<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, 1999
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)
REQUIRED INFORMATION
(a) Financial Statements for the J. Gordon Gaines, Inc. Retirement Savings Plan
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
(i) Report of Independent Auditors
(ii) Audited statements of net assets available for
plan benefits as of December 31, 1998 and 1997
(iii) Audited statements of changes in net assets
available for plan benefits for the years
ended December 31, 1999
</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
Certified Public Accountants
<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 28, 2000
2
<PAGE>
J. Gordon Gaines, Inc.
Retirement Savings Plan
Financial Statements and Supplemental Schedules
As of December 31, 1999 and 1998 and For the Year Ended
December 31, 1999
<PAGE>
<TABLE>
<CAPTION>
J. Gordon Gaines, Inc. Retirement Savings Plan
Table of Contents
-------------------------------------------------------------------------------------
Pages
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998 2
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1999 3
Notes to Financial Statements 4 - 11
Supplemental Schedules:
*Schedule G, Part III - Schedule of Nonexempt Transaction For the Year
Ended December 31, 1999 12
*Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
as of December 31, 1999 13
*Schedule H, Line 4j - Schedule of Reportable Transactions
For the Year Ended December 31, 1999 14 - 15
* Refers to item number in Form 5500 (Annual Return/Report of Employee
Benefit Plan) for the plan year ended December 31, 1999.
</TABLE>
<PAGE>
Report of Independent Accountants
To the Administrative Committee
J. Gordon Gaines, Inc. Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the J. Gordon Gaines, Inc. Retirement Savings Plan (the "Plan") at December
31, 1999 and 1998 and the changes in net assets available for benefits for the
year ended December 31, 1999 in conformity with accounting principles generally
accepted in the United States. 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 of these
statements in accordance with auditing standards generally accepted in the
United States, which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
table of contents 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. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules 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.
June 27, 2000
/s/ PricewaterhouseCoopers
--------------------------
1
<PAGE>
<TABLE>
<CAPTION>
J. Gordon Gaines, Inc. Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
------------------------------------------------------------------------------
1999 1998
ASSETS
<S> <C> <C>
Investments at fair value:
Vesta Insurance Group, Inc. (Vesta) common stock $ 474,901 $ 374,846
Mutual funds and trusts 3,922,124 2,945,096
Loans to participants 112,051 27,114
---------- ----------
Total investments 4,509,076 3,347,056
Cash 2,403 71
Accrued income receivable 3,407 2,092
Employee contributions receivable 31,481 117,714
Employer contributions receivable 17,393 48,614
---------- ----------
Total assets 4,563,760 3,515,547
---------- ----------
Net assets available for benefits $4,563,760 $3,515,547
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
J. Gordon Gaines, Inc. Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1999
-----------------------------------------------------------------------------
Additions:
<S> <C>
Dividend income (includes dividends from Vesta stock
of $2,345) $ 194,543
Interest income 4,014
Net appreciation in fair value of investments 130,776
Employee contributions 1,201,032
Employer contributions 622,247
Rollover contributions 159,886
Other, net 1,192
----------
Total additions 2,313,690
Deductions:
Distributions to participants 1,264,427
Administrative fee 1,050
----------
Total deductions 1,265,477
----------
Net increase 1,048,213
Net assets available for benefits:
Beginning of year 3,515,547
----------
End of year $4,563,760
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Notes to Financial Statements
For the Year Ended December 31, 1999
------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies
Organization - The J. Gordon Gaines, Inc. Retirement Savings Plan (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).
Basis of Presentation - The accompanying financial statements of the Plan
have been prepared on an accrual basis in accordance with accounting
principles generally accepted in the United States. J. Gordon Gaines, Inc.
(the Company or Sponsor) is a wholly owned subsidiary of Vesta Insurance
Group, Inc. (Vesta).
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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 dates of the financial statements and the reported amounts of
additions and deductions during the reporting periods. Actual results could
differ from these estimates.
Risks and Uncertainties - The Plan provides for various investment options in
any combination of stocks, mutual funds and other investment securities.
Generally all investments are exposed to various risks, such as interest
rate, market and credit. Due to the level of risk associated with certain
investments and the level of uncertainty related to changes in the value of
investments, it is at least reasonably possible that changes in risks in the
near term could materially affect participants' account balances, and the
amounts reported in the statement of net assets available for plan benefits
and the statement of changes in net assets available for plan benefits.
Investments Valuation - Investments in mutual funds and in Vesta common stock
are stated at fair value, based on quotations obtained from national
securities exchanges. The Merrill Lynch Retirement Preservation Trust Fund is
valued at cost plus interest earned, which approximates market. Purchase and
sales of securities are recorded on a trade-date basis. Realized gains and
losses are calculated using the average cost method.
For cash and receivables, the carrying amounts approximate fair value because
of the short-term nature of these instruments.
The Plan administrator believes it is not practicable to determine the fair
value of its loans to participants due to various interest and maturities.
Such loans are carried at their outstanding balances.
4
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Notes to Financial Statements
For the Year Ended December 31, 1999
------------------------------------------------------------------------------
Plan Expenses - Merrill Lynch Trust Company serves as the trustee and
administrator of the Plan. Administration fees paid to the trustee and all
other administrative expenses are paid by the Sponsor.
Net Appreciation (Depreciation) - The Plan presents in the statement of
changes in net assets available for benefits the net appreciation
(depreciation) in the fair value of its investments which consists of the
realized gains or losses and the unrealized appreciation (depreciation) on
those investments.
Reclassifications - Certain reclassifications have been made in the
previously reported financial statements and accompanying notes to make the
prior year amounts comparable to those of the current year. Such
reclassifications had no effect on previously reported net assets available
for benefits.
2. Description of Plan
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions. The Plan was approved to provide
retirement benefits for eligible employees of Vesta and its subsidiaries.
Participant Contributions - For the periods prior to June 30, 1998, employees
became eligible to participate in the Plan on the first day of January,
April, July, or October following completion of one year of service.
Participants could elect to have from 1% to 10% of their compensation
deferred and contributed to the Plan. Effective July 1, 1998, all employees
are eligible to participate in the Plan upon employment and may elect to have
from 1% to 15% of their compensation deferred and contributed to the Plan.
There were 290 participants as of December 31, 1999.
Participants allocated their contributions, in multiples of 1%, to the
following investments through the periods ending June 30, 1998:
Money Market Fund - invested primarily in the Wachovia Prime Cash
Management Fund which invests in commercial paper and other money market
instruments maturing in one year or less;
Bond Fund - invested primarily in the Wachovia Fixed Income Fund which
invests in direct obligations of the United States Government or its
agencies;
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;
5
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Notes to Financial Statements
For the Year Ended December 31, 1999
------------------------------------------------------------------------------
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;
Company Stock Fund - invested in Vesta Insurance Group, Inc. common stock.
Effective July 1, 1998 participants may allocate their contributions, in
multiples of 5%, to the following investments:
Merrill Lynch Retirement Preservation Trust Fund - a common collective
trust that seeks to provide preservation of capital, liquidity, and current
income at levels that are higher than those provided by money market funds
by investing primarily in a broadly diversified portfolio of Guaranteed
Investment Contracts (GICs) and in obligations of U.S. government and
government agency securities.
Merrill Lynch Corporate Bond Fund, Inc. (High Income Portfolio) - seeks a
high level of current income consistent with the investment policies of the
portfolio and with prudent investment management. As a secondary objective
the portfolio seeks capital appreciation, when consistent with its primary
objective;
Merrill Lynch Corporate Bond Fund, Inc. (Intermediate Term Portfolio) -
seeks a high level of current income consistent with the investment
policies of the Fund and prudent management. As a secondary objective, the
Fund seeks capital appreciation when consistent with its primary objective;
Merrill Lynch Basic Value Fund, Inc. - seeks capital appreciation, and
secondarily, income, by investing primarily in equities that appear to be
undervalued;
Merrill Lynch Global Allocation Fund, Inc. - seeks high total investment
return consistent with prudent risk;
Davis New York Venture Fund, Inc. - seeks to achieve superior long-term
growth through specific, long term trends that provide consistent growth
over time;
GAM International Fund - seeks capital appreciation through investing in
equity markets worldwide, excluding that of the U.S.A.;
Merrill Lynch S&P 500 Index Fund - seeks to provide investment results
that, before expenses, replicate the total return of the Standard & Poor's
500 Composite Stock Price Index (S&P 500). In seeking to replicate the
total return of the S&P 500, management generally will allocate investments
among common stocks in approximately the same weighting as the index;
PIMCO Small Cap Value Fund - seeks long-term growth of capital and income
through investment in smaller capitalization stocks that appear to be
undervalued;
Vesta Insurance Group, Inc. Common Stock - seeks investment in the common
stock of Vesta Insurance Group, Inc.
6
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Notes to Financial Statements
For the Year Ended December 31, 1999
------------------------------------------------------------------------------
In addition to the above ten core funds, participants have the option, as of
July 1, 1998, to direct their investments into a mutual fund window. This
allows participants to direct their investments into additional funds beyond
the ten core funds mentioned above. These options are available to all
participants. The options are intended to provide investment flexibility for
employees who desire a wider range of investment options. The mutual fund
window options are AIM Constellation Fund, AIM Global Telecommunications
Fund, Alger MidCap Growth Portfolio, Alliance New Europe Fund, Alliance
Worldwide Privatization Fund, Davis Convertible Securities Fund, Davis Real
Estate Fund, GAM Global Fund, GAM Pacific Basin Fund, John Hancock Financial
Industries Fund, Merrill Lynch Pacific Fund, Inc., MFS Government Mortgage
Fund, MFS Total Return Fund, Morgan Stanley Aggressive Equity Fund, Morgan
Stanley Latin American Fund, Morgan Stanley U.S. Real Estate Fund, Nicholas
Applegate Emerging Countries Fund, Nicholas Applegate SmallCap Growth Fund,
Oppenheimer Development Markets Fund, Oppenheimer International Bond Fund,
PIMCO Precious Metals Fund, Seligman Communications and Information Fund,
Inc., Seligman Henderson Global Technology Fund, Van Kampen Latin America
Fund, Van Kampen Focus Equity Fund, Pilgrim Emerging Countries Fund, and
State Street Research Managed Assets Fund.
As of July 1, 1998, in addition to the core funds and the mutual fund window,
the Plan participant may select from three investment models, which are
comprised of a combination of the core funds. The investment models are as
follows:
Conservative to Moderate Investment Model - this model invests 35% of its
assets in the stable value option, 35% in the bond funds, and 30% in stock
funds.
Moderate Model - this model invests 20% of its assets in the stable value
option, 55% in stock funds, and 25% in the bond funds.
Aggressive Model - this model invests 80% of its assets in the stock funds,
15% in bond funds, and 5% in the stable value fund.
Employer Matching Contributions - Vesta and its subsidiaries (the Employer),
at its sole discretion, may make matching contributions in an amount
determined by the board of directors of the Company. For 1999, the matching
contributions was 100% of employee contributions up to 3% and 50% from 3% to
5% not to exceed a maximum of 4% of the employee's compensation.
Participant Accounts - Each participant's account is credited with an
allocation of the Company's contribution and an allocable share of
investments earnings or loss. Allocations are based on contribution rates
specified in the Plan and the time-weighted value of account balances.
Participants are entitled to the benefits that can be provided from the
distributable value of their participant accounts.
7
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Notes to Financial Statements
For the Year Ended December 31, 1999
------------------------------------------------------------------------------
Vesting - Participants have a fully-vested and non-forfeitable interest in
the portion of their account balances attributable to their contributions.
Effective January 1, 1999, a participant acquires a fully-vested and non-
forfeitable interest in the portion of their accounts attributable to
Employer matching and additional discretionary contributions. Prior to
January 1, 1999, Employer matching and additional discretionary contributions
were vested based on length of employment, as follows:
Years of Service Vesting
---------------- -------
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 100%
Forfeitures - At December 31, 1999, forfeited nonvested accounts totaled
approximately $73,800. These accounts will be reallocated to participants in
the same manner as employer contributions.
Loans - Participants are able to borrow up to the lesser of one half of their
account balances or $50,000 minus the highest outstanding loan balance from
the Plan during the past year in accordance with the plan provisions. Only
one loan outstanding is allowed. Repayment periods do not exceed five years
unless the loan proceeds are used to purchase a home. The interest rates on
the loans are at least equal to the prime rate as published in the Wall
Street Journal at the time of application or some higher rate that reflects
current commercial lending rates as determined by the plan administrator.
Repayments are made in equal weekly installments collected through payroll
deductions. Loans are valued at cost, which approximates fair value.
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. Such a
withdrawal would require the participant to cease making contributions to the
Plan for a period of at least twelve months following the receipt of the
hardship withdrawal.
Benefit Payments - Participants are eligible for benefit payments upon
reaching age sixty-five (65). The Plan also provides for distributions to
participants, or their beneficiaries, upon death, disability, early
retirement at or after age fifty-five with seven years of service, and
termination of employment. Participants may choose to have benefits paid
directly to them or to another qualified retirement plan or individual
retirement arrangement on their behalf. Benefits are recorded when paid.
8
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Notes to Financial Statements
For the Year Ended December 31, 1999
------------------------------------------------------------------------------
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.
3. Income Tax Status
The Plan is exempt from federal income taxes under Section 501(a) of the
Internal Revenue Code. The Plan obtained its latest determination letter on
June 29, 1993, in which the Internal Revenue Service stated that the Plan, as
then designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the Plan administrator and the Plan's tax
counsel believe that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
9
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Notes to Financial Statements
For the Year Ended December 31, 1999
------------------------------------------------------------------------------
4. Investments
The investments of the Plan as of December 31, 1999 and 1998 are summarized
as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------ -----------------------
Investment Name Market Cost Market Cost
--------------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Vesta Insurance Group, Inc $ 474,901 $1,069,029 $ 374,846 $ 830,865
Merrill Lynch Retirement Preservation Trust Fund 461,038 461,038 361,183 361,183
Merrill Lynch S&P 500 Index Fund 357,471 313,791 167,410 160,486
GAM International Fund 74,450 63,866 29,316 27,934
PIMCO Small Cap Value Fund 94,152 99,900 35,379 34,906
Davis New York Venture Fund, Inc. 1,724,812 1,535,002 1,517,656 1,508,962
Merrill Lynch Basic Value Fund, Inc. 96,213 96,965 53,578 51,764
Merrill Lynch Corporate Bond Fund, Inc.
(High Income Portfolio) 50,281 52,104 21,416 21,945
Merrill Lynch Corporate Bond Fund, Inc.
(Intermediate Term Portfolio) 236,217 247,938 231,548 230,896
Merrill Lynch Global Allocation Fund, Inc. 600,977 614,640 521,040 602,024
Morgan Stanley U.S. Real Estate Fund 2,219 2,369 141 140
GAM Global Fund 2,416 2,048 158 146
Davis Convertible Securities Fund 2,046 1,979 274 274
MFS Total Return Fund 21,190 23,408 5,997 6,537
PIMCO Precious Metals Fund 1,405 1,403
Davis Real Estate Fund 1,302 1,432
Alger MidCap Growth Portfolio 29,353 27,296
Van Kampen Focus Equity Fund 541 497
Seligman Henderson Global Technology Fund 97,885 78,820
Merrill Lynch Pacific Fund, Inc. 808 581
Van Kampen Latin America Fund 6,027 5,000
Seligman Communication and Information Fund, Inc. 36,758 28,491
AIM Constellation Fund 3,650 2,875
Alliance New Europe Fund 880 758
AIM Global Telecommunications Fund 17,768 14,078
Pilgrim Emerging Countries Fund 2,265 1,378
Loans to participants 112,051 27,114
----------- ---------- ---------- ----------
$ 4,509,076 $4,746,686 $3,347,056 $3,838,062
=========== ========== ========== ==========
</TABLE>
10
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Notes to Financial Statements
For the Year Ended December 31, 1999
------------------------------------------------------------------------------
The following is a summary of assets held in excess of 5% of the Plan's net
assets at December 31:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Vesta Insurance Group, Inc. $ 474,901 $ 374,846
Merrill Lynch Retirement Preservation Trust Fund $ 461,038 $ 361,183
Merrill Lynch Corporate Bond Fund, Inc.
(Intermediate Term Portfolio) $ 236,217 $ 231,548
Davis New York Venture Fund, Inc. $1,724,812 $1,517,656
Merrill Lynch Global Allocation Fund, Inc. $ 600,977 $ 521,040
Merrill Lynch S&P 500 Index Fund $ 357,471 $ 167,410
</TABLE>
During 1999, the Plan's investments (including gains and losses on
investments bought and sold as well as held during the year)
(depreciated)/appreciated in value by $1,201,032 as follows:
Vesta common stock $ (231,428)
Mutual funds and trust 1,432,460
------------
$ 1,201,032
============
5. Related Party Transactions
The Sponsor pays administrative expenses on behalf of the Plan, including
legal, trust, administrative, and accounting fees. During 1999, the Plan
acquired and sold Vesta Insurance Group, Inc. common stock as follows:
<TABLE>
<CAPTION>
Selling
Price/
Shares Cost Fair Value
------ -------- ----------
<S> <C> <C> <C>
Acquired 83,335 $436,005 $436,005
Sold 23,155 197,114 104,110
------ -------- --------
60,180 $238,891 $331,895
====== ======== ========
</TABLE>
6. Comparison of Financial Statements to Form 5500
Annually, the Company files, on behalf of the Plan, an information return
(Form 5500) that includes financial information prepared on the basis of
cash receipts and disbursements. The accompanying financial statements
differ from the Form 5500 primarily due to the accruals reflected in the
financial statements.
11
<PAGE>
Supplemental Schedules
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Schedule G, Part III - Schedule of Nonexempt Transaction
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
(c) Description of
transactions including
(b) Relationship to plan, maturity date, rate of (d)
(a) Identity of party employer or other party- interest, collateral, par or Purchase (e) Selling (f) Lease
involved in-interest maturity value price price rental
Failure to remit employee
contributions on a timely
J. Gordon Gaines, Inc. sponsor basis $113,564
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(g) Expenses
incurred in (i) Current
connection with (h) Cost value of (j) Net gain or (loss) on
transaction of asset asset each transaction
$113,564 $113,564
</TABLE>
12
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
December 31, 1999
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
c. Description of Investment Including
b. Identity of Issuer, Borrower, Maturity Date, Rate of Interest, e. Current
a. Lessor, or Similar Party Collateral, Par or Maturity Value d. Cost Value
-- ------------------------------------ --------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
* Vesta Insurance Group, Inc. Common Stock $1,069,029 $ 474,901
* Merrill Lynch Retirement Preservation
Trust Fund Collective Trust 461,038 461,038
* Merrill Lynch S&P 500 Index Fund Mutual Fund 313,791 357,471
GAM International Fund Mutual Fund 63,866 74,450
PIMCO Small Cap Value Fund Mutual Fund 99,900 94,152
Davis New York Venture Fund, Inc. Mutual Fund 1,535,002 1,724,812
* Merrill Lynch Basic Value Fund, Inc. Mutual Fund 96,965 96,213
* Merrill Lynch Corporate Bond Fund, Inc.
(High Income Portfolio) Mutual Fund 52,104 50,281
* Merrill Lynch Corporate Bond Fund, Inc.
(Intermediate Term Portfolio) Mutual Fund 247,938 236,217
* Merrill Lynch Global Allocation Fund, Inc. Mutual Fund 614,640 600,977
Morgan Stanley U.S. Real Estate Fund Mutual Fund 2,369 2,219
GAM Global Fund Mutual Fund 2,048 2,416
Davis Convertible Securities Fund Mutual Fund 1,979 2,046
MFS Total Return Fund Mutual Fund 23,408 21,190
PIMCO Precious Metals Fund Mutual Fund 1,403 1,405
Davis Real Estate Fund Mutual Fund 1,432 1,302
Alger MidCap Growth Portfolio Mutual Fund 27,296 29,353
Van Kampen Focus Equity Fund Mutual Fund 497 541
Seligman Henderson Global Technology
Fund Mutual Fund 78,820 97,885
* Merrill Lynch Pacific Fund, Inc. Mutual Fund 581 808
Van Kampen Latin America Fund Mutual Fund 5,000 6,027
Seligman Communication and Information
Fund, Inc. Mutual Fund 28,491 36,758
AIM Constellation Fund Mutual Fund 2,875 3,650
Alliance New Europe Fund Mutual Fund 758 880
AIM Global Telecommunications Fund Mutual Fund 14,078 17,768
Pilgrim Emerging Countries Fund Mutual Fund 1,378 2,265
Loans to participants Loans, interest rates range from
8.75% to 9.25% 112,051
---------- ----------
$4,746,686 $4,509,076
========== ==========
</TABLE>
* Party-in-interest to the Plan.
13
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Schedule H, Line 4j - Schedule of Reportable Transactions
For the Year Ended December 31, 1999
----------------------------------------------------------------------
I. Single transactions exceeding 5% of assets.
NONE
II. Series of transactions involving property other than securities.
NONE
III. Series of transactions of same issue exceeding 5% of assets.
NONE
IV. Transactions in conjunction with same person involved in reportable
single transactions.
NONE
14
<PAGE>
J. Gordon Gaines, Inc. Retirement Savings Plan
Schedule H, Line 4j - Schedule of Reportable Transactions
For the Year Ended December 31, 1999
----------------------------------------------------------------------
No schedule of reportable transactions would be prepared as investments are
participant-directed. Only nonparticipant-directed transactions are required to
be reported.
15
