<PAGE>
SECURITY NATIONAL FINANCIAL CORPORATION
5300 South 360 West, Suite 310
Salt Lake City, Utah 84123
PROXY STATEMENT
Annual Meeting of Stockholders
To Be Held on September 24, 1997
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Security
National Financial Corporation (the "Company") for use at the
Annual Meeting of Stockholders to be held on September 24, 1997,
at 5258 Pinemont Drive, Suite B, Salt Lake City, Utah, at 12:00
Noon, Mountain Daylight Savings Time, or at any adjournment or
postponements thereof (the "Annual Meeting"). The shares covered
by the enclosed Proxy, if such is properly executed and received
by the Board of Directors prior to the meeting, will be voted in
favor of the proposals to be considered at the Annual Meeting,
and in favor of the election of the nominees to the Board of
Directors (three nominees to be elected by the Class A common
stockholders voting separately as a class and six nominees to be
elected by the Class A and Class C common stockholders voting
together) as listed unless such Proxy specifies otherwise, or the
authority to vote in the election of directors is withheld. A
Proxy may be revoked at any time before it is exercised by giving
written notice to the Secretary of the Company at its above
address. Stockholders may vote their shares in person if they
attend the Annual Meeting, even if they have executed and
returned a Proxy. This Proxy Statement and accompanying Proxy
Card were mailed to stockholders on or about August 24, 1997.
Your vote is important. Please complete and return the
Proxy Card so your shares can be represented at the Annual
Meeting, even if you plan to attend in person.
If a shareholder wishes to assign a proxy to someone other
than the Directors' Proxy Committee, all three names appearing on
the Proxy Card must be crossed out and the name(s) of another
person or persons (not more than three) inserted. The signed
card must be presented at the meeting by the person(s)
representing the shareholder.
The cost of this solicitation will be borne by the Company.
The Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in
forwarding solicitation materials to such beneficial owners.
Proxies may also be solicited by certain of the Company's
directors, officers, and regular employees, without additional
compensation.
The matters to be brought before the Annual Meeting are (1)
to elect directors to serve for the ensuing year, and (2) to
ratify the appointment of Ernst & Young LLP as the Company's
independent accountants for the fiscal year ending December 31,
1997.
<PAGE>
VOTING SECURITIES
Only holders of record of Common Stock at the close of
business on August 11, 1997, will be entitled to vote at the
Annual Meeting. As of June 30, 1997, there were issued and
outstanding 3,468,258 shares of Class A Common Stock, $2.00 par
value per share, and 4,912,485 shares of Class C Common Stock
$.20 par value per share resulting in a total of 8,380,743 shares
of both Class A and Class C Common Stock outstanding. A majority
of the outstanding shares (4,190,373) of Common Stock will
constitute a quorum for the transaction of business at the
meeting.
The holders of either class of Common Stock of the Company
are entitled to one vote per share. Cumulative voting is not
permitted in the election of directors.
The Company's Articles of Incorporation provide that the
Class A common stockholders and Class C common stockholders have
different voting rights in the election of directors. The Class
A common stockholders voting separately as a class will be
entitled to vote for three of the nine directors to be elected
(the nominees to be voted upon by the Class A stockholders
separately consist of Messrs. George R. Quist, W. Lowell Steen
and Nathan H. Wagstaff). The remaining six directors will be
elected by the Class A and Class C common stockholders voting
together (the nominees to be so voted upon consist of Messrs.
Charles L. Crittenden, Sherman W. Lowe, R.A.F. McCormick, H.
Craig Moody, Scott M. Quist and William C. Sargent). For the
other business to be conducted at the Annual Meeting, the Class
A and Class C common stockholders will vote together, one vote
per share. Class A common stockholders will receive a different
form of Proxy than the Class C common stockholders.
ELECTION OF DIRECTORS
There are three committees of the Board of Directors which
meet periodically during the year: the Audit Committee, the
Compensation Committee, and the Executive Committee. The Board
of Directors does not have a Nominating Committee.
The Compensation Committee is responsible for recommending
to the Board of Directors for approval the annual compensation of
each executive officer of the Company and the executive officers
of the Company's subsidiaries, developing policy in the areas of
compensation and fringe benefits, contributions under the
Employee Stock Ownership Plan, contribution under the 401(k)
Retirement Savings Plan, granting of options under the stock
option plans and creating other employee compensation plans. The
Compensation Committee consists of Messrs. Charles L. Crittenden,
Sherman B. Lowe, George R. Quist and W. Lowell Steen. During
1996 the Compensation Committee met on one occasion.
The Audit Committee directs the auditing activities of the
Company's internal auditors and outside public accounting firm
and approves the services of the outside public accounting firm.
The Audit Committee consists of Messrs. Charles L. Crittenden,
Sherman B. Lowe and Nathan H. Wagstaff. During 1996 the Audit
Committee met on one occasion.
<PAGE>
The Executive Committee reviews Company policy, major
investment activities and other pertinent transactions of the
Company. The Executive Committee consists of Messrs. George R.
Quist, Scott M. Quist, William C. Sargent and H. Craig Moody.
During 1996 the Executive Committee met on four occasions.
During 1996 there were five meetings of the Company's Board
of Directors.
The Company's Bylaws provide that the Board of Directors
shall consist of not less than three nor more than eleven
members. The term of office of each director is for a period of
one year or until the election and qualification of his
successor. A director is not required to be a resident of the
State of Utah but must be a stockholder of the Company.
The size of the Board of Directors of the Company for the
coming year is nine members. Unless authority is withheld by
your Proxy, it is intended that the Common Stock represented by
your Proxy will be voted for the respective nominees listed
below. If any nominee should not serve for any reason, the Proxy
will be voted for such person as shall be designated by the Board
of Directors to replace such nominee. The Board of Directors has
no reason to expect that any nominee will be unable to serve.
There is no arrangement between any of the nominees and any other
person or persons pursuant to which he was or is to be selected
as a director. There is no family relationship between or among
any of the nominees, except that Scott M. Quist is the son of
George R. Quist.
The Nominees
The nominees to be elected by the holders of Class A Common
Stock are as follows:
<TABLE>
<CAPTION>
Name Age Director Since Position(s)
with the
Company
---------------- ----- --------------- ---------------
<S> <C> <C> <S>
George R. Quist 76 October 1979 Chairman of the
Board,
President,
and Chief
Executive
Officer
W. Lowell Steen 81 October 1979 Director
Nathan H. Wagstaff 75 October 1979 Director
</TABLE>
<TABLE>
<CAPTION>
The nominees for election by the holders of Class A and Class
C Common Stock, voting together, are as follows:
Name Age Director Since Position(s)
with the
Company
------------- ------ ---------------- --------------
<S> <C> <C> <C>
Charles L.
Crittenden 76 October 1979 Director
Sherman B. Lowe 82 October 1979 Director
R.A.F. McCormick 83 October 1979 Director
H. Craig Moody 45 September 1995 Director
Scott M. Quist 43 May 1986 First Vice
President,
General
Counsel,
Treasurer and
Director
William C. Sargent 68 February 1980 Senior Vice
President,
Secretary and
Director
</TABLE>
<PAGE>
The following is a description of the business experience of
each of the nominees and directors.
George R. Quist, age 76, has been Chairman of the Board of
Directors, President and Chief Executive Officer of the Company
since October 1979. From 1946 to 1960, he was an agent, District
Manager and Associate General Agent for various insurance
companies. From 1960 to 1964, he was Treasurer and Executive
Vice President of Pacific Guardian Life Insurance Company. Mr.
Quist also served from 1981 to 1982 as the President of The
National Association of Life Companies, a trade association of
642 life insurance companies, and from 1982 to 1983 as its
Chairman of the Board.
William C. Sargent, age 68, has been Senior Vice President of the
Company since 1980, Secretary since October 1993, and a director
since February 1980. Prior to that time, he was employed by
Security National Life as a salesman and agency superintendent.
Scott M. Quist, age 43, has been the Company's General Counsel
since 1982, a Vice President since 1983, the Treasurer since
October 1993, and a director since May 1986. From 1980 to 1982,
Mr. Quist was a tax specialist with Peat, Marwick, Main, & Co.,
in Dallas, Texas. Since 1986 he has been a director of the
National Association of Life Companies, a trade association of
642 insurance companies and its Treasurer until its merger with
the American Council of Life Companies. Mr. Quist is currently
a member of the Board of Governors of the Forum 500 Section
(representing small companies) of the American Council of Life
Insurance. Mr. Quist has also been a director since November
1993 of Key Bank of Utah.
Charles L. Crittenden, age 76, has been a director of the Company
since October 1979. Mr. Crittenden is sole stockholder of
Crittenden Paint & Glass Company since 1958. He is a 50%
stockholder of Crittenden Enterprises, a real estate development
company and Chairman of the Board of Linco, Inc.
Sherman B. Lowe, age 82, has been a director of the Company since
October 1979. Mr. Lowe was formerly President and Manager of
Lowe's Pharmacy located in Salt Lake City, Utah, for the past 30
years. He is now retired. He is a one-third owner of Burton-
Lowe Ranches, a general partnership.
R.A.F. McCormick, age 83, has been a director of the Company
since October 1979. He is the past Vice President of Sales for
Clover Club Foods, a food processing company. He is now retired.
H. Craig Moody, age 45, was elected a director of the Company on
September 25, 1995. Mr. Moody is owner of Moody & Associates, a
company which is involved in political consulting and real
estate. He is a former Speaker and Majority Leader of the House
of Representatives of the State of Utah.
W. Lowell Steen, age 81, has been a director of the Company since
October 1979. He has been a real estate investment broker for
the last 13 years. Prior to that time, he was a large-scale
rancher and food processor. Currently, he is President and sole
stockholder of Lowell Steen, Inc., a real estate company.
<PAGE>
Nathan H. Wagstaff, age 75, has been a director of the Company
since October, 1979. He has served as President and Chairman of
the Board of Directors of Nate Wagstaff Company, Inc., since
1975. He has also served as President and General Manager of
Western States Distribution Company, Highland Petroleum Company,
Inc., and Holiday Oil Company. Mr. Wagstaff is the sole
stockholder of Nate Wagstaff Company, Inc., an oil distribution
company.
Executive Officers
- ------------------
The following table sets forth certain information with
respect to the executive officers of the Company (the business
biographies for the first three individuals are set forth above):
<TABLE>
<CAPTION>
Name Age Title
---------------- ----- ----------------------------------
<S> <C> <S>
George R. Quist1 76 Chairman of the Board, President
and Chief Executive Officer
Scott M. Quist1 43 First Vice President, General
Counsel and Treasurer
William C. Sargent 68 Senior Vice President and Secretary
</TABLE>
1George R. Quist is the father of Scott M. Quist.
The Board of Directors of the Company has a written procedure
which requires disclosure to the Board of any material interest
or any affiliation on the part of any of its officers, directors
or employees which is in conflict or may be in conflict with the
interests of the Company.
No director, officer or 5% stockholder of the Company or its
subsidiaries, or any affiliate thereof has had any transactions
with the Company or its subsidiaries during 1996 or 1995 other
than employment arrangements or as described above.
None of the Directors are board members of any other company
having a class of equity securities registered under the
Securities Exchange Act of 1934, as amended, or any company
registered as an investment company under the Investment Company
Act of 1940, as amended, with the exception of Scott M. Quist,
who is a director of Key Bank of Utah. All directors of the
Company hold office until the next annual meeting of
stockholders, until their successors have been elected and
qualified, or until their earlier resignation or removal.
<PAGE>
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth security ownership information of the Company's
Class A and Class C Common Stock as of June 30, 1997, (i) for persons who
own beneficially more than 5% of the Company's outstanding Class A or Class C
Common Stock, (ii) each director of the Company, and (iii) for all executive
officers and directors of the Company as a group.
Class A Class C
Common Stock Common Stock
----------------- -------------------
Amount Amount
Name and Address of Beneficially Percent Beneficially Percent
Beneficial Owner Owned of Class Owned of Class
- --------------------- ------------- --------- ------------- ---------
<S> <C> <C> <C> <C>
George R. Quist (1) (2)
4491 Wander Lane
Salt Lake City,
Utah 84124 237,554 6.8 2,462,390 50.1
Employee Stock Ownership
Plan (4)
5300 S. 360 W., Suite 310
Salt Lake City,
Utah 84123 590,579 17.0 1,051,159 21.4
William C. Sargent (1) (2) (3)
4974 Holladay Blvd.
Salt Lake City,
Utah 84117 74,761 2.2 257,820 5.2
Scott M. Quist (3)
7 Wanderwood Way
Sandy, Utah 84092 74,581 2.2 55,918 1.1
Charles L. Crittenden
248 - 24th Street
Ogden, Utah 84404 -0- * 162,187 3.3
Sherman B. Lowe (3)
2197 South 2100 East
Salt Lake City,
Utah 84109 19,279 * 177,248 3.6
R.A.F. McCormick (1)
400 East Crestwood Road
Kaysville,
Utah 84037 9,246 * 92,474 1.9
H. Craig Moody
1782 East Faunsdale Dr.
Sandy, Utah 84092 111 * -0- *
W. Lowell Steen
12705 SE River Rd.,
Apt. 803C
Portland, Oregon 97222 221 * 1,611 *
Nathan H. Wagstaff
2131 King Street
Salt Lake City,
Utah 84109 23,094 * 173,899 3.5
Associated Investors (5)
5300 S. 360 W. Suite 310
Salt Lake City,
Utah 84123 69,401 2.0 443,658 9.0
All directors and executive
officers (9 persons) 438,847 12.7 3,383,547 68.9
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Class A
and Class C
Common Stock
---------------------------
Amount
Name and Address of Beneficially Percent
Beneficial Owner Owned of Class
- ----------------------- --------------- ----------
<S> <C> <C>
George R. Quist (1) (2)
4491 Wander Lane
Salt Lake City, Utah 84124 2,699,944 32.2
Employee Stock Ownership Plan (4)
5300 S. 360 W., Suite 310
Salt Lake City, Utah 84123 1,641,738 19.6
William C. Sargent (1) (2) (3)
4974 Holladay Blvd.
Salt Lake City, Utah 84117 332,581 4.0
Scott M. Quist (3)
7 Wanderwood Way
Sandy, Utah 84092 130,499 1.6
Charles L. Crittenden
248 - 24th Street
Ogden, Utah 84404 162,187 1.9
Sherman B. Lowe (3)
2197 South 2100 East
Salt Lake City, Utah 84109 196,527 2.3
R.A.F. McCormick (1)
400 East Crestwood Road
Kaysville, Utah 84037 101,720 1.2
H. Craig Moody
1782 East Faunsdale Dr.
Sandy, Utah 84092 111 *
W. Lowell Steen
12705 SE River Rd., Apt. 803C
Portland, Oregon 97222 1,832 *
Nathan H. Wagstaff
2131 King Street
Salt Lake City, Utah 84109 196,993 2.4
Associated Investors (5)
5300 S. 360 W. Suite 310
Salt Lake City, Utah 84123 513,059 6.1
All directors and executive
officers (9 persons) 3,822,394 45.6
</TABLE>
* Less than one percent
(1) Does not include 590,579 shares of Class A Common
Stock and 1,051,159 shares of Class C Common Stock
owned by the Company's Employee Stock Ownership Plan
(ESOP), of which George R. Quist, William C. Sargent
and R.A.F. McCormick are the trustees and accordingly,
exercise shared voting and investment powers with
respect to such shares.
(2) Does not include 69,401 shares of Class A Common Stock
and 443,658 shares of Class C Common Stock owned by
Associated Investors, a Utah general partnership, of
which these individuals are the managing partners and,
accordingly, exercise shared voting and investment
powers with respect to such shares.
Does not include 4,099 shares of Class A Common Stock
owned by the Company's 401(k) Retirement Savings Plan,
of which William C. Sargent, Scott M. Quist and
Sherman B. Lowe are the trustees and accordingly,
exercise shared voting and investment powers with
respect to such shares.
(4) The trustees of the Employee Stock Ownership Plan
(ESOP) are George R. Quist, William C. Sargent and
R.A.F. McCormick, who exercise shared voting and
investment powers.
(5) The managing partners of Associated Investors are
George R. Quist and William C. Sargent, who exercise
shared voting and investment powers.
The Company's officers and directors, as a group, own
beneficially approximately 43.4% of the outstanding shares of the
Company's Class A and Class C Common Stock.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Officer Compensation
The following table sets forth, for each of the last three
fiscal years, the compensation received by George R. Quist, the
Company's President and Chief Executive Officer, and all other
executive officers (collectively, the "Named Executive Officers')
at December 31, 1996 whose salary and bonus for all services in
all capacities exceed $100,000 for the fiscal year ended December
31, 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
________Annual Compensation__________
Other
Annual
Compen-
Name and Principal sation
Position Year Salary($) Bonus($) ($)(2)
- ------------------- ----- --------- ------- ------
<S> <C> <C> <C> <C>
George R. Quist (1)
Chairman of the Board, 1996 $ 109,127 $15,303 $2,400
President and Chief 1995 104,469 15,303 2,400
Executive Officer 1994 102,245 15,303 2,400
William C. Sargent
Senior Vice President, 1996 103,915 15,000 4,500
Secretary and 1995 77,538 11,725 4,500
Director 1994 82,777 10,725 4,500
Scott M. Quist (1)
First Vice President, 1996 96,192 16,250 7,200
General Counsel 1995 84,871 13,000 7,200
Treasurer and Director 1994 82,502 12,000 7,200
</TABLE>
<TABLE>
<CAPTION>
Summary Compensation Table
Awards Payouts
Securities Long-
Restricted Underlying Term All Other
Stock Options/ Incentive Compensa-
Awards($) SARs(#) Payout($) tion($)(3)
------------ --------- --------- -----------
<S> <C> <C> <C> <C>
George R. Quist (1)
Chairman of the Board, 0 0 0 3,573
President and Chief 0 0 0 5,937
Executive Officer 0 88,200 0 8,263
William C. Sargent
Senior Vice President, 0 0 0 4,320
Secretary and 0 0 0 2,100
Director 0 26,129 0 4,020
Scott M. Quist (1)
First Vice President, 0 0 0 4,497
General Counsel 0 0 0 2,206
Treasurer and Director 0 0 0 3,924
</TABLE>
(1) George R. Quist is the father of Scott M. Quist.
(2) The amounts indicated under "Other Annual
Compensation" for 1996 consist of payments related to
the operation of automobiles by the Named Executive
Officers. However, such payments do not include the
furnishing of an automobile by the Company to George
R. Quist, William C. Sargent and Scott M. Quist nor
the payment of insurance and property taxes with
respect to the automobiles operated by the Named
Executive Officers.
(3) The amounts indicated under "All Other Compensation"
for 1996 consist of (a) amounts contributed by the
Company into a trust for the benefit of the Named
Executive Officers under the Employee Stock Ownership
Plan (for fiscal 1996, such amounts were George R.
Quist, $3,085; William C. Sargent, $3,567; and Scott
M. Quist, $3,373); (b) matching contributions made by
the Company pursuant to the 401(k) Retirement Savings
Plan in which all matching contributions are invested
in the Company's Class A Common Stock (for fiscal
1996, such amounts were George R. Quist, $488; William
C. Sargent, $107; and Scott M. Quist, $478); (c)
insurance premiums paid by the Company with respect to
a group life insurance plan for the benefit of the
Named Executive Officers (for fiscal 1996, $1,292 was
paid for all Named Executive Officers as a group, or
$646 each for William C. Sargent and Scott M. Quist);
and (d) life insurance premiums paid by the Company
for the benefit of the family of Mr. George R. Quist
($4,645).
The following table sets forth information concerning the
exercise of options to acquire shares of the Company's Common
Stock by the Named Executive Officers during the fiscal year
ended December 31, 1996, as well as the aggregate number and
value of unexercised options held by the Named Executive Officers
on December 31, 1996.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal
Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options/SARs
at December 31, 1996 (#)
Shares Acquired Value
Name on Exercise(#) Realized ($) Exercisable Unexercisable
- -------------- --------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
George R. Quist 0 0 146,082 0
William C. Sargent 0 0 72,434 0
Scott M. Quist 31,534 $149,787 0 0
</TABLE>
<TABLE>
<CAPTION>
Value of Unexercised
In-the-Money Options/SARs at
December 31, 1996($)
Name Exercisable Unexercisable
- ----------------- ------------ -------------
<S> <C> <C>
George R. Quist $243,101 0
William C. Sargent 160,407 0
Scott M. Quist 0 0
</TABLE>
Retirement Plans
- ----------------
George R. Quist, who has been Chairman, President and
Chief Executive Officer of the Company since 1979, has a
Deferred Compensation Agreement, dated December 8, 1988, with
the Company (the "Compensation Agreement"). This Compensation
Agreement provides upon Mr. Quist's retirement the Company
shall pay him $50,000 per year as an annual retirement benefit
for a period of 10 years from the date of retirement; and upon
his death, the remainder of such annual payments shall be
payable to his wife, if she survives him.
The Compensation Agreement further provides that the
Board of Directors may elect to pay the entire amount of
deferred compensation in the form of a single lump-sum payment
or other installment payments, so long as the term of such
payments do not exceed 10 years. However, in the event Mr.
Quist's employment with the Company is terminated for any
reason other than retirement, death or disability, the entire
deferred compensation shall be forfeited by him.
William C. Sargent, who has been Senior Vice President of
the Company since 1980, has a Deferred Compensation Agreement
with the Company (the "Compensation Agreement"). This
Compensation Agreement provides upon Mr. Sargent's retirement
the Company shall pay him $50,000 per year as an annual
retirement benefit for a period of 10 years from the date of
retirement; and upon his death, the remainder of such annual
payments shall be payable to his wife, if she survives him,
otherwise the children born of the marriage.
The Compensation Agreement further provides that the
Board of Directors may elect to pay the entire amount of
deferred compensation in the form of a single lump-sum payment
or other installment payments, so long as the term of such
payments do not exceed 10 years. However, in the event Mr.
Sargent's employment with the Company is terminated for any
reason other than retirement, death or disability, the entire
deferred compensation shall be forfeited by him.
Employment Agreement
- --------------------
The Company maintains an employment agreement with Scott
M. Quist. The agreement, which has a five year term, was
entered into in 1996, and renewed in 1997. Under the terms of
the agreement, Mr. Quist is to devote his full time to the
Company serving as its Treasurer, First Vice President, and
General Counsel at not less than his current salary and
benefits, and to include $500,000 of life insurance protection.
In the event of disability, Mr. Quist's salary would be
continued for up to 5 years at 50% of its current level. In
the event of a sale or merger of the Company, and Mr. Quist
were not retained in his current position, the Company would be
obligated to continue Mr. Quist's current compensation and
benefits for seven years following the merger or sale.
Director Compensation
- ---------------------
Directors of the Company (but not including directors who
are employees) are paid a director's fee of $8,400 per year by
the Company for their services and are reimbursed for their
expenses in attending board and committee meetings. No
additional fees are paid by the Company for committee
participation or special assignments.
<PAGE>
Employee 401(k) Retirement Savings Plan
- ---------------------------------------
In 1995, the Company's Board of Directors adopted a
401(k) Retirement Savings Plan. Under the terms of the 401(k)
plan, effective as of January 1, 1995, the Company may make
discretionary employer matching contributions to its employees
who choose to participate in the plan. The plan allows the
board to determine the amount of the contribution at the end of
each year. For the years 1996 and 1995 the board adopted a
contribution formula specifying that such discretionary
employer matching contributions would equal 50% of the
participating employee's contribution to the plan up to a
maximum discretionary employee contribution of 5% of a
participating employee's compensation, as defined by the plan.
All persons who have completed at least one years'
service with the Company and satisfy other plan requirements
are eligible to participate in the 401(k) plan. All Company
matching contributions are invested in the Company's Class A
Common Stock. The Company's matching contributions for 1996
and 1995 were approximately $50,000 and $21,000, respectively.
The trustees under the 401(k) plan are Messrs. Sherman B. Lowe,
Scott M. Quist and William C. Sargent.
Employee Stock Ownership Plan
- -----------------------------
Effective January 1, 1980, the Company adopted an
employee stock ownership plan (the "Ownership Plan") for the
benefit of career employees of the Company and its
subsidiaries. The following is a description of the Ownership
Plan, and is qualified in its entirety by the Ownership Plan, a
copy of which is available for inspection at the Company's
offices.
Under the Ownership Plan, the Company has discretionary
power to make contributions on behalf of all eligible employees
into a trust created under the Ownership Plan. Employees
become eligible to participate in the Ownership Plan when they
have attained the age of 19 and have completed one year of
service (a twelve-month period in which the Employee completes
at least 1,040 hours of service). The Company's contributions
under the Ownership Plan are allocated to eligible employees on
the same ratio that each eligible employee's compensation bears
to total compensation for all eligible employees during each
year. To date, the Ownership Plan has approximately 98
participants and had contributions payable to the Plan in 1996
of $50,017. Benefits under the Ownership Plan vest as follows:
20% after the third year of eligible service by an employee, an
additional 20% in the fourth, fifth, sixth and seventh years of
eligible service by an employee.
Benefits under the Ownership Plan will be paid out in one
lump sum or in installments in the event the employee becomes
disabled, reaches the age of 65, or is terminated by the
Company and demonstrates financial hardship. The Ownership
Plan Committee, however, retains discretion to determine the
final method of payment. Finally, the Company reserves the
right to amend or terminate the Ownership Plan at any time.
The trustees of the trust fund under the Ownership Plan are
Messrs. R.A.F. McCormick, George R. Quist, and William C.
Sargent, all directors of the Company.
<PAGE>
1987 Incentive Stock Option Plan
- --------------------------------
In 1987, the Company adopted the 1987 Incentive Stock
Option Plan (the 1987 Plan). The 1987 Plan provides that
shares of the Class A Common Stock of the Company may be
optioned to certain officers and key employees of the Company.
The Plan establishes a Stock Option Plan Committee which
selects the employees to whom the options will be granted and
determines the price of the stock. The Plan establishes the
minimum purchase price of the stock at an amount which is not
less than 100% of the fair market value of the stock (110% for
employees owning more than 10% of the total combined voting
power of all classes of stock).
The Plan provides that if additional shares of Class A
Common Stock are issued pursuant to a stock split or a stock
dividend, the number of shares of Class A Common Stock then
covered by each outstanding option granted hereunder shall be
increased proportionately with no increase in the total
purchase price of the shares then so covered, and the number of
shares of Class A Common Stock reserved for the purpose of the
Plan shall be increased by the same proportion. In the event
that the shares of Class A Common Stock of the Company from
time to time issued and outstanding are reduced by a
combination of shares, the number of shares of Class A Common
Stock then covered by each outstanding option granted hereunder
shall be reduced proportionately with no reduction in the total
price of the shares then so covered, and the number of shares
of Class A Common Stock reserved for the purposes of the Plan
shall be reduced by the same proportion.
The Plan terminates ten years from its effective date and
options granted are non-transferable. The Plan also includes a
Stock Appreciation Right which permits the holder of the option
to elect to receive cash, amounting to the difference between
the option price and the fair market value of the stock at the
time of the exercise, or a lesser amount of stock without
payment, upon exercise of the option.
1993 Stock Option Plan
- -----------------------
On June 21, 1993, the Company adopted the Security
National Financial Corporation 1993 Stock Incentive Plan (the
"1993 Plan"), which reserves shares of Class A Common Stock for
issuance thereunder. The 1993 Plan was approved at the annual
meeting of the stockholders held on June 21, 1993. The 1993
Plan allows the Company to grant options and issue shares as a
means of providing equity incentives to key personnel, giving
them a proprietary interest in the Company and its success and
progress.
The 1993 Plan provides for the grant of options and the
award or sale of stock to officers, directors, and employees of
the Company. Both "incentive stock options," as defined under
Section 422A of the Internal Revenue Code of 1986 (the "Code"),
and "non-qualified options" may be granted pursuant to the 1993
Plan. The exercise prices for the options granted are equal to
or greater than the fair market value of the stock subject to
such options as of the date of grant, as determined by the
Company's Board of Directors. The options granted under the
1993 Plan, were to reward certain officers and key employees
who have been employed by the Company for a number of years and
to help the Company retain these officers by providing them
with an additional incentive to contribute to the success of
the Company.
<PAGE>
The 1993 Plan is to be administered by the Board of
Directors or by a committee designated by the Board. The terms
of options granted or stock awards or sales effected under the
1993 Plan are to be determined by the Board of Directors or its
committee. The Plan provides that if the shares of Common
Stock shall be subdivided or combined into a greater or smaller
number of shares or if the Company shall issue any shares of
Common Stock as a stock dividend on its outstanding Common
Stock, the number of shares of Common Stock deliverable upon
the exercise of Options shall be increased or decreased
proportionately, and appropriate adjustments shall be made in
the purchase price per share to reflect such subdivision,
combination or stock dividend. No options may be exercised for
a term of more than ten years from the date of grant.
Options intended as incentive stock options may be issued
only to employees, and must meet certain conditions imposed by
the code, including a requirement that the option exercise
price be no less than the fair market value of the option
shares on the date of grant. The 1993 Plan provides that the
exercise price for non-qualified options will be not less than
at least 50% of the fair market value of the stock subject to
such option as of the date of grant of such options, as
determined by the Company's Board of Directors.
The 1993 Plan has a term of ten years. The Board of
Directors may amend or terminate the 1993 Plan at any time,
subject to approval of certain modifications to the 1993 Plan
by the shareholders of the Company as may be required by law or
the 1993 Plan. On November 7, 1996 the Company amended the
Articles of Incorporation as follows: (i) to increase the
number of shares of Class A Common Stock reserved for issuance
under the Plan from 300,000 Class A shares to 600,000 Class A
shares; and (ii) to provide that the stock subject to options,
awards and purchases may include Class C common stock.
OTHER MATTERS
The Company knows of no other matters to be brought
before the Annual Meeting; but if other matters properly come
before the meeting, it is the intention of the persons named in
the enclosed form of Proxy to vote the shares they represent in
accordance with their judgment.
ANNUAL REPORT AND FINANCIAL STATEMENTS
You are referred to the Company's annual report,
including financial statements, for the fiscal year ended
December 31, 1996. The annual report is incorporated in this
Proxy Statement and is not to be considered part of the
soliciting material. The Company will provide, without charge
to each stockholder upon written request, a copy of the
Company's Annual Report Form 10-K as filed with the Securities
and Exchange Commission for the fiscal year ended December 31,
1996. Such requests should be directed to Mr. William C.
Sargent, Senior Vice President and Secretary, at P.O. Box
57250, Salt Lake City, Utah 84157-0250.
DEADLINE FOR RECEIPT OF STOCKHOLDER'S PROPOSALS FOR ANNUAL
MEETING TO BE HELD IN JUNE, 1998
Any proposal by a stockholder to be presented at the
Company's next Annual Meeting of Stockholders expected to be
held in June, 1998, must be received at the offices of the
Company, P.O. Box 57250, Salt Lake City, Utah 84157-0250, no
later than March 31, 1998.
<PAGE>
SECURITY NATIONAL FINANCIAL CORPORATION
5300 South 360 West, Suite 310
Salt Lake City, Utah 84123
August 11, 1997
Dear Stockholder:
On behalf of the Board of Directors, it is my pleasure to
invite you to attend the Annual Meeting of Stockholders of
Security National Financial Corporation (the "Company") to be
held on September 24, 1997 at 12:00 noon, Mountain Daylight
Savings Time, at 5258 Pinemont Drive, Suite B, Salt Lake City,
Utah.
The matters to be addressed at the meeting will include the
election of nine directors and the ratification of the
appointment of Ernst & Young LLP as the Company's independent
accountants for the fiscal year ending December 31, 1997.
Your vote is very important. We hope you will take a few
minutes to review the Proxy Statement and complete, sign, and
return your Proxy Card in the envelope provided, even if you plan
to attend the meeting. Please note that sending us your Proxy
will not prevent you from voting in person at the meeting, should
you wish to do so.
Thank you for your support of Security National Financial
Corporation. We look forward to seeing you at the Annual
Stockholders Meeting.
Sincerely yours,
SECURITY NATIONAL
FINANCIAL CORPORATION
George R. Quist,
---------------------
Chairman of the Board,
President, and Chief
Executive Officer
<PAGE>
SECURITY NATIONAL FINANCIAL CORPORATION
5300 South 360 West, Suite 310
Salt Lake City, Utah 84123
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of Security National Financial Corporation (the
"Company"), a Utah corporation, will be held on September 24,
1997, at 5258 Pinemont Drive, Suite B, Salt Lake City, Utah, at
12:00 Noon, Mountain Daylight Savings Time, to consider and act
upon the following:
1. To elect a Board of Directors consisting of nine
directors (three directors to be elected exclusively by the Class
A common stockholders voting separately as a class and the
remaining six directors to be elected by the Class A and Class C
common stockholders voting together) to serve until the next
Annual Meeting of Stockholders or until their successors are
elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as the
Company's independent accountants for the fiscal year ending
December 31, 1997; and
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The foregoing items of business are more fully described in
the Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on
August 11, 1997, as the record date for the determination of
stockholders entitled to notice of and to vote at the annual
meeting.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. A
PROXY STATEMENT AND PROXY CARD ARE ENCLOSED HEREWITH. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN
THE PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE SO THAT YOUR
SHARES MAY BE VOTED AT THE MEETING. THE GIVING OF A PROXY WILL
NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
By Order of the Board of
Directors,
William C. Sargent
-----------------------
Senior Vice President
and Secretary
Salt Lake City, Utah, August 11, 1997
<PAGE>
PROXY-SECURITY NATIONAL FINANCIAL CORPORATION-PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
CLASS C COMMON STOCK
The undersigned Class C common stockholder of Security
National Financial Corporation (the "Company") acknowledges
receipt of the Notice of Annual Meeting of the Stockholders to be
held on September 24, 1997, at 5258 Pinemont Drive, Suite B, Salt
Lake City, Utah, at 12:00 Noon Mountain Daylight Savings Time,
and hereby appoints Messrs. George R. Quist, William C. Sargent
and Scott M. Quist, or any of them, each with full power of
substitution, as attorneys and proxies to vote all the shares of
the undersigned at said Annual Meeting of Stockholders and at all
adjournments or postponements thereof, hereby ratify and confirm
all that said attorneys and proxies may do or cause to be done by
virtue hereof. The above-named attorneys and proxies are
instructed to vote all of the undersigned's shares as follows:
1. To elect of six of the nine directors to be voted upon
by Class A and Class C common stockholders together:
[ ] FOR all nominees listed below (except as marked
to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees
listed below.
(INSTRUCTION: to withhold authority to vote for any individual
nominee, strike a line through that nominee's name in the list
below.)
Charles L. Crittenden, Sherman B. Lowe, R.A.F. McCormick,
H. Craig Moody, Scott M. Quist and William C. Sargent
2. To ratify the appointment of Ernst & Young LLP as the
Company's independent accountants for the fiscal year
ending December 31, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
(Continued on Other Side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN PROPOSAL 1.
Dated __________________________________________, 1997
- -------------------------------------------------------
Signature
- -------------------------------------------------------
Signature
Please sign your name exactly as it appears on your share
certificate. If shares are held jointly, each holder should
sign. Executors, trustees, and other fiduciaries should so
indicate when signing. Please sign, date, and return this Proxy
Card immediately.
NOTE: Securities dealers or other representatives please state
the number of shares voted by this Proxy.
<PAGE>
PROXY - SECURITY NATIONAL FINANCIAL CORPORATION - PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
CLASS A COMMON STOCK
The undersigned Class A common stockholder of Security National
Financial Corporation (the "Company") acknowledges receipt of the
Notice of Annual Meeting of the Stockholders to be held on
September 24, 1997, at 5258 Pinemont Drive, Suite B, Salt Lake
City, Utah, at 12:00 Noon, Mountain Daylight Savings Time, and
hereby appoints Messrs. George R. Quist, William C. Sargent and
Scott M. Quist, or any of them, each with full power of
substitution, as attorneys and proxies to vote all the shares of
the undersigned at said Annual Meeting of Stockholders and at all
adjournments or postponements thereof, hereby ratify and
confirming all that said attorneys and proxies may do or cause to
be done by virtue hereof. The above-named attorneys and proxies
are instructed to vote all of the undersigned's shares as
follows:
1. To elect three directors to be voted upon by Class A
common stockholders voting separately as a class:
[ ] FOR all nominees listed below (except as marked to
the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below
(INSTRUCTION: to withhold authority to vote for any individual
nominee, strike a line through that nominee's name in the list
below.)
George R. Quist, W. Lowell Steen and Nathan H.
Wagstaff
2. To elect the remaining six directors to be voted upon by
Class A and Class C common stockholders together:
[ ] FOR all nominees listed below (except as
marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees
listed below
(INSTRUCTION: to withhold authority to vote for any individual
nominee, strike a line through that nominee's name in the list
below.)
Charles L. Crittenden, Sherman B. Lowe,
R.A.F. McCormick, H. Craig Moody, Scott M.
Quist and William C. Sargent
3. To ratify the appointment of Ernst & Young LLP as
the Company's independent accountants for the
fiscal year ending December 31, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. To transact such other business as may properly
come before the meeting or any adjournment
thereof.
(Continued on Other Side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN PROPOSAL 1
and 2 ABOVE.
Dated __________________________________________, 1997
_______________________________________________________
Signature
_______________________________________________________
Signature
Please sign your name exactly as it appears on your share
certificate. If shares are held jointly, each holder should
sign. Executors, trustees, and other fiduciaries should so
indicate when signing. Please sign, date, and return this Proxy
Card immediately.
NOTE: Securities dealers or other representatives please state
the number of shares voted by this Proxy.
