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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-54772
[Financial Industrial Corporation LOGO]
May 8, 2001
Dear Financial Industries Corporation shareholder,
As you know, we are currently soliciting proxies for a Special Meeting of
Shareholders of Financial Industries Corporation ("FIC") to be held on May 18,
2001, at which you will be asked to consider and to vote upon, among other
things, proposals relating to the proposed merger of ILCO Acquisition Company, a
wholly-owned subsidiary of FIC ("Merger Sub"), and InterContinental Life
Corporation ("ILCO"). We are enclosing a supplement to the joint proxy
statement/prospectus dated April 20, 2001 to provide you with information
concerning a recently adopted amendment to the merger agreement that was
originally executed by FIC, Merger Sub and ILCO on January 17, 2001.
Under the terms of the original merger agreement, as a condition to the
consummation of the merger, each of FIC and ILCO were required to receive
opinions from their respective tax counsel, dated as of the closing date of the
merger, to the effect that: (i) the merger will constitute a reorganization
under Section 368(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), (ii) FIC, Merger Sub and ILCO will each be a party to the
reorganization under Section 368(a) of the Code and (iii) with respect to the
opinion required to be delivered by ILCO's tax counsel, no gain or loss will be
recognized by the shareholders of ILCO upon receipt of FIC common stock in
exchange for ILCO common stock pursuant to the merger (except with respect to
any cash received in lieu of fractional shares) and, with respect to the opinion
required to be delivered by FIC's tax counsel, no gain or loss will be
recognized by FIC, Merger Sub or ILCO by reason of the merger. The amendment of
the merger agreement provides that the delivery of the tax opinions described
above will no longer be a condition to the consummation of the merger.
THE BOARD OF DIRECTORS OF FIC HAS APPROVED THE AMENDMENT TO THE MERGER
AGREEMENT AND REAFFIRMS ITS VIEW THAT THE TERMS OF THE MERGER AGREEMENT AND THE
MERGER ON SUBSTANTIALLY THE TERMS AND CONDITIONS SET FORTH IN THE MERGER
AGREEMENT ARE ADVISABLE AND ARE FAIR TO, AND IN THE BEST INTEREST OF, FIC AND
ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF
THE ISSUANCE OF SHARES OF FIC COMMON STOCK IN THE MERGER AND "FOR" THE APPROVAL
OF THE AMENDMENT TO FIC'S ARTICLES OF INCORPORATION.
If you have already delivered a properly executed proxy, you need not
reexecute a proxy unless you wish to change your vote. If you wish to change or
revoke your vote, please contact us at the address set forth in the accompanying
supplement to receive a new proxy card.
It is important that your shares be represented at the special meeting
either in person or by proxy. Your prompt attention to this matter is greatly
appreciated.
Sincerely,
/s/ Roy F. Mitte
Roy F. Mitte
Chairman, President and Chief
Executive Officer
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[ILCO LOGO]
May 8, 2001
Dear InterContinental Life Corporation shareholder,
As you know, we are currently soliciting proxies for a Special Meeting of
Shareholders of InterContinental Life Corporation ("ILCO") to be held on May 18,
2001, at which you will be asked to consider and to vote upon, among other
things, proposals relating to the proposed merger of ILCO Acquisition Company
("Merger Sub"), a wholly-owned subsidiary of Financial Industries Corporation
("FIC"), with ILCO. We are enclosing a supplement to the joint proxy
statement/prospectus dated April 20, 2001 to provide you with information
concerning a recently adopted amendment to the merger agreement that was
originally executed by FIC, Merger Sub and ILCO on January 17, 2001.
Under the terms of the original merger agreement, as a condition to the
consummation of the merger, each of FIC and ILCO were required to receive
opinions from their respective tax counsel, dated as of the closing date of the
merger, to the effect that: (i) the merger will constitute a reorganization
under Section 368(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), (ii) FIC, Merger Sub and ILCO will each be a party to the
reorganization under Section 368(a) of the Code and (iii) with respect to the
opinion required to be delivered by ILCO's tax counsel, no gain or loss will be
recognized by the shareholders of ILCO upon receipt of FIC common stock in
exchange for ILCO common stock pursuant to the merger (except with respect to
any cash received in lieu of fractional shares) and, with respect to the opinion
required to be delivered by FIC's tax counsel, no gain or loss will be
recognized by FIC, Merger Sub or ILCO by reason of the merger. The amendment of
the merger agreement provides that the delivery of the tax opinions described
above will no longer be a condition to the consummation of the merger.
THE BOARD OF DIRECTORS OF ILCO HAS APPROVED THE AMENDMENT TO THE MERGER
AGREEMENT AND REAFFIRMS ITS VIEW THAT THE TERMS OF THE MERGER AGREEMENT AND THE
MERGER ON SUBSTANTIALLY THE TERMS AND CONDITIONS SET FORTH IN THE MERGER
AGREEMENT ARE ADVISABLE AND ARE FAIR TO, AND IN THE BEST INTEREST OF, ILCO AND
ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF
THE PLAN OF MERGER CONTAINED IN THE MERGER AGREEMENT.
If you have already delivered a properly executed proxy, you need not
reexecute a proxy unless you wish to change your vote. If you wish to change or
revoke your vote, please contact us at the address set forth in the accompanying
supplement to receive a new proxy card.
It is important that your shares be represented at the special meeting
either in person or by proxy. Your prompt attention to this matter is greatly
appreciated.
Sincerely,
/s/ ROY F MITTE
Roy F. Mitte
Chairman, President and Chief
Executive Officer
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SUPPLEMENT TO JOINT PROXY STATEMENT/PROSPECTUS
[Financial Industrial [ILCO LOGO]
Corporation LOGO] INTERCONTINENTAL LIFE CORPORATION
FINANCIAL INDUSTRIES SPECIAL MEETING OF SHAREHOLDERS
CORPORATION TO BE HELD MAY 18, 2001
SPECIAL MEETING OF
SHAREHOLDERS
TO BE HELD MAY 18, 2001
This supplement dated May 8, 2001 is being furnished to the shareholders of
FIC and ILCO as a supplement to the joint proxy statement/prospectus dated April
20, 2001 previously sent to the FIC and ILCO shareholders in connection with the
solicitation of proxies on behalf of the Board of Directors of FIC for use at
the special meeting of shareholders of FIC to be held on May 18, 2001 and on
behalf of the Board of Directors of ILCO for use at the special meeting of
shareholders of ILCO to be held on May 18, 2001.
This supplement relates to an amendment of the merger agreement pursuant to
which Merger Sub will merge with and into ILCO, with ILCO surviving the merger
as a wholly-owned subsidiary of FIC. This supplement is a supplement to and
should be read in conjunction with the joint proxy statement/ prospectus dated
April 20, 2001. Any statement contained in the joint proxy statement/prospectus
dated April 20, 2001 will be deemed to be modified and superseded to the extent
that a statement set forth in this supplement, including the annexes hereto,
modifies or supersedes such statement.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS SUPPLEMENT TO THE JOINT PROXY STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This supplement to the joint proxy statement/prospectus is dated May 8,
2001 and it was first mailed to the shareholders of FIC and ILCO on or about May
8, 2001.
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FIRST AMENDMENT TO MERGER AGREEMENT; BACKGROUND AND REASONS
Under the terms of the original merger agreement, as a condition to the
consummation of the merger, each of FIC and ILCO were required to receive
opinions from their respective tax counsel, dated as of the closing date of the
merger, to the effect that: (i) the merger will constitute a reorganization
under Section 368(b) of the Code, (ii) FIC, Merger Sub and ILCO will each be a
party to the reorganization under Section 368(a) of the Code and (iii) with
respect to the opinion required to be delivered by ILCO's tax counsel, no gain
or loss will be recognized by the shareholders of ILCO upon receipt of FIC
common stock in exchange for ILCO common stock pursuant to the merger (except
with respect to any cash received in lieu of fractional shares) and, with
respect to the opinion required to be delivered by FIC's tax counsel, no gain or
loss will be recognized by FIC, Merger Sub or ILCO by reason of the merger.
Opinions to this effect were issued as of April 3, 2001 and filed with the
Securities and Exchange Commission in connection with the registration statement
containing the joint proxy statement/prospectus dated April 20, 2001.
As previously disclosed in the joint proxy statement/prospectus dated April
20, 2001, FIC has received several indications of interest to acquire FIC after
the merger. Since the date of the joint proxy statement/prospectus, FIC has
received one indication of interest which it intends to pursue through further
discussions with the party that submitted the indication of interest. As a
result, management of FIC believes that it is not likely to be able to deliver
to tax counsel an officer's certificate at the closing of the merger containing
a representation that FIC has not received any formal indications of interest
that may result in a sale of FIC after the merger. Since this representation was
part of the basis for the April 3, 2001 tax opinions, FIC and ILCO no longer
will be receiving their respective counsel's tax opinions as described above on
the closing date of the merger. The amendment of the merger agreement provides
that the delivery of the tax opinions described above will no longer be a
condition to the consummation of the merger.
During the week of April 30, 2001, management of FIC had various
conversations with representatives of Weil, Gotshal & Manges LLP, counsel to the
FIC Special Committee, and Philo Smith Capital Corporation, financial advisor to
the FIC Special Committee, and management of ILCO had various conversations with
representatives of Fulbright & Jaworski, L.L.P., counsel to the ILCO Special
Committee, and a representative of P.W. Mattingly & Co., Inc., financial advisor
to the ILCO Special Committee, with respect to the merger, the potential sale of
FIC and the terms of the first amendment to the merger agreement. On May 3,
2001, a representative of Mattingly & Co. orally confirmed to representatives of
management of ILCO and Fulbright & Jaworski that the changes to the terms of the
merger agreement would not cause it to revoke its opinion, dated as of January
17, 2001, given as of such date. On May 3, 2001, the members of the ILCO Special
Committee held a meeting with representatives of Fulbright & Jaworski and
management of ILCO to discuss the terms of the first amendment to the merger
agreement and the effects thereof. After a full and lengthy discussion, the ILCO
Special Committee unanimously voted to recommend that the ILCO board of
directors amend the merger agreement to remove as a condition to closing the
receipt of the tax opinions. On May 4, 2001, the members of the ILCO Special
Committee held a meeting with a representative of Mattingly & Co.,
representatives of Fulbright & Jaworski and management of ILCO at which
Mattingly & Co. stated that had it known on January 17, 2001 that Fulbright &
Jaworski would be unable to deliver its tax opinion as required by the merger
agreement, then it would have been unable to deliver a fairness opinion on the
proposed transaction as of such date. After a full and lengthy discussion, the
ILCO Special Committee decided not to modify its actions at the May 3 meeting.
On May 4, 2001, the members of the FIC Special Committee held a telephonic
meeting with representatives of Weil Gotshal, Philo Smith Capital and management
of FIC to discuss the terms of the first amendment to the merger agreement and
the effects thereof. At the meeting, Philo Smith Capital orally confirmed to the
FIC Special Committee that the changes to the terms of the merger agreement
would not cause it to revoke its opinion, dated as of January 17, 2001, given as
of such date. After a full discussion, the FIC Special Committee unanimously
approved the first amendment to the merger agreement and unanimously voted to
recommend that the FIC board of directors approve and adopt the first amendment
to the merger agreement.
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On May 7, 2001, a unanimous written consent of each of the boards of
directors of FIC and ILCO was executed wherein the first amendment to the merger
agreement was approved and adopted.
The first amendment to the merger agreement is attached as Annex S-I to
this supplement and is hereby incorporated by reference. All references to the
merger agreement in the joint proxy statement/ prospectus and related proxies
are deemed to refer to the merger agreement as amended by the first amendment.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The inability of counsel to issue the tax opinions described above does not
mean that the merger necessarily will be taxable. The merger, in fact, might
still constitute a tax-free reorganization as to which no gain or loss would be
recognized by ILCO shareholders upon their exchange of ILCO stock for FIC common
stock (except with respect to any cash received in lieu of fractional shares of
FIC common stock), and with the other income tax consequences to them described
on page 56 of the joint proxy statement/prospectus dated April 20, 2001. On the
other hand, should the merger be followed by a sale of all or substantially all
of FIC that is deemed, for U.S. federal income tax purposes, to be "in
connection with" the merger itself, then the merger, at least in the view of the
IRS, would fail to qualify as a tax-free reorganization. In that event, ILCO
shareholders would recognize gain or loss upon their receipt of FIC common stock
in the merger and would have the other income tax consequences described on the
top of page 57 of the joint proxy statement/prospectus dated April 20, 2001.
POTENTIAL POST-MERGER SALE OF FIC
Since the date of the joint proxy statement/prospectus, FIC has received
one indication of interest that it intends to pursue through further discussions
with the third party submitting such indication of interest. However, FIC has
still not determined whether it will sell the company, and no price or material
terms on which it would agree to sell the company have been determined by the
board of directors of FIC or agreed upon with any third party.
SOLICITATION AND REVOCATION OF PROXIES
FIC Shareholders
Any FIC shareholder who has previously delivered a properly executed proxy
need NOT reexecute a proxy. A proxy, previously delivered, may, however, be
revoked by either:
- filing with the Secretary of FIC, at or before the FIC special meeting, a
written notice of revocation bearing a later date than the proxy;
- duly executing a subsequent proxy bearing a later date than the earlier
submitted proxy; or
- attending the FIC special meeting and voting in person, although
attendance at the meeting will not in and of itself constitute a
revocation of proxy.
Any written notice revoking a proxy or request for an additional proxy
should be sent to:
Financial Industries Corporation
6500 River Place Blvd., Building One
Austin, Texas 78730
Attn: Secretary
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ILCO Shareholders
Any ILCO shareholder who has previously delivered a properly executed proxy
need NOT reexecute a proxy. A proxy, previously delivered, may, however, be
revoked by either:
- filing with the Secretary of ILCO, at or before the ILCO special meeting,
a written notice of revocation bearing a later date than the proxy;
- duly executing a subsequent proxy bearing a later date than the earlier
submitted proxy; or
- attending the ILCO special meeting and voting in person, although
attendance at the meeting will not in and of itself constitute a
revocation of proxy.
Any written notice revoking a proxy or request for an additional proxy
should be sent to:
InterContinental Life Corporation
6500 River Place Blvd., Building One
Austin, Texas 78730
Attn: Secretary
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ANNEX S-1
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This First Amendment to Agreement and Plan of Merger (this "First
Amendment") is made and entered into this 7th day of May, 2001, by and among
Financial Industries Corporation, a Texas corporation ("FIC"), ILCO Acquisition
Company, a Texas corporation and wholly-owned subsidiary of FIC ("Merger Sub"),
and InterContinental Life Corporation, a Texas corporation ("ILCO").
WHEREAS, FIC, ILCO and Merger Sub entered into an Agreement and Plan of
Merger as of January 17, 2001 (the "Agreement"); and
WHEREAS, the parties hereto desire to make certain amendments to the
Agreement.
NOW THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS
The Agreement shall be amended as follows:
1.1 Section 7.2(c). Section 7.2(c) of the Agreement shall be amended by
deleting Section 7.2(c) in its entirety and replacing it with the following:
[Intentionally Omitted]
1.2 Section 7.3(c). Section 7.3(c) of the Agreement shall be amended by
deleting Section 7.3(c) in its entirety and replacing it with the following:
[Intentionally Omitted]
SECTION 2. REAFFIRMATION OF AGREEMENT
Except as expressly provided herein, the Agreement is not amended, modified
or affected by this First Amendment, and the Agreement and the obligations of
the parties hereto thereunder are hereby ratified and confirmed by the parties
in all respects.
SECTION 3. CAPITALIZED TERMS
Capitalized terms used, but not defined, in this First Amendment shall have
the meaning set forth in the Agreement.
SECTION 4. BINDING EFFECT
This First Amendment shall benefit and bind the parties and their
respective assigns, successors, and legal representatives.
SECTION 5. GOVERNING LAW
This First Amendment shall be governed by and construed in accordance with
the Laws of the State of Texas, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
SECTION 6. COUNTERPARTS
This First Amendment may be executed in multiple counterparts, each of
which shall constitute an original, but all of which shall be but one and the
same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to Agreement and Plan of Merger as of the first date written above.
FINANCIAL INDUSTRIES CORPORATION
By: /s/ ROY F. MITTE
------------------------------------
Roy F. Mitte
Chairman, President and
Chief Executive Officer
ILCO ACQUISITION COMPANY
By: /s/ ROY F. MITTE
------------------------------------
Roy F. Mitte
President
INTERCONTINENTAL LIFE CORPORATION
By: /s/ ROY F. MITTE
------------------------------------
Roy F. Mitte
Chairman, President and
Chief Executive Officer
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