8-K

UNITED STATES

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): March 31, 2008

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)	(IRS Employer Identification No.)
6500 River Place Boulevard, Building I, Austin, Texas		78730
(Address of Principal Executive Offices)		(Zip Code)
Registrant’s telephone number (including area code): (512) 404-5000
N/A
(Former Name or Former Address, if Changed Since Last Report)

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:

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

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

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

£           Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 31, 2008, Financial Industries Corporation (“FIC”) entered into a retention agreement with Vincent L. Kasch, pursuant to which Mr. Kasch agrees to continue to serve as FIC’s Chief Financial Officer on a full-time basis through April 13, 2008 and on a part-time basis from April 14, 2008 through May 30, 2008.  During his part-time engagement, Mr. Kasch will devote such time to his responsibilities as Chief Financial Officer of FIC as is reasonably necessary, in the good faith opinion of FIC, for the timely completion of FIC’s statutory and publicly-filed financial statements for the fiscal quarter ended March 31, 2008.  The retention agreement permits Mr. Kasch to accept additional employment during his part-time engagement with FIC, provided that such employment does not unreasonably interfere with Mr. Kasch’s obligations to FIC.  Mr. Kasch has accepted a position as the Vice President – Accounting Services of Texas Medical Liability Trust, effective April 14, 2008.  Mr. Kasch will continue to receive his annual salary through April 13, 2008 and will thereafter be compensated at an hourly rate of $105.  In addition, Mr. Kasch’s retention agreement provides that, in consideration of his continued services, upon the consummation of the merger pursuant to the Agreement and Plan of Merger, dated January 14, 2008, between Americo Life, Inc. and FIC (the “Merger”), he will receive a lump-sum change of control payment in the amount of $204,075.  Mr. Kasch will be entitled to this change of control payment even if the Merger is consummated after his employment with FIC has terminated, provided that Mr. Kasch has fulfilled his obligations under the retention agreement and was not terminated by FIC for cause (as defined in the retention agreement).

The foregoing description of the retention agreement does not purport to be complete and is qualified in its entirety by reference to the agreement, which is incorporated herein by reference as an exhibit to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Retention Agreement, dated March 31, 2008.

SIGNATURES

Pursuant to 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
By:	/s/ William B. Prouty
Name:	William B. Prouty
Title:	Chief Executive Officer
Date:  April 3, 2008

EX-99.1

Exhibit 99.1

RETENTION AGREEMENT

THIS RETENTION AGREEMENT (this “Agreement”) is made and entered into as of March 31, 2008, by and between Financial Industries Corporation, a Texas corporation (hereinafter, together with its successors, referred to as the “Company”), on the one hand, and Vincent L. Kasch (hereinafter referred to as the “Executive”), on the other hand.

W I T N E S S E T H :

WHEREAS, the Executive currently serves as the Chief Financial Officer of the Company; and

WHEREAS, the Executive and the Company are parties to that certain letter agreement, dated as of September 1, 2006, regarding certain payments to be made to the Executive in connection with a change of control of the Company (the “Change of Control Agreement”); and

WHEREAS, the Company is party to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of January 14, 2008 and amended as of February 20, 2008, between the Company and Americo Life, Inc. (“Americo”), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, the Company will be merged with an indirect subsidiary of Americo, with the Company surviving as an indirect, wholly-owned subsidiary of Americo (the “Merger”);

WHEREAS, the parties hereto desire to set forth in writing the terms and conditions of Executive’s continued engagement as the Company’s Chief Financial Officer and to supersede and terminate the Change of Control Agreement as set forth herein;

NOW THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.              Definitions.  In addition to the terms set forth throughout this Agreement, the following capitalized terms shall have the respective meanings set forth below:

“Accrued Benefits” means (a) all unpaid base compensation earned or accrued through the date the Executive’s engagement is terminated and (b) reimbursement for any and all unreimbursed reasonable and necessary expenses incurred by the Executive through the date the Executive’s engagement is terminated.

“Act” shall mean the Securities Exchange Act of 1934, as amended.

“Affiliate” shall have the meaning given such term in Rule 12b-2 of the Act.

“Board” shall mean the board of directors of the Company.

“Cause” shall mean any of the following: (a) the Executive’s conviction of a crime involving dishonesty, fraud, breach of trust or violation of the rights of employees, (b) the Executive’s willful engagement in any misconduct in the performance of his duties that, in the opinion of the Company, could materially injure the Company, (c) the Executive’s performance of any act that, if known to customers, agents, employees or stockholders of the Company, could, in the opinion of the Company, materially injure the Company or (d) the Executive’s continued willful and substantial nonperformance of assigned duties for at least ten days after he receives notice from the Company of such nonperformance and of the Company’s intention to terminate his engagement because of such nonperformance.

“Confidential Information” shall mean trade secrets, confidential or proprietary information, and all other information, documents or materials, owned, developed or possessed by the Company or any of its Affiliates, or their respective predecessors and successors, whether in tangible or intangible form, that is not generally known to the public.  Confidential Information includes, but is not limited to, (a) financial information, (b) product and service plans, costs, prices, profits and sales, (c) business ideas, recommendations and strategies, (d) marketing plans and studies, (e) projections, forecasts and budgets, (f) computer access codes, computer programs and data bases (and the documentation and information contained therein), (g) know-how, technologies, concepts and designs, (h) research and development efforts and projects, (i) records, (j) existing or prospective client, customer, vendor and supplier information (including, but not limited to, contracts, identities, needs, transaction histories, volumes, characteristics, agreements, prices, spending, preferences and habits), (k) training manuals and similar materials, (l) skills, responsibilities, compensation and personnel files of the employees, officers, directors and independent contractors of the Company and its Affiliates and (m) competitive analyses.

“Full-Time Engagement Period” shall mean the period during which the Company engages the Executive to act as the Chief Financial Officer of the Company on a full-time basis pursuant to the terms of this Agreement.

“Investors Life” means Investors Life Insurance Company of North America, a wholly-owned subsidiary of the Company.

“Part-Time Engagement Period” shall mean the period during which the Company engages the Executive to act as the Chief Financial Officer of the Company on a part-time basis pursuant to the terms of this Agreement.

“Person” shall mean any individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, other entity or group (as defined in the Act).

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“Unauthorized” shall mean: (a) in contravention of the Company’s policies or procedures; (b) otherwise inconsistent with the Company’s measures to protect its interests in any Confidential Information; (c) in contravention of any lawful instruction or directive, either written or oral, of the Board; or (d) in contravention of any duty existing under law or contract.

Section 2.              Term of Engagement.  Unless earlier terminated in accordance with the terms of this Agreement, (a) the Executive’s Full-Time Engagement Period shall commence on the date hereof and shall end on April 13, 2008, and (b) the Executive’s Part-Time Engagement Period shall commence on April 14, 2008 and shall end on May 30, 2008.  The Full-Time Engagement Period and the Part-Time Engagement Period shall be referred to collectively herein as the “Engagement Period.”

Section 3.              Duties.

(a)           During the Engagement Period, the Executive (i) shall serve as Chief Financial Officer of the Company, (ii) shall report directly to the Company’s Chief Executive Officer, (iii) shall have such authority and responsibility to perform such duties consistent with and reasonably related to his position as Chief Financial Officer as may be assigned to him from time to time by the Chief Executive Officer and (iv) subject to Section 3(c), shall devote his commercially reasonable best efforts and time, attention, knowledge and skill to the operation of the business and affairs of the Company.

(b)           During the Full-Time Engagement Period, the Executive will devote his full business time to his responsibilities as Chief Financial Officer of the Company and shall not serve as an employee of any Person other than the Company.

(c)           During the Part-Time Engagement Period, the Executive will devote such time to his responsibilities as Chief Financial Officer of the Company as is requested by the Company, provided that such time shall not exceed the amount reasonably necessary, in the good faith opinion of the Company, for the timely completion of the Company’s statutory and publicly-filed financial statements for the fiscal quarter ended March 31, 2008 and the Executive’s execution of applicable regulatory certifications, including, without limitation, the certifications required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. Section 1350, and other duties assigned.  The Company expressly acknowledges that the Executive may serve as an employee of a Person other than the Company during the Part-Time Engagement Period; provided that such employment does not unreasonably interfere with the Executive’s obligations to the Company pursuant to this Section 3.

Section 4.              Compensation.  In consideration of the services provided by the Executive to the Company during the Engagement Period, the Executive shall be compensated as follows:

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(a)           Full-Time Compensation.  The Executive shall receive, at such intervals as are consistent with the Company’s customary payroll policies as may be in effect from time to time, an annual salary (prorated for any partial year) equal to $204,075 during the Full-Time Engagement Period.

(b)           Part-Time Compensation.  The Executive shall receive, at such intervals as are consistent with the Company’s customary payroll policies as may be in effect from time to time, an amount equal to $105 per hour (prorated for any partial hours, rounded to the nearest one-tenth of an hour) of services requested by the Company and actually provided by the Executive during the Part-Time Engagement Period.

(c)           Expenses.  The Executive shall be reimbursed, at such intervals and in accordance with such Company policies as may be in effect from time to time, for any and all reasonable and necessary business expenses incurred by him for the benefit of the Company during the Engagement Period.

(d)           Change of Control Payment.  Subject to Section 5(d), within five business days following the consummation of the Merger, the Company shall pay to the Executive $204,075 in cash (the “Change of Control Payment”).  In the event that the Merger is not consummated, the Executive is not entitled to the Change of Control Payment.

Section 5.              Termination of Engagement.  The Company and the Executive shall have the right to terminate the engagement of the Executive as set forth in this Section 5.

(a)           Termination by the Company for Cause.  The Company may immediately terminate the Executive’s engagement for Cause by giving the Executive written or oral notice of such termination.  Upon termination for Cause, the Executive shall receive only the Accrued Benefits as of the date of termination and thereafter no other payments shall be owed by the Company to the Executive.

(b)           Termination by the Company without Cause.  The Company may terminate the Executive’s engagement under this Agreement immediately without any Cause or notice whatsoever.  Upon termination without Cause, the Executive shall receive the Accrued Benefits as of the date of termination and, if and when it becomes payable pursuant to Section 4(d), the Change of Control Payment.

(c)           Termination by the Executive.  The Executive may terminate his engagement with the Company immediately upon notice to the Company.  In the event of termination by the Executive under this Section 5(c), the Executive shall be entitled to his Accrued Benefits as of the date of termination and thereafter no other payments shall be owed by the Company to the Executive.

(d)           Change of Control Payment.  Notwithstanding anything herein to the contrary, following the termination of the Executive’s engagement with the Company, the Executive will remain entitled to receive the Change of Control Payment in accordance with Section 4(d) provided that (i) the Executive’s engagement was not terminated for Cause under Section 5(a) hereof and (ii) the Executive fully performed all services requested by the Company pursuant to Section 3 and did not terminate his engagement with the Company prior to the end of the Engagement Period.

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Section 6.              Non-Solicitation, Confidentiality, Discoveries and Works.

(a)           Non-Solicitation.  During the Engagement Period and for a period of twelve (12) monthsfollowing the termination of such engagement, the Executive agrees that the Executive will not, either on the Executive’s ownbehalf or on behalf of any other Person (other than for the benefit of the Company), directly or indirectly, solicit or encourage any person who is then an employee or contractor of the Company or who was an employee or contractor of the Company within the last six (6) months of the Executive’s engagement with the Company, to leave the Company, cease working for or providing services to the Company or discontinue doing business with the Company.  “Help wanted” and similar general solicitations not targeted at the Company’s employees shall not be deemed to violate the foregoing prohibition.

(b)           Confidentiality.

(i)          During the Engagement Period and for all time following the termination, for any reason, of such engagement, the Executive shall hold all Confidential Information in a fiduciary capacity and agrees not to take any action which would constitute or facilitate the Unauthorized use or disclosure of Confidential Information.

(ii)         As of the date of termination, for any reason, of the Executive’s engagement with the Company, the Executive agrees to deliver to the Company all property and materials within the Executive’s possession or control which belong to the Company or which contain Confidential Information.

(iii)        In the event that the Executive is requested by any governmental or judicial authority to disclose any Confidential Information, the Executive shall (to the extent that it is lawful and practicable to do so) give the Company prompt notice of such request (including, by giving the Company a copy of such request if it is in writing), such that the Company may seek a protective order or other appropriate relief, and in any such proceeding the Executive shall disclose only so much of the Confidential Information as is required to be disclosed.

(c)           Discoveries and Works.  All discoveries and works made or conceived by the Executive during and in the course of his engagement by the Company, jointly or with others, that relate to the Company’s activities shall be owned by the Company.  The terms “discoveries and works” include, by way of example, products, inventions, computer programs (including documentation of such programs), technical improvements, processes, drawings, and works of authorship, including all educational and sales materials or other publications which relate to Company’s current business.  The Executive shall promptly notify and make full disclosure to, and execute and deliver any documents requested by, the Company to evidence or better assure title to such discoveries and works by the Company, assist the Company in obtaining or maintaining for itself at its own expense United States and foreign patents, copyrights, trade secret protection and other protection of any and all such discoveries and works, and promptly execute, whether during his engagement or thereafter, all applications or other endorsements necessary or appropriate to maintain trademarks, patents and other rights for the Company and to protect its title thereto.

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(d)           Representations, Warranties and Acknowledgements.  The Executive acknowledges that: (i) but for the agreements contained in this Section 6, the Company would not enter into this Agreement; (ii) the Company considers Confidential Information to be commercially and competitively valuable to the Company and critical to its success; (iii) Unauthorized use or disclosure of Confidential Information could cause irreparable harm to the Company; and (iv) by this Agreement, the Company is taking reasonable steps to protect its legitimate interests in its Confidential Information.

(e)           Remedies.  In the event of breach or threatened breach by the Executive of any provision of this Section 6, the Company shall be entitled to seek (i) temporary, preliminary and permanent injunctive relief, in each case without the posting of any bond or other security, (ii) damages and an equitable accounting of all earnings, profits and other benefits arising from such breach, or threatened breach and (iii) any other legal and equitable relief to which it may be entitled, including any and all monetary damages which the Company may incur as a result of said breach or threatened breach.  The Company shall be entitled to seek temporary and preliminary injunctive relief from a court of competent jurisdiction.  The Company may pursue any remedy available, including declaratory relief, concurrently or consecutively, in any order, and the pursuit of one such remedy at any time will not be deemed an election of remedies or waiver of the right to pursue any other remedy.

Section 7.              Attorney’s Fees and Costs.  If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

Section 8.              Severability and Limitation.  All agreements and covenants contained herein are severable and, in the event any of them shall be held to be invalid by any competent court, this Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein.  Should any court or other legally constituted authority determine that for any such agreement or covenant to be effective that it must be modified to limit its duration or scope, the parties hereto shall consider such agreement or covenant to be amended or modified with respect to duration and scope so as to comply with the orders of any such court or other legally constituted authority or to be enforceable under the laws of the State of Texas, and all other portions of such agreement or covenants shall remain in full force and effect as originally written.

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Section 9.              Mandatory Arbitration.  All claims, disputes, controversies, differences or misunderstandings between the parties arising out of, or by virtue of this Agreement or the interpretation of this Agreement which cannot be settled or resolved by the parties hereto shall be settled or determined by binding arbitration under the then-current rules of the American Arbitration Association.  The exclusive jurisdiction for any such arbitration shall be Travis County, Texas, and each party consents to personal jurisdiction in Travis County, Texas.  The arbitrator will apportion attorneys’ fees and costs in his or her judgment.  Either party may, however, seek injunctive relief in any court of competent jurisdiction, pending arbitration.  Judgment based on the arbitrator’s award may be entered in any court of competent jurisdiction.

Section 10.            Exculpation and Indemnification.  Subject to applicable law, the Executive shall be entitled to such exculpation and indemnification under the terms of the Company’s Articles of Incorporation and bylaws and such other liability insurance as the Company may purchase for its officers and directors from time to time.

Section 11.            Assignment; Successors.  The Company may assign its rights under this Agreement to any successor to all or substantially all the assets of the Company, by merger or otherwise.  The rights of the Executive under this Agreement, except as provided in the last sentence of this Section 11, may not be assigned or encumbered by the Executive, voluntarily or involuntarily, during his lifetime, and any such purported assignment shall be void ab initio.  However, all rights of the Executive under this Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, estates, executors, administrators, heirs and beneficiaries.

Section 12.            Third Parties.  Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person other than the parties hereto and their successors and permitted assigns any rights or remedies under or by reason of this Agreement.

Section 13.            Amendment.  Except as otherwise provided in Section 8, this Agreement may not be amended or modified at any time except by a written agreement approved and executed by the Company and the Executive.  Any attempted amendment or modification without such approval and execution shall be null and void ab initio and of no effect.

Section 14.            Withholding.  The Company shall be entitled to withhold from any amounts to be paid to the Executive hereunder any federal, state, local, or foreign withholding or other taxes or charges that it is from time to time required to withhold.

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Section 15.            Governing Law.  This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Texas, without regard to principles of conflicts of law of Texas or any other jurisdiction.  Subject to Section 9, the exclusive jurisdiction for any litigation arising under or in connection with this Agreement shall be Travis County, Texas (provided, that this limitation shall not apply if and to the extent that the courts in Travis County, Texas, do not have or do not accept jurisdiction over such litigation), and each party consents to personal jurisdiction in Travis County, Texas.

Section 16.            Notice.  Notices given pursuant to this Agreement shall be in writing and will be effective (a) upon delivery, if delivered personally, (b) three days after depositing in the United Stated mail, if mailed by registered or certified mail, return receipt requested, postage prepaid, (c) the next business day, if sent via a reputable, established courier service that guarantees next business day delivery or (d) upon transmission of the telecopy in complete, readable form, if sent via telecopier followed within 24 hours by confirmation, addressed as set forth below.

If to the Company:

Financial Industries Corporation

6500 River Place Boulevard

Building I

Austin, Texas 78730

Attention:  General Counsel

Facsimile No.: (512) 404-5051

If to the Executive:

At the address for the Executive set forth on his signature page hereto; or to such other address as the party to be notified shall have given to the other in accordance with the notice provisions set forth herein.

Section 17.            No Waiver.  No term or condition of this Agreement shall be deemed to have been waived nor shall there be any estoppel to enforce any of the terms of provisions of this Agreement except by written instrument of the party charged with such waiver or estoppel.  No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at any time.

Section 18.            Headings.  The headings contained herein are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement.

Section 19.            Entire Agreement.  This Agreement supersedes any and all other agreements, either oral or in writing between the parties hereto with respect to the engagement of the Executive by the Company, including, without limitation, the Change of Control Agreement.  This Agreement constitutes the entire agreement and understanding by and between the Executive and the Company with respect to the engagement of the Executive by the Company.  No agreement or representation, oral or otherwise, express or implied, with respect to the subject matter hereof has been made by either party which is not set forth expressly in this Agreement.

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Section 20.            Executive Representations.  The Executive hereby represents and warrants to the Company that (a) the Executive has negotiated and entered into this Agreement with the full advice and representation of legal counsel specifically retained for such purpose, (b) the Executive’s execution and delivery of this Agreement and his performance of his duties and obligations hereunder will not conflict with, or cause a default under, or give any party a right to damages under, or to terminate, any other agreement to which the Executive is a party or by which he is bound and (c) there are no agreements or understandings that would make unlawful the Executive’s execution or delivery of this Agreement or his engagement hereunder.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the parties have executed this Agreement in one or more counterparts, each of which shall be deemed one and the same instrument, as of the day and year first written above.

FINANCIAL INDUSTRIES CORPORATION
By:	/s/ William B. Prouty
Name:	William B. Prouty
Title:	Chief Executive Officer
EXECUTIVE:
/s/ Vincent L. Kasch
Vincent L. Kasch
Address for Notice:
16912 Tidewater Cove
Austin, Texas 78717

SIGNATURE PAGE TO RETENTION AGREEMENT