APPENDIX

















                                                                                                                        Exhibit
10.26


EXHIBIT A


 


APPENDIX


 


TO


ADOPTION AGREEMENT


 


FOR


 


PARKWAY PROPERTIES, INC.


DEFERRED COMPENSATION PLAN


 


as Amended and Restated


Effective January 1, 2005






              The provisions of this Appendix supersede any contrary or
conflicting provisions of the Adoption Agreement or Plan Document as amended
and restated effective January 1, 2005.


               1.                 
Definitions.  Capitalized terms used in this Appendix that are
defined in the Plan Document have the meanings given in the Plan Document.


               2.                 
Salary and Bonus Deferral Feature - Delayed Effective Date.  No Participant
may elect to reduce Compensation other than Deferred Share Units described in
Section 3 below unless and until the Compensation Committee of the Board of Directors authorizes the Employer to accept salary or bonus Deferral Agreements with Participants.


               3.                 
Deferred Share Units.  With respect to each Participant who:


(a)               
has elected, pursuant to the Parkway Properties, Inc. 2003 Equity
Incentive Plan or the Parkway Properties, Inc. 1994 Stock Option and Long Term
Incentive Plan, as amended, (the "Incentive Plans") to surrender Incentive
Restricted Shares (as defined in the Incentive Plan) in exchange for the grant
of Deferred Incentive Share Units (within the meaning of the Incentive Plans),
or


(b)              
has elected, pursuant to the Incentive Plans, to be granted a Deferred
Incentive Share Unit (within the meaning of the Incentive Plans) in place of an
Incentive Restricted Share that would otherwise have been granted under the
Incentive Plans, or


(c)               
has been granted Deferred Incentive Share Units under the Incentive
Plans, and










































(d)              
who, in any such case, has been designated by the Committee as eligible
to participate in this Deferred Compensation Plan with respect to the Deferred
Incentive Share Units so granted and who has elected to participate in this
Plan with respect to such Deferred Incentive Share Units, the Employer shall
credit to a Parkway Stock Subaccount established under the Participant's
Deferred Compensation Account, the number of Deferred Incentive Share Units
with respect to which the Participant has been so designated and has made such
an election.  For the purposes of the Deferred Compensation Plan, a Deferred
Incentive Share Unit shall be called a "Deferred Share Unit."


                                With respect to each Participant who has
elected, pursuant to the Parkway Properties, Inc. 2001 Non-Employee Directors
Equity Compensation Plan (the "Directors' Plan") and with the consent
of the Committee that an award under the Directors' Plan be made in Deferred
Share Units (as defined in the Directors' Plan), rather than in shares of
common stock, $0.001 per value, of the Employer ("Parkway Common
Stock"), the Employer shall credit to a Parkway Stock Subaccount
established under the Participant's Deferred Compensation Account, one Deferred
Share Unit for each share of Parkway Common Stock that would otherwise have
been awarded.


            4.                 
Dividend Equivalents.  The Employer shall credit a Dividend
Equivalent Subaccount established under a Participant's Deferred Compensation
Account with an amount equivalent to the amount of dividends that would be
payable on a number of shares of Parkway Common Stock that is equal to the
number of Deferred Share Units credited to the Participant's Parkway Stock
Subaccount on the record date for dividend payment.


            5.                 
Further Allocation to Other Accounts.  A Participant may elect in
his or her Incentive Plan or Directors' Plan payment election to have Deferred
Share Units that are credited to his or her Parkway Stock Subaccount further
allocated to In‐Service Accounts and Education Accounts within the Parkway
Stock Subaccount.  Amounts credited to the Participant's Dividend Equivalent
Subaccount that are attributable to the Deferred Share Units allocated to an In‐Service
or Education Account shall also be allocated to those accounts.  The provisions
of the Plan Document governing the timing of payment from In‐Service and
Education Accounts shall apply to the portions of a Participant's Parkway Stock
and Dividend Equivalent Subaccounts allocated to In-Service and Education
Accounts.


            6.                 
Separate Set of Accounts for Each Award; Participant Deferral Credits. 
The Employer shall establish a separate set of accounts and subaccounts for
each award to a Participant under the Incentive Plans and Directors' Plan. 
Deferred Share Units credited to those accounts are, for the purposes of the
Plan Document, "Participant Deferral Credits."


            7.                 
Participant Elections.  A Participant's elections with respect to
the deferral of payment of Deferred Share Units and amounts credited to the
Participant's Dividend Equivalent Subaccount and changes in such elections
shall conform to the provisions of the Adoption Agreement and Plan Document
governing Participant Deferral Agreements and subsequent elections regarding
the changing the method of payment of Deferred Compensation Accounts.




	
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            8.                 
Vesting.  Notwithstanding any contrary provision of the Adoption
Agreement or Plan Document, a Participant's interest in Deferred Share Units
and amounts credited to the Participant's Dividend Equivalent Subaccount that
are attributable to those Deferred Share Units shall become vested only in
accordance with the Incentive Plan or Directors' Plan under which the Deferred
Share Units were awarded.  No payment may be made under this Deferred
Compensation Plan with respect to any Deferred Share Unit or the portion of the
Dividend Equivalent Subaccount attributable to a Deferred Incentive Share Unit
before the Participant's interest in the Deferred Share Unit has become vested
and nonforfeitable under the terms of the applicable plan.


            9.                 
No Deemed Investment of Parkway Stock Subaccount.  A Participant
shall have no right to direct the deemed investment of his or her Parkway Stock
Subaccount.  The only credits to that subaccount at any time shall be in the
form of Deferred Share Units, as they may be adjusted from time to time in
accordance with the Incentive Plan or Directors' Plan to which they are
attributable.


            10.             
Provision for No Deemed Investment of Nonvested Dividend Equivalent
Subaccount.  The Committee may, in its discretion, provide that a
Participant has no right to direct the deemed investment of a Dividend
Equivalent Subaccount to the extent the subaccount is attributable to Deferred
Share Units in which the Participant's interest has not yet become vested, in which
case the Committee shall provide for the crediting of interest on the affected
portion of the subaccount.


            11.             
Form of Payment from Parkway Stock Subaccount.  Payment from a
Participant's Parkway Stock Subaccount shall be only in the form of Parkway
Common Stock, one share of Parkway Common Stock for each Deferred Share Unit
payable.


            12.             
2007.  The last sentence of Section 6.1 of the Plan Document is
amended to refer to the year 2007 and the date December 31, 2007, in place of
the year 2006 and the date December 31, 2006, in each place they appear in
that sentence.


            13.             
Committee Discretion.  The Compensation Committee of the Board of
Directors of the Employer shall have complete discretion in exercising its
authority and responsibilities under the Plan, including but not limited to,
discretion with respect to the designation of Participants and the
interpretation of Plan provisions.


            IN WITNESS WHEREOF, the Board of Directors of Parkway
Properties, Inc., has authorized the execution of this document as part of the
Deferred Compensation Plan.


February __, 2007


                                                                                                                        PARKWAY PROPERTIES, INC.








 








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