GOLF TRUST OF AMERICA INC, DEF 14A, 1998-04-27

GOLF TRUST OF AMERICA INC
DEF 14A, 1998-04-27
LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES)

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
GOLF TRUST OF AMERICA, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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<PAGE>

GOLF TRUST OF AMERICA, INC.

NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS

Notice is hereby given that the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of Golf Trust of America, Inc. (the "Company") will be held at
the Charleston Place Hotel, 130 Market Street, Charleston, South Carolina, on
May 18, 1998 at 9:30 a.m. for the following purposes:

1. to amend the Charter of the Company;

2. to ratify the 1997 Stock-Based Incentive Plan;

3. to elect two directors to the Company; and

4. to transact such other business as may properly be brought before the
1998 Annual Meeting or any adjournments or postponements thereof.

The close of business on April 1, 1998 has been fixed as the record date
for determination of stockholders entitled to notice of and to vote at the
Annual Meeting and any adjournment thereof. Only stockholders of record at such
time will be entitled to vote.

You are cordially invited to attend the Annual Meeting in person. Even if
you plan to attend the Annual Meeting, please promptly sign, date and return the
enclosed proxy card in the enclosed self-addressed, postage prepaid envelope.
It will assist us in keeping down the expenses of the Annual Meeting if all
stockholders, whether you own a few shares or many shares, return your signed
proxies promptly.

A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK ENTITLED TO VOTE AT
THE ANNUAL MEETING MUST BE REPRESENTED AT THE ANNUAL MEETING, IN PERSON OR BY
PROXY, IN ORDER TO CONSTITUTE A QUORUM AT THE ANNUAL MEETING. PLEASE RETURN
YOUR PROXY CARD IN ORDER TO ENSURE THAT A QUORUM IS OBTAINED AND TO AVOID THE
ADDITIONAL COSTS TO THE COMPANY OF ADJOURNING THE ANNUAL MEETING AND
RESOLICITING PROXIES.

YOUR VOTE IS IMPORTANT.

By Order of the Board of Directors,

DAVID J. DICK
Secretary

Charleston, South Carolina
April 25, 1998

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PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Golf Trust of America, Inc. (the "Company",
or "Golf Trust") for use at the Annual Meeting of Stockholders to be held on May
18, 1998 (the "1998 Annual Meeting").

The Company's principal executive offices are located at 14 North Adger's
Wharf, Charleston, South Carolina, 29401. A copy of the Company's 1997 Annual
Report to Stockholders and this Proxy Statement and accompanying proxy card will
be first mailed to stockholders on or about April 25, 1998.

VOTING PROCEDURES

A proxy card is enclosed for your use. You are solicited on behalf of the
Board of Directors to sign, date and return the proxy card in the accompanying
envelope, which is postage prepaid if mailed in the United States.

You have three choices on each of the matters to be voted upon at the 1998
Annual Meeting:

1. Concerning the amendments to the Company's Articles of Amendment and
Restatement (the "Charter"), you may: (a) vote "For" the amendment; (b) vote
"Against" the amendment; or (c) "Abstain" from voting for the amendment. As
discussed below, if you abstain from voting on any matter it will have the
effect of a vote "Against" the amendment if a quorum is present.

2. Concerning the ratification of the Company's 1997 Stock-Based Incentive
Plan (the "Plan"), you may: (a) vote "For" the plan; (b) vote "Against" the
plan; or (c) "Abstain" from voting for the plan. As discussed below, if you
abstain from voting on the plan it will have the effect of a vote "Against" the
plan if a quorum is present.

3. Concerning the election of directors, by checking the appropriate box
on your proxy card you may: (a) vote for all of the director nominees; (b)
withhold authority to vote for all director nominees; or (c) vote for a director
nominee and withhold authority to vote for the other director nominee.

Stockholders may vote by either completing and returning the enclosed proxy
card prior to the 1998 Annual Meeting, voting in person at the 1998 Annual
Meeting, or submitting a signed proxy card at the 1998 Annual Meeting.

YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO SIGN AND RETURN THE
ACCOMPANYING PROXY CARD REGARDLESS OF HOW MANY OR FEW SHARES YOU OWN AND WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING.

You may revoke your proxy at any time before it is actually voted at the
1998 Annual Meeting by: (a) delivering written notice of your revocation to the
Secretary of the Company at 14 North Adger's Wharf, Charleston, South Carolina,
29401; (b) submitting a later dated proxy; or (c) attending the 1998 Annual
Meeting and voting in person. Attendance at the 1998 Annual Meeting will not,
by itself, constitute revocation of the proxy. You may also be represented by
another person present at the 1998 Annual Meeting by executing a form of proxy
designating such person to act on your behalf.

Each unrevoked proxy card properly signed and received prior to the close
of the 1998 Annual Meeting will be voted as indicated. Unless otherwise
specified on the proxy, the shares represented by a signed proxy card will be
voted FOR items 1, 2, 3, 4 and 5 on the proxy card and will be voted in the
discretion of the persons named as proxies on the other business that may
properly come before the 1998 Annual Meeting.

If a proxy card indicates an abstention or a broker non-vote on a
particular matter, then the shares represented by such proxy will be counted for
quorum purposes. If a quorum is present, an abstention or a broker non-vote
will have no effect on the outcome.

<PAGE>

The presence at the 1998 Annual Meeting, in person or by proxy, of a
majority of the shares of the Company's Common Stock ("Common Stock") issued and
outstanding as of April 1, 1998, will constitute a quorum.

Votes cast at the 1998 Annual Meeting will be tabulated by ChaseMellon
Shareholder Services which will act as inspectors of election for the 1998
Annual Meeting.

SHARES ENTITLED TO VOTE AND REQUIRED VOTE

Stockholders of record at the close of business on April 1, 1998 are
entitled to vote at the 1998 Annual Meeting. At that date, 7,631,694 shares of
Common Stock were outstanding. A majority of the votes cast at a meeting of
stockholders, duly called and at which a quorum is present, shall be sufficient
to take or authorize action upon any matter which may properly come before the
1998 Annual Meeting. Each share of Common Stock is entitled to one vote.

PROPOSAL 1:

APPROVAL OF CHARTER AMENDMENT REGARDING INDEMNIFICATION
OF DIRECTORS AND PAYMENT OF EXPENSES

At the Company's 1998 Annual Meeting, the Company's stockholders are being
asked to approve amendments to the Company's Charter concerning indemnification
of directors and advance payment of director's expenses incurred by a director
who is involved in a suit or action pertaining to his or her position on the
board.

Article VIII, Section 1 of the Company's Charter provides that the Company
must indemnify, to the fullest extent permitted by Maryland law, its officers
and directors against any suit or action against them in their official capacity
and that the Company must pay for all expenses and costs of defending such suit
or action. Article VIII, Section 2 of the Charter also permits the Company to
purchase and maintain liability insurance on behalf of each officer and director
to the fullest extent permitted under the Maryland General Corporation Law (the
"MGCL").

Currently, the Company's Charter expressly permits, but does not
require, the Company to pay defense costs in advance and expressly permits,
but does not require, the Company to maintain liability insurance on behalf
of the officers and directors. By not requiring the Company to purchase
liability insurance on behalf of its directors, there is a possibility that
the Company, for whatever reason, could not be able to meet its obligations
to directors if there was an adverse ruling in such a suit or action.
Moreover, if the Company is not required to advance the costs of an action or
suit against its directors, such directors would be required to advance
potentially large sums of money for litigation costs. These potential
scenarios could have a negative impact on the Company. Such consequences
could discourage directors from continuing at their posts or could make
directors more risk averse in making their board decisions. Such consequences
could also deter new highly qualified directors from accepting a position on
the board. Continuity of board service, thoughtful decision-making without
regard to personal risk, and the ability to attract new highly qualified
directors are essential elements to the Company's growth and success. For
these reasons, it is necessary to amend the Company's Charter to require the
Company to advance the costs of defending any suit or action against a
director acting in his or her capacity as such and to require the Company to
maintain liability insurance on behalf of its directors. The Company would
only be required to advance such defense costs to the fullest extent
permitted under Maryland law. Section 2-418 of the MGCL permits the Company
to advance expenses and costs if the director in question submits a written
affirmation of his or her good faith belief that the standard of conduct
necessary for indemnification has been met and an agreement by the director
to repay the amount if it is ultimately determined that such standard has not
been met.

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The Board of Directors has determined that it is in the best interests of
the Company to amend the Charter to require the Company to both advance the
costs of any action or suit against any director acting in his or her capacity
as such and to also require the Company to maintain adequate liability insurance
on behalf of its directors.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
AMENDMENT TO THE COMPANY'S CHARTER. PURSUANT TO THE CHARTER, THE AFFIRMATIVE
VOTE OF 66 2/3% OF THE OUTSTANDING SHARES OF COMMON STOCK IS REQUIRED TO APPROVE
THE PROPOSED AMENDMENT.

PROPOSAL 2:

APPROVAL OF CHARTER AMENDMENT REGARDING
STOCKHOLDER APPROVAL OF CERTAIN AMENDMENTS TO THE CHARTER

At the 1998 Annual Meeting, Company stockholders are being asked to approve
amendments (the "Supermajority Vote Provisions") to the Anti-Takeover Provisions
(as herein defined) of the Company's Charter.

The Company's Board of Directors believes that the Supermajority Vote
Provisions will be in the best interests of the Company. The Supermajority Vote
Provisions would help to ensure the continuity and stability of Golf Trust, as
well as help to minimize disruptions to Golf Trust's management, by tending to
discourage attempts to gain control of the Company or its assets through a
hostile takeover. A hostile takeover attempt could prove to be highly
disruptive to the business and operations of Golf Trust and could result in a
significant diversion of the time and resources of Golf Trust's management.

With certain limited exceptions not applicable to the Supermajority Vote
Provisions, the MGCL permits a corporation to include a provision in its Charter
requiring the vote of a larger proportion of the shares of any class or series
than is otherwise required under the MGCL to take any or all corporate actions.

EFFECTS OF SUPERMAJORITY VOTE PROVISIONS; COMPARISON WITH
PROVISIONS OF COMPANY CHARTER AND LAW

Under the Supermajority Vote Provisions, in addition to any Board and/or
stockholder approvals required under applicable law, the proposal must be
approved by the affirmative vote of at least a majority of the continuing
directors (as defined in the Company's charter). If such proposal does not
receive such vote, the Company would need approval of stockholders by the
affirmative vote of shares representing at least 80% of the combined voting
power of the Company's outstanding shares entitled to vote thereon.

The Supermajority Vote Provisions would, as permitted by the MGCL, override
various provisions of the MGCL that would otherwise prescribe the stockholder
approval required for certain corporate actions and procedures.

Under the MGCL, in order to amend the corporate charter, (i) the board
of directors proposing the amendment must adopt a board resolution that sets
forth the proposed amendment and declares it advisable, and (ii) the
amendment must be approved by the affirmative vote of 66 2/3% of all votes
entitled to be cast on the matter. The MGCL also permits the charter of a
corporation to require a greater or lesser percentage vote on any matter,
provided that the charter may not permit any matter requiring stockholder
approval to be so approved by less than a majority of the votes entitled to
be cast on the matter.

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Article XI, Section 3(a) of the Company's Charter provides that amendments
to the Charter require the affirmative vote of a majority of all votes entitled
to be cast by the Company's stockholders; provided, that amendments to the
following sections of the Charter, among with selected others, require the
approval of 66 2/3% of the votes entitled to be cast: Article VI, Section 2
(requiring a classified board); Article VI, Section 3 (procedure for removal of
directors); Article VI, Section 5 (prohibiting cumulative voting); Article VIII
(provisions regarding indemnification and limitation of liability of directors
and officers); and Article V (restricting share transfers and authorizing blank
check shares) (collectively, the "Anti-Takeover Provisions").

OTHER EFFECTS

The Supermajority Vote Provisions will have the effect of giving Golf
Trust's continuing directors a veto power over transactions that would result in
a change of control of Golf Trust or all or substantially all of its assets,
even if such transactions are desired by a majority of the voting power of the
outstanding shares entitled to vote thereon. However, 80% of the voting power
of the outstanding shares entitled to rule will override a board vote in these
circumstances. Another effect of the Supermajority Vote Provisions will be to
give the holders of shares representing a minority of Golf Trust's voting power
a veto power over a change-of-control transaction which a majority (but less
than 80%) of the shareholders may believe is desirable. These provisions may
have takeover-resistive effects. The Company also has other corporate
attributes that may have the effect of helping the Company to resist an
unfriendly acquisition. Based on their beneficial ownership of the shares as of
March 15, 1998, directors, officers and owners of 5% or more of the Company's
Common Shares, beneficially own shares representing an aggregate of 18.28% of
the combined voting power of Golf Trust's outstanding shares. This figure does
not include OP Units that may be redeemed for the Company's Common Shares. See
Security Ownership of Certain Beneficial Owners and Management.

Proposals 2 and 3 are not in response to any anticipated effort by a
minority shareholder or group of shareholders to attain representation on the
Board of Directors or acquire greater influence in the management of Golf
Trust's business. Further, they are not in response to any anticipated attempt
to acquire control of Golf Trust.

RECOMMENDATION OF THE BOARD OF DIRECTORS

PROPOSAL 3:

APPROVAL OF CHARTER AMENDMENT REGARDING
APPLICABILITY OF STOCK TRANSFER RESTRICTIONS

At the 1998 Annual Meeting, Company stockholders are being asked to approve
an amendment regarding the Stock Transferability Restriction (as herein defined)
in the Company's Charter.

The Company's Board of Directors believes that amending the Stock
Transferability Restriction will be in the best interests of the Company.
The Stock Transferability Restriction would help to ensure the continuity and
stability of Golf Trust, as well as help to minimize disruptions to Golf
Trust's management, by tending to discourage attempts to gain control of the
Company or its assets through a hostile takeover. A hostile takeover attempt
could prove to be highly disruptive to the business and operations of Golf
Trust and could result in a significant diversion of the time and resources
of Golf Trust's management. For possible detrimental effects to

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stockholders, see "Proposal 2 -- Approval of Charter Amendment Regarding
Stockholder Approval of Certain Amendments to the Charter -- Other Effects."

Article V, Section 2 of the Company's Charter provides that no person shall
own shares in excess of the ownership limit (9.8%) and that any attempt or
purported transfer that would cause any person to own shares in excess of the
ownership limit will be deemed to be held in a trust for a beneficiary to be
named by the Company (the "Stock Transferability Restriction").

Effective October 1, 1997, the State of Maryland amended the MGCL to
provide that the charter of a Maryland corporation may contain "restrictions on
transferability FOR ANY PURPOSE, including restrictions designed to permit a
corporation to qualify as . . . a real estate investment trust under the
Internal Revenue Code. . ." Section 2-105, MGCL (Emphasis added). In light of
an unwanted takeover attempt, the current language of the Company's Charter does
not fully reflect the scope or breadth of the newly amended Section 2-105.

In order to take maximum advantage of Section 2-105, the Board of Directors
has determined that it is in the best interest of the Company to amend Section
2(b) of the Company's Charter to provide expressly that each of the transfer
restrictions enumerated in Section 2(b) applies whether or not a proposed
transfer or acquisition of shares would affect the status of the Company as a
real estate investment trust.

RECOMMENDATION OF THE BOARD OF DIRECTORS

PROPOSAL 4:

RATIFICATION OF THE COMPANY'S
1997 STOCK-BASED INCENTIVE PLAN

STOCK-BASED COMPENSATION PLANS

The Company has established three stock-based incentive plans (collectively
the "Plans"): the Directors' Plan (as defined below) is for Independent
Directors and the two Stock Incentive Plans (as defined below) are for executive
officers, other key employees and consultants associated with the Company. Such
plans are described next. At the 1998 Annual Meeting, Company stockholders are
being asked to ratify the Company's 1997 Stock-Based Incentive Plan. If the
Stockholders don't ratify the 1997 Stock-Based Incentive Plan, the Board of
Directors will consider, but not be required to, terminate or amend the 1997
Stock-Based Incentive Plan.

STOCK INCENTIVE PLANS

1997 STOCK-BASED INCENTIVE PLAN. On May 19, 1997 the Compensation
Committee recommended approval and the Board of Directors adopted the Golf Trust
of America, Inc. 1997 Stock-Based Incentive Plan (the "1997 Stock-Based
Incentive Plan"). A maximum of 600,000 shares of Common Stock may be issued
under the 1997 Stock-Based Incentive Plan, which amount has been reserved for
issuance by the Board of Directors. Through the date hereof, the Compensation
Committee has awarded grants relating to 560,939 shares (such that 39,061
shares remain available for grant) under the 1997 Stock-Based Incentive Plan.

ORIGINAL INCENTIVE PLAN. On January 28, 1997, the Company's sole
stockholder approved the Board of Directors' adoption of the Golf Trust of
America 1997 Stock Incentive Plan (the "Original Incentive Plan" and,

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together with the 1997 Stock-Based Incentive Plan, the "Stock Incentive Plans").
The Original Plan relates to a maximum of 500,000 shares of Common Stock, all of
which are the subject of current option grants. If any such grant fails to vest
or is otherwise terminated, the underlying shares will again be available for
grant under the Original Incentive Plan.

Certain terms common to both Stock Incentive Plans are described below.

PURPOSE. By enabling participants to share in ownership of the Company,
the Stock Incentive Plans provide additional means with which the Company can
attract, motivate, retain and reward its officers and key employees and certain
consultants. The Stock Incentive Plans are designed to provide incentives to
officers, key employees and consultants to maximize the Company's stock price
and cash flow available for distribution. At the Compensation Committee's
discretion, awards under the Stock Incentive Plans may take the form of stock
options, stock appreciation rights ("SARs"), restricted stock awards,
performance share awards and/or stock bonuses (collectively "Awards").

ADMINISTRATION. The Stock Incentive Plans are administered by the
Compensation Committee, which is authorized to select from among the eligible
persons the individuals to whom awards are to be granted and to determine the
number of shares to be subject thereto and the terms and conditions thereof. The
Compensation Committee is authorized to adopt, amend and rescind rules relating
to the administration of the Plan. No member of the Compensation Committee is
eligible to participate in the Stock Incentive Plans.

AWARDS UNDER THE STOCK INCENTIVE PLANS. To eligible employees the Stock
Incentive Plans authorize the Compensation Committee to make the following types
of awards:

NONQUALIFIED STOCK OPTIONS, which provide for the right to purchase Common
Stock at a specified price that may be less than fair market value on the date
of grant (but not less than par value), and usually become exercisable in
installments after the grant date. Nonqualified stock options may be granted for
any reasonable term.

INCENTIVE STOCK OPTIONS, which are designed to comply with the provisions
of the Internal Revenue Code of 1986, as amended (the "Code") and will be
subject to restrictions contained in the Code, including exercise prices equal
to at least 100% of fair market value of the Common Stock on the grant date and
a 10 year restriction on their term, but may be subsequently modified to
disqualify them from treatment as incentive stock options.

RESTRICTED STOCK, which may be sold to participants at various prices (but
not below par value) and made subject to such restrictions as may be determined
by the Compensation Committee. Consideration for restricted stock may include
notes and past services. Restricted stock, typically, may be repurchased by the
Company at the original purchase price if the conditions or restrictions are not
met. In general, restricted stock may not be sold, or otherwise transferred or
hypothecated, until restrictions are removed or expire. Purchasers of
restricted stock, unlike recipients of options, will have voting rights and will
receive dividends prior to the time when the restrictions lapse.

PERFORMANCE AWARDS, which may be granted by the Compensation Committee on
an individual or group basis. Generally, these awards will be based upon
specific agreements and may be paid in cash or in Common Stock or in a
combination of cash and Common Stock. Performance awards may include "phantom"
stock awards that provide for payments based upon increases in the price of the
Company's Common Stock over a predetermined period. Performance awards may also
include bonuses which may be granted by the Compensation Committee on an
individual or group basis and which may be payable in cash or in Common Stock
or in a combination of cash and Common Stock.

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STOCK APPRECIATION RIGHTS, may be granted under the 1997 Stock-Based
Incentive Plan only and may be made in tandem with other Awards or
independently. Each SAR entitles the holder, upon exercise, to receive the
difference between the initial share value specified in the SAR Award and the
fair market value of a share of Common Stock on the date of exercise. At the
Compensation Committee's discretion, payments under SARs may be made in cash,
shares of Common Stock (valued at fair market value) or any combination thereof.

DEFERRED COMPENSATION PLAN

The Company intends to establish a deferred compensation plan under which
executive officers of the Company may elect to defer receiving a portion of
their cash compensation otherwise payable in one tax year until a later tax year
and thereby postpone payment of tax on the deferred amount. Prior to the
beginning of any taxable year, such executive officers may elect to defer
receipt of such amount of cash compensation until a future date or until an
event selected by such persons pursuant to the terms of the plan. Deferred
compensation is invested in a separate trust account.

<PAGE>

AWARDS UNDER THE STOCK INCENTIVE PLANS

Certain information regarding awards given pursuant to the Stock Incentive
Plans is listed below.

STOCK-BASED COMPENSATION PLAN BENEFITS
<TABLE>
<CAPTION>
Date of Number of
Name Grant Type of Grant Shares Exercise/Purchase Price
----- ------ ------------- ------- -----------------------
<S> <C> <C> <C> <C>
W. Bradley Blair, II 2/6/97 (1) options 150,000 $21.00

4/25/97 (1) options 90,000 $24.875

5/19/97 (2) options 160,000 $25.75

9/19/97 (2) restricted stock 30,000 $ 0.01

1/1/98 (2) restricted stock 9,507 $ 0.01

David J. Dick 2/6/97 (1) options 125,000 $21.00

4/25/97 (1) options 75,000 $24.875

5/19/97 (2) options 130,000 $25.75

9/19/97 (2) restricted stock 25,000 $ 0.01

1/1/98 (2) restricted stock 7,809 $ 0.01

Scott D. Peters 2/6/97 (1) options 40,000 $21.00

4/25/97 (1) options 20,000 $24.875

5/19/97 (2) options 80,000 $25.75

9/19/97 (2) restricted stock 15,000 $ 0.01

1/1/98 (2) restricted stock 3,623 $ 0.01

Roy C. Chapman 2/6/97 (3) options 5,000 $21.00

2/6/98 (3) options 5,000 $29.00
Raymond V. Jones 2/6/97 (3) options 5,000 $21.00

2/6/98 (3) options 5,000 $29.00

Fred W. Reams 2/6/97 (3) options 5,000 $21.00

2/6/98 (3) options 5,000 $29.00

Edward L. Wax 2/6/97 (3) options 5,000 $21.00

2/6/98 (3) options 5,000 $29.00

Other Employees 5/19/97 (2) options 50,000 $25.75

1/30/98 (2) options 50,000 $29.125
</TABLE>

- ---------------------------

(1)1997 Stock Incentive Plan
(2)1997 Stock-Based Incentive Plan
(3)1997 Non-Employee Directors' Plan

<PAGE>

SECURITIES LAWS

The 1997 Stock-Based Incentive Plan is intended to conform to the extent
necessary with all provisions of the Securities Act of 1933, as amended (the
"Securities Act") and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, including without limitation Rule
16b-3. The 1997 Stock-Based Incentive Plan will be administered, and options
will be granted and may be exercised, only in such a manner as to conform to
such laws, rules and regulations. To the extent permitted under applicable law,
the 1997 Stock-Based Incentive Plan and awards granted thereunder shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.

GENERAL FEDERAL TAX CONSEQUENCES UNDER THE 1997 STOCK-BASED INCENTIVE PLAN

Under current federal laws, in general, recipients of awards and grants of
nonqualified stock options, SAR's, restricted stock, deferred stock, dividend
equivalents, performance awards and stock payments under the 1997 Stock-Based
Incentive Plan are taxable under Section 83 of the Code upon their receipt of
Common Stock or cash with respect to such awards or grants and, subject to
Section 162(m) of the Code, the Company will be entitled to an income tax
deduction with respect to the amounts taxable to such recipients. Under
Sections 421 and 422 of the Code, recipients of incentive stock options are
generally not taxable on their receipt of common stock upon their exercise of
incentive stock options if the incentive stock options and option stock are held
for certain minimum holding periods and, in such event, the Company is not
entitled to income tax deductions with respect to such exercises. Participants
in the 1997 Stock-Based Incentive Plan have or will be provided with detailed
information regarding the tax consequences relating to the various types of
awards and grants under the plan.

In general, under Section 162(m) of the Code, income tax deductions of
publicly-held corporations may be limited to the extent total compensation
(including base salary, annual bonus, stock option exercises and
non-qualified benefits paid) for certain executive officers exceeds
$1,000,000 (less the amount of any "excess parachute payments" as defined in
Section 280G of the Code) in any one year. However, under Section 162(m),
the deduction limit does not apply to certain "performance-based
compensation" established by an independent compensation committee which is
adequately disclosed to, and approved by, stockholders. In particular, stock
options and SARs will satisfy the "performance-based compensation" exception
if the awards are made by a qualifying compensation committee, the plan sets
the maximum number of shares that can be granted to any person within a
specified period and the compensation is based solely on an increase in the
stock price after the grant date (i.e., the option exercise price is equal to
or greater than the fair market value of the stock subject to the award on
the grant date). Rights or awards granted under the 1997 Stock-Based
Incentive Plan, other than options and SARs, will not qualify as
"performance-based compensation" for purposes of Section 162(m) unless such
rights or awards are granted or vest upon preestablished objective
performance goals, the material terms of which are disclosed to and approved
by the stockholders of the Company.

The Company has attempted to structure the 1997 Stock-Based Incentive Plan
in such a manner that subject to obtaining stockholder ratification of the 1997
Stock-Based Incentive Plan, the renumeration attributable to stock options and
SARs which meet the other requirements of Section 162(m) will not be subject to
the $1,000,000 limitation.

PROPOSAL 5:

ELECTION OF DIRECTORS

The Charter of the Company provides for the Company's Board of Directors to
be divided into three classes, serving staggered terms so that director's
initial terms expire at the 1998, 1999 and 2000 Annual Meeting

9
<PAGE>

of Stockholders. The preceding notwithstanding, directors serve until their
electors have been duly elected and qualified or until they resign, become
disqualified or disabled, or are otherwise removed. The following persons
have been nominated by the Nominating Committee (as herein defined) and shall
be designated as nominees to serve on the Board until the 2001 Annual
Meeting: Mr. David J. Dick and Mr. Roy C. Chapman. If either of such
nominees should unexpectedly become unavailable for election, proxies will be
voted for the election of persons selected as nominees in their place by the
Board of Directors.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF EACH OF MESSRS. DICK AND CHAPMAN TO SERVE AS DIRECTORS OF THE
COMPANY UNTIL THE 2001 ANNUAL MEETING, AT WHICH TIME THEIR SUCCESSORS WILL BE
ELECTED AND QUALIFIED.

Certain information about Messrs. Dick and Chapman is set forth below.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
David J. Dick . . . . . . . . 38 Executive Vice President, Director

Roy C. Chapman (1)(2)(3). . . 57 Independent Director
</TABLE>

- -----------------

(1) Audit Committee Member.
(2) Compensation Committee Member.
(3) Nominating Committee Member.

Mr. Dick is Executive Vice President of the Company. From 1993 until the
Company's IPO, Mr. Dick worked with the Inland Group, Inc. as a consultant
specializing in real estate investment banking and golf course finance. From
1983 to 1992 Mr. Dick served as Vice President of Development and
Asset/Portfolio Management for Thoner & Birmingham Development Corporation, a
golf and country club community developer that is affiliated with the owner of
Northgate Country Club. While with Thoner & Birmingham Development Corporation,
Mr. Dick's responsibilities included many aspects of golf course and country
club development, finance, operations and management. Mr. Dick received a
Bachelor of Science in Business Administration from Central Missouri State
University. Mr. Dick is a Certified Commercial Investment Member.

Mr. Chapman is an Independent Director. Mr. Chapman currently is the
Chairman, Chief Executive Officer and principal stockholder of Human Capital
Resources, Inc., which was formed to assist students to finance higher
education. From 1987 until his retirement in February 1993, he was Chairman and
Chief Executive Officer of Cache, Inc., the owner and operator of a nationwide
chain of upscale women's apparel stores. He has served as the Chief Financial
and Administrative Officer of Brooks Fashion Stores and was a partner in the
international accounting and consulting firm of Coopers & Lybrand LLP. Mr.
Chapman has also served as a member of the staff of the Division of Market
Regulation of the Securities and Exchange Commission and acted as a consultant
to the Special Task Force to Overhaul the Securities Investors Protection Act.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

BOARD OF DIRECTORS. The Company is currently managed by a Board of
Directors, that is composed of seven members, a majority of which are
independent of the Company's management. The Board met four times in 1997 and
acted by unanimous consent on eight other occasions. The Compensation Committee
acted by

<PAGE>

unanimous consent three times and the Audit Committee met once during a
regular board meeting. Each of the directors with the exception of Larry D.
Young, who was absent from two meetings, either attended or participated by
speakerphone in at least 75% of the total number of meetings of the Board of
Directors and of the committees of the Company of which he was a member.

AUDIT COMMITTEE. The Board of Directors has established an audit committee
consisting of three Independent Directors (the "Audit Committee"). Mr. Jones is
currently the chairman of the Audit Committee. The Audit Committee's role is to
make recommendations concerning the engagement of independent public
accountants, review with the independent public accountants the plans and
results of the audit engagement, approve professional services provided by the
independent public accountants, review the independence of the independent
public accountants, consider the range of audit and non-audit fees and review
the adequacy of the Company's internal accounting controls.

COMPENSATION COMMITTEE. The Board of Directors has established a
compensation committee (the "Compensation Committee") to determine compensation,
including awards under the Company's Stock Incentive Plans, for the Company's
executive officers. The Compensation Committee consists of three Independent
Directors. The current chairman is Mr. Chapman. The Compensation Committee
report is set forth below.

NOMINATING COMMITTEE. The Board of Directors has established a nominating
committee (the "Nominating Committee") to determine the nominees for the
Company's Board of Directors. The Nominating Committee consists of three
directors, Mr. Chapman, Mr. Reams and Mr. Blair, who serves as the chairman.

The Company may from time to time form other committees as circumstances
warrant. Such committees will have authority and responsibility as delegated by
the Board of Directors.

COMPENSATION OF DIRECTORS

The Company pays its Independent Directors fees for their services as
directors. Directors receive annual compensation of $10,000 plus a fee of
$1,000 for attendance at each meeting of the Board of Directors (whether in
person or telephonically) and $500 for attending committee meetings. Directors
who are not Independent Directors are not paid any director fees. The Company
reimburses directors for their reasonable and documented out-of-pocket travel
expenses.

DIRECTORS' PLAN

On January 28, 1997 the Company's sole stockholder approved the Board of
Directors' adoption of the Golf Trust of America 1997 Non-Employee Directors'
Plan (the "Directors' Plan").

SHARE AUTHORIZATION. A maximum of 100,000 shares of Common Stock may be
issued under the Directors' Plan except that the share limitation and terms of
outstanding awards may be adjusted, as the Compensation Committee deems
appropriate, in the event of a stock dividend, stock split, combination,
reclassification, recapitalization or other similar event.

ELIGIBILITY. The Directors' Plan provides for the grant of options to
purchase Common Stock to each eligible director of the Company. No director who
is an employee of the Company or an owner who contributes a golf course to the
Company and receives OP Units is eligible to participate in the Directors' Plan.

OPTIONS. Pursuant to the Directors' Plan each director was awarded
nonqualified options to purchase 5,000 shares of Common Stock in connection
with the Company's IPO. Such initial grants are exercisable at the IPO price of
$21.00 per share. Each subsequently elected eligible director will receive
nonqualified options to purchase 5,000 shares of Common Stock on the date such
director is first elected or appointed to the Board of

<PAGE>

Directors. The Directors' Plan also provides for an automatic annual grant to
each eligible Director of options to purchase 5,000 shares of Common Stock,
beginning in 1998. The exercise price of all options grants under the
Directors' Plan is 100% of the fair market value of the Common Stock on the
date of grant. All awards under the Directors' Plan vest immediately upon
grant. The exercise price may be paid in cash, cash equivalents, Common Stock
or a combination thereof acceptable to the Compensation Committee. Options
granted under the Directors' Plan are exercisable for 10 years from the date
of grant.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES RELATING TO OPTIONS. Generally, an
eligible director does not recognize any taxable income, and the Company is not
entitled to a deduction,upon the grant of an option. Upon the exercise of an
option the eligible director recognizes ordinary income equal to the excess of
the fair market value of the shares acquired over the option exercise price, if
any. Special rules may apply as a result of Section 16 of the Exchange Act. The
Company is generally entitled to a deduction equal to the compensation taxable
to the eligible director as ordinary income. Eligible directors may be subject
to backup withholding requirements for federal income tax.

AMENDMENT AND TERMINATION. The Directors' Plan provides that the Board may
amend or terminate the Directors' Plan, but the terms relating to the amount,
price and timing of awards may not be amended more than once every six months
other than to comport with changes in the Code, or the rules and regulations
thereunder. An amendment will not become effective without stockholder approval
if the amendment materially (i) increases the number of shares that may be
issued under the Directors' Plan, (ii) changes the eligibility requirements or
(iii) increases the benefits that may be provided under the Directors' Plan. No
options may be granted under the Directors' Plan after December 31, 2006.

DIRECTORS AND OFFICERS INSURANCE

The Company maintains directors and officers liability insurance. Directors
and officers liability insurance insures (i) the officers and directors of the
Company from any claim arising out of an alleged wrongful act by such persons
while acting as directors and officers of the Company, and (ii) the Company to
the extent that it has indemnified the directors and officers for such loss.

INDEMNIFICATION

The Charter provides that the Company shall indemnify its officers and
directors against certain liabilities to the fullest extent permitted under
applicable law. The Charter also provides that the directors and officers of the
Company be exculpated from monetary damages to the fullest extent permitted
under applicable law.

OTHER MATTERS AT THE MEETING

The Board of Directors does not know of any matters to be presented at the
1998 Annual Meeting other than those mentioned in this Proxy Statement. If any
other matters are properly brought before the 1998 Annual Meeting, it is
intended that the proxies will be voted in accordance with the best judgment of
the person or persons voting such proxies.

DIRECTORS AND OFFICERS

The Company's Board of Directors consists of seven (7) members. The
directors include W. Bradley Blair II, Chairman, Chief Executive Officer and
President, David J. Dick, Executive Vice President and Larry D. Young, founder
of Legends Golf. The remaining directors are independent directors who are not
employees of the Company (the "Independent Directors"). Subject to severance
compensation rights pursuant to any employment agreements, officers of the
Company serve at the pleasure of the Board of Directors.

<PAGE>

Set forth below is information with respect to the Company's directors and
executive officers.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
W. Bradley Blair, II (1) . 54 Chairman of the Board of Directors,
Chief Executive Officer and President

David J. Dick . . . . . . . 38 Executive Vice President, Director

Scott D. Peters . . . . . . 40 Senior Vice President and Chief
Financial Officer

Larry D. Young . . . . . . 56 Director

Roy C. Chapman (1)(2)(3) . 57 Independent Director

Raymond V. Jones (2) . . . 50 Independent Director

Fred W. Reams (1)(3) . . . 55 Independent Director

Edward L. Wax (2)(3) . . . 61 Independent Director
</TABLE>

- ------------------------

(1) Nominating Committee Member.
(2) Audit Committee Member.
(3) Compensation Committee Member.

Mr. Blair is the Chairman of the Board of Directors, Chief Executive
Officer and President of the Company. From 1993 until the Company's IPO, Mr.
Blair served as Executive Vice President, Chief Operating Officer and General
Counsel for Legends Golf. As an officer of Legends Group Ltd., Mr. Blair was
responsible for all aspects of operations, including acquisitions, development
and marketing. From 1978 to 1993, Mr. Blair was the managing partner at Blair,
Conaway Bograd & Martin, P.A., a law firm, specializing in real estate, finance,
taxation and acquisitions. Mr. Blair received a Bachelor of Science Degree in
Business from Indiana University and a Juris Doctorate from the University of
North Carolina at Chapel Hill Law School.

Mr. Peters is Senior Vice President and Chief Financial Officer of the
Company. From 1992 through 1996, Mr. Peters served as Senior Vice President and
Chief Financial Officer of the Pacific Holding Company in Los Angeles, where he
participated in the management of a 4,000 acre real estate portfolio consisting
of residential, commercial and country club properties focusing on
master-planned golf communities. From 1988 to 1992, Mr. Peters served as Senior
Vice President and Chief Financial Officer of Castle & Cooke Homes, Inc; and
during 1990 and 1991 lectured on Real Estate Finance and Asset Management at
California State University at Bakersfield. Mr. Peters is a certified public
accountant and worked with Arthur Andersen & Co. and Laventhol & Horwath from
1981 to 1985. From 1986 to 1988, Mr. Peters worked with a general partnership
that managed the construction of the Scottsdale Princess Resort. He received a
Bachelor of Arts degree in Accounting and Finance with honors from Kent State
University and a Masters Degree in Taxation from the University of Akron, Ohio.

Mr. Young is a director of the Company and is the founder of Legends Golf.
Mr. Young has been involved in the golf business for 25 years, and for 21 of
those years in Myrtle Beach. In 1975 he moved to Myrtle Beach, South Carolina,
where he started what became Legends Golf, a leading golf course owner,
developer and operator in the southeast and Mid-Atlantic regions of the United
States. Mr. Young has developed 10 courses during that time, four of which were
rated the best new course in their respective category in the year developed by
GOLF DIGEST. Mr. Young has served in numerous capacities in golf industry
related non-profit organizations.

Mr. Jones is an Independent Director. From 1984 until March 1998, Mr. Jones
was the Executive Vice President of Summit Properties Inc. Summit Properties
Inc. is a publicly-traded REIT listed on the New York Stock Exchange and is one
of the largest developers and operators of luxury garden multifamily apartment

<PAGE>

communities in the southeastern United States. While at Summit Properties Inc.,
Mr. Jones oversaw the development of 26 communities comprising nearly 6,500
apartment homes in Georgia, North Carolina, South Carolina and Ohio. Prior to
1984, Mr. Jones served as General Operations Manager for both the Charlotte and
Houston divisions of Ryan Homes, Inc. Mr. Jones earned a B.A. in Political
Science from George Washington University.

Mr. Reams is an Independent Director. Since 1981 Mr. Reams has served as
the President of Reams Asset Management Company, LLC ("Reams Management"), an
independent private investment firm, which he co-founded. Reams Management
employs a staff of 20 persons and manages approximately $2.5 billion in assets.
In addition, Mr. Reams has served as President of the Board of Directors of the
Otter Creek Golf Course since 1981. Otter Creek, located in Indiana and rated in
the top 25 public courses by GOLF DIGEST in 1990, recently expanded to 27 holes
and has hosted several noteworthy tournaments including multiple U.S. Open and
U.S. Senior Open Qualifiers and four American Junior Golf Association
Championships.

Mr. Wax is an Independent Director. Mr. Wax is currently Chairman Emeritus
of Saatchi & Saatchi ("Saatchi") Advertising Worldwide. From 1992 until when he
was recently appointed to his current position, Mr. Wax served as Chairman and
Chief Executive Officer of Saatchi. There, Mr. Wax has been responsible for the
operations of 143 offices, in 87 countries. Mr. Wax has been employed by Saatchi
since 1982. Mr. Wax was formerly Chairman of The American Association of
Advertising Agencies as well as a director of both the Ad Council and the
Advertising Educational Foundation. Mr. Wax serves on the Board of Directors of
Dollar Thrifty Automotive Group. Mr. Wax holds an M.B.A. from the Wharton
Graduate School of Business and an undergraduate degree from Northeastern
University.

EXECUTIVE COMPENSATION

The Company has three executive officers. Prior to the IPO, the Company did
not pay any compensation to its executive officers. The following tables set
forth 1997 compensation (on an annualized basis) and certain information
regarding stock option and restricted stock grants made through the date hereof
to the Company's executive officers.

SUMMARY COMPENSATION TABLE, 1997
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------------
AWARDS
-----------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
----------------------- STOCK UNDERLYING
AWARDS OPTIONS
NAME PRINCIPAL POSITION SALARY (1) BONUS (2) (3) GRANTED
---- ---------------------- ---------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
W. Bradley Blair, II . . Chief Executive $250,000 $280,133 $785,325 400,000(4)
Officer

David J. Dick . . . . . . Executive Vice $150,000 $156,903 $654,437 330,000(5)
President

Scott D. Peters . . . . . Chief Financial $138,500(6) $117,271 $392,663 140,000(7)
Officer
</TABLE>

14
<PAGE>

(1) Amounts given are annualized for the year ending December 31, 1997. No
salary was paid prior to completion of the Company's IPO on February 12,
1997.

(2) Listed bonuses consist of amounts paid in lieu of first and second quarter
dividends on then-pending restricted stock grants prior to the date of
issuance of such restricted stock, as well as performance related bonuses,
earned in 1997 but paid in 1998. The named executives' employment
agreements also allow the Compensation Committee to award bonuses upon the
executives' achievement of performance-related criteria. Not included in
these amounts are car allowances paid to Messrs. Blair, Dick and Peters of
$7,500, $6,000 and $4,500, respectively.

(3) On September 19, 1997, pursuant to the 1997 Stock-Based Incentive Plan,
Messrs. Blair, Dick and Peters were sold 30,000, 25,000 and 15,000 shares
of restricted stock, respectively, for the shares' par value. Beginning in
1998, such grants will vest in four equal annual installments on the
anniversary of the date of grant. Vesting generally is contingent upon
each named executive's continued employment with the Company but is subject
to acceleration upon termination without cause, changes of control and
certain other events defined in such executive's employment agreement and
in the award. The amounts shown are the fair market value of the entire
award (regardless of vesting) on the date of grant (based on the closing
price of $26.1875), less the purchase price paid by each named executive.
Under the 1997 Stock-Based Incentive Plan, dividends are payable on all
restricted stock awards prior to vesting.

(4) Mr. Blair was granted: (a) on February 6, 1997, options to purchase 150,000
shares at $21.00 per share; (b) on April 25, 1997, options to purchase
90,000 shares at $24.875 per share; and (c) on May 19, 1997, options to
purchase 160,000 shares at $25.75 per shares. All such grants vest in
three equal annual installments beginning one year from the date of grant,
subject to provisions in Mr. Blair's employment agreement providing for
accelerated vesting upon changes of control, termination without "good
reason" and certain other events.

(5) Mr. Dick was granted: (a) on February 6, 1997, options to purchase 125,000
shares at $21.00 per share; (b) on April 25, 1997, options to purchase
75,000 shares at $24.875 per share; and (c) on May 19, 1997, options to
purchase 130,000 shares at $25.75 per shares. All such grants vest in
three equal annual installments beginning one year from the date of grant,
subject to provisions in Mr. Dick's employment agreement providing for
accelerated vesting upon changes of control, termination without "good
reason" and certain other events.

(6) Effective on July 1, 1997, Scott D. Peters' salary was increased from
$125,000 per year to $150,000 per year. Mr. Peters' employment with the
Company began on February 12, 1997, the closing date of the IPO. Prior to
such date, Mr. Peters was paid a consulting fee totalling $12,000 by
Legends Golf, which amount was subsequently reimbursed to Legends Golf by
the Company.

(7) Mr. Peters was granted: (a) on February 6, 1997, options to purchase 40,000
shares at $21.00 per share; (b) on April 25, 1997, options to purchase
20,000 shares at $24.875 per share; and (c) on May 19, 1997, options to
purchase 80,000 shares at $25.75 per shares. All such grants vest in three
equal annual installments beginning one year from the date of grant,
subject to provisions in Mr. Peters' employment agreement providing for
accelerated vesting upon changes of control, termination without "good
reason" and certain other events.

<PAGE>

OPTION GRANTS IN 1997
<TABLE>
<CAPTION>

Individual Grants Potential Realizable
----------------- Value at Assumed
Annual Rates of Stock
Percent of Price Appreciation for
Total Option Term
Number of Options -------------
Shares Under- Granted to Exercise
lying Options Employees Price per Expiration
Name Date of Grant Granted in 1997 Share Date 5% 10%
----- -------------- -------- -------- ------ ----- --- ----
<S> <C> <C> <C> <C> <C> <C> <C>
W. Bradley 2/6/97 (1) 150,000 16.3% $21.00 2/5/2007 $1,822,343 $4,533,999
Blair, II
4/25/97 (1) 90,000 9.8% $24.875 4/24/2007 $1,332,204 $3,334,749

5/19/97 (2) 160,000 17.4% $25.75 5/18/2007 $2,472,789 $6,201,463

David J. Dick 2/6/97 (1) 125,000 13.6% $21.00 2/5/2007 $1,518,620 $3,778,333

4/25/97 (1) 75,000 8.2% $24.875 4/24/2007 $1,110,170 $2,778,957

5/19/97 (2) 130,000 14.1% $25.75 5/18/2007 $2,009,141 $5,038,689

Scott D. Peters 2/6/97 (1) 40,000 4.3% $21.00 2/5/2007 $ 485,958 $1,209,066

4/25/97 (1) 20,000 2.2% $24.875 4/24/2007 $ 296,045 $ 741,055

5/19/97 (2) 80,000 8.7% $25.75 5/18/2007 $1,236,394 $3,100,731
</TABLE>
- --------------------------------

(1) Grant awarded pursuant to 1997 Stock Incentive Plan.
(2) Grant awarded pursuant to 1997 Stock-Based Incentive Plan.

OPTION EXERCISES AND VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-money Options
Options at December 31, 1997 (1)
at December 31, 1997 ------------------------
--------------------
Shares Value
Acquired on Received
Name Exercise to date Exercisable Unexercisable Exercisable Unexercisable
---- to date ------- ----------- ------------- ----------- -------------
-------
<S> <C> <C> <C> <C> <C> <C>
W. Bradley --- --- --- 400,000 --- $2,091,250
Blair, II

David J. Dick --- --- --- 330,000 --- $1,731,875

Scott D. --- --- --- 140,000 --- $ 662,500
Peters
</TABLE>

(1) The closing price on the AMEX of the class of common stock underlying
all options was $29.00 on the given date.

<PAGE>

EMPLOYMENT AGREEMENTS

The Company has entered into written employment agreements with W. Bradley
Blair, II, David J. Dick and Scott D. Peters. The employment agreement with Mr.
Blair has a term of four years, commencing February 7, 1997, the employment
agreement with Mr. Dick has a term of three years, commencing February 7, 1997,
and the employment agreement with Mr. Peters has a term of two years commencing
February 12, 1997. The employment agreements provide for an annual salary of
$250,000, $150,000 and $150,000 for Messrs. Blair, Dick and Peters,
respectively, with annual performance bonuses determined by the Compensation
Committee in connection with the achievement of performance criteria to be
determined by the Compensation Committee. In addition, each of Messrs. Blair,
Dick and Peters have received options to purchase shares of Common Stock as
described above under the heading "Executive Compensation." Each of Messrs.
Blair, Dick and Peters, or their estates, would receive severance payments and
their stock-based compensation immediately would vest in full upon the death,
disability, termination or resignation of such executive, unless such executive
resigns without "good cause" or unless the Company terminates such executive
with "good reason," i.e., as a result of gross negligence, willful misconduct,
fraud or a material breach of the employment agreement. Each such executive will
have "good cause" to terminate his employment with the Company in the event of
any material reduction in his compensation or benefits, material breach or
material default by the Company under his employment agreement or following a
change in control of the Company. The severance payments of Messrs. Blair and
Dick would be equal to base compensation plus bonus at the most recent annual
amount for the longer of the balance of the employment term or two years. The
severance payments of Mr. Peters would be equal to base compensation for a
period which varies from four months to one year depending upon the time and
cause of termination.

The Compensation Committee may establish additional incentive compensation
arrangements for its executive officers and certain key employees.

COVENANTS NOT TO COMPETE

In their employment agreements, Messrs. Blair, Dick and Peters have agreed
to devote substantially all of their time to the business of the Company and not
to engage in any competitive business. They have agreed further not to compete
directly with the Company in a business similar to that of the Company for a
period of one year following any termination of employment. Mr. Blair may
continue to invest with Mr. Young and his affiliates in certain residential real
estate developments and resort operations.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

RESPONSIBILITIES OF THE COMPANY'S COMPENSATION COMMITTEE. The Company's
Executive Compensation Program is administered under the direction of the
Compensation Committee of the Board of Directors of the Company, which is
composed of three of the four Independent Directors. The specific
responsibilities of the Compensation Committee are to:

1. Administer the Company's Executive Compensation Program;

2. Review and approve compensation awarded to the Company's executive
officers pursuant to the Executive Compensation Program;

3. Monitor the performance of the Company in comparison to performance by
executive officers in conjunction with executive officer compensation;
and

4. Monitor compensation awarded to executive officers of the Company in
comparison to compensation received by executive officers of the
Company's Compensation Committee Peer Group (as herein defined).

<PAGE>

Compensation determinations pursuant to the Executive Compensation
Program are in substantial part generally made at or shortly after the end of
the fiscal year. At the end of the fiscal year, incentive cash bonuses are
calculated pursuant to the funds from operations ("FFO") growth criteria
which was contained in the respective Golf Trust of America, Inc. Incentive
Compensation Plan approved by the Compensation Committee. Payment of a cash
bonus is subject to confirmation of the Company's financial performance,
which occurs immediately after the end of the fiscal year. Also at the end
of the fiscal year, base salaries and grants of long-term equity based
compensation under the applicable Stock-Based Incentive Plan are set for the
following fiscal year.

In fulfilling its responsibilities, the Compensation Committee takes into
account recommendations from management as well as the specific factors
enumerated herein for specific elements of compensation. The Compensation
Committee periodically reviews comparative compensation data which includes data
on the Compensation Committee Peer Group as well as data from other companies
with attributes comparable to the Company.

THE PHILOSOPHY OF THE COMPENSATION COMMITTEE. The philosophy of the
Compensation Committee as reflected in the specific compensation plans included
in the Executive Compensation Program is to:

1. Attract, retain and reward experienced, highly motivated executive
officers who are capable of effectively leading and continuing the
growth of the Company;

2. Place more emphasis on short and long-term incentive compensation
which is dependent upon both Company and individual performance rather
than base salary;

3. Reward and encourage executive officer activity that results in
enhanced value for stockholders; and

4. Link both short and long-term incentive compensation as much as
possible to the achievement of specific individual and Company goals.

ELEMENTS OF COMPENSATION. It is the belief of the Compensation Committee
that the above philosophy can best be implemented through three separate
components of executive compensation with each component designed to reward
different performance goals, yet with all three components working together to
satisfy the ultimate goal of enhancing stockholder value. The three elements of
executive compensation are:

1. Salary, which compensates the executive for performing the basic job
description through the performance of routine designated tasks;

2. Cash bonus, which rewards the executive for commendable performance of
special designated tasks or outstanding performance of routine
designated tasks during the fiscal year; and

3. Stock options and/or stock grants, which provide long-term rewards to
the executive in a manner directly related to the enhancement of
stockholder value through an appreciated stock price.

In administering each element of compensation, the Compensation Committee
considers the integration of that element not only with the other two elements
of compensation, but also with additional benefits available to the executive
such as the 1997 Employee Stock Purchase Plan, insurance benefits provided by
the Company and the 401(k) Profit Sharing Plan and Trust sponsored by the
Company.

<PAGE>

BASE SALARY. Base salaries for executive officers are set based on the
following factors:

1. Comparison to executive officer base salaries for the Compensation
Committee Peer Group to the extent such data is available;

2. Individual performance of the routine designated tasks assigned;

3. Overall experience of the executive officer; and

4. Historical relationship with the Company.

As a result of the Compensation Committee's philosophy of focusing the
compensation of the Company's executive officers on performance-based rewards,
the base salaries of the executive officers may be lower than the Compensation
Committee Peer Group.

Base salary increases for executive officers are considered annually by the
Compensation Committee. The granting of salary increases is dependent upon:

1. The executive's performance in the following areas:

a. Accomplishing the routine designated tasks of the position;

b. Promoting Company values;

c. Development and training of subordinated Company employees;

d. Leadership and team abilities; and

e. The satisfaction of the respective executive officer's roles
and responsibilites.

2. Increased or revised job responsibilities.

3. Comparison to the Compensation Committee Peer Group.

4. The executive's prior year base salary and non-performance
factors limiting such amount.

Based upon the above criteria, Mr. Blair, Mr. Dick and Mr. Peters were
awarded an increase in their 1997 respective base salaries.

CASH BONUSES. The Company's 1997 Incentive Compensation Plan rewards
Company executives with annual cash bonuses based on favorable performance of
both the Company and the individual executive. This plan was formulated to
foster a team performance among the executive officers in accomplishing goals
for growth in FFO per share of Common Stock ("Per Share FFO") while at the
same time aligning executive annual cash incentive goals with stockholder
goals through the translation of Per Share FFO growth into an appreciated
share price. In 1997, 100% of Mr. Blair's cash bonus was dependent upon Per
Share FFO growth over the prior fiscal year. In 1997, Mr. Peter's cash bonus
was dependent in large part on Per Share FFO growth over the prior fiscal
year and a minority portion of his cash bonus was dependent upon commendable
performance of specially assigned tasks and outstanding performance of
acquisition goals. The majority of Mr. Dick's cash bonus for 1997 was
dependent on the attainment of certain acquisition goals. The remainder of
Mr. Dick's cash bonus was dependent upon commendable performance of specially
assigned tasks and outstanding performance of routine duties.

<PAGE>

Management has informed the Compensation Committee that to further promote
the Company's philosophy of performance-based compensation for 1997, certain
non-executive senior level officers also have cash bonus elements of
compensation, wherein the cash bonus is equally dependent on per share
FFO growth over the prior fiscal year and commendable performance of routine
duties.

STOCK OPTIONS AND STOCK GRANTS. The Compensation Committee believes that
awards of stock options or stock grants provide long-term incentive compensation
to executive officers that is aligned most directly with the achievement of
enhancing value for stockholders through an appreciating stock price. As such,
the Compensation Committee believes that awards of stock options or stock grants
should be made to executive officers in meaningful amounts on a regular basis.

The number of stock options or stock grants awarded to an executive officer
is based on the following criteria:

1. Overall responsibility of the executive officer;

2. Overall ability to contribute to an increase in FFO;

3. Level of base salary component of compensation; and

4. Level of incentive cash bonus.

The Compensation Committee considers the awards of stock options or
restricted stock grants on a current basis only. The existing stockholdings of
an individual executive are not taken into consideration when awarding stock
options or restricted stock grants.

DEFINITION OF FUNDS FROM OPERATIONS (FFO). As noted above, certain
elements of executive compensation are based on achieving specific goals in Per
Share FFO growth. FFO is defined as income or loss before minority interest of
unitholders of the Operating Partnership, extraordinary items and non-recurring
formation expenses and certain non-cash items, primarily depreciation. Industry
analysts consider FFO to be an appropriate measure of the performance of an
equity REIT.

COMPENSATION COMMITTEE PEER GROUP The Compensation Committee compares both
the individual components as well as total compensation of executive officers to
compensation practices in the comparative market by periodically reviewing data
on the Compensation Committee Peer Group provided by management or outside
consultants. The Compensation Committee Peer Group is primarily a sampling of
REITs with similar characteristics to the Company as well as some similar sized
companies from other industries. Utilization of this comparative data provides
assurance to both executive officers and the Company's stockholders that
executive officers are being compensated adequately yet reasonably in the
context of the overall market. While comparative market data is valuable in
providing assurance of reasonable compensation for executive officers, the
Company's stated policy of emphasizing performance-based compensation may
result in base salaries for executive officers being below the comparative norm.

A portion of the REITs that comprise the Compensation Committee Peer Group
as defined above, are also included in the National Association of Real Estate
Investment Trust ("NAREIT") equity index that is the basis for the Company
Performance Graph contained elsewhere in this Proxy statement, however, not all
of those REITs are included in the Compensation Committee Peer Group. The
Compensation Committee believes that the equity REITs that comprise the
Compensation Committee Peer Group are the best comparisons for the Company and
its Executive Compensation Program.

<PAGE>

THE FOREGOING REPORT SHOULD NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY
GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY
FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT OF
1934, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS
INFORMATION BY REFERENCE AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH
ACTS.

STOCK PERFORMANCE GRAPH

[Stock Performance Graph]

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL STOCKHOLDERS OF THE COMPANY AND PRINCIPAL PARTNERS IN THE OPERATING
PARTNERSHIP

The following table sets forth certain information regarding the beneficial
ownership of Common Stock and OP Units by each director, by each named executive
officer of the Company, by all directors and officers of the Company as a group
and by each person known to the Company to be the beneficial owner of 5% or more
of the outstanding Common Stock as of March 15, 1998. Each person named in the
table has voting and investment power with respect to all of the shares of
Common Stock or OP Units shown as beneficially owned by such person, except as
otherwise set forth in the notes to the table.

<PAGE>

<TABLE>
<CAPTION>
PERCENTAGE OF SHARES PERCENTAGE INTEREST
NUMBER OF SHARES OF COMMON STOCK NUMBER OF IN OPERATING
NAME OF BENEFICIAL OWNER OF COMMON STOCK OUTSTANDING OP UNITS (1) PARTNERSHIP
------------------------ --------------- ------------------ -------------- -----------------
<S> <C> <C> <C> <C>
W. Bradley Blair, II . . . . . . . 50,007 (2) * 12,500 (3) *

David J. Dick . . . . . . . . . . . 35,109 (4) * 12,500 *

Scott D. Peters . . . . . . . . . . 18,623 (5) * --- ---

Larry D. Young (6) . . . . . . . . --- --- 3,738,556 29.38%

Roy C. Chapman . . . . . . . . . . 10,500 (7) * --- ---

Raymond V. Jones . . . . . . . . . 11,000 (7) * --- ---

Fred W. Reams . . . . . . . . . . 35,000 (7) * --- ---

Edward L. Wax . . . . . . . . . . 11,250 (7) * --- ---

Directors and officers as a
group (8 persons) . . . . . . . . . 171,489 2.25% 3,763,556 29.57%

Equitable Companies, Inc. (8) . . 824,600 (9) 10.8% --- ---

Wall Street Associates (10) . . . . 435,400 (11) 5.71% --- ---
</TABLE>

- ------------

* Less than 1%.

- ------------

(1) The Operating Partnership has 12,726,313 OP Units outstanding as of March
15, 1998. The OP Units (other than those owned by the Company) may be redeemed
as follows: 50% after the first anniversary of the completion of the IPO and 50%
after the second anniversary of the completion of the IPO. Subject to certain
limitations including restrictions on owning more than 9.8% of the outstanding
shares of Common Stock.

(2) Includes the 39,507 shares of restricted stock sold by the Company to Mr.
Blair, all of which remain subject to vesting conditions. Does not include
133,333 options to purchase shares of the Company's common stock that have
vested or will vest by May 20, 1998.

(3) Does not include 598,187 OP Units held by Legends of Virginia, LC, a prior
owner which contributed two of the Initial Courses to the Company. Mr. Blair is
the trustee of, and has no equity interest in, a trust that is the managing
member of Legends of Virginia, LC by virtue of its 52% voting interest therein.
Mr. Blair disclaims any beneficial interest in such OP Units.

(4) Includes the 33,709 shares of restricted stock sold by the Company to Mr.
Dick, all of which remain subject to vesting conditions. Does not include
109,999 options to purchase shares of the Company's common stock that have
vested or will vest by May 20, 1998.

22
(FOOTNOTES ON FOLLOWING PAGE)

<PAGE>

(5) Includes the 18,623 shares of restricted stock sold by the Company to Mr.
Peters, all of which remain subject to vesting conditions. Does not include
46,607 options to purchase shares of the Company's common stock that have vested
or will vest by May 20, 1998.

(6) Mr. Young's address is c/o Legends Golf, 1500 Legends Drive, Myrtle Beach,
South Carolina 29577. Includes 598,187 OP Units held by Legends of Virginia, LC
which are beneficially owned by the children and grandchildren of Mr. Young.
Mr. Young disclaims any beneficial ownership in such OP Units.

(7) Includes 10,000 options to purchase shares of the Company's common stock
which have not been exercised.

(8) Equitable Companies, Inc.,is located at 787 Seventh Avenue, New York, New
York 10019..

(9) According to the Amendment to Schedule 13(G) filed with the SEC, Equitable
has sole voting power over 177,500 Shares, shared voting power over 647,100
Shares and sole dispositive power over 824,600 Shares.

(10) Wall Street Associates is located at 1200 Prospect Street, Suite 100, La
Jolla, CA 92037.

(11) According to Schedule 13(G) filed with the SEC, Wall Street Associates has
voting power over 272,000 Shares and sole dispositive power over 435,400 shares.

CERTAIN RELATIONSHIPS AND TRANSACTIONS

RELATIONSHIPS AMONG OFFICERS AND DIRECTORS

Larry Young, a director of the Company, is the majority owner of Legends
Golf (which contributed seven of the Golf Courses to the Company) and the
Legends Lessees (which lease the same seven Golf Courses from the Company).
Until the IPO, Mr. Blair, who is Chairman of the Board, was the Executive Vice
President and Chief Operating Officer of Legends Group Ltd., the parent company
of Legends Golf. Upon completion of the IPO, Mr. Blair resigned from Legends
Group Ltd. and currently has no affiliation or interest in the golf operations
of Legends Golf. Mr. Blair is an inactive shareholder in Blair Conaway Bograd &
Martin, P.A., a law firm engaged on a limited basis to provide real estate,
corporate and labor law services to the Company.

ACQUISITION OF INTERESTS IN CERTAIN OF THE GOLF COURSES

Mr. Young and his affiliates received 3,738,556 OP Units in exchange for
their interests in certain of the Golf Courses. Upon exercise of their right to
redeem such OP Units (one-half of which are currently exercisable and the
balance of which are not exercisable until February 1999), such persons and
entities may receive an aggregate of 3,738,556 shares of Common Stock or, at the
Company's option, cash.

ACQUISITION OF WILDEWOOD GOLF CLUB AND COUNTRY CLUB AT WOODCREEK FARMS

The Company purchased Wildewood Golf Club and the Country Club at Woodcreek
Farms from Stonehenge Golf Development, LLC, of which Lyndell L. Young is the
President. Lyndell L. Young is the brother of Larry D. Young, a director the
Company.

<PAGE>

SANDPIPER TRANSACTION

Concurrent with the acquisition of Sandpiper Golf Course, the Company
formed a taxable subsidiary, Sandpiper GTA Development, Inc. (the "Taxable
Subsidiary") to hold title to a 14-acre development site adjacent to the
Sandpiper Golf Course. This structure is designed to legally separate the
development and sale activities on such site from the operations of the Company
and allows for certain transactions and activities to be undertaken on such
property while preserving the REIT status of the Company. These activities
involve primarily holding property for sale in the ordinary course and possible
development of the site while permitting 95% or more of the economic benefit of
the site to accrue to the Company in the form of interest and dividends. The
Operating Partnership contributed $360,000 in exchange for all of the non-voting
common stock of the Taxable Subsidiary, and also made a loan to the Taxable
Subsidiary in the amount of $2.7 million, which accrues interest at 9.0% per
annum. The Operating Partnership also contributed $1.35 million for the Series
A Preferred Stock which provides for a preferred, cumulative return of 8.5%, has
a liquidation preference equal to the original capital contribution, and
provides for certain participation rights in the sales proceeds of the property
owned by the Taxable Subsidiary. Mr. Blair and Mr. Young contributed $22,500
each to the Taxable Subsidiary in exchange for all of the voting common stock of
the Taxable Subsidiary and signed a promissory note agreeing to contribute an
additional $22,500 each to the Taxable Subsidiary, which permits Mr. Blair and
Mr. Young, subject to the senior rights of the Operating Partnership as holder
of the $2.7 million promissory note and holder of the preferred stock, to
participate in a portion of the net sales proceeds of the property of the
Taxable Subsidiary.

LOANS TO OFFICERS

On September 19, 1997, the Company issued 70,000 restricted common shares
to officers of the Company under the 1997 Stock-Based Incentive Plan. These
shares were issued for $.01 when the market price was $26.1875. On January 2,
1998 loans, of approximately $525,000 were made to W. Bradley Blair, II and
David J. Dick, for the partial payment of related taxes. Mr. Blair borrowed
$286,000 at 6.02% interest per annum and Mr. Dick borrowed $239,000 at 6.02% per
annum. In addition, the Company has agreed to fund up to approximately $937,000
over the next five years to pay additional taxes related to the issuance of such
shares. Such loans are secured by OP Units and/or shares of Common Stock and
are payable in full by December 31, 2002 with interest payable annually.

REPAYMENT OF INDEBTEDNESS

The Company repaid approximately $26.3 million of indebtedness guaranteed
by Mr. Young. The Company also paid to Mr. Young's affiliates approximately $8.4
million in repayment of a loan made to Legends Golf in connection with the
development of the two recently-opened Golf Courses.

Additionally, the Company reimbursed Legends Golf $522,500 and Mr. Dick
$62,000 for direct out-of-pocket expenses incurred in connection with the
Formation Transactions.

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with W. Bradley
Blair, II, David J. Dick and Scott D. Peters, pursuant to which Mr. Blair
serves as Chairman of the Board, Chief Executive Officer and President, Mr.
Dick serves as Executive Vice President and Mr. Peters serves as Senior Vice
President and Chief Financial Officer of the Company for a term of four
years, three years and two years, respectively, at an initial annual base
compensation of $250,000, $150,000 and $150,000, respectively, subject to any
increases in base compensation approved by the Compensation Committee. Upon
termination of the employments other than for cause, Messrs. Blair, Dick and
Peters will be entitled to receive severance benefits and the immediate
vesting of all stock-based compensation.

<PAGE>

OPTION TO PURCHASE AND RIGHT OF FIRST REFUSAL

Legends Golf currently owns a golf course that is not being contributed to
the Company because it is subject to a ground lease with a short remaining term,
and may acquire or develop additional golf courses in the future. The Company
has an option and right of first refusal to acquire all such golf courses,
pursuant to an Option to Purchase and Right of First Refusal Agreement (the
"Option Agreement"). Commencing four years after the public opening of a golf
course developed by Legends Golf, or 24 months after the acquisition of an
established operating golf course, the Company may purchase the applicable golf
course under the Option Agreement for a purchase price based on the net
operating income of the golf course, subject to adjustments agreed upon by the
parties, divided by a capitalization rate equal to the Company's cost of equity
capital plus 200 basis points. For purposes of this calculation, the Company's
cost of equity capital is deemed to equal the Company's Funds From Operations
yield for the then current fiscal year as published by First Call, less reserves
for capital expenditures. In the event Legends Golf receives a bona fide third
party offer to acquire a developed golf course, the option will not be effective
pending the acquisition by the third party, in which case the Company shall have
the right to purchase the developed golf course pursuant to the right of first
refusal described below. The Company anticipates that any such developed golf
course will have achieved stabilized operating revenues before the Company would
consider purchasing such developed golf course from Legends Golf or any
affiliate of Legends Golf.

If the Company does not elect to exercise its option to acquire a golf
course owned, acquired or developed by Legends Golf, or if the parties are
unable to agree on the adjustments to net operating income for purposes of the
pricing formula, then the Company has a right of first refusal under the Option
Agreement with respect to such golf course. The right of first refusal will
obligate Legends Golf to offer the Company the right to buy any such golf course
on the same terms and conditions as Legends Golf intends to offer to any third
party. If the Company does not exercise its right to acquire such golf course,
Legends Golf will be free to sell to a third party, provided if Legends Golf
either opts not to sell the golf course within nine months or reduces the
purchase price by 5% or more, Legends Golf must again offer the golf course to
the Company. The Option Agreement shall generally run for a period of 10 years
after the IPO.

CHANGES IN THE COMPANY'S CERTIFYING PUBLIC ACCOUNTANT

Effective February 28, 1997, the Company engaged BDO Seidman, LLP as
principal accountants. BDO Seidman, LLP audited the Company's financial
statements for the period ending December 31, 1997. A representative from BDO
Seidman, LLP will be present at the 1998 Annual Meeting and will be given an
opportunity to make a statement and to answer appropriate questions.

The Company was formed on November 8, 1996. Price Waterhouse LLP were
engaged as the Company's original independent accountants. On February 26,
1997, the Company dismissed Price Waterhouse LLP as independent accountants.
The decision to change accountants was approved by the Audit Committee and
ratified by the Board of Directors of the Company.

The Company's balance sheet as of November 8, 1996 was audited by Price
Waterhouse LLP. The balance sheet and the report of Price Waterhouse LLP thereon
were included in the Company's Form S-11 which was declared effective by the
Securities and Exchange Commission on February 6, 1997. In connection with
Price Waterhouse LLP's audit of the November 8, 1996 balance sheet and through
February 26, 1997, there were no disagreements between the Company and Price
Waterhouse LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of Price Waterhouse LLP would have caused them to
make reference thereto in their report on the November 8, 1996 balance sheet and
there were no reportable events (as defined in Regulation S-K Item
304(a)(1)(v)).

The report of Price Waterhouse LLP on the Registrant's November 8, 1996
balance sheet did not contain an adverse opinion or a disclaimer of opinion and
the report was not qualified or modified as to uncertainty, audit scope or
accounting principles.

<PAGE>

COST OF SOLICITATION

The expense of soliciting proxies and the cost of preparing, assembling and
mailing material in connection with the solicitation of proxies will be paid by
the Company. In addition to the use of mails, certain directors, officers or
employees of the Company and its subsidiaries, who receive no compensation for
their services other than their regular salaries, may solicit personally or by
telephone and tabulate the proxies. The Company will also request persons,
firms and corporations holding shares in their names or in the names of their
nominees, which are beneficially owed by others, to send proxy materials to and
obtain proxies from such beneficial owners. The Company will reimburse such
holders for their reasonable expenses.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and the National
Association of Securities Dealers. Officers, directors and stockholders owning
greater that 10% of the Common Stock of the Company are required by SEC
regulations to furnish the Company with copies of all reports filed pursuant to
Section 16(a).

Based solely on review of copies of such reports required by Section 16(a)
or written representations that no such reports were required, the Company
believes that during 1997, all of its officers and directors, and stockholders
owning greater that 10% of the Common Stock of the Company complied with all
applicable Section 16(a) filing requirements.

STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING

Any stockholder who meets the requirements of the proxy rules under the
Exchange Act may submit to the Board of Directors proposals to be considered for
submission to the stockholders at the 1999 Annual Meeting of Stockholders. Any
such proposal must comply with the requirements of Rule 14a-8 under the Exchange
Act and may be submitted in writing by notice delivered or mailed by first-class
United States mail, postage prepaid, to the Secretary, Golf Trust of America, 14
North Adger's Wharf, Charleston, South Carolina, 29401. Any such notice shall
set forth:

(a) the name and address of the stockholder and the text to be introduced;

(b) the number of shares of stock held of record, owned beneficially and
represented by proxy by such stockholder as of the date of the notice; and

(c) a representation that the stockholder intends to appear in person or by
proxy at the meeting to introduce the proposal specified in the notice.

Such notice must be received by December 31, 1998. The chairman of the
meeting may refuse to acknowledge the introduction of any stockholder proposal
not made in compliance with the foregoing procedures.

By Order of the Board of Directors
/s/ David J. Dick
Executive Vice President and Secretary
GOLF TRUST OF AMERICA, INC.

<PAGE>

Proxy for 1998 Annual Meeting of Stockholders

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder of Golf Trust of America, Inc., a Maryland
corporation, hereby acknowledges receipt of the Notice of 1998 Annual Meeting of
Stockholders and Proxy Statement and hereby appoints W. Bradley Blair, II and
David J. Dick as proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of the Common Stock of Golf Trust of America, Inc. held of record by the
undersigned on April 1, 1998 at the 1998 Annual Meeting of Stockholders to be
held May 18, 1998 or any adjournment or postponement thereof.

This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR Proposals 1, 2, 3, 4 and 5 and in accordance with the
recommendations of the Board of Directors on any other matters that may properly
come before the meeting.

[Continued and to be signed on the reverse side]

- ----------------------------------------------------------------------------

FOLD AND DETACH HERE

1. To approve the amendment to the Company's Charter regarding indemnification
of directors and advance payment of expenses:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

2. To approve the amendment to the Company's Charter regarding Supermajority
Provisions for certain amendments to the Charter:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. To approve the amendment to the Company's Charter regarding applicability
of stock transfer restrictions:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

<PAGE>

4. To approve the Company's 1997 Stock-Based Incentive Plan:

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

5. To elect the following directors to serve for a term of three years:

WITHHOLD
FOR AUTHORITY TO VOTE

David J. Dick [ ] [ ]

Roy C. Chapman [ ] [ ]

6. In their discretion, the proxies are authorized to vote upon matters not
known to the Board of Directors as of the date of the accompanying proxy
statement, approval of minutes of the prior annual meeting, matters incident to
the conduct of the meeting and to vote for any nominee of the Board whose
nomination results from the inability of any of the above named nominees to
serve.

In addition, the proxies are authorized, in their discretion, to vote upon
such other matters as may properly come before the Annual Meeting. The Board of
Directors recommends a vote FOR the nominees listed above and FOR Proposals 1,
2, 3 and 4. This proxy, when properly executed, will be voted as specified
above. THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED ABOVE AND FOR PROPOSALS
1, 2, 3 AND 4 IF NO SPECIFICATION IS MADE

PLEASE RETURN YOUR EXECUTED PROXY TO
CHASEMELLON SHAREHOLDER SERVICES
IN THE ENCLOSED SELF-ADDRESSED, POSTAGE PRE-PAID ENVELOPE

Signature(s) Dated: , 1998
---------------------------------- -----------
Print name(s)
----------------------------------
(Print name(s) as it/they appear on certificates)
Please print name(s) appearing on each share certificate(s) over which you have
voting authority.

I plan to attend the 1998 Annual Meeting of Stockholders. [ ]