Interim CEO Employment Agreement LTR

January 1, 2006


Re: Employment Letter


Dear Mr. Hydanus:


Through this letter, the Board of Directors of Financial Industries Corporation (the "Company") hereby wishes to offer you the position of Interim Chief Executive Officer ("Interim CEO"), of Financial Industries Corporation ("FIC"), Investors Life Insurance Company of North America ("ILINA") and Family Life Insurance Company ("FLIC", and together with ILINA and FIC, the "Company"), effective as of October 15, 2005. You will assume all of the duties and responsibilities of Chief Executive Officer ("CEO") and continue those duties until either (i) you are appointed CEO permanently by the Board of Directors, in their discretion, or (ii) such time as another person is appointed permanent CEO and you are reassigned to assume your duties as Chief Operating Officer ("COO") of the Company as stated in that certain letter agreement dated April 19, 2005 (the "COO Letter"). This letter agreement ("Agreement") is intended to amend and restate the terms of the COO Letter. To the extent that any terms of the COO Letter do not conflict with or are not inconsistent with the terms of this Agreement, such terms shall be considered valid and continuing in force and effect. The terms of this Agreement shall be binding and effective for so long as you serve in the position of Interim CEO or permanent CEO ("Term").


Your salary will be $11,301.69 on a biweekly basis (representing an annualized amount of $294,000), again effective as of October 15, 2005. Eligibility for an annual bonus will be determined prior to the beginning of each fiscal year, based on goals established by you and the board of directors.


You will continue to be eligible to participate in stock option plans of the Company on the basis of your current participation, and the Board of Directors in its discretion, may grant additional option rights commensurate with your new position as Interim CEO. Your participation in Company benefit plans will continue and will be adjusted appropriately to reflect your new position as Interim CEO, including without limitation, the amount of Company-paid life insurance and vacation time.


You will report directly to the Board of Directors of the Company, and will discharge the duties assigned to you by the Board from time to time.


Either you or the Company may terminate your employment at any time. If the Company terminates your employment for Cause or you terminate your employment without Good Reason (both as defined below) (or if you die while an employee of the Company), you (or your estate) will be entitled to receive only your accrued but unpaid salary and vacation pay, based on the levels of ...