SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
SCHEDULE 13D
(rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
VESTA INSURANCE GROUP, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(Title of Class of Securities)
925391
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(CUSIP Number)
Capital Z Management, LLC
54 Thompson Street
New York, New York 10012
Attention: David A. Spuria, Esq.
(212) 965-0800
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(Name, address and telephone number of person
authorized to receive notices and communications)
December 31, 2001
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(Date of event which requires filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), (f) or (g), check the following box.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
========= =============================================================================================================
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
Capital Z Financial Services Fund II, L.P.
--------- -------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
--------- -------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
--------- -------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------- -------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
--------- -------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
-------------------------------------------- ------- ------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 2,044,875
BENEFICIALLY ------- ------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING
PERSON ------- ------------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
2,044,875
------- ------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-------------------------------------------- ------- ------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,044,875
--------- -------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
[ ]
--------- -------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
5.67%
--------- -------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
--------- -------------------------------------------------------------------------------------------------------------
2
========= =============================================================================================================
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
Capital Z Financial Services Private Fund II, L.P.
--------- -------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
--------- -------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
--------- -------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------- -------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
--------- -------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
-------------------------------------------- ------- ------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 10,863
BENEFICIALLY ------- ------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING
PERSON ------- ------------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
10,863
------- ------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-------------------------------------------- ------- ------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,863
--------- -------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
[ ]
--------- -------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
.03%
--------- -------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
--------- -------------------------------------------------------------------------------------------------------------
3
========= =============================================================================================================
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
Capital Z Partners, L.P.*
--------- -------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
--------- -------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
--------- -------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not Applicable
--------- -------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
--------- -------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
-------------------------------------------- ------- ------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY ------- ------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 2,055,738
PERSON ------- ------------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
------- ------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,055,738
-------------------------------------------- ------- ------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,055,738
--------- -------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
[ ]
--------- -------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
5.7%
--------- -------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
--------- -------------------------------------------------------------------------------------------------------------
*Solely in its capacity as the sole general partner of Capital Z Financial
Services Fund II, L.P. and Capital Z Financial Services Private Fund II, L.P.
4
========= =============================================================================================================
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
Capital Z Partners, Ltd.*
--------- -------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [X]
(b) [ ]
--------- -------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
--------- -------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not Applicable
--------- -------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
--------- -------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
-------------------------------------------- ------- ------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY ------- ------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 2,055,738
PERSON ------- ------------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
------- ------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,055,738
-------------------------------------------- ------- ------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,055,738
--------- -------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
[ ]
--------- -------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
5.7%
--------- -------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
--------- -------------------------------------------------------------------------------------------------------------
* Solely in its capacity as the sole general partner of Capital Z Partners, L.P.
5
Item 1. Security and Issuer.
This Statement relates to the common stock, par value $0.01 per share
(the "Common Stock"), of Vesta Insurance Group, Inc., a Delaware corporation
(the "Company").
The Company's principal executive office is located at 3760 River Run
Road, Birmingham, Alabama 35243.
Item 2. Identity and Background.
This Statement is being filed jointly on behalf of Capital Z Financial
Services Fund II, L.P., a Bermuda limited partnership ("Capital Z Fund II"),
Capital Z Financial Services Private Fund II, L.P. ("Capital Z Private Fund
II"), Capital Z Partners, L.P., a Bermuda limited partnership ("Capital Z
L.P."), and Capital Z Partners, Ltd., a Bermuda corporation ("Capital Z Ltd.",
and together with Capital Z Fund II, Capital Z Private Fund II, Capital Z L.P.,
the "Reporting Persons").
Each of Capital Z Fund II, Capital Z Private Fund II, are referred to
as a "Purchaser" and together they are referred to as the "Purchasers".
Capital Z Fund II and Capital Z Private Fund II are each limited
partnerships that invest in the securities of financial-service companies and
related businesses. Capital Z L.P. is a limited partnership which acts as the
sole general partner of Capital Z Fund II and Capital Z Private Fund II. Capital
Z Ltd. is a corporation which acts as the sole general partner of Capital Z L.P.
Information regarding the control persons and executive officers of the
Reporting Persons is set forth on Schedule I attached hereto, which Schedule is
hereby incorporated by reference. Except as set forth on Schedule I, all such
persons are citizens of the United States.
The principal business address of each Reporting Person is 54 Thompson
Street, New York, New York 10012.
None of the entities or persons identified on Schedule I hereto has,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors). None of the Reporting Persons has
been convicted in a criminal proceeding during the last 5 years.
None of the entities or persons identified on Schedule I hereto has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws. None
of the Reporting Persons has, during the last 5 years, been a party to any civil
proceeding as a result of which he or it was subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violations with respect to such laws.
Item 3. Source and Amount of Funds.
Capital Z Private Fund II and Capital Z Fund II purchased, pursuant to
the Securities Purchase Agreement, dated as of December 21, 2000 (the "2000
Securities Purchase Agreement"), by and among Instant Insurance Holdings, Inc.,
a Delaware corporation ("Instant"), the Company, Thomas E. Mangold ("Mangold"),
Capital Z Fund II and Capital Z Private Fund II, an aggregate of 555,738 shares
of Common Stock, at a purchase price of $6.10 per share, which purchase price
was paid with an aggregate of 3,000,000 shares of Series E Preferred Stock, par
value $1.00 per share ("Series E Preferred Stock"), of Instant, valued at $1.13
per share.
6
Capital Z Private Fund II and Capital Z Fund II purchased, pursuant to
the Securities Purchase Agreement, dated as of December 28, 2001 (the
"Securities Purchase Agreement"), by and among the Company and the Purchasers,
an aggregate of 1,500,000 shares of Common Stock. In addition, the Company paid
the Purchasers cash in the amount of $138,284. The purchase price for each share
of Common Stock was $6.77. In consideration for the cash and the Common Stock,
the Purchasers transferred the following securities of Instant to the Company:
17,787 shares of common stock, par value $0.01 per share ("Instant Common
Stock"), 200,000 shares of Series A Preferred Stock, par value $1.00 per share
("Series A Preferred Stock"), 7,450,000 shares of Series C Preferred Stock, par
value $1.00 per share ("Series C Preferred Stock"), warrants to purchase an
aggregate of 151,032 shares of Common Stock (the "Warrant") and certain rights
to acquire an aggregate of 88,935 shares of Instant Common Stock held by
management of Instant upon their termination (the "Call Rights").
None of the Reporting Persons borrowed any funds in connection with the
purchase of the Common Stock.
Item 4. Purpose of Transaction.
The Reporting Persons consummated the transactions described herein in
order to acquire an interest in the Company for investment purposes. The
Reporting Persons intend to review continuously their position in the Company.
Depending upon further evaluations of the business prospects of the Company and
upon other developments, including, but not limited to, general economic and
business conditions and stock market conditions, the Reporting Persons may
retain or from time to time increase their holdings or dispose of all or a
portion of their holdings subject to any applicable legal and contractual
restrictions on their ability to do so in privately negotiated transactions,
open market purchases or otherwise.
In addition, the matters set forth in Item 6 below are incorporated in
this Item 4 by reference as if fully set forth therein.
Except as set forth in this Item 4 (including the matters described in
Item 6 below which are incorporated in this Item 4 by reference), the Reporting
Persons have no present plans or proposals that relate to or that would result
in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule
13D of the Securities Exchange Act of 1934, as amended.
Item 5. Interest in Securities of Issuer.
(a) - (b)
Capital Z Fund II has the sole power to vote and the sole power to
dispose of 2,044,875 shares of Common Stock, which is 5.67% of the Common Stock.
Capital Z Private Fund II has the sole power to vote and the sole power to
dispose of 10,863 shares of Common Stock, which is .03% of the Common Stock.
Capital Z L.P. and Capital Z Ltd. may be deemed to beneficially own 2,055,738
Common Stock by virtue of Capital Z Fund II's and Capital Z Private Fund II's
ownership of 2,044,875 and 10,863 shares of Common Stock, respectively. Captial
Z L.P. and Capital Z Ltd. each have the shared power to vote or direct the vote,
and to dispose or to direct the disposition, of such shares. Such shares
represent, in the aggregate, approximately 5.7% of the outstanding total Common
Stock.
All calculations made herein are made in accordance with Rule 13d-3(d)
of the Securities Exchange Act of 1934, as amended and based on the number of
shares of Common Stock outstanding as of December 28, 2001.
(c) Except as set forth herein, none of the Reporting Persons
has effected any transactions in shares of Common Stock during the past 60 days.
(d) None.
7
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
1. Capital Z Private Fund II and Capital Z Fund II purchased, pursuant the 2000
Securities Purchase Agreement, an aggregate of 555,738 shares of Common Stock,
at a purchase price of $6.10 per share of Common Stock, which purchase price was
paid with an aggregate of 3,000,000 shares of Series E Preferred Stock, valued
at $1.13 per share.
2. In connection with the transactions contemplated by the 2000 Securities
Purchase Agreement, Capital Z Fund II, Capital Z Private Fund II and the Company
entered into that certain Registration Rights Agreement (the "Registration
Rights Agreement"), dated as of December 21, 2000. As more fully described in
the Registration Rights Agreement, the Company granted certain registration
rights to the Purchasers with respect to the 555,738 shares of Common Stock
owned by the Purchasers, including demand registration rights and certain other
incidental registration rights with respect to offerings made by the Company
under the Securities Act of 1933, as amended.
3. Capital Z Private Fund II and Capital Z Fund II purchased, pursuant the
Securities Purchase Agreement, an aggregate of 1,500,000 shares of Common Stock.
In addition, and the Company paid the Purchasers cash in the amount of $138,284.
The purchase price for each share of Common Stock was $6.77. In consideration
for the cash and the Common Stock, the Purchasers transferred the following
securities of Instant to the Company: 17,787 shares of Instant Common Stock,
200,000 shares of Series A Preferred Stock, 7,450,000 shares of Series C
Preferred Stock, the Warrants and the Call Rights.
4. In connection with the transactions contemplated by the Securities Purchase
Agreement, the Purchasers and the Company executed and delivered the First
Amendment to the Registration Rights Agreement (the "First Amendment"), dated as
of December 28, 2001, which amends certain provisions of the Registration Rights
Amendment to make the 1,500,000 shares of Common Stock purchased under the
Securities Purchase Agreement subject to the terms of the Registration Rights
Agreement.
The descriptions of the 2000 Securities Purchase Agreement, the
Registration Rights Agreement, the Securities Purchase Agreement, and the First
Amendment contained herein are qualified in their entirety by reference to the
applicable agreements, which are incorporated by reference herewith as Exhibits
I, II, III, and IV respectively.
Item 7. Material to be Filed as Exhibits.
1. Securities Purchase Agreement, dated December 21, 2000, by and
among Instant Insurance Holdings, Inc., Vesta Insurance Group, Inc., Thomas E.
Mangold, Capital Z Financial Services Fund II, L.P. and Capital Z Financial
Services Private Fund II, L.P.
2. The Registration Rights Agreement, dated as of December 21,
2000, by and among Vesta Insurance Group, Inc., Capital Z Financial Services
Fund II, L.P. and Capital Z Financial Services Private Fund II, L.P.
3. Securities Purchase Agreement, dated December 28, 2001, by and
among Vesta Insurance Group, Inc., Capital Z Financial Services Fund II, L.P.
and Capital Z Financial Services Private Fund II, L.P.
4. The First Amendment to the Registration Rights Agreement, dated
as of December 28, 2001, by and among Vesta Insurance Group, Inc., Capital Z
Financial Services Fund II, L.P. and Capital Z Financial Services Private Fund
II, L.P.
8
5. Joint Filing Agreement, dated January 9, 2002, by and among
Capital Z Financial Services Fund II, L.P., Capital Z Financial Services Private
Fund II, L.P., Capital Z Partners, L.P., and Capital Z Partners, Ltd.
9
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Statement is true,
complete, and correct.
Date: January 9, 2002.
CAPITAL Z FINANCIAL SERVICES FUND II, L.P.
By: Capital Z Partners, Ltd., it ultimate general partner
By: /s/ David A. Spuria
-------------------------------------------
David A. Spuria
General Counsel, Vice President of
Administration and Secretary
CAPITAL Z FINANCIAL SERVICES PRIVATE FUND II, L.P.
By: Capital Z Partners, Ltd., it ultimate general partner
By: /s/ David A. Spuria
-------------------------------------------
David A. Spuria
General Counsel, Vice President of
Administration and Secretary
CAPITAL Z PARTNERS, L.P.
By: Capital Z Partners, Ltd., it ultimate general partner
By: /s/ David A. Spuria
-------------------------------------------
David A. Spuria
General Counsel, Vice President of
Administration and Secretary
CAPITAL Z PARTNERS, LTD.
By: Capital Z Partners, Ltd., it ultimate general partner
By: /s/ David A. Spuria
-------------------------------------------
David A. Spuria
General Counsel, Vice President of
Administration and Secretary
10
SCHEDULE I
----------
CONTROL PERSONS AND EXECUTIVE OFFICERS
OF THE CAPITAL Z REPORTING PERSONS
The names, present principal occupations and business addresses of the
control persons and executive officers of the Capital Z Reporting Persons are
set forth below. The control person's or executive officer's business address is
that of the Reporting Person. Unless otherwise indicated, each occupation set
forth opposite an individual's name refers to the Reporting Person. Each of the
named individuals is a citizen of the United States of America except for
Laurence Cheng who is a citizen of Canada. Capital Z Partners, Ltd. is the
ultimate general partner and control person of Capital Z Financial Services Fund
II, L.P. and Capital Z Financial Services Private Fund II, L.P.
Robert A. Spass
Chairman of the Board
Laurence W. Cheng
Chief Executive Officer and Director
Bradley E. Cooper
Senior Vice President and Director
Mark K. Gormley
Senior Vice President and Director
Scott M. Delman
Senior Vice President and Director
David A. Spuria
General Counsel, Vice President of Administration and Secretary
Roland V. Bernardon
Chief Financial Officer, Treasurer and Assistant Secretary
11
Exhibits
1. Securities Purchase Agreement, dated December 21, 2000, by and
among Instant Insurance Holdings, Inc., Vesta Insurance Group, Inc., Thomas E.
Mangold, Capital Z Financial Services Fund II, L.P. and Capital Z Financial
Services Private Fund II, L.P.
2. The Registration Rights Agreement, dated as of December 21,
2000, by and among Vesta Insurance Group, Inc., Capital Z Financial Services
Fund II, L.P. and Capital Z Financial Services Private Fund II, L.P.
3. Securities Purchase Agreement, dated December 28, 2001, by and
among Vesta Insurance Group, Inc., Capital Z Financial Services Fund II, L.P.
and Capital Z Financial Services Private Fund II, L.P.
4. The First Amendment to the Registration Rights Agreement, dated
as of December 28, 2001, by and among Vesta Insurance Group, Inc., Capital Z
Financial Services Fund II, L.P. and Capital Z Financial Services Private Fund
II, L.P.
5. Joint Filing Agreement, dated January 9, 2002, by and among
Capital Z Financial Services Fund II, L.P., Capital Z Financial Services Private
Fund II, L.P., Capital Z Partners, L.P., and Capital Z Partners, Ltd.
12