As filed with the Securities and Exchange Commission on March 16, 2010
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Cousins Properties Incorporated
(Exact Name of Registrant as Specified in its Charter)
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Georgia
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58-0869052
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(State or Other Jurisdiction of
Incorporation or
Organization)
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(I.R.S. Employer Identification Number)
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191 Peachtree Street
Suite 3600
Atlanta, Georgia 30303-1740
(404) 407-1000
(Address, Including Zip Code and Telephone Number, Including Area Code, of
Registrants Principal Executive Offices)
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James A. Fleming
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Executive Vice President
and Chief Financial Officer
Cousins Properties Incorporated
191 Peachtree Street
Suite 3600
Atlanta, Georgia 30303-1740
Telephone: (404) 407-1000
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Copy to:
Alan J. Prince, Esq.
King & Spalding LLP
1180 Peachtree Street, N.E.
Atlanta, Georgia 30309
Telephone: (404) 572-4600
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(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Approximate date of commencement of proposed sale to the public:
From time to time after the
effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box:
o
If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment plans, please check the following
box:
þ
If this Form is filed to register additional securities for an offering pursuant to
Rule 462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same
offering:
o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering:
o
If this Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box.
o
If this Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box.
o
Indicate by check mark whether Registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
þ
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of
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Proposed Maximum
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Proposed Maximum
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Securities to be
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Amount to be
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Offering Price Per
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Aggregate Offering
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Amount of
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Registered
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Registered
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Unit(1)
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Price
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Registration Fee
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Common Stock,
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$
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500,000,000
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(3)
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$
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500,000,000
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(3)
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$
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25,612
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(4)
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Warrants, Debt
Securities(2), Preferred
Stock and Depositary
Shares
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(1)
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The proposed maximum offering price per unit will be determined from time to time by the
Registrant in connection with the issuance by the Registrant of the securities registered
hereunder.
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(2)
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If any Debt Securities are issued at an original issue discount, there is registered hereby
such greater principal amount as shall result in an aggregate initial offering price not in
excess of $500,000,000. If any Debt Securities are denominated or payable in a foreign or
composite currency or currencies, there
is registered hereby such principal amount as shall result in a maximum aggregate initial
offering price equivalent to $500,000,000 at the time of initial offering.
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(3)
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This registration statement also covers such indeterminate number of shares of Common Stock
as shall be issuable upon exercise of Warrants and conversion of any convertible Preferred
Stock, convertible Debt Securities or convertible Depositary Shares. No separate
consideration will be received for Common Stock issued upon exercise of Warrants or the
conversion of convertible Preferred Stock, convertible Debt Securities or convertible
Depositary Shares. Each security registered hereby may be issued separately or with other
securities registered hereby.
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(4)
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The Registrant filed a Registration Statement on Form S-3 (File No. 333-158234) (the Prior
Registration Statement), which registered an aggregate of $500,000,000 of Common Stock,
Warrants, Debt Securities and Preferred Stock of the Registrant, $140,792,883 of which remain
unsold (the Unsold Securities). Pursuant to Rule 415(a)(6) under the Securities Act, this
Registration Statement includes the Unsold Securities and the Registrant is continuing to
apply the previously paid filing fee of $7,856 associated with the Unsold Securities to the Unsold
Securities. Accordingly, the amount of the registration fee has been
based on the additional $359,207,117 of securities registered. As a result, a filing fee of $25,612 is being paid herewith. Pursuant to Rule
415(a)(6), the offering of securities under the Prior Registration Statement will be deemed
terminated as of the date of effectiveness of this registration statement.
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The Registrant hereby amends this Registration Statement on such date or dates as may be
necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in
accordance with
Section 8(a)
of the Securities Act or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section
8(a)
, may determine.
SUBJECT TO COMPLETION, DATED MARCH 16, 2010
PROSPECTUS
Cousins Properties Incorporated
$500,000,000
Common Stock
Warrants
Debt Securities
Preferred Stock
Depositary Shares
We may offer and sell, from time to time, in one or more offerings, together or
separately, any combination of the securities described in this prospectus. The aggregate initial
offering price of the securities that we offer will not exceed $500,000,000. We may offer and sell
these securities to or through one or more underwriters, dealers and agents, or directly, on a
continuous or delayed basis.
This prospectus describes some of the general terms that may apply to these securities and the
general manner in which they may be offered. We will provide specific terms of these securities in
supplements to this prospectus. You should read this prospectus and any prospectus supplement, as
well as the documents incorporated or deemed to be incorporated by reference in this prospectus,
carefully before you invest.
Our principal executive offices are located at 191 Peachtree Street, Suite 3600, Atlanta,
Georgia 30303-1740 and our telephone number is (404) 407-1000.
Our common stock trades on the New York Stock Exchange under the symbol CUZ. On March 12,
2010, the last sales price of our common stock on the New York Stock
Exchange was $8.00 per share.
Our Series A Cumulative Redeemable Preferred Stock trades on the New York Stock Exchange under
the symbol CUZPRA. On March 12, 2010, the last sales price of our Series A Cumulative Redeemable
Preferred Stock on the New York Stock Exchange was $22.53 per share.
Our Series B Cumulative Redeemable Preferred Stock trades on the New York Stock Exchange under
the symbol CUZPRB. On March 12, 2010, the last sales price of our Series B Cumulative Redeemable
Preferred Stock on the New York Stock Exchange was $21.40 per share.
Investing in our securities involves risks. You should refer to the risk factors included in
our periodic reports and other information that we file with the Securities and Exchange Commission
and carefully consider that information before buying our securities.
These securities have not been approved or disapproved by the Securities and Exchange
Commission or any state securities commission, nor has the Securities and Exchange Commission or
any state securities commission passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
We may sell these securities directly, through agents, dealers or underwriters as designated
from time to time, or through a combination of these methods. If any agents, dealers or
underwriters are involved in the sale of any securities, the relevant prospectus supplement will
set forth any applicable commissions or discounts. This prospectus may not be used to consummate
sales of securities unless accompanied by the applicable prospectus supplement.
The date of this prospectus is
, 2010.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and
Exchange Commission, or SEC, using a shelf registration process. Under this shelf process, we
may sell any combination of the securities described in this prospectus in one or more offerings.
This prospectus provides you with a general description of the securities that we may offer. Each
time we sell securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also add, update or
change information contained in this prospectus. You should read this prospectus and the
applicable prospectus supplement together with the additional information described under the
heading Where You Can Find More Information.
The registration statement that contains this prospectus contains additional information about
us and the securities offered under this prospectus. The registration statement can be read at the
SECs web site or at the SEC offices mentioned under the heading Where You Can Find More
Information.
You should rely only on the information contained or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with information that is different. This
prospectus may be used only where it is legal to sell these securities. You should not assume that
the information contained or incorporated by reference in this prospectus is correct at any date
other than the date of the document containing the information.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the
SEC. Our SEC filings are available to the public over the Internet at the SECs web site at
www.sec.gov. Except as specifically described below, information included in the SECs website is
not incorporated by reference into this prospectus. You may also read and copy any document we
file with the SEC at its public reference room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public
reference room. Our SEC filings are also available at the offices of the New York Stock Exchange.
For further information on obtaining copies of our public filings at the New York Stock Exchange,
you should call (212) 656-5060.
We incorporate by reference into this prospectus some of the documents that we have filed
and will file with the SEC, which means that we can disclose important information to you by
referring you to these documents. The information incorporated by reference is an important part
of this prospectus and any prospectus supplement, and information that we file subsequently with
the SEC will automatically update this prospectus and any prospectus supplement. We incorporate by
reference the documents and information listed below and any future filings we make with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as amended, or
the Exchange Act, after the date of this prospectus and up until we sell all the securities offered
by this prospectus and any prospectus supplement:
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Annual Report on Form 10-K for the year ended December 31, 2009;
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Current Reports on Form 8-K filed on January 15, 2010,
February 9, 2010, February 25, 2010 and March 11, 2010;
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The description of our Series A Cumulative Redeemable Preferred Stock contained in
our Registration Statement on Form 8-A (File No. 1-11312) filed July 23, 2003,
including any amendment or report filed for the purpose of updating such description;
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The description of our Series B Cumulative Redeemable Preferred Stock contained in
our Registration Statement on Form 8-A (File No. 1-11312) filed December 16, 2004,
including any amendment or report filed for the purpose of updating such description;
and
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The description of our common stock contained in our Registration Statement on Form
8-A (File No. 1-11312) dated August 4, 1992, including any amendment or report filed
for the purpose of updating such description.
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You may request a copy of these filings (other than an exhibit to a filing unless that exhibit
is specifically incorporated by reference into that filing) at no cost, by contacting us at the
following address or telephone number:
Cousins Properties Incorporated
191 Peachtree Street
Suite 3600
Atlanta, Georgia 30303-1740
Attention: Investor Relations
Telephone: (404) 407-1000
We also maintain an Internet site at www.cousinsproperties.com at which there is additional
information about our business, but the contents of that site are not incorporated by reference
into, and are not otherwise a part of, this prospectus.
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COUSINS PROPERTIES INCORPORATED
We are a diversified real estate company with extensive experience in development,
acquisition, financing, management and leasing. Based in Atlanta, Georgia, we invest in office,
multi-family, retail and land development projects. We have been a public company since 1962, and
our common stock trades on the NYSE under the symbol CUZ. Our Series A and Series B Cumulative
Redeemable Preferred Stock trades on the NYSE under the symbols CUZ PrA and CUZ PrB,
respectively. We have elected to be taxed as a REIT under the Internal Revenue Code.
Our strategy is to seek to produce strong shareholder returns by creating value through the
acquisition, development and redevelopment of high quality, well-located office, multi-family,
retail and residential properties. As part of our strategy, we are focused on continuing to
strengthen our balance sheet by reducing leverage, achieving organic growth through lease-up of our
properties and positioning ourselves for opportunistic real estate investments.
We have developed substantially all of the income producing real estate assets that we own and
operate. A key element in our strategy is to actively manage our portfolio of investment properties
and, at the appropriate times, to engage in timely and strategic dispositions either by sale or
through contributions to ventures in which we retain an ownership interest. These transactions seek
to maximize the value of the assets we create, generate capital for additional development and
acquisition opportunities and return a portion of the value created to our shareholders.
FORWARD-LOOKING STATEMENTS
Our disclosure and analysis in this prospectus and the documents that are incorporated by
reference herein contain forward-looking statements within the meaning of the federal securities
laws and are subject to uncertainties and risks. These forward looking statements include
information about possible or assumed future results of our business and our financial condition,
liquidity, results of operations, plans and objectives. They also include, among other things,
statements concerning anticipated revenues, income or loss, impairments, capital expenditures,
distributions, capital structure, or other financial terms, as well as statements regarding
subjects that are forward looking by their nature, such as:
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our business and financial strategy;
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our ability to obtain future financing arrangements;
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our understanding of our competition and our ability to compete effectively;
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our projected operating results;
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market and industry trends;
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estimates relating to future distributions;
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projected capital expenditures; and
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interest rates.
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The forward looking statements are based upon our beliefs, assumptions, and expectation
of our future performance, taking into account the information currently available to us. These
beliefs, assumptions, and expectations may change as a result of many possible events or factors,
not all of which are known to us. If a change occurs, our business, financial condition, liquidity,
and results of operations may vary materially from those expressed in our forward looking
statements. You should carefully consider
these risks when you make a decision concerning an investment in our common stock, along with
the following factors, among others, that may cause actual results to vary from our forward looking
statements:
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availability and terms of capital and financing, both to fund our operations and to
refinance our indebtedness at it matures;
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risks and uncertainties related to the current recession, the national and local
economic conditions, and the real estate industry in general, in our specific markets
and the commercial, residential and condominium markets in particular;
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continued adverse market and economic conditions could require that we recognize
additional impairments;
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leasing risks, including our inability to obtain new tenants or renew tenants on
favorable terms, or at all, upon the expiration of existing leases and the ability to
lease newly developed or currently unleased space;
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financial condition of existing tenants;
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rising interest rates and insurance rates;
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the availability of sufficient development or investment opportunities;
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competition from other developers or investors;
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the risks associated with development projects (such as construction delay, cost
overruns and leasing/sales risk of new properties);
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potential liability for uninsured losses, condemnation or environmental liability;
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potential liability for a failure to meet regulatory requirements;
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the financial condition and liquidity of, or disputes with, our joint venture partners;
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any failure to comply with debt covenants under our credit agreements;
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any failure to continue to qualify for taxation as a real estate investment trust, or
REIT; and
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the factors incorporated by reference into this prospectus including those described
in the section entitled Risk Factors in our Annual Report on Form 10-K for the year
ended December 31, 2009.
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The words believes, expects, anticipates, estimates, plans, may, intend,
will, or similar expressions are intended to identify forward-looking statements. You should not
place undue reliance on these forward looking statements, which apply only as of the date of this
prospectus. We undertake no obligation to publicly update or revise any forward-looking statement,
whether as a result of future events, new information or otherwise, except as required under
U.S. federal securities laws.
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RISK FACTORS
An investment in our securities involves various risks. You should carefully consider the risk
factors incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended
December 31, 2009, and the other information contained in this prospectus, as updated by our
subsequent filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and
the risk factors and other information contained in the applicable prospectus supplement before
acquiring any of our securities.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying prospectus supplement, we intend to use the net
proceeds of any sale of securities for general corporate purposes. Pending application of such net
proceeds, we will invest such proceeds in interest-bearing accounts and short-term,
interest-bearing securities, which are consistent with our intention to continue to qualify for
taxation as a REIT.
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
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Year Ended December 31,
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2005
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2006
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2007
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2008
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2009
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Ratio of earnings to fixed charges
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2.17
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4.95
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0.79
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1.32
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3.37
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Ratio of earnings to combined
fixed charges and preferred stock
dividends
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1.39
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3.36
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0.54
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1.02
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2.65
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We compute the ratio of earnings to fixed charges by dividing earnings by fixed charges.
We compute the ratio of earnings to combined fixed charges and preferred stock dividends by
dividing earnings by combined fixed charges and preferred stock dividends. For this purpose,
earnings consist of pre-tax income from continuing operations, adjusted for equity investees and
minority interests, further adjusted for gain on sale of investment property, net of applicable
income tax provision, distributed income of equity investees, amortization of capitalized interest
and fixed charges less capitalized interest. Fixed charges consist of interest expense (including
capitalized interest) and the portion of rental expense representing interest (estimated as 30%).
Preferred stock dividends consist of dividends on our Series A preferred stock and Series B
preferred stock.
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DESCRIPTION OF COMMON STOCK
General
Our authorized common stock consists of 150,000,000 shares of common stock, par value $1.00
per share. Each outstanding share of common stock entitles the holder to one vote on all matters
presented to shareholders for a vote. Cumulative voting for the election of directors is not
permitted, which means that holders of more than 50% of the shares of common stock voting for the
election of directors can elect all of the directors if they choose to do so and the holders of the
remaining shares cannot elect any directors. Holders of common stock have no preemptive rights. At
March 12, 2010, there were 100,046,701 shares of common stock outstanding and 427,421 shares of
common stock reserved for issuance under our various plans.
Shares of common stock currently outstanding are listed for trading on the New York Stock
Exchange, or the NYSE, under the symbol CUZ. We will apply to the NYSE to list the additional
shares of common stock to be sold pursuant to any prospectus supplement, and we anticipate that
such shares will be so listed.
All shares of common stock issued will be duly authorized, fully paid, and nonassessable.
Distributions may be paid to the holders of common stock if and when declared by our board of
directors out of funds legally available therefor.
Under Georgia law, shareholders are generally not liable for our debts or obligations. If
Cousins is liquidated, subject to the rights of any holders of preferred stock, if any, to receive
preferential distributions, each outstanding share of common stock will be entitled to participate
pro rata in the assets remaining after payment of, or adequate provision for, all of our known
debts and liabilities.
Provisions of our Articles of Incorporation and Bylaws
In addition to any vote otherwise required by applicable law, our Restated and Amended
Articles of Incorporation, as amended, or Articles of Incorporation, provide that:
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any merger or consolidation of Cousins with or into any other corporation;
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any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one
transaction or a series of related transactions) of all or substantially all of the
assets of Cousins;
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the adoption of any plan or proposal for the liquidation or dissolution of Cousins;
or
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any reclassification of our securities or recapitalization or reorganization of
Cousins,
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requires the affirmative vote of the holders of at least two-thirds of the then outstanding shares
of common stock. In addition, any amendment of or addition to our Articles of Incorporation or our
amended and restated Bylaws (our Bylaws) which would have the effect of amending, altering,
changing or repealing the foregoing provisions of our Articles of Incorporation requires the
affirmative vote of the holders of at least two-thirds of the then outstanding shares of common
stock.
The provisions of our Articles of Incorporation described above and those described below
under the caption Restrictions on Transfer may make it more difficult, and thereby discourage,
attempts to take over control of Cousins, and may make it more difficult to remove incumbent
management. None of these provisions, however, prohibit an offer for all of the outstanding shares
of our common stock or a merger of Cousins with another entity. Other than as set forth in this
prospectus, our board of directors has no present plans to adopt any additional measures which
would discourage a takeover or change in control of Cousins.
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Restrictions on Transfer
In order for Cousins to qualify as a REIT under the Code, not more than 50% in value of our
outstanding stock may be owned, directly or indirectly, by five or fewer individuals (as defined in
the Code to include certain entities) during the last half of a taxable year, and our stock must be
beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months
or during a proportionate part of a shorter taxable year. See Certain Federal Income Tax
Considerations. Because our board of directors believes that it is essential for us to continue to
qualify as a REIT, our board of directors has adopted, and our shareholders have approved,
provisions of the Articles of Incorporation restricting the acquisition of shares of stock.
Article 11 of our Articles of Incorporation generally prohibits any transfer of shares of
stock which would cause the transferee of such shares to Own shares in excess of 3.9% in value of
the outstanding shares of all classes of stock (the Limit). For purposes of Article 11,
Ownership of shares is broadly defined to include all shares that would be attributed to a
Person for purposes of determining whether Cousins is closely held under Section 856(a)(6) of
the Code. A Person is broadly defined to include an individual, corporation, partnership, estate,
trust (including a trust qualified under Section 401(a) or 501(c)(1) of the Code), association,
private foundation within the meaning of Section 509(a) of the Code, joint stock company or other
entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the
Exchange Act, but does not include a corporate underwriter which participates in a public offering
of our common stock for a period of seven days following the purchase by such underwriter. Person
does not include an organization that qualifies under Section 501(c)(3) of the Code and that is not
a private foundation within the meaning of Section 509(a) of the Code. Article 11 also prohibits
any Person, except for Persons who Owned shares in excess of the Limit on December 31, 1986 (Prior
Owners), from Owning shares in excess of the Limit. Article 11 further prohibits Prior Owners
(including certain family members and other persons whose shares are attributed to such Prior
Owners under the relevant sections of the Code) from acquiring any shares not Owned as of
December 31, 1986, unless after any such acquisition, such Prior Owner would not Own a percentage
of the value of our outstanding shares of stock greater than the percentage of the value of our
outstanding shares of stock Owned by such Prior Owner on December 31, 1986, excluding, for the
purpose of calculating such Prior Owners Ownership percentage after such acquisition, shares
acquired since December 31, 1986 through pro rata stock dividends or splits, shareholder approved
stock plans or from Persons whose shares are attributed to such Prior Owner for determining
compliance with the stock ownership requirement.
The Articles of Incorporation allow our board of directors, in the exercise of its sole and
absolute discretion, to except from the Limit certain specified shares of stock proposed to be
transferred to a Person who provided our board of directors with such evidence, undertakings and
assurances our board of directors may require that such transfer to such Person of the specified
shares of stock will not prevent our continued qualification as a REIT under the Code. Our board of
directors may, but is not required to, condition the grant of any such exemption on obtaining an
opinion of counsel, a ruling from the Internal Revenue Service, assurances from one or more third
parties as to future acquisitions of shares or such other assurances as our board of directors may
deem to be satisfactory.
If, notwithstanding the prohibitions contained in Article 11, a transfer occurs which, absent
the prohibitions, would have resulted in the Ownership of shares in excess of the Limit or in
excess of those owned by a Prior Owner on December 31, 1986, such transfer is void and the
transferee acquires no rights in the shares. Shares attempted to be acquired in excess of the Limit
or shares attempted to be acquired by a Prior Owner after December 31, 1986, as the case may be,
would constitute Excess Shares under Article 11.
Excess Shares have the following characteristics under Article 11:
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Excess Shares shall be deemed to have been transferred to Cousins as Trustee of a
trust (the Trust) for the exclusive benefit of the Person or Persons to whom the
Excess
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Shares are later transferred;
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an interest in the Trust (representing the number of Excess Shares held by the
Trust attributable to the particular transferee) shall be transferable by the
transferee (1) at a price not exceeding the price paid by such transferee in
connection with the transfer to it or (2) if the shares became Excess Shares in a
transaction other than for value, at a price not exceeding the Market Price (as
defined) on the date of transfer, and only to a Person who could Own the shares
without the shares being deemed Excess Shares;
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Excess Shares shall not have any voting rights and shall not be considered for the
purposes of any shareholder vote or of determining a quorum for such vote, but shall
continue to be reflected as issued and outstanding stock of Cousins;
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no dividends or distributions shall be paid with respect to Excess Shares, and any
dividends paid in error on Excess Shares are payable back to us upon demand; and
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Excess Shares shall be deemed to have been offered for sale to Cousins for the
period of 90 days following the date on which the shares become Excess Shares, if
notice is given by the transferee to us, or the date on which our board of directors
determines that such shares are Excess Shares, if notice is not given by the
transferee to Cousins. During such 90-day period, we may accept the offer and
purchase any or all of such Excess Shares at the lesser of the price paid by the
transferee and the Market Price (as defined) on the date we accept the offer to
purchase. Before any transfer of Excess Shares to any transferee, we must (1) be
notified, (2) waive our rights to accept the offer to purchase the Excess Shares, and
(3) determine in good faith that the shares do not constitute Excess Shares in the
hands of the transferee.
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Under Article 11, if any Person acquires shares in violation of the prohibitions in
Article 11, and we would have qualified as a REIT under the Code but for such acquisition, that
Person must indemnify us in an amount equal to the amount that will put us in the same financial
position as we would have been in had we not lost our qualified REIT status. Such amount includes
the full amount of all taxes, penalties, interest imposed and all costs (plus interest thereon)
incurred by us as a result of losing our qualified REIT status. Such indemnification is applicable
until we are again able to elect to be taxed as a REIT. If more than one Person has acquired shares
in violation of Article 11 at or prior to the time of the loss of REIT qualification, then all such
Persons shall be jointly and severally liable for the indemnity.
Article 11 also requires our board of directors to take such action as it deems advisable to
prevent or refuse to give effect to any transfer or acquisition of our stock in violation of
Article 11, including refusing to make or honor on our books, or seeking to enjoin, a transfer in
violation of Article 11. Article 11 does not limit the authority of our board of directors to take
any other action as it deems necessary or advisable to protect us and the interests of our
shareholders by preserving our qualified REIT status.
Article 11 further requires any Person who acquires or attempts to acquire shares in violation
of Article 11 to give us written notice of such transaction and to provide us with such other
relevant information as we may request. We can request such information from any Person that we
determine, in good faith, is attempting to acquire shares in violation of Article 11.
All certificates representing shares of stock bear a legend referring to the restrictions
described above.
Limitation of Directors Liability
The Articles of Incorporation eliminate, subject to certain exceptions, the personal liability
of a director to Cousins or our shareholders for monetary damages for breaches of such directors
duty of care or other duties as a director. The Articles of Incorporation do not provide for the
elimination of, or any
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limitation on, the personal liability of a director for (1) any appropriation, in violation of the
directors duties, of any business opportunity of Cousins, (2) acts or omissions that involve
intentional misconduct or a knowing violation of law, (3) unlawful corporate distributions or
(4) any transaction from which the director derived an improper personal benefit. These provisions
of our Articles of Incorporation will limit the remedies available to a shareholder in the event of
breaches of any directors duties to such shareholder or Cousins.
Under Article VI of our Bylaws, we are required to indemnify any person who is made or
threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative and whether formal or informal (including
any action by or in the right of Cousins), by reason of the fact that he is or was a director,
officer, agent or employee of Cousins against expenses (including reasonable attorneys fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such proceeding provided that such person shall not be indemnified in any
proceeding in which he is adjudged liable to us for:
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any appropriation, in violation of his duties, or of any business opportunity of
Cousins;
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acts or omissions which involve intentional misconduct or knowing violation of law;
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unlawful corporate distributions; or
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any transaction from which such person received improper personal benefit.
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Expenses incurred by any person according to the foregoing provisions shall be paid by us in
advance of the final disposition of such proceeding upon receipt of the written affirmation of such
persons good faith belief that he has met the standards of conduct required under our Bylaws.
Indemnification Agreements with Directors and Certain Officers
We have entered into indemnification agreements with our directors and certain officers
providing contractual indemnification by us to the maximum extent authorized by law.
Shareholder Action
Our Bylaws allow action by the shareholders without a meeting only by unanimous written
consent.
Advance Notice for Shareholder Proposals or Nominations at Meetings
In accordance with our Bylaws, shareholders may, (i) nominate persons for election to the
Board of Directors or bring other business before an annual meeting of shareholders and (ii)
nominate persons for election to the Board of Directors at a special meeting of shareholders, only
by delivering prior written notice to us and complying with certain other requirements. With
respect to any annual meeting of shareholders, such notice must generally be received by our
Corporate Secretary no later than the 90th day nor earlier than the 120th day prior to the first
anniversary of the preceding years annual meeting. With respect to any special meeting of
shareholders, such notice must generally be received by our Corporate Secretary no later than the
10th day following the day on which the date of the special meeting and either the names of the
nominees proposed to be elected at such meeting or the number of directors to be elected is
publicly announced or disclosed. Any notice provided by a shareholder under these provisions must
include the information specified in our Bylaws.
Georgia Anti-Takeover Statutes
The Georgia Business Corporation Code restricts certain business combinations with interested
shareholders and contains fair price requirements applicable to certain mergers with certain
interested shareholders that are summarized below. The restrictions imposed by these statutes will
not apply to a
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corporation unless it elects to be governed by these statutes. Cousins has not elected to be
covered by these restrictions, but, although we have no present intention to do so, could elect to
do so in the future.
The Georgia Business Corporation Code regulates business combinations such as mergers,
consolidations, share exchanges and asset purchases where the acquired business has at least
100 shareholders residing in Georgia and has its principal office in Georgia, and where the
acquiror became an interested shareholder of the corporation, unless either:
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the transaction resulting in such acquiror becoming an interested shareholder or
the business combination received the approval of the corporations board of directors
prior to the date on which the acquiror became an interested shareholder;
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the acquiror became the owner of at least 90% of the outstanding voting stock of
the corporation, excluding shares held by directors, officers and affiliates of the
corporation and shares held by certain other persons, in the same transaction in which
the acquiror became an interested shareholder; or
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the acquiror became the owner of at least 90% of the outstanding voting stock of
the corporation, excluding shares held by directors, officers and affiliates of the
corporation and shares held by certain other persons, subsequent to the transaction in
which the acquiror became an interested shareholder, and the business combination is
approved by a majority of the shares entitled to vote, exclusive of shares owned by
the interested shareholder, directors and officers of the corporation, certain
affiliates of the corporation and the interested shareholder and certain employee
stock plans.
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For purposes of this statute, an interested shareholder generally is any person who directly or
indirectly, alone or in concert with others, beneficially owns or controls 10% or more of the
voting power of the outstanding voting shares of the corporation. The statute prohibits business
combinations with an unapproved interested shareholder for a period of five years after the date on
which such person became an interested shareholder. The statute restricting business combinations
is broad in its scope and is designed to inhibit unfriendly acquisitions.
The Georgia Business Corporation Code also prohibits certain business combinations between a
Georgia corporation and an interested shareholder unless:
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certain fair price criteria are satisfied;
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the business combination is unanimously approved by the continuing directors;
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the business combination is recommended by at least two-thirds of the continuing
directors and approved by a majority of the votes entitled to be cast by holders of
voting shares, other than voting shares beneficially owned by the interested
shareholder; or
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the interested shareholder has been such for at least three years and has not
increased his ownership position in such three-year period by more than one percent in
any 12-month period.
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The fair price statute is designed to inhibit unfriendly acquisitions that do not satisfy the
specified fair price requirements.
Other Matters
The transfer agent and registrar for our common stock is American Stock Transfer & Trust
Company.
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DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of common stock. The warrants may be issued
independently or together with any other securities offered by any prospectus supplement and may be
attached to or separate from the common stock. Each series of warrants will be issued under a
separate warrant agreement to be entered into between us and a warrant agent specified in the
applicable prospectus supplement. The warrant agent will act solely as our agent in connection with
the warrants of such series and will not assume any obligation or relationship of agency or trust
for or with any holders or beneficial owners of warrants. The following sets forth certain general
terms and provisions of the warrants offered by this prospectus. Further terms of the warrants and
the applicable warrant agreement will be set forth in the applicable prospectus supplement.
The applicable prospectus supplement will describe the terms of the warrants in respect of
which this prospectus is being delivered, including, where applicable, the following:
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the title of such warrants;
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the aggregate number of such warrants;
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the price or prices at which such warrants will be issued;
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the designation, number and terms of shares of common stock purchasable upon
exercise of such warrants;
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the process for changes to or adjustments in the exercise price;
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the date, if any, on and after which such warrants and the related common stock
will be separately transferable;
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the price at which each share of common stock purchasable upon exercise of such
warrants may be purchased;
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the date on which the right to exercise such warrants shall commence and the date
on which such right shall expire;
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the minimum or maximum amount of such warrants which may be exercised at any one
time;
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information with respect to book-entry procedures, if any;
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a discussion of certain federal income tax considerations; and
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any other terms of such warrants, including terms, procedures and limitations
relating to the exchange and exercise of such warrants.
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DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt securities which may be
offered by this prospectus. The debt securities will be issued under an Indenture (the Indenture)
between us and U.S. Bank, National Association as Trustee (the Trustee). The Indenture has been
filed as an exhibit to our Registration Statement on Form S-3 (No. 333-12031) on September 16, 1996
and is available for inspection at the SECs website as described above under Where You Can Find
More Information and at the corporate trust office of the Trustee. The Indenture is subject to,
and governed by, the Trust Indenture Act of 1939, as amended. The statements made hereunder
relating to the Indenture and the debt securities to be issued thereunder are summaries of certain
provisions thereof and do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all provisions of the Indenture and such debt securities. You should also
read the applicable prospectus supplement, which will contain additional information and may update
or change some of the information below. All section references appearing herein are to sections of
the Indenture.
General
The debt securities will be our direct, unsecured obligations and will rank equally with all
other unsecured and unsubordinated indebtedness of Cousins. As of the date of this prospectus, we
have no publicly registered debt outstanding. At December 31, 2009, our consolidated outstanding
debt was $590.2 million. The debt securities may be issued without limit as to aggregate principal
amount, in one or more series, in each case as established from time to time in or pursuant to
authority granted by a resolution of our board of directors or as established in one or more
indentures supplemental to the Indenture. All debt securities of one series need not be issued at
the same time and, unless otherwise provided, a series may be reopened, without the consent of the
holders of the debt securities of such series, for issuances of additional debt securities of such
series (Section 301).
The Indenture provides that there may be more than one Trustee thereunder, each with respect
to one or more series of debt securities. Any Trustee under the Indenture may resign or be removed
with respect to one or more series of debt securities, and a successor Trustee may be appointed to
act with respect to such series (Section 608). In the event that two or more persons are acting as
Trustee with respect to different series of debt securities, each such Trustee shall be a trustee
of a trust under the Indenture separate and apart from the trust administered by any other Trustee
(Section 609), and, except as otherwise indicated herein, any action described herein to be taken
by a Trustee may be taken by each such Trustee with respect to, and only with respect to, the one
or more series of debt securities for which it is Trustee under the Indenture.
Reference is made to the prospectus supplement relating to the series of debt securities
offered thereby for the specific terms thereof, including:
(1) the title of such debt securities;
(2) the aggregate principal amount of such debt securities and any limit on such aggregate
principal amount;
(3) the percentage of the principal amount at which such debt securities will be issued and,
if other than the principal amount thereof, the portion of the principal amount thereof payable
upon declaration of acceleration of the maturity thereof;
(4) the date or dates, or the method for determining such date or dates, on which the
principal of such debt securities will be payable;
(5) the rate or rates, or the method by which such rate or rates shall be determined, at
which such debt securities will bear interest, if any;
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(6) the date or dates, or the method for determining such date or dates, from which any
interest will accrue, the dates on which any such interest will be payable, the record dates for
such interest payment dates, or the method by which any such date shall be determined, the person
to whom such interest shall be payable, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day months;
(7) the place or places where the principal of (and premium, if any), interest, if any, and
additional amounts, if any, on such debt securities will be payable, such debt securities may be
surrendered for registration of transfer or exchange and notices or demands to or upon us in
respect of such debt securities and the Indenture may be served;
(8) the period or periods within which, the price or prices at which, and the terms and
conditions upon which such debt securities may be redeemed, as a whole or in part, at our option,
if we are to have such an option;
(9) the obligation, if any, of us to redeem, repay or purchase such debt securities pursuant
to any sinking fund or analogous provision or at the option of a holder thereof, and the period or
periods within which, the price or prices at which, and the terms and conditions upon which such
debt securities will be redeemed, repaid or purchased, as a whole or in part, pursuant to such
obligation;
(10) if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which any registered debt securities (Registered Securities) shall be issuable
and, if other than denominations of $5,000 and any integral multiple thereof, the denomination or
denominations in which any bearer debt securities (Bearer Securities) shall be issuable;
(11) if other than the Trustee, the identity of each security registrar and/or paying agent;
(12) if other than the principal amount thereof, the portion of the principal amount of the
debt securities that shall be payable upon declaration of acceleration of the maturity thereof or
the method by which such portion shall be determined;
(13) if other than U.S. dollars, the currency or currencies in which payment of the principal
of (and premium, if any) or interest or additional amounts, if any, on the debt securities shall be
payable or in which the debt securities shall be denominated;
(14) whether the amount of payments of principal of (and premium, if any) or interest, if
any, on the debt securities may be determined with reference to an index, formula or other method
(which index, formula or method may be based, without limitation, on one or more currencies,
currency units, composite currencies, commodities, equity indices or other indices), and the manner
in which such amounts shall be determined;
(15) whether the principal of (and premium, if any) or interest or additional amounts, if
any, on the debt securities are to be payable, at our election or a holder (a Holder) thereof, in
a currency or currencies, currency unit or units or composite currency or currencies other than
that in which such debt securities are denominated or stated to be payable, the period or periods
within which, and the terms and conditions upon which, such election may be made, and the time and
manner of, and identity of the exchange rate agent with responsibility for, determining the
exchange rate between the currency or currencies, currency unit or units or composite currency or
currencies in which such debt securities are denominated or stated to be payable and the currency
or currencies, currency unit or units or composite currency or currencies in which such debt
securities are to be so payable;
(16) provisions, if any, granting special rights to the Holders of the debt securities upon
the occurrence of such events as may be specified;
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(17) any deletions from, modifications of or additions to the events of default (the Events
of Default) or covenants of Cousins with respect to the debt securities, whether or not such
Events of Default or covenants are consistent with the Events of Default or covenants set forth in
the Indenture;
(18) whether the debt securities are to be issuable as Registered Securities, Bearer
Securities (with or without coupons) or both, any restrictions applicable to the offer, sale or
delivery of Bearer Securities and the terms upon which Bearer Securities may be exchanged for
Registered Securities and vice versa (if permitted by applicable laws and regulations), whether any
debt securities are to be issuable initially in temporary global form and whether any debt
securities are to be issuable in permanent global form with or without coupons and, if so, whether
beneficial owners of interests in any such permanent global debt security may exchange such
interests for debt securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may occur, and, if Registered
Securities are to be issuable as a global debt security, the identity of the depositary for such
series;
(19) the date as of which any Bearer Securities and any temporary global debt security
representing Outstanding (as hereinafter defined) debt securities shall be dated if other than the
date of original issuance of the first debt security of the series to be issued;
(20) the person to whom any interest on any Registered Security shall be payable, if other
than the person in whose name that debt security is registered at the close of business on the
applicable record date (the Regular Record Date) for such interest, the manner in which, or the
person to whom any interest on any Bearer Security shall be payable, if otherwise than upon
presentation and surrender of the coupons appertaining thereto as they severally mature, and the
extent to which, or the manner in which, any interest payable on a temporary global debt security
on an interest payment date (an Interest Payment Date) will be paid;
(21) if the defeasance and covenant defeasance provisions described herein are to be
inapplicable or any modifications of such provisions;
(22) if the debt securities are to be issuable in definitive form (whether upon original
issue or upon exchange of a temporary debt security) only upon receipt of certain certificates or
other documents or satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;
(23) whether and under what circumstances we will pay additional amounts on the debt
securities in respect of any tax, assessment or governmental charge and, if so, whether we will
have the option to redeem such debt securities rather than pay such additional amounts (and the
terms of any such option);
(24) with respect to any debt securities that provide for optional redemption or prepayment
upon the occurrence of certain events (such as a change of control of Cousins), (i) the possible
effects of such provisions on the market price of our securities or in deterring certain mergers,
tender offers or other takeover attempts, and our intention to comply with the requirements of Rule
14e-l under the Exchange Act and any other applicable securities laws in connection with such
provisions; (ii) whether the occurrence of the specified events may give rise to cross-defaults on
other indebtedness such that payment on such debt securities may be effectively subordinated; and
(iii) the existence of any limitations on our financial or legal ability to repurchase such debt
securities upon the occurrence of such an event (including, if true, the lack of assurance that
such a repurchase can be effected) and the impact, if any, under the Indenture of such a failure,
including whether and under what circumstances such a failure may constitute an Event of Default;
(25) conversion or exchange provisions, if any; and
(26) any other terms of such debt securities not inconsistent with the terms of the
Indenture.
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The debt securities may provide for less than the entire principal amount thereof to be
payable upon declaration of acceleration of the maturity thereof (Original Issue Discount
Securities). If material or applicable, special U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be described in the applicable
prospectus supplement.
Except as described under Merger, Consolidation or Sale or as may be set forth in any
prospectus supplement, the Indenture does not contain any other provisions that would limit the
ability of us to incur indebtedness or that would afford holders of the debt securities protection
in the event of (i) a highly leveraged or similar transaction involving us, or our management, or
any affiliate of any such party, (ii) a change of control, or (iii) a reorganization,
restructuring, merger or similar transaction involving us that may adversely affect the holders of
the debt securities. In addition, subject to the limitations set forth under Merger,
Consolidation or Sale, we may, in the future, enter into certain transactions, such as the sale of
all or substantially all of our assets or the merger or consolidation of Cousins, that would
increase the amount of our indebtedness or substantially reduce or eliminate our assets, which may
have an adverse effect on our ability to service our indebtedness, including the debt securities.
In addition, restrictions on ownership and transfers of our common stock are designed to preserve
our status as a REIT and, therefore, may act to prevent or hinder a change of control. See
Description of Common Stock Restrictions on Transfer. Reference is made to the applicable
prospectus supplement for information with respect to any deletions from, modifications of or
additions to the events of default or covenants that are described below, including any addition of
a covenant or other provision providing event risk or similar protection.
The applicable prospectus supplement will summarize the nature and scope of any event risk
provisions contained in any offered debt security, including the types of events protected by such
provisions and any limitations on our ability to satisfy our obligations under such provisions. The
applicable prospectus supplement also will summarize anti-takeover provisions in other securities
of Cousins, if any, which could have a material effect on the offered debt securities. Such summary
will contain a detailed and quantifiable definition of any change in control provision.
Reference is made to Certain Covenants below and to the description of any additional
covenants with respect to a series of debt securities in the applicable prospectus supplement.
Except as otherwise described in the applicable prospectus supplement, compliance with such
covenants generally may not be waived with respect to a series of debt securities by our board of
directors or by the Trustee unless the Holders of at least a majority in principal amount of all
outstanding debt securities of such series consent to such waiver, except to the extent that the
defeasance and covenant defeasance provisions of the Indenture described under Discharge,
Defeasance and Covenant Defeasance below apply to such series of debt securities. See
Modification of the Indenture.
Denominations, Interest, Registration and Transfer
Unless otherwise described in the applicable prospectus supplement, the debt securities of any
series which are Registered Securities, other than Registered Securities issued in global form
(which may be of any denomination) shall be issuable in denominations of $1,000 and any integral
multiple thereof, and the debt securities which are Bearer Securities, other than Bearer Securities
issued in global form (which may be of any denomination), shall be issuable in denominations of
$5,000 (Section 302).
Unless otherwise specified in the applicable prospectus supplement, the principal of (and
premium, if any) and interest on any series of debt securities will be payable at the corporate
trust office of the Trustee, provided that, at our option, payment of interest may be made by check
mailed to the address of the Person entitled thereto as it appears in the applicable Security
Register or by wire transfer of funds to such Person at an account maintained within the United
States (Sections 301, 307 and 1002).
Any interest not punctually paid or duly provided for on any Interest Payment Date with
respect to a debt security (Defaulted Interest) will forthwith cease to be payable to the Holder
on the Regular Record Date and may either be paid to the Person in whose name such debt security is
registered at the close of
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business on a special record date (the Special Record Date) for the
payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to the
Holder of such debt security not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more completely described in the Indenture.
Subject to certain limitations imposed upon debt securities issued in book-entry form, the
debt securities of any series will be exchangeable for other debt securities of the same series and
of a like aggregate principal amount and tenor of different authorized denominations upon surrender
of such debt securities at the corporate trust office of the Trustee. In addition, subject to
certain limitations imposed upon debt securities issued in book-entry form, the debt securities of
any series may be surrendered for registration of transfer thereof at the corporate trust office of
the Trustee. Every debt security surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any debt securities, but the Trustee or we may require
payment of a sum sufficient to cover any tax or other governmental charge payable in connection
therewith (Section 305). If the applicable prospectus supplement refers to any transfer agent (in
addition to the Trustee) initially designated by us with respect to any series of debt securities,
we may at any time rescind the designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, except that we will be required to maintain a
transfer agent in each place of payment for such series. We may at any time designate additional
transfer agents with respect to any series of debt securities (Section 1002).
Neither we nor the Trustee shall be required (i) to issue, register the transfer of or
exchange any debt security if such debt security may be among those selected for redemption during
a period beginning at the opening of business 15 days before selection of the debt securities to be
redeemed and ending at the close of business on (A) if such debt securities are issuable only as
Registered Securities, the day of the mailing of the relevant notice of redemption and (B) if such
debt securities are issuable as Bearer Securities, the day of the first publication of the relevant
notice of redemption or, if such debt securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or (ii) to register the
transfer of or exchange any Registered Security so selected for redemption in whole or in part,
except, in the case of any Registered Security to be redeemed in part, the portion thereof not to
be redeemed, or (iii) to exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and like tenor, provided
that such Registered Security shall be simultaneously surrendered for redemption, or (iv) to issue,
register the transfer of or exchange any debt security which has been surrendered for repayment at
the option of the Holder, except the portion, if any, of such debt security not to be so repaid
(Section 305).
Merger, Consolidation or Sale
We may consolidate with, or sell, lease or convey all or substantially all of our assets to,
or merge with or into, any other entity, provided that (a) we shall be the continuing entity, or
the successor entity (if other than Cousins) formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such assets shall expressly assume payment of
the principal of (and premium, if any) and interest on all the debt securities and the due and
punctual performance and observance of all of the covenants and conditions contained in the
Indenture; (b) immediately after giving effect to such transaction and treating any indebtedness
which becomes an obligation of us or any subsidiary of Cousins (a Subsidiary) as a result thereof
as having been incurred by us or such Subsidiary at the time of such transaction, no Event of
Default under the Indenture, and no event which, after notice or the lapse of time, or both, would
become such an Event of Default, shall have occurred and be continuing; and (c) an officers
certificate and legal opinion covering such conditions shall be delivered to the Trustee
(Sections 801 and 803).
Certain Covenants
Existence.
Except as permitted under Merger, Consolidation or Sale, we are required to do
or cause to be done all things necessary to preserve and keep in full force and effect our
existence, rights and
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franchises; provided, however, that we shall not be required to preserve any
right or franchise if we determine that the preservation thereof is no longer desirable in the
conduct of our business and that the loss thereof is not disadvantageous in any material respect to
the Holders of the debt securities (Section 1006).
Maintenance of Properties.
We are required to cause all of our material properties used or
useful in the conduct of our business or the business of any Subsidiary to be maintained and kept
in good condition, repair and working order and supplied with all necessary equipment and to cause
to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all
as in our judgment may be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that we and our Subsidiaries
shall not be prevented from selling or otherwise disposing for value their respective properties in
the ordinary course of business (Section 1007).
Insurance.
We are required to, and are required to cause each of our Subsidiaries to, keep
all of our insurable properties insured against loss or damage at least equal to their then full
insurable value with financially sound and reputable insurance companies (Section 1008).
Payment of Taxes and Other Claims.
We are required to pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all taxes, assessments and governmental
charges levied or imposed upon us or any Subsidiary or upon our income, profits or property or that
of any Subsidiary, and (ii) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of us or any Subsidiary; provided, however, that we
shall not be required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings (Section 1009).
Provision of Financial Information.
The Holders of debt securities will be provided with
copies of the annual reports and quarterly reports of Cousins. Whether or not we are subject to
Section 13 or 15(d) of the Exchange Act and for so long as any debt securities are outstanding, we
will, to the extent permitted under the Exchange Act, be required to file with the SEC the annual
reports, quarterly reports and other documents which we would have been required to file with the
SEC pursuant to such Section 13 or 15(d) (the Financial Statements) if we were so subject, such
documents to be filed with the SEC on or prior to the respective dates (the Required Filing
Dates) by which we would have been required so to file such documents if we were so subject. We
will also in any event (x) within 15 days of each Required Filing Date (i) transmit by mail to all
Holders of debt securities, as their names and addresses appear in the security register for the
debt securities (the Security Register), without cost to such Holders, copies of the annual
reports and quarterly reports which we would have been required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act if we were subject to such Sections and (ii) file with the
Trustee copies of the annual reports, quarterly reports and other documents which we would have
been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were
subject to such Sections and (y) if filing such documents by us with the SEC is not permitted under
the Exchange Act, promptly upon written request and payment of the reasonable cost of duplication
and delivery, supply copies of such documents to any prospective Holder (Section 1010).
Additional Covenants.
Any additional or different covenants of Cousins with respect to any
series of debt securities will be set forth in the prospectus supplement relating thereto.
Events of Default, Notice and Waiver
The Indenture provides that the following events are Events of Default with respect to any
series of debt securities issued thereunder: (a) default for 30 days in the payment of any
installment of interest on any debt security of such series; (b) default in the payment of the principal of (or premium, if
any, on) any debt security of such series at its maturity; (c) default in making any sinking fund
payment as required for
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any debt security of such series; (d) default in the performance of any
other covenant of Cousins contained in the Indenture (other than a covenant added to the Indenture
solely for the benefit of a series of debt securities issued thereunder other than such series),
such default having continued for 60 days after written notice as provided in the Indenture;
(e) default in the payment of an aggregate principal amount exceeding $5,000,000 of any evidence of
recourse indebtedness of Cousins or any mortgage, indenture or other instrument under which such
indebtedness is issued or by which such indebtedness is secured, such default having occurred after
the expiration of any applicable grace period and having resulted in the acceleration of the
maturity of such indebtedness, but only if such indebtedness is not discharged or such acceleration
is not rescinded or annulled; (f) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of us or any Significant Subsidiary or any
of their respective property; and (g) any other Event of Default provided with respect to a
particular series of debt securities. The term Significant Subsidiary means each significant
subsidiary (as defined in Regulation S-X promulgated under the Securities Act) of Cousins.
If an Event of Default under the Indenture with respect to debt securities of any series at
the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding debt securities of that series may
declare the principal amount (or, if the debt securities of that series are Original Issue Discount
Securities or Securities, the terms of which provide that the principal amount thereof payable at
maturity may be more or less than the principal face amount thereof at original issuance (Indexed
Securities), such portion of the principal amount as may be specified in the terms thereof) of all
of the debt securities of that series to be due and payable immediately by written notice thereof
to us (and to the Trustee if given by the Holders). However, at any time after such a declaration
of acceleration with respect to debt securities of such series (or of all debt securities then
Outstanding under the Indenture, as the case may be) has been made, but before a judgment or decree
for payment of the money due has been obtained by the Trustee, the Holders of not less than a
majority in principal amount of Outstanding debt securities of such series (or of all debt
securities then Outstanding under the Indenture, as the case may be) may rescind and annul such
declaration and its consequences if (a) we shall have deposited with the applicable Trustee all
required payments of the principal of (and premium, if any) and interest on the debt securities of
such series (or of all debt securities then Outstanding under the Indenture, as the case may be),
plus certain fees, expenses, disbursements and advances of the Trustee and (b) all Events of
Default, other than the nonpayment of accelerated principal of (or specified portion thereof), or
premium (if any) or interest on the debt securities of such series (or of all debt securities then
Outstanding under the Indenture, as the case may be) have been cured or waived as provided in the
Indenture (Section 502). The Indenture also provides that the Holders of not less than a majority
in principal amount of the Outstanding debt securities of any series (or of all debt securities
then Outstanding under the Indenture, as the case may be) may waive any past default with respect
to such series and its consequences, except a default (x) in the payment of the principal of (or
premium, if any) or interest on any debt security or such series or (y) in respect of a covenant or
provision contained in the Indenture that cannot be modified or amended without the consent of the
Holder of each Outstanding debt security affected thereby (Section 513).
The Trustee will be required to give notice to the Holders of debt securities within 90 days
of a default under the Indenture unless such default has been cured or waived; provided, however,
that the Trustee may withhold notice to the Holders of any series of debt securities of any default
with respect to such series (except a default in the payment of the principal of (or premium, if
any) or interest on any debt security of such series or in the payment of any sinking fund
installment in respect of any debt security of such series) if specified Responsible Officers of
the Trustee consider such withholding to be in the interest of such Holders (Section 601).
The Indenture provides that no Holders of debt securities of any series may institute any
proceedings, judicial or otherwise, with respect to the Indenture or for any remedy thereunder,
except in the case of failure of the Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an Event of Default from the Holders of not less
than 25% in principal amount of the Outstanding debt securities of such series, as well as an offer of indemnity reasonably
satisfactory to it (Section 507). This provision will not prevent, however, any holder of debt
securities from instituting suit
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for the enforcement of payment of the principal of (and premium,
if any) and interest on such debt securities at the respective due dates thereof (Section 508).
Subject to provisions in the Indenture relating to the Trustees duties in case of default,
the trustee is under no obligation to exercise any of its rights or powers under the Indenture at
the request or direction of any Holders of any series of debt securities then Outstanding under the
Indenture, unless such Holders shall have offered to the Trustee thereunder reasonable security or
indemnity (Section 602). The Holders of not less than a majority in principal amount of the
Outstanding debt securities of any series (or of all debt securities then Outstanding under the
Indenture, as the case may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or of exercising any trust or
power conferred upon the Trustee. However, the Trustee may refuse to follow any direction which is
in conflict with any law or the Indenture, which may involve the Trustee in personal liability or
which may be unduly prejudicial to the holders of debt securities of such series not joining
therein (Section 512).
Within 120 days after the close of each fiscal year, we must deliver to the Trustee a
certificate, signed by one of several of our specified officers, stating whether or not such
officer has knowledge of any default under the Indenture and, if so, specifying each such default
and the nature and status thereof.
Modification of the Indenture
Modifications and amendments of the Indenture will be permitted to be made only with the
consent of the Holders of not less than a majority in principal amount of all Outstanding debt
securities or series of Outstanding debt securities which are affected by such modification or
amendment; provided, however, that no such modification or amendment may, without the consent of
the Holders of each such debt security affected thereby, (a) change the Stated Maturity of the
principal of, or premium (if any) or any installment of interest on, any such debt security;
(b) reduce the principal amount of, or the rate or amount of interest on, or any premium payable on
redemption of, any such debt security, or reduce the amount of principal of an Original Issue
Discount Security that would be due and payable upon declaration of acceleration of the maturity
thereof or would be provable in bankruptcy, or adversely affect any right of repayment of the
holder of any such debt security; (c) change the place of payment, or the coin or currency, for
payment of principal of, premium, if any, or interest on any such debt security; (d) impair the
right to institute suit for the enforcement of any payment on or with respect to any such debt
security; (e) reduce the above stated percentage of outstanding debt securities of any series
necessary to modify or amend the Indenture, to waive compliance with certain provisions thereof or
certain defaults and consequences thereunder or to reduce the quorum or voting requirements set
forth in the Indenture; or (f) modify any of the foregoing provisions or any of the provisions
relating to the waiver of certain past defaults or certain covenants, except to increase the
required percentage to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holders of such debt security (Section 902). A debt
security shall be deemed outstanding (Outstanding) if it has been authenticated and delivered
under the Indenture unless, among other things, such debt security has been cancelled or redeemed.
The Indenture provides that the Holders of not less than a majority in principal amount of a
series of Outstanding debt securities have the right to waive compliance by us with certain
covenants relating to such series of debt securities in the Indenture (Section 1013).
Modifications and amendments of the Indenture may be made by us and the Trustee without the
consent of any Holder of debt securities for any of the following purposes: (i) to evidence the
succession of another Person to us as obligor under the Indenture; (ii) to add to our covenants for
the benefit of the Holders of all or any series of debt securities or to surrender any right or
power conferred upon us in the Indenture; (iii) to add Events of Default for the benefit of the
Holders of all or any series of debt securities; (iv) to add or change any provisions of the
Indenture to facilitate the issuance of, or to liberalize certain terms of, debt securities in
bearer form, or to permit or facilitate the issuance of debt securities in
uncertificated form, provided, that such action shall not adversely affect the interests of the
Holders of the debt securities of any series in any material respect; (v) to change or eliminate
any provisions of the
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Indenture, provided that any such change or elimination shall become
effective only when there are no debt securities Outstanding of any series created prior thereto
which are entitled to the benefit of such provision; (vi) to secure the debt securities; (vii) to
establish the form or terms of debt securities of any series; (viii) to provide for the acceptance
of appointment by a successor Trustee or facilitate the administration of the trusts under the
Indenture by more than one Trustee; (ix) to cure any ambiguity, defect or inconsistency in the
Indenture, provided that such action shall not adversely affect the interests of Holders of debt
securities of any series in any material respect; or (x) to supplement any of the provisions of the
Indenture to the extent necessary to permit or facilitate defeasance and discharge of any series of
such debt securities, provided that such action shall not adversely affect the interests of the
Holders of the debt securities of any series in any material respect (Section 901).
The Indenture provides that in determining whether the Holders of the requisite principal
amount of Outstanding debt securities of a series have given any request, demand, authorization,
direction, notice, consent or waiver thereunder or whether a quorum is present at a meeting of
Holders of debt securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon declaration of acceleration of the maturity
thereof, (ii) the principal amount of a debt security denominated in a foreign currency that shall
be deemed Outstanding shall be the U.S. dollar equivalent, determined on the issue date for such
debt security, of the principal amount (or, in the case of an Original Issue Discount Security, the
U.S. dollar equivalent on the issue date of such debt security of the amount determined as provided
in (i) above), (iii) the principal amount of an Indexed Security that shall be deemed Outstanding
shall be the principal face amount of such Indexed Security at original issuance, unless otherwise
provided with respect to such Indexed Security pursuant to the Indenture; and (iv) debt securities
owned by us or any other obligor upon the debt securities or any of our affiliates or of such other
obligor shall be disregarded.
The Indenture contains provisions for convening meetings of the Holders of debt securities of
a series (Section 1501). A meeting will be permitted to be called at any time by the Trustee, and
also, upon request, by us or the holders of at least 10% in principal amount of the Outstanding
debt securities of such series, in any such case upon notice given as provided in the Indenture
(Section 1502). Except for any consent that must be given by the Holder of each debt security
affected by certain modifications and amendments of the Indenture, any resolution presented at a
meeting or adjourned meeting duly reconvened at which a quorum is present will be permitted to be
adopted by the affirmative vote of the Holders of a majority in principal amount of the Outstanding
debt securities of that series; provided, however, that, except as referred to above, any
resolution with respect to any request, demand, authorization, direction, notice, consent, waiver
or other action that may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in principal amount of the Outstanding debt securities of a series may be
adopted at a meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding
debt securities of that series. Any resolution passed or decision taken at any meeting of Holders
of debt securities of any series duly held in accordance with the Indenture will be binding on all
Holders of debt securities of that series. The quorum at any meeting called to adopt a resolution,
and at any reconvened meeting, will be Persons holding or representing a majority in principal
amount of the Outstanding debt securities of a series; provided, however, that if any action is to
be taken at such meeting with respect to a consent or waiver which may be given by the Holders of
not less than a specified percentage in principal amount of the Outstanding debt securities of a
series, the Persons holding or representing such specified percentage in principal amount of the
Outstanding debt securities of such series will constitute a quorum (Section 1504).
Notwithstanding the foregoing provisions, if any action is to be taken at a meeting of Holders
of debt securities of any series with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that the Indenture expressly provides may be made, given or
taken by the Holders of a specified percentage in principal amount of all Outstanding debt
securities affected thereby, or of the Holders of such series and one or more additional series:
(i) there shall be no minimum quorum requirement for such meeting and (ii) the principal amount of the Outstanding debt securities of
such series that vote in favor of such request, demand, authorization, direction, notice, consent,
waiver or other action
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shall be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been made, given or taken
under the Indenture (Section 1504).
Discharge, Defeasance and Covenant Defeasance
We may discharge certain obligations to Holders of any series of debt securities that have not
already been delivered to the Trustee for cancellation and that either have become due and payable
or will become due and payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the Trustee, in trust, funds in such currency or currencies, currency
unit or units or composite currency or currencies in which such debt securities are payable in an
amount sufficient to pay the entire indebtedness on such debt securities in respect of principal
(and premium, if any) and interest to the date of such deposit (if such debt securities have become
due and payable) or to the Stated Maturity or Redemption Date, as the case may be (Sections 1401
and 1404).
The Indenture provides that, if the provisions of Article Fourteen are made applicable to the
debt securities of or within any series pursuant to Section 301 of the Indenture, we may elect
either (a) to defease and be discharged from any and all obligations with respect to such debt
securities (except for the obligation to pay additional amounts, if any, upon the occurrence of
certain events of tax, assessment or governmental charge with respect to payments on such debt
securities and the obligations to register the transfer or exchange of such debt securities, to
replace temporary or mutilated, destroyed, lost or stolen debt securities, to maintain an office or
agency in respect of such debt securities and to hold moneys for payment in trust) (defeasance)
(Section 1402) or (b) to be released from our obligations with respect to such debt securities
under Sections 1004 to 1011, inclusive, of the Indenture (including the restrictions described
under Certain Covenants) and our obligation with respect to any other covenant, and any omission
to comply with such obligations shall not constitute a default or an Event of Default with respect
to such debt securities (covenant defeasance) (Section 1403), in either case upon the irrevocable
deposit by us with the Trustee, in trust, of an amount, in such currency or currencies, currency
unit or units or composite currency or currencies in which such debt securities are payable at the
stated maturity date specified thereon (Stated Maturity), or Government Obligations (as defined
below), or both, applicable to such debt securities which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an amount sufficient to
pay the principal of (and premium, if any) and interest on such debt securities, and any mandatory
sinking fund or analogous payments thereon, on the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other things, we have
delivered to the Trustee an Opinion of Counsel (as specified in the Indenture) to the effect that
the Holders of such debt securities will not recognize income, gain or loss for U.S. Federal income
tax purposes as a result of such defeasance or covenant defeasance and will be subject to U.S.
Federal income tax on the same amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred, and such Opinion of Counsel,
in the case of defeasance, must refer to and be based upon a ruling of the Internal Revenue Service
or a change in applicable U.S. Federal income tax law occurring after the date of the Indenture
(Section 1404).
Government Obligations means securities which are (i) direct obligations of the United
States of America or the government which issued the foreign currency in which the debt securities
of a particular series are payable, for the payment of which its full faith and credit is pledged
or (ii) obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued the foreign
currency in which the debt securities of such series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of America or
such other government, which, in either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the account of the holder of
a depository receipt, provided that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from any amount received
by the
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custodian in respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.
Unless otherwise provided in the applicable prospectus supplement, if after we have deposited
funds and/or Government Obligations to effect defeasance or covenant defeasance with respect to
debt securities of any series, (a) the Holder of a debt security of such series is entitled to, and
does, elect pursuant to the Indenture or the terms of such debt security to receive payment in a
currency, currency unit or composite currency other than that in which such deposit has been made
in respect of such debt security, or (b) a Conversion Event (as defined below) occurs in respect of
the currency, currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such debt security shall be deemed to have been, and will be, fully
discharged and satisfied through the payment of the principal of (and premium, if any) and interest
on such debt security as they become due out of the proceeds yielded by converting the amount so
deposited in respect of such debt security into the currency, currency unit or composite currency
in which such debt security becomes payable as a result of such election or such Conversion Event
based on the applicable market exchange rate. Conversion Event means the cessation of use of
(i) a currency, currency unit or composite currency both by the government of the country which
issued such currency and for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions by public institutions of or within
the European Community or (iii) any currency unit or composite currency other than the ECU for the
purposes for which it was established.
Unless otherwise provided in the applicable prospectus supplement, all payments of principal
of (and premium, if any) and interest on any debt security that is payable in a foreign currency
that ceases to be used by its government of issuance shall be made in U.S. dollars.
In the event we effect covenant defeasance with respect to any debt securities and such debt
securities are declared due and payable because of the occurrence of any Event of Default other
than the Event of Default described in clause (d) under Events of Default, Notice and Waiver
with respect to Sections 1004 to 1011, inclusive, of the Indenture (which Sections would no longer
be applicable to such debt securities) or described in clause (g) under Events of Default,
Notice and Waiver with respect to any other covenant as to which there has been covenant
defeasance, the amount in such currency, currency unit or composite currency in which such debt
securities are payable, and Government Obligations on deposit with the Trustee, will be sufficient
to pay amounts due on such debt securities at the time of their Stated Maturity but may not be
sufficient to pay amounts due on such debt securities at the time of the acceleration resulting
from such Event of Default. However, we would remain liable to make payment of such amounts due at
the time of acceleration.
The applicable prospectus supplement may further describe the provisions, if any, permitting
such defeasance or covenant defeasance, including any modifications to the provisions described
above, with respect to the debt securities of or within a particular series.
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DESCRIPTION OF PREFERRED STOCK
This section describes the general terms and provisions of our preferred stock that may be
offered by this prospectus as well as a description of our Series A Cumulative Redeemable Preferred
Stock, or Series A preferred stock, and Series B Cumulative Redeemable Preferred Stock, or Series B
preferred stock, outstanding as of the date of this prospectus. We refer to our Series A preferred
stock and Series B preferred stock collectively as our Existing preferred stock. The applicable
prospectus supplement will describe the specific terms of the series of the preferred stock offered
through that prospectus supplement and any general terms outlined in this section that will not
apply to that series of preferred stock.
In this section, we have summarized the material terms and provisions of the preferred stock
as well as the material terms and provisions of the Existing preferred stock. You should read our
Articles of Incorporation and the amendment to our Articles of Incorporation establishing the terms
of the series of our preferred stock (the Certificate of Designations) relating to the applicable
series of the preferred stock, including the Certificates of Designations setting forth the terms
of the Existing preferred stock, for additional information before you buy any preferred stock.
Our Preferred Stock Generally
Pursuant to our Articles of Incorporation, our board of directors has the authority, without
further shareholder action, to issue a maximum of 20,000,000 shares of preferred stock, $1.00 par
value per share. As of December 31, 2009, there were 2,993,090 shares of Series A preferred stock
issued and outstanding and 3,791,000 shares of Series B preferred stock issued and outstanding. Our
Series A preferred stock trades on the NYSE under the symbol CUZPRA. Our Series B preferred
stock trades on the NYSE under the symbol CUZPRB. We will apply to the NYSE to list the
additional shares of preferred stock to be sold pursuant to any prospectus supplement, and we
anticipate that such shares will be so listed.
The board of directors has the authority to determine or fix the following terms with respect
to shares of any series of preferred stock:
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the dividend rate, the times of payment and the date from which dividends will
accumulate, if dividends are to be cumulative;
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whether and upon what terms the shares will be redeemable;
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whether and upon what terms the shares will have a sinking fund;
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whether and upon what terms the shares will be convertible or exchangeable;
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whether the shares will have voting rights and the terms thereof;
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the rights of the holders upon our liquidation, dissolution or winding-up;
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restrictions on transfer to preserve our tax status as a REIT; and
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any other relative rights, powers and limitations or restrictions.
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These terms will be described in the applicable prospectus supplement for any series of
preferred stock that we offer. In addition, you should read the prospectus supplement relating to
the particular series of the preferred stock offered thereby for specific terms, including:
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the title of the series of preferred stock and the number of shares offered;
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the initial public offering price at which we will issue the preferred stock; and
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any additional dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions.
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When we issue the preferred stock, the shares will be fully paid and nonassessable. This means
that the full purchase price for the outstanding preferred stock will have been paid and the
holders of such preferred stock will not be assessed any additional monies for such preferred
stock. Unless the applicable prospectus supplement specifies otherwise:
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each series of preferred stock will rank senior to our common stock and equally in
all respects with the outstanding shares of each other series of preferred stock; and
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the preferred stock will have no preemptive rights to subscribe for any additional
securities which we may issue in the future. This means that the holders of preferred
stock will have no right, as holders of preferred stock, to buy any portion of those
issued securities.
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Shareholder Liability
Georgia law provides that no shareholder, including holders of preferred stock, shall be
personally liable for the acts and obligations of a Georgia corporation. This means that with
respect to the Company, the funds and property of the Company will be the only recourse for these
acts or obligations.
Restrictions on Ownership
As discussed above under Description of Common Stock Restrictions on Transfer, for us to
qualify as a REIT under the Code, not more than 50% in value of our outstanding stock may be owned,
directly or indirectly, by five or fewer individuals (as defined in the Code to include certain
entities) during the last half of a taxable year. To assist us in meeting this requirement, we may
take certain actions to limit the beneficial ownership, directly or indirectly, by a single person
of our outstanding stock, including any of our preferred stock, in addition to the restrictions
currently applicable to all classes of our stock pursuant to Article 11 of our Articles of
Incorporation. Therefore, the Certificate of Designations for each series of preferred stock may
contain provisions restricting the ownership and transfer of the preferred stock. The applicable
prospectus supplement will specify any additional ownership limitation relating to a series of
preferred stock.
Registrar and Transfer Agent
The Registrar and Transfer Agent for the preferred stock will be set forth in the applicable
prospectus supplement.
Existing Preferred Stock Ranking
With respect to the payment of dividends and amounts upon liquidation, the Existing preferred
stock ranks:
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senior to our common stock and to any other class or series of our capital stock
other than any class or series referred to in the next succeeding bullet points;
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on a parity with any other class or series of our capital stock the terms of which
specifically provide that such class or series of capital stock ranks on a parity with
the Existing preferred stock as to the payment of dividends and the distribution of
assets in
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the event of any liquidation, dissolution or winding up;
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junior to any class or series of our capital stock the terms of which specifically
provide that such class or series of capital stock ranks senior to the Existing
preferred stock as to the payment of dividends and the distribution of assets in the
event of any liquidation, dissolution or winding up; and
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junior to our indebtedness.
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Existing Preferred Stock Dividends
Holders of Series A preferred stock are entitled to receive, when and as declared by our board
of directors, out of funds legally available for the payment of dividends, cumulative cash
dividends at the rate of 7 3/4% per year of the $25.00 liquidation preference per share, equivalent
to a fixed annual amount of $1.9375 per share. Holders of Series B preferred stock are entitled to
receive, when and as declared by our board of directors, out of funds legally available for the
payment of dividends, cumulative cash dividends at the rate of 7 1/2% per year of the $25.00
liquidation preference per share, equivalent to a fixed annual amount of $1.875 per share.
Dividends on the Existing preferred stock are payable quarterly in arrears on February 15, May 15,
August 15 and November 15 of each year, and if such day is not a business day, the next succeeding
business day. We refer to each of these dates as a dividend payment date in this prospectus, and
the period beginning after each dividend payment date and ending on the next succeeding dividend
payment date is referred to as the dividend period. Any partial dividend period will be computed
on the basis of a 360-day year consisting of twelve 30-day months.
Dividends will be payable to holders of record as they appear in our stock records at the
close of business on the applicable record date, which is the first day of the calendar month in
which the applicable dividend payment date falls or on such other date designated by our board of
directors for the payment of dividends that is not more than 30 nor less than 10 days prior to such
dividend payment date. We refer to each of these dates as a dividend record date in this
prospectus.
No dividends on Existing preferred stock may be declared by our board of directors or paid or
set apart for payment by us if such declaration or payment is restricted or prohibited by law, or
at any time at which one or more of our contractual agreements, including any agreement relating to
our outstanding indebtedness, (a) prohibits the declaration, payment or setting apart for payment
of dividends or (b) provides that the declaration, payment or setting apart for payment of
dividends would constitute a breach thereof or a default thereunder.
Notwithstanding the foregoing, dividends on the Existing preferred stock accrue regardless of
whether:
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our agreements, including our credit facilities, at any time prohibit the current
payment of dividends;
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we have earnings;
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there are funds legally available for the payment of such dividends; or
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such dividends are declared.
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Accrued but unpaid dividends on the Existing preferred stock will accumulate as of the
dividend payment date on which they first become payable. No dividends will be declared or paid or
set apart for payment, and no distribution will be made, on any of our common stock or any other
series of preferred stock ranking, as to dividends, on a parity with or junior to the Existing
preferred stock, other than a dividend that consists of shares
of our common stock or shares of any other class of stock ranking junior to the Existing preferred
stock as to dividends and upon liquidation, for any period unless full cumulative
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dividends on the Existing preferred stock have been, or contemporaneously are declared and
paid, or declared and a sum sufficient for the payment thereof is set apart for such payment for
all dividend periods ending on or prior to the date of such action with respect to our common stock
or any other series of preferred stock ranking, as to dividends, on a parity with or junior to the
Existing preferred stock.
When dividends are not paid in full (or a sum sufficient for such full payment is not so set
apart) with respect to the Existing preferred stock and any other series of preferred stock ranking
on a parity as to dividends with the Existing preferred stock, all dividends declared upon the
Existing preferred stock and any other series of preferred stock ranking on a parity as to
dividends with the Existing preferred stock will be declared pro rata so that the amount of
dividends declared per share of Existing preferred stock and such other series of preferred stock
shall in all cases bear to each other the same ratio that accrued dividends per share on the
Existing preferred stock and such other series of preferred stock (which shall not include any
accrual in respect of unpaid dividends for prior dividend periods if such shares of preferred stock
do not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of
interest, will be payable in respect of any dividend payment or payments on the Existing preferred
stock which may be in arrears.
Unless full cumulative dividends on the Existing preferred stock have been or
contemporaneously are declared and paid, or declared and a sum sufficient for the payment thereof
is set apart for payment, for all dividend periods ending on or prior to the date of any action
described below:
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no dividends (other than in shares of our common stock or shares of our capital
stock ranking junior to the Existing preferred stock as to dividends and upon
liquidation) shall be declared or paid or set aside for payment;
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no other distribution may be declared or made upon shares of our common stock or
any shares of our capital stock ranking junior to or on a parity with the Existing
preferred stock as to dividends or upon liquidation; and
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no shares of our common stock, or any other shares of our capital stock ranking
junior to or on a parity with the Existing preferred stock as to dividends or upon
liquidation may be redeemed, purchased or otherwise acquired by us for any
consideration (or any moneys be paid to or made available for a sinking fund for the
redemption of any such shares) (except by conversion into or exchange for other of our
shares of capital stock ranking junior to the Existing preferred stock as to dividends
and upon liquidation, and except for our redemption, purchase or acquisition of
Excess Shares under our Articles of Incorporation to ensure that we remain a
qualified REIT for federal income tax purposes).
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Holders of the Existing preferred stock are not entitled to any dividend, whether payable in
cash, property or shares of capital stock, in excess of full cumulative dividends on the Existing
preferred stock as provided above. Any dividend payment made on the Existing preferred stock will
first be credited against the earliest accrued but unpaid dividend due with respect to such shares
which remains payable.
Existing Preferred Stock Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the
holders of Existing preferred stock will be entitled to be paid out of our assets legally available
for distribution to our shareholders a liquidation preference of $25.00 per share, plus all accrued
and unpaid dividends to the date of payment, before any distribution of assets is made to holders
of our common stock or any other class or series of our capital stock that ranks junior to the
Existing preferred stock as to liquidation rights. After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Existing preferred stock will
have no right or claim to any of our remaining assets.
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In the event that, upon any voluntary or involuntary liquidation, dissolution or winding up,
our available assets are insufficient to pay the amount of the liquidating distributions on all
outstanding Existing preferred stock and the corresponding amounts payable on all other classes or
series of our capital stock ranking on a parity with the Existing preferred stock in the
distribution of assets, then the holders of the Existing preferred stock and all other such classes
or series will share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively entitled.
Our consolidation, combination or merger with or into any other corporation, trust or entity
or consolidation or merger of any other corporation with or into us, the sale, lease or conveyance
of all or substantially all of our assets, property or business or any statutory share exchange,
will not be deemed to constitute a liquidation, dissolution or winding up of us.
Existing Preferred Stock Redemption
We, at our option upon not less than 30 nor more than 60 days prior written notice, may redeem
the Existing preferred stock, in whole or in part, at any time or from time to time, for cash at a
redemption price of $25.00 per share, plus all accrued and unpaid dividends on such shares to the
date fixed for redemption (except as provided below), without interest. Holders of Existing
preferred stock to be redeemed must surrender the Existing preferred stock at the place designated
in the notice and will be entitled to the redemption price and any accrued and unpaid dividends
payable upon the redemption following surrender. If notice of redemption of any Existing preferred
stock has been given and if the funds necessary for such redemption have been set aside by us in
trust for the benefit of the holders of any Existing preferred stock called for redemption, then
from and after the redemption date:
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dividends will cease to accrue on the Existing preferred stock;
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the Existing preferred stock will no longer be deemed outstanding; and
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all rights of the holders of the Existing preferred stock will terminate, except
the holders right to receive the redemption price.
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If less than all of the outstanding Existing preferred stock is to be redeemed, the Existing
preferred stock to be redeemed will be selected pro rata (as nearly as may be practicable without
creating fractional shares) or by any other equitable method determined by us.
Unless full cumulative dividends on all Existing preferred stock have been, or
contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof
is set apart for payment for all dividend periods ending on or prior to the date of any applicable
redemption, purchase or acquisition, no Existing preferred stock may be redeemed unless all
outstanding shares of Existing preferred stock are simultaneously redeemed, and we may not purchase
or otherwise acquire directly or indirectly any Existing preferred stock (except by exchange for
shares of our capital stock ranking junior to the Existing preferred stock as to dividends and upon
liquidation). This requirement will not prevent the Existing preferred stock from becoming Excess
Shares under our Articles of Incorporation or the purchase by us of Excess Shares in order to
ensure that we remain qualified as a REIT for federal income tax purposes.
The terms of the Existing preferred stock do not prevent us from conducting open-market
purchases of our Existing preferred stock and/or any of our other equity securities from time to
time, in accordance with applicable law and subject to the limitations described under the headings
Existing Preferred Stock Dividends and Existing Preferred Stock Redemption above.
Notice of redemption will be given by publication in a newspaper of general circulation in The
City of New York, such publication to be made once a week for two successive weeks commencing not
less than 30 nor more than 60 days before the redemption date. A similar notice will be mailed by
us, postage
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prepaid, not less than 30 nor more than 60 days before the redemption date, addressed to the
respective holders of record of the Existing preferred stock to be redeemed at their respective
addresses as they appear on our stock transfer records. No failure to give such notice or any
defect therein or in the mailing thereof shall affect the validity of the proceedings for the
redemption of any Existing preferred stock except as to the holder to whom notice was defective or
not given. Each notice will state:
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the redemption date;
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the redemption price;
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the number of shares of Existing preferred stock to be redeemed;
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the place or places where shares of Existing preferred stock are to be surrendered
for payment of the redemption price; and
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that dividends on the Existing preferred stock to be redeemed will cease to accrue
on such redemption date.
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If less than all of the shares of Existing preferred stock held by any holder are to be
redeemed, the notice mailed to the holder will also specify the number of shares to be redeemed.
The holders of Existing preferred stock at the close of business on a dividend record date
will be entitled to receive the dividend payable with respect to the Existing preferred stock on
the corresponding dividend payment date notwithstanding the redemption thereof between the dividend
record date and the corresponding dividend payment date. Except as provided above, we will make no
payment or allowance for unpaid dividends, whether or not in arrears, on shares of Existing
preferred stock that are called for redemption.
The Existing preferred stock has no stated maturity and is not be subject to any sinking fund
or mandatory redemption. However, in order to ensure that we remain a qualified REIT for federal
income tax purposes, Existing preferred stock owned by a shareholder in excess of the ownership
limit specified in the Articles of Incorporation may become Excess Shares under our Articles of
Incorporation, which we will have the right to purchase from the holder. See Existing Preferred
Stock Restrictions on Ownership.
Existing Preferred Stock Voting Rights
Holders of the Existing preferred stock do not have any voting rights, except as set forth
below or as otherwise from time to time required by law.
Whenever we fail to pay dividends on any Existing preferred stock for six or more quarterly
periods, which we refer to in this prospectus as a preferred dividend default, the holders of the
series of preferred stock so affected (voting separately as a class with all other series of
preferred stock, if any, ranking on a parity with the Existing preferred stock as to dividends or
upon liquidation, referred to in this prospectus as parity preferred, upon which like voting
rights have been conferred and are exercisable) will be entitled to vote for the election of a
total of two members of our board of directors, referred to in this prospectus as preferred
directors:
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at the next annual meeting of the shareholders or at a special meeting of the
shareholders called by the holders of record of at least 20% of either the Series A
preferred stock or the Series B preferred stock or the holders of 20% of any other
series of such parity preferred so in arrears (unless such request is received less
than 90 days before the date fixed for the next annual or special meeting of the
shareholders); and
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at each subsequent annual meeting until all dividends accrued on the applicable
series of preferred stock for all dividend periods ending on or prior to the date of
any applicable annual meeting shall have been fully paid or declared and a sum
sufficient for the payment thereof set aside for payment.
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If and when all accumulated dividends on the Existing preferred stock shall have been declared
and paid in full or declared and set aside for payment in full, the holders thereof shall be
divested of the foregoing voting rights (subject to revesting in the event of each and every
preferred dividend default) and, if all accumulated dividends have been paid in full or declared
and set aside for payment in full on all Existing preferred stock and series of parity preferred
upon which like voting rights have been conferred and are exercisable, the term of office of each
preferred director so elected shall terminate.
Any preferred director may be removed at any time with or without cause by, and shall not be
removed otherwise than by the vote of, the holders of record of a majority of the outstanding
Existing preferred stock (voting separately as a class with all other series of parity preferred,
if any, upon which like voting rights have been conferred and are exercisable). So long as a
preferred dividend default shall continue, any vacancy in the office of a preferred director may be
filled by written consent of the preferred director remaining in office, or if none remains in
office, by a vote of the holders of record of a majority of the outstanding Existing preferred
stock when they have the voting rights described above (voting separately as a class with all other
series of parity preferred, if any, upon which like voting rights have been conferred and are
exercisable). The preferred directors will each be entitled to one vote per director on any matter.
So long as any shares of Existing preferred stock remain outstanding, we will not, without the
affirmative vote or consent of the holders of at least two-thirds of each class of the Existing
preferred stock outstanding at the time, given in person or by proxy, either in writing or at a
meeting (voting separately as a class):
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authorize or create, or increase the authorized or issued amount of, any class or
series of capital stock ranking senior to such class of Existing preferred stock with
respect to payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up or reclassify any authorized shares of our capital stock
into such shares, or create, authorize or issue any obligation or security convertible
into or evidencing the right to purchase any such shares; or
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amend, alter or repeal the provisions of our Articles of Incorporation, by merger,
consolidation or otherwise (an event), so as to materially and adversely affect any
right, preference, privilege or voting power of such class of Existing preferred stock
or the holders thereof,
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provided, however, with respect to the occurrence of any event set forth in the second bullet point
above, so long as any shares of such class of Existing preferred stock remain outstanding with the
terms thereof materially unchanged, taking into account that upon the occurrence of an event we may
not be the surviving entity, the occurrence of any such event will not be deemed to materially and
adversely affect any right, preference, privilege or voting power of such class of Existing
preferred stock or the holders thereof, and provided further that (1) any increase in the amount of
the authorized common stock or preferred stock or the creation or issuance of any other series of
common stock or preferred stock, ranking on a parity with or junior to the Existing preferred stock
with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or
winding up, or (2) any change to the number or classification of our directors, will not be deemed
to materially and adversely affect such rights, preferences, privileges or voting powers, and
provided further that any amendment to Article 11 of our Articles of Incorporation relating to
Excess Shares, the ownership limit set forth therein or any other matter described therein of any
type or nature will not be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers so long as after such amendment, any single Person may Own (each as
defined in Article 11 of the Articles of Incorporation prior to or after such amendment) 3.9% of
the value of the outstanding shares of our capital stock without violating the ownership limit set
forth therein.
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The foregoing voting provisions will not apply, and each class of Existing preferred stock
will not be entitled to vote, after any notice of redemption is mailed to the holders and a sum
sufficient to redeem the shares of such class has been deposited with a bank, trust company, or
other financial institution under an irrevocable obligation to pay the redemption price to the
holders upon surrender of the shares.
Existing Preferred Stock Conversion
The Existing preferred stock is not convertible into or exchangeable for any of our other
property or securities. However, to preserve our status as a REIT for federal income tax purposes,
shares of Existing preferred stock may become Excess Shares under Article 11 of our Articles of
Incorporation. See Existing Preferred Stock Restrictions on Ownership.
Existing Preferred Stock Restrictions on Ownership
For us to qualify as a REIT under the Code, not more than 50% in value of our outstanding
stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to
include certain entities) during the last half of a taxable year. To assist us in complying with
this requirement, subject to certain exceptions, the Articles of Incorporation limit Ownership
(as defined in the Articles of Incorporation) by a single Person (as defined in the Articles of
Incorporation) to 3.9% of the aggregate value of all outstanding shares of all classes of stock
(including the Existing preferred stock). For a more complete description of the transfer
restrictions contained in our Articles of Incorporation, please see the discussion above under the
heading Description of Common Stock Restrictions on Transfer.
Existing Preferred Stock Transfer Agent
The transfer agent, registrar and dividend disbursing agent for the Existing preferred stock
is American Stock Transfer & Trust Company.
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DESCRIPTION OF DEPOSITARY SHARES
General
This section describes the general terms and provisions of the depositary shares. The
prospectus supplement will describe the specific terms of the depositary shares offered through
that prospectus supplement and any general terms outlined in this section that will not apply to
those depositary shares.
We may issue fractional interests in shares of preferred stock in the form of depositary
shares. Each depositary share will represent a fractional ownership interest in one share of
preferred stock, and will be evidenced by a depositary receipt. The shares of preferred stock
represented by depositary shares will be deposited under a deposit agreement among us, a
depositary, which will be a bank or trust company having its principal office in the United States
and having a combined capital and surplus of at least $50 million, and the holders from time to
time of the depositary receipts evidencing the depositary shares. We will name the depositary in
the applicable prospectus supplement. Subject to the terms of the deposit agreement, each holder of
a depositary share will be entitled, through the depositary, in proportion to the applicable
fraction of a share of preferred stock represented by that depositary share, to all the rights and
preferences of the shares of preferred stock represented thereby (including dividend, voting,
redemption and liquidation rights).
Immediately following the issuance of the shares of preferred stock, we will deposit the
shares of preferred stock with the depositary.
We have summarized selected terms and provisions of the deposit agreement, the depositary
shares and the depositary receipts in this section. The summary is not complete. We will file the
form of deposit agreement, including the form of depositary receipt, as an exhibit to a Current
Report on Form 8-K before we issue the depositary shares. You should read the forms of deposit
agreement and depositary receipt relating to a series of preferred stock for additional information
before you buy any depositary shares that represent preferred stock of such series.
Dividends and Other Distributions
The depositary will distribute any cash dividends or other cash distributions received in
respect of the deposited shares of preferred stock to the record holders of depositary shares
relating to the underlying shares of preferred stock in proportion to the number of depositary
shares held by the holders. The depositary will distribute any property received by it other than
cash to the record holders of depositary shares entitled to those distributions, unless it
determines that the distribution cannot be made proportionally among those holders or that it is
not feasible to make a distribution. In that event, the depositary may, with our approval, sell the
property and distribute the net proceeds from the sale to the holders of the depositary shares in
proportion to the number of depositary shares they hold.
Record dates for the payment of dividends and other matters relating to the depositary shares
will be the same as the corresponding record dates for the shares of preferred stock.
The amounts distributed to holders of depositary shares will be reduced by any amounts
required to be withheld by the depositary or by us on account of taxes or other governmental
charges.
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Redemption of Depositary Shares
If the series of preferred stock underlying the depositary shares is subject to redemption,
the depositary shares will be redeemed from the proceeds received by the depositary resulting from
the redemption of the shares of preferred stock held by the depositary. The redemption price per
depositary share will be equal to the applicable fraction of the redemption price per share payable
with respect to the shares of preferred stock. Whenever we redeem shares of preferred stock held by
the depositary, the depositary will redeem, as of the same redemption date, the number of
depositary shares representing the shares of preferred stock so redeemed.
In case of any redemption of less than all of the outstanding depositary shares, the
depositary shares to be redeemed may be selected by the depositary pro rata or in any other manner
determined by the depositary to be equitable and that preserves our REIT status. In any such case,
we may redeem depositary shares only in certain increments.
After the date fixed for redemption, the depositary shares called for redemption will no
longer be deemed to be outstanding, and all rights of the holders of those shares will cease,
except the right to receive the amount payable and any other property to which the holders were
entitled upon the redemption. To receive this amount or other property, the holders must surrender
the depositary receipts evidencing their depositary shares to the depositary. Any funds that we
deposit with the depositary for any depositary shares that the holders fail to redeem will be
returned to us after a period of two years from the date we deposit the funds.
Conversion
If any series of preferred stock underlying the depositary shares is subject to conversion,
the applicable prospectus supplement will describe the rights or obligations of each record holder
of depositary receipts to convert the depositary shares.
Withdrawal of Preferred Stock
Unless the related depositary shares have previously been called for redemption, any holder of
depositary shares may receive the number of whole shares of preferred stock and any money or other
property represented by those depositary receipts after surrendering the depositary receipts at the
corporate trust office of the depositary, paying any taxes, charges and fees provided for in the
deposit agreement and complying with any other requirement of the deposit agreement. Holders of
depositary shares making these withdrawals will be entitled to receive whole shares of preferred
stock, but holders of whole shares of preferred stock will not be entitled to deposit those shares
of preferred stock under the deposit agreement or to receive depositary receipts for those shares
of preferred stock after withdrawal. If the depositary shares surrendered by the holder in
connection with withdrawal exceed the number of depositary shares that represent the number of
whole shares of preferred stock to be withdrawn, the depositary will deliver to that holder at the
same time a new depositary receipt evidencing the excess number of depositary shares.
Voting the Shares of Preferred Stock
When the depositary receives notice of any meeting at which the holders of the shares of
preferred stock are entitled to vote, the depositary will mail the information contained in the
notice to the record holders of the depositary shares relating to the shares of preferred stock.
Each record holder of the depositary shares on the record date, which will be the same date as the
record date for the shares of preferred stock, may instruct the depositary to vote the amount of
the shares of preferred stock represented by the holders depositary shares. To the extent
possible, the depositary will vote the amount of the shares of preferred stock represented by
depositary shares in accordance with the instructions it receives. We will agree to take all
reasonable actions that the depositary determines are necessary to enable the depositary to vote as
instructed. If the depositary does not receive specific instructions from the holders of any
depositary shares representing the shares of preferred stock, it will vote all depositary shares of
that series held by it proportionately with instructions received.
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Liquidation Preference
In the event of the liquidation, dissolution or winding up of us, whether voluntary or
involuntary, the applicable prospectus supplement will set forth the fraction of the liquidation
preference accorded each share of preferred stock represented by the depositary share evidenced by
a depositary receipt.
Amendment and Termination of the Deposit Agreement
We may amend the form of depositary receipt evidencing the depositary shares and any provision
of the deposit agreement at any time and from time to time by agreement with the depositary.
However, any amendment that imposes additional charges or materially and adversely alters any
substantial existing right of the holders of depositary shares will not be effective unless the
holders of at least a majority of the affected depositary shares then outstanding approve the
amendment. We will make no amendment that impairs the right of any holder of depositary shares, as
described above under Withdrawal of Preferred Stock, to receive shares of preferred stock and
any money or other property represented by those depositary shares, except in order to comply with
mandatory provisions of applicable law. Holders who retain or acquire their depositary receipts
after an amendment becomes effective will be deemed to have agreed to the amendment and will be
bound by the amended deposit agreement.
The deposit agreement will automatically terminate if:
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all outstanding depositary shares have been redeemed; or
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a final distribution in respect of the shares of preferred stock has been made to
the holders of depositary shares in connection with any liquidation, dissolution or
winding up of us.
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We may terminate the deposit agreement at any time, and the depositary will give notice of
that termination to the record holders of all outstanding depositary receipts not less than 30 days
before the termination date. In that event, the depositary will deliver or make available for
delivery to holders of depositary shares, upon surrender of the depositary receipts evidencing the
depositary shares, the number of whole or fractional shares of preferred stock as are represented
by those depositary shares.
Charges of Depositary; Taxes and Other Governmental Charges
We will pay the fees, charges and expenses of the depositary provided in the deposit agreement
to be payable by us. Holders of depositary receipts will pay any taxes and governmental charges and
any charges provided in the deposit agreement to be payable by them, including a fee for the
withdrawal of shares of preferred stock upon surrender of depositary receipts. If the depositary
incurs fees, charges or expenses for which it is not otherwise liable at the election of a holder
of a depositary receipt or other person, that holder or other person will be liable for those fees,
charges and expenses.
Resignation and Removal of Depositary
The depositary may resign at any time by giving us notice, and we may remove or replace the
depositary at any time. Resignations or removals will take effect upon the appointment of a
successor depositary and its acceptance of the appointment. The successor depositary must be
appointed within 60 days after delivery of the notice of resignation or removal and must be a bank
or trust company having its principal office in the United States and having a combined capital and
surplus of at least $50 million.
Reports to Holders
We will deliver all required reports and communications to holders of the shares of preferred
stock to the depositary. It will forward those reports and communications to the holders of
depositary shares.
Limitation on Liability of the Depositary
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The depositary will not be liable if it is prevented or delayed by law or any circumstances
beyond its control in performing its obligations under the deposit agreement. The obligations of
the depositary under the deposit agreement will be limited to performance in good faith of its
duties under the agreement, and it will not be obligated to prosecute or defend any legal
proceeding in respect of any depositary shares, depositary receipts or shares of preferred stock
unless satisfactory and reasonable protection from expenses and liability is furnished. This is
called an indemnity. The depositary may rely upon written advice of counsel or accountants, upon
information provided by holders of depositary receipts or other persons believed to be competent
and upon documents believed to be genuine.
Restrictions on Ownership
As discussed above under Description of Common Stock Restrictions on Transfer, for us to
qualify as a REIT under the Code, not more than 50% in value of our outstanding capital stock may
be owned, directly or constructively, by five or fewer individuals, including certain entities that
are treated as individuals for this purpose, during the last half of a taxable year. To assist us
in meeting this requirement, we may take certain actions to limit the beneficial ownership,
directly or indirectly, by a single person of our outstanding equity securities, including any of
our preferred stock. Therefore, the Certificate of Designations for each series of preferred stock
underlying the depositary shares may contain provisions restricting the ownership and transfer of
the preferred stock. The deposit agreement may contain similar provisions. The applicable
prospectus supplement will specify any additional ownership limitation relating to a series of
preferred stock and any depositary shares.
BOOK ENTRY PROCEDURES AND SETTLEMENT
We can issue the securities covered by this prospectus in definitive form or in the form of
one or more global securities. The applicable prospectus supplement will describe the manner in
which the securities offered thereby will be issued.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes the material federal income tax considerations relating to
our taxation as a REIT under the Code. As used in this section, the terms we and our refer
solely to Cousins Properties Incorporated and not to our subsidiaries and affiliates which have not
elected to be taxed as REITs under the Code.
This section also summarizes material federal income tax considerations relating to the
ownership and disposition of our common stock. A prospectus supplement will contain information
about additional federal income tax considerations, if any, relating to a particular offering of
warrants, debt securities, preferred stock or depositary shares.
King & Spalding LLP has reviewed this summary and is of the opinion that the discussion
contained herein fairly summarizes the federal income tax consequences that are material to a
holder of our common stock. This discussion is not exhaustive of all possible tax considerations
and does not provide a detailed discussion of any state, local or foreign tax considerations, nor
does it discuss all of the aspects of federal income taxation that may be relevant to a prospective
shareholder in light of his or her particular circumstances or to shareholders (including insurance
companies, tax-exempt entities, financial institutions or broker-dealers, foreign corporations and
persons who are not citizens or residents of the United States) who are subject to special
treatment under the federal income tax laws.
The information in this section is based on the current provisions of the Code, current final,
temporary and proposed regulations, the legislative history of the Code, current administrative
interpretations and
practices of the Internal Revenue Service, and court decisions. The reference to Internal Revenue
Service interpretations and practices includes Internal Revenue Service practices and policies
reflected in private letter rulings issued to other taxpayers, which would not be binding on the
Internal Revenue Service in any
34
of its dealings with us. These sources are being relied upon as of
the date of this prospectus. No assurance can be given that future legislation, regulations,
administrative interpretations and court decisions will not significantly change current law, or
adversely affect existing interpretations of law, on which the information in this section is
based. Any change of this kind could apply retroactively to transactions preceding the date of the
change in law. Even if there is no change in applicable law, no assurance can be provided that the
statements made in the following discussion will not be challenged by the Internal Revenue Service
or will be sustained by a court if so challenged.
Each prospective shareholder is advised to consult with his or her own tax advisor to
determine the impact of his or her personal tax situation on the anticipated tax consequences of
our status as a REIT and the ownership and sale of our stock. This includes the federal, state,
local, and foreign income and other tax consequences of the ownership and sale of our stock, and
the potential impact of changes in applicable tax laws.
Taxation of Cousins Properties Incorporated
General.
We have elected to be taxed as a REIT under Sections 856 through 860 of the Code,
and we believe that we have met the requirements for qualification and taxation as a REIT since our
initial REIT election in 1987. We intend to continue to operate in such a manner as to continue to
so qualify, but no assurance can be given that we have qualified or will remain qualified as a
REIT. We have not requested and do not intend to request a ruling from the Internal Revenue Service
as to our current status as a REIT. However, we have received an opinion from Deloitte Tax LLP
stating that, since the commencement of our taxable year which began January 1, 2004 through the
tax year ending December 31, 2009, we have been organized and have operated in conformity with the
requirements for qualification and taxation as a REIT under the Code, and our actual method of
operation has enabled, and our proposed method of organization and operation will enable, us to
continue to meet the requirements for qualification and taxation as a REIT, provided that we have
been organized and have operated and continue to be organized and to operate in accordance with
certain assumptions and representations made by us. It must be emphasized that this opinion is
based on various assumptions and on our representations concerning our organization and operations,
including an assumption that we qualified as a REIT at all times from January 1, 1987 through
December 31, 2003, and including representations regarding the nature of our assets and the conduct
and method of operation of our business. The opinion cannot be relied upon if any of those
assumptions and representations later prove incorrect. Moreover, continued qualification and
taxation as a REIT depend upon our ability to meet, through actual annual operating results,
distribution levels and diversity of stock ownership, the various REIT qualification tests imposed
under the Code, the results of which will not be reviewed by Deloitte Tax LLP. Accordingly, no
assurance can be given that the actual results of our operations will satisfy such requirements.
Additional information regarding the risks associated with our failure to qualify as a REIT is set
forth under the caption Risk Factors.
The opinion of Deloitte Tax LLP is based upon current law, which is subject to change either
prospectively or retroactively. Changes in applicable law could modify the conclusions expressed in
the opinion. Moreover, unlike a tax ruling (which we will not seek), this opinion is not binding on
the Internal Revenue Service, and no assurance can be given that the Internal Revenue Service could
not successfully challenge our status as a REIT.
If we have qualified and continue to qualify for taxation as a REIT, we generally will
not be subject to federal corporate income taxes on that portion of our ordinary income and capital
gain that we distribute (or are deemed to distribute) currently to our shareholders. Even if we
qualify as a REIT, however, we will be subject to federal income taxes under the following
circumstances. First, we will be taxed at regular corporate rates on any undistributed taxable
income, including undistributed net capital
gains. Second, under certain circumstances, we may be subject to the alternative minimum tax on
certain items of tax preference. Third, if we have (i) net income from the sale or other
disposition of foreclosure property (which is, in general, property acquired by foreclosure or
otherwise on default of a loan secured by the property) which is held primarily for sale to
customers in the ordinary course of business or (ii) other non-qualifying income from foreclosure
property, we will be subject to tax at the highest corporate rate on such
35
income. Fourth, if we have net income from prohibited transactions (which are, in general,
certain sales or other dispositions of property (other than foreclosure property) held primarily
for sale to customers in the ordinary course of business), such income will be subject to a 100%
tax. This 100% tax on income from prohibited transactions is discussed in more detail below. Fifth,
if we should fail to satisfy the 75% gross income test or the 95% gross income test (as discussed
below), and nonetheless have maintained our qualification as a REIT because certain other
requirements have been met, we will be subject to a 100% tax on the income attributable to the
greater of the amount by which we failed the 75% or 95% test, multiplied by a fraction intended to
reflect our profitability. Sixth, if we were to violate one or more of the REIT asset tests (as
discussed below) under certain circumstances, but the violation was due to reasonable cause and not
willful neglect and we were to take certain remedial actions, we may avoid a loss of our REIT
status by, among other things, paying a tax equal to the greater of $50,000 or the highest
corporate tax rate multiplied by the net income generated by the non-qualifying asset during a
specified period. Seventh, if we should fail to distribute during each calendar year at least the
sum of (i) 85% of our REIT ordinary income for such year, (ii) 95% of our REIT capital gain net
income for such year, and (iii) any undistributed taxable income (including net capital gain) from
prior years, subject to certain adjustments, we would be subject to a 4% excise tax on the excess
of such required distribution over the amounts actually distributed. Eighth, if we were to acquire
any asset, directly or indirectly, from a C corporation (i.e., a corporation generally subject to
full corporate level tax) in a transaction in which our basis in the asset is determined by
reference to the basis of the asset (or any other property) in the hands of the C corporation, and
we were to recognize gain on the disposition of such asset during the 10-year period beginning on
the date on which we acquired such asset, then, to the extent of such propertys built-in gain
(the excess of the fair market value of such property at the time we acquired it over the adjusted
basis of such property at such time), such gain will be subject to tax at the highest regular
corporate rate applicable. We refer to this tax as the Built-in Gains Tax. Ninth, if we fail to
satisfy certain of the REIT qualification requirements under the Code (other than the gross income
and asset tests), and the failure is due to reasonable cause and not willful neglect, we may be
required to pay a penalty of $50,000 for each such failure to maintain our REIT status. Finally,
if we fail to comply with the requirements to send annual letters to certain shareholders
requesting information regarding the actual ownership of our outstanding stock and the failure was
not due to reasonable cause or was due to willful neglect, we will be subject to a $25,000 penalty
or, if the failure is intentional, a $50,000 penalty.
Activities conducted by our taxable REIT subsidiaries, including Cousins Real Estate
Corporation (CREC) and its subsidiaries, are subject to federal income tax at regular corporate
rates. In general, a taxable REIT subsidiary may engage in activities that, if engaged in directly
by a REIT, would produce income that does not satisfy the REIT gross income tests, described below,
or income that, if earned by the REIT, would be subject to the 100% tax on prohibited transactions,
also described below. A number of constraints, however, are imposed on REITs and their taxable REIT
subsidiaries to ensure that taxable REIT subsidiaries pay an appropriate corporate-level tax on
their income. For example, a taxable REIT subsidiary is subject to the earnings stripping rules
of the Code with respect to interest paid to the REIT, which could defer or disallow a portion of
our taxable REIT subsidiaries deductions for interest paid to us under certain circumstances. In
addition, if our taxable REIT subsidiaries make deductible payments to us (such as interest or
rent), and the amount of those deductible payments is determined by the Internal Revenue Service to
exceed the amount that unrelated parties would charge to each other, we would be subject to a 100%
penalty tax on the excess payments. We would incur a similar 100% penalty tax on a portion of the
rent we receive from our tenants, to the extent the Internal Revenue Service determines that the
rent payments are attributable to certain services provided to our tenants by our taxable REIT
subsidiaries without receiving adequate compensation either from us or from our tenants.
Requirements for Qualification.
The Code defines a REIT as a corporation, trust or
association:
(1) which is managed by one or more trustees or directors;
(2) the beneficial ownership of which is evidenced by transferable shares or by transferable
certificates of beneficial interest;
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(3) which would be taxable as a domestic corporation but for Sections 856 through 859 of the
Code;
(4) which is neither a financial institution nor an insurance company subject to certain
provisions of the Code;
(5) the beneficial ownership of which is held by 100 or more persons;
(6) not more than 50% in value of the outstanding stock of which is owned, directly or
indirectly, by or for five or fewer individuals (as defined in the Code to include certain
entities);
(7) which makes an election to be a REIT (or has made such an election for a previous taxable
year, which election has not been revoked or terminated) and satisfies all relevant filing and
other administrative requirements that must be met to elect and maintain REIT status;
(8) which uses the calendar year as its taxable year; and
(9) which meets certain other tests, described below, regarding the nature of its income and
assets and regarding distributions to its shareholders.
The Code provides that conditions (1) through (4), inclusive, must be met during the entire
taxable year, that condition (5) must be met during at least 335 days of a taxable year of 12
months, or during a proportionate part of a taxable year of less than 12 months, and that condition
(6) must be met during the last half of each taxable year. We have issued sufficient shares of our
common stock with sufficient diversity of ownership to allow us to satisfy requirements (5) and
(6). We will be treated as having met condition (6) above if we complied with certain Treasury
Regulations for ascertaining the ownership of our stock and if we did not know (or after the
exercise of reasonable diligence would not have known) that our stock was sufficiently closely held
to cause us to fail condition (6). In addition, Article 11 of our Articles of Incorporation
contains restrictions regarding the transfer and ownership of our shares that are intended to
assist us in continuing to satisfy the share ownership requirements described in clauses (5) and
(6) above but without causing us to violate the freely transferable shares requirement described in
clause (2) above. See Description of Common Stock Restrictions on Transfer.
In the case of a REIT owning an interest in a partnership, joint venture, limited liability
company, or other legal entity that is classified as a partnership for federal income tax purposes
(which we refer to collectively as partnerships), the REIT is deemed to own its proportionate share
of the assets of the partnership and is deemed to be entitled to the income of the partnership
attributable to such share (based on the REITs capital interest in the partnership). In addition,
the assets and gross income of the partnership will retain the same character in the hands of the
REIT for purposes of Section 856 of the Code, including satisfying the gross income tests and asset
tests that are discussed below. We own interests in a number of partnerships (the Subsidiary
Partnerships), and thus, our proportionate share of the assets, liabilities and items of income
from the Subsidiary Partnerships are treated as our assets, liabilities and items of income for
purposes of applying the requirements described herein.
Income Tests.
To maintain our qualification as a REIT, we must satisfy two gross income
requirements annually. First, at least 75% of our gross income (excluding gross income from
prohibited transactions) for each taxable year must be derived directly or indirectly from
investments relating to real property or mortgages on real property (including rents from real
property and, in certain circumstances, mortgage interest) or from certain types of temporary
investments. Second, at least 95% of our gross income (excluding gross income from prohibited
transactions) for each taxable year must be derived from such real property investments described
above, and from dividends, interest and gain from the sale or disposition of stock or securities,
or from any combination of the foregoing. In our taxable years from 1998 through 2004, any payment
that we received under certain kinds of financial instruments that we entered into to reduce the
interest rate risks with respect to any indebtedness incurred or to be incurred to acquire or carry
real estate assets, as well as any gain derived from the sale or other disposition of any such
37
investment, constituted qualifying income for purposes of the 95% gross income test (but not the
75% gross income test). In our taxable years beginning on or after January 1, 2005, any transaction
that we enter into to hedge indebtedness incurred or to be incurred to acquire or carry real estate
assets must constitute a properly identified hedging transaction (in accordance with Section 1221
of the Code and the Treasury Regulations thereunder) to avoid giving rise to non-qualifying gross
income, and any income or gain that we derive from such a properly-identified hedging transaction
will be excluded from our gross income for purposes of the 95% gross income test (but not the 75%
gross income test). For hedging transactions entered into after July 30, 2008, such income is also
excluded for purposes of the 75% gross income test.
Rents that we receive will qualify as rents from real property in satisfying the above gross
income tests only if several conditions are met. First, the amount of rent must not be based in
whole or in part on the income or profits of any person. However, an amount received or accrued
generally will not be excluded from rents from real property solely by reason of being based on a
fixed percentage or percentages of receipts or sales. Second, rents received from a tenant will not
qualify as rents from real property if we directly or constructively were deemed to own 10% or
more of the ownership interests in such tenant (a Related Party Tenant), unless such tenant is
our taxable REIT subsidiary and certain other conditions are satisfied. Third, if rent attributable
to personal property that is leased in connection with a lease of real property is greater than 15%
of the total rent received under the lease, then the portion of rent attributable to such personal
property will not qualify as rents from real property. Finally, for rent to qualify as rents
from real property, we generally must not operate or manage the property or furnish or render
services to our tenants, other than through an independent contractor from whom we derive no
revenue. The independent contractor requirement, however, does not apply to the extent the
services we provide are usually or customarily rendered in connection with the rental of space
for occupancy only and are not otherwise considered rendered to the occupant. In addition, the
independent contractor requirement will not apply to noncustomary services we provide, if the
annual value of such noncustomary services does not exceed 1% of the gross income derived from the
property with respect to which the noncustomary services are provided (the 1% de minimis
exception). For this purpose, such services may not be valued at less than 150% of our direct cost
of providing the services, and any gross income deemed to have been derived by us from the
performance of noncustomary services pursuant to the 1% de minimis exception will constitute
nonqualifying gross income under the 75% and 95% gross income tests. In addition, our taxable REIT
subsidiaries are permitted to provide noncustomary services to our tenants without causing the
rents we receive from such tenants to be disqualified as rents from real property.
From time to time, we may derive rent from certain tenants based, in whole or in part, on the
net profits of the tenant, rent from Related Party Tenants, or rent that is more than 15%
attributable to personal property. However, the amount of such nonqualifying rent income, if any,
is not expected to be material, and we have complied and believe we will continue to comply with
the 95% and 75% gross income tests. In addition, based on our knowledge of the real estate markets
in the geographic regions in which we operate, we believe that all services that are provided to
the tenants of the properties generally will be considered usually or customarily rendered in
connection with the rental of comparable real estate. Further, we intend to provide any
noncustomary services only through qualifying independent contractors, through our taxable REIT
subsidiaries or in compliance with the 1% de minimis exception.
We manage certain properties held by the Subsidiary Partnerships, and in return for such
services, we receive certain management and accounting fees. We obtained a ruling from the Internal
Revenue Service that the portion of such fees that is apportioned to the capital interests of the
other partners constitutes non-qualifying gross income for purposes of Section 856 of the Code, and
the portion of each fee that is apportioned our capital interest is disregarded for purposes of
Section 856 of the Code. We also expect to receive certain other types of non-qualifying income,
such as dividends and interest paid by CREC to us (which will qualify under the 95% gross income
test but not under the 75% gross income test). We believe, however, that the aggregate amount of
such non-qualifying income in any taxable year will not cause us to exceed the limits on
non-qualifying income under the 75% and 95% gross income tests.
If we were to fail to satisfy one or both of the 75% or 95% gross income tests for any taxable
year, we may nevertheless qualify as a REIT for such year if we are entitled to relief under
certain provisions of the
38
Code. These relief provisions generally will be available if our failure to meet such tests was due
to reasonable cause and not due to willful neglect and we attach a schedule to our federal income
tax return containing certain information concerning our gross income. It is not possible, however,
to state whether in all circumstances we would be entitled to the benefit of these relief
provisions. As discussed above in General, even if these relief provisions were to apply, a tax
would be imposed with respect to the excess income.
Asset Tests.
At the close of each quarter of our taxable year, we must satisfy several tests
relating to the nature of our assets. First, at least 75% of the value of our total assets must be
represented by real estate assets (including our allocable share of real estate assets held by the
Subsidiary Partnerships), certain temporary investments in stock or debt instruments purchased with
the proceeds of a stock offering or a public offering of long-term debt (but only for the one-year
period beginning on the date we receive the applicable offering proceeds), cash, certain cash items
and government securities. Second, not more than 25% of our total assets may be represented by
securities other than those in the 75% asset class. Third, of the investments included in the 25%
asset class, the value of any one issuers debt and equity securities that we own may not exceed 5%
of the value of our total assets (the 5% asset test). Fourth, we may not own more than 10% of the
total voting power of any one issuers outstanding securities (the 10% voting securities test).
Fifth, with respect to taxable years beginning after December 31, 2000, we may not own more than
10% of the total value of any one issuers outstanding debt and equity securities (the 10% value
test), subject to certain exceptions. Mortgage debt secured by real estate assets constitutes a
real estate asset and does not constitute a security for purposes of the foregoing tests.
The following assets are not treated as securities held by us for purposes of the 10% value
test: (i) straight debt meeting certain requirements, unless we hold (either directly or through
our controlled taxable REIT subsidiaries) certain other securities of the same corporate or
partnership issuer that have an aggregate value greater than 1% of such issuers outstanding
securities; (ii) loans to individuals or estates; (iii) certain rental agreements calling for
deferred rents or increasing rents that are subject to Section 467 of the Code, other than with
certain related persons; (iv) obligations to pay us amounts qualifying as rents from real
property under the 75% and 95% gross income tests; (v) securities issued by a state or any
political subdivision of a state, the District of Columbia, a foreign government, any political
subdivision of a foreign government, or the Commonwealth of Puerto Rico, but only if the
determination of any payment received or accrued under the security does not depend in whole or in
part on the profits of any person not described in this category, or payments on any obligation
issued by such an entity; (vi) securities issued by another qualifying REIT; and (vii) other
arrangements identified in Treasury regulations (which have not yet been issued or proposed). In
addition, any debt instrument issued by a partnership will not be treated as a security under the
10% value test if at least 75% of the partnerships gross income (excluding gross income from
prohibited transactions) is derived from sources meeting the requirements of the 75% gross income
test. If the partnership fails to meet the 75% gross income test, then the debt instrument issued
by the partnership nevertheless will not be treated as a security to the extent of our interest
as a partner in the partnership. Also, in looking through any partnership to determine our
allocable share of any securities owned by the partnership, our share of the assets of the
partnership, solely for purposes of applying the 10% value test in taxable years beginning on or
after January 1, 2005, will correspond not only to our interest as a partner in the partnership but
also to our proportionate interest in certain debt securities issued by the partnership.
For taxable years beginning after December 31, 2000, the 5% asset test, the 10% voting
securities test, and the 10% value test do not apply to the securities of a taxable REIT
subsidiary. However, the value of the debt and equity securities of all taxable REIT subsidiaries
we own cannot represent more than 20% of the value of our total assets (with a 25% limit applying
to our taxable years beginning on or after January 1, 2009). Any corporation in which a REIT
directly or indirectly owns stock (other than another REIT, a corporation which directly or
indirectly operates or manages a lodging facility or a health care facility, and, with certain
exceptions, a corporation which directly or indirectly provides to any person (under a franchise,
license, or otherwise) rights to any brand name under which any lodging facility or health care
facility is operated) may be treated as a taxable REIT subsidiary if the REIT and the corporation
file a joint
39
election with the Internal Revenue Service for the corporation to be treated as a taxable REIT
subsidiary of the REIT.
We own 100% of the stock of CREC, and we also have made loans to CREC. We have filed a joint
election with CREC to have CREC, as well as its corporate subsidiaries, treated as our taxable REIT
subsidiaries, effective as of January 1, 2001. Accordingly, the debt and equity securities of CREC
that we hold are not subject to the 5% asset test, the 10% voting securities test, or the 10% value
test.
We believe that our debt and equity securities of CREC, together with the debt and equity
securities of our other taxable REIT subsidiaries, have represented, at all relevant times, less
than 20% of the value of our total assets. With respect to taxable years ending on or prior to
December 31, 2000, we believe that the securities of each such issuer also represented less than 5%
of the value of our total assets. We also believe that the value of the securities, including
unsecured debt, of each other issuer in which we have owned an interest, excluding equity interests
in partnerships (which are looked through rather than treated as securities for purposes of the
REIT asset tests), has never exceeded 5% of the total value of our assets and that we comply with
the 10% voting securities test and the 10% value test (taking into account the various exceptions
referred to above). No independent appraisals have been obtained, however, to support these
conclusions, and Deloitte Tax LLP, in rendering the tax opinion described above, is relying upon
our representations regarding the value of our securities and our other assets. Although we plan to
take steps to ensure that we continue to satisfy all of the applicable REIT asset tests, there can
be no assurance that such steps will always be successful or will not require a reduction in our
overall interest in the taxable REIT subsidiaries or changes in our other investments.
If we were to fail any of the asset tests discussed above at the end of any quarter without
curing such failure within 30 days after the end of such quarter, we would fail to qualify as a
REIT, unless we were to qualify under certain relief provisions. Under one of these relief
provisions, if we were to fail the 5% asset test, the 10% voting securities test, or the 10% value
test, we nevertheless would continue to qualify as a REIT if the failure was due to the ownership
of assets having a total value not exceeding the lesser of 1% of our assets at the end of the
relevant quarter or $10,000,000, and we were to dispose of such assets (or otherwise meet such
asset tests) within six months after the end of the quarter in which the failure was identified. If
we were to fail to meet any of the REIT asset tests for a particular quarter, but we did not
qualify for the relief for
de minimis
failures that is described in the preceding sentence, then we
would be deemed to have satisfied the relevant asset test if: (i) following our identification of
the failure, we were to file a schedule with a description of each asset that caused the failure;
(ii) the failure was due to reasonable cause and not due to willful neglect; (iii) we were to
dispose of the non-qualifying asset (or otherwise meet the relevant asset test) within six months
after the last day of the quarter in which the failure was identified, and (iv) we were to pay a
penalty tax equal to the greater of $50,000, or the highest corporate tax rate multiplied by the
net income generated by the non-qualifying asset during the period beginning on the first date of
the failure and ending on the date we dispose of the asset (or otherwise cure the asset test
failure). It is not possible to predict whether in all circumstances we would be entitled to the
benefit of these relief provisions.
Annual Distribution Requirements.
To qualify as a REIT, we are required to distribute
dividends (other than capital gain dividends) to our shareholders in an amount at least equal to
(A) the sum of (i) 90% of our REIT taxable income (computed without regard to the dividends paid
deduction and our net capital gain) and (ii) 90% of the net income (after tax), if any, from
foreclosure property, minus (B) the sum of certain items of noncash income. Such distributions must
be paid in the taxable year to which they relate, or in the following taxable year if declared
before we timely file our tax return for such year and if paid on or before the first regular
dividend payment after such declaration. To the extent that we do not distribute all of our net
capital gain or distribute at least 90%, but less than 100%, of our REIT taxable income, as
adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates.
Furthermore, if we should fail to distribute during each calendar year at least the sum of (i) 85%
of our REIT ordinary income for such year, (ii) 95% of our REIT capital gain income for such year,
and (iii) any undistributed taxable income (including any net capital gain) from prior periods,
subject to certain adjustments, we will be subject to a 4% excise tax on the excess of such
required distribution over the amounts actually distributed.
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We have made and intend to continue to make timely distributions sufficient to satisfy the
annual distribution requirements. It is possible, however, that we may not have sufficient cash or
liquid assets, from time to time, to meet the distribution requirements due to timing differences
between the receipt of income and actual payment of deductible expenses and the inclusion of such
income and deduction of such expenses in arriving at our taxable income, or if the amount of
nondeductible expenses (such as principal amortization or capital expenses) exceeds the amount of
noncash deductions (such as depreciation). In the event that such timing differences occur, we may
need to borrow money, sell assets, pay taxable stock dividends (for example, where shareholders may
elect to receive a dividend paid in cash or with newly issued shares of our common stock), or take
other measures to permit us to pay the required dividends.
Under certain circumstances, we may be able to rectify a failure to meet the distribution
requirement for a year by paying deficiency dividends to our shareholders in a later year that
may be included in our deduction for dividends paid for the earlier year. Thus, we may be able to
avoid being taxed on amounts distributed as deficiency dividends; however, we will be required to
pay interest and penalties, if any, to the Internal Revenue Service based upon the amount of any
deduction taken for deficiency dividends.
Failure to Qualify
. If we were to fail to satisfy one or more requirements for REIT
qualification, other than an asset or income test violation of a type for which relief is otherwise
available as described above, we would retain our REIT qualification if the failure was due to
reasonable cause and not willful neglect, and if we were to pay a penalty of $50,000 for each such
failure. It is not possible to predict whether in all circumstances we would be entitled to the
benefit of this relief provision.
If we were to fail to qualify for taxation as a REIT in any taxable year and no relief
provisions were to apply, we would be subject to tax (including any applicable alternative minimum
tax) on our taxable income at regular corporate rates. Distributions to shareholders in any year in
which we fail to qualify will not be deductible from our taxable income, nor will they be required
to be made. In such event, to the extent of current and accumulated earnings and profits, all
distributions to our shareholders will be taxable as regular dividend income. Under these
circumstances, subject to certain limitations in the Code, corporate shareholders may be eligible
for the dividends received deduction and individual shareholders may be eligible for a reduced tax
rate on qualified dividend income received from regular C corporations. Unless entitled to relief
under specific statutory provisions, we also would be disqualified from taxation as a REIT for the
four taxable years following the year during which qualification was lost. It is not possible to
state whether in all circumstances we would be entitled to such statutory relief. In addition, to
re-elect REIT status after being disqualified, we would have to distribute as dividends, no later
than the end of our first taxable year as a re-electing REIT, all of the earnings and profits
attributable to any taxable years for which we were a taxable C corporation. Thus, to re-elect REIT
status after being disqualified, we could be required to incur substantial indebtedness or
liquidate substantial investments in order to make such distributions.
Prohibited Transactions Tax
. Any gain that a REIT recognizes from the sale of property held
as inventory or otherwise held primarily for sale to customers in the ordinary course of business
(excluding sales of foreclosure property and sales conducted by taxable REIT subsidiaries) will be
treated as income from a prohibited transaction that is subject to a 100% penalty tax. Under
existing law, whether property is held as inventory or primarily for sale to customers in the
ordinary course of business is a question of fact that depends on all of the facts and
circumstances of the particular transaction. Under a statutory safe harbor, however, we will not
be subject to the 100% tax with respect to a sale of property if (i) the property has been held for
at least four years (shortened to two years for sales after July 30, 2008) for the production of
rental income prior to the sale, (ii) capitalized expenditures on the property in the four years
preceding the sale (shortened to two years for sales after July 30, 2008) are less than 30% of the
net selling price of the property and (iii) we either (a) have seven or fewer sales of property
(excluding certain property obtained through foreclosure and other than certain involuntary
conversions) in the year of sale or (b) (x) the aggregate tax basis of property sold during the
year of sale is 10% or less of the aggregate tax basis of all of our assets as of the beginning of
the taxable year, or for sales after July 30, 2008, the aggregate fair market value of property
sold during the year of sale is 10% or less of the aggregate fair market value of all of our assets
as of the beginning of the taxable year, in each case excluding sales of foreclosure property
41
and involuntary conversions, and (y) substantially all of the marketing and development
expenditures with respect to the property sold are made through an independent contractor from whom
we derive no income. The sale of more than one property to a buyer as part of one transaction
constitutes one sale for purposes of this safe harbor. Not all of our property sales will qualify
for the safe harbor. Nevertheless, we intend to own our properties for investment with a view to
long-term appreciation, to engage in the business of acquiring, developing and owning rental
properties and making occasional sales of properties as are consistent with our investment
objectives. However, the Internal Revenue Service may successfully contend that some of our sales
are prohibited transactions, in which case we would be required to pay the 100% penalty tax on the
gains resulting from any such sales. Because of this prohibited transactions tax, we intend that
sales of property to customers in the ordinary course of business (such as condominiums or
residential lots) will be made by a taxable REIT subsidiary, which will be subject to
corporate-level tax on its profit but will not be subject to the 100% penalty tax on prohibited
transactions.
Other Tax Considerations
We believe that each of the Subsidiary Partnerships qualifies as a partnership for federal
income tax purposes and not as an association taxable as a corporation or as a publicly traded
partnership (within the meaning of Section 7704 of the Code).
If a Subsidiary Partnership were treated as an association taxable as a corporation, the value
of our interest in such partnership would no longer qualify as a real estate asset for purposes of
the 75% asset test. Further, if a Subsidiary Partnership were treated as a taxable corporation,
then we would cease to qualify as a REIT if our ownership interest in such partnership exceeded 10%
of the partnerships voting interests, or the value of our debt and equity interest in such
partnership exceeded 5% of the value of the our total assets or 10% of the value of the
partnerships outstanding debt and equity securities. Furthermore, in such a situation,
distributions from the Subsidiary Partnership to us would be treated as dividends, which do not
qualify in satisfying the 75% gross income test described above and which therefore could make it
more difficult for us to meet such test, and we would not be able to deduct our share of losses
generated by such Subsidiary Partnership in computing our net taxable income.
Taxation of Shareholders
Taxation of Taxable Domestic Shareholders.
Under current law, certain qualified dividend
income received by domestic non-corporate shareholders in taxable years 2003 through 2010 is
subject to tax at the same tax rates as long-term capital gain (generally, a maximum rate of 15%
for such taxable years). Dividends received from REITs, however, generally are not eligible for
these reduced tax rates and, therefore, will continue to be subject to tax at ordinary income rates
(generally, a maximum rate of 35% for taxable years 2003-2010), subject to three narrow exceptions.
Under the first exception, dividends received from a REIT may be treated as qualified dividend
income eligible for the reduced tax rates to the extent that the REIT itself has received
qualified dividend income from other corporations (such as taxable REIT subsidiaries) in which the
REIT has invested. Under the second exception, dividends paid by a REIT in a taxable year may be
treated as qualified dividend income in an amount equal to the sum of (i) the excess of the REITs
REIT taxable income for the preceding taxable year over the corporate-level federal income tax
payable by the REIT for such preceding taxable year and (ii) the excess of the REITs income that
was subject to the Built-in Gains Tax (as described above) in the preceding taxable year over the
tax payable by the REIT on such income for such preceding taxable year. Under the third exception,
dividends received from a REIT may be treated as qualified dividend income to the extent
attributable to earnings and profits accumulated in non-REIT taxable years. We do not expect to
receive a material amount of dividends from our taxable REIT subsidiaries or from other taxable
corporations, we do not expect to pay a material amount of federal income tax on undistributed REIT
taxable income or a material amount of Built-in Gains Tax, and we believe we have previously
distributed as dividends all of our non-REIT accumulated earnings and profits. Therefore, as long
as we qualify as a REIT, distributions made to our taxable domestic shareholders out of current or
accumulated earnings and profits (and not designated as capital gain dividends) will be taken into
account by them as ordinary income (except, in the case of non-corporate shareholders who meet
certain holding period requirements, to the limited extent that one of the foregoing
42
exceptions applies). In addition, as long as we qualify as a REIT, corporate shareholders will not
be eligible for the dividends received deduction as to any dividends received from us.
Under IRS guidance that applies to taxable years of publicly traded REITs ending on or before
December 31, 2011, we may declare a distribution on our common stock that is payable, at the
election of each shareholder, either in the form of cash or newly issued shares of our common stock
of equivalent value. The IRS guidance allows the amount of cash to be distributed in the aggregate
to all shareholders to be limited to not less than 10% of the aggregate declared distribution, with
a proration mechanic applying if too many shareholders elect to receive cash. In such
circumstances, the shareholders who actually receive shares of common stock would be treated for
federal income tax purposes as if they had received the distribution in cash, so that our
shareholders would recognize dividend income, and we would be permitted to take a dividends paid
deduction, to the extent the distribution does not exceed our current or accumulated earnings and
profits.
Distributions that we designate as capital gain dividends will be taxed as long-term capital
gains (to the extent they do not exceed our actual net capital gain for the taxable year) without
regard to the period for which the shareholder has held his or her shares. However, corporate
shareholders may be required to treat up to 20% of certain capital gain dividends as ordinary
income. Distributions in excess of current and accumulated earnings and profits will not be taxable
to a shareholder to the extent that they do not exceed the adjusted basis of the shareholders
shares of our common stock, but rather will reduce the adjusted basis of such shares. To the extent
that such distributions exceed the adjusted basis of a shareholders shares of our common stock,
they will be included in income as long-term capital gain (or short-term capital gain if the shares
have been held for one year or less), assuming the shares are a capital asset in the hands of the
shareholder. In addition, any dividend that we declare in October, November or December of any year
payable to a shareholder of record on a specific date in any such month shall be treated as both
paid by us and received by the shareholder on December 31 of such year, provided that the dividend
is actually paid by us during January of the following calendar year.
We may make an election to treat all or part of our undistributed net capital gain as if it
had been distributed to our shareholders. These undistributed amounts would be subject to
corporate-level tax payable by us. If we were to make such an election, our shareholders would be
required to include in their income as long-term capital gain their proportionate shares of our
undistributed net capital gain. Each shareholder would be deemed to have paid his or her
proportionate share of the income tax imposed on us with respect to such undistributed net capital
gain, and this amount would be credited or refunded to the shareholder in computing his or her own
federal income tax liability. In addition, the tax basis of the shareholders stock would be
increased by his or her proportionate share of the undistributed net capital gains included in his
or her income, less his or her proportionate share of the income tax imposed on us with respect to
such gains.
Domestic shareholders may not include in their individual income tax returns any of our net
operating losses or net capital losses. Instead, we would carry over such losses for potential
offset against our future income, subject to certain limitations. Taxable distributions from us and
gain from the sale of our shares will not be treated as passive activity income and, therefore,
domestic shareholders generally will not be able to apply any passive activity losses (such as
losses from certain types of limited partnerships in which a shareholder is a limited partner)
against such income. In addition, taxable distributions from us generally will be treated as
investment income for purposes of the investment interest limitations. Capital gains from the
disposition of our stock (or distributions, if any, taxable at capital gain rates), however, will
be treated as investment income only if the shareholder so elects, in which case such capital gains
or distributions, as the case may be, will be taxed at ordinary income rates. For purposes of
computing each shareholders alternative minimum taxable income, certain of our differently
treated items for each taxable year (for example, differences in computing depreciation deductions
for regular tax purposes and alternative minimum tax purposes) may be apportioned to our
shareholders in accordance with section 59(d)(1)(A) of the Code.
43
In general, any gain or loss realized upon a taxable disposition of our shares by a domestic
shareholder who is not a dealer in securities will be treated as a capital gain or loss. Any loss
upon a sale or exchange of shares of our common stock by a shareholder who has held such shares for
six months or less (after applying certain holding period rules) will be treated as a long-term
capital loss to the extent of actual or deemed distributions from us that were required to be
treated by such shareholder as long-term capital gain. All or a portion of any loss realized upon a
taxable disposition of our shares may be disallowed if other shares of our stock are purchased
within 30 days before or after the disposition.
For non-corporate taxpayers, the tax rate differential between capital gain and ordinary
income may be significant. Under current law, the highest marginal non-corporate income tax rate
applicable to ordinary income is 35%. Any capital gain recognized or otherwise properly taken into
account before January 1, 2011, generally will be taxed to a non-corporate taxpayer at a maximum
rate of 15% with respect to capital assets held for more than one year. (Under current law, the
maximum capital gains rate for non-corporate taxpayers will rise to 20% for gain taken into account
on or after January 1, 2011.) The tax rates applicable to ordinary income apply to gain from the
sale or exchange of capital assets held for one year or less. In the case of capital gain
attributable to the sale or exchange of certain real property held for more than one year, an
amount of such gain equal to the amount of all prior depreciation deductions not otherwise required
to be taxed as ordinary depreciation recapture income will be taxed at a maximum rate of 25%. With
respect to distributions designated by us as capital gain dividends (including any deemed
distributions of retained capital gains), subject to certain limits, we also may designate, and
will notify our shareholders, whether the dividend is taxable to non-corporate shareholders at
regular long-term capital gain rates or at the 25% rate applicable to unrecaptured depreciation.
The characterization of income as capital or ordinary also may affect the deductibility of
capital losses. Capital losses not offset by capital gains may be deducted against a non-corporate
taxpayers ordinary income only up to a maximum annual amount of $3,000. Non-corporate taxpayers
may carry forward their unused capital losses. All net capital gain of a corporate taxpayer is
subject to tax at ordinary corporate rates. A corporate taxpayer may deduct capital losses only to
the extent of its capital gains, with unused losses eligible to be carried back three years and
forward five years.
Information Reporting and Backup Withholding .
We will report to our domestic shareholders and
the Internal Revenue Service the amount of dividends paid during each calendar year, and the amount
of tax withheld, if any, with respect thereto. Under the backup withholding rules, a shareholder
may be subject to backup withholding, at a rate equal to the fourth lowest rate of federal income
tax applicable to ordinary income of individuals (currently 28%), with respect to dividends paid
unless such shareholder (a) is a corporation or comes within certain other exempt categories and,
when required, demonstrates this fact, or (b) provides a taxpayer identification number, certifies
as to no loss of exemption from backup withholding, and otherwise complies with applicable
requirements of the backup withholding rules. A shareholder who does not provide his or her correct
taxpayer identification number may also be subject to penalties imposed by the Internal Revenue
Service. Any amount paid as backup withholding may be applied as a credit against the shareholders
federal income tax liability, which could result in a refund. In addition, we may be required to
withhold a portion of capital gain distributions made to any shareholders who fail to certify their
non-foreign status to us. See Taxation of Foreign Shareholders below.
Taxation of Tax-Exempt Shareholders.
The Internal Revenue Service has ruled publicly that
amounts distributed by a REIT to a tax-exempt employees pension trust do not constitute unrelated
business taxable income (UBTI). Based upon this ruling and subject to the discussion below
regarding qualified pension trust investors, distributions by us to a shareholder that is a
tax-exempt entity should not constitute UBTI, provided that the tax-exempt entity has not financed
the acquisition of its shares with acquisition indebtedness within the meaning of the Code and
the shares of our stock are not otherwise used in an unrelated trade or business of the tax-exempt
entity. Revenue rulings, however, are interpretive in nature and subject to revocation or
modification by the Internal Revenue Service.
A qualified trust (defined to be any trust described in section 401(a) of the Code and
exempt from tax under section 501(a) of the Code) that holds more than 10% of the value of the
shares of a REIT may be
44
required, under certain circumstances, to treat a portion of distributions from the REIT as UBTI.
This requirement will apply for a taxable year only if (i) the REIT satisfies the requirement that
not more than 50% of the value of its shares be held by five or fewer individuals (the five or
fewer requirement) by relying on a special look-through rule under which shares held by
qualified trust shareholders are treated as held by the beneficiaries of such trusts in proportion
to their actuarial interests therein, and (ii) the REIT is predominantly held by qualified
trusts. A REIT is predominantly held if either (i) a single qualified trust holds more than 25%
of the value of the REITs shares or (ii) one or more qualified trusts, each owning more than 10%
of the value of the REITs shares, hold in the aggregate more than 50% of the value of the REITs
shares. If the foregoing requirements are met, the percentage of any REIT dividend treated as UBTI
to a qualified trust that owns more than 10% of the value of the REITs shares is equal to the
ratio of (a) the UBTI earned by the REIT (treating the REIT as if it were a qualified trust and
therefore subject to tax on its UBTI) to (b) the total gross income (less certain associated
expenses) of the REIT. A de minimis exception applies where the ratio set forth in the preceding
sentence is less than 5% for any year. The provisions requiring qualified trusts to treat a portion
of REIT distributions as UBTI will not apply if the REIT is able to satisfy the five or fewer
requirement without relying upon the look-through rule.
Taxation of Foreign Shareholders.
The rules governing U.S. federal income taxation of
nonresident alien individuals, foreign corporations, foreign partnerships and other foreign
shareholders (collectively, Non-U.S. Shareholders) are complex, and no attempt will be made
herein to provide more than a limited summary of such rules. Prospective Non-U.S. Shareholders
should consult with their own tax advisors to determine the impact of U.S. federal, state and local
income tax laws with regard to an investment in our common stock, including any reporting
requirements.
Distributions that are not attributable to gain from sales or exchanges by us of U.S. real
property interests and not designated by us as capital gain dividends will be treated as dividends
of ordinary income to the extent that they are made out of our current or accumulated earnings and
profits. Such distributions, ordinarily, will be subject to a withholding tax equal to 30% of the
gross amount of the distribution unless an applicable tax treaty reduces that tax. However, if
income from the investment in our stock is treated as effectively connected with the Non-U.S.
Shareholders conduct of a U.S. trade or business, the Non-U.S. Shareholder generally will be
subject to a tax at graduated rates, in the same manner as U.S. shareholders are taxed with respect
to such dividends (and may also be subject to the 30% branch profits tax if the shareholder is a
foreign corporation). We expect to withhold U.S. income tax at the rate of 30% on the gross amount
of any dividends paid to a Non-U.S. Shareholder that are not designated as capital gain dividends
unless (i) a lower treaty rate applies and the required IRS Form W-8BEN evidencing eligibility for
that reduced rate is filed with us or (ii) the Non-U.S. Shareholder files an IRS Form W-8ECI with
us properly claiming that the distribution is effectively connected income. Distributions in
excess of our current and accumulated earnings and profits will not be taxable to a shareholder to
the extent that they do not exceed the adjusted basis of the shareholders shares of stock, but
rather will reduce the adjusted basis of such shares. To the extent that such distributions exceed
the adjusted basis of a Non-U.S. Shareholders shares, such excess will constitute gain that may be
subject to U.S. federal income tax under the provisions of the Foreign Investment in Real Property
Tax Act of 1980 (FIRPTA), as described below. If it cannot be determined at the time a
distribution is made whether or not such distribution will be in excess of current and accumulated
earnings and profits, the distribution will be subject to withholding at the rate applicable to
ordinary dividends. In addition, the portion of such distributions in excess of current and
accumulated earnings and profits, to the extent not subject to the 30% withholding tax on ordinary
dividends, will be subject to a 10% withholding tax under FIRPTA, unless the Non-U.S. Shareholder
obtains a withholding certificate from the Internal Revenue Service establishing the right to a
reduced amount of FIRPTA withholding. The Non-U.S. Shareholder may seek a refund from the Internal
Revenue Service of excess tax withheld if it is subsequently determined that such distribution was,
in fact, in excess of current and accumulated earnings and profits or, if the 10% withholding tax
applied, did not give rise to taxable gain under FIRPTA.
Under current law, distributions to a Non-U.S. Shareholder that are attributable to gain from
sales or exchanges by us of U.S. real property interests will not be treated under FIRPTA as income
effectively connected with a U.S. business carried on by the Non-U.S. Shareholder, provided that
(i) the distribution
45
is received with respect to a class of our stock that is regularly traded on an established
securities market located in the United States and (ii) the Non-U.S. Shareholder does not own more
than 5% of that regularly traded class of stock at any time during the one-year period ending on
the date of the relevant distribution. Rather than being subject to tax as effectively connected
income under FIRPTA, such distributions will be treated as ordinary REIT dividends that are not
capital gain dividends. Thus, such distributions generally will be subject to the 30% withholding
tax described above (as opposed to a 35% withholding tax under prior law), such distributions will
not be subject to the branch profits tax, and Non-U.S. Shareholders generally will not be required
to file a U.S. federal income tax return by reason of receiving such distributions.
In the case of any Non-U.S. Shareholder who is not eligible for the exception described above
(an Ineligible Non-U.S. Shareholder), for any year in which we qualify as a REIT, distributions
that are attributable to gain from sales or exchanges by us of U.S. real property interests will be
taxed to such Ineligible Non-U.S. Shareholder under the provisions of FIRPTA. Under FIRPTA, these
distributions are taxed to an Ineligible Non-U.S. Shareholder as if such gain were effectively
connected with a U.S. business. Thus, Ineligible Non-U.S. Shareholders will be taxed on such
distributions at the normal capital gain rates applicable to U.S. shareholders (subject to
applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident
alien individuals) and will be required to file U.S. federal income tax returns. Also,
distributions subject to FIRPTA may be subject to a 30% branch profits tax in the hands of a
corporate Ineligible Non-U.S. Shareholder not entitled to treaty relief or exemption. We are
required by applicable Treasury Regulations to withhold 35% of any distribution to an Ineligible
Non-U.S. Shareholder that could be designated by us as a capital gain dividend. This amount may be
applied as a credit against the Ineligible Non-U.S. Shareholders FIRPTA tax liability.
Gain recognized by a Non-U.S. Shareholder upon a sale of our stock generally will not be taxed
under FIRPTA if we are a domestically controlled REIT, defined generally as a REIT in which at
all times during a specified testing period less than 50% in value of the stock was held directly
or indirectly by foreign persons. We believe that we currently qualify as a domestically
controlled REIT, and that the sale of common stock by a Non-U.S. Shareholder therefore will not be
subject to tax under FIRPTA. Because our stock is publicly traded, however, no assurance can be
given that we are, or will continue to be, a domestically controlled REIT. If we were not a
domestically controlled REIT, whether a Non-U.S. Shareholders gain would be taxed under FIRPTA
would depend on whether our common stock is regularly traded on an established securities market at
the time of sale and on the size of the selling shareholders interest in our stock. In addition,
gain not subject to FIRPTA will be taxable to a Non-U.S. Shareholder if (i) the investment in our
common stock is treated as effectively connected with the Non-U.S. Shareholders U.S. trade or
business, in which case the Non-U.S Shareholder will be subject to the same treatment as U.S.
shareholders with respect to such gain, or (ii) the Non-U.S. Shareholder is a nonresident alien
individual who was present in the United States for 183 days or more during the taxable year and
certain other conditions are met, in which case the nonresident alien individual will be subject to
a 30% tax on the individuals capital gains. If the gain on the sale of our common stock were to be
subject to tax under FIRPTA, the Non-U.S. Shareholder would be subject to the same treatment as
U.S. shareholders with respect to such gain (subject to applicable alternative minimum tax and a
special alternative minimum tax in the case of nonresident alien individuals).
State and Local Taxes
Cousins Properties Incorporated, its subsidiaries, and its shareholders may be subject to
state or local taxation in various state or local jurisdictions, including those in which it or
they transact business or reside (although shareholders who are individuals generally should not be
required to file state income tax returns outside of their state of residence with respect to our
operations and distributions), and their state and local tax treatment may not conform to the
federal income tax consequences discussed above. Consequently, prospective shareholders should
consult their own tax advisors regarding the effect of state and local tax laws on an investment in
our securities.
46
PLAN OF DISTRIBUTION
We may sell any securities:
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to or through underwriters or dealers;
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through agents;
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in block trades;
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directly to one or more purchasers; or
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through a combination of any of these methods of sale.
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The distribution of the securities may be effected from time to time in one or more
transactions at a fixed price or prices, which may be changed from time to time, at market prices
prevailing at the time of sale or at prices related to prevailing market prices, or at negotiated
prices.
For each series of securities, the prospectus supplement will set forth the terms of the
offering including:
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the initial public offering price;
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the names of any underwriters, dealers or agents;
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the purchase price of the securities;
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our proceeds from the sale of the securities;
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any underwriting discounts, agency fees, or other compensation payable to
underwriters or agents;
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any discounts or concessions allowed or reallowed or repaid to dealers; and
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the securities exchanges on which the securities will be listed, if any.
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If we use underwriters in the sale, they will buy the securities for their own account. The
underwriters may then resell the securities in one or more transactions at a fixed public offering
price or at varying prices determined at the time of sale or thereafter. The obligations of the
underwriters to purchase the securities may be on a firm commitment basis or best efforts basis and
will be subject to certain conditions. If the underwriters agree to purchase the securities on a
firm commitment basis, they will be obligated to purchase all the securities offered if they
purchase any securities. Any initial public offering price and any discounts or concessions allowed
or re-allowed or paid to dealers may be changed from time to time. In connection with an offering,
underwriters and selling group members and their affiliates may engage in transactions to
stabilize, maintain or otherwise affect the market price of the securities in accordance with
applicable law.
If we use dealers in the sale, we will sell securities to such dealers as principals. The
dealers may then resell the securities to the public at varying prices to be determined by such
dealers at the time of resale. If we use agents in the sale, they will use their reasonable best
efforts to solicit purchases for the period of their appointment. If we sell directly, no
underwriters or agents would be involved. We are not making an offer of securities in any state
that does not permit such an offer.
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Underwriters, dealers and agents that participate in the securities distribution may be deemed
to be underwriters as defined in the Securities Act. Any discounts, commissions, or profit they
receive when they resell the securities may be treated as underwriting discounts and commissions
under the Securities Act. We may have agreements with underwriters, dealers and agents to indemnify
them against certain civil liabilities, including certain liabilities under the Securities Act, or
to contribute with respect to payments that they may be required to make.
We may authorize underwriters, dealers or agents to solicit offers from certain institutions
whereby the institution contractually agrees to purchase the securities from us on a future date at
a specific price. This type of contract may be made only with institutions that we specifically
approve. Such institutions could include banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. The underwriters, dealers or agents will not
be responsible for the validity or performance of these contracts.
We have not authorized any dealer, salesperson or other person to give any information or
represent anything not contained in this prospectus. You must not rely on any unauthorized
information. This prospectus does not offer to sell or buy any securities in any jurisdiction where
it is unlawful.
The securities, other than the common stock, will be new issues of securities with no
established trading market and unless otherwise specified in the applicable prospectus supplement,
we will not list any series of the securities on any exchange. It has not presently been
established whether the underwriters, if any, of the securities will make a market in the
securities. If the underwriters make a market in the securities, such market making may be
discontinued at any time without notice. No assurance can be given as to the liquidity of the
trading market for the securities.
One or more of the underwriters, dealer or agents, and/or one or more of their respective
affiliates, may be a lender under our credit facility and may provide other commercial banking,
investment banking and other services to us and/or our subsidiaries and affiliates in the ordinary
course of our business.
EXPERTS
The financial statements, the related financial statement schedule, incorporated in this
Prospectus by reference from Cousins Properties Incorporateds Annual Report on Form 10-K and the
effectiveness of Cousins Properties Incorporateds internal control over financial reporting have
been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated
in their reports, which are incorporated herein by reference. Such financial statements and
financial statement schedule have been so incorporated in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
LEGAL MATTERS
The legality of the securities will be passed upon for Cousins by King & Spalding LLP,
Atlanta, Georgia.
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PART II
INFORMATION NOT REQUIRED IN THIS PROSPECTUS
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Item 14. Other Expenses of Issuance and Distribution
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Securities and Exchange Commission registration fee*
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$
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25,612
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New York Stock Exchange Listing Fee
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200,000
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Accounting fees and expenses
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100,000
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Legal fees and expenses
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250,000
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Printing and distribution fees
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100,000
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Miscellaneous expenses
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25,000
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Total Expenses
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$
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700,612
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*
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The Prior Registration Statement registered an aggregate of $500,000,000 of Common Stock,
Warrants, Debt Securities and Preferred Stock of the Registrant, $140,792,883 of which remain
unsold. Pursuant to Rule 415(a)(6) under the Securities Act, this Registration Statement
includes the Unsold Securities and the Registrant is continuing to apply the previously paid
filing fee associated with the Unsold Securities to the Unsold Securities. As a result, a
filing fee of $25,612 is being paid herewith.
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All fees other than the SEC registration fee are estimated. Unless otherwise specified in the
applicable prospectus supplement, all of the expenses of the issuance and distribution of the
securities being offered will be borne by us.
Item 15.
Indemnification of Directors and Officers
Part 5 of Article 8 of the Georgia Business Corporation Code (the GBCC) states:
14-2-850. Part definitions
As used in this part, the term:
(1) Corporation includes any domestic or foreign predecessor entity of a corporation in a
merger or other transaction in which the predecessors existence ceased upon consummation of the
transaction.
(2) Director or officer means an individual who is or was a director or officer,
respectively, of a corporation or who, while a director or officer of the corporation, is or was
serving at the corporations request as a director, officer, partner, trustee, employee, or agent
of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit
plan, or other entity. A director or officer is considered to be serving an employee benefit plan
at the corporations request if his or her duties to the corporation also impose duties on, or
otherwise involve services by, the director or officer to the plan or to participants in or
beneficiaries of the plan. Director or officer includes, unless the context otherwise requires, the
estate or personal representative of a director or officer.
(3) Disinterested director means a director who at the time of a vote referred to in
subsection (c) of Code Section 14-2-853 or a vote or selection referred to in subsection (b) or (c)
of Code Section 14-2-855 or subsection (a) of Code Section 14-2-856 is not:
(A) A party to the proceeding; or
II-1
(B) An individual who is a party to a proceeding having a familial, financial, professional,
or employment relationship with the director whose indemnification or advance for expenses is the
subject of the decision being made with respect to the proceeding, which relationship would, in the
circumstances, reasonably be expected to exert an influence on the directors judgment when voting
on the decision being made.
(4) Expenses includes counsel fees.
(5) Liability means the obligation to pay a judgment, settlement, penalty, fine (including
an excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred
with respect to a proceeding.
(6) Official capacity means:
(A) When used with respect to a director, the office of director in a corporation; and
(B) When used with respect to an officer, as contemplated in Code Section 14-2-857, the
office in a corporation held by the officer.
Official capacity does not include service for any other domestic or foreign corporation or any
partnership, joint venture, trust, employee benefit plan, or other entity.
(7) Party means an individual who was, is, or is threatened to be made a named defendant or
respondent in a proceeding.
(8) Proceeding means any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, arbitrative, or investigative and whether formal or
informal.
14-2-851. Authority to indemnify
(a) Except as otherwise provided in this Code section, a corporation may indemnify an
individual who is a party to a proceeding because he or she is or was a director against liability
incurred in the proceeding if:
(1) Such individual conducted himself or herself in good faith; and
(2) Such individual reasonably believed:
(A) In the case of conduct in his or her official capacity, that such conduct was in the best
interests of the corporation;
(B) In all other cases, that such conduct was at least not opposed to the best interests of
the corporation; and
(C) In the case of any criminal proceeding, that the individual had no reasonable cause to
believe such conduct was unlawful.
(b) A directors conduct with respect to an employee benefit plan for a purpose he or she
believed in good faith to be in the interests of the participants in and beneficiaries of the plan
is conduct that satisfies the requirement of subparagraph (a)(2)(B) of this Code section.
II-2
(c) The termination of a proceeding by judgment, order, settlement, or conviction or upon a
plea of nolo contendere or its equivalent is not, of itself, determinative that the director did
not meet the standard of conduct described in this Code section.
(d) A corporation may not indemnify a director under this Code section:
(1) In connection with a proceeding by or in the right of the corporation, except for
reasonable expenses incurred in connection with the proceeding if it is determined that the
director has met the relevant standard of conduct under this Code section; or
(2) In connection with any proceeding with respect to conduct for which he or she was
adjudged liable on the basis that personal benefit was improperly received by him or her, whether
or not involving action in his or her official capacity.
14-2-852. Mandatory indemnification
A corporation shall indemnify a director who was wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he or she was a party because he or she was a
director of the corporation against reasonable expenses incurred by the director in connection with
the proceeding.
14-2-853. Advance for expenses
(a) A corporation may, before final disposition of a proceeding, advance funds to pay for or
reimburse the reasonable expenses incurred by a director who is a party to a proceeding because he
or she is a director if he or she delivers to the corporation:
(1) A written affirmation of his or her good faith belief that he or she has met the relevant
standard of conduct described in Code Section 14-2-851 or that the proceeding involves conduct for
which liability has been eliminated under a provision of the articles of incorporation as
authorized by paragraph (4) of subsection (b) of Code Section 14-2-202; and
(2) His or her written undertaking to repay any funds advanced if it is ultimately determined
that the director is not entitled to indemnification under this part.
(b) The undertaking required by paragraph (2) of subsection (a) of this Code section must be
an unlimited general obligation of the director but need not be secured and may be accepted without
reference to the financial ability of the director to make repayment.
(c) Authorizations under this Code section shall be made:
(1) By the board of directors:
(A) When there are two or more disinterested directors, by a majority vote of all the
disinterested directors (a majority of whom shall for such purpose constitute a quorum) or by a
majority of the members of a committee of two or more disinterested directors appointed by such a
vote; or
(B) When there are fewer than two disinterested directors, by the vote necessary for action
by the board in accordance with subsection (c) of Code Section 14-2-824, in which authorization
directors who do not qualify as disinterested directors may participate; or
(2) By the shareholders, but shares owned or voted under the control of a director who at the
time does not qualify as a disinterested director with respect to the proceeding may not be voted
on the authorization.
II-3
14-2-854. Court-ordered indemnification and advances for expenses
(a) A director who is a party to a proceeding because he or she is a director may apply for
indemnification or advance for expenses to the court conducting the proceeding or to another court
of competent jurisdiction. After receipt of an application and after giving any notice it considers
necessary, the court shall:
(1) Order indemnification or advance for expenses if it determines that the director is
entitled to indemnification or advance for expenses under this part; or
(2) Order indemnification or advance for expenses if it determines, in view of all the
relevant circumstances, that it is fair and reasonable to indemnify the director or to advance
expenses to the director, even if the director has not met the relevant standard of conduct set
forth in subsections (a) and (b) of Code Section 14-2-851, failed to comply with Code Section
14-2-853, or was adjudged liable in a proceeding referred to in paragraph (1) or (2) of subsection
(d) of Code Section 14-2-851, but if the director was adjudged so liable, the indemnification shall
be limited to reasonable expenses incurred in connection with the proceeding.
(b) If the court determines that the director is entitled to indemnification or advance for
expenses under paragraph (1) of subsection (a) of this Code Section, it shall also order the
corporation to pay the directors reasonable expenses to obtain court ordered indemnification or
advance for expenses. If the court determines that the director is entitled to indemnification or
advance for expenses under paragraph (2) of subsection (a) of this Code section, it may also order
the corporation to pay the directors reasonable expenses to obtain court ordered indemnification
or advance for expenses.
(c) The court may summarily determine, without a jury, a corporations obligation to advance
expenses.
14-2-855. Determination and authorization of indemnification
(a) A corporation may not indemnify a director under Code Section 14-2-851 unless authorized
thereunder and a determination has been made for a specific proceeding that indemnification of the
director is permissible in the circumstances because he or she has met the relevant standard of
conduct set forth in Code Section 14-2-851.
(b) The determination shall be made:
(1) If there are two or more disinterested directors, by the board of directors by a majority
vote of all the disinterested directors (a majority of whom shall for such purpose constitute a
quorum) or by a majority of the members of a committee of two or more disinterested directors
appointed by such a vote;
(2) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (1) of this subsection; or
(B) If there are fewer than two disinterested directors, selected by the board of directors
(in which selection directors who do not qualify as disinterested directors may participate); or
(3) By the shareholders, but shares owned by or voted under the control of a director who at
the time does not qualify as a disinterested director may not be voted on the determination.
(c) Authorization of indemnification or an obligation to indemnify and evaluation as to
reasonableness of expenses shall be made in the same manner as the determination that
indemnification is permissible,
II-4
except that if there are fewer than two disinterested directors or if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to reasonableness of
expenses shall be made by those entitled under subparagraph (b)(2)(B) of this Code section to
select special legal counsel.
14-2-856. Shareholder approved indemnification
(a) If authorized by the articles of incorporation or a bylaw, contract, or resolution
approved or ratified by the shareholders by a majority of the votes entitled to be cast, a
corporation may indemnify or obligate itself to indemnify a director made a party to a proceeding
including a proceeding brought by or in the right of the corporation, without regard to the
limitations in other Code sections of this part, but shares owned or voted under the control of a
director who at the time does not qualify as a disinterested director with respect to any existing
or threatened proceeding that would be covered by the authorization may not be voted on the
authorization.
(b) The corporation shall not indemnify a director under this Code section for any liability
incurred in a proceeding in which the director is adjudged liable to the corporation or is
subjected to injunctive relief in favor of the corporation:
(1) For any appropriation, in violation of the directors duties, of any business opportunity
of the corporation;
(2) For acts or omissions which involve intentional misconduct or a knowing violation of law;
(3) For the types of liability set forth in Code Section 14-2-832; or
(4) For any transaction from which he or she received an improper personal benefit.
(c) Where approved or authorized in the manner described in subsection (a) of this Code
section, a corporation may advance or reimburse expenses incurred in advance of final disposition
of the proceeding only if:
(1) The director furnishes the corporation a written affirmation of his or her good faith
belief that his or her conduct does not constitute behavior of the kind described in subsection (b)
of this Code section; and
(2) The director furnishes the corporation a written undertaking, executed personally or on
his or her behalf, to repay any advances if it is ultimately determined that the director is not
entitled to indemnification under this Code section.
14-2-857. Indemnification of officers, employees, and agents
(a) A corporation may indemnify and advance expenses under this part to an officer of the
corporation who is a party to a proceeding because he or she is an officer of the corporation:
(1) To the same extent as a director; and
(2) If he or she is not a director, to such further extent as may be provided by the articles
of incorporation, the bylaws, a resolution of the board of directors, or contract except for
liability arising out of conduct that constitutes:
(A) Appropriation, in violation of his or her duties, of any business opportunity of the
corporation;
II-5
(B) Acts or omissions which involve intentional misconduct, or a knowing violation of law;
(C) The types of liability set forth in Code Section 14-2-832; or
(D) Receipt of an improper personal benefit.
(b) The provisions of paragraph (2) of subsection (a) of this Code section shall apply to an
officer who is also a director if the sole basis on which he or she is made a party to the
proceeding is an act or omission solely as an officer.
(c) An officer of a corporation who is not a director is entitled to mandatory
indemnification under Code Section 14-2-852, and may apply to a court under Code Section 14-2-854
for indemnification or advances for expenses, in each case to the same extent to which a director
may be entitled to indemnification or advances for expenses under those provisions.
(d) A corporation may also indemnify and advance expenses to an employee or agent who is not
a director to the extent, consistent with public policy, that may be provided by its articles of
incorporation, bylaws, general or specific action of its board of directors, or contract.
14-2-858. Insurance
A corporation may purchase and maintain insurance on behalf of an individual who is a
director, officer, employee, or agent of the corporation or who, while a director, officer,
employee, or agent of the corporation, serves at the corporations request as a director, officer,
partner, trustee, employee, or agent of another domestic or foreign corporation, partnership, joint
venture, trust, employee benefit plan, or other entity against liability asserted against or
incurred by him or her in that capacity or arising from his or her status as a director, officer,
employee, or agent, whether or not the corporation would have power to indemnify or advance
expenses to him or her against the same liability under this part.
14-2-859. Application of part
(a) A corporation may, by a provision in its articles of incorporation or bylaws or in a
resolution adopted or a contract approved by its board of directors or shareholders, obligate
itself in advance of the act or omission giving rise to a proceeding to provide indemnification or
advance funds to pay for or reimburse expenses consistent with this part. Any such obligatory
provision shall be deemed to satisfy the requirements for authorization referred to in subsection
(c) of Code Section 14-2-853 or subsection (c) of Code Section 14-2-855.
(b) Any provision pursuant to subsection (a) of this Code section shall not obligate the
corporation to indemnify or advance expenses to a director of a predecessor of the corporation,
pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any
provision for indemnification or advance for expenses in the articles of incorporation, bylaws, or
a resolution of the board of directors or shareholders, partners, or, in the case of limited
liability companies, members or managers of a predecessor of the corporation or other entity in a
merger or in a contract to which the predecessor is a party, existing at the time the merger takes
effect, shall be governed by paragraph (3) of subsection (a) of Code Section 14-2-1106.
(c) A corporation may, by a provision in its articles of incorporation, limit any of the
rights to indemnification or advance for expenses created by or pursuant to this part.
(d) This part shall not limit a corporations power to pay or reimburse expenses incurred by
a director or an officer in connection with his or her appearance as a witness in a proceeding at a
time when he or she is not a party.
II-6
(e) Except as expressly provided in Code Section 14-2-857, this part shall not limit a
corporations power to indemnify, advance expenses to, or provide or maintain insurance on behalf
of an employee or agent.
(f) Any provision in a corporations articles of incorporation or bylaws or in a resolution
adopted or contract approved by its board of directors or shareholders that obligates the
corporation to provide indemnification to the fullest extent permitted by law shall, unless such
provision or another provision in the corporations articles of incorporation or bylaws or in a
resolution adopted or a contract approved by its board of directors or shareholders expressly
provides otherwise, be deemed to obligate the corporation:
(1) To advance funds to pay for or reimburse expenses in accordance with Code Section 14-2-853
to the fullest extent permitted by law; and
(2) To indemnify directors to the fullest extent permitted in Code Section 14-2-856, provided
that such provision is duly authorized as required in subsection (a) of Code Section 14-2-856, and
to indemnify officers to the fullest extent permitted in paragraph (2) of subsection (a) and
subsection (b) of Code Section 14-2-857.
Restated and Amended Articles of Incorporation and Bylaws
As permitted by the GBCC, the Registrants Restated and Amended Articles of Incorporation
provide that a director shall not be personally liable to the Registrant or its shareholders for
monetary damages for breach of duty of care or other duty as a director, except that such provision
shall not eliminate or limit the liability of a director (a) for any appropriation, in violation of
his duties, of any business opportunity of the Registrant, (b) for acts or omissions that involve
intentional misconduct or a knowing violation of law, (c) for unlawful corporate distributions
under Section 14-2-832 of the GBCC or (d) for any transaction from which the director derived an
improper personal benefit.
Under Article VI of the Registrants Bylaws, the Registrant is required to indemnify any
person who is made or threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or
informal (including any action by or in the right of the Registrant), by reason of the fact that he
is or was a director, officer, agent or employee of the Registrant against expenses (including
reasonable attorneys fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such proceeding provided that such person shall not
be indemnified in any proceeding in which he is adjudged liable to the Registrant for (i) any
appropriation, in violation of his duties, of any business opportunity of the Registrant, (ii) acts
or omissions which involve intentional misconduct or knowing violation of law, (iii) unlawful
corporate distributions or (iv) any transaction from which such person received improper personal
benefit. Expenses incurred by any person according to the foregoing provisions shall be paid by the
Registrant in advance of the final disposition of such proceeding upon receipt of the written
affirmation of such persons good faith belief that he has met the standards of conduct required
under the Bylaws.
Indemnification Agreements between Registrant and Directors and Certain Officers
The Registrant has entered into indemnification agreements with its directors and certain
officers providing contractual indemnification by the Registrant to the maximum extent authorized
by law.
II-7
Item 16.
Exhibits
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Exhibit
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Number
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Description
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1.1*
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Form of Underwriting Agreement.
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3.1
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Restated and Amended Articles of Incorporation of the Registrant, as amended August 9,
1999 (incorporated by reference from the Registrants Quarterly Report on Form 10-Q for
the quarter ended June 30, 2002), as further amended July 22, 2003 (incorporated by
reference from the Registrants Current Report on Form 8-K filed on July 23, 2003) and as
further amended December 15, 2004 (incorporated by reference from the Registrants Annual
Report on Form 10-K for the year ended December 31, 2004).
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3.2
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Bylaws of the Registrant, as amended and restated June 6, 2009 (incorporated by reference
from Exhibit 3.1 to the Registrants Current Report on Form 8-K filed on June 8, 2009).
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4.1
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Form of Indenture between the Registrant and the Trustee (incorporated by reference from
Exhibit 4.1 to the Registrants Registration Statement on Form S-3 (File No. 333-12031),
filed on September 16, 1996).
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4.2*
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Form of Certificate of Designations relating to the Preferred Stock.
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5.1
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Opinion of King & Spalding LLP.
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8.1
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Opinion of King & Spalding LLP regarding certain tax matters.
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8.2
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Opinion of Deloitte Tax LLP regarding certain tax matters.
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12.1
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Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.
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23.1
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Consent of King & Spalding LLP (included as part of its opinions filed as Exhibit 5.1 and
Exhibit 8.1 hereto).
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23.2
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Consent of Deloitte & Touche LLP.
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23.3
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Consent of Deloitte Tax LLP (included as part of its opinion filed as Exhibit 8.2 hereto).
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24.1
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Power of Attorney (included on signature page).
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25.1
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Statement of Eligibility of Trustee on Form T-1.
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*
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To be filed by amendment or incorporated by reference from a Current Report on Form 8-K.
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Item 17.
Undertakings
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement (i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
II-8
offered would not exceed that which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20% change in the maximum aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration statement; and (iii) to include any material
information with respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration statement. Provided,
however, that paragraphs (i), (ii) and (iii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the registration statement,
or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the
registration statement.
2. That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
4. That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(a) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed
to be part of the registration statement as of the date the filed prospectus was deemed
part of and included in the registration statement; and
(b) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing
the information required by Section 10(a) of the Securities Act of 1933 shall be deemed
to be part of and included in the registration statement as of the earlier of the date
such form of prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
Provided, however,
that no statement made in a
registration statement or prospectus that is part of the registration statement or made
in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately prior to such
effective date.
5. That, for the purpose of determining liability of the registrant under the Securities Act
of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant
undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
(a) Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule 424;
II-9
(b) Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(c) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant; and
(d) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
6. That, for purposes of determining any liability under the Securities Act of 1933, each
filing of the registrants annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefits plans
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
7. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
8. To file an application for the purpose of determining the eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act.
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration Statement on Form S-3 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia on
the 16th day of March, 2010.
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COUSINS PROPERTIES INCORPORATED
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By:
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/s/ James A. Fleming
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James A. Fleming
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Executive Vice President and Chief Financial Officer
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Lawrence L. Gellerstedt III and James A. Fleming, and each of them, such persons true and
lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for such
person and in such persons name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement, and any subsequent
related registration statements and amendments thereto pursuant to Rule 462(b) of the Securities
Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and confirming all that
each of said attorneys-in-fact or such persons substitute or substitutes, may lawfully do or cause
to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement on Form S-3 has been signed by the following persons in the
capacities indicated on March 16, 2010.
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Signature
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Title
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/s/ Lawrence L. Gellerstedt III
Lawrence L. Gellerstedt III
|
|
President, Chief Executive Officer
and Director
(Principal Executive Officer)
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/s/ James A. Fleming
James A. Fleming
|
|
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
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|
/s/ John D. Harris, Jr.
John D. Harris, Jr.
|
|
Senior Vice President
Chief Accounting Officer
and Assistant Secretary
(Principal Accounting Officer)
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/s/ S. Taylor Glover
S. Taylor Glover
|
|
Chairman of the Board of Directors
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|
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/s/ Erskine B. Bowles
Erskine B. Bowles
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|
Director
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II-11
|
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|
Signature
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Title
|
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/s/ Tom G. Charlesworth
Tom G. Charlesworth
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Director
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|
|
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/s/ James D. Edwards
James D. Edwards
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Director
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/s/ Lillian C. Giornelli
Lillian C. Giornelli
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Director
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/s/ James H. Hance, Jr.
James H. Hance, Jr.
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Director
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/s/ William B. Harrison, Jr.
William B. Harrison, Jr.
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Director
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/s/ Boone A. Knox
Boone A. Knox
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Director
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/s/ William Porter Payne
William Porter Payne
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Director
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II-12
Exhibit Index
|
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Exhibit
|
|
|
Number
|
|
Description
|
1.1*
|
|
Form of Underwriting Agreement.
|
|
|
|
3.1
|
|
Restated and Amended Articles of Incorporation of the Registrant, as amended August 9,
1999 (incorporated by reference from the Registrants Quarterly Report on Form 10-Q for
the quarter ended June 30, 2002), as further amended July 22, 2003 (incorporated by
reference from the Registrants Current Report on Form 8-K filed on July 23, 2003) and as
further amended December 15, 2004 (incorporated by reference from the Registrants Annual
Report on Form 10-K for the year ended December 31, 2004).
|
|
|
|
3.2
|
|
Bylaws of the Registrant, as amended and restated June 6, 2009 (incorporated by reference
from Exhibit 3.1 to the Registrants Current Report on Form 8-K filed on June 8, 2009).
|
|
|
|
4.1
|
|
Form of Indenture between the Registrant and the Trustee (incorporated by reference from
Exhibit 4.1 to the Registrants Registration Statement on Form S-3 (File No. 333-12031),
filed on September 16, 1996).
|
|
|
|
4.2*
|
|
Form of Certificate of Designations relating to the Preferred Stock.
|
|
|
|
5.1
|
|
Opinion of King & Spalding LLP.
|
|
|
|
8.1
|
|
Opinion of King & Spalding LLP regarding certain tax matters.
|
|
|
|
8.2
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|
Opinion of Deloitte Tax LLP regarding certain tax matters.
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12.1
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Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.
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23.1
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Consent of King & Spalding LLP (included as part of its opinions filed as Exhibit 5.1 and
Exhibit 8.1 hereto).
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23.2
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Consent of Deloitte & Touche LLP.
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23.3
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Consent of Deloitte Tax LLP (included as part of its opinion filed as Exhibit 8.2 hereto).
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24.1
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|
Power of Attorney (included on signature page).
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|
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25.1
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|
Statement of Eligibility of Trustee on Form T-1.
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|
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*
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To be filed by amendment or incorporated by reference from a Current Report on Form 8-K.
|
II-13
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