Exhibit
10.1


 


FOURTH
AMENDED AND RESTATED EMPLOYMENT AGREEMENT


(Scott D. Peters)


 


August 29, 2003


 


THIS FOURTH AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of
August 29, 2003 (the “Effective Date”), by and between Golf Trust
of America, Inc., a Maryland corporation (the “Company”), and Scott D.
Peters, an individual (the “Executive”).


 


THE COMPANY AND THE EXECUTIVE ENTER
THIS AGREEMENT on the basis of the following facts,
understandings and intentions:


 


A.                                   The
Executive has been an executive of the Company employed under that certain
Employment Agreement dated as of February 7, 1997, as amended and restated as
of July 25, 1997, and as further amended and restated as of November 8, 1999
(the “Original
Agreement”), which employment commenced on the date of the closing
of the Company’s initial public offering on February 12, 1997 (the “Commencement
Date”).


 


B.                                     The
Executive and the Company agreed to amend the Original Agreement pursuant to an
agreement dated February 25, 2001 (the “Existing Agreement”).


 


C.                                     As
a result of the changed circumstances of the Company since the execution of the
Existing Agreement, including, inter alia, the following: (i) the recent
sale of Sandpiper, Eagle Ridge and Mystic Creek golf courses; (ii) the payoff
of the Company’s credit line; (iii) the accelerated sale by the Company of
certain of its other properties; (iv) the anticipated takeover and operation of
the Innisbrook Resort by the Company, with related changes to the business plan
of the Company related thereto; (v) a reduction in the time and expense of
set-up procedures to facilitate compliance with the disclosure requirements of
being a public company and a corresponding reduction in the Company’s need for
the Executive’s services; (vi) the Executive’s objective to obtain new
employment; (vii) the Executive’s willingness to remain on the Board of
Directors of the Company (the “Board,” which term shall also include the
board of directors or board of trustees of any successor in interest to the
Company) and maintain Executive’s responsibilities as Chief Financial Officer
of the Company for a limited period of time; and (viii) the Company’s desire to
initially retain the Executive as a full-time employee on a temporary basis
and, thereafter, transition the Executive to a modified schedule.


 


D.                                    The
Executive desires to modify the Executive’s employment with the Company in
order to accommodate the changed circumstances and needs of the Company as set
forth in Recital C above.


 


E.                                      The
Company and the Executive desire to amend and restate the Existing Agreement in
its entirety as set forth below.


 


NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the Company and the
Executive agree as follows:


 

















 


1.                                       Employment.  The Company hereby agrees to continue to
employ the Executive, and the Executive hereby agrees to continue to be
employed by the Company, on the terms and conditions set forth herein.


 


2.                                       Term.  The term of this Agreement commenced on the
Commencement Date and will terminate one (1) year after the end of the Modified
Schedule (as defined below).  Such term
in its full duration is herein referred to as the “Term.”


 


(a)                                  Initial
Employment Period. The period of the Executive’s employment under this
Agreement from the period beginning on the Effective Date and ending on the
Date of Initial Employment Termination (as defined in Section 5(f) of this
Agreement), is herein referred to as the “Initial Employment Period.”


 


(b)                                 Modified
Schedule.  The period of the
Executive’s employment under this Agreement, consisting of the period following
completion of the Initial Employment Period and ending on the Date of
Termination of  Modified Schedule (as
defined in Section 5.A(c) of this Agreement) is herein referred to as the “Modified
Schedule.”


 


3.                                       Position.


 


(a)                                  Title
and Position.


 


(i)                                     During
the Initial Employment Period, the Executive shall continue to be employed as
an executive officer of the Company with the title of Senior Vice President and
Chief Financial Officer or in such other executive position as the Board may
from time to time determine with the reasonable consent of the Executive.  In the performance of the Executive’s duties
as an officer, the Executive shall be subject to the direction of the Board and
the President and shall not be required to take direction from or report to any
other person unless otherwise directed by the Board or the President.  The Executive’s duties and authority shall
be commensurate with the Executive’s title and position with the Company.


 


(ii)                                  During
the Modified Schedule, the Executive shall continue to be employed as an
executive officer of the Company with the title of  Chief Financial Officer (or in such other executive position as
the Board may from time to time determine with the reasonable consent of the
Executive) and shall maintain the Executive’s responsibilities as Chief
Financial Officer of the Company, including, inter alia, the following:
managing investor relations; coordinating the outside auditor needs of the
Company and certification requirements; providing litigation support;
coordinating the preparation of the budgets for the golf courses owned by the
Company (directly or indirectly), including, without limitation, the Innisbrook
Resort; conducting performance reviews of employees; maintaining primary
responsibility for the contents and the filing of all public reports (regular
and periodic) with the Securities and Exchange Commission; maintaining primary
responsibility for the contents of all earnings releases; executing all public
reports (and all certifications required thereby) as the principal accounting
and financial officer of the Company; coordinating and participating in all
earnings releases and analyst calls; coordinating at the request of the Audit
Committee all information required by the Audit Committee; supervising the
Company’s Controller and site personnel; maintaining relationships with any
lenders under any new credit facilities of the Company,


 


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including the execution of all certifications to the lenders; assisting
the Company with the formation of a liquidating trust, as the President may
request; and advising the Company (and its affiliates) on various special
projects of the Company as requested by the Company from time to time.


 


(iii)                               During
the Term and thereafter for so long as the Executive is elected by the
Company’s stockholders (or other appropriate body), the Executive hereby agrees
to serve as a member of the Board.  The
Executive understands that the Executive’s position as a member of the Board is
subject to nomination by the Board.


 


(b)                                 Place
of Employment.


 


(i)                                     During
the Initial Employment Period, the Executive shall perform the services and
duties required by this Agreement at the Company’s place of business in
Charleston, South Carolina, or at such other location as the President of the
Company shall determine; provided, however, that the Company may
require the Executive to travel to other locations on the Company’s business.


 


(ii)                                  At
all times during the Modified Schedule, the Executive may perform the services
and duties required by this Agreement at the Company’s place of business in
Charleston, South Carolina, or at such other location as the Executive shall
determine in the Executive’s reasonable discretion, subject to the requirement
that the Executive shall at all times comply with applicable law and the
policies and procedures of the Company.


 


(c)                                  Duties.


 


(i)                                     During
the Initial Employment Period, the Executive shall devote commercially reasonable
efforts and substantially full working time and attention to the promotion and
advancement of the Company and its welfare. 
During the Initial Employment Period, the Executive shall serve the
Company faithfully and to the best of the Executive’s ability, and shall
perform such services and duties in connection with the business, affairs and
operations of the Company as may be assigned or delegated to him from time to
time by or under, and in accordance with, the authority and direction of the
Board.  During the Initial Employment
Period, the Company shall retain the right to direct and control the means and
methods by which the Executive performs the above services.


 


(ii)                                  During
the Modified Schedule, the Executive shall continue to be employed by the
Company but shall have no authority to bind the Company by contract or
otherwise, except as set forth in Section 3(a)(ii) above or as specifically
directed by the President of the Company in each instance.  During the Modified Schedule, the Executive
shall perform the Executive’s duties at the general discretion of the Company,
but the Executive shall determine, in consultation with, and with the approval
of, the President of the Company, the manner and means by which the Executive’s
services and duties are accomplished, subject to the requirement that the
Executive shall at all times comply with applicable law and the policies and
procedures of the Company.


 


(d)                                 Other
Activities.  Except with the prior
written approval of the Board (which the Board may grant or withhold in its
sole and absolute discretion) and except as may be


 


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set forth in Section 9 of this Agreement, the Executive, during the
Term, shall not (i) accept any other employment (except during the Modified
Schedule), or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that (a) is currently
competitive with the Company, or (b) may become competitive with, or that might
place the Executive in a competing position to, that of the Company or any of
its affiliates.  Notwithstanding the
foregoing, the Company agrees that the Executive (or affiliates of the
Executive) shall be permitted (i) to undertake the activities set forth in Section
9, and (ii) to make any other passive personal investment that is not in a
business activity competitive with the Company.


 


4.                                       Compensation
and Related Matters.


 


(a)                                  Compensation.


 


(i)                                     Salary.  During the Initial Employment Period, the
Company shall pay the Executive a salary at a rate of Two Hundred Three
Thousand Two Hundred Dollars ($203,200) per year.  All salary shall be paid according to the standard payroll
practices of the Company (regarding timing of payments, standard employee
deductions, income tax withholdings, social security deductions, etc.) as may
be in place from time to time.


 


(ii)                                  Compensation
During Modified Schedule.  In lieu
of the salary set forth in Section 4(a)(i) above, during the Modified
Schedule the Company shall compensate the Executive as follows: (A) the Company
shall pay the Executive an amount equal to Twelve Thousand Dollars ($12,000.00)
per calendar quarter (prorated for partial quarter services), and (B) if in any
calendar quarter the Company requires more than eighty (80) hours of the
Executive’s services, the Company shall pay the Executive an additional amount
equal to One Hundred Fifty Dollars ($150.00) per hour; provided, however, that the
maximum amount to be paid to the Executive under this paragraph (B) shall not
exceed One Thousand Two Hundred Dollars ($1,200.00) per day.  Compensation payable by the Company under
this Section 4(a)(ii) shall be paid to Executive on a semi-monthly or other
regular basis as determined by the Company from time to time, subject to
receipt of regular invoices for extra hours of services and business expenses
provided for hereafter.


 


(b)                                 Business
Expenses.  During the Initial
Employment Period, the Modified Schedule and any subsequent time while serving
on the Company’s Board of Directors, the Company shall reimburse the Executive
for personal expenditures incurred in connection with the conduct of the
Company’s business upon presentation of sufficient evidence of such
expenditures as may be required by the Company’s policies as in place from time
to time.


 


(c)                                  Benefits;
Employment Taxes.


 


(i)                                     During
the Initial Employment Period, the Executive shall be entitled to participate
in any benefit plans that are made generally available to executive officers of
the Company from time to time, including, without limitation, any deferred
compensation, health, dental, life insurance, long-term disability insurance,
retirement, pension or 401(k) savings plan. 
Nothing in this Section 4(c) is intended, or shall be construed, to
require the Company to institute or to continue any, or any particular, plan or
benefit.  During the Initial


 


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Employment Period, the Executive shall be entitled to fringe benefits
as may be determined or granted from time-to-time by the Board or by the
President acting under the authority of the Board; provided, however, that the
Company shall provide the fringe benefits authorized by the Board on April 25,
1997 (which resolution is attached to this Agreement as Exhibit A) and
shall not reduce or modify those benefits in a manner adverse to the Executive
without the written consent of the Executive. 
During the Initial Employment Period, the Executive shall be entitled to
four (4) weeks (i.e., twenty (20) business days) of paid vacation time
in each calendar year on a pro-rated basis. 
During the Initial Employment Period, the Executive shall be entitled to
all paid Company holidays.


 


(ii)                                  During
the Modified Schedule, the Executive shall not be entitled to receive any
vacation or illness payments, or to participate in any plans, arrangements or
distributions by the Company pertaining to any bonus, stock option, profit
sharing, insurance or similar benefits for the Company’s employees, except as
set forth in Section 4(c)(iii) of this Agreement.


 


(iii)                               Limited
Continuation of Health Benefits. 
Notwithstanding any of the foregoing, during the Modified Schedule the
Executive shall be entitled to health, optical and dental insurance plans that
are generally available to executive officers of the Company (the “Health and
Dental Plans”) until the earlier to occur of: (A) the date the
Executive obtains alternative coverage, (B) the date the Executive is no longer
eligible for coverage under the terms and conditions of the Health and Dental
Plans, or (C) the expiration or termination of the Modified Schedule.


 


(d)                                 Directors
and Officers Insurance; Indemnification. 
For so long as the Executive serves as a director or officer of the
Company during the Term, the Company shall maintain directors and officers
insurance to insure the Executive to the same extent as the other directors or
officers are insured, respectively.


 


4.A                             Milestone
Payments and Interest; Release.


 


(a)                                  Milestone
Payments.  The Executive hereby
agrees that the Executive has been paid the Performance Milestone Payment and
related interest thereon provided for in Section 4.A(b)(i)(A) of the Existing
Agreement and earned the right to payment of the Performance Milestone Payment
and related interest thereon provided for in Section 4.A(b)(i)(B) of the
Existing Agreement (such latter milestone payment, the “Remaining Earned Milestone Payment”).  Subject to Sections 4.A(b) and 6(d) below,
in consideration of the Executive’s performance of the Executive’s obligations
owed to the Company under this Agreement and in full satisfaction of any and
all obligations of the Company to pay Milestone Payments to the Executive under
Section 4.A(b) of the Existing Agreement, the Executive and the Company hereby
agree that the Company shall pay to the Executive one fourth of the Remaining
Earned Milestone Payment on September 30, 2003 and one fourth of the Remaining
Earned Milestone Payment upon the sale of Company golf course assets after the
Effective Date, whereby the Company receives more than One Million Two Hundred
Thousand Dollars ($1,200,000) of net cash proceeds.  The remaining one half of the Remaining Earned Milestone Payment
shall be paid to the Executive upon the sale of Company golf course assets after
the Effective Date, whereby the Company receives more than Two Million Five
Hundred Thousand Dollars ($2,500,000) of net cash proceeds, and such


 


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receipts are not subject to holdback, claw-backs or any escrow or other
limitations.  The Remaining Earned
Milestone Payment shall be paid as provided for above by the Company to the
Executive by check or wire transfer. 
The Executive and the Company agree that the Remaining Earned Milestone
Payment represents full and final payment of any and all obligations of the
Company to the Executive under Section 4.A(b) of the Existing Agreement.


 


(b)                                 Notwithstanding
the provisions of Section 4A(b)(iii) of the Existing Agreement, commencing
October 1, 2003, interest on the unpaid portion of the Remaining Earned
Milestone Payment shall be five percent (5%) per annum.


 


(c)                                  Release.  In consideration of and in full satisfaction
of any and all obligations of the Company as aforesaid, the Executive shall
execute and deliver a full release of the Company (and its affiliates) to the
Company in the form attached hereto as Exhibit B.


 


5.                                       Termination
of Initial Employment Period. 
The Executive’s employment during the Initial Employment Period shall be
terminated upon the earlier to occur of:


 


(a)                                  Death.  The Executive’s employment under this
Agreement shall terminate upon the Executive’s death.


 


(b)                                 Disability.  The Executive’s employment under this
Agreement shall terminate upon the Executive’s physical or mental disability or
infirmity which, in the opinion of a competent physician selected by the Board,
renders the Executive unable to perform the Executive’s duties under this
Agreement for more than one hundred twenty (120) days during any one hundred
eighty (180) day period.


 


(c)                                  Employment-At-Will;
Termination by Company for Any Reason. 
The Executive’s employment hereunder is “at will” and may be terminated
by the Company at any time with or without Good Reason by delivery of a written
notice of termination to the Executive (the “Notice of Termination of Initial Employment”).  The Notice of Termination of Initial
Employment shall set forth (i) if the Executive’s employment is terminated by
the Company with Good Reason, a description in reasonable detail of the facts
and circumstances claimed to provide a basis for the termination of the
Executive’s employment with Good Reason, and (ii) the date such termination
shall become effective, which date shall in any event, be at least forty-five
(45) days from the date the Notice of Termination of Initial Employment is delivered
to the Executive.


 


(d)                                 Voluntary
Resignation.  Subject to Section 4.A
above, the Executive may voluntarily resign the Executive’s position and
terminate the Executive’s employment with the Company at any time by delivery
of a written notice of resignation to the Company (the “Notice of Resignation”).  The Notice of Resignation shall set forth
(i) if the Executive resigns with Good Cause, a description in reasonable
detail of the facts and circumstances claimed to provide a basis for the
Executive’s resignation with Good Cause, and (ii)  the date such resignation shall become effective, which date
shall in any event be at least ten (10) days (thirty (30) days in the event of
a resignation with Good Cause following a Change of Control) from the date the
Notice of Resignation is delivered to the Company.


 


(e)                                  Initial
Employment End Date.  September 30,
2003.


 


(f)                                    Date
of Initial Employment Termination. “Date of Initial Employment Termination”
shall mean (i) if the Executive’s employment is terminated by the Executive’s
death, the date of the Executive’s death; (ii) if the Executive’s employment is
terminated by


 


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reason of the Executive’s disability, the date of the opinion of the
physician referred to in Section 5(b), above; (iii) if the Executive’s
employment is terminated by the Company pursuant to Section 5(c) above, the
date specified in the Notice of Termination of Initial Employment; (iv) if the
Executive voluntarily resigns pursuant to Section 5(d) above (but subject to
Section 4.A above), the date specified in the Notice of Resignation; or (v)
September 30, 2003.


 


(g)                                 “Good Reason”
means a finding by the Board that (A) the Executive materially breached any of
the material terms of this Agreement, or (B) the Executive acted with gross
negligence, willful misconduct or fraudulently in the performance of the
Executive’s duties hereunder; provided, however, that if the Board
elects, in its sole discretion, to give Executive a warning and opportunity to
cure the material breach or other conduct that is alleged to constitute Good
Reason and if the Executive does effect such a cure within the cure period
specified by the Board, then such default shall no longer constitute “Good
Reason” under this Agreement.


 


5.A.                          Termination
of Modified Schedule.   The
Executive’s employment during the 
Modified Schedule shall be terminated upon the earlier to occur of:


 


(a)                                  Termination
by the Company for Any Reason.  The
Company may terminate the Executive’s employment during the Modified Schedule
any time with or without Good Reason by delivery of a written notice of
termination to the Executive (the “Notice of Termination of Modified Schedule”).  The Notice of Termination of Modified
Schedule shall set forth the date such termination of the Modified Schedule
shall be effective.


 


(b)                                 Termination
by Executive.  Subject to Section
4.A above, the Executive may terminate the Modified Schedule with Good Cause at
any time by delivery of a written notice of termination to the Company (the “Notice of
Executive Termination of Modified Schedule”).  The Notice of Executive Termination of
Modified Schedule shall set forth (i) a description in reasonable detail of the
facts and circumstances claimed to provide a basis for the termination of the
Modified Schedule with Good Cause, and (ii) the date such termination of the
Modified Schedule shall be effective, which date shall in any event be at least
thirty (30) days from the date the Notice of Resignation is delivered to the
Company in the event of a Termination of Modified Schedule with Good Cause
following a Change of Control.


 


(i)                                     “Good Cause”
means the occurrence, without the express written consent of the Executive, of
any of the following events, unless in the case of (A) and (B) immediately
below, such event is substantially corrected by the Company within forty-five
(45) days following written notification by the Executive to the Company that
the Executive intends to terminate the Executive’s employment or the Modified
Schedule under this Agreement because of such event:


 


(A)                              any
reduction or diminution in the compensation, benefits or responsibilities of
the Executive, except as provided for under this Agreement;


 


(B)                                any
material breach or material default by the Company under any material provision
of this Agreement; or


 


(D)                               any
Change in Control (as defined below).


 


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(ii)                                  For
the purposes of this Agreement, “Change in Control” means the occurrence of
any of the following events after the effective date of the first initial
public offering of the Company’s common stock:


 


(A)                              (1)
the stockholders approve a plan relating to the merger of the Company, and such
merger is consummated; or (2) the stockholders adopt a plan relating to the
complete liquidation of the Company (other than the plan approved by the Board
on February 25, 2001 or any amendment thereto), and such plan is substantially
completed.


 


(B)                                a
Person (as defined below) directly or indirectly becomes the “beneficial owner”
(as such term is defined in Rule 13d-3 and Rule 13d-5 under the Securities
Exchange Act of 1934) of more than twenty-five percent (25%) of the total
voting power of the total outstanding voting securities of the Company on a
fully diluted basis; provided, however, that beneficial
ownership of partnership units in Golf Trust of America, L.P. shall not be
considered beneficial ownership of voting securities of the Company;


 


(C)                                a
Person directly or indirectly acquires or agrees to acquire all or
substantially all of the assets and business of the Company (other than
pursuant to a plan of liquidation);


 


(D)                               for
any reason during any period of two (2) consecutive years (not including any
period prior to the date of this Agreement) a majority of the Board is
constituted by individuals other than (1) individuals who were directors
immediately prior to the beginning of such period, and (2) new directors whose
election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors immediately prior to the beginning of the
period or whose election or nomination for election was previously so approved.


 


(c)                                  Date
of Termination of Modified Schedule. “Date of Termination of Modified Schedule”
shall mean (i) if the Modified Schedule is terminated by the Company pursuant
to Section 5.A(a) above, the date specified in the Notice of Termination of
Modified Schedule; (ii) if the Modified Schedule is terminated by the Executive
pursuant to Section 5.A(b) above (subject to Section 4.A above ), the date
specified in the Notice of Executive Termination of Modified Schedule; or (iii)
June 30, 2004.


 


6.                                       Obligations
Upon Termination.


 


(a)                                  Return
of Property.  The Executive hereby
acknowledges and agrees that all personal property and equipment furnished to
or prepared by the Executive in the course of or incident to the Executive’s
employment  belongs to the Company and
shall be promptly returned to the Company upon termination of the Modified
Schedule (or if this Agreement is terminated prior to the commencement of the
Modified Schedule, on the Date of Initial Employment Termination).


 


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(b)                                 Complete
Resignation.  Upon the termination
or expiration of the Modified Schedule (or if this Agreement is terminated
prior to the commencement of the Modified Schedule, on the Date of Initial
Employment Termination) and unless otherwise requested in writing by the Board,
the Executive shall be deemed to have resigned from all offices and
directorships then held with the Company or any of its subsidiaries.


 


(c)                                  Survival
of Representations, Warranties, Covenants and Other Provisions.  The representations and warranties contained
in this Agreement and the parties’ obligations under Section 4(d), Section 4.A,
this Section 6, Sections 7 through 9, and Sections 16 through 18, inclusively,
shall survive termination of the Initial Employment Period and the Modified
Schedule and the termination or expiration of this Agreement.


 


(d)                                 Release.  In exchange for the Company entering into
this Agreement and the terms and conditions of Section 4.A above, the Executive
agrees that, at the time of the termination of the Modified Schedule, the
Executive will execute a release acceptable to the Company of all liability of
the Company and its officers, stockholders, employees and directors to the
Executive in connection with or arising out of the Executive’s employment
relationship with the Company.


 


7.                                       Compensation
Upon Termination.


 


(a)                                  Termination
Under Sections 5(a) or 5(b).  Except
for the provisions of Section 4.A above, the Executive shall not be entitled to
any payments following the Initial Employment Period in the event the Initial
Employment Period terminates due to death or disability pursuant to Sections
5(a) or 5(b) above.


 


(b)                                 Termination
Under Section 5.  In the event of
any termination of the Initial Employment Period pursuant to Section 5 above,
the Executive shall be entitled to retain any and all options to purchase
securities of the Company granted to the Executive pursuant to the terms and
conditions of any of the Company’s stock incentive plans or otherwise that have
vested as of the date of such termination.


 


(c)                                  Benefits
Under Section 4 (c) (iii).  If, in
spite of the provisions of Section 4(c)(iii) of this Agreement entitling the
Executive to benefits under the Company’s Health and Dental Plans for a limited
period of time following the termination of the Initial Employment Period, such
benefits are not payable or provideable under any such plan to the Executive,
or to the Executive’s dependents, beneficiaries or estate, because the
Executive is no longer deemed to be an employee of the Company, then the
Company shall independently pay or provide for payment of such benefits for so
long as the Executive is entitled to such benefits under Section 4(c)(iii) of
this Agreement.


 


(d)                                 Excess
Parachute Payment.  In the event
that any payment by or on behalf of the Company or Golf Trust of America, L.P.
(or any affiliate of or successor to either of them) to Executive (whether or
not such payment is required under this Agreement) qualifies, or on the advice
of the Executive’s counsel or the Company’s auditors could reasonably be
expected to qualify, as an “excess parachute payment” under Section 280G or
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Tax Code”),
the Company shall immediately make


 


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additional payments in cash to Executive (so called “gross-up
payments”) so that the Executive will be put in the same after-tax position as
the Executive would have been in had no excise tax been imposed by Section 4999
of the Tax Code (or any successor or similar provision).  In the event that the Company makes a
payment under this Section 7(d) in the expectation that such excise tax may be
imposed, but such tax is not ultimately imposed, the Executive shall refund the
payment to the Company upon its written request, plus any interest actually
earned on such funds while in the Executive’s possession (net of the
Executive’s tax liability on such interest).


 


8.                                       Covenant
of Confidentiality.  In addition
to the agreements set forth in Section 6 above, the Executive hereby agrees
that the Executive will not, during the Term and one (1) year thereafter,
directly or indirectly disclose or make available to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever,
any Confidential Information.  As used
in this Agreement, “Confidential Information” means:  non-public information disclosed to the
Executive or known by the Executive as a consequence of or through the
Executive’s relationship with the Company, about the Company’s subsidiaries,
affiliates and partners thereof, owners, customers, employees, business
methods, public relations methods, organization, procedures or finances,
including, without limitation, information of or relating to properties that
the Company or any of its affiliates, subsidiaries or partners thereof owns or
may be considering acquiring an interest in; provided, however, that the
Executive shall not be obligated to treat as confidential, or return to the
Company copies of, any Confidential Information that (i) was publicly known at the
time of disclosure to the Executive, (ii) becomes publicly known or available
thereafter other than by any means in violation of this Agreement or any other
duty owed to the Company by any person or entity, or (iii) the Executive is
required by law to disclose to a third party.


 


9.                                       Covenant
Not to Compete.


 


(a)                                  Limitations.  The Executive agrees that during the Initial
Employment Period the Executive will devote substantially the Executive’s full
working time to the business of the Company and, throughout the Term, will not
engage in any competitive business. 
Subject to such full-time requirement and the other restrictions set
forth in this Section 9 and Section 3(d) above, the Executive shall be
permitted to continue the Executive’s existing business investments and
activities and may pursue additional business investments.  Without limiting the foregoing, the
Executive specifically covenants that during the Term and one (1) year
thereafter the Executive shall not:


 


(i)                                     compete
directly with the Company in a business similar to that of the Company;


 


(ii)                                  compete
directly or indirectly with the Company, its subsidiaries and/or its partners,
potential golf course buyers, potential buyers of the Company (and/or its
affiliates), potential buyers of any preferred stock of the Company or
potential buyers of any debt of the Company (or any of its affiliates)
(collectively, the “Non-Compete Parties”) with respect to any
acquisition or development of any real estate project undertaken or being
considered by the Non-Compete Parties at any time during the Initial Employment
Period or the Modified Schedule;


 


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(iii)                               lend
or allow the Executive’s name or reputation to be used by or in connection with
any business competitive with the Company, its subsidiaries and/or partners
thereof; excepting, however, the Executive shall have the right during the
period of the Modified Schedule to be employed by any business competitive with
the Company so long as the Executive does not have direct or indirect
responsibility for any interaction with the Company or analysis thereof, and is
wholly screened-off from such interaction and analysis by the business
competitive with the Company.


 


(iv)                              intentionally
interfere with, disrupt or attempt to disrupt the relationship, contractual or
otherwise, between the Company, its subsidiaries and/or partners thereof, and
any lessee, tenant, supplier, contractor, lender, employee or governmental
agency or authority.


 


(b)                                 The
provisions of this Section 9 shall survive for the Term and one (1) year
thereafter and no longer.


 


10.                                 Injunctive
Relief and Enforcement.  In the
event of breach by the Executive of the terms of Sections 6, 8 or 9 of this
Agreement, the Company shall be entitled to institute legal proceedings to
enforce the specific performance of this Agreement by the Executive and to
enjoin the Executive from any further violation of Sections 6, 8 or 9 and to
exercise such remedies cumulatively or in conjunction with all other rights and
remedies provided by law and not otherwise limited by this Agreement. The
Executive acknowledges, however, that the remedies at law for any breach by him
of the provisions of Sections 6, 8 or 9 may be inadequate. In addition, in the
event the agreements set forth in Sections 6, 8 or 9 shall be determined by any
court of competent jurisdiction to be unenforceable by reason of extending for
too great a period of time or over too great a geographical area or by reason
of being too extensive in any other respect, each such agreement shall be
interpreted to extend over the maximum period of time for which it may be
enforceable and to the maximum extent in all other respects as to which it may
be enforceable, and enforced as so interpreted, all as determined by such court
in such action.


 


11.                                 Notice.  For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered,
when transmitted by telecopy with receipt confirmed, or one day after delivery
to an overnight air courier guaranteeing next day delivery, addressed as
follows:


 


	
  If to the Executive:

  	
   

  	
  Scott D. Peters

  
	
   

  	
   

  	
  2758 Christ Church
  Court

  
	
   

  	
   

  	
  Mt. Pleasant, South
  Carolina 29464

  
	
   

  	
   

  	
  telecopy:  (843) 971-7487

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  Golf Trust of America,
  Inc.

  
	
   

  	
   

  	
  14 North Adger’s Wharf

  
	
   

  	
   

  	
  Charleston, South
  Carolina  29401

  
	
   

  	
   

  	
  Attention:  Chief Executive Officer

  
	
   

  	
   

  	
  telecopy: (843)
  723-0479

  



 


11

















 


	
  With a copy to:

  	
   

  	
  O’Melveny & Myers
  LLP

  
	
   

  	
   

  	
  Embarcadero Center West

  
	
   

  	
   

  	
  275 Battery Street,
  Suite 2600

  
	
   

  	
   

  	
  San Francisco,
  California 94111-3305

  
	
   

  	
   

  	
  Attention: Peter T.
  Healy, Esq.

  
	
   

  	
   

  	
  telecopy: (415)
  984-8701

  



 


or to such other address
as any such party may furnish to the others from time to time in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.


 


12.                                       Severability.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect; provided, however, that if any one or more
of the terms contained in Sections 6, 8 or 9 of this Agreement hereto shall for
any reason be held to be excessively broad with regard to time, duration,
geographic scope or activity, that term shall not be deleted but shall be
reformed and constructed in a manner to enable it to be enforced to the extent
compatible with applicable law.


 


13.                                       Assignment.  This Agreement may not be assigned by the
Executive, but may be assigned by the Company to any successor to its business
and will inure to the benefit and be binding upon any such successor.


 


14.                                       Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.


 


15.                                       Headings.  The headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.


 


16.                                       Choice of
Law; Consent to Jurisdiction. 
This Agreement shall be construed, interpreted and the rights of the
parties determined in accordance with the laws of the State of South Carolina
(without reference to the choice of law provisions of the State of South
Carolina), except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the subject of
this Agreement, and as to those matters the law of the jurisdiction under which
the respective entity derives its powers shall govern.  Each of the parties agree to submit to the
exclusive jurisdiction of the federal and state courts of the State of South
Carolina with respect to the interpretation of this Agreement or for the
purposes of any action arising out of or relating to this Agreement.


 


17.                                       LIMITATION
ON LIABILITIES.  IF
EITHER THE EXECUTIVE OR THE COMPANY IS AWARDED ANY DAMAGES AS COMPENSATION FOR
ANY BREACH OR ACTION RELATED TO THIS AGREEMENT, A BREACH OF ANY COVENANT
CONTAINED IN THIS AGREEMENT (WHETHER EXPRESS OR IMPLIED BY EITHER LAW OR FACT),
OR ANY OTHER CAUSE OF ACTION BASED IN WHOLE OR IN PART ON ANY BREACH OF ANY
PROVISION OF THIS AGREEMENT, SUCH DAMAGES SHALL BE LIMITED TO CONTRACTUAL
DAMAGES AND SHALL EXCLUDE (I)


 


12

















 


PUNITIVE DAMAGES, AND (II) CONSEQUENTIAL AND/OR INCIDENTAL DAMAGES
(E.G., LOST PROFITS AND OTHER INDIRECT OR SPECULATIVE DAMAGES). THE MAXIMUM
AMOUNT OF DAMAGES THAT THE EXECUTIVE MAY RECOVER FOR ANY REASON SHALL BE THE
AMOUNT EQUAL TO ALL AMOUNTS OWED (BUT NOT YET PAID) TO THE EXECUTIVE PURSUANT
TO THIS AGREEMENT THROUGH ITS NATURAL TERM, PLUS INTEREST ON ANY DELAYED
PAYMENT AT THE MAXIMUM RATE PER ANNUM ALLOWABLE BY APPLICABLE LAW FROM AND
AFTER THE DATE(S) THAT SUCH PAYMENTS WERE DUE.


 


18.                                       WAIVER
OF JURY TRIAL.  TO THE EXTENT
APPLICABLE, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT.


 


19.                                       Entire
Agreement.  This Agreement, and
the related agreements referred to herein, contain the entire agreement and
understanding between the Company and the Executive with respect to the
employment of the Executive by the Company as contemplated hereby and no
representations promises agreements or understandings written or oral, not
herein contained shall be of any force or effect.  This Agreement shall not be changed unless in writing and signed
by both the Executive and the Board of Directors of the Company.


 


20.                                       Executive’s
Acknowledgment.  The Executive
acknowledges (a) that the Executive has had the opportunity to consult with
independent counsel of the Executive’s own choice concerning this Agreement,
and (b) that the Executive has read and understands the Agreement, is
fully aware of its legal effect, and has entered into it freely based on the
Executive’s own judgment.


 


[Signature page follows.]


 


13

















 


IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date and year first written
above.


 


	
   

  	
  “COMPANY”

  
	
   

  	
   

  
	
   

  	
  GOLF TRUST OF AMERICA, INC., a Maryland

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Bradley Blair,
  II

  	
   

  
	
   

  	
  W.
  Bradley Blair, II

  
	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Scott D. Peters

  	
   

  
	
   

  	
  SCOTT D. PETERS

  



 


S-1

















 


EXHIBIT A


 


Board Minutes of April 25, 1997


 


14.                                 Compensation
Committee Matters


 


Mr. Chapman, Chairman of
the Compensation Committee, led a discussion of compensation matters.


 


a.                                       Approval
of Benefit Plans


 


After discussion, upon motion duly made, seconded and
unanimously carried, the following recitals and resolutions were adopted by the
Board:


 


WHEREAS, the
employment agreements between the Company and W. Bradley Blair, II, David J.
Dick and Scott D. Peters (collectively the “Executives”) contemplate but do not
require that the Company will establish certain benefit plans for its
Executives;


 


WHEREAS, this Board
of Directors deems it advisable and in the best interest of the Company and its
stockholders to make certain benefit plans available to the Executives; and


 


WHEREAS, this Board
of Directors deems it appropriate to direct the provision of certain employee
benefits and the adoption of certain benefit plans;


 


NOW, THEREFORE, BE IT RESOLVED,
that the Company shall offer the following benefits to each of the Executives:


 


1.                                       Financial
planning, tax compliance assistance and related services (to be provided
initially by the Company’s accountant, and thereafter by such provider as the
President shall select);


 


2.                                       Accidental
death and dismemberment insurance plan;


 


3.                                       Long-term
disability insurance (at 50% of employee’s salary);


 


4.                                       Payment
of, or reimbursement for, professional association dues, professional licensing
fees, continuing education tuition and associated expenses.


 


RESOLVED FURTHER,
that the Company shall provide the following benefits to each of the Executives
with the frequency or in the amounts indicated:


 


1.                                       Full
health exam and medical testing available on the following basis:


 


	
  Blair:

  	
   

  	
  Annually

  
	
  Dick:

  	
   

  	
  Bi-Annually

  
	
  Peters:

  	
   

  	
  Bi-Annually

  



 


 


A-1

















 


2.                                       Automobile
allowances in the following amounts or, at the Compensation Committee’s option
and on such terms and conditions as the Compensation Committee shall specify,
use of Company automobiles:


 


	
  Blair:

  	
   

  	
  $1000/month

  
	
  Dick:

  	
   

  	
  $800/month

  
	
  Peters:

  	
   

  	
  $600/month

  



 


RESOLVED FURTHER,
that the enumeration of benefits in these resolutions is non-exclusive and
shall not be construed to limit the availability of other benefits for which
the Executives or any of them are otherwise eligible.


 


RESOLVED FURTHER,
that W. Bradley Blair, II and such other officers as he may from time to time
designate be, and hereby are, authorized and empowered on behalf of and by the
Company and in its name to enter into contracts with providers of the above
benefit packages as each shall deem advisable to accomplish the purposes of
these resolutions.


 


RESOLVED FURTHER,
that each of the officers of this Company be, and hereby is, authorized and
empowered on behalf of this Company and in its name to execute any applications,
certificates, agreements, or any other instruments or documents or amendments
or supplements thereto, or to do and to cause to be done any and all other acts
and things as such officers may in their discretion deem necessary or
appropriate to carry out the purposes of each of the foregoing resolutions, the
execution and delivery of such documents and the taking of such actions to be
conclusive evidence of the necessity or appropriateness thereof.


 


RESOLVED FURTHER,
that any and all actions heretofore or hereafter taken by any appropriate
officer or authorized representative of this Company within the terms or intent
of any of the foregoing resolutions be, and hereby are, ratified and confirmed
as the act and deed of this Company.


 


A-2

















 


EXHIBIT B


 


FORM OF RELEASE


 


A-3