UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
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Financial Industries Corporation
(Name of Registrant as Specified In Its Charter)
_________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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The Registrant provided the following statement to its shareholders:
Financial Industries Corporation
6500 River Place Boulevard
Austin, Texas 78730
July 25, 2003
Dear Valued Shareholder:
Your vote for our Annual Meeting this year is extremely important. Please take
this last opportunity to reject the hostile efforts of the hedge fund Otter
Creek to seize control of your Company. Over the past few weeks, it is our
opinion that Otter Creek has repeatedly inundated you with deceitful accusations
and purposely misleading information. By contrast, your Board has respectfully
responded with verifiable facts and a proven track record on your behalf.
Otter Creek's attempt to bully its way onto your Board leaves us with one
question: Is a group that resorts to the low-down mudslinging tactics of Otter
Creek one that you can trust to act in the best interests of all FIC
shareholders and beyond those of its own secret list of investors?
Please return the WHITE card in time for your vote to be counted at the Annual
Meeting of Shareholders on July 31, 2003. Despite the failure of Otter Creek to
engage in an honest debate about your Company on the merits, we would ask you to
consider these final points as you cast your vote:
* INTEGRITY, EXPERIENCE, VISION - At a time of slack corporate
governance standards, your Board stood out from the crowd and did what
the boards of Enron, WorldCom and Global Crossing did not do - when a
corporate wrong-doing was brought to its attention, your Board
investigated diligently and efficiently, and it took decisive action
in your best interest. In order to stabilize your Company and chart
the right course in your interest, your Board sought the counsel of
independent financial advisor, Salomon Smith Barney, to evaluate all
of our options -- including a possible sale. Your Board also
re-examined and strengthened the corporate governance policies of your
Company. We now offer you a balanced slate of new and experienced
nominees who believe that it is not only their fiduciary
responsibility, but also their personal objective, to maximize the
investment value of every shareholder of our Company.
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* A PLAN TO INCREASE SHAREHOLDER VALUE - Your Company has begun
implementing its business plan in earnest - having among other things,
completed a series of acquisitions in the secondary education
financial services market, formed a new targeted marketing alliance in
the senior annuities market, and cut sales and marketing costs on its
traditional lines of business. Since we announced in June of this year
the progress we have made against our plan, FIC's stock has climbed
more than 14%! We believe following the course of this plan will
greatly expand the volume of sales for your Company over the next few
years, and result in dramatic gains in shareholder value. Because of
this, we do not believe this is the time to turn over the management
of your Company to a group that says it wants to dismantle this plan
and stop the tremendous progress that has been made.
* NO PLAN OF ITS OWN - When it began this proxy challenge, Otter Creek
stated in its communications with you that its purpose was the sale of
your Company. It offered no steps it would take to sell your Company,
nor what it would do in the interim if it could not find a buyer
willing to pay the right price. Ironically, in subsequent
communications with you, Otter Creek states to you that it intends to
"conduct a thorough review of the company's operations to determine
how best to maximize value for shareholders... and thoroughly evaluate
the company's strategic options..." which sounds to us rather similar
to actions already taken by your Board. It is our opinion that in its
last communication with you, Otter Creek once again changes its
position to imply that it wants to ride on the coattails of the
business plan your Board has implemented to increase shareholder
value. We wonder if Otter Creek's costly efforts to take control of
your Board are merely a vanity exercise at the expense of your
Company's shareholders?
The absence of a proactive plan from Otter Creek makes it evident to
your Board that Otter Creek does not know how it would run your
Company. FIC is just one of many investments made by this hedge fund
by simply examining financial value; in our opinion, Otter Creek does
not have the experience to manage a workforce, develop, price and
market new insurance products, or administer policyholder services.
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VOTE THE WHITE CARD TODAY!
Thank you for following these matters closely over the past few weeks and for
not being misled by the narrow agenda of a dissident shareholder. In order to
continue the progress we have made to date in the interests of all shareholders,
your Board would very much appreciate your support by voting the WHITE card in
time for the Annual Meeting of Shareholders on July 31, 2003.
Sincerely,
Eugene E. Payne
Chairman, President and Chief Executive Officer
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HOW TO VOTE
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
1. If your shares are registered in your own name, please sign, date and mail
the enclosed WHITE Proxy Card to Georgeson Shareholder Communications Inc.
in the postage paid envelope provided today.
2. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can sign a WHITE Proxy Card with respect to your
shares and only after receiving your specific instructions. Accordingly,
please sign, date and mail the enclosed WHITE Proxy Card in the
postage-paid envelope provided, and to ensure that your shares are voted,
you should also contact the person responsible for your account and give
instructions for a WHITE Proxy Card to be issued representing your shares.
3. After signing the enclosed WHITE Proxy Card do not sign or return the gold
proxy card. Remember - only your latest dated proxy will determine how your
shares are to be voted at the meeting. If you voted a gold proxy card and
want to change your vote, you can do so now by sending in this WHITE proxy
card.
4. If you have any questions or need further assistance in voting your shares,
please contact our proxy solicitor.
Georgeson Shareholder
17 State Street, 10th Floor
New York, NY 10004
Banks and Brokers (212) 440-9800
Shareholders Call Toll Free (866) 274-2148
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