<PAGE>
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:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(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):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / 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.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
GOLF TRUST OF AMERICA, INC.
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") of Golf Trust of America, Inc. (the "Company") will be held at
the Mills House Hotel, 115 Meeting Street, Charleston, South Carolina, on May 3,
1999 at 9:30 a.m. for the following purposes:
1. to ratify the 1998 Stock-Based Incentive Plan;
2. to elect two directors to the Board of Directors of the Company; and
3. to transact such other business as may properly be brought before the
1999 Annual Meeting or any
adjournments or postponements thereof.
The close of business on April 1, 1999 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 holders of record of the
Company's sole class of Common Stock 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. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE YOUR
SHARES OF COMMON STOCK IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY CARD.
YOUR VOTE IS IMPORTANT.
By Order of the Board of Directors,
/s/ David Dick Joseph
-------------------------------------
David Dick Joseph
Secretary
Charleston, South Carolina
April 1, 1999
<PAGE>
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
3, 1999 (the "1999 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 1998 Annual
Report to Stockholders, this Proxy Statement and accompanying proxy card will be
first mailed to stockholders on or about April 1, 1999. The 1998 Annual Report
to Stockholders, however, is not part of the proxy solicitation material. The
Company will provide a copy of the Company's Annual Report on Form 10-K, as
filed with the Securities and Exchange Commission, without charge to any
shareholder who so requests in writing to Golf Trust of America, Inc., 14 North
Adger's Wharf, Charleston, SC 29401, Attention: Investor Relations.
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 1999
Annual Meeting:
1. Concerning the ratification of the Company's 1998 Stock-Based Incentive
Plan (the "Plan"), you may: (a) vote "For" the plan; (b) vote "Against"
the plan; or (c) "Abstain" from voting on 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.
2. Concerning the election of directors, you may: (a) vote for all of the
director nominees; (b) withhold authority to vote for all director
nominees; or (c) vote for one director nominee and withhold authority to
vote for the other director nominee.
Stockholders may vote by completing and returning the enclosed proxy card
prior to the 1999 Annual Meeting, by voting in person at the 1999 Annual Meeting
or by submitting a signed proxy card at the 1999 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
1999 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 1999 Annual
Meeting and voting in person. Attendance at the 1999 Annual Meeting will not,
by itself, constitute revocation of the proxy. You may also be represented by
another person present at the 1999 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 1999 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 proposal 1 and FOR each director nominee named in proposal 2 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 1999 Annual Meeting.
The presence at the 1999 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, 1999, will constitute a quorum. A quorum is
necessary for the transaction of business at the 1999 Annual Meeting. The
Company will treat abstentions as shares that are present and entitled to vote
for purposes of determining the presence of a quorum, but as not voting for
purposes of determining the approval of any matter submitted to the stockholders
for a vote. If a broker indicates on the enclosed proxy or its substitute that
it does not have discretionary voting authority as to certain shares to vote on
a particular matter ("broker non-votes"), those shares will be treated as
abstentions with respect to that matter.
Votes cast at the 1999 Annual Meeting will be tabulated by the persons
appointed by the Company to act as inspectors of election for the 1999 Annual
Meeting.
2
<PAGE>
SHARES ENTITLED TO VOTE AND REQUIRED VOTE
Holders of record of the Company's sole class of Common Stock at the close
of business on April 1, 1999 are entitled to vote at the 1999 Annual Meeting.
On March 10, 1999, 7,680,956 shares of Common Stock were outstanding. The
presence in person or by proxy of stockholders entitled to cast a majority of
all the votes entitled to be cast at the meeting constitutes a quorum. A
majority of the votes cast at a meeting of stockholders, duly called and at
which a quorum is present, is sufficient to take or authorize action upon any
matter which may properly come before the 1999 Annual Meeting. A plurality of
all the votes cast at a meeting at which a quorum is present is sufficient to
elect a director. Each share of Common Stock is entitled to one vote.
PROPOSAL 1:
RATIFICATION OF THE COMPANY'S 1998 STOCK-BASED INCENTIVE PLAN
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE TO APPROVE THE
1998 STOCK-BASED INCENTIVE PLAN.
The Company has established the 1998 Stock-Based Incentive Plan (as defined
below) for its executive officers and other key employees associated with the
Company. At the 1999 Annual Meeting, Company stockholders are being asked to
ratify the Company's 1998 Stock-Based Incentive Plan. If the Stockholders do
not ratify the 1998 Stock-Based Incentive Plan, the Board of Directors will
consider, but not be required to, terminate or amend the 1998 Stock-Based
Incentive Plan.
On November 11, 1998, the Compensation Committee recommended approval and
the Board of Directors adopted the Golf Trust of America, Inc. 1998 Stock-Based
Incentive Plan (the "1998 Stock-Based Incentive Plan"). A maximum of 500,000
shares of Common Stock may be issued under the 1998 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
350,000 options and 44,000 restricted stock grants (such that 106,000 shares
remain available for grant) under the 1998 Stock-Based Incentive Plan. The 1998
Stock-Based Incentive Plan will be filed as an exhibit to the Company's Annual
Report in Form 10-K for the year ended December 31, 1998 and appears as Appendix
A in the copy of this Proxy Statement filed with the SEC.
Certain terms of the 1998 Stock-Based Incentive Plan are described below.
PURPOSE. By enabling participants to share in ownership of the Company,
the 1998 Stock-Based Incentive Plan provides additional means with which the
Company can attract, motivate, retain and reward its officers and key employees.
The 1998 Stock-Based Incentive Plan is designed to provide incentives to
officers and key employees to maximize the Company's stock price and cash flow
available for distribution. The Company has three officers and other key
employees who will be eligible participants. At the Compensation Committee's
discretion, awards under the Stock-Based Incentive Plans may take the form of
stock options, stock appreciation rights, restricted stock awards, performance
share awards and/or stock bonuses (collectively "Awards").
ADMINISTRATION. The 1998 Stock-Based Incentive Plan is 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 1998 Stock-Based Incentive Plan.
3
<PAGE>
AWARDS UNDER THE 1998 STOCK-BASED INCENTIVE PLAN. The 1998 Stock-Based
Incentive Plan authorizes the Compensation Committee to make the following types
of awards to eligible employees:
- NON-QUALIFIED 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. Non-qualified
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.
- STOCK APPRECIATION RIGHTS ("SARS"), may be granted under the 1998
Stock-Based Incentive Plan 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.
- AMENDMENT OF THE 1998 STOCK-BASED INCENTIVE PLAN. The Board may, at
any time, terminate or, from time to time, amend, modify or suspend the
1998 Stock-Based Incentive Plan, in whole or in part. No Awards may be
granted during any suspension of this Plan or after termination of this
Plan, but the Compensation Committee shall retain jurisdiction as to
awards then outstanding. Any amendment that would (i) materially
increase the benefits accruing to participants under the 1998
Stock-Based Incentive Plan, (ii) materially increase the aggregate
number of securities that may be issued under the 1998 Stock-Based
Incentive Plan, or (iii) materially modify the requirements as to
eligibility for participation in the 1998 Stock-Based Incentive Plan,
shall be subject to shareholder approval only to the extent then
required by Section 425 of the Code or applicable law, or deemed
necessary or advisable by the Board. Without limiting any other
express authority of the Compensation Committee under but subject to
the express limits of the 1998 Stock-Based Incentive Plan, the
Compensation Committee by agreement or resolution may waive conditions
of or limitations on awards to participants that the Compensation
Committee in the prior exercise of its discretion has imposed, without
the consent of a participant, and may make other changes to the terms
and conditions of awards that do not affect in any manner materially
adverse to the participant, his or her rights and benefits under an
award. No amendment, suspension or termination of the 1998 Stock-Based
Incentive Plan or change of or affecting any outstanding award shall,
without written consent of the participant, affect in any manner
materially adverse to the participant any rights or benefits of the
participant or obligations of the Company under any award granted prior
to the effective date of such change.
4
<PAGE>
- SECURITIES ACT REGISTRATION. The Company intends to register the
securities subject to the 1998 Stock-Based Incentive Plan on Form S-8
under the Securities Act, as amended, shortly after stockholder
ratification.
BENEFITS UNDER THE 1998 STOCK-BASED INCENTIVE PLAN
Certain information regarding awards given pursuant to the 1998 Stock-Based
Incentive Plan is listed below.
- - -------------------------------------------------------------------------------
1998 STOCK-BASED INCENTIVE PLAN BENEFITS (1)
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF SHARES/ EXERCISE PRICE/ CURRENT DOLLAR
NAME AND POSITION DATE OF GRANT TYPE OF GRANT STOCK OPTIONS PURCHASE PRICE VALUE (2)
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
W. Bradley Blair, II 11/11/98 options 155,000 $25.063 ---
CEO and President 3/10/99 restricted stock 20,000 $ .01 $455,000
David Dick Joseph Executive 11/11/98 options 110,000 $25.063 ---
Vice President 3/10/99 restricted stock 10,000 $ .01 $227,500
Scott D. Peters 11/11/98 options 85,000 $25.063 ---
Chief Financial Officer 3/10/99 restricted stock 14,000 $ .01 $318,500
All Current Executive 11/11/98 options 350,000 $25.063 ---
Officers (as a group) 3/10/99 restricted stock 44,000 $ .01 $1,001,000
- - -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This table reports grants to date under the 1998 Stock-Based Incentive
Plan. The amounts and recipients of future grants, if any, are
indeterminable.
(2) Calculated as the excess, if any, of the closing market price of the Common
Stock on March 10, 1999 of $22.75 over the exercise price or purchase price
as the case may be, multiplied by the number of shares underlying the
grant.
5
<PAGE>
SECURITIES LAWS
The 1998 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 1998 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 1998 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 1998 STOCK-BASED INCENTIVE PLAN
Under current federal laws, in general, recipients of awards and grants of
non-qualified stock options, SAR's, restricted stock, deferred stock, dividend
equivalents, performance awards and stock payments under the 1998 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 1998 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 that the otherwise
allowable tax deductions attributable to 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 a compensation committee
comprised solely of two or more outside directors of the corporation if the
material terms of the compensation arrangement are adequately disclosed to, and
approved by, stockholders. Stock options and SARs granted under the 1998
Stock-Based Incentive Plan will satisfy the "performance-based compensation"
exception if the awards are made by a qualifying compensation committee, the
material terms of the plan are disclosed to, and approved by, the Company's
stockholders, 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 1998
Stock-Based Incentive Plan, other than stock options and SARs, will not qualify
as "performance-based compensation" for purposes of Section 162(m) unless such
rights or awards meet certain requirements designed to ensure that the right or
awards are granted or vest upon preestablished objective performance goals
established by a qualifying compensation committee, the material terms of which
are disclosed to and approved by the stockholders of the Company, and the
compensation committee certifies that the performance goals were in fact
satisfied.
The Company has attempted to structure the 1998 Stock-Based Incentive Plan
in such a manner that, subject to obtaining stockholder ratification of the 1998
Stock-Based Incentive Plan, the tax deductions attributable to stock options and
SARs granted under the plan which meet the other requirements of Section 162(m)
will not be subject to the $1,000,000 limitation.
6
<PAGE>
PROPOSAL 2:
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 the current
directors' terms expire at the 1999, 2000 and 2001 Annual Meetings of
Stockholders. The preceding notwithstanding, directors serve until their
successors have been duly elected and qualified or until they resign, become
disqualified or disabled, or are otherwise removed. The following persons shall
be designated as nominees to serve on the Board until the 2002 Annual Meeting:
Mr. W. Bradley Blair, II and Mr. Raymond V. Jones. 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 MESSRS. BLAIR AND JONES TO SERVE AS DIRECTORS OF THE COMPANY UNTIL
THE 2002 ANNUAL MEETING, AT WHICH TIME THEIR SUCCESSORS WILL BE ELECTED AND
QUALIFIED.
Certain information about Messrs. Blair and Jones is set forth below.
<TABLE>
<CAPTION>
Name Age Position
- - ---- --- --------
<S> <C> <C>
W. Bradley Blair, II (1).................. 55 Chief Executive Officer,
President, Chairman of the Board
Raymond V. Jones (2)...................... 51 Independent Director
- - -------------------------------------------------------------------------------
</TABLE>
(1) Nominating Committee Member.
(2) Audit 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 The Legends Group Ltd. 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. Jones is an Independent Director. From 1984 to 1994 he was
Managing Partner of Summit Properties Limited Partnership before such entity
went public in 1994. From 1994 until retiring in March 1998, Mr. Jones was
the Executive Vice President of Summit Properties Inc. ("Summit"). Summit is
a publicly-traded REIT listed on the New York Stock Exchange and is one of
the largest developers and operators of luxury garden multi-family apartment
communities in the Southeastern United States. While at Summit, 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.
7
<PAGE>
OTHER MATTERS AT THE MEETING
The Board of Directors does not know of any matters to be presented
at the 1999 Annual Meeting other than those mentioned in this Proxy
Statement. If any other matters are properly brought before the 1999 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.
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 1998 and
acted by unanimous consent on seven other occasions. The Compensation Committee
acted by unanimous consent three times and the Audit Committee met once during a
regular board meeting. Each of the directors 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 accounts, 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 within this document.
NOMINATING COMMITTEE. The Board of Directors has established a
nominating committee (the "Nominating Committee") to nominate individuals for
elections to the Board of Directors. The Nominating Committee consists of
two Independent Directors and Mr. Blair. The current chairman is Mr. Blair.
The Nominating Committee will consider nominees recommended by security
holders. (A shareholder wishing to recommend a nominee should contact the
Secretary of the Company; David Dick Joseph at (843) 723-4653.)
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. As described below, the Independent Directors receive automatic
annual grants of options to purchase 5,000 shares of Common Stock at the stock's
fair market value on the date of grant.
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.
8
<PAGE>
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. Consequently, only the Independent Directors are eligible to
participate.
OPTIONS. Pursuant to the Directors' Plan each eligible director was
awarded non-qualified options to purchase 5,000 shares of Common Stock in
connection with the Company's Initial Public Offering ("IPO"). Such initial
grants are exercisable at the IPO price of $21.00 per share. Each subsequently
elected eligible director will receive non-qualified options to purchase 5,000
shares of Common Stock on the date such director is first elected or appointed
to the Board of 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 on the anniversary of the IPO, beginning in 1998. Accordingly,
each director was awarded non-qualified options to purchase 5,000 options at
$29.00 per share on February 7, 1998 and non-qualified options to purchase 5,000
shares at $24.50 per share on February 6, 1999. 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 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 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.
9
<PAGE>
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 of the Company, David Dick Joseph, Executive Vice President and
Secretary of the Company and Larry D. Young, founder of The Legends Group and
contributor of seven of the Company's ten original golf courses. 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.
Set forth below is information with respect to the Company's
directors and executive officers.
<TABLE>
<CAPTION>
Year Elected Current Board
Name Age Position to Board Term Expiration
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
W. Bradley Blair, II (3)........... 55 Chairman of the Board of Directors, Chief 1997 1999
Executive Officer and President
David Dick Joseph.................. 39 Director, Executive Vice President, and 1997 2001
Secretary
Scott D. Peters.................... 41 Senior Vice President and Chief Financial N/A N/A
Officer
Larry D. Young..................... 57 Director 1997 2000
Roy C. Chapman (1)(2)(3)........... 58 Independent Director 1997 2001
Raymond V. Jones (1)............... 51 Independent Director 1997 1999
Fred W. Reams (2)(3)............... 56 Independent Director 1997 2000
Edward L. Wax (1)(2)............... 62 Independent Director 1997 2000
- - -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Audit Committee Member.
(2) Compensation Committee Member.
(3) Nominating 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 The Legends Group. 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. Joseph is Executive Vice President of the Company. From 1993
until the Company's IPO, Mr. Joseph worked with the Inland Group, Inc. as a
consultant specializing in real estate investment banking and golf course
finance. From 1983 to 1992 Mr. Joseph 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 prior owner of Northgate Country Club, one of the Company's golf
courses. While with Thoner & Birmingham Development Corporation, Mr.
Joseph's responsibilities included many aspects of golf course and country
club development, finance, operations and management. Mr. Joseph received a
Bachelor of Science in Business Administration from Central Missouri State
University. Mr. Joseph is a Certified Commercial Investment Member. In last
year's annual report and proxy statement, Mr. Joseph was referred to as David
J. Dick, which was his legal name prior to March 10, 1998.
10
<PAGE>
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 became 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 The
Legends Group. Mr. Young has been involved in the golf business for 35
years, and for 25 of those years in Myrtle Beach, South Carolina. In 1975 he
moved to Myrtle Beach, where he started what became The Legends Group, 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, nine of which have received national recognition,
including four courses which were rated the best new course in their
respective category in the year developed by GOLF DIGEST magazine. Mr. Young
has served in numerous capacities in golf industry related non-profit
organizations.
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.
Mr. Jones is an Independent Director. From 1984 to 1994 he was
Managing Partner of Summit Properties Limited Partnership before such entity
went public in 1994. From 1994 until retiring in March 1998, Mr. Jones was
the Executive Vice President of Summit Properties Inc. ("Summit"). Summit 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
communities in the Southeastern United States. While at Summit, 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 $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,
four American Junior Golf Association Championships, The National Pub Linx
Championship and over 20 state amateur championships.
Mr. Wax is an Independent Director. Mr. Wax is currently Chairman
Emeritus of Saatchi & Saatchi, a worldwide advertising and ideas company.
From 1992 until his appointment to his current position in 1997, Mr. Wax
served as Chairman and Chief Executive Officer of Saatchi & Saatchi. Mr. Wax
has been responsible at Saatchi for the operations of 143 offices, in 87
countries. Mr. Wax has been employed by Saatchi & 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 also serves on the Board of Directors of Dollar Thrifty
Automotive Group. Mr. Wax holds a M.B.A. degree from the Wharton Graduate
School of Business and an undergraduate degree from Northeastern University.
11
<PAGE>
EXECUTIVE COMPENSATION
The Company has three executive officers. Prior to its IPO in
February, 1997, the Company did not pay any compensation to its executive
officers. The following tables set forth 1997 and 1998 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.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- - ------------------------------------------------------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
- - ------------------------------------------------------------------------------------------------------------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING
AWARDS OPTIONS
NAME PRINCIPAL POSITION YEAR SALARY (1) BONUS (2) (3) GRANTED
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
W. Bradley Blair, II Chief Executive Officer and 1998 $ 300,000 $328,929 $275,703 155,000 (4)
President 1997 $ 250,000 $280,133 $785,325 400,000 (4)
David Dick Joseph Executive Vice President 1998 $ 190,000 $173,014 $226,461 110,000 (5)
1997 $ 150,000 $156,903 $654,437 330,000 (5)
Scott D. Peters (6) Chief Financial Officer 1998 $ 160,000 $173,014 $105,067 85,000 (7)
1997 $ 138,500 $117,271 $392,663 140,000 (7)
- - ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amounts given for 1997 are annualized totals for the amounts paid from the
Company's IPO on February 12, 1997 through December 31, 1997. No salary
was paid prior to completion of the Company's IPO on February 12, 1997.
(2) Listed bonuses for 1997 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. Similarly, listed bonuses in 1998
include performance related bonuses earned in 1998 but paid in 1999. Not
included in these amounts are car allowances paid to Messrs. Blair, Joseph
and Peters of $7,500, $6,000 and $4,500, respectively for 1997 and
$12,000, $9,600, and $7,200 respectively for 1998.
(3) On September 19, 1997, pursuant to the 1997 Stock-Based Incentive Plan,
Messrs. Blair, Joseph and Peters were sold 30,000, 25,000 and 15,000
shares of restricted stock, respectively, for the shares' par value when
the stock price was $26.1875. On January 1, 1998, Messrs. Blair, Joseph
and Peters were sold 9,507, 7,809 and 3,623 shares of restricted stock,
respectively, for the shares' par value when the stock price was $29.00.
Such grants vest in four equal annual installments on the anniversary of
the date of grant. On March 10, 1999, pursuant to the 1998 Stock-Based
Incentive Plan, Messrs. Blair, Joseph and Peters were awarded 20,000,
10,000 and 14,000 shares of restricted stock, respectively for the shares'
par value when the stock price was $22.75. Such shares will be issued upon
American Stock Exchange listing approval and will vest in 5 equal annual
installments on the anniversary of the date of grant. Vesting of all
restricted stock grants 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
Compensation Committee accelerated the 1999 vesting of 2,865, 2,388 and
1,433 shares, which were granted September 19, 1997 to January 4, 1999 for
Messrs. Blair, Joseph and Peters, respectively. 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 on the date of grant), less the
purchase price paid by each named executive. Under the applicable option
plan, dividends are payable on all restricted stock awards prior to
vesting.
12
<PAGE>
(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. On November 11, 1998 Mr. Blair was
granted options to purchase 155,000 shares at $25.063 per share. This
grant vests in five equal annual installments beginning one year from the
date of grant, subject to the same acceleration provisions mentioned above.
(5) Mr. Joseph 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. Joseph's employment agreement providing
for accelerated vesting upon changes of control, termination without "good
reason" and certain other events. On November 11, 1998, Mr. Joseph was
granted options to purchase 110,000 shares at $25.063 per share. This
grant vests in five equal annual installments beginning one year from the
date of grant, subject to the same acceleration provisions mentioned above.
(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 totaling $12,000 by The
Legends Group, which amount was subsequently reimbursed to The Legends
Group 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. On November 11, 1998 Mr. Peters was
granted options to purchase 85,000 shares at $25.063 per share. This grant
vests in five equal annual installments beginning one year from the date of
grant, subject to the same acceleration in provisions mentioned above.
- - -------------------------------------------------------------------------------
OPTION GRANTS IN 1998
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
PERCENTAGE
OF TOTAL POTENTIAL REALIZABLE
NUMBER OF OPTIONS VALUE AT ASSUMED
SHARES UNDER- GRANTED TO EXERCISE ANNUAL RATES OF STOCK
LYING OPTIONS EMPLOYEES PRICE PER EXPIRATION PRICE APPRECIATION FOR
NAME DATE OF GRANT GRANTED (1) IN 1998 SHARE DATE OPTION TERM
- - ----------------------------------------------------------------------------------------------------------------------------------
5% 10%
-------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
W. Bradley Blair, II 11/11/98 155,000 36% $25.063 11/11/2008 $2,443,108 $6,191,315
David Dick Joseph 11/11/98 110,000 26% $25.063 11/11/2008 $1,733,818 $4,393,836
Scott D. Peters 11/11/98 85,000 20% $25.063 11/11/2008 $1,339,769 $3,395,237
- - ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Grant awarded pursuant to 1998 Stock-Based Incentive Plan.
13
<PAGE>
- - -------------------------------------------------------------------------------
OPTION EXERCISES IN 1998 AND YEAR-END OPTION VALUES
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON OPTIONS AT OPTIONS AT
NAME EXERCISE VALUE RECEIVED DECEMBER 31, 1998 DECEMBER 31, 1998 (1)
- - -----------------------------------------------------------------------------------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
W. Bradley Blair, II --- --- 133,333 421,667 $530,417 $1,477,318
David Dick Joseph --- --- 110,000 330,000 $439,792 $1,175,153
Scott D. Peters --- --- 46,667 178,333 $162,500 $ 553,395
- - -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The closing price on the AMEX of the class of Common Stock underlying all
options was $27.75 on the given date.
EMPLOYMENT AGREEMENTS
The Company has entered into written employment agreements with W.
Bradley Blair, II, David Dick Joseph 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. Joseph 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, which has been
automatically extended for one year. The employment agreements originally
provided for an annual salary of $250,000, $150,000 and $150,000 for Messrs.
Blair, Joseph 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, Joseph and Peters have received options to
purchase shares of Common Stock as described above under the heading
"Executive Compensation". Each of Messrs. Blair, Joseph and Peters, or their
estates, would receive severance payments and their stock-based compensation
immediately would vest in full upon the death, disability, termination of
such executive's employment or resignation of such executive, unless such
executive resigns without "good cause" or unless the Company terminates such
executive's employment 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, Joseph and Peters 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 Compensation Committee may establish additional incentive
compensation arrangements for the Company's executive officers and certain
key employees.
COVENANTS NOT TO COMPETE
In their employment agreements, Messrs. Blair, Joseph 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. However, Mr.
Blair may continue to invest with Mr. Young and his affiliates in certain
residential real estate developments and resort operations.
14
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
THE FOLLOWING 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.
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 Independent Directors. The specific responsibilities of
the Compensation Committee are to:
Administer the Company's executive compensation program;
1. Review and approve compensation awarded to the Company's executive
officers pursuant to the executive compensation program;
2. Monitor the performance of the Company in comparison to performance by
executive officers in conjunction with executive officer compensation;
and
3. 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 defined below.
Compensation determinations pursuant to the executive compensation
program are 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 is contained in
the respective Golf Trust of America, Inc. incentive compensation plan
approved by the Compensation Committee prior to or at the beginning of the
fiscal year. Payment of a cash bonus is subject to audited confirmation of
the Company's financial performance, which occurs immediately after the end
of the 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.
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 on 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.
15
<PAGE>
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 have all three components work
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 assigned
responsibilities;
2. Cash bonus, which rewards the executive for commendable
performance of special designated tasks or outstanding
performance of assigned responsibilities 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.
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 retirement savings plan sponsored by
the Company.
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; and
3. Overall experience of the executive officer.
Messrs. Blair, Joseph and Peters were awarded an increase in their
1998 respective base salaries as set forth in the above Summary Compensation
Table.
CASH BONUSES. The 1998 Incentive Compensation Plan was approved
by the Compensation Committee establishing, among other things, the specific
per share FFO growth criteria and requisite financial returns on acquisitions
upon which executive officers' cash bonuses were dependent. This plan was
formulated to foster a team performance among the executive officers in
accomplishing various corporate goals, among which, growth in FFO per share
of Common Stock was given prime consideration. The cash bonuses set forth
above reflect the Compensation Committee's determination of the contribution
of the respective executive officers to the achievement of the Company's
goals for 1998.
Management has informed the Compensation Committee that to further
promote the Company's philosophy of performance-based compensation for 1998,
certain non-executive employees should also have cash bonus elements of
compensation.
16
<PAGE>
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. 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. When granting stock, it is the intention of the Compensation
Committee to utilize restricted stock grants subject to a three to five year
vesting period other than in instances where stock is granted in lieu of cash
compensation, in which case the Compensation Committee may award unrestricted
stock which is not subject to vesting.
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 the growth of the Company; and
3. Level of base salary component of compensation.
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 unit holders 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.
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.
By: The Compensation Committee composed of:
Roy C. Chapman
Fred W. Reams
Edward L. Wax
17
<PAGE>
STOCK PERFORMANCE CHART
The following graph information reflects the Company's stock price since
inception in February 1997:
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------
GOLF TRUST OF
PERIOD AMERICA, INC. S&P 500 INDEX NAREIT INDEX
- - ----------------------------------------------------------------------------------
PRICE INDEX PRICE INDEX PRICE INDEX
- - ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FEB-97 24.25 100.00 444.72 100.00 106.82 100.00
- - ----------------------------------------------------------------------------------
MAR-97 24.38 100.52 426.18 95.83 105.48 98.75
- - ----------------------------------------------------------------------------------
APR-97 25.50 105.15 452.03 101.64 102.42 95.88
- - ----------------------------------------------------------------------------------
MAY-97 27.25 112.37 479.70 107.86 105.03 98.33
- - ----------------------------------------------------------------------------------
JUN-97 27.81 114.69 500.77 112.60 109.67 102.67
- - ----------------------------------------------------------------------------------
JUL-97 28.25 116.49 541.00 121.65 112.31 105.14
- - ----------------------------------------------------------------------------------
AUG-97 27.50 113.40 511.24 114.96 111.44 104.32
- - ----------------------------------------------------------------------------------
SEP-97 27.00 111.34 538.81 121.16 120.16 112.48
- - ----------------------------------------------------------------------------------
OCT-97 26.06 107.48 521.12 117.18 116.36 108.93
- - ----------------------------------------------------------------------------------
NOV-97 27.00 111.34 545.21 122.60 117.66 110.15
- - ----------------------------------------------------------------------------------
DEC-97 29.00 119.59 554.18 124.61 119.50 111.87
- - ----------------------------------------------------------------------------------
JAN-98 29.13 120.10 560.88 126.12 118.29 110.74
- - ----------------------------------------------------------------------------------
FEB-98 28.88 119.07 601.14 135.17 115.69 108.30
- - ----------------------------------------------------------------------------------
MAR-98 31.38 129.38 631.98 142.11 117.25 109.76
- - ----------------------------------------------------------------------------------
APR-98 32.63 134.54 639.06 143.70 112.67 105.47
- - ----------------------------------------------------------------------------------
MAY-98 32.75 135.05 627.85 141.18 111.08 103.99
- - ----------------------------------------------------------------------------------
JUN-98 34.38 141.75 653.72 146.99 110.10 103.07
- - ----------------------------------------------------------------------------------
JUL-98 30.63 126.29 646.73 145.42 102.21 95.69
- - ----------------------------------------------------------------------------------
AUG-98 26.50 109.28 553.86 124.54 91.01 85.20
- - ----------------------------------------------------------------------------------
SEP-98 29.75 122.68 589.04 132.45 96.32 90.17
- - ----------------------------------------------------------------------------------
OCT-98 26.75 110.31 635.58 142.92 93.10 87.16
- - ----------------------------------------------------------------------------------
NOV-98 26.13 107.73 674.64 151.70 94.26 88.24
- - ----------------------------------------------------------------------------------
DEC-98 27.75 114.43 713.78 160.50 91.03 85.22
- - ----------------------------------------------------------------------------------
</TABLE>
Note: The stock price performance shown on the graph above is not necessarily
indicative of future price performance.
18
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Since February 28, 1997, the Company has engaged BDO Seidman, LLP as
its principal accountants. BDO Seidman, LLP audited the Company's financial
statements for the periods ending December 31, 1997 and December 31, 1998. A
representative from BDO Seidman, LLP will be present at the 1999 Annual
Meeting and will be given the opportunity to make a statement and is expected
to be available to respond to 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 Company'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.
19
<PAGE>
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 as of March 10,
1999 regarding the beneficial ownership of Common Stock and OP Units (which
are units of limited partnership interest in Golf Trust of America, L.P., the
operating partnership through which the Company owns its golf course
interests (the "Operating Partnership")) 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. Each person
named in the table has sole voting and investment/disposition 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.
<TABLE>
<CAPTION>
COMMON STOCK PARTNERSHIP UNITS
------------ -----------------
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....................... 314,378 (2) 3.9% 12,500(3) *
David Dick Joseph.......................... 242,433 (4) 3.1% 12,500 *
Scott D. Peters............................ 114,344 (5) 1.5% --- ---
Larry D. Young (6)......................... --- 3,726,856 70.6%
Roy C. Chapman ............................ 15,500 (7) * --- ---
Raymond V. Jones .......................... 16,000 (7) * --- ---
Fred W. Reams ............................. 40,000 (7) * --- ---
Edward L. Wax ............................. 16,250 (7) * --- ---
Directors and Officers as a group
(8 persons)............................... 758,905 (8) 9.0% 3,751,856 71.0%
Alliance Capital Management
L.P (9).................................... 908,400 11.8% -- --
Firstar Corporation (10)................... 469,250 6.1% -- --
Firstar Investment Research &
Management Company LLC (11)................ 462,850 6.0% -- --
USAA Investment Management Company
(12)....................................... 425,500 5.5% -- --
Wall Street Associates (13)................ 428,200 5.6% -- --
- - ---------------------------------------------------------------------------------------------------------------------------------
* Less than 1%
- - ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
(1) The Operating Partnership has 5,280,938 OP Units outstanding as of March
10, 1999. OP Units (other than those owned by the Company) may be
generally redeemed for cash (or, at the Company's option, for shares of
Common Stock on a one-for-one basis) as follows: 50% after the first
anniversary of issuance and the remaining 50% after the second anniversary
of subject to certain limitations including restrictions on owning more
than 9.8% of the outstanding shares of Common Stock.
(2) Includes the 59,507 shares of restricted stock sold by the Company to
Mr. Blair, the majority of which remain subject to vesting conditions.
Also includes options to purchase 213,333 shares of the Company's Common
Stock that have vested and or will vest by May 10, 1999.
(3) Does not include 598,187 OP Units held by Legends of Virginia, LC, a prior
owner which contributed two golf 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 42,809 shares of restricted stock sold by the Company to
Mr. Joseph, the majority of which remain subject to vesting conditions.
Also includes options to purchase 176,666 shares of the Company's Common
Stock that have vested or will vest by May 10, 1999.
(5) Includes the 32,623 shares of restricted stock sold by the Company to
Mr. Peters, the majority of which remain subject to vesting conditions.
Also includes options to purchase 66,667 shares of the Company's Common
Stock that have vested or will vest by May 10, 1999.
(6) Mr. Young's address is c/o The Legends Group, 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 15,000 options to purchase shares of the Company's Common Stock
which have not been exercised.
(8) Includes 129,839 shares of restricted stock sold by the Company to its
executive officers, the majority of which remain subject to vesting. Also
includes options to purchase shares of Common Stock that have vested or
will vest prior to May 10, 1999.
(9) Information about Alliance Capital Management L.P. is included in reliance
on the Schedule 13G filed with the SEC on January 11, 1999 by The Equitable
Companies Incorporated, as the parent holding company of Alliance Capital
Management L.P., regarding holdings of Company stock on December 31, 1998.
The Equitable Companies' address is 1290 Avenue of the Americas, New York,
NY 10104. Alliance Capital Management L.P. has sole voting control as to
117,500 shares, shared voting control as to 782,900 shares and sole
disposition control as to 908,400 shares.
(10) Information about Firstar Corporation is included in reliance on its
Schedule 13G filed with the SEC on February 16, 1999 regarding its holdings
of Company stock on December 31, 1998. Firstar Corporation's address is
777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202. Firstar Corporation
has sole voting control as to 434,975 shares, shared voting control as to
34,275 shares, sole disposition control as to 1,800 shares and shared
disposition control as to 467,450 shares.
(11) Information about Firstar Investment Research & Management Company, LLC is
included in reliance on its Schedule 13G filed with the SEC on February 10,
1999 regarding its holdings of Company stock on December 31, 1998. Firstar
Investment Research & Management Company, LLC's address is 777 E. Wisconsin
Avenue, Milwaukee, Wisconsin 53202. Firstar Investment Research &
Management Company, LLC has sole voting control as to 79,738 shares, shared
voting control as to 382,712 shares, sole disposition control as to 79,738
shares and shared disposition control as to 383,112 shares.
21
<PAGE>
(12) Information about USAA Investment Management Company is included in
reliance on its Schedule 13G filed with the SEC on February 10, 1999
regarding its holdings of Company stock on December 31, 1998. USAA
Investment Management Company's address is 9800 Fredericksburg Road,
San Antonio, Texas 78288.
(13) Information about Wall Street Associates is included in reliance on its
Schedule 13G filed with the SEC on February 9, 1999 regarding its holdings
of Company stock on December 31, 1998. Wall Street Associates' address is
1200 Prospect Street, Suite 100, La Jolla, California 92037. Wall Street
Associates has sole voting control as to 267,300 shares, shared voting
control as to 0 shares and sole disposition control as to 428,200 shares.
22
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Larry Young, a director of the Company, is the majority owner of the
Legends lessees (i.e., those lessees that lease the seven courses contributed
to the Company by the Legends Group and its affiliates). W. Bradley Blair,
II, President and CEO of the Company and Chairman of the Board, is an
inactive shareholder in Blair Conaway Bograd & Martin, P.A., a law firm
engaged by the Company on a limited basis to provide real estate, corporate
and labor law services to the Company.
SANDPIPER TRANSACTION
Concurrent with the acquisition of Sandpiper Golf Course, in March,
1998, 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 legally to
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 for $.01 when the market price was $26.1875 to officers of the Company
under the 1997 Stock-Based Incentive Plan. On January 1, 1998 the Company
issued an additional 20,939 restricted common shares for $.01 when the market
was $29.00 to officers of the Company under the 1997 Stock-Based Incentive
Plan. Subsequent to these issuance's, loans of approximately $772,000,
secured by OP Units and Common Stock, with interest rates of 4.4 to 6.0
percent were made to officers of the Company for the payment of related
taxes. Of these amounts, $400,000, $334,000 and $38,000 were made to Messrs.
Blair, Joseph and Peters for the payment of taxes related to stock grant
vesting. The Company agreed to fund up to $490,000 in additional loans
related to taxes.
The Company has agreed to make additional loans of $2.0 million to
the Company's executive officers, the proceeds of which (i) must be used (at
least sixty percent in total) for the purchase of Company stock on the open
market and (ii) the remainder to be used for taxes. Loans of $1,121,000 have
been made to officers of the Company to purchase stock on the open market.
Of these amounts $731,000, $488,000 and $352,000 were made for Messrs. Blair,
Joseph and Peters to purchase Common Stock on the open market. These loans
are collateralized by the shares purchased, bear interest at 4.51% to 4.83%
and are due at the earlier of time of sale greater than $25 per share, within
270 days of employee termination or 5 years.
23
<PAGE>
OPTION TO PURCHASE AND RIGHT OF FIRST REFUSAL
Larry Young, a director of the Company, is majority owner of The
Legends Group. The Legends Group contributed seven of its eight golf courses
to the Company at the IPO. The Legends Group currently owns one golf course
that was not 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 The Legends Group, 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 The Legends Group 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 The Legends Group or any affiliate of The Legends Group.
If the Company does not elect to exercise its option to acquire a
golf course owned, acquired or developed by The Legends Group, 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 The Legends Group to offer the Company
the right to buy any such golf course on the same terms and conditions as The
Legends Group intends to offer to any third party. If the Company does not
exercise its right to acquire such golf course, The Legends Group will be
free to sell to a third party, provided if The Legends Group either opts not
to sell the golf course within nine months or reduces the purchase price by
5% or more, The Legends Group must again offer the golf course to the
Company. The Option Agreement shall generally run for a period of 10 years
after the IPO.
24
<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 American Stock Exchange. Officers, directors and
stockholders owning more than 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) and filed by or on behalf of the Company's officers and directors or
written representations that no such reports were required, the Company
believes that during 1998 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. However, Messrs. Blair, Joseph
and Young filed amended Form 3 reports in January 1999 in respect of their OP
Unit holdings at the time of the IPO, which holdings were fully disclosed in
prior SEC filings, including last year's Proxy Statement, but which were not
disclosed in such directors' original Form 3 reports filed in February 1997.
STOCKHOLDER PROPOSALS FOR THE 2000 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 2000 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 of the Company, Golf Trust of America, Inc., 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 Friday, December 3, 1999. 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,
GOLF TRUST OF AMERICA, INC.
/S/ DAVID DICK JOSEPH
------------------------------
David Dick Joseph
Secretary
25
<PAGE>
EXHIBIT A
GOLF TRUST OF AMERICA, INC.
1998 STOCK-BASED INCENTIVE PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
1. THE PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
1.2 Administration and Authorization; Power and Procedure. . . . . . .A-1
1.3 Participation. . . . . . . . . . . . . . . . . . . . . . . . . . .A-2
1.4 Shares Available for Awards; Share Limits. . . . . . . . . . . . .A-2
1.5 Grant of Awards. . . . . . . . . . . . . . . . . . . . . . . . . .A-3
1.6 Award Period.. . . . . . . . . . . . . . . . . . . . . . . . . . .A-3
1.7 Limitations on Exercise and Vesting of Awards. . . . . . . . . . .A-3
1.8 Acceptance of Notes to Finance Exercise. . . . . . . . . . . . . .A-3
1.9 No Transferability; Limited Exception to Transfer
Restrictions.. . . . . . . . . . . . . . . . . . . . . . . . . . .A-4
2. OPTIONS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-5
2.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-5
2.2 Option Price.. . . . . . . . . . . . . . . . . . . . . . . . . . .A-5
2.3 Limitations on Grant and Terms of Incentive Stock Options. . . . .A-5
2.4 Limits on 10% Holders. . . . . . . . . . . . . . . . . . . . . . .A-6
2.5 Option Repricing/Cancellation and Regrant/Waiver of
Restrictions.. . . . . . . . . . . . . . . . . . . . . . . . . . .A-6
2.6 Effects of Termination of Employment; Termination of
Subsidiary Status; Discretionary Provisions. . . . . . . . . . . .A-6
2.7 Options and Rights in Substitution for Stock Options
Granted by Other Corporations. . . . . . . . . . . . . . . . . . .A-7
3. STOCK APPRECIATION RIGHTS (INCLUDING LIMITED STOCK
APPRECIATION RIGHTS). . . . . . . . . . . . . . . . . . . . . . . . . .A-7
3.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-7
3.2 Exercise of Stock Appreciation Rights. . . . . . . . . . . . . . .A-7
3.3 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-8
3.4 Limited Stock Appreciation Rights. . . . . . . . . . . . . . . . .A-8
4. RESTRICTED STOCK AWARDS.. . . . . . . . . . . . . . . . . . . . . . . .A-8
4.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-8
4.2 Restrictions.. . . . . . . . . . . . . . . . . . . . . . . . . . .A-9
4.3 Return to the Corporation. . . . . . . . . . . . . . . . . . . . .A-9
5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES. . . . . . . . . . . . . . .A-9
5.1 Grants of Performance Share Awards . . . . . . . . . . . . . . . .A-9
5.2 [Reserved].. . . . . . . . . . . . . . . . . . . . . . . . . . . .A-9
5.3 Grants of Stock Bonuses. . . . . . . . . . . . . . . . . . . . . .A-9
5.4 Deferred Payments. . . . . . . . . . . . . . . . . . . . . . . . .A-10
6. OTHER PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .A-10
6.1 Rights of Eligible Persons, Participants and Beneficiaries . . . .A-10
6.2 Adjustments; Acceleration. . . . . . . . . . . . . . . . . . . . .A-10
6.3 Effect of Termination of Employment. . . . . . . . . . . . . . . .A-11
6.4 Compliance with Laws.. . . . . . . . . . . . . . . . . . . . . . .A-11
-i-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
6.5 Tax Withholding. . . . . . . . . . . . . . . . . . . . . . . . . .A-11
6.6 Plan Amendment, Termination and Suspension.. . . . . . . . . . . .A-12
6.7 Privileges of Stock Ownership. . . . . . . . . . . . . . . . . . .A-12
6.8 Effective Date of the Plan.. . . . . . . . . . . . . . . . . . . .A-12
6.9 Term of the Plan.. . . . . . . . . . . . . . . . . . . . . . . . .A-12
6.10 Governing Law/Construction/Severability. . . . . . . . . . . . . .A-13
6.11 Captions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-13
6.12 Effect of Change of Subsidiary Status. . . . . . . . . . . . . . .A-13
6.13 Non-Exclusivity of Plan. . . . . . . . . . . . . . . . . . . . . .A-13
7. DEFINITIONS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-13
7.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . .A-13
</TABLE>
-ii-
<PAGE>
GOLF TRUST OF AMERICA, INC.
1998 STOCK-BASED INCENTIVE PLAN
1. THE PLAN
1.1 PURPOSE
The purpose of this Plan is to promote the success of the Company by providing
an additional means through the grant of Awards to attract, motivate, retain and
reward key employees, including officers, whether or not directors, of the
Company with awards and incentives for high levels of individual performance and
improved financial performance of the Company. "Corporation" means Golf Trust
of America, Inc. and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are defined in Article 7.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
(a) COMMITTEE. This Plan shall be administered by and all Awards to Eligible
Employees shall be authorized by the Committee. Action of the Committee
with respect to the administration of this Plan shall be taken pursuant to
a majority vote or by written consent of its members.
(b) PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject to the express
provisions of this Plan, the Committee shall have the authority:
(i) to determine from among those persons eligible the particular
Eligible Employees who will receive any Awards;
(ii) to grant Awards to Eligible Employees, determine the price at which
securities will be offered or awarded and the amount of securities to
be offered or awarded to any of such persons, and determine the other
specific terms and conditions of such Awards consistent with the
express limits of this Plan, and establish the installments (if any)
in which such Awards shall become exercisable or shall vest, or
determine that no delayed exercisability or vesting is required, and
establish the events of termination or reversion of such Awards;
(iii) to approve the forms of Award Agreements (which need not be identical
either as to type of award or among Participants);
(iv) to construe and interpret this Plan and any agreements defining the
rights and obligations of the Company and Employee Participants under
this Plan, further define the terms used in this Plan, and prescribe,
amend and rescind rules and regulations relating to the
administration of this Plan;
(v) to cancel, modify, or waive the Corporation's rights with respect to,
or modify, discontinue, suspend, or terminate any or all outstanding
Awards held by Eligible Employees, subject to any required consent
under Section 6.6;
(vi) to accelerate or extend the exercisability or extend the term of any
or all such outstanding Awards within the maximum ten-year term of
Awards under Section 1.6; and
A-1
<PAGE>
(vii) to make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.
(c) BINDING DETERMINATIONS. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating or
pursuant to this Plan shall be within the absolute discretion of that
entity or body and shall be conclusive and binding upon all persons. No
member of the Board or Committee, or officer of the Corporation or any
Subsidiary, shall be liable for any such action or inaction of the entity
or body, of another person or, except in circumstances involving bad faith,
of himself or herself. Subject only to compliance with the express
provisions hereof, the Board and Committee may act in their absolute
discretion in matters within their authority related to this Plan.
(d) RELIANCE ON EXPERTS. In making any determination or in taking or not
taking any action under this Plan, the Committee or the Board, as the case
may be, may obtain and may rely upon the advice of experts, including
professional advisors to the Corporation. No director, officer or agent of
the Company shall be liable for any such action or determination taken or
made or omitted in good faith.
(e) DELEGATION. The Committee may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of the Company.
1.3 PARTICIPATION.
Awards may be granted by the Committee only to those persons that the Committee
determines to be Eligible Persons. An Eligible Person who has been granted an
Award may, if otherwise eligible, be granted additional Awards if the Committee
shall so determine.
1.4 SHARES AVAILABLE FOR AWARDS; SHARE LIMITS.
(a) SHARES AVAILABLE. Subject to the provisions of Section 6.2, the capital
stock that may be delivered under this Plan shall be shares of the
Corporation's authorized but unissued Common Stock and any shares of its
Common Stock held as treasury shares. The shares may be delivered for any
lawful consideration.
(b) SHARE LIMITS. The maximum number of shares of Common Stock that may be
delivered pursuant to Awards granted to Eligible Persons under this Plan
shall not exceed 500,000 shares (the "SHARE LIMIT"). The maximum number
of shares of Common Stock that may be delivered pursuant to options
qualified as Incentive Stock Options granted under this Plan is 500,000
shares. Each of the two foregoing numerical limits shall be subject to
adjustment as contemplated by this Section 1.4 and Section 6.2.
(c) CALCULATION OF AVAILABLE SHARES AND REPLENISHMENT. Shares subject to
outstanding Awards of derivative securities (as defined in Rule 16a-1(c)
under the Exchange Act) shall be reserved for issuance. If any option or
other right to acquire shares of Common Stock under an Award shall expire
or be cancelled or terminated without having been exercised in full, or any
Common Stock subject to a Restricted Stock Award or other Award shall not
vest or be delivered, the unpurchased, unvested or undelivered shares
subject thereto shall again be available for the purposes of the Plan,
subject to any applicable limitations under Section 162(m) of the Code. If
a Stock Appreciation Right or similar right is exercised or a Performance
Share Award based on the increased market value of a specified number of
shares of Common Stock is paid in shares, only the number of shares
actually issued shall be charged against the maximum amount of Common Stock
that may be delivered pursuant to Awards under this Plan and, if
applicable, such Award. If the Corporation withholds shares of Common
Stock pursuant to Section 6.5, the number of shares that would have been
deliverable with respect to an Award but that are withheld pursuant to the
provisions of Section 6.5 may in effect not be issued, and the aggregate
number of shares issuable with respect to the applicable Award and under
the Plan shall not be reduced by the number of shares withheld and such
shares shall be available for additional Awards under this Plan. To the
extent a performance share award or dividend equivalent constitutes an
equity security (as this
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phrase is defined in Rule 16a-1 under the Exchange Act) issued by the
Corporation and is paid in shares of Common Stock, the number of shares
of Common Stock (if any) subject to such Performance Share Award or
dividend equivalent shall be charged (but in the case of tandem or
substituted Awards or dividend equivalents, without duplication) against
the maximum number of shares of Common Stock that may be delivered pursuant
to Awards under this Plan. Notwithstanding the foregoing provisions, but
subject to Section 6.10(c), Awards payable solely in cash shall not reduce
the number of shares available for Awards under this Plan and any imputed
charges to the maximum number of shares deliverable under this Plan
pursuant to Awards payable in shares or cash shall be reversed to the
extent the Awards are actually paid in cash. To the extent any shares were
previously reserved in respect of such Awards payable in cash or shares,
the number of shares not issued shall again be available for purposes of
this Plan.
1.5 GRANT OF AWARDS.
Subject to the express provisions of this Plan, the Committee shall determine
the number of shares of Common Stock subject to each Award, the price (if any)
to be paid for the shares or the Award and, in the case of performance share
awards, in addition to matters addressed in Section 1.2(b), the specific
objectives, goals and performance criteria (such as an increase in sales, market
value, earnings or book value over a base period, the years of service before
vesting, the relevant job classification or level of responsibility or other
factors) that further define the terms of the performance share award. Each
Award shall be evidenced by an Award Agreement signed by the Corporation and, if
required by the Committee, by the Participant. The Award Agreement shall set
forth the material terms and conditions of the Award established by the
Committee consistent with the specific provisions of this Plan.
1.6 AWARD PERIOD.
Each Award and all executory rights or obligations under the related Award
Agreement shall expire on such date (if any) as shall be determined by the
Committee, but in the case of Options or other rights to acquire Common Stock
not later than ten (10) years after the Award Date.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
(a) PROVISIONS FOR EXERCISE. Unless the Committee otherwise expressly
provides, no Award shall be exercisable or shall vest until at least six
months after the initial Award Date, and once exercisable an Award shall
remain exercisable until the expiration or earlier termination of the
Award.
(b) PROCEDURE. Any exercisable Award shall be deemed to be exercised when the
Secretary of the Corporation receives written notice of such exercise from
the Participant, together with any required payment made in accordance with
Section 2.2(a), as the case may be.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share interests shall be
disregarded, but may be accumulated. The Committee, however, may determine
in the case of Eligible Persons that cash, other securities, or other
property will be paid or transferred in lieu of any fractional share
interests. No fewer than 100 shares may be purchased on exercise of any
Award at one time unless the number purchased is the total number at the
time available for purchase under the Award.
1.8 ACCEPTANCE OF NOTES TO FINANCE EXERCISE.
The Corporation may, with the Committee's approval, accept one or more notes
from any Eligible Person in connection with the exercise or receipt of any
outstanding Award; provided that any such note shall be subject to the following
terms and conditions:
(a) The principal of the note shall not exceed the amount required to be paid
to the Corporation upon the exercise or
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receipt of one or more Awards under the Plan and the note shall be
delivered directly to the Corporation in consideration of such exercise
or receipt.
(b) The initial term of the note shall be determined by the Committee; PROVIDED
that the term of the note, including extensions, shall not exceed a period
of five years.
(c) The note shall provide for full recourse to the Participant and shall bear
interest at a rate determined by the Committee but not less than the
interest rate necessary to avoid the imputation of interest under the Code.
(d) If the employment of the Participant terminates, the unpaid principal
balance of the note shall become due and payable on the 10th business day
after such termination; provided, however, that if a sale of such shares
would cause such Participant to incur liability under Section 16(b) of the
Exchange Act, the unpaid balance shall become due and payable on the 10th
business day after the first day on which a sale of such shares could have
been made without incurring such liability assuming for these purposes that
there are no other transactions (or deemed transactions in securities of
this Corporation) by the Participant subsequent to such termination.
(e) If required by the Committee or by applicable law, the note shall be
secured by a pledge of any shares or rights financed thereby in compliance
with applicable law.
(f) The terms, repayment provisions, and collateral release provisions of the
note and the pledge securing the note shall conform with applicable rules
and regulations of the Federal Reserve Board as then in effect.
1.9 NO TRANSFERABILITY; LIMITED EXCEPTION TO TRANSFER RESTRICTIONS.
(a) LIMIT ON EXERCISE AND TRANSFER. Unless otherwise expressly provided in (or
pursuant to) this Section 1.9, by applicable law and by the Award
Agreement, as the same may be amended, (i) all Awards are non-transferable
and shall not be subject in any manner to sale, transfer, anticipation,
alienation, assignment, pledge, encumbrance or charge; Awards shall be
exercised only by the Participant; and (ii) amounts payable or shares
issuable pursuant to an Award shall be delivered only to (or for the
account of) the Participant.
(b) EXCEPTIONS. The Committee may permit Awards to be exercised by and paid
only to certain persons or entities related to the Participant, including
but not limited to members of the Participant's family, charitable
institutions, or trusts or other entities whose beneficiaries or beneficial
owners are members of the Participant's family and/or charitable
institutions, or to such other persons or entities as may be approved by
the Committee, pursuant to such conditions and procedures as the Committee
may establish. Any permitted transfer shall be subject to the condition
that the Committee receive evidence satisfactory to it that the transfer is
being made for estate and/or tax planning purposes on a gratuitous or
donative basis and without consideration (other than nominal
consideration). Notwithstanding the foregoing, ISOs and Restricted Stock
Awards shall be subject to any and all additional transfer restrictions
under the Code.
(c) FURTHER EXCEPTIONS TO LIMITS ON TRANSFER. The exercise and transfer
restrictions in Section 1.9(a) shall not apply to:
(i) transfers to the Corporation,
(ii) the designation of a beneficiary to receive benefits in the event of
the Participant's death or, if the Participant has died, transfers to
or exercise by the Participant's beneficiary, or, in the absence of a
validly designated beneficiary, transfers by will or the laws of
descent and distribution,
(iii) transfers pursuant to a QDRO order,
(iv) if the Participant has suffered a disability, permitted transfers or
exercises on behalf of the
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Participant by his or her legal representative, or
(v) the authorization by the Committee of "cashless exercise" procedures
with third parties who provide financing for the purpose of (or who
otherwise facilitate) the exercise of Awards consistent with
applicable laws and the express authorization of the Committee.
2. OPTIONS.
2.1 GRANTS.
One or more Options may be granted under this Article to any Eligible Person.
Each Option granted shall be designated in the applicable Award Agreement, by
the Committee as either an Incentive Stock Option, subject to Section 2.3, or a
Non-Qualified Stock Option.
2.2 OPTION PRICE.
(a) PRICING LIMITS. The purchase price per share of the Common Stock covered
by each Option shall be determined by the Committee at the time of the
Award, but in the case of Incentive Stock Options shall not be less than
100% (110% in the case of a Participant described in Section 2.4) of the
Fair Market Value of the Common Stock on the date of grant and in all cases
shall not be less than the par value thereof.
(b) PAYMENT PROVISIONS. The purchase price of any shares purchased on exercise
of an Option granted under this Article shall be paid in full at the time
of each purchase in one or a combination of the following methods:
(i) in cash or by electronic funds transfer;
(ii) by check payable to the order of the Corporation;
(iii) if authorized by the Committee or specified in the applicable Award
Agreement, by a promissory note of the Participant consistent with
the requirements of Section 1.8;
(iv) by notice and third party payment in such manner as may be
authorized by the Committee; or
(v) by the delivery of shares of Common Stock of the Corporation already
owned by the Participant, PROVIDED, HOWEVER, that the Committee may
in its absolute discretion limit the Participant's ability to
exercise an Award by delivering such shares, and provided further
that any shares delivered which were initially acquired upon
exercise of a stock option must have been owned by the Participant
at least six months as of the date of delivery. Shares of Common
Stock used to satisfy the exercise price of an Option shall be
valued at their Fair Market Value on the date of exercise.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS.
(a) $100,000 LIMIT. To the extent that the aggregate "Fair Market Value" of
stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000, taking
into account both Common Stock subject to Incentive Stock Options under
this Plan and stock subject to incentive stock options under all other
plans of the Company or any parent corporation, such options shall be
treated as Nonqualified Stock Options. For this purpose, the "Fair Market
Value" of the stock subject to options shall be determined as of the date
the options were awarded. In reducing the number of options treated as
incentive stock options to meet the $100,000 limit, the most recently
granted options shall be reduced first. To the extent a reduction of
simultaneously granted options is necessary to meet the $100,000 limit, the
Committee may, in the manner and to the extent permitted by law, designate
which shares of Common Stock are to be treated
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as shares acquired pursuant to the exercise of an Incentive Stock Option.
(b) OPTION PERIOD. Each Option and all rights thereunder shall expire no later
than 10 years after the Award Date.
(c) OTHER CODE LIMITS. Incentive Stock Options may only be granted to Eligible
Employees of the Corporation or a Subsidiary that satisfies the other
eligibility requirements of the Code. There shall be imposed in any Award
Agreement relating to Incentive Stock Options such other terms and
conditions as from time to time are required in order that the Option be an
"incentive stock option" as that term is defined in Section 422 of the
Code.
2.4 LIMITS ON 10% HOLDERS.
No Incentive Stock Option may be granted to any person who, at the time the
Option is granted, owns (or is deemed to own under Section 424(d) of the Code)
shares of outstanding Common Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation, unless the
exercise price of such Option is at least 110% of the Fair Market Value of the
stock subject to the Option and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is granted.
2.5 OPTION REPRICING/CANCELLATION AND REGRANT/WAIVER OF RESTRICTIONS.
Subject to Section 1.4 and Section 6.6 and the specific limitations on Awards
contained in this Plan, the Committee from time to time may authorize, generally
or in specific cases only, for the benefit of any Eligible Person any adjustment
in the exercise or purchase price, the vesting schedule, the number of shares
subject to, the restrictions upon or the term of, an Award granted under this
Article by cancellation of an outstanding Award and a subsequent regranting of
an Award, by amendment, by substitution of an outstanding Award, by waiver or by
other legally valid means. Such amendment or other action may result among
other changes in an exercise or purchase price which is higher or lower than the
exercise or purchase price of the original or prior Award, provide for a greater
or lesser number of shares subject to the Award, or provide for a longer or
shorter vesting or exercise period.
2.6 EFFECTS OF TERMINATION OF EMPLOYMENT; TERMINATION OF SUBSIDIARY STATUS;
DISCRETIONARY PROVISIONS.
(a) OPTIONS - RESIGNATION OR DISMISSAL. If the Participant's employment by (or
other service specified in the Award Agreement to) the Company terminates
for any reason (the date of such termination being referred to as the
"SEVERANCE DATE") other than Retirement, Total Disability or death, the
Participant shall have, unless otherwise provided in the Award Agreement
and subject to earlier termination pursuant to or as contemplated by
Section 1.6 or 6.2, three months after the Severance Date to exercise any
Option to the extent it shall have become exercisable on the Severance
Date. The Option, to the extent not exercisable on the Severance Date,
shall terminate.
(b) OPTIONS - DEATH OR DISABILITY. If the Participant's employment by (or
specified service to) the Company terminates as a result of Total
Disability or death, the Participant, Participant's Personal Representative
or his or her Beneficiary, as the case may be, shall have, unless otherwise
provided in the Award Agreement and subject to earlier termination pursuant
to or as contemplated by Section 1.6 or 6.2, until 12 months after the
Severance Date to exercise any Option to the extent it shall have become
exercisable by the Severance Date. Any Option to the extent not
exercisable on the Severance Date shall terminate.
(c) OPTIONS - RETIREMENT. If the Participant's employment by (or specified
service to) the Company terminates as a result of Retirement, the
Participant, Participant's Personal Representative or his or her
Beneficiary, as the case may be, shall have, unless otherwise provided in
the Award Agreement and subject to earlier termination pursuant to or as
contemplated by Section 1.6 or 6.2, until 12 months after the Severance
Date to exercise any Nonqualified Stock Option (three months after the
Severance Date in the case of an Incentive Stock Option) to
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the extent it shall have become exercisable by the Severance Date. The
Option, to the extent not exercisable on the Severance Date, shall
terminate.
(d) CERTAIN SARS. Any SAR granted concurrently or in tandem with an Option
shall have the same post-termination provisions and exercisability periods
as the Option to which it relates, unless the Committee otherwise provides.
(e) OTHER AWARDS. The Committee shall establish in respect of each other Award
granted hereunder the Participant's rights and benefits (if any) in the
event of a termination of employment and in so doing may make distinctions
based upon the cause of termination and the nature of the Award.
(f) COMMITTEE DISCRETION. Notwithstanding the foregoing provisions of this
Section 2.6, in the event of, or in anticipation of, a termination of
employment with the Company for any reason, other than discharge for cause,
the Committee may, in its discretion, increase the portion of the
Participant's Award available to the Participant, or Participant's
Beneficiary or Personal Representative, as the case may be, or, subject to
the provisions of Section 1.6, extend the exercisability period upon such
terms as the Committee shall determine and expressly set forth in or by
amendment to the Award Agreement.
2.7 OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER
CORPORATIONS. OPTIONS AND STOCK APPRECIATION RIGHTS MAY BE GRANTED TO
ELIGIBLE PERSONS UNDER THIS PLAN IN SUBSTITUTION FOR EMPLOYEE STOCK OPTIONS
GRANTED BY OTHER ENTITIES TO PERSONS WHO ARE OR WHO WILL BECOME ELIGIBLE
PERSONS IN RESPECT OF THE COMPANY, IN CONNECTION WITH A DISTRIBUTION,
MERGER OR REORGANIZATION BY OR WITH THE GRANTING ENTITY OR AN AFFILIATED
ENTITY, OR THE ACQUISITION BY THE COMPANY, DIRECTLY OR INDIRECTLY, OF ALL
OR A SUBSTANTIAL PART OF THE STOCK OR ASSETS OF THE OTHER ENTITY.
3. STOCK APPRECIATION RIGHTS (INCLUDING LIMITED STOCK APPRECIATION RIGHTS).
3.1 GRANTS.
In its discretion, the Committee may grant to any Eligible Person Stock
Appreciation Rights either concurrently with the grant of another Award or in
respect of an outstanding Award, in whole or in part, or independently of any
other Award. Any Stock Appreciation Right granted in connection with an
Incentive Stock Option shall contain such terms as may be required to comply
with the provisions of Section 422 of the Code and the regulations promulgated
thereunder, unless the holder otherwise agrees.
3.2 EXERCISE OF STOCK APPRECIATION RIGHTS.
(a) EXERCISABILITY. Unless the Award Agreement or the Committee otherwise
provides, a Stock Appreciation Right related to another Award shall be
exercisable at such time or times, and to the extent, that the related
Award shall be exercisable.
(b) EFFECT ON AVAILABLE SHARES. To the extent that a Stock Appreciation Right
is exercised, only the actual number of delivered shares of Common Stock
shall be charged against the maximum amount of Common Stock that may be
delivered pursuant to Awards under this Plan. The number of shares subject
to the Stock Appreciation Right and the related Option of the Participant
shall, however, be reduced by the number of underlying shares as to which
the exercise related, unless the Award Agreement otherwise provides.
(c) STAND-ALONE SARS. A Stock Appreciation Right granted independently of any
other Award shall be exercisable
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pursuant to the terms of the Award Agreement but in no event earlier than
six months after the Award Date, except in the case of death or Total
Disability.
3.3 PAYMENT.
(a) AMOUNT. Unless the Committee otherwise provides, upon exercise of a Stock
Appreciation Right and the attendant surrender of an exercisable portion of
any related Award, the Participant shall be entitled to receive payment of
an amount determined by multiplying:
(i) the difference obtained by subtracting the exercise price per share
of Common Stock under the related Award (if applicable) or the
initial share value specified in the Award from the Fair Market
Value of a share of Common Stock on the date of exercise of the
Stock Appreciation Right, by
(ii) the number of shares with respect to which the Stock Appreciation
Right shall have been exercised.
(b) FORM OF PAYMENT. The Committee, in its sole discretion, shall determine
the form in which payment shall be made of the amount determined under
paragraph (a) above, either solely in cash, solely in shares of Common
Stock (valued at Fair Market Value on the date of exercise of the Stock
Appreciation Right), or partly in such shares and partly in cash, provided
that the Committee shall have determined that such exercise and payment are
consistent with applicable law. If the Committee permits the Participant
to elect to receive cash or shares (or a combination thereof) on such
exercise, any such election shall be subject to such conditions as the
Committee may impose.
3.4 LIMITED STOCK APPRECIATION RIGHTS.
The Committee may grant to any Eligible Person Stock Appreciation Rights
exercisable only upon or in respect of a change in control or any other
specified event ("Limited SARs") and such Limited SARs may relate to or operate
in tandem or combination with or substitution for Options, other SARs or other
Awards (or any combination thereof), and may be payable in cash or shares based
on the spread between the base price of the SAR and a price based upon the Fair
Market Value of the Shares during a specified period or at a specified time
within a specified period before, after or including the date of such event.
4. RESTRICTED STOCK AWARDS.
4.1 GRANTS.
The Committee may, in its discretion, grant one or more Restricted Stock Awards
to any Eligible Person. Each Restricted Stock Award Agreement shall specify the
number of shares of Common Stock to be issued to the Participant, the date of
such issuance, the consideration for such shares (but not less than the minimum
lawful consideration under applicable state law) by the Participant, the extent
(if any) to which and the time (if ever) at which the Participant shall be
entitled to dividends, voting and other rights in respect of the shares prior to
vesting, and the restrictions (which may be based on performance criteria,
passage of time or other factors or any combination thereof) imposed on such
shares and the conditions of release or lapse of such restrictions. Such
restrictions shall not lapse earlier than six months after the Award Date,
except to the extent the Committee may otherwise provide. Stock certificates
evidencing shares of Restricted Stock pending the lapse of the restrictions
("Restricted Shares") shall bear a legend making appropriate reference to the
restrictions imposed hereunder and shall be held by the Corporation or by a
third party designated by the Committee until the restrictions on such shares
shall have lapsed and the shares shall have vested in accordance with the
provisions of the Award and Section 1.7. Upon issuance of the Restricted Stock
Award, the Participant may be required to provide such further assurance and
documents as the Committee may require to enforce the restrictions.
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4.2 RESTRICTIONS.
(a) PRE-VESTING RESTRAINTS. Except as provided in Section 4.1 and 1.9,
restricted shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered,
either voluntarily or involuntarily, until the restrictions on such shares
have lapsed and the shares have become vested.
(b) DIVIDEND AND VOTING RIGHTS. Unless otherwise provided in the applicable
Award Agreement, a Participant receiving a Restricted Stock Award shall be
entitled to cash dividend and voting rights for all shares issued even
though they are not vested, provided that such rights shall terminate
immediately as to any Restricted Shares which cease to be eligible for
vesting.
(c) CASH PAYMENTS. If the Participant shall have paid or received cash
(including any dividends) in connection with the Restricted Stock Award,
the Award Agreement shall specify whether and to what extent such cash
shall be returned (with or without an earnings factor) as to any restricted
shares which cease to be eligible for vesting.
4.3 RETURN TO THE CORPORATION.
Unless the Committee otherwise expressly provides, Restricted Shares that remain
subject to restrictions at the time of termination of employment or are subject
to other conditions to vesting that have not been satisfied by the time
specified in the applicable Award Agreement shall not vest and shall be returned
to the Corporation in such manner and on such terms as the Committee shall
therein provide.
5. PERFORMANCE SHARE AWARDS AND STOCK BONUSES.
5.1 GRANTS OF PERFORMANCE SHARE AWARDS.
The Committee may, in its discretion, grant Performance Share Awards to Eligible
Persons based upon such factors as the Committee shall deem relevant in light of
the specific type and terms of the award. An Award Agreement shall specify the
maximum number of shares of Common Stock (if any) subject to the Performance
Share Award, the consideration (but not less than the minimum lawful
consideration) to be paid for any such shares as may be issuable to the
Participant, the duration of the Award and the conditions upon which delivery of
any shares or cash to the Participant shall be based. The amount of cash or
shares or other property that may be deliverable pursuant to such Award shall be
based upon the degree of attainment over a specified period of not more than 10
years (a "performance cycle") as may be established by the Committee of such
measure(s) of the performance of the Company (or any part thereof) or the
Participant as may be established by the Committee. The Committee may provide
for full or partial credit, prior to completion of such performance cycle or the
attainment of the performance achievement specified in the Award, in the event
of the Participant's death, Retirement, or Total Disability, a Change in Control
Event or in such other circumstances as the Committee consistent with Section
6.10(c)(2), if applicable may determine.
5.2 [RESERVED].
5.3 GRANTS OF STOCK BONUSES.
The Committee may grant a Stock Bonus to any Eligible Person to reward
exceptional or special services, contributions or achievements in the manner and
on such terms and conditions (including any restrictions on such shares) as
determined from time to time by the Committee. The number of shares so awarded
shall be determined by the Committee. The Award may be granted independently or
in lieu of a cash bonus.
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5.4 DEFERRED PAYMENTS.
The Committee may authorize for the benefit of any Eligible Person the deferral
of any payment of cash or shares that may become due or of cash otherwise
payable under this Plan, and provide for accredited benefits thereon based upon
such deferment, at the election or at the request of such Participant, subject
to the other terms of this Plan. Such deferral shall be subject to such further
conditions, restrictions or requirements as the Committee may impose, subject to
any then vested rights of Participants.
6. OTHER PROVISIONS.
6.1 RIGHTS OF ELIGIBLE PERSONS, PARTICIPANTS AND BENEFICIARIES.
(a) EMPLOYMENT STATUS. Status as an Eligible Person shall not be construed as
a commitment that any Award will be made under this Plan to an Eligible
Person or to Eligible Persons generally.
(b) NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in any other
documents related to this Plan or to any Award) shall confer upon any
Eligible Person or other Participant any right to continue in the employ or
other service of the Company or constitute any contract or agreement of
employment or other service, nor shall interfere in any way with the right
of the Company to change such person's compensation or other benefits or to
terminate the employment of such person, with or without cause, but nothing
contained in this Plan or any document related hereto shall adversely
affect any independent contractual right of such person without his or her
consent thereto.
(c) PLAN NOT FUNDED. Awards payable under this Plan shall be payable in shares
or from the general assets of the Corporation, and (except as provided in
Section 1.4(c)) no special or separate reserve, fund or deposit shall be
made to assure payment of such Awards. No Participant, Beneficiary or
other person shall have any right, title or interest in any fund or in any
specific asset (including shares of Common Stock, except as expressly
otherwise provided) of the Company by reason of any Award hereunder.
Neither the provisions of this Plan (or of any related documents), nor the
creation or adoption of this Plan, nor any action taken pursuant to the
provisions of this Plan shall create, or be construed to create, a trust of
any kind or a fiduciary relationship between the Company and any
Participant, Beneficiary or other person. To the extent that a
Participant, Beneficiary or other person acquires a right to receive
payment pursuant to any Award hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Company.
6.2 ADJUSTMENTS; ACCELERATION.
(a) ADJUSTMENTS. If there shall occur any extraordinary dividend or other
extraordinary distribution in respect of the Common Stock (whether in the
form of cash, Common Stock, other securities, or other property), or any
reclassification, recapitalization, stock split (including a stock split in
the form of a stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Common Stock or other securities of the Corporation, or there
shall occur any similar, unusual or extraordinary corporate transaction or
event in respect of the Common Stock or a sale of substantially all the
assets of the Corporation as an entirety, then the Committee shall, in such
manner and to such extent (if any) as it deems appropriate and equitable
(1) proportionately adjust any or all of (a) the number and type of shares
of Common Stock (or other securities) which thereafter may be made the
subject of Awards (including the specific maximum and numbers of shares set
forth elsewhere in this Plan), (b) the number, amount and type of shares of
Common Stock (or other securities or property) subject to any or all
outstanding Awards, (c) the grant, purchase, or exercise price of any or
all outstanding Awards, (d) the securities, cash or other property
deliverable upon exercise of any outstanding Awards, or (e) the performance
standards appropriate to any outstanding Awards, or (2) in the case of an
extraordinary dividend or other distribution, recapitalization,
reclassification, merger, reorganization, consolidation, combination, sale
of assets, split up, exchange, or spin
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off, make provision for a cash payment or for the substitution or exchange
of any or all outstanding Awards or the cash, securities or property
deliverable to the holder of any or all outstanding Awards based upon
the distribution or consideration payable to holders of the Common Stock
of the Corporation upon or in respect of such event; PROVIDED, HOWEVER,
in each case, that with respect to Awards of Incentive Stock Options, no
such adjustment shall be made which would cause the Plan to violate
Section 424(a) of the Code or any successor provisions thereto without
the written consent of holders materially adversely affected thereby.
In any of such events, the Committee may take such action sufficiently
prior to such event if necessary to permit the Participant to realize the
benefits intended to be conveyed with respect to the underlying shares in
the same manner as is available to shareholders generally.
(b) ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. As to any Participant,
unless prior to a Change in Control Event the Committee determines that,
upon its occurrence, there shall be no acceleration of benefits under
Awards or determines that only certain or limited benefits under Awards
shall be accelerated and the extent to which they shall be accelerated,
and/or establishes a different time in respect of such Event for such
acceleration, then upon the occurrence of a Change in Control Event (i)
each Option and Stock Appreciation Right shall become immediately
exercisable, (ii) Restricted Stock shall immediately vest free of
restrictions, and (iii) each Performance Share Award shall become payable
to the Participant. The Committee may override the limitations on
acceleration in this Section 6.2(b) by express provision in the Award
Agreement and may accord any Eligible Person a right to refuse any
acceleration, whether pursuant to the Award Agreement or otherwise, in such
circumstances as the Committee may approve. Any acceleration of Awards
shall comply with applicable regulatory requirements, including without
limitation Section 422 of the Code.
6.3 EFFECT OF TERMINATION OF EMPLOYMENT.
The Committee shall establish in respect of each Award granted to an Eligible
Person the effect of a termination of employment on the rights and benefits
thereunder and in so doing may make distinctions based upon the cause of
termination.
6.4 COMPLIANCE WITH LAWS.
This Plan, the granting and vesting of Awards under this Plan and the offer,
issuance and delivery of shares of Common Stock and/or the payment of money
under this Plan or under Awards granted hereunder are subject to compliance with
all applicable federal and state laws, rules and regulations (including but not
limited to state and federal securities law and federal margin requirements) and
to such approvals by any listing, regulatory or governmental authority as may,
in the opinion of counsel for the Corporation, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Corporation, provide such assurances and representations to the
Corporation as the Corporation may deem necessary or desirable to assure
compliance with all applicable legal requirements.
6.5 TAX WITHHOLDING.
(a) CASH OR SHARES. Upon any exercise, vesting, or payment of any Award or
upon the disposition of shares of Common Stock acquired pursuant to the
exercise of an Incentive Stock Option prior to satisfaction of the holding
period requirements of Section 422 of the Code, the Company shall have the
right at its option to (i) require the Participant (or Personal
Representative or Beneficiary, as the case may be) to pay or provide for
payment of the amount of any taxes which the Company may be required to
withhold with respect to such Award event or payment or (ii) deduct from
any amount payable in cash the amount of any taxes which the Company may be
required to withhold with respect to such cash payment. In any case where
a tax is required to be withheld in connection with the delivery of shares
of Common Stock under this Plan, the Committee may in its sole discretion
grant (either at the time of the Award or thereafter) to the Participant
the right to elect, pursuant to such rules and subject to such conditions
as the Committee may establish, to have the Corporation reduce the number
of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares valued at their then Fair Market Value, to satisfy such
withholding obligation.
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(b) TAX LOANS. The Company may, in its discretion and to the extent permitted
by law, authorize a loan to an Eligible Person in the amount of any taxes
which the Company may be required to withhold, or for which the Eligible
Person may otherwise be liable, with respect to shares of Common Stock
received (or disposed of, as the case may be) pursuant to a transaction
described in Section 6.5(a). Such a loan shall be for a term, at a rate of
interest and pursuant to such other terms and conditions as the Company,
under applicable law may establish and such loan need not comply with the
provisions of Section 1.8.
6.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
(a) BOARD AUTHORIZATION. The Board may, at any time, terminate or, from time
to time, amend, modify or suspend this Plan, in whole or in part. No
Awards may be granted during any suspension of this Plan or after
termination of this Plan, but the Committee shall retain jurisdiction as to
Awards then outstanding in accordance with the terms of this Plan.
(b) SHAREHOLDER APPROVAL. Any amendment that would (i) materially increase the
benefits accruing to Participants under this Plan, (ii) materially increase
the aggregate number of securities that may be issued under this Plan, or
(iii) materially modify the requirements as to eligibility for
participation in this Plan, shall be subject to shareholder approval only
to the extent then required by Section 425 of the Code or applicable law,
or deemed necessary or advisable by the Board.
(c) AMENDMENTS TO AWARDS. Without limiting any other express authority of the
Committee under but subject to the express limits of this Plan, the
Committee by agreement or resolution may waive conditions of or limitations
on Awards to Eligible Persons that the Committee in the prior exercise of
its discretion has imposed, without the consent of a Participant, and may
make other changes to the terms and conditions of Awards that do not affect
in any manner materially adverse to the Participant, his or her rights and
benefits under an Award.
(d) LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment, suspension or
termination of this Plan or change of or affecting any outstanding Award
shall, without written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the
Participant or obligations of the Corporation under any Award granted under
this Plan prior to the effective date of such change. Changes contemplated
by Section 6.2 shall not be deemed to constitute changes or amendments for
purposes of this Section 6.6.
6.7 PRIVILEGES OF STOCK OWNERSHIP.
Except as otherwise expressly authorized by the Committee or this Plan, a
Participant shall not be entitled to any privilege of stock ownership as to any
shares of Common Stock not actually delivered to and held of record by him or
her. No adjustment will be made for dividends or other rights as shareholders
for which a record date is prior to such date of delivery.
6.8 EFFECTIVE DATE OF THE PLAN.
This Plan shall be effective as of November 11, 1998, the date of Board
approval.
6.9 TERM OF THE PLAN.
No Award shall be granted under this Plan after more than ten years after the
effective date of this Plan (the "termination date"). Unless otherwise
expressly provided in this Plan or in an applicable Award Agreement, any Award
granted prior to the termination date may extend beyond such date, and all
authority of the Committee with respect to Awards hereunder, including the
authority to amend an Award, shall continue during any suspension of this Plan
and in respect of
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Awards outstanding on the termination date.
6.10 GOVERNING LAW/CONSTRUCTION/SEVERABILITY.
(a) CHOICE OF LAW. This Plan, the Awards, all documents evidencing Awards and
all other related documents shall be governed by, and construed in
accordance with the laws of the state of incorporation of the Corporation.
(b) SEVERABILITY. If any provision shall be held by a court of competent
jurisdiction to be invalid and unenforceable, the remaining provisions of
this Plan shall continue in effect.
(c) PLAN CONSTRUCTION.
(1) Rule 16b-3. It is the intent of the Corporation that transactions in and
affecting Awards in the case of Participants who are or may be subject to
Section 16 of the Exchange Act satisfy any then applicable requirements of
Rule 16b-3 so that such persons (unless they otherwise agree) will be
entitled to the benefits of Rule 16b-3 or other exemptive rules under
Section 16 of the Exchange Act in respect of those transactions and will
not be subjected to avoidable liability thereunder. If any provision of
this Plan or of any Award would otherwise frustrate or conflict with the
intent expressed above, that provision to the extent possible shall be
interpreted as to avoid such conflict. If the conflict remains
irreconcilable, the Committee may disregard the provision if it concludes
that to do so furthers the interest of the Corporation and is consistent
with the purposes of this Plan as to such persons in the circumstances.
6.11 CAPTIONS.
Captions and headings are given to the sections and subsections of this Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
this Plan or any provision thereof.
6.12 EFFECT OF CHANGE OF SUBSIDIARY STATUS.
For purposes of this Plan and any Award hereunder, if an entity ceases to be a
Subsidiary a termination of employment and service shall be deemed to have
occurred with respect to each Eligible Person in respect of such Subsidiary who
does not continue as an Eligible Person in respect of another entity within the
Company.
6.13 NON-EXCLUSIVITY OF PLAN.
Nothing in this Plan shall limit or be deemed to limit the authority of the
Board or the Committee to grant awards or authorize any other compensation, with
or without reference to the Common Stock, under any other plan or authority.
7. DEFINITIONS.
7.1 DEFINITIONS.
(a) "AWARD" shall mean an award of any Option, Stock Appreciation Right,
Restricted Stock, Stock Bonus, performance share award, dividend equivalent
or deferred payment right or other right or security that would constitute
a "derivative security" under Rule 16a-1(c) of the Exchange Act, or any
combination thereof, whether alternative or cumulative, authorized by and
granted under this Plan.
(b) "AWARD AGREEMENT" shall mean any writing setting forth the terms of an
Award that has been authorized by the Committee.
(c) "AWARD DATE" shall mean the date upon which the Committee took the action
granting an Award or such later date as the Committee designates as the
Award Date at the time of the Award or, in the case of Awards under Article
8, the applicable dates set forth therein.
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(d) "AWARD PERIOD" shall mean the period beginning on an Award Date and ending
on the expiration date of such Award.
(e) "BENEFICIARY" shall mean the person, persons, trust or trusts designated by
a Participant or, in the absence of a designation, entitled by will or the
laws of descent and distribution, to receive the benefits specified in the
Award Agreement and under this Plan in the event of a Participant's death,
and shall mean the Participant's executor or administrator if no other
Beneficiary is designated and able to act under the circumstances.
(f) "BOARD" shall mean the Board of Directors of the Corporation.
(g) "CHANGE IN CONTROL EVENT" shall mean any of the following:
(i) Approval by the shareholders of the Corporation of the dissolution
or liquidation of the Corporation; or
(ii) Approval by the shareholders of the Corporation of an agreement to
merge or consolidate, or otherwise reorganize, with or into one or
more entities that are not Subsidiaries or other affiliates, as a
result of which less than 50% of the outstanding voting securities
of the surviving or resulting entity immediately after the
reorganization are, or will be, owned, directly or indirectly, by
shareholders of the Corporation immediately before such
reorganization (assuming for purposes of such determination that
there is no change in the record ownership of the Corporation's
securities from the record date for such approval until such
reorganization and that such record owners hold no securities of the
other parties to such reorganization); or
(iii) Approval by the shareholders of the Corporation of the sale of
substantially all of the Corporation's business and/or assets to a
person or entity which is not a Subsidiary or other affiliate; or
(iv) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act but excluding any person described in and
satisfying the conditions of Rule 13d-1(b)(1) thereunder), becomes
the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation
representing more than 25% of the combined voting power of the
Corporation's then outstanding securities entitled to then vote
generally in the election of directors of the Corporation; or
(v) During any period not longer than two consecutive years, individuals
who at the beginning of such period constituted the Board cease to
constitute at least a majority thereof, unless the election, or the
nomination for election by the Corporation's shareholders, of each
new Board member was approved by a vote of at least two-thirds of
the Board members then still in office who were Board members at the
beginning of such period (including for these purposes, new members
whose election or nomination was so approved).
(h) "CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
(i) "COMMISSION" shall mean the Securities and Exchange Commission.
(j) "COMMITTEE" shall mean the Board or a committee appointed by the Board to
administer this Plan, which committee shall be comprised only of two or
more directors or such greater number of directors as may be required under
applicable law, each of whom, in respect of any decision at a time when the
Participant affected by the decision may be subject to Section 162(m) of
the Code, shall be Disinterested.
(k) "COMMON STOCK" shall mean the Common Stock of the Corporation and such
other securities or property as may
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become the subject of Awards, or become subject to Awards, pursuant to an
adjustment made under Section 6.2 of this Plan.
(l) "COMPANY" shall mean, collectively, the Corporation and its Subsidiaries.
(m) "CORPORATION" shall mean Golf Trust of America, Inc., a Maryland
corporation, and its successors.
(n) "DISINTERESTED" shall mean a disinterested director or an "outside
director" within the meaning of any mandatory legal or regulatory
requirements, including Section 162(m) of the Code.
(o) "ELIGIBLE EMPLOYEE" shall mean an officer (whether or not a director) or
key employee of the Company.
(p) "ELIGIBLE PERSON" means an Eligible Employee, or any Other Eligible Person,
as determined by the Committee in its discretion.
(q) "ERISA" shall mean the Employee Retirement Income Security At of 1974, as
amended from time to time.
(r) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
(s) "FAIR MARKET VALUE" on any date shall mean (i) if the stock is listed or
admitted to trade on a national securities exchange, the closing price of
the stock on the Composite Tape, as published in the Western Edition of The
Wall Street Journal, of the principal national securities exchange on which
the stock is so listed or admitted to trade, on such date, or, if there is
no trading of the stock on such date or for purposes of awards made prior
to the opening of such exchange on such date, then the closing price of the
stock as quoted on such Composite Tape on the next preceding date on which
there was trading in such shares; (ii) if the stock is not listed or
admitted to trade on a national securities exchange, the last price for the
stock on such date, as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the NASDAQ National Market Reporting System
or a similar organization if the NASD is no longer reporting such
information; (iii) if the stock is not listed or admitted to trade on a
national securities exchange and is not reported on the National Market
Reporting System, the mean between the bid and asked price for the stock on
such date, as furnished by the NASD or a similar organization; or (iv) if
the stock is not listed or admitted to trade on a national securities
exchange, is not reported on the National Market Reporting System and if
bid and asked prices for the stock are not furnished by the NASD or a
similar organization, the value as established by the Committee at such
time for purposes of this Plan.
(t) "INCENTIVE STOCK OPTION" shall mean an Option which is intended, as
evidenced by its designation, as an incentive stock option within the
meaning of Section 422 of the Code, the award of which contains such
provisions (including but not limited to the receipt of shareholder
approval of this Plan, if the Award is made prior to such approval) and is
made under such circumstances and to such persons as may be necessary to
comply with that section.
(u) "NONQUALIFIED STOCK OPTION" shall mean an Option that is designated as a
Nonqualified Stock Option and shall include any Option intended as an
Incentive Stock Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not designated as an
incentive stock option shall be deemed to be designated a nonqualified
stock option under this Plan and not an incentive stock option under the
Code.
(v) "NON-EMPLOYEE DIRECTOR" shall mean a member of the Board of Directors of
the Corporation who is not an officer or employee of the Company.
(w) [reserved]
(x) "OPTION" shall mean an option to purchase Common Stock granted under this
Plan. The Committee shall designate any Option granted to an Eligible
Person as a Nonqualified Stock Option or an Incentive Stock Option.
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(y) "OTHER ELIGIBLE PERSON" shall mean any Non-Employee Director or any
individual consultant or advisor who or (to the extent provided in the next
sentence) agent who renders or has rendered BONA FIDE services (other than
services in connection with the offering or sale of securities of the
Company in a capital raising transaction) to the Company, and who is
selected to participate in this Plan by the Committee. A non-employee
agent providing BONA FIDE services to the Company (other than as an
eligible advisor or consultant) may also be selected as an Other Eligible
Person if such agent's participation in this Plan would not adversely
affect (x) the Corporation's eligibility to use Form S-8 to register under
the Securities Act of 1933, as amended, the offering of shares issuable
under this Plan by the Company or (y) the Corporation's compliance with any
other applicable laws.
(z) "PARTICIPANT" shall mean an Eligible Person who has been granted an Award
under this Plan.
(aa) "PERFORMANCE SHARE AWARD" shall mean an Award of a right to receive shares
of Common Stock under Section 5.1, or to receive shares of Common Stock or
other compensation (including cash) under Section 5.2, the issuance or
payment of which is contingent upon, among other conditions, the attainment
of performance objectives specified by the Committee.
(bb) "PERSONAL REPRESENTATIVE" shall mean the person or persons who, upon the
disability or incompetence of a Participant, shall have acquired on behalf
of the Participant, by legal proceeding or otherwise, the power to exercise
the rights or receive benefits under this Plan and who shall have become
the legal representative of the Participant.
(cc) "PLAN" shall mean this Golf Trust of America, Inc. 1997 Stock-Based
Incentive Plan.
(dd) "QDRO" shall mean a qualified domestic relations order.
(ee) "RESTRICTED SHARES" OR "RESTRICTED STOCK" shall mean shares of Common Stock
awarded to a Participant under this Plan, subject to payment of such
consideration, if any, and such conditions on vesting (which may include,
among others, the passage of time, specified performance objectives or
other factors) and such transfer and other restrictions as are established
in or pursuant to this Plan and the related Award Agreement, for so long as
such shares remain unvested under the terms of the applicable Award
Agreement.
(ff) "RETIREMENT" shall mean retirement with the consent of the Company or, from
active service as an employee or officer of the Company on or after
attaining age 55 with 10 or more years of service or after age 65.
(gg) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the Commission
pursuant to the Exchange Act, as amended from time to time.
(hh) "SECTION 16 PERSON" shall mean a person subject to Section 16(a) of the
Exchange Act.
(ii) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time.
(jj) "STOCK APPRECIATION RIGHT" shall mean a right authorized under this Plan to
receive a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Common
Stock.
(kk) "STOCK BONUS" shall mean an Award of shares of Common Stock granted under
this Plan for no consideration other than past services and without
restriction other than such transfer or other restrictions as the
Committee may deem advisable to assure compliance with law.
(ll) "SUBSIDIARY" shall mean any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.
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(mm) "TOTAL DISABILITY" shall mean a "permanent and total disability" within the
meaning of Section 22(e)(3) of the Code and such other disabilities,
infirmities, afflictions or conditions as the Committee by rule may
include.
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Proxy for 1999 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 1999 Annual Meeting
of Stockholders and Proxy Statement and the 1998 Annual Report and hereby
appoints W. Bradley Blair, II and David Dick Joseph 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, 1999 at
the 1999 Annual Meeting of Stockholders to be held May 3, 1999 and any and
all adjournments or postponements 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 PROPOSAL 1 AND FOR EACH DIRECTOR NOMINEE NAMED IN PROPOSAL 2 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
<PAGE>
The Board of Directors recommends a vote FOR Proposal 1 and FOR the nominees
listed in Proposal 2.
1. To approve the Company's 1998 Stock-Based Incentive Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To elect the following directors to serve for a term of three years and
until their successors are elected and qualified:
[ ] FOR the nominees listed below (except as marked to the contrary
below).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
W. Bradley Blair, II
Raymond V. Jones
(Instruction: To withhold authority to vote for only one nominee,
strike a line through that nominee's name)
3. 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 Proposal 1 and FOR the nominees
listed in Proposal 2. This proxy, when properly executed, will be voted as
specified above. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
THE DIRECTOR NOMINEES LISTED ABOVE AND FOR PROPOSAL 1.
PLEASE RETURN YOUR EXECUTED PROXY TO
CHASEMELLON SHAREHOLDER SERVICES
IN THE ENCLOSED SELF-ADDRESSED, POSTAGE PRE-PAID ENVELOPE
Signature(s) __________________________________ Dated: ___________, 1999
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 1999 Annual Meeting of Stockholders. [ ]
