Exhibit 10.39



 





EMPLOYMENT AGREEMENT




     This Employment Agreement (this “Agreement”) is made and entered into as of May 15, 2007
(the “Effective Date”) by and between GTx, Inc., located at 3 North Dunlap, 3rd Floor,
Memphis, Tennessee 38163 (the “Employer”), and JEFF G. HESSELBERG (the “Employee”), residing at
18905 203 Avenue N.E., Woodinville, Washington 98077.



     WHEREAS, the Employer desires to retain the services of Employee as Vice President, Regulatory
Affairs;



     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.



     “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.



1









 





     “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.



     “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 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.



2









 





     “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 the
Effective Date 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.



     “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 since his initial date of employment on May 15, 2007
(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, 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



3









 







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;



          (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.



4









 





     “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.



     “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.



5









 





          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, Regulatory Affairs
for the Employer, provided that the Board of Directors shall have approved his appointment as an
officer of the company. 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. 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.



          As an employee of the Employer, the responsibilities and duties of the Employee shall include
managing and overseeing the Company’s regulatory functions, including staffing and managing these
functions in a manner satisfactory to the CEO. 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 $8,077 per pay period (the “Salary”), which is the equivalent of $210,000 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 performance of the
Employee’s duties under this Agreement, including sufficient capital



6









 







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, 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 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









 





     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.




          (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



8









 







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).




          (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



9









 







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
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 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.



10









 






     (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 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.



11









 






     (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 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,



12









 







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 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.



13









 





          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.



14









 





          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.:901-844-8075
	 
	 	 	 	 
	 

	 	If to the Employee:
	 	Jeff G. Hesselberg
	 

	 	 	 	18905 203 Avenue N.E.
	 

	 	 	 	Woodinville, Washington 98077






     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.



15









 





          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.




	 	 	 	 	 
	 	Jeff G. Hesselberg

 	 
	 	/s/ Jeff G. Hesselberg
 	 
	 	 	 
	 	 	 
	 	By:  	/s/ Henry P. Doggrell
 	 
	 	 	Name:  	Henry P. Doggrell 	 
	 	 	Title:  	V.P., General Counsel 	 
	 




16