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NEWS BULLETIN
MONTEREY HOMES CORPORATION
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William W. Cleverly
Chairman and Co-CEO
Steven J. Hilton
President and Co-CEO
6613 North Scottsdale Road, #200
Scottsdale, Arizona 85250
602/998-8700 FAX 602/998-9162
FOR IMMEDIATE RELEASE
MONTEREY HOMES CORPORATION
(FORMERLY HOMEPLEX MORTGAGE INVESTMENTS CORPORATION)
ANNOUNCES MERGER, NAME CHANGE AND REVERSE STOCK SPLIT
SCOTTSDALE, ARIZONA, January 3, 1997 - Monterey Homes Corporation (the
"Company") (NYSE Symbol - MTH) announced today the successful completion of a
merger with Monterey Homes Construction II, Inc. and Monterey Homes Arizona II,
Inc. (the "Monterey Entities"), a group of privately held companies engaged in
the homebuilding business in Phoenix, Scottsdale and Tucson, Arizona. The
parties had previously announced the execution of a definitive merger agreement,
which was approved by the Company's stockholders during its annual meeting held
on December 23, 1996.
Effective with the December 31, 1996 consummation of the merger, the
Company changed its name from Homeplex Mortgage Investments Corporation to
Monterey Homes Corporation and its New York Stock Exchange ticker symbol from
HPX to MTH. In addition, concurrent with the merger, a one for three reverse
stock split was effected.
The merger involved the issuance of approximately 1.3 million shares of
Company stock resulting in the outstanding stock of the Company reaching
approximately 4.5 million shares.
Approximately 267,000 additional shares of Company stock, contingent upon
reaching certain trading prices, and options to purchase approximately 334,000
shares of Company stock at $5.25 per share were granted in the merger. These
rights and options, coupled with existing stock options, could result in the
issuance of approximately an additional 1.0 million shares of Company stock.
(Note: All share and per share amounts are on a post-reverse split basis).
Mr. William W. Cleverly and Mr. Steven J. Hilton, the prior owners of
the Monterey Entities, have been elected and will serve as Chairman and
President, respectively, and Co-Chief Executive Officers of the Company
beginning January 1, 1997, under five year employment contracts. The new board
will consist of Messrs. Cleverly and Hilton, the immediate prior Chairman, Alan
Hamberlin, and two new outside directors, Robert G. Sarver and C. Timothy White.
The transaction resulted in the termination of the Company's tax status
as a real estate investment trust, although, it is anticipated that the
Company's $58.0 million net operating loss carryforward will continue to be
available to the Company after the merger.
The Company will continue with the homebuilding operations of the
Monterey Entities as its main line of business and will withdraw from the
residual and real estate lending business.
Bill Cleverly, Chairman and Co-CEO of the Company, stated: "With this
merger, Monterey Homes Corporation enters a new era. We plan to re-deploy the
capital of the Company to grow our existing Arizona homebuilding operations and
expand geographically into other markets which present superior profit
potential."
For questions regarding this press release, please call Larry W. Seay,
Chief Financial Officer of the Company at (602) 998-8700.