<PAGE>
DRAFT
-----
6/5/96
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 11-K
( X ) Annual Report Pursuant to Secton 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1995
Commission File No. 1-12338
-------------------------
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
(Full Title of the Plan)
VESTA INSURANCE GROUP, INC.
3760 River Run Drive
Birmingham, Alabama 35243
(Name of Issuer of the Securities Held
Pursuant to the Plan and the Address
of its Principal Executive Office)
<PAGE>
REQUIRED INFORMATION
(a) Financial Statements for the J. Gordon Gaines, Inc. Retirement Savings Plan
<TABLE>
<CAPTION>
Page
----------
<S> <C>
(i) Report of Independent Accountants F-1
(ii) Audited statements of net assets available for plan F-2
benefits as of December 31, 1995 and 1994
(iii) Audited statements of changes in net assets available F-3
for plan benefits for the years ended December 31,1995
and December 31, 1994.
</TABLE>
(b) Exhibits
The following exhibit is filed herewith as a part of this annual report:
Exhibit Number Description of Exhibit
------------------------ --------------------------
23.1 Consent of Independent
Public Accountants
-2-
<PAGE>
[LOGO OF KPMG PEAT MARWICK LLP APPEARS HERE]
Financial Center, Suite 1200
Birmingham, AL 35203
Independent Auditors' Report
----------------------------
The Administrative Committee
J. Gordon Gaines, Inc. Retirement Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the J. Gordon Gaines, Inc. Retirement Savings Plan (Plan) as of
December 31, 1995 and 1994 and the related statements of changes in net assets
available for plan benefits for the years ended December 31, 1995 and 1994 and
for the period from November 15, 1993 (inception) to December 31, 1993. These
financial statements are the responsibility of the Plan's management. 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 audits 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, 1995 and 1994, and the changes in net assets available for
plan benefits for the years ended December 31, 1995 and 1994 and for the
period from November 15, 1993 (inception) to December 31, 1993 ended in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included
in Schedules 1 and 2 is presented for purposes of additional analysis and is
not a required part of the basic financial statements but is 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. Such information has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
KPMG PEAT MARWICK LLP
June 21, 1996
Member Firm of
[_][_][_][_] Klyerveld Peat Marwick Goardeter
3
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Assets:
Investments at fair value:
Vesta Insurance Group, Inc. common stock
(cost: 1995 - $396,370, 1994 - $182,410) $ 676,182 185,335
Mutual fund investments:
Vanguard Index Trust (cost: 1995 - $155,193,
1994 - $88,638) 190,032 87,132
Fidelity Balanced Fund (cost: 1995 - $93,867,
1994 - $69,320) 97,606 65,713
Biltmore Fixed Income Fund (cost: 1995 - $49,574,
1994 - $33,071) 52,134 31,612
Biltmore Prime Cash Management (cost: 1995 -
$146,760, 1994 - $72,853)
146,760 72,853
--------- -------
Total investments 1,162,714 442,645
Cash 655 317
Employee contributions receivable 6,280 --
Employer contributions receivable 1,054 --
--------- -------
Total assets 1,170,703 442,962
Liabilities:
Payable to broker 31,410 19,816
Other 2,705 --
--------- -------
Total liabilities 34,115 19,816
--------- -------
Net assets available for plan benefits $ 1,136,588 423,146
========= =======
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
For the Years Ended December 31, 1995 and 1994 and for the
Period from November 15, 1993 (Inception) to December 31, 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- -------- -------
<S> <C> <C> <C>
Investment income-dividends (includes
dividends from sponsor's stock of $2,393
in 1995 and $430 in 1994) $ 17,014 7,826 151
Unrealized appreciation (depreciation) of
investments 324,597 (3,612) (35)
Net realized gains (losses) on sale of
investments (includes realized gain from
sales of sponsor's stock of $550 in
1995 and $0 in 1994) 3,248 (1,432) --
--------- ------- ------
344,859 2,782 116
--------- ------- ------
Contributions:
Employee 306,017 270,256 39,571
Employer 123,273 123,102 16,441
--------- ------- ------
429,290 393,358 50,012
--------- ------- ------
Distributions to participants (67,542) (42,904) --
Rollovers 6,835 13,782 --
--------- ------- ------
Net increase 713,442 367,018 56,128
Net assets available for plan benefits:
Beginning of year 423,146 56,128 --
--------- ------- ------
End of year $ 1,136,588 423,146 56,128
========= ======= ======
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1995, 1994 and 1993
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) Basis of Presentation
---------------------
The accompanying financial statements of J. Gordon Gaines, Inc.
Retirement Savings Plan (the Plan) have been prepared on an accrual
basis in accordance with generally accepted accounting principles.
J. Gordon Gaines (the Company or Sponsor) is a wholly-owned
subsidiary of Vesta Insurance Group, Inc. (Vesta).
(b) Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrators 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 the
components of changes in net assets during the reporting period. Actual
results could differ from those estimates.
(c) Investments Valuation
---------------------
Investments in mutual funds and in Vesta common stock are stated at
fair value, based on quotations obtained from national securities
exchanges. Purchase and sales of securities are recorded on a
trade-date basis. Realized gains and losses are calculated using the
average cost method.
(d) Plan Expenses
-------------
Wachovia Services, Inc. (the Trustee) is trustee for the Plan.
Administration fees paid to the Trustee and all other administrative
expenses are paid by the Sponsor.
(e) Federal Income Taxes
--------------------
A determination letter has been received from the Internal Revenue
Service stating that the Plan qualifies under Section 401 of the
Internal Revenue Code and that the Plan is exempt from federal income
tax. Amounts contributed by the employer and Plan earnings and
appreciation in the value of investments will not be taxed to the
employee until a distribution is received from the Plan, except for
appreciation in the value of Vesta Insurance Group, Inc. common stock
which will not be taxed until the participant disposes of that stock.
(Continued)
6
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(2) Organization
------------
The Plan was adopted on November 15, 1993. The Plan includes a salary
reduction feature which permits employees who participate (Participants) in
the Plan to defer and save part of their compensation, as provided for under
Section 401(k) of the Internal Revenue Code. The Plan is subject to the
applicable provisions of the Employee Retirement Income Security Act of
1974, as amended (ERISA).
(3) Description of Plan
-------------------
(a) Participant Contributions
-------------------------
Employees become eligible to participate in the Plan on the first day
of January, April, July, or October following completion of one year of
participation service. Participants may elect to have from 1 to 10
percent of their compensation deferred and contributed to the Plan.
There were 130 participants and 108 participants as of
December 31, 1995 and 1994, respectively.
Participants may allocate their contributions, in multiples of 10
percent, to the following investments:
(i) Money Market Fund: Invested primarily in the Biltmore Prime
Cash Management Fund which invests in commercial paper and
other money market instruments maturing in one year or less;
(ii) Bond Fund: Invested primarily in the Biltmore Fixed Income
Fund which invests in direct obligations of the United States
or agencies;
(iii) Balanced Fund: Invested primarily in the Fidelity Balanced
Fund which invests in common or preferred stock, and securities
convertible into common stock, direct obligations of the United
States Government and its agencies, corporate bonds,
debentures, notes, and certificates of indebtedness;
(iv) Equity Fund: Invested primarily in the Vanguard Index Trust
which invests in common or capital stock and convertible bonds,
convertible notes, debentures or preferred stocks which are
convertible into common or capital stocks;
(v) Vesta Insurance Group, Inc. common stock.
(b) Employer Matching Contributions
-------------------------------
The Employer, in its sole discretion, may make matching contributions
in an amount determined by the board of directors of the Company.
For 1995 and 1994, these matching contributions were 50 percent of
employee contributions up to a maximum of 6 percent of the employee's
compensation. The Employer may also make additional discretionary
contributions. However, there were no additional discretionary
contributions in 1995 or 1994.
(Continued)
7
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(3) Description of Plan, Continued
------------------------------
(c) Vesting
-------
Participants have a fully-vested and nonforfeitable interest in
the portion of their accounts attributable to their contributions. A
Participant acquires a vested interest in the portion of their accounts
attributable to Employer matching and additional discretionary
contributions based on length of employment, as follows:
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
Less than 3 0
3 20
4 40
5 60
6 80
7 100
</TABLE>
(d) Forfeitures
-----------
If a Participant incurs a "break in service," as defined in the Plan,
for any reason other than permanent disability, death or normal
retirement, and is not 100 percent vested in the employer discretionary
contributions, the nonvested portion is forfeited. Forfeited amounts
are applied to the Company's contributions.
(e) Withdrawal Provisions
---------------------
Participants may request that all or part of their accounts
attributable to elective contributions be paid to them to meet an
immediate and heavy financial hardship for which funds are not
reasonably available to them from other sources. The amount paid to
a Participant in this fashion will be taxable and may not be repaid
to the Plan.
(f) Priorities Upon Termination
---------------------------
Upon termination of the Plan, all Participants' funds shall become
fully vested. The trust will continue until the Plan benefits of each
Participant has been distributed.
(g) Rollovers
---------
During 1995 and 1994, assets were rolled into the Plan from the plans
that were associated with new employees of the Company.
(Continued)
8
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(4) Investments
-----------
The investments of the Plan as of December 31, 1995 and 1994 are summarized
as follows:
<TABLE>
<CAPTION>
December 31, 1995
-----------------------------------------------
Number of Fair value per Fair
shares/units Cost share or unit value
------------ ---- ------------- -----
<S> <C> <C> <C> <C>
Vesta Insurance Group, Inc. 12,407 $ 396,370 54.50 676,182
Vanguard Index Trust 3,299 155,193 57.60 190,032
Fidelity Balanced Fund 7,219 93,867 13.52 97,606
Biltmore Fixed Income Fund 5,224 49,574 9.98 52,134
Biltmore Prime Cash
Management 146,760 146,760 1.00 146,760
------- ---------
$ 841,764 1,162,714
======= =========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
-----------------------------------------------
Number of Fair value per Fair
shares/units Cost share or unit value
------------ ---- ------------- -----
<S> <C> <C> <C> <C>
Vesta Insurance Group, Inc. 6,503 $ 182,410 28.50 185,335
Vanguard Index Trust 2,028 88,638 42.97 87,132
Fidelity Balanced Fund 5,347 69,320 12.29 65,713
Biltmore Fixed Income Fund 3,516 33,071 8.99 31,612
Biltmore Prime Cash
Management 72,853 72,853 1.00 72,853
------- ---------
$ 446,292 442,645
======= =========
</TABLE>
(Continued)
9
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(4) Investments, Continued
----------------------
Allocation of Net Assets Available for Plan Benefits to Investment Programs
December 31, 1995
<TABLE>
<CAPTION>
Money Company
Market Bond Balanced Equity Stock Combined
Fund Fund Fund Fund Fund Funds
---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at fair value $ 99,194 53,258 100,199 194,147 715,916 1,162,714
Cash 466 6 14 25 144 655
Employee contributions
receivable 628 398 921 1,453 2,880 6,280
Employer contributions
receivable -- -- -- -- 1,054 1,054
------- ------ ------- ------- ------- ---------
Total assets 100,288 53,662 101,134 195,625 719,994 1,170,703
------- ------ ------- ------- ------- ---------
Liabilities:
Payable to broker -- -- -- -- 31,410 31,410
Other 219 409 612 1,465 -- 2,705
------- ------ ------- ------- ------- ---------
219 409 612 1,465 31,410 34,115
------- ------ ------- ------- ------- ---------
Net assets available
for plan benefits $ 100,069 53,253 100,522 194,160 688,584 1,136,588
======= ====== ======= ======= ======= =========
</TABLE>
Allocation of Net Assets Available for Plan Benefits to Investment Programs
December 31, 1994
<TABLE>
<CAPTION>
Money Company
Market Bond Balanced Equity Stock Combined
Fund Fund Fund Fund Fund Funds
---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at fair value $ 56,003 32,913 68,828 87,132 197,769 442,645
Cash 259 4 7 10 37 317
------- ------ ------- ------- ------- ---------
Total assets 56,262 32,917 68,835 87,142 197,806 442,962
Liabilities:
Payable to broker -- 1,301 3,115 -- 15,400 19,816
------- ------ ------- ------- ------- ---------
Total liabilities -- 1,301 3,115 -- 15,400 19,816
------- ------ ------- ------- ------- ---------
Net assets available
for plan benefits $ 56,262 31,616 65,720 87,142 182,406 423,146
======= ====== ====== ======= ======= =========
</TABLE>
(Continued)
10
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(4) Investments, Continued
----------------------
Allocation of Changes in Net Assets Available for Plan Benefits to Investment
Programs
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Money Company
Market Bond Balanced Equity Stock Combined
Fund Fund Fund Fund Fund Funds
---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Investment income - dividends $ 4,364 2,530 3,660 4,067 2,393 17,014
Unrealized appreciation
of investments -- 4,019 7,347 36,345 276,886 324,597
Realized gains -- 97 279 2,322 550 3,248
------- ------ ------- ------- ------- ---------
4,364 6,646 11,286 42,734 279,829 344,859
------- ------ ------- ------- ------- ---------
Contributions:
Employee 37,271 17,833 39,784 59,446 151,683 306,017
Employer 14,296 6,076 13,694 23,203 66,004 123,273
------- ------ ------- ------- ------- ---------
51,567 23,909 53,478 82,649 217,687 429,290
------- ------ ------- ------- ------- ---------
Rollovers 954 -- -- 1,827 4,054 6,835
Distributions to participants (8,778) (9,179) (14,897) (11,056) (23,632) (67,542)
Transfers (4,300) 261 (15,065) (9,136) 28,240 --
------- ------ ------- ------- ------- ---------
Net increase 43,807 21,637 34,802 107,018 506,178 713,442
Net assets available for
plan benefits:
Beginning of year 56,262 31,616 65,720 87,142 182,406 423,146
------- ------ ------- ------- ------- ---------
End of year $ 100,069 53,253 100,522 194,160 688,584 1,136,588
======= ====== ======= ======= ======= =========
</TABLE>
(Continued)
11
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(4) Investments, Continued
----------------------
Allocation of Changes in Net Assets Available for Plan Benefits to Investment
Programs
For the Year Ended December 31, 1994
<TABLE>
<CAPTION>
Money Company
Market Bond Balanced Equity Stock Combined
Fund Fund Fund Fund Fund Funds
---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Investment income - dividends $ 1,495 1,404 1,959 2,538 430 7,826
Unrealized appreciation
(depreciation) of
investments -- (1,448) (3,718) (1,371) 2,925 (3,612)
Realized loss on sale of
investments -- (529) (686) (217) -- (1,432)
------- ------- ------- ------- ------- --------
1,495 (573) (2,445) 950 3,355 2,782
------- ------- ------- ------- ------- --------
Contributions:
Employee 35,611 27,120 62,606 81,018 63,901 270,256
Employer 18,742 12,156 28,167 33,988 30,049 123,102
------- ------- ------- ------- ------- --------
54,353 39,276 90,773 115,006 93,950 393,358
------- ------- ------- ------- ------- --------
Rollovers 1,038 1,037 2,478 4,029 5,200 13,782
Distributions to participants (3,443) (3,246) (15,792) (14,591) (5,832) (42,904)
Transfers (5,209) (11,442) (28,161) (40,921) 85,733 --
------ ------- ------- ------- ------- --------
Net increase 48,234 25,052 46,853 64,473 182,406 367,018
Net assets available for
plan benefits:
Beginning of year 8,028 6,564 18,867 22,669 -- 56,128
------- ------- ------- ------- ------- --------
End of year $ 56,262 31,616 65,720 87,142 182,406 423,146
======= ======= ======= ======= ======= ========
</TABLE>
(Continued)
12
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(4) Investments, Continued
----------------------
Allocation of Changes in Net Assets Available for Plan Benefits to Investment
Programs
For the Period from November 15, 1993 (Inception) to December 31, 1993
<TABLE>
<CAPTION>
Money Company
Market Bond Balanced Equity Stock Combined
Fund Fund Fund Fund Fund Funds
---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Investment income - dividends $ 7 3 9 132 -- 151
Unrealized appreciation
(depreciation) of
investments -- (11) 110 (134) -- (35)
------ ------ ------ ------- ------ -------
7 (8) 119 (2) -- 116
Contributions:
Employee 5,554 4,571 13,068 16,378 -- 39,571
Employer 2,467 2,001 5,680 6,293 -- 16,441
------ ------ ------ ------- ------ -------
8,021 6,572 18,748 22,671 -- 56,012
------ ------ ------ ------- ------ -------
Net increase 8,028 6,564 18,867 22,669 -- 56,128
Net assets available for
plan benefits:
Beginning of period -- -- -- -- -- --
------ ------ ------ ------- ------ -------
End of year $ 8,028 6,564 18,867 22,669 -- 56,128
====== ====== ====== ======= ====== =======
</TABLE>
(Continued)
13
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(4) Investments, Continued
----------------------
The net unrealized appreciation (depreciation) of investments included in
plan equity is as follows:
<TABLE>
<CAPTION>
Biltmore Biltmore
Prime Fixed Fidelity Vanguard Vesta
Cash Income Balanced Index Common
Management Fund Fund Trust Stock Total
---------- ---- ---- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance at November 15, 1993 $ -- -- -- -- -- --
1993 appreciation (depreciation) -- (11) 110 (134) -- (35)
--------- ------ ------ ------ ------- -------
Balance at December 31, 1993 -- (11) 110 (134) -- (35)
1994 appreciation -- (1,448) (3,717) (1,372) 2,925 (3,612)
--------- ------ ------ ------ ------- -------
Balance at December 31, 1994 -- (1,459) (3,607) (1,506) 2,925 (3,647)
1995 appreciation -- 4,019 7,347 36,345 276,886 324,597
--------- ------ ------ ------ ------- -------
Balance at December 31, 1995 $ -- 2,560 3,740 34,839 279,811 320,950
========= ====== ====== ====== ======= =======
</TABLE>
The aggregate cost and proceeds relating to the realized gain (loss)
recognized by the Plan for the years ended December 31, 1995 and 1994 are
summarized as follows:
<TABLE>
<CAPTION>
For the year ended December 31, 1995
------------------------------------
Aggregate Aggregate Realized
cost proceeds gain
---- -------- ----
<S> <C> <C> <C>
Vesta common stock $ 2,024 2,574 550
Fidelity Balanced Fund 22,615 22,894 279
Vanguard Index Trust 11,430 13,752 2,322
Biltmore Fixed Income Fund 6,712 6,809 97
-----
$ 3,248
=====
For the year ended December 31, 1994
------------------------------------
Aggregate Aggregate Realized
cost proceeds gain
---- -------- ----
<S> <C> <C> <C>
Fidelity Balanced Fund $12,186 11,500 (686)
Vanguard Index Trust 9,717 9,500 (217)
Biltmore Fixed Income Fund 12,449 11,920 (529)
-----
$(1,432)
=====
</TABLE>
(Continued)
14
<PAGE>
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(5) Fair Value of Financial Instruments
-----------------------------------
Statement of Financial Accounting Standards No. 107, Disclosures About Fair
Value of Financial Instruments, requires disclosure of fair value
information about financial instruments, whether or not recognized on the
face of the balance sheet, for which it is practical to estimate that value.
The assumptions used in the estimation of the fair value of the Company's
financial instruments are explained in note 1(c) and below. Fair value
estimates should not be considered representative of the liquidation value
of the Plan's financial instruments, but rather a good-faith estimate of the
fair value of financial instruments held by the Plan.
For cash, receivables and payables, the carrying amounts approximate
fair value because of the short-term nature of these instruments.
(6) Related Party Transactions
--------------------------
The Sponsor paid all of the Plan's administrative expenses in 1995 and
1994. During 1995 and 1994, the Plan acquired and sold Vesta Insurance
Group, Inc. common stock as follows:
<TABLE>
<CAPTION>
Selling price/
Shares Cost fair value Gain
------ ---- ---------- ----
<S> <C> <C> <C> <C>
1995:
Acquired 6,309 $ 227,602 227,602 --
Sold 67 2,024 2,574 550
Balance at year-end 12,407 396,370 676,182 --
1994:
Acquired 6,503 $ 182,410 182,410 --
Balance at year-end 6,503 182,410 185,335 --
</TABLE>
(Continued)
15
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Administrator of the J. Gordon Gaines, Inc. Retirement Savings Plan
has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
By: J. Gordon Gaines, Inc.,
Administrator of the Plan
By: /s/ Donald W. Thornton
-------------------------------------
Donald W. Thornton
Its: Senior Vice President, General
Counsel and Secretary
Date: June 26, 1996
16
<PAGE>
SCHEDULE 1
---------
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
As of December 31, 1995
<TABLE>
<CAPTION>
December 31, 1995
------------------------------------
Number of Fair
shares/units Cost value
------------ ---- -----
<S> <C> <C> <C>
Vesta Insurance Group, Inc. common stock * 12,407 $ 396,370 676,182
Vanguard Index Trust 3,299 155,194 190,032
Fidelity Balanced Fund 7,219 93,867 97,606
Biltmore Fixed Income Fund 5,224 49,574 52,134
Biltmore Prime Cash Management 146,760 146,760 146,760
------- ---------
$ 841,764 1,162,714
======= =========
</TABLE>
* Vesta Insurance Group, Inc. owns 100 percent of the common stock of the
Sponsor making Vesta a party-in-interest.
17
<PAGE>
SCHEDULE 2
----------
J. GORDON GAINES, INC.
RETIREMENT SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
1995
---------------------------------------------------
Current
Purchase value of
Number price and asset on
of aggregate Selling transaction Net
shares cost price date gain
----------- --------- ------- ----------- -----
<S> <C> <C> <C> <C> <C>
Purchase of investments:
* Vesta Insurance Group,
Inc. common stock 6,309 $227,602 -- $227,602 --
Fidelity Balanced Fund 3,621 47,165 -- 47,165 --
Vanguard Index Trust 1,520 77,985 -- 77,985 --
Biltmore Fixed Income
Fund 2,527 23,213 -- 23,213 --
Biltmore Prime
Cash Management Fund 469,576 469,576 -- 469,576 --
Sale of investments:
* Vesta Insurance Group,
Inc. common stock 67 2,024 2,574 2,574 550
Fidelity Balanced Fund 1,748 22,615 22,894 22,894 279
Vanguard Index Trust 247 11,430 13,752 13,752 2,322
Biltmore Fixed Income
Fund 707 6,712 6,809 6,809 97
Biltmore Prime Cash
Management Fund 395,670 395,670 395,670 395,670 --
</TABLE>
* Vesta Insurance Group, Inc. owns 100 percent of the common stock of the
Sponsor making Vesta a party-in-interest.
18
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Description of Exhibit Number
------------ ------------------------------------------- ----------
23.1 Consent of Independent Public Accountants
19
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Administrative Committee
J. Gordon Gaines, Inc. Retirement Savings Plan
We consent to incorporation by reference in the registration statement on
Form S-8 of J. Gordon Gaines, Inc. Retirement Savings Plan of our report dated
June 21, 1996, relating to the statements of net assets available for plan
benefits of J. Gordon Gaines, Inc. Retirement Savings Plan as of
December 31, 1995 and 1994, and the related statements of changes in net assets
available for plan benefits and related schedules for the years ended
December 31, 1995 and 1994 and for the period from November 15, 1993 (inception)
to December 31, 1993, which report appears in the December 31, 1995 Annual
Report on Form 11-K of J. Gordon Gaines, Inc. Retirement Savings Plan.
KPMG Peat Marwick LLP
Birmingham, Alabama
June 21, 1996
