UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
SCHEDULE
14A
(Rule
14a-101)
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
Amendment No. 1
Filed by
Registrant :
Filed by
a Party other than the Registrant 9
Check the
appropriate box:
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9
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Preliminary
Proxy Statement
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9
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(3)(2))
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:
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Definitive
Proxy Statement
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9
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Definitive
Additional Materials
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9
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Soliciting
Material Pursuant to '240.14a-12
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SECURITY
NATIONAL FINANCIAL CORPORATION
(Name of
Registrant as Specified In Its Charter)
_________________________________________
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the Appropriate box):
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No
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Fee computed on table below per
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0-11.
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9
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Fee
paid previously with preliminary
materials.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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Per
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Securities Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was
determined):
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(4)
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Proposed
maximum aggregate value of
transaction:
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Total
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9
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box if any part of the fee is offset as provided by Securities Exchange
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was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
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Date
Filed:
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SECURITY
NATIONAL FINANCIAL CORPORATION
5300
South 360 West, Suite 250
Salt Lake
City, Utah 84123
June 5,
2009
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 Friday, July 10, 2009, at 10:00 a.m., Mountain Daylight
Time, at Valley Center Towers, 5373 South Green Street, Conference Room 105,
Salt Lake City, Utah.
The
formal notice of the Annual Meeting and the Proxy Statement have been made a
part of this invitation. Also enclosed is a copy of the Company=s Annual
Report for the year ended December 31, 2008.
The
matters to be addressed at the meeting will include (1) the election of seven
directors; (2) the approval of the amendment to the 2003 Stock Option Plan to
authorize an additional 500,000 shares of Class A common stock and an additional
1,000,000 shares of Class C common stock to be made available for issuance under
the plan; (3) the ratification of the appointment of Hansen, Barnett &
Maxwell, P.C. as the Company's independent registered public accountants for the
fiscal year ending December 31, 2009; and (4) the transaction of such other
business as may properly come before the Annual Meeting or any adjournment
thereof. I will also report on the Company's business activities and
answer any stockholder questions.
The Board
of Directors recommends that you vote FOR election of the director nominees, FOR
approval of the amendment to the 2003 Stock Option Plan to authorize additional
shares for issuance thereunder; and FOR ratification of appointment of the
independent registered public accountants; and FOR the transaction of such other
business as may properly come before the Annual Meeting or any adjournment
thereof. Please refer to the Proxy Statement for detailed information
on each of the proposals and the Annual Meeting.
Your vote
is very important. We hope you will take a few minutes to review the
Proxy Statement and complete, sign, date 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 Meeting.
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Sincerely
yours,
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| /s/ George R. Quist | |
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George
R. Quist
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Chairman
of the Board and
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Chief
Executive
Officer
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SECURITY
NATIONAL FINANCIAL CORPORATION
5300
South 360 West, Suite 250
Salt Lake
City, Utah 84123
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD JULY 10, 2009
Dear
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
Friday, July 10, 2009, at Valley Center Towers, 5373 South Green Street,
Conference Room 105, Salt Lake City, Utah, at 10:00 a.m., Mountain Daylight
Time, to consider and act upon the following:
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1.
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To
elect a Board of Directors consisting of seven directors (two directors to
be elected exclusively by the Class A common stockholders voting
separately as a class and the remaining five directors to be elected by
the Class A and Class C common stockholders voting together) to serve
until the next Annual Meeting of Stockholders and until their successors
are elected and qualified;
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2.
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To
amend the Company's Stock Option Plan to authorize an additional 500,000
shares of Class A common stock and an additional 1,000,000 shares of Class
C common stock to be made available for issuance
thereunder;
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3.
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To
ratify the appointment of Hansen, Barnett & Maxwell, P.C. as the
Company's independent registered public accountants for the fiscal year
ending December 31, 2009; and
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4.
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To
transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
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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 May 22, 2009, as the record date
for determining stockholders entitled to notice of and to vote at the Annual
Meeting and any adjournment thereof. A list of such stockholders will
be available for examination by a stockholder for any purpose relevant to the
meeting during ordinary business hours at the offices of the Company at 5300
South 360 West, Suite 250, Salt Lake City, Utah during the 20 days prior to the
meeting.
If you do not expect to attend the
meeting in person, it is important that your shares be
represented. Please use the enclosed proxy card to vote on the
matters to be considered at the meeting, sign and date the proxy card and mail
it promptly in the enclosed envelope, which requires no postage if mailed in the
United States. You may revoke your proxy at any time before the
meeting by written notice to such effect, by submitting a subsequently dated
proxy or by attending the meeting and voting in person. If
your shares are held in "street name," you should instruct your broker how to
vote in accordance with your voting instruction form.
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By
order of the Board of Directors,
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| /s/ Jeffrey R. Stephens | |
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Jeffrey
R. Stephens
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General
Counsel and
Secretary
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June 5,
2009
Salt Lake
City, Utah
SECURITY
NATIONAL FINANCIAL CORPORATION
5300
South 360 West, Suite 250
Salt Lake
City, Utah 84123
PROXY
STATEMENT
For
Annual Meeting of Stockholders
To
Be Held on July 10, 2009
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 Friday,
July 10, 2009 at Valley Center Towers, 5373 South Green Street, Conference Room
105, Salt Lake City, Utah, at 10:00 a.m., Mountain Daylight 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 (two nominees to be elected by the
Class A common stockholders voting separately as a class and five 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 5300 South 360 West, Suite 250, Salt Lake City,
Utah 84123, Attention: Jeffrey R. Stephens, by submitting in writing a Proxy
bearing a later date, or by attending the Annual Meeting and voting in
person. 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 are being
mailed to stockholders on or about June 5, 2009.
If a
stockholder 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 stockholder.
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; (2) to approve the amendment to the 2003
Stock Option Plan to authorize an additional 500,000 shares of Class A common
stock and an additional 1,000,000 shares of Class C common stock to be made
available for issuance thereunder; (3) to ratify the appointment of Hansen,
Barnett & Maxwell, P.C. as the Company's independent registered public
accountants for the fiscal year ending December 31, 2009; and (4) to transact
such other business as may properly come before the Annual Meeting.
RECORD
DATE AND VOTING INFORMATION
Only
holders of record of common stock at the close of business on May 22, 2009, will
be entitled to vote at the Annual Meeting. As of May 22, 2009, there
were issued and outstanding 6,826,922 shares of Class A common stock, $2.00 par
value per share and 8,803,257 shares of Class C common stock, $.20 par value per
share, resulting in a total of 15,630,179 shares of both Class A and Class C
common stock. A majority of the outstanding shares (or 7,815,090
shares) of common stock will constitute a quorum for the transaction of business
at the meeting. A list of our stockholders will be available for
review at the Company=s executive
offices during regular business hours for a period of 20 days before the Annual
Meeting.
The
holders of each class of common stock of the Company are entitled to one vote
per share. Cumulative voting is not permitted in the election of
directors.
After
carefully reading and considering the information contained in this Proxy
Statement, each holder of the Company's common stock should complete, date and
sign the Proxy Card and mail the Proxy Card in the enclosed return envelope as
soon as possible so that those shares of the Company's common stock can be voted
at the Annual Meeting, even if the holders plan to attend the Annual Meeting in
person.
Proxies
received at any time before the Annual Meeting, and not revoked or superseded
before being voted, will be voted at the Annual Meeting. If a Proxy
indicates a specification, it will be in accordance with the
specification. If no specification is indicated, the Proxy will be
voted for approval of the election of the directors recommended by the Board of
Directors; for approval of the amendment to the 2003 Stock Option Plan to
authorize an additional 500,000 shares of Class A common stock and an additional
1,000,000 shares of Class C common stock to be made available for issuance
thereunder; for the ratification of the appointment of Hansen, Barnett &
Maxwell, P.C. as the Company's independent registered public accountants for the
fiscal year ending December 31, 2009; and, in the discretion of the persons
named in the Proxy, to transact such other business that may properly
come before the meeting or any adjournments of the meeting. You may
also vote in person by ballot at the Annual Meeting.
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 two of the seven directors to be elected (the
nominees to be voted upon by the Class A common stockholders separately consist
of Messrs. J. Lynn Beckstead, Jr. and H. Craig Moody).
The
remaining five 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, Robert G. Hunter, M.D., George R. Quist, Scott M.
Quist, and Norman G. Wilbur). 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. The Class A common stockholders will
receive a different form of Proxy than the Class C common
stockholders.
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.
ELECTION
OF DIRECTORS
PROPOSAL
1
The
Nominees
The
Company's Board of Directors consists of seven directors. All
directors are elected annually to serve until the next annual meeting of the
stockholders and until their respective successors are duly elected and
qualified, or until their earlier resignation or removal. The
nominees for the upcoming election of directors include four independent
directors, as defined in the applicable rules for companies traded on the Nasdaq
Stock Market, and three members of the Company's senior
management. All of the nominees for director have served as directors
since the 2008 Annual Meeting.
The
nominees to be elected by the holders of Class A common stock are as
follows:
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Name
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Age
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Director
Since
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Position(s) with the
Company
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J.
Lynn Beckstead, Jr.
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55
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2002
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Vice
President of Mortgage Operations and Director
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H.
Craig Moody
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57
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1995
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Director
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The
nominees for election by the holders of Class A and Class C common stock, voting
together, are as follows:
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Name
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Age
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Director
Since
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Position(s) with the
Company
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Charles
L. Crittenden
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89
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1979
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Director
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Robert
G. Hunter, M.D.
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49
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1998
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Director
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George
R. Quist
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88
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1979
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Chairman
of the Board and Chief Executive Officer
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Scott
M. Quist
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56
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1986
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President,
Chief Operating Officer and Director
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Norman
G. Wilbur
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70
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1998
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Director
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2
The
following is a description of the business experience of each of the nominees
and directors.
George R. Quist has been
Chairman of the Board and Chief Executive Officer of the Company since
1979. Mr. Quist served as President of the Company from 1979 until
2002. From 1960 to 1964, Mr. Quist was Executive Vice President
and Treasurer of Pacific Guardian Life Insurance Company. From 1946
to 1960, he was an agent, District Manager and Associate General Agent for
various insurance companies. 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.
Scott M. Quist has been
President of the Company since 2002, its Chief Operating Officer since 2001, and
a director since 1986. Mr. Quist served as First Vice President of
the Company from 1986 to 2002. From 1980 to 1982, Mr. Quist was a tax
specialist with Peat, Marwick, Mitchell, & Co., in Dallas,
Texas. From 1986 to 1991, he was Treasurer and a director of The
National Association of Life Companies, a trade association of 642 insurance
companies until its merger with the American Council of Life
Companies. Mr. Quist has been a member of the Board of Governors of
the Forum 500 Section (representing small insurance companies) of the American
Council of Life Insurance. He has also served as a regional director
of Key Bank of Utah since November 1993. Mr. Quist is currently a
director and a past president of the National Alliance of Life Companies, a
trade association of over 200 life companies.
J. Lynn Beckstead Jr. has
been Vice President of Mortgage Operations and a director of the Company since
2002. In addition, Mr. Beckstead is President of SecurityNational
Mortgage Company, a wholly owned subsidiary of the Company, having served in
this position since 1993. From 1990 to 1993, Mr. Beckstead was Vice
President and a director of Republic Mortgage Corporation. From 1983
to 1990, Mr. Beckstead was Vice President and a director of Richards Woodbury
Mortgage Corporation. From 1980 to 1983, he was a principal broker
for Boardwalk Properties. From 1978 to 1980, Mr. Beckstead was a
residential loan officer for Medallion Mortgage Company. From 1977 to
1978, he was a residential construction loan manager of Citizens
Bank.
Charles L. Crittenden has
been a director of the Company since 1979. Mr. Crittenden has been
sole stockholder of Crittenden Paint & Glass Company since
1958. He is also an owner of Crittenden Enterprises, a real estate
development company, and Chairman of the Board of Linco, Inc.
Robert G. Hunter, M.D. has
been a director of the Company since 1998. Dr. Hunter is currently a
practicing physician in private practice. Dr. Hunter created the
statewide E.N.T. Organization (Rocky Mountain E.N.T.,
Inc.). Dr. Hunter is Department Head of Otolaryngology, Head and Neck
Surgery at Intermountain Medical Center and a past President of the medical
staff of the Intermountain Medical Center. He is also a delegate to
the Utah Medical Association and has served as a delegate representing the State
of Utah to the American Medical Association. Dr. Hunter is a member
of several medical advisory boards.
H. Craig Moody has been a
director of the Company since 1995. Mr. Moody is owner of Moody &
Associates, a political consulting and real estate company. He is a
former Speaker and House Majority Leader of the House of Representatives of the
State of Utah.
Norman G. Wilbur has been a
director of the Company since 1998. Mr. Wilbur worked for J.C.
Penny's regional offices in budget and analysis. His final position
was Manager of Planning and Reporting for J.C. Penny's stores. After
36 years with J.C. Penny's, Mr. Wilbur opted for early retirement in
1997. Mr. Wilbur is a past board member of Habitat for Humanity in
Plano, Texas.
The
Board of Directors recommends that stockholders vote "FOR" the election of each
of the director nominees.
The
Board of Directors, Board Committees and Meetings
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 Board of
Directors held a total of five meetings during the fiscal year ended December
31, 2008. No directors attended fewer than 75% of all meetings of the
Board of Directors during the 2008 fiscal year.
The size
of the Board of Directors of the Company for the coming year is seven
members. A majority of the Board of Directors must qualify as
"independent" as that term is defined in Rule 4200 of the listing standards of
the Nasdaq Stock Market. The Board of Directors has affirmatively
determined that four of the seven members of the Board of Directors, Messrs.
Charles L. Crittenden, Robert G. Hunter, M.D., H. Craig Moody and Norman G.
Wilbur, are independent under the listing standards of the Nasdaq Stock
Market.
3
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
above. 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.
There are
four committees of the Board of Directors, which meet periodically during the
year: the Audit Committee, the Compensation Committee, the Executive Committee,
and the Nominating and Corporate Governance Committee.
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, H. Craig Moody and Norman G. Wilbur (Chairman of the
committee). During 2008, the Audit Committee met on three
occasions.
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, contributions under the 401(k) Retirement Savings Plans,
Deferred Compensation Plan, granting of options under the stock option plans,
and creating other employee compensation plans. The Compensation
Committee consists of Messrs. Charles L. Crittenden (Chairman of the committee),
Robert G. Hunter, M.D., H. Craig Moody and Norman G. Wilbur. During
2008, the Compensation Committee met on one occasion.
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, and H. Craig
Moody. During 2008, the Executive Committee met on one
occasion.
The
Nominating and Corporate Governance Committee identifies individuals qualified
to become board members consistent with criteria approved by the board,
recommends to the board the persons to be nominated by the board for election as
directors at a meeting of stockholders, and develops and recommends to the board
a set of corporate governance principles. The Nominating and
Corporate Governance Committee consists of Messrs. Charles L. Crittenden, Robert
G. Hunter, M.D., H. Craig Moody (Chairman of the committee), and Norman G.
Wilbur. The Nominating and Corporate Governance Committee is composed
solely of independent directors, as defined in the listing standards of the
Nasdaq Stock Market. During 2008, the Nominating and Corporate
Governance Committee met on one occasion.
Director
Nominating Process
The
process for identifying and evaluating nominees for directors include the
following steps: (1) the Nominating and Corporate Governance Committee, Chairman
of the Board or other board members identify a need to fill vacancies or add
newly created directorships; (2) the Chairman of the Nominating and Corporate
Governance Committee initiates a search and seeks input from board members and
senior management and, if necessary, obtains advice from legal or other advisors
(but does not hire an outside search firm); (3) director candidates, including
any candidates properly proposed by stockholders in accordance with the
Company's Bylaws, are identified and presented to the Nominating and Corporate
Governance Committee; (4) initial interviews with candidates are conducted by
the Chairman of the Nominating and Corporate Governance Committee; (5) the
Nominating and Corporate Governance Committee meets to consider and approve
final candidate(s) and conduct further interviews as necessary; and (6) the
Nominating and Corporate Governance Committee makes recommendations to the board
for inclusion in the slate of directors at the annual meeting. The
evaluation process will be the same whether the nominee is recommended by a
stockholder or by a member of the Board of Directors.
The
Nominating and Corporate Governance Committee will consider nominees proposed by
stockholders. To recommend a perspective nominee for the Nominating
and Corporate Governance Committee's consideration, stockholders may submit the
candidate's name and qualifications to: Jeffrey R. Stephens, General Counsel and
Secretary, Security National Financial Corporation, 5300 South 360 West, Suite
250, Salt Lake City, Utah 84123. Recommendations from stockholders
for nominees must be received by Mr. Stephens not later than the date set forth
under "Deadline for Receipt of Stockholder's Proposals for Annual Meeting to be
Held in July 2010" below.
4
The
Nominating and Corporate Governance Committee operates pursuant to a written
charter. The full text of the charter is published on the Company's
website at www.securitynational.com. Stockholders
may also obtain a copy of the charter without charge by writing
to: Jeffrey R. Stephens, General Counsel and Secretary, Security
National Financial Corporation, 5300 South 360 West, Suite 250, Salt Lake City,
Utah 84123.
Meetings
of Non-Management Directors
The
Company's independent directors meet regularly in executive session without
management. The Board of Directors has designated a lead director to
preside at executive sessions of independent directors. Mr. H. Craig
Moody is currently the lead director.
Stockholder
Communications with the Board of Directors
Stockholders
who wish to communicate with the Board of Directors or a particular director may
send a letter to Jeffrey R. Stephens, General Counsel and Secretary, Security
National Financial Corporation, 5300 South 360 West, Suite 250, Salt Lake City,
Utah 84123. The mailing envelope must contain a clear notation
indicating that the enclosed letter is a "Stockholder-Board Communication" or
"Stockholder-Director Communication." All such letters must identify
the author as a stockholder and clearly state whether the intended recipients
are all members of the board or just certain specified individual
directors. The Secretary will make copies of all such letters and
circulate them to the appropriate director or directors.
Executive
Officers
The
following table sets forth certain information with respect to the executive
officers of the Company (the business biographies for George R. Quist, Scott M.
Quist and J. Lynn Beckstead, Jr. are set forth above):
|
Name
|
Age
|
Title
|
|
George
R. Quist1
|
88
|
Chairman
of the Board and Chief Executive Officer
|
|
Scott
M. Quist1
|
56
|
President,
Chief Operating Officer and Director
|
|
Stephen
M. Sill
|
63
|
Vice
President, Treasurer and Chief Financial Officer
|
|
J.
Lynn Beckstead, Jr.
|
55
|
Vice
President of Mortgage Operations and Director
|
|
Christie
Q. Overbaugh1
|
60
|
Senior
Vice President of Internal
Operations
|
________________
1 George R. Quist is the
father of Scott M. Quist and Christie Q. Overbaugh
Stephen M. Sill has been Vice
President, Treasurer and Chief Financial Officer of the Company since
2002. From 1997 to 2002, Mr. Sill was Vice President and
Controller of the Company. From 1994 to 1997, Mr. Sill was Vice
President and Controller of Security National Life Insurance
Company. From 1989 to 1993, he was Controller of Flying J.
Inc. From 1978 to 1989, Mr. Sill was Senior Vice President
and Controller of Surety Life Insurance Company. From 1975 to 1978,
he was Vice President and Controller of Sambo's Restaurant, Inc. From
1974 to 1975, Mr. Sill was Director of Reporting for Northwest Pipeline
Corporation. From 1970 to 1974, he was an auditor with
Arthur Andersen & Co. Mr. Sill is a past president and a former
director of the Insurance Accounting and Systems Association, a national
association of over 1,300 insurance companies and associate
members.
Christie Q. Overbaugh has
been Senior Vice President of Internal Operations of the Company since June
2006, and a Vice President of the Company from 1998 to June 2006. Ms.
Overbaugh has also served as Vice President of Underwriting for Security
National Life Insurance Company since 1998. From 1986 to 1991, she
was Chief Underwriter for Investors Equity Life Insurance Company of Hawaii and
Security National Life Insurance Company. From 1990 to 1991, Ms.
Overbaugh was President of the Utah Home Office Underwriters
Association. Ms. Overbaugh is currently a member of the Utah Home
Office Underwriters Association and an Associate Member of LOMA (Life Office
Management Association).
5
On
September 26, 2008, the Board of Directors accepted the resignation of G. Robert
Quist as the Company's First Vice President and Secretary. Mr. Quist
resigned from these positions to pursue other opportunities.
The Board
of Directors of the Company has a written procedure that requires disclosure to
the board of any material interest or any affiliation on the part of any of its
officers, directors or employees that is in conflict or may be in conflict with
the Company's interests.
Corporate
Governance
Corporate Governance
Guidelines. The Board of Directors has adopted the Security
National Financial Corporation Corporate Governance Guidelines. These
guidelines outline the functions of the board, director qualifications and
responsibilities, and various processes and procedures designed to insure
effective and responsive governance. The guidelines are reviewed from
time to time in response to regulatory requirements and best practices and are
revised accordingly. The full text of the guidelines is published on
the Company's website at www.securitynational.com. A
copy of the Corporate Governance Guidelines may also be obtained at no charge by
written request to the attention of Jeffrey R. Stephens, General Counsel and
Secretary, Security National Financial Corporation, 5300 South 360 West, Suite
250, Salt Lake City, Utah 84123.
Code of Business
Conduct. All of the Company's officers, employees and
directors are required to comply with the Company's Code of Business
Conduct and Ethics to help insure that the Company's business is conducted in
accordance with appropriate standards of ethical behavior. The
Company's Code of Business Conduct and Ethics covers all areas
of professional conduct, including customer relationships, conflicts
of interest, insider trading, financial disclosures, intellectual property and
confidential information, as well as requiring adherence to all laws and
regulations applicable to the Company's business. Employees are
required to report any violations or suspected violations of the
Code. The Code includes an anti-retaliation statement. The
full text of the Code of Business Conduct and Ethics is published on the
Company's website at www.securitynational.com. A
copy of the Code of Business Conduct and Ethics may also be obtained at no
charge by written request to the attention of Jeffrey R. Stephens, General
Counsel and Secretary, Security National Financial Corporation, 5300 South 360
West, Suite 250, Salt Lake City, Utah 84123.
6
COMPENSATION
OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY
COMPENSATION TABLE
The
following table sets forth compensation information for fiscal years 2008, 2007
and 2006 for (i) the Company's Chief Executive Officer, (ii) the Company's Chief
Financial Officer, and (iii) the Company's three other executive officers, who,
based on their total compensation, were the most highly compensated in
2008. The Company refers to them in this Proxy Statement collectively
as the "Named Executive Officers."
|
Name
and
Principal
Position
|
Year
|
Salary$
|
Bonus($)
|
Stock
Awards($)
|
Option
Awards($)
|
Non-Equity
Incentive
Plan
Compen-
sation($)
|
Change
in Pension
Value
and Non-
qualified
Deferred
Compen-
sation
Earnings($)(3)
|
All
Other
Compen-
sation($)(4)
|
Total($)
|
|
George
R. Quist(1)
Chairman
of the
Board
and Chief
Executive
Officer
|
2008
2007
2006
|
$236,013
219,513
203,013
|
$50,755
-0-
40,000
|
--
--
--
|
--
--
--
|
--
--
--
|
$ --
24,200
21,967
|
$10,959
10,760
10,683
|
$297,727
254,473
275,663
|
|
Scott
M. Quist(1)
President
and Chief
Operating
Officer
|
2008
2007
2006
|
$332,400
303,900
275,400
|
$91,350
-0-
75,000
|
--
--
--
|
--
--
--
|
--
--
--
|
$ --
25,300
24,150
|
$32,791
33,172
26,879
|
$456,541
362,372
401,429
|
|
Stephen
M. Sill
Vice
President,
Treasurer
and Chief
Financial
Officer
|
2008
2007
2006
|
$131,969
125,292
120,292
|
$11,113
6,000
3,000
|
--
--
--
|
--
--
--
|
--
--
--
|
$ --
14,179
13,922
|
$17,074
15,878
15,386
|
$160,156
161,349
152,600
|
|
J.
Lynn Beckstead, Jr.
Vice
President of
Mortgage
Operations
|
2008
2007
2006
|
$217,583
207,500
246,292
|
$119,741
46,888
6,000
|
--
--
--
|
--
--
--
|
--
--
--
|
$ --
21,166
21,945
|
$21,528
21,140
15,295
|
$358,852
296,694
289,532
|
|
G.
Robert Quist(1)(2)
First
Vice President
and
Secretary
|
2008
2007
2006
|
$102,457
122,433
126,221
|
$15,000
10,203
10,000
|
--
--
--
|
--
--
--
|
--
--
--
|
$ --
13,529
12,209
|
$19,239
20,281
18,218
|
$136,696
166,446
166,648
|
|
Christie
Q.
Overbaugh(1)
Vice
President of
Internal
Operations
|
2008
2007
|
$111,655
103,392
|
$14,850
7,000
|
--
--
|
--
--
|
--
--
|
$ --
10,758
|
$12,697
8,292
|
$139,202
129,442
|
______________________
|
(1)
|
George
R. Quist is the father of Scott M. Quist, G. Robert Quist and Christie Q.
Overbaugh.
|
|
(2)
|
On
September 26, 2008, G. Robert Quist resigned as First Vice President and
Secretary to pursue other
opportunities.
|
|
(3)
|
The
amounts indicated under "Change in Pension Value and Non-qualified
Deferred Compensation Earnings" consist of amounts contributed
by the Company into a trust for the benefit of the Named Executive
Officers under the Company's Deferred Compensation
Plan.
|
|
(4)
|
The
amounts indicated under "All Other Compensation" consist of the following
amounts paid by the Company for the benefit of the Named Executive
Officers:
|
|
(a)
|
payments
related to the operation of automobiles for George R. Quist ($2,400 for
each of the years 2008, 2007 and 2006); Scott M. Quist ($7,200 for each of
the years 2008, 2007 and 2006); Stephen M. Sill ($5,700 for 2008, $4,275
for 2007, and $3,600 for 2006); G. Robert Quist ($5,700 for 2008 and 2007,
and $4,525 for 2006); and Christie Q. Oberbaugh ($4,800 for 2008 and $400
for 2007). However, such payments do not include the furnishing
of an automobile by the Company to George R. Quist, Scott M. Quist, J.
Lynn Beckstead Jr., and G. Robert Quist, nor the payment of insurance and
property taxes with respect to the automobiles operated by the Named
Executive Officers;
|
|
(b)
|
group
life insurance premiums paid by the Company to a group life insurance plan
for George R. Quist ($154, $9 and $9, for 2008, 2007 and 2006,
respectively); Scott M. Quist, Stephen M. Sill, and J. Lynn Beckstead, Jr.
($218, $250 and $241 each for 2008, 2007 and 2006, respectively); G.
Robert Quist ($184, $250 and $241 for 2008, 2007 and 2006, respectively);
and Christie Q. Overbaugh ($210 and $240 for 2008 and 2007,
respectively);
|
7
|
(c)
|
life
insurance premiums paid by the Company for the benefit of George R. Quist
($4,644 for each of the years 2008, 2007 and 2006); Scott M. Quist
($14,056 for 2008, $14,340 for 2007, and $8,584 for
2006); Stephen M. Sill ($2,976 for 2008 and 2007, and $3,643
for 2006); J. Lynn Beckstead, Jr. ($4,200 for each of the years 2008, 2007
and 2006); G. Robert Quist, ($2,949 for 2008 and 2007 and
$2,598 for 2006); and Christie Q. Overbaugh ($3,945 for 2008 and
2007).
|
|
(d)
|
medical
insurance premiums paid by the Company to a medical insurance plan for
George R. Quist ($3,491 for 2008, $3,419 for 2007, and $3,342 for 2006);
Scott M. Quist and J. Lynn Beckstead, Jr. ($11,047 each for 2008, $11,094
each for 2007, and $10,566 each for 2006); Stephen M. Sill ($7,910 for
2008, $8,089 for 2007, and $7,614 for 2006); G. Robert Quist ($10,136 for
2008, $11,094 for 2007, and $10,566 for 2006); and Christie Q. Overbaugh
($3,491 for 2008 and $3,419 for
2007).
|
|
(e)
|
long
term disability insurance premiums paid by the Company to a provider of
long term disability insurance for George R. Quist, Scott M. Quist,
Stephen M. Sill, J. Lynn Beckstead, Jr., and G. Robert Quist ($270 each
for 2008 and $288 each for years 2007 and 2006); and Christie Q. Overbaugh
($251 for 2008 and $288 for 2007),
and
|
|
(f)
|
membership
dues paid by the Company to Alpine Country Club for the benefit of J. Lynn
Beckstead, Jr. ($5,793 for 2008, $5,308 for 2007, and $5,117 for
2006).
|
SUPPLEMENTAL
ALL OTHER COMPENSATION TABLE
The
following table sets forth all other compensation provided to the Named
Executive Officers for fiscal years 2008, 2007 and 2006.
|
Name
|
Year
|
Perks
and
Other
Personal
Benefits
|
Tax
Reimburse-
ments
|
Discounted
Securities
Purchases
|
Payments/
Accruals
on
Termin-
ation
Plans
|
Registrant
Contribu-
tions
to
Defined
Contribu-
tion
Plans
|
Insurance
Premiums
|
Dividends
or
Earnings
on
Stock
or
Option
Awards
|
Other
|
|
George
R. Quist
|
2008
2007
2006
|
$2,400
2,400
2,400
|
--
--
--
|
--
--
--
|
--
--
--
|
--
--
--
|
$8,559
8,360
8,283
|
--
--
--
|
--
--
--
|
|
Scott
M. Quist
Stephen
M. Sill
J.
Lynn
Beckstead,
Jr.
G.
Robert Quist
Christie
Q.
Overbaugh
|
2008
2007
2006
2008
2007
2006
2008
2007
2006
2008
2007
2006
2008
2007
|
$7,200
7,200
7,200
$5,700
4,275
3,600
$5,793
5,308
5,117
$5,700
5,700
4,525
$4,800
400
|
--
--
--
--
--
--
--
--
--
--
--
--
--
--
|
--
--
--
--
--
--
--
--
--
--
--
--
--
--
|
--
--
--
--
--
--
--
--
--
--
--
--
--
--
|
--
--
--
--
--
--
--
--
--
--
--
--
--
--
|
$25,591
25,972
19,679
$11,374
11,603
11,786
$15,735
15,832
15,295
$13,539
14,581
13,693
$ 7,897
7,892
|
--
--
--
--
--
--
--
--
--
--
--
--
--
--
|
--
--
--
--
--
--
--
--
--
--
--
--
--
--
|
8
GRANTS
OF PLAN-BASED AWARDS
For
Fiscal Year Ended December 31, 2008
The
following table sets forth certain information regarding options granted to the
Named Executive Officers during the fiscal year ended December 31,
2008.
|
Name
|
Grant
Date
|
Estimated
Future Payouts Under
Non-Equity
Incentive Plan
Awards
|
Estimated
Future Payouts
Under
Equity Incentive Plan
Awards
|
All
Other
Stock
Awards:
Number
of
Shares
of
Stock
or
Units
(#)
|
All
Other
Option
Awards:
Number
of
Securities
Underlying
Options
(#)
|
Exercise
or
Base
Price
of
Option
Awards
($/Sh)
|
Grant
Date
Fair
Value
of
Stock
and
Option
Awards
($)
|
||||
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
($)
|
||||||
|
George
R.
Quist
|
3/31/08
12/5/08
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
50,000
100,000
|
$
4.24
1.65
|
$2.15
1.10
|
|
Scott
M.
Quist
|
3/31/08
12/5/08
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
50,000(1)
100,000(1)
|
$4.24
1.65
|
$2.15
1.10
|
|
Stephen
M.
Sill
|
3/31/08
12/5/08
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
7,500
7,500
|
$3.85
1.50
|
$2.15
1.10
|
|
J.Lynn
Beckstead, Jr
|
3/31/08
12/5/08
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
8,000
20,000
|
$3.85
1.50
|
$2.15
1.10
|
|
G.
Robert
Quist
|
3/31/08
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
20,000
|
$3.85
|
$2.15
|
|
Christie
Q.
Overbaugh
|
3/31/08
12/5/08
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
--
--
|
10,000
10,000
|
$3.85
1.50
|
$2.15
1.10
|
________________
|
(1)
|
This
reflects the equivalent of Class A common shares. On March 31,
2008, Scott M. Quist was granted stock options to purchase 500,000 shares
of Class C common stock at an exercise price of $.424 per share, which is
equivalent to options to purchase 50,000 shares of Class A common stock at
an exercise price of $4.24 per share. On December 5, 2008, Mr.
Quist was granted stock options to purchase 610,770 shares of Class C
common stock at an exercise price of $.165 per share, which is equivalent
to options to purchase 61,077 shares of Class A common stock at an
exercise price of $1.65 per share, and to purchase 38,923 shares of Class
A common stock at an exercise price of $1.65 per
share.
|
9
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END 2008
The
following table sets forth information concerning outstanding equity awards held
by Named Executive Officers at December 31, 2008.
|
Option
Awards
|
Stock
Awards
|
|
Name
|
Number
of Securities
Underlying
Unexercised
Options
(#)
Exercisable
(1)
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexer-
cisable
(1)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or Other
Rights
That
Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
($)
|
|
George
R.
Quist
Scott
M.
Quist(1)
Stephen
M. Sill
J.
Lynn
Beckstead,
Jr.
G.
Robert
Quist
Christie
Q.
Overbaugh
|
60,775
(3)
60,775
(4)
81,034
(5)
37,500
(6)
--
89,340
(2)
81,034
(5)
37,500
(6)(8)
--
5,625
(6)
--
19,144
(2)
6,077
(4)
40,517
(5)
6,000
(6)
--
44,670
(2)
15,000
(6)
9,116
(4)
23,152
(5)
7,500
(6)
--
|
--
--
--
12,500
(6)
100,000
(7)
--
--
12,500
(6)(8)
100,000
(7)(8)
1,875
(6)
7,500
(7)
--
--
--
2,000
(6)
20,000
(7)
--
5,000
(6)
--
--
2,500
(6)
10,000
(7)
|
$3.26
$2.92
$3.33
$4.24
$1.65
$4.62
$3.03
$4.24
$1.65
$3.85
$1.50
$4.62
$2.66
$3.03
$3.85
$1.50
$4.62
$3.85
$2.66
$3.03
$3.85
$1.50
|
7/16/09
12/10/09
3/25/10
3/31/13
12/05/13
3/21/13
3/25/15
3/31/13
12/05/13
3/13/18
12/05/18
3/21/13
12/10/14
3/25/15
3/31/18
12/05/18
3/21/13
3/31/18
12/10/14
3/25/15
3/31/18
12/05/18
|
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
|
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
|
__________________
|
(1)
|
Except
for options granted to George R. Quist and options granted to Scott M.
Quist after May 31, 2007, which have a five year terms, such grants have
ten year terms. The vesting of any unvested shares is subject
to the recipient's continuous employment. This reflects the
equivalent of Class A common
shares.
|
|
(2)
|
Stock
options vest at the rate of 25% of the total number of shares subject to
the options on June 30, 2003 and 25% of the total number of shares on the
last day of each three month period
thereafter.
|
|
(3)
|
Stock
options vest at the rate of 25% of the total number of shares subject to
the options on October 31, 2004 and 25% of the total number of shares on
the last day of each three month period
thereafter.
|
|
(4)
|
Stock
options vest at the rate of 25% of the total number of shares subject to
the options on March 31, 2005 and 25% of the total number of shares on the
last day of each three month period
thereafter.
|
|
(5)
|
Stock
options vest at the rate of 25% of the total number of shares subject to
the options on June 30, 2005 and 25% of the total number of shares on the
last day of each three month period
thereafter.
|
|
(6)
|
Stock
options vest at the rate of 25% of the total number of shares subject to
the options on June 30, 2008 and 25% of the total number of shares on the
last day of each three month period
thereafter.
|
|
(7)
|
Stock
options vest at the rate of 25% of the total number of shares subject to
the options on March 31, 2009 and 25% of the total number of shares on the
last day of each three month period
thereafter.
|
|
(8)
|
On
March 31, 2008, Scott M. Quist was granted stock options to purchase
500,000 shares of Class C common stock at an exercise price of $.424 per
share, which is equivalent to options to purchase 50,000 shares of Class A
common stock at an exercise price of $4.24 per share. On
December 5, 2008, Mr. Quist was granted stock options to purchase 610,770
shares of Class C common stock at an exercise price of $.165 per share,
which is equivalent to options to purchase 61,077 shares of Class A common
stock at an exercise price of $1.65 per share, and to purchase 38,923
shares of Class A common stock at an exercise price of $1.65 per
share.
|
10
OPTION
EXERCISES AND STOCK VESTED
The
following table sets forth all stock options exercised and value received upon
exercise, and all stock awards vested and value realized upon vesting, by the
Named Executive Officers during the year ended December 31, 2008.
|
Option
Awards
|
Stock
Awards
|
|
|
|
|||
|
Name
|
Number
of
Shares
Acquired
on
Exercise
(#)
|
Value
Realized
on
Exercise
($)
|
Number
of
Shares
Acquired
on
Vesting
(#)
|
Value
Realized
on
Vesting
($)
|
|
George
R. Quist
Scott
M. Quist
Stephen
M. Sill
J.
Lynn Beckstead, Jr.
G.
Robert Quist
Christie
Q. Overbaugh
|
--
--
--
--
--
--
|
--
--
--
--
--
--
|
--
--
--
--
--
--
|
--
--
--
--
--
--
|
PENSION
BENEFITS FOR FISCAL 2008
The
following table sets forth the present value as of December 31, 2008 of the
benefit of the Named Executive Officers under a defined benefit pension
plan.
|
Name
|
Plan
Name
|
Number
of
Years
Credited
Service
(#)
|
Present
Value of
Accumulated
Benefit
($)
|
Payments
During
Last
Fiscal Year
($)
|
|
George
R. Quist
Scott
M. Quist
Stephen
M. Sill
J.
Lynn Beckstead, Jr.
G.
Robert Quist
Christie
Q. Overbaugh
|
None
None
None
None
None
None
|
--
--
--
--
--
--
|
--
--
--
--
--
--
|
--
--
--
--
--
--
|
Retirement
Plans
On
December 8, 1988, the Company entered into a deferred compensation plan with
George R. Quist, the Chairman and Chief Executive Officer of the
Company. The plan was later amended on three occasions with the third
amendment effective February 1, 2001. Under the terms of the plan as
amended, upon the retirement of Mr. Quist, the Company is required to pay him
ten annual installments in the amount of $60,000. Retirement is
defined in the plan as the age of 70, or a later retirement age, as specified by
the Board of Directors. The $60,000 annual payments are to be
adjusted for inflation in accordance with the United States Consumer Price Index
for each year after January 1, 2002. If Mr. Quist's employment is
terminated by reason of disability or death before he reaches retirement age,
the Company is to make the ten annual payments to Mr. Quist, in the event of
disability, or to his designated beneficiary, in the event of
death.
11
The plan
also provides that the Board of Directors may, in its discretion, pay the
amounts due under the plan in a single, lump-sum payment. In the
event that Mr. Quist dies before the ten annual payments are made, the unpaid
balance will continue to be paid to his designated beneficiary. The
plan further requires the Company to furnish an automobile for Mr. Quist's use
and to pay all reasonable expenses incurred in connection with its use for a ten
year period, and to provide Mr. Quist with a hospitalization policy with similar
benefits to those provided to him the day before his retirement or
disability. However, in the event Mr. Quist's employment with the
Company is terminated for any reason other than retirement, death, or
disability, the entire amount of deferred compensation payments under the plan
shall be forfeited by him. The Company accrued $49,000 and $38,000 in
fiscal 2008 and 2007, respectively, to cover the present value of anticipated
retirement benefits under the employment agreement, which was $505,600 as of
December 31, 2008.
Employment
Agreements
On July
16, 2004, the Company entered into an employment agreement with Scott M. Quist,
its President and Chief Operating Officer. The agreement is effective
as of December 4, 2003 and has a five-year term, but the Company has agreed to
renew the agreement on December 4, 2008 and December 4, 2013 for additional
five-year terms, provided Mr. Quist performs his duties with usual and customary
care and diligence. Under the terms of the agreement, Mr. Quist is to
devote his full time to the Company serving as its President and Chief Operating
Officer at not less than his current salary and benefits. The Company
also agrees to maintain a group term life insurance policy of not less than
$1,000,000 on Mr. Quist's life and a whole life insurance policy in the amount
of $500,000 on Mr. Quist's life. In the event of disability, Mr.
Quist's salary would be continued for up to five years at 75% of its current
level.
In the
event of a sale or merger of the Company and Mr. Quist is not retained in his
current position, the Company would be obligated to continue paying Mr. Quist's
current compensation and benefits for seven years following the merger or
sale. The agreement further provides that Mr. Quist is entitled to
receive annual retirement benefits beginning (i) one month from the date of his
retirement (to commence no sooner than age 65), (ii) five years following
complete disability, or (iii) upon termination of his employment without
cause. These retirement benefits are to be paid for a period of ten
years in annual installments in the amount equal to 75% of his then current rate
of compensation. However, in the event that Mr. Quist dies prior to
receiving all retirement benefits thereunder, the remaining benefits are to be
paid to his heirs. The Company accrued $116,400 and $101,200 in
fiscal 2008 and 2007, respectively, to cover the present value of anticipated
retirement benefits under the employment agreement, which was $703,900 as of
December 31, 2008.
On
December 4, 2003, the Company, through its subsidiary SecurityNational Mortgage
Company, entered into an employment agreement with J. Lynn Beckstead, Jr., Vice
President of Mortgage Operations and President of SecurityNational Mortgage
Company. The agreement has a five-year term, but the Company
has agreed to renew the agreement on December 4, 2008 and December 4, 2013 for
additional five-year terms, provided Mr. Beckstead performs his duties with
usual and customary care and diligence. Under the terms of the
agreement, Mr. Beckstead is to devote his full time to the Company serving as
President of SecurityNational Mortgage Company at not less than his current
salary and benefits, and to include $350,000 of life insurance
protection. In the event of disability, Mr. Beckstead's salary would
be continued for up to five years at 50% of its current level.
In the
event of a sale or merger of the Company, and Mr. Beckstead was not retained in
his current position, the Company would be obligated to continue paying Mr.
Beckstead's current compensation and benefits for five years following the
merger or sale. The agreement further provides that Mr. Beckstead is entitled to
receive annual retirement benefits beginning (i) one month from the date of his
retirement (to commence no sooner than age 62½) (ii) five years
following complete disability, or (iii) upon termination of his employment
without cause. These retirement benefits are to be paid for a period
of ten years in annual installments in the amount equal to one-half of his then
current annual salary. However, in the event that Mr. Beckstead dies
prior to receiving all retirement benefits thereunder, the remaining benefits
are to be paid to his heirs. The Company accrued $46,400 and $43,900
in 2008 and 2007, respectively, to cover the present value of the retirement
benefits of the employment agreement, which was $363,300 as of December 31,
2008.
12
Director
Compensation
Directors
of the Company (but not including directors who are employees) are currently
paid a director's fee of $16,800 per year by the Company for their services and
are reimbursed for their expenses in attending board and committee meetings. An
additional fee of $750 is paid to each audit committee member for each audit
committee meeting attended. Each director is provided with an annual grant of
stock options to purchase 1,000 shares of Class A common stock, which occurred
under the 2000 Director Stock Option Plan for years 2000 to 2005 and under the
2006 Director Stock Option Plan for years 2006 to 2008. During 2008,
each director was granted options to purchase an additional 7,500 shares of
Class A common stock.
DIRECTOR
COMPENSATION FOR FISCAL 2008
The
following table sets forth the compensation of the Company's non-employee
directors for fiscal 2008.
|
Name
|
Fees
Earned
or
Paid
In
Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
|
All
Other
Compensation
($)
|
Total
($)
|
|
Charles
L. Crittenden
Robert
G. Hunter
H.
Craig Moody
Norman
G. Wilbur
|
$18,150
18,150
18,150
13,150
|
--
--
--
--
|
$6,366
6,366
6,366
6,366
|
--
--
--
--
|
--
--
--
--
|
--
--
--
--
|
$24,516
24,516
24,516
24,516
|
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. During the period from January 1, 1995 to December 31, 2007,
the board had adopted a contribution formula specifying that such discretionary
employer matching contributions would equal 50% of the participating employee's
contribution to the plan to purchase the Company's stock up to a maximum
discretionary employee contribution of ½ of 1% of a
participating employee's compensation, as defined by the plan.
All
persons who have completed at least one year's 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 2007 and 2006 were $10,001 and $8,656, respectively. Also, the
Company may contribute at the discretion of the Company's Board of Directors an
Employer Profit Sharing Contribution to the 401(k) plan. The Employer
Profit Sharing Contribution is to be divided among three different classes of
participants in the plan based upon the participant's title in the
Company. All amounts contributed to the plan are deposited into a
trust fund administered by an independent trustee. The Company's
contributions to the plan for 2008 and 2007 were $198,022 and $162,584,
respectively.
Beginning
January 1, 2008, the Company elected to be a "Safe Harbor" Plan for its matching
401(k) contributions. The Company will match 100% of up to 3% of an
employee's total annual compensation and 50% of 4% to 5% of an employee's annual
compensation. The match is in shares of the Company's Class A Common
Stock. The Company's contribution for 2008 was $365,925 under the
"Safe Harbor" Plan.
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.
13
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 372
participants and had $-0- contributions payable to the Plan in
2008. Benefits under the Ownership Plan vest as follows: 20% after
the third year of eligible service by an employee, and 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 George R. Quist, Scott M. Quist and Robert G.
Hunter, who each serve as a director of the Company.
Deferred
Compensation Plan
In 2001,
the Company's Board of Directors adopted a Deferred Compensation
Plan. Under the terms of the Deferred Compensation Plan, the Company
will provide deferred compensation for a select group of management or highly
compensated employees, within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as
amended. The board has appointed a committee of the Company to be the
plan administrator and to determine the employees who are eligible to
participate in the plan. The employees who participate may elect to
defer a portion of their compensation into the plan. The Company may
contribute into the plan at the discretion of the Company's Board of
Directors. The Company's contributions for 2008, 2007 and 2006 were
$-0-, $133,037 and $125,558, respectively.
NONQUALIFIED
DEFERRED COMPENSATION FOR FISCAL 2008
The
following table sets forth contributions to the deferred compensation account of
the Named Executive Officers in fiscal 2008 and the aggregate balance of
deferred compensation of the Named Executive Officers at December 31,
2008.
|
Name
|
Executive
Contributions
In
Last
Fiscal
Year
($)
|
Registrant
Contributions
In
Last
Fiscal
Year
($)
|
Aggregate
Earnings
in Last
Fiscal
Year
($)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at Last
Fiscal
Year End
($)
|
|
George
R. Quist
Scott
M. Quist
Stephen
M. Sill
J.
Lynn Beckstead, Jr.
G.
Robert Quist
Christie
Q. Overbaugh
|
--
--
--
--
--
--
|
--
--
--
--
--
--
|
--
--
--
--
--
--
|
--
--
--
--
--
--
|
$89,004
98,496
31,144
49,848
44,387
36,578
|
2003
Stock Option Plan
On July
11, 2003, the Company adopted the Security National Financial Corporation 2003
Stock Incentive Plan (the "2003 Plan"), which reserved 500,000 shares of Class A
common stock and 1,000,000 shares of Class C common stock for issuance
thereunder. The 2003 Plan was approved by the Board of Directors on
May 9, 2003, and by the stockholders at the annual meeting of the stockholders
held on July 11, 2003. The 2003 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. On June 8, 2007, the stockholders approved an amendment to
the 2003 Plan to increase the number of shares of Class A and Class C common
stock reserved for issuance thereunder to 978,528 shares of Class A common stock
and 2,110,775 shares of Class C common stock.
14
The 2003
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 and "non-qualified options" may be granted under
the 2003 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 2003 Plan are 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.
The 2003
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 affected under the 2003 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
to reflect such subdivision, combination or stock dividend. In
addition, the number of shares of common stock reserved for purposes of the plan
shall be adjusted by the same proportion. 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 then fair market value of the option
shares on the date of grant. The 2003 Plan provides that the exercise
price for non-qualified options will not be 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 2003
Plan has a term of ten years. The Board of Directors may amend or
terminate the 2003 Plan at any time, subject to approval of certain
modifications to the 2003 Plan by the stockholders of the Company as may be
required by law or the 2003 Plan.
2006
Director Stock Option Plan
On
December 7, 2006, the Company adopted the 2006 Director Stock Option Plan (the
"Director Plan") effective December 7, 2006. The Director Plan provides for the
grant by the Company of options to purchase up to an aggregate of 100,000 shares
of Class A Common Stock for issuance thereunder. The Director Plan provides that
each member of the Company's Board of Directors who is not an employee or paid
consultant of the Company is automatically eligible to receive options to
purchase the Company's Class A Common Stock under the Director
Plan.
Effective
as of December 7, 2006, and on each anniversary date thereof during the term of
the Director Plan, each outside director shall automatically receive an option
to purchase 1,000 shares of Class A Common Stock. In addition, each new outside
director who shall first join the Board after the effective date shall be
granted an option to purchase 1,000 shares upon the date which such person first
becomes an outside director and an annual grant of an option to purchase 1,000
shares on each anniversary date thereof during the term of the Director Plan.
The options granted to outside directors shall vest in their entirety on the
first anniversary date of the grant. The primary purposes of the Director Plan
are to enhance the Company's ability to attract and retain well-qualified
persons for service as directors and to provide incentives to such directors to
continue their association with the Company.
In the
event of a merger of the Company with or into another company, or a
consolidation, acquisition of stock or assets or other change in control
transaction involving the Company, each option becomes exercisable in full,
unless such option is assumed by the successor corporation. In the event the
transaction is not approved by a majority of the "Continuing Directors" (as
defined in the Director Plan), each option becomes fully vested and exercisable
in full immediately prior to the consummation of such transaction, whether or
not assumed by the successor corporation.
Certain
Relationships and Related Transactions
On
November 19, 2007, Security National Life and Scott M. Quist entered into a Use
and Buy Sale Agreement to jointly purchase a condominium located in St. George,
Utah. Mr. Quist is the Company's President and Chief Operating
Officer. The condominium is to be used for the entertainment of
Security National Life's executive officers, employees, outside vendors and
prospective customers. The purchase price of the condominium,
including improvements and furnishings, was $538,962. Mr. Quist paid
$286,207 of that amount and Security National Life paid $252,755.
15
Under the
terms of the agreement, Security National Life and Mr. Quist have the right to
use the condominium in proportion to their respective contributions towards the
purchase price, including furnishings and fixtures. Mr. Quist is
responsible for the care and maintenance of the condominium. The
payment of taxes, insurance, utilities and homeowners' fees is to be divided
between Security National Life and Mr. Quist according to their respective
ownership percentages.
Upon the
death, disability or retirement of Mr. Quist or his separation from employment
with the Company, Mr. Quist or his estate, as the case may be, shall have the
right to purchase Security National Life's interest in the condominium at the
original purchase price or fair market value, whichever is
less. Security National Life's contribution to the purchase price of
the condominium was equal to an amount of accrued but unpaid bonuses owed to Mr.
Quist, which he agreed to continue to defer for the option that would allow him
or his estate to purchase Security National Life's interest in the condominium
upon his death, disability or retirement at the lesser of the original purchase
price or fair market value.
The
Company's Board of Directors 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
that is in conflict or may be in conflict with the interests of the
Company.
Compliance
with Section 16(a) of the Securities Exchange Act of 1934
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and persons who own more than 10% of
a registered class of the Company=s equity
securities to file reports of ownership and periodic changes in ownership of the
Company=s common
stock with the Securities and Exchange Commission. Such persons are
also required to furnish the Company with copies of all Section 16(a) reports
they file.
Based
solely on its review of the copies of stock reports received by it with respect
to fiscal 2008, or written representations from certain reporting persons, the
Company believes that its directors, officers and greater than 10% beneficial
owners complied with all Section 16(a) filing requirements applicable to them,
except George R. Quist, Chairman and Chief Executive Officer through an
oversight, filed two late Form 4 reports reporting ten transactions involving
the purchase of shares of Class A common stock.
16
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 March 31, 2009, (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 and
|
||||||||
|
Class
A
|
Class
C
|
Class
C
|
||||||
|
Common
Stock
|
Common
Stock
|
Common
Stock
|
||||||
|
Amount
|
|
Amount
|
Amount
|
|||||
|
Beneficially
|
Percent
|
Beneficially
|
Percent
|
Beneficially
|
Percent
|
|||
|
Name and Address
(1)
|
Owned
|
of
Class
|
Owned
|
of
Class
|
Owned
|
of
Class
|
||
|
George
R. and Shirley C. Quist
|
||||||||
|
Family
Partnership, Ltd. (2)
|
585,291
|
7.4%
|
4,082,507
|
43.0%
|
4,667,798
|
26.8%
|
||
|
Scott
M. Quist (3)(6)(7)
|
495,421
|
6.3%
|
2,292,152
|
24.2%
|
2,787,573
|
16.0%
|
||
|
Employee
Stock
|
||||||||
|
Ownership
Plan (4)
|
608,038
|
7.7%
|
1,887,731
|
19.9%
|
2,495,769
|
14.4%
|
||
|
George
R. Quist (3)(5)(6)(8)
|
709,064
|
9.0%
|
570,315
|
6.0%
|
1,249,409
|
7.4%
|
||
|
Associated
Investors (9)
|
86,059
|
1.1%
|
796,901
|
8.4%
|
882,960
|
5.1%
|
||
|
G.
Robert Quist (11)
|
182,635
|
2.3%
|
284,697
|
3.0%
|
467,331
|
2.7%
|
||
|
Christie
Q. Overbaugh (12)
|
124,999
|
1.6%
|
128,237
|
1.4%
|
253,236
|
1.5%
|
||
|
J.
Lynn Beckstead, Jr. (10)(13)
|
222,942
|
2.8%
|
--
|
--
|
222,942
|
1.3%
|
||
|
Stephen
M. Sill (10)(14)
|
85,450
|
1.1%
|
--
|
--
|
85,450
|
*
|
||
|
Robert
G. Hunter, M.D. (3)(15)
|
15,038
|
*
|
--
|
--
|
15,038
|
*
|
||
|
Charles
L. Crittenden (16)
|
12,629
|
*
|
--
|
--
|
12,629
|
*
|
||
|
Norman
G. Wilbur (17)
|
14,810
|
*
|
--
|
--
|
14,810
|
*
|
||
|
H.
Craig Moody (18)
|
12,295
|
*
|
--
|
--
|
12,295
|
*
|
||
|
All
directors and executive officers
|
||||||||
|
(10
persons) (3)(5)(6)(10)
|
2,460,603
|
31.2%
|
7,357,908
|
77.5
%
|
9,818,511
|
56.5%
|
||
* Less than 1%
|
(1)
|
Unless
otherwise indicated, the address of each listed stockholder is c/o
Security National Financial Corporation, 5300 South 360 West, Suite 250,
Salt Lake City, Utah 84123.
|
|
(2)
|
This
stock is owned by the George R. and Shirley C. Quist Family Partnership,
Ltd., of which Scott M. Quist is the general
partner.
|
|
(3)
|
Does
not include 608,038 shares of Class A common stock and 1,887,731 shares of
Class C common stock owned by the Company's Employee Stock Ownership Plan
(ESOP), of which George R Quist, Scott M. Quist and Robert G. Hunter 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,
Scott M. Quist, and Robert G. Hunter who exercise shared voting and
investment powers.
|
|
(5)
|
Does
not include 86,059 shares of Class A common stock and 796,901 shares of
Class C common stock owned by Associated Investors, a Utah general
partnership, of which George R. Quist is the managing partner and,
accordingly, exercises sole voting and investment powers with respect to
such shares.
|
|
(6)
|
Does
not include 339,426 shares of Class A common stock owned by the Company's
Deferred Compensation Plan, of which George R. Quist and Scott M. Quist
are members of the investment committee and, accordingly, exercise shared
voting and investment powers with respect to such
shares.
|
|
(7)
|
Includes
options to purchase 189,109 shares of Class A common stock and 685,327
shares of Class C common stock granted to Scott M. Quist that are
currently exercisable or will become exercisable within 60 days of
March 31, 2009.
|
|
(8)
|
Includes
options to purchase 291,463 shares of Class A common stock granted to
George R. Quist that are currently exercisable or will become exercisable
within 60 days of March 31, 2009.
|
|
(9)
|
The
managing partner of Associated Investors is George R. Quist, who exercises
sole voting and investment powers.
|
17
|
(10)
|
Does
not include 511,858 shares of Class A common stock owned by the Company's
401(k) Retirement Savings Plan, of which J. Lynn Beckstead, Jr. and
Stephen M. Sill are members of the investment committee and, accordingly,
exercise shared voting and investment powers with respect to such
shares.
|
|
(11)
|
Includes
options to purchase 67,903 shares of Class A common stock granted to G.
Robert Quist that are currently exercisable or will become exercisable
within 60 days of March 31, 2009.
|
|
(12)
|
Includes
options to purchase 47,007 shares of Class A common stock granted to Ms.
Overbaugh that are currently exercisable or will become exercisable within
60 days of March 31, 2009.
|
|
(13)
|
Includes
options to purchase 82,675 shares of Class A common stock granted to Mr.
Beckstead that are currently exercisable or will become exercisable within
60 days of March 31, 2009.
|
|
(14)
|
Includes
options to purchase 9,844 shares of Class A common stock granted to Mr.
Sill that are currently exercisable or will become
exercisable within 60 days of March 31,
2009.
|
|
(15)
|
Includes
options to purchase 8,953 shares of Class A common stock granted to Dr.
Hunter that are currently exercisable or will become exercisable within 60
days of March 31, 2009.
|
|
(16)
|
Includes
options to purchase 8,953 shares of Class A common stock granted to Mr.
Crittenden that are currently exercisable or will become exercisable
within 60 days of March 31, 2009.
|
|
(17)
|
Includes
options to purchase 8,953 shares of Class A common stock granted to Mr.
Wilbur that are currently exercisable or will become exercisable within 60
days of March 31, 2009.
|
|
(18)
|
Includes
options to purchase 8,953 shares of Class A common stock granted to Mr.
Moody that are currently exercisable or will become exercisable within 60
days of March 31, 2009.
|
The
Company=s officers
and directors, as a group, own beneficially approximately 56.5% of the
outstanding shares of the Company=s Class A
and Class C common stock.
REPORT
OF THE COMPENSATION COMMITTEE
Under
rules established by the Securities and Exchange Commission (the "Commission"),
the Company is required to provide certain data and information in regard to the
compensation and benefits provided to its Chief Executive Officer, Chief
Financial Officer, and the three other most highly compensated executive
officers. In fulfillment of this requirement, the Compensation
Committee, at the direction of the Board of Directors, has prepared the
following report for inclusion in this Proxy Statement.
Executive Compensation
Philosophy. The Compensation Committee of the Board of
Directors is composed of four directors, all of whom are independent, outside
directors. The Compensation Committee is responsible for setting and
administering the policies and programs that govern both annual compensation and
stock ownership programs for the executive officers of the
Company. The Company's executive compensation policy is based on
principles designed to ensure that an appropriate relationship exists between
executive pay and corporate performance, while at the same time motivating and
retaining executive officers.
Executive Compensation
Components. The key components of the Company's compensation
program are base salary, an annual incentive award, and equity
participation. These components are administered with the goal of
providing total compensation that is competitive in the marketplace, rewards
successful financial performance and aligns executive officers' interests with
those of stockholders. The Compensation Committee reviews each
component of executive compensation on an annual basis.
Base Salary. Base
salaries for executive officers are set at levels believed by the Compensation
Committee to be sufficient to attract and retain qualified executive
officers. Base pay increases are provided to executive officers based
on an evaluation of each executive's performance, as well as the performance of
the Company as a whole. In establishing base salaries, the
Compensation Committee not only considers the financial performance of the
Company, but also the success of the executive officers in developing and
executing the Company's strategic plans, developing management employees and
exercising leadership. The Compensation Committee believes that
executive officer base salaries for 2008 were reasonable as compared to amounts
paid by companies of similar size.
Annual
Incentive. The Compensation Committee believes that a
significant proportion of total cash compensation for executive officers should
be subject to attainment of specific Company financial
performance. This approach creates a direct incentive for executive
officers to achieve desired performance goals and places a significant
percentage of each executive officer=s
compensation at risk. Consequently, each year the Compensation
Committee establishes potential bonuses for executive officers based on the
Company's achievement of certain financial performance. The
Compensation Committee believes that executive officer annual bonuses for 2008
were reasonable as compared to amounts paid by companies of similar
size.
18
Stock Options. The
Compensation Committee believes that equity participation is a key component of
its executive compensation program. Stock options are granted to
executive officers primarily based on the officer=s actual and
potential contribution to the Company's growth and profitability and competitive
marketplace practices. Option grants are designed to retain executive
officers and motivate them to enhance stockholder value by aligning the
financial interests of executive officers with those of
stockholders. Stock options also provide an effective incentive for
management to create stockholder value over the long term since the full benefit
of the compensation package cannot be realized unless an appreciation in the
price of the Company=s Class A
common stock occurs over a number of years.
Compensation of Chief Executive
Officer. Consistent with the executive compensation policy and
components described above, the Compensation Committee determined the salary,
bonus and stock options received by George R. Quist, the Chairman of the Board
and Chief Executive Officer of the Company, for services rendered in
2008. Mr. Quist received a base salary of $236,013 for
2008. Under the Compensation Committee's rules, the Chief Executive
Officer may not be present during voting or deliberations related to his
compensation.
|
COMPENSATION
COMMITTEE
|
|
|
Charles
L. Crittenden, Chairman
|
|
|
Robert
G. Hunter, M.D.
|
|
|
H.
Craig Moody
|
|
|
Norman
G. Wilbur
|
REPORT
OF THE AUDIT COMMITTEE
The
Company has an Audit Committee consisting of three non-management directors,
Charles L. Crittenden, H. Craig Moody, and Norman G. Wilbur. Each
member of the Audit Committee is considered independent and qualified in
accordance with applicable independent director and audit committee listing
standards. The Company's Board of Directors has adopted a written
charter for the Audit Committee.
During
the year 2008, the Audit Committee met three times. The Audit
Committee has met with management and discussed the Company's internal controls,
the quality of the Company's financial reporting, the results of internal and
external audit examinations, and the audited financial statements. In
addition, the Audit Committee met with the Company's independent registered
public accountants, Hansen, Barnett & Maxwell, P.C. and discussed all
matters required to be discussed by the auditors with the Audit Committee under
Statement on Auditing Standards No. 61 (communication with audit
committees). The Audit Committee reviewed and discussed with the
auditors their annual written report on their independence from the Company and
its management, which is made under Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and Public Company Accounting
Oversight Board Rule No. 3526 (Communication with Audit Committees Concerning
Independence), and considered with the auditors whether the non-audit services
provided by them to the Company during 2008 was compatible with the auditors'
independence.
In
performing these functions, the Audit Committee acts only in an oversight
capacity. In its oversight role, the Audit Committee relies on the
work and assurances of the Company's management, which is responsible for the
integrity of the Company's internal controls and its financial statements and
reports, and the Company's independent auditors, who are responsible for
performing an independent audit of the Company's financial statements in
accordance with generally accepted auditing standards and for issuing a report
on these financial statements.
Pursuant
to the reviews and discussions described above, the Audit Committee recommended
to the Board of Directors that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2008, for filing with the Securities and Exchange Commission.
|
AUDIT
COMMITTEE
|
|
|
Norman
G. Wilbur, Chairman
|
|
|
Charles
L. Crittenden
|
|
|
H.
Craig Moody
|
19
APPROVAL
OF AMENDMENT TO THE 2003 STOCK OPTION PLAN
PROPOSAL
2
The Board
of Directors adopted on April 29, 2009, subject to the approval by the
shareholders, an amendment to the Company's 2003 Stock Option
Plan. The amendment increases from 978,528 to 1,478,528 the number of
shares of the Company's Class A common stock available for issuance under the
2003 Stock Option Plan, and from 2,110,775 to 3,110,775 the number of shares of
the Company's Class C common stock available for issuance
thereunder. The Company has in the past used, and intends in the
future to use, stock options as incentive devices to motivate and compensate its
salaried officers and other key employees, and believes that equity incentives
represented by stock options enhances the Company's ability in attracting and
retaining the best possible persons for positions of significant responsibility
by providing its officers and other key employees with additional incentives to
contribute to the Company's success.
Management
further believes that the availability of such equity incentives has served, and
will continue to serve, an important part in the implementation of the Company's
growth strategy. As of March 31, 2009, options to purchase 892,423
shares of Class A common stock and 2,110,770 shares of Class C common stock have
been granted under the 2003 plan; as of such date and after the adjustments to
reflect the annual 5% stock dividends, options to purchase 840,136 shares of
Class A common stock and 1,575,000 shares of Class C common stock were
outstanding under the 2003 Stock Option Plan. Accordingly, options to
purchase only 119,020 shares of Class A common stock and five shares of Class C
common stock remain available for future grants under the 2003 Stock Option Plan
as of such date.
The
Board of Directors recommends that the shareholders vote "FOR" approval of the
amendment to the 2003 Stock Option Plan.
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
PROPOSAL
3
The
independent public accounting firm of Hansen, Barnett & Maxwell, P.C. has
been the Company's independent registered public accountants since May 20,
2005. The Audit Committee has recommended and the Board of Directors
has appointed Hansen, Barnett & Maxwell, P.C. for purposes of auditing the
consolidated financial statements of the Company for the fiscal year ending
December 31, 2009. It is anticipated that representatives of Hansen,
Barnett & Maxwell, P.C. will be present at the Annual Meeting and will be
provided an opportunity to make a statement if they desire, and to be available
to respond to appropriate questions.
The
Board of Directors recommends that stockholders vote "FOR" ratification of the
appointment of Hansen, Barnett & Maxwell, P.C. as the Company's independent
registered public accountants for fiscal year ending December 31,
2009.
AUDIT
FEES, FINANCIAL INFORMATION SYSTEMS DESIGN
AND
IMPLEMENTATION FEES AND ALL OTHER FEES
Fees for
the year 2008 for the annual audit of the financial statements and employee
benefit plans and related quarterly reviews by the Company's independent
registered public accountants were $383,800. There were $120,800 in
other fees during 2008.
20
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
Stockholders
are referred to the Company's annual report, including financial statements, for
the fiscal year ended December 31, 2008 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 on Form
10-K as filed with the Securities and Exchange Commission for the fiscal year
ended December 31, 2008 Such requests should be directed to Jeffrey
R. Stephens, General Counsel and Secretary, P.O. Box 57250, Salt Lake City, Utah
84157-0250.
DEADLINE
FOR RECEIPT OF STOCKHOLDER'S PROPOSALS
FOR
ANNUAL MEETING TO BE HELD IN JULY 2010
Any
proposal by a stockholder to be presented at the Company's next Annual Meeting
of Stockholders expected to be held in July 2010 must be received at the offices
of the Company, P.O. Box 57250, Salt Lake City, Utah 84157-0250, no later than
March 31, 2010.
|
By
order of the Board of Directors,
|
|
| /s/ Jeffrey R. Stephens | |
|
Jeffrey
R. Stephens
|
|
|
General
Counsel and
Secretary
|
June 5,
2009
Salt Lake
City, Utah
21
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 Friday, July 10, 2009, at Valley Center
Towers, 5373 South Green Street, Conference Room 105, Salt Lake City, Utah, at
10:00 a.m., Mountain Daylight Time, and hereby appoints Messrs. George R. Quist,
Scott M. Quist, and Jeffrey R. Stephens, 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 five of the seven 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, Robert G. Hunter, M.D., Scott M. Quist
George R.
Quist and Norman G. Wilbur
|
2.
|
To
amend the Company's Stock Option Plan to authorize an additional 500,000
shares of Class A common stock and an additional 1,000,000 shares of Class
C common stock to be made available for issuance
thereunder
|
|
[ ] FOR
|
[ ] AGAINST
|
|
3.
|
To
ratify the appointment of Hansen, Barnett & Maxwell, P.C. as the
Company's independent registered public accountants for the fiscal year
ending December 31, 2009
|
|
[ ] FOR
|
[ ] AGAINST
|
|
4.
|
To
transact such other business as may properly come before the meeting or
any adjournment thereof
|
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 ABOVE AND FOR PROPOSALS 2, 3 and
4.
Dated
, 2009
_________________________________________
Signature
of Stockholder
_________________________________________
Signature
of Stockholder
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.
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 Friday, July 10, 2009, at Valley Center
Towers, 5373 South Green Street, Conference Room 105, Salt Lake City, Utah, at
10:00 a.m., Mountain Daylight Time, and hereby appoints Messrs. George R. Quist,
Scott M. Quist, and Jeffrey R. Stephens, 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 two 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.)
J. Lynn
Beckstead, Jr. and H. Craig Moody
2. To
elect the remaining five 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, Robert G. Hunter, M.D., George R. Quist
Scott M.
Quist, and Norman G. Wilbur
|
3.
|
To
amend the Company's Stock Option Plan to authorize an additional 500,000
shares of Class A common stock and an additional 1,000,000 shares of Class
C common stock to be made available for issuance
thereunder
|
|
[ ] FOR
|
[ ] AGAINST
|
|
4.
|
To
ratify the appointment of Hansen, Barnett & Maxwell, P.C. as the
Company's independent registered public accountants for the fiscal year
ending December 31, 2009
|
|
[ ] FOR
|
[ ] AGAINST
|
|
5.
|
To
transact such other business as may properly come before the meeting or
any adjournment thereof
|
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 PROPOSALS 1 AND 2 ABOVE AND FOR PROPOSALS 3, 4
and 5.
Dated
, 2009
_________________________________________
Signature
of Stockholder
_________________________________________
Signature
of Stockholder
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.