UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
to
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 29, 1997
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MONTEREY HOMES CORPORATION
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(Exact name of registrant as specified in its charter)
Maryland 1-9977 86-0611231
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6613 North Scottsdale Road, Suite 200, Scottsdale, Arizona 85250
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 998-8700
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NONE
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(Former name or former address, if changed since last report.)
The undersigned registrant hereby amends the following item of
its Current Report on Form 8-K dated May 29, 1997, as set forth below:
Item 5. Other Events
On May 29, 1997, the Company signed a definitive agreement
with Legacy Homes, Ltd., Legacy Enterprises, Inc., and John and Eleanor Landon
(together, the "Legacy Entities"), to acquire the homebuilding and related
mortgage service business of Legacy Homes, Ltd. and affiliates. Legacy Homes is
a builder of entry-level and move-up homes headquartered in the Dallas/Fort
Worth metropolitan area and was founded in 1988 by its current President, John
Landon. In 1996 Legacy Homes had pre-tax income of $8.8 million on sales of $84
million, compared to pre-tax income of $5.7 million on sales of $62 million in
1995. Legacy Homes closed escrow on 623 homes in 1996, a 32% increase over 1995,
a year in which Legacy was recognized as one of the top ten homebuilders in the
Dallas/Fort Worth area.
At Closing, the Company will pay an amount equal to the book
value of the acquired assets, plus $623,000 in cash and will issue approximately
$4 million of Company common stock. The Company will also assume substantially
all the liabilities of the Legacy Entities, including indebtedness that will be
incurred prior to Closing to fund distributions to the current shareholders of
Legacy Homes that are expected to reduce its book value to $5 million. The
transactions are subject to normal closing conditions, including certain third
party consents. The transactions are expected to be consummated on or about June
30, 1997.
Additionally, the purchase price will include deferred
contingent payments for the four years following the closing of the
transactions. The deferred contingent payments will be equal to 12% of the
pre-tax income of the Company and 20% of the pre-tax income of the Texas
division of the Company. In no event will the total of the deferred contingent
payments exceed $15 million.
In connection with the transactions, John Landon will enter
into a four-year employment agreement with the Company. He will be appointed
Chief Operating Officer and Co- Chief Executive Officer of the Company and
President and Chief Executive Officer of the Company's Texas division. Mr.
Landon will also be granted an option to purchase 166,667 shares of the
Company's common stock. In addition, the Company has agreed to use reasonable
best efforts to cause Mr. Landon to be elected to its Board of Directors. The
transactions are more fully described in the agreement included herein as
Exhibit 2.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Agreement of Purchase and Sale of Assets By and Among Exhibit 2
Monterey Homes Corporation, Legacy Homes, Ltd., Legacy
Enterprises, Inc. and John Landon and Eleanor Landon
dated May 29, 1997
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
MONTEREY HOMES CORPORATION
Date: June 18, 1997 By: /s/Larry W. Seay
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Larry W. Seay
Vice President of Finance and
Chief Financial Officer
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