Financial Industries Corporation
Austin Centre, 701 Brazos Street
Austin, Texas 78701
October 21, 1996
Dear Stockholder:
You are invited to attend a Special Meeting of Stockholders of
Financial Industries Corporation, which will be held on Tuesday,
November 12, 1996, at 10:00 a.m. local time, at the offices of
the Company at 701 Brazos Street, Austin, Texas 78701. Please
give the enclosed Proxy Statement your careful attention. It is
important that your shares of Common Stock be represented and
voted at the Special Meeting, regardless of the size of your
holdings. For those of you who cannot be present at this
meeting, we urge that you participate by indicating your choice
on the enclosed proxy and completing and returning it to us in
the enclosed postage paid envelope at your earliest convenience.
By returning your proxy promptly, you will assist us in reducing
the company's expenses relating to the meeting, You can revoke
your signed proxy at any time before it is used at the Special
Meeting.
Sincerely,
Roy F. Mitte
Chairman, President and Chief Executive Officer
Financial Industries Corporation
Notice of Special Meeting of Stockholders
November 12, 1996
A Special Meeting of Stockholders of Financial Industries
Corporation will be held at the offices of the Company, 701
Brazos Street, Austin, Texas on Tuesday, November 12, 1996, at
10:00 a.m., for the following purpose:
1. To approve an amendment to the Company's Articles of
Incorporation, as amended, to increase the number of
authorized shares of Company's Common Stock and to
decrease the par value of the Common Stock.
The Board of Directors of the Company has fixed October 14, 1996,
as the record date for the determination of stockholders entitled
to vote at the meeting.
If you will be unable to attend the meeting, kindly mark, sign,
date and return the enclosed proxy. A postage prepaid envelope
is enclosed for you use. A prompt response is helpful and your
cooperation is appreciated.
The Proxy Statement accompanies this notice.
October 21, 1996
By Order of the Board of Directors
James M. Grace
Secretary
Financial Industries Corporation
701 Brazos Street
Austin, Texas 78701
The Annual Report to Stockholders for the year 1995, including
financial statements, was mailed to stockholders on or about
April 19, 1996.
PROXY STATEMENT
This Proxy Statement and enclosed form of proxy are being
furnished on or about October 21, 1996, in connection with a
solicitation of proxies by the Board of Directors (the "Board of
Directors") of Financial Industries Corporation (the "Company")
to be used at a Special Meeting of stockholders of the Company
(the "Meeting") to be held on November 12, 1996, at 10:00 a.m.,
local time, at the offices of the Company at 701 Brazos Street,
Austin, Texas 78701.
Voting Procedure
Stockholders of record at the close of business on October 14,
1996 will be entitled to vote at the Meeting. On the record
date, there were 1,085,593 shares of Common Stock outstanding,
and each such share will be entitled to one vote at the Meeting.
The By-Laws of the Company provide that the holders of a majority
of the shares of the Common Stock of the Company, issued and
outstanding and entitled to vote at the Meeting, present in
person or represented by proxy, shall constitute a quorum at the
Meeting.
Votes cast at the Meeting will be counted by the person appointed
by the Company to act as inspector of election at the Meeting.
The inspector of election will treat shares of Common Stock
represented by a properly executed proxy as present at the
Meeting for purposes of determining a quorum. Proxies marked
"abstain" or "against" will be counted as shares present for
purposes of determining a quorum.
The proposal to amend the Articles of Incorporation, as amended
to increase the number of authorized shares of Common Stock and
to reduce the par value of the Common Stock of the Company (the
"Proposal") requires the affirmative vote of a majority of the
outstanding shares of Common Stock; therefore, with respect to
the Proposal, abstention and broker non-votes will have the same
effect as votes against the Proposal.
Proxies in the enclosed form are solicited by the Board of
Directors of the Company to provide an opportunity to each
stockholder to vote on the Proposal, whether or not he or she
attends the Meeting in person. If proxies in the enclosed form
are properly executed and returned, the shares represented
thereby will be voted at the meeting in accordance with the
directions of the stockholder. Any stockholder executing a proxy
may revoke that proxy or submit a revised proxy at any time
before it is voted at the Meeting. A stockholder may also attend
the Meeting in person and vote by ballot, thereby cancelling any
proxy previously given.
Proxy Solicitation
The cost of soliciting proxies will be borne by the Company. In
addition to solicitations by mail, arrangements have been made
for brokers and nominees to send proxy material to their
principals, and the Company will reimburse such brokers and
nominees for their reasonable expenses in doing so. Certain
employees of the Company, who will receive no compensation other
than their regular remuneration, may also solicit proxies by
telephone, telegram, telex, telecopy or personal interview.
PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK AND TO REDUCE THE PAR VALUE
OF THE COMMON STOCK
There will be submitted to the Special Meeting a proposal (i) to
amend the first paragraph of Article IV of the Company's Articles
of Incorporation, as amended, in order to increase the number of
shares of Common Stock which the Company is authorized to issue
from 3,304,200 to 10,000,000 and (ii) to reduce the par value of
the Common Stock from $1.00 to $0.20. The text of the first
paragraph of Article IV as it will read if the Proposal is
adopted is set forth in Exhibit A hereto.
Adoption of this proposal to amend the Articles of Incorporation
requires the affirmative vote of the holders of a majority of the
outstanding shares of the Company's Common Stock.
The purpose of the increase in authorized shares is to provide a
sufficient number of shares of Common Stock for implementation of
the five-for-one stock split unanimously approved by the Board of
Directors at its meeting on September 27, 1996 (the "Stock
Split') and to provide for potential future corporate
requirements. The approval by the Board of Directors of the
Stock Split is subject to approval by the stockholders of the
amendment of the Articles of Incorporation at the Special
Meeting. If the proposed amendment of the Articles of
Incorporation is approved at the Special Meeting, the date of
distribution of the new certificates representing the additional
shares of Common Stock would be November 19, 1996. The record
date established by the Board of Directors with respect to the
Stock Split is November 12, 1996. Following the effective date
of the Stock Split, the number of outstanding shares would
increase to 5,427,965. Certificates representing shares of the
Common Stock of the Company prior to the Stock Split (which
certificates reflect a par value of $1.00) may continue to be
used to effect transfers or deliveries of the Common Stock of the
Company, and such outstanding certificates shall be automatically
converted to share certificates with a par value of $0.20 as of
the distribution date of new certificates issued in connection
with the Stock Split.
As of October 1, 1996, there were outstanding options to purchase
shares of the Company's Common Stock in an amount up to 9.9% of
the outstanding shares, at an exercise price of $10.50 per share.
Such options were granted in 1991 to an affiliate of the Company
(Investors Life Insurance Company of North America) in connection
with certain loans granted by such affiliate to certain subsidies
of the Company. The options include provisions for adjustment in
the number of shares covered thereby, and the exercise price
thereof, in the event of a stock split. If the Proposal is
adopted, the exercise price would be adjusted to $2.10 per share.
The holders of Common Stock do not have preemptive rights to
purchase capital stock of the Company. Any future issuance of
Common Stock other than on a pro rata basis may dilute the
percentage ownership position of current stockholders. The Stock
Split is a distribution on a pro rata basis to stockholders on
the record date.
The Board of directors believes that it is desirable to have
sufficient authorized shares of Common stock available for future
stock splits or dividends, financing and acquisition transactions
and other general corporate purposes. In addition to providing a
sufficient number of authorized shares to implement the Stock
Split, the additional authorized shares of Common Stock will
allow the Company to maintain the flexibility to issue Common
Stock without the potential expense and delay of a special
meeting of stockholders at a future date. The additional shares
of Common Stock, over and above the number of shares required to
implement the Stock Split would be available for issuance without
further action by the stockholders unless such action is required
by applicable law or regulation. Except for the issuance of
additional shares of Common Stock in connection with the Stock
Split, the Company has no present intent, understandings or
arrangements for issuance of the Common Stock which would be
authorized by the proposed amendment to the Articles of
Incorporation.
The following table illustrates the effect of the proposed
amendment to the Articles of Incorporation discussed in the
preceding paragraphs and the Stock Split:
Number of Shares Prior to After Amendment
of Common Stock Amendment of of Articles and
Articles and Stock Split
Stock Split
Authorized 3,304,200 10,000,000
Outstanding 1,085,593 5,427,965
Treasury Stock 83,467 417,335
Available for issuance in 107,473 537,365
connection with exercise
of options granted to
affiliate
Available for future 2,027,667 3,617,335
issuance by action of the
Board of Directors (after
giving effect to the
above reservations)
Assuming that the proposed amendment to the first paragraph of
Article IV of the Company's Articles of Incorporation, effecting
the Proposal, is approved, a Certificate of Amendment amending
the Articles of Incorporation will be filed with the Secretary of
State of the State of Texas as promptly as practicable
thereafter. The amendment would become effective upon the date
of filing.
The Board of Directors has unanimously approved the amendment and
recommends that you vote FOR the approval of the amendment to the
Articles of Incorporation to increase the number of shares of
authorized Common Stock and the reduction of the par value from
$1.00 per share to $.20
Security Ownership Of Certain Beneficial Owners and Management
The following table sets forth information as to each person who
is known by the Company to be the beneficial owner of five
percent (5%) or more of the outstanding shares of Common Stock of
the Company as of October 1, 1996.
Amount &
Nature of
Beneficial Percent of
Name and Address Ownership Class
Roy F. Mitte, Chairman of the Board,
President and Chief Executive Officer
Austin, Centre
701 Brazos
Austin, Texas 78701. . . . . . . . . 373,304 (1) 34.39% (1)
InterContinental Life Corporation
Austin Centre
701 Brazos
Austin, Texas 78701. . . . . . . . . 145,423 (2) 12.19% (3)
Investors Life Insurance Company of
North America
Austin Centre
701 Brazos
Austin, Texas 78701. . . . . . . . . 145,423 (2) 12.19% (3)
(1) These shares are beneficially owned by Mr. Mitte and held
jointly with his wife, Joann C. Mitte.
(2) Of such shares, 29,100 shares are owned by Investors Life
Insurance Company of North America ("Investors-NA"), 8,850 shares
are owned by InterContinental Life Insurance Company ("ILIC"),
and 107,473 shares are issuable upon exercise of an option held
by Investors-NA. Investors-NA is a direct subsidiary of ILCO.
ILIC is a direct subsidiary of Investors-NA.
(3) Assumes that outstanding stock options or warrants held by
other persons have not been exercised.
The following table contains information as of October 1, 1996 as
to the Common Stock of the Company beneficially owned by each
Director and executive officer and by all executive officers,
nominees and directors of the Company as a group. The
information contained in the table has been obtained by the
Company from each Director and executive officer except for
information known to the Company. Except as indicated in the
notes to the table, each beneficial owner has sole voting power
and sole investment power as to the shares listed opposite his
name.
Amount and Nature of Beneficial Percent
Name Ownership of Class
Roy F. Mitte 373,304 (1)(2) 34.39%
James M. Grace 1,120 (2) *
Dale E. Mitte 400 *
Leonard A. Nadler 333 *
Eugene E. Payne 347 *
All Executive
Officers,
Nominees and
Directors as a
group (10 375,504 (1)(2) 34.59%
persons)
(1) These shares are beneficially owned by Mr. Mitte and are
held jointly with his wife Joann C. Mitte.
(2) No executive officer or director holds any options to
acquire FIC common stock. Messrs. Roy Mitte, Grace, Payne, and
Crowe are officers and/or directors of InterContinental Life
Corporation ("ILCO") and beneficially owned approximately 67% of
the outstanding shares of ILCO common stock as of October 1,
1996. Since FIC beneficially owns 62% of ILCO Common Stock, Mr.
Roy Mitte's personal holdings are combined with FIC's holdings in
determining the percentage of ILCO Common Stock beneficially
owned by Mr. Mitte. ILCO beneficially owned 145,423 shares of
FIC common stock (12.19% of the outstanding shares) as of October
1, 1996.
* Less than 1%
Future Stockholder Proposals
Any proposal of a stockholder intended to be presented at the
Company's Annual Meeting must be received by the Company for
inclusion in the proxy statement and form of proxy for that
meeting no later than December 31, 1996, and must be in
compliance with applicable laws and Securities and Exchange
Commission regulations.
Other Matters
As of the date of this Proxy Statement, the Board of directors
has no knowledge of any business other than described herein
which will be presented for consideration at the Special Meeting.
In the event that any other business is presented at the meeting,
the persons named in the enclosed proxy will vote such proxy
thereon in accordance with their judgment in the best interests
of the Company.
Exhibit A
Proposed First Paragraph of Article IV
of the Articles of Incorporation of
Financial Industries Corporation
The aggregate number of shares which the
corporation shall have the authority to issue is
ten million (10,000,000) shares of common stock of
the par value of twenty cents ($0.20) each.
PROXY
FINANCIAL INDUSTRIES CORPORATION
Special Meeting of Shareholders, November 12, 1996
Roy F. Mitte and James M. Grace, or either of them, each
with the power of substitution, are hereby authorized to
represent and vote the shares of the undersigned, with all the
powers that the undersigned would possess if personally present
at the Special Meeting of Shareholders of Financial Industries
Corporation to be held on Tuesday, November 12, 1996 or at any
postponements or adjournments thereof, as indicated below.
1. AMENDMENT OF FIRST FOR the amendment.
PARAGRAPH OF ARTICLE AGAINST the amendment.
IV OF THE ARTICLES
OF INCORPORATION
2. In their discretion, the proxies are authorized to vote
upon such other matters which may properly come before
the meeting or at any postponements or adjournments
thereof.
(Continued on reverse side)
(Continued from reverse side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTIONS
ARE GIVEN, THIS PROXY WILL CONSTITUTE AUTHORIZATION TO VOTE THE
UNDERSIGNED'S SHARES FOR THE PROPOSED AMENDMENTS TO THE ARTICLES
OF INCORPORATION. It will be voted on other business matters
which may properly be brought before the meeting in accordance
with the best judgment of the proxies.
The Board of Directors recommends a vote "FOR" on matters
set forth in this proxy
Please date, sign and return in the
enclosed postage paid envelope.
Dated: , 1996
Signature
Signature
(if held jointly)
In the case of joint or common
ownership, each owner should sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTOR OF
FINANCIAL INDUSTRIES CORPORATION
