HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
                              1997 UNIT OPTION PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN: DEFINITIONS

         The name of the plan is the Highwoods/Forsyth Limited Partnership 1997
Unit Option Plan (the "Plan"). The purpose of the Plan is to supplement the
Amended and Restated 1994 Stock Option Plan of Highwoods Properties, Inc. (the
"Company") and thereby encourage and enable the officers, employees, independent
contractors and directors of Highwoods Properties, Inc. (the "Company") and its
Subsidiaries, including Highwoods/Forsyth Limited Partnership (the
"Partnership") upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business to acquire a proprietary
interest in the Partnership. Providing such persons with a direct stake in the
Company's welfare through awards of Units, as defined below, in the Partnership
will assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company.

         The following terms shall be defined as set forth below:

         "ACT" means the Securities Exchange Act of 1934, as amended.

         "AWARD" or "AWARDS", except where referring to a particular grant under
the Plan, shall include Unit Option, Unit Appreciation Right, Phantom Unit and
Restricted Unit Awards.

         "BOARD" means the Board of Directors of the Company.

         "CAUSE" means and shall be limited to a vote of the Board resolving
that the participant should be dismissed as a result of (i) any material breach
by the participant of any agreement to which the participant and the Company are
parties, (ii) any act (other than retirement) or omission to act by the
participant which may have a material and adverse effect on the business of the
Company or any Subsidiary or on the participant's ability to perform services
for the Company or any Subsidiary, including, without limitation, the commission
of any crime (other than ordinary traffic violations), or (iii) any material
misconduct or neglect of duties by the participant in connection with the
business or affairs of the Company or any Subsidiary.

         "CHANGE OF CONTROL" is defined in Section 13.

         "CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

         "COMMITTEE" means the Board or any Committee of the Board referred to
in Section 2.

         "DISABILITY" means disability as set forth in Section 22(e)(3) of the
Code.

         "EFFECTIVE DATE" means the date on which the Plan is approved by the
Board of Directors of the Company in its capacity as general partner of the
Partnership.

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         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related rules, regulations and interpretations.

         "FAIR MARKET VALUE" on any given date means the last reported sale
price at which the Shares are traded on such date or, if no Shares are traded on
such date, the most recent date on which the Shares were traded, as reflected on
the New York Stock Exchange or, if applicable, any other national stock exchange
on which the Shares are traded.

         "GENERAL PARTNER" means the Company in its capacity as the general
partner of the Partnership.

         "INDEPENDENT DIRECTOR" means a member of the Board who is not also an
employee of the Company or any Subsidiary. A director emeritus shall not be
considered as an active Board member for purposes of this definition.

         "NON-EMPLOYEE DIRECTOR" means a director who qualifies as such under
Rule 16b-3(b)(3) promulgated under the Act or any successor definition under the
Act.

         "OPTION" OR "UNIT OPTION" means any option to purchase Units granted
pursuant to Section 5.

         "PHANTOM UNIT" means Awards granted pursuant to Section 8.

         "RESTRICTED UNIT  AWARD" means Awards granted pursuant to Section 7.

         "RESTRICTED UNITS" means Units subject to restrictions as provided in
Section 7 and the subject of a Restricted Stock Award.

         "SHARE" means one or more, respectively, of the Company's shares of
common stock, par value $.01 per share, subject to adjustments pursuant to
Section 3.

         "SUBSIDIARY" means the Partnership, Highwoods Services, Inc. and any
corporation or other entity (other than the Company) in any unbroken chain of
corporations or other entities, beginning with the Company, if each of the
corporations or entities (other than the last corporation or entity in the
unbroken chain) owns stock or other interests possessing 50% or more of the
economic interest or the total combined voting power of all classes of stock or
other interests in one of the other corporations or entities in the chain.

         "UNIT" means one of the Class A common ownership interests in the
Partnership as defined in and subject to the provisions of the First Amended and
Restated Agreement of Limited Partnership of the Partnership (the "Partnership
Agreement"), except that Units to be awarded hereby or to be received upon the
exercise of Unit Options shall not be redeemable for Shares as allowed by
Section 8.6 of the Partnership Agreement unless and until such action is
permitted by applicable state and federal securities laws and the rules and
regulations of the applicable securities exchange.

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         "UNIT APPRECIATION RIGHTS" ("UAR") means Awards granted pursuant to
Section 6.


SECTION 2. ADMINISTRATION OF PLAN: COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS

                  (a) COMMITTEE. Except as set forth in Section 2(c), the Plan
         shall be administered by the executive compensation committee of the
         Board of the General Partner, or any other committee of not less than
         two Non-Employee Directors performing similar functions, as appointed
         by the Board from time to time. Only Non-Employee Directors may vote
         with respect to transactions involving an Award or other acquisition of
         Units from the Partnership.

                  (b) POWERS OF COMMITTEE. The Committee shall have the power
         and authority to grant Awards consistent with the terms of the Plan,
         including the power and authority:

                           (i) to select participants to whom Awards may be
                  granted from time to time;

                           (ii) to determine the time or times of grant, and the
                  extent of Awards, or any combination of Awards, granted to any
                  one or more participants;

                           (iii) to determine the number of Units to be covered
                  by any Award;

                           (iv) to determine and modify the terms and
                  conditions, including restrictions, not inconsistent with the
                  terms of the Plan, of any Award, which terms and conditions
                  may differ among individual Awards and participants, and to
                  approve the form of written instruments evidencing the Awards
                  provided, however that in no event shall the Committee take
                  any action in furtherance hereof which shall reduce or delay
                  the realization of the economic benefit accruing to any
                  grantee of any Award upon the occurrence of an event described
                  in this Section 3(b);

                           (v) to accelerate the exercisability or vesting of
                  all or any portion of any Award;

                           (vi) subject to the provisions of Section 5(a)(iii),
                  to extend the period in which Unit Options may be exercised;

                           (vii) to determine whether, to what extent, and under
                  what circumstances Units and other amounts payable with
                  respect to an Award shall be deferred either automatically or
                  at the election of the participant and whether and to what
                  extent the Company shall pay or credit amounts constituting
                  interest (at rates determined by the Committee) or dividends
                  or deemed dividends on such deferrals; and

                           (viii) to adopt, alter and repeal such rules,
                  guidelines and practices for administration of the Plan and
                  for its own acts and proceedings as it shall deem

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                  advisable; to interpret the terms and provisions of the Plan
                  and any Awards (including related written instruments); to
                  make all determinations it deems advisable for the
                  administration of the Plan; to decide all disputes arising in
                  connection with the Plan; and to otherwise supervise the
                  administration of the Plan.

                  All decisions and interpretations of the Committee shall be
binding on all persons, including the Company, the Partnership and Plan
participants.

SECTION 3. UNITS AVAILABLE UNDER THE PLAN; MERGERS; SUBSTITUTIONS

         (a) UNITS ISSUABLE. The maximum number of Units reserved and available
for issuance under the Plan shall be 1,500,000 Units. For purposes of this
limitation, the Units underlying any Awards which are forfeited, canceled,
reacquired by the Partnership, satisfied without the issuance of Units or
otherwise terminated (other than by exercise) shall be added back to the Units
available for issuance under the Plan so long as the participants to whom such
Awards had been previously granted received no benefits of ownership of the
underlying Units to which the Award related. Subject to such overall limitation,
Units may be issued up to such maximum number pursuant to any type or types of
Award.

         (b) STOCK DIVIDENDS, MERGERS, ETC. In the event of a stock dividend,
stock split or similar change in capitalization affecting the Shares, the
Committee shall make appropriate adjustments in (i) the number and kind of Units
on which Awards may thereafter be granted, (ii) the number and kind of Units
remaining subject to outstanding Awards, and (iii) the option or purchase price
in respect of such Units. Except as otherwise provided in any applicable
severance or employment agreement with any grantee hereunder, in the event of
any merger, consolidation, dissolution or liquidation of the Company, the
Committee in its sole discretion shall, as to any outstanding Awards, make such
substitution or adjustment in the aggregate number of Units reserved for
issuance under the Plan and the number and purchase price (if any) of Units
subject to such Awards as it may determine and as may be permitted by the terms
of such transaction, or amend or terminate such Awards upon such terms and
conditions as it shall provide (which, in the case of the termination of or
modification relating to the vested portion of any Award, shall require payment
or other consideration which the Committee deems equitable in the
circumstances), provided, however that in no event shall the Committee take any
action in furtherance hereof which shall reduce or delay the realization of the
economic benefit accruing to any grantee of any Award upon the occurrence of an
event described in this Section 3(b).

         (c) SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock-based awards held by employees of another
corporation who concurrently become employees of the Company or a Subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.

SECTION 4. ELIGIBILITY



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         Participants in the Plan will be such directors, full or part-time
officers and other employees and independent contractors of the Company and its
Subsidiaries who are responsible for or contribute to the management, growth, or
profitability of the Company and its Subsidiaries and who are selected from time
to time by the Committee, in its sole discretion.

SECTION 5. UNIT OPTIONS

         Any Unit Option granted under the Plan shall be in such form as the
Committee may from time to time approve.

         (a) Unit Options Granted to Employees. The Committee in its discretion
may grant Unit Options to employees of the Company or any Subsidiary or
independent contractors engaged by the Company or its Subsidiaries. Unit Options
granted pursuant to this Section 5(a) shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

                  (i) Exercise Price. The exercise price per Unit for the Units
         covered by a Unit Option granted pursuant to this Section 5(a) shall be
         determined by the Committee at the time of grant but shall not be less
         than 25% of the Fair Market Value on the date of grant.

                  (ii) Option Term. The term of each Unit Option shall be fixed
         by the Committee.

                  (iii) Exercisability; Rights of a Unitholder. Unit Options
         shall become vested and exercisable at such time or times, whether or
         not in installments, as shall be determined by the Committee at the
         grant date. The Committee may at any time accelerate the exercisability
         of all or any portion of any Unit Option. An optionee shall have the
         rights of a unitholder only as to Units acquired upon the exercise of a
         Unit Option and not as to unexercised Unit Options.

                  (iv) Method of Exercise. Unit Options may be exercised in
         whole or in part, by giving written notice of exercise to the Company
         as General Partner in the Partnership, specifying the number of Shares
         to be purchased. Payment of the purchase price may be made by one or
         more of the following methods or by such other method as the Committee
         may allow:

                           (A) In cash, by certified or bank check or other
                  instrument acceptable to the Committee;

                           (B) In the form of Shares or Units that are not then
                  subject to restrictions under any Company plan and that have
                  been held by the optionee for at least six months, if
                  permitted by the Committee in its discretion. Such surrendered
                  Shares or Units shall be valued at Fair Market Value on the
                  exercise date; or




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                  (v) Admission to the Partnership. The delivery of an amendment
         to the Partnership Agreement admitting the optionee as a partner
         pursuant to the exercise of a Unit Option will be contingent upon
         receipt from the optionee of the full purchase price for such Units and
         the fulfillment of any other requirements contained in the Unit Option
         grant or applicable provisions or laws and an agreement to be bound by
         the terms and conditions of the Partnership Agreement.

                  (vi) Non-transferability of Options. No Unit Option shall be
         transferable by the optionee otherwise than by will or by the laws of
         descent and distribution and all Unit Options shall be exercisable,
         during the optionee's lifetime, only by the optionee.

                  (vii) Termination by Reason of Death. If any optionee's
         employment by the Company and its Subsidiaries terminates by reason of
         death, the Unit Option may thereafter be exercised, to the extent
         exercisable at the date of death, by the legal representative or
         legatee of the optionee, for a period of six months (or such longer
         periods as the Committee shall specify at any time) from the date of
         death, or until the expiration of the stated term of the Option, if
         earlier.

                  (viii) Termination by Reason of Disability.

                           (A) Any Unit Option held by an optionee whose
                  employment by the Company and its Subsidiaries has terminated
                  by reason of Disability may thereafter be exercised, to the
                  extent it was exercisable at the time of such termination, for
                  a period of six months (or such longer period as the Committee
                  shall specify at any time) from the date of such termination
                  of employment, or until the expiration of the stated term of
                  the Option, if earlier.

                           (B) The Committee shall have sole authority and
                  discretion to determine whether a participant's employment has
                  been terminated by reason of Disability.

                           (C) Except as otherwise provided by the Committee at
                  the time of grant, the death of an optionee during a period
                  provided in this Section 5(a)(viii) for the exercise of a Unit
                  Option, shall extend such period of six months from the date
                  of death, subject to termination on the expiration of the
                  stated term of the Option, if earlier.

                  (ix) Termination for Cause. If any optionee's employment by
         the Company and its Subsidiaries has been terminated for Cause except
         as otherwise provided in any applicable severance or employment
         agreement with any grantee hereunder, any Unit Option held by such
         optionee shall immediately terminate and be of no further force and
         effect; provided, however, that the Committee may, in its sole
         discretion, provide that such Unit Option can be exercised for a period
         of up to 30 days from the date of termination of employment or until
         the expiration of the stated term of the Option, if earlier.

                  (x) Other Termination. Unless otherwise determined by the
         Committee or except as



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         otherwise provided in any applicable severance or employment agreement
         with any grantee hereunder, if an optionee's employment by the Company
         and its Subsidiaries terminates for any reason other than death,
         Disability, or for Cause, any Unit Option held by such optionee may
         thereafter be exercised, to the extent it was exercisable on the date
         of termination of employment for three months (or such longer period as
         the Committee shall specify at any time) from the date of termination
         of employment or until the expiration of the stated term of the Option,
         if earlier.

                  (xi) Units Issued in Settlement. Units issued upon exercise of
         a Unit Option shall be free of all restrictions under the Plan, except
         as otherwise provided in this Plan.

         (b) Unit Options Granted to Independent Directors.

                  (i) Discretionary Grant of Options. The Committee in its
         discretion may grant Unit Options to Independent directors and provide
         for an exercise price per Unit for the Units covered by a Unit Option
         granted as it establishes in its sole discretion.

                  (ii) Exercise; Termination; Non-transferability.

                           (A) Options granted under Section 5(b)(i) may be
                  exercised at any time and upon such conditions as established
                  by the Committee.

                           (B) The rights of an Independent Director in an
                  Option granted under Section 5(b)(i) shall be as provided or
                  allowed by the Committee.

                           (C) No Unit Option granted under this Section 5(b)
                  shall be transferable by the optionee otherwise than by Will
                  or by the laws of descent and distribution, and such Options
                  shall be exercisable, during the optionee's lifetime only by
                  the optionee. Any Option granted to an Independent Director
                  pursuant to Section 5(b)(i) and outstanding on the date of his
                  death may be exercised by the legal representative or legatee
                  of the optionee for a period of six months from the date of
                  death or until the expiration of the stated term of the
                  Option, if earlier.

                           (D) Options granted under this Section 5(b) may be
                  exercised only by written notice to the General Partner
                  specifying the number of Units to be purchased. Payment of the
                  full purchase price of the Units to be purchased may be made
                  by one or more of the methods specified in Section 5(a)(iv).
                  An optionee shall have the rights of a unitholder only as to
                  Units acquired upon the exercise of an Option and not as to
                  unexercised Options.

SECTION 6. UNIT APPRECIATION RIGHTS

         The Committee may from time to time grant UARs unrelated to Options or
related to Options or portions of Options granted to participants under the
Plan. Each UAR shall be evidenced by a written instrument and shall be subject
to such terms and conditions as the Committee may


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determine. Subject to such terms and conditions established by the Committee,
the participant may exercise a UAR or portion thereof, and thereupon shall be
entitled to receive payment of an amount equal to the aggregate appreciation in
value of the Units as to which the UAR is awarded, as measured by the difference
between the purchase price of such Units and their Fair Market Value at the date
of exercise. Such payments may be made in cash, in Units valued at Fair Market
Value as of the date of exercise, or in any combination thereof, as the
Committee in its discretion shall determine.

SECTION 7. RESTRICTED UNIT AWARDS

         (a) Nature of Restricted Unit Award. The Committee may grant Restricted
Unit Awards to any participant under the Plan. A Restricted Unit Award is an
Award entitling the recipient to acquire, at no cost or for a purchase price
determined by the Committee, Units subject to such restrictions and conditions
as the Committee may determine at the time of grant. Conditions may be based on
continuing employment and/or achievement of pre-established performance goals
and objectives.

         (b) Acceptance of Award. A participant who is granted a Restricted Unit
Award shall have no rights with respect to such Award unless the participant
shall have accepted the Award within 60 days (or such shorter date as the
Committee may specify) following the award date by making payment to the
Company, if required, by certified or bank check or other instrument or form of
payment acceptable to the Committee in an amount equal to the specified purchase
price, if any, of the Units covered by the Award and by executing and delivering
to the Company a written instrument that sets forth the terms and conditions of
the Restricted Units in such form as the Committee shall determine.

         (c) Rights as a Unitholder. Upon complying with Section 7(b) above, a
participant shall have all the rights of a unitholder with respect to the
Restricted Units including voting and distribution rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section 7 and subject to such conditions contained in the
written instrument evidencing the Restricted Unit Award.

         (d) Restrictions. Restricted Units may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment by the
Company and its Subsidiaries, or in the case of Independent Directors, an
Independent Director ceases to be a director, for any reason (including death,
retirement, Disability, or for Cause), the Company shall have the right, at the
discretion of the Committee, to repurchase at their original purchase price as
established at Section 7(a) above Restricted Units with respect to which
conditions have not lapsed, or except as otherwise provided in any applicable
severance or employment agreement with any grantee hereunder to require
forfeiture of such Units to the Company if acquired at no cost, from the
participant or the participant's legal representative. The Company must exercise
such right of repurchase or forfeiture not later than the 90th day following
such termination of employment (unless otherwise specified in the written
instrument evidencing the Restricted Unit Award).



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         (e) Vesting of Restricted Units. Except as otherwise provided in any
applicable severance or employment agreement with any grantee hereunder, the
Committee at the time of grant shall specify the date or dates and/or the
attainment of pre-established performance goals, objectives and other conditions
on which the non-transferability of the Restricted Units and the Company's right
of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the Units on which all restrictions have lapsed shall no longer be
Restricted Units and shall be deemed "vested."

         (F) Waiver, Deferral and Reinvestment of Distributions. The written
instrument evidencing the Restricted Unit Award may require or permit the
immediate payment, waiver, deferral or investment of distributions paid on the
Restricted Units.

SECTION 8. PHANTOM UNITS.

         The Committee may from time to time grant Phantom Unit Awards to any
participant under the Plan. Each Phantom Unit Award shall be evidenced by a
written instrument and shall be subject to such terms and conditions as the
Committee may determine. Subject to such terms and conditions as may be
established by the Committee, the participant may exercise a Phantom Unit Award
or portion thereof, and thereupon shall be entitled to receive payment of an
amount equal to the Fair Market Value at the date of exercise of the Units as to
which the Phantom Unit is awarded. Such payments may be made in cash, in Units
valued at Fair Market Value as of the date of exercise, or in any combination
thereof, as the Committee in its discretion shall determine.

SECTION 9. TAX WITHHOLDING

         (a) Payment by Participant. Each participant shall, no later than the
date as of which the value of an Award of any Units or other amounts received
thereunder first becomes includable in the gross income of the participant for
federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.

         (b) Payment in Units. A participant may elect to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing the
Company to withhold from the Units to be issued pursuant to any Award a number
of Units with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the withholding amount due, or (ii) transferring to
the Company Units owned by the participant with an aggregate Fair Market Value
(as of the date the withholding is effected) that would satisfy the withholding
amount due. With respect to any participant who is subject to Section 17 of the
Act, the following additional restrictions shall apply:

                  (A) the election to satisfy tax withholding obligations
         relating to an Award in the manner permitted by this Section 9(b) shall
         be made either (1) during the period beginning on the third business
         day following



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         the date of release of quarterly or annual summary statements of
         revenues of the Company and ending on the twelfth business day
         following such date, or (2) at least six months prior to the date as of
         which the receipt of such Award first becomes a taxable event for
         federal income tax purposes;

                  (B) such election shall be irrevocable;

                  (C) such election shall be subject to the consent or
                  disapproval of the Committee, and

                  (D) the Units withheld to satisfy tax withholding must pertain
                  to an Award which has been outstanding for at least six
                  months.

SECTION 10. TRANSFER, LEAVE OF ABSENCE, ETC.

         For purposes of the Plan, the following events shall not be deemed a
termination of employment:

         (a) a transfer to the employment of the Company from a Subsidiary or
         from the Company to a Subsidiary, or from one Subsidiary to another; or

         (b) an approved leave of absence for military service or sickness, or
for any other purposes approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.

SECTION 11. AMENDMENTS AND TERMINATION

         The Board may, at any time, amend or discontinue the Plan and the
Committee may, at any time, amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award as if it were
then initially granted under this Plan) for the purpose of satisfying changes in
law without the holder's consent, provided, however that in no event shall the
Board or the Committee take any action which shall reduce or delay the
realization of the economic benefit accruing to any grantee of any Award.

SECTION 12. STATUS OF PLAN

         With respect to the portion of any Award which has not been exercised
and any payments in cash, Units or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Units or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provisions of the foregoing sentence.

SECTION 13. CHANGE OF CONTROL PROVISIONS



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         Upon the occurrence of a Change of Control as defined in this Section
13:

         (a) Each outstanding Unit Option shall automatically become fully
         exercisable notwithstanding any provision to the contrary herein.

         (b) Restrictions and conditions on Restricted Unit Awards shall
         automatically be deemed waived, and the recipients of such Awards shall
         become entitled to receipt of the Units subject to such Awards unless
         the Committee shall otherwise expressly provide at the time of grant.

         (c) "CHANGE OF CONTROL" shall mean the occurrence of any one of the
         following events:

                  (i) The acquisition by any individual, entity or group (within
         the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
         Act of 1934, as amended (the "Exchange Act")) (a "Person") of
         beneficial ownership (within the meaning of Rule 13d-3 promulgated
         under the Exchange Act) of 20% or more of either (a) the then
         outstanding shares of common stock of the Company (the "Outstanding
         Company Common Stock") or (b) the combined voting power of the then
         outstanding voting securities of the Company entitled to vote generally
         in the election of directors (the "Outstanding Company Voting
         Securities"); provided, however that the following acquisitions shall
         not constitute a Chance of Control: (I) any acquisition directly from
         the Company (excluding an acquisition by virtue of the exercise of a
         conversion privilege), (II) any acquisition by the Company, (III) any
         acquisition by any employee benefit plan (or related trust) sponsored
         or maintained by the Company or any corporation controlled by the
         Company or (IV) any acquisition by any corporation pursuant to a
         reorganization, merger or consolidation, if, following such
         reorganization, merger or consolidation, the conditions described in
         clauses (I), (II) and (III) of subsection (i) of this Section 1(c) are
         satisfied; or

                  (ii) Individuals who, as of the date hereof, constitute the
         Board (the "Incumbent Board") cease for any reason to constitute at
         least a majority of the Board; provided, however, that any individual
         becoming a director subsequent to the date hereof whose election, or
         nomination for election by the Company's shareholders, was approved by
         a vote of at least a majority of the directors then comprising the
         Incumbent Board shall be considered as though such individual were a
         member of the Incumbent Board, but excluding, for this purpose, any
         such individual whose initial assumption of office occurs as a result
         of either an actual or threatened election contest (as such terms are
         used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
         Act) or other actual or threatened solicitation of proxies or consents
         by or on behalf of a Person other than the Board; or

                  (iii) Approval by the shareholders of the Company of a
         reorganization, merger or consolidation, in each case, unless,
         following such reorganization, merger or consolidation, (a) more than
         60% of, respectively, the then outstanding shares of common stock of
         the corporation resulting from such reorganization, merger or
         consolidation and the combined voting power of the then outstanding
         voting securities of such corporation entitled to vote


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         generally in the election of directors is then beneficially owned,
         directly or indirectly, by all or substantially all of the individuals
         and entities who were the beneficial owners, respectively, of the
         Outstanding Company Common Stock and Outstanding Company Voting
         Securities immediately prior to such reorganization, merger or
         consolidation in substantially the same proportions, as their
         ownership, immediately prior to such reorganization, merger or
         consolidation, of the Outstanding Company Common Stock and Outstanding
         Company Voting Securities, as the case may be, (b) no Person (excluding
         the Company, any employee benefit plan (or related trust) of the
         Company or such corporation resulting from such reorganization, merger
         or consolidation and any Person beneficially owning, immediately prior
         to such reorganization, merger or consolidation, directly or
         indirectly, 20% or more of the Outstanding Company Common Stock or
         Outstanding Voting Securities, as the case may be) beneficially owns,
         directly or indirectly, 20% or more of, respectively, the then
         outstanding shares of common stock of the corporation resulting from
         such reorganization, merger or consolidation or the combined voting
         power of the then outstanding voting securities of such corporation
         entitled to vote generally in the election of directors and (c) at
         least a majority of the members of the board of directors of the
         corporation resulting from such reorganization, merger or consolidation
         were members of the Incumbent Board at the time of the execution of the
         initial agreement providing for such reorganization, merger or
         consolidation; or

                  (iv) Approval by the shareholders of the Company of (a) a
         complete liquidation or dissolution of the Company or (b) the sale or
         other disposition of all or substantially all of the assets of the
         Company, other than to a corporation, with respect to which following
         such sale or other disposition, (I) more than 60% of, respectively, the
         then outstanding shares of common stock of such corporation and the
         combined voting power of the then outstanding voting securities of such
         corporation entitled to vote generally in the election of directors is
         then beneficially owned, directly or indirectly, by all or
         substantially all of the individuals and entities who were beneficial
         owners, respectively, of the Outstanding Company Common Stock and
         Outstanding Company Voting Securities immediately prior to such sale or
         other disposition in substantially the same proportion as their
         ownership, immediately prior to such sale or other disposition, of the
         Outstanding Company Common Stock and Outstanding Company Voting
         Securities, as the case may be, (II) no Person (excluding the Company
         and any employee benefit plan (or related trust) of the Company or such
         corporation and any Person beneficially owning, immediately prior to
         such sale or other disposition, directly or indirectly, 20% or more of
         the Outstanding Company Common Stock or Outstanding Company Voting
         Securities, as the case may be) beneficially owns, directly or
         indirectly, 20% or more of, respectively, the then outstanding shares
         of common stock of such corporation and the combined voting power of
         the then outstanding voting securities of such corporation entitled to
         vote generally in the election of directors and (III) at least a
         majority of the members of the board of directors of such corporation
         were members of the Incumbent Board at the time of the execution of the
         initial agreement or action of the Board providing for such sale or
         other disposition of assets of the Company.

         Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the



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<PAGE>


Company which, by reducing the number of Shares or other Voting Securities
outstanding, increases (x) the proportionate number of Shares beneficially owned
by any person to 40% or more of the Shares then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any person to 40% or more of the combined voting power of all then
outstanding Voting Securities; PROVIDED, HOWEVER, that if any person referred to
in clause (x) or (y) of this sentence shall thereafter become the beneficial
owner of any additional Shares or other Voting Securities (other than pursuant
to a stock split, stock dividend, or similar transaction), then a "Change of
Control" shall be deemed to have occurred for purposes of the foregoing clause
(i).

SECTION 14. GENERAL PROVISIONS

         (a) NO DISTRIBUTION: COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee
may require each person acquiring Units pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the Units
without a view to distribution thereof.

         No Units shall be issued pursuant to an Award until all applicable
securities laws and other legal and stock exchange requirements have been
satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Units and Awards as it deems
appropriate.

         (b) OTHER COMPENSATION ARRANGEMENTS: NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Partnership from adopting other or
additional compensation arrangements, including trusts, subject to limited
partnership approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases. The adoption
of the Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.

SECTION 16. GOVERNING LAW

This Plan shall be governed by North Carolina law except to the extent such law
is preempted by federal law.


                                      Highwoods/Forsyth Limited Partnership

                                      By:      Highwoods Properties, Inc.

                                               By:
                                               Title:
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