculosis; and
     4. Flavopiridol, clofarabine, 17-AAG, SAHA, or botanicals (excluding,
however, phytoestrogens) for cancer;
and will not be expanded to include any compounds, molecular targets, or other
intellectual property developed within GTx for the period of time set forth in
Section 8.1 hereof, without first obtaining the prior written approval of
Employer. As an employee of the Employer, the responsibilities and duties of the
Employee shall include managing and overseeing and being personally responsible
for all preclinical research and development projects, including specifically
those for selective androgen receptor modulator compounds, selective estrogen
receptor modulator compounds, nuclear hormone receptor ligands, anti-cancer
drugs and other similar compounds of the Employer. Employee agrees to abide by
all bylaws, policies, practices, procedures or rules of Employer.
     3. COMPENSATION
          3.1 Basic Compensation
          (a) Salary. As of the Effective Date, the Employee was paid
approximately for each of the twenty-six pay periods established by GTx for 2007
a gross salary of approximately $10,000 per pay period (the “Salary”), which is
the equivalent of $260,000 per year. Additionally, Employee’s Salary may be
adjusted from time to time by agreement of the Employee and the CEO.
          (b) Benefits. The Employee will, during his employment with the
Employer, be permitted to participate in such life insurance, hospitalization,
major medical, short term disability, long term disability, 401K plan and other
employee benefit plans of the Employer that may be in effect from time to time
(collectively, the “Benefits”). The Employer may withhold from any Salary or
Benefits payable to Employee all federal, state, local, and other taxes and
other amounts as permitted or required pursuant to law, rules or regulations.
     4. FACILITIES AND EXPENSES
          4.1 General
          The Employer will furnish the Employee office space, equipment,
supplies, and such other facilities and personnel as the Employer deems
necessary or appropriate for the

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performance of the Employee’s duties under this Agreement, including sufficient
capital equipment as determined by the CEO to support the needs of a preclinical
research & development department. The Employer will pay on behalf of the
Employee (or reimburse the Employee for) reasonable expenses incurred by the
Employee at the request of, or on behalf of, the Employer in the performance of
the Employee’s duties pursuant to this Agreement, and in accordance with the
Employer’s employment policies, including reasonable expenses for travel between
Employee’s residence in Upper Arlington, Ohio and Employer’s headquarters in
Memphis, Tennessee and all reasonable expenses incurred by the Employee in
attending conventions, seminars, and other business meetings and appropriate
business entertainment activities, and for promotional expenses.
     5. VACATIONS AND HOLIDAYS
     Employee will be entitled to three (3) weeks paid vacation each year in
accordance with the vacation policies of the Employer in effect from time to
time. Vacation must be taken by the Employee at such time or times as approved
by the CEO or President. Employee will also be entitled to the paid holidays set
forth in the Employer’s policies from and after the Effective Date. Vacation
days and holidays during any year that are not used by the Employee during such
year may not be used in any subsequent year.
     6. TERMINATION
          6.1 Events of Termination
          Either the Employee or Employer may terminate this Employment
Agreement (with the exception of the provisions of Section 7 and 8 which shall
survive termination of this Agreement) and Basic Compensation with or without
cause or notice, at any time at either the Employee’s or the Employer’s option.
          6.2 The employment of Employee shall terminate on the date of the
Employee’s death, in which event Employee’s Basic Compensation owing to Employee
through the date of Employee’s death shall be paid to his estate. Employee’s
estate will not be entitled to any other compensation or payments under this
Agreement.
          6.3 The Employer shall be released from any and all further
obligations under this Agreement, except the Employer shall be obligated to pay
Employee his Basic Compensation owing to Employee through the day on which
Employee’s employment is terminated and as provided in Section 6.4, as
applicable. Employee’s obligation under Sections 7 and 8 shall continue pursuant
to the terms and conditions of this Agreement.
          6.4 As additional consideration for the covenants in Section 7 and
Section 8, in the event of a Change of Control Termination, Employee shall
receive the equivalent of the Salary he would be entitled to receive over
twenty-six pay periods during a period of one (1) calendar year at the time of
his termination of Employment, with such amount payable for a period of one
(1) year from the date of termination in accordance with Employer’s then current
payroll policies and procedures, less deductions required by law; provided that
if Employee shall terminate his employment on account of a reduction in his
Salary or Benefits, as provided in

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paragraph (b) of the definition of “Good Reason”, then Employee shall be
entitled to receive hereunder the equivalent Salary he was making immediately
prior to such reduction.
     7. NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
          7.1 Acknowledgements by the Employee
          The Employee acknowledges and agrees that (a) during the course of his
employment and as a part of his employment, the Employee will be afforded access
to Confidential Information and/or Proprietary Information; (b) public
disclosure of such Confidential Information and/or Proprietary Information could
have an adverse effect on the Employer and its business; (c) because the
Employee possesses substantial technical expertise and skill with respect to the
Employer’s business, the Employer desires to obtain exclusive ownership of each
Employee Invention, and the Employer will be at a substantial competitive
disadvantage if it fails to acquire exclusive ownership of each Employee
Invention; and (d) the provisions of this Section 7 are reasonable and necessary
to prevent the improper use or disclosure of Confidential Information and/or
Proprietary Information and to provide the Employer with exclusive ownership of
all Employee Inventions.
          7.2 Agreements of the Employee
          In consideration of the compensation and benefits to be paid or
provided to the Employee by the Employer under this Agreement and in
consideration of Employee’s receipt of grants of options to purchase Employer
stock and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Employee covenants and agrees as follows:
          (a) Confidentiality.
               (i) That all of such Confidential Information and/or Proprietary
Information are a unique asset of the business of Employer, the disclosure of
which would be damaging to Employer.
               (ii) That the Employee will not at any time, whether during or
after termination or cessation of the Employee’s employment, except as
authorized by Employer and for its benefit, use, divulge or disclose (or enable
anyone else to use, divulge or disclose) to any person, association or entity
any Confidential Information and/or Proprietary Information which the Employee
presently possesses or which the Employee may obtain during the course of the
Employee’s employment with respect to the business, finances, customers or
affairs of Employer or trade secrets, developments, methods or other information
and data pertaining to the Employer’s business. The Employee shall keep strictly
confidential all matters and information entrusted to the Employee and shall not
use or attempt to use any such Confidential Information and/or Proprietary
Information in any manner which may injure or cause loss or may be calculated to
injure or cause loss, whether directly or indirectly, to Employer.

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               (iii) That during the course of this Agreement or at any time
after termination, Employee will keep in strictest confidence and will not
disclose or make accessible to any other person without the prior written
consent of Employer, the Confidential Information and/or Proprietary
Information; Employee agrees: (a) not to use any such Confidential Information
and/or Proprietary Information for himself or others; and (b) not to take any
such material or reproductions thereof from the Employer’s facilities at any
time during his employment except, in each case, as required in connection with
the Employee’s duties to the Employer.
               (iv) Employee agrees to hold in confidence, and not to distribute
or disseminate to any person or entity for any reason, any Confidential
Information and/or Proprietary Information of Employer under this Agreement, or
information relating to experiments or results obtained based on the duties of
Employee, except for information which: (a) is in or which becomes a part of the
public domain not as a result of a breach of this Agreement, (b) information
lawfully received from a third party who had the right to disclose such
information or (c) is required by legal process before a court of proper
jurisdiction (by oral questions, deposition, interrogatories, requests for
information or documents, subpoena, civil investigative domain or other similar
process) to disclose all or any part of any Confidential Information and/or
Proprietary Information, provided that Employee will provide Employer with
prompt notice of such request or requirement, as well as notice of the terms and
circumstances surrounding such request or requirements, so that Employer may
seek an appropriate protective order or waive compliance with the provisions of
this Agreement. In such case, the parties will consult with each other on the
advisability of pursuing any such order or other legal action or available step
to resist or narrow such request or requirement. If, failing the entry of a
protective order or the receipt of a waiver hereunder, Employee is, in the
opinion of counsel reasonably acceptable to Employer, legally compelled to
disclose Confidential Information and/or Proprietary Information, Employee may
disclose that portion of such information which counsel advises is necessary to
disclose, but Employee will not oppose any action by Employer to prevent
disclose pursuant to an appropriate protective order or to pursue other reliable
assurances that confidential treatment will be accorded the disclosure of such
information.
               (v) Upon written notice by Employer, Employee shall promptly
redeliver to Employer, or, if requested by Employer, promptly destroy all
written Confidential Information and/or Proprietary Information and any other
written material containing any information included in the Confidential
Information and/or Proprietary Information (whether prepared by Employer,
Employee, or a third party), and will not retain any copies, extracts or other
reproductions in whole or in part of such written Confidential Information
and/or Proprietary Information (and upon request certify such redelivery of
destruction to Employer in a written instrument reasonably acceptable to
Employer and its counsel).

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               (vi) This Agreement and the terms and conditions recited herein
are confidential and non-public, except as may be expressly permitted by the
Employer. The Employee agrees not to disclose the contents of this Agreement to
any person or entity, including, but not limited to, the press, other media, any
public body, or any competitor of Employer, except to the Employee’s legal
counsel and the appropriate Dean of Employee’s Department at The Ohio State
University, or as may be required by law.
               (vii) Any trade secrets of the Employer will be entitled to all
of the protections and benefits of State of Tennessee law and any other
applicable law. If any information that the Employer deems to be a trade secret
is found by a court of competent jurisdiction not be to a trade secret for
purposes of this Agreement, such information will, nevertheless, be considered
Confidential Information and/or Proprietary Information for purposes of this
Agreement. The Employee hereby waives any requirement that the Employer submits
proof of the economic value of any trade secret or posts a bond or other
security.
               (viii) None of the foregoing obligations and restrictions applies
to any part of the Confidential Information and/or Proprietary Information that
the Employee demonstrates was or became generally available to the public other
than as a result of a disclosure by the Employee.
               (ix) The Employee will not remove from the Employer’s premises
(except to the extent such removal is for purposes of the performance of the
Employee’s duties at home or while traveling, or except as otherwise
specifically authorized by the Employer) any Proprietary Items. The Employee
recognizes that, as between the Employer and the Employee, all of the
Proprietary Items, whether or not developed by the Employee, are the exclusive
property of the Employer. Upon termination of this Agreement by either party, or
upon the request of the Employer during the employment of Employee, the Employee
will return to the Employer all of the Proprietary Items in the Employee’s
possession or subject to the Employee’s control, and the Employee shall not
retain any copies, abstracts, sketches, or other physical or electronic
embodiment of any of the Proprietary Items.
          (b) Employee Inventions.
          (i) Each Employee Invention will belong exclusively to the Employer.
Employee agrees that Employer shall have sole and exclusive ownership rights in
any conception, invention, trade secrets, information, ideas, improvement,
substance, know-how, whether or not patentable, arising out of, resulting from,
or derivative of: (1) the work or services of Employee, or (2) within the scope
of the duties of Employee, or (3) using any materials, compounds, devices, or
monies of Employer. Any resulting or derivative rights, including patent rights,
shall become the exclusive property of Employer and Employer shall be entitled
to the entire right, title and interest with respect hereto. Employee agrees,
without additional compensation, to convey, assign the entire right, title, and
interest in

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and to any inventions for the United States and all foreign jurisdictions to
Employer arising out of, resulting from, or derivative of: (1) the work or
services of Employee, or (2) within the scope of the duties of Employee, or
(3) using any materials, compounds, devices, or monies.
          (ii) Employer shall retain the entire right, title and interest in and
to any and all Confidential Information and/or Proprietary Information provided
by Employer to Employee and to any methods, compounds, improvements, substances,
and compositions using or incorporating such Confidential Information and/or
Proprietary Information.
          (iii) Employee agrees that Confidential Information and/or Proprietary
Information provided to the Employee by Employer shall be used for work purposes
only and shall not be used for any other uses, studies, experiments, or tests.
          (iv) Employee agrees that he will promptly disclose to Employer, or
any persons designated by Employer, all Employee Inventions, made or conceived
or reduced to practice or learned by him, either alone or jointly with others,
during the employment of the Employee. The Employee further agrees to assist
Employer in every proper way (but at Employer’s expense) to obtain and from time
to time enforce patents, copyrights or other rights on Employee Inventions in
any and all countries, and to that end Employee will execute all documents
necessary: (a) to apply for, obtain and vest in the name of Employer alone
(unless Employer otherwise directs) letters patent, copyrights or other
analogues protection in any country throughout the world and when so obtained or
vested to renew and restore the same; and (b) to defend (including the giving of
testimony and rendering any other assistance) any opposition proceedings in
respect of such applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright or other analogous
protection. Employee’s obligation to assist Employer in obtaining and enforcing
patents and copyrights for Employee Inventions in any and all countries shall
continue beyond and after the termination of Employee.
          (v) Any copyrightable work whether published or unpublished created by
Employee in connection with or during the performance of services below shall be
considered a work made for hire, to the fullest extent permitted by law and all
right, title and interest therein, including the worldwide copyrights, shall be
the property of Employer as the employer and party specially commissioning such
work. In the event that any such copyrightable work or portion thereof shall not
be legally qualified as a work made for hire, or shall subsequently be so held,
Employee agrees to properly convey to Employer, without additional compensation,
the entire right, title and interest in and to such work or portion thereof,
including but not limited to the worldwide copyrights, extensions of such
copyrights, and renewal copyrights therein, and further including all rights to
reproduce the copyrighted work in copies or phonorecords, to prepare derivative
works based on the copyrighted work, to distribute copies of the copyrighted

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work, to perform the copyrighted work publicly, to display the copyrighted work
publicly, and to register the claim of copyright therein and to execute any and
all documents with respect hereto.
          (vi) Employee may not publish or disclose any Confidential Information
and/or Proprietary Information relating to, arising from, derivative of, or as a
result of his employment pursuant to this Agreement, including but not limited
to, information, improvements, results, experiments, data, or methods that makes
reference to any of the Confidential Information and/or Proprietary Information.
Any work performed under, or arising from, or a result of his employment with
Employer shall not be published or disclosed in written, electronic, or oral
form without the express written permission of Employer.
          7.3 Disputes or Controversies
          The Employee recognizes that should a dispute or controversy arising
from or relating to this Agreement be submitted for adjudication to any court,
arbitration panel, or other third party, the preservation of the secrecy of
Confidential Information and/or Proprietary Information may be jeopardized. All
pleadings, documents, testimony, and records relating to any such adjudication
will be maintained in secrecy and will be available for inspection by the
Employer, the Employee, and their respective attorneys and experts, who will
agree, in advance and in writing, to receive and maintain all such information
in secrecy, except as may be limited by them in writing.
     8. NON-COMPETITION
          8.1 Acknowledgments by the Employee
          Except for circumstance involving a Change of Control as described in
Section 8.4 below, Employee understands and recognizes that the Employee’s
services provided to Employer are special, unique, unusual, extraordinary and
intellectual in character, and Employee agrees that, during the employment of
Employee and for a period of two (2) years from the date of termination of the
Employee’s employment with Employer, he will not in any manner, directly or
indirectly, on behalf of himself or any Person, firm, partnership, joint
venture, corporation or other business entity, engage or invest in, own, manage,
operate, finance, control or participate in the ownership, management,
operation, financing, or control of, be employed by, associated with, or in any
manner connected with, lend the Employee’s name or similar name to, lend
Employee’s credit to or render services or advice to, enter into or engage in
any Competing Business; provided, however, that Employee may purchase or
otherwise acquire up to (but not more than) one percent of any class of
securities of any enterprise (but without otherwise participating in the
activities of such enterprise) if such securities are listed on any national or
regional securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934.
          8.2 Except for circumstances involving a Change of Control as
described in Section 8.4 below, in consideration of the acknowledgements by the
Employee, and in consideration of the compensation and benefits to be paid or
provided to the Employee by the

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Employer, the Employee covenants that he will not, directly or indirectly,
whether for the Employee’s own account or the account of any other person (i) at
any time during the employment of Employee and for a period of two (2) years
from the termination of the Employee’s employment with Employer, solicit,
employ, or otherwise engage as an employee, independent contractor, or
otherwise, any person who is or was an employee of the Employer at any time
during the Employee’s employment with Employer or in any manner induce or
attempt to induce any employee of the Employer to terminate his employment with
the Employer; or (ii) at any time during the employment of Employee with
Employer and for two (2) years from the termination of Employee’s employment
with Employer, interfere with the Employer’s relationship with any person,
including any person who at any time during the Employee’s employment with
Employer was an employee, contractor, supplier, or customer of the Employer.
          8.3 In further consideration of these premises, Employee agrees that
he will not at any time during or after Employee’s employment with Employer,
disparage the Employer or any of its shareholders, directors, officers,
employees, or agents.
          8.4 Change of Control. In the event of a Change of Control
Termination, Employee’s obligations under Sections 8.1 and 8.2 above shall
expire one (1) year from the date of termination of his employment with Employer
(or any entity acquiring Employer as a result of a Change of Control).
          8.5 If any covenant in Section 8 is held to be unreasonable,
arbitrary, or against public policy, such covenant will be considered to be
divisible with respect to scope, time, and geographic area, and such lesser
scope, time, or geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding, and enforceable against the Employee.
          The period of time applicable to any covenant in Section 8 will be
extended by the duration of any violation by the Employee of such covenant.
          The Employee will, while the covenants under Section 8 are in effect,
give notice to the Employer, within ten days after accepting any other
employment, of the identity of the Employee’s employer. The Employer may notify
such employer that the Employee is bound by this Agreement and, at the
Employer’s election, furnish such employer with a copy of this Agreement or
relevant portions thereof.
     9. GENERAL PROVISIONS
          9.1 Injunctive Relief and Additional Remedy
          The Employee acknowledges that the injury that would be suffered by
the Employer as a result of a breach of the provisions of this Agreement
(including any provision of Sections 7 and 8) would be irreparable and that an
award of monetary damages to the Employer for such a breach would be an
inadequate remedy. Consequently, the Employer will have the right, in addition
to any other rights it may have, to obtain injunctive relief to restrain any
breach or threatened breach or otherwise to specifically enforce any provision
of this Agreement, and the Employer will not be obligated to post bond or other
security in seeking such relief. Without limiting the Employer’s rights under
this Section 9 or any other remedies of the Employer, if the

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Employee breaches any of the provisions of Section 7 or 8, the Employer will
have the right to cease making any payments otherwise due to the Employee under
this Agreement.
          9.2 Covenants of Sections 7 and 8 are Essential and Independent
Covenants
          The covenants by the Employee in Sections 7 and 8 are essential
elements of this Agreement, and without the Employee’s agreement to comply with
such covenants, the Employer would not have entered into this Agreement or
employed or continued the employment of the Employee. The Employer and the
Employee have had the right to independently consult their respective counsel
and to have been advised in all respects concerning the reasonableness and
propriety of such covenants, with specific regard to the nature of the business
conducted by the Employer.
          The Employee’s covenants in Sections 7 and 8 are independent covenants
and the existence of any claim by the Employee against the Employer under this
Agreement or otherwise will not excuse the Employee’s breach of any covenant in
Section 7 or 8.
          If the Employee’s employment hereunder is terminated by either party,
this Agreement will continue in full force and effect as is necessary or
appropriate to enforce the covenants and agreements of the Employee in
Sections 7 and 8.
          9.3 Representations and Warranties by the Employee
          The Employee represents and warrants to the Employer that the
execution and delivery by the Employee of this Agreement do not, and the
performance by the Employee of the Employee’s obligations hereunder will not,
with or without the giving of notice or the passage of time, or both:
(a) violate any judgment, writ, injunction, or order of any court, arbitrator,
or governmental agency applicable to the Employee; or (b) conflict with, result
in the breach of any provisions of or the termination of, or constitute a
default under, any agreement to which the Employee is a party or by which the
Employee is or may be bound.
          9.4 Waiver
          The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power, or privilege under this Agreement will
operate as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement.

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          9.5 Binding Effect; Delegation of Duties Prohibited
          This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, assigns, heirs, and
legal representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Employee under this Agreement,
being personal, may not be delegated.
          9.6 Notices
          All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when
(a) delivered by hand (with written confirmation of receipt), (b) sent by
facsimile (with written confirmation of receipt), provided that a copy is mailed
by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):

     
     If to Employer:
  GTx,Inc
 
  3 N. Dunlap Ave, 3rd Floor
 
  Memphis, Tennessee 38163
 
  Attention: Vice President, General Counsel
 
  Facsimile No.: 901-523-9772
 
   
     If to the Employee:
  James T. Dalton
 
  4180 Greenview Road
 
  Upper Arlington, Ohio 43220

     Employee shall notify Employer in writing of any change of his address.
Otherwise, Employer shall send all notices to Employee’s address herein.
          9.7 Entire Agreement; Amendments
          This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with respect to the
subject matter hereof. This Agreement may not be amended orally, but only by an
agreement in writing signed by the parties hereto.
          9.8 Governing Law
          This Agreement will be governed by the laws of the State of Tennessee
without regard to conflicts of laws principles.

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          9.9 Jurisdiction
          Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement shall be brought against either of
the parties in the courts of the State of Tennessee, County of Shelby, or, if it
has or can acquire jurisdiction, in the United States District Court for the
Western District of Tennessee, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on either party anywhere in the world.
          9.10 Section Headings, Construction
          The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to “Section” or “Sections” refer to the corresponding Section or
Sections of this Agreement unless otherwise specified. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word “including” does not
limit the preceding words or terms.
          9.11 Severability
          If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
          9.12 Counterparts
          This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date above first written above.

            JAMES T. DALTON
      /s/ James T. Dalton                     GTx, Inc.
      By:   /s/ Henry P. Doggrell         Name:   Henry P. Doggrell       
Title:   V.P., General Counsel     

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