SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
FINANCIAL INDUSTRIES CORPORATION
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(Name of Registrant as Specified In Its Charter)
OTTER CREEK MANAGEMENT INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY COPY, SUBJECT TO COMPLETION
DATED APRIL 8, 2003
PROXY STATEMENT
OF
OTTER CREEK MANAGEMENT INC.
IN OPPOSITION TO THE BOARD OF DIRECTORS
OF
FINANCIAL INDUSTRIES CORPORATION
----------------
2003 ANNUAL MEETING OF STOCKHOLDERS
INTRODUCTION
This Proxy Statement and the accompanying form of GOLD proxy card are
being furnished by Otter Creek Management Inc., a Delaware corporation ("Otter
Creek"), to the owners of shares of Common Stock (the "Common Stock") of
Financial Industries Corporation (the "Company") in connection with the
solicitation by Otter Creek of proxies from such stockholders to be voted at the
Company's 2003 Annual Meeting of Stockholders and at any adjournments,
postponements or rescheduling thereof (the "Annual Meeting"). The annual meeting
is scheduled to be held on May 9, 2003. Otter Creek is soliciting proxies for
use at the Annual Meeting whenever it may be held.
According to the Company's preliminary proxy statement filed with the
Securities and Exchange Commission (the "S.E.C.") on March 31, 2003, 11
individuals will be elected at the Annual Meeting to the Board of Directors of
the Company (the "Board"). However, Otter Creek is soliciting proxies from the
holders of Common Stock to amend the Company's Bylaws to fix the number of
directors constituting the entire Board of Directors at eight and to elect the
eight individuals named below under the heading "ELECTION OF DIRECTORS--Otter
Creek Nominees" as the directors at the Annual Meeting (the "Otter Creek
Nominees"). Otter Creek intends to nominate the Otter Creek Nominees for
election at the Annual Meeting and to vote for such nominees. The Otter Creek
Nominees are all independent nominees who would be qualified to serve on the
Board's Audit Committee if elected.
This Proxy Statement and the accompanying form of GOLD proxy card are
first being sent or given to holders of Common Stock on April ___, 2003.
The Company's principal place of business is located at 6500 River
Place Blvd., Building One, Austin, Texas 78730.
The solicitation is being made by Otter Creek and not on behalf of the
Board.
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YOU MAY ALREADY HAVE RECEIVED, OR WILL SOON RECEIVE, A PROXY CARD FROM THE
COMPANY. PLEASE RETURN ONLY OTTER CREEK'S GOLD PROXY CARD AND DO NOT RETURN ANY
COMPANY PROXY CARD UNDER ANY CIRCUMSTANCES. IF YOU RETURN BOTH PROXY CARDS THERE
IS A DANGER THAT YOUR SHARES WILL NOT BE VOTED AS YOU DESIRE BECAUSE ONLY THE
LATEST DATED PROXY CARD YOU SUBMIT COUNTS.
Information About Otter Creek
Otter Creek is an investment advisory firm that manages three investment
funds: Otter Creek Partners I, L.P., a Delaware limited partnership; Otter Creek
International Ltd., a British Virgin Islands investment corporation; and HHMI
XIII LLC, a Delaware limited liability company. The three funds have investment
securities valued at approximately $300,000,000. R. Keith Long, Otter Creek's
sole stock-holder, serves as its president. Joseph W. O'Neill Jr. serves as its
chief financial officer. Otter Creek employs three other persons, all full-time.
Otter Creek became a stockholder of the Company in 2001. The principal business
address of Otter Creek is 400 Royal Palm Way #212, Palm Beach, Florida 33480 and
its telephone number is (561) 832-4110.
As of the date of this Proxy Statement, Otter Creek is the beneficial
owner of 349,528 shares of Common Stock, all of which are owned of record by
Otter Creek, which constitute approximately 3.7% of the outstanding Common Stock
based on the Company's preliminary proxy statement filed with the S.E.C. on
March 31, 2003.
Otter Creek has become dissatisfied with the Company's performance and
plans and is concerned about preserving the value of its significant investment
in the Company. [INSERT SUMMARIES OF 2002 RESULTS] See "BACKGROUND OF OTTER
CREEK'S INTEREST IN THE COMPANY AND REASONS FOR THE SOLICITATION" below.
Otter Creek believes that actions taken by the Board and management over
the course of the last two years have been designed to entrench and enrich
management at the expense and to the detriment of all of the Company's
stockholders.
Accordingly, Otter Creek is proposing the Otter Creek Nominees for
election to the Board in opposition to the slate proposed by the Board. Otter
Creek and the Otter Creek Nominees are committed to promoting business
objectives, goals and values that are in the best interest of all of the
Company's stockholders and following a program that will return value to all of
the Company's stockholders. See "BACKGROUND OF OTTER CREEK'S INTEREST IN THE
COMPANY AND REASONS FOR THE SOLICITATION--Program for Enhancing Stockholder
Value".
Otter Creek is not subject to the informational filing requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and,
accordingly is not required to file periodic reports, proxy statements and other
information with the S.E.C. relating to its business, financial condition and
other matters.
IMPORTANT
OTTER CREEK STRONGLY RECOMMENDS THAT YOU VOTE FOR THE OTTER CREEK NOMINEES
AND TO AMEND THE COMPANY'S BYLAWS TO FIX THE NUMBER OF DIRECTORS AT EIGHT BY
MARKING, SIGNING, DATING AND MAILING THE ENCLOSED GOLD PROXY CARD PROMPTLY IN
THE ENVELOPE PROVIDED.
HOLDERS OF RECORD OF SHARES OF COMMON STOCK AS OF MARCH 18, 2003, THE
RECORD DATE ESTABLISHED BY THE COMPANY FOR VOTING AT THE ANNUAL MEETING, ARE
URGED TO SUBMIT A GOLD PROXY CARD EVEN IF YOUR SHARES HAVE BEEN SOLD AFTER THE
RECORD DATE.
IF YOU HAVE PURCHASED SHARES OF COMMON STOCK AFTER THE RECORD DATE AND
WISH TO VOTE SUCH SHARES AT THE ANNUAL MEETING, YOU SHOULD SEEK TO OBTAIN A
PROXY FROM THE SELLER OF SUCH SHARES.
IF YOUR SHARES OF COMMON STOCK ARE HELD IN THE NAME OF A BROKERAGE FIRM,
BANK OR NOMINEE ON THE RECORD DATE, ONLY IT CAN VOTE YOUR SHARES AND ONLY UPON
RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. PLEASE CONTACT THE PERSON RESPONSIBLE FOR
YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR YOUR SHARES TO BE VOTED ON THE GOLD PROXY
CARD.
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QUESTIONS CONCERNING THIS PROXY STATEMENT OR THE ACCOMPANYING GOLD
PROXY CARD SHOULD BE DIRECTED TO:
MELLON INVESTOR SERVICES
LLC 44 Wall
Street
New York, NY
10005
[INSERT PHONE NUMBER]
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VOTING
The information contained in the following paragraphs is based on
publicly-available copies of the Company's Articles of Incorporation, as amended
(the "Articles of Incorporation"), and Bylaws, as amended (the "Bylaws"), and on
information contained in the Company's preliminary proxy statement filed on
March 18, 2003 with the S.E.C.:
The Board has fixed March 18, 2003 as the record date for the
determination of the holders of capital stock of the Company entitled to notice
of and to vote at the Annual Meeting. As of March 18, 2003, there were 9,625,630
shares of Common Stock outstanding.
The attendance at the Annual Meeting, in person or by proxy, of the
holders of shares representing a majority of the aggregate votes entitled to be
cast by the record holders of all outstanding shares of Common Stock is
necessary to constitute a quorum. Votes to "withhold authority", abstentions and
"broker non-votes" with respect to any matter to be voted on at the Annual
Meeting will not be voted but will be counted as present to determine whether
there is a quorum for purposes of voting on such matter at the Annual Meeting.
With respect to the election of directors, the affirmative vote of the
holders of shares representing a plurality of the aggregate votes cast at the
Annual Meeting in respect of the election of directors is required for their
election. Because the election of directors will be determined by votes cast
rather than by a percentage of the shares present, votes to "withhold authority"
and "broker non-votes" will not affect the election of directors. If any other
matter properly comes before the Annual Meeting, its resolution will be
determined by the affirmative vote of the holders of shares of Common Stock
representing a majority of votes cast at the Annual Meeting with respect to such
matter, unless a higher vote is required under applicable state law such as
described in the next paragraph. Accordingly, abstentions will have the effect
of a negative vote on any such matter, but "broker non-votes" will not be voted
and will have no effect in determining whether such matter has received
sufficient votes for approval.
With respect to amending the Bylaws to fix the number of directors at
eight, the affirmative vote of the holders of a majority of shares is required
to amend the Bylaws. Accordingly, abstentions and "broker non-votes" will have
the effect of a negative vote on such matter. Reducing the size of the Board
would ensure that if the Otter Creek Nominees are elected as directors they will
constitute the entire Board of Directors.
If the enclosed form of GOLD proxy card is executed and returned, it may
nevertheless be revoked by the person giving it any time before the vote at the
Annual Meeting either by filing with the Secretary of the Company a written
notice of revocation or a proxy card bearing a later date than the most recently
submitted proxy card or by attending the Annual Meeting and voting in person.
The execution of a proxy card will not affect a stockholder's right to attend
the Annual Meeting and vote in person, but attendance at the Annual Meeting will
not, by itself, revoke a proxy.
IF YOU, AS A HOLDER OF COMMON STOCK, WISH TO VOTE FOR THE OTTER CREEK
NOMINEES, YOU MUST SUBMIT THE ENCLOSED GOLD PROXY CARD AND SHOULD NOT SUBMIT THE
COMPANY'S PROXY CARD.
Unless contrary instructions are indicated on the enclosed GOLD proxy
card, all shares of Common Stock represented by valid GOLD proxy cards received
pursuant to this solicitation (which have not been revoked as described above)
will be voted FOR the election of the Otter Creek Nominees and FOR the reduction
of the size of the Board and at the discretion of the proxy holder(s) on such
other business as may properly come before the Annual Meeting.
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YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT.
PLEASE SIGN AND DATE THE ENCLOSED GOLD PROXY CARD AND RETURN IT IN
THE ENCLOSED ENVELOPE PROMPTLY.
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ELECTION OF DIRECTORS; BYLAWS AMENDMENT
General
The Bylaws provide that the Board shall consist of not less than three nor
more than 25 directors, with the exact number to be fixed by resolution of the
Board. Otter Creek is asking the stockholders of the Company to approve the
reduction of the size of the Board from 11 to eight and to elect the eight Otter
Creek Nominees. According to the Company's preliminary proxy statement filed
with the S.E.C. on March 31, 2003, 11 persons will be elected at the Annual
Meeting to serve as directors on the Board for a term of one year and until
their successors are duly elected and qualified or until their earlier
resignation or removal.
Otter Creek Nominees
At the Annual Meeting, Otter Creek will nominate the Otter Creek Nominees
for election as directors. The information below concerning age and principal
occupation of the Otter Creek Nominees has been furnished by the respective
nominees. Except as described in this Proxy Statement, none of the Otter Creek
Nominees beneficially owns any Common Stock. Each has agreed that if elected he
shall acquire shares of the Company's Common Stock in open-market transactions.
OTTER CREEK NOMINEES
Name Age Principal Occupation
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J. Bruce Boisture 53 Mr. Boisture serves as president of Trinity Capital Alliance Inc., an investment banking
company he founded in 1992, specializing in leveraged buy-outs, start-up investments,
turnarounds and venture capital financings. From 1986 through 1991 he was a partner and
chief operating officer of Rosecliff Inc./Acadia Partners L.P., a $1.7 billion
investment fund. Mr. Boisture has a bachelors degree from Princeton University, a
bachelors in philosophy degree from Oxford University and a law degree from Yale Law
School.
Wilson C. Cooney 67 Mr. Cooney is the founder and chairman of Forces Group Ltd., an insurance and financial
services company serving the U.K. military and their families. He served in various
senior executive positions at USAA's Property and Casualty Group from 1985 through 1999,
a division with 16,000 employees and $5 billion in revenues. Before that he served 31
years in the U.S. Air Force.
Salvador Diaz-Verson Jr. 51 Since 1991 Mr. Diaz-Verson has served as chairman and president of Diaz-Verson Capital
Investment LLC. From 1979 through 1991 he served as president and chief investment
officer of American Family Life Assurance Co., a New York Stock Exchange company. A
native of Cuba, Mr. Diaz-Verson has a bachelors degree from Florida State University.
Patrick E. Falconio 61 From 1988 through his retirement in 1999 Mr. Falconio served as executive vice president
and chief investment officer of Aegon USA Inc. Prior to that he worked at Life Investors
Insurance Co., Lincoln National Life Insurance Co. and Prudential Insurance Co. He has a
bachelors degree from Duquesne University and an MBA from the University of Georgia.
Richard H. Gudeman 65 Mr. Gudeman served as executive vice president at SunGard Insurance Systems Inc., and as
an actuary at Country Life Insurance Co., Washington National Insurance Co., State Farm
Life Insurance Co. and Federal Life Insurance Co. over the last 30 years. He has a
bachelors degree from Illinois State University and a masters degree from Northeastern
University.
Steven A. Haxton 45 A certified public accountant, Mr. Haxton is the principal in Haxton Advisors, a
consulting firm. Previously he was an executive vice president at ING, president of
Aetna Financial Services' Financial Intermediary Group, senior vice president of Aetna
Investment Services and president of Nationwide Distributors Inc. He has a bachelors
degree from Malone College.
R. Keith Long 55 Mr. Long has served as president of Otter Creek Management Inc. since founding it in
1991. From 1983 through 1991 he worked at Morgan Stanley in long bond cash/futures
arbitrage. As chairman of the board of Financial Institutions Insurance Group he oversaw
its sale in a leveraged buy-out in 1996. Mr. Long has bachelors and MBA degrees from
Indiana University.
Lonnie L. Steffen 53 Since 1997 Mr. Steffen has served as president and chief financial officer of Dearborn
Risk Management. From 1991 through 1997 he served as chief financial officer of
Financial Institutions Insurance Group. From 1986 through 1991 he served as chief
financial officer of First Reinsurance Co. of Hartford. A certified public accountant,
Mr. Steffen has a bachelors degree from Northern Illinois University.
None of the corporations or organizations mentioned above is a parent,
subsidiary or other affiliate of the Company.
Each of the Otter Creek Nominees has agreed to be named in this Proxy
Statement and to serve as a director of the Company, if elected. Otter Creek
does not expect that any of the Otter Creek Nominees will be unable to stand for
election or serve as a director, but if any vacancy in the slate of the Otter
Creek Nominees occurs for any reason (including if the Company makes or
announces any changes to the Bylaws or takes or announces any other action that
has, or if consummated would have, the effect of disqualifying any or all of the
Otter Creek Nominees, the shares represented by GOLD proxy cards received by
Otter Creek and not properly revoked will be voted for the substitute candidate
nominated by Otter Creek in compliance with the rules of the S.E.C. and any
other applicable law and, if applicable, the Bylaws.
If the size of the Board of Directors is not reduced to eight, then the
Board would consist of 11 directors while Otter Creek has nominated eight
individuals. Under that circumstance, the Otter Creek Nominees, if elected,
would constitute eight of 11 directors on the Board. Otter Creek therefore urges
you to vote not only FOR the Otter Creek Nominees but also FOR the proposal to
reduce the size of the Board.
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OTTER CREEK RECOMMENDS THAT HOLDERS OF SHARES OF COMMON STOCK VOTE IN FAVOR OF
THE OTTER CREEK NOMINEES FOR DIRECTORS AND THE REDUCTION OF THE SIZE OF THE
BOARD AND NOT VOTE IN FAVOR OF ANY OF THE BOARD'S NOMINEES FOR DIRECTORS.
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BACKGROUND OF OTTER CREEK'S INTEREST IN THE COMPANY
AND REASONS FOR THE SOLICITATION
General
Otter Creek is the beneficial owner of 349,528 shares of Common Stock, all
of which are owned of record by Otter Creek, which constitute approximately 3.7%
of the Company's outstanding Common Stock based on the Company's preliminary
proxy statement filed with the S.E.C. on March 31, 2003. For a description of
recent transactions in Company securities by Otter Creek, please refer to the
section entitled "INFORMATION CONCERNING PERSONS WHO MAY SOLICIT
PROXIES--Participant Ownership of and Transactions in Company Securities".
Stock Investment
Otter Creek purchased 349,528 shares of Common Stock in 2001, 2002 and
2003 in open market transactions.
Recent Board Actions to Entrench Management
On December 11, 2002 the Company announced that it had received an
unsolicited letter from Pillar Foundation Group of Austin, Texas expressing
interest in the possible acquisition by Pillar of "all or a part" of the
Company's shares of Common Stock for between $13 and $18 per share. Because the
Company believed the letter contained misleading and inaccurate statements, it
recommended that Company stockholders who had received copies of the letter
refer to the Company's S.E.C. filings for more accurate information concerning
the Company.
On January 22, 2003 a group of Company shareholders led by The Roy
F. and Joann Cole Mitte Foundation requested that the Company call a special
meeting of the Company's shareholders to remove the Company's directors and
replace them with independent directors.
On January 27, 2003 the Company announced that it had engaged
Salomon Smith Barney to explore strategic alternatives for the Company,
including consideration of the Pillar proposal, among other options.
On February 13, 2003 the Company and the Mitte Foundation agreed
that the annual meeting of the Company's shareholders would take place the week
of May 5, 2003 and that the Company would give the Mitte Foundation advance
notice of the Company's director nominees.
On March 2, 2003, the Company announced that it would not put itself
up for sale. The Board of Directors voted 10-1 to implement the business plans
of the Company's management over any other strategic alternative.
On March 18, 2003 Otter Creek and several other Company shareholders
requested that the Company call a special meeting of the Company's shareholders
to remove the Company's directors and replace them with independent directors.
The Company denied the request on March 20, 2003.
On March 27, 2003 the Mitte Foundation filed a preliminary proxy
statement with the S.E.C. seeking to elect a slate of directors that will
consider selling the Company. Only William J. Renfro was named as a director
nominee.
Otter Creek considers these recent actions of the Company's Board of
Directors to be against the best interests of the Company's stockholders but
rather only in the best interests of the Company's management. Furthermore,
Otter Creek cannot comprehend how a four-week investigation caused Salomon Smith
Barney to recommend against the sale of the Company as a viable option for
maximizing stockholder value. The Company's refusal to consider seeking a buyer
has prompted Otter Creek to seek a change in Company management.
Program for Enhancing Stockholder Value
In light of the Company's disappointing financial performance and the
Board's unwillingness to consider a sale or merger, which Otter Creek believes
has been adopted in order to entrench the Company's directors and executive
management, Otter Creek believes that the interests of all stockholders will be
better served if the Otter Creek Nominees are elected at the Annual Meeting. If
the Otter Creek Nominees are elected at the Annual Meeting, they are committed
to exploring a sale of the Company. The Company's stockholders will be kept
apprised of the progress of the sale process.
INFORMATION CONCERNING PERSONS WHO MAY SOLICIT PROXIES
Information Concerning Participants
Under the applicable regulations of the S.E.C., Otter Creek and each of
the Otter Creek Nominees is deemed to be a "participant" in Otter Creek's
solicitation of proxies. The following table(1) sets forth the name, business
address and principal occupation of the Otter Creek Nominees and any other
employee of Otter Creek who may solicit proxies from stockholders of the Company
on behalf of Otter Creek ("Otter Creek Participants").
J. Bruce Boisture investment banker, Trinity Capital
49 High Street Alliance Inc.
Farmington, CT 06032
Wilson C. Cooney insurance and financial services
Grand Coteau executive, Forces Group Ltd.
Fair Oaks Ranch, TX 78015
Salvador Diaz-Verson Jr. chairman and president, Diaz-Verson
Diaz-Verson Ventures LLC Capital Investment LLC
260 Brookstone Centre Parkway
Columbus, GA 31904
Patrick E. Falconio retired
2 Symon's Lane
Savannah, GA 31904
Richard H. Gudeman actuary, SunGard Insurance Systems Inc.
2101 Oakwood Ave.
Bloomington, IL 61704
Steven A. Haxton financial consultant, Haxton Advisors
4 Cobtail Way
Simsbury, CT 06070
R. Keith Long president, Otter Creek Management Inc.
Otter Creek Management Inc.
400 Royal Palm Way #212
Palm Beach, FL 33480
Joseph W. O'Neill Jr. chief financial officer, Otter Creek
Otter Creek Management Inc. Management Inc.
400 Royal Palm Way #212
Palm Beach, FL 33480
Lonnie L. Steffen president and chief financial officer,
65 Deer Run Dearborn Risk Management
Avon, CT 06001
(1) The companies named in the table above, to the extent that the
participants are officers of such companies, are deemed to be associates
of such participants.
In connection with the engagement of Mellon Investor Services LLC by Otter
Creek as its proxy solicitor in connection with the election of the Otter Creek
Nominees at the Annual Meeting (see "COST AND METHOD OF SOLICITATION"), Otter
Creek anticipates that certain employees of Mellon may communicate in person, by
telephone or otherwise with a limited number of institutions, brokers or other
persons who are stockholders of the Company for the purpose of assisting in the
solicitation of proxies for the Annual Meeting (collectively, "Participants").
Neither Mellon nor any of its employees will receive any fee for or in
connection with such solicitation activities apart from the fees which it may
otherwise be entitled to receive as described under "COST AND METHOD OF
SOLICITATION".
Participant Ownership of and Transactions in Company Securities
Other than as disclosed in this Proxy Statement, neither Otter Creek nor,
to the knowledge of Otter Creek, any of the Participants nor, with respect to
clause (3), any of their respective associates: (1) owns beneficially, directly
or indirectly, or of record but not beneficially, any securities of the Company;
(2) owns beneficially, directly or indirectly, or of record but not
beneficially, any securities of any parent or subsidiary of the Company; or (3)
is, or was since January 1, 2002, a party to any contract, arrangement or
understanding with any person with respect to any securities of the Company,
including, but not limited to, joint ventures, loan or option arrangements, puts
or calls, guarantees against loss or guarantees of profit, division of losses or
profits, or the giving or withholding of proxies. The Otter Creek Participants
disclaim beneficial ownership of any securities of the Company owned by Otter
Creek, and this Proxy Statement shall not be deemed an admission that any Otter
Creek Participant is the beneficial owner of such securities for any purpose.
The following is a summary of all transactions in Company securities by
Otter Creek over the last two years. Except as otherwise indicated under
"ELECTION OF DIRECTORS", to the knowledge of Otter Creek, none of the other
Participants has purchased or sold any Company securities within the past two
years.
Amount of
Common Stock
Date of Purchased
Transaction (or Sold*) Unit Price Trade Amount
----------- ---------- ---------- ------------
OTTER CREEK
PARTNERS I, L.P.
05-30-01 5000 $11.9030 $59,515.00
09-19-01 2000 $13.3825 $26,765.00
09-20-01 5500 $13.1627 $72,395.00
03-04-02 8000 $13.7519 $110,015.00
04-10-02 4800 $14.0500 $67,455.00
04-12-02 6800 $13.9800 $95,079.00
05-03-02 400 $13.9500 $55,815.00
07-23-02 2000 $14.6000 $29,215.00
08-26-02 2000 $16.0000 $32,015.00
08-27-02 4000 $15.9000 $63,615.00
09-19-02 1100 $14.8458 $16,356.38
12-11-02 400 $14.3700 $5,767.00
12-17-02 2000 $13.8100 $27,655.00
12-20-02 1000 $13.9663 $13,991.30
12-23-02 1000 $14.2000 $14,220.00
12-31-02 400 $14.2000 $5,702.80
01-02-03 5000 $14.2500 $71,055.00
01-08-03 5300 $14.2850 $75,540.00
01-13-03 200 $14.2850 $2,878.40
01-22-03 4000 $14.5148 $58,114.20
01-22-03 2300 $14.5148 $33,422.04
01-23-03 4000 $14.6463 $58,600.00
01-27-03 200 $15.2500 $3,071.40
01-28-03 400 $15.1900 $6,095.00
01-31-03 600 $15.2000 $9,141.00
02-05-03 22000 $15.5600 $342,335.00
02-11-03 250 $14.8227 $3,723.18
03-06-03 500 $14.4734 $7,256.70
03-07-03 1900 $14.7466 $28,051.84
03-10-03 3600 $14.8100 $53,331.00
03-11-03 7000 $14.8500 $103,965.00
03-31-03 700 $14.6535 $10,279.45
OTTER CREEK
INTERNATIONAL
05-30-01 5000 $11.9030 $59,515.00
09-18-01 2000 $13.6075 $27,215.00
09-19-01 2000 $13.3825 $26,765.00
09-20-01 8500 $13.1618 $111,875.00
03-04-02 12000 $13.7513 $165,015.00
03-25-02 11500 $13.7813 $158,485.00
04-10-02 9200 $14.0500 $129,275.00
04-12-02 13200 $13.9800 $184,551.00
05-03-02 7000 $13.9500 $97,665.00
07-23-02 3000 $14.6000 $43,815.00
08-26-02 2000 $16.0000 $32,015.00
08-27-02 6000 $16.0000 $95,415.00
09-09-02 200 $15.9000 $2,971.40
09-19-02 2000 $14.7500 $29,726.60
09-20-02 5000 $14.8458 $74,055.00
12-11-02 600 $14.8000 $8,643.00
12-17-02 4100 $14.3700 $56,677.00
12-20-02 1400 $13.8100 $19,596.82
12-20-02 500 $13.9877 $7,070.00
12-23-02 2000 $14.1000 $28,440.00
01-02-03 5900 $14.2000 $83,841.30
01-08-03 8700 $14.2500 $123,990.00
01-15-03 266 $14.2500 $3,812.36
01-22-03 7000 $14.5148 $101,688.60
01-22-03 3400 $14.5148 $49,399.32
01-23-03 6000 $14.6500 $87,900.00
01-28-03 800 $15.1900 $12,160.00
01-29-03 1800 $15.0100 $27,050.60
01-31-03 500 $15.1700 $7,608.50
01-31-03 900 $15.2000 $13,704.00
02-04-03 100 $15.0600 $1,526.70
02-05-03 51000 $15.5600 $793,575.00
02-11-03 450 $14.8227 $6,689.71
03-06-03 900 $14.4734 $13,050.06
03-07-03 8100 $14.7466 $119,524.16
03-10-03 6400 $14.8100 $94,799.00
03-11-03 13000 $14.8500 $193,065.00
03-31-03 1300 $14.6535 $19,077.55
*07-01-02 5000 $17.6500 $88,236.63
*07-01-02 2000 $17.6500 $35,294.65
*07-02-02 2000 $17.3500 $34,695.95
*07-02-02 8000 $17.3500 $138,783.82
HHMI XIII LLC
04-03-02 16000 $13.9500 $223,215.00
05-02-02 5000 $13.9000 $69,500.00
09-19-02 1000 $14.6500 $14,650.00
01-03-02 7062 $14.2059 $100,391.50
01-22-03 3000 $14.5148 $43,574.40
01-30-03 5000 $15.1500 $75,750.00
02-05-03 7800 $15.5000 $120,974.60
Information Regarding the Relationship between the Participants and Otter Creek
Certain of the Participants are employees of Otter Creek (the "Participant
Employees"), and they may be deemed to have an interest in the outcome of the
election of directors of the Company at the Annual Meeting by virtue of their
ownership of Otter Creek securities and employment arrangements with Otter
Creek. Consequently, set forth below is information concerning the ownership of
Otter Creek securities by the Participant Employees and their compensation
arrangements as employees of Otter Creek. However, Otter Creek does not have any
specific arrangements with the Participant Employees that will result in any
additional compensation if the Otter Creek Nominees are elected as directors to
the Board at the Annual Meeting or relating to any future transactions between
Otter Creek and the Company.
Set forth below are the number of shares of common stock of Otter Creek
beneficially owned by the Participant Employees within the meaning of S.E.C.
Rule 13d-3:
Issued Shares Exercisable Stock Total Beneficial
Name of Beneficial Owner Beneficially Owned Options Ownership Percentage
- ------------------------ ------------------ ----------------- ---------------- ----------
R. Keith Long 200 0 200 100%
Joseph W. O'Neill Jr. 0 0 0 0%
COST AND METHOD OF SOLICITATION
Otter Creek will bear the cost of this solicitation and will not seek
reimbursement for such costs unless the Otter Creek Nominees win election as
directors. While no precise estimate of this cost can be made at the present
time, Otter Creek currently estimates that it will spend a total of
approximately $100,000 for its solicitation of proxies, including expenditures
for attorneys, solicitors and advertising, financial advisors, printing,
transportation and related expenses but excluding the salaries and wages of
regular employees and officers. As of April 8, 2003, Otter Creek has incurred
proxy solicitation expenses of approximately $15,000. In addition to soliciting
proxies by mail, proxies may be solicited in person or by telephone or telecopy
or through advertisements. Information regarding certain employees of Otter
Creek and other representatives of Otter Creek who may solicit or participate in
the solicitation of proxies is set forth under "INFORMATION CONCERNING PERSONS
WHO MAY SOLICIT PROXIES".
Otter Creek will also reimburse brokers, fiduciaries, custodians and other
nominees, as well as persons holding stock for others who have the right to give
voting instructions, for out-of-pocket expenses incurred in forwarding this
Proxy Statement and related materials to, and obtaining instructions or
authorizations relating to such materials from, beneficial owners of Common
Stock. Otter Creek will pay for the cost of these solicitations, but these
individuals will receive no additional compensation for these solicitation
services.
Otter Creek has retained the proxy solicitation firm of Mellon Investor
Services LLC in connection with the solicitation of proxies for the Annual
Meeting. Mellon will be paid a fee of up to $50,000 for its services. Otter
Creek also has agreed to reimburse Mellon for its expenses, and to indemnify
Mellon against certain liabilities and claims incurred in connection with its
performance of services pursuant to its engagement by Otter Creek.
ADDITIONAL INFORMATION
Certain information regarding beneficial ownership of shares of Common
Stock held by the Company's directors, nominees, management and 5% stockholders
is contained in the Company's proxy statement furnished to stockholders in
connection with the Annual Meeting under the heading "STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT", and is incorporated herein by reference.
Information concerning the date by which proposals of stockholders intended to
be presented at the 2004 annual meeting of stockholders of the Company must be
received by the Company for inclusion in the Company's proxy statement and form
of proxy for that meeting is also contained in the Company's proxy statement
furnished to stockholders in connection with the Annual Meeting under the
heading "ADDITIONAL INFORMATION", and is incorporated herein by reference.
Certain of the information contained in this Proxy Statement is based on,
or incorporated by reference to, publicly available information filed by the
Company with the S.E.C. Although Otter Creek does not have any information that
would indicate that any information contained in this Proxy Statement that has
been taken from such documents is inaccurate or incomplete, Otter Creek does not
take any responsibility for the accuracy or completeness of such information.
Otter Creek is not aware of any other substantive matters to be considered
at the Annual Meeting, however, if any other matter should properly come before
the Annual Meeting, Otter Creek will vote all proxies held by it in accordance
with its best judgment and consistent with the federal proxy rules.
OTTER CREEK MANAGEMENT INC.
April 8, 2003
By:
----------------------------
R. Keith Long, President
- --------------------------------------------------------------------------------
IMPORTANT
1. Your proxy is important no matter how many shares of Common Stock you own.
Be sure to vote on the GOLD proxy card. Otter Creek urges you NOT to sign
any WHITE proxy card or other proxy card which is sent to you by the
Company or any other party.
2. If you have already submitted a proxy card to the Company for the Annual
Meeting, you may change your vote to a vote "FOR" the election of the
Otter Creek Nominees and reduction of the size of the Board and "Against"
the Company's slate by signing, dating and returning Otter Creek's GOLD
proxy card, which must be dated after any proxy card you may previously
have submitted to the Company. Only your last dated proxy card for the
Annual Meeting will count at the Annual Meeting.
3. If any of your shares are held in the name of a bank, broker or other
nominee, please contact the person responsible for your account and direct
him or her to vote on the GOLD proxy card "FOR" election of the Otter
Creek Nominees and reduction of the size of the Board.
4. If you hold your shares in more than one type of account or your shares
are registered differently, you may receive more than one GOLD proxy card.
We encourage you to vote each GOLD proxy card that you receive.
5. If you have any questions or need assistance in voting your shares, please
contact our proxy solicitors, Mellon Investor Services LLC, at the number
set forth below:
MELLON INVESTOR SERVICES LLC
44 Wall Street
New York, NY 10005
[INSERT PHONE NUMBER]
PRELIMINARY COPY, SUBJECT TO COMPLETION
DATED APRIL 8, 2003
FINANCIAL INDUSTRIES CORPORATION
COMMON STOCK PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
OTTER CREEK MANAGEMENT INC.
The undersigned hereby appoints R. Keith Long and/or Ronald E. Powell (of
Mellon Investor Services LLC) as proxy for the undersigned with full power of
substitution to vote all shares of common stock of Financial Industries
Corporation (the "Company") which the undersigned is entitled to vote at the
Company's 2003 Annual Meeting of Stockholders, and any postponements or
adjournments thereof (the "Meeting"), hereby revoking all prior proxies, on the
matters set forth below as follows:
1. Election of Directors Nominees: J. Bruce Boisture
Wilson C. Cooney
Salvador Diaz-Verson
Patrick E. Falconio
Richard H. Gudeman
Steven A. Haxton
R. Keith Long
Lonnie L. Steffen
FOR all the nominees listed above WITHHOLD AUTHORITY to vote for all
the nominees listed above
|_| |_|
INSTRUCTION: To withhold authority to vote for any individual nominee or
nominees, write that nominee's name in the space provided below:
2. Reduce Size of Board to Eight Directors
FOR AGAINST ABSTAIN
|_| |_| |_|
3. In the discretion of the proxy holders, on any other matters that may
properly come before the Meeting.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS SPECIFIED.
IF A CHOICE IS NOT SPECIFIED, THE PROXY WILL BE VOTED
"FOR" THE NOMINEES LISTED ABOVE AND "FOR" A REDUCTION IN THE SIZE OF THE BOARD.
- --------------------------------------------------------------------------------
Please sign exactly as your name appears hereon. When shares are held by
two or more persons, all of them should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by an authorized officer. If a
partnership, please sign in partnership name by the authorized person.
Date _____________________________ _________________________________
(SIGNATURE)
_________________________________
(SIGNATURE IF HELD JOINTLY)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD USING THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------