<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, 1997
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.
6333 North State Highway 161, Fourth Floor, Irving, Texas 75039
<PAGE>
H.D. VEST, INC.
SALARY SAVINGS TRUST
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996,
AND SUPPLEMENTAL SCHEDULES
AS OF DECEMBER 31, 1997
Together With Report Of Independent Public Accountants
<PAGE>
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
Page(s)
-------
Report of Independent Public Accountants 2
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1997 3
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1996 4
Statement of Changes in Net Assets Available for Plan Benefits
with Fund Information for the Year Ended December 31, 1997 5
Statement of Changes in Net Assets Available for Plan Benefits
with Fund Information for the Year Ended December 31, 1996 6
Notes to Financial Statements 7-12
Schedule I - Item 27a - Supplemental Schedule of Assets Held for
Investment Purposes as of December 31, 1997 13
Schedule II - Item 27d - Supplemental Schedule of Reportable
Transactions for the Year Ended December 31, 1997 14
Signatures 15
<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, 1997 and 1996, and the related statements 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 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, 1997 and 1996, 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 purposes as of December 31, 1997, 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.
Dallas, Texas,
June 12, 1998
/s/ ARTHUR ANDERSEN LLP
<PAGE>
-3-
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
AS OF DECEMBER 31, 1997
-----------------------
<TABLE>
<CAPTION>
Participant Directed
--------------------------------------------------------
Capital Kemper-
Reserves Kemper U.S. Dreman Massachusetts
Bank One Money Government Small Investors
Holding Market Securities Cap Trust A
Account Fund Fund Value Fund
---------- -------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair market value $45,794 $10,345 $27,415 $125,455 $153,404
RECEIVABLES:
Interfund receivables (payables) (35,351) 2 209 6,290 6,098
Participant contributions - 323 180 2,628 1,464
Employer matching contributions - 65 36 525 293
Accrued income 214 43 - 10 6
-------- ------- ------- -------- --------
Total receivables (35,137) 433 425 9,453 7,861
-------- ------- ------- -------- --------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 10,657 $10,778 $27,840 $134,908 $161,265
======== ======= ======= ======== ========
<CAPTION>
Participant Directed
-------------------------------------------------------
Putnam H.D. Vest
Oppenheimer Putnam International Employer
Global Voyager Growth Stock Loan
Fund Fund Fund Fund Fund Total
----------- -------- ------------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair market value $401,195 $925,936 $55,000 $168,010 $84,102 $1,996,656
RECEIVABLES:
Interfund receivables (payables) (253) 20,634 1,863 508 - -
Participant contributions 2,451 5,698 1,754 461 - 14,959
Employer matching contributions 490 1,140 351 92 - 2,992
Accrued income 14 37 6 9 - 339
-------- -------- ------- -------- ------- ----------
Total receivables 2,702 27,509 3,974 1,070 - 18,290
-------- -------- ------- -------- ------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $403,897 $953,445 $58,974 $169,080 $84,102 $2,014,946
======== ======== ======= ======== ======= ==========
</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, 1996
-----------------------
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------
Capital
Reserves Kemper U.S. Massachusetts
Bank One Money Government Investors
Holding Market Securities Trust A
Account Fund Fund Fund
---------- -------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at fair market value $22,230 $3,307 $10,126 $91,222
RECEIVABLES:
Interfund receivables (payables) (18,655) - - -
Dividends receivable - - - -
Participant contributions 14,451 - - -
Employer matching
contributions 2,890 - - -
------- ------ ------- -------
Total receivables (1,314) - - -
------- ------ ------- -------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $20,916 $3,307 $10,126 $91,222
======= ====== ======= =======
<CAPTION>
Participant Directed
-------------------------------------
H.D. Vest
Oppenheimer Putnam Employer H.D Vest
Global Voyager Stock Liquidity Loan
Fund Fund Fund Fund Fund Total
----------- -------- ----------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair market value $256,362 $731,823 $153,479 $37 $74,409 $1,342,995
RECEIVABLES:
Interfund receivables (payables) 2,053 14,075 2,527 - - -
Dividends receivable - 48,686 - - - 48,686
Participant contributions - - - - - 14,451
Employer matching contributions - - - - - 2,890
-------- -------- -------- ----- ------- ----------
Total receivables 2,053 62,761 2,527 - - 66,027
-------- -------- -------- ----- ------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $258,415 $794,584 $156,006 $37 $74,409 $1,409,022
======== ======== ======== ===== ======= ==========
</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, 1997
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------
Capital Kemper Kemper-
Bank Reserves U.S. Dreman Massachusetts
One Money Government Small Investors
Holding Market Securities Cap Trust A
Account Fund Fund Value Fund
--------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net appreciation
(depreciation) in fair
value of investments $ - $ 14 $ 125 $ (7,855) $ 15,911
Interest and dividends 1,608 541 859 251 1,741
Realized gain (loss) - - 48 (14) 14,019
Contributions-
Participant (17,270) 22,658 4,255 40,849 35,410
Employer match - 4,532 851 8,170 7,083
Rollovers - - - 2,297 3,445
--------- ---------- ---------- ---------- -------------
Total additions (15,662) 27,745 6,138 43,698 77,609
--------- ---------- ---------- ---------- -------------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and benefits
paid to participants
and beneficiaries (5,297) (8,714) (979) (82) (30,851)
--------- ---------- ---------- ---------- -------------
Total deductions (5,297) (8,714) (979) (82) (30,851)
--------- ---------- ---------- ---------- -------------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND
TRANSFERS (20,959) 19,031 5,159 43,616 46,758
INTERFUND TRANSFERS 10,700 (11,560) 12,555 91,292 23,285
--------- ---------- ---------- ---------- -------------
NET INCREASE (DECREASE) (10,259) 7,471 17,714 134,908 70,043
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning
of year 20,916 3,307 10,126 - 91,222
--------- ---------- ---------- ---------- -------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of
year $ 10,657 $ 10,778 $ 27,840 $ 134,908 $ 161,265
========= ========== ========== ========== =============
<CAPTION>
Participant Directed
------------------------------------------------------
Putnam H.D. Vest
Oppenheimer Putnam International Employer H.D. Vest
Global Voyager Growth Stock Liquidity Loan
Fund Fund Fund Fund Fund Fund Total
----------- --------- ------------- ---------- --------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net appreciation
(depreciation) in fair
value of investments $ (1,039) $ 120,032 $ (5,033) $ 8,787 $ - $ - $ 130,942
Interest and dividends 8,267 6,497 378 469 - - 20,611
Realized gain (loss) 53,646 46,600 (768) (2,929) - - 110,602
Contributions-
Participant 97,924 243,170 24,548 14,148 - - 465,692
Employer match 19,577 48,642 4,910 2,829 - - 96,594
Rollovers 4,985 28,687 3,445 886 - - 43,745
----------- --------- -------- -------- -------- ------- -----------
Total additions 183,360 493,628 27,480 24,190 - - 868,186
----------- --------- -------- -------- -------- ------- -----------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and benefits
paid to participants
and beneficiaries (30,368) (168,653) (4,725) (5,959) - (6,634) (262,262)
----------- --------- -------- -------- -------- ------- -----------
Total deductions (30,368) (168,653) (4,725) (5,959) - (6,634) (262,262)
----------- --------- -------- -------- -------- ------- -----------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND
TRANSFERS 152,992 324,975 22,755 18,231 - (6,634) 605,924
INTERFUND TRANSFERS (7,510) (166,114) 36,219 (5,157) (37) 16,327 -
----------- --------- -------- -------- -------- ------- -----------
NET INCREASE (DECREASE) 145,482 158,861 58,974 13,074 (37) 9,693 605,924
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning of year 258,415 794,584 - 156,006 37 74,409 1,409,022
----------- --------- -------- -------- -------- ------- -----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of
year $ 403,897 $ 953,445 $ 58,974 $169,080 $ - $84,102 $ 2,014,946
=========== ========= ======== ======== ======== ======= ===========
</TABLE>
The accompanying notes are an integral part of this nancial 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, 1996
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------
Capital Kemper
Bank Reserves U.S. Massachusetts
One Money Government Investors Oppenheimer
Holding Market Securities Trust A Global
Account Fund Fund Fund Fund
--------- --------- ---------- ------------- -----------
<S> <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
Interest and dividends - 63 307 6,168 12,886
Realized gain (loss) - - (42) 727 2,348
Contributions-
Participant 5,495 12,464 2,825 17,750 65,140
Employer match 1,099 2,493 565 3,550 13,013
Rollovers - - - - 9,567
------- -------- ------- -------- --------
Total additions 6,594 15,020 3,328 36,876 120,784
------- -------- ------- -------- --------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and benefits
paid to participants
and beneficiaries - (48,690) (130) (1,321) (11,394)
------- -------- ------- -------- --------
Total deductions - (48,690) (130) (1,321) (11,394)
------- -------- ------- -------- --------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND
TRANSFERS 6,594 (33,670) 3,198 35,555 109,390
INTERFUND TRANSFERS 3,575 36,384 (733) (2,114) (5,559)
------- -------- ------- -------- --------
NET INCREASE (DECREASE) 10,169 2,714 2,465 33,441 103,831
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning
of year 10,747 593 7,661 57,781 154,584
------- -------- ------- -------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of
year $20,916 $ 3,307 $10,126 $ 91,222 $258,415
======= ======== ======= ======== ========
<CAPTION>
Participant Directed
-------------------------
H.D. Vest
Putnam Employer H.D. Vest
Voyager Stock Liquidity Loan
Fund Fund Fund Fund Total
--------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net appreciation
(depreciation) in fair
value of investments $ 17,838 $ 61,070 $ 302 $ - $ 105,394
Interest and dividends 49,536 128 17 - 69,105
Realized gain (loss) 11,458 411 - - 14,902
Contributions-
Participant 189,748 - 17,710 - 311,132
Employer match 37,968 - 3,538 - 62,226
Rollovers 22,324 2 - - 31,893
-------- -------- ----------- ------- ----------
Total additions 328,872 61,611 21,567 - 594,652
-------- -------- ----------- ------- ----------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and benefits
paid to participants
and beneficiaries (14,555) (4,580) - (3,747) (84,417)
-------- -------- ----------- ------- ----------
Total deductions (14,555) (4,580) - (3,747) (84,417)
-------- -------- ----------- ------- ----------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND
TRANSFERS 314,317 57,031 21,567 (3,747) 510,235
INTERFUND TRANSFERS (95,121) 33,485 (21,601) 51,684 -
-------- -------- ----------- ------- ----------
NET INCREASE (DECREASE) 219,196 90,516 (34) 47,937 510,235
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning
of year 575,388 65,490 71 26,472 898,787
-------- -------- ----------- ------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of
year $794,584 $156,006 $ 37 $74,409 $1,409,022
======== ======== =========== ======= ==========
</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, 1997
-----------------
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 Bank One Texas, N.A. 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, the Plan's record keeping
responsibilities were performed by Sedgewick, Noble, Lowndes and CPI Qualified
Plan Consultants, Inc. for the fiscal years ended December 31, 1997 and 1996,
respectively. 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 1997 and 1996.
Matching contributions were $96,594 and $62,226 in 1997 and 1996,
respectively.
Discretionary - Any amount deemed appropriate by the Company. No
discretionary contributions were made in 1997 or 1996.
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 1997 or 1996.
Participant Contributions
- -------------------------
Eligible employees can contribute up to 15% of their annual compensation each
calendar year, not to exceed $9,500 per participant in 1997 and 1996,
respectively. Participant contributions, including rollovers, were $509,437 and
$343,025 in 1997 and 1996, 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. There were $13,525 and $3,575 of
requested but not paid benefits owed to participants at December 31, 1997 and
1996, respectively.
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 eight investment options. A
description of each investment option is provided below:
Bank One Holding Account - This money market account acts as a holding
account until contributions can be transferred into the participant-
directed funds.
Capital Reserves Money Market Fund - 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.
Kemper-Dreman Small Cap Value - The fund invests at least 65% of its assets
in equity securities of companies with market capitalizations of less than
$1 billion. It invests primarily in common stocks of companies that the
advisor determines to have low price to earnings ratios, reasonable returns
on equity and sound finances. The fund may invest up to 20% of its assets
in sponsored American Depository Receipts.
Massachusetts Investors Trust A Fund - 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.
Putnam International Growth Fund - The fund invest approximately 65% of its
assets in equity securities of companies located outside of North America.
It may invest in companies of any size that it judges to be in a strong
growth trend or that it believes to be undervalued. The fund may invest in
both developed and emerging markets. It may engage in various hedging
strategies.
<PAGE>
-9-
H.D. Vest Employer Stock Fund - 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 the H.D. Vest Employer Stock Fund.
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>
1997 1996
-------------------- --------------------
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 3,126 $ 8.77 1,172 $ 8.64
Kemper-Dreman Small Cap Value 5,977 20.99 - -
Massachusetts Investors Trust A 8,757 17.52 6,309 14.46
Oppenheimer Global Fund 9,753 41.14 6,570 39.03
Putnam Voyager Fund 49,479 18.71 45,443 16.12
Putnam International Growth Fund 3,299 16.67 - -
H.D. Vest Employer Stock Fund 35,387 4.75 33,103 4.63
</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, 1997 and 1996, the Plan had $84,102 and $74,409, respectively, in
loans outstanding issued at 9.00% to 9.75% rates of interest. Loan payments and
withdrawals are included in Interfund Transfers on the Statement of Changes in
Net Assets Available For Plan Benefits With Fund Information. Interest income
on loans is directly allocated to the fund from which the loan funds were
originally borrowed and is included in Interest and Dividends on the Statement
of Changes in Net Assets Available for Plan Benefits with Fund Information.
Interest income on all loans was approximately $8,700 and $4,700 for the fiscal
years ended December 31, 1997 and 1996, respectively.
Plan Amendments
- ---------------
Effective July 1, 1996, the Plan's trustees were changed from Ted Sinclair and
Shannon Soefje, both officers of the Plan sponsor to Bank One Texas, N.A.
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, and amounted to $55,000 and $51,000 for the years ended December 31,
1997 and 1996, respectively. The Plan is not responsible for reimbursing the
Company for expenses paid by the Company on behalf of the Plan.
<PAGE>
-10-
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.
Purchases and sales of securities are recorded on a settlement-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
Derivative Financial Instruments
- --------------------------------
Statement of Financial Accounting Standards 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. At December 31, 1997 and 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.
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.
Reclassifications
- -----------------
Certain prior year amounts were reclassified to conform with the current year
presentation.
<PAGE>
-11-
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, 1997 and 1996, are as follows:
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Massachusetts Investors Trust A Fund $153,404 $ 91,222
Oppenheimer Global Fund 401,195 256,362
Putnam Voyager Fund 925,936 731,823
H.D. Vest Employer Stock Fund 168,010 153,479
Kemper-Dreman Small Cap Value 125,455 -
</TABLE>
4. TAX STATUS:
-----------
The Internal Revenue Service determined and informed the Company, by a letter
dated September 10, 1996, that the Plan and related trust are designed in
accordance with the applicable requirements of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the letter. The Plan's administrator
has filed for a new determination letter covering these amendments. The Plan
administrator believes 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 non-forfeitable account balance as soon
as administratively possible.
6. 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:
December 31, December 31,
1997 1996
------------ ------------
Net assets available for plan benefits
per the financial statements $ 2,014,946 $ 1,409,017
Amounts allocated to withdrawing participants (13,525) (3,575)
------------ ------------
Net assets available for plan benefits per
the Form 5500 $ 2,001,421 $ 1,405,442
============ ============
<PAGE>
-12-
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
December 31, December 31,
1997 1996
------------ ------------
Distributions to participants per the
financial statements $ 262,262 $ 84,417
Amounts allocated to withdrawing participants
at end of period 13,525 3,575
------------ ------------
Distributions to participants per the
Form 5500 $ 275,787 $ 87,992
============ ============
<PAGE>
-13- SCHEDULE I
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
-----------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
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 Holding Account $ 45,794 $ 45,794
* Capital Reserves Money
Market Fund Money Market 10,345 10,345
Kemper U.S. Government
Securities Fund Mutual Fund, fixed income 27,180 27,415
Kemper-Dreman Small
Cap Value Mutual Fund, stock and debt 134,695 125,455
Massachusetts Investors
Trust A Fund Mutual Fund, stock and debt 136,195 153,404
Oppenheimer Global Fund Mutual Fund, growth stock and debt 393,329 401,195
Putnam Voyager Fund Mutual Fund, international stock
and debt 844,790 925,936
Putnam International Mutual Fund, international stock
Growth Fund and debt 60,030 55,000
* H.D. Vest Employer
Stock Fund H.D. Vest, Inc., common stock 173,685 168,010
* Loan Fund Loans to Participants, interest
rates ranging from 9.00% to 9.75% - 84,102
---------- ---------
$1,826,043 $1,996,656
========== ==========
</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, 1997, as required by the Department of Labor Rules and
Regulations for Reporting and Disclosure.
<PAGE>
-14- SCHEDULE II
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
EIN: 75-2154244
----------------
PLAN #001
---------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (g) (h) (i)
Current
Value on Net
Purchase Selling Cost of Transaction Gain/
Identity of Party Involved Description of Asset Price Price Asset Date (Loss)
- ------------------------------------ -------------------- -------- ------- ------- ----------- ------
<S> <C> <C> <C> <C> <C> <C>
INDIVIDUAL: NONE
SERIES TRANSACTIONS:
Purchases:
H.D. Vest Investment Securities, Inc.* Capital Reserves Money Market $727,744 $ - $727,744 $727,744 $ -
Massachusetts Financial Services Massachusetts Investors Trust A
Fund 79,172 - 79,172 79,172 -
Oppenheimer Funds Distributors Oppenheimer Global Funds Mutual
Fund 194,466 - 194,466 194,466 -
Putnam Fiduciary Trust Putnam Voyager Fund Mutual Fund 422,229 - 422,229 422,229 -
Massachusetts Financial Services The One Group Prime Money
Market Fund 78,074 - 78,074 78,074 -
Kemper/Dreman Fiduciary Trust Kemper-Dreman Small Cap
Value 134,840 - 134,840 134,840 -
Putnam Fiduciary Trust The One Group Prime Money
Market Fund 542,387 - 542,387 542,387 -
Oppenheimer Funds Distributors The One Group Prime Money
Market Fund 144,828 - 144,828 144,828 -
Sales:
H.D. Vest Investment Securities, Inc.* Capital Reserves Money Market - 705,225 705,225 705,225 -
Massachusetts Financial Services The One Group Prime Money
Market Fund - 79,386 79,386 79,386 -
Oppenheimer Funds Distributors The One Group Prime Money
Market Fund - 147,016 147,016 147,016 -
Putnam Fiduciary Trust Putnam Voyager Fund Mutual
Fund - 342,679 301,682 342,679 40,997
Putnam Fiduciary Trust The One Group Prime Money
Market Fund - 553,587 553,587 553,587 -
</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 of individual and series of investment
transactions in the same security, which alone, or in the aggregate, exceeded
5% of plan assets at January 1, 1997, as required by the Department of
Labor Rules and Regulations for Reporting and Disclosure.
<PAGE>
-15-
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/ Wesley Ted Sinclair
------------------------------------
Wesley Ted Sinclair
Member of the Benefit
Plan Advisory Committee
