KING & SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303-1763
TELEPHONE: 404/572-4600
FACSIMILE: 404/572-5100
DIRECT DIAL: DIRECT FAX:
404/572-3595 404/572-5146
October 2, 1996
VIA EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Cousins Properties Incorporated - Amendment No. 1 to
Registration Statement on Form S-3 (File No. 333-12031)
Ladies and Gentlemen:
On behalf of Cousins Properties Incorporated, a Georgia corporation (the
"Company"), we attach hereto for filing electronically under the Securities Act
of 1933, as amended, Amendment No. 1 to the Registration Statement on Form S-3
(the "Registration Statement") with exhibits. In response to the Staff's comment
regarding FFO, the Company previously has filed via EDGAR a Form 10-K/A.
Please call the undersigned with any questions concerning the attached
materials.
Very truly yours,
/s/ Alan J. Prince
Alan J. Prince
Attachments
cc: Josh Wexler
Linda van Doorn
Tom G. Charlesworth
Peter A. Tartikoff
Kelly H. Barrett
Tony W. Rothermel
1730 PENNSYLVANIA AVENUE, N.W. 120 WEST 45TH STREET 1100 LOUISIANA STREET,
WASHINGTON, DC 20006-4706 NEW YORK, NY 10036-4003 SUITE 3300
TELEPHONE: 202/737-0500 TELEPHONE: 212/556-2100 HOUSTON, TX 77002-5219
FACSIMILE: 202/626-3737 FACSIMILE: 212/556-2222 TELEPHONE: 713/751-3200
FACSIMILE: 713/751-3290
<PAGE>
As filed with the Securities and Exchange Commission on October 2, 1996
Registration No. 333-12031
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_______________
COUSINS PROPERTIES INCORPORATED
(Exact name of Registrant as specified in its charter)
Georgia
(State or other jurisdiction of incorporation or organization)
58-086952
(I.R.S. Employer Identification No.)
____________________
2500 Windy Ridge Parkway
Atlanta, Georgia 30339
(770) 955-2200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
____________________
Tom G. Charlesworth with a copy to:
Senior Vice President, General Counsel
and Secretary Alan J. Prince, Esq.
Cousins Properties Incorporated King & Spalding
2500 Windy Ridge Parkway 191 Peachtree Street
Atlanta, Georgia 30339 Atlanta, Georgia 30303-1763
(770) 955-2200 (404) 572-4600
(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. --
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, check the following box. X
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. ___
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. ____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ____
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 of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
<PAGE>
EXPLANATORY NOTE
This Registration Statement relates to securities which may be offered from
time to time by Cousins Properties Incorporated (the "Company"). This
Registration Statement contains a form of basic prospectus (the "Basic
Prospectus") relating to the Company which will be used in connection with one
or more offerings of securities by the Company. The specific terms of the
securities to be offered will be set forth in a Prospectus Supplement relating
to such securities.
<PAGE>
================================================================================
PROSPECTUS
$200,000,000
COUSINS PROPERTIES INCORPORATED
Common Stock, Warrants and Debt Securities
Cousins Properties Incorporated (the "Company") may from time to time offer
in one or more series or classes (i) shares of its common stock, par value $1.00
per share (the "Common Stock"), (ii) warrants to purchase shares of its Common
Stock (the "Warrants") and (iii) unsecured, non-convertible debt securities
("Debt Securities"), with an aggregate public offering price of up to
$200,000,000 (or its equivalent in another currency based on the exchange rate
at the time of sale) in amounts, at prices and on terms to be determined at the
time of offering. The Common Stock, Warrants and Debt Securities (collectively,
the "Securities") may be offered, separately or together, in separate series in
amounts, at prices and on terms to be set forth in one or more supplements to
this Prospectus (each, a "Prospectus Supplement").
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable (i) in the case of Common Stock, any initial
public offering price; (ii) in the case of Warrants, the duration, offering
price, exercise price and detachability thereof, as well as the terms of which
such Warrants may be exercised; and (iii) in the case of Debt Securities, the
specific title, aggregate principal amount, currency, form (which may be
registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of the Company or repayment at the
option of the holder, terms for sinking fund payments, covenants and any initial
public offering price. In addition, such specific terms may include limitations
on direct or beneficial ownership and restrictions on transfer of the
Securities, in each case as may be appropriate to preserve the status of the
Company as a real estate investment trust ("REIT") for Federal income tax
purposes.
The applicable Prospectus Supplement also will contain information, where
applicable, about certain United States Federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by the Company, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of such
series of 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.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
_____________
The date of this Prospectus is October 2, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be examined without
charge at, or copies obtained upon payment of prescribed fees from, the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and are also available for inspection and copying at the
regional offices of the Commission located at Seven World Trade Center, New
York, New York 10048 and at 500 West Madison Street, Chicago, Illinois
60661-2511. The Commission maintains a Web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding the Company. In addition, the Company's Common Stock is listed on the
New York Stock Exchange and such material also can be inspected and copied at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
The Company has filed with the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations promulgated thereunder, with respect to the Securities. This
Prospectus, which is part of the Registration Statement, does not contain all of
the information set forth in the Registration Statement and the exhibits and
financial schedules thereto. For further information concerning the Company and
the Securities, reference is made to the Registration Statement and the exhibits
and schedules filed therewith, which may be examined without charge at, or
copies obtained upon payment of prescribed fees from, the Commission and its
regional offices at the locations listed above. Any statements contained herein
concerning the provisions of any document are not necessarily complete, and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company (File No. 2-20111)
with the Commission are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1995 as amended by Form 10-K/A for the year ended December 31, 1995 as filed
on October 1, 1996;
(b) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1996 and June 30, 1996;
(c) the description of the Common Stock of the Company included in the
Company's 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.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and made a part hereof from the
date of the filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other document subsequently filed with the
Commission which also is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference herein (not including the exhibits to such documents, unless such
exhibits are specifically incorporated by reference in such documents). Requests
for such copies should be directed to: Cousins Properties Incorporated, 2500
Windy Ridge Parkway, Atlanta, Georgia 30339, Attention: Secretary; telephone:
(770) 955-2200.
THE COMPANY
The Company is an Atlanta-based, fully-integrated equity real estate
investment trust ("REIT"). The Company has extensive experience in the real
estate industry, including experience in acquiring, financing, developing,
managing and leasing properties. The Company owns a portfolio of well-located,
high-quality office and retail developments and several tracts of
strategically-located, undeveloped land. The Company's properties are
concentrated in the southeastern United States, primarily in the Atlanta area.
Office. As of June 30, 1996, the Company owned, directly or indirectly,
equity interests of at least 50% in 15 high-quality commercial office buildings
(including two buildings under construction), with aggregate rentable space of
approximately 4.9 million square feet.
Retail. As of June 30, 1996, the Company also owned, directly or
indirectly, 100% equity interests in 10 retail shopping centers (including two
centers under construction) and a 50% equity interest in one other retail
shopping center.
Other. As of June 30, 1996, the Company also owned, directly or indirectly,
equity interests in approximately 475 acres of strategically-located land in the
metropolitan Atlanta area at North Point and Wildwood Office Park which is held
for investment and future development. In addition, the Company holds two
mortgage notes totaling $27 million secured by a 250,000 square foot office
building located in Washington, D.C.
As of June 30, 1996, the Company had outstanding indebtedness of $257.8
million (including its pro rata share of unconsolidated joint venture debt and
intercompany debt). Any applicable Prospectus Supplement relating to offered
Securities will set forth the outstanding indebtedness of the Company as of a
recent date.
The Company, a Georgia corporation, was founded in 1958 and has been a
public company since 1962. The Company became a REIT in 1987, and its Common
Stock has been listed on the New York Stock Exchange since 1992. The Company's
executive offices are located at 2500 Windy Ridge Parkway, Suite 1600, Atlanta,
Georgia 30339, and its telephone number is (770) 955-2200.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
Company intends to use the net proceeds of any sale of Common Stock, Warrants or
Debt Securities for general corporate purposes, including, without limitation,
the acquisition and development of additional properties and the repayment of
debt, including joint venture debt. Pending application of such net proceeds,
the Company will invest such proceeds in interest-bearing accounts and
short-term, interest-bearing securities, which are consistent with the Company's
intention to continue to qualify for taxation as a REIT.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for the six months ended
June 30, 1996 was 2.37, for the year ended December 31, 1995 was 2.68, for the
year ended December 31, 1994 was 3.87, for the year ended December 31, 1993 was
1.72, for the year ended December 31, 1992 was 1.72 and for the year ended
December 31, 1991 was 1.31. There was no preferred stock outstanding for any of
the periods shown above. Accordingly, the ratio of earnings to combined fixed
charges and preferred stock dividends is identical to the ratio of earnings to
fixed charges.
For purposes of computing these ratios, earnings have been calculated by
adding fixed charges, excluding capitalized interest, to pre-tax income from
continuing operations. Fixed charges consist of interest costs, whether expensed
or capitalized, the interest component of rental expense and amortization of
debt issuance costs.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture (the "Indenture")
between the Company and a Trustee (the "Trustee") chosen by the Company and
qualified to act as Trustee under the Trust Indenture Act of 1939, as amended
(the "TIA"). The Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part and will be available for
inspection at the corporate trust office of the trustee or as described above
under "Available Information." The Indenture is subject to, and governed by, the
TIA. 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. All section references appearing herein are to sections of the
Indenture.
General
The Debt Securities will be direct, unsecured obligations of the Company
and will rank equally with all other unsecured and unsubordinated indebtedness
of the Company. At June 30, 1996, the total outstanding debt of the Company
(including the Company's pro rata share of unconsolidated joint venture debt)
was $257.8 million. Of such outstanding debt, $234.8 million was fixed rate
mortgage debt. 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 the Board of
Directors of the Company 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;
(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 the Company 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 the option of the Company, if the Company is to have such
an option;
(9) the obligation, if any, of the Company 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 the
election of the Company 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;
(17) any deletions from, modifications of or additions to the events of
default (the "Events of Default") or covenants of the Company 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 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) if the Debt Securities are to be issued upon the exercise of warrants,
the time, manner and place of such Debt Securities to be authenticated and
delivered;
(24) whether and under what circumstances the Company will pay additional
amounts on the Debt Securities in respect of any tax, assessment or governmental
charge and, if so, whether the Company will have the option to redeem such Debt
Securities rather than pay such additional amounts (and the terms of any such
option);
(25) 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 the Company), (i) the possible effects of such provisions on the
market price of the Company's securities or in deterring certain mergers, tender
offers or other takeover attempts, and the intention of the Company 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 the Company's
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; and
(26) any other terms of such Debt Securities not inconsistent with the
terms of the Indenture.
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 the Company 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 the Company, the management
of the Company, or any affiliate of any such party, (ii) a change of control, or
(iii) a reorganization, restructuring, merger or similar transaction involving
the Company that may adversely affect the holders of the Debt Securities. In
addition, subject to the limitations set forth under "-- Merger, Consolidation
or Sale," the Company may, in the future, enter into certain transactions, such
as the sale of all or substantially all of its assets or the merger or
consolidation of the Company, that would increase the amount of the Company's
indebtedness or substantially reduce or eliminate the Company's assets, which
may have an adverse effect on the Company's ability to service its indebtedness,
including the Debt Securities. In addition, restrictions on ownership and
transfers of the Company's Common Stock are designed to preserve its 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 the
Company's ability to satisfy its obligations under such provisions. The
applicable Prospectus Supplement also will summarize anti-takeover provisions in
other securities of the Company, 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 the Board of
Directors of the Company 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
the option of the Company, 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 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 the Company 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 the Company
with respect to any series of Debt Securities, the Company 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 the Company
will be required to maintain a transfer agent in each place of payment for such
series. The Company may at any time designate additional transfer agents with
respect to any series of Debt Securities (Section 1002).
Neither the Company 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
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other entity,
provided that (a) the Company shall be the continuing entity, or the successor
entity (if other than the Company) 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 the Company or any subsidiary of the
Company (a "Subsidiary") as a result thereof as having been incurred by the
Company 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 officer's 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,"
the Company is required to do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises;
provided, however, that the Company shall not be required to preserve any right
or franchise if it determines that the preservation thereof is no longer
desirable in the conduct of its 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. The Company is required to cause all of its
material properties used or useful in the conduct of its 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 the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that the Company and its Subsidiaries
shall not be prevented from selling or otherwise disposing for value their
respective properties in the ordinary course of business (Section 1007).
Insurance. The Company is required to, and is required to cause each of its
Subsidiaries to, keep all of its 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. The Company is 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 it or any Subsidiary or upon its 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 the
Company or any Subsidiary; provided, however, that the Company 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 the Company.
Whether or not the Company is subject to Section 13 or 15(d) of the Exchange Act
and for so long as any Debt Securities are outstanding, the Company will, to the
extent permitted under the Exchange Act, be required to file with the Commission
the annual reports, quarterly reports and other documents which the Company
would have been required to file with the Commission pursuant to such Section 13
or 15(d) (the "Financial Statements") if the Company were so subject, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so subject. The Company 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
the Company would have been required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act if the Company were subject to such
Sections and (ii) file with the Trustee copies of the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if the
Company were subject to such Sections and (y) if filing such documents by the
Company with the Commission 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 the Company
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 any Debt Security of such series; (d)
default in the performance of any other covenant of the Company 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 the Company 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 the Company 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 the Company.
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 the Company (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) the Company 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 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 Trustee's 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, the Company must
deliver to the Trustee a certificate, signed by one of several specified
officers of the Company, 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 the Company 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 the Company
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 the
Company as obligor under the Indenture; (ii) to add to the covenants of the
Company for the benefit of the Holders of all or any series of Debt Securities
or to surrender any right or power conferred upon the Company 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
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 the Company or any other obligor
upon the Debt Securities or any affiliate of the Company 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 the Company 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 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
The Company 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, the Company 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 its obligations with
respect to such Debt Securities under Sections 1004 to 1011, inclusive, of the
Indenture (including the restrictions described under "Certain Covenants") and
its obligations 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 the Company 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, the Company has 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 United States 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
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
the Company has 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 the Company effects 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, the Company
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.
No Conversion Rights
The Debt Securities will not be convertible into or exchangeable for any
capital stock of the Company.
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary (the "Depositary") identified in
the applicable Prospectus Supplement relating to such series. Global Securities
may be issued in either registered or bearer form and in either temporary or
permanent form. The specific terms of the depositary arrangement with respect to
a series of Debt Securities will be described in the applicable Prospectus
Supplement relating to such series.
DESCRIPTION OF COMMON STOCK
General
The authorized common stock of the Company includes 50,000,000 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 June 30, 1996, there were 28,503,161
shares of Common Stock outstanding and 3,461,049 shares reserved for issuance
under the Company's various benefit plans.
Shares of Common Stock currently outstanding are listed for trading on the
New York Stock Exchange (the "NYSE") under the symbol "CUZ." The Company will
apply to the NYSE to list the additional shares of Common Stock to be sold
pursuant to any Prospectus Supplement, and the Company anticipates 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 the Board of Directors of the Company out of funds legally
available therefor.
Under Georgia law, shareholders are generally not liable for the Company's
debts or obligations. If the Company is liquidated, subject to the right 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 known
debts and liabilities of the Company.
Provisions of Company's Restated Articles of Incorporation and Bylaws
In addition to any vote otherwise required by applicable law, the Company's
Restated Articles of Incorporation provide that (i) any merger or consolidation
of the Company with or into any other corporation, or (ii) 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
the Company, or (iii) the adoption of any plan or proposal for the liquidation
or dissolution of the Company, or (iv) any reclassification of securities of the
Company or recapitalization or reorganization of the Company, 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 the
Restated Articles of Incorporation or the Bylaws of the Company which would have
the effect of amending, altering, changing or repealing the foregoing provisions
of the Restated 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 the Restated 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 the
Company, 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 the Company's Common Stock or a merger of the Company with another entity.
The Board of Directors of the Company has no present plans to adopt any
additional measures which would discourage a takeover or change in control of
the Company.
Restrictions on Transfer
In order for the Company to qualify as a REIT under the Internal Revenue
Code of 1986 (the "Code"), not more than 50% in value of its outstanding Common
Stock may be owned, directly or indirectly, by five or fewer individuals during
the last half of a taxable year, and the Common 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 "Federal Income
Tax Considerations." Because the Board of Directors believes that it is
essential for the Company to continue to qualify as a REIT, the Board of
Directors has adopted, and the shareholders have approved, provisions of the
Restated Articles of Incorporation restricting the acquisition of shares of
Common Stock.
Article 11 of the Company's Restated Articles of Incorporation generally
prohibits any transfer of shares of Common Stock which would cause the
transferee of such shares to "Own" shares in excess of 3.9% in value of the
outstanding shares of Common 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 applying 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 the Company's 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 the Company's outstanding shares of Common
Stock greater than the percentage of the value of the Company's outstanding
shares of Common Stock Owned by such Prior Owner on December 31, 1986,
excluding, for the purpose of calculating such Prior Owner's 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.
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: (i)
Excess Shares shall be deemed to have been transferred to the Company as Trustee
of a trust (the "Trust") for the exclusive benefit of the Person or Persons to
whom the Excess Shares are later transferred, (ii) 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 (a) at a price
not exceeding the price paid by such transferee in connection with the transfer
to it or (b) 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, (iii) 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 the Company, (iv) 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 the Company upon demand, and (v) Excess Shares shall
be deemed to have been offered for sale to the Company for the period of 90 days
following the date on which the shares become Excess Shares, if notice is given
by the transferee to the Company, or the date on which the Board of Directors
determines that such shares are Excess Shares, if notice is not given by the
transferee to the Company. During such 90-day period, the Company 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 the Company
accepts the offer to purchase. Before any transfer pursuant to (ii) above, the
Company must (a) be notified, (b) waive its rights to accept the offer to
purchase the Excess Shares, and (c) determine in good faith that the shares do
not constitute Excess Shares in the hands of the transferee.
Under Article 11, if any Person acquires shares in violation of the
prohibitions in Article 11, and the Company would have qualified as a REIT under
the Code but for such acquisition, that Person shall indemnify the Company in an
amount equal to the amount that will put the Company in the same financial
position as it would have been in had it not lost its qualified REIT status.
Such amount includes the full amount of all taxes, penalties, interest imposed
and all costs (plus interest thereon) incurred by the Company as a result of
losing its qualified REIT status. Such indemnification is applicable until the
Company is 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 the Board of Directors of the Company to take such
action as it deems advisable to prevent or refuse to give effect to any transfer
or acquisition of the Company's Common Stock in violation of Article 11,
including refusing to make or honor on the books of the Company, or seeking to
enjoin, a transfer in violation of Article 11. Article 11 does not limit the
authority of the Board of Directors to take any other action as it deems
necessary or advisable to protect the Company and the interests of its
shareholders by preserving the Company's qualified REIT status.
Article 11 further requires any Person who acquires or attempts to acquire
shares in violation of Article 11 to give the Company written notice of such
transaction and to provide the Company with such other relevant information as
the Company may request. The Company can request such information from any
Person that it determines, in good faith, is attempting to acquire shares in
violation of Article 11.
All certificates representing shares of Common Stock bear a legend
referring to the restrictions described above.
Limitation of Directors' Liability
The Articles eliminate, subject to certain exceptions, the personal
liability of a director to the Company or its shareholders for monetary damages
for breaches of such director's duty of care or other duties as a director. The
Articles do not provide for the elimination of, or any limitation on, the
personal liability of a director for (i) any appropriation, in violation of the
director's duties, of any business opportunity of the Company, (ii) acts or
omissions which involve intentional misconduct or a knowing violation of law,
(iii) unlawful corporate distributions or (iv) any transaction from which the
director received an improper personal benefit. These provisions of the Articles
will limit the remedies available to a shareholder in the event of breaches of
any director's duties to such shareholder or the Company.
Under Article VI of the Company's Bylaws, the Company is required to
indemnify any person who is made or threatened to be made a party to any 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 Company), by reason of the fact that he is or was a director,
officer, agent or employee of the Company 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 Company for (i) any appropriation, in violation of his duties, of any
business opportunity of the Company, (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 Company in advance of the final disposition of
such proceeding upon receipt of the written affirmation of such person's good
faith belief that he has met the standards of conduct required under the Bylaws.
Georgia Anti-Takeover Statutes
The Georgia Business Corporation Code ("GBCC") restricts certain business
combinations with "interested shareholders" (as defined below) (the "Business
Combination Statute"), and contains fair price requirements applicable to
certain mergers with certain interested shareholders (the "Fair Price statute").
In accordance with the provisions of these statutes, the Company must elect in
its Articles or Bylaws to be covered by the restrictions imposed by these
statutes. The Company has not elected to be covered by such restrictions;
however, the Company, by action of its Board of Directors without shareholder
approval, may in the future amend its Bylaws to make such an election.
Furthermore, shareholders may amend or repeal the Company's Bylaws or adopt new
Bylaws (even though the Bylaws may also be amended or repealed by the Board of
Directors) and may also expressly provide that any Bylaw so amended or repealed
by them may not be amended or repealed by the Board of Directors.
The Business Combination Statute 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, as the Company does, and where the acquiror became an
interested shareholder of the corporation, unless either (i) the transaction
resulting in such acquiror becoming an interested shareholder or the business
combination received the approval of the corporation's board of directors prior
to the date on which the acquiror became an interested shareholder, or (ii) the
acquiror became the owner of at least 90% of the outstanding voting shares 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. For purposes
of the Business Combination Statute and the Fair Price 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 Business
Combination 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 Business Combination Statute is
broad in its scope and is designed to inhibit unfriendly acquisitions.
The Fair Price Statute prohibits certain business combinations between a
Georgia business corporation and an interested shareholder. The Fair Price
Statute would permit the business combination to be effected if (i) certain
"fair price" criteria are satisfied, (ii) the business combination is
unanimously approved by the continuing directors, (iii) 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
(iv) 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 twelve month period. 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 the Common Stock is First Union
National Bank.
DESCRIPTION OF WARRANTS
The Company 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 (each, a "Warrant Agreement") to be entered into between the Company
and a warrant agent specified in the applicable Prospectus Supplement (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of the Company
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 hereby. 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:
(1) the title of such Warrants;
(2) the aggregate number of such Warrants;
(3) the price or prices at which such Warrants will be issued;
(4) the designation, number and terms of shares of Common Stock
purchasable upon exercise of such Warrants;
(5) the date, if any, on and after which such Warrants and the
related Common Stock will be separately transferable;
(6) the price at which each share of Common Stock purchasable upon
exercise of such Warrants may be purchased;
(7) the date on which the right to exercise such Warrants shall
commence and the date on which such right shall expire;
(8) the minimum or maximum amount of such Warrants which may be
exercised at any one time;
(9) information with respect to book-entry procedures, if any;
(10) a discussion of certain Federal income tax considerations; and
(11) any other terms of such Warrants, including terms, procedures
and limitations relating to the exchange and exercise of such Warrants.
FEDERAL INCOME TAX CONSIDERATIONS
Introductory Notes
The following discussion summarizes certain Federal income tax
considerations that may be relevant to a prospective holder of securities of the
Company. This discussion is based on current law. The discussion is not
exhaustive of all possible tax considerations and does not give a detailed
discussion of any state, local, or foreign tax considerations. It also does not
discuss all of the aspects of Federal income taxation that may be relevant to a
prospective shareholder in light of his particular circumstances or to certain
types of 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. As used in this section, the term
"Company" refers solely to Cousins Properties Incorporated.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT WITH HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OF THE PURCHASE, OWNERSHIP AND
SALE OF SECURITIES IN AN ENTITY ELECTING TO BE TAXED AS A REAL ESTATE INVESTMENT
TRUST, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES
OF SUCH PURCHASE, OWNERSHIP, SALE, AND ELECTION AND OF POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
Taxation of the Company
General. Beginning with its taxable year 1987, and for all its subsequent
taxable years, the Company has elected to be taxed as a REIT under Sections 856
through 860 of the Code. The Company's qualification and taxation as a REIT
depends upon the Company's ability to meet on a continuing basis, through actual
annual operating results, distribution levels and diversity of stock ownership,
the various qualification tests and organizational requirements imposed under
the Code, as discussed below. The Company believes that it is organized and has
operated in such a manner as to qualify under the Code for taxation as a REIT,
and the Company intends to continue to operate in such a manner. No assurance,
however, can be given that the Company will operate in a manner so as to qualify
or remain qualified as a REIT. See "Failure to Qualify" below.
The following is a general summary of the Code provisions that govern the
Federal income tax treatment of a REIT and its shareholders. These provisions of
the Code are highly technical and complex. This summary is qualified in its
entirety by the applicable Code provisions, the regulations promulgated
thereunder ("Treasury Regulations"), and administrative and judicial
interpretations thereof.
If the Company qualifies for taxation as a REIT, it generally will not be
subject to Federal corporate income taxes on net income that it currently
distributes to shareholders. This treatment substantially eliminates the "double
taxation" (at the corporate and shareholder levels) that generally results from
investment in a corporation. Notwithstanding its REIT election, however, the
Company will be subject to Federal income tax in the following circumstances.
First, the Company will be taxed at regular corporate rates on any undistributed
taxable income, including undistributed net capital gains. Second, under certain
circumstances, the Company may be subject to the "alternative minimum tax" on
its items of tax preference. Third, if the Company has (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, it will be subject to tax at the highest corporate rate on such
income. Fourth, if the Company has 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. Fifth, if the
Company should fail to satisfy the 75% gross income test or the 95% gross income
test (as discussed below), and has nonetheless maintained its qualification as a
REIT because certain other requirements have been met, it will be subject to a
100% tax on the net income attributable to the greater of the amount by which
the Company fails the 75% or 95% test, multiplied by a fraction intended to
reflect the Company's profitability. Sixth, if the Company should fail to
distribute during each calendar year at least the sum of (i) 85% of its REIT
ordinary income for such year, (ii) 95% of its REIT capital gain net income for
such year, and (iii) any undistributed taxable income from prior years, the
Company would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. Seventh, if the Company
acquires any asset from a C corporation (i.e., a corporation generally subject
to full corporate level tax) in a transaction in which the basis of the asset in
the Company's hands is determined by reference to the basis of the asset (or any
other property) in the hands of the C corporation, and the Company recognizes
gain on the disposition of such asset during the 10-year period beginning on the
date on which such asset was acquired by the Company, then, to the extent of
such property's "built-in" gain (the excess of the fair market value of such
property at the time of acquisition by the Company over the adjusted basis of
such property at such time), such gain will be subject to tax at the highest
regular corporate rate applicable (as provided in IRS regulations that have not
yet been promulgated).
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; (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) during the last half of each taxable year not more than 50% in
value of the outstanding stock of which is owned, directly or indirectly, by
five or fewer individuals (as defined in the Code to include certain entities);
and (7) which meets certain other tests, described below, regarding the nature
of its income and assets. The Code provides that conditions (1) through (4),
inclusive, must be met during the entire taxable year and 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. Conditions (5) and
(6) will not apply until after the first taxable year for which an election is
made to be taxed as a REIT. The Company has issued sufficient shares of Common
Stock with sufficient diversity of ownership to allow the Company to satisfy
requirements (5) and (6). In addition, Article 11 of the Company's Restated
Articles of Incorporation generally prohibits any transfer of shares of stock of
the Company which would cause the transferee of such shares to Own in excess of
3.9% in value of the outstanding shares of Common Stock. Article 11 also
prohibits any person, except Prior Owners, from Owning shares in excess of the
3.9% limit. See "Description of Common Stock -- Restrictions on Transfer." The
Company has obtained a ruling from the Service that the transfer and ownership
restrictions originally contained in Article 11 did not render the shares
nontransferable for REIT qualification purposes and that such restrictions,
while in effect and enforceable, would prevent any actual or attempted violation
of such restrictions from causing the Company to violate the REIT stock
ownership requirements. Following the receipt of such ruling from the Service,
Article 11 was amended generally to allow Prior Owners to acquire additional
shares as long as the Ownership percentage of the Prior Owner after such
acquisition would not exceed such Prior Owners' Ownership percentage as of
December 31, 1986. The Company believes that the amendment has not altered the
efficacy of the transfer restrictions and therefore has not sought a ruling from
the Service regarding such amendment.
In addition, a corporation may not elect to become a REIT unless its
taxable year is the calendar year. The Company's taxable year is the calendar
year.
In the case of a REIT which is a partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate share
of the assets of the partnership and will be deemed to be entitled to the income
of the partnership attributable to such share. In addition, the character of 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 (as discussed below). The Company owns
interests in a number of subsidiary partnerships (the "Subsidiary
Partnerships"), and thus, the Company's proportionate share of the assets,
liabilities and items of income from the Subsidiary Partnerships are treated as
assets, liabilities and items of income of the Company for purposes of applying
the requirements described herein.
Income Tests. In order to maintain qualification as a REIT, three gross
income requirements must be satisfied annually. First, at least 75% of the
REIT's 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, interest) or from certain types of
temporary investments. Second, at least 95% of the REIT's 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. Third, short-term gain
from the sale or other disposition of stock or securities, gain from prohibited
transactions and gain on the sale or other disposition of real property held for
less than four years (apart from involuntary conversions and sales of
foreclosure property) must represent less than 30% of the REIT's gross income
(including gross income from prohibited transactions) for each taxable year.
Rents received by the Company 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 the Company, or
an owner of 10% or more of the Company, directly or constructively owns 10% or
more of such tenant (a "Related Party Tenant"). 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." The Company derives rent from certain tenants which may be based, in
whole or in part, on the net profits of the tenant and derives rent from certain
Related Party Tenants. However, the amount of such nonqualifying rent income is
not material, and the Company has complied and believes it will continue to
comply with the 95% and 75% gross income tests. Finally, for rents received to
qualify as "rents from real property," the Company generally must not operate or
manage the property or furnish or render services to residents, other than
through an "independent contractor" from whom the Company derives no revenue.
The "independent contractor" requirement, however, does not apply to the extent
the services provided by the Company are "usually or customarily rendered" in
connection with the rental of space for occupancy only and are not otherwise
considered "rendered to the occupant." The Company provides certain services
with respect to its properties, and based on the Company's knowledge of the real
estate markets in the geographic regions in which it operates, the Company
believes that all services that are provided to the tenants of the properties
will be considered "usually or customarily" rendered in connection with the
rental of comparable real estate. Further, any noncustomary services will be
provided only through qualifying independent contractors.
The Company manages certain properties held by the Subsidiary Partnerships,
and in return for such services, the Company receives certain management and
accounting fees. The Company has obtained a ruling from the Service that the
portion of such fees that is apportioned to the capital interests of the other
partners constitutes non-qualifying income for purposes of Section 856 of the
Code, and the portion of each fee that is apportioned to the capital interest of
the Company is disregarded for purposes of Section 856 of the Code. The Company
will also receive certain types of non-qualifying income, including any
dividends paid by Cousins Real Estate Corporation ("CREC") to the Company (which
qualify under the 95% gross income test but not under the 75% gross income
test). The Company believes, however, that the aggregate amount of such
non-qualifying income in any taxable year will not cause the Company to exceed
the limits on non-qualifying income under the 75% and 95% gross income tests.
If the Company fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may nevertheless qualify as a REIT for such year
if it is entitled to relief under certain provisions of the Code. These relief
provisions generally will be available if the Company's failure to meet such
tests was due to reasonable cause and not due to willful neglect, the Company
attaches a schedule of the sources of its income to its return, and any income
information on the schedules was not due to fraud with intent to evade tax. It
is not possible, however, to state whether in all circumstances the Company
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 net income.
Asset Tests. At the close of each quarter of its taxable year, the Company
must also satisfy three tests relating to the nature of its assets. First, at
least 75% of the value of the Company's total assets must be represented by real
estate assets (including (i) its allocable share of real estate assets held by
the Subsidiary Partnerships and (ii) stock or debt instruments held for not more
than one year purchased with the proceeds of a stock offering or long-term (at
least five years) debt offering of the Company), cash, cash items and government
securities. Second, not more than 25% of the Company's 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 issuer's
securities owned by the Company may not exceed 5% of the value of the Company's
total assets, and the Company may not own more than 10% of any one issuer's
outstanding voting securities. The 5% test must generally be met for any quarter
in which a REIT acquires securities of an issuer.
The Company owns 100% of the non-voting common stock and 100% of the
cumulative preferred stock of CREC, but does not own any voting stock of CREC.
In addition, the Company does not own more than 10% of any one corporate
issuer's outstanding voting securities. In addition, the Company owns certain
debt securities of CREC. Based on the estimated value of the debt and equity
securities of CREC owned by the Company relative to the estimated value of the
other assets owned (or deemed to be owned through its interests in the
Subsidiary Partnerships) by the Company, the Company believes that the value of
such debt and equity securities at all relevant times has been and is less than
5% of the total value of the Company's assets. However, no independent
appraisals have been obtained to support this conclusion. Although the Company
plans to take steps to ensure that it satisfies the 5% value test for each
calendar quarter, there can be no assurance that such steps will always be
successful or will not require a reduction in the Company's overall interest in
CREC.
Annual Distribution Requirements. The Company, in order to qualify as a
REIT, is required to distribute dividends (other than capital gain dividends) to
its shareholders in an amount at least equal to (A) the sum of (i) 95% of the
Company's "REIT taxable income" (computed without regard to the dividends paid
deduction and the REIT's net capital gain) and (ii) 95% 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 the Company
timely files its tax return for such year and if paid on or before the first
regular dividend payment after such declaration. To the extent that the Company
does not distribute all of its net capital gain or distributes at least 95%, but
less than 100%, of its "REIT taxable income," as adjusted, it will be subject to
tax on the undistributed amount at regular capital gains and ordinary corporate
tax rates. Furthermore, if the Company should fail to distribute during each
calendar year at least the sum of (i) 85% of its REIT ordinary income for such
year, (ii) 95% of its REIT capital gain income for such year, and (iii) any
undistributed taxable income from prior periods, the Company will be subject to
a 4% excise tax on the excess of such required distribution over the amounts
actually distributed. The Company has made and intends to continue to make
distributions sufficient to satisfy the annual distribution requirements.
Under certain circumstances, the Company may be able to rectify a failure
to meet the distribution requirement for a year by paying "deficiency dividends"
to shareholders in a later year that may be included in the Company's deduction
for dividends paid for the earlier year. Thus, the Company may be able to avoid
being taxed on amounts distributed as deficiency dividends; however, the Company
will be required to pay interest to the IRS based upon the amount of any
deduction taken for deficiency dividends.
Failure to Qualify. If the Company fails to qualify for taxation as a REIT
in any taxable year and no relief provisions apply, the Company will be subject
to tax (including any applicable alternative minimum tax) on its taxable income
at regular corporate rates. Distributions to shareholders in any year in which
the Company fails to qualify will not be deductible by the Company, nor will
they be required to be made. In such event, to the extent of current and
accumulated earnings and profits, all distributions to shareholders will be
taxable as ordinary income, and, subject to certain limitations in the Code,
corporate distributees may be eligible for the dividends received deduction.
Unless entitled to relief under specific statutory provisions, the Company also
will 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 the Company would be entitled to such
statutory relief. Because the Company had substantial earnings and profits
attributable to pre-1987 taxable years, it could be required to incur
substantial indebtedness or liquidate substantial investments in order to make
such distributions, and such distributions would be taxable as ordinary income
to its shareholders.
Taxation of Shareholders
Taxation of Taxable Domestic Shareholders. As long as the Company qualifies
as a REIT, distributions made to the Company's 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, and
corporate shareholders will not be eligible for the dividends received deduction
as to such amounts. Distributions that are designated as capital gain dividends
will be taxed as long-term capital gains (to the extent they do not exceed the
Company's actual net capital gain for the taxable year) without regard to the
period for which the shareholder has held his 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 shareholder's shares of Common
Stock, but rather will reduce the adjusted basis of such shares. To the extent
that such distributions exceed the adjusted basis of a shareholder's shares of
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 declared by the Company 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 the Company and received by the
shareholder on December 31 of such year, provided that the dividend is actually
paid by the Company during January of the following calendar year. Shareholders
may not include in their individual income tax returns any net operating losses
or capital losses of the Company.
In general, any loss upon a sale or exchange of shares of 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 distributions from the Company required to be treated by such
shareholder as long-term capital gain.
Backup Withholding. The Company will report to its domestic shareholders
and the IRS 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 the
rate of 31% with respect to dividends paid unless such holder (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 the Company with its correct taxpayer
identification number may also be subject to penalties imposed by the IRS. Any
amount paid as backup withholding will be creditable against the shareholder's
income tax liability. In addition, the Company may be required to withhold a
portion of capital gain distributions made to any shareholders who fail to
certify their non-foreign status to the Company. See "Taxation of Foreign
Shareholders" below.
Taxation of Tax-Exempt Shareholders. The IRS has ruled 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 the Company 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 Common Stock are not otherwise used in an unrelated
trade or business of the tax-exempt entity. Revenue rulings, however, are
interpretative in nature and subject to revocation or modification by the IRS.
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 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 REIT shares or (ii) one
or more qualified trusts, each owning more than 10% of the value of the REIT
shares, hold in the aggregate more than 50% of the value of the REIT 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 REIT
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 Common Stock, including any reporting requirements.
Distributions that are not attributable to gain from sales or exchanges by
the Company of U.S. real property interests and not designated by the Company as
capital gain dividends will be treated as dividends of ordinary income to the
extent that they are made out of current or accumulated earnings and profits of
the Company. 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 the
shares of Common Stock is treated as effectively connected with the
Non-U.S. Shareholder's 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). The Company expects 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 form evidencing eligibility for that reduced rate is
filed with the Company or (ii) the Non-U.S. Shareholder files an IRS Form 4224
with the Company claiming that the distribution is "effectively connected"
income. Distributions in excess of current and accumulated earnings and profits
of the Company will not be taxable to a shareholder to the extent that they do
not exceed the adjusted basis of the shareholder's shares of Common 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. Shareholder's shares, such
excess will constitute gain subject to U.S. 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 dividends. In addition, the portion of such distributions in excess of
current and accumulated earnings and profits, to the extent not subject to the
withholding tax on dividends, will be subject to a 10% withholding tax under
FIRPTA, unless the Non-U.S. Shareholder obtains a withholding certificate from
the Service establishing the right to a reduced amount of FIRPTA withholding.
The Non-U.S. Shareholder may seek a refund from the 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.
For any year in which the Company qualifies as a REIT, distributions that
are attributable to gain from sales or exchanges by the Company of U.S. real
property interests will be taxed to a Non-U.S. Shareholder under the provisions
of FIRPTA. Under FIRPTA, these distributions are taxed to a Non-U.S. Shareholder
as if such gain were effectively connected with a U.S business. Thus,
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). Also, distributions subject to FIRPTA may be subject to a
30% branch profits tax in the hands of a corporate Non-U.S. Shareholder not
entitled to treaty relief or exemption. The Company is required by applicable
Treasury Regulations to withhold 35% of any distribution that could be
designated by the Company as a capital gain dividend. This amount is creditable
against the Non-U.S. Shareholder's FIRPTA tax liability.
Gain recognized by a Non-U.S. Shareholder upon a sale of Common Stock
generally will not be taxed under FIRPTA if the Company is 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. The Company believes that it currently
qualifies as a "domestically controlled REIT," and that the sale of Common Stock
will not therefore be subject to tax under FIRPTA. Because the Company is
publicly traded, however, no assurance can be given that the Company will
continue to be a domestically controlled REIT. If the Company were not a
domestically controlled REIT, whether a Non-U.S. Shareholder's gain would be
taxed under FIRPTA would depend on whether the Common Stock were regularly
traded on an established securities market and on the size of the selling
shareholder's interest in the Company. In addition, gain not subject to FIRPTA
will be taxable to a Non-U.S. Shareholder if (i) the investment in Common Stock
is treated as effectively connected with the Non-U.S. Shareholder's 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 has a "tax home"
in the United States, in which case the nonresident alien individual will be
subject to a 30% tax on the individual's capital gains. If the gain on the sale
of 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).
Tax Status of the Subsidiary Partnerships
The Company believes 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 the Company's 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
the Company would cease to qualify as a REIT if the Company's ownership interest
in such partnership exceeded 10% of the partnership's voting interests or the
value of such interest exceeded 5% of the value of the Company's assets.
Furthermore, in such a situation, distributions from the Subsidiary Partnership
to the Company would be treated as dividends, which are not taken into account
in satisfying the 75% gross income test described above and which could
therefore make it more difficult for the Company to meet such test, and the
Company would not be able to deduct its share of losses generated by such
Subsidiary Partnership in computing its taxable income. See "Taxation of the
Company (Failure to Qualify)" above for a discussion of the effect of the
Company's failure to meet such tests for a taxable year.
State and Local Taxes
The Company 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 the Company's operations and distributions). The
state and local tax treatment of the Company and its shareholders 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 the Securities.
Taxation of CREC and Cousins MarketCenters, Inc.
CREC conducts certain leasing and development activities for the Company. A
wholly owned subsidiary of CREC, Cousins MarketCenters, Inc. ("CMC"), develops
retail power centers for the Company. CREC and CMC file a consolidated federal
tax return. Neither CREC nor CMC qualifies as a REIT, and their income is
subject to federal and state corporate income tax.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters and also may
sell Securities directly to other purchasers or through agents.
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, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities, for whom they
may act as agents, in the form of discounts, concessions, or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions, or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers, and agents that participate in the distribution
of Securities may be deemed to be underwriters, and any discounts or commissions
they receive from the Company, and any profit on the resale of Securities they
realize may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from the Company will be described, in the Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of Securities will be a new issue with no established trading market,
other than the Common Stock which is listed on the NYSE. Any shares of Common
Stock sold pursuant to a Prospectus Supplement will be listed on such exchange,
subject to official notice of issuance. The Company may elect to list any series
of Debt Securities or Warrants on an exchange, but is not obligated to do so. It
is possible that one or more underwriters may make a market in a series of
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of the trading market for the Securities.
Under agreements the Company may enter into, underwriters, dealers, and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, the Company in the ordinary course of
business.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
at the public offering price set forth in such Prospectus Supplement pursuant to
delayed delivery contracts ("Contracts") providing for payment and delivery on
the date or dates stated in such Prospectus Supplement. Each Contract will be
for an amount not less than, and the aggregate principal amount of Securities
sold pursuant to Contracts shall be not less nor more than, the respective
amounts stated in the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but will in all cases be subject
to the approval of the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Securities covered by its
Contracts shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject, and (ii)
if the Securities are being sold to underwriters, the Company shall have sold to
such underwriters the total principal amount of the Securities less the
principal amount thereof covered by Contracts.
EXPERTS
The audited financial statements and schedules incorporated by reference in
this Prospectus and elsewhere in the Registration Statement of which this
Prospectus is a part have been audited by Arthur Andersen LLP, independent
public accountants, as set forth in their reports. In those reports, that firm
states that, with respect to certain joint ventures, its opinion is based on the
reports of other independent public accountants, namely Ernst & Young LLP. The
financial statements and supporting schedules referred to above have been
incorporated by reference herein in reliance upon the authority of said firms as
experts in giving said reports.
LEGAL MATTERS
The legality of the Securities will be passed upon for the Company by King
& Spalding, Atlanta, Georgia.
<PAGE>
No person has been authorized in connection with the offering made hereby
to give any information or to make any representation not contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company or any other person. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any of the Securities offered hereby to any person or by anyone in any
jurisdiction in which it is unlawful to make such offer or solicitation. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein is
correct as of any date subsequent to the date hereof.
_________________
TABLE OF CONTENTS
Page
Available Information.......................... 2
Incorporation of Certain
Documents by Reference...................... 2
The Company.................................... 3
Use of Proceeds................................ 3
Ratio of Earnings to Fixed Charges............. 3
Description of Debt Securities................. 4
Description of Common Stock.................... 14
Description of Warrants........................ 17
Federal Income Tax Considerations.............. 18
Plan of Distribution........................... 25
Experts........................................ 26
Legal Matters.................................. 26
$200,000,000
COUSINS PROPERTIES
INCORPORATED
Common Stock
Warrants
Debt Securities
_________________
PROSPECTUS
_________________
October 2, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits.
Exhibit No. Description of Exhibit
4.1* -- Form of Indenture between the Company and the Trustee.
4.2* -- Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 4.1 of the
Company's Registration Statement on Form S-8
(File No. 33-56787)).
4.3* -- Bylaws of the Company (incorporated by reference
to Exhibit 4.2 to the Company's Registration
Statement on Form S-8 (File No. 33-56787)).
5.1* -- Opinion of King & Spalding regarding the legality of
the securities being registered.
8.1* -- Opinion of King & Spalding regarding tax matters.
12.1* -- Computation of Ratio of Earnings to Fixed Charges.
23.1* -- Consent of King & Spalding (included as part of its
opinions filed as Exhibits 5.1 and 8.1).
23.2 -- Consent of Arthur Andersen LLP, independent public
accountants.
23.3 -- Consent of Ernst & Young LLP, independent auditors.
24.1* -- Power of attorney (included on signature page).
25.1* -- Statement of Eligibility of Trustee on Form T-1.
__________________
*Previously filed.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of
Georgia on the 2nd day of October, 1996.
COUSINS PROPERTIES INCORPORATED
By: /s/ Peter A. Tartikoff
____________________________________
Peter A. Tartikoff
Senior Vice President and Chief
Financial Officer
5
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the
following persons in the capacities indicated below on the 2nd day of
October, 1996:
Signature Title
* Chairman of the Board of Directors and
T. G. Cousins Chief Executive Officer
(Principal Executive Officer)
/s/ Peter A. Tartikoff Senior Vice President and Chief
Peter A. Tartikoff Financial Officer (Principal Financial
Officer)
*
Kelly H. Barrett Vice President and Controller
(Principal Accounting Officer)
* Director
Bennett A. Brown
* Director
Richard W. Courts, II
* Director
Terence C. Golden
* Director
Boone A. Knox
* Director
William Porter Payne
* Director
Richard E. Salomon
*By: /s/ Peter A. Tartikoff
______________________
Peter A. Tartikoff
Attorney-in-fact
6
<PAGE>
INDEX OF EXHIBITS
- ----------------------- ------------------------------------------------------
Sequentially
Numbered
Exhibit No.
Exhibit
4.1* Form of Indenture between the Company and the Trustee.
4.2* Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 4.1 of the Company's
Registration Statement on Form S-8 (File No. 33-56787)).
4.3* Bylaws of the Company (incorporated by reference to
Exhibit 4.2 to the Company's Registration Statement on
Form S-8 (File No. 33-56787)).
5.1* Opinion of King & Spalding regarding the legality of the
securities being registered.
8.1* Opinion of King & Spalding regarding tax matters.
12.1* Computation of Ratio of Earnings to Fixed Charges.
23.1* Consent of King & Spalding (included as part of its
opinions filed as Exhibits 5.1 and 8.1).
23.2 Consent of Arthur Andersen LLP, independent public
accountants.
23.3 Consent of Ernst & Young LLP, independent auditors.
24.1* Power of attorney (included on signature page).
25.1* Statement of Eligibility of Trustee on Form T-1.
__________________
*Previously filed.
<PAGE>
EXHIBIT 23.2
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 20,
1996 included or incorporated by reference in Cousins Properties Incorporated's
Form l0-K for the year ended December 31, 1995 and to all references to our Firm
included in this registration statement.
Arthur Andersen LLP
Atlanta, Georgia
October 1, 1996
18
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement No. 333-12031 (Form S-3 Amendment No. 1) and related
Prospectus of Cousins Properties Incorporated for the registration of
$200,000,000 of its common stock, warrants and debt securities and the
incorporation by reference therein of our report dated February 6, 1996, with
respect to the financial statements and schedule of CSC Associates, L.P. and
our report dated February 8, 1996 with respect to the financial statements and
schedule of Haywood Mall Associates, included in the Form l0-K/A of Cousins
Properties Incorporated for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Atlanta, Georgia
October 1, 1996
