Employment Agreement

Employment Agreement


   

                              EMPLOYMENT AGREEMENT


    
   
         THIS AGREEMENT, made and entered into as of this 12th day of 
February, 1997, by and between HIGHWOODS PROPERTIES, INC., a Maryland 
corporation, (the "Company") and GENE ANDERSON, a resident of Atlanta, 
Georgia (the "Employee").
    
                              W I T N E S S E T H :

         WHEREAS, the Company desires to obtain the services of Employee, for
its own benefit and for the benefit of any existing and future Affiliated
Company (defined as any corporation or other business entity that directly or
indirectly controls, is controlled by, or is under common control with the
Company) and Employee desires to secure employment from the Company upon the
following terms and conditions;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree that the following provisions
shall constitute their agreement of employment:

         1. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company, for the term set forth in
Section 2 below, in the position and with the duties and responsibilities set
forth in Section 3 below, and upon the other terms and conditions hereinafter
stated.

         2. Period of Employment. The term of this Agreement (the "Period of
Employment") shall commence on the date hereof and shall continue through the
earlier of the third anniversary of such date or the date of termination as
otherwise provided hereinafter. Subject to the provisions of Section 7, the
Company shall pay the Employee compensation as provided in Section 4 during the
Period of Employment, and thereafter the Company's obligations hereunder shall
end. In the event that this Agreement expires and a new written agreement is not
entered into by the parties, the provisions of Sections 8, 9, and 10 of this
Agreement will apply with respect to any continued employment of the Employee by
the Company or by any successor to the business of the Company. It is
acknowledged and agreed that in the event of a termination of the Period of
Employment prior to the third anniversary of the date hereof, such termination
will have prospective effect only and not affect or reduce the compensation and
benefits provided to the Employee hereunder prior to such date of termination.

         3.       Position; Duties; Extent of Services.

                  (a) Duties; Position. The Employee shall serve initially as
         the Senior Vice President - Highwoods/Anderson Division of Highwoods
         Properties, Inc., and he shall have responsibilities, duties and
         authorities and shall perform such services of an executive character
         as shall be designated from time to time by the Board of Directors or
         the President of the Company so long as such responsibilities, duties,
         authorities and services are generally to be performed in Atlanta,
         Georgia. The Company shall retain full direction and control of the
         means and methods by which Employee


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         performs the above services and of the place(s) at which such
         services are to be provided so long as such place is generally in
         Atlanta, Georgia.

                  (b) Other Activities. Except upon the prior written consent of
         the Board, Employee, during the Period of Employment, will not (I)
         accept any other employment, or (II) engage, directly or indirectly, in
         any other business activity (whether or not pursued for pecuniary
         advantage) that is or may be competitive with, or that might place him
         in a competing position to that of the Company or any Affiliated
         Company with respect to the development, operation, management or
         leasing of any industrial, office, research and development, or
         warehouse and distribution properties, including properties in which
         Employee has an ownership interest.

         4. Compensation. In consideration of the services to be rendered by the
Employee to the Company and in consideration of the Employee's other covenants
hereunder, the Employee will receive a minimum base salary at the rate of
$150,000.00 per year, payable at such intervals as may be established by the
Company from time to time for salary payments to its management employees. The
Employee shall receive such salary increases and/or bonuses as the Board of
Directors of the Company may from time to time approve in its discretion. The
Employee shall also be entitled to participate in such incentive compensation
plans as the Company at its discretion may from time to time maintain for its
executive employees generally with a bonus percentage of up to 70% of base
salary but not to exceed $105,000.00.

         5. Employee Benefits. The Employee will be entitled to participate, in
accordance with the provisions thereof, in the employee benefit plans made
available from time to time by the Company to its senior management employees
generally. In the event of the death or total disability of the Employee, the
Employee or his estate or beneficiaries shall also be entitled to benefits in
accordance with Section 7 hereof.

         6. Business Expense Reimbursements. During the period of his employment
under this Agreement, the Employee will be entitled to reimbursement for all
reasonable, out-of-pocket expenses incurred by him in performing services
hereunder, including, but not limited to, an automobile allowance of not less
than $550 per month, provided that such expenses are incurred in accordance with
the applicable policies of the Company. The Employee shall be entitled to such
reimbursement upon presentation by the Employee, from time to time, of an
itemized account of such expenses and appropriate documentation therefor.

         7.       Termination of Employment.

                  (a) Death. In the event of the death of the Employee during
         his employment under this Agreement, the following payments shall be
         made to the Employee's designated beneficiary, or, in the absence of
         such designation, to the estate or other legal representative of the
         Employee: (I) his base salary for the month in which his death occurs,
         and (II) such bonuses (if any) as have been earned by the Employee and
         not paid to him at the time of his death. In the event of the
         Employee's 



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         death any rights and benefits the Employee or his estate or any other
         person may have under employee benefit plans and programs of the
         Company generally shall be determined in accordance with the terms of
         such plans and programs. Except as provided in this Section 7, neither
         the Employee's estate nor any other person shall have any rights or
         claims arising out of wages or employee benefits against the Company in
         the event of the death of the Employee during his employment hereunder.

                  (b) Long-Term Disability. In the event of the Employee's
         disability (as hereinafter defined) during his employment under this
         Agreement, the Period of Employment may be terminated by the Company.
         For the first six months following termination of employment due to
         disability, the Employee shall be paid his base salary at the rate in
         effect at the time of the commencement of disability. Thereafter, the
         Employee shall be entitled to benefits in accordance with and subject
         to the terms and provisions of the Company's long-term disability plan
         for senior management employees, as in effect at the time of the
         commencement of disability. For purposes of this Agreement,
         "disability" shall have the same meaning as given that term under the
         Company's long-term disability plan for senior management employees, as
         in effect from time to time. Anything herein to the contrary
         notwithstanding, if, during the six-month period following a
         termination of employment under this Section 7 in which salary
         continuation payments are payable by the Company, the Employee becomes
         reemployed or otherwise engaged (whether as an employee, partner,
         consultant, or otherwise), any salary or other remuneration or benefits
         earned by him from such employment or engagement shall offset any
         payments due him under this Section 7. In the event of the Employee's
         disability, any rights and benefits the Employee may have under
         employee benefit plans and programs of the Company generally shall be
         determined in accordance with the terms of such plans and programs.
         Upon termination of the Employee's employment by reason of disability
         under this Section 7, the Employee shall be entitled, in addition to
         the other payments provided for in this Section 7, to payment of such
         bonuses (if any) as may have been earned by the Employee and not paid
         to him at the time of such termination. Except as provided in this
         Section 7, neither the Employee nor his estate, or any other person,
         shall have any rights or claims arising out of wages or employee
         benefits against the Company in the event of the termination of the
         Employee's employment by reason of disability.

                  (c) Termination for Cause. Nothing herein shall prevent the
         Company from terminating the Period of Employment for Cause (as
         hereinafter defined). Upon termination for Cause, the Employee shall
         receive his base salary only through the date of termination, and
         neither the Employee nor any other person shall be entitled to any
         further payments from the Company, for salary, unpaid bonuses or any
         other amounts. Any rights and benefits the Employee may have under
         employee benefit plans and programs of the Company generally following
         a termination of the Employee's employment for Cause shall be
         determined in accordance with the terms of such plans and programs. For
         purposes of this Agreement, termination for Cause shall mean (I)
         termination due to (y) willful or gross neglect of duties for which


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         employed, or (z) willful misconduct in the performance of duties for
         which employed, in either such instance so as to cause material harm to
         the Company, all such facts to be determined in good faith by the Board
         of Directors of the Company, (II) termination due to the Employee's
         committing fraud, misappropriation or embezzlement in the performance
         of his duties as an employee of the Company, or (III) termination due
         to the Employee's committing any felony for which he is convicted and
         which, as determined in good faith by the Board of Directors of the
         Company, constitutes a crime involving moral turpitude.

                  (d) Termination by the Company Other than for Cause.
         Notwithstanding any other term or provision of this Agreement, the
         Company may terminate the Period of Employment at any time and for
         whatever reason it deems appropriate, or for no reason. In the event
         such termination by the Company occurs and is not due to disability as
         provided in Section 7(b) above or for Cause as provided in Section 7(c)
         above, the Employee shall be entitled to payment of his base salary, at
         the rate in effect at the time of such termination, until the fourth
         anniversary of the date hereof, provided, however, that such salary
         continuation payments shall cease in the event of the Employee's death
         prior to completion of such payments. The Employee shall also be
         entitled to such bonuses (if any) as have been earned by the Employee
         and not paid to him at the time of such termination. Following a
         termination of his employment by the Company under the circumstances
         described above in this Section 7(d), the Employee will make reasonable
         efforts to find other employment and, upon his becoming reemployed or
         otherwise engaged (whether as an employee, partner, consultant, or
         otherwise), any salary or other remuneration or benefits accruing to
         him from such other employment or engagement shall offset any salary
         continuation payments due him under this Section 7. Any rights and
         benefits the Employee may have under employee benefit plans and
         programs of the Company generally following a termination of the
         Employee's employment under the circumstances described in this Section
         7(d) shall be determined in accordance with the terms of such plans and
         programs. Except as provided in this Section 7(d), neither the Employee
         nor any other person shall have any rights or claims arising out of
         wages or employee benefits against the Company by reason of the
         termination of the Employee's employment under the circumstances
         described in this Section 7(d).

                  (e) Voluntary Termination by the Employee. At any time,
         Employee may terminate, without liability, the Period of Employment for
         any reason, by giving thirty (30) days' advance written notice to the
         Company. If Employee terminates his employment pursuant to this Section
         7(e), the Company shall have the option, in its complete discretion, to
         terminate Employee immediately without the running of the notice
         period. Such earlier termination by the Company shall nevertheless be
         treated as a termination by the Employee as provided by this Section
         7(e). The Company shall pay Employee the compensation to which he is
         entitled pursuant to Section 4 through the end of the notice period,
         or, if elected, through the day upon which early termination is elected
         pursuant to the foregoing sentence, and thereafter all obligations of
         the Company hereunder shall terminate.


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         8.       Covenants Not to Compete.

                  (a) Scope of Agreement Not to Compete. Except as provided in
         Section 8(c) with regard to a termination of the Period of Employment
         by the Company other than for Cause, the Employee promises and agrees
         that, during the Period of Employment and until the expiration of one
         year following the termination or expiration of the Period of
         Employment, he will not for himself or any third party, directly or
         indirectly (I) engage in the development, operation, management or
         leasing of any industrial, office, research and development, or
         warehouse and distribution properties in any town, city, county,
         municipality or metropolitan area in which the Company is engaged in
         business at the time of termination, (II) interfere with, disrupt or
         attempt to disrupt the relationship, contractual or otherwise, between
         the Company and any third party, including but not limited to its
         employees, contractors, tenants and lessees.

                  (b) Enforceability. It is the desire and intent of the parties
         that the provisions of this Section 8 shall be enforced to the fullest
         extent permitted under the laws and public policies of each
         jurisdiction in which enforcement is sought. Accordingly, if any
         particular portion of this Section 8 shall be adjudicated to be invalid
         or unenforceable, such adjudication shall apply only with respect to
         the operation of that portion in the particular jurisdiction in which
         such adjudication is made, and all other portions shall continue in
         full force and effect.

                  (c) Termination Not for Cause. It is expressly agreed that the
         provisions and covenants in this Section 8 shall not apply and shall be
         of no force or effect in the event the Company terminates the
         Employee's employment under this Agreement and such termination is not
         due to disability or for cause.

         9.       Confidential Information:  Rights to Materials.

                  (a) Confidential Information. The Employee promises and agrees
         that he will not, either while in the Company's employ or at any time
         thereafter, disclose to any person not employed by the Company, or not
         engaged to render services to the Company, or use, for himself or any
         other person, firm, corporation or entity, any confidential information
         of the Company obtained by him while in the employ of the Company,
         including, without limitation, any of the Company's methods, processes,
         techniques, practices, research data, marketing and sales information,
         personnel data, customer lists, financial data, plans, know-how, trade
         secrets, and proprietary information of the Company; provided, however,
         that this provision shall not preclude the Employee from use or
         disclosure of information known generally to the public (other than
         information known generally to the public as a result of a violation of
         this Section 9(a) by the Employee), from use or disclosure of
         information acquired by the Employee outside of his affiliation with
         the Company, from disclosure required by law



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         or court order, or from disclosure or use appropriate and in the 
         ordinary course of carrying out his duties as an employee of the 
         Company.


                  (b) Rights to Materials. The Employee further promises and
         agrees that, upon termination of his employment for whatever reason and
         at whatever time, he will not take with him, without the prior written
         consent of an officer authorized to act in the matter by the Board of
         Directors of the Company, any records, files, memoranda, reports,
         customer lists, drawings, plans, sketches, documents, specifications,
         and the like (or any copies thereof) relating to the business of the
         Company or any of its current or future Affiliated Companies.

      10.         Stock Options.  As of the date hereof, Employee shall be 
awarded 30,000 stock options, which may be either incentive or nonqualified 
options, with a term of ten years, exercisable in four equal annual installments
beginning on the second anniversary of the date of grant at the fair market 
value of the Company's stock at the date of grant, to be issued under the terms
and conditions of the Highwoods Properties, Inc. 1994 Stock Option Plan.

      11. Injunctive Relief. The Employee acknowledges and agrees that the
Company would suffer irreparable injury in the event of a breach by him or any
of the provisions of Section 8 or Section 9 of this Agreement and that the
Company shall be entitled to an injunction restraining him from any breach or
threatened breach thereof. The Employee further agrees that, in the event of his
breach of any provision of Section 8 or 9 hereof, the Company shall be entitled
to cease any payments otherwise due and payable to the Employee hereunder.
Nothing herein shall be construed, however, as prohibiting the Company from
pursuing any other remedies at law or in equity which it may have for any such
breach or threatened breach of any provision of Section 8 or 9 hereof, including
the recovery of damages from the Employee.

      12. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Employee and his personal representatives, estate
and heirs and the Company and its successors and assigns, including without
limitation any corporation or other entity to which the Company may transfer all
or substantially all of its assets and business (by operation of law or
otherwise) and to which the Company may assign this Agreement. The Employee may
not assign this Agreement or any part hereof without the prior written consent
of the Company, which consent may be withheld by the Company for any reason it
deems appropriate.

      13. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the employment of the Employee by the Company and
supersedes and replaces all other understandings and agreements, whether oral or
in writing, if any there be, previously entered into be the parties with respect
to such employment.

      14. Amendment; Waiver. No provisions of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver is agreed to in
writing and signed by the Employee and by a duly authorized officer of the
Company. No waiver by either party of any breach by the other party of any
provision of this Agreement shall be deemed a waiver of any other breach.



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      15.         Notices.  Any notice to be given hereunder shall be in writing
and delivered personally, or sent by certified mail or registered mail, postage
prepaid, return receipt requested, addressed to the party concerned at, if to 
the Company, the Company's address and if to the Employee, at the Employee's 
home address.

      16.         Severability.  If any one or more of the provisions contained 
in this Agreement shall be invalid, illegal, or unenforceable in any respect 
under any applicable law, the validity, legality and enforceability of the 
remaining provisions shall not in any way be affected or impaired thereby.

      17.         Withholding.  Anything herein to the contrary notwithstanding,
all payments made by the Company hereunder shall be subject to the withholding 
of such amounts relating to taxes as the Company may reasonably determined it 
should withhold pursuant to any applicable law or regulation.

      18.         Governing Law.  This Agreement shall be governed by and 
construed in accordance  with the laws and judicial decisions of the State of 
Georgia.

        IN WITNESS WHEREOF, the parties have executed this Agreement on the day 
and year first above written.


                                                     HIGHWOODS PROPERTIES, INC.

ATTEST:
   
                                                     By: /s/ Ronald P. Gibson
                                                         _____________________

                                                     Title: President
                                                            __________________

/s/ Edward J. Fritsch
________________________________
                       Secretary
    

[CORPORATE SEAL]



                                                     EMPLOYEE
   
                                                     /s/ H. Gene Anderson
                                                     _____________________(SEAL)
                                                     GENE ANDERSON
    
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