<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the fiscal year ended December 31, 1996
or
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from ______ to ______
Commission File Number 0-19614
H.D. VEST, INC. SALARY SAVINGS TRUST
H.D. VEST, INC.
433 East Las Colinas Blvd., Third Floor, Irving, Texas 75039
<PAGE>
H.D. VEST, INC.
SALARY SAVINGS TRUST
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995,
AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1996
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrator of the
H.D. Vest, Inc. Salary Savings Trust:
We have audited the accompanying statements of net assets available for plan
benefits of the H.D. Vest, Inc. Salary Savings Trust (the "Plan") as of December
31, 1996 and 1995, and the related statement of changes in net assets available
for plan benefits for the years then ended, as listed in the accompanying index.
These financial statements and the supplemental schedules referred to below are
the responsibility of the Plan's Administrator. Our responsibility is to
express an opinion on these financial statements and supplemental schedules
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1996 and 1995, and the changes in its net assets available for
plan benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purpose as of December 31, 1996, and reportable transactions
for the year then ended are presented for purposes of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The Fund information in the statements of net assets available for plan
benefits and the statements of changes in net assets available for plan benefits
is presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and Fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/S/ ARTHUR ANDERSEN LLP
Dallas, Texas,
June 12, 1997
<PAGE>
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
Page(s)
-------
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1996 3
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1995 4
Statement of Changes in Net Assets Available for Plan Benefits
with Fund Information for the Year Ended December 31, 1996 5
Statement of Changes in Net Assets Available for Plan Benefits
with Fund Information for the Year Ended December 31, 1995 6
Notes to Financial Statements 7-11
Schedule I - Item 27a - Supplemental Schedule of Assets Held for
Investment Purposes as of December 31, 1996 12
Schedule II - Item 27d - Supplemental Schedule of Reportable
Transactions for the Year Ended December 31, 1996 13
<PAGE>
-3-
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
AS OF DECEMBER 31, 1996
-----------------------
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------------------------
Capital Kemper
Reserves U.S. Massachusetts H.D. Vest
Bank One Money Government Investors Oppenheimer Putnam Employer H.D. Vest
Holding Market Securities Trust A Global Voyager Stock Liquidity
Account Fund Fund Fund Fund Fund Fund Fund
--------- -------- ---------- ------------- ----------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair
value $ 22,230 $3,307 $10,126 $91,222 $256,362 $731,823 $153,479 $37
RECEIVABLES:
Interfund receivables
(payables) (18,655) - - - 2,053 14,075 2,527 -
Dividends receivable - - - - - 48,686 - -
Participant contributions - - - - - - - -
Employer matching
contributions - - - - - - - -
-------- ------ ------- ------- -------- -------- -------- ---
Total receivables (18,655) - - - 2,053 62,761 2,527 -
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 3,575 $3,307 $10,126 $91,222 $258,415 $794,584 $156,006 $37
======== ====== ======= ======= ======== ======== ======== ===
<CAPTION>
----------------
Loan
Fund Other Total
------- ------- ----------
<S> <C> <C> <C>
ASSETS:
Investments, at fair
value $74,409 $ - $1,342,995
RECEIVABLES:
Interfund receivables
(payables) - - -
Dividends receivable - - 48,686
Participant contributions - 14,451 14,451
Employer matching
contributions - 2,890 2,890
------- ------- ----------
Total receivables - 17,341 66,027
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $74,409 $17,341 $1,409,022
======= ======= ==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
-4-
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
AS OF DECEMBER 31, 1995
-----------------------
<TABLE>
<CAPTION>
Participant Directed
----------------------------------------------------------------------------------------------
Capital Kemper H.D.
Reserves U.S. Massachusetts Vest
Money Government Investors Oppenheimer Putnam Employer H.D. Vest
Market Securities Trust A Global Voyager Stock Liquidity Loan
Fund Fund Fund Fund Fund Fund Fund Fund Other Total
-------- ---------- ------------- ----------- -------- -------- --------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair
value $593 $7,661 $57,781 $154,584 $575,388 $65,490 $71 $26,472 $ - $888,040
RECEIVABLES:
Participant contributions - - - - - - - - 8,956 8,956
Employer matching
contributions - - - - - - - - 1,791 1,791
---- ------ ------- -------- -------- ------- --- ------- ------- --------
Total receivables - - - - - - - - 10,747 10,747
---- ------ ------- -------- -------- ------- --- ------- ------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $593 $7,661 $57,781 $154,584 $575,388 $65,490 $71 $26,472 $10,747 $898,787
==== ====== ======= ======== ======== ======= === ======= ======= ========
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
-5-
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
------------------------------------------------------------------------
INFORMATION
-----------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
----------------------------------------------------------------------------------
Capital
Reserves Kemper U.S. Massachusetts H.D. Vest
Bank One Money Government Investors Oppenheimer Putnam Employer
Holding Market Securities Trust A Global Voyager Stock
Account Fund Fund Fund Fund Fund Fund
-------- -------- ---------- ------------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net appreciation
(depreciation) in
fair value of
investments $ - $ - $ (327) $ 8,681 $ 17,830 $ 17,838 $ 61,070
Interest and
dividends - 63 307 6,168 12,886 49,536 128
Realized gain (loss) - - (42) 727 2,348 11,458 411
Contributions-
Participant - 12,464 2,825 17,750 65,140 189,748 -
Employer match - 2,493 565 3,550 13,013 37,968 -
Rollovers - - - - 9,567 22,324 2
------ -------- ------- ------- -------- -------- --------
Total additions - 15,020 3,328 36,876 120,784 328,872 61,611
------ -------- ------- ------- -------- -------- --------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and
benefits paid to
participants and
beneficiaries - (48,690) (130) (1,321) (11,394) (14,555) (4,580)
Loan payments - - - - - - -
------ -------- ------- ------- -------- -------- --------
Total deductions - (48,690) (130) (1,321) (11,394) (14,555) (4,580)
------ -------- ------- ------- -------- -------- --------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND
TRANSFERS - (33,670) 3,198 35,555 109,390 314,317 57,031
TRANSFERS WITHIN PLAN 3,575 36,384 (733) (2,114) (5,559) (95,121) 33,485
------ -------- ------- ------- -------- -------- --------
NET INCREASE (DECREASE) 3,575 2,714 2,465 33,441 103,831 219,196 90,516
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning
of year - 593 7,661 57,781 154,584 575,388 65,490
------ -------- ------- ------- -------- -------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of
year $3,575 $ 3,307 $10,126 $91,222 $258,415 $794,584 $156,006
====== ======== ======= ======= ======== ======== ========
<PAGE>
<CAPTION>
------------------------------
H.D. Vest
Liquidity Loan
Fund Fund Other Total
--------- ------- ------- ----------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net appreciation
(depreciation) in
fair value of
investments $ 302 $ - $ - $ 105,394
Interest and
dividends 17 - - 69,105
Realized gain (loss) - - - 14,902
Contributions-
Participant 17,710 - 5,495 311,132
Employer match 3,538 - 1,099 62,226
Rollovers - - - 31,893
-------- ------- ------- ----------
Total additions 21,567 - 6,594 594,652
-------- ------- ------- ----------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and
benefits paid to
participants and
beneficiaries - - - (80,670)
Loan payments - (3,747) - (3,747)
-------- ------- ------- ----------
Total deductions - (3,747) - (84,417)
-------- ------- ------- ----------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND
TRANSFERS 21,567 (3,747) 6,594 510,235
TRANSFERS WITHIN PLAN (21,601) 51,684 - -
-------- ------- ------- ----------
NET INCREASE (DECREASE) (34) 47,937 6,594 510,235
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning
of year 71 26,472 10,747 898,787
-------- ------- ------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of
year $ 37 $74,409 $17,341 $1,409,022
======== ======= ======= ==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
-6-
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
------------------------------------------------------------------------
INFORMATION
-----------
FOR THE YEAR ENDED DECEMBER 31, 1995
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------------------
Capital
Reserves Kemper U.S. Massachusetts H.D. Vest
Money Government Investors Oppenheimer Putnam Employer
Market Securities Trust A Global Voyager Stock
Fund Fund Fund Fund Fund Fund
-------- ----------- ------------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net appreciation
(depreciation) in
fair value of
investments $ - $ 747 $ 8,640 $ 7,540 $106,431 $(23,489)
Interest and
dividends 159 402 885 9,576 31,692 -
Realized gain (loss) - 28 2,317 1,688 12,711 (744)
Contributions-
Participant 10,313 2,357 19,735 51,840 146,062 -
Employer match 2,063 471 3,949 10,372 29,234 -
-------- ------ ------- -------- -------- --------
Total additions 12,535 4,005 35,526 81,016 326,130 (24,233)
-------- ------ ------- -------- -------- --------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and
benefits paid to
participants and
beneficiaries (646) (264) (8,069) (16,622) (72,985) (25,853)
Loan payments - - - - - -
-------- ------ ------- -------- -------- --------
Total deductions (646) (264) (8,069) (16,622) (72,985) (25,853)
-------- ------ ------- -------- -------- --------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND
TRANSFERS 11,889 3,741 27,457 64,394 253,145 (50,086)
INTERFUND TRANSFERS, net (11,380) (107) (5,786) 6,349 (8,744) 36,315
-------- ------ ------- -------- -------- --------
NET INCREASE (DECREASE) 509 3,634 21,671 70,743 244,401 (13,771)
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning
of year 84 4,027 36,110 83,841 330,987 79,261
-------- ------ ------- -------- -------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of
year $ 593 $7,661 $57,781 $154,584 $575,388 $ 65,490
======== ====== ======= ======== ======== ========
<PAGE>
<CAPTION>
---------------------------
H.D. Vest
Liquidity Loan
Fund Fund Other Total
--------- ------- ------- ---------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net appreciation
(depreciation) in
fair value of
investments $ - $ - $ - $ 99,869
Interest and
dividends 162 - - 42,876
Realized gain (loss) (7) - - 15,993
Contributions-
Participant 23,162 - (4,529) 248,940
Employer match 4,610 - 442 51,141
-------- ------- ------- ---------
Total additions 27,927 - (4,087) 458,819
-------- ------- ------- ---------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and
benefits paid to
participants and
beneficiaries (11) - - (124,450)
Loan payments - (5,101) - (5,101)
-------- ------- ------- ---------
Total deductions (11) (5,101) - (129,551)
-------- ------- ------- ---------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND
TRANSFERS 27,916 (5,101) (4,087) 329,268
INTERFUND TRANSFERS, net (27,871) 11,224 - -
-------- ------- ------- ---------
NET INCREASE (DECREASE) 45 6,123 (4,087) 329,268
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning
of year 26 20,349 14,834 569,519
-------- ------- ------- ---------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of
year $ 71 $26,472 $10,747 $ 898,787
======== ======= ======= =========
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE>
-7-
H. D. VEST, INC. SALARY SAVINGS TRUST
-------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1996
-----------------
1. PLAN DESCRIPTION:
-----------------
General
- -------
The H.D. Vest, Inc. Salary Savings Trust (the "Plan") is a defined contribution
retirement plan established by H.D. Vest, Inc. (the "Company") under the
provisions of Section 401(a) of the Internal Revenue Code (IRC), which includes
a qualified cash or deferred arrangement as described in Section 401(k) of the
IRC, for the benefit of eligible employees of the Company. All employees of the
Company who are age 21 or older and have completed one year of service, as
defined, are eligible to participate. The Plan entry dates are January 1, April
1, July 1, and October 1 of each year. The Plan, which became effective January
1, 1993, is subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended (ERISA). Participants should refer to the plan
agreement for a more complete description of the Plan's provisions.
The Plan's trustee is Banc One Investment Management Group, Inc. The trustee is
designated to hold and invest plan assets for the benefit of plan participants
in accordance with the terms of the plan agreement. In addition, CPI Qualified
Plan Consultants, Inc. is responsible for keeping the records of the Plan and
National Financial Services serves as the asset custodian. The Plan
administrator is the Benefit Plan Advisory Committee consisting of three
employees of the Company. This committee is responsible for Plan oversight.
Employer Contributions
- ----------------------
Matching - The Company provided a matching contribution equal to 20% of
each participant's contribution for the calendar year 1996 and 1995.
Matching contributions were $62,226 and $51,141 in 1996 and 1995,
respectively.
Discretionary - Any amount deemed appropriate by the Company. No
discretionary contributions were made in 1996 or 1995.
Nonelective - The Company, at its sole discretion, may contribute an amount
which it designates as a qualified nonelective contribution. There were no
nonelective contributions in 1996 or 1995.
Participant Contributions
- -------------------------
Eligible employees can contribute up to 15% of their annual compensation each
calendar year, not to exceed $9,500 and $9,240 per participant in 1996 and 1995,
respectively. Participant contributions, including rollovers, were $343,025 and
$248,940 in 1996 and 1995, respectively.
Vesting
- -------
Participants are immediately vested in their voluntary contributions and Company
contributions and the earnings thereon.
<PAGE>
-8-
Benefits
- --------
In general, participants are eligible to receive vested benefits upon reaching
the normal retirement age of 65, upon death (benefits are paid to a
participant's beneficiary), upon permanent disability, upon termination of
employment, or upon termination of the Plan. Participants are entitled to
receive 100% of their account balance. At December 31, 1996, there was $3,575
of requested but not paid benefits owed to participants. At December 31, 1995,
there were no unpaid benefits owed to participants.
Participant Accounts
- --------------------
Individual accounts are maintained for each of the Plan's participants to
reflect the participant's contributions, related employer matching
contributions, rollover contributions, if any, and an allocation of Plan income,
gains, and losses. Allocations of income are based on participant earnings.
Investment Options
- ------------------
Upon enrollment in the Plan, a participant may direct employee and employer
matching contributions in any increment into the six investment options. A
description of each investment option is provided below:
Capital Reserves Money Market - This fund seeks current income, stability,
and liquidity through investment in high-quality money market securities.
Kemper U.S. Government Securities Fund - The fund invests primarily in
Government National Mortgage Association certificates of the modified pass-
through type. The fund may invest in the entire range of maturities of
fixed-income securities.
Massachusetts Investors Trust A - The fund invests primarily in common
stocks and convertible securities, emphasizing securities that are
considered to be of high or improving quality. The fund may invest up to
35% of its assets in foreign securities, and a portion of the fund's assets
may be held in debt securities and cash equivalents.
Oppenheimer Global Fund - The fund invests primarily in common stocks
issued by companies domiciled in at least three countries or securities of
cyclical industries. The fund may use special investment techniques, such
as hedging.
Putnam Voyager Fund - The fund invests primarily in common stocks.
Preferred stocks, debt securities, and convertible issues may also be held.
The fund generally invests largely in the securities of smaller and less-
seasoned companies.
H.D. Vest Employer Stock - This fund invests in H.D. Vest, Inc. common
stock. Any stock so acquired is purchased on the open market.
H.D. Vest Liquidity Fund - This fund acts as a holding account until
contributions can be transferred into H.D. Vest Employer Stock.
<PAGE>
-9-
The net asset value per unit for the various unitized funds are as follows (the
Capital Reserves Money Market Fund and the H.D. Vest Liquidity Fund do not have
units):
<TABLE>
<CAPTION>
1996 1995
-------------------- --------------------
Number Net Asset Number Net Asset
Fund of Units Value/Unit of Units Value/Unit
-------------------------------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Kemper U.S. Government Securities Fund 1,172 $ 8.64 852 $ 9.04
Massachusetts Investors Trust A 6,309 14.46 4,549 12.71
Oppenheimer Global Fund 6,570 39.03 4,431 34.89
Putnam Voyager Fund 45,443 16.12 37,731 15.25
H.D. Vest Employer Stock 33,103 4.63 26,196 2.50
</TABLE>
Loans to Participants
- ---------------------
The Plan allows for a participant to borrow from his or her participant account.
A loan to a participant may not exceed 50% of the participant's vested benefit
and cannot exceed $50,000. Loans are repayable through payroll deductions over
periods ranging up to 60 months with a minimum loan amount of $1,000. If the
purpose of the loan is to acquire or construct the primary residence of the
participant, the period of repayment may exceed five years, but in no event
shall it exceed the usual repayment period required by commercial lenders for
similar loans. The interest rate is determined by the plan administrator based
on prevailing market conditions and is fixed over the life of the note. At
December 31, 1996 and 1995, the Plan had $74,409 and $26,472, respectively, in
loans outstanding issued at 7.2% to 13% rates of interest. Loan withdrawals are
included in Transfers Within Plan on the Statement of Changes in Net Assets
Available For Benefits With Fund information.
Plan Amendments
- ---------------
Effective July 1, 1996, the Plan's trustees were changed from Ted Sinclair and
Shannon Soefje, both officers of the sponsor to Banc One Investment Management
Group, Inc.
Effective July 1, 1996, the Plan changed the date that participant-directed
changes went into effect from the next business day to the first business day of
the following month.
Expenses of the Plan
- --------------------
All expenses related to the administration and operation of the Plan, including
but not limited to legal, brokerage, and accounting fees, are paid by the
Company. The Plan is not responsible for reimbursing the Company for expenses
paid by the Company on behalf of the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Basis of Accounting
- -------------------
The accompanying financial statements are prepared on the accrual basis of
accounting.
Investment Valuation
- --------------------
Marketable securities are stated at fair value. Securities traded on a national
securities exchange are valued at the last reported sales price on the last
business day of the year; investments traded in the over-the-counter market and
listed securities for which no sale was reported on the last day of the plan
year are valued at the last reported bid price.
<PAGE>
-10-
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. DISCLOSURE OF SIGNIFICANT ASSETS:
---------------------------------
The fair market values of individual assets that represent 5% or more of the
Plan's net assets as of December 31, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Massachusetts Investors Trust A $ 91,222 $ 57,781
Oppenheimer Global Fund 256,362 154,584
Putnam Voyager Fund 731,823 575,388
H.D. Vest Employer Stock 153,479 65,490
</TABLE>
4. TAX STATUS:
-----------
The Plan is intended to satisfy the tax qualification requirements under Section
401(a) of the Internal Revenue Code, therefore, the contributions and investment
earnings of the Plan and related trust are intended to be exempt from federal
income taxes under Section 501(a). A determination letter dated September 10,
1996, was received from the Internal Revenue Service certifying the Plan's tax-
exempt status as of January 1, 1995. The Plan was amended effective July 1,
1996, and those changes were not considered by the IRS before it granted the
favorable determination letter mentioned above. The Plan's administrator
intends to file for a new determination letter covering these amendments.
Additionally, the plan administrator and the Plan's tax counsel believe the plan
is designed and is currently being operated in compliance with the applicable
requirements of the Code.
5. PLAN TERMINATION:
-----------------
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants may elect to receive their nonforfeitable account balance as soon
as administratively practicable.
6. NEW ACCOUNTING PRONOUNCEMENTS:
------------------------------
SFAS No. 119, "Disclosure about Derivative Financial Instruments and Fair Value
of Financial Instruments," requires disclosure about derivative financial
instruments, futures, forwards, swaps, option contracts, and other financial
instruments with similar characteristics. This statement is effective for
fiscal years ending after December 15, 1996. At December 31, 1996, the Plan did
not hold any derivative financial instruments; however, the Oppenheimer Global
Fund investment held by the Plan includes derivative financial instruments. As
described by the Oppenheimer Global Fund prospectus, futures and options are
used only for the purpose of managing the fund's exposure to stock and bond
markets and to fluctuations in interest rates and currency values. The Plan's
exposure with these derivative financial instruments is limited to the amount of
investment in the mutual fund.
<PAGE>
-11-
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
----------------------------------------------------
The following is a reconciliation of net assets available for plan benefits per
the financial statements and the Form 5500:
<TABLE>
<CAPTION>
December 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Net assets available for plan benefits per the financial
statements $1,409,017 $898,787
Amounts allocated to withdrawing participants (3,575) -
---------- --------
Net assets available for plan benefits per the Form 5500 $1,405,442 $898,787
========== ========
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Distributions to participants per the financial statements $ 84,417 $129,551
Amounts allocated to withdrawing participants at end
of period 3,575 -
---------- --------
Distributions to participants per the Form 5500 $ 87,992 $129,551
========== ========
</TABLE>
8. SUBSEQUENT EVENT
----------------
Effective January 1, 1997 the Plan's recordkeeper was changed from CPI Qualified
Plan Consultants, Inc. to Sedgewick Noble Lowndes.
<PAGE>
-12-
SCHEDULE 1
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
-----------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
EIN: 75-2154244
----------------
PLAN # 001
----------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Current
Identity of Party Involved Description of Investment Cost Value
- ----- ----------------------------- ------------------------------------- ----------- -----------
<S> <C> <C> <C> <C>
* Bank One Holding Account $ 22,230 $ 22,230
* H.D. Vest Financial Services Capital Reserves Money Market 3,307 3,307
Kemper U.S. Government
Securities Fund Mutual Fund, fixed income 10,016 10,126
Massachusetts Investors
Trust A Mutual Fund, stock and debt 89,892 91,222
Oppenheimer Global Fund Mutual Fund, growth stock and debt 248,862 256,362
Putnam Voyager Fund Mutual Fund, international stock
and debt 755,783 731,823
* H.D. Vest Investment H.D. Vest Employer Stock, par
Securities, Inc. value $5.50 163,061 153,479
* H.D. Vest Investment
Securities, Inc. H.D. Vest Liquidity Fund 37 37
* Participant Loans Loans to Participants, interest rates
ranging from 7.2% to 13% - 74,409
---------- ----------
$1,293,188 $1,342,995
========== ==========
</TABLE>
* Column (a) indicates each identified person/entity known to be a party-in-
interest.
This supplemental schedule lists assets held for investment purposes at
December 31, 1996, as required by the Department of Labor Rules and
Regulations for Reporting and Disclosure.
<PAGE>
-13-
SCHEDULE 2
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
EIN: 75-2154244
----------------
PLAN #001
---------
<TABLE>
<CAPTION>
(a) (b) (c)
Purchase
Identity of Party Involved Description of Asset Price
- ------------------------------- ------------------------------------------- ---------
<S> <C> <C>
INDIVIDUAL: NONE
SERIES TRANSACTIONS:
Purchases:
H.D. Vest Investment
Securities, Inc.* Capital Reserves Money Market $ 11,655
Massachusetts Financial
Services Massachusetts Investors Trust A
Mutual Fund 30,627
Oppenheimer Funds Distributors Oppenheimer Global Funds Mutual
Fund 116,373
Putnam Fiduciary Trust Putnam Voyager Fund Mutual Fund 315,933
H.D. Vest Investment
Securities, Inc.* H.D. Vest Employer Stock 33,960
H.D. Vest Investment
Securities, Inc.* H.D. Vest Liquidity Fund 33,963
Sales:
H.D. Vest Investment
Securities, Inc.* Capital Reserves Money Market $ -
Massachusetts Financial
Services Massachusetts Investors Trust A Mutual Fund -
Oppenheimer Funds Distributors Oppenheimer Global Funds Mutual Fund -
Putnam Fiduciary Trust Putnam Voyager Fund Mutual Fund -
H.D. Vest Investment
Securities, Inc.* H.D. Vest Employer Stock -
H.D. Vest Investment
Securities, Inc.* H.D. Vest Liquidity Fund -
<PAGE>
<CAPTION>
(d) (g) (h) (i)
Current
Value on Net
Selling Cost of Transaction Gain/
Price Asset Date (Loss)
- --------- --------- ------------ --------
<C> <C> <C> <C>
$ - $ 11,655 $ 11,655 $ -
- 30,627 30,627 -
- 116,373 116,373 -
- 315,933 315,933 -
- 33,960 33,960 -
- 33,963 33,963 -
$ 60,091 $ 60,091 $ 60,901 $ -
6,496 5,578 6,496 918
32,268 30,750 32,268 1,518
123,263 91,118 123,263 32,145
4,925 7,356 4,925 (2,431)
33,999 33,999 33,999 -
</TABLE>
Categories (e) Lease Rental and (f) Transaction Expense do not apply to any of
these transactions.
*indicates each identified person known to be a party-in-interest
This supplemental schedule is a listing and series of investment transactions
in the same security
which alone, or in the aggregate, exceeded 5% of plan assets at January 1, 1996,
as required by
the Department of Labor Rules and Regulations for Reporting and Disclosure.
<PAGE>
-14-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees of the Plan have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
H.D. VEST INC. SALARY SAVINGS TRUST
By: /s/Timothy O'Brien
----------------------------------------
Timothy O'Brien
Member of the Administrative Committee
