As filed with the Securities and Exchange Commission on October 14, 1997
Registration No. 333-____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------
Monterey Homes Corporation
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Maryland 86-0611231
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6613 North Scottsdale Road, Suite 200, Scottsdale, Arizona 85250
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Monterey Homes Corporation Stock Option Plan
- --------------------------------------------------------------------------------
(Full title of the plan)
Larry W. Seay
Vice President and Chief Financial Officer
Monterey Homes Corporation
6613 North Scottsdale Road, Suite 200
Scottsdale, Arizona 85250
- --------------------------------------------------------------------------------
(Name and address of agent for service)
(602) 998-8700
- --------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
With copy to:
Steven D. Pidgeon
Snell & Wilmer L.L.P.
One Arizona Center
Phoenix, Arizona 85004-0001
(602) 382-6000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To Be To Be Price Offering Registration
Registered Registered Per Share Price Fee
---------- ---------- ----------- ------- ---
<S> <C>
Common Stock 475,000 724.09*
</TABLE>
- -------------------------
* Based on 225,000 shares under the Stock Option Plan at $5.62 per share and
250,000 shares under the Hamberlin Stock Option Agreement at $4.50 per
share.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I, Items 1
and 2, will be delivered to employees in accordance with Form S-8 and Securities
Act Rule 428.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
------------------------------------------------
The following documents filed by Monterey Homes Corporation
("Monterey Homes") are hereby incorporated by reference into this Registration
Statement: (a) Monterey Homes' Annual Report on Form 10-K for the year ended
December 31, 1996, as amended by its Form 10-K/A Report for the fiscal year
ended December 31, 1996; (b) Monterey Homes' Quarterly Reports on Form 10-Q for
the quarters ended March 31 and June 30, 1997; (c) Monterey Homes' Form 8-K
Report dated December 31, 1996, as amended by its Form 8-K/A1 Report dated
December 31, 1996 and its Form 8-K/A2 Report dated December 31, 1996; (d)
Monterey Homes' Form 8-K Report dated June 9, 1997, as amended by its Form 8-K/A
Report dated June 18, 1997; (e) Monterey Homes' Form 8-K Report dated July 15,
1997, as amended by its Form 8-K/A Report dated September 12, 1997; and (f) the
description of Monterey Homes' capital stock contained in the Form 8-A of
Emerald Mortgage Investments Corporation (a predecessor of Monterey Homes) filed
on July 7, 1988.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment to this Registration Statement
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities. Not applicable.
--------------------------
Item 5. Interests of Named Experts and Counsel. Not applicable.
---------------------------------------
Item 6. Indemnification of Directors and Officers.
------------------------------------------
Under the provisions of the Maryland General Corporation Law, a
corporation's articles may, with certain exceptions, include any provision
expanding or limiting the liability of its directors and officers to the
corporation or its stockholders for money damages, but may not include any
provision that restricts or limits the liability of its directors or officers to
the corporation or its stockholders to the extent that (i) it is proved that the
person actually received an improper benefit or profit in money, property, or
services for the amount of the benefit or profit in money, property,
3
<PAGE>
or services actually received; or (ii) a judgment or other final adjudication
adverse to the person is entered in a proceeding based on a finding in the
proceeding that the person's action, or failure to act, was the result of active
and deliberate dishonesty and was material to the cause of action adjudicated in
the proceeding. The Company's charter contains a provision limiting the personal
liability of officers and directors to the Company and its stockholders to the
fullest extent permitted under Maryland law.
In addition, the provisions of the Maryland General Corporation
Law permit a corporation to indemnify its present and former directors and
officers, among others, against liability incurred, unless it is established
that (i) the act or omission of the director or officer was material to the
matter giving rise to the proceeding and was committed in bad faith or was the
result of active and deliberate dishonesty, or (ii) the director or officer
actually received an improper personal benefit in money, property, or services,
or (iii) in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. The Company's
charter provides that it will indemnify its directors, officers, and others so
designated by the Board of Directors to the full extent allowed under Maryland
law.
Insofar as indemnification for liability arising under the
Securities Act may be permitted to directors, officers, or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed. Not applicable.
------------------------------------
Item 8. Exhibits.
---------
Exhibit Index located at Page 8.
Item 9. Undertakings.
-------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of
the estimated
4
<PAGE>
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, State of Arizona, on October 14, 1997.
MONTEREY HOMES CORPORATION
By: /s/ Larry W. Seay
------------------------------------
Larry W. Seay
Vice President Finance
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints William W. Cleverly, Steven J. Hilton,
John R. Landon and Larry W. Seay, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this registration statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully and to all intents and purposes as he might or
could do in person hereby ratifying and confirming all that said
attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ William W. Cleverly Chairman of the Board and Co-Chief October 10, 1997
- --------------------------------- Executive Officer (Co-Principal
William W. Cleverly Executive Officer)
and Director
/s/ Steven J. Hilton President and Co-Chief Executive October 10, 1997
- --------------------------------- Officer (Co-Principal Executive Officer)
Steven J. Hilton and Director
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John R. Landon Chief Operating Officer and Co-Chief October 13 1997
- --------------------------------- Executive Officer (Co-Principal
John R. Landon Executive Officer) and Director
/s/ Larry W. Seay Vice President Finance and Chief October 10, 1997
- --------------------------------- Financial Officer (Principal Financial
Larry W. Seay Officer and Principal Accounting Officer)
/s/ Alan D. Hamberlin Director October 10, 1997
- ---------------------------------
Alan D. Hamberlin
/s/ Robert G. Sarver Director October 10, 1997
- ---------------------------------
Robert G. Sarver
/s/ C. Timothy White Director October 13, 1997
- ---------------------------------
C. Timothy White
</TABLE>
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page or
Number Description Method of Filing
------ ----------- ----------------
<S> <C> <C>
4.1 Monterey Homes Corporation Stock Option Plan Filed Herewith
4.2 Stock Option Agreement between the Company and Incorporated by reference
Alan D. Hamberlin to Exhibit 10(h) of the
1995 Form 10-K
5 Opinion of Venable, Baetjer & Howard, Maryland Filed Herewith
counsel (including consent)
23.1 Consent of KPMG Peat Marwick LLP Filed Herewith
23.2 Consent of Ernst & Young LLP Filed Herewith
23.3 Consent of Ernst & Young LLP Filed Herewith
23.4 Consent of Counsel See Exhibit No. 5
24 Power of Attorney See Signature Page
</TABLE>
8
MONTEREY HOMES CORPORATION
STOCK OPTION PLAN
-----------------
1. ESTABLISHMENT, PURPOSE AND DEFINITIONS.
---------------------------------------
a. The Stock Option Plan (the "Option Plan") of Monterey Homes
(the "Company"), is hereby adopted. The Option Plan shall
provide for the issuance of incentive stock options ("ISOs")
and nonqualified stock options ("NSOs").
b. The purpose of this Option Plan is to promote the long-term
success of the Company by attracting, motivating and retaining
key executives, consultants and directors (the "Participants")
through the use of competitive long-term incentives which are
tied to stockholder interests by providing incentives to the
Participants in the form of stock options which offer rewards
for achieving the long-term strategic and financial objectives
of the Company.
c. The Option Plan is intended to provide a means whereby
Participants may be given an opportunity to purchase shares of
Stock of the Company pursuant to (i) options which may qualify
as ISOs under Section 422 of the Internal Revenue Code of
1986, as amended (the "Internal Revenue Code"), or (ii) NSOs
which may not so qualify.
d. The term "Affiliates" as used in this Option Plan means parent
or subsidiary corporations, as defined in Section 424(e) and
(f) of the Code (but substituting "the Company" for "employer
corporation"), including parents or subsidiaries which become
such after adoption of the Option Plan.
2. ADMINISTRATION OF THE PLAN
--------------------------
a. The Option Plan shall be administered by the Compensation
Committee (the "Committee") appointed by the Board of
Directors of the Company from time to time (the "Board").
b. The Committee shall consist entirely of directors qualifying
as "non-employee directors" as such term is defined in Rule
16b-3 promulgated by the Securities and Exchange Commission
(the "Committee"). Members of the Committee shall serve at the
pleasure of the Board.
c. The Committee may from time to time determine which employees
of the Company or its Affiliates or other individuals or
entities (each an "option holder") shall be granted options
under the Option Plan, the terms thereof (including without
1
<PAGE>
limitation determining whether the option is an incentive
stock option and the times at which the options shall become
exercisable), and the number of shares of Stock for which an
option or options may be granted.
d. If rights of the Company to repurchase Stock are imposed, the
Board or the Committee may, in its sole discretion,
accelerate, in whole or in part, the time for lapsing of any
rights of the Company to repurchase shares of such Stock or
forfeiture restrictions.
e. If rights of the Company to repurchase Stock are imposed, the
certificates evidencing such shares of Stock awarded
hereunder, although issued in the name of the option holder
concerned, shall be held by the Company or a third party
designated by the Committee in escrow subject to delivery to
the option holder or to the Company at such times and in such
amounts as shall be directed by the Board under the terms of
this Option Plan. Share certificates representing Stock which
is subject to repurchase rights shall have imprinted or typed
thereon a legend or legends summarizing or referring to the
repurchase rights.
f. The Board or the Committee shall have the sole authority, in
its absolute discretion, to adopt, amend and rescind such
rules and regulations, consistent with the provisions of the
Option Plan, as, in its opinion, may be advisable in the
administration of the Option Plan, to construe and interpret
the Option Plan, the rules and regulations, and the
instruments evidencing options granted under the Option Plan
and to make all other determinations deemed necessary or
advisable for the administration of the Option Plan. All
decisions, determinations and interpretations of the Committee
shall be binding on all option holders under the Option Plan.
3. STOCK SUBJECT TO THE PLAN
-------------------------
a. "Stock" shall mean Common Stock of the Company or such stock
as may be changed as contemplated by Section 3(c) below. Stock
shall include shares drawn from either the Company's
authorized but unissued shares of Common Stock or from
reacquired shares of Common Stock, including without
limitation shares repurchased by the Company in the open
market. The maximum shares of Common Stock that can be issued
under this Option Plan is 225,000 shares, and the maximum
shares of Common Stock that can be issued to any one person
under this Option Plan is 50,000 shares.
b. Options may be granted under the Option Plan from time to time
to eligible persons. Stock options awarded pursuant to the
Option Plan which are forfeited, terminated, surrendered or
canceled for any reason prior to exercise shall again become
available for grants under the Option Plan (including any
option canceled in accordance with the cancellation regrant
provisions of Section 6 (f) herein).
2
<PAGE>
c. If there shall be any changes in the Stock subject to the
Option Plan, including Stock subject to any option granted
hereunder, through merger, consolidation, recapitalization,
reorganization, reincorporation, stock split, reverse stock
split, stock dividend, combination or reclassification of the
Company's Stock or other similar events, an appropriate
adjustment shall be made by the Committee in the number of
shares of Stock. Consistent with the foregoing, in the event
that the outstanding Stock is changed into another class or
series of capital stock of the Company, outstanding option to
purchase Stock granted under the Option Plan shall become
options to purchase such other class or series and the
provisions of this Section 3(c) shall apply to such new class
or series.
d. The aggregate number of shares of Stock approved by the Option
Plan may not be exceeded without amending the Option Plan and
obtaining stockholder approval within twelve months of such
amendment.
4. ELIGIBILITY
-----------
Persons who shall be eligible to receive stock options granted under
the Option Plan shall be those individuals and entities as the
Committee in its discretion determines should be awarded such
incentives given the best interests of the Company; provided, however,
that (i) ISOs may only be granted to employees of the Company and its
Affiliates and (ii) any person holding capital stock possessing more
than 10% of the total combined voting power of all classes of Stock of
the Company or any Affiliate shall not be eligible to receive ISOs
unless the exercise price per share of Stock is at least 110% of the
fair market value of the Stock on the date the option is granted.
5. EXERCISE PRICE FOR OPTIONS GRANTED UNDER THE PLAN
-------------------------------------------------
a. All ISOs and the majority of NSOs will have option exercise
prices per option share not less than the fair market value of
a share of the Stock on the date the option is granted, except
that in the case of ISOs granted to any person possessing more
than 10% of the total combined voting power of all classes of
stock of the Company or any Affiliate the price shall be not
less than 110% of such fair market value. The price of ISOs or
NSOs granted under the Option Plan shall be subject to
adjustment to the extent provided in Section 3(c) above.
b. The fair market value on the date of grant shall be determined
based upon the closing price on an exchange on that day or, if
the Stock is not listed on an exchange, on the average of the
closing bid and asked prices in the Over the Counter Market on
that day.
3
<PAGE>
6. TERMS AND CONDITIONS OF OPTIONS
-------------------------------
a. Each option granted pursuant to the Option Plan shall be
evidenced by a written stock option agreement (the "Option
Agreement") executed by the Company and the person to whom
such option is granted. The Option Agreement shall designate
whether the option is an ISO or an NSO.
b. The term of each ISO and NSO shall be no more than 10 years,
except that the term of each ISO issued to any person
possessing more than 10% of the voting power of all classes of
stock of the Company or any Affiliate shall be no more than 5
years. Subsequently issued options, if Stock becomes available
because of further allocations or the lapse of previously
outstanding options, will extend for terms determined by the
Board or the Committee but in no event shall an ISO be
exercised after the expiration of 10 years from the date of
its grant.
c. In the case of ISOs, the aggregate fair market value
(determined as of the time such option is granted) of the
Stock to which ISOs are exercisable for the first time by such
individual during any calendar year (under this Option Plan
and any other plans of the Company or its Affiliates if any)
shall not exceed the amount specified in Section 422(d) of the
Internal Revenue Code, or any successor provision in effect at
the time an ISO becomes exercisable.
d. The Option Agreement may contain such other terms, provisions
and conditions regarding vesting, repurchase or other
provisions as may be determined by the Committee. To the
extent such terms, provisions and conditions are inconsistent
with this Option Plan, the specific provisions of the Option
Plan shall prevail. If an option, or any part thereof, is
intended to qualify as an ISO, the Option Agreement shall
contain those terms and conditions which the Committee
determine are necessary to so qualify under Section 422 of the
Internal Revenue Code.
e. The Committee shall have full power and authority to extend
the period of time for which any option granted under the
Option Plan is to remain exercisable following the option
holder's cessation of service as an employee, director or
consultant, including without limitation cessation as a result
of death or disability; provided, however, that in no event
shall such option be exercisable after the specified
expiration date of the option term.
f. As a condition to option grants under the Option Plan, the
option holder agrees to grant the Company the repurchase
rights as Company may at its option require and as may be set
forth in a separate repurchase agreement. Any option granted
under the Option Plan may be subject to a vesting schedule as
provided in the Option Agreement and, except as provided in
this Section 6 herein, only the vested portion of such option
may be exercised at any time during the Option Period. All
rights to
4
<PAGE>
exercise any option shall lapse and be of no further effect
whatsoever immediately if the option holder's service as an
employee is terminated for "Cause" (as hereinafter defined) or
if the option holder voluntarily terminates the option
holder's service as an employee. The unvested portion of the
option will lapse and be of no further effect immediately upon
any termination of employment of the option holder for any
reason. In the remaining cases where the option holder's
service as an employee is terminated due to death, permanent
disability, or is terminated by the Company (or its
affiliates) without Cause at any time, unless otherwise
provided by the Committee, the vested portion of the option
will extend for a period of three (3) months following the
termination of employment and shall lapse and be of no further
force or effect whatsoever only if it is not exercised before
the end of such three (3) month period. "Cause" shall be
defined in an Employment Agreement between Company and option
holder and if none there shall be "Cause" for termination if
(i) the option holder is convicted of a felony, (ii) the
option holder engages in any fraudulent or other dishonest act
to the detriment of the Company, (iii) the option holder fails
to report for work on a regular basis, except for periods of
authorized absence or bona fide illness, (iv) the option
holder misappropriates trade secrets, customer lists or other
proprietary information belonging to the Company for the
option holder's own benefit or for the benefit of a
competitor, (v) the option holder engages in any willful
misconduct designed to harm the Company or its stockholders,
or (vi) the option holder fails to perform properly assigned
duties.
g. No fractional shares of Stock shall be issued under the Option
Plan, whether by initial grants or any adjustments to the
Option Plan.
7. USE OF PROCEEDS
---------------
Cash proceeds realized from the sale of Stock under the Option Plan
shall constitute general funds of the Company.
8. AMENDMENT, SUSPENSION OR TERMINATION OF PLAN
--------------------------------------------
a. The Board may at any time suspend or terminate the Option
Plan, and may amend it from time to time in such respects as
the Board may deem advisable provided that (i) such amendment,
suspension or termination complies with all applicable state
and federal requirements and requirements of any stock
exchange on which the Stock is then listed, including any
applicable requirement that the Option Plan or an amendment to
the Option Plan be approved by the stockholders, and (ii) the
Board shall not amend the Option Plan to increase the maximum
number of shares of Stock subject to ISOs under the Option
Plan or to change the description or class of persons eligible
to receive ISOs under the Option Plan without the consent of
the stockholders of the Company sufficient to approve the
Option Plan in the first instance. The Option Plan shall
terminate on the earlier of (i) tenth anniversary of
5
<PAGE>
the Plan's approval or (ii) the date on which no additional shares of
Stock are available for issuance under the Option Plan.
b. No option may be granted during any suspension or after the
termination of the Option Plan, and no amendment, suspension
or termination of the Option Plan shall, without the option
holder's consent, alter or impair any rights or obligation
under any option granted under the Option Plan.
c. The Committee, with the consent of affected option holders,
shall have the authority to cancel any or all outstanding
options under the Option Plan and grant new options having an
exercise price which may be higher or lower than the exercise
price of canceled options.
d. Nothing contained herein shall be construed to permit a
termination, modification or amendment adversely affecting the
rights of any option holder under an existing option
theretofore granted without the consent of the option holder.
9. ASSIGNABILITY OF OPTIONS AND RIGHTS
-----------------------------------
Each ISO and NSO granted pursuant to this Option Plan shall, during the
option holder's lifetime, be exercisable only by the option holder, and
neither the option nor any right to purchase Stock shall be
transferred, assigned or pledged by the option holder, by operation of
law or otherwise, other than upon a beneficiary designation executed by
the option holder and delivered to the Company or the laws of descent
and distribution.
10. PAYMENT UPON EXERCISE
---------------------
Payment of the purchase price upon exercise of any option or right to
purchase Stock granted under this Option Plan shall be made by giving
the Company written notice of such exercise, specifying the number of
such shares of Stock as to which the option is exercised. Such notice
shall be accompanied by payment of an amount equal to the Option Price
of such shares of Stock. Such payment may be (i) cash, (ii) by check
drawn against sufficient funds, (iii) such other consideration as the
Committee, in its sole discretion, determines and is consistent with
the Option Plan's purpose and applicable law, or (iv) any combination
of the foregoing. Any Stock used to exercise options to purchase Stock
(including Stock withheld upon the exercise of an option to pay the
purchase price of the shares of Stock as to which the option is
exercised) shall be valued in accordance with procedures established by
the Committee. If accepted by the Committee in its discretion, such
consideration also may be paid through a broker-dealer sale and
remittance procedure pursuant to which the option holder (i) shall
provide irrevocable written instructions to a designated brokerage firm
to effect the immediate sale of the purchased Stock and remit to the
Company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate option price payable for the
purchased Stock plus all applicable Federal and State income and
6
<PAGE>
employment taxes required to be withheld by the Company in connection
with such purchase and (ii) shall provide written directives to the
Company to deliver the certificates for the purchased Stock directly to
such brokerage firm in order to complete the sale transaction.
11. WITHHOLDING TAXES
-----------------
a. Shares of Stock issued hereunder shall be delivered to an
option holder only upon payment by such person to the Company
of the amount of any withholding tax required by applicable
federal, state, local or foreign law. The Company shall not be
required to issue any Stock to an option holder until such
obligations are satisfied.
b. The Committee may, under such terms and conditions as it deems
appropriate, authorize an option holder to satisfy withholding
tax obligations under this Section 11 by surrendering a
portion of any Stock previously issued to the option holder or
by electing to have the Company withhold shares of Stock from
the Stock to be issued to the option holder, in each case
having a fair market value equal to the amount of the
withholding tax required to be withheld.
12. RATIFICATION
------------
This Option Plan and all options issued under this Option Plan shall be
void unless this Option Plan is or was approved or ratified by (i) the
Board; and (ii) a majority of the votes cast at a stockholder meeting
at which a quorum representing at least a majority of the outstanding
shares of Stock is (either in person or by proxy) present and voting on
the Option Plan within twelve months of the date this Option Plan is
adopted by the Board. No ISOs shall be exercisable prior to the date
such stockholder approval is obtained.
13. CORPORATE TRANSACTIONS
----------------------
a. For the purpose of this Section 13, a "Corporate Transaction"
shall include any of the following stockholder-approved
transactions to which the Company is a party: (i)a merger or
consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of
which is to change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assetsof the Company in
liquidation or dissolution of the Company; or
(iii) any reverse merger in which the Company is the
surviving entity but in which beneficial ownership of
securities possessing more than fifty percent (50%)
of the total combined voting power of the Company's
outstanding securities are transferred to holders
different from those who held such securities
immediately prior to such merger.
b. Upon the occurrence of a Corporate Transaction, if the
surviving corporation or the purchaser, as the case may be,
does not assume the obligations of the Company under
7
<PAGE>
the Option Plan, then irrespective of the vesting provisions
contained in individual option agreements, all outstanding
options shall become immediately exercisable in full and each
option holder will be afforded an opportunity to exercise
their options prior to the consummation of the merger or sale
transaction so that they can participate on a pro rata basis
in the transaction based upon the number of shares of Stock
purchased by them on exercise of options if they so desire. To
the extent that the Option Plan is unaffected and assumed by
the successor corporation or its parent company a Corporate
Transaction will have no effect on outstanding options and the
options shall continue in effect according to their terms.
c. Each outstanding option under this Option Plan which is
assumed in connection with the Corporate Transaction or is
otherwise to continue in effect shall be appropriately
adjusted, immediately after such Corporate Transaction, to
apply and pertain to the number and class of securities which
would have been issued to the option holder in connection with
the consummation of such Corporate Transaction had such person
exercised the option immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the
option price payable per share, provided the aggregate option
price payable for such securities shall remain the same. In
addition, the class and number of securities available for
issuance under this Option Plan following the consummation of
the Corporate Transaction shall be appropriately adjusted.
d. The grant of options under this Option Plan shall in no way
affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
14. REGULATORY APPROVALS
--------------------
The obligation of the Company with respect to Stock issued under the
Plan shall be subject to all applicable laws, rules and regulations and
such approvals by any governmental agencies or stock exchanges as may
be required. The Company reserves the right to restrict, in whole or in
part, the delivery of Stock under the Plan until such time as any legal
requirements or regulations have been met relating to the issuance of
Stock, to their registration or qualification under the Securities
Exchange Act of 1934, if applicable, or any applicable state securities
laws, or to their listing on any stock exchange at which time such
listing may be applicable.
15. NO EMPLOYMENT/SERVICE RIGHTS
----------------------------
Neither the action of the Company in establishing this Option Plan, nor
any action taken by the Board or the Committee hereunder, nor any
provision of this Option Plan shall be construed so as to grant any
individual the right to remain in the employ or service of the
8
<PAGE>
Company (or any parent, subsidiary or affiliated corporation) for any
period of specific duration, and the Company (or any parent, subsidiary
or affiliated corporation retaining the services of such individual)
may terminate or change the terms of such individual's employment or
service at any time and for any reason, with or without cause.
16. MISCELLANEOUS PROVISIONS
------------------------
a. The provisions of this Option Plan shall be governed by the
laws of the State of Arizona, as such laws are applied to
contracts entered into and performed in such State, without
regard to its rules concerning conflicts of law.
b. The provisions of this Option Plan shall insure to the benefit
of, and be binding upon, the Company and its successors or
assigns, whether by Corporate Transaction or otherwise, and
the option holders, the legal representatives of their
respective estates, their respective heirs or legatees and
their permitted assignees.
c. The option holders shall have no divided rights, voting rights
or any other rights as a stockholder with respect to any
options under the Option Plan prior to the issuance of a stock
certificate for such Stock.
d. If there is a conflict between the terms of any employment
agreement pursuant to which options under this Plan are to be
granted and the provisions of this Plan, the terms of the
employment agreement shall prevail.
9
October 14, 1997
VIA FEDERAL EXPRESS
- -------------------
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Monterey Homes Corporation Stock Option Plan
------------------------------------------------
Ladies and Gentlemen:
We have acted as special Maryland counsel to Monterey Homes Corporation
(the "Company"), in connection with its Registration Statement on Form S-8 (the
"Registration Statement") filed under the Securities Act of 1933, relating to
the registration of 225,000 and 250,000 shares of its Common Stock, $.01 par
value (the "Plan Shares" and "Hamberlin Shares," respectively), issuable
pursuant to the Company's Stock Option Plan (the "Plan") and to the Stock Option
Agreement dated December 21, 1995 between the Company and Alan D. Hamberlin (the
"Hamberlin Agreement"), respectively.
In that connection, we have examined such documents, corporate records,
and other instruments as we have deemed necessary or appropriate for purposes of
this opinion.
Based upon the foregoing, we are of the opinion that the Plan Shares,
when issued and sold in accordance with the terms of the Plan, and the Hamberlin
Shares, when issued upon exercise of the Hamberlin Agreement, will be validly
issued, fully paid, and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Venable, Baetjer and Howard LLP
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Monterey Homes Corporation
We consent to the use of our report dated February 21, 1997 incorporated herein
by reference.
/s/ KPMG PEAT MARWICK LLP
Phoenix, Arizona
October 10, 1997
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference of our report dated April 15, 1997,
except for note 6, as to which the date is July 1, 1997, with respect to the
financial statements of Legacy Homes, Ltd. incorporated by reference in the
Registration Statement (Form S-8) pertaining to the Monterey Homes Corporation
Stock Option Plan of Monterey Homes Corporation included in its Form 8-K/A dated
September 12, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Dallas, Texas
October 10, 1997
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of Monterey Homes Corporation (formerly Homeplex Mortgage Investments
Corporation) of our report dated February 13, 1996, with respect to the
consolidated financial statements of Monterey Homes Corporation included in the
Annual Report (Form 10-K) for the year ended December 31, 1996.
/s/ Ernst & Young LLP
Phoenix, Arizona
October 10, 1997
