GABLES REALTY LIMITED PARTNERSHIP
EXHIBIT 10.3 SEVERANCE AGREEMENT
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<TYPE>EX-10.3
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<FILENAME>ex3ds.htm
<DESCRIPTION>EXHIBIT 10.3 SEVERANCE AGREEMENT
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<DIV class=Section1>
<P></P><B>&nbsp;</B><B> &nbsp; Exhibit 10.3
<P align=center>GABLES RESIDENTIAL TRUST</P><U>
<P align=center>Senior Executive Severance Agreement</P></U></B>
<P align=center>&nbsp;</P>
<P>AGREEMENT made as of this 30th day of March, 2001 by and among Gables
Residential Trust, a Maryland business trust with its principal place of
business in Atlanta, Georgia (the "Company"), and Dawn H. Severt (the
"Executive"), an individual presently employed as the Vice President and Chief
Accounting Officer of the Company.</P>
<P>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Purpose</U>. The
Company considers it essential to the best interests of its stockholders to
foster the continuous employment of key management personnel. The Board of
Trustees of the Company (the "Board") recognizes, however, that, as is the case
with many publicly held corporations, the possibility of a Change in Control (as
defined in Section&nbsp;2 hereof) exists and that such possibility, and the
uncertainty and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its shareholders. Therefore, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Executive, to
their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control. Nothing in
this Agreement shall be construed as creating an express or implied contract of
employment and, except as otherwise agreed in writing between the Executive and
the Company, the Executive shall not have any right to be retained in the employ
of the Company.</P>
<P>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Change in Control</U>.
For purposes of this Agreement, a "Change in Control" shall mean the occurrence
of any one of the following events:</P>
<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; any "person," as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Act") (other than the Company, any of its Subsidiaries (as defined
below), or any trustee, fiduciary or other person or entity holding securities
under any employee benefit plan or trust of the Company or any of its
Subsidiaries), together with all "affiliates" and "associates" (as such terms
are defined in Rule 12b-2 under the Act) of such person, shall become the
"beneficial owner" (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 40% or more of
either (i) the combined voting power of the Company's then outstanding
securities having the right to vote in an election of the Board ("Voting
Securities") or (ii) the then outstanding common shares of beneficial interest,
par value $.01 per share, of the Company ("Shares") (in either such case other
than as a result of an acquisition of securities directly from the Company);
or</P>
<P>(b) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Members") cease for any reason to constitute at least a majority of
the Board, provided, however, that any individual becoming a trustee of the
Company subsequent to the date hereof (excluding, for this purpose, (A) any such
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of members of the Board or
other actual or threatened solicitation of proxies or consents by or on behalf
of a person other than the Board, including by reason of agreement intended to
avoid or settle any such actual or threatened contest or solicitation, and (B)
any individual whose initial assumption of office is in connection with a merger
or consolidation, involving an unrelated entity), whose election or nomination
for election by the Company's shareholders was approved by a vote of at least a
majority of the persons then comprising Incumbent Members shall for purposes of
this Agreement be considered an Incumbent Member; or </P>
<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the consummation of a
consolidation or merger of the Company where the shareholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, "beneficially own" (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, shares representing in the
aggregate 50% or more of the voting shares of the corporation issuing cash or
securities in the consolidation or merger (or of its ultimate parent
corporation, if any) (the "Resulting Corporation"); or</P>
<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the shareholders of the Company
shall approve (A) any sale, lease, exchange or other transfer to an unrelated
party (in one transaction or a series of transactions contemplated or arranged
by any party as a single plan) of all or substantially all of the assets of the
Company or (B) any plan or proposal for the liquidation or dissolution of the
Company.</P>
<P>Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
have occurred for purposes of the foregoing clause (a) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
Shares or other Voting Securities outstanding, increases (x) the proportionate
number of Shares beneficially owned by any person to 40% or more of the Shares
then outstanding or (y) the proportionate voting power represented by the Voting
Securities beneficially owned by any person to 40% or more of the combined
voting power of all then outstanding Voting Securities; <U>provided</U>,
<U>however</U>, that if such person referred to in clause (x) or (y) of this
sentence shall thereafter become the beneficial owner of any additional Shares
or Voting Securities (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from
the Company) and immediately thereafter beneficially owns 40% or more of the
combined voting power of all the outstanding Voting Securities or 40% or more of
the Shares then outstanding, then a "Change in Control" shall be deemed to have
occurred for purposes of the foregoing clause (a).</P>
<P>Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
have occurred for purposes of the foregoing clause (c) if after the consummation
of a consolidation or merger of the Company where the shareholders of the
Company, immediately prior to the consolidation or merger, would, immediately
after the consolidation or merger, "beneficially own" (as such term is defined
in Rule 13d-3 under the Act), directly or indirectly, shares representing in the
aggregate less than 50% or more of the voting shares of the Resulting
Corporation, the Incumbent Members constitute at least 50% of the board of
directors or board of trustees of the Resulting Corporation and the Chairman and
Chief Executive Officer of the Company prior to the consolidation or merger
remains the Chief Executive Officer of the Resulting Company immediately after
the consolidation or merger.</P>
<P>As used in this definition of "Change in Control," the term "Subsidiary"
means Gables Realty Limited Partnership, Gables Residential Services, Inc.,
Gables Central Construction, Inc., and Gables East Construction, Inc., and any
corporation or other entity (other than the Company) in any unbroken chain of
corporations or other entities, beginning with the Company if each of the
corporations or entities (other than the last corporation or entity in the
unbroken chain) owns stock or other interests possessing 50% or more of the
economic interest or the total combined voting power of all classes of stock or
other interests in one of the other corporations or entities in the chain.</P>
<P>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Terminating Event</U>.
A "Terminating Event" shall mean any of the events provided in this
Section&nbsp;3 occurring within 24 months following a Change in Control:</P>
<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; termination by the Company of
the employment of the Executive with the Company and its Subsidiaries for any
reason other than for Cause or the death of the Executive. "Cause" shall mean,
and shall be limited to, the occurrence of any one or more of the following
events: </P>
<P>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a willful act of
dishonesty by the Executive in connection with the performance of his material
duties involving the Company or any of its Subsidiaries; or</P>
<P>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; conviction of the Executive of
a crime involving moral turpitude or conviction of a felony and such conviction
has a material adverse affect on the interests of the Company; or</P>
<P>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the deliberate or willful failure
by the Executive (other than by reason of the Executive's physical or mental
illness, incapacity or disability) to substantially perform the Executive's
duties with the Company and the continuation of such failure for a period of 30
days after delivery by the Company to the Executive of written notice specifying
the scope and nature of such failure and its intention to terminate the
Executive for Cause. </P>
<P>A Terminating Event shall not be deemed to have occurred pursuant to this
Section&nbsp;3(a) solely as a result of the Executive being an employee of any
direct or indirect successor to the business or assets of the Company, rather
than continuing as an employee of the Company following a Change in Control. For
purposes of clauses&nbsp;(i) and&nbsp;(iii) of this Section&nbsp;3(a), no act,
or failure to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company;
or</P>
<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; termination by the Executive of
the Executive's employment with the Company and its Subsidiaries for Good
Reason. "Good Reason" shall mean the occurrence of any of the following
events:</P>
<P>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a substantial adverse
change in the nature or scope of the Executive's responsibilities, authorities,
powers, functions, or duties from the responsibilities, authorities, powers,
functions, or duties exercised by the Executive immediately prior to the Change
in Control; or</P>
<P>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a reduction in the Executive's
annual base salary as in effect on the date hereof or as the same may be
increased from time to time except for across-the-board salary reductions
similarly affecting all or substantially all management employees; or</P>
<P>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the relocation of the Company's
offices at which the Executive is principally employed immediately prior to the
date of a Change in Control to a location more than 30 miles from such offices,
or the requirement by the Company for the Executive to be based anywhere other
than the Company's offices at such location, except for required travel on the
Company's business to an extent substantially consistent with the Executive's
business travel obligations immediately prior to the Change in Control; or</P>
<P>(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the failure by the Company to pay to
the Executive any portion of his compensation or to pay to the Executive any
portion of an installment of deferred compensation under any deferred
compensation program of the Company within 15 days of the date such compensation
is due without prior written consent of the Executive; or</P>
<P>(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the failure by the Company to
obtain an effective agreement from any successor to assume and agree to perform
this Agreement.</P>
<P>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Special Termination
Payments</U>. In the event a Terminating Event occurs within 24 months after a
Change in Control, subject to the signing by Executive of a release of
employment-related claims reasonably acceptable to the Company (or its
successor),</P>
<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the Company shall pay to the
Executive an amount equal to two (2) times the sum of Executive's (i) most
recent annual base salary (or Executive's annual base salary immediately prior
to the Change in Control, if higher), (ii) the cash bonus awarded for the fiscal
year of the Company most recently ended prior to the Change of Control, if any,
and (iii) the value of the entire restricted stock grant (determined using the
fair market value on the date of grant, less consideration paid, if any, of both
the vested and unvested portion of the total grant, without regard to any
restrictions thereon) awarded for the fiscal year of the Company most recently
ended prior to the Change of Control, if any.</P>
<P>Said amount shall be paid in one lump sum payment no later than 31 days
following the date of termination; and</P>
<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the Company shall pay to the
Executive all reasonable legal and mediation fees and expenses incurred by the
Executive in obtaining or enforcing any right or benefit provided by this
Agreement, except in cases involving frivolous or bad faith litigation initiated
by the Executive.</P>
<P>Notwithstanding the foregoing, the special termination benefits required by
Section 4(a) hereof shall be reduced by any amount paid or payable to the
Executive by the Company pursuant to any employment or similar agreement between
the Company and the Executive (or any employment or similar agreement to which
the Executive becomes a party after the date hereof), on account of the
termination of employment of the Executive.</P>
<P>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Term</U>. This
Agreement shall take effect on the date first set forth above and shall
terminate upon the earliest of (a) the termination by the Company of the
employment of the Executive for Cause; (b) the resignation or voluntary
termination of the Executive for any reason prior to a Change in Control; (c)
the resignation of the Executive after a Change in Control for any reason other
than the occurrence of any of the events enumerated in Section 3(b)(i)-(v) of
this Agreement; or (d) 24 months plus one day following a Change in Control.</P>
<P>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Withholding</U>. All
payments made by the Company under this Agreement shall be net of any tax or
other amounts required to be withheld by the Company under applicable law.</P>
<P>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>No Mitigation;
Disputes; Etc.</U></P>
<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>No Mitigation</U>. The
Company agrees that, if the Executive's employment by the Company is terminated
during the term of this Agreement, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Section 4 hereof. Further, the amount of
any payment provided for in this Agreement shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, or otherwise.</P>
<P>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Mediation of Disputes</U>.
The parties shall endeavor in good faith to settle within 90 days any
controversy or claim arising out of or relating to this Agreement or the breach
thereof through mediation with JAMS, Endispute or similar organizations. If the
controversy or claim is not resolved within 90 days, the parties shall be free
to pursue other legal remedies in law or equity.</P>
<P>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Assignment; Prior
Agreements</U>. Neither the Company nor the Executive may make any assignment of
this Agreement or any interest herein, by operation of law or otherwise, without
the prior written consent of the other party, and without such consent any
attempted transfer shall be null and void and of no effect. This Agreement shall
inure to the benefit of and be binding upon the Company and the Executive, their
respective successors, executors, administrators, heirs and permitted assigns.
In the event of the Executive's death after a Terminating Event but prior to the
completion by the Company of all payments due him under Section 4 of this
Agreement, the Company shall continue such payments to the Executive's
beneficiary designated in writing to the Company prior to his death (or to his
estate, if the Executive fails to make such designation).</P>
<P>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Enforceability</U>. If
any portion or provision of this Agreement shall to any extent be declared
illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.</P>
<P>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Waiver</U>. No waiver of any
provision hereof shall be effective unless made in writing and signed by the
waiving party. The failure of any party to require the performance of any term
or obligation of this Agreement, or the waiver by any party of any breach of
this Agreement, shall not prevent any subsequent enforcement of such term or
obligation or be deemed a waiver of any subsequent breach.</P>
<P>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Notices</U>. Any notices,
requests, demands, and other communications provided for by this Agreement shall
be sufficient if in writing and delivered in person or sent by registered or
certified mail, postage prepaid, to the Executive at the last address the
Executive has filed in writing with the Company, or to the Company at its main
office, attention of the Board of Trustees.</P>
<P>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Effect on Other Plans</U>. Nothing
in this Agreement shall be construed to limit the rights of the Executive under
the Company's benefit plans, programs or policies.</P>
<P>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Amendment</U>. This Agreement may
be amended or modified only by a written instrument signed by the Executive and
by a duly authorized representative of the Company.</P>
<P>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Governing Law</U>. This is a
Maryland contract and shall be construed under and be governed in all respects
by the laws of the State of Maryland.</P>
<P>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Obligations of Successors</U>. In
addition to any obligations imposed by law upon any successor to the Company,
the Company will use their best efforts to require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place.</P>
<P>IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument
by the Company by its duly authorized officer and by the Executive, as of the
date first above written.</P>
<P align=right>GABLES RESIDENTIAL TRUST</P>
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      <P>By:<BR>Name:<BR>Title: </P></TD>
    <TD vAlign=top width="75%">
      <P><U>/s/ Chris D. Wheeler</U><BR>Chris D. Wheeler<BR>Chief Executive
      Officer<U><BR><BR><BR>/s/ Dawn H. Severt<BR></U>Dawn H. Severt
  </P></TD></TR></TABLE>
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