<PAGE>
As filed with the Securities and Exchange
Commission on January 16, 1996
Registration Statement No. 33-62529
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
AMENDMENT NO. 2
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:
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,
Salt Lake City, Utah 84123 Suite 900
(801) 264-1060 Salt Lake City, Utah 84101-1655
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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. [ ]
<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)
<TABLE>
<CAPTION>
<S> <C>
Form F-1 Item Number and Caption Location or Heading in
Prospectuses
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 Outside Front Cover Page;
Registered Description of Capital Stock
10. Interests of Named Experts and Counsel Not Applicable
11. Material changes Not Applicable
12. Incorporation of Certain Information Documents Incorporated by
by Reference by Reference
13. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities . . . . . . . . . . . Not applicable
</TABLE>
<PAGE>
SUBJECT TO COMPLETION
PROSPECTUS DATED JANUARY 16, 1996
SECURITY NATIONAL FINANCIAL CORPORATION
40,000 Shares of Class A
Common Stock,
$2.00 par value per share
_________________________
This Prospectus relates to offer and sale of shares of Class A Common Stock,
$2.00 par value per share, of Security National Financial Corporation, a Utah
corporation (the "Company"), by Suncoast Financial Corporation, a Delaware
corporation (the "Selling Shareholder"), which shares were 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"), the Selling Shareholder and sole shareholder of CILIC
(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 the Selling
Shareholder and agreed to register the shares (the "Shares") with the United
States Securities and Exchange Commission.
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 stock-
holders 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 January 7, 1996, 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 $4.75 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 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.
____________________
January __, 1996
<PAGE>
After the Shares have been registered, they may be sold from time to time
directly by the Selling Shareholder, or by pledgees, donees, transferees or
other successors-in-interest to the Selling Shareholder. 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. . . . . . . . . . . . . . . . . . . . . . . . 4
Documents Incorporated by Reference. . . . . . . . . . . . . . . . . 4
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . 9
Description of the Company's Capital Stock . . . . . . . . . . . . . 9
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
</TABLE>
<PAGE>
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 there-
with 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.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
<TABLE>
<CAPTION>
<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 Quarterly Report on Form 10-Q for the quarter ended September 30,
1995;
(5) The Report on Form 8-K filed on January 3, 1995;
(6) The Report on Form 8-K/A filed on March 6, 1995;
(7) The Report on Form 8-K/A-2 filed on March 31, 1995;
(8) The Report on Form 8-K filed on May 3, 1995;
(9) The Report on Form 8-K filed on January 16, 1996; and
(10) The definitive Proxy Statement for the Company's 1995 Annual Meeting
of Shareholders 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.
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
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 Memorial Crematory,
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.
<PAGE>
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.
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 shares of common stock of Greer-Wilson Funeral Home,
Inc., which owns and operates a funeral home in Phoenix, Arizona.
In December 1995, the Company acquired all of the issued and outstanding shares
of Common Stock of Civil Service Employees Life Insurance Company ("CSE Life"),
a California domiciled insurance company. Following the completion of the
purchase of CSE Life, the Company merged CSE Life into Capital Investors
Life.
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 1989
and 1990, but not in 1992, 1993, and 1994.
(3) Does not include investment income or other income.
</TABLE>
<PAGE>
For the years presented, accident and health insurance has been combined with
the life insurance segment, since the amounts were insignificant.
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 subsidiary competes 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.
<PAGE>
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.
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 subsidiary is
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.
<PAGE>
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.
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
he 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 the Selling
Shareholder and sole shareholder of CILIC (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 the Selling
Shareholder and agreed to register the Shares with the United States Securities
and Exchange Commission. Upon completion of the registration of the Shares,
the Shares may be sold from time to time by the Selling Shareholder.
Consequently, the Company will not receive any proceeds from the sale of the
Shares.
PLAN OF DISTRIBUTION
Upon completion of registration, the Shares offered hereby may be sold from
time to time directly by the Selling Shareholder or by pledgees, donees,
transferees or other successors-in-interest to the Selling Shareholder.
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.
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,
<PAGE>
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 to each
Class A share so obtained.
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.
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.
<PAGE>
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.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<CAPTION>
<S> <C>
Registration Fee . . . . . . . . . . . . . . . . . . . . . $ 100
Blue Sky Fees and Expenses . . . . . . . . . . . . . . . . $ 200*
Legal Fees and Expenses. . . . . . . . . . . . . . . . . . $3,000*
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . $ 0 *
Total. . . . . . . . . . . . . . . . . . . $3,300*
</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
<PAGE
(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.
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>
5.1 Opinion of Mackey Price & Williams
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>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(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.
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 16th day of January, 1996.
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:
Signature Title Date
------------- ------------------------- ---------
George R. Quist Chairman of the Board of
Directors, President and January 16, 1996
Chief Executive Officer
Scott M. Quist First Vice President, General
Counsel, Treasurer and Director January 16, 1996
William C. Sargent Senior Vice President, Secretary January 16, 1996
and Director
Charles L. Crittenden Director January 16, 1996
Sherman B. Lowe Director January 16, 1996
R.A.F. McCormick Director January 16, 1996
Craig Moody Director January 16, 1996
W. Lowell Steen Director January 16, 1996
Nathan H. Wagstaff Director January 16, 1996
* By George R. Quist
Attorney-in-Fact
<PAGE>
As filed with the Securities and Exchange Commission on January 16, 1996
Registration Statement No. 33-62529
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
EXHIBITS
TO
AMENDMENT NO. 2
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:
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
(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). . . . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE>
EXHIBIT 5.1
<PAGE>
January 16, 1996
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 authorization 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
<PAGE>
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 its 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
January 16, 1996
<PAGE>
EXHIBIT 24.2
<PAGE>
INCLUDED IN EXHIBIT 5.1 HERETO
<PAGE>
EXHIBIT 25.1
<PAGE>
CONTAINED ON PAGE II-15 OF THIS REGISTRATION STATEMENT
<PAGE>
October 24, 1995
National Association of Securities
Dealers, Inc.
NASDAQ Report Section, 3rd Floor
1735 "K" Street, N.W.
Washington, D.C. 20006
RE: Security National Financial Corporation
Amendment No. 1 to Form S-3
File No. 033-62529
Ladies and Gentlemen:
On behalf of Security National Financial Corporation, we enclose for filing
pursuant to Section 13 of the Securities Exchange Act of 1934 one manually
executed and two (2) conformed copies of the Amendment No. 1 to Form S-3
Registration Statement.
Please date stamp the enclosed copy of this letter and return it in the
enclosed self-addressed, stamped envelope. If the staff has any questions
or requires additional information, please call (collect) to Mr. Randall
A. Mackey at (801) 575-5000.
Very truly yours,
SECURITY NATIONAL
FINANCIAL CORPORATION
Scott M. Quist
First Vice President,
General Counsel and Treasurer
SMQ/cmw
Enclosures
