-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qgn4Pj226y+9Tfz+vj2o22b4oOWhPBIAf39CJNlQsgGfkVus7hQb95XjOWl9XPWJ JKYNovuUnaYb8JYhfe8S5A== 0000025232-00-000017.txt : 20001208 0000025232-00-000017.hdr.sgml : 20001208 ACCESSION NUMBER: 0000025232-00-000017 CONFORMED SUBMISSION TYPE: PRES14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001117 FILED AS OF DATE: 20001117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COUSINS PROPERTIES INC CENTRAL INDEX KEY: 0000025232 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 580869052 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRES14A SEC ACT: SEC FILE NUMBER: 000-03576 FILM NUMBER: 772766 BUSINESS ADDRESS: STREET 1: 2500 WINDY RIDGE PKWY STE 1600 CITY: ATLANTA STATE: GA ZIP: 30339-5683 BUSINESS PHONE: 7709552200 MAIL ADDRESS: STREET 1: 2500 WINDY RIDGE PARKWAY STREET 2: SUITE 1600 CITY: ATLANTA STATE: GA ZIP: 30339-5683 DEF 14A 1 0001.txt SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant |X| Filed by a Party other than the Registrant |_| Check the appropriate box: |X| Preliminary Proxy Statement |_| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |_| Definitive Proxy Statement |_| Definitive Additional Materials |_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 Cousins Properties Incorporated - - ------------------------------------------------------------------------------ (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: PRELIMINARY PROXY STATEMENT -- DATED NOVEMBER 17, 2000 COUSINS PROPERTIES INCORPORATED 2500 WINDY RIDGE PARKWAY, SUITE 1600 ATLANTA, GEORGIA 30339 NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 28, 2000 TO THE STOCKHOLDERS OF COUSINS PROPERTIES INCORPORATED: NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Cousins Properties Incorporated (the "Company") will be held on Thursday, December 28, 2000, at 9:00 a.m., local time, at the Wildwood Conference Center, Lobby Level, 2300 Windy Ridge Parkway, Atlanta, Georgia 30339, for the following purposes: (1) To approve an amendment to the 1999 Incentive Stock Plan to increase the number of shares of Common Stock available under the Plan by 1.2 million shares; and (2) To transact such other business as may properly come before the meeting or any adjournments thereof. Only stockholders of record at the close of business on November 27, 2000 will be entitled to notice of and to vote at the meeting. A list of stockholders as of the close of business on November 27, 2000 will be available at the Special Meeting of Stockholders for examination by any stockholder, his agent or his attorney. Your attention is directed to the Proxy Statement submitted with this notice. By Order of the Board of Directors. TOM G. CHARLESWORTH Secretary Atlanta, Georgia December 1, 2000 WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, YOU ARE URGED TO VOTE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON. COUSINS PROPERTIES INCORPORATED 2500 WINDY RIDGE PARKWAY, SUITE 1600 ATLANTA, GEORGIA 30339 PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS To Be Held December 28, 2000 The accompanying proxy is solicited by the Board of Directors of Cousins Properties Incorporated (the "Company") for use at a Special Meeting of Stockholders (the "Special Meeting") to be held on December 28, 2000, at 9:00 a.m., local time, at the Wildwood Conference Center, Lobby Level, 2300 Windy Ridge Parkway, Atlanta, Georgia 30339, and any adjournments thereof. When such proxy is properly executed and returned, the shares it represents will be voted at the meeting and, where a choice has been specified on the proxy, will be voted in accordance with such specification. If no choice is specified on the proxy with respect to the matter to be acted upon, the shares represented by the proxy will be voted in favor of the matter. The presence of holders of a majority of the outstanding shares of Common Stock either in person or by proxy will constitute a quorum for the transaction of business at the Special Meeting. Broker non-votes are neither counted in establishing a quorum nor voted for or against matters presented for stockholder consideration. Consequently, such broker non-votes have no effect on the outcome of the vote. Abstentions with respect to the proposal are counted for purposes of establishing a quorum. Abstentions, however, are neither counted for or against the matter presented for stockholder consideration, and as a result have no effect on the outcome of the vote. Any stockholder giving a proxy has the power to revoke it at any time before it is voted. Revocation of a proxy is effective upon receipt by the Secretary of the Company of either (i) an instrument revoking it or (ii) a duly executed proxy bearing a later date. A stockholder who is present at the Special Meeting may also revoke his or her proxy and vote in person if he or she so desires. Only stockholders of record as of the close of business on November 27, 2000 will be entitled to vote at the Special Meeting. As of that date, the Company had outstanding 49,023,188 shares of Common Stock, each share being entitled to one vote. No cumulative voting rights are authorized and dissenters' rights for stockholders are not applicable to the matters being proposed. The approximate date on which this Proxy Statement and the accompanying form of proxy are first being given or sent to stockholders is December 1, 2000. AMENDMENT TO THE 1999 INCENTIVE STOCK PLAN At the annual meeting of stockholders in 1999, the stockholders approved the adoption of the Cousins Properties Incorporated 1999 Incentive Stock Plan (the "Plan"). The primary purpose of the Plan is to (i) attract and retain key employees and outside directors, (ii) provide an incentive to key employees and outside directors to work to increase the value of the Company's Common Stock, and (iii) to provide key employees and outside directors with a stake in the future of the Company which corresponds to the stake of each of the Company's stockholders. Over the past twelve months, the Board of Directors has been reviewing the Company's overall compensation strategy, including stock based grants. As part of this review process, the Board hired an outside consultant to advise it on appropriate compensation levels, including the appropriate usage and levels of stock based grants. After reviewing the report prepared by the outside consultants, the Board has determined that it is necessary to increase the number of shares of stock authorized for use under the Plan. The Board has determined that it is in the best interests of the stockholders to amend the Plan to increase by 1,200,000 the number of shares of Common Stock available for issuance under the Plan. The Board currently anticipates that substantially all of the additional shares of Common Stock available for issuance under the Plan will be used for fiscal year 2000 stock based grants and that such grants will be consistent with the outside consultant's recommendations. The Board of Directors has adopted and recommends that the stockholders vote "FOR" approval of the proposed amendment to the Plan to increase the number of shares of Common Stock available for issuance under the Plan. The amendment to the Plan will be approved upon receiving the affirmative vote of holders of a majority of the shares voting at the meeting. Proxies will be voted in accordance with the specifications marked thereon, and, if no specification is made, will be voted "FOR" approval of the amendment to the Plan. The following discussion summarizes the material terms of the Plan. This discussion does not purport to be complete and is qualified in its entirety by reference to the Plan, as proposed to be amended and restated, a copy of which is attached hereto as Exhibit "A". The amended and restated Plan reflects the adjustments which are required under the Plan as a result of the 3 for 2 stock split that occurred on October 2, 2000. Proposed Amendment to the Plan The proposed amendment to the Plan is to increase the number of shares of Common Stock available for issuance under the Plan by 1,200,000 shares for a total of 2,543,287.5 shares. Administration The Plan is administered by a committee of two or more directors serving on the Company's Board of Directors (the "Committee"). Each director, while a member of the Committee, must satisfy the requirements for a "non-employee" director under Rule 16b-3 of the Securities Exchange Act of 1934 (the "Exchange Act") and an "outside director" under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). All grants under the Plan are evidenced by a certificate that incorporates such terms and conditions as the Committee deems necessary or appropriate. Coverage, Eligibility and Annual Grant Limits The Plan provides for the issuance of stock options ("Options") and restricted stock ("Restricted Stock") to certain key employees and to outside directors, for the issuance of stock appreciation rights ("SARs") to certain key employees, and for the issuance of shares of Common Stock in lieu of cash to outside directors. A key employee is any employee of the Company, Cousins Real Estate Corporation, a "preferred stock subsidiary" (as defined in the Plan) that has been designated by the Board of Directors as covered by the Plan, or any subsidiary, parent or affiliate of the Company or Cousins Real Estate Corporation who has been designated by the Committee and who, in the judgment of the Committee acting in its absolute discretion, is a key to the success of one these entities. The Company estimates that there currently are approximately 100 such key employees. No key employee in any calendar year may be granted an Option to purchase more than 450,000 shares of Common Stock or an SAR with respect to more than 450,000 shares of Common Stock. Options Under the Plan, either incentive stock options ("ISOs"), which are intended to qualify for special tax treatment under Code Section 422, or non-incentive stock options ("Non-ISOs") may be granted to key employees by the Committee, but ISOs can only be granted to key employees of the Company or a subsidiary or parent of the Company. Each Option granted under the Plan entitles the holder thereof to purchase the number of shares of Common Stock specified in the grant at the option price specified in the related stock option certificate. The terms and conditions of each Option granted under the Plan will be determined by the Committee, but no Stock Option will be granted at an exercise price which is less than the fair market value of the Common Stock as determined on the grant date in accordance with the Plan. In addition, if the Option is an ISO that is granted to a ten percent stockholder of the Company, the option price may be no less than 110% of the fair market value of the shares of Common Stock on the grant date. No Option may be exercisable more than ten years from the grant date or, if the Option is an ISO granted to a ten percent stockholder of the Company, it may not be exercisable more than five years from the grant date. Moreover, no participant may be granted ISOs which are first exercisable in any calendar year for stock having an aggregate fair market value (determined as of the date that the ISO was granted) that exceeds $100,000. Each outside director automatically is granted a Non-ISO as of the first day he or she serves as an outside director to purchase 6,000 shares of Common Stock at an option price equal to the fair market value of the Common Stock determined on the grant date in accordance with the Plan. Thereafter, each outside director who is serving as such on March 31 of each calendar year and who has served as such for more than ten consecutive months automatically is granted a Non-ISO as of March 31 of such calendar year to purchase 6,000 shares of Common Stock at an option price equal to the fair market value of the Common Stock as determined on the grant date in accordance with the Plan. Stock Appreciation Rights SARs may be granted by the Committee to key employees under the Plan, either as part of an Option or as stand alone SARs. The terms and conditions for an SAR granted as part of an Option will be set forth in the related Option certificate while the terms and conditions for a stand alone SAR will be set forth in a related SAR certificate. SARs entitle the holder to receive an amount equal to the excess of the fair market value of one share of Common Stock as of the date such right is exercised over the baseline price specified in the Option or SAR certificate (the "SAR Value"), multiplied by the number of shares of Common Stock in respect of which the SAR is being exercised. The SAR Value for an SAR is the fair market value of a share of Common Stock as determined on the grant date in accordance with the Plan. Restricted Stock Restricted Stock may be granted by the Committee to key employees and outside directors under the Plan subject to such terms and conditions, if any, as the Committee acting in its absolute discretion deems appropriate. The Committee, in its discretion, may prescribe that a key employee's or outside director's rights in a Restricted Stock award will be nontransferable or forfeitable or both unless certain conditions are satisfied. These conditions may include, for example, a requirement that the key employee continue employment or the outside director continue service with the Company for a specified period or that the Company or the key employee achieve stated performance or other objectives. Each grant of Restricted Stock shall be evidenced by a certificate which will specify what rights, if any, a key employee or outside director has with respect to such Restricted Stock as well as any conditions applicable to the Restricted Stock. Stock in Lieu of Cash An outside director shall have the right to elect in accordance with the procedures stated under the Plan to receive Common Stock in lieu of cash as part of his or her compensation package with respect to all or a specific percentage of (i) any installment of his or her annual cash retainer fee as an outside director, (ii) any fee payable in cash to him or to her for attending a meeting of the Board of Directors or a committee of the Board of Directors and (iii) any fee payable in cash to him or to her for serving as the chairperson of a committee of the Board of Directors. Any election to receive Common Stock in lieu of cash which was in effect under the Cousins Properties Incorporated Stock Plan for Outside Directors immediately before the effective date of the Plan shall remain in effect until revoked under the Plan. The Company shall have the right to issue the shares of Common Stock which an outside director shall receive in lieu of any cash payment subject to a restriction that the outside director have no right to transfer such share until the applicable holding period requirement, if any, set forth in the exemption under Rule 16b to Section 16(b) of the 1934 Act has been satisfied. Non-transferability No Option, SAR or Restricted Stock (absent the Committee's consent) is transferable by a key employee or an outside director other than by will or by the laws of descent and distribution, and any Option or SAR (absent the Committee's consent) is exercisable during a key employee's or outside director's lifetime only by the key employee or outside director. Amending or Terminating the Plan The Plan may be amended by the Board to the extent it deems necessary or appropriate (but any amendment relating to ISOs will be made subject to the limits of Code Section 422), and the Plan may be terminated by the Board at any time. The Board may not unilaterally modify, amend or cancel any Option, SAR or Restricted Stock previously granted without the consent of the holder of such Option, SAR or Restricted Stock or unless there is a dissolution or liquidation of the Company or a similar transaction. Adjustment of Shares Capital Structure. The number, kind or class of shares of Common Stock reserved for issuance under the Plan, the annual grant caps, the number, kind or class of shares of Common Stock subject to Options or SARs granted under the Plan, and the option price of the Options and the SAR Value of the SARs, as well as the number, kind or class of shares of Restricted Stock granted under the Plan, shall be adjusted by the Committee in an equitable manner to reflect any change in the capitalization of the Company. Mergers. The Committee as part of any transaction described in Code Section 424(a) shall have the right to adjust (in any manner which the Committee in its discretion deems consistent with Code Section 424(a)) the number, kind or class of shares of Common Stock reserved for issuance under the Plan, the number, kind or class of shares of Common Stock underlying any Restricted Stock grants previously made under the Plan and any related grant and forfeiture conditions, and the number, kind or class of shares of Common Stock subject to Option and SAR grants previously made under the Plan and the related option price of the Options and SAR Value of the SARs, and, further, shall have the right to make (in any manner which the Committee in its discretion deems consistent with Code Section 424(a)) Restricted Stock, Option and SAR grants to effect the assumption of, or the substitution for, restricted stock, option and stock appreciation right grants previously made by any other corporation to the extent that such transaction calls for the substitution or assumption of such grants. Federal Income Tax Consequences The rules concerning the federal income tax consequences with respect to grants made pursuant to the Plan are technical, and reasonable persons may differ on the proper interpretation of such rules. Moreover, the applicable statutory and regulatory provisions are subject to change, as are their interpretations and applications, which may vary in individual circumstances. Therefore, the following discussion is designed to provide only a brief, general summary description of the federal income tax consequences associated with such grants, based on a good faith interpretation of the current federal income tax laws, regulations (including certain proposed regulations) and judicial and administrative interpretations. The following discussion does not set forth (i) any federal tax consequences other than income tax consequences or (ii) any state, local or foreign tax consequences that may apply. ISOs. In general, a key employee will not recognize taxable income upon the grant or the exercise of an ISO. For purposes of the alternative minimum tax, however, the key employee will be required to treat an amount equal to the difference between the fair market value of the Common Stock on the date of exercise over the exercise price as an item of adjustment in computing the key employee's alternative minimum taxable income. If the key employee does not dispose of the Common Stock received pursuant to the exercise of the ISO within either (i) two years after the date of the grant of the ISO or (ii) one year after the date of exercise of the ISO, a subsequent disposition of the Common Stock will generally result in long-term capital gain or loss to such individual with respect to the difference between the amount realized on the disposition and the exercise price. The Company will not be entitled to any income tax deduction as a result of such disposition. The Company normally will not be entitled to take an income tax deduction at either the grant or the exercise of an ISO. If the key employee disposes of the Common Stock acquired upon exercise of the ISO within either of the above-mentioned time periods, then in the year of such disposition, such individual generally will recognize ordinary income, and the Company will be entitled to an income tax deduction (provided the Company satisfies applicable federal income tax reporting requirements), in an amount equal to the lesser of (i) the excess of the fair market value of the Common Stock on the date of exercise over the exercise price or (ii) the amount realized upon disposition over the exercise price. Any gain in excess of such amount recognized by the key employee as ordinary income would be taxed to such individual as short-term or long-term capital gain (depending on the applicable holding period). Non-ISOs. A key employee or an outside director will not recognize any taxable income upon the grant of a Non-ISO, and the Company will not be entitled to take an income tax deduction at the time of such grant. Upon the exercise of a Non-ISO, the key employee or outside director generally will recognize ordinary income and the Company will be entitled to take an income tax deduction (provided the Company satisfies applicable federal income tax reporting requirements) in an amount equal to the excess of the fair market value of the Common Stock on the date of exercise over the exercise price. Upon a subsequent sale of the Common Stock by the key employee or outside director, such individual will recognize short-term or long-term capital gain or loss (depending on the applicable holding period). SARs. A key employee will recognize ordinary income for federal income tax purposes upon the exercise of an SAR under the Plan for cash, Common Stock or a combination of cash and Common Stock, and the amount of income that the key employee will recognize will depend on the amount of cash, if any, and the fair market value of the Common Stock, if any, that the key employee receives as a result of such exercise. The Company generally will be entitled to a federal income tax deduction in an amount equal to the ordinary income recognized by the key employee in the same taxable year in which the key employee recognizes such income, if the Company satisfies applicable federal income tax reporting requirements. Restricted Stock. A key employee or outside director is not subject to any federal income tax upon the grant of Restricted Stock, nor does the grant of Restricted Stock result in an income tax deduction for the Company, unless the restrictions on the stock do not present a substantial risk of forfeiture as defined under Section 83 of the Code. In the year that the Restricted Stock is no longer subject to a substantial risk of forfeiture, the key employee or outside director will recognize ordinary income in an amount equal to the fair market value of the shares of Common Stock transferred to the key employee or outside director, generally determined on the date the Restricted Stock is no longer subject to a substantial risk of forfeiture. If a key employee or outside director is subject to Section 16(b) of the Exchange Act and cannot sell the Common Stock without being subject to liability under such section, the stock will be treated as subject to a substantial risk of forfeiture. If the Restricted Stock is forfeited, the key employee or outside director will recognize no gain. SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS The following table sets forth the number and percentage of shares of Common Stock of the Company beneficially owned by the Directors of the Company, the five most highly compensated Executive Officers of the Company and by all Directors and Executive Officers of the Company as a group, as of October 31, 2000. Shares of Common Stock Beneficially Owned on Name October 31, 2000 (1) Percent of Class (2) Thomas G. Cousins, 9,684,931 (3) 19.63% Chairman and Chief Executive Officer Thomas D. Bell, Jr. 6,000 (4) * Director Richard W. Courts, II, 2,180,759 (5) 4.45% Director Lillian C. Giornelli, 331,321 (6) * Director Terence C. Golden, 22,323 (7) * Director Boone A. Knox, 249,309 (8) * Director William Porter Payne, 25,858 (9) * Director Richard E. Salomon, 139,647 (10) * Director Daniel M. DuPree, 470,818 (11) * President and Chief Operating Officer Craig B. Jones 114,034 (12) * Senior Vice President and President - Office Division Joel T. Murphy 114,177 (13) * Senior Vice President and President - Retail Division John L. Murphy 205,402 (14) * Senior Vice President Tom G. Charlesworth 204,622 (15) * Senior Vice President, General Counsel and Secretary Total for all Directors and 14,133,268 (16) 27.91% Executive Officers as a group (18 persons) * Less than 1% (1) Based upon information furnished by the Directors and Executive Officers. Under the rules of the Securities and Exchange Commission, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote, or direct the voting of, such security, or "investment power," which includes the power to dispose of, or to direct the disposition of, such security. A person also is deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within sixty days. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he has no beneficial economic interest. Except as indicated in these notes, the persons indicated possessed sole voting and investment power with respect to all shares set forth opposite their names. (2) Except for Thomas G. Cousins, who is included in the table, the Company is not aware of any other beneficial owner of more than 5% of the outstanding shares of the Company's Common Stock as of October 31, 2000. This is based on information contained in Schedule 13Gs filed with the Securities and Exchange Commission. (3) Does not include 688,947 shares owned by Mr. Cousins' wife, as to which Mr. Cousins disclaims beneficial interest. Includes 202,140 shares as to which Mr. Cousins shares voting and investment power. Also includes 315,000 shares which may be currently acquired by exercise of options. (4) Includes 6,000 shares which may be currently acquired by exercise of options. (5) Includes a total of 2,078,626 shares as to which Mr. Courts shares voting and investment power. Of these shares (i) 387,751 shares are owned by the Courts Foundation for which Mr. Courts serves as a Trustee and as Chairman and (ii) 1,690,875 shares are owned by Atlantic Investment Company. Also includes 19,500 shares which may be currently acquired by exercise of options and 21,690 shares owned by his children as to which Mr. Courts disclaims beneficial interest. By virtue of his position with Atlantic Investment Company, Mr. Courts may be deemed to have sole voting and investment power of the shares owned by Atlantic Investment Company. Does not include 11,098 shares owned by Mr. Courts' wife, as to which Mr. Courts disclaims beneficial interest. (6) Includes 24,306 shares held by Ms. Giornelli as custodian for her children. Also includes 533 shares held by the Estate of Lillian W. Cousins, for which Ms. Giornelli is executrix and as to which Ms. Giornelli disclaims beneficial interest. Also includes 6,000 shares which may be currently acquired by exercise of options. (7) Includes 19,500 shares which may be currently acquired by exercise of options. (8) Includes 105,000 shares owned by the Knox Foundation, of which Mr. Knox is a trustee, and 526 shares owned by BT Investments, a partnership of which Mr. Knox is a general partner. Mr. Knox shares voting and investment power with respect to the Knox Foundation and BT Investments shares. Also includes 19,500 shares which may be currently acquired by exercise of options. (9) Does not include 1,875 shares held by the Estate of John F. Beard, for which Mr. Payne's wife is executrix and as to which Mr. Payne disclaims beneficial interest. Includes 19,500 shares which may be currently acquired by exercise of options. (10) Includes 19,500 shares which may be currently acquired by exercise of options and 73,412 shares held in trust for the benefit of Mr. Salomon's mother, for which Mr. Salomon serves as co-trustee. (11) Includes 315,000 shares subject to presently exercisable options and 7,854 shares allocated to Mr. DuPree from the Company's Profit Sharing Plan. (12) Includes 105,000 shares subject to presently exercisable options and 7,754 shares allocated to Mr. Jones from the Company's Profit Sharing Plan. Includes 1,280 shares held by Mr. Jones as custodian for his minor children, as to which he disclaims beneficial interest. (13) Includes 108,750 shares subject to presently exercisable options and 5,000 shares held in a self directed account for Mr. Joel Murphy in the Company's Profit Sharing Plan. Does not include 416 shares owned by Mr. Joel Murphy's wife, as to which Mr. Joel Murphy disclaims any beneficial interest. (14) Includes 187,500 shares subject to presently exercisable options and 16,816 shares held in a self directed account for Mr. John Murphy in the Company's Profit Sharing Plan. (15) Includes 160,086 shares subject to presently exercisable options and 6,861 shares allocated to Mr. Charlesworth from the Company's Profit Sharing Plan. Also includes 3,873 shares owned by Mr.Charlesworth's children. (16) Includes a total of 1,621,836 shares subject to presently exercisable stock options. Includes 2,896,591 shares as to which Executive Officers and Directors share voting and investment power with others. Does not include 703,120 shares owned by spouses and other affiliates of Executive Officers and Directors, as to which such Executive Officers and Directors disclaim beneficial interest. EXECUTIVE COMPENSATION Summary Compensation Table The following information is furnished with respect to the Chief Executive Officer and each of the other five most highly compensated Executive Officers of the Company (collectively, the "Named Executive Officers") and includes salary and bonuses paid by the Company and Cousins Real Estate Corporation ("CREC").
Long Term Annual Compensation (1) Compensation ---------------------------------------- ------------ Name Securities and Underlying All Other Principal Options/ Compensation Position Year Salary(2) Bonus SARs (3) --------- ---- --------- -------- ---------- ------------ Thomas G. Cousins, 1999 $425,000 $350,000 - $22,624 Chairman and Chief 1998 400,000 300,000 125,000 22,624 Executive Officer 1997 400,000 275,000 125,000 22,624 Daniel M. DuPree, 1999 275,000 300,000 135,000 17,648 President and Chief 1998 260,000 270,000 100,000 17,678 Operating Officer 1997 250,000 225,000 100,000 17,678 Craig B. Jones, 1999 206,000 225,000 50,000 17,860 Senior Vice President and 1998 200,000 150,000 40,000 17,860 President - Office Division 1997 194,155 120,000 30,000 17,860 Joel T. Murphy, 1999 206,000 150,000 50,000 16,840 Senior Vice President and 1998 200,000 150,000 40,000 17,620 President - Retail Division 1997 190,000 100,000 35,000 17,620 John L. Murphy, 1999 200,000 150,000 25,000 18,340 Senior Vice President 1998 197,245 150,000 25,000 18,340 1997 191,500 150,000 25,000 18,340 Tom G. Charlesworth, 1999 190,000 160,000 50,000 17,620 Senior Vice President, 1998 180,000 150,000 30,000 17,620 General Counsel and Secretary 1997 165,000 80,000 25,000 17,620
(1) Excludes perquisites and other personal benefits, the aggregate amount of which did not, in the case of any individual, exceed $20,000 in any year. (2) Salary amounts disclosed are before reductions in compensation elected by the executives for medical, child care and related benefits. (3) All Other Compensation for 1999 includes the Company's annual contribution of $16,000 to the Company's Profit Sharing Plan on behalf of each of Messrs. Cousins, DuPree, Jones, Murphy, Murphy and Charlesworth, with the remainder for each person representing life insurance premiums paid by the Company on behalf of the Named Executive Officers for life insurance in excess of $50,000. The Company maintains a Profit Sharing Plan for the benefit of all of the Company's full time salaried employees. The annual contribution is determined by the Board of Directors of the Company and CREC and is allocated among eligible participants. Contributions become vested over a six-year period. Vested benefits are generally paid to participants upon retirement, but may be paid earlier in certain circumstances, such as death, disability, or termination of employment. Option/SAR Grants In Last Fiscal Year The following table sets forth certain information with respect to options and SARs granted to the Named Executive Officers for the year ended December 31, 1999.
Individual Grants ------------------------------------------------------------------------------------- Percent of Number Total of Options/ Securities SARs Underlying Granted to Options/ Employees Exercise or SARs in Fiscal Base Price Expiration Grant Date Name Granted (1)(2) Year ($/share) (2)(3) Date Value (4) ---- -------------- ---------- ---------------- ---------- ---------- Thomas G. Cousins - - - - - Daniel M. DuPree 202,500 20% $22.7917 12/14/09 $845,640 Craig B. Jones 75,000 7% $22.7917 12/14/09 $313,200 Joel T. Murphy 75,000 7% $22.7917 12/14/09 $313,200 John L. Murphy 37,500 4% $22.7917 12/14/09 $156,600 Tom G. Charlesworth 75,000 7% $22.7917 12/14/09 $313,200
(1) Options vest over a period of five years. (2) Amounts have been adjusted for a 3 for 2 stock split that occurred on October 2, 2000. (3) All options were granted at prices equal to the market value of the underlying stock on the date of grant. (4) The Black-Scholes option pricing model was used to determine the grant date value. This model assumes a risk free rate of 8 year U.S. Government Obligations as of grant dates, five year closing price volatility, dividend rates which existed as of the date of grant and an exercise period of 8 years. Aggregated Option/SAR Exercises In Last Fiscal Year And Fiscal Year End Option/SAR Values The following table sets forth certain information with respect to options/SARs exercised and the value of unexercised options and SARs held by the Named Executive Officers of the Company at December 31, 1999.
Number of Value of Securities Underlying Unexercised # of Unexercised In-The-Money Shares Options and SARs Options and SARs Acquired at FY-End at FY-End ($) on Value Exercisable/ Exercisable/ Name Exercise (1) Realized Unexercisable (1) Unexercisable ---- ------------ -------- ----------------- --------------- Thomas G. Cousins 75,000 $905,813 315,000/ 322,500 $2,312,500/$1,120,313 Daniel M. DuPree - - 356,250/ 475,500 $3,088,594/$ 884,375 Craig B. Jones - - 120,750/ 168,000 $1,033,281/$ 331,625 Joel T. Murphy - - 116,250/ 177,000 $ 927,156/$ 380,500 John L. Murphy - - 187,500/ 112,500 $1,987,813/$ 315,625 Tom G. Charlesworth - - 158,910/ 151,500 $1,603,469/$ 292,063
(1) Amounts have been adjusted for a 3 for 2 stock split that occurred on October 2, 2000. Committee Report On Compensation The Compensation, Succession, Nominating and Board Structure Committee of the Company's Board of Directors (the "Committee") is responsible for ensuring that a proper system of short and long term compensation is in place to provide performance-oriented incentives to management. The Committee's report on compensation is as follows: Each executive officer's compensation is determined annually by the Committee. Senior management makes recommendations to the Committee regarding each executive officer's compensation (except the Chief Executive Officer's compensation), including recommendations for base salary for the succeeding year and discretionary cash bonuses and stock incentive awards. The Company conducts a reevaluation annually of compensation of executive officers and certain other management personnel. This is done with the assistance of an independent compensation consulting firm which provides a report setting forth competitive compensation data for executive officer positions and certain other management positions. The Company's compensation philosophy is based on a pay for performance approach. The compensation program seeks to reward individual action that contributes to operating unit performance and Company performance. The Company's goal is to be competitive with the marketplace on a total compensation basis, including base salary and annual and long-term incentives: - - - Base Salary. Each executive officer's base salary is based upon the competitive market for the executive officer's services, including the executive's specific responsibilities, experience and overall performance. In keeping with the Company's pay for performance approach, the Company's objective is to set the base salary at the median base salary level of the Company's peers in its industry. Base salaries are adjusted annually, following review of competitive base salary data. Changes in responsibilities also are taken into account in the review process. - - - Annual Incentive Compensation. The Company awards discretionary year-end bonuses. These bonuses reflect the contribution of the individual as well as the performance of the operating unit and the Company as a whole. Assuming an above average performance in a given position, the level of bonus is based upon the median industry bonus for the position. The net result is that base salary and annual incentive compensation will be at a level commensurate with normal, median industry levels where performance is above average or superior. The performance measures applicable to a particular position vary according to the functions of the position. Performance measures considered by the Committee included the level of the predevelopment pipeline, the volume of development construction commenced, completion of development projects on time and within budget, execution of tenant leases, property management and leasing results, property sales and financings achieved. - - - Long-Term Incentive Compensation. The Committee believes that extraordinary performance should be rewarded with extraordinary levels of long-term incentive compensation. Long-term incentive compensation also aligns management's interests with that of the stockholders. The Committee believes that stock-based awards are most appropriate for long-term incentive compensation. In 1999 the Board adopted, and the stockholders approved, the 1999 Incentive Stock Plan. Under this plan, various stock-based awards may be made by the Committee, including stock options, restricted stock, performance shares and stock grants. In 1999 the Committee awarded stock options to each of the executive officers, other than Mr. Cousins. In 1995 the Committee awarded stock to Mr. DuPree, subject to certain employment and performance conditions. In general, these performance conditions are based on stockholder total return and funds from operations per share growth rates over a four to seven year period from the date of the award. The level of shares ultimately earned by Mr. DuPree will depend in part on the total return achieved by the stockholders and in part on the funds from operations per share growth rate achieved by the Company over this period. These performance measures are regarded by the Committee as the most important long-term performance measures. The Company maintains a Profit Sharing Plan for the benefit of its executive officers and other employees. The Board of Directors determines the Company's annual contribution under the Profit Sharing Plan. The annual contribution is allocated among eligible employees of the Company in accordance with each such employee's compensation. At December 31, 1999, approximately 73% of the Profit Sharing Plan was invested in the Company's Common Stock. Mr. Thomas G. Cousins has been the Chief Executive Officer of the Company since its founding in 1958 and beneficially owns approximately 19.86% of the Company's Common Stock. The Committee believes that Mr. Cousins is responsible for much of the Company's success. Mr. Cousins has hired and developed an outstanding management group and has furnished leadership in all areas of the Company's business. In determining Mr. Cousins' bonus for 1999, the Committee considered Mr. Cousins' significant role in the accomplishments of the Company in 1999, including performance measures referred to above. COMPENSATION, SUCCESSION, NOMINATING AND BOARD STRUCTURE COMMITTEE February 8, 2000 Richard W. Courts, II, Chairman Terence C. Golden Boone A. Knox William Porter Payne Richard E. Salomon Note: Subsequent to the date of this report, the 1995 stock award to Mr. DuPree became fully vested. Compensation Committee Interlocks and Insider Participation The Company's Compensation, Succession, Nominating and Board Structure Committee is comprised of Messrs. Courts, Golden, Knox, Payne and Salomon. None of such directors have any interlocking relationships required to be disclosed in this Proxy Statement. Compensation of Directors Each Director who is not an Officer will earn a $22,000 annual retainer plus $1,000 for each Board meeting and each Committee meeting attended. The 1999 Incentive Stock Plan provides that an outside Director may elect to receive Company stock in lieu of cash fees otherwise payable for services as a Director. The price at which such shares are issued is equal to 95% of the market price on the issuance date. On March 31, 1999, each Director at such time was granted 4,000 stock options pursuant to the 1999 Incentive Stock Plan. Such options have a term of ten years, are exercisable upon grant and are exercisable at the closing stock price on the date of grant ($28.9375 per share). Adjusting for the 3 for 2 stock split that occurred on October 2, 2000, each director received 6,000 shares under such grant at an exercise price of $19.2917 per share. On May 4, 1999 Ms. Giornelli was elected a director and pursuant to the 1999 Incentive Stock Plan was granted 4,000 stock options. Such options have terms similar to the options granted to the other directors on March 31, 1999 and the closing stock price on the date of grant was $34.8125 per share. Adjusting for the 3 for 2 stock split that occurred on October 2, 2000, Ms. Giornelli received 6,000 shares under such grant at an exercise price of $23.2083 per share. On August 22, 2000 Mr. Bell was similarly granted 4,000 stock options and the closing stock price on the date of grant was $42.125 per share. Adjusting for the 3 for 2 stock split that occurred on October 2, 2000, Mr. Bell received 6,000 shares under such grant at an exercise price of $28.0833 per share. Comparison Of Five Year Cumulative Total Return The following table compares cumulative total returns of the Company and the indicated indexes assuming an investment of $100 on December 31, 1994 and reinvestment of dividends.
Fiscal Year Ended December 31, Company/Index 1994 1995 1996 1997 1998 1999 ------------- ---- ------- ------ ------- ------- ------- Cousins Properties Incorporated $100 $123.33 $180.42 $196.66 $227.37 $251.52 New York Stock Exchange Index 100 129.66 156.20 205.49 244.52 267.75 Standard & Poor 500 Index 100 137.58 169.17 225.61 290.09 351.13 NAREIT Equity REIT Index 100 115.27 155.92 187.51 154.69 147.54 Media General Industry Group 44 - Real Estate Index (1) 100 141.29 187.18 239.40 244.24 211.72 (1) This index is published by Media General Financial Services and includes the Company and 309 other real estate companies.
STOCKHOLDER PROPOSALS AT THE COMPANY'S NEXT ANNUAL MEETING OF STOCKHOLDERS Stockholders who intend to submit proposals for consideration at the Company's next annual meeting of stockholders were required to submit such proposals to the Company no later than November 27, 2000 in order to be considered for inclusion in the proxy statement and form of proxy to be distributed by the Board in connection with that meeting. Any stockholder proposal to be considered at next year's annual meeting but not included in the proxy statement must be submitted in writing by February 10, 2001 or the persons appointed as proxies may exercise their discretionary voting authority if the proposal is considered at the meeting. Stockholder proposals should be submitted to Tom G. Charlesworth, 2500 Windy Ridge Parkway, Suite 1600, Atlanta, Georgia 30339. OTHER MATTERS The Board knows of no other matters to be brought before the meeting. However, if any other matters should come before the meeting, the persons named in the proxy will vote such proxy in accordance with their judgment on such matters. EXPENSES OF SOLICITATION The cost of proxy solicitation will be borne by the Company. In an effort to have as large a representation at the meeting as possible, special solicitation of proxies may, in certain instances, be made personally, or by telephone, electronic mail, facsimile, or mail by one or more Company employees. The Company will also reimburse brokers, banks, nominees and other fiduciaries for postage and reasonable clerical expenses of forwarding the proxy materials to their principals, the beneficial owners of the Company's stock. TOM G. CHARLESWORTH Secretary December 1, 2000 EXHIBIT "A" COUSINS PROPERTIES INCORPORATED 1999 INCENTIVE STOCK PLAN (AS AMENDED AND RESTATED EFFECTIVE AS OF DECEMBER 28, 2000)
TABLE OF CONTENTS Page ---- ss.1 BACKGROUND AND PURPOSE..................................... A1 ss.2 DEFINITIONS................................................ A1 2.1......AFFILIATE.......................................... A1 2.2......BOARD.............................................. A1 2.3......CHANGE IN CONTROL.................................. A1 2.4......CODE............................................... A2 2.5......COMMITTEE.......................................... A2 2.6......CPI................................................ A2 2.7......CREC............................................... A2 2.8......DIRECTOR........................................... A2 2.9......FAIR MARKET VALUE.................................. A2 2.10.....ISO................................................ A2 2.11.....KEY EMPLOYEE....................................... A2 2.12.....1933 ACT........................................... A2 2.13.....1934 ACT........................................... A2 2.14.....NON-ISO............................................ A2 2.15.....OLD PLANS.......................................... A3 2.16.....OPTION............................................. A3 2.17.....OPTION CERTIFICATE................................. A3 2.18.....OPTION PRICE....................................... A3 2.19.....PARENT............................................. A3 2.20.....PLAN............................................... A3 2.21.....PREFERRED STOCK SUBSIDIARY......................... A3 2.22.....RESTRICTED STOCK................................... A3 2.23.....RESTRICTED STOCK CERTIFICATE....................... A3 2.24.....RULE 16B-3......................................... A3 2.25.....STOCK.............................................. A3 2.26.....SAR VALUE.......................................... A3 2.27.....STOCK APPRECIATION RIGHT........................... A3 2.28.....STOCK APPRECIATION RIGHT CERTIFICATE............... A3 2.29.....SUBSIDIARY......................................... A3 2.30.....TEN PERCENT SHAREHOLDER............................ A4 ss.3 SHARES RESERVED UNDER PLAN................................. A4 ss.4 EFFECTIVE DATE............................................. A4 ss.5 COMMITTEE.................................................. A4 ss.6 ELIGIBILITY AND ANNUAL GRANT CAPS.......................... A5 ss.7 OPTIONS .................................................. A5 7.1......COMMITTEE ACTION................................... A5 7.2......$100,000 LIMIT..................................... A5 7.3......GRANTS TO DIRECTORS................................ A5 7.4......OPTION PRICE....................................... A6 7.5......EXERCISE PERIOD.................................... A6 ss.8 STOCK APPRECIATION RIGHTS.................................. A7 8.1......COMMITTEE ACTION................................... A7 8.2......TERMS AND CONDITIONS............................... A7 (a) Stock Appreciation Right Certificate...... A7 (b) Option Certificate........................ A7 8.3......EXERCISE........................................... A7 ss.9 RESTRICTED STOCK........................................... A8 9.1......COMMITTEE ACTION................................... A8 9.2......EFFECTIVE DATE..................................... A8 9.3......CONDITIONS......................................... A8 (a) Conditions to Issuance of Stock........... A8 (b) Forfeiture Conditions..................... A8 9.4......DIVIDENDS AND VOTING RIGHTS........................ A9 9.5......SATISFACTION OF FORFEITURE CONDITIONS; PROVISION FOR .........INCOME AND EXCISE TAXES............................ A9 9.6......SECTION 162(M)..................................... A9 ss.10 STOCK IN LIEU OF CASH...................................... A9 10.1.....ELECTION........................................... A9 10.2.....ELECTION AND ELECTION REVOCATION PROCEDURE......... A10 10.3.....NUMBER OF SHARES................................... A10 10.4.....INSUFFICIENT SHARES................................ A10 10.5.....RESTRICTIONS ON SHARES............................. A10 ss.11 NONTRANSFERABILITY......................................... A11 ss.12 SECURITIES REGISTRATION.................................... A11 ss.13 LIFE OF PLAN............................................... A11 ss.14 ADJUSTMENT................................................. A12 14.1.....CAPITAL STRUCTURE.................................. A12 14.2.....MERGERS............................................ A12 14.3.....FRACTIONAL SHARES.................................. A12 ss.15 SALE, MERGER OR CHANGE IN CONTROL.......................... A13 15.1.....CONTINUATION OR ASSUMPTION OF PLAN OR GRANTS....... A13 15.2.....NO CONTINUATION OR ASSUMPTION OF PLAN OR GRANTS.... A13 ss.16 AMENDMENT OR TERMINATION................................... A14 ss.17 MISCELLANEOUS.............................................. A14 17.1.....SHAREHOLDER RIGHTS................................. A14 17.2.....NO CONTRACT OF EMPLOYMENT.......................... A14 17.3.....WITHHOLDING........................................ A14 17.4.....CONSTRUCTION....................................... A15 17.5.....OTHER CONDITIONS................................... A15 17.6.....RULE 16B-3......................................... A15 17.7.....LOANS.............................................. A15
A2 ss. 1 BACKGROUND AND PURPOSE The purpose of this Plan is to promote the interest of CPI by authorizing the Committee to grant Options and Restricted Stock to Key Employees and Directors and to grant Stock Appreciation Rights to Key Employees in order (1) to attract and retain Key Employees and Directors, (2) to provide an additional incentive to each Key Employee or Director to work to increase the value of Stock and (3) to provide each Key Employee or Director with a stake in the future of CPI which corresponds to the stake of each of CPI's stockholders. ss. 2 DEFINITIONS 2.1 Affiliate -- means any organization (other than a Subsidiary) that would be treated as under common control with CPI or CREC under ss. 414(c) of the Code if "50 percent" were substituted for "80 percent" in the income tax regulations under ss. 414(c) of the Code. 2.2 Board -- means the Board of Directors of CPI. ----- 2.3 Change in Control -- means (1) a "change in control" of CPI 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 1934 Act, (2) a "person" (as that term is used in Section 14(d)(2) of the 1934 Act) becomes after the effective date of this Plan the beneficial owner (as defined in Rule 13d-3 under the 1934 Act) directly or indirectly of securities representing 50% or more of the combined voting power for election of directors of the then outstanding securities of CPI, (3) the individuals who at the beginning of any period of two consecutive years or less constitute the Board cease for any reason during such period to constitute at least a majority of the 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 the Board then still in office who were members of the Board at the beginning of such period, (4) the shareholders of CPI approve any dissolution or liquidation of CPI or any sale or disposition of 50% or more of the assets or business of CPI or (5) the shareholders of CPI approve a merger or consolidation to which CPI is a party (other than a merger or consolidation with a wholly-owned subsidiary of CPI) or a share exchange in which CPI shall exchange CPI shares for shares of another corporation as a result of which the persons who were shareholders of CPI immediately before the effective date of such merger, consolidation or share exchange shall have beneficial ownership of less than 50% of the combined voting power for election of directors of the surviving corporation following the effective date of such merger, consolidation or share exchange. 2.4 Code -- means the Internal Revenue Code of 1986, as amended. ----- 2.5 Committee -- means a committee of the Board which shall have at least 2 members, each of whom shall be appointed by and shall serve at the pleasure of the Board and shall come within the definition of a "non-employee director" under Rule 16b-3 and an "outside director" under ss. 162(m) of the Code. 2.6 CPI -- means Cousins Properties Incorporated and any successor --- to such corporation. 2.7 CREC -- means Cousins Real Estate Corporation and any ---- successor to such corporation. 2.8 Director -- means any member of the Board who is not an employee of CPI or a Parent or Subsidiary or affiliate (as such term is defined in Rule 405 of the 1933 Act) of CPI. 2.9 Fair Market Value -- means (1) the closing price on any date for a share of Stock as reported by The Wall Street Journal under the New York Stock Exchange Composite Transactions quotation system (or under any successor quotation system) or, if Stock is no longer traded on the New York Stock Exchange, under the quotation system under which such closing price is reported or, if The Wall Street Journal no longer reports such closing price, such closing price as reported by a newspaper or trade journal selected by the Committee; or, (2) if no such closing price is available on such date, such closing price as so reported in accordance with ss. 2.8(1) for the immediately preceding business day; or, (3) if no newspaper or trade journal reports such closing price or if no such price quotation is available, the price which the Committee acting in good faith determines through any reasonable valuation method that a share of Stock might change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant facts. 2.10 ISO -- means an option granted under this Plan to purchase Stock which is intended to satisfy the requirements of ss. 422 of the Code. 2.11 Key Employee -- means an employee of CPI, CREC, a Preferred Stock Subsidiary that has been designated by the Board as covered by this Plan, any Subsidiary of CPI or CREC, any Parent of CPI or CREC, or any Affiliate of CPI or CREC who has been designated by the Committee and who, in the judgment of the Committee acting in its absolute discretion, is key directly or indirectly to the success of CPI, CREC, a Preferred Stock Subsidiary, a Subsidiary of CPI or CREC, a Parent of CPI or CREC or an Affiliate of CPI or CREC. 2.12 1933 Act -- means the Securities Act of 1933, as amended. -------- 2.13 1934 Act -- means the Securities Exchange Act of 1934, as -------- amended. 2.14 Non-ISO -- means an option granted under this Plan to purchase ------- Stock which is intended A15 to fail to satisfy the requirements ofss. 422 of the Code. 2.15 Old Plans -- means (1) the Cousins Properties Incorporated 1996 Stock Incentive Plan effective as of September 5, 1995, (2) the Cousins Properties Incorporated Stock Plan for Outside Directors and (3) the Cousins Properties Incorporated Stock Appreciation Right Plan. 2.16 Option -- means an ISO or a Non-ISO which is granted under ------ ss.7. 2.17 Option Certificate -- means the written certificate which sets forth the terms and conditions of an Option granted to a Key Employee or Director under this Plan. 2.18 Option Price -- means the price which shall be paid to purchase one share of Stock upon the exercise of an Option granted under this Plan. 2.19 Parent -- means any corporation which is a parent corporation ------ within the meaning ofss. 424(e) of the Code. 2.20 Plan -- means this Cousins Properties Incorporated 1999 Incentive Stock Plan as effective as of the date adopted by the Board in 1999 and as amended from time to time thereafter. 2.21 Preferred Stock Subsidiary --means any entity in which CPI, CREC, any Parent of CPI or CREC, or any Affiliate of CPI or CREC owns capital stock or other equity interests representing the right to receive at least 50% of all dividends or distributions, as applicable, paid by such entity, regardless of whether such stock or other equity interest also entitles the holder thereof to 50% or more of the voting power of all outstanding capital stock or other equity interests of such entity. 2.22 Restricted Stock -- means Stock granted to a Key Employee ---------------- under ss. 9. 2.23 Restricted Stock Certificate -- means the written certificate which sets forth the terms and conditions of a Restricted Stock grant to a Key Employee. 2.24 Rule 16b-3 -- means the exemption under Rule 16b-3 to Section 16(b) of the 1934 Act or any successor to such rule. 2.25 Stock -- means $1.00 par value common stock of CPI. ----- 2.26 SAR Value -- means the value assigned by the Committee to a share of Stock in connection with the grant of a Stock Appreciation Right under ss. 8. 2.27 Stock Appreciation Right -- means a right to receive the appreciation in a share of Stock which is granted under ss. 8 either as part of an Option or independent of any Option. 2.28 Stock Appreciation Right Certificate -- means the written certificate which sets forth the terms and conditions of a Stock Appreciation Right which is granted to a Key Employee independent of an Option. 2.29 Subsidiary -- means a corporation which is a subsidiary ---------- corporation within the meaning of ss. 424(f) of the Code. 2.30 Ten Percent Shareholder -- means a person who owns (after taking into account the attribution rules of ss. 424(d) of the Code) more than ten percent of the total combined voting power of all classes of stock of either CPI, a Subsidiary of CPI or Parent of CPI. ss. 3 SHARES RESERVED UNDER PLAN There shall be 1,200,000 shares of Stock reserved for use under this Plan in addition to the 1,343,287.5 shares of Stock for use under this Plan on the original effective date of this Plan under ss. 4, all of which may be used in connection with Option grants, Restricted Stock grants and the payment of Stock Appreciation Rights in Stock. All such shares of Stock shall be reserved to the extent that CPI deems appropriate from authorized but unissued shares of Stock and from shares of Stock which have been reacquired by CPI. Any shares of Stock subject to an Option which remain unissued after the cancellation, expiration or exchange of such Option and any shares of Restricted Stock which are forfeited or canceled and thereafter shall again become available for use under this Plan, but any shares of Stock used to exercise an Option or to satisfy a withholding obligation shall not again become available for use under this Plan. No additional grants shall be made under the Old Plans if this Plan is approved by CPI's shareholders. ss. 4 EFFECTIVE DATE The effective date of this Plan shall be the date of its adoption by the Board, provided the shareholders of CPI (acting at a duly called meeting of such shareholders) approve such adoption within twelve (12) months of such effective date. Any Option or Restricted Stock or Stock Appreciation Right granted before such shareholder approval automatically shall be granted subject to such approval. ss. 5 COMMITTEE This Plan shall be administered by the Committee. The Committee acting in its absolute discretion shall exercise such powers and take such action as expressly called for under this Plan and, further, the Committee shall have the power to interpret this Plan and (subject to ss. 14, ss. 15 and ss. 16 and Rule 16b-3) to take such other action in the administration and operation of this Plan as the Committee deems equitable under the circumstances, which action shall be binding on CPI, on each affected Key Employee or Director and on each other person directly or indirectly affected by such action. ss. 6 ELIGIBILITY AND ANNUAL GRANT CAPS Only Key Employees who are employed by CPI, a Subsidiary of CPI or a Parent of CPI shall be eligible for the grant of ISOs under this Plan, and Key Employees and Directors shall be eligible for the grant of Non-ISOs and Restricted Stock under this Plan. Only Directors shall be eligible for the grant of Stock in lieu of cash under this Plan, and only Key Employees shall be eligible for the grant of Stock Appreciation Rights under this Plan. No Key Employee in any calendar year shall be granted an Option to purchase more than 450,000 shares of Stock or a Stock Appreciation Right with respect to more than 450,000 shares of Stock. ss. 7 OPTIONS 7.1 Committee Action. The Committee acting in its absolute discretion shall have the right to grant Options to Key Employees under this Plan from time to time to purchase shares of Stock and, further, the Committee shall have the right to grant new Options in exchange for the cancellation of outstanding Options which have a lower Option Price than the new Options. Each grant of an Option to a Key Employee shall be evidenced by an Option Certificate, and each Option Certificate shall set forth whether the Option is an ISO or a Non-ISO and shall set forth such other terms and conditions of such grant as the Committee acting in its absolute discretion deems consistent with the terms of this Plan; however, if the Committee grants an ISO and a Non-ISO to a Key Employee on the same date, the right of the Key Employee to exercise the ISO shall not be conditioned on his or her failure to exercise the Non-ISO. The Committee shall have the right to grant a Non-ISO and Restricted Stock to a Key Employee at the same time and to condition the exercise of the Non-ISO on the forfeiture of the Restricted Stock grant. 7.2 $100,000 Limit. No Option shall be treated as an ISO to the extent that the aggregate Fair Market Value of Stock subject to the Option which would first become exercisable in any calendar year exceeds $100,000. Any such excess shall instead automatically be treated as a Non-ISO. The Committee shall interpret and administer the ISO limitation set forth in this ss. 7.2 in accordance with ss. 422(d) of the Code, and the Committee shall treat this ss. 7.2 as in effect only for those periods for which ss. 422(d) of the Code is in effect. 7.3 Grants to Directors. Each Director automatically shall be granted (without any further action on the part of the Committee) a Non-ISO under this Plan as of the first day he first serves as a Director to purchase 6,000 shares of Stock at an Option Price equal to the Fair Market Value of a share of Stock on the date of such grant. Thereafter, each Director who is serving as such on March 31 of each calendar year and who has served as such for more than ten consecutive months automatically shall be granted (without any further action on the part of the Committee) a Non-ISO under this Plan as of March 31 of such calendar year to purchase 6,000 shares of Stock at an Option Price equal to the Fair Market Value of a share of Stock on the date of such grant. Each Non-ISO granted under this Plan to a Director shall be evidenced by an Option Certificate, shall be exercisable in full upon grant and shall expire 90 days after a Director ceases to serve as such or, if earlier, on the tenth anniversary of the date of the grant of the Non-ISO. A Non-ISO granted to a Director under this ss. 7.3 shall conform in all other respects to the terms and conditions of a Non-ISO under this Plan, and no Director shall be eligible to receive an Option under this Plan except as provided in this ss. 7.3. A grant of a Non-ISO to a Director under this ss. 7.3 is intended to be granted in a manner which continues to allow such Director to be a "non-employee director" within the meaning of Rule 16b-3 and an "outside director" within the meaning of ss. 162(m) of the Code, and all Non-ISOs granted to Directors under this ss. 7.3 shall be construed to effect such intent. 7.4 Option Price. The Option Price for each share of Stock subject to an Option which is granted to a Key Employee shall be no less than the Fair Market Value of a share of Stock on the date the Option is granted; provided, however, if the Option is an ISO granted to a Key Employee who is a Ten Percent Shareholder, the Option Price for each share of Stock subject to such ISO shall be no less than 110% of the Fair Market Value of a share of Stock on the date such ISO is granted. The Option Price shall be payable in full upon the exercise of any Option, and at the discretion of the Committee an Option Certificate can provide for the payment of the Option Price either in cash, by check or in Stock which has been held for at least 6 months and which is acceptable to the Committee or in any combination of cash, check and such Stock. The Option Price in addition may be paid through any broker facilitated cashless exercise procedure acceptable to the Committee or its delegate. Any payment made in Stock shall be treated as equal to the Fair Market Value of such Stock on the date the properly endorsed certificate for such Stock is delivered to the Committee or its delegate. 7.5 Exercise Period. Each Option granted under this Plan to a Key Employee shall be exercisable in whole or in part at such time or times as set forth in the related Option Certificate, but no Option Certificate shall make an Option granted to a Key Employee exercisable on or after the earlier of (1) the date such Option is exercised in full, or (2) the date which is the fifth anniversary of the date the Option is granted, if the Option is an ISO and the Key Employee is a Ten Percent Shareholder on the date the Option is granted, or (3) the date which is the tenth anniversary of the date the Option is granted, if the Option is (a) a Non-ISO or (b) an ISO which is granted to a Key Employee who is not a Ten Percent Shareholder on the date the Option is granted. An Option Certificate may provide for the exercise of an Option after the employment of a Key Employee has terminated for any reason whatsoever, including death or disability. ss. 8 STOCK APPRECIATION RIGHTS 8.1 Committee Action. The Committee acting in its absolute discretion shall have the right to grant a Stock Appreciation Right to a Key Employee under this Plan from time to time, and each Stock Appreciation Right grant shall be evidenced by a Stock Appreciation Right Certificate or, if such Stock Appreciation Right is granted as part of an Option, shall be evidenced by the Option Certificate for the related Option. 8.2 Terms and Conditions. -------------------- (a) Stock Appreciation Right Certificate. If a Stock Appreciation Right is evidenced by a Stock Appreciation Right Certificate, such certificate shall set forth the number of shares of Stock to which the Key Employee has the right to appreciation and the SAR Value of each share of Stock. Such SAR Value shall be no less than the Fair Market Value of a share of Stock on the date that the Stock Appreciation Right is granted. The Stock Appreciation Right Certificate shall set forth such other terms and conditions for the exercise of the Stock Appreciation Right as the Committee deems appropriate under the circumstances, but no Stock Appreciation Right Certificate shall make a Stock Appreciation Right exercisable on or after the date which is the tenth anniversary of the date such Stock Appreciation Right is granted. (b) Option Certificate. If a Stock Appreciation Right is evidenced by an Option Certificate, the SAR Value for each share of Stock subject to the Stock Appreciation Right shall be the Option Price for the related Option. Each such Option Certificate shall provide that the exercise of the Stock Appreciation Right with respect to any share of Stock shall cancel the Key Employee's right to exercise his or her Option with respect to such share and, conversely, that the exercise of the Option with respect to any share of Stock shall cancel the Key Employee's right to exercise his or her Stock Appreciation Right with respect to such share. A Stock Appreciation Right which is granted as part of an Option shall be exercisable only while the related Option is exercisable. The Option Certificate shall set forth such other terms and conditions for the exercise of the Stock Appreciation Right as the Committee deems appropriate under the circumstances. 8.3 Exercise. A Stock Appreciation Right shall be exercisable only when the Fair Market Value of a share of Stock subject to such Stock Appreciation Right exceeds the SAR Value for such share, and the payment due on exercise shall be based on such excess with respect to the number of shares of Stock to which the exercise relates. A Key Employee upon the exercise of his or her Stock Appreciation Right shall receive a payment from CPI in cash or in Stock, or in a combination of cash and Stock, and any payment in Stock shall be based on the Fair Market Value of a share of Stock on the date the Stock Appreciation Right is exercised. The Committee acting in its absolute discretion shall have the right to determine the form and time of any payment under this ss. 8.3. ss. 9 RESTRICTED STOCK 9.1 Committee Action. The Committee acting in its absolute discretion shall have the right to grant Restricted Stock to Key Employees and Directors under this Plan from time to time and, further, shall have the right to make new Restricted Stock grants in exchange for the cancellation of an outstanding Restricted Stock grant to such Key Employee or Director. Each Restricted Stock grant shall be evidenced by a Restricted Stock Certificate, and each Restricted Stock Certificate shall set forth the conditions, if any, under which the grant will be effective and the conditions under which the Key Employee's or Director's interest in the underlying Stock will become nonforfeitable. 9.2 Effective Date. A Restricted Stock grant shall be effective (1) as of the date set by the Committee when the grant is made or, (2) if the grant is made subject to one, or more than one, condition, as of the date such conditions have been timely satisfied. 9.3 Conditions. ---------- (a) Conditions to Issuance of Stock. The Committee acting in its absolute discretion may make the issuance of Restricted Stock to a Key Employee or Director subject to the satisfaction of one, or more than one, condition which the Committee deems appropriate under the circumstances for Key Employees or Directors generally or for a Key Employee or Director in particular, and the related Restricted Stock Certificate shall set forth each such condition and the deadline for satisfying each such condition. Stock subject to a Restricted Stock grant shall be issued in the name of a Key Employee or Director only after each such condition, if any, has been timely satisfied, and any Stock which is so issued shall be held by CPI pending the satisfaction of the forfeiture conditions, if any, under ss. 9.3(b) for the related Restricted Stock grant. (b) Forfeiture Conditions. The Committee acting in its absolute discretion may make Restricted Stock issued in the name of a Key Employee or Director subject to one, or more than one, objective employment, performance or other forfeiture condition that the Committee acting in its absolute discretion deems appropriate under the circumstances for Key Employees or Directors generally or for a Key Employee or Director in particular, including a condition which results in a forfeiture if a Key Employee or Director exercises a Non-ISO granted in tandem with his or her Restricted Stock grant, and the related Restricted Stock Certificate shall set forth each such condition, if any, and the deadline, if any, for satisfying each such forfeiture condition. A Key Employee's or Director's nonforfeitable interest in the shares of Stock underlying a Restricted Stock grant shall depend on the extent to which he or she timely satisfies each such condition. Each share of Stock underlying a Restricted Stock grant shall be unavailable under ss. 3 after such grant is effective unless such share is forfeited as a result of a failure to timely satisfy a forfeiture condition, in which event such share of Stock shall again become available under ss. 3 as of the date of such failure. 9.4 Dividends and Voting Rights. Each Restricted Stock Certificate shall specify what rights, if any, a Key Employee or Director shall have with respect to the Stock issued in his or her name, including rights to dividends and to vote, pending the forfeiture of such Stock or the lapse of each forfeiture condition, if any, with respect to such Stock. Furthermore, the Committee may grant dividend equivalent rights on Restricted Stock while such Stock remains subject to an issuance condition under ss. 9.3(a) under which a cash equivalent to a dividend shall be paid when a dividend is paid, and any such dividend equivalent right shall be set forth in the related Restricted Stock Certificate. 9.5 Satisfaction of Forfeiture Conditions; Provision for Income and Excise Taxes. A share of Stock shall cease to be Restricted Stock at such time as a Key Employee's or Director's interest in such Stock becomes nonforfeitable under this Plan, and the certificate representing such share shall be transferred to the Key Employee or Director as soon as practicable thereafter. The Committee acting in its absolute discretion shall have the power to authorize and direct the payment of a cash bonus (or to provide in the terms of the Restricted Stock Certificate for CPI to make such payment) to a Key Employee or Director to pay all, or any portion of, his or her federal, state and local income tax liability which the Committee deems attributable to his or her interest in his or her Restricted Stock grant becoming nonforfeitable and, further, to pay any such tax liability attributable to such cash bonus. 9.6 Section 162(m). Except where the Committee deems it in the best interests of CPI, the Committee shall use its best efforts to grant Restricted Stock either (1) subject to at least one condition which can result in the Restricted Stock qualifying as "performance-based compensation" under ss. 162(m) of the Code if the shareholders of CPI approve such condition and the Committee takes such other action as the Committee deems necessary or appropriate for such grant to so qualify under ss. 162(m) or (2) under such other circumstances as the Committee deems likely to result in an income tax deduction for the grant. ss. 10 STOCK IN LIEU OF CASH 10.1 Election. Each Director shall have the right on or after the effective date of this Plan to elect (in accordance with ss. 10.2) to receive Stock in lieu of cash as part of his or her compensation package with respect to all or a specific percentage of: (a) any installment of his or her annual cash retainer fee as a Director; (b) any fee payable in cash to him or to her for attending a meeting of the Board or a committee of the Board; and (c) any fee payable in cash to him or to her for serving as the chairperson of a committee of the Board. Any election to receive Stock in lieu of cash which was in effect under the Cousins Properties Incorporated Stock Plan for Outside Directors immediately before the effective date of this Plan shall remain in effect under this Plan until revoked under ss. 10.2. 10.2 Election and Election Revocation Procedure. An election by a Director under ss. 10.1 to receive Stock in lieu of cash shall be made in writing and shall be effective as of the date the Director delivers such election to the Secretary of CPI. An election may apply to one, or more than one, cash payment described in ss. 10.1. After a Director has made an election under this ss. 10.2, he or she may elect to revoke such election or may elect to revoke such election and make a new election. Any such subsequent election shall be made in writing and shall be effective as of the date the Director delivers such election to the Secretary of CPI. There shall be no limit on the number of elections which a Director can make under this ss. 10.2. 10.3 Number of Shares. The number of shares of Stock which a Director shall receive in lieu of any cash payment shall be determined by CPI by dividing the amount of the cash payment which the Director has elected under ss. 10.1 to receive in the form of Stock by 95% of the Fair Market Value of a share of Stock (1) on the date of a regular quarterly Board meeting with respect to shares of Stock to be issued for fees earned on the date of such a meeting or (2) on the date of the next regular quarterly Board meeting with respect to shares of Stock to be issued for fees earned between regular quarterly Board meetings, and by rounding down to the nearest whole share of Stock. Such shares shall be issued to the Director as of the date of a regular quarterly Board meeting with respect to shares of Stock to be issued for fees earned on the date of such a meeting or on the date of the next regular quarterly Board meeting with respect to shares of Stock to be issued for fees earned between regular quarterly Board meetings. 10.4 Insufficient Shares. If the number of shares of Stock available under this Plan is insufficient as of any date to issue the Stock called for under ss. 10.3, CPI shall issue Stock under ss. 10.3 to each Director based on a fraction of the then available shares of Stock, the numerator of which fraction shall equal the amount of the cash payment to the Director on which the issuance of such Stock was to be based under ss. 10.1 and the denominator of which shall equal the amount of the total cash payments to all Directors on which the issuance of such Stock was to be based under ss. 10.1. All elections made under this ss. 10 thereafter shall be null and void, and no further Stock shall be issued under this Plan with respect to any such elections. 10.5 Restrictions on Shares. CPI shall have the right to issue the shares of Stock which a Director shall receive in lieu of any cash payment subject to a restriction that the Director have no right to transfer such Stock (except to the extent permissible under Rule 16b-3) for the six month period which starts on the date the Stock is issued or to take such other action as CPI deems necessary or appropriate to make sure that the Director satisfies the applicable holding period requirement, if any, set forth in Rule 16b-3. ss. 11 NONTRANSFERABILITY No Option, Restricted Stock or Stock Appreciation Right shall (absent the Committee's consent) be transferable by a Key Employee or an Director other than by will or by the laws of descent and distribution, and any Option or Stock Appreciation Right shall (absent the Committee's consent) be exercisable during a Key Employee's or Director's lifetime only by the Key Employee or Director. The person or persons to whom an Option or Restricted Stock or Stock Appreciation Right is transferred by will or by the laws of descent and distribution (or with the Committee's consent) thereafter shall be treated as the Key Employee or Director. ss. 12 SECURITIES REGISTRATION Each Option Certificate, Restricted Stock Certificate and Stock Appreciation Right Certificate shall provide that, upon the receipt of shares of Stock as a result of the exercise of an Option or a Stock Appreciation Right or the satisfaction of the forfeiture conditions under a Restricted Stock Certificate, the Key Employee or Director shall, if so requested by CPI, hold such shares of Stock for investment and not with a view of resale or distribution to the public and, if so requested by CPI, shall deliver to CPI a written statement satisfactory to CPI to that effect. As for Stock issued pursuant to this Plan, CPI at its expense shall take such action as it deems necessary or appropriate to register the original issuance of such Stock to a Key Employee or Director under the 1933 Act or under any other applicable securities laws or to qualify such Stock for an exemption under any such laws prior to the issuance of such Stock to a Key Employee or Director; however, CPI shall have no obligation whatsoever to take any such action in connection with the transfer, resale or other disposition of such Stock by a Key Employee or Director. ss. 13 LIFE OF PLAN No Option, Restricted Stock or Stock Appreciation Right shall be granted under this Plan on or after the earlier of (1) the tenth anniversary of the effective date of this Plan (as determined under ss. 4), in which event this Plan otherwise thereafter shall continue in effect until all outstanding Options and Stock Appreciation Rights have been exercised in full or no longer are exercisable and all Restricted Stock grants under this Plan have been forfeited or the forfeiture conditions, if any, on such Stock have been satisfied in full, or (2) the date on which all of the Stock reserved under ss. 3 has (as a result of the exercise of Options or the payment in Stock upon the exercise of Stock Appreciation Rights granted under this Plan or the satisfaction of the forfeiture conditions, if any, on Restricted Stock granted under this Plan) been issued or no longer is available for use under this Plan, in which event this Plan also shall terminate on such date. ss. 14 ADJUSTMENT 14.1 Capital Structure. The number, kind or class (or any combination thereof) of shares of Stock reserved under ss. 3, the annual grant caps described in ss. 6, the annual grant described in ss. 7.3, the number, kind or class (or any combination thereof) of shares of Stock subject to Options or Stock Appreciation Rights granted under this Plan and the Option Price of such Options and the SAR Value of such Stock Appreciation Rights as well as the number, kind or class of shares of Restricted Stock granted under this Plan shall be adjusted by the Committee in an equitable manner to reflect any change (after the original effective date of this Plan under ss. 4) in the capitalization of CPI, including, but not limited to, such changes as stock dividends or stock splits. 14.2 Mergers. The Committee as part of any corporate transaction described in ss. 424(a) of the Code shall have the right to adjust (in any manner which the Committee in its discretion deems consistent with ss. 424(a) of the Code) the number, kind or class (or any combination thereof) of shares of Stock reserved under ss. 3. Furthermore, the Committee as part of any corporate transaction described in ss. 424(a) of the Code shall have the right to adjust (in any manner which the Committee in its discretion deems consistent with ss. 424(a) of the Code) the number, kind or class (or any combination thereof) of shares of Stock underlying any Restricted Stock grants previously made under this Plan and any related grant conditions and forfeiture conditions, and the number, kind or class (or any combination thereof) of shares subject to Option and Stock Appreciation Right grants previously made under this Plan and the related Option Price and SAR Value for each such Option and Stock Appreciation Right, and, further, shall have the right (in any manner which the Committee in its discretion deems consistent with ss. 424(a) of the Code) to make Restricted Stock, Option and Stock Appreciation Right grants to effect the assumption of, or the substitution for, restricted stock, option and stock appreciation right grants previously made by any other corporation to the extent that such corporate transaction calls for such substitution or assumption of such restricted stock, option or appreciation right grants. 14.3 Fractional Shares. If any adjustment under this ss. 14 would create a fractional share of Stock or a right to acquire a fractional share of Stock, such fractional share shall be disregarded and the number of shares of Stock reserved under this Plan and the number subject to any Options or Stock Appreciation Right grants and Restricted Stock grants shall be the next lower number of shares of Stock, rounding all fractions downward. An adjustment made under this ss. 14 by the Board shall be conclusive and binding on all affected persons and, further, shall not constitute an increase in "the number of shares reserved under ss. 3" within the meaning of ss. 16. ss. 15 CHANGE IN CONTROL 15.1 Continuation or Assumption of Plan or Grants. If (1) there is a Change in Control of CPI on any date and this Plan and the outstanding Options, Stock Appreciation Rights and Restricted Stock granted under this Plan are continued in full force and effect or there is an assumption of this Plan or the assumption or substitution of the outstanding Options, Stock Appreciation Rights and Restricted Stock granted under this Plan in connection with such Change in Control and (2) (i) a Key Employee's employment with CPI, CREC, a Preferred Stock Subsidiary that has been designated by the Board as covered by this Plan, any Subsidiary of CPI or CREC, any Parent of CPI or CREC, or any Affiliate of CPI or CREC terminates for any reason within the two-year period starting on the date of the Change in Control or (ii) a Director's service on the Board terminates for any reason within the two-year period starting on the date of the Change in Control, then any conditions to the exercise of such Key Employee's or Director's outstanding Options and Stock Appreciation Rights and any then outstanding issuance and forfeiture conditions on such Key Employee's or Director's Restricted Stock automatically shall expire and shall have no further force or effect on or after the date his or her employment or service so terminates. 15.2 No Continuation or Assumption of Plan or Grants. If there is a Change in Control of CPI on any date and this Plan and the outstanding Options, Stock Appreciation Rights and Restricted Stock granted under this Plan are not continued in full force and effect or there is no assumption of this Plan or the assumption or substitution of the Options, Stock Appreciation Rights and Restricted Stock granted under this Plan in connection with such Change in Control, (1) any conditions to the exercise of outstanding Options and Stock Appreciation Rights granted under this Plan and any then outstanding issuance and forfeiture conditions on Restricted Stock granted under this Plan automatically shall expire and shall have no further force or effect on a date selected by the Board which shall provide each Key Employee and Director a reasonable opportunity to exercise his or her Options and Stock Appreciation Rights and to take such other action as necessary or appropriate to receive the Stock subject to any Restricted Stock grants before the date of the Change in Control and (2) each then outstanding Option, Stock Appreciation Right and Restricted Stock grant may be canceled unilaterally by the Board immediately before the date of the Change in Control. ss. 16 AMENDMENT OR TERMINATION This Plan may be amended by the Board from time to time to the extent that the Board deems necessary or appropriate; provided, however, no such amendment shall be made absent the approval of the shareholders of CPI required under ss. 422 of the Code (1) to increase the number of shares of stock reserved under ss. 3 for ISO grants, or (2) to change the class of employees eligible for Options which are ISOs. The Board also may suspend the granting of Options or Stock Appreciation Rights or Restricted Stock under this Plan at any time and may terminate this Plan at any time; provided, however, the Board shall not have the right unilaterally to modify, amend or cancel any Option, Stock Appreciation Right or Restricted Stock granted before such suspension or termination unless (1) the Key Employee or Director consents in writing to such modification, amendment or cancellation or (2) there is a dissolution or liquidation of CPI or a transaction described in ss. 14 or ss. 15. ss. 17 MISCELLANEOUS 17.1 Shareholder Rights. No Key Employee or Director shall have any rights as a shareholder of CPI as a result of the grant of an Option or a Stock Appreciation Right granted to him or her under this Plan or his or her exercise of such Option or Stock Appreciation Right pending the actual delivery of the Stock subject to such Option to such Key Employee or Director. Subject to ss. 9, a Key Employee's or Director's rights as a shareholder in the shares of Stock underlying a Restricted Stock grant which is effective shall be set forth in the related Restricted Stock Certificate. 17.2 No Contract of Employment. The grant of an Option or a Stock Appreciation Right or Restricted Stock to a Key Employee or Director under this Plan shall not constitute a contract of employment or a right to continue to serve on the Board and shall not confer on a Key Employee or Director any rights upon his or her termination of employment or service in addition to those rights, if any, expressly set forth in the related Option Certificate, Stock Appreciation Right Certificate, or Restricted Stock Certificate. 17.3 Withholding. Each Option, Stock Appreciation Right and Restricted Stock grant shall be made subject to the condition that the Key Employee or Director consents to whatever action the Committee directs to satisfy the federal and state tax withholding requirements, if any, which the Committee in its discretion deems applicable to the exercise of such Option or Stock Appreciation Right or the satisfaction of any forfeiture conditions with respect to Restricted Stock issued in the name of the Key Employee or Director. The Committee also shall have the right to provide in an Option Certificate, Stock Appreciation Right Certificate or a Restricted Stock Certificate that a Key Employee or Director may elect to satisfy federal and state tax withholding requirements through a reduction in the cash or the number of shares of Stock actually transferred to him or to her under this Plan. 17.4 Construction. All references to sections (ss.) are to sections (ss.) of this Plan unless otherwise indicated. This Plan shall be construed under the laws of the State of Georgia. Finally, each term set forth in ss. 2 shall have the meaning set forth opposite such term for purposes of this Plan and, for purposes of such definitions, the singular shall include the plural and the plural shall include the singular. 17.5 Other Conditions. Each Option Certificate, Stock Appreciation Right Certificate or Restricted Stock Certificate may require that a Key Employee or Director (as a condition to the exercise of an Option or a Stock Appreciation Right or a Restricted Stock grant) enter into any agreement or make such representations prepared by CPI, including any agreement which restricts the transfer of Stock acquired pursuant to the exercise of an Option or a Stock Appreciation Right or Restricted Stock grant or provides for the repurchase of such Stock by CPI under certain circumstances. 17.6 Rule 16b-3. The Committee shall have the right to amend any Option, Restricted Stock or Stock Appreciation Right grant or to withhold or otherwise restrict the transfer of any Stock or cash under this Plan to a Key Employee or Director as the Committee deems appropriate in order to satisfy any condition or requirement under Rule 16b-3 to the extent Rule 16 of the 1934 Act might be applicable to such grant or transfer. 17.7 Loans. If approved by the Committee, CPI may lend money to, or guarantee loans made by a third party to, any Key Employee to finance the exercise of any Option granted under this Plan, and the exercise of an Option with the proceeds of any such loan shall be treated as an exercise for cash under this Plan. If approved by the Committee, CPI also may, in accordance with a Key Employee's instructions, transfer Stock upon the exercise of an Option directly to a third party in connection with any arrangement made by the Key Employee for financing the exercise of such Option. IN WITNESS WHEREOF, CPI Corporation has caused its duly authorized officer to execute this Plan to evidence its adoption of this Plan. COUSINS PROPERTIES INCORPORATED By:______________________________ Date:____________________________ Please sign the proxy card below, detach it at the perforation and return it in the enclosed envelope. ? Fold and Detach Here ? ============================================================================= Cousins Properties Incorporated Proxy Solicited on Behalf of the Board of Directors for the Special Meeting of Stockholders December 28, 2000 The undersigned hereby appoints Daniel M. DuPree, Tom G. Charlesworth and Kelly Barrett, and each of them, proxies with full power of substitution for and in the name of the undersigned, to vote all shares of stock of Cousins Properties Incorporated which the undersigned would be entitled to vote if personally present at the Special Meeting of Stockholders to be held Thursday, December 28, 2000, 9:00 a.m., local time, and at any adjournments thereof, upon the matters described in the accompanying Notice of Special Meeting of Stockholders and Proxy Statement dated December 1, 2000 and upon any other business that may properly come before the meeting or any adjournments thereof. Said proxies are directed to vote or refrain from voting pursuant to said Proxy Statement as follows, and otherwise in their discretion upon all other matters that may properly come before the meeting or any adjournments thereof. 1. Amendment to the 1999 Incentive Stock Plan to increase the number of shares of Common Stock available under the Plan by 1.2 million: FOR ___ AGAINST ___ ABSTAIN ___ THIS PROXY WILL BE VOTED AS DIRECTED OR IF NO DIRECTION IS INDICATED WILL BE VOTED "FOR" THE ABOVE PROPOSAL. Continued on other side ? Fold and Detach Here ? ============================================================================== Continued from other side The undersigned acknowledges receipt with this proxy of a copy of the Notice of Special Meeting and Proxy Statement dated December 1, 2000. Dated ------------------------ Signed: ------------------------------------- Signed: ------------------------------------- Signature of Stockholder(s) Please date this proxy and sign exactly as your name appears hereon. If stock is held jointly, each owner must sign. When signing as attorney or in a fiduciary capaicty, please give full title. A corporation must sign in full corporate name by an authorized officer. A partnership must sign in the partnership name by an authorized person. PLEASE VOTE, SIGN AND DATE THIS PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY REVOKE THE PROXY AND VOTE THE SHARES IN PERSON. [King & Spalding letterhead] November 17, 2000 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Cousins Properties Incorporated Preliminary Proxy Statement Ladies and Gentlemen: On behalf of Cousins Properties Incorporated (the "Registrant"), and pursuant to Rule 14a-6(a) of the Securities Exchange Act of 1934, as amended, enclosed for filing please find a Preliminary Proxy Statement for a Special Meeting of Stockholders to be held on December 28, 2000. The purpose of the special meeting is to approve an amendment to the 1999 Incentive Stock Plan to increase the number of shares available under the plan. The Registrant expects to mail the Definitive Proxy Statement to its stockholders on December 1, 2000. Please contact the undersigned at 404-572-2738 should you have any questions. Sincerely, /s/ Laura O. Hewett Laura O. Hewett -----END PRIVACY-ENHANCED MESSAGE-----