TIER Tier Reit, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

Filed by the Registrant   x

Filed by a Party other than the Registrant    o

Check the appropriate box:

o    Preliminary Proxy Statement

o     Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x    Definitive Proxy Statement

o    Definitive Additional Materials

o    Soliciting Materials Pursuant to Rule 14a-12

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TIER REIT, INC.

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TIER REIT, INC.

5950 Sherry Lane, Suite 700

Dallas, Texas 75225

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HOW TO VOTE IF YOU ARE A STOCKHOLDER OF RECORD

Your vote is important. Please save us the expense of a second mailing by voting promptly.

Voting by Proxy for Shares Registered Directly in the Name of the Stockholder

If you hold your shares of common stock in your own name as a holder of record with our transfer agent, you may instruct the proxy holders named in the proxy card how to vote your shares of common stock in one of the following ways:

Vote by Internet. You may vote via the Internet by following the instructions provided in the Notice or, if you received printed copies of the proxy materials, on your proxy card. The website for Internet voting is printed on the Notice and also on your proxy card. Please have your Notice or proxy card in hand. Internet voting is available 24 hours per day until 11:59 p.m., Eastern Time, on June 21, 2016. You will receive a series of instructions that will allow you to vote your shares of common stock. If you vote via the Internet, you do not need to return your proxy card.

Vote by Telephone.  If you received printed copies of the materials, you also have the option to vote by telephone by calling the toll-free number listed on your proxy card. Telephone voting is available 24 hours per day until 11:59 p.m., Eastern Time, on June 21, 2016. When you call, please have your proxy card in hand. You will receive a series of voice instructions that will allow you to vote your shares of common stock. If you did not receive printed materials and would like to vote by telephone, you must request printed or email copies of the proxy materials by following the instructions on your Notice.  If you vote via telephone, you do not need to return your proxy card.

Vote by Mail.  If you received printed copies of the proxy materials and would like to vote by mail, please mark, sign and date your proxy card and return it promptly in the postage-paid envelope provided. If you did not receive printed materials and would like to vote by mail, you must request printed copies of the proxy materials by following the instructions on your Notice.

Voting by Proxy for Shares Registered in Street Name

If your shares of common stock are held in street name, you will receive instructions from your broker, bank or other nominee that you must follow in order to have your shares of common stock voted.

Voting in Person at the Meeting

If you are a stockholder of record and attend the annual meeting, you may vote in person at the meeting. If your shares of common stock are held in street name and you wish to vote in person at the meeting, you will need to obtain a “legal proxy” from the broker, bank or other nominee that holds your shares of common stock of record prior to attending the meeting.

How Votes are Counted

All proxies that have been properly authorized and not revoked will be voted at the annual meeting. If you submit a proxy but do not indicate any voting instructions, the shares represented by that proxy will be voted: (1) FOR the election of each of the six director nominees named in Proposal One; (2) FOR the approval, on a non-binding advisory basis, of the compensation of our named executive officers as set forth in Proposal Two; and (3) FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 2016 fiscal year as set forth in Proposal Three. With respect to any other business that may properly come before the stockholders for a vote at the annual meeting, your shares will be voted in the discretion of the holders of the proxy.

Quorum Requirement and Required Vote

The presence, in person or by proxy, of the holders of a majority of the outstanding shares of common stock entitled to vote at the annual meeting is necessary to constitute a quorum for the transaction of business at the meeting. A stockholder may withhold his or her vote in the election of directors or abstain with respect to any other item submitted for stockholder approval. Broker non-votes are shares represented at the meeting held by brokers, as to which instructions have not been

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received from the beneficial owners or persons entitled to vote such shares and with respect to which, on a particular matter, the broker does not have discretionary voting power to vote such shares. Withheld votes, abstentions and broker non-votes will be counted as present and entitled to vote for purposes of determining the existence of a quorum.

With respect to Proposal One, directors are elected by a plurality of the votes cast. With respect to the approval, on a non-binding, advisory basis, of the compensation of our named executive officers as set forth in Proposal Two and the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 2016 fiscal year as set forth in Proposal Three, the affirmative vote of a majority of votes cast is required for approval. A majority of votes cast means that the number of shares voted FOR a proposal exceeds the number of votes cast AGAINST the proposal.

Any shares not voted (whether by abstention, broker non-vote or otherwise) will have no impact on the election of directors in Proposal One and no impact on the non-binding, advisory vote on the compensation of our named executive officers in Proposal Two, the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 2016 fiscal year as set forth in Proposal Three, or any other business that may properly come before the stockholders for a vote at the annual meeting.

Revocation of Proxies

You can revoke your proxy at any time before it is voted by:

·                   providing written notice of your revocation to the Company’s corporate secretary;

·                   signing and submitting a new proxy card with a later date;

·                   authorizing a new proxy by telephone or Internet (your latest telephone or Internet proxy is counted); or

·                   attending and voting your shares in person at the annual meeting, provided that attending the annual meeting will not revoke your proxy unless you specifically so request.

Information Regarding Tabulation of the Vote

Broadridge Financial Solutions, Inc. will tabulate all votes cast at the annual meeting and will act as the inspector of election at the annual meeting.

Proxy Solicitation

We will bear the entire cost of soliciting proxies, including the cost associated with preparing, assembling, printing and mailing this proxy statement, the proxy card and any additional solicitation material that we may provide to stockholders. Further, we may reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to the owners of our common stock. Our officers and employees may solicit proxies, but they will not be paid additional compensation for doing so.

Interest of Certain Persons in Matters to Be Acted On

Except as described below, no director, executive officer or person who has served as director or executive officer at any time since January 1, 2015, nominee for election as a director, associate of any director, executive officer or nominee or any other person has any substantial interest, direct or indirect, through security holdings or otherwise, in any matter to be acted upon at the annual meeting.

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Generally, any stockholder seeking to make a nomination or bring other business before the annual meeting must provide, among other things, written notice to our corporate secretary not later than the deadline for such proposals, which was previously disclosed to stockholders. We did not receive notice of any proposals prior to the deadline.

Electronic Delivery of Future Proxy Materials

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions on your proxy card or Notice to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

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Our board believes that Mr. Gilchrist’s professional experience and other board service make him well-qualified to serve on our board.

Charles G. Dannis, 66 , served as our non-executive chairman of the board from February 2013 to June 2015 and has served as an independent director since February 2003. Mr. Dannis has over 35 years of experience in the commercial real estate industry, having been a commercial real estate appraiser and consultant since 1972. Mr. Dannis co-founded the firm Crosson Dannis, Inc., a real estate appraisal and consulting firm, in 1977, and had been employed by the firm until it was merged into National Valuation Consultants, Inc. in January 2015, where he is a Senior Managing Director. He is past treasurer and member of the board of the National Council of Real Estate Investment Fiduciaries (1997-2001; 2015-present) and past chairman of its valuation committee. He has been an active member of the Pension Real Estate Association, American Real Estate Society and Urban Land Institute. Since 1988, Mr. Dannis has been an adjunct professor/lecturer in Real Estate and Urban Land Economics at the Cox School of Business at Southern Methodist University in both the undergraduate and graduate schools; he also is an award-winning teacher for the Mortgage Bankers Association of America’s School of Mortgage Banking. He is a member of the Appraisal Institute. Mr. Dannis received a bachelor of business administration degree from Southern Methodist University. He currently serves on the boards of the Dallas Marathon (Chairman Emeritus), The Friends of the Katy Trail, The Shelton School and The Folsom Institute For Real Estate at SMU.

Our board believes Mr. Dannis’ professional experience, along with his experience as an educator, uniquely qualifies him for service on our board.

Scott W. Fordham, 48 , is our chief executive officer and president and has been a director since July 2014. Mr. Fordham has more than 20 years of experience in corporate finance and accounting with an emphasis on capital markets, financial forecasting and strategy, and accounting practices for public companies. His experience includes over 23 years in the real estate industry and more than 19 years with real estate investment trusts. From January 2007 until joining the Behringer organization in May 2008, he served as senior vice president and chief accounting officer for Apartment Investment and Management Company (Aimco) (NYSE: AIV). From November 1992 to December 2006, Mr. Fordham held various finance and accounting positions with Prentiss Properties Trust and its successor, Brandywine Realty Trust (NYSE: BDN), and served as chief accounting officer from May 2004 to December 2006. Mr. Fordham was also previously employed by PricewaterhouseCoopers LLP. Mr. Fordham is a certified public accountant in the State of Texas and received a bachelor of business administration degree in accounting from Baylor University.

Our board believes that Mr. Fordham’s real estate knowledge and executive leadership experience make him well-suited to serve on our board.

Thomas M. Herzog, 53 , has served as an independent director since April 2015. Mr. Herzog has served as Chief Financial Officer of UDR, Inc. (NYSE: UDR), a leading multifamily real estate investment trust, since January 2013. Previously, Mr. Herzog served as Chief Financial Officer at each of Amstar, a Denver-based real estate investment company, from 2011 to 2013; HCP, Inc. (NYSE: HCP), a fully integrated REIT serving the healthcare industry, from 2009 to 2011; and Apartment Investment and Management Company (Aimco) (NYSE: AIV) from 2005 to 2009. Mr. Herzog also held the position of Chief Accounting Officer at Aimco from 2004 to 2005. Prior to joining Aimco, Mr. Herzog spent four years at GE Real Estate as an executive and ten years at the accounting firm Deloitte & Touche LLP.

Our board believes that Mr. Herzog’s extensive industry and executive experience make him well-suited to serve on our board.

Dennis J. Martin, 60 , has served as an independent director since January 1, 2016.  Mr. Martin has been the Chief Financial Officer of Carefree Communities, Inc., a privately-held real estate investment trust that owns and operates manufactured home communities and destination RV resorts, since March 2014. From 2010 to 2013, Mr. Martin was the Chief Financial Officer of American Residential Communities, a privately-held operator of manufactured home communities. Previously, Mr. Martin served as a Senior Vice President of HCP, Inc. (NYSE: HCP), a fully integrated REIT serving the healthcare industry, from 2008 to 2010, and as a Senior Vice President of Apartment Investment and Management Company (Aimco) (NYSE: AIV) from 2004 to 2008. Mr. Martin held the positions of Vice President of Investor Relations and Senior Vice President Corporate Planning & Treasurer at ICG Communications Inc. from 1999 to 2002 and was employed for 18 years by Gulf Canada from 1981 to 1999, at the time one of Canada’s largest oil and gas companies, and held the position of Director Strategic Planning and Investor Relations for Gulf Canada and its 72%-owned subsidiary Gulf Indonesia.

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Our board believes that Mr. Martin’s extensive industry and executive experience qualify him to serve on our board.

G. Ronald Witten, 65 , has served as an independent director since April 2004. Mr. Witten has over 40 years of experience in the commercial real estate industry. Since January 2001, Mr. Witten has served as president of Witten Advisors, LLC, a market advisory firm providing ongoing market advisory services to apartment developers, investors and lenders nationwide to identify the location and timing of future development and acquisition opportunities in major markets. Mr. Witten began his career in 1973 at M/PF Research, Inc., a national leader in apartment market data and market analysis, and served as its president from 1978 to 2000. Mr. Witten has been an active member of the Urban Land Institute, where he served as chairman of both the Multi-Family Silver Council and the Multi-Family Gold Council, and the National Multi Housing Council and its research advisory group. Mr. Witten received a bachelor of business administration degree from Texas Tech University and has completed graduate classes in statistics and economics at Southern Methodist University.

Our board believes that Mr. Witten’s knowledge of, and experience with, market analysis makes him well-suited to serve on our board.

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GOVERNANCE AND BOARD MATTERS

Independence

Our charter and the rules of the NYSE require a majority of the members of our board of directors to qualify as “independent.” Our charter defines an “independent director” as a director who satisfies the independence requirements under the rules and regulations of the NYSE as in effect from time to time. To qualify under the NYSE independence standards, in addition to satisfying certain bright-line criteria, the board of directors must affirmatively determine that a director has no material relationship with us, either directly or as a partner, stockholder or officer of an organization that has a relationship with us.

Consistent with the NYSE independence standards, our board has reviewed all relevant transactions or relationships between each director, or any of his family members, and the Company, our management team and our independent registered public accounting firm. The board has concluded that each of Richard I. Gilchrist, Charles G. Dannis, Thomas M. Herzog, Dennis J. Martin, Steven W. Partridge and G. Ronald Witten, a majority of the members of our board, is “independent” under the independence standards of the NYSE.

Board Leadership Structure and Risk Oversight

We have a bifurcated chairman of the board and executive leadership arrangement. Mr. Gilchrist serves as our non-executive chairman of the board, and Mr. Fordham is our president and chief executive officer. Our board believes that having separate persons serving in the roles of chairman of the board and president and chief executive officer enables Mr. Fordham, as president and chief executive officer, to focus his efforts on setting our strategic direction as well as to provide day-to-day leadership and allows Mr. Gilchrist the opportunity to lead the board and facilitate communication among directors and management. Accordingly, we believe this structure is presently the best governance model for the Company and our stockholders.

Each board member is kept apprised of our business and developments impacting our business, and each director has complete and open access to our executive officers and management team.

The board of directors oversees risk through (1) its review and discussion of regular periodic reports made to the board and its committees by our management team, including reports and studies on existing market conditions, leasing activity and property operating data, as well as actual and projected financial results, and various other matters relating to our business, (2) the approval by the board of directors of all material transactions, including, among others, financing transactions and acquisitions and dispositions of properties, and (3) regular periodic reports from our independent registered public accounting firm and other outside consultants regarding various areas of potential risk, including, among others, those relating to the qualification of the Company as a REIT for tax purposes and our internal control over financial reporting.

Meetings of the Board of Directors and Committees

During the fiscal year ended December 31, 2015, the board met ten times and acted by unanimous written consent two times. Each of the persons nominated for election to the board who served as directors during 2015 attended at least 75% of the aggregate number of meetings of the board and the meetings of the committees on which he served. We encourage our directors to attend our annual meeting of stockholders. In 2015, Messrs. Aisner, Dannis, Fordham, Herzog, Mattox, Partridge and Witten attended the annual meeting of stockholders.

The board of directors has established three permanent committees: the audit committee, the compensation committee and the nominating committee. Each member of our audit committee (Messrs. Martin, Partridge and Witten), compensation committee (Messrs. Dannis, Gilchrist and Herzog) and nominating committee (Messrs. Gilchrist, Herzog and Witten) has been determined by the board to be “independent” under the independence standards of the NYSE. In addition, each member of the audit committee has been determined to be “independent” under the rules of the SEC. Each committee has adopted a written charter approved by the board of directors, which can be found on our website at www.tierreit.com . During the fiscal year ended December 31, 2015, the audit committee met four times and acted by unanimous written consent two times, the compensation committee met seven times and acted by unanimous written consent one time, and the nominating committee met five times and acted by unanimous written consent one time.

Audit Committee. The audit committee’s primary functions are to evaluate and approve the services and fees of our independent registered public accounting firm, to periodically review the independent registered public accounting firm’s

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independence, to review the Company’s major financial risk exposures and the steps taken to monitor and minimize those exposures, and to assist our board of directors in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the stockholders and others, the system of internal control that management has established and the audit and financial reporting process. Mr. Partridge is the chairman of the audit committee, and our board of directors has determined that each of Messrs. Martin and Partridge is an “audit committee financial expert,” as defined by the rules of the SEC.

Compensation Committee. The compensation committee assists the board of directors in discharging its responsibility in all matters of compensation practices, including any salary, bonus and other forms of compensation that we may pay to our executive officers and our directors. In addition to establishing the compensation for our executive officers and making recommendations regarding the compensation of the non-employee directors, the primary duties of the committee include approving all stock option grants, restricted stock awards, restricted stock unit awards, warrants, stock appreciation rights and other current or deferred compensation payable with respect to the current or future value of our shares of common stock. The compensation committee is also charged with overseeing our executive compensation policies and our equity compensation programs. Mr. Dannis is the chairman of the compensation committee.

Nominating Committee. The nominating committee is responsible for recommending nominees to serve on our board of directors and overseeing the applicable corporate governance guidelines and policies of the Company, particularly as these policies relate to the selection of persons to serve on the board. The nominating committee considers all nominees recommended by stockholders if submitted to the committee in accordance with the procedures specified in Section 2.13 of our bylaws. Generally, this requires that the stockholder send certain information about the nominee to our corporate secretary between 90 and 120 days prior to the first anniversary of the mailing of notice for the annual meeting held in the prior year. Because our directors perform a critical role in guiding our strategic direction and oversee our management, board candidates must demonstrate broad-based business and professional skills and experiences, a global business and social perspective, concern for the long-term interests of our stockholders, and personal integrity and judgment. In addition, directors must have time available to devote to board activities and to enhance their knowledge of our industry. The nominating committee is responsible for assessing the appropriate mix of skills and characteristics required of board members in the context of the perceived needs of the board at a given point in time. The committee periodically reviews and recommends any updates to this criteria as deemed necessary. As stated in the nominating committee charter, diversity in personal background, race, gender, age and nationality for the board as a whole is taken into account in considering individual candidates. The nominating committee evaluates the qualifications of each director candidate against these criteria in making its recommendation to the board concerning nominations for election or reelection as a director. The process for evaluating candidates recommended by our stockholders pursuant to Section 2.13 of our bylaws is no different than the process for evaluating other candidates considered by the nominating committee. Mr. Herzog is the chairman of the nominating committee.

Special Committee. From time to time, our board may form a special committee or committees comprised entirely of disinterested directors to evaluate a particular transaction or related party arrangement. For example, a special committee comprised entirely of our independent directors was previously formed to explore strategic alternatives for the Company, which ultimately resulted in the listing of our common stock on the New York Stock Exchange in 2015. Neither this committee nor any other special committee that may be formed are standing or permanent committees of the board.

Executive Sessions of Non-Management Directors

Our non-management directors meet regularly in separate executive sessions without management participation. The executive sessions are chaired by Mr. Gilchrist, our chairman of the board.

Communication with Directors

We have established procedures for stockholders and other interested parties to communicate directly with our board of directors. These parties may contact the board by mail at: Chairman of the TIER REIT, Inc. Audit Committee, 6125 Luther Lane, #105, Dallas, Texas 75225. The chairman of the audit committee receives all communications made by this means and relays all communications to the board of directors.

Code of Business Conduct Policy

Our board of directors has adopted a Code of Business Conduct Policy that, along with the charters adopted by the audit, compensation and nominating committees as well as other Company policies and procedures, including our Corporate

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Governance Guidelines, provides the framework for our corporate governance. The policy describes ethical and legal principles and applies to all of the Company’s employees, as well as all of the Company’s officers, directors and contract personnel. A complete copy of the policy can be found at www.tierreit.com . Printed copies are available to any stockholder without charge by writing to us at: Corporate Secretary, 5950 Sherry Lane, Suite 700, Dallas, Texas 75225. We intend to disclose on our website any amendment to, or waiver of, any provision of this policy applicable to our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions that would otherwise be required to be disclosed under the rules of the SEC.

Corporate Governance Guidelines

Our board of directors has adopted Corporate Governance Guidelines that address certain matters relating to corporate governance and set forth procedures by which the board carries out certain of its responsibilities. A complete copy of the Corporate Governance Guidelines can be found at www.tierreit.com . Printed copies are available to any stockholder without charge by writing to us at: Corporate Secretary, 5950 Sherry Lane, Suite 700, Dallas, Texas 75225.

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OWNERSHIP OF EQUITY SECURITIES

The following table sets forth information as of March 28, 2016, regarding the beneficial ownership of our common stock by each person known by us to own 5% or more of the outstanding shares of common stock, each of our directors, each named executive officer, and our directors and executive officers as a group. The percentage of beneficial ownership is calculated based on 47,740,916 shares of common stock outstanding as of March 28, 2016.

*  Less than 1%.

(1)                The address of Ms. Schelin and each of Messrs. Gilchrist, Dannis, Herzog, Martin, Partridge, Witten, Fordham, Lucas, Reister and Sharp is c/o TIER REIT, Inc., 5950 Sherry Lane, Suite 700, Dallas, Texas 75225.

(2)                For purposes of calculating the percentage beneficially owned, the number of shares of common stock deemed outstanding consists of:  (1) 47,740,916 shares of common stock outstanding as of March 28, 2016, which includes shares of restricted stock, (2) shares of common stock issuable pursuant to options held by the respective person that may be exercised within 60 days following March 28, 2016; and (3) restricted stock units convertible into shares of common stock upon certain events or at specified future dates within 60 days following March 28, 2016.  Beneficial ownership is determined in accordance with the SEC rules that deem shares to be beneficially owned by any person or group who has or shares voting and investment power with respect to such shares.

(3)                Does not include 3,663 restricted stock units.

(4)                Includes vested options exercisable into 4,165 shares of common stock; does not include 7,725 restricted stock units.

(5)                Consists of 42,300 shares of common stock owned by Mr. Herzog through a family trust; does not include 3,945 restricted stock units.

(6)                Does not include 1,695 restricted stock units.

(7)                Includes vested options exercisable into 4,165 shares of common stock; does not include 6,686 restricted stock units.

(8)                Includes 120,440 restricted shares of common stock and 2,600 shares of common stock owned by Mr. Fordham’s spouse; does not include 15,369 restricted stock units.

(9)                Includes 49,703 restricted shares of common stock; does not include 8,512 restricted stock units.

(10)          Includes 46,654 restricted shares of common stock; does not include 5,521 restricted stock units.

(11)          Includes 38,853 restricted shares of common stock; does not include 5,161 restricted stock units.

(12)          Includes 16,834 restricted shares of common stock; does not include 2,458 restricted stock units.

(13)          Information regarding The Vanguard Group, Inc. is based solely on a Schedule 13G/A filed by The Vanguard Group, Inc. with the SEC on February 10, 2016. The Vanguard Group, Inc. reported sole voting power with respect to 100,602 shares, shared voting power with respect to 34,700 shares, sole investment power with respect to 4,851,184 shares and shared investment power with respect to 60,902 shares. The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

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The foregoing report shall not constitute “soliciting material” and shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under either Act.

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EXECUTIVE OFFICERS

The following individuals serve as our executive officers. Our executive officers are elected annually by our board of directors, and each of these executive officers will continue in office until his or her successor has been elected and qualified or until his or her earlier death, resignation or removal. The biography of our president and chief executive officer Mr. Fordham, who is also a member of our board, is set forth above.

Dallas E. Lucas, 54 , is our chief financial officer and treasurer. Prior to joining the Company in May 2014, Mr. Lucas served as chief financial officer of Intrawest ULC (“Intrawest”) from July 2012 to October 2013. Intrawest is a developer and operator of destination resorts. Prior to joining Intrawest, Mr. Lucas was a founding partner of Pacshore Partners, a Los Angeles-based real estate investment company. He also served as chief executive officer and president and as a director of Pacific Office Properties Trust, Inc., a publicly traded REIT, from September 2007 to August 2009. He served as executive vice president and chief financial officer of Maguire Properties, Inc., a publicly traded REIT, from July 2002 to March 2007, and he served as chief financial officer and vice president and as a director of NorthStar Capital Investment Corp. from August 1998 to July 2002. From December 1993 to August 1998, he served as senior vice president and chief financial officer of Crescent Real Estate Equities Inc., a publicly traded REIT. He began his career as an auditor with Arthur Andersen & Company in 1984 until joining Crescent in 1993. He received a bachelor of business administration degree in accounting from the University of Oklahoma.

William J. Reister, 55 , is our chief investment officer and executive vice president and previously served as our senior vice president – capital markets. Mr. Reister has over 30 years of experience in the commercial real estate industry, including investment management, finance, acquisitions, dispositions, development, leasing, property management, accounting and reporting. Prior to joining the Behringer organization in November 2009, from 1996 to 2008, Mr. Reister was a senior officer with Prentiss Properties Trust and its successor, Brandywine Realty Trust, a publicly traded REIT (NYSE: BDN). During his tenure with Prentiss, he was responsible for acquisition, disposition, leasing, asset management and operations activities of its portfolio of office properties located in Dallas, Austin, Houston, Denver and Southern California. Prior to this role, Mr. Reister was a senior corporate finance officer responsible for portfolio level acquisitions and financing. Mr. Reister was also a member of the executive team that formed Prentiss upon its successful initial public offering, which was the culmination of investments of Prentiss Properties Realty Advisors (“PPRA”), of which Mr. Reister was a founding officer. PPRA raised the institutional capital that was invested in what became the core portfolio of Prentiss. Prior to these activities, Mr. Reister was the senior operations controller for Prentiss Properties Limited, a corporate controller for Cadillac Fairview and a senior auditor for PricewaterhouseCoopers LLP. Mr. Reister received a bachelor of business administration degree in accounting from the University of Texas at Austin and is a former certified public accountant in the State of Texas.

Telisa Webb Schelin, 43 , is our chief legal officer, executive vice president and secretary. Ms. Schelin is responsible for all legal aspects of the Company, including corporate governance, public company reporting, securities offerings, mergers and acquisitions, investor relations, lease and contract administration, risk management, litigation management, human resources, employment and benefits matters, and finance, real estate, and commercial business transactions. Ms. Schelin has over 17 years of experience in the corporate, securities and regulatory environment. Prior to joining the Behringer organization in 2005, she was in private practice with Gardere Wynne Sewell LLP where she advised clients on a wide variety of corporate and securities matters. Ms. Schelin is licensed to practice law in Texas and Oklahoma and received a juris doctor degree with highest honors and a bachelor of arts degree in political science from the University of Tulsa.

James E. Sharp, 43 , is our chief accounting officer and executive vice president. Mr. Sharp has more than 20 years of experience in accounting and auditing related to public and private real estate companies. From January 1996 until March 2000, and again from April 2003 until joining the Behringer organization in October 2010, he worked as an auditor in public accounting with Ernst & Young LLP, serving primarily public and private real estate companies, including various REITs, homebuilders and real estate investment companies. From March 2000 until March 2003, he served in an accounting and finance role with Terrabrook, a national master-planned community developer with a portfolio of over 50 communities in 20 states. Mr. Sharp is a certified public accountant in the State of Texas and received a bachelor of business administration degree in accounting from the University of Texas at Austin.

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COMPENSATION DISCUSSION AND ANALYSIS

Overview

We provide what we believe is a competitive total compensation package to our named executive officers through a combination of base salary, annual cash incentive compensation, long-term equity incentive compensation and broad-based benefits programs. This Compensation Discussion and Analysis explains our compensation philosophy, objectives, and practices with respect to our chief executive officer and president, our chief financial officer, and the other three most highly-compensated executive officers as of the end of 2015 as determined in accordance with applicable SEC rules, who are collectively referred to as our named executive officers or, in this “Compensation Discussion and Analysis” section, our executives. Our executives are as follows: Scott W. Fordham, chief executive officer and president; Dallas E. Lucas, chief financial officer and treasurer; William J. Reister, chief investment officer and executive vice president; Telisa Webb Schelin, chief legal officer, executive vice president and secretary; and James E. Sharp, chief accounting officer and executive vice president.

Executive Summary

2015 was a transformative year for the Company with the listing of our common stock on the New York Stock Exchange (“NYSE”) in July 2015.  In additional to this milestone achievement, we exhibited strong growth across a variety of critical financial and operating metrics, which is discussed in “–Annual Cash Incentive Compensation” below.  In addition, the Company accomplished several key objectives in 2015, including:

·                   Internalizing property management and remaining administrative services at the end of the second quarter of 2015, resulting in estimated overall savings of approximately $6.5 million annually;

·                   Reinstating quarterly cash distributions in the second quarter of 2015;

·                   Disposing of assets outside of target markets, including selling approximately $550 million in properties and reducing our total markets from 18 to 15;

·                   Recycling capital into target markets, including the acquisition of the Domain in Austin, Texas, as well as two strategic land parcels in Austin and Plano, Texas;

·                   Strengthening the balance sheet, including reducing debt maturities through 2016 from $945 million to $213 million and decreasing our weighted average interest rate from 5.34% to 4.03%; and

·                Increasing occupancy from 88.0% at the end of 2014 to 89.7% at the end of 2015.

In determining the compensation of our executives, our compensation committee made a comprehensive assessment of our 2015 corporate performance and the personal performance of our executives. In light of our significant success in executing our key 2015 objectives and the level of achievement of our objective corporate performance measures and personal performance measures discussed under “–Annual Cash Incentive Compensation” below, our compensation committee approved for each executive a level and mix of pay that it believes reflect our strong pay for performance philosophy.

As discussed under “–Annual Cash Incentive Compensation” and “–Long-Term Equity Incentive Compensation” below, we considered our successful achievement of certain 2015 objective corporate performance measures and each executive’s role in the significant success we had in achieving our key 2015 objectives in determining annual cash incentive compensation and long-term equity incentive compensation. For example, as a result of such successes, our compensation committee awarded each executive between 131% and 138% of the established percentages of the executive’s target attributable to the combined objective and personal performance measures in determining cash incentive compensation and long-term equity incentive compensation.

The compensation paid to our executives in light of 2015 performance generally increased relative to 2014 primarily as a result of our success in executing our 2015 key objectives, our corporate performance based on certain objective measures, and the personal performance of our executives as discussed under “–Annual Cash Incentive

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Compensation” and “–Long-Term Equity Incentive Compensation,” and market adjustments made to base salaries in 2015 based on the competitive market compensation data provided by the committee’s consultant.

New Long-Term Incentive Program

To reinforce our “pay-for-performance” compensation philosophy, on January 26, 2016, the compensation committee approved the general terms of a new, long-term incentive program (the “Program”), a multi-year, performance-based and time-based equity compensation program.  The purpose of the Program is to further align the interests of management with those of our stockholders by encouraging our executive officers to create stockholder value in a pay-for-performance structure.  Historically, to provide alignment with the interests of our stockholders during the period prior to the listing of the Company’s common stock on the NYSE, the compensation committee had utilized an arrears-based restricted stock incentive program with awards tied to specific objective performance metrics and individual subjective performance for the previous year. On December 30, 2015, approximately 30 days earlier than the originally scheduled award date, the compensation committee awarded grants of restricted stock to our executives and other employees under this historic incentive program for 2015 objective and subjective performance.  The compensation committee also established the following vesting schedule for the 2015 grants: (1) 50% of the awarded amounts vested immediately upon issuance and (2) 50% of the awarded amounts vest ratably on December 30, 2015, 2016 and 2017.  T he compensation committee determined to transition from this arrears-based restricted stock incentive program used for compensation related to 2015 and previous years to the new forward-looking Program that will be principally based on total stockholder return performance.  In making this transition, the compensation committee considered that (1) the transition to the new Program should provide alignment with the interests of our stockholders and provide equity incentive compensation more consistent with our publicly traded REIT peers; (2) the executives and other employees would receive their equity grants for 2015 performance approximately 30 days earlier than the originally scheduled award date but would not receive any additional compensation as a result of transitioning from the historic program to the new Program; and (3) without the accelerated grant date and vesting schedule discussed above, the transition from the historic program to the new Program would result in overlapping compensation expense for the next several years, distorting the Company’s results of operations.  See the Stock Awards column and related footnote under “–Summary Compensation Table” for the impact of issuing both the 2014 and 2015 equity incentive awards in 2015.

Under the Program, beginning in 2016, 60% of a participant’s annual equity award will be in the form of restricted stock units that are subject to performance-based vesting over a three-year period, and 40% of a participant’s annual equity award will be in the form of shares of restricted stock that are subject to time-based vesting over a three-year period with the first vesting for awards granted in 2016 to occur on December 30, 2016.

The performance-based restricted stock units are subject to vesting based on the Company’s annualized total return to stockholders (“TSR”) over a three-year performance measurement period on both an absolute and relative basis.  For example, the performance measurement period for restricted stock units granted in 2016 began on January 1, 2016 and continues through December 31, 2018.  The vesting of one-third of the restricted stock unit award will be based on our achievement of a predetermined absolute TSR, the vesting of one-third of the restricted stock unit award will be based on our TSR relative to the TSR of the constituent companies of the NAREIT Office Index (unweighted), and the vesting of one-third of the restricted stock unit award will be based on our TSR relative to the TSR of a select peer group of companies.

With respect to each of the three metrics described above, the number of restricted stock units that vest over a performance measurement period will be based on a predetermined threshold, target and maximum level of performance of our TSR determined by the compensation committee at the time of each restricted stock unit grant.  The restricted stock units granted annually under the Program will not vest if our TSR during the performance measurement period does not meet the minimum thresholds determined by the compensation committee for such grant.  Participants can receive (1) 50% of the target restricted stock units with respect to each of the three TSR metrics at the threshold level of performance, (2) 100% of the target restricted stock units with respect to each of the three TSR metrics at the target level of performance and (3) 200% of the target restricted stock units with respect to each of the three TSR metrics at the maximum level of performance.  The number of restricted stock units that vest if performance is between the threshold and target levels or between the target and maximum levels with respect to any of the metrics described above will be determined based on linear interpolation.

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After the performance measurement period, we will issue to participants a number of shares of our common stock under our 2015 Equity Incentive Plan based on the number of restricted stock units that vest.  In addition, participants would receive additional shares to cover the dividends that would have been paid with respect to the vested restricted stock units calculated as if the restricted stock units were outstanding shares during the performance period and prior to the issuance date of the shares.

In January 2016, the compensation committee awarded the following target restricted stock unit awards to our executives under the Program for the performance measurement period from January 1, 2016 through December 31, 2018:

Overview of Compensation Philosophy & Objectives

We seek to maintain a total compensation package that we believe provides fair, reasonable, and competitive compensation for our executives while also permitting us the flexibility to differentiate actual pay based on the level of corporate organizational and individual performance. We place significant emphasis on annual and long-term, performance-based incentive compensation, including cash and equity-based incentives, which are designed to reward our executives based on the achievement of corporate and individual goals.

The compensation programs for our executives are designed to achieve the following objectives:

·                   attract and retain top talent to ensure that we have high caliber executives;

·                   create and maintain a performance-driven organization by providing upside compensation opportunity for outstanding performance and downside compensation risk in the event of performance below expectations;

·                   align the interests of our executives and stockholders by motivating executives to achieve key corporate goals and objectives that should enhance stockholder value;

·                   encourage teamwork and cooperation while recognizing individual contributions by linking variable compensation to both corporate and individual performance based on responsibilities and ability to influence financial and organizational results;

·                   provide flexibility and allow for discretion in applying our compensation principles in order to appropriately reflect individual circumstances as well as changing business conditions and priorities; and

·                   motivate our executives to manage our business to meet and appropriately balance our short- and long-term objectives, and reward them for meeting these objectives.

We believe our compensation programs are effectively designed and work in alignment with the interests of our stockholders and include a number of best practices, such as:

·       Our chief executive officer’s compensation generally places a greater emphasis (approximately 75%) on variable, performance-based compensation than typical market practice;

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·       Approximately 45% of our chief executive officer’s pay opportunity is in the form of long-term, equity-based compensation; and

·       The employment agreements with our executives contain “clawback” provisions that require them to reimburse us for incentive-based compensation received to the extent their intentional misconduct results in the Company being required to file an accounting restatement.

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In establishing the amounts for base salaries and targets for short-term cash and long-term equity incentive compensation for our executives, the committee generally targeted the 25th percentile of the asset-based peer group described above and the median of the size-based peer group described above given the size of the Company compared to these peer groups. However, the committee also took into account other factors, including, among others, the individual experience and skills of, and expected contributions from, the executives.

The Role of Executive Officers in Compensation Decisions

Our chief executive officer consulted with the compensation committee regarding compensation levels for each of our executives (except for himself). Our chief executive officer annually reviews the performance of each of the other executives. Based on this review, he makes compensation recommendations to the compensation committee, including recommendations for performance targets, salary adjustments, annual cash incentive compensation, and long-term equity-based incentive awards. Although the compensation committee considers these recommendations along with data provided by its consultant, if any, it retains full discretion to set all compensation.

Elements of Executive Compensation

Base Salary . Our compensation committee believes that payment of a competitive base salary is a necessary element of any compensation program that is designed to attract and retain talented and qualified executives. Subject to our existing contractual obligations, we expect our compensation committee to consider salary levels for our executives annually as part of our performance review process, as well as upon any promotion or other change in job responsibility. For 2016, in light of the market adjustments made to base salaries in 2015 and based on the competitive market compensation data provided by the committee’s consultant, none of the executives received base salary adjustments.

The goal of our base salary program is to provide salaries at a level that allows us to attract and retain qualified executives while preserving significant flexibility to recognize and reward individual performance with other elements of the overall compensation program. Base salary levels also affect the annual cash incentive compensation because each executive’s annual cash incentive target opportunity is expressed as a percentage of base salary. The following items are generally considered when determining base salary levels:

·                market data provided by the compensation committee’s consultant;

·                  our financial resources; and

·                the executive’s experience, scope of responsibilities, performance, and prospects.

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Annual Cash Incentive Compensation . It is the intention of our compensation committee to make a meaningful portion of the executives’ compensation contingent on achieving certain performance measures each year. Based on each executive’s employment agreement, target cash incentive compensation for each of our executives is set as a percentage of base salary. For a description of the target cash incentive compensation for each of our executives, please see “–Employment Agreements” below. However, the committee has further established percentages of the target for each executive that are attributable to objective performance measures and personal performance as set forth in the following table:

The committee set objective performance measures for the executives and utilized a mix of these objective measures and a subjective review of personal performance for setting 2015 cash incentive compensation. The committee set threshold, target, and maximum levels with respect to each of these measures, which were weighted between 5% and 20%. The following table sets forth information about each performance-based measure for 2015:

(1)                Cash Net Operating Income is equal to rental revenue (excluding non-cash revenue items such as straight-line rent and amortization of acquired above- and below-market leases), less lease termination fee income, property operating expenses (excluding tenant improvement demolition costs), real estate taxes, and property management expenses and is considered a non-GAAP financial measure.

(2)                Investment Dollars is equal to total dollars invested in the acquisition of properties or joint ventures.

(3)                Controllable General & Administrative Expenses is equal to general and administrative expense, excluding expenses related to the BHT Advisors, LLC (“BHT Advisors”) termination, the HPT Management Services, LLC (“HPT Management”) buyout, our tender offer and related listing on the NYSE, amortization of restricted shares and units, acquisitions, director fees, fees incurred by our board of directors for third party advisors, cash incentive compensation and certain legal activities.

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If the threshold level is not satisfied with respect to a particular measure, the actual performance factor would be zero with respect to that factor. If performance exceeds the threshold level but does not satisfy the target level, the actual performance factor would range on a sliding scale between 50% and 100% with respect to that factor. If performance is between the target level and the maximum level, the actual performance factor would range on a sliding scale between 100% and 150% with respect to that factor. The factor used to determine the amount an executive could earn in 2015 in cash incentive compensation was the average of the actual performance factors for each of the performance-based measures, which were weighted between 5% and 20% for each executive. Notwithstanding the formulas described above, our compensation committee retains the discretion and flexibility to increase or decrease the actual performance factor with respect to any particular measure or any particular officer to more appropriately reflect actual performance, market conditions, unanticipated circumstances, and other factors in the committee’s sole discretion. In relation to personal performance, the committee considered each executive’s role in connection with the significant accomplishments of the Company’s key objectives in 2015. Based on the actual performance factors and each executive’s personal performance, the compensation committee awarded each executive between 131% and 138% of the established percentages of the executive’s target attributable to the combined objective performance measures and personal performance.

Long-Term Equity Incentive Compensation. The objective of our long-term equity incentive award program, which is administered through our 2015 Equity Incentive Plan, is to attract and retain qualified personnel by offering an equity-based program that is competitive with our peer companies, as well as to promote a performance-focused culture by rewarding employees, including our executives, based upon the achievements of the Company and individual performance. Our compensation committee believes that equity awards are necessary to successfully attract qualified employees, including the executives, and will continue to be an important incentive for promoting employee retention going forward. The 2015 equity awards for the executives were determined by the compensation committee, in consultation with our chief executive officer (with respect to all awards except his own), based on the initial award targets determined by the committee in consultation with FPL Associates. For a description of the target equity incentive awards for each of our executives, please see “– Employment Agreements” below.

Our compensation committee made restricted stock awards under our 2015 Equity Incentive Plan in January 2015. The January 2015 awards, which were based on 2014 performance, were made at the same actual performance factor and personal performance factor for each executive as annual cash incentive compensation as described in our 2015 proxy statement.

Our compensation committee also made restricted and unrestricted stock awards under our 2015 Equity Incentive Plan in December 2015. The December 2015 awards, which were based on 2015 performance, were made at the same actual performance and personal performance factors as previously described herein. The compensation committee believes that an emphasis on performance measures will drive our long-term success. Based on the actual performance factors and each executive’s personal performance, the compensation committee awarded each executive between 131% and 138% of the established percentages of the executive’s target attributable to the combined corporate objective performance measures and personal performance.

Benefits. All full-time employees, including our executives, may participate in our health and welfare benefit programs, including medical, dental, and vision care coverage, disability and life insurance, and our 401(k) plan. We do not have any special benefits or retirement plans for our executives.

Severance. Under their employment agreements, each of our executives is entitled to receive severance payments under certain circumstances in the event that their employment is terminated. These circumstances and payments are described below under “–Employment Agreements” and “–Potential Payments upon Termination or Change of Control.”

2015 Equity Incentive Plan

The 2015 Equity Incentive Plan was approved by our board of directors on July 30, 2015 and by our stockholders on December 3, 2015. The 2015 Equity Incentive Plan replaced the 2005 Incentive Award Plan, which expired on March 28, 2015. The 2015 Equity Incentive Plan is administered by our compensation committee. Employees, officers, non-employee directors, and consultants of ours and our subsidiaries are eligible to be granted stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other stock-based

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awards, dividend equivalent rights, performance share awards and cash-based awards under the 2015 Equity Incentive Plan at the discretion of our compensation committee. We anticipate that providing such persons with interests and awards of this nature will result in a closer alignment of their interests with our own interests and those of our stockholders, thereby motivating their efforts on our behalf and strengthening their desire to remain with the Company.

As of December 31, 2015, we had outstanding options to purchase 12,495 shares of our common stock at a weighted average exercise price of $40.13, all of which are held by our independent directors. These options have a maximum term of ten years and became exercisable one year after the date of grant.

As of December 31, 2015, we also had 281,905 shares of restricted stock outstanding that were granted to employees, including our executives, with a weighted average grant date fair value of $22.46 per share. Shares of restricted stock granted prior to December 2015 vest 25% annually over a four-year period following the grant date.  With respect to shares of restricted stock granted in December 2015, one-third of such shares vested on the grant date, one-third vest one year after the grant date and one-third vest two years after the grant date. We also granted 138,697 shares of unrestricted common stock under the 2015 Equity Incentive Plan in December 2015.

As of December 31, 2015, we had 28,705 restricted stock units outstanding that were granted to our independent directors with a weighted average grant date fair value of $18.29 per unit. These units vest 13 months after the grant date. Subsequent to vesting, the restricted stock units will be converted to an equivalent number of shares of common stock upon the earlier to occur of the following events or dates: (i) separation from service for any reason other than cause; (ii) a change in control of the Company; (iii) death; or (iv) specific dates chosen by the independent directors that range from June 2016 to December 2020.

Risk Management

The compensation committee was involved in negotiating each of the employment agreements with our executives. The committee believes that our compensation policies and practices do not encourage our employees to take excessive or unnecessary risks and are not reasonably likely to have a material adverse effect on the Company. The compensation committee considered a variety of factors, including base salary, annual cash incentive compensation, and long-term equity incentive compensation opportunities available to our executives. The committee believes that the combination of those factors should lead to executive and employee behavior that is consistent with our overall objectives and risk profile.

Impact of Regulatory Requirements on Executive Compensation

Section 162(m) . Substantially all of the services rendered by our executives were performed on behalf of our operating partnership or its subsidiaries. The IRS has issued a series of private letter rulings that indicate that compensation paid by an operating partnership to executives of a REIT that serves as its general partner is not subject to limitation under Section 162(m) to the extent such compensation is attributable to services rendered to the operating partnership. We have not obtained a ruling on this issue, but have no reason to believe that the same conclusion would not apply to us.

Section 409A . Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), generally affects the federal income tax treatment of most forms of deferred compensation by accelerating the timing of the inclusion of the deferred compensation to the recipient for federal income tax purposes and imposing an additional federal income tax on the recipient equal to 20% of the amount of the accelerated income. The committee considers the potential adverse federal income tax impact of Section 409A of the Code in determining the form and timing of compensation paid to our executives and other employees and service providers.

Section 280G and 4999. Sections 280G and 4999 of the Code limit a company’s ability to deduct, and impose excise taxes on, certain “excess parachute payments” (as defined in Sections 280G and 4999 of the Code and related regulations) paid to each service provider (including an employee or officer) in connection with a change of control of the company (as set forth in Sections 280G and 4999 of the Code and related regulations). The committee considers the potential adverse tax impact of Sections 280G and 4999 of the Code, as well as other competitive

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factors, in structuring certain post-termination compensation or other compensation that might be payable to our executives and other employees and service providers in connection with a change of control of the company.

Accounting Rules

We account for stock-based employee compensation (currently restricted stock and restricted stock units) using the fair value based method of accounting, which requires that the fair value of stock-based employee compensation awards with service conditions be measured at the grant date of the award and amortized into expense over the appropriate vesting period. If an award is forfeited, previously recognized compensation expense related to the forfeited award is reversed, and no additional compensation expense is recognized.

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Summary Compensation Table

As noted above under “–New Long-Term Incentive Program,” in connection with the transition from an arrears-based restricted stock incentive program to the new forward-looking Program that is principally based on total stockholder return performance, the compensation committee granted stock awards in December 2015 for 2015 performance, approximately 30 days earlier than originally scheduled.  In accordance with SEC rules, stock awards must be reported in the year made regardless of the performance year they are based on.  Therefore, the following table sets forth stock awards granted in 2013 for 2012 performance, in 2014 for 2013 performance and in 2015 for both 2014 and 2015 performance.

The following table sets forth the compensation paid in 2015, 2014 and 2013 to our executives.

(1)           Reflects the grant date fair value of such restricted stock and unrestricted stock awards. For information regarding the valuation of grants of restricted stock made in 2013, 2014 and 2015, see Note 12 (Equity) to the consolidated financial statements in our Annual Reports on Form 10-K for the fiscal years ended 2013, 2014 and 2015, respectively.

(2)           Reflects equity grants made in January 2015 for 2014 performance equal to $1,222,180, $509,860,  $435,375,  $306,298,  and  $120,100,  for Mr. Fordham, Mr. Lucas, Mr. Reister, Ms. Schelin, and Mr. Sharp, respectively, and equity grants made in December 2015 for 2015 performance equal to $1,585,366,  $847,530,  $555,248,  $543,612,  and  $258,877,  for Mr. Fordham, Mr. Lucas, Mr. Reister, Ms. Schelin, and Mr. Sharp, respectively.

(3)           Prorated from date of hire on May 27, 2014.

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Outstanding Equity Awards at Fiscal Year End

The following table sets forth information with respect to outstanding restricted stock awards under our 2015 Equity Incentive Plan and our 2005 Incentive Award Plan that have not vested for each of the executives as of December 31, 2015.

(1)                    The shares of restricted stock granted prior to December 2015 vest 25% annually over a four-year period following the grant date. With respect to the shares of restricted stock granted in December 2015, one-third of such shares vested on the grant date, one-third vest one year after the grant date and one-third vest two years after the grant date.

(2)                    Based on the closing price of our common stock on the NYSE of $14.75 on December 31, 2015.

(1)               Shares vested prior to the listing of our shares of common stock on the NYSE; market value realized on vesting is based on an estimated valuation of $26.88 per share.

(2)               Shares vested after the listing of our shares of common stock on the NYSE; market value realized is based on the closing price of our shares of common stock on the NYSE on the date of vesting.

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Employment  Agreements

We have employment agreements, as amended, (collectively, the “Employment Agreements”) with each of the following executive officers: Scott W. Fordham, our chief executive officer and President; Dallas E. Lucas, our chief financial officer and treasurer; William J. Reister, our chief investment officer and executive vice president; Telisa Webb Schelin, our chief legal officer, executive vice president and secretary; and James E. Sharp, our chief accounting officer and executive vice president. The term of these Employment Agreements ends on July 15, 2018, 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. These agreements were approved by our compensation committee. The compensation committee reviewed market materials related to executive contracts and retained its own legal counsel and independent compensation consultant to, among other things, negotiate the terms of the agreements.

Compensation . During the initial term of each employment agreement, we pay each executive an annual base salary, which is set forth in the table below for 2016. However, the base salary is reviewed annually and may not be reduced without the executive’s consent. In addition, during the term of each employment agreement, each executive is eligible to receive cash incentive compensation as determined by the compensation committee. Each executive’s target annual incentive compensation is equal to a percentage of his or her base salary, also as set forth below. The cash incentive compensation is predicated on both objective corporate and individual measures to be mutually agreed upon between the executive and the compensation committee. The amount of cash incentive compensation awarded to the executive each year must be reasonable in light of the contributions made by the executive for the year in relation to the contributions made and incentive compensation awarded to the other executives for the same year.

During the initial term, each executive is also eligible to receive equity awards under the 2015 Equity Incentive Plan and any other successor plan, at the discretion of the compensation committee. Each executive’s target annual long-term incentive award is equal to a percentage, as set forth in the table below, of the executive’s base salary plus the target annual cash incentive compensation. The amount of each equity award granted to the executive must be reasonable in light of the contributions made, or anticipated to be made, by the executive for the period for which that equity award is made.

Payments Upon Termination or a Change of Control .  Under the employment agreements, we are required to provide any earned compensation and other vested benefits to the executives in the event of a termination of employment. In addition, each executive will have the right to additional compensation and benefits depending upon the manner of termination of employment, as summarized below.

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During the term of each employment agreement, we may terminate the agreement with or without “cause,” defined as, among other things, the executive’s dishonest or fraudulent action, willful misconduct or gross negligence in the conduct of his or her duties to us, or the executive’s material uncured breach of the employment agreement. In addition, each executive may terminate his or her employment agreement for “good reason,” defined as, among other things, a material breach of the employment agreement by us. If we terminate the executive’s employment without “cause” or if the executive terminates for “good reason:”

If the executive’s employment is terminated within eighteen months after the occurrence of the first event constituting a “change in control” (as defined in the employment agreements) of us or the operating partnership, each employment agreement provides that all equity awards with time-based vesting will immediately vest and each equity award with performance vesting will vest at the greater of: (1) the target amount of the award, if applicable, or (2) a prorated amount based on our performance from the commencement of the performance period through the end of the calendar month immediately preceding the change in control. Further, during the initial term, if within eighteen months after a change in control, we terminate the executive’s employment without “cause” or the executive terminates his or her employment for “good reason”:

If an executive’s employment agreement is terminated upon death or disability, we will pay (1) a lump sum in cash in an amount equal to the executive’s base salary and (2) the pro rata portion of any cash incentive compensation that would have been earned during the year of the termination.

Other Terms and Conditions . During the term of the employment agreements (including any extensions) and for a period of fifteen months thereafter, each executive has agreed to certain non-competition and non-solicitation provisions. The executives have also agreed to certain non-disclosure and non-disparagement provisions both during and after their employment with us.

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Potential Payments upon Termination or Change of Control

The following table summarizes the potential cash payments and estimated equivalent cash value of unvested equity awards and other benefits that would be payable to our executives or immediately vest under the terms of their employment agreements described above upon termination of those agreements under the various scenarios listed below, assuming the event took place on December 31, 2015 (without regard to any potential reductions required under the employment agreements for amounts in excess of Section 280G thresholds):

(1)              Includes the lump sum payment to the executive if he or she was participating in our group medical, vision, and dental plans immediately prior to the date of termination (assuming premiums as of December 31, 2015).

(2)              Excludes the fair value of unvested equity awards that would immediately vest upon the executive’s death or disability pursuant to the terms of restricted stock award agreements.  The fair value of unvested equity awards are $1,696,073, $551,960, $695,713, $542,077, and $220,778, for Mr. Fordham, Mr. Lucas, Mr. Reister, Ms. Schelin, and Mr. Sharp, respectively.

The amounts described above do not include payment or benefits to the extent they have been earned prior to the termination of employment or are provided on a non-discriminatory basis to salaried employees upon termination of employment, including, but not limited to, accrued vacation.

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