<PAGE>
As filed with the Securities and Exchanage Commission on August 28, 1995
Registration Statement No. 33-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
__________________
SECURITY NATIONAL FINANCIAL CORPORATION
(Exact name of issuer as specified in its charter)
Utah
(State or other jurisdiction of incorporation or organization)
87-0345941
(I.R.S. Employer Identification No.)
5300 South 360 West, Suite 310
Salt Lake City, Utah 84123
(801) 264-1060
(Address, including zip code, and telephone number, including area code,
of issuer's principal executive offices)
<TABLE>
<CAPTION>
Copies to:
<S> <S>
George R. Quist, President Randall A. Mackey, Esq.
Security National Financial Corporation Mackey Price & Williams
5300 South 360 West, Suite 310 170 South Main Street, Suite 900
Salt Lake City, Utah 84123 Salt Lake City, Utah 84101-1655
(801) 264-1060 (801) 575-5000
</TABLE>
(Name, address, including zip code, and telephone number, including area code,
of agent for service)<PAGE>
Approximate date of commencement of proposed sale to
the public: From time to time after the effective date of this
Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
<TABLE>
<CAPTION>
Calculation of Registration Fee
<C> <C> <C> <C> <C>
Proposed Proposed
Title of Each Class Amount Maximum Offering Maximum Amount of
of Securities to be to be Offering Aggregate Registration
Registered Registered Per Share(1) Price(1) Fee
------------------- ------------ ---------------- ---------- ------------
Class A Common Stock,
par value $2.00 per share 40,000 $3.50 $140,000 $100.00
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the average of the final bid and asked
prices for the Registrant's Common Stock on July 25, 1995, as reported on
the NASDAQ Stock Market.
<PAGE>
SECURITY NATIONAL FINANCIAL CORPORATION
CROSS REFERENCE SHEET
(Pursuant to Item 501(b) of Regulation S-K showing location
in Prospectus of information required by Items in Form S-3)
Form F-1 Item Number and Caption Location or Heading in
Prospectuses
<TABLE>
<CAPTION>
<C> <S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus . . .Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus. . . . . . . . . . . . . . . Available Information;
Documents Incorporated by
Reference
3. Summary Information and Risk Factors . . . Summary Information;
Risk Factors
4. Use of Proceeds . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . Not applicable
6. Dilution. . . . . . . . . . . . . . . . . . Not applicable
7. Selling Security-Holders. . . . . . . . . . Not applicable
8. Plan of Distribution. . . . . . . . . . . . Outside Front Cover Page;
Plan of Distribution
9. Description of Securities to be Registered. Outside Front Cover Page;
Description of Capital Stock
10. Interests of Named Experts and Counsel. . . Not applicable
11. Material changes. . . . . . . . . . . . . . Not applicable
12. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . . . Documents Incorporated by
Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . Not applicable
</TABLE>
<PAGE>
SUBJECT TO COMPLETION PROSPECTUS DATED AUGUST 22, 1995
SECURITY NATIONAL FINANCIAL CORPORATION
40,000 Shares of Class A
Common Stock,
$2.00 par value per share
_________________________
This Prospectus relates to shares of Class A Common Stock, $2.00 par value
per share, of Security National Financial Corporation, a Utah corporation
(the "Company"), which shares are to be issued pursuant to a certain Stock
Purchase Agreement dated October 19, 1994 and entered into by and among the
Company, Capital Investors Life Insurance Company, a Florida corporation
("CILIC"), and Suncoast Financial Corporation, a Delaware corporation and sole
shareholder of CILIC ("Suncoast") (the "Agreement"). As part of the
consideration paid by the Company pursuant to the Agreement, the Company
issued 40,000 restricted shares of the Company's Class A Common Stock, $2.00
par value per share, to Suncoast and agreed to register the shares (the
"Shares") with the United States Securities and Exchange Commission.
Upon completion of the registration of the Shares, the Company and Suncoast
will exchange the Shares for the unregistered shares previously issued.
The Company is authorized to issue three classes of Common Stock, Class A
Common Stock, Class B Common Stock and Class C Common Stock. Holders of the
Class A Common Stock are entitled to one vote per share on each matter to be
decided by the stockholders. Holders of Class A Common Stock elect one-third
of the Company's directors without the participation of any other class of
Common Stock and also participate with the Class C common stockholders in
the election of the remaining two-thirds of the Board of Directors on a share
for share basis. Holders of Class A Common Stock are also entitled to all
rights customarily associated with common stock.
The Company has no shares of Class B Common Stock issued or outstanding and
there is no public market for shares of Class C Common Stock. The Class A
Common Stock is traded on the NASDAQ Stock Market under the symbol "SNFCA".
On July 25, 1995, the average of the final bid and asked prices for the
Company's Class A Common Stock as reported on the NASDAQ Stock Market was
$3.50 per share.
The Company has paid or will pay all costs and fees associated with the
registration of the Shares under federal and state securities laws and the
preparation and delivery of this Prospectus. The Shares, after registered,
will be exchanged for unregistered shares previously issued to Suncoast;
consequently, the Company will receive no proceeds from the issuance of
the Shares and no underwriting discounts or commissions will be payable in
connection with the issuance of the Shares.
INVESTORS SHOULD CONSIDER THE FACTORS SET FORTH IN THIS PROSPECTUS UNDER
"RISK FACTORS" PRIOR TO MAKING ANY INVESTMENT DECISION.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
____________________
August ______, 1995
<PAGE>
After being issued, the Shares may be sold from time to time directly by
Suncoast, or by pledges, donees, transferees or other successors-in-interest
to such shareholders. Alternatively, the Shares may be offered from time to
time by or through brokers or dealers who may act solely as agents or who may
acquire the Shares as principals. The distribution of the Shares may be
effected in one or more transactions that may take place on the NASDAQ Stock
Market, including block trades, ordinary broker's transactions, privately
negotiated transactions or through sales to one or more broker or dealer for
resale of such securities as a principal, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. Usual and customary or specifically negotiated brokerage
fees or commissions may be paid in connection with such sales.
No dealer, salesman or other person or entity has been authorized to give any
information or to make any representations not contained in or incorporated by
reference in this Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or by any other person or entity. All information contained
herein is as of the date of this Prospectus. Neither the delivery of this
Prospectus, nor any sale, distribution or resale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
business or affairs of the Company or in the facts herein set forth since the
date hereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the securities covered
by this Prospectus, nor does this Prospectus constitute an offer to or
solicitation of any person or entity in any jurisdiction in which such offer
or solicitation may not be lawfully made.
Information contained herein is subject to completion or amendment.
A Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer or the solicitation
of an offer to buy nor shall there be any sale of these securities in any state
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
Available Information. . . . . . . . . . . . . . . . . . . . . .1
Documents Incorporated by Reference. . . . . . . . . . . . . . .1
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . .2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . .4
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . .6
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . .6
Description of the Company's Capital Stock . . . . . . . . . . .6
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . .8
</TABLE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed with the Commission a registration statement on Form S-3
(together with all amendments and Exhibits thereto) (collectively, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"1933 Act"). This Prospectus does not contain all of the information set forth
in the Registration Statement, certain parts of which are omitted in accordance
with the Rules and Regulations of the Commission. For further information,
reference is made to the Registration Statement.
The Company's Class A Common Stock is listed on the NASDAQ Stock Market and
reports and other information concerning the Company can be inspected at such
exchange.
<TABLE>
<CAPTION>
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
<C> <S>
(1) The Annual Report on Form 10-K for the fiscal year ended December 31,
1994;
(2) The Quarterly Report on Form 10-Q for the quarter ended March 31, 1995;
(3) The Quarterly Report on Form 10-Q for the quarter ended June 30, 1995;
(4) The Current Report on Form 8-K filed on May 31, 1995; and
(5) Portions of the definitive Proxy Statement for the Company's 1995
Annual Meeting of Shareholders (incorporated by reference to Annual
Report on Form 10-K for the fiscal year ended December 31, 1994) filed
on May 26, 1995.
</TABLE>
All documents subsequently filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and prior to the
termination of this offering, shall be deemed to be incorporated by reference
in this Prospectus. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein, or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.<PAGE>
The Company will provide, without charge, to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of such person, a copy of any or all of the
documents that have been incorporated herein by reference, other
than Exhibits to such documents (unless such Exhibits are specifically
incorporated by reference therein). Requests for such copies should be
directed to: George R. Quist, President, Security National Financial
Corporation, 5300 South 360 West, Suite 310, Salt Lake City, Utah 84123,
telephone number (801) 264-1060.
<PAGE>
THE COMPANY
Security National Financial Corporation (the "Company"), through its
subsidiaries, is engaged in the business of selling and servicing selected
lines of life insurance and annuity products, in selling cemetery and funeral
products and services, and in originating, refinancing and servicing
residential and commercial mortgage loans. The Company markets its insurance
and annuity products in 29 states through a commissioned sales force of 103
independent licensed insurance agents who may also sell insurance products of
other companies. The Company owns six cemeteries (four with funeral chapels
on the property) and four mortuaries in the state of Utah and three mortuaries
in the State of Arizona. The Company markets its cemetery and funeral products
and services in the States of Utah and Arizona, through a commissioned sales
force of 72 sales representatives, of which 21 sales representatives also sell
the Company's insurance and annuity products. At December 31, 1994, the
Company had 81 full time employees and 35 part-time employees. The Company
had approximately $437,000,000 of life insurance in force and approximately
$22,000,000 of annuity reserves in force as of December 31, 1994.
The Company was organized as a holding company in 1979 when Security National
Life Insurance Company ("Security National Life") became a wholly-owned
subsidiary of the Company and the former stockholders of Security National
Life became stockholders of the Company. Security National Life was formed in
1965 and completed a public offering of Class A common stock in that year. It
has grown through the direct sales of life insurance and annuities and through
acquisitions of other companies. Memorial Estates, Inc. and Memorial
Mortuary became wholly-owned subsidiaries of the Company in the 1979
reorganization when the Company was formed. Those companies had been acquired
by Security National Life in 1973. Investors Equity Life Insurance Company of
Hawaii, Ltd. ("Investors Equity"), formerly a wholly-owned subsidiary of the
Company, was acquired in June 1986, and subsequently sold in June 1991.
In 1989, the Company acquired Paradise Chapel Funeral Home, Inc. as a
wholly-owned subsidiary. Also in 1989 IEL Holding Company, Inc. was formed as
a wholly-owned subsidiary of the Company to acquire all of the stock of
Investors Equity pursuant to a reorganization which was completed on December
31, 1989. During December 1992, 100% of the common stock of IEL Holding
Company, Inc., was contributed by the Company to Security National Life, a
wholly owned subsidiary of the Company. Effective April 1, 1994, IEL Holding
Company Inc., was liquidated into Security National Life.
At the annual meeting of stockholders held on December 27, 1990, the Articles
of Incorporation were amended such that the name was changed from S.N.L.
Financial Corporation to Security National Financial Corporation.
In 1991, the Company acquired Holladay Memorial Park, Inc., Cottonwood
Mortuary, Inc., Holladay Cottonwood Memorial Foundation, and Deseret Memorial,
Inc. as wholly-owned subsidiaries. Deseret Memorial, Inc. includes the
following entities: Deseret Mortuary, Colonial Mortuary, Deseret Memorial
Plan, Lake Hills Benevolent Trust, Lake Hills MemorialCrematory, Lake Hills
Mortuary, Lake Hills Memorial Park, and Alta Concrete Products and Vault Plant.
In July 1993, the Company formed Security National Mortgage Company ("Security
National Mortgage") to originate, refinance and service residential and
commercial mortgage loans in the State of Utah. The Company contributed
assets of approximately $268,000 to capitalize the initial operations of
Security National Mortgage. As of December 31, 1994, there were approximately
11 full time employees and two part-time employees at Security National
Mortgage, of which five were involved as full time mortgage brokers originating
and refinancing loans for Security National Mortgage. In January 1994, the
Company acquired Sunset Funeral Home, Inc. which owns and operates a mortuary
located in Phoenix, Arizona. Security National Mortgage and Sunset Funeral
Home are both wholly-owned subsidiaries of the Company.
In December 1994, the Company acquired Capital Investors Life Insurance Company
("Capital Investors Life"), a Florida based life insurance company. On
December 28, 1994, Capital Investors Life was redomesticated to Utah. Capital
Investors Life is licensed in 23 states (17 of which Security National Life is
also licensed). At December 23, 1994, Capital Investors Life had approximately
$79,000,000 insurance in force and $10,000,000 of annuity reserves. In April
1995, the Company moved Capital Investors Life's administrative operations to
Salt Lake City.
<PAGE>
In February 1995, the Company, through its newly-formed wholly-owned
subsidiary, California Memorial Estates, Inc., purchased approximately 100
acres of real property located in San Diego, California, of which approximately
35 acres will be used for the development of a cemetery. The Company is in the
process of obtaining approval from the federal government and the California
Cemetery Board to operate a cemetery on the property. In March 1995, the
Company acquired 97.8% of the issued and outstanding common stock of Greer-
Wilson Funeral Home, Inc., which owns and operates a funeral home in Phoenix,
Arizona.
The Company through its insurance subsidiaries issues and distributes selected
lines of life insurance and annuities. The Company's life insurance business
includes funeral plans and interest-sensitive whole life insurance, as well as
other traditional life and accident insurance products. The Company's annuity
business includes flexible premium deferred annuity contracts, single premium
deferred annuity contracts, and other types of annuities. The Company's life
insurance and annuity business decreased significantly with the sale of
Investors Equity.
The Company through its cemetery and mortuary subsidiaries markets a variety of
products and services utilized in its cemetery and funeral service operations.
The products include grave plots, markers, caskets, and other related products.
The services include opening and closing of graves, professional services, use
of automobiles, and the use of chapels and viewing rooms. The Company markets
these products and services through its six cemeteries (four with funeral
chapels on the property) and seven mortuaries on both an at-need (at time of
death) and a pre-need basis. The Company's cemetery and mortuary business
increased with the acquisition of the Holladay Memorial Park, Inc., Cottonwood
Mortuary, Inc. and Deseret Memorial, Inc. in September 1991 and with the
acquisition of Sunset Funeral Home, Inc. in 1994.
The following table sets forth information with respect to revenues from the
Company's life and accident and health insurance, and cemetery and mortuary
products and services for the five years ended December 31, 1990 to 1994:
<TABLE>
<CAPTION>
Life and Accident Cemetery and
Year and Health Insurance Mortuary Total(3)
----- ---------------------- ------------ --------
<C> <C> <C> <C>
1994 $4,759,000 $5,888,000 $10,647,000
1993 4,777,000 6,085,000 10,862,000
1992 4,493,000 5,741,000 10,234,000
1991(1)(2) 5,182,000 4,054,000 9,236,000
1990 5,170,000 3,443,000 8,613,000
</TABLE>
<TABLE>
<CAPTION>
<C> <S>
(1) Only includes Cottonwood Mortuary, Inc. and Holladay Memorial Park,
Inc. for three months ended December 31, 1991. Revenues from these
companies are included in subsequent years but not prior to September
1991, the date in which they were purchased by the Company.
(2) Only includes Investors Equity Life Insurance Company ("Investors
Equity") for the first five months of 1991 since Investors Equity was
sold in June 1991. Revenues from Investors Equity are included
in 1990, but not in 1992, 1993, and 1994.
(3) Does not include investment income or other income.
</TABLE>
For the years presented, accident and health insurance has been combined with
the life insurance segment, since the amounts were insignificant.
<PAGE>
RISK FACTORS
An investment in the Class A Common Stock is highly speculative and should
only be considered by those persons or entities who can afford the loss of
their entire investment. In addition to the other information contained in
this Prospectus, the following risk factors should be carefully considered in
evaluating the Company and its business and an investment in shares
of the Company's Class A Common Stock. The order in which the following risk
factors are presented is not intended to indicate the magnitude of the risks
described.
Possible Volatility of Stock Price.
-----------------------------------
The market price of the Class A Common Stock is subject to significant
fluctuations in response to variations in the Company's operating results,
general trends in the market for the Company's products and the prospective
products of the Company and other factors. In addition, broad market
fluctuations, as well as general economic and political and regulatory
conditions and philosophies may adversely affect the market for and/or the
value of the Company's Class A Common Stock, irrespective of the Company's
actual performance.
Dependance on Key Personnel.
----------------------------
The Company is dependant on the efforts and abilities of certain of its senior
management personnel, particularly George R. Quist, the Company's
Chairman, President and Chief Executive Officer. The loss of Mr. Quist
could have a material adverse effect on the Company, its operations and
prospects and the value of the Company's Class A Common Stock. The Company
does not carry key person insurance on any of its key personnel.
Control by Existing Stockholders.
---------------------------------
Approximately 35.9% of the shares of the Company's outstanding shares of Class
A and Class C Common Stock are beneficially owned by the current officers and
directors of the Company. As a result, the persons currently in control of
the Company will continue to be in a position to exercise a significant degree
of control over the Company and its Board of Directors in the future, and
generally to direct the business and affairs of the Company.
Competition.
------------
The life insurance industry is highly competitive. There are approximately
2,000 legal reserve life insurance companies in business in the United States.
These insurance companies differentiate themselves through marketing
techniques, product features, price and customer service. The Company's
insurance subsidiaries compete with a large number of insurance companies, many
of which have greater financial resources, a longer business history,
and a more diversified line of insurance coverage than the Company. In
addition, such companies generally have a larger sales force. Further, many of
the companies with which the Company competes are mutual companies which may
have a competitive advantage because all profits accrue to policyholders.
Because the Company is small by industry standards and lacks broad
diversification of risk, it may be more vulnerable to losses than large, well
established companies. The Company believes that its policies and rates for
the markets it serves are generally competitive.
The cemetery and funeral business is also highly competitive. In the Salt
Lake, Ogden and Phoenix areas in which the Company competes, there are a number
of cemeteries and mortuaries which have longer business histories, more
established positions in the community and stronger financial positions than
the Company. In addition, some of the cemeteries with which the Company must
compete for sales are owned by municipalities and, as a result, can
offer lower prices than can the Company. The Company bears the cost of
a pre-need sales program that is not incurred by those competitors that do not
have a pre-need sales force. The Company believes that its products and prices
are generally competitive with those in the industry.
The mortgage loan business is highly competitive with several mortgage
companies and banks in the same geographic area in which the Company is
operating which have longer business histories and more established positions
in the community. The refinancing market is particularly vulnerable to changes
in interest rates.
Risk of Adverse Governmental Regulation.
----------------------------------------
Insurance companies are subject to comprehensive regulation in the
jurisdictions in which they do business under statutes and regulations
administered by state insurance commissioners. Such regulation relates to,
among other things, prior approval of the acquisition of a controlling interest
in an insurance company; standards of solvency which must be met and
maintained; licensing of insurers and their agents; nature of and limitations
on investments; deposits of securities for the benefit of policyholders;
approval of policy forms and premium rates; periodic examinations of the
affairs of insurance companies; annual and other reports required to be filed
on the financial condition of insurers or for other purposes; and requirements
regarding reserves for unearned premiums, losses and other matters. The
Company's insurance subsidiaries are subject to this type of regulation in
any state in which they are licensed to do business. Such regulation could
involve additional costs, restrict operations or delay implementation of the
Company's business plans.
<PAGE>
The Company is currently subject to regulation in Utah under insurance holding
company legislation, and other states where applicable. Intercorporate
transfers of assets and dividend payments from its insurance subsidiaries are
subject to prior notice of approval if they are deemed "extraordinary" under
these statutes. The insurance subsidiaries are required, under state insurance
laws, to file detailed annual reports with the supervisory agencies in each of
the states in which they do business. Their business and accounts are also
subject to examination by these agencies.
The cemetery and mortuary subsidiaries are subject to the Federal Trade
Commission's comprehensive funeral industry rules and are licensed by the Utah
State Cemetery Board to operate as endowment care cemeteries. The morticians
must be licensed by the state in which they provide services and the Company's
mortuaries are subject to the state laws of Arizona and Utah and related city
laws within those states. Reports are required on a yearly basis to the Utah
Cemetery Board and include financial information concerning the number
of spaces sold and funds provided to the Endowment Care Trust Fund. Licenses
are issued annually on the basis of such reports. The cemeteries maintain city
or county licenses where they conduct business.
There is and can be no assurance that federal, state or local governments will
not impose additional laws, regulations or restrictions upon all or a portion
of the Company's activities or prospective products, which could have a
material adverse effect on the Company's business and results of operations
and, therefore, on the value and marketability of the Company's Class A
Common Stock.
Persistency.
------------
Persistency is the extent to which policies sold remain in force. Excess
policy lapses or nonrenewals could have an adverse effect on the profitability
of the Company. Policy acquisition costs are deferred and recognized over the
life of the policy. Excess policy lapses will cause the immediate expensing of
deferred acquisition costs. The Company's past lapse and surrender
experience has been within its pricing assumptions for its insurance policies
and acquisitions. As long as the Company maintains its lapse and surrender
rate within its pricing assumptions for its insurance policies and
acquisitions, the Company believes that its lapse and surrender rate should
not have a material adverse effect on its earnings. However, there can
be no assurance that the Company will be able to maintain its lapse and
surrender rate and any increase in this rate could have a material adverse
effect of the Company's business and results of operations and, therefore,
on the value and marketability on the Company's Class A Common Stock.
Interest Rate Volatility.
-------------------------
Profitability in the insurance industry is affected by fluctuations in
interest rates. In order to maintain profitability, the Company must invest
premiums at a higher interest rate than the interest rate credited to
existing life and annuity policies. Rapid decreases or increases in
interest rates may affect the Company's ability to maintain a positive spread
between the yield on invested assets and the interest credited to life and
annuity policies. Rapid interest rate changes could cause increased lapses
of policies in force.
Recent Growth and Growth Strategy.
----------------------------------
The Company's growth through acquisitions of other companies poses risks of
increased policy lapses, loss of agents and similar problems that may
reduce the value of the acquisition to the Company and may more than offset
the potential benefits of increased revenues, economies of scale and
potential for increased profits. To date, the Company has not experienced
unacceptable policy lapses, loss of agents or other problems arising from
acquisitions, and plans to continue to pursue acquisitions as a means of growth
in the future. However, no assurance is or can be given that the Company will
not experience adverse effects with future acquisitions.
<PAGE>
Dividend Policy.
----------------
The Company has never paid cash dividends on any class of its Common
Stock. The Company's present intention is to retain all earnings, if any, for
working capital, capital expenditures and general corporate operational
purposes. The Company does not anticipate paying any cash dividends on its
Common Stock in the foreseeable future.
USE OF PROCEEDS
The Shares are being registered pursuant to a certain Stock Purchase Agreement
dated October 19, 1994 and entered into by and among Company, Capital Investors
Life Insurance Company, a Florida corporation ("CILIC"), and Suncoast Financial
Corporation, a Delaware corporation and sole shareholder of CILIC ("Suncoast")
(the "Agreement"). As part of the consideration relating to the Agreement,
wherein the Company purchased all of the common stock of CILIC, the Company
issued 40,000 restricted shares of the Company's Class A Common Stock, $2.00
par value per share, to Suncoast and agreed to register the Shares with the
United States Securities and Exchange Commission. Upon completion of the
registration of the Shares, the Company will exchange the Shares with
Suncoast for the restricted shares previously issued. Consequently, the
Company will not receive any proceeds from the sale of the Shares.
PLAN OF DISTRIBUTION
Upon completion of registration, the Shares will be issued to Suncoast in
exchange for 40,000 restricted shares of the Company's Class A Common Stock
held by Suncoast. After being issued to Suncoast, the shares may be sold
from time to time directly by Suncoast or by pledges, donees, transferees
or other successors-in-interest to Suncoast. Alternatively, the Shares may
be offered from time to time by or through brokers or dealers who may act
solely as agents, or who may acquire the Shares as principals. The
distribution of the Shares may be effected in one or more transactions that
may take place on the NASDAQ Stock Market, including block trades, ordinary
broker's transactions, privately negotiated transactions or sales
through one or more broker-dealer for resale of such securities as a
principal, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
Usual and customary or specifically negotiated brokerage fees or commissions
may be paid by these holders in connection with such sales.
DESCRIPTION OF THE COMPANY'S CAPITAL STOCK
Class A Common Stock.
---------------------
The Company is authorized to issue 10,000,000 shares of Class A
Common Stock, par value $2.00 per share, of which 3,026,391 shares were
outstanding as of June 30, 1995. Holders of the Class A Common Stock are
entitled to one vote per share on each matter to be decided by the
shareholders. Holders of Class A Common Stock elect one-third of the
directors as a class without the participation of any other class of Common
Stock and also participate with the Class C common stockholders in the
election of the remaining two-thirds of the Board of Directors on a share
for share basis. Cumulative voting for election of the directors is not
permitted, which means the holders of more than one half of the Class
A and Class C Common Stock can elect all of the directors. The Class A
Common Stock has no redemption provision and the holders thereof have no
preemptive rights. Holders of the Class A Common Stock are entitled to
receive ratably such dividends, if any, as the Board of Directors may
declare from time to time out of funds legally available therefore. Upon
liquidation of the Company, after payment or provision for payment of all
the Company's debts and obligations and outstanding Preferred Stock, if any,
the holders of the Class A Common Stock may share with the holders of the
Class B Common Stock, if any, and holders of Class C Common Stock in the
Company's remaining assets. The outstanding shares of Common Stock are
fully paid and non-assessable and the shares of Class A Common Stock offered
hereby, upon payment therefore, will be fully paid and non-assessable.
Class B Common Stock.
---------------------
The Company is authorized to issue 5,000,000 shares of Class B
Common Stock, par value $1.00 per share; there are no Class B shares issued
or outstanding. Holders of the Class B Common Stock are entitled to no
votes per share. The Class B Common Stock has no redemption provision and
the holders thereof have no preemptive rights. Holders of the Class B
Common Stock are entitled to receive ratably such dividends, if any,
as the Board of Directors may declare from time to time out of funds legally
available therefore. Upon liquidation of the Company, after payment or
provision for payment of all the Company's debts and obligations and
outstanding Preferred Stock, if any, the holders of the Class B Common Stock
may share ratably in the Company's remaining assets.
<PAGE>
Class C Common Stock.
---------------------
The Company is authorized to issue 7,500,000 shares of Class C
Common Stock, par value $.40 per share, of which 2,250,764 shares were
outstanding as of June 30, 1995. With the exception of electing the Board
of Directors, holders of the Class C Common Stock are entitled to one vote
per share on each matter to be decided by the stockholders. Holders of
Class C Common Stock do not participate in the election of one-third
of the Board of Directors which are elected solely by the holders of Class
A Common Stock. However, they do participate with the Class A common
stockholders in the election of the remaining two-thirds of the Board of
Directors on a share for share basis. Cumulative voting for election of
directors is not permitted, which means the holders of more than one half of
the Class C and Class A Common Stock can elect all of the directors. The
Class C Common Stock has no redemption provision and the holders thereof
have no preemptive rights. Holders of the Class C Common Stock are entitled
to receive 18% of the per share Class A Common Stock dividends, if any, as
the Board of Directors may declare from time to time out of funds legally
available therefore. Upon liquidation of the Company, after payment or
provision for payment of all the Company's debts and obligations and
outstanding Preferred Stock, if any, the holders of the Class C Common
Stock may share in the Company's remaining assets up to 18% of the per share
distributions received by the holders of Class A and Class B Common Stock.
The Class C Common Stock is convertible at any time into Class A Common Stock,
upon election of the holders of Class C Common Stock at the ratio of five
shares of Class C Common Stock to one share of Class A Common Stock, except
that following a stockholder vote approving a plan of complete liquidation or
dissolution of the Company, the conversion ratio shall be at the reduced rate
of 5.56 shares of Class C Common Stock to one share of Class A Common Stock.
There are significant transferability restrictions upon the Class C Common
Stock, and there is no public market for these shares. For a description of
those restrictions, reference is made to the Articles of Incorporation and
this description is qualified in its entirety by the Articles. In general,
a holder of Class C Common Stock can transfer his or her shares without
restrictions to lineal descendants of his or her grandparents and certain
trusts, partnerships and corporations. To the extent that a Class C share
is conveyed to anyone other than such a permitted transferee, then such
Class C shares will revert to Class A shares on the ratio of five
Class C shares to one Class A share. After a holding period of 48 months,
the non-permitted transferee may elect at any time during the 45 day period
following the conclusion of said holding period to have his or her Class A
shares converted back into Class C shares, at the rate of five Class C
shares for each Class A share held.
Preferred Stock.
----------------
The Company is authorized to issue 5,000,000 shares of Preferred Stock, par
value $1.00 per share. Currently, there are no shares of Preferred Stock
issued or outstanding. The Board of Directors is authorized to divide any
or all of the Preferred Stock into series and to fix and determine the relative
rights and preferences of the shares of each series so established. The
Board of Directors, without stockholder approval, could issue the Preferred
Stock with conversion rights which could dilute the voting power of the
holders of the Class A and Class C Common Stock and may have an adverse
effect on all classes of common stock.
Transfer Agent.
---------------
The transfer agent for the Company's Common Stock is First Security Bank,
N.A. of Salt Lake City, Utah.
<PAGE>
EXPERTS
The consolidated financial statements of Security National Financial
Corporation appearing in Security National Financial Corporation's Annual
Report (Form 10-K) for the year ended December 31, 1994, have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference
in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters relating to the Shares will be passed upon for the
Company by Mackey Price & Williams, 170 South Main Street, Suite 900, Salt Lake
City, Utah 84101-1655.
<PAGE>
<TABLE>
<CAPTION>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<S> <C>
Registration Fee. . . . . . . . . . . . . . . . . . . . . . . . $ 48
Blue Sky Fees and Expenses. . . . . . . . . . . . . . . . $ 200*
Legal Fees and Expenses . . . . . . . . . . . . . . . . . $3,000*
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . $ 0 *
Total . . . . . . . . . . . . . . . . . . $3,248*
</TABLE>
All such fees and expenses will be borne entirely by the Company.
_______________________
* Estimated
Item 15. Indemnification of Directors and Officers.
Article XV of the Company's Articles of Restatement of Articles of
Incorporation, in accordance with Section 16-10a-901 et seq. of the Utah
Revised Business Corporation Act, provides that the Company may, to the
maximum extent and in the manner permitted by the Utah Revised Business
Corporation Act, indemnify an individual made a party to a proceeding
because he or she is or was a director of the Company against liability
incurred in any threatened, pending, or completed action, suit or
proceeding, whether civil, criminal, administrative, or investigative and
whether formal or informal, if the individual's conduct was in good faith,
he or she reasonably believed that his or her conduct was in, or not opposed
to, the Company's best interests, and, in the case of any criminal proceeding,
he or she had no reasonable cause to believe his or her conduct was unlawful.
The liability against which indemnification is applicable is the liability
incurred with respect to a proceeding to pay a judgment, settlement, penalty,
fine (including an excise tax assessed with respect to an employee benefit
plan), or reasonable expenses. The termination of a proceeding by judgment,
order, settlement, conviction, or upon plea of nolo contendere or its
equivalent is not, of itself, determinative that the individual's conduct was
not in good faith, that the individual did not reasonably believe that his
or her conduct was in, or not opposed to, the Company's best interests or
that, in the case of any criminal proceeding, the individual had reasonable
cause to believe his or her conduct was unlawful. The Company may also
indemnify an officer who is not a director to a greater extent, if not
inconsistent with public policy, and if provided for by its Articles of
Incorporation, Bylaws, or general or specific action of its board of directors,
or contract.
The Company may not indemnify an individual unless authorized and
a determination is made in the specific case that indemnification of the
individual is permissible in the circumstances because the individual has
met the applicable standard of conduct set forth above. The Company may not
advance expenses to an individual to whom the Company may ultimately
be responsible for indemnification unless authorized in the specific case
after the individual furnishes the following to the Company: a written
affirmation of the individual's good faith belief that his or her conduct
was in good faith, that the individual reasonably believed that his
or her conduct was in, or not opposed to the Company's best interests, and,
in the case of any criminal proceeding, the individual had no reasonable
cause to believe his or her conduct was unlawful; and the individual
furnishes to the Company a written undertaking, executed personally or on
his or her behalf, to repay the advance if it is ultimately determined that
he did not meet the standard of conduct required by law. In addition to the
individual furnishing the aforementioned written affirmation and undertaking,
for the Company to advance expenses, the determination must also be made
that the facts then known to those making the determination would not
preclude indemnification.
All authorizations and determinations relative to indemnification must be made
as follows: (1) by the Board of Directors of the Company by a majority vote
of those present at a meeting at which a quorum is present, and only those
directors not parties to the proceeding shall be counted in satisfying the
quorum; or (2) if a quorum cannot be obtained as contemplated in part (1)
of this sentence, by a majority vote of a committee of the Board of Directors
designated by the Board of Directors of the Company, which committee shall
consist of two or more directors not parties to the proceeding, except that
directors who are parties to the proceeding may participate in the
designation of directors for the committee; or (3) by special legal counsel
selected by the Board of Directors or its committee in the manner prescribed
in part (1) or (2) of this sentence (however, if a quorum of the Board of
Directors cannot be obtained under part (1) of this sentence and a committee
cannot be designated under part (2) of this sentence then a special legal
counsel shall be selected by a majority vote of the full board of directors,
in which selection directors who are parties to the proceeding may
participate); or (4) by shareholders, by a majority of the votes entitled to
be cast by holders of qualified shares present in person or by proxy at a
meeting.
<PAGE>
The Company has also entered into Indemnification Agreements with its officers
and directors. These Indemnification Agreements are substantially similar in
effect to the Bylaws and Articles of Incorporation relative to providing
indemnification to the maximum extent and in the manner permitted by the
Utah Revised Business Corporation Act. Additionally, such Indemnification
Agreements contractually bind the Company with respect to indemnification
and contain certain exceptions to indemnification, but do not limit the
indemnification available pursuant to the Company's Bylaws, the Company's
Articles of Incorporation or the Utah Revised Business Corporation Act.
<TABLE>
<CAPTION>
Item 16. Exhibits.
<C> <S>
10.1 Stock Purchase Agreement by and among the Company, CILIC and Suncoast
(incorporated by reference to Report on Form 8-K, as filed on October
31, 1994).
10.2 Profit Sharing Agreement between the Company and Suncoast
(incorporated by reference to Report on Form 8-K, as filed on March
6, 1995).
10.3 Service Agreement between the Company and Suncoast (incorporated by
reference to Report on Form 8-K, as filed on March 6, 1995).
10.4 Promissory Note between the Company, as borrower, and Key Bank of
Utah, as lender (incorporated by reference to Report on Form 8-K,
as filed on March 6, 1995).
10.5 Loan and Security Agreement between Key Bank of Utah and the Company
(incorporated by reference to Report on Form 8-K, as filed on March
6, 1995).
10.6 General Pledge Agreement between the Company and Key Bank of Utah
(incorporated by reference to Report on Form 8-K, as filed on March
6, 1995).
24.1 Consent of Ernst & Young LLP.
24.2 Consent of Mackey Price & Williams (included in Exhibit 5.1 hereto).
25.1 Power of Attorney (contained on page II-15 of this Registration
Statement).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
<C> <S>
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any Prospectus required by Section 10(a)(3) of
the 1933 Act;
(ii) to reflect in the Prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) shall not
apply to information required to be included in a post-effective
amendment by those paragraphs that are contained in periodic
reports filed by the registrant pursuant to Section 13 or Section
15(d) of the 1934 Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
(4) For purposes of determining any liability under the 1933 Act,
each filing of the registrant's Annual Report pursuant to Section 13(a) or
Section 15(d) of the 1934 Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the 1934
Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
</TABLE>
Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to directors, officers and controlling persons of the small business
issuer pursuant to the foregoing provisions, or otherwise, the registrant has
been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Salt Lake City, State of Utah, on the 22nd day of August, 1995.
SECURITY NATIONAL FINANCIAL CORPORATION
By: George R. Quist
Its: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints George R. Quist as his true and lawful
attorney-in-fact and agent with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all Exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
----------------- -------- --------
<S> <S> <C>
George R. Quist Chairman of the Board of
Directors, President and August 22, 1995
Chief Executive Officer
Scott M. Quist First Vice President,
General Counsel, August 22, 1995
Treasurer and Director
William C. Sargent Senior Vice President,
Secretary and Director August 22, 1995
Sherman B. Lowe Director August 22, 1995
R.A.F. McCormick Director August 22, 1995
W. Lowell Steen Director August 22, 1995
Nathan H. Wagstaff Director August 22, 1995
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
<C> <S> <C>
5.1 Opinion of Mackey Price & Williams as to the
legality of the Shares registered hereby. . . . . . .
24.1 Consent of Ernst & Young LLP. . . . . . . . . . . . .
24.2 Consent of Mackey Price & Williams (included in Exhibit 5.1
hereto) . . . . . . . . . . . . . . . . . . . . . . .
25.1 Power of Attorney (contained on part II-15 of this Registration
Statement). . . . . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE>
As filed with the Securities and Exchange Commission on August 28, 1995
Registration Statement No. 33-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
EXHIBITS
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
__________________
SECURITY NATIONAL FINANCIAL CORPORATION
(Exact name of issuer as specified in its charter)
Utah
(State or other jurisdiction of incorporation or organization)
87-0345941
(I.R.S. Employer Identification No.)
5300 South 360 West, Suite 310
Salt Lake City, Utah 84123
(801) 264-1060
(Address, including zip code, and telephone number, including area code, of
issuer's principal executive offices)
Copies to:
<TABLE>
<CAPTION>
<S> <S>
George R. Quist, President Randall A. Mackey, Esq.
Security National Financial Corporation Mackey Price & Williams
5300 South 360 West, Suite 310 170 South Main Street, Suite 900
Salt Lake City, Utah 84123 Salt Lake City, Utah 84101-1655
(801) 264-1060 (801) 575-5000
</TABLE>
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
<C> <S> <C>
5.1 Opinion of Mackey Price & Williams as to the
legality of the Shares registered hereby. . . . . . .
24.1 Consent of Ernst & Young LLP. . . . . . . . . . . . .
24.2 Consent of Mackey Price & Williams (included in Exhibit
5.1 hereto) . . . . . . . . . . . . . . . . . . . . .
25.1 Power of Attorney (contained on page II-15 of this Registration
Statement). . . . . . . . . . . . . . . . . . . . . .
<PAGE>
EXHIBIT 5.1
August 22, 1995
Security National Financial Corporation
5300 South 360 West, Suite 310
Salt Lake City, Utah 84123
RE: Registration of 40,000 Shares of Class A Common Stock
Ladies and Gentlemen:
We have acted as your counsel, in connection with the registration of 40,000
shares of Class A Common Stock (the "Shares"), which are the subject of a
Registration Statement on Form S-3 filed under the Securities Act of 1933,
as amended. In such connection, we have examined certain corporate records
and proceedings of the company, including the proceedings taken in connection
with the authorizaton and issuance of the Shares described above, and such
other investigation as we deemed necessary.
Based upon the foregoing, we are of the opinion that the Shares to be
registered, as contemplated by the aforesaid Registration Statement, have
been validly issued, fully paid and nonassessable.
We hereby consent to be named in the Registration Statement, as amended from
time to time, as the attorneys who will pass upon legal matters in connection
with the registration of the Shares, and to the filing of this opinion as
an Exhibit to the aforesaid Registration Statement.
Very truly yours,
Mackey Price & Williams
RAM:dt
<PAGE>
EXHIBIT 24.1
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Security
National Financial Corporation for the registration of 40,000 shares of
Class A Common Stock and to the incorporation by reference therein of our
report dated March 10, 1995 with respect to the consolidated financial
statements and schedules of Security National Financial Corporation included
in its Annual Report (Form 10-K) for the year ended December 31, 1994,
filed with the Securities and Exchange Commission.
Ernst & Young LLP
Salt Lake City, Utah
August 22, 1995
<PAGE>
EXHIBIT 24.2
INCLUDED IN EXHIBIT 5.1 HERETO
<PAGE>
EXHIBIT 25.1
CONTAINED ON PAGE II-15 OF THIS REGISTRATION STATEMENT
</TABLE>
