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EXHIBIT 10.3
EXECUTION COPY
AMENDED AND RESTATED EMPLOYMENT
AND CHANGE IN CONTROL AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT
(the
"Agreement"), is made and entered into as
of this 17th day of October, 2005, by
and among CHRISTOPHER J. PAPA (the
"Executive"), and POST PROPERTIES, INC., a
Georgia corporation ("Post"), POST
APARTMENT HOMES, L.P., a Georgia limited
partnership ("Post Apartment Homes"), and
POST SERVICES, INC., a Georgia
corporation ("Post Services", and together
with Post and Post Apartment Homes,
the "Post Parties").
REASONS FOR THIS AGREEMENT.
The Post
Parties have identified Executive as an individual with
significant skills and experience critical
to the business of the Post Parties.
In view of the significant and growing
demand for executive talent and the need
to ensure continuity of Post's senior
management team, the Post Parties desire
to provide Executive through this Agreement
with certain incentives to remain in
the Post Parties' employment. This
Agreement is also designed to provide
additional motivation for meeting the Post
Parties' goals and objectives, to
address potential long term employment
concerns of Executive, and to impose
certain reasonable restrictions on
Executive's activities designed to protect
the Post Parties' interests should
Executive's employment terminate.
Executive
acknowledges that the Post Parties and Post Affiliates shall
disclose or make available Confidential
Information and Trade Secrets to
Executive that could be used by Executive
to the Post Parties' or Post
Affiliates' detriment. In addition, in
connection with his employment, Executive
shall develop important relationships and
contacts with employees valuable to
the Post Parties and Post Affiliates.
Executive
further acknowledges that Sections 7, 8, 9 and 10 of this
Agreement are fair and reasonable,
enforcement of the provisions of this
Agreement will not cause him undue
hardship, and the provisions of this
Agreement are reasonably necessary and
commensurate with the need to protect the
Post Parties and Post Affiliates and their
business interests and property from
irreparable harm.
WHEREAS,
Post and Executive are parties to that certain employment
agreement dated December 1, 2003 (the
"Original Employment Agreement");
WHEREAS,
Post and Executive have agreed to amend and restate the
Original
Employment Agreement;
WHEREAS, the Post Parties desire to employ Executive, and
Executive
desires to be employed by the Post Parties
on the terms and conditions contained
in this Agreement, and in consideration of
the mutual promises and agreements
contained herein and other good and
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valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties to this
Agreement, intending to be legally bound,
hereby agree as follows:
SECTION 1. DEFINITIONS.
1.1.
Board. The term "Board" for purposes of this Agreement shall mean
the
Board of Directors of Post.
1.2. Cash
Compensation. The term "Cash Compensation" for purposes of this
Agreement shall mean the sum of:
(a) Executive's annual salary (as determined without regard to
any
salary
deferral election) payable pursuant to Section 5.1 in effect on
the
day before
Executive's employment terminates under Section 4, Section 6.1
or Section 6.3
or, if greater, Executive's average annualized annual
salary (as
determined without regard to any salary deferral election) paid
pursuant
to Section 5.1 over the three (3) consecutive year period (or,
if
less,
Executive's period of employment by the Post Parties) which ends
on
the date
that Executive's employment so terminates (for the avoidance of
doubt,
Executive's employment prior to the date of this Agreement may
be
used in
calculating Executive's average annualized combined annual
salary),
and
(b) the average annual bonuses which have been paid pursuant to
Section
5.2 or which would have been paid pursuant to Section 5.2 but
for
a bonus
deferral election with respect to Executive's performance over
the
three (3)
consecutive year period which ends on the date that Executive's
employment
so terminates (or, if less, Executive's period of employment by
the Post
Parties) whether such bonuses are paid (or would have been paid
but for a
bonus deferral election) in cash, in property, or in any
combination of cash and property (for the avoidance of doubt,
Executive's
employment
prior to the date of this Agreement may be used in calculating
Executive's average annual
bonus); provided, however,
(c) neither the value of any stock option or restricted stock
grants
made by
Post to Executive in any calendar year, nor any income which
Executive
realizes in any calendar year from the exercise of any such
stock
options or the lapse of any restrictions on such restricted
stock
grants,
nor any payments under Post's Shareholder Value Plan shall be
treated as
part of Executive's salary under Section 1.2(a), as part of
Executive's bonuses under Section 1.2(b), or otherwise be
considered or
treated as
Cash Compensation.
1.3.
Cause. The term "Cause" for purposes of this Agreement shall
(subject
to Section 1.3(d)) mean:
(a) Executive is convicted of, pleads guilty to, or confesses
or
otherwise
admits to the Post Parties or a Post Affiliate or a prosecutor,
or
otherwise publicly admits, any felony or any act of fraud,
misappropriation, or embezzlement, or Executive engages in a
fraudulent
act or
course of conduct;
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(b) There is any material act or omission by Executive
involving
malfeasance or negligence in the performance of Executive's duties
to the
Post
Parties or a Post Affiliate to the material detriment of the
Post
Parties or
such Post Affiliate; or
(c) Executive breaches in any material respect any of the
covenants
set forth
in Section 7, Section 8, Section 9 or Section 10 of this
Agreement;
provided, however,
(d) No such act or omission or event shall be treated as
"Cause"
under this
Agreement unless (i) Executive has been provided a detailed,
written
statement of the basis for Post's belief such act or omission
or
event
constitutes "Cause" and an opportunity to meet with the
Compensation
Committee
(together with Executive's counsel if Executive chooses to have
Executive's counsel present at such meeting) after Executive has
had a
reasonable
period in which to review such statement and, if the allegation
is under
Section 1.3(b) or Section 1.3(c), has had at least a thirty
(30)
day period
to take corrective action, and (ii) tHe Compensation Committee
after such
meeting (if Executive meets with the Compensation Committee)
and after
the end of such thirty (30) day correction period (if
applicable) determines reasonably and in good faith and by the
affirmative
vote of at
least a majority of the members of the Compensation Committee
then in
office at a meeting called and held for such purpose that
"Cause"
does exist
under this Agreement.
1.4.
Change in Control. The term "Change in Control" for purposes of
this
Agreement shall mean:
(a) a "change in control" of Post of a nature that would be
required
to be
reported in response to Item 6(e) of Schedule 14A for a proxy
statement
filed under Section 14(a) of the Securities Exchange Act as in
effect on the
date of this Agreement;
(b) a "person" (as that term is used in 14(d)(2) of the
Exchange
Act)
becomes the beneficial owner (as defined in Rule 13d-3 under
the
Exchange
Act) directly or indirectly of securities representing 45% or
more of
the combined voting power for election of directors of the then
outstanding securities of Post;
(c) the individuals who at the beginning of any period of two
(2)
consecutive years or less (starting on or after the date of
this
Agreement)
constitute Post's Board cease for any reason during such period
to
constitute at least a majority of Post's Board, unless the election
or
nomination
for election of each new member of the Board was approved by
vote of at
least two-thirds of the members of such Board then still in
office who
were members of such Board at the beginning of such period;
(d) the shareholders of Post approve any reorganization,
merger,
consolidation, or share exchange as a result of which the common
stock of
Post shall
be changed, converted, or exchanged into or for securities of
another
organization (other than a merger with a Post Affiliate
identified
in Section
1.16(a) oF this Agreement or a wholly-owned subsidiary of
Post), or
any dissolution or liquidation of Post, or any sale or the
disposition of 50% or more of the assets or business of Post;
or
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(e) the shareholders of Post approve any reorganization,
merger,
consolidation, or share exchange with another corporation unless
(i) the
persons
who were the beneficial owners of the outstanding shares of the
common
stock of Post immediately before the consummation of such
transaction beneficially own more than 60% of the outstanding
shares of
the common
stock of the successor or survivor corporation in such
transaction immediately following the consummation of such
transaction and
(ii) the
number of shares of the common stock of such successor or
survivor
corporation beneficially owned by the persons described in
Section
1.4(e)(i) immediately following the consummation of such
transaction is beneficially owned by each such person in
substantially the
same
proportion that each such person had beneficially owned shares
of
Post
common stock immediately before the consummation of such
transaction,
provided
(iii) the percentage described in Section 1.4(e)(i) of the
beneficially owned shares of the successor or survivor corporation
and the
number
described in Section 1.4(e)(ii) of the beneficially owned shares
of
the
successor or survivor corporation shall be determined exclusively
by
reference
to the shares of the successor or survivor corporation which
result
from the beneficial ownership of shares of common stock of Post
by
the
persons described in Section 1.4(e)(i) immediately before the
consummation of such transaction.
1.5. Code.
The term "Code" for purposes of this Agreement shall mean the
Internal Revenue Code of 1986, as
amended.
1.6.
Compensation Committee. The term "Compensation Committee" for
purposes of this Agreement shall mean the
Executive Compensation and Management
Development Committee of the Board, or any
successor to such committee.
1.7.
Confidential or Proprietary Information. The term "Confidential
or
Proprietary Information" for purposes of
this Agreement shall mean any secret,
confidential, or proprietary information of
the Post Parties or a Post Affiliate
(not otherwise included in the definition
of Trade Secret in Section 1.23 of
this Agreement) that has not become
generally available to the public by the act
of one who has the right to disclose such
information without violating any
right of the Post Parties or a Post
Affiliate.
1.8.
Disability. The term "Disability" for purposes of this
Agreement
shall mean that Executive, as a result of a
mental or physical condition or
illness affecting a major life activity, is
unable to perform the essential
functions of Executive's job at the Post
Parties for any consecutive 180-day
period, even with reasonable accommodation,
all as reasonably determined by the
Compensation Committee.
1.9.
Effective Date. The term "Effective Date" for purposes of this
Agreement shall mean either the date which
includes the "closing" of the
transaction which makes a Change in Control
effective, if the Change in Control
is made effective through a transaction
which has a "closing", or the date a
Change in Control is reported in accordance
with applicable law as effective to
the Securities and Exchange Commission (or
otherwise publicly announced as
effective), if the Change in Control is
made effective other than through a
transaction which has a "closing".
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1.10.
Exchange Act. The term "Exchange Act" for purposes of this
Agreement
shall mean the Securities Exchange Act of
1934, as amended.
1.11.
Executive. The term "Executive" for purposes of this Agreement
shall
mean Christopher J. Papa, a resident of the
State of Georgia.
1.12. Good
Reason.
(1) The
term "Good Reason" for purposes of Section 6 of this Agreement
shall (subject to Section 1.12(1)(e))
mean:
(a) there is a reduction after a Change in Control, but before
the
end of
Executive's Protection Period, in Executive's salary payable
pursuant
to Section 5.1 or there is a reduction after a Change in
Control,
but before
the end of Executive's Protection Period, in Executive's
eligibility to receive any bonuses pursuant to Section 5.2 or
incentive
compensation pursuant to Section 5.3 or Section 5.4
substantially
different
from the eligibility of other senior executives of the Post
Parties to
receive such bonuses or incentive compensation, all without
Executive's express written consent; or
(b) there is a reduction after a Change in Control, but before
the
end of
Executive's Protection Period, in the scope, importance, or
prestige
of Executive's duties, responsibilities, or authority (other
than
as a
result of a mere change in Executive's title, if such change in
title
is
consistent with the organizational structure of Post following
such
Change in
Control) without Executive's express written consent; or
(c) the Post Parties at any time after a Change in Control, but
before the
end of Executive's Protection Period (without Executive's
express
written consent), transfers Executive's primary work site from
Executive's primary work site on the date of such Change in Control
or, if
Executive
subsequently consents in writing to such a transfer under this
Agreement,
from the primary work site that was the subject of such
consent,
to a new primary work site that is more than 35 miles from
Executive's then current primary work site, unless such new primary
work
site is
closer to Executive's primary residence than Executive's then
current
primary work site; or
(d) the Post Parties fail (without Executive's express written
consent)
after a Change in Control, but before the end of Executive's
Protection
Period, to continue to provide to Executive health and welfare
benefits,
deferred compensation benefits, executive perquisites (other
than the
use of a company airplane for personal purposes), and stock
option and
restricted stock grants that are in the aggregate comparable in
value to
those provided to Executive immediately prior to the Change in
Control
Date; provided, however,
(e) No such act or omission shall be treated as "Good Reason"
under
Section
1.12(1) unless:
(i) (A) Executive delivers to the Compensation Committee a
detailed, written statement of the basis for Executive's belief
that
such act or omission constitutes Good Reason, (B) Executive
delivers
such statement before the later of
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(1) the end of the ninety (90) day period that starts on the
date
there is an act or omission which forms the basis for
Executive's
belief that Good Reason exists, or (2) the end of the period
mutually agreed upon for purposes of this Section
1.12(1)(e)(i)(B)
in writing by Executive and the Chairman of the Compensation
Committee, (C)
Executive gives the Compensation Committee a thirty
(30) day period after the delivery of such statement to cure
the
basis for such belief, and (D) Executive actually submits
Executive's written resignation to the Compensation Committee
during
the sixty (60) day period that begins immediately after the end
of
such thirty (30) day period if Executive reasonably and in good
faith determines that Good Reason continues to exist after the
end
of such thirty (30) day period, or
(ii) Post states in writing to Executive that Executive has
the right to treat any such act or omission as Good Reason
under
this Agreement and Executive resigns during the sixty (60) day
period that starts on the date such statement is actually
delivered
to Executive;
(f) If (A) Executive gives the Compensation Committee the
statement
described
in Section 1.12(1)(e)(i) before the end of the thirty (30) day
period
that immediately follows the end of the Protection Period and
Executive
thereafter resigns within the period described in Section
1.12(1)(e)(i), or (B) Post provides the statement to Executive
described
in Section
1.12(1)(e)(ii) before the end of the thirty (30) day period
that
immediately follows the end of the Protection Period and
Executive
thereafter
resigns within the period described in Section 1.12(1)(e)(ii),
then such
resignation shall be treated under this Agreement as if made iN
Executive's Protection Period; and
(g) If Executive consents in writing to any reduction described
in
Section
1.12(1)(a) or Section 1.12(1)(b), to any transfer described in
Section
1.12(1)(c) or to any failure described in Section 1.12(1)(d) in
lieu of
exercising Executive's right to resign for Good Reason and
delivers
such consent to Post, the date such consent is delivered to
Post
thereafter shall
be treated under this definition as the date of a Change
in Control
for purposes of determining whether Executive subsequently has
Good
Reason under this Agreement to resign under Section 6.1 or
Section
6.3 as a
result of any subsequent reduction described in Section
1.12(1)(a)
or Section 1.12(1)(b), any subsequent transfer described in
Section
1.12(1)(c), or any subsequent failure described in Section
1.12(1)(d).
(2) The
term "Good Reason" for purposes of Section 4 of this Agreement
shall (subject to Section 1.12(2)(d))
mean:
(a) Post changes Executive's eligibility for compensation and
benefits
in a manner that results in Executive's compensation and
benefits
being
reduced five percent (5%) more than the reduction of other
senior
Post
executives' compensation and benefits; or
(b) there is a significant reduction in Executive's level of
responsibility or authority at Post (other than a mere change
in
Executive's title) without Executive's express written consent;
or
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(c) Post transfers Executive's primary work site from the
Executive's primary work site on the date of this Agreement or, if
the
Executive
subsequently consents in writing to such a transfer under this
Agreement,
from the primary work site that was the subject of such
consent,
to a new primary work site that is more than 35 miles from
Executive's then current primary work site, unless such new primary
work
site is
closer to Executive's primary residence than Executive's then
current
primary work site or unless Executive provides his express
written
consent;
provided however,
(d) No such act or omission shall be treated as "Good Reason"
under
Section
1.12(2) unless:
(i) (A) Executive delivers to the Compensation Committee a
detailed, written statement of the basis for Executive's belief
that
such act or omission constitutes Good Reason, (B) Executive
delivers
such statement before the later of (1) the end of the ninety
(90)
day period that starts on the date there is an act or omission
which
forms the basis for Executive's belief that Good Reason exists,
or
(2) the end of the period mutually agreed upon for purposes of
this
Section 1.12(2)(d)(i)(B) in writing by Executive and the Chairman
of
the Compensation Committee, (C) Executive gives the
Compensation
Committee a thirty (30) day period after the delivery of such
statement to cure the basis for such belief, and (D) Executive
actually submits Executive's written resignation to the
Compensation
Committee during the sixty (60) day period that begins
immediately
after the end of such thirty (30) day period if Executive
reasonably
and in good faith determines that Good Reason continues to
exist
after the end of such thirty (30) day period, or
(ii) Post states in writing to Executive that Executive has
the right to treat any such act or omission as Good Reason
under
this Section 1.12 (2) and Executive resigns during the sixty
(60)
day period that starts on the date such statement is actually
delivered to Executive.
1.13.
Gross Up Payment. The term "Gross Up Payment" for purposes of
this
Agreement shall mean a payment to or on
behalf of Executive which shall be
sufficient to pay (a) any excise tax
described in Section 13 in full, (b) any
federal, state and local income tax and
social security and other employment tax
on the payment made to pay such excise tax
as well as any additional taxes on
such payment and (c) any interest or
penalties assessed by the Internal Revenue
Service on Executive which are related to
the payment of such excise tax unless
such interest
