Heritage Property Investment Trust, Inc. Announces Agreement to Eliminate Tax-Offset Provision In Respect of Stock Options of Th
06 January 2006 - 8:15AM
PR Newswire (US)
Will Release Fourth Quarter and 2005 Full Year Financial Results
and Provide 2006 Earnings Guidance on Wednesday, February 15, 2006,
Conference Call on Thursday, February 16, 2006 BOSTON, Jan. 5
/PRNewswire-FirstCall/ -- Heritage Property Investment Trust, Inc.
(NYSE:HTG) ("Heritage" or the "Company"), today announced that on
December 30, 2005, the Company entered into an amendment to the
Employment Agreement between the Company and Mr. Thomas C.
Prendergast, the Company's Chairman, President and Chief Executive
Officer. The purpose of the amendment is to eliminate from Mr.
Prendergast's Employment Agreement the provision that previously
obligated the Company to make payments to Mr. Prendergast to offset
any taxes he might have incurred in connection with his exercise of
certain stock options. In consideration for his agreement to the
elimination of this provision, the Company has made a one-time cash
payment to Mr. Prendergast of $6.4 million. The full text of the
amendment has been filed as an exhibit to a Form 8-K concurrently
filed by the Company with the Securities and Exchange Commission.
As previously disclosed, the discovery of the accounting
consequences of the tax-offset provision with respect to Mr.
Prendergast's stock options required the Company to restate its
audited financial statements for the fiscal years ended December
31, 2003 and 2004, and its unaudited financial statements for the
quarterly periods ended March 31, and June 30, 2005. As a result of
the elimination of the provision, and taking into account the
decrease in the Company's stock price during the fourth quarter of
2005, the Company's general and administrative expense associated
with the tax-offset provision decreased by $0.7 million for the
quarter ended December 31, 2005. At December 31, 2005, the
Company's general and administrative expense relating to the
tax-offset provision was composed of two elements: the change in
the liability for the payment in settlement of the tax-offset
provision, and the change in the intrinsic value of Mr.
Prendergast's stock options. With respect to the first element, as
of December 30, 2005, the liability with respect to the tax-offset
provision was $5.0 million, $0.9 million less than the liability
accrued in the Company's financial statements as of September 30,
2005. This decrease was the result of a decrease in the Company's
stock price from September 30, 2005 to December 30, 2005. As a
result of the amendment, the amount of the payment to Mr.
Prendergast in settlement of the tax-offset provision exceeded the
amount of this liability by $1.4 million. In addition, the amount
of the payment exceeded the accrued liability with respect to the
tax-offset provision in the Company's financial statements as of
September 30, 2005 by $0.5 million. However, the expense noted in
the preceding paragraph was offset by the second element: the
change in the intrinsic value of Mr. Prendergast's vested stock
options previously subject to the tax-offset provision. As a result
of the decrease in the Company's stock price between September 30,
2005 and December 30, 2005, the intrinsic value of Mr.
Prendergast's vested stock options decreased by $1.3 million.
However, the Company is required to record an additional $0.1
million of general and administrative expense relating to the
intrinsic value of Mr. Prendergast's unvested options, which
expense was not previously required to be recorded in the Company's
financial statements, resulting in a net $1.2 million decrease in
general and administrative expense with respect to this second
element. The Company has concluded that, with the elimination of
the tax-offset provision relating to stock options from Mr.
Prendergast's employment agreement, in fiscal periods ending after
December 31, 2005, the Company will no longer be required to record
a liability relating to the tax-offset provision and Mr.
Prendergast's stock options will no longer be subject to variable
accounting treatment. As is the case with other stock options
issued by the Company, Mr. Prendergast's stock options will be
subject to fixed accounting. 2005 Fourth Quarter Conference Call
Details The Company is scheduled to release its fourth quarter and
2005 full year financial results and provide 2006 projected
earnings guidance on Wednesday, February 15, 2006 after the market
closes. The Company's earnings press release and supplemental
operating and financial data package will be posted on the
Company's investor relations section of its web site at
http://www.heritagerealty.com/. Members of Heritage's senior
management will also host a conference call on Thursday, February
16, 2006, at 10:00 a.m., ET, to discuss the Company's fourth
quarter and full year results and 2006 earnings guidance.
Stockholders, analysts and other interested parties may participate
in this conference call by dialing 800-218-0530 or 303-262-2140 at
least five minutes before the scheduled start time. Investors can
also access the call via the Internet at the Company's website,
http://www.heritagerealty.com/. To listen to a live broadcast,
access this site at least 15 minutes prior to the scheduled start
time in order to register, download, and install any necessary
audio software. A replay of the conference call will be available
after the call through February 23, 2006 by accessing the Company's
website at http://www.heritagerealty.com/ or by dialing
800-405-2236 or 303-590-3000, pass-code 11050207. ABOUT HERITAGE
PROPERTY INVESTMENT TRUST, INC. Heritage is a fully integrated,
self-administered and self-managed REIT traded on the New York
Stock Exchange under the symbol "HTG". Heritage is one of the
largest owners and operators of neighborhood and community shopping
centers in the United States. Heritage focuses on grocer-anchored
shopping centers with multiple anchors. As of September 30, 2005,
Heritage had a shopping center portfolio of 171 properties, located
in 30 states and totaling approximately 34.9 million square feet of
total gross leasable area, of which 28.7 million square feet is
company-owned gross leasable area. Heritage's shopping center
portfolio was approximately 92.5% leased as of September 30, 2005.
Heritage is headquartered in Boston, Massachusetts and has an
additional 16 regional offices located in the Eastern, Midwestern
and Southwestern United States. Some of the statements contained in
this press release constitute forward-looking statements.
Forward-looking statements relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or
trends and similar expressions concerning matters that are not
historical facts. The forward-looking statements reflect the
Company's current views about future events and are subject to
risks, uncertainties, assumptions and changes in circumstances that
may cause the Company's actual results to differ significantly from
those expressed in any forward-looking statement. You should not
rely on forward-looking statements since they involve known and
unknown risks, uncertainties and other factors, which are, in some
cases, beyond the Company's control and which could materially
affect actual results. The factors that could cause actual results
to differ materially from current expectations include risks
detailed from time to time in filings with the Securities and
Exchange Commission. The forward-looking statements contained
herein represent the Company's judgment as of the date of this
release, and the Company cautions readers not to place undue
reliance on such statements. DATASOURCE: Heritage Property
Investment Trust, Inc. CONTACT: Patrick O'Sullivan, Vice President,
Finance and Accounting of Heritage Property Investment Trust, Inc.,
+1-617-247-2200, ; or Analyst Info: Claire Koneman,
+1-312-640-6745, or General Info: Joe Calabrese, +1-212-827-3772,
both of Financial Relations Board, both for Heritage Property
Investment Trust, Inc. Web site: http://www.heritagerealty.com/
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