<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, 1998
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, 1998 And 1997,
And Supplemental Schedules
As Of December 31, 1998
Together With Report Of Independent Public Accountants
<PAGE>
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
<TABLE>
<CAPTION>
Page(s)
-------
<S> <C>
Report of Independent Public Accountants 2
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1998 3
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1997 4
Statements of Changes in Net Assets Available for Plan Benefits
with Fund Information for the Year Ended December 31, 1998 5
Statements of Changes in Net Assets Available for Plan Benefits
with Fund Information for the Year Ended December 31, 1997 6
Notes to Financial Statements 7-11
Schedule I - Item 27a - Supplemental Schedule of Assets Held for
Investment Purposes as of December 31, 1998 12
Schedule II - Item 27d - Supplemental Schedule of Reportable
Transactions for the Year Ended December 31, 1998 13
</TABLE>
<PAGE>
-2-
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, 1998 and 1997, 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 and 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, 1998 and 1997, 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, 1998, 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's 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 14, 1999
<PAGE>
-3-
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
AS OF DECEMBER 31, 1998
-----------------------
<TABLE>
<CAPTION>
Participant Directed
-------------------------------------------------------------------
Capital Kemper-
Reserves Kemper U.S. Dreman Massachusetts
Bank One Money Government Small Investors Oppenheimer
Holding Market Securities Cap Trust A Global
Account Fund Fund Value Fund Fund
-------- ---------- ---------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair market value $21,232 $ 36,624 $55,670 $214,486 $249,031 $456,901
RECEIVABLES:
Interfund receivables (payables) (1,420) (12,680) 126 3,310 433 (3,466)
Participant contributions - 29 311 4,076 2,262 2,662
Employer matching contributions - 5 62 816 453 533
Accrued income 146 147 2 14 19 24
------- -------- ------- -------- -------- --------
Total receivables (payables) (1,274) (12,499) 501 8,216 3,167 (247)
------- -------- ------- -------- -------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $19,958 $ 24,125 $56,171 $222,702 $252,198 $456,654
======= ======== ======= ======== ======== ========
<CAPTION>
-----------------------------------------------
Putnam H.D. Vest
Putnam International Employer
Voyager Growth Stock Loan
Fund Fund Fund Fund Total
------- ------------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair market value $1,233,928 $157,420 $201,219 $118,421 $2,744,932
RECEIVABLES:
Interfund receivables (payables) (4,844) 4,901 13,640 - -
Participant contributions 4,980 2,330 827 - 17,477
Employer matching contributions 996 466 165 - 3,496
Accrued income 36 8 14 - 410
---------- -------- -------- -------- ----------
Total receivables (payables) 1,168 7,705 14,646 - 21,383
---------- -------- -------- -------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,235,096 $165,125 $215,865 $118,421 $2,766,315
========== ======== ======== ======== ==========
</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, 1997
-----------------------
<TABLE>
<CAPTION>
Participant Directed
-------------------------------------------------------------------
Capital Kemper-
Reserves Kemper U.S. Dreman Massachusetts
Bank One Money Government Small Investors Oppenheimer
Holding Market Securities Cap Trust A Global
Account Fund Fund Value Fund Fund
--------- ----------- ----------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair market value $ 45,794 $10,345 $27,415 $125,455 $153,404 $401,195
RECEIVABLES:
Interfund receivables (payables) (35,351) 2 209 6,290 6,098 (253)
Participant contributions - 323 180 2,628 1,464 2,451
Employer matching contributions - 65 36 525 293 490
Accrued income 214 43 - 10 6 14
-------- ------- ------- -------- -------- --------
Total receivables (payables) (35,137) 433 425 9,453 7,861 2,702
-------- ------- ------- -------- -------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 10,657 $10,778 $27,840 $134,908 $161,265 $403,897
======== ======= ======= ======== ======== ========
<CAPTION>
--------------------------------------
Putnam H.D. Vest
Putnam International Employer
Voyager Growth Stock Loan
Fund Fund Fund Fund Total
-------- ------------- --------- ------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair market value $925,936 $55,000 $168,010 $84,102 $1,996,656
RECEIVABLES:
Interfund receivables (payables) 20,634 1,863 508 - -
Participant contributions 5,698 1,754 461 - 14,959
Employer matching contributions 1,140 351 92 - 2,992
Accrued income 37 6 9 - 339
-------- ------- -------- ------- ----------
Total receivables (payables) 27,509 3,974 1,070 - 18,290
-------- ------- -------- ------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $953,445 $58,974 $169,080 $84,102 $2,014,946
======== ======= ======== ======= ==========
</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, 1998
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
-------------------------------------------------------------------
Capital Kemper-
Reserves Kemper U.S. Dreman Massachusetts
Bank One Money Government Small Investors Oppenheimer
Holding Market Securities Cap Trust A Global
Account Fund Fund Value 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 $ - $ - $ (127) $(13,061) $ 23,140 $ 10,580
Interest and dividends 1,408 1,498 2,286 2,345 1,778 5,918
Realized gain (loss) - - 86 (232) 18,058 35,310
Contributions-Participant - 20,336 7,880 99,501 58,955 87,244
Employer match - 4,067 1,576 19,899 11,779 17,433
Rollovers - - 9,669 22,476 19,471 841
------- -------- ------- -------- -------- --------
Total additions 1,408 25,901 21,370 130,928 133,181 157,326
------- -------- ------- -------- -------- --------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and benefits
paid to participants
and beneficiaries 7,893 (15,454) (8,791) (72,035) (39,932) (97,268)
------- -------- ------- -------- -------- --------
Total deductions 7,893 (15,454) (8,791) (72,035) (39,932) (97,268)
------- -------- ------- -------- -------- --------
NET INCREASE PRIOR TO
INTERFUND TRANSFERS 9,301 10,447 12,579 58,893 93,249 60,058
INTERFUND TRANSFERS - 2,900 15,752 28,901 (2,316) (7,301)
------- -------- ------- -------- -------- --------
NET INCREASE 9,301 13,347 28,331 87,794 90,933 52,757
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning of year 10,657 10,778 27,840 134,908 161,265 403,897
------- -------- ------- -------- -------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of year $19,958 $ 24,125 $56,171 $222,702 $252,198 $456,654
======= ======== ======= ======== ======== ========
<CAPTION>
---------------------------------------------
Putnam H.D. Vest
Putnam International Employer
Voyager Growth Stock 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 $ 119,437 $ 11,901 $ 14,505 $ - $ 166,375
Interest and dividends 4,944 1,414 1,331 - 22,922
Realized gain (loss) 91,419 1,530 12,611 - 158,782
Contributions-Participant 195,183 60,843 21,663 - 551,605
Employer match 38,978 12,169 4,332 - 110,233
Rollovers 27,412 22,255 4,918 - 107,042
---------- -------- -------- -------- ----------
Total additions 477,373 110,112 59,360 - 1,116,959
---------- -------- -------- -------- ----------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and benefits
paid to participants
and beneficiaries (181,612) (17,610) (30,818) 90,037 (365,590)
---------- -------- -------- -------- ----------
Total deductions (181,612) (17,610) (30,818) 90,037 (365,590)
---------- -------- -------- -------- ----------
NET INCREASE PRIOR TO
INTERFUND TRANSFERS 295,761 92,502 28,542 90,037 751,369
INTERFUND TRANSFERS (14,110) 13,649 18,243 (55,718) -
---------- -------- -------- -------- ----------
NET INCREASE 281,651 106,151 46,785 34,319 751,369
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning of year 953,445 58,974 169,080 84,102 2,014,946
---------- -------- -------- -------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of year $1,235,096 $165,125 $215,865 $118,421 $2,766,315
========== ======== ======== ======== ==========
</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, 1997
------------------------------------
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------------------------------
Capital Kemper-
Reserves Kemper U.S. Dreman Massachusetts
Bank One Money Government Small Investors Oppenheimer
Holding Market Securities Cap Trust A Global
Account Fund Fund Value 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 $ - $ 14 $ 125 $ (7,855) $ 15,911 $ (1,039)
Interest and dividends 1,608 541 859 251 1,741 8,267
Realized gain (loss) - - 48 (14) 14,019 53,646
Contributions-Participant (17,270) 22,658 4,255 40,849 35,410 97,924
Employer match - 4,532 851 8,170 7,083 19,577
Rollovers - - - 2,297 3,445 4,985
-------- -------- ------- -------- -------- --------
Total additions (15,662) 27,745 6,138 43,698 77,609 183,360
-------- -------- ------- -------- -------- --------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and benefits
paid to participants
and beneficiaries (5,297) (8,714) (979) (82) (30,851) (30,368)
-------- -------- ------- -------- -------- --------
Total deductions (5,297) (8,714) (979) (82) (30,851) (30,368)
-------- -------- ------- -------- -------- --------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND TRANSFERS (20,959) 19,031 5,159 43,616 46,758 152,992
INTERFUND TRANSFERS 10,700 (11,560) 12,555 91,292 23,285 (7,510)
-------- -------- ------- -------- -------- --------
NET INCREASE (DECREASE) (10,259) 7,471 17,714 134,908 70,043 145,482
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning of year 20,916 3,307 10,126 - 91,222 258,415
-------- -------- ------- -------- -------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of year $ 10,657 $ 10,778 $27,840 $134,908 $161,265 $403,897
======== ======== ======= ======== ======== ========
<CAPTION>
----------------------------------------------------------------------------
Putnam H.D. Vest
Putnam International Employer H.D. Vest
Voyager Growth Stock Liquidity Loan
Fund Fund Fund Fund Fund Total
---------- ------------- ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income-
Net appreciation
(depreciation) in fair
value of investments $ 120,032 $(5,033) $ 8,787 $ - $ - $ 130,942
Interest and dividends 6,497 378 469 - - 20,611
Realized gain (loss) 46,600 (768) (2,929) - - 110,602
Contributions-Participant 243,170 24,548 14,148 - - 465,692
Employer match 48,642 4,910 2,829 - - 96,594
Rollovers 28,687 3,445 886 - - 43,745
--------- ------- -------- --------- ------- ----------
Total additions 493,628 27,480 24,190 - - 868,186
--------- ------- -------- --------- ------- ----------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Withdrawals and benefits
paid to participants
and beneficiaries (168,653) (4,725) (5,959) - (6,634) (262,262)
--------- ------- -------- --------- ------- ----------
Total deductions (168,653) (4,725) (5,959) - (6,634) (262,262)
--------- ------- -------- --------- ------- ----------
NET INCREASE (DECREASE)
PRIOR TO INTERFUND TRANSFERS 324,975 22,755 18,231 - (6,634) 605,924
INTERFUND TRANSFERS (166,114) 36,219 (5,157) (37) 16,327 -
--------- ------- -------- --------- ------- ----------
NET INCREASE (DECREASE) 158,861 58,974 13,074 (37) 9,693 605,924
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning of year 794,584 - 156,006 37 74,409 1,409,022
--------- ------- -------- --------- ------- ----------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, end of year $ 953,445 $58,974 $169,080 $ - $84,102 $2,014,946
========= ======= ======== ========= ======= ==========
</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, 1998
-----------------
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 (the Code), which
includes a qualified cash or deferred arrangement as described in Section 401(k)
of the Code, 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 to be 1,000 hours, 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 for the fiscal
years ended December 31, 1998 and 1997. During 1999, Sedgwick, Noble, Lowndes
was acquired by Milliman and Robertson, Inc., who is currently performing the
recordkeeper function. 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 1998 and 1997.
Matching contributions were $110,233 and $96,594 in 1998 and 1997,
respectively.
Discretionary - Any amount deemed appropriate by the Company. No
discretionary contributions were made in 1998 or 1997.
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 1998 or 1997.
Participant Contributions
- -------------------------
Eligible employees can contribute up to 15% of their annual compensation each
calendar year, not to exceed $10,000 and $9,500 per participant in 1998 and
1997, respectively. Participant contributions, including rollovers, were
$658,647 and $509,437 in 1998 and 1997, respectively.
Vesting
- -------
Participants are immediately vested in their voluntary contributions and Company
contributions.
<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 $23,039 and $13,525 of
requested but not paid benefits owed to participants at December 31, 1998 and
1997, 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.
The net asset value per unit for the various unitized funds are as follows (the
Capital Reserves Money Market Fund does not have units):
<TABLE>
<CAPTION>
1998 1997
----------------------- -----------------------
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 6,107 $ 8.79 3,126 $ 8.77
Kemper-Dreman Small Cap Value 11,279 18.50 5,977 20.99
Massachusetts Investors Trust A Fund 12,073 20.25 8,757 17.52
Oppenheimer Global Fund 10,393 42.60 9,753 41.14
Putnam Voyager Fund 55,111 21.92 49,479 18.71
Putnam International Growth Fund 7,837 19.23 3,299 16.67
H.D. Vest Employer Stock Fund 34,477 5.75 35,387 4.75
</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, 1998 and 1997, the Plan had $118,421 and $84,102, respectively, in
loans outstanding issued with rates of interest ranging from 9.00% to 9.75%.
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 $9,200
and $8,700 for the fiscal years ended December 31, 1998 and 1997, respectively.
Plan Amendments
- ---------------
Effective January 1, 1999, the Plan was amended to allow employees to be
eligible for the Plan after six months of employment. Further, the Plan was
amended to increase the amount of matching contributions made by the Company to
40% for employees with three to four years of service and 60% with employees
with greater than five years. The Plan administrator does not believe these
amendments will cause the Plan to be in noncompliance with the applicable
requirements of the Code.
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 $64,500 and $55,000 for the years ended December 31,
1998 and 1997, 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 market 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, 1998 and 1997, 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 may require 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, 1998 and 1997, are as follows:
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Kemper-Dreman Small Cap Value $ 214,486 $ 125,455
Massachusetts Investors Trust A Fund 249,031 153,404
Oppenheimer Global Fund 456,901 401,195
Putnam Voyager Fund 1,233,928 925,936
Putnam International Growth Fund 157,420 55,000
H.D. Vest Employer Stock Fund 201,219 168,010
</TABLE>
<PAGE>
-11-
4. TAX STATUS:
-----------
The Internal Revenue Service determined and informed the Company, by a letter
dated April 21, 1998, that the Plan and related trust are designed in accordance
with the applicable requirements of the Internal Revenue Code. The Plan has
been amended since receiving the letter. 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:
<TABLE>
<CAPTION>
December 31,
1998
-------------
<S> <C>
Net assets available for plan benefits per the financial
statements $2,766,315
Amounts allocated to withdrawing participants (23,039)
----------
Net assets available for plan benefits per the Form 5500 $2,743,276
==========
</TABLE>
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1998
-------------
<S> <C>
Distributions to participants per the financial statements $365,590
Amounts allocated to withdrawing participants at beginning
of period (13,525)
Amounts allocated to withdrawing participants at end
of period 23,039
--------
Distributions to participants per the Form 5500 $375,104
========
</TABLE>
<PAGE>
-12- SCHEDULE I
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
-----------------------------------------------------------------------
AS OF DECEMBER 31, 1998
-----------------------
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, variable interest rate $ 21,232 $ 21,232
* Capital Reserves Money
Market Fund Money Market, 4.95% interest rate 36,624 36,624
Kemper U.S. Government
Securities Fund Mutual Fund, fixed income 55,561 55,670
Kemper-Dreman Small
Cap Value Mutual Fund, stock and debt 235,402 214,486
Massachusetts Investors
Trust A Fund Mutual Fund, growth stock and debt 208,650 249,031
Oppenheimer Global Fund Mutual Fund, growth stock and debt 439,792 456,901
Putnam Voyager Fund Mutual Fund, growth stock
and debt 1,016,706 1,233,928
Putnam International Mutual Fund, international stock
Growth Fund and debt 150,551 157,420
* H.D. Vest Employer
Stock Fund H.D. Vest, Inc., common stock
par value $.05 per share 188,509 201,219
* Loan Fund Loans to Participants, interest rates
ranging from 9.00% to 9.75% - 118,421
</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, 1998, as required by the Department of Labor Rules and
Regulations for Reporting and Disclosure.
<PAGE>
-13- SCHEDULE II
H.D. VEST, INC. SALARY SAVINGS TRUST
------------------------------------
ITEM 27d - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
EIN: 75-2154244
---------------
PLAN #001
---------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (g) (h) (i)
Current
Value on
Purchase Selling Cost of Transaction Net
Identity of Party Involved Descrption of Assets Price Price Asset Date Gain
- ---------------------------- ---------------------------- ----------------- ------------ ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C>
INDIVIDUAL: NONE
SERIES TRANSACTIONS:
Purchases:
Massachusetts Financial
Services Massachusetts Investors
Trust A Fund $104,438 $ - $ 104,438 $ 104,438 $ -
Oppenheimer Funds
Distributors Oppenheimer Global Fund 141,005 - 141,005 141,005 -
Putnam Fiduciary Trust Putnam Voyager Fund 342,008 - 342,008 342,008 -
Kemper/Dreman Fiduciary Kemper-Dreman Small Cap
Trust Value 166,656 - 166,656 166,656 -
HD Vest Investment Capital Reserves Money
Securities, Inc.* Market Fund 1,873,806 - 1,873,806 1,873,806 -
Putnam Fiduciary Trust Putnam International
Growth Fund 101,204 - 101,204 101,204 -
Sales:
H.D. Vest Investment
Securities, Inc.* Capital Reserves Money Market
Fund - 1,808,193 1,808,193 1,808,193 -
Putnam Fiduciary Trust Putnam Voyager Fund - 170,960 149,944 170,960 21,016
</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, 1998, 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 (or other persons who administer the employee benefit plan) 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/ TIM OBRIEN
------------------------------
TIM OBRIEN
Member of the Benefit
Plan Advisory Committee
