Cousins Properties Incorporated
2500 Windy Ridge Parkway
Atlanta, Georgia 30339-5683
February 14, 2003
Mr. Jonathan G. Katz
United States Securities and Exchange Commission
Mail Stop 6-9
450 Fifth Street, NW
Washington, DC 20549-6009
Re: Proposed Rule Regarding Rule 10b-18 and Purchases of Certain Equity Securities by the Issuer and Others (S7-50-02)
Dear Mr. Katz:
Cousins Properties Incorporated (the "Company") would like to take this opportunity to respond to the request for comments from the United States Securities and Exchange Commission (the "Commission") on certain proposals contained in Release Nos. 33-8160 and 34-46980 (collectively, the "Release") with respect to amending Rule 10b-18 ("Rule 10b-18") promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Company is an Atlanta, Georgia-based real estate investment trust ("REIT") whose common stock is listed on The New York Stock Exchange under the trading symbol "CUZ". The Company currently has in place a publicly-announced stock repurchase program. While we generally support the enhanced disclosure aspect of the Commission's proposed changes to Rule 10b-18, the Company disagrees with the Commission's proposal to eliminate the block trade exception to the volume condition of Rule 10b-18. Based on an analysis of our stock trading patterns, we believe that the inclusion of block trades in the daily volume limit would severely limit our ability to use the Rule 10b-18 safe harbor to repurchase stock.
The trading volume of the Company's stock is relatively low on most days, but large block trades occur during a few days each quarter as institutional investors decide to liquidate their investment in the Company's stock. As a result, most of the stock that we have been able to repurchase has occurred through block trades. We have analyzed the trades that occurred in the third quarter of 2002 (the latest period for which such data is available) and have determined that, if the block trade exception were eliminated and block trades were included in the calculation of the Company's average daily trading volume, the Company would have been able to acquire only approximately 16% of the stock that it repurchased during the quarter. This would have severely limited the effectiveness of our stock repurchase program. We do not believe that any of the purchases we have made under our stock repurchase program have had any manipulative effect on our stock price. While we recognize that repurchases may be effected permissibly outside the Rule 10b-18 safe harbor, we are seriously concerned that the elimination of the safe harbor would substantially reduce the number of repurchases effected by the Company and similarly situated issuers.
Additionally, many institutional holders of the Company's stock have indicated to the Company that its current stock repurchase program is a positive and attractive feature of owning the Company's stock. The Company would be adversely affected should institutions not desire to own a stock which is relatively thinly traded, such as that of the Company.
The Company thanks the Commission for this opportunity to comment on the Release. Please feel free to contact Tom Charlesworth or Jim Fleming at (770) 955-2200 if you would like to discuss our comments in more detail.
/s/ Thomas D. Bell, Jr.
President and Chief Executive Officer