Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies

Commitments and Contingencies

13.          Commitments and Contingencies

As of September 30, 2012, we had commitments of approximately $59.9 million for future tenant improvements and leasing commissions.

Effective as of September 1, 2012, we entered into Employment Agreements (collectively, the “Employment Agreements”) with each of the following executive officers: Scott W. Fordham, our Chief Operating and Chief Financial Officer; William J. Reister, our Chief Investment Officer and Executive Vice President; Telisa Webb Schelin, our Senior Vice President - Legal, General Counsel and Secretary; Thomas P. Simon, our Senior Vice President - Finance and Treasurer; and James E. Sharp, our Chief Accounting Officer.  The term of each Employment Agreement commenced on September 1, 2012 and ends on December 31, 2015, provided that the term will automatically continue for an additional one-year period unless either party provides 60 days written notice of non-renewal prior to the expiration of the initial term.  The agreements provide for acceleration of vesting of compensation received under the long-term incentive plan and lump sum payments upon termination of employment without cause.  In the event the Company terminated all of these agreements, approximately $4.8 million would be due in the form of lump sum payments.

We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters, individually or in the aggregate, will not have a material adverse effect on our results of operations or financial condition.

On September 17, 2012, a lawsuit, seeking class action status, was filed in the United States District Court for the Northern District of Texas (Dallas Division).  Neither we nor any of the other defendants believe the suit has merit and each intend to defend it vigorously.  The named plaintiff, Ms. Lillian Hohenstein, purports to file the suit individually and on behalf of all others similarly situated.  Ms. Hohenstein and the persons that she claims are similarly situated persons are referred to below as “Plaintiffs.”

Plaintiffs named us, BHH (our previous sponsor) as well as each of our directors: Robert M. Behringer, Robert S. Aisner, Ronald Witten, Charles G. Dannis and Steven W. Partridge (individually a “Director” and collectively the “Directors”) and Scott W. Fordham, the Company’s Chief Operating and Financial Officer, and James E. Sharp, the Company’s Chief Accounting Officer (individually an “Officer” and collectively the “Officers”), as defendants.

Plaintiffs allege that the Directors violated Sections 14(a) and (e) and Rules 14a-9 and 14e-2(b) of and under federal securities law in connection with: (1) the recommendations made to the shareholders in response to certain tender offers made by CMG Partners, LLC and its affiliates; and (2) the solicitation of proxies for our annual meeting of shareholders held on June 24, 2011.

Plaintiffs also allege that we, BHH, the Directors and Officers each individually breached various fiduciary duties purportedly owed to Plaintiffs.  Plaintiffs also allege that we, BHH, the Directors and Officers were unjustly enriched by the purported failures to provide complete and accurate disclosure regarding, among other things, the value of our common stock and the source of funds used to pay distributions.  Finally, Plaintiffs allege that we, BHH, the Directors and Officers were also negligent in permitting us to make what Plaintiffs allege were misleading disclosures.

Plaintiffs seek the following relief: (1) that the court declare the proxy to be materially false and misleading; (2) that the filings on Schedule 14D-9 were false and misleading; (3) that the authorization secured pursuant to the proxy be found null and void and that we be required to re-solicit a shareholder vote pursuant to court supervision and court approved proxy materials; (4) that the defendants have violated their fiduciary duties to the shareholders who purchased our shares from February 19, 2003 to the present; (5) that the defendants be required to account to Plaintiffs for damages suffered by Plaintiffs; and (6) that Plaintiffs be awarded costs of the action including reasonable allowance for attorneys and experts fees.