8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported): May 2, 2007

FINANCIAL INDUSTRIES CORPORATION

(Exact name of Registrant as specified in charter)

Texas	0-4690	74-2126975
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. employer identification no.)

6500 River Place Blvd., Building One

Austin, Texas 78730

(Address of principal executive offices)

Registrant’s telephone number, including area code: (512) 404-5000

Former name or former address, if changed since last report - Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Item 1.01 Entry into a Material Definitive Agreement.

Financial Industries Corporation (“FIC”) has entered into a change of control agreement (the “Agreement”) with William McCarthy, Senior Vice President and Chief Actuary of FIC, effective May 2, 2007. The following sets forth a description of certain of the material provisions of the Agreement:

· This agreement applies if a change of control (as defined in the Agreement) of FIC or Investors Life Insurance Company of North America occurs, and Mr. McCarthy is terminated without cause (as defined in the Agreement) within twelve months after such change of control. The Agreement provides that in such an event, Mr. McCarthy’s then-current bi-weekly salary and benefits, including but not limited to health and life insurance, will continue to be paid by the Company for twelve months following his date of termination or until such time that he is actively employed, whichever comes first.

The foregoing descriptions of the agreements above do not purport to be complete and are qualified in their entirety by reference to agreements, which are incorporated herein by reference as exhibits to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

Exhibit 10.1 - Change of Control letter, dated May 2, 2007, by and between Financial Industries Corporation and William McCarthy

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Financial Industries Corporation
Date: May 7, 2007	By:	/s/ William B. Prouty
	Name: William B. Prouty
	Title: Chief Executive Officer

EX-10.1

Exhibit 10.1

April 26, 2007

Mr. William McCarthy

12204 Mustang Chase

Austin, Texas 78727

Dear Bill:

This letter will confirm our agreement regarding a possible future “change of control” of Financial Industries Corporation (“FIC”) and Investors Life Insurance Company of North America (“ILINA” and, together with FIC, the “Company”).

If a Change of Control of FIC or ILINA occurs, and if your employment is terminated without Cause (as defined below) within twelve months after such Change of Control, your then-current bi-weekly salary and benefits, including but not limited to health and life insurance, will continue to be paid by the Company for up to twelve months following your date of termination or until such time that you are actively employed, whichever comes first. “Change of Control” means (i) any one person, or more than one person acting as a group (as defined pursuant to the Securities Exchange Act of 1934), acquires ownership of stock of FIC that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of FIC, or (ii) any one person, or more than one person acting as a group (as defined pursuant to the Securities Exchange Act of 1934), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from FIC or ILINA that have a total gross fair market value equal to or more than 80 percent of the total gross fair market value of all of the assets of FIC or ILINA immediately prior to such acquisition or acquisitions or (iii) a majority of members of FIC’s board of directors is replaced during any six-month period by directors whose appointment or election is not endorsed by a majority of the members of FIC’s board of directors prior to the date of such appointment or election.

For purposes of the preceding paragraph, “Cause” shall mean (i) your conviction of a crime involving dishonesty, fraud, breach of trust, or violation of the rights of employees; (ii) your willful engagement in any misconduct in the performance or your duties that, in the opinion of the Company, could materially injure the Company; (iii) your performance of any act that, if known to customers, agents, employees, or stockholders the Company, could, in the opinion of the Company, materially injure the Company; or (iv) your continued willful and substantial nonperformance of assigned duties for at least ten days after you receive notice from the Company of such nonperformance and of the Company’s intention to terminate your employment because of such nonperformance.

It is the intent of the parties to this letter agreement that any payments to be made hereunder be exempt from or compliant with Section 409A of the Internal Revenue Code and related regulations and Treasury pronouncements (“Section 409A”). If based on subsequent guidance or interpretations any provision provided herein would result in the imposition of an excise tax under Section 409A, the parties agree that each will use good faith efforts to reform any such provision to avoid imposition of any such excise tax in the manner that the parties mutually determine is appropriate to comply with or maintain an exemption from Section 409A.

As long as this letter agreement remains in effect, the terms set forth shall be binding upon any successor entity to the Company, whether direct or indirect and whether by purchase, merger, consolidation, liquidation, supervision or otherwise. This letter agreement is fully assignable to any successor to all or substantially all of the Company's business and/or assets and such successor shall assume all of the obligations under this letter agreement.

Sincerely yours,

William B. Prouty

Chief Executive Officer

Accepted By: /s/ William McCarthy Date: May 2, 2007