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                                                                    EXHIBIT 10.6

                                    GTX, INC.

                 2004 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

                            ADOPTED JANUARY 14, 2004
                    APPROVED BY STOCKHOLDERS JANUARY 14, 2004

1.       PURPOSES.

         (a)      ELIGIBLE OPTION RECIPIENTS. The persons eligible to receive
Options are the Non-Employee Directors of the Company.

         (b)      AVAILABLE OPTIONS. The purpose of the Plan is to provide a
means by which Non-Employee Directors may be given an opportunity to benefit
from increases in value of the Common Stock through the granting of Nonstatutory
Stock Options.

         (c)      GENERAL PURPOSE. The Company, by means of the Plan, seeks to
retain the services of its Non-Employee Directors, to secure and retain the
services of new Non-Employee Directors and to provide incentives for such
persons to exert maximum efforts for the success of the Company and its
Affiliates.

2.       DEFINITIONS.

         (a)      "ACCOUNTANT" means the independent public accountants of the
Company.

         (b)      "AFFILIATE" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f), respectively, of the Code.

         (c)      "ANNUAL GRANT" means an Option granted annually to all
Non-Employee Directors who meet the specified criteria pursuant to Section 6(b).

         (d)      "ANNUAL MEETING" means the annual meeting of the stockholders
of the Company.

         (e)      "BOARD" means the Board of Directors of the Company.

         (f)      "CAPITALIZATION ADJUSTMENT" has the meaning ascribed to that
term in Section 11(a).

         (g)      "CHANGE IN CONTROL" means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events:

                  (i)      any Exchange Act Person becomes the Owner, directly
or indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company's then outstanding securities
other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall

                                       1.

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not be deemed to occur solely because the level of Ownership held by any
Exchange Act Person (the "Subject Person") exceeds the designated percentage
threshold of the outstanding voting securities as a result of a repurchase or
other acquisition of voting securities by the Company reducing the number of
shares outstanding, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of voting
securities by the Company, and after such share acquisition, the Subject Person
becomes the Owner of any additional voting securities that, assuming the
repurchase or other acquisition had not occurred, increases the percentage of
the then outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control shall be deemed to
occur;

                  (ii)     there is consummated a merger, consolidation or
similar transaction involving (directly or indirectly) the Company and,
immediately after the consummation of such merger, consolidation or similar
transaction, the stockholders of the Company immediately prior thereto do not
Own, directly or indirectly, outstanding voting securities representing more
than fifty percent (50%) of the combined outstanding voting power of the
surviving Entity in such merger, consolidation or similar transaction or more
than fifty percent (50%) of the combined outstanding voting power of the parent
of the surviving Entity in such merger, consolidation or similar transaction;

                  (iii)    the stockholders of the Company approve or the Board
approves a plan of complete dissolution or liquidation of the Company, or a
complete dissolution or liquidation of the Company shall otherwise occur;

                  (iv)     there is consummated a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries, other than a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
stockholders of the Company in substantially the same proportions as their
Ownership of the Company immediately prior to such sale, lease, license or other
disposition; or

                  (v)      individuals who, on the date this Plan is adopted by
the Board, are members of the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the members of the Board; (provided,
however, that if the appointment or election (or nomination for election) of any
new Board member was approved or recommended by a majority vote of the members
of the Incumbent Board then still in office, such new member shall, for purposes
of this Plan, be considered as a member of the Incumbent Board).

         (h)      "CODE" means the Internal Revenue Code of 1986, as amended.

         (i)      "COMMITTEE GRANT" means an Option granted annually to all
Non-Employee Directors who meet the specified criteria pursuant to Section 6(c).

         (j)      "COMMON STOCK" means the common stock of the Company.

         (k)      "COMPANY" means GTx, Inc., a Delaware corporation.

                                       2.

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         (l)      "CONSULTANT" means any person, including an advisor, (i)
engaged by the Company or an Affiliate to render consulting or advisory services
and who is compensated for such services or (ii) serving as a member of the
Board of Directors of an Affiliate. However, the term "Consultant" shall not
include either Directors of the Company who are not compensated by the Company
for their services as Directors or Directors of the Company who are merely paid
a director's fee by the Company for their services as Directors.

         (m)      "CONTINUOUS SERVICE" means that the Optionholder's service
with the Company or an Affiliate, whether as an Employee, Director or
Consultant, is not interrupted or terminated. The Optionholder's Continuous
Service shall not be deemed to have terminated merely because of a change in the
capacity in which the Optionholder renders service to the Company or an
Affiliate as an Employee, Consultant or Director or a change in the entity for
which the Optionholder renders such service, provided that there is no
interruption or termination of the Optionholder's Continuous Service. For
example, a change in status from a Non-Employee Director of the Company to a
Consultant of an Affiliate or an Employee of the Company will not constitute an
interruption of Continuous Service. The Board or the chief executive officer of
the Company, in that party's sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or any other
personal leave.

         (n)      "CORPORATE TRANSACTION" means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events:

                  (i)      a sale or other disposition of all or substantially
all, as determined by the Board in its discretion, of the consolidated assets of
the Company and its Subsidiaries;

                  (ii)     a sale or other disposition of at least ninety
percent (90%) of the outstanding securities of the Company;

                  (iii)    a merger, consolidation or similar transaction
following which the Company is not the surviving corporation; or

                  (iv)     a merger, consolidation or similar transaction
following which the Company is the surviving corporation but the shares of
Common Stock outstanding immediately preceding the merger, consolidation or
similar transaction are converted or exchanged by virtue of the merger,
consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise.

         (o)      "DIRECTOR" means a member of the Board of Directors of the
Company.

         (p)      "DISABILITY" means the inability of a person, in the opinion
of a qualified physician acceptable to the Company, to perform the major duties
of that person's position with the Company or an Affiliate of the Company
because of the sickness or injury of the person.

                                       3.

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         (q)      "EMPLOYEE" means any person employed by the Company or an
Affiliate. Service as a Director or payment of a director's fee by the Company
or an Affiliate shall not be sufficient to constitute "employment" by the
Company or an Affiliate.

         (r)      "ENTITY" means a corporation, partnership or other entity.

         (s)      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         (t)      "EXCHANGE ACT PERSON" means any natural person, Entity or
"group" (within the meaning of Section 13(d) or 14(d) of the Exchange Act),
except that "Exchange Act Person" shall not include (A) the Company or any
Subsidiary of the Company, (B) any employee benefit plan of the Company or any
Subsidiary of the Company or any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any Subsidiary of the Company,
(C) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (D) an Entity Owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
Ownership of stock of the Company.

         (u)      "FAIR MARKET VALUE" means, as of any date, the value of the
Common Stock determined as follows:

                  (i)      If the Common Stock is listed on any established
stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in the Common Stock) on the last market trading day prior to
the day of determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable.

                  (ii)     In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined in good faith by the Board.

         (v)      "INITIAL GRANT" means an Option granted to a Non-Employee
Director who meets the specified criteria pursuant to Section 6(a).

         (w)      "IPO DATE" means the means the first day that the Common Stock
is publicly traded after the initial public offering of the Common Stock.

         (x)      "NON-EMPLOYEE DIRECTOR" means a Director who is not an
Employee.

         (y)      "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

         (z)      "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

         (aa)     "OPTION" means a Nonstatutory Stock Option granted pursuant to
the Plan.

                                       4.

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         (bb)     "OPTION AGREEMENT" means a written agreement between the
Company and an Optionholder evidencing the terms and conditions of an individual
Option grant. Each Option Agreement shall be subject to the terms and conditions
of the Plan.

         (cc)     "OPTIONHOLDER" means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.

         (dd)     "OWN," "OWNED," "OWNER," "OWNERSHIP" A person or Entity shall
be deemed to "Own," to have "Owned," to be the "Owner" of, or to have acquired
"Ownership" of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.

         (ee)     "PLAN" means this GTx, Inc. 2004 Non-Employee Directors' Stock
Option Plan.

         (ff)     "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange
Act or any successor to Rule 16b-3, as in effect from time to time.

         (gg)     "SECURITIES ACT" means the Securities Act of 1933, as amended.

         (hh)     "SUBSIDIARY" means, with respect to the Company, (i) any
corporation of which more than fifty percent (50%) of the outstanding capital
stock having ordinary voting power to elect a majority of the board of directors
of such corporation (irrespective of whether, at the time, stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or
indirectly, Owned by the Company, and (ii) any partnership in which the Company
has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%).

3.       ADMINISTRATION.

         (a)      ADMINISTRATION BY BOARD. The Board shall administer the Plan.
The Board may not delegate administration of the Plan to a committee.

         (b)      POWERS OF BOARD. The Board shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:

                  (i)      To determine the provisions of each Option to the
extent not specified in the Plan.

                  (ii)     To construe and interpret the Plan and Options
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Option Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.

                  (iii)    To amend the Plan or an Option as provided in Section
12.

                                       5.

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                  (iv)     Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company and that are not in conflict with the provisions of the
Plan.

         (c)      EFFECT OF BOARD'S DECISION. All determinations,
interpretations and constructions made by the Board in good faith shall not be
subject to review by any person and shall be final, binding and conclusive on
all persons.

4.       SHARES SUBJECT TO THE PLAN.

         (a)      SHARE RESERVE. Subject to the provisions of Section 11
relating to adjustments upon changes in the Common Stock, the Common Stock that
may be issued pursuant to Options shall not exceed in the aggregate Two Hundred
Thousand (200,000) shares of Common Stock (on a post split basis), plus an
annual increase for ten years beginning on January 1, 2005 and ending on (and
including) January 1, 2013 equal to the number of shares subject to Options
granted during the prior calendar year. Notwithstanding the foregoing, the Board
may act, prior to the first day of any fiscal year of the Company, to increase
the share reserve by such number of shares of Common Stock as the Board shall
determine, which number shall be less than the amount described in the foregoing
sentence.

         (b)      REVERSION OF SHARES TO THE SHARE RESERVE. If any Option shall
for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, the shares of Common Stock not acquired under
such Option shall revert to and again become available for issuance under the
Plan.

         (c)      SOURCE OF SHARES. The shares of Common Stock subject to the
Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.

5.       ELIGIBILITY.

         The Options, as set forth in Section 6, automatically shall be granted
under the Plan to all Non-Employee Directors who meet the criteria specified in
Section 6. Notwithstanding the foregoing, a Non-Employee Director shall not be
eligible for the grant of an Option under the Plan if the Non-Employee Director
is the Owner, directly or indirectly, of securities of the Company representing
more than ten percent (10%) of the combined voting power of the Company's then
outstanding securities.

6.       NON-DISCRETIONARY GRANTS.

         (a)      INITIAL GRANTS. Without any further action of the Board, each
person who is serving as a Non-Employee Director on the IPO Date automatically
shall, on the IPO Date, be granted an Initial Grant to purchase ten thousand
(10,000) shares of Common Stock on the terms and conditions set forth herein.
Additionally, without any further action of the Board, each person who after the
IPO Date is elected or appointed for the first time to be a Non-Employee
Director automatically shall, upon the date of his or her initial election or
appointment to be a Non-Employee Director, be granted an Initial Grant to
purchase ten thousand (10,000) shares of Common Stock (after

                                       6.

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adjustment for the 8.5 to 1 stock split of January 14, 2004) on the terms and
conditions set forth herein.

         (b)      ANNUAL GRANTS. Without any further action of the Board, on the
day following each Annual Meeting, commencing with the Annual Meeting in 2005,
each person who is then a Non-Employee Director automatically shall be granted
an Annual Grant to purchase two thousand (2,000) shares of Common Stock on the
terms and conditions set forth herein; provided, however, that a Non-Employee
Director shall not receive an Annual Grant within one year of an Initial Grant.

7.       OPTION PROVISIONS.

         Each Option shall be in such form and shall contain such terms and
conditions as required by the Plan. Each Option shall contain such additional
terms and conditions, not inconsistent with the Plan, as the Board shall deem
appropriate. Each Option shall include (through incorporation of provisions
hereof by reference in the Option or otherwise) the substance of each of the
following provisions:

         (a)      TERM. No Option shall be exercisable after the expiration of
ten (10) years from the date it was granted.

         (b)      EXERCISE PRICE. The exercise price of each Option shall be one
hundred percent (100%) of the Fair Market Value of the stock subject to the
Option on the date the Option is granted; provided however, that for Initial
Grants granted on or within three (3) months after the IPO Date, the exercise
price of such Initial Grants shall be the price at which the Common Stock was
first sold to the public in the initial public offering of the Common Stock.

         (c)      CONSIDERATION. The purchase price of stock acquired pursuant
to an Option may be paid, to the extent permitted by applicable law, in any
combination of (i) cash or check, (ii) delivery to the Company of other Common
Stock or (iii) pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board that, prior to the issuance of Common Stock,
results in either the receipt of cash (or check) by the Company or the receipt
of irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds. The purchase price of Common Stock acquired pursuant to
an Option that is paid by delivery to the Company of other Common Stock
acquired, directly or indirectly from the Company, shall be paid only by shares
of the Common Stock of the Company that have been held for more than six (6)
months (or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes).

         (d)      TRANSFERABILITY. An Option is transferable by will or by the
laws of descent and distribution. An Option also may be transferable upon
written consent of the Company if, at the time of transfer, a Form S-8
registration statement under the Securities Act is available for the exercise of
the Option and the subsequent resale of the underlying securities. In addition,
an Optionholder may, by delivering written notice to the Company, in a form
provided by or otherwise satisfactory to the Company, designate a third party
who, in the event of the death of the Optionholder, shall thereafter be entitled
to exercise the Option.

                                       7.

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         (e)      VESTING. Options shall vest as follows:

                  (i)      Initial Grants: 1/3rd of the shares shall vest
annually on the anniversary of the date of grant, so that the Initial Grant is
fully vested after 3 years.

                  (ii)     Annual Grants: 1/3rd of the shares shall vest
annually on the anniversary of the date of grant, so that the Annual Grant is
fully vested after 3 years.

         (f)      EARLY EXERCISE. The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as to any
part or all of the shares of Common Stock subject to the Option prior to the
full vesting of the Option. Any unvested shared of Common Stock so purchased may
be subject to a repurchase option in favor of the Company or to any other
restriction the Board determines to be appropriate. The Company will not
exercise its repurchase option until at least six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes) have elapsed following exercise of the Option unless the
Board otherwise specifically provides in the Option.

         (g)      TERMINATION OF CONTINUOUS SERVICE. In the event an
Optionholder's Continuous Service terminates (other than upon the Optionholder's
death or Disability), the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise it as of the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service, or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If the Optionholder's Continuous Service
terminates either as a condition of a Change in Control or upon the
effectiveness of a Change in Control then the Optionholder may exercise the
outstanding vested portion his or her Option within such period of time ending
on the earlier of (i) the date twelve (12) months following the termination of
the Optionholder's Continuous Service, or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time specified in
the Option Agreement, the Option shall terminate.

         (h)      EXTENSION OF TERMINATION DATE. If the exercise of the Option
following the termination of the Optionholder's Continuous Service (other than
upon the Optionholder's death or Disability) would be prohibited at any time
solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option as set forth in the
Option Agreement or (ii) the expiration of a period of three (3) months after
the termination of the Optionholder's Continuous Service during which the
exercise of the Option would not be in violation of such registration
requirements.

         (i)      DISABILITY OF OPTIONHOLDER. In the event an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise it as of the date of termination), but only within such
period of time ending on the earlier of (i) the date twelve (12) months
following such termination or (ii) the expiration of the term of the Option as
set forth in

                                       8.

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the Option Agreement. If, after termination, the Optionholder does not exercise
his or her Option within the time specified herein, the Option shall terminate.

         (j)      DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the three-month period after the termination of the
Optionholder's Continuous Service for a reason other than death, then the Option
may be exercised (to the extent the Optionholder was entitled to exercise the
Option as of the date of death) by the Optionholder's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the Option upon the Optionholder's death, but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death or (2) the expiration of the term of such Option as
set forth in the Option Agreement. If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate.

8.       SECURITIES LAW COMPLIANCE.

         The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
grant Options and to issue and sell shares of Common Stock upon exercise of the
Options; provided, however, that this undertaking shall not require the Company
to register under the Securities Act the Plan, any Option or any stock issued or
issuable pursuant to any such Option. If, after reasonable efforts, the Company
is unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such Options unless and until
such authority is obtained.

9.       USE OF PROCEEDS FROM STOCK.

         Proceeds from the sale of stock pursuant to Options shall constitute
general funds of the Company.

10.      MISCELLANEOUS.

         (a)      STOCKHOLDER RIGHTS. No Optionholder shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
subject to such Option unless and until such Optionholder has satisfied all
requirements for exercise of the Option pursuant to its terms.

         (b)      NO SERVICE RIGHTS. Nothing in the Plan or any instrument
executed or Option granted pursuant thereto shall confer upon any Optionholder
any right to continue to serve the Company as a Non-Employee Director or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant's agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

                                       9.

<PAGE>

         (c)      INVESTMENT ASSURANCES. The Company may require an
Optionholder, as a condition of exercising or acquiring stock under any Option,
(i) to give written assurances satisfactory to the Company as to the
Optionholder's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters and that he
or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (ii) to give
written assurances satisfactory to the Company stating that the Optionholder is
acquiring the stock subject to the Option for the Optionholder's own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (1) the issuance of the shares upon the
exercise or acquisition of stock under the Option has been registered under a
then currently effective registration statement under the Securities Act or (2)
as to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.

         (d)      WITHHOLDING OBLIGATIONS. The Optionholder may satisfy any
federal, state or local tax withholding obligation relating to the exercise or
acquisition of stock under an Option by any of the following means (in addition
to the Company's right to withhold from any compensation paid to the
Optionholder by the Company) or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold shares from the shares of
the Common Stock otherwise issuable to the Optionholder as a result of the
exercise or acquisition of stock under the Option; provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of the Common Stock.

11.      ADJUSTMENTS UPON CHANGES IN COMMON STOCK.

         (a)      CAPITALIZATION ADJUSTMENTS. If any change is made in, or other
events occur with respect to, the stock subject to the Plan, or subject to any
Option, without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company (each a "Capitalization Adjustment")), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject both to the
Plan pursuant to Section 4 and to the nondiscretionary Options specified in
Section 6, and the outstanding Options will be appropriately adjusted in the
class(es) and number of securities and price per share of stock subject to such
outstanding Options. The Board shall make such adjustments, and its
determination shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a transaction
"without receipt of consideration" by the Company.)

                                      10.

<PAGE>

         (b)      DISSOLUTION OR LIQUIDATION. In the event of a dissolution or
liquidation of the Company, then all outstanding Options shall terminate
immediately prior to the completion of such dissolution or liquidation.

         (c)      CORPORATE TRANSACTION. In the event of a Corporate
Transaction, any surviving corporation or acquiring corporation may assume any
or all Options outstanding under the Plan or may substitute similar stock
options for Options outstanding under the Plan (it being understood that similar
stock options include, but are not limited to, options to acquire the same
consideration paid to the stockholders or the Company, as the case may be,
pursuant to the Corporate Transaction). In the event that any surviving
corporation or acquiring corporation does not assume any or all such outstanding
Options or substitute similar stock options for such outstanding Options, then
with respect to Options that have been neither assumed nor substituted and that
are held by Optionholders whose Continuous Service has not terminated prior to
the effective time of the Corporate Transaction, the vesting of such Options
(and, if applicable, the time at which such Options may be exercised) shall
(contingent upon the effectiveness of the Corporate Transaction) be accelerated
in full to a date prior to the effective time of such Corporate Transaction as
the Board shall determine (or, if the Board shall not determine such a date, to
the date that is five (5) days prior to the effective time of the Corporate
Transaction), and the Options shall terminate if not exercised (if applicable)
at or prior to such effective time. With respect to any other Options
outstanding under the Plan that have been neither assumed nor substituted, the
vesting of such Options (and, if applicable, the time at which such Options may
be exercised) shall not be accelerated unless otherwise provided in Section
11(d) or in a written agreement between the Company or any Affiliate and the
holder of such Options, and such Options shall terminate if not exercised (if
applicable) prior to the effective time of the Corporate Transaction.

         (d)      CHANGE IN CONTROL. If a Change in Control occurs, then,
immediately prior to such Change in Control, the Optionholder's Options shall
become fully vested and exercisable. In the event that an Optionholder is
required to resign his or her position as a Non-Employee Director as a condition
of a Change in Control, the outstanding Options of such Optionholder shall
become fully vested and exercisable immediately prior to the effectiveness of
such resignation.

         (e)      PARACHUTE PAYMENTS. If the acceleration of the vesting and
exercisability of Options provided for in Section 11(c), together with payments
and other benefits of an Optionholder, (collectively, the "Payment") (i)
constitute a "parachute payment" within the meaning of Section 280G of the Code,
or any comparable successor provisions, and (ii) but for this Section 11(e)
would be subject to the excise tax imposed by Section 4999 of the Code, or any
comparable successor provisions (the "Excise Tax"), then such Payment shall be
either (1) provided to such Optionholder in full, or (2) provided to such
Optionholder as to such lesser extent that would result in no portion of such
Payment being subject to the Excise Tax, whichever of the foregoing amounts,
when taking into account applicable federal, state, local and foreign income and
employment taxes, the Excise Tax, and any other applicable taxes, results in the
receipt by such Optionholder, on an after-tax basis, of the greatest amount of
the Payment, notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax.

                                      11.

<PAGE>

         Unless the Company and such Optionholder otherwise agree in writing,
any determination required under this Section 11(e) shall be made in writing in
good faith by the Accountant. If a reduction in the Payment is to be made as
provided above, reductions shall occur in the following order unless the
Optionholder elects in writing a different order (provided, however, that such
election shall be subject to Company approval if made on or after the date that
triggers the Payment or a portion thereof): reduction of cash payments;
cancellation of accelerated vesting of Options; reduction of employee benefits.
If acceleration of vesting of Options is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of date of grant of Options
(i.e., earliest granted Option cancelled last) unless the Optionholder elects in
writing a different order for cancellation.

         For purposes of making the calculations required by this Section 11(e),
the Accountant may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of the Code and other applicable legal authority. The
Company and the Optionholder shall furnish to the Accountant such information
and documents as the Accountant may reasonably request in order to make such a
determination. The Company shall bear all costs the Accountant may reasonably
incur in connection with any calculations contemplated by this Section 11(e).

         If, notwithstanding any reduction described above, the Internal Revenue
Service (the "IRS") determines that the Optionholder is liable for the Excise
Tax as a result of the Payment, then the Optionholder shall be obligated to pay
back to the Company, within thirty (30) days after a final IRS determination or,
in the event that the Optionholder challenges the final IRS determination, a
final judicial determination, a portion of the Payment equal to the "Repayment
Amount." The Repayment Amount with respect to the Payment shall be the smallest
such amount, if any, as shall be required to be paid to the Company so that the
Optionholder's net after-tax proceeds with respect to the Payment (after taking
into account the payment of the Excise Tax and all other applicable taxes
imposed on the Payment) shall be maximized. The Repayment Amount with respect to
the Payment shall be zero if a Repayment Amount of more than zero would not
result in the Optionholder's net after-tax proceeds with respect to the Payment
being maximized. If the Excise Tax is not eliminated pursuant to this paragraph,
the Optionholder shall pay the Excise Tax.

         Notwithstanding any other provision of this Section 11(e), if (i) there
is a reduction in the Payment as described above, (ii) the IRS later determines
that the Optionholder is liable for the Excise Tax, the payment of which would
result in the maximization of the Optionholder's net after-tax proceeds of the
Payment (calculated as if the Payment had not previously been reduced), and
(iii) the Optionholder pays the Excise Tax, then the Company shall pay or
otherwise provide to the Optionholder that portion of the Payment that was
reduced pursuant to this Section 11(e) contemporaneously or as soon as
administratively possible after the Optionholder pays the Excise Tax so that the
Optionholder's net after-tax proceeds with respect to the Payment are maximized.

         If the Optionholder either (i) brings any action to enforce rights
pursuant to this Section 11(e), or (ii) defends any legal challenge to his or
her rights under this Section 11(e), the Optionholder shall be entitled to
recover attorneys' fees and costs incurred in connection with

                                      12.

<PAGE>
such action, regardless of the outcome of such action; provided, however, that
if such action is commenced by the Optionholder, the court finds that the action
was brought in good faith.

12.      AMENDMENT OF THE PLAN AND OPTIONS.

         (a)      AMENDMENT OF PLAN. The Board, at any time and from time to
time, may amend the Plan. However, except as provided in Section 11 relating to
adjustments upon changes in Common Stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of applicable laws.

         (b)      STOCKHOLDER APPROVAL. The Board, in its sole discretion, may
submit any other amendment to the Plan for stockholder approval.

         (c)      NO IMPAIRMENT OF RIGHTS. Rights under any Option granted
before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.

         (d)      AMENDMENT OF OPTIONS. The Board, at any time, and from time to
time, may amend the terms of any one or more Options; provided, however, that
the rights under any Option shall not be impaired by any such amendment unless
(i) the Company requests the consent of the Optionholder and (ii) the
Optionholder consents in writing.

13.      TERMINATION OR SUSPENSION OF THE PLAN.

         (a)      PLAN TERM. The Board may suspend or terminate the Plan at any
time. No Options may be granted under the Plan while the Plan is suspended or
after it is terminated.

         (b)      NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan
shall not impair rights and obligations under any Option granted while the Plan
is in effect except with the written consent of the Optionholder.

14.      EFFECTIVE DATE OF PLAN.

         The Plan shall become effective on the IPO Date, but no Option shall be
exercised unless and until the Plan has been approved by the stockholders of the
Company.

15.      CHOICE OF LAW.

         The law of the state of Delaware shall govern all questions concerning
the construction, validity and interpretation of this Plan, without regard to
such state's conflict of laws rules.

                                      13.

<PAGE>

                                    GTX, INC.
                 2004 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT
                           (NONSTATUTORY STOCK OPTION)

         Pursuant to your Stock Option Grant Notice ("GRANT NOTICE") and this
Stock Option Agreement, GTx, Inc. (the "COMPANY") has granted you an option
under its 2004 Non-Employee Directors' Stock Option Plan (the "PLAN") to
purchase the number of shares of the Company's Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice. Defined terms
not explicitly defined in this Stock Option Agreement but defined in the Plan
shall have the same definitions as in the Plan.

         The details of your option are as follows:

         1.       VESTING. Subject to the limitations contained herein, your
option will vest as provided in your Grant Notice, provided that vesting will
cease upon the termination of your Continuous Service (and, for an option
granted for service on a committee of the Board, vesting will cease when you
cease to be a member of such committee) and that your vesting may be accelerated
as provided in the Plan.

         2.       NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of
Common Stock subject to your option and your exercise price per share referenced
in your Grant Notice may be adjusted from time to time for Capitalization
Adjustments.

         3.       EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). If permitted in
your Grant Notice (i.e., the "Exercise Schedule" indicates that "Early Exercise"
of your option is permitted) and subject to the provisions of your option, you
may elect at any time that is both (i) during the period of your Continuous
Service and (ii) during the term of your option, to exercise all or part of your
option, including the nonvested portion of your option; provided, however, that:

                  (a)      a partial exercise of your option shall be deemed to
cover first vested shares of Common Stock and then the earliest vesting
installment of unvested shares of Common Stock;

                  (b)      any shares of Common Stock so purchased from
installments that have not vested as of the date of exercise shall be subject to
the purchase option in favor of the Company as described in the Company's form
of Early Exercise Stock Purchase Agreement; and

                  (c)      you shall enter into the Company's form of Early
Exercise Stock Purchase Agreement with a vesting schedule that will result in
the same vesting as if no early exercise had occurred.

         4.       METHOD OF PAYMENT. Payment of the exercise price is due in
full upon exercise of all or any part of your option. You may elect to make
payment of the exercise price

                                       1.

<PAGE>

in cash or by check or in any other manner PERMITTED BY YOUR GRANT NOTICE, which
may include one or more of the following:

                  (a)      In the Company's sole discretion at the time your
option is exercised and provided that at the time of exercise the Common Stock
is publicly traded and quoted regularly in The Wall Street Journal, pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt
of cash (or check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales proceeds.

                  (b)      Provided that at the time of exercise the Common
Stock is publicly traded and quoted regularly in The Wall Street Journal, by
delivery of already-owned shares of Common Stock either that you have held for
the period required to avoid a charge to the Company's reported earnings
(generally six (6) months) or that you did not acquire, directly or indirectly
from the Company, that are owned free and clear of any liens, claims,
encumbrances or security interests, and that are valued at Fair Market Value on
the date of exercise. "Delivery" for these purposes, in the sole discretion of
the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a
form approved by the Company. Notwithstanding the foregoing, you may not
exercise your option by tender to the Company of Common Stock to the extent such
tender would violate the provisions of any law, regulation or agreement
restricting the redemption of the Company's stock.

         5.       WHOLE SHARES. You may exercise your option only for whole
shares of Common Stock.

         6.       SECURITIES LAW COMPLIANCE. Notwithstanding anything to the
contrary contained herein, you may not exercise your option unless the shares of
Common Stock issuable upon such exercise are then registered under the
Securities Act or, if such shares of Common Stock are not then so registered,
the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option
also must comply with other applicable laws and regulations governing your
option, and you may not exercise your option if the Company determines that such
exercise would not be in material compliance with such laws and regulations.

         7.       TERM. You may not exercise your option before the commencement
or after the expiration of its term. The term of your option commences on the
Date of Grant and expires upon the earliest of the following:

                  (a)      three (3) months after the termination of your
Continuous Service for any reason other than your Disability or death, provided
that if during any part of such three (3) month period your option is not
exercisable solely because of the condition set forth in Section 6, your option
shall not expire until the earlier of the Expiration Date or until it shall have
been exercisable for an aggregate period of three (3) months after the
termination of your Continuous Service;

                                       2.

<PAGE>

                  (b)      twelve (12) months after the termination of your
Continuous Service due to your Disability;

                  (c)      eighteen (18) months after your death if you die
either during your Continuous Service or within three (3) months after your
Continuous Service terminates;

                  (d)      the Expiration Date indicated in your Grant Notice;
or

                  (e)      the day before the tenth (10th) anniversary of the
Date of Grant.

         8.       EXERCISE.

                  (a)      You may exercise the vested portion of your option
(and the unvested portion of your option if your Grant Notice so permits) during
its term by delivering a Notice of Exercise (in a form designated by the
Company) together with the exercise price to the Secretary of the Company, or to
such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.

                  (b)      By exercising your option you agree that, as a
condition to any exercise of your option, the Company may require you to enter
into an arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Common Stock acquired upon such exercise.

         9.       TRANSFERABILITY. Except as otherwise provided in this Section,
your option is not transferable other than by will or the laws of descent and
distribution, and your option may be exercised only by you during your lifetime.
However, you may, with the approval of the Board, transfer your option for no
consideration to (i) any person or entity, if, at the time of such transfer, a
Form S-8 registration statement under the Securities Act is available for the
issuance by the Company of the shares upon exercise of the transferred option or
(ii) your employer at the time of the transfer or an affiliate of your employer
at the time of the transfer. Any such transfer is subject to such limits as the
Board may establish, and subject to the transferee agreeing to remain subject to
all the terms and conditions applicable to your option prior to such transfer.
The forgoing right to transfer your option shall apply to the right to consent
to amendments to this Stock Option Agreement. Notwithstanding the foregoing,
until you transfer your option, you may designate a third party who, in the
event of your death, shall thereafter be entitled to exercise your option by
delivering written notice to the Company, in a form satisfactory to the Company.

         10.      OPTION NOT A SERVICE CONTRACT. Your option is not an
employment or service contract, and nothing in your option shall be deemed to
create in any way whatsoever any obligation on your part to continue in the
employ of the Company or an Affiliate, or of the Company or an Affiliate to
continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors,
Officers or Employees to continue any relationship that you might have as a
Director or Consultant for the Company or an Affiliate.

                                       3.

<PAGE>

         11.      WITHHOLDING OBLIGATIONS.

                  (a)      At the time you exercise your option, in whole or in
part, or at any time thereafter as requested by the Company, you hereby
authorize withholding from payroll and any other amounts payable to you, and
otherwise agree to make adequate provision for (including by means of a
"cashless exercise" pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board to the extent permitted by the
Company), any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Company or an Affiliate, if any, which arise in
connection with the exercise of your option.

                  (b)      Upon your request and subject to approval by the
Company, in its sole discretion, and compliance with any applicable legal
conditions or restrictions, the Company may withhold from fully vested shares of
Common Stock otherwise issuable to you upon the exercise of your option a number
of whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax
required to be withheld by law (or such lower amount as may be necessary to
avoid variable award accounting). If the date of determination of any tax
withholding obligation is deferred to a date later than the date of exercise of
your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of
the Code, covering the aggregate number of shares of Common Stock acquired upon
such exercise with respect to which such determination is otherwise deferred, to
accelerate the determination of such tax withholding obligation to the date of
exercise of your option. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection
with such share withholding procedure shall be your sole responsibility.

                  (c)      You may not exercise your option unless the tax
withholding obligations of the Company and/or any Affiliate are satisfied.
Accordingly, you may not be able to exercise your option when desired even
though your option is vested, and the Company shall have no obligation to issue
a certificate for such shares of Common Stock or release such shares of Common
Stock from any escrow provided for herein unless such obligations are satisfied.

         12.      NOTICES. Any notices provided for in your option or the Plan
shall be given in writing and shall be deemed effectively given upon receipt or,
in the case of notices delivered by mail by the Company to you, five (5) days
after deposit in the United States mail, postage prepaid, addressed to you at
the last address you provided to the Company.

         13.      GOVERNING PLAN DOCUMENT. Your option is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of your
option, and is further subject to all interpretations, amendments, rules and
regulations, which may from time to time be promulgated and adopted pursuant to
the Plan. In the event of any conflict between the provisions of your option and
those of the Plan, the provisions of the Plan shall control.

                                       4.