Edgar Filing: SECURITY NATIONAL FINANCIAL CORP

SECURITY NATIONAL FINANCIAL CORPORATION

5300 South 360 West, Suite 250
Salt Lake City, Utah 84123

June 7, 2005

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 8, 2005, at 10:00 a.m.,
Mountain Daylight Time, at 5300 South 360 West, Suite 250, 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, 2004.

The matters to be addressed at the meeting will include the election of
seven directors and the ratification of the appointment of Hansen, Barnett &
Maxwell, P.C. as the Company's registered public independent accountants for the
fiscal year ending December 31, 2005. 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 and FOR
ratification of appointment of the registered public independent accountants.
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, 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.

Sincerely yours,

George R. Quist
Chairman of the Board and
Chief Executive Officer

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 8, 2005

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 8, 2005, at 5300 South 360 West, Suite 250, Salt Lake City,
Utah, at 10:00 a.m., Mountain Daylight Time, to consider and act upon the
following:

1. 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;

2. To ratify the appointment of Hansen, Barnett & Maxwell, P.C. as the
Company's registered public independent accountants for the fiscal year
ending December 31, 2005; and

3. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

The Board of Directors has fixed the close of business on May 24, 2005, 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.

By order of the Board of Directors,

G. Robert Quist
First Vice President and Secretary

June 7, 2005
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 8, 2005

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 8, 2005, at 5300 South 360 West, Suite 250, 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: G. Robert Quist, 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 7,
2005.

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 shareholder.

The cost of this solicitation will be borne by the Company. The Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation materials to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers, and regular employees, without additional compensation.

The matters to be brought before the Annual Meeting are (1) to elect
directors to serve for the ensuing year; (2) to ratify the appointment of
Hansen, Barnett & Maxwell, P.C. as the Company's registered public independent
accountants for the fiscal year ending December 31, 2005; and (3) 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 24,
2005, will be entitled to vote at the Annual Meeting. As of May 24, 2005, there
were issued and outstanding 5,441,713 shares of Class A common stock, $2.00 par
value per share and 6,380,197 shares of Class C common stock, $.20 par value per
share, resulting in a total of 11,821,910 shares of both Class A and Class C
common shares. A majority of the outstanding shares (or 5,910,956 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 seven directors recommended by the Board of Directors, for the
ratification of the appointment of Hansen, Barnett & Maxwell, P.C. as the
Company's registered public independent accountants for the fiscal year ending
December 31, 2005, and in the discretion of the persons named in the Proxy with
respect to the 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. 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 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 2004 Annual Meeting.

The nominees to be elected by the holders of Class A common stock are as
follows:

Name Age Director Since Position(s) with the Company
---- --- -------------- ----------------------------
J. Lynn Beckstead, Jr. 51 March 2002 Vice President of
Mortgage Operations
and Director
H. Craig Moody 53 September 1995 Director

The nominees for election by the holders of Class A and Class C common
stock, voting together, are as follows:

Name Age Director Since Position(s) with the Company
---- --- -------------- ----------------------------
Charles L. Crittenden 85 October 1979 Director
Robert G. Hunter, M.D. 45 October 1998 Director
George R. Quist 84 October 1979 Chairman of the Board
and Chief Executive Officer
Scott M. Quist 52 May 1986 President, Chief Operating
Officer and Director
Norman G. Wilbur 66 October 1998 Director

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 October 1979. Mr. Quist served as President of the Company
from 1979 until July 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 July 2002, its Chief
Operating Officer since October 2001, and a director since May 1986. Mr. Quist
served as First Vice President of the Company from May 1986 to July 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 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 March 2002. In addition, Mr. Beckstead is
President of SecurityNational Mortgage Company, an affiliate of the Company,
having served in this position since July 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 October
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 October
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.)
where he is currently a member of the Executive Committee. He is also Chairman
of Surgery at Cottonwood Hospital, a delegate to the Utah Medical Association
and a delegate representing the State of Utah to the American Medical
Association, and a member of several medical advisory boards.

H. Craig Moody has been a director of the Company since September 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 October 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. Penney's stores.
After 36 years with J.C. Penny's, he took an option of an early retirement in
1997. Mr. Wilbur is a past board member of a homeless organization 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, 2004. No directors
attended fewer than 75% of all meetings of the Board of Directors during the
2004 fiscal year.

The size of the Board of Directors of the Company for the coming year is
seven members. Four of the directors, or a majority of the Board of Directors,
are independent directors. The independent directors have regularly scheduled
meetings at which only independent directors are present.

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 Compensation Committee is responsible for recommending to the Board of
Directors for approval the annual compensation of each executive officer of the
Company and the executive officers of the Company's subsidiaries, developing
policy in the areas of compensation and fringe benefits, contributions under the
Employee Stock Ownership Plan, contribution under the 401(k) Retirement Savings
Plan, 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),
H. Craig Moody, Robert G. Hunter, M.D. and Norman G. Wilbur. During 2004, the
Compensation Committee met on two occasions.

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 2004, the Audit Committee met on four occasions.

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
2004, the Executive Committee met on two occasions. During 2004, there were four
meetings of the Company's Board of Directors.

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, H.
Craig Moody (Chairman of the Committee), Robert G. Hunter, M.D. 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, Inc.

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: G. Robert Quist, First Vice President
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. Quist not later than the date set forth under
"Deadline for Receipt of Stockholder's Proposals for Annual Meeting to be Held
in July 2006"; below.

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: G. Robert Quist, First Vice President 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 non-management directors regularly meet without management
participation. In addition, an executive session including only the independent
directors is held at least annually.

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 G. Robert Quist, First Vice President
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 the first two
individuals are set forth above):

Name Age Title
------------------ --- ------------------
George R. Quist(1) 84 Chairman of the Board and
Chief Executive Officer
Scott M. Quist(1) 52 President, Chief Operating Officer
and Director
G. Robert Quist(1) 53 First Vice President and Secretary
Stephen M. Sill 59 Vice President, Treasurer and
Chief Financial Officer
J. Lynn Beckstead, Jr. 51 Vice President of Mortgage Operations
and Director
Christie Q. Overbaugh(1) 56 Senior Vice President of Internal
Operations of Southern Security Life
Insurance Company

(1) George R. Quist is the father of Scott M. Quist, G. Robert Quist and
Christie Q. Overbaugh

Stephen M. Sill has been Vice President, Treasurer and Chief Financial
Officer of the Company since March 2002. From 1997 to March 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 (IASA), a national association of over 1,300 insurance
companies and associate members.

G. Robert Quist has been First Vice President and Secretary of the Company
since March 2002. Mr. Quist has also served as First Vice President of Singing
Hills Memorial Park since 1996. Mr. Quist has served as Vice President of
Memorial Estates since 1982; he began working for Memorial Estates in 1978. Also
since 1987, Mr. Quist has served as President and a director of Big Willow Water
Company and as Secretary-Treasurer and a director of the Utah Cemetery
Association. From 1987 to 1988, Mr. Quist was a director of Investors Equity
Life Insurance Company of Hawaii.

Christie Q. Overbaugh has been Senior Vice President of Internal Operations
for Southern Security Life Insurance Company since June 2002, and Vice President
of Underwriting of Security National Life Insurance Company since October 1998.
Ms. Overbaugh has also served as Vice President of the Company from October 1999
to June 2002, and as Vice President of Underwriting for Southern Security Life
Insurance Company from October 1998 to June 2002. >From 1985 to 1990, 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).

The Board of Directors of the Company has a written procedure, which
requires disclosure to the board of any material interest or any affiliation on
the part of any of its officers, directors or employees that is in conflict or
may be in conflict with the interests of the Company.

No director, officer or 5% stockholder of the Company or its subsidiaries,
or any affiliate thereof has had any transactions with the Company or its
subsidiaries during 2004 or 2003.

Corporate Governance

Corporate Governance Guidelines. The board 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 G. Robert Quist, First Vice President 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 G. Robert
Quist, First Vice President and Secretary, Security National Financial
Corporation, 5300 South 360 West, Suite 250, Salt Lake City, Utah 84123.

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

Executive Officer Compensation

The following table sets forth, for each of the last three fiscal years,
the compensation received by George R. Quist, the Company's Chairman of the
Board and Chief Executive Officer, and all other executive officers
(collectively, the "Named Executive Officers") at December 31, 2004, whose
salary and bonus for all services in all capacities exceed $100,000 for the
fiscal year ended December 31, 2004.

Summary Compensation Table
Annual Compensation
Long-Term Compensation
Other
Annual Restricted Securities Long-Term All Other
Name and Compen- Stock Underlying Incentive Compen-
Principal Position Year Salary($) Bonus($) sation($)(2) Awards($) Options/SARs(#) Payout($) sation($)(3)
------------------ ---- --------- -------- ------------ --------- --------------------------- ------------

George R. Quist (1) 2004 $165,600 $ 50,000 $2,400 $0 100,000 $0 $26,002
Chairman of the 2003 165,600 50,000 2,400 0 100,000 0 23,273
Board and Chief 2002 165,600 25,000 2,400 0 80,000 0 31,186
Executive Officer

Scott M. Quist (1) 2004 $215,900 $ 75,000 $7,200 $0 1,000,000(4) $0 $34,773
President, Chief 2003 205,400 60,000 7,200 0 70,000 0 29,531
Operating Officer 2002 179,400 35,000 7,200 0 40,000 0 24,066
and Director

J. Lynn Beckstead, Jr. 2004 $195,796 $ 85,000 $0 $0 5,000 $0 $25,750
Vice President of 2003 158,500 255,675 0 0 15,000 0 16,104
Mortgage Operations 2002 150,000 120,401 0 0 10,000 0 15,101
and Director

G. Robert Quist (1) 2004 $104,814 $ 0 $2,400 $0 10,000 $0 $10,711
First Vice President 2003 87,175 16,599 2,400 0 35,000 0 9,748
and Secretary

Stephen M. Sill 2004 $102,855 $ 6,000 $3,600 $0 5,000 $0 $11,684
Vice President,
Treasurer and Chief
Financial Officer

(1) George R. Quist is the father of Scott M. Quist and G. Robert Quist.

(2) The amounts indicated under "Other Annual Compensation" consist of
payments related to the operation of automobiles by the Named
Executive Officers. However, such payments do not include the
furnishing of an automobile by the Company to George R. Quist, 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.

(3) The amounts indicated under "All Other Compensation" consist of (a)
amounts contributed by the Company into a trust for the benefit of the
Named Executive Officers under the Security National Financial
Corporation Deferred Compensation Plan (for the years 2004, 2003, and
2002, such amounts were George R. Quist, $21,341, $18,590 and $16,207,
respectively; Scott M. Quist, $23,001, $23,000 and $19,219,
respectively; J. Lynn Beckstead, Jr., $21,000, $12,750 and $0,
respectively; G. Robert Quist, $10,161 and $9,394 for the years 2004
and 2003, respectively; and Stephen M. Sill $11,134 for the year
2004); (b) insurance premiums paid by the Company with respect to a
group life insurance plan for the benefit of the Named Executive
Officers (for the years 2004, 2003 and 2002, such amounts were for
George R. Quist $17, $39 and $125, respectively; and for Scott M.
Quist, G. Robert Quist, Stephen M. Sill and J. Lynn Beckstead, Jr.,
$550, $354, and $642 each, respectively); (c) life insurance premiums
paid by the Company for the benefit of the family of George R. Quist
($4,644 for each of the years 2004, 2003 and 2002); Scott M. Quist
($11,222 for the year 2004, $6,177 for the year 2003, $4,205 for the
year 2002); and J. Lynn Beckstead, Jr. ($4,200 for the year 2004); (d)
compensation paid for the cashless exercise of 50,000 shares of
Company stock exercised by George R. Quist ($10,210) for the year
2002; (e) amounts contributed by the Company into a trust for the
benefit of the Named Executive Officers under the Security National
Financial Corporation's Employer Stock Ownership Plan (ESOP) (for the
years 2003 and 2002, such amounts were J. Lynn Beckstead Jr., $3,000
and $2,754, respectively; and (f) amounts contributed by the Company
into a trust for the benefit of the Named Executive Officers under the
Security National Financial Corporation Tax-Favored Retirement Savings
Plan (401-k) Plan) (for the years 2003 and 2002, such amounts were J.
Lynn Beckstead Jr., $0 and $11,705, respectively). The amounts under
"All Other Compensation" do not include the no-interest loan in the
amount of $172,000 that the Company made to George R. Quist on April
29, 1998 to exercise stock options granted to him. The loan has been
fully paid as of March 31, 2005.

(4) Options to purchase 1,000,000 shares of Class C common stock. The
Class C common shares are convertible to Class A common shares on the
basis of ten shares of Class C common stock to one share of Class A
common stock.

The following table sets forth information concerning the exercise of
options to acquire shares of the Company's Common Stock by the Named Executive
Officers during the fiscal year ended December 31, 2004, as well as the
aggregate number and value of unexercised options held by the Named Executive
Officers on December 31, 2004.

Aggregated Option/SAR Exercised in Last Fiscal Year and Fiscal Year-End
Option/SAR Values:

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Shares December 31, December 31,
Acquired on 2004(#) 2004
Exercise Value ------- ------
Name (#) Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------

George R. Quist 68,298 $560,040 153,620 -0- $ 27,233 $ -0-
Scott M. Quist -0- -0- 1,082,175(1) -0- -0- -0-
J. Lynn Beckstead, Jr. 8,355 62,243 21,788 -0- -0- -0-
G. Robert Quist 6,862 51,455 49,088 -0- -0- -0-
Stephen M. Sill 3,718 32,350 5,250 -0- 1,228 -0-
-----------------

(1) Includes options to purchase 1,000,000 shares of Class C common stock.
The Class C common shares are convertible to Class A common shares on
the basis of ten shares of Class C common stock to one share of Class
A common stock.

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.

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.

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 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 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 $31,500 and $328,000 in fiscal 2004 and 2003,
respectively, to cover the present value of anticipated retirement benefits
under the employment agreement.

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 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 were not
retained in his current position, the Company would be obligated to continue 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 62 1/2) (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 in 2004 and 2003 approximately $18,500 and $172,000,
respectively, to cover the present value of the retirement benefit of the
agreement.

Director Compensation

Directors of the Company (but not including directors who are employees)
are paid a director's fee of $13,200 per year by the Company for their services
and are reimbursed for their expenses in attending board and committee meetings.
No additional fees are paid by the Company for committee participation or
special assignments. However, each director is provided with an annual grant of
stock options to purchase 1,000 shares of Class A Common Stock under the 2000
Director Stock Option Plan.

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. The Board
adopted a contribution formula specifying that such discretionary employer
matching contributions would equal 50% of the participating employee's
contribution to the plan to purchase Company stock up to a maximum discretionary
employee contribution of 1/2% 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 2004, 2003 and 2002 were
approximately $5,746, $4,493 and $7,975, 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 shall 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 2004, 2003 and
2002, were $128,949, $110,081 and $142,218, respectively.

Employee Stock Ownership Plan

Effective January 1, 1980, the Company adopted an employee stock ownership
plan (the "Ownership Plan") for the benefit of career employees of the Company
and its subsidiaries. The following is a description of the Ownership Plan, and
is qualified in its entirety by the Ownership Plan, a copy of which is available
for inspection at the Company's offices.

Under the Ownership Plan, the Company has discretionary power to make
contributions on behalf of all eligible employees into a trust created under the
Ownership Plan. Employees become eligible to participate in the Ownership Plan
when they have attained the age of 19 and have completed one year of service (a
twelve-month period in which the Employee completes at least 1,040 hours of
service). The Company's contributions under the Ownership Plan are allocated to
eligible employees on the same ratio that each eligible employee's compensation
bears to total compensation for all eligible employees during each year. To
date, the Ownership Plan has approximately 234 participants and had $105,196
contributions payable to the Plan in 2004. Benefits under the Ownership Plan
vest as follows: 20% after the third year of eligible service by an employee, an
additional 20% in the fourth, fifth, sixth and seventh years of eligible service
by an employee.

Benefits under the Ownership Plan will be paid out in one lump sum or in
installments in the event the employee becomes disabled, reaches the age of 65,
or is terminated by the Company and demonstrates financial hardship. The
Ownership Plan Committee, however, retains discretion to determine the final
method of payment. Finally, the Company reserves the right to amend or terminate
the Ownership Plan at any time. The trustees of the trust fund under the
Ownership Plan are 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 contribution for 2004, 2003 and 2002
was $123,249, $95,485 and $100,577, respectively.

1993 Stock Option Plan

On June 21, 1993, the Company adopted the Security National Financial
Corporation 1993 Stock Incentive Plan (the "1993 Plan"), which reserves shares
of Class A common stock for issuance thereunder. The 1993 Plan was approved at
the annual meeting of the stockholders held on June 21, 1993. The 1993 Plan
allows the Company to grant options and issue shares as a means of providing
equity incentives to key personnel, giving them a proprietary interest in the
Company and its success and progress.

The 1993 Plan provides for the grant of options and the award or sale of
stock to officers, directors, and employees of the Company. Both "incentive
stock options," as defined under Section 422A of the Internal Revenue Code of
1986 (the "Code"), and "non-qualified options" may be granted pursuant to the
1993 Plan. The exercise prices for the options granted are equal to or greater
than the fair market value of the stock subject to such options as of the date
of grant, as determined by the Company's Board of Directors. The options granted
under the 1993 Plan, were to reward certain officers and key employees who have
been employed by the Company for a number of years and to help the Company
retain these officers by providing them with an additional incentive to
contribute to the success of the Company.

The 1993 Plan is to be administered by the Board of Directors or by a
committee designated by the Board. The terms of options granted or stock awards
or sales effected under the 1993 Plan are to be determined by the Board of
Directors or its committee. The Plan provides that if the shares of common stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of common stock as a stock dividend on its
outstanding common stock, the number of shares of common stock deliverable upon
the exercise of options shall be increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share to reflect
such subdivision, combination or stock dividend. 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 the fair market value
of the option shares on the date of grant. The 1993 Plan provides that the
exercise price for non-qualified options will be not less than at least 50% of
the fair market value of the stock subject to such option as of the date of
grant of such options, as determined by the Company's Board of Directors.

The 1993 Plan has a term of ten years. The Board of Directors may amend or
terminate the 1993 Plan at any time, subject to approval of certain
modifications to the 1993 Plan by the shareholders of the Company as may be
required by law or the 1993 Plan. On November 7, 1996, the Company amended the
1993 Plan as follows: (i) to increase the number of shares of Class A common
stock reserved for issuance under the 1993 Plan from 300,000 Class A shares to
600,000 Class A shares; and (ii) to provide that the stock subject to options,
awards and purchases may include Class C common stock. On October 14, 1999, the
Company amended the 1993 Plan to increase the number of shares of Class A common
stock reserved for issuance under the plan from 746,126 Class A shares to
1,046,126 Class A shares. The Plan terminated in 2003 and options granted
thereunder are non-transferable.

2000 Director Stock Option Plan

On October 16, 2000, the Company adopted the 2000 Directors Stock Option
Plan (the "Director Plan") effective November 1, 2000. The Director Plan
provides for the grant by the Company of options to purchase up to an aggregate
of 50,000 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 automatically is eligible to receive
options to purchase the Company's Class A common stock under the Director Plan.

Effective as of November 1, 2000, 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.

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.

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 (the "Code") 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 shareholders of the Company as may be
required by law or the 2003 Plan.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than 10% of any class of
the Company's common stock 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 2004, or written representations from certain reporting
persons, the Company believes that all filing requirements applicable to its
directors, officers and greater than 10% beneficial owners were compiled with,
except that George R. Quist, Chairman and Chief Executive Officer of the
Company, through an oversight, filed one late Form 4 report reporting the
purchase of shares of Class A common stock in one transaction.

Certain Relationships and Related Transactions

On December 19, 2001, the Company entered into an option agreement with
Monument Title, LLC, a Utah limited liability company in which the Company made
available a $100,000 line of credit to Monument Title at an interest rate of 8%
per annum. The line of credit is secured by the assets of Monument Title. From
December 28, 2001 to June 14, 2002, the Company advanced Monument Title a total
of $77,953 under the line of credit. The amount advanced under the line of
credit plus accrued interest are payable upon demand. Ron Motzkus and Troy
Lashley, who own 90% and 10% of the outstanding shares of Monument Title,
respectively, are brother-in-laws of Scott M. Quist, President and Chief
Operating Officer of the Company. The Company has the right under the option
agreement for a period of five years from the date thereof to acquire 100% of
the outstanding common shares of Monument Title for the sum of $10. The purpose
of the transaction, which was approved by the Company's Board of Directors, is
to insure that the title and escrow work performed for Security National
Mortgage Company in connection with its mortgage loans are completed as
accurately as possible by Monument Title to avoid any economic losses to the
Company.

On November 1, 2004, the Company entered into an Agreement to Repay
Indebtedness and to Convey Option with Monument Title and Mr. Motzkus. Under the
terms of the agreement, Monument Title agreed to pay the Company a total of
$94,177, representing the total of $77,953 that the Company advanced to Monument
Title under the line of credit, plus interest thereon, within seven days from
the date of the agreement. Monument Title paid the $94,177 to the Company
pursuant to the agreement. In addition, the Company agreed to release its
interest in the option agreement to acquire 100% of the outstanding common
shares of Monument Title, in consideration for the payment of an additional
$94,177. Monument Title is to pay the additional $94,177 to the Company in
minimum payments of $500 per month for the first twelve months following the
date of the agreement, with additional payments of $1,000 per month for the
second twelve months following the date of the agreement. After the 24th month
following the date of the agreement, the outstanding balance is to bear interest
at the three-year treasury rate plus one percent. The minimum payment for the
third year is $1,500 per month, the minimum payment for the fourth year is
$2,000 per month and the minimum payment for the fifth year is $2,500 per month.
Any remaining unpaid balance, including interest, shall be due and payable at
the conclusion of the 60th month from the date of the agreement.

On December 26, 2003, Security National Life entered into a coinsurance
agreement and a modified coinsurance agreement with Southern Security Life
Insurance Company, effective September 30, 2003. Under the terms of these
agreements, Southern Security Life Insurance Company ceded 50% of certain blocks
of its universal life business to Security National Life. The total liabilities
reinsured for this business on October 1, 2003 were $22,195,259. Southern
Security Life Insurance Company received a ceding commission from Security
National Life of $3,200,000 and will pay a risk charge to Security National Life
of 1% of the outstanding coinsurance per calendar quarter. Southern Security
Life Insurance Company placed investment grade bonds in a bank trust, the value
of which equal the outstanding liabilities ceded to Security National Life.
Security National Life is named as a beneficiary of the trust, and the terms of
the trust are such that Southern Security Life Insurance Company will maintain
investment grade bonds in the trust to equal the outstanding liabilities ceded
to Security National Life.

September 30, 2004, upon 90 days advance notice. As of December 31, 2004, the
outstanding coinsurance amount was $2,426,107. Southern Security Life Insurance
Company recorded as an expense the risk charge of $112,315 for 2004. The
coinsurance agreements have remained in effect following completion of the
merger of SSLIC Holding Company into Southern Security Life Insurance Company.
As a result, the coinsurance agreements have not been impacted or affected by
the completion of such merger.

On December 28, 2004, Security National Life entered into a coinsurance
agreement and a modified coinsurance agreement with Southern Security Life
Insurance Company, effective October 1, 2004. Under the terms of these
agreements, Southern Security Life Insurance Company ceded 25% of certain blocks
of its universal life business to Security National Life. The total liabilities
reinsured for this business on October 1, 2004 were $11,010,599. Southern
Security Life Insurance Company received a ceding commission from Security
National Life of $1,200,000 and will pay a risk charge to Security National Life
of 1% of the outstanding coinsurance per calendar quarter. Southern Security
Life Insurance Company placed investment grade bonds in a bank trust, the value
of which equal the outstanding liabilities ceded to Security National Life.
Security National Life is named as a beneficiary of the trust, and the terms of
the trust are such that Southern Security Life Insurance Company will maintain
investment grade bonds in the trust to equal the outstanding liabilities ceded
to Security National Life.

Under the coinsurance agreement and the modified coinsurance agreement, the
coinsurance and the decrease in reserves are equal in amount. Under U. S. GAAP
the coinsurance and the reserve decreases are netted since these are non-cash
items, and Southern Security Life Insurance Company expects to recapture the
coinsurance from future profits of the reinsured business. Southern Security
Life Insurance Company has the right to recapture the business at any time after
September 30, 2005, upon 120 days advance notice. As of December 31, 2004 the
outstanding coinsurance amount was $1,157,886. Southern Security Life Insurance
Company recorded as an expense the risk charge of $12,000 for 2004. The
coinsurance agreements have remained in effect following completion of the
merger of SSLIC Holding Company into Southern Security Life Insurance Company.
As a result, the coinsurance agreements have not been impacted or affected by
the completion of such merger.

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 which is in conflict or may be in
conflict with the interests of the Company.

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, 2005, (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) 426,375 7.0% 3,358,687 52.6% 3,785,062 28.1%
Employee Stock
Ownership Plan (3) 577,183 9.5% 1,553,041 24.3% 2,130,224 15.8%
George R. Quist (4)(5)(7)(8) 449,945 7.4% 470,581 7.4% 920,526 6.8%
Scott M. Quist (4)(7)(9) 347,885 5.7% 1,307,079 20.5% 1,654,964 12.3%
Associated Investors (10) 92,798 1.5% 655,610 10.3% 748,408 5.5%
G. Robert Quist (6)(11) 112,300 1.9% 244,052 3.8% 356,352 2.6%
J. Lynn Beckstead, Jr., (6)(12) 104,193 1.7% -- * 104,193 *
Stephen M. Sill (6)(13) 58,087 1.0% -- * 58,087 *
Christie Q. Overbaugh (14) 56,979 * 105,501 1.7% 162,480 1.2%
Robert G. Hunter, M.D., (4)(15) 7,296 * -- * 7,296 *
Norman G. Wilbur (16) 5,962 * -- * 5,962 *
Charles L. Crittenden (17) 5,921 * -- * 5,921 *
H. Craig Moody (18) 5,678 * -- * 5,678 *
All directors and executive officers
(10 persons) (4)(5)(6)(7) 1,580,621 26.1% 5,485,500 86.0% 7,066,521 52.4%

* 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 George R. Quist is the general partner.

(3) 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.

(4) Does not include 577,183 shares of Class A common stock and 1,553,041
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.

(5) Does not include 92,798 shares of Class A common stock and 655,611
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 252,757 shares of Class A common stock owned by the
Company's 401(k) Retirement Savings Plan, of which G. Robert Quist, J.
Lynn Beckstead, and Stephen M. Sill are members of the Investment
Committee and, accordingly, exercise shared voting and investment
powers with respect to such shares.

(7) Does not include 140,573 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.

(8) Includes options to purchase 153,620 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, 2005.

(9) Includes options to purchase 77,175 shares of Class A common stock and
1,050,000 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, 2005.

(10) The managing partner of Associated Investors is George R. Quist, who
exercises sole voting and investment powers.

(11) Includes options to purchase 49,088 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, 2005.

(12) Includes options to purchase 21,788 shares of Class A common stock
granted to Mr. Beckstead that are currently exercisable or will become
exercisable within 60 days of March 31, 2005.

(13) Includes options to purchase 5,250 shares of Class A common stock
granted to Mr. Sill that are currently exercisable or will become
exercisable within 60 days of March 31, 2005.

(14) Includes options to purchase 7,875 shares of Class A common stock
granted to Ms. Overbaugh that are currently exercisable or will become
exercisable within 60 days of March 31, 2005.

(15) Includes options to purchase 4,753 shares of Class A common stock
granted to Mr. Hunter that are currently exercisable or will become
exercisable within 60 days of March 31, 2005.

(16) Includes options to purchase 4,753 shares of Class A common stock
granted to Mr. Wilbur that are currently exercisable or will become
exercisable within 60 days of March 31, 2005.

(17) Includes options to purchase 1,103 shares of Class A common stock
granted to Mr. Crittenden that are currently exercisable or will
become exercisable within 60 days of March 31, 2005.

The Company's officers and directors, as a group, own beneficially
approximately 52.4% 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 the Company's Chairman of
the Board of Directors and Chief Executive Officer and the five 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 2004 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 2004 were reasonable as compared to amounts paid by
companies of similar size.

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 2004. Mr. Quist received a base salary of $165,600 for 2004. He also
received an annual bonus of $50,000 and stock options to purchase 100,000 shares
of the Company's Class A common stock, of which 50,000 shares are exercisable at
$3.96 per share and 50,000 shares are exercisable at $3.55 per share. 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 2004, the Audit Committee met four 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 former independent auditors, Tanner
LC, 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 considered with the
auditors whether the provision of financial information systems design and
implementation and other non-audit services provided by them to the Company
during 2004 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, 2004, for filing with the Securities and Exchange
Commission.

AUDIT COMMITTEE

Norman G. Wilbur, Chairman
Charles L. Crittenden
H. Craig Moody

COMPANY STOCK PRICE PERFORMANCE

This graph below compares the cumulative total stockholder return of the
Company's Class A common stock with the cumulative total return on the Standard
& Poor's 500 Stock Index and the Standard & Poor's Insurance Index for the
period from December 31, 1999 through December 31, 2004. The graph assumes that
the value of the investment in the Company's Class A common stock and in each of
the indexes was 100 at December 31, 1999, and that all dividends were
reinvested.

The comparisons in the graph below are based on historical data and are not
intended to forecast the possible future performance of the Company's Class A
common stock.

December 31, December 31, December 31, December 31, December 31, December 31,
1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ----

Security National
Financial Corporation 100 70 81 216 262 117
S&P 500 100 90 78 60 76 82
S&P Insurance Index 100 133 116 91 108 115

The graph set forth above is required by the Securities and Exchange
Commission and shall not be deemed to be incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933, as amended, or under the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed soliciting material or filed under such acts.

RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

PROPOSAL 2

The independent public accounting firm of Hansen, Barnett & Maxwell, P.C.
has been the Company's registered public independent accountants since May 20,
2005. The Audit Committee has recommended and the Board of Directors has
appointed Hansen, Barnett & Maxwell for purposes of auditing the consolidated
financial statements of the Company for the fiscal year ending December 31,
2005. It is anticipated that representatives of Hansen, Barnett & Maxwell 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
registered public independent accountants for fiscal year ending December 31,
2005.

AUDIT FEES, FINANCIAL INFORMATION SYSTEMS DESIGN
AND IMPLEMENTATION FEES AND ALL OTHER FEES

Fees for the year 2004 for the annual audit of the financial statements and
employee benefit plans and related quarterly reviews by Tanner L.C., the
Company's former registered public independent accountants, were approximately
$262,000. There were $19,000 in other fees during 2004.

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, 2004. The annual
report is incorporated in this Proxy Statement and is not to be considered part
of the soliciting material. The Company will provide, without charge to each
stockholder upon written request, a copy of the Company's Annual Report Form
10-K as filed with the Securities and Exchange Commission for the fiscal year
ended December 31, 2004. Such requests should be directed to G. Robert Quist,
First Vice President and Secretary, at P.O. Box 57250, Salt Lake City, Utah
84157-0250.

DEADLINE FOR RECEIPT OF STOCKHOLDER'S PROPOSALS
FOR ANNUAL MEETING TO BE HELD IN JULY 2006

Any proposal by a stockholder to be presented at the Company's next Annual
Meeting of Stockholders expected to be held in July 2006 must be received at the
offices of the Company, P.O. Box 57250, Salt Lake City, Utah 84157-0250, no
later than March 31, 2006.

By order of the Board of Directors,

G. Robert Quist
First Vice President and Secretary
June 7, 2005
Salt Lake City, Utah

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 8, 2005, at 5300 South 360 West,
Suite 250, Salt Lake City, Utah, at 10:00 a.m. Mountain Daylight Time, and
hereby appoints Messrs. George R. Quist, Scott M. Quist and G. Robert Quist, or
any of them, each with full power of substitution, as attorneys and proxies to
vote all the shares of the undersigned at said Annual Meeting of Stockholders
and at all adjournments or postponements thereof, hereby ratify and confirm all
that said attorneys and proxies may do or cause to be done by virtue hereof. The
above-named attorneys and proxies are instructed to vote all of the
undersigned's shares as follows:

1. To elect 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 ratify the appointment of Hansen, Barnett & Maxwell, P.C. as the
Company's registered public independent accountants for the fiscal year
ending December 31, 2005;

[ ] FOR [ ] AGAINST

3. 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 AND FOR PROPOSALS 2 and 3.

Dated , 2005
------------------------------------------------------

-----------------------------------------
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 8, 2005, at 5300 South 360 West,
Suite 250, Salt Lake City, Utah, at 10:00 a.m., Mountain Daylight Time, and
hereby appoints Messrs. George R. Quist, Scott M. Quist and G. Robert Quist, or
any of them, each with full power of substitution, as attorneys and proxies to
vote all the shares of the undersigned at said Annual Meeting of Stockholders
and at all adjournments or postponements thereof, hereby ratify and confirming
all that said attorneys and proxies may do or cause to be done by virtue hereof.
The above-named attorneys and proxies are instructed to vote all of the
undersigned's shares as follows:

1. To elect 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 ratify the appointment of Hansen, Barnett & Maxwell, P.C. as the
Company's registered public independent accountants for the fiscal year
ending December 31, 2005;

[ ] FOR [ ] AGAINST

4. To transact such other business as may properly come before the meeting or
any adjournment thereof.

Dated , 2005
----------------------------------------------------------------

-----------------------------------------
Signature of Stockholder

NOTE: Securities dealers or other representatives please state the number of
shares voted by this Proxy.