GTXI Gtx, Inc.

ITEM 11.              EXECUTIVE COMPENSATION

Summary Compensation Table

        The following table sets forth certain summary information for the years indicated with respect to the compensation earned by our Chief Executive Officer and our two most highly compensated executive officers other than our Chief Executive Officer who were serving as executive officers as of December 31, 2018. We refer to these individuals in this report as our "named executive officers."

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Narrative Disclosure to Summary Compensation Table

Base Salary

        Our Compensation Committee recognizes the importance of base salary as an element of compensation that helps to attract and retain our executive officers. We provide base salary as a fixed source of income for our executives for the services they provide to us during the year, and allow us to maintain a stable executive team.

        In determining base salaries for 2018, the Compensation Committee took into account that there had been no salary increases since 2016 other than in connection with certain employee promotions. After considering GTx's capital position and the achievement of certain operational milestones during 2017, in November 2017, the Compensation Committee determined that the base salaries of our executive officers and other employees should be increased approximately 3% from their existing base salaries, effective January 1, 2018. The Compensation Committee also approved the performance criteria for 2018 under our Bonus Plan that were tied to the attainment of certain milestones, as described in detail below. Additionally, the base salaries of our named executive officers were increased, effective January 1, 2018, to the following:

        Following the results of our placebo-controlled Phase 2 clinical trial of enobosarm to evaluate the change in frequency of daily stress urinary incontinence, or SUI, episodes following 12 weeks of treatment, or the ASTRID trial, the Compensation Committee did not adjust any base salaries for 2019, and determined to maintain existing executive base salary levels at the beginning of 2019 at the same levels that existed in 2018.

Annual Bonus Plan

        General.     Our Compensation Committee first established our Bonus Plan in 2007 as a means of rewarding executive officers for their role in achieving specified annual or short-term performance goals. The potential for payments under the Bonus Plan for any fiscal year is generally based on the attainment of pre-established, objective performance goals approved by the Compensation Committee at the beginning of the year. Each year, unless cash bonus award eligibility under the Bonus Plan is suspended or eliminated for the relevant year, the Compensation Committee approves the objective performance goals and specific criteria, including the weight attributable to each objective, and, if applicable, any weighting for specific categories of performance objectives, for each executive officer. The Compensation Committee (as it did for bonus eligibility under the Bonus Plan for 2018) may include a subjective, discretionary bonus payment opportunity based on the Compensation Committee's assessment of the executive officer's personal performance. Historically, the Compensation Committee solicits and considers the recommendations of our senior management officers in making these determinations.

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        The objective criteria for the Bonus Plan can vary each year and may include the achievement of the operating budget for GTx, personnel-related objectives, continued innovation in development and progress towards the clinical development of our product candidates, timely development of new product candidates or processes, implementation of financing strategies, including licensing and/or asset dispositions that raise near-term capital for GTx and provide opportunities for increased stockholder value, the establishment of strategic alliances, partnerships or collaborations with third parties, and meeting preclinical, clinical, or regulatory objectives.

        Although the Compensation Committee typically approves the performance goals and specific criteria prior to the start of or early in the applicable calendar year, it retains the discretion to modify or otherwise change the objectives during the applicable calendar year. In addition, under the Bonus Plan, the Compensation Committee has the discretion to make additional bonus awards, apart from those related to the achievement of specified performance objectives.

        Bonus Plan for 2018.     In December 2017, our Compensation Committee initially approved the performance criteria to be achieved in order for our executive officers to be eligible to receive cash bonus awards under the Bonus Plan for the performance period from January 1, 2018 through December 31, 2018. In March 2018, the Compensation Committee revised the performance criteria to allocate most of the cash bonus award potential to the attainment of enrollment goals in the ASTRID trial within a designated time period, and to the achievement of certain clinical results in the ASTRID trial. For 2018, an executive officer could have received: (i) 40% of such executive officer's target bonus as a result of the achievement of enrollment goals in the ASTRID trial within a designated time period; (ii) 50% of such executive officer's target bonus as a result of the achievement of certain clinical results in the ASTRID trial; and (iii) 10% of such executive officer's target bonus related to certain pre-clinical goals related to our SARD technology. However, in the event that a strategic transaction resulted in the cancelation or modification of any of the milestone events set forth above prior to their anticipated occurrence, any such milestone events that had been canceled or modified would have been deemed to have been fulfilled and the commensurate bonus payment or payments associated with such milestone events would have become payable. Additionally, an executive officer was eligible for a bonus award of up to 10% of his or her target bonus based on the Compensation Committee's assessment of the executive officer's personal performance. Accordingly, an executive officer's actual total bonus award could have been awarded at a level above target. As in 2017, the potential bonus payments under the Bonus Plan for 2018 were 65% of base salary for Mr. Hanover and Dr. Wills and 35% of base salary for the other executive officers of the Company. Also as in 2017, actual cash bonus awards under the Bonus Plan for 2018 generally were paid upon the achievement of the applicable performance criteria.

        Fiscal Year 2018 Payouts.     A bonus payment equal to approximately 40% of each named executive officer's target bonus payment was paid in April 2018 following the achievement of the enrollment goals in the ASTRID trial. No other bonus payments tied to the objective performance criteria for 2018 were earned by the named executive officers, and no discretionary bonus payments were awarded to our named executive officers. Below is a summary of each named executive officer's target bonus and actual bonus for 2018 under the Bonus Plan:

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        Bonus Plan for 2019.     Following the results from the ASTRID trial, the Compensation Committee determined that the executive's focus should be on developing strategies for the GTx Board's consideration to maximize stockholder value, given the diminished prospects for the Company, including partnering, collaborating or selling the Company's remaining assets or selling or merging the Company with interested third parties. The Compensation Committee felt that it was not appropriate to develop a Bonus Plan for 2019 that would reward executives for attaining any specific goals since trying to formulate a plan to realize stockholder value was deemed paramount, even if it meant that some or all company employees may lose their employment depending on the strategies the GTx Board decided to adopt.

Option Awards

        Option Awards for 2018.     In December 2017, the Compensation Committee approved the grant of stock options to purchase 65,000 shares of GTx common stock to each of Mr. Hanover and Dr. Wills, and a stock option to purchase 45,000 shares of GTx common stock to Mr. Doggrell, each of which grants was effective on January 1, 2018. The stock options vest in three equal annual installments beginning January 1, 2021, subject to continuous service, thus providing long term incentive compensation for those employees who remain with GTx and increase stockholder value. The exercise price for these stock options is $12.71 per share, the closing price of GTx's common stock on December 29, 2017, the last trading day of 2017. The stock options expire on December 31, 2027, unless they are forfeited or expire earlier in accordance with their terms.

        Option Awards for 2019.     There were no stock options awarded to company employees as of January 1, 2019, due to the results of the ASTRID trial.

        General Provisions of Stock Option Awards.     All options granted to our named executive officers may be exercised with cash, provided that the GTx Board or the Compensation Committee may provide that the exercise price may also be paid by delivery to us of other unencumbered shares of our common stock with a value equal to the aggregate option exercise price, pursuant to a cashless exercise program, or in any other form of legal consideration that may be acceptable to the GTx Board or the Compensation Committee (which may include a "net exercise" of the option). As a general matter, the vested portion of the stock options granted to our named executive officers in 2018 and in previous years will expire three months after the named executive officer's last day of service with us, subject to extension in certain termination situations as described below under "— Post-Termination Compensation — Stock Option and Equity Plan Provisions — Extended Post-Termination Option Exercise Period " below. Events that can accelerate the vesting of GTx's stock options are described below under "— Post-Termination Compensation — Stock Option and Equity Plan Provisions — Stock Award Vesting Acceleration " below.

Employment Agreements

        Each of our named executive officers has entered into a written employment agreement with GTx. Descriptions of our employment agreements with our named executive officers are included under the caption " — Post-Termination Compensation — Employment Agreement s" below.

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Other Compensatory Arrangements

        For a description of the other elements of our executive compensation program, see " — Post-Termination Compensation — Retirement and Other Benefits ." Except for the benefits described under " — Post-Termination Compensation — Retirement and Other Benefits ," GTx does not generally provide its executive officers with any other perquisites and benefits that differ from what are provided to GTx employees generally. To date, the Compensation Committee has not generally considered the provision of such additional perquisites and benefits to be a necessary element of GTx's executive compensation program. However, GTx may, from time to time, offer certain perquisites and benefits to its executive officers not offered to the general employee population, such as commuting, relocation and temporary housing benefits. In this regard, we reimbursed travel-related expenses for Dr. Wills in 2018 for travel between his out-of-state permanent residence and GTx's headquarters in Memphis, Tennessee. Upon the recommendation of the Compensation Committee, the GTx Board also approved tax gross-up payments to Dr. Wills related to these expense reimbursements, as the reimbursements are taxable to Dr. Wills as imputed income. The Compensation Committee believes that the provision of tax gross-up payments to Dr. Wills to offset the tax obligation associated with these imputed income amounts was appropriate and necessary for retaining Dr. Wills.

Outstanding Equity Awards at Fiscal-Year End

        The following table summarizes the number of outstanding equity awards held by each of our named executive officers as of December 31, 2018. There were no stock awards outstanding as of December 31, 2018.

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Post-Termination Compensation

        We have entered into employment agreements with each of our named executive officers. Described below are the circumstances that would trigger our obligation to make cash payments pursuant to these employment agreements following the termination of a named executive officer's employment with us and the cash payments that we would be required to provide. We also describe below the termination and change of control events that would trigger the accelerated vesting of stock options and the extension of the post-termination exercise period with respect to those stock options.

Employment Agreements

Termination Without "Cause" or For "Good Reason" after a Change of Control

        The employment agreements with our named executive officers provide for cash post-termination change of control payments equal to one year's base salary and, for those executives eligible for COBRA under federal law, monthly premium payments to continue the named executive officer's health insurance coverage for up to 12 months following his or her termination. These change of control salary continuation and health insurance coverage benefits are structured on a "double-trigger" basis, meaning that before a named executive officer is eligible to receive such change of control benefits, (1) a change of control must occur and (2) within 12 months after such change of control, the named executive officer's employment must be terminated without "cause" or the named executive officer must resign for "good reason." GTx's obligation to make the salary continuation payments and health insurance premium payments under the employment agreements is conditioned upon the former named executive officer's compliance with the confidentiality provisions of the employment agreement and the provisions of the non-competition provisions of the employment agreement for a period of one year following termination. In addition, GTx's obligation to make the salary continuation payments and health insurance premium payments is conditioned upon GTx's receipt of an effective general release of claims executed by the named executive officer. The post-termination salary continuation payments will either be made over the one-year period following termination on our regular payroll dates or in a lump sum, except that the timing of the monthly payments may be deferred for up to six months if those payments would constitute deferred compensation under Section 409A of the Internal Revenue Code (in which case, the deferred payment would be made in a lump sum following the end of the deferral period, with the balance being paid thereafter on our regular payroll dates).

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        A change of control generally means the following:

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the sale or other disposition of all or substantially all of GTx's assets (including a liquidation or dissolution of GTx);



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if any person or group acquires beneficial ownership of 50% or more of GTx's voting securities (subject to certain exceptions);



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a merger or consolidation of GTx with or into any other entity, if immediately after the transaction more than 50% of the voting stock of the surviving entity is held by persons who were not holders of at least 50% of GTx's voting stock as of the effective date of the named executive officer's employment agreement; or



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a majority of our Board becomes comprised of individuals whose nomination, appointment, or election was not approved by a majority of the Board members or their approved successors.

        " Cause " is generally defined as the named executive officer's:

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conviction for a felony;



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theft, embezzlement, misappropriation of or intentional infliction of material damage to GTx's property or business opportunities;



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breach of his or her confidentiality or non-competition obligations, as applicable, under his or her employment agreement; or



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ongoing willful neglect of or failure to perform his or her duties, or his or her ongoing willful failure or refusal to follow any reasonable, unambiguous duly adopted written direction that is not inconsistent with the description of such named executive officer's duties, provided that such willful neglect or failure is materially damaging or materially detrimental to the business and operations of GTx, and after 30 days' notice and the opportunity to cure.

        " Good reason " is generally defined as the following actions taken without the consent of the named executive officer after a change of control (in each case where the named executive officer has provided written notice within 30 days of the action, such action is not remedied by GTx within 30 days following such notice, and the named executive officer's resignation is effective not later than 60 days after the expiration of such 30-day cure):

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an adverse change in the named executive officer's authority, duties or responsibilities (including reporting responsibilities) which, without the named executive officer's consent, represents a material reduction in or a material demotion of the named executive officer's authority, duties or responsibilities as in effect immediately prior to the change of control, or the assignment to the named executive officer of any duties or responsibilities that are materially inconsistent with and materially adverse to such authority, duties or responsibilities;



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a material reduction in the then current base salary of the named executive officer;



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the relocation of the named executive officer's principal office to a location that increases his one-way commute by more than 20 miles (or, in the case of Dr. Wills, a relocation outside of New Jersey);

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the failure of GTx to obtain an agreement reasonably satisfactory to the named executive officer from any successor entity upon the change of control to assume and agree to perform his or her employment agreement in all material respects; or



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a material breach by GTx of any provision of the named executive officer's employment agreement or any other then-effective agreement with the named executive officer.

Termination Without "Cause" or For "Good Reason" Prior to or Not in Connection with a Change of Control

        Our employment agreement with Dr. Wills provides for cash post-termination payments equal to one year's base salary (either to be made over the one-year period following termination on our regular payroll dates or in a lump sum payment) and monthly premium payments to continue his health insurance coverage for up to 12 months following his termination, should his employment be terminated without "cause" or should he resign for "good reason", in each case irrespective of whether such termination is within 12 months after (or otherwise in connection with) a change of control.

Other Termination Scenarios

        If we terminate a named executive officer's employment for "cause," or if a named executive officer voluntarily terminates his or her employment without "good reason," or upon the death of a named executive officer, the named executive officer would generally have no right to receive any compensation or benefits under his or her employment agreement on or after the effective date of termination, other than any accrued and unpaid salary and expense reimbursement. However, under our employment agreements with Dr. Wills, Dr. Wills would nonetheless be entitled to any earned but unpaid annual bonus with respect to any completed calendar year immediately preceding his termination date. Likewise, except as described above under " — Termination Without "Cause" or For "Good Reason" Prior to or Not in Connection with a Change of Control " with respect to Dr. Wills, if we terminate a named executive officer's employment without "cause," or if a named executive officer voluntarily terminates his or her employment with "good reason," in each case not within 12 months following a change of control, the named executive officer would have no right to receive any compensation or benefits under his employment agreement on or after the effective date of termination, other than any accrued and unpaid salary and expense reimbursement and, solely in the case of Dr. Wills, subject to our obligation under his employment agreement to pay any accrued but unpaid annual bonus with respect to any completed calendar year immediately preceding his termination date.

Other Employment Agreement Benefits

        Except as set forth above, under the employment agreements with our named executive officers, our named executive officers would not be entitled to any other benefits following termination of service, including the continuation of general employee benefits, life insurance coverage and long term disability coverage, except as otherwise required by applicable law.

Stock Option and Equity Plan Provisions

Stock Award Vesting Acceleration

        Under the Merger Agreement, as of immediately prior to the Effective Time, the vesting of all outstanding options to purchase shares of our common stock, including those held by our executive officers and directors, will accelerate in full. The number of shares of our common stock underlying such options and the exercise price of such options will be adjusted appropriately to reflect the reverse stock split of GTx's common stock to be implemented prior to the consummation of the merger as set forth in the Merger Agreement.

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        The terms of our equity plans provide for additional accelerated exercisability that could apply in other scenarios, as described below.

        2004 Plan.     Our 2004 Equity Incentive Plan, or the 2004 Plan, provides that in the event of a specified corporate transaction such as a merger, consolidation or similar transaction, all outstanding options under the 2004 Plan may be assumed, continued or substituted for by any surviving or acquiring entity. If the surviving or acquiring entity elects not to assume, continue or substitute for such options, such options then held by individuals whose service has not terminated prior to the effective date of the corporate transaction would become fully vested, and, if applicable, exercisable and such options would be terminated if not exercised within 90 days of the effective date of the corporate transaction. A recipient's award agreement may provide for acceleration upon other events. In this regard, the standard form of stock option agreement under the 2004 Plan provides for each stock option to become fully vested and exercisable if (i) the optionholder's service with GTx or its successor terminates within 12 months after a change of control and the termination of service is a result of an involuntary termination without cause or a constructive termination or (ii) the optionholder is required to resign his or her position with GTx as a condition of the change of control. For purposes of our 2004 Plan, the definition of change of control is similar to the definition of change of control under the employment agreements with our named executive officers. As a result of the adoption of the 2013 Plan, we no longer grant any equity awards under the 2004 Plan, and stock options were the only form of stock awards granted to our named executive officers under the 2004 Plan.

        The standard form of stock option agreement under the 2004 Plan generally defines "cause" as the grant recipient:

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committing an act that materially injures the business of GTx;



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refusing or failing to follow the lawful and reasonable directions of the Board or the appropriate individual to whom he or she reports, after 15 days' notice and the opportunity to cure;



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willfully or habitually neglecting his or her duties with GTx, after 15 days' notice and the opportunity to cure;



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being convicted of a felony that is likely to inflict or has inflicted material injury on the business of GTx; or



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committing a material fraud, misappropriation, embezzlement or other act of gross dishonesty that resulted in material loss, damage or injury to GTx.

        The standard form of stock option agreement under the 2004 Plan generally defines a "constructive termination" as a voluntary termination within 12 months after a change of control after any of the following actions are taken without the consent of the grant recipient:

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the assignment to the grant recipient of any duties or responsibilities which results in a significant reduction in his or her function as in effect immediately prior to the change of control;



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a material reduction in the grant recipient's salary, as in effect on the effective date of the change of control;

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the failure to continue in effect any benefit plan or program in which the grant recipient was participating immediately prior to the effective date of the change of control, or the taking of any action that would adversely affect his or her participation in (or reduce his or her benefits under) any such benefit plan or program (but either circumstance will only be grounds for a "constructive termination" if the range of benefit plans and programs offered by the acquirer is not comparable to the benefit plans previously offered by GTx, when considered as a whole);



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a relocation of the grant recipient's principal office to a location more than 50 miles from the location at which he or she performed his or her duties as of the effective date of the change of control; or



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a material breach by GTx of any provision of the grant recipient's stock option agreement under the 2004 Plan.

        2013 Plan.     Our 2013 Plan provides that in the event of a specified corporate transaction such as a merger, consolidation or similar transaction, all outstanding stock awards under the 2013 Plan may be assumed, continued or substituted for by any surviving or acquiring entity, and any reacquisition or repurchase rights held by GTx in respect of common stock issued pursuant to outstanding stock awards may be assigned by GTx to its successor (or the successor's parent company). If the surviving or acquiring corporation does not assume, continue or substitute any or all such outstanding stock awards, then with respect to stock awards that have not been assumed, continued or substituted and that are held by participants whose continuous service has not terminated prior to the effective time of the corporate transaction, the vesting (and, if applicable, the exercisability) of such stock awards will (contingent upon the effectiveness of the corporate transaction) be accelerated in full to a date prior to the effective time of the corporate transaction as the Board determines (or, if the Board does not determine such a date, to the date that is five days prior to the effective time of the corporate transaction), such stock awards will terminate if not exercised (if applicable)at or prior to the effective time of the corporate transaction, and any reacquisition or repurchase rights held by GTx with respect to such stock awards will (contingent upon the effectiveness of the corporate transaction) lapse. Unless otherwise provided in a written agreement between GTx or an affiliate and a participant, the vesting (and, if applicable, the exercisability) of any other outstanding stock awards that are not assumed, continued or substituted in connection with the corporate transaction will not be accelerated and such stock awards will terminate if not exercised (if applicable) prior to the effective time of the corporate transaction. A recipient's award agreement may provide for acceleration upon other events. In this regard, the standard form of stock option agreement under the 2013 Plan provides for each stock option to become fully vested and exercisable if the optionholder's service with GTx or its successor terminates on or within 12 months after a change of control and the termination of service is a result of an involuntary termination without cause or a constructive termination. In addition, if a stock option is assumed, continued or substituted for in a change in control and a participant's service terminates as a condition to such change in control or upon the effectiveness of the change in control, such stock option would remain exercisable for 12 months post-termination.

        For purposes of our 2013 Plan, the definition of change of control is similar to the definition of change of control under the employment agreements with our named executive officers.

        For purposes of our 2013 Plan, "cause" has the meaning ascribed to such term in any written agreement between the grant recipient and GTx, and in the absence of such an agreement, "cause" means the occurrence of any of the following:

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the grant recipient's willful failure substantially to perform his or her duties and responsibilities or deliberate violation of a company policy;

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the grant recipient's commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to GTx;



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unauthorized use or disclosure by the grant recipient of any proprietary information or trade secrets of GTx or any affiliate or any other party to whom the grant recipient owes an obligation of nondisclosure as a result of the grant recipient's relationship with GTx or any affiliate; or



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the grant recipient's willful breach of any of his or her obligations under any written agreement or covenant with GTx or any affiliate.

        The definition of a "constructive termination" in the standard form of stock option agreement under the 2013 Plan is similar to the definition of a "constructive termination" in the standard form of stock option agreement under the 2004 Plan, except that a constructive termination would also be deemed to occur if the board of GTx's successor requires the participant to resign from GTx in a manner that terminates the participant's continuous service, as a condition of the change in control. In addition, in order to have a basis for constructive termination under the 2013 Plan, a participant must provide written notice of the event giving rise to constructive termination to the board of GTx's successor within 30 days following such event, provide the successor with 30 days to cure such event, and, if not cured, the participant must resign from all positions then held with GTx and its successor not later than six months after the date of the participant's written notice to the board of the successor (or such earlier date as may be requested by the Board).

Extended Post-Termination Option Exercise Period

        As a general matter, the terms of the options we have granted to our executive officers provided that the vested portion of these options will expire three months after the executive officer's termination of service. The period following the executive officer's termination during which he or she can continue to exercise his or her vested stock options is referred to as the post-termination exercise period. However, in connection with the adoption of a retention bonus program by the Compensation Committee in September 2013, the options held by certain of our executive officers and outstanding on or prior to September 27, 2013 were modified to generally provide for a six month post-termination exercise period. In addition, a retention stock option granted to Mr. Doggrell in 2013 generally provides for a six month post-termination exercise period. All such post-termination exercise periods are limited by, and will not exceed, the original expiration date of the option. The terms of the retention benefit agreements with our executive officers will, however, be less favorable than the terms for an extension of the post-termination exercise period provided under the terms of our equity plans. Such more favorable terms will apply under the circumstances described below. Under our 2004 Plan and the form of stock option agreement under our 2004 Plan, the post-termination exercise period will generally be one year following termination if the termination of service is a result of an involuntary termination without cause or a constructive termination within 12 months after a change of control. Under our 2013 Plan and the form of stock option agreement under our 2013 Plan, the post-termination exercise period will generally be one year following termination if the termination of service occurs either as a condition of a change of control or upon the effectiveness of a change of control, unless the stock option is not assumed, continued or replaced by the successor or acquiring entity. If the termination is a retirement, the exercise period will be two years under each of the 2004 Plan and 2013 Plan. Currently, Messrs. Hanover and Doggrell are retirement-eligible.

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        With respect to all of our stock option plans and the forms of stock option agreements under such stock option plans, if the termination is due to the named executive officer's death, the post-termination exercise period will generally be 18 months following termination, and if the termination is due to the named executive officer's disability, the post-termination exercise period will generally be one year following termination. With respect to our 2013 Plan and the form of stock option agreement under our 2013 Plan, if the termination is for cause, the option will terminate upon the date on which the event giving rise to the termination for cause first occurred (or, if required by law, the date of the termination). With respect to our 2001 Plan and 2002 Plan and the forms of stock option agreements under those plans, if a named executive officer voluntarily retires his or her employment (which generally means a retirement after age 65 or after age 55 following a specified period of service), the post-termination exercise period will generally be five years following termination. However, our 1999 and 2000 Plans provide that the Compensation Committee in its discretion can provide for any post-termination exercise period for a vested option in the event of the disability, death or involuntary termination of an option grant recipient of up to, but not exceeding, the initial ten-year term of the option. Under our 2004 Plan and 2013 Plan and the forms of stock option agreements under those plans, if a named executive officer voluntarily retires his or her employment (which generally means a retirement after age 65 following a specified period of service or after age 55 following a specified period of service and with the authorization of our Chief Executive Officer or the Board), the post-termination exercise period will generally be two years following termination. Currently, Messrs. Hanover and Doggrell are retirement-eligible. In no event, however, will the post-termination exercise period be extended beyond the initial ten-year term of the option.

        The standard form of stock option agreement under the 2004 Plan generally defines "cause" as the grant recipient:

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committing an act that materially injures the business of GTx;



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refusing or failing to follow the lawful and reasonable directions of the Board or the appropriate individual to whom he or she reports, after 15 days' notice and the opportunity to cure;



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willfully or habitually neglecting his or her duties with GTx, after 15 days' notice and the opportunity to cure;



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being convicted of a felony that is likely to inflict or has inflicted material injury on the business of GTx; or



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committing a material fraud, misappropriation, embezzlement or other act of gross dishonesty that resulted in material loss, damage or injury to GTx.

        The standard form of stock option agreement under the 2004 Plan generally defines a "constructive termination" as a voluntary termination within 12 months after a change of control after any of the following actions are taken without the consent of the grant recipient:

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the assignment to the grant recipient of any duties or responsibilities which results in a significant reduction in his or her function as in effect immediately prior to the change of control;



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a material reduction in the grant recipient's salary, as in effect on the effective date of the change of control;

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the failure to continue in effect any benefit plan or program in which the grant recipient was participating immediately prior to the effective date of the change of control, or the taking of any action that would adversely affect his or her participation in (or reduce his or her benefits under) any such benefit plan or program (but either circumstance will only be grounds for a "constructive termination" if the range of benefit plans and programs offered by the acquirer is not comparable to the benefit plans previously offered by GTx, when considered as a whole);



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a relocation of the grant recipient's principal office to a location more than 50 miles from the location at which he or she performed his or her duties as of the effective date of the change of control; or



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a material breach by GTx of any provision of the grant recipient's stock option agreement under the 2004 Plan.

Retirement and Other Benefits

        We do not provide our employees, including our named executive officers, with a defined benefit pension plan, any supplemental executive retirement plans or retiree health benefits. Our named executive officers may participate on the same basis as other employees in our 401(k) retirement savings plan. Our 401(k) retirement savings plan provides an employer matching contribution of 100% of the first 4% of the employee's eligible compensation, subject to the annual Internal Revenue Service limits in effect from time to time. We believe this matching contribution is consistent with market practice and helps in attracting and retaining key executives. The 401(k) plan will be terminated prior to the closing of the merger.

        We offer a comprehensive employee benefit program, including health, life and disability insurance, to all of our regular employees, including certain of our named executive officers who are full time employees. This program provides a safety net of protection against the financial catastrophes that can result from illness, disability or death. Company-funded life insurance of up to $50,000 is provided to employees generally, and company-funded long-term disability insurance provides a 60% income-replacement benefit, up to $10,000 per month.

        The Compensation Committee has also approved supplemental life and long-term disability insurance for our executive officers. The total life insurance benefit for Mr. Hanover and certain eligible Vice Presidents is equal to twice the executive officer's annual salary, not to exceed $1 million in coverage for any officer, although Mr. Doggrell's total coverage amount was reduced 65% following his 65th birthday. Dr. Wills, as a part time employee, does not quality for health, life or disability insurance and other similar benefits pursuant to the requirements of the insurers' programs. However, should he in the future be deemed to be a "full time" employee by the insurers, he would also receive the same benefits as are presently provided to Mr. Hanover and our eligible Vice Presidents. The Compensation Committee believes that the cost of providing this supplemental insurance coverage is minimal in comparison to the value of such benefits in attracting and retaining executive employees and that providing these supplemental benefits is consistent with the practices of other public companies.

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Compensation and Risk

        In March 2018, the Compensation Committee considered our compensation policies, practices and programs as generally applicable to our employees and determined that our policies, practices and programs do not encourage excessive or unnecessary risk-taking, and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on our company. The design of our compensation policies and programs encourage our employees to remain focused on our long-term goals of increasing stockholder value through the successful development of our clinical product candidates. For example, through our use of different types of equity compensation awards that provide long term incentives to increase our share price, as well as our use of multi-year vesting for stock option, we believe that our employee compensation programs promote a long-term stockholder perspective, encourage decisions that will result in sustainable performance over the longer term, and mitigate the risks associated with an undue short-term focus on results.

DIRECTOR COMPENSATION

Cash Retainers

        The GTx Board has approved the GTx Non-Employee Director Compensation Policy, or the Director Compensation Policy, pursuant to which the following cash compensation payments are made quarterly to the GTx Board and committee members:

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a $35,000 annual retainer for service as a member of our Board of Directors;



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a supplemental annual retainer for the Lead Director of the Board and for the Chairs of each Board committee in the following amounts: $15,000 for the Lead Director of the Board; $17,500 for Chair of the Audit Committee; $10,000 for Chair of the Compensation Committee; and $8,500 for Chair of the Nominating and Corporate Governance Committee; and



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a supplemental annual retainer for each member of the following committees other than the Chairs, in the following amounts: $10,000 for members of the Audit Committee; $7,500 for members of the Compensation Committee; $5,000 for members of the Nominating & Corporate Governance Committee; and $10,000 for members of the Scientific and Development Committee.

        No directors currently receive consulting fees from GTx. Directors who are also employees (currently Mr. Hanover and Dr. Wills) receive no additional compensation for service on the GTx Board.

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Directors' Deferred Compensation Plan

        Since June 30, 2004, our non-employee directors have had the opportunity to defer all or a portion of their fees under our Directors' Deferred Compensation Plan. Deferrals can be made into a cash account, a stock account, or a combination of both. Deferrals into a cash account would accrue interest at the prime rate of interest announced from time to time by a local bank utilized by us, and deferrals into a stock account accrue to the deferring director rights in shares of GTx common stock equal to the cash compensation then payable to the director for his or her Board service divided by the then current fair market value of GTx common stock, or the Deferred Stock Rights. As of March 31, 2019, five of our non-employee directors held Deferred Stock Rights, and an aggregate of 155,426 shares of our common stock were issuable pursuant to Deferred Stock Rights. In addition, as of March 31, 2019, two of our non-employee directors had elected to defer compensation under the Director Deferred Compensation Plan after January 3, 2019, which deferrals will be paid to the non-employee directors at the closing of the merger in cash. Under the Directors' Deferred Compensation Plan, amounts credited to cash or stock accounts are distributed in a single lump sum on the date, if any, selected by the director pursuant to his or her election or, if no such election is made or if the selected distribution date is after his or her separation from service, then the distribution would be made on the date of his or her separation from service in the form of a single lump sum (subject to deferral under certain circumstances to the extent necessary to avoid the incurrence of adverse personal tax consequences under Section 409A of the Internal Revenue Code). Any fractional shares of GTx common stock will be distributed in cash valued at the then current fair market value of GTx common stock.

        Under the Merger Agreement, as of immediately prior to the Effective Time (but in no event more than 30 days prior to the Effective Time), we shall take all actions necessary to cause the termination and liquidation of the Deferred Stock Rights. As a result, the outstanding Deferred Stock Rights will be settled at the closing of the merger in shares, to the extent shares have been credited to non-employee director stock accounts under the plan. We shall also ensure that any deferrals under the Director Deferred Compensation Plan on or after January 3, 2019 shall be settled only in cash and that the maximum number of shares of our common stock issuable upon settlement of the Deferred Stock Rights shall be limited to the number of Deferred Stock Rights outstanding as of the date of the Merger Agreement.

Equity Compensation

        Pursuant to our Director Compensation Policy, each non-employee director of GTx (who does not own more than ten percent of the combined voting power of GTx's then outstanding securities) is eligible for certain initial and annual stock awards, which grants are currently made pursuant to GTx's 2013 Non-Employee Director Equity Incentive Plan, or the 2013 Directors' Plan. Accordingly, each of our non-employee directors, with the exception of Mr. Hyde, is eligible to receive these initial and annual non-statutory stock awards. Under the Director Compensation Policy, any individual who first becomes a non-employee director is eligible for a stock award in such form and in such amount that the GTx Board deems necessary to attract such individual to join the GTx Board. In addition, under the Director Compensation Policy, any individual who is serving as a non-employee director on the day following an annual meeting of GTx's stockholders automatically will be granted an option to purchase shares of common stock on that date; provided, however, that if the individual has not been serving as a non-employee director for the entire period since the preceding annual meeting, the number of shares subject to such individual's annual grant will be reduced pro rata for each full month prior to the date of grant during which such individual did not serve as a non-employee director. In March 2018, the GTx Board, upon the upon the recommendations of the Nominating and Corporate Governance Committee and the Compensation Committee, determined that the number of shares subject to the automatic annual grants occurring on the date following the 2018 Annual Meeting will be 7,500 shares of GTx common stock; accordingly, each non-employee director then serving as a non-employee director received a grant for 7,500 shares on the date following the 2018 annual meeting of stockholders. Following the results from the ASTRID trial, the GTx Board made no determination about stock option grants for Board members in 2019.

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        The shares subject to each initial grant and each annual grant vest in a series of three successive equal annual installments measured from the date of grant, so that each initial grant and each annual grant will be fully vested three years after the date of grant. The exercise price per share for the options granted under the 2013 Directors' Plan is not less than the fair market value of the stock on the date of grant. Prior to the adoption of the 2013 Directors' Plan at the 2013 annual meeting of stockholders, initial and annual stock option grants were made pursuant to the Prior Directors' Plan.

        In the event of a specified corporate transaction, as defined in the Prior Directors' Plan or the 2013 Directors' Plan, as applicable, all outstanding options granted under the Prior Directors' Plan and the 2013 Directors' Plan may be assumed or substituted for by any surviving or acquiring entity. If the surviving or acquiring entity elects not to assume or substitute for such options, then (a) with respect to any such options that are held by optionees then performing services for GTx or its affiliates, the vesting and exercisability of such options will be accelerated in full and such options will be terminated if not exercised prior to the effective date of the corporate transaction, and (b) all other outstanding options will terminate if not exercised prior to the effective date of the corporate transaction. If a specified change of control transaction occurs, as defined in the Prior Directors' Plan, then the vesting and exercisability of the optionee's options granted under the Prior Directors' Plan will be accelerated in full immediately prior to (and contingent upon) the effectiveness of the transaction. Under the Prior Directors' Plan, if an optionee is required to resign his or her position as a non-employee director as a condition of the change of control transaction, the vesting and exercisability of the optionee's options will be accelerated in full immediately prior to the effectiveness of such resignation. Under the 2013 Directors' Plan, if a specified change of control transaction occurs, as defined in the 2013 Directors' Plan, then all stock awards held by a participant whose continuous service has not terminated prior to such time will become fully vested and, if applicable, exercisable, immediately prior to the transaction. In addition, under the 2013 Directors' Plan, if a non-employee director is required to resign his or her position as a non-employee director as a condition of the change of control transaction, all outstanding stock awards held by such individual will become fully vested and, if applicable, exercisable, as of immediately prior to such resignation. During 2008, the GTx Board, upon the recommendation of the Compensation Committee, adopted a general policy regarding the retirement of non-employee directors that provides that the GTx Board will act, on a case-by-case basis, to accelerate the vesting and exercisability of the retiring director's options in full provided such director retires from the GTx Board in good standing.

        Pursuant to the merger agreement, all outstanding unvested options held by GTx's non-employee directors will vest upon the closing of the merger.

        The table below represents the compensation earned by each non-employee director who served on the GTx Board during 2018. Neither Mr. Hanover nor Dr. Wills are listed in the following table since they served as our employees during their respective term service on our Board of Directors and did not receive any additional compensation for serving as members of our Board of Directors. Each of Mr. Hanover's and Dr. Wills' compensation is described under " Executive Compensation " above.

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        The following table indicates the grant date fair value for the annual option awarded to each non-employee director during the year ended December 31, 2018, as determined in accordance with FASB ASC Topic 718, as well as the total number of shares subject to options outstanding as of December 31, 2018 for each non-employee director listed in the table above. Assumptions used in computing the aggregate grant date fair value in accordance with FASB ASC Topic 718 are set forth in Note 3 — Share-Based Compensation to our audited financial statements included in the 2018 10-K.

        Following completion of the merger, it is expected that the combined organization will provide compensation to non-employee directors. Our current director compensation program will be suspended at the time of the closing of the merger and the director compensation policies for the combined organization following the merger will be re-evaluated by the compensation committee and board of directors of the combined organization following completion of the merger and may be subject to change. Non-employee directors of the combined organization are, however, expected to receive annual cash retainers and equity compensation, although the amount of such compensation has not yet been determined.