Commitments and Contingencies

Commitments

The Company leases office facilities under non-cancelable operating leases that expire at various dates through 2023 and include fixed or minimum payments plus, in some cases, scheduled base rent increases over the terms of the lease. Certain leases provide for monthly payment of real estate taxes, insurance and other operating expenses applicable to the property. The Company has various leases that grant a free rent period and entitle the Company to a lease incentive. The accompanying consolidated financial statements reflect all rent expense on a straight-line basis over the term of the leases. In addition to office leases, the Company leases a nominal amount of equipment under operating leases that expire at various dates through 2016.

As detailed in Note 3, the Company is committed to obligations pursuant to the TRA. The timing of payments is subject to certain contingencies including Duff & Phelps Corporation having sufficient taxable income to utilize all of the tax benefits defined in the TRA.

Future minimum annual lease payments and obligations pursuant to the TRA are summarized as follows:



	Operating Lease Obligations		Payments Pursuant to the TRA		Revolving Credit Facility^(a)		Contingent Consideration Obligations^(b)		Acquisition Retention Obligations^(c)		Total
Year Ending December 31,
2013	$	21,257	$	7,623	$	—	$	5,964	$	3,478	$	38,322
2014	19,688		8,985		—		6,662		4,046		39,381
2015	18,678		9,324		—		2,303		2,934		33,239
2016	16,870		9,686		22,500		1,407		167		50,630
2017	16,033		10,080		—		171		—		26,284
Thereafter	62,505		102,383		—		778		—		165,666
	$	155,031	$	148,081	$	22,500	$	17,285	$	10,625	$	353,522



	_______________
	(a)	Reflects principal payments only. Excludes amounts for interest and unused commitment fees.
	(b)	Reflects the probability weighted fair market value of acquisition-related contingent consideration payable. The maximum remaining eligible contingent consideration payable totaled $24,765 at December 31, 2012.
	(c)	Acquisition retention expenses include expense associated with cash-based retention incentives to certain individuals who became employees of the Company through an acquisition. Cash-based incentives are generally subject to certain annual or cliff vesting provisions up to four years contingent upon certain conditions which may include employment. These incentives may be in addition to future grants or cash bonuses awarded as a component of ongoing incentive compensation.

Total rental expense for operating leases is summarized as follows:



	Year Ended
	December 31, 2012		December 31, 2011		December 31, 2010
Rental expense	$	18,015	$	15,672	$	15,690

Contingencies

From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business.

Additionally, on January 15, 2013, a putative class action captioned Rutkowski v. Gottdiener et al., Index. No. 650144/2013, was filed in the Supreme Court of the State of New York (New York County) against us and our directors, as well as D&P Acquisitions, Parent, Merger Sub I and Merger Sub II. The complaint alleges that our directors breached their fiduciary duties of good faith and loyalty and failed to maximize shareholder value when they accepted an offer to sell the Company at a price that fails to reflect the true value of the Company, thus depriving common stock shareholders of the reasonable, fair and adequate value of their shares. The complaint further alleges that there is no indication that the proposed acquisition was the result of a competitive bidding process or arms-length negotiation where all possible synergistic acquirers were vetted. The complaint also alleges that the Company, D&P Acquisitions, Parent, Merger Sub I and Merger Sub II aided and abetted the directors' breaches of fiduciary duty. Among other things, the complaint seeks injunctive relief prohibiting consummation of the proposed acquisition, or rescission (in the event the transaction has already been consummated), as well as damages, costs and disbursements, including reasonable attorneys' and experts' fees. On February 11, 2013, the plaintiff filed an amended complaint in this action that adds claims challenging the adequacy of the disclosures the Company has made in connection with the proposed acquisition. On February 15, 2013 the plaintiff filed a motion seeking expedited discovery and to set a timetable for a hearing on a preliminary injunction.

On January 17, 2013, a putative class action captioned West Palm Beach Police Pension Fund v. Duff & Phelps Corporation et al., Civil Action No. 8231-VCN, was filed in the Delaware Court of Chancery. The complaint alleges that our board of directors breached its fiduciary duties of care and loyalty by failing to take steps to maximize the value of the Company for its public shareholders and instead diverting consideration to themselves. The complaint further alleges that Carlyle Investment Management, L.L.C. (d/b/a The Carlyle Group), Stone Point Capital LLC, Pictet & Cie, The Edmond de Rothschild Group, D&P Acquisitions, Parent, Merger Sub I and Merger Sub II aided and abetted the breaches of fiduciary duties by the members of our board of directors. The complaint seeks injunctive relief, or rescission (in the event the proposed transaction has already been consummated) and rescissory or other compensatory damages, as well as costs and disbursements, including reasonable attorneys' and experts' fees. On February 21, 2013, the plaintiff filed an amended complaint in this action that adds claims challenging the adequacy of the disclosures the Company has made in connection with the proposed acquisition.