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Exhibit 10.2
EMPLOYMENT
AGREEMENT
This Employment
Agreement ("Agreement") is made and entered into as of
November 8, 2007 by and between Golf Trust of
America, Inc., a Maryland corporation (the "Company"), and
Michael Pearce (the "Employee").
WHEREAS , the parties
desire that the Employee become the Chief Executive Officer and
President of the Company, subject to the terms and conditions of
this Agreement.
NOW, THEREFORE , the
parties, intending to be legally bound and in consideration of the
promises and mutual covenants and agreements contained herein,
hereby stipulate and agree as follows:
1.
Term of Employment . The Company hereby employs the
Employee, and the Employee hereby accepts employment from the
Company, for the period commencing as of November 8,
2007.
2.
Duties of Employee .
-
(a) The
Employee shall be employed by the Company as its Chief Executive
Officer and President. Employee's duties shall include, but not be
limited to, those duties and responsibilities set forth in the
Company's Second Amended and Restated Articles of Incorporation and
the Company's Bylaws, as either may be amended from time to time
(the "Duties"). In addition to these services, the Duties will
include such other services and duties commensurate with the
Employee's position with the Company as the Board of Directors of
the Company (the "Board) may, from time to time, assign to the
Employee.
(b) The
Employee shall at all times discharge the Employee's
responsibilities and duties in compliance with the rules and
regulations of the Company and in accordance with the policies and
directives of the Company adopted from time to time.
(c) The
Employee shall serve the Company faithfully in the performance of
the Employee's Duties and shall devote the Employee's time and best
efforts to the Employee's employment, including the requirements of
the Company and the performance of the Employee's Duties. The
Employee shall not during the term of this Agreement be engaged in
any other business activity which interferes with the Employee's
obligations under this Agreement, whether or not such business
activity is pursued for gain, profit, or other pecuniary advantage,
without the prior written approval of the Board.
3.
Compensation . For all
services rendered by Employee under this Agreement, the Employee
shall be entitled to compensation in accordance with the
following:
-
(a)
Base Salary . From the commencement of employment,
the Employee shall be paid an annual salary ("Annual Base Salary")
of $144,000. The Employee shall be paid according to the Company's
normal payroll practices, less normal and appropriate withholdings.
This Annual Base Salary shall be adjusted by the Company on an
annual basis to account for cost of living changes (as determined
by the Company in its reasonable discretion), and may also be
increased based on merit at the Company's discretion.
(b)
Stock Options . In the event that the Golf Trust of
America, Inc. 2007 Stock Option Plan (the "2007 Plan") is
approved by the Company's stockholders at the 2007 Annual Meeting
of Stockholders to be held on December 14, 2007 (the "2007
Annual Meeting"), the Employee will receive, on December 14,
2007, a grant of 275,000 options to purchase the Company's common
stock at an exercise price equal to the closing price of the
Company's common stock on the American Stock Exchange (the "Closing
Price") on the date of grant (the "Stock Options"). The Stock
Options will vest on each of the first three anniversaries of the
grant date in the following amounts: 91,667 on December 14,
2008; 91,667 on December 14, 2009 and 91,666 on
December 14, 2010; provided, that all unvested Stock Options
will automatically vest upon a termination Without Cause (as
defined below), the Employee's death or Disability (as
defined
below) or a change of
control of the Company or other similar fundamental corporate
transaction. The Stock Options will be granted in accordance with
the terms and conditions of the 2007 Plan and any grant agreement
entered into by and between the Company and the
Employee.
(c)
Stock Appreciation Rights . The Company hereby grants to the
Employee 275,000 Stock Appreciation Rights (the "SARs") at an
exercise base price equal to the Closing Price on the date hereof
(the "Exercise Base Price"). The SARs will vest on each of the
first three anniversaries of the grant date in the following
amounts: 91,667 on November 8, 2008; 91,667 on
November 8, 2009 and 91,666 on November 8, 2010;
provided, that all unvested SARs will automatically vest upon a
termination Without Cause (as defined below), the Employee's death
or Disability (as defined below) or a change of control of the
Company or other similar fundamental corporate transaction. Once
vested, the SARs will provide the Employee the right to receive a
cash payment for each exercised SAR equal to the Closing Price on
the date of exercise minus the Exercise Base Price. The SARs will
be granted in accordance with the terms and conditions of a Stock
Appreciation Rights Grant Agreement entered into by and between the
Company and the Employee. If the 2007 Plan is approved by the
Company's stockholders at the 2007 Annual Meeting, the SARs granted
hereunder will automatically terminate upon the grant of the Stock
Options pursuant to Section 3(b) above without any payment to
the Employee.
4.
Fringe Benefits . The
Employee shall receive with other similarly situated employees of
the Company, all of the fringe benefits to be established by the
Company, together with the following additional fringe benefits,
provided that the Employee is otherwise eligible and desires to
participate.
-
(a) Reimbursement
for all business expenses which are ordinary, necessary and
reasonable, including, without limitation, travel expenses,
incurred by the Employee in accordance with the policies, practices
and procedures of the Company that may be in effect from time to
time and in connection with the performance of the Employee's
Duties; provided that the Employee presents appropriate
substantiation for such expenses in a form acceptable to the
Internal Revenue Services and in compliance with the Company's then
applicable policy.
(b) The
Employee shall be entitled to participate in all Company sponsored
group insurance policies and programs or elect to have the Company
remit premiums on his behalf for third-party health coverage if
such coverage is less costly than the Company-provided
programs.
(c) During
each full calendar year of employment, the Employee shall be
entitled to four weeks of paid vacation time. The Employee shall
also be paid for observed Company holidays.
5.
Termination of Employment
. This Agreement shall terminate as
follows:
-
(a)
Death or Disability . The Employee's employment shall
terminate automatically upon the Employee's death. For purposes of
this Agreement, the Employee shall be deemed to be "Disabled" (the
defined term including "Disability") if the Employee suffers an
illness or disability resulting in the Employee's inability to
perform the essential functions of the Employee's Duties hereunder,
with or without reasonable accommodation, for a period of
one-hundred eighty (180) consecutive days. If the Employee is
Disabled, then the Company shall give to the Employee written
notice of its intention to terminate the Employee's employment. In
such event, the Employee's employment wi
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