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<SEC-DOCUMENT>0000318673-03-000028.txt : 20031114
<SEC-HEADER>0000318673-03-000028.hdr.sgml : 20031114
<ACCEPTANCE-DATETIME>20031114144941
ACCESSION NUMBER:		0000318673-03-000028
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20030930
FILED AS OF DATE:		20031114

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SECURITY NATIONAL FINANCIAL CORP
		CENTRAL INDEX KEY:			0000318673
		STANDARD INDUSTRIAL CLASSIFICATION:	LIFE INSURANCE [6311]
		IRS NUMBER:				870345941
		STATE OF INCORPORATION:			UT
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-09341
		FILM NUMBER:		031003500

	BUSINESS ADDRESS:	
		STREET 1:		PO BOX 57220
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84157
		BUSINESS PHONE:		8012641060

	MAIL ADDRESS:	
		STREET 1:		PO BOX 57220
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84157

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SNL FINANCIAL CORP
		DATE OF NAME CHANGE:	19910401
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>snfc10q0903.txt
<TEXT>





                       SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



For Quarter Ended September 30, 2003         Commission File Number: 0-9341
- ------------------------------------         ------------------------------



                     SECURITY NATIONAL FINANCIAL CORPORATION
                            Exact Name of Registrant.



                 UTAH                               87-0345941
- ------------------------------              -------------------------
(State or other jurisdiction                IRS Identification Number
of incorporation or organization)



5300 South 360 West, Salt Lake City, Utah               84123
- -----------------------------------------        ------------------
(Address of principal executive offices)              (Zip Code)



Registrant's telephone number, including Area Code     (801) 264-1060
                                                       --------------



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                              YES  X         NO
                                  ---


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.


Class A Common Stock, $2.00 par value                  4,284,012
- -------------------------------------      ----------------------------------
         Title of Class                    Number of Shares Outstanding as of
                                                 September 30, 2003

Class C Common Stock, $.20 par value                   6,094,950
- ------------------------------------       ----------------------------------
         Title of Class                    Number of Shares Outstanding as of
                                                 September 30, 2003


<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q

                        QUARTER ENDED SEPTEMBER 30, 2003

                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION



Item 1    Financial Statements                                      Page No.
- ------                                                              --------

          Consolidated Statement of Earnings - Nine and three
          months ended September 30, 2003 and 2002 (unaudited).........3

          Consolidated Balance Sheet - September 30, 2003 (unaudited)
          and December 31, 2002 .......................................4-5

          Consolidated Statement of Cash Flows -
          Nine months ended September 30, 2003
          and 2002 (unaudited).........................................6

          Notes to Consolidated Financial Statements...................7-10


Item 2    Management's Discussion and Analysis.........................11-14
- ------

Item 3    Quantitative and Qualitative Disclosure of Market Risk.......14
- ------

Item 4    Controls and Procedures......................................15
- ------

                           PART II - OTHER INFORMATION

          Other Information............................................15-17

          Signature Page...............................................18

          Certifications...............................................19-21


<PAGE>
<TABLE>
<CAPTION>




                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                       CONSOLIDATED STATEMENT OF EARNINGS
                                   (Unaudited)

                                                             Nine Months Ended                Three Months Ended
                                                               September 30,                     September 30,
Revenues:                                                 2003              2002             2003             2002
- --------                                                  ----              ----             ----             ----
<S>                                                    <C>              <C>               <C>              <C>
Insurance premiums and other considerations            $17,342,353      $10,319,892       $5,752,258       $3,627,683
Net investment income                                   13,630,206        8,504,297        5,264,666        3,052,659
Net mortuary and cemetery sales                          8,026,021        7,954,592        2,730,776        2,717,806
Realized gains on investments and other assets              (2,207)         746,021           (2,207)          27,205
Mortgage fee income                                     76,979,168       34,828,830       24,067,019       15,988,606
Other                                                      245,893          415,292           62,468          106,325
                                                     -------------    -------------    -------------    -------------
   Total revenues                                      116,221,434       62,768,924       37,874,980       25,520,284
                                                     -------------    -------------    -------------    -------------

Benefits and expenses:
Death benefits                                           9,768,115        4,298,196        2,725,055        1,325,095
Surrenders and other policy benefits                     1,573,695        1,442,718          472,603          372,618
Increase in future policy benefits                       4,921,318        3,628,655        2,113,665        1,569,539
Amortization of deferred policy acquisition costs
   and cost of insurance acquired                        3,622,216        2,334,477        1,353,437          565,708
General and administrative expenses:
   Commissions                                          55,435,397       26,554,414       16,215,158       12,591,644
   Salaries                                             10,378,702        8,308,534        3,421,014        2,925,397
   Other 16,260,51                                      10,320,968        6,076,615        3,955,599
Interest expense                                         3,130,982        1,013,868        1,331,544          491,072
Cost of goods and services sold
  of the mortuaries and cemeteries                       1,699,005        1,515,575          575,267          535,029
                                                     -------------    -------------    -------------    -------------
   Total benefits and expenses                         106,789,942       59,417,405       34,284,358       24,331,701
                                                     -------------    -------------    -------------    -------------

Earnings before income taxes                             9,431,492        3,351,519        3,590,622        1,188,583
Income tax expense                                      (3,065,751)        (825,614)      (1,145,524)        (294,796)
Minority interest (income) loss of subsidiary               17,219           18,263           31,625            3,898
                                                     -------------    -------------    -------------    -------------
      Net earnings                                      $6,382,960       $2,544,168       $2,476,723         $897,685
                                                     =============    =============    =============    =============

Net earnings per common share                                $1.24             $.54             $.49             $.19
                                                             =====             ====             ====             ====
   Weighted average outstanding common shares            5,165,311        4,680,665        5,034,832        4,684,250
                                                     =============    =============    =============    =============

Net earnings per common share-assuming dilution              $1.19             $.51             $.47             $.18
                                                             =====            =====            =====            =====
   Weighted average outstanding common shares
      assuming-dilution                                  5,378,996        5,013,965        5,252,132        5,083,126
                                                     =============    =============    =============    =============
See accompanying notes to consolidated financial statements

</TABLE>

<PAGE>


                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET



                                             September 30, 2003    December 31,
                                                 (Unaudited)           2002
                                             ------------------    ------------
Assets:
- -------
Insurance-related investments:
Fixed maturity securities held
   to maturity, at amortized cost              $33,509,058      $33,015,097
Fixed maturity securities available
   for sale, at market                          17,841,657       18,514,943
Equity securities available for sale,
   at market                                     3,033,204        2,642,093
Mortgage loans on real estate                   25,041,443       21,016,008
Real estate, net of accumulated
   depreciation and allowances for losses        8,863,328        9,331,248
Policy, student and other loans                 10,924,403       10,974,165
Short-term investments                           4,677,926        5,335,478
                                             -------------    -------------
      Total insurance-related
         investments                           103,891,019      100,829,032
                                             -------------    -------------
Restricted assets of cemeteries and mortuaries   5,310,865        5,332,736
                                              ------------    -------------
Cash                                            30,294,277       38,199,041
                                              ------------    -------------
Receivables:
   Trade contracts                               9,786,737       11,358,027
   Mortgage loans sold to investors            107,255,174       89,455,105
   Receivable from agents                        1,441,923        2,054,071
   Receivable from officers                         46,540           70,290
   Other                                         1,593,581        1,131,977
                                             -------------    -------------
      Total receivables                        120,123,955      104,069,470
   Allowance for doubtful accounts              (4,817,755)      (2,385,309)
                                             -------------    -------------
   Net receivables                             115,306,200      101,684,161
                                             -------------    -------------
Policyholder accounts on deposit
   with reinsurer                                6,822,334        6,955,691
Land and improvements held for sale              8,573,388        8,429,215
Accrued investment income                        1,316,052          928,287
Deferred policy and pre-need acquisition costs  16,879,934       15,917,257
Property, plant and equipment, net              11,004,751       10,921,635
Cost of insurance acquired                      15,229,005       16,330,711
Excess of cost over net assets
   of acquired subsidiaries                        683,191          683,191
Other                                              887,548          945,805
                                             -------------    -------------
      Total assets                            $316,198,564     $307,156,762
                                             =============    =============






See accompanying notes to consolidated financial statements.


<PAGE>


                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (Continued)


                                             September 30, 2003    December 31,
                                                (Unaudited)            2002
                                             ------------------    ------------
Liabilities:
- -----------
Future life, annuity, and other
   policy benefits                              $218,603,200     $215,980,207
Unearned premium reserve                           1,945,307        1,914,700
Bank loans payable                                14,986,969       16,113,227
Notes and contracts payable                        3,430,279        3,160,009
Potential stock redemption                         1,800,000           --
Deferred pre-need cemetery and funeral
   contracts revenues and estimated future
   cost of pre-need sales                         10,559,213       10,002,396
Accounts payable                                   1,290,172        1,553,777
Funds held under reinsurance treaties              1,304,981        1,334,964
Other liabilities and accrued expenses            10,843,157       10,182,382
Income taxes                                      11,036,256        8,103,882
                                               -------------    -------------

      Total liabilities                          275,799,534      268,345,544
                                               -------------    -------------

Commitments and Contingencies                         --               --

Minority interest                                  3,963,890        4,297,807
                                               -------------    -------------

Stockholders' Equity:
Common stock:
      Class A: $2.00 par value, authorized 10,000,000
         shares, issued 5,561,233 shares in 2003
         and 5,794,492 shares in 2002             11,122,466       11,588,984
      Class C: $0.20 par value, authorized
         7,500,000 shares, issued 6,166,699
         shares in 2003 and 6,182,669
         shares in 2002                            1,233,340        1,236,533
                                               -------------    -------------
Total common stock                                12,355,806       12,825,517
Additional paid-in capital                        10,316,658       11,280,842
Accumulated other comprehensive income
      (loss) and other items, net of
      deferred taxes                                (846,100)       1,191,863
Retained earnings                                 18,134,598       11,992,542
Treasury stock at cost (1,277,221 Class A
      shares and 1,749 Class C shares in
      2003; 1,151,811 Class A shares
      and 71,749 Class C shares in 2002, held by
      affiliated companies)                        (3,525,822)      (2,777,353)
                                                -------------    -------------
Total stockholders' equity                         36,435,140       34,513,411
                                                -------------    -------------
   Total liabilities and stockholders' equity    $316,198,564     $307,156,762
                                                =============    =============



See accompanying notes to consolidated financial statements.


<PAGE>


                     SECURITY NATIONAL FINANCIAL CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                               Nine Months Ended September 30,
                                               2003                   2002
                                               ----                   ----
Cash flows from operating activities:
      Net cash provided by operating
      activities                            $4,097,189            $12,523,692
                                          ------------            -----------

Cash flows from investing activities:
   Securities held to maturity:
      Purchase - fixed maturity securities  (8,080,087)     (4,062,931)
      Calls and maturities - fixed
        maturity securities                  7,607,038       7,122,717
   Securities available for sale:
      Calls and maturities - fixed
         maturity securities                   360,000       3,301,497
      Purchases of equity securities           (51,921)           (367)
   Purchases of short-term investments     (15,608,535)     (8,334,285)
   Sales of short-term investments          16,661,402       7,425,705
   Purchases of restricted assets               41,009        (147,552)
   Mortgage, policy, and other loans made  (17,258,017)     (4,707,046)
   Payments received for mortgage,
      real estate, policy, and other loans  12,861,203       4,648,685
   Purchases of property, plant,
      and equipment                         (1,215,617)     (1,160,274)
   Purchases of real estate                 (1,012,284)     (1,501,405)
   Sale of real estate                       1,230,802          --
                                          ------------    ------------

         Net cash (used in) provided by
            investing activities            (4,465,007)      2,584,744
                                          ------------    ------------

Cash flows from financing activities:
   Annuity receipts                          4,422,489       6,153,617
   Annuity withdrawals                      (8,061,431)     (8,325,543)
   Repayment of bank loans and notes and
      contracts payable                     (3,174,736)     (1,659,228)
   Stock options exercised                      25,200          --
   Proceeds from borrowings on bank loans
      and notes and contracts payable            --            186,594
   Purchase of Treasury Stock                 (748,468)         --
   Sale of Treasury Stock                        --             37,824
   Other                                         --             --
                                          ------------    ------------

      Net cash (used in) provided by
         financing activities               (7,536,946)     (3,606,736)
                                          ------------    ------------
Net change in cash                          (7,904,764)     11,501,700

Cash at beginning of period                 38,199,041       8,757,246
                                          ------------    ------------

Cash at end of period                      $30,294,277     $20,258,946
                                          ============    ============

Non cash investing and financial activities
- -----------------------------------------------
During the nine months  ended  September  30, 2003,  the Company  entered into a
potential  stock  redemption  agreement  (see Note 7). As a result,  the Company
reclassified  $1,800,000  of common stock and  additional  paid-in  capital to a
liability.


See accompanying notes to consolidated financial statements.

            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                         September 30, 2003, (Unaudited)

1.  Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim  financial  information and with the instructions to Form
10-Q and Article 10 of Regulation S-X.  Accordingly,  they do not include all of
the  information  and  footnotes  required by  accounting  principles  generally
accepted in the United States of America for complete financial  statements.  In
the opinion of  management,  all  adjustments  (consisting  of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the three and nine months ended  September 30, 2003,  are
not  necessarily  indicative  of the results  that may be expected  for the year
ending  December 31, 2003. For further  information,  refer to the  consolidated
financial statements and footnotes thereto for the year ended December 31, 2002,
included in the Company's Annual Report on Form 10-K (file number 0-9341).

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

The estimates  susceptible to  significant  change are those used in determining
the liability for future policy  benefits and claims,  those used in determining
valuation  allowances  for  mortgage  loans on real  estate,  and those  used in
determining  the  estimated  future  costs for  pre-need  sales.  Although  some
variability  is inherent in these  estimates,  management  believes  the amounts
provided are adequate.

2.   Comprehensive Income

For the nine  months  ended  September  30, 2003 and 2002,  total  comprehensive
income amounted to $4,344,997 and $2,357,975, respectively.

For the three  months ended  September  30, 2003 and 2002,  total  comprehensive
income amounted to $2,339,192 and $807,461, respectively.

3.   Stock-Based Compensation

The Company  accounts for  stock-based  compensation  under the  recognition and
measurement  principles  of APB Opinion No. 25,  Accounting  for Stock Issued to
Employees,  and related  interpretations.  The Company has adopted SFAS No. 123,
"Accounting for Stock-Based Compensation".  In accordance with the provisions of
SFAS 123,  the Company has  elected to continue to apply  Accounting  Principles
Board Opinion No. 25,  "Accounting for Stock Issued to Employees"  ("APB Opinion
No. 25"), and related  interpretations in accounting for its stock option plans.
In accordance with APB Opinion No. 25, no compensation  cost has been recognized
for these plans.  Had  compensation  cost for these plans been determined  based
upon the fair value at the grant date consistent with the methodology prescribed
under SFAS No. 123, the Company's net earnings for three months ended  September
30,  2003,  and 2002 would not have been  effected.  Net  earnings  for the nine
months  ended  September  30,  2003 and 2002  would  have  been  reduced  by the
following:

                                              Nine Months Ended September 30,
                                             2003                       2002
                                             ----                       ----
Net earnings as reported                 $6,382,960                 $2,544,168
Deduct:  Total stock-based employee
         compensation expense determined
         under fair value based method for
         all awards, net of related
         tax effects                       (133,000)                     --
                                        -----------                 ----------
Pro forma net earnings                   $6,249,960                 $2,544,168
                                         ==========                 ==========

            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                         September 30, 2003 (Unaudited)

                                             Nine Months Ended September 30,
                                            2003                       2002
                                            ----                       ----
      Net earnings per common share:
        Basic - as reported                 $1.24                      $.54
        Basic - pro forma                   $1.21                      $.54
        Diluted - as reported               $1.19                      $.51
        Diluted - pro forma                 $1.16                      $.51

4.  Earnings  Per  Share In  accordance  with SFAS  128,  the basic and  diluted
earnings per share amounts were calculated as follows:

                                             Nine Months Ended September 30,
                                            2003                     2002
                                            ----                     ----
Numerator:
      Net income                        $6,382,960                $2,544,168
                                        ==========                ==========
Denominator:
      Denominator for basic earnings per share-
        weighted-average shares          5,165,311                 4,680,665
                                        ----------               -----------

      Effect of dilutive securities:
        Employee stock options             208,961                   305,041
        Stock appreciation rights            4,724                    28,259
                                      ------------              ------------
      Dilutive potential common shares     213,685                   333,300
                                        ----------               -----------
      Denominator for diluted earnings
        per share-adjusted
        weighted-average shares and
        assumed conversions             5,378,996                  5,013,965
                                      ===========                ===========

      Basic earnings per share              $1.24                       $.54
                                            =====                       ====

      Diluted earnings per share            $1.19                       $.51
                                            =====                       ====

                                           Three Months Ended September 30,
                                         2003                            2002
                                         ----                            ----
Numerator:
      Net income                     $2,476,723                  $    897,685
                                     ==========                  ============
Denominator:
      Denominator for basic earnings
      per share-weighted-average
      shares                          5,034,832                     4,684,250
                                     ----------                   -----------

      Effect of dilutive securities:
        Employee stock options          212,541                       314,024
        Stock appreciation rights         4,759                        84,852
                                     ----------                    ----------
      Dilutive potential common shares  217,300                       398,876
                                   ------------                   -----------

      Denominator for diluted earnings
       per share-adjusted weighted-
       average shares and assumed
       conversions                    5,252,132                     5,083,126
                                    ===========                   ===========

      Basic earnings per share             $.49                          $.19
                                           ====                          ====

      Diluted earnings per share           $.47                          $.18
                                           ====                          ====


<PAGE>
<TABLE>
<CAPTION>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                         September 30, 2003, (Unaudited)

5.  Business Segment
                                        Life             Cemetery/                            Reconciling
                                      Insurance          Mortuary           Mortgage             Items        Consolidated
For the Nine Months Ended
September 30, 2003
- --------------------------
<S>                                <C>                 <C>                 <C>                <C>           <C>
Revenues from
      external customers            $ 22,137,919       $ 8,880,150         $85,203,365$          --          $116,221,434

Intersegment revenues                  7,379,515           --                  --              (7,379,515)         --

Segment profit                         1,114,422           135,785           8,181,285           --             9,431,492

Identifiable assets                  296,676,591        43,828,908          19,512,932        (43,819,867)    316,198,564

For the Nine Months Ended
September 30, 2002
- -------------------------
Revenues from
   external customers               $ 14,844,979       $ 9,454,018         $38,469,927$          --          $ 62,768,924

Intersegment revenues                  3,474,189           --                  --              (3,474,189)        --

Segment profit                           563,976         1,221,538           1,566,005           --             3,351,519

Identifiable assets                  203,071,749        41,053,996          10,180,717        (34,485,755)    219,820,707


For the Three Months Ended
September 30, 2003
- --------------------------
Revenues from
   external customers               $  7,363,273       $ 3,051,572         $27,460,135$             --       $ 37,874,980

Intersegment revenues                  2,675,710           --                  --              (2,675,710)          --

Segment profit                           511,322           225,413           2,853,887              --          3,590,622

For the Three Months Ended
September 30, 2002
- --------------------------
Revenues from
   external customers               $  5,083,781       $ 3,005,034         $17,431,469$            --        $ 25,520,284

Intersegment revenues                  1,186,158           --                  --              (1,186,158)        --

Segment profit                            59,282           195,121             934,180           --             1,188,583

</TABLE>

<PAGE>


            SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                         September 30, 2003, (Unaudited)

6. Recent Acquisition

On December 23, 2002, the Company  completed an asset purchase  transaction with
Acadian Life Insurance  Company,  a Louisiana  domiciled life insurance  company
("Acadian  Life"),  in which it acquired from Acadian Life $75,000,000 in assets
and  $75,000,000  in insurance  reserves  through its wholly  owned  subsidiary,
Security  National Life  Insurance  Company,  a Utah  domiciled  life  insurance
company. The acquired assets consist primarily of approximately  275,000 funeral
insurance  policies  in  force in the  state of  Mississippi.  The  assets  were
originally  acquired by Acadian Life from Gulf National Life  Insurance  Company
("GNLIC") on June 6, 2001,  consisting of all of GNLIC's  insurance  policies in
force and in effect on June 1, 2001.

7. Potential Stock Redemption

The Company  entered into an agreement with a stockholder in August 2003 wherein
it purchased  124,000 shares of Class A Common Stock from this  stockholder  for
$6.00 per share.  The purchase of these shares is reflected in treasury stock as
of September 30, 2003.

Also  under the terms of this  agreement,  this  stockholder  has  agreed not to
purchase or control, directly or indirectly, any additional shares of Class A or
Class C common stock through August 2007, and on August 27, 2004, 2005 and 2006,
this  stockholder may request,  but is not obligated to request,  the Company to
purchase  an  additional  100,000  shares of Class A common  stock  held by this
stockholder  for $6.00 per share.  In accordance with the Statement of Financial
Accounting  Standards ("SFAS") No. 150, the Company has recorded $1,800,000 as a
liability under the assumption that the stockholder could request the Company to
purchase these shares, and has reduced stockholders' equity for the same amount.
This amount has not been  recorded at its present  value because the discount is
not material.  The Company is not aware of the intention of the  stockholder  to
exercise  his right in the future.  In the event that the  stockholder  does not
exercise  his right,  the amount  recorded  as a  liability  will be reduced and
stockholders' equity will be increased.

8.  Recent Accounting Pronouncements

In April  2003,  the FASB issued SFAS No. 149,  Amendment  of  Statement  133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts  (collectively referred to as
derivatives)  and for  hedging  activities  under SFAS No. 133,  Accounting  for
Derivative  Instruments and Hedging Activities.  This Statement is effective for
contracts entered into or modified after June 30, 2003, with certain exceptions,
and for hedging  relationships  designated  after  September  30,  2003.  We are
currently  evaluating  the effect that the adoption of SFAS No. 149 will have on
our results of operations and financial position.

In January  2003,  the FASB  issued  SFAS No.  46,  "Consolidation  of  Variable
Interest  Entities."  SFAS No. 46 is currently  effective for periods  beginning
after  December 15, 2003.  SFAS No. 46 clarifies the  application  of Accounting
Research  Bulletin  No.  51,  "Consolidated  Financial  Statements,"  to certain
entities  in  which  equity  investors  do not  have  the  characteristics  of a
controlling  financial interest or do not have sufficient equity at risk for the
entity to finance  its  activities  without  additional  subordinated  financial
support from a separate  enterprise.  Such  entities are  identified as Variable
Interest  Entities.  The  objective  of  SFAS  No.  46 is to  improve  financial
reporting  by  those  separate   enterprises  involved  with  variable  interest
entities. If those separate enterprises have a controlling financial interest in
a  variable  interest  entity,  the  assets,  liabilities,  and  results  of the
activities of the variable  interest  entity should be included in the financial
statements  with those of the business  enterprise.  Management does not believe
the  adoption  of SFAS No.  46 will  have a  material  effect  on the  Company's
financial  position or results of operations.  SFAS No. 46 further  requires the
disclosure of certain information related to variable interest entities in which
the Company holds a significant variable interest.  The Company does not believe
that it owns any such interests that require disclosure at this time.


<PAGE>



Item 2.  Management's Discussion and Analysis

Overview

The Company's  operations  over the last several years  generally  reflect three
trends or events which the Company expects to continue:  (i) increased attention
to "niche" insurance  products,  such as the Company's funeral plan policies and
traditional  whole-life  products;   (ii)  emphasis  on  cemetery  and  mortuary
business;  and (iii)  capitalizing  on lower interest  rates by originating  and
refinancing mortgage loans.

During the nine months ended  September  30, 2003,  Security  National  Mortgage
Company  ("SNMC")  experienced  increases  in revenue  and  expenses  due to the
increase  in  loan  volume  of  its  operations.   SNMC  is  a  mortgage  lender
incorporated under the laws of the State of Utah. SNMC is approved and regulated
by the Federal Housing Administration (FHA), a department of the U.S. Department
of Housing and Urban Development (HUD), to originate mortgage loans that qualify
for government  insurance in the event of default by the borrower.  SNMC obtains
loans  primarily from  independent  brokers and  correspondents.  SNMC funds the
loans from internal cash flows and lines of credit from financial  institutions.
SNMC receives fees from the borrowers and other  secondary fees from third party
investors who purchase the loans from SNMC. SNMC sells all of its loans to third
party  investors  and does not retain  servicing to these  loans.  SNMC pays the
brokers and  correspondents  a commission  for loans that are  brokered  through
SNMC.   SNMC   originated   and   sold   14,487   ($2,125,995,000)   and   7,403
($1,075,229,000) loans respectively for the nine months ended September 30, 2003
and 2002.

On December 23, 2002, the Company  completed an asset purchase  transaction with
Acadian Life Insurance Company, a Louisiana domiciled life insurance company, in
which it acquired from Acadian Life  $75,000,000  in assets and  $75,000,000  in
insurance  reserves through its wholly owned subsidiary,  Security National Life
Insurance Company, a Utah domiciled life insurance company.  The acquired assets
consist primarily of approximately  275,000 funeral insurance  policies in force
in the state of Mississippi. The assets were originally acquired by Acadian Life
from Gulf National Life Insurance Company ("GNLIC") on June 6, 2001,  consisting
of all of GNLIC's insurance policies in force and in effect on June 1, 2001.

Results of Operations

Nine Months Ended September 30, 2003 Compared to Nine Months Ended September 30,
2002

Total revenues increased by $53,452,000,  or 85.2%, to $116,221,000 for the nine
months ended  September  30, 2003,  from  $62,769,000  for the nine months ended
September  30,  2002.  Contributing  to this  increase in total  revenues  was a
$42,150,000  increase in mortgage fee income, a $7,022,000 increase in insurance
premiums and other  considerations,  and a $5,126,000 increase in net investment
income.

Insurance premiums and other considerations  increased by $7,022,000,  or 68.0%,
to $17,342,000 for the nine months ended  September 30, 2003,  from  $10,320,000
for the  comparable  period in 2002.  This  increase  was  primarily  due to the
additional  insurance  premiums from the policies acquired in the asset purchase
transaction with Acadian Life.

Net investment income increased by $5,126,000,  or 60.3%, to $13,630,000 for the
nine months ended September 30, 2003, from $8,504,000 for the comparable  period
in 2002. This increase was primarily  attributable to the additional  investment
income from the assets acquired in the asset purchase  transaction  with Acadian
Life.

Net mortuary and cemetery sales increased by $71,000, or 0.9%, to $8,026,000 for
the nine months ended  September 30, 2003,  from  $7,955,000  for the comparable
period in 2002.  This increase was primarily due to increased  sales of cemetery
properties.


<PAGE>


Realized gains on investments and other assets  decreased by $748,000 or 100.3%,
to $(2,000) for the nine months ended  September 30, 2003, from $746,000 for the
comparable period in 2002. The realized gains on investments and other assets in
2002 were from the sale of property at Lake Hills Cemetery.

Mortgage fee income increased by $42,150,000,  or 121.0%, to $76,979,000 for the
nine months ended September 30, 2003, from $34,829,000 for the comparable period
in 2002.  This increase was primarily  attributable  to a greater number of loan
originations  during  the  nine  months  of 2003  due to  lower  interest  rates
resulting in more borrowers refinancing their mortgage loans.

Total benefits and expenses were  $106,790,000,  or 91.9%, of total revenues for
the nine months ended September 30, 2003, as compared to $59,417,000,  or 94.7%,
of total revenues for the comparable period in 2002.

Death  benefits,  surrenders and other policy  benefits,  and increase in future
policy  benefits  increased  by  an  aggregate  of  $6,893,000,   or  73.6%,  to
$16,263,000  for the nine months ended  September 30, 2003,  from $9,370,000 for
the comparable period in 2002. This increase was primarily due to the additional
death benefits,  surrenders and other policy benefits from the policies acquired
in the asset purchase transaction with Acadian Life.

Amortization of deferred policy acquisition costs and cost of insurance acquired
increased  by  $1,288,000,  or 55.2%,  to  $3,622,000  for the nine months ended
September 30, 2003,  from  $2,334,000  for the comparable  period in 2002.  This
increase was primarily due to the  additional  amortization  of deferred  policy
acquisition  costs and cost of insurance  acquired from the additional  policies
acquired in the asset purchase transaction with Acadian Life.

General and  administrative  expenses  increased by  $36,891,000,  or 81.6%,  to
$82,075,000 for the nine months ended  September 30, 2003, from  $45,184,000 for
the comparable period in 2002. This increase primarily resulted from an increase
in commissions and other expenses due to additional  mortgage loan  originations
having been made by the Company's mortgage  subsidiary during the nine months of
2003.

Interest expense increased by $2,117,000,  or 208.8%, to $3,131,000 for the nine
months ended September 30, 2003,  from  $1,014,000 for the comparable  period in
2002.  This increase was primarily due to additional  warehouse  lines of credit
required for the additional mortgage loan originations by the Company's mortgage
subsidiary.

Cost of goods and services sold of the mortuaries  and  cemeteries  increased by
$184,000,  or 12.1%, to $1,699,000 for the nine months ended September 30, 2003,
from  $1,515,000 for the comparable  period in 2002. This increase was primarily
due to increased costs of funeral products.

Third Quarter of 2003 Compared to Third Quarter of 2002

Total revenues  increased by  $12,355,000,  to $37,875,000  for the three months
ended September 30, 2003, from  $25,520,000 for the three months ended September
30,  2002.  Contributing  to this  increase in total  revenues  was a $8,078,000
increase in mortgage fee income, a $2,124,000 increase in insurance premiums and
other considerations, and a $2,212,000 increase in net investment income.

Insurance premiums and other considerations  increased by $2,124,000,  or 58.6%,
to $5,752,000 for the three months ended September 30, 2003, from $3,628,000 for
the comparable period in 2002. This increase was primarily due to the additional
insurance premiums from the policies acquired in the asset purchase  transaction
with Acadian Life.

Net investment  income increased by $2,212,000,  or 72.5%, to $5,265,000 for the
three months ended September 30, 2003, from $3,053,000 for the comparable period
in 2002. This increase was primarily  attributable to the additional  investment
income from the assets acquired in the asset purchase  transaction  with Acadian
Life.


<PAGE>


Net mortuary and cemetery sales increased by $13,000,  or .5%, to $2,731,000 for
the three months ended  September 30, 2003,  from  $2,718,000 for the comparable
period in 2002.  This increase was primarily due to increased  sales of cemetery
properties.

Mortgage fee income  increased by $8,078,000,  or 50.5 %, to $24,067,000 for the
three months ended September 30, 2003, from $15,989,00 for the comparable period
in 2002.  This increase was primarily  attributable  to a greater number of loan
originations  during the third  quarter  of 2003,  due to lower  interest  rates
resulting in more borrowers refinancing their mortgage loans.

Total benefits and expenses were  $34,284,000,  or 90.5%,  of total revenues for
the three months ended September 30 2003, as compared to $24,332,000,  or 95.3%,
of total revenues for the comparable period in 2002.

Death  benefits,  surrenders and other policy  benefits,  and increase in future
policy benefits increased by an aggregate of $2,044,000, or 62.6%, to $5,311,000
for  the  three  months  ended  September  30,  2003,  from  $3,267,000  for the
comparable  period in 2002.  This increase was  primarily due to the  additional
death benefits,  surrenders and other policy benefits from the policies acquired
in the asset purchase transaction with Acadian Life.

Amortization of deferred policy acquisition costs and cost of insurance acquired
increased  by $787,000  or 139.2%,  to  $1,353,000  for the three  months  ended
September  30, 2003,  from  $566,000  for the  comparable  period in 2002.  This
increase was primarily due to the  additional  amortization  of deferred  policy
acquisition  costs and cost of insurance  acquired from the additional  policies
acquired in the asset purchase transaction with Acadian Life.

General and  administrative  expenses  increased  by  $6,240,000,  or 32.0%,  to
$25,713,000 for the three months ended September 30, 2003, from  $19,473,000 for
the comparable period in 2002. This increase primarily resulted from an increase
in commissions and other expenses due to additional  mortgage loan  originations
having been made by the Company's mortgage  subsidiary during the second quarter
of 2003.

Interest expense  increased by $840,000,  or 171.2%, to $1,332,000 for the three
months ended  September  30, 2003,  from $491,000 for the  comparable  period in
2002.  This increase was primarily due to additional  warehouse  lines of credit
required for the additional mortgage loan originations by the Company's mortgage
subsidiary.

Cost of goods and services sold of the mortuaries  and  cemeteries  increased by
$40,000,  or 7.5%,  to $575,000 for the three months ended  September  30, 2003,
from $535,000 for the comparable period in 2002. This increase was primarily due
to the increase in the cost of merchandise of funeral products.

Liquidity and Capital Resources

The Company's life insurance subsidiaries and cemetery and mortuary subsidiaries
realize  cash flow  from  premiums,  contract  payments  and  sales on  personal
services  rendered  for  cemetery  and  mortuary  business,  from  interest  and
dividends  on  invested  assets,  and from the  proceeds  from the  maturity  of
held-to-maturity  investments,  or  sale  of  other  investments.  The  mortgage
subsidiary realizes cash flow from fees generated by originating and refinancing
mortgage loans and interest  earned on mortgages sold to investors.  The Company
considers these sources of cash flow to be adequate to fund future  policyholder
and  cemetery and mortuary  liabilities,  which  generally  are  long-term,  and
adequate to pay current policyholder claims,  annuity payments,  expenses on the
issuance of new policies,  the maintenance of existing  policies,  debt service,
and operating expenses.

The  Company  attempts  to  match  the  duration  of  invested  assets  with its
policyholder  and  cemetery  and  mortuary  liabilities.  The  Company  may sell
investments other than those  held-to-maturity  in the portfolio to help in this
timing;  however,  to date, that has not been necessary.  The Company  purchases
short-term investments on a

<PAGE>


temporary  basis to meet the  expectations  of  short-term  requirements  of the
Company's products. The Company's investment philosophy is intended to provide a
rate of return,  which will persist during the expected duration of policyholder
and  cemetery  and  mortuary  liabilities  regardless  of future  interest  rate
movements.

The Company's  investment  policy is to invest  predominantly  in fixed maturity
securities,  mortgage loans, and warehouse  mortgage loans on a short-term basis
before selling the loans to investors in accordance  with the  requirements  and
laws  governing  the  life  insurance  subsidiaries.  Bonds  owned  by the  life
insurance  subsidiaries  amounted  to  $51,351,000  as of  September  30,  2003,
compared to $51,530,000 as of December 31, 2002.  This represents 49% and 51% of
the total  insurance-related  investments as of September 30, 2003, and December
31,  2002,  respectively.  Generally,  all  bonds  owned by the  life  insurance
subsidiaries are rated by the National  Association of Insurance  Commissioners.
Under this rating  system,  there are six categories  used for rating bonds.  At
September 30, 2003 and December 31, 2002, 3% ($1,785,000) and 4% ($1,903,000) of
the  Company's  total  investment  in bonds  were  invested  in bonds in  rating
categories three through six, which are considered non-investment grade.

The Company has  classified  certain of its fixed income  securities,  including
high-yield  securities,  in its  portfolio  as  available  for  sale,  with  the
remainder  classified as held to maturity.  However,  in accordance with Company
policy,  any such securities  purchased in the future will be classified as held
to maturity.  Business conditions,  however, may develop in the future which may
indicate a need for a higher level of liquidity in the investment portfolio.  In
that event the  Company  believes  it could  sell  short-term  investment  grade
securities before liquidating higher-yielding longer-term securities.

The Company has a substantial portion of its assets invested in cash, short-term
investments and mortgage loans sold to investors.  If market  conditions were to
change  so that  rates  for  these  investments  were  to  decline  or if  these
investments and higher yielding  long-term  investments were not available,  the
Company's interest rate spread (excess interest earned over interest credited to
policyholders)  would be  adversely  affected  and could  result in  significant
decreases in the Company's overall profitability or losses.

The Company is subject to risk based capital guidelines established by statutory
regulators  requiring  minimum  capital  levels based on the  perceived  risk of
assets,  liabilities,  disintermediation,  and business  risk.  At September 30,
2003,  and  December  31,  2002,  the life  insurance  subsidiary  exceeded  the
regulatory criteria.

The Company's total  capitalization  of  stockholders'  equity and bank debt and
notes  payable  was  $54,852,000  as of  September  30,  2003,  as  compared  to
$53,787,000  as of  December  31,  2002.  Stockholders'  equity as a percent  of
capitalization  increased  to 66%  as of  September  30,  2003,  from  64% as of
December 31, 2002.

Lapse  rates  measure the amount of  insurance  terminated  during a  particular
period.  The  Company's  lapse  rate for  life  insurance  in 2002 was  10.7% as
compared to a rate of 13.2% for 2001. The 2003 lapse rate has been approximately
the same as 2002.

At September 30, 2003, $23,355,000 of the Company's  consolidated  stockholders'
equity  represents  the statutory  stockholders'  equity of the  Company's  life
insurance subsidiaries. The life insurance subsidiaries cannot pay a dividend to
its parent company without the approval of insurance regulatory authorities.

Item 3.  Quantitative and Qualitative Disclosure of Market Risk

There have been no  significant  changes since the annual report Form 10-K filed
for the year ended December 31, 2002.


<PAGE>


Item 4.   Controls and Procedures

The  Company's  Chief  Executive  Officer and its Chief  Financial  Officer (the
"Certifying  Officers"),   are  responsible  for  establishing  and  maintaining
disclosure controls and procedures for the Company. The Certifying Officers have
concluded  (based on their  evaluation of these  controls and procedures as of a
date within 90 days of the filing of this report) that the design and  operation
of the  Company's  disclosure  controls  and  procedures  (as  defined  in  Rule
13a-14(c)  under  the  Securities  Exchange  Act  of  1934)  are  effective.  No
significant  changes were made in the  Company's  internal  controls or in other
factors that could significantly affect those controls subsequent to the date of
the  evaluation,  including any  corrective  actions with regard to  significant
deficiencies and material weaknesses.

                           Part II Other Information:

Item 1.  Legal Proceedings

An action was brought  against the Company in May 2001,  by Glenna  Brown Thomas
individually  and as personal  representative  of the Estate of Lynn W. Brown in
the Third  Judicial  Court,  Salt Lake  County,  Utah.  The action  asserts that
Memorial Estates delivered to Lynn W. Brown six stock certificates  representing
2,000 shares in 1970 and 1971.  Mr. Brown died in 1972.  It is asserted  that at
the time the 2,000 shares were issued and  outstanding,  such  represented  a 2%
ownership  of  Memorial  Estates.  It is  alleged  Mr.  Brown  was  entitled  to
preemptive  rights and that after the  issuance of the stock to Mr.  Brown there
were further issuances of stock without providing written notice to Mr. Brown or
his estate with respect to an opportunity to purchase more stock. It is asserted
among other  things that the  plaintiff  "has the right to a transfer of Brown's
shares to Thomas on defendants'  (which  includes  Security  National  Financial
Corporation  as well as  Memorial  Estates,  Inc.) books and to  restoration  of
Brown's  proportion  of share  ownership in Memorial at the time of his death by
issuance and delivery to Thomas of  sufficient  shares of  defendant's  publicly
traded and unrestricted stock in exchange for the 2,000 shares of Memorial stock
and payment of all dividends  from the date of Thomas's  demand,  as required by
Article XV of the Articles of  Incorporation."  The formal  discovery  cutoff is
January  15,  2004.  Based  on  present  information,  the  Company  intends  to
vigorously  defend  the  matter,  including  an  assertion  that the  statute of
limitations bars the claims.

An action was  brought  against  Southern  Security  Life  Insurance  Company by
National Group Underwriters,  Inc. ("NGU") in state court in the State of Texas.
The case was removed by the Company to the United States  District Court for the
Northern District of Texas, Fort Worth Division,  with Civil No.  4:01-CV-403-E.
An Amended  Complaint was filed on or about July 18, 2001. The Amended Complaint
asserted  that NGU had a contract  with the  Company  wherein  NGU would  submit
applications for certain  policies of insurance to be issued by the Company.  It
alleged that disputes had arisen  between NGU and the Company with regard to the
calculation  and  payment of  certain  advanced  commissions  as well as certain
production bonuses.

NGU  alleged  that it had been  damaged  far in  excess of the  $75,000  minimum
jurisdictional  limits of the Federal Court. NGU also sought attorney's fees and
costs  as well as  prejudgment  and  postjudgment  interest.  A  second  amended
complaint  and a third amended  complaint,  which  included a fraud claim,  were
filed. A motion was filed by the Company to dismiss the third amended complaint,
including   the  fraud  claim.   The  court  denied  the  motion.   The  Company
counterclaimed for what it claimed to be a debit balance owing to it pursuant to
the relationship  between the parties with said  counterclaim  seeking such from
NGU (the amount subject to reduction as premiums are received). The Company also
sought to recover  attorney's  fees and costs,  as well as  punitive  damages on
three of its causes of action.  Certain  discovery took place.  The federal case
was  dismissed  per  stipulation.  The matter was refiled in Texas state  court,
Tarrant County, Case No. 348 195490 02. The claims of the respective parties are
essentially the same as set forth above,  which claims against Southern Security
Life Insurance Company include fraudulent inducement relative to entering into a
contract,  fraud,  breach of  contract,  breach  of duty of good  faith and fair
dealing,  attorneys' fees and exemplary damages.  Certain  depositions have been
taken  since  the  filing  again  in  state  court  and  further   discovery  is
anticipated.  The  Company  intends to  vigorously  defend the matter as well as
prosecute its counterclaim. A trial is presently set for July, 2004.


<PAGE>


The Company is not a party to any other legal  proceedings  outside the ordinary
course of the Company's  business or to any other legal  proceedings,  which, if
adversely determined, would have a material adverse effect on the Company or its
business.

Item 2.        Changes in Securities

               NONE

Item 3.        Defaults Upon Senior Securities

               NONE

Item 4.        Submission of Matters to a Vote of Security Holders

               At the annual  stockholders  meeting held on July 11,  2003,  the
               following matters were acted upon: (i) seven directors consisting
               of George R.  Quist,  J. Lynn  Beckstead,  Jr.,  Scott M.  Quist,
               Charles L. Crittenden,  Dr. Robert G. Hunter,  H. Craig Moody and
               Norman G.  Wilbur  were  elected to serve  until the next  annual
               stockholders  meeting or until their  respective  successors  are
               elected and qualified  (for George R. Quist,  Class A and Class C
               shares,  9,065,935 votes were cast in favor of election, no votes
               were cast against election and there were 13,542 abstentions; for
               J. Lynn Beckstead, Jr., Class A shares only, 3,594,399 votes were
               cast in favor of election,  no votes were cast  against  election
               and there were 87,757  abstentions;  for Scott M. Quist,  Class A
               and  Class C  shares,  9,066,826  votes  were  cast in  favor  of
               election,  no votes  were cast  against  election  and there were
               12,651  abstentions;  for Charles L.  Crittenden,  Class A shares
               only, 3,675,477 votes were cast in favor of election and no votes
               were cast against election and there were 6,552 abstentions;  for
               Dr. Robert G. Hunter, Class A and Class C shares, 9,067,239 votes
               were cast in favor of election,  no votes cast  against  election
               and there were 12,238  abstentions;  for H. Craig Moody,  Class A
               and C shares,  9,067,174 votes were cast in favor of election, no
               votes cast against  election  and there were 12,303  abstentions;
               for Norman G. Wilbur, Class A and Class C shares, 9,067,239 votes
               were  cast in  favor of  election,  no votes  were  cast  against
               election and there were 12,238 abstentions;  (ii) the appointment
               of Tanner + Co., as the Company's independent accountants for the
               fiscal year ended December 31, 2003, was ratified (with 9,039,595
               votes cast for appointment,  9,173 votes against  appointment and
               24,207 abstentions);  and (iii) adoption of the 2003 Stock Option
               Plan and the  reservation  of  500,000  shares  of Class A Common
               Stock and  1,000,000  shares of Class C Common Stock was ratified
               (with  7,772,537  votes  cast for  adoption,  300,330  votes cast
               against adoption and 15,071 abstentions).

Item 5.        Other Information

               NONE

Item 6.        Exhibits and Reports on Form 8-K

 (a)     Exhibits:
      3.1. Articles of Restatement of Articles of Incorporation (8)
      3.2. Amended Bylaws
      4.1. Specimen Class A Stock Certificate (1) 4.2. Specimen Class C Stock
           Certificate (1)
      4.3  Specimen Preferred Stock Certificate and Certificate of Designation
           of Preferred Stock (1)
      10.1 Restated and Amended Employee Stock Ownership Plan and  Trust
           Agreement (1)
      10.2 1993 Stock Option Plan (3)
      10.3 2000 Director Stock Option Plan (5)


<PAGE>



      10.4    2003 Stock Option Plan (10)
      10.5    Deferred Compensation Agreement with George R. Quist (2)
      10.6    Employment Agreement with Scott M. Quist. (4)
      10.7    Promissory Note with George R. Quist (6)
      10.8    Deferred Compensation Plan (7)
      10.9    Coinsurance Agreement between Security National Life and
              Acadian (8)
      10.10   Assumption Agreement among Acadian, Acadian Financial Group,
              Inc., Security National Life and the Company (8)
      10.11   Asset Purchase Agreement between Acadian, Acadian Financial
              Group, Inc., Security National Life and the Company (8)
      10.12   Promissory Note with Key Bank of Utah (9)
      10.13   Loan and Security Agreement with Key Bank of Utah (9)
      10.14   Stock Purchase and Sale Agreement with Ault Glazer & Co.
              Investment Management LLC
       31.1   Certification pursuant to 18 U.S.C. Section 1350 as enacted by
              Section 302 of the Sarbanes-Oxley Act of 2002.
       31.2   Certification pursuant to 18 U.S.C. Section 1350 as enacted by
              Section 302 of the Sarbanes-Oxley Act of 2002.
       32.1   Certification pursuant to 18 U.S.C. Section 1350, as adopted
              pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       32.2   Certification pursuant to 18 U.S.C. Section 1350, as adopted
              pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
              (1) Incorporated by reference from Registration Statement on Form
                  S-1, as filed on June 29, 1987.
              (2) Incorporated by reference from Annual Report on Form 10-K, as
                  filed on March 31, 1989.
              (3) Incorporated by reference from Annual Report on Form 10-K, as
                  filed on March 31, 1994.
              (4) Incorporated by reference from Annual Report on Form 10-K, as
                  filed on March 31, 1998.
              (5) Incorporated  by reference from Schedule 14A Definitive
                  Proxy  Statement, filed August 29, 2000, relating to the
                  Company's Annual Meeting of Shareholders.
              (6) Incorporated by reference from Annual Report on Form 10-K,
                  as filed on April 16, 2001.
              (7) Incorporated by reference from Annual Report on Form 10-K, as
                  filed on April 3, 2002.
              (8) Incorporated by reference from Report on Form 8-K-A as filed
                  on January 8, 2003.
              (9) Incorporated by reference from Annual Report on Form 10-K, as
                  filed on April 15, 2003.
             (10) Incorporated  by reference from Schedule 14A Definitive
                  Proxy  Statement, Filed on June 5, 2003, relating to the
                  Company's Annual Meeting of Shareholders.

Subsidiaries of the Registrant
      (b) Reports on Form 8-K:
          No Current Report on Form 8-K was filed by the Company during the
          quarter ended September 30, 2003.

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                   REGISTRANT

                     SECURITY NATIONAL FINANCIAL CORPORATION
                                   Registrant



DATED: November 14, 2003              By:    George R. Quist,
                                             ----------------
                                             Chairman of the Board and
                                             Chief Executive Officer
                                             (Principal Executive Officer)


DATED: November 14, 2003              By:    Stephen M. Sill
                                             ---------------
                                             Vice President, Treasurer and
                                             Chief Financial Officer
                                             (Principal Financial and
                                             Accounting Officer)


<PAGE>


                                  EXHIBIT 31.1
                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                          AS ENACTED BY SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

I, George R. Quist, certify that:

1. I have  reviewed  this  quarterly  report on Form 10-Q of  Security  National
Financial Corporation.

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure  that  material  information  relating  to  the  small  business  issuer,
including its  consolidated  subsidiaries,  is made known to us by others within
those entities, particularly during the period in which this quarterly report is
being prepared;

     (b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  registrant's  internal
control over financial  reporting  that occurred  during the  registrant's  most
recent fiscal quarter (the registrant's  fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the registrant's  internal control over financial  reporting;
and

5. The registrant's other certifying  officer(s) and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's  auditors  and the audit  committee  of the  registrant's  board of
directors (or persons performing the equivalent functions):

     (a) All significant  deficiencies and material  weaknesses in the design or
operation of internal  controls over  financial  reporting  which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and

     (b) Any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's  internal control over
financial reporting.


Date: November 14, 2003                 By:      George R. Quist
                                                 Chairman of the Board and
                                                 Chief Executive Officer
                                                 (Principal Executive Officer)


<PAGE>


                                  EXHIBIT 31.2
                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                          AS ENACTED BY SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002


I, Stephen M. Sill, certify that:

1. I have  reviewed  this  quarterly  report on Form 10-Q of  Security  National
Financial Corporation.

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure  that  material  information  relating  to  the  small  business  issuer,
including its  consolidated  subsidiaries,  is made known to us by others within
those entities, particularly during the period in which this quarterly report is
being prepared;

     (b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  registrant's  internal
control over financial  reporting  that occurred  during the  registrant's  most
recent fiscal quarter (the registrant's  fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the registrant's  internal control over financial  reporting;
and

5. The registrant's other certifying  officer(s) and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's  auditors  and the audit  committee  of the  registrant's  board of
directors (or persons performing the equivalent functions):

     (a) All significant  deficiencies and material  weaknesses in the design or
operation of internal  controls over  financial  reporting  which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and

     (b) Any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's  internal control over
financial reporting.


Date:  November 14, 2003              By:      Stephen M. Sill
                                               Vice President, Treasurer and
                                               Chief Financial Officer
                                               (Principal Financial and
                                                Accounting Officer)


                                  EXHIBIT 32.1
                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with  the  Quarterly  Report  of  Security  National   Financial
Corporation  (the  "Company")  on Form 10Q for the period  ending  September 30,
2003, as filed with the  Securities  and Exchange  Commission on the date hereof
(the  "Report"),  I, George R. Quist,  Chief  Executive  Officer of the Company,
certify,  pursuant to 18 U.S.C.  ss. 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

     (1)  the Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities  Exchange Act of 1934; and (2) the information
          contained in the Report fairly presents, in all material respects, the
          financial condition and result of operations of the Company.



George R. Quist
Chief Executive Officer
November 14, 2003

A signed  original of this written  statement  required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the  electronic  version of this written  statement
required by Section 906, has been provided to Security  National Life  Insurance
Company and will be retained by Security  National  Life  Insurance  Company and
furnished to the Securities and Exchange Commission or its staff upon request.


                                  EXHIBIT 32.2
                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with  the  Quarterly  Report  of  Security  National   Financial
Corporation  (the  "Company")  on Form 10Q for the period  ending  September 30,
2003, as filed with the  Securities  and Exchange  Commission on the date hereof
(the  "Report"),  I, Stephen M. Sill,  Chief  Financial  Officer of the Company,
certify,  pursuant to 18 U.S.C.  ss. 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

     (1)  the Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities  Exchange Act of 1934; and (2) the information
          contained in the Report fairly presents, in all material respects, the
          financial condition and result of operations of the Company.


Stephen M. Sill
Chief Financial Officer
November 14, 2003

A signed  original of this written  statement  required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the  electronic  version of this written  statement
required by Section 906, has been provided to Security  National Life  Insurance
Company and will be retained by Security  National  Life  Insurance  Company and
furnished to the Securities and Exchange Commission or its staff upon request.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(II)
<SEQUENCE>2
<FILENAME>bylaws0903.txt
<TEXT>
                                 AMENDED BYLAWS

                                       OF

                     SECURITY NATIONAL FINANCIAL CORPORATION



<PAGE>


                                AMENDED BYLAWS OF

                     SECURITY NATIONAL FINANCIAL CORPORATION


                                Table Of Contents

                                                                          Page

ARTICLE 1         CORPORATE OFFICES.........................................1
         1.1      Business Office...........................................1
         1.2      Registered Office.........................................1

ARTICLE 2         SHAREHOLDERS..............................................1
         2.1      Annual Meeting............................................1
         2.2      Special Meetings..........................................1
         2.3      Place of Meetings.........................................1
         2.4      Notice of Meetings........................................2
         2.5      Fixing of Record Date.....................................2
         2.6      Voting List...............................................2
         2.7      Shareholder Quorum and Voting Requirements................2
         2.8      Proxies...................................................3
         2.9      Voting Shares.............................................3
         2.10     Shareholder Action Without a Meeting......................3
         2.11     Waiver....................................................3

ARTICLE 3         BOARD OF DIRECTORS........................................3
         3.1      General Powers............................................3
         3.2      Number of Directors and Qualification.....................4
         3.3      Election and Term of Office...............................4
         3.4      Chairman of the board of directors........................4
         3.5      Regular Meetings..........................................4
         3.6      Special Meetings..........................................4
         3.7      Notice....................................................4
         3.8      Quorum....................................................5
         3.9      Manner of Acting..........................................5
         3.10     Vacancies and Newly-Created Directorships.................5
         3.11     Fees and Compensation.....................................5
         3.12     Presumption of Assent.....................................5
         3.13     Resignations..............................................6
         3.14     Action by Written Consent.................................6
         3.15     Meetings by Telephone Conference Call.....................6
         3.16     Removal of Directors......................................6



                                                                       i


<PAGE>


                            Table of Contents, Con't.

                                                                          Page

ARTICLE 4         COMMITTEES................................................6
         4.1      Committees................................................6
         4.2      Procedures, Meetings and Quorum...........................7

ARTICLE 5         OFFICERS..................................................7
         5.1      Officers..................................................7
         5.2      Appointment, Term of Office and Qualification.............7
         5.3      Resignations..............................................7
         5.4      Removal...................................................8
         5.5      Vacancies and Newly-Created Offices.......................8
         5.6      President.................................................8
         5.7      Vice Presidents...........................................8
         5.8      Secretary.................................................8
         5.9      Treasurer.................................................9
         5.10     Assistant Secretaries and Treasurers......................9
         5.11     Salaries..................................................9
         5.12     Surety Bonds..............................................9

ARTICLE 6         EXECUTION OF INSTRUMENTS, BORROWING OF MONEY
                  AND DEPOSIT OF CORPORATE FUNDS                          10
         6.1      Instruments.............................................10
         6.2      Loans...................................................10
         6.3      Deposits................................................10
         6.4      Checks, Drafts, etc.....................................10
         6.5      Bonds and Debentures....................................10
         6.6      Sale, Transfer, etc., of Securities.....................11
         6.7      Proxies.................................................11

ARTICLE 7         CAPITAL STOCK...........................................11
         7.1      Stock Certificates......................................11
         7.2      Shares Without Certificates.............................12
         7.3      Transfer of Stock.......................................12
         7.4      Restrictions on Transfer or Registration of Shares......12
         7.5      Regulations.............................................12
         7.6      Transfer Agents and Registrars..........................12
         7.7      Lost or Destroyed Certificates..........................13
         7.8      Consideration for Shares................................13

ARTICLE 8         INDEMNIFICATION.........................................13
         8.1      Indemnification.........................................13
         8.2      Certain Restrictions on Indemnification.................13

                                       ii


<PAGE>


                            Table of Contents, Con't

                                                                         Page

         8.3      Mandatory Indemnification...............................13
         8.4      Determination...........................................14
         8.5      General Indemnification.................................14
         8.6      Advances................................................14
         8.7      Scope of Indemnification................................14
         8.8      Insurance...............................................15

ARTICLE 9         FISCAL YEAR.............................................15

ARTICLE 10        DIVIDENDS...............................................15

ARTICLE 11        AMENDMENTS..............................................15

ARTICLE 12        CONTROL SHARES ACQUISITIONS ACT.........................16
         12.1     Shares Subject to Redemption............................16
         12.2     Dissenter's Rights......................................16


                                       iii


<PAGE>


                                 AMENDED BYLAWS

                                       OF

                     SECURITY NATIONAL FINANCIAL CORPORATION

                                    ARTICLE 1

                               CORPORATE OFFICES


1.1 Business Office . The principal  office of the Corporation  shall be located
at such place  within the state of Utah,  as may be  determined  by the Board of
Directors. The Corporation may have such other offices, either within or without
the state of Utah as the Board of Directors  may designate or as the business of
the Corporation may require from time to time.

1.2  Registered  Office . The  registered  office  of the  Corporation  shall be
located within the state of Utah and may be, but need not be, identical with the
principal  office  (if  located  within the state of Utah).  The  address of the
registered office may be changed from time to time by the Board of Directors.


                                    ARTICLE 2
                                  SHAREHOLDERS

2.1 Annual Meeting . The annual meeting of shareholders  shall be held each year
on a date and at a time  designated by the Board of  Directors.  At the meeting,
directors shall be elected and any other proper  business may be transacted.  If
the election of directors shall not be held on the day designated for the annual
meeting  of the  shareholders,  or at any  adjournment  thereof,  the  Board  of
Directors  shall  cause  the  election  to be held at a special  meeting  of the
shareholders.

2.2 Special Meetings . Special meetings of the shareholders may be called at any
time  by the  chairman  of the  board,  by the  President,  or by the  Board  of
Directors.  Special  meetings  of the  shareholders  may also be  called  by the
holders of shares representing at least ten percent of all the votes entitled to
be cast on any issue proposed to be considered at the proposed  special  meeting
by  delivery of one or more signed and dated  written  demands for the  meeting,
stating the purpose or purposes for which it is to be held to the  Corporation's
Secretary or other designated officer.

2.3 Place of Meetings . Meetings of shareholders may be held at any place within
or outside the state of Utah as  designated  by the Board of  Directors.  In the
absence of any such designation,  meetings shall be held at the principal office
of the Corporation.







                                        1


<PAGE>


2.4 Notice of Meetings . Written or printed notice stating the place,  date, and
hour of the meeting,  and in case of a special meeting,  the purpose or purposes
for which the meeting is called,  shall be given not less than ten nor more than
60 days before the date of the meeting, either personally,  by facsimile,  mail,
or  express  courier  by or at the  direction  of the  chairman  of the Board of
Directors, the President, the Secretary, or the officer or person(s) calling the
meeting,  to each  shareholder of record  entitled to vote at such meeting or to
any other shareholder entitled by the Utah Revised Business Corporation Act (the
"Revised Act") or the Corporation's  articles of incorporation to receive notice
of the meeting.

2.5 Fixing of Record Date . For the purpose of determining  shareholders  of any
voting group entitled to notice of or to vote at any meeting of shareholders, or
shareholders entitled to take action without a meeting, or shareholders entitled
to  receive  payment  of any  distribution  or  dividend,  or in order to make a
determination  of  shareholders  for any  other  proper  purpose,  the  Board of
Directors  may fix in advance a date as the record date.  Such record date shall
not be more  than 70 days  prior  to the  date on which  the  particular  action
requiring such  determination  of the  shareholders is to be taken. If no record
date is so fixed by the Board of Directors, the record date for determination of
such shareholders shall be determined in accordance with the Revised Act.

2.6 Voting  List . Unless  otherwise  directed  by the Board of  Directors,  the
Secretary  of the  Corporation  shall  prepare a list of the names of all of the
shareholders who are entitled to be given notice of the meeting.  The list shall
be arranged by voting group,  and within each voting group by class or series of
shares. The list shall be alphabetical within each class or series and must show
the  address  of,  and the  number  of shares  held by,  each  shareholder.  The
shareholder  list must be made  available for  inspection by any  shareholder in
accordance with the Revised Act.

2.7 Shareholder Quorum and Voting Requirements. If the Corporation's articles of
incorporation  or the Revised Act provide for voting by a single voting group on
a matter,  action on that matter is taken when voted upon by that voting  group.
If the articles of incorporation or the Revised Act provide for voting by two or
more voting  groups on a matter,  action on that matter is taken only when voted
upon by each of those voting  groups  counted  separately.  One voting group may
vote on a matter even though another voting group entitled to vote on the matter
has not voted.

     Shares  entitled  to vote as a separate  voting  group may take action on a
matter at a meeting only if a quorum of those shares exists with respect to that
matter.  Unless the  articles  of  incorporation,  these  amended  bylaws or the
Revised Act provide  otherwise,  a majority of the votes  entitled to be cast on
the matter by the voting  group  constitutes  a quorum of that voting  group for
action on that matter.

     Once a share is  represented  for any purpose at a meeting,  including  the
purpose of  determining  that a quorum  exists,  it is deemed present for quorum
purposes  for the  remainder  of the  meeting  and for any  adjournment  of that
meeting unless a new record date is or must be set for the adjourned meeting.

     If a  quorum  exists,  action  on a matter  (other  than  the  election  of
directors)  by a voting  group is  approved  if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action,  unless the
articles of  incorporation,  these amended bylaws,  or the Revised Act require a
greater number of affirmative votes.




                                        2


<PAGE>


2.8 Proxies . At all meetings of shareholders, a shareholder may vote in person,
or vote by a proxy that is  executed by the  shareholder  or that is executed by
the shareholder's duly authorized agent or attorney-in-fact, or by an electronic
transmission  containing or accompanied  by information  that indicates that the
shareholder,  or the  shareholders  duly  authorized  agent or  attorney-in-fact
authorized the transmission. Such proxy shall be filed with the Secretary of the
Corporation,  the  inspector of  election,  or any other  person  authorized  to
tabulate  votes  before or at the time of the  meeting.  No proxy shall be valid
after eleven months from the date of its execution unless otherwise  provided in
the proxy.

2.9 Voting Shares . Each outstanding  share,  regardless of class, and except as
otherwise  required by the Revised Act,  shall be entitled to one vote, and each
fractional share is entitled to a corresponding  fractional vote, on each matter
submitted to a vote at a meeting of the shareholders,  except to the extent that
the voting rights of the shares of any class or classes are limited or denied by
the articles of  incorporation  of this  Corporation as permitted by the Revised
Act.

     Redeemable  shares are not entitled to vote after notice of  redemption  is
mailed to the  holders  and a sum  sufficient  to  redeem  the  shares  has been
deposited with a bank, trust company,  or other financial  institution  under an
irrevocable obligation to pay the holders the redemption price upon surrender of
the shares.

     Unless the articles of incorporation of this Corporation provide otherwise,
at each  election  for  directors,  every  shareholder  entitled to vote at such
election  shall have the right to vote, in person or by proxy,  all of the votes
to which the shareholder's  shares are entitled for as many persons as there are
directors to be elected and for whose election such  shareholder  has a right to
vote.

2.10 Shareholder Action Without a Meeting . Any action required to be taken at a
meeting of the shareholders,  or any other action that may be taken at a meeting
of the  shareholders,  may be taken  without a meeting if a consent in  writing,
setting forth the action so taken, is signed by all the shareholders entitled to
vote with respect to the subject matter thereof.

2.11 Waiver.  A shareholder may waive any required notice in accordance with the
Revised Act.


                                    ARTICLE 3
                               BOARD OF DIRECTORS1

3.1 General  Powers . All  corporate  powers  shall be exercised by or under the
authority of, and the business and affairs of the  Corporation  shall be managed
under the direction of, the Board of Directors,  subject to any  limitation  set
forth  in  the  articles  of  incorporation  or  in  a  shareholder's  agreement
authorized under the Revised Act.








                                        3


<PAGE>


3.2 Number of Directors and  Qualification  . The initial  authorized  number of
directors  shall be not less  than five nor more than  twelve  unless  otherwise
specified  from time to time by resolution of the Board of Directors,  but shall
not be less than three unless the number of  shareholders  of the Corporation is
less than three,  in which event the  Corporation may have a number of directors
equal to or  greater  than the  number of  shareholders.  Directors  need not be
residents of the state of Utah. Every person elected to be a director who, after
such election, shall cease to be a shareholder, shall cease to be a director and
his office shall then become vacant.

3.3  Election  and Term of Office .  Directors  shall be elected at each  annual
meeting of the  shareholders  to hold office  until the next  succeeding  annual
meeting.  Each director,  including a director elected to fill a vacancy,  shall
hold  office  until the  expiration  of the term for which  elected  and until a
successor has been elected and qualified.  No decrease in the authorized  number
of  directors  shall have the  effect of  shortening  the term of any  incumbent
director.

3.4  Chairman  of the Board of  Directors . The Board of  Directors  may elect a
Chairman  of the  Board of  Directors,  which  person  shall  at all  times be a
director.  The Chairman of the Board of Directors,  if such a person is elected,
shall,  if present,  preside at meetings of the Board of Directors  and exercise
and perform such other powers and duties as may from time to time be assigned to
him by the Board of Directors or as may be prescribed  by these amended  bylaws.
Unless  otherwise  restricted by law, the Chairman of the Board of Directors may
also be given the duties of an officer of the  Corporation,  as well as serve as
an officer, as determined by the Board of Directors. The period(s) of service by
the  Chairman  of the Board of  Directors  shall be  determined  by the Board of
Directors. In the absence of the Chairman of the Board of Directors, if elected,
the Board of Directors may appoint  another  member of the Board of Directors to
conduct the meeting(s) of the Board of Directors.

3.5 Regular Meetings . The Board of Directors may provide by resolution the time
and  place,  either  within or  without  the state of Utah,  for the  holding of
regular meetings without notice other than such resolution.

3.6  Special  Meetings  . Special  meetings  of the Board of  Directors  for any
purpose  or  purposes  may be  called  at any time by or at the  request  of the
Chairman of the Board of Directors,  the President,  or any two  directors.  The
person or persons  authorized to call special meetings of the Board of Directors
may fix any place,  either within or without the state of Utah, as the place for
holding any special meeting of the Board of Directors.

3.7 Notice . Notice of the date,  time, and place of any special  meeting of the
Board of  Directors  shall  be  delivered  personally  or by  telephone  to each
director  or sent by mail,  express  courier,  or  facsimile,  charges  prepaid,
addressed  to each  director  at that  director's  address as it is shown on the
records of the  Corporation.  If the notice is mailed,  it shall be deposited in
the United  States mail at least five days before the time of the holding of the
meeting.  If the  notice is  delivered  personally,  by express  courier,  or by
telephone,  facsimile,  telegraph or  electronic  mail, it shall be delivered at
least 48 hours before the meeting begins. Any oral notice given personally or by
telephone  may be  communicated  either  to the  director  or to a person at the
office of the director who the person  giving  notice has reason to believe will
promptly  communicate  it to the director.  Any director may waive notice of any
meeting  by  delivering  a  written  waiver  to the  Corporation  to file in its
corporate records,  and attendance of a director at a meeting shall constitute a
waiver of notice of such  meeting,  except where the director  attends a meeting
for the express purpose of objecting to the transaction of any business  because
the meeting is not lawfully  called or convened and does not thereafter vote for
or consent to action taken at the meeting. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board of Directors
needs to be specified in the notice or waiver of notice of such meeting.

                                        4


<PAGE>


3.8  Quorum . A  majority  of the  authorized  number of  directors  as fixed in
accordance  with  these  amended  bylaws  shall  constitute  a  quorum  for  the
transaction  of business at any meeting of the Board of  Directors,  but if less
than a majority is present at a meeting, a majority of the directors present may
adjourn the meeting  from time to time  without  further  notice  until a quorum
shall be present.

3.9  Manner of Acting . The act of a  majority  of the  directors  present  at a
meeting at which a quorum is present  shall,  unless the act of a greater number
of directors is required by the articles of  incorporation of the Corporation or
these amended bylaws, be the act of the Board of Directors.

3.10 Vacancies and  Newly-Created  Directorships . Any vacancy  occurring in the
Board of Directors  may be filled by the  affirmative  vote of a majority of the
remaining  directors,  though less than a quorum,  or by the affirmative vote of
the majority of shares  entitled to vote for  directors.  A director  elected to
fill a vacancy shall be elected for the  unexpired  term of his  predecessor  in
office.  The term "vacancy"  includes any directorship  authorized under Section
3.2 but not filled by shareholders  at the annual  meeting,  whether or not such
directorship had a prior encumbrance.

3.11 Fees and  Compensation . Directors may receive such  compensation,  if any,
for  their  services  and  such  reimbursement  of  expenses  as may be fixed or
determined by  resolution  of the Board of Directors.  This section shall not be
construed  to preclude any director  from serving the  Corporation  in any other
capacity as an officer, agent, employee, or otherwise and receiving compensation
for those services.

3.12 Presumption of Assent . A director who is present at a meeting of the Board
of Directors when  corporate  action is taken is considered to have consented to
the action taken at the meeting unless the director  objects at the beginning of
the meeting,  or promptly  upon arrival,  to holding the meeting or  transacting
business  at the  meeting  and does not  thereafter  vote for or  consent to any
action taken at the  meeting,  or the  director  contemporaneously  requests his
dissent or abstention  as to any specific  action to be entered into the minutes
of the meeting, or the director causes written notice of a dissent or abstention
as to a specific  action to be received by the presiding  officer of the meeting
before  adjournment  of  the  meeting  or  by  the  Corporation  promptly  after
adjournment of the meeting.

                                        5


<PAGE>


3.13 Resignations . A director may resign at any time by giving a written notice
of resignation to either the Chairman of the Board of Directors,  the President,
a Vice  President,  or the  Secretary or  Assistant  Secretary,  if any.  Unless
otherwise  provided in the resignation,  the resignation  shall become effective
when the notice is received by an officer or director of the Corporation. If the
resignation  is effective at a future time,  the Board of Directors  may elect a
successor to take office when the resignation becomes effective.

3.14 Action by Written Consent . Any action required to be taken at a meeting of
the Board of Directors of the  Corporation or any other action that may be taken
at a meeting  of the Board of  Directors,  may be taken  without a meeting  if a
consent in writing,  setting forth the action so taken,  is signed by all of the
directors.  Such consent shall have the same legal effect as a unanimous vote of
all the  directors  and may be described as such in any document or  instrument.
Action taken  pursuant to this Section is effective when the last director signs
a writing describing the action taken, unless the Board of Directors establishes
a different effective date.

3.15 Meetings by Telephone  Conference Call.  Members of the Board of Directors,
or any  committee  designated by the Board of Directors,  may  participate  in a
meeting of the Board of Directors or committee,  as the case may be, by means of
conference  telephone  call or  similar  communications  equipment  by which all
persons participating in the meeting can hear each other throughout the meeting.
Participation  in such a meeting  shall  constitute  presence  in person at such
meeting.

3.16 Removal of Directors.  The shareholders may remove one or more directors at
a meeting called for that purpose if notice has been given that a purpose of the
meeting is such  removal.  The removal may be with or without  cause  unless the
articles of incorporation provide that directors may only be removed with cause.
If  a  director  is  elected  by  a  voting  group  of  shareholders,  only  the
shareholders  of that voting  group may  participate  in the vote to remove such
director.  A director  may be removed only if the number of votes cast to remove
such director exceeds the number of votes cast not to remove such director.

                                    ARTICLE 4
                                   COMMITTEES

4.1 Committees. The Board of Directors shall by resolution adopted by a majority
of the Board of Directors  designate  from among its members an audit  committee
and may from time to time by  resolution  adopted by a majority  of the Board of
Directors designate from among its members one or more committees in addition to
an audit committee,  including, but not limited to, a compensation committee and
an executive committee,  each of which shall have such authority of the Board of
Directors  as may be  specified  in the  resolution  of the  Board of  Directors
designating  such  committee;  provided,  however,  that any such  committee  so
designated  shall not have any powers not  allowed  under the Revised  Act.  The
chairman of any such  committee  shall be  designated by the Board of Directors.
Each  committee  must have at least three  directors  as  members.  The Board of
Directors  shall  have  power  at any time to  change  the  members  of any such
committee,  designate  alternate  members  of any such  committee,  and fill all
vacancies  therein.  Any such committee shall serve at the pleasure of the Board
of Directors.




                                        6


<PAGE>


4.2 Procedures, Meetings and Quorum. Meetings of any committee designated by the
Board of Directors  may be held at such times and places as the chairman of such
committee  shall from time to time  determine.  Notice of such meetings shall be
given within the same times and by the same means as set forth in these  amended
bylaws for  meetings  of the Board of  Directors.  At every  meeting of any such
committee,  the  presence of a majority of all of the members of such  committee
shall be necessary for the  transaction of business,  and the action of any such
committee  must be  authorized  by the  affirmative  vote of a  majority  of the
members present at such meeting at which a quorum is present. Any such committee
shall keep minutes of its proceedings, and all action by such committee shall be
reported to the Board of Directors at its meeting next succeeding such action.

                                    ARTICLE 5
                                    OFFICERS

5.1  Officers.  Except as provided  otherwise  by a  resolution  of the Board of
Directors,  the officers of the  Corporation  shall be a President,  one or more
Vice Presidents as may be determined by resolution of the Board of Directors,  a
Secretary and a Treasurer.  The principal  officers of the Corporation  shall be
the  President,  Treasurer and Secretary and such offices shall be held by three
separate  natural  persons.  The Corporation may also have, at the discretion of
the Board of Directors, one or more assistant secretaries, one or more assistant
Treasurers,  and  such  other  officers  as may be  appointed  by the  Board  of
Directors. Officers need not be shareholders of the Corporation.

5.2  Appointment,  Term  of  Office  and  Qualification.  The  officers  of  the
Corporation  shall be  appointed  by, and serve at the pleasure of, the Board of
Directors, subject to any rights of an officer under any contract of employment.
Appointment of officers shall take place annually or at such other  intervals as
the Board of  Directors  may  determine,  and may be made at  regular or special
meetings of the Board of Directors or by the written  consent of the  directors.
Each  officer  shall  hold  office  until  his  successor  shall  have been duly
appointed and qualified or until such officer's death,  resignation,  or removal
in the manner provided in these amended bylaws.  No officer provided for in this
Article 5 need be a director of the  Corporation nor shall any such officer be a
director unless elected a director in accordance with these amended bylaws.

5.3  Resignations.  Any officer may resign at any time by  delivering  a written
resignation to the Board of Directors,  the President, or the Secretary.  Unless
otherwise  specified  therein,  such  resignation  shall take  effect  upon such
delivery of the resignation; and, unless otherwise specified in the resignation,
the acceptance of the  resignation  shall not be necessary to make it effective.
Any resignation is without  prejudice to the rights,  if any, of the Corporation
under any contract to which the officer is a party.










                                        7


<PAGE>


5.4  Removal.  Any  officer  may be  removed by the Board of  Directors  or by a
committee,  if any, if so authorized by the Board of Directors,  whenever in its
judgment the best interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed.

5.5 Vacancies and Newly-Created  Offices.  A vacancy in any office may be filled
by the Board of Directors at any regular or special  meeting or by the unanimous
written consent of the directors.

5.6 President.  Unless the Board of Directors  shall  otherwise  determine,  the
President shall be the chief executive  officer of the  Corporation,  and, if so
designated by  resolution  of the Board of Directors,  shall also have the title
chief  executive  officer,  and shall,  subject  to the  control of the Board of
Directors,  have general  supervision,  direction,  and control of the business,
officers,  employees,  and agents of the Corporation.  The President shall, when
present,  preside at meetings of the shareholders.  The President shall have the
general  powers  and  duties  of  management  usually  vested  in the  office of
President of a  Corporation,  and shall have such other powers and duties as may
be prescribed by the Board of Directors or these amended bylaws.

5.7 Vice  Presidents.  In the absence or disability of the  President,  the Vice
Presidents, in order of their rank as fixed by the Board of Directors or, if not
ranked, a Vice President designated by the Board of Directors, shall perform all
the duties of the President  and, when so acting,  shall have all the powers of,
and be subject to all the restrictions upon, the President.  The Vice Presidents
shall have such other  powers and perform  such other duties as may from time to
time be prescribed for them by the Board of Directors, these amended bylaws, the
President,  or the chairman of the Board of Directors and,  unless  otherwise so
prescribed,  the  powers  and  duties  customarily  vested in the office of Vice
President of a Corporation.

5.8  Secretary.  The Secretary  shall keep or cause to be kept, at the principal
executive  office  of the  Corporation  or such  other  place  as the  Board  of
Directors may direct,  a book of minutes of the  proceedings of all meetings of,
and a record of all actions  taken by, the Board of Directors or any  committees
of the Board of Directors.  The Secretary shall cause all notices of meetings to
be duly given in accordance  with the  provisions of these amended bylaws and as
required by the Revised Act.

     The Secretary  shall be the  custodian of the corporate  records and of the
seal, if any, of the  Corporation.  Unless  otherwise  required by law or by the
Board of Directors, the adoption or use of a corporate seal is not required. The
Secretary shall see that the books, reports, statements, certificates, and other
documents and records required by the Revised Act are properly kept and filed.

     The Secretary  shall have charge of the stock books of the  Corporation and
cause the stock and  transfer  books to be kept in such manner as to show at any
time the  amount  of the  stock of the  Corporation  of each  class  issued  and
outstanding,  the manner in which and the time when such stock was paid for, the
alphabetically  arranged  names and addresses of the holders of record  thereof,
the number of shares held by each holder, and the time when each became a holder
of record.  The Secretary shall exhibit at all reasonable times to any director,
upon application,  the original or duplicate stock register. The Secretary shall
cause the stock ledger to be kept and exhibited at the  principal  office of the
Corporation in the manner and for the purposes  provided by these amended bylaws
and the Revised Act.

     The Secretary  shall perform all duties incident to the office of Secretary
and such other duties as are given to him or her by law or these amended  bylaws
or as from time to time may be assigned by the Board of Directors.

                                        8


<PAGE>


5.9 Treasurer.  The Treasurer  shall keep and maintain,  or cause to be kept and
maintained, adequate and correct books and records of accounts of the properties
and business transactions of the Corporation,  including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings,
and  shares.  The  books of  account  shall at all  reasonable  times be open to
inspection by any director.

     The Treasurer  shall deposit all monies and other valuables in the name and
to the credit of the Corporation with such  depositories as may be designated by
the  Board  of  Directors.  The  Treasurer  shall  disburse  the  funds  of  the
Corporation  as may be ordered by the Board of  Directors,  shall  render to the
President  and the Board of  Directors,  whenever they request it, an account of
all of  transactions  taken as Treasurer and of the  financial  condition of the
Corporation,  and shall have such other  powers and perform such other duties as
may be prescribed by the Board of Directors or these amended bylaws.

5.10  Assistant  Secretaries  and  Treasurers.   Any  assistant  secretaries  or
assistant Treasurers elected by the Board of Directors shall perform such of the
duties of the Secretary or the  Treasurer,  respectively,  as may be assigned to
them by the  officers  they  are  elected  to  assist,  or as may  otherwise  be
prescribed for them by the Board of Directors.

5.11  Salaries.  The  salaries  or other  compensation  of the  officers  of the
Corporation  shall be fixed from time to time by the Board of Directors,  except
that the Board of  Directors  may delegate to any person or group of persons the
power to fix the  salaries or other  compensation  of any  officers.  No officer
shall be prevented from receiving any such salary or  compensation  by reason of
the fact that he is also a director of the Corporation.

5.12 Surety  Bonds.  In the event the Board of Directors  shall so require,  any
officer or agent of the Corporation  shall provide the Corporation  with a bond,
in such sum and with such  surety or  sureties  as the  Board of  Directors  may
direct,  conditioned  upon the faithful  performance of his or her duties to the
Corporation,  including  responsibility for negligence and for the accounting of
all property,  monies,  or securities of the Corporation that may come under his
or her responsibility.



















                                        9


<PAGE>


                                    ARTICLE 6
                  EXECUTION OF INSTRUMENTS, BORROWING OF MONEY
                         AND DEPOSIT OF CORPORATE FUNDS

6.1  Instruments.  The Board of Directors may authorize any officer,  agent,  or
agents,  to enter into any contract or execute and deliver any instrument in the
name of, and on behalf of, the Corporation, and such authority may be general or
confined to specific instances.

6.2 Loans . No loan to the Corporation shall be contracted,  no negotiable paper
or other evidence of its obligation  under any loan to the Corporation  shall be
issued in its name,  and no  property  of the  Corporation  shall be  mortgaged,
pledged,  hypothecated,  transferred, or conveyed as security for the payment of
any loan,  advance,  indebtedness,  or liability of the Corporation,  unless and
except as authorized by the Board of Directors.  Any such  authorization  may be
general or confined to specific instances.

6.3 Deposits.  All monies of the  Corporation  not otherwise  employed  shall be
deposited  from time to time to its credit in such banks or trust  companies  or
with such bankers or other depositories as the Board of Directors may select, or
as from time to time may be selected by any officer or agent authorized so to do
by the Board of Directors.

6.4 Checks, Drafts, etc. All checks, drafts,  acceptances,  notes, endorsements,
and,   subject  to  the  provisions  of  these  amended  bylaws,   evidences  of
indebtedness of the  Corporation  shall be signed by such officer or officers or
such  agent or  agents  of the  Corporation  and in such  manner as the Board of
Directors  from time to time may  determine.  Endorsements  for  deposit  to the
credit of the Corporation in any of its duly authorized depositories shall be in
such manner as the Board of Directors from time to time may determine.

6.5 Bonds and  Debentures  . Every bond or debenture  issued by the  Corporation
shall be evidenced by an  appropriate  instrument  signed by the  President or a
Vice  President  and  by  the  Secretary.   Where  such  bond  or  debenture  is
authenticated  with  the  manual  signature  of an  authorized  officer  of  the
Corporation  or other  trustee  designated  by the  indenture  of trust or other
agreement  under which such  security  is issued,  the  signature  of any of the
Corporation's officers named thereon may be a facsimile. In case any officer who
signed,  or  whose  facsimile  signature  has  been  used  on any  such  bond or
debenture, shall cease to be an officer of the Corporation for any reason before
the same has been  delivered  by the  Corporation,  such bond or  debenture  may
nevertheless  be adopted by the  Corporation  and issued and delivered as though
the person who signed it or whose facsimile  signature has been used thereon had
not ceased to be such officer.










                                       10


<PAGE>


6.6 Sale, Transfer,  etc., of Securities.  Sales, transfers,  endorsements,  and
assignments of shares of stock, bonds, and other securities owned by or standing
in the name of the  Corporation  and the execution and delivery on behalf of the
Corporation  of any and all  instruments  in writing  incident to any such sale,
transfer,  endorsement, or assignment, shall be effected by the President, or by
any Vice  President,  together  with the  Secretary,  or by any officer or agent
thereunto authorized by the Board of Directors.

6.7  Proxies.  Proxies  to vote  with  respect  to  shares  of  stock  of  other
Corporations  owned  by or  standing  in the  name of the  Corporation  shall be
executed and delivered on behalf of the Corporation by the President or any Vice
President  and the  Secretary  of the  Corporation  or by any  officer  or agent
thereunto authorized by the Board of Directors.


                                    ARTICLE 7

                                 CAPITAL STOCK

7.1 Stock  Certificates.  The shares of the  Corporation  may,  but need not be,
represented by certificates. If the shares are represented by certificates,  the
certificates  shall be  signed by two  officers  as  designated  by the Board of
Directors,  or in the  absence  of such  designation,  any two of the  following
officers:  the President,  any Vice President,  the Secretary,  or any assistant
Secretary of the Corporation.  The signatures of the designated  officers upon a
certificate may be facsimiles if the certificate is  countersigned by a transfer
agent,  or registered by a registrar,  other than the  Corporation  itself or an
employee  of the  Corporation.  In case  any  officer  who has  signed  or whose
facsimile  signature has been placed upon such certificate  shall have ceased to
be such  officer  before  such  certificate  is issued,  it may be issued by the
Corporation  with the same effect as if he were such  officer at the date of its
issue.

     If the Corporation is authorized to issue different  classes of shares or a
different series within a class, the designations, preferences, limitations, and
relative  rights  applicable  to each  class,  the  variations  in  preferences,
limitations,  and relative rights determined for each series,  and the authority
of the Board of  Directors to  determine  variations  for any existing or future
class  or  series,  must be  summarized  on the  front  or  back  of each  share
certificate.  Alternatively,  each  certificate may state  conspicuously  on its
front or back that the Corporation will furnish the shareholder this information
on request in writing, without charge.

Each certificate representing shares shall also state upon the face thereof:

     (a) The name of the issuing  Corporation and that it is organized under the
laws of the state of Utah.

     (b) The name of the person to whom the certificate is issued.

     (c) The number and class of shares,  and the designation of the series,  if
any, which such certificate represents.

     There shall be entered upon the stock transfer books of the  Corporation at
the time of issuance of each share,  the number of the certificate  issued,  the
name and address of the person owning the shares represented thereby, the number
and kind,  class,  or series of such shares,  and the date of issuance  thereof.
Every  certificate  exchanged  or  returned to the  Corporation  shall be marked
"Cancelled"  with the date of  cancellation.  Unless  otherwise  required by the
Revised Act, or by the Board of Directors in accordance with applicable law, the
foregoing with respect to shares does not affect shares  already  represented by
certificates.

                                       11


<PAGE>


7.2 Shares  Without  Certificates  . The Board of Directors  may  authorize  the
issuance  of some or all of the shares of any or all of the classes or series of
the Corporation's stock without certificates.  The authorization does not affect
shares already  represented by  certificates  until they are  surrendered to the
Corporation.  Within a reasonable  time after the issuance or transfer of shares
without  certificates,  the  Corporation  shall send the  shareholder  a written
statement of the  information  required on certificates as stated in Section 7.1
of these amended bylaws.

7.3  Transfer  of Stock .  Transfers  of stock shall be made only upon the stock
transfer  books  of  the  Corporation  kept  at  the  principal  office  of  the
Corporation  or by the transfer  agent(s)  designated to transfer  shares of the
stock of the Corporation. Except where a certificate is issued in replacement of
a lost or  destroyed  certificate  as  provided  in  these  amended  bylaws,  an
outstanding  certificate  for the number of shares involved shall be surrendered
for  cancellation  before  a new  certificate  is  issued  therefor.  Except  as
otherwise  provided  by law,  the  Corporation  and the  transfer  agent(s)  and
registrar(s),  if any,  shall be  entitled  to treat the holder of record of any
share or shares of stock as the absolute  owner  thereof for all  purposes  and,
accordingly,  shall not be bound to  recognize  any legal,  equitable,  or other
claim to or  interest  in such  share or shares on the part of any other  person
whether or not it or they shall have express or other notice thereof.

7.4  Restrictions on Transfer or Registration of Shares . The Board of Directors
may,  as they  may  deem  expedient,  impose  restrictions  on the  transfer  or
registration of transfer of shares of the Corporation.  The restriction does not
affect shares issued before the  restriction  was adopted  unless the holders of
the shares are  parties to the  restriction  agreement  or voted in favor of the
restriction or otherwise consented to the restriction.

     The  restriction on the transfer or  registration  of transfer of shares is
valid and enforceable  against the holder or a transferee of the holder,  if the
restriction  is  authorized  by the  Revised  Act and  its  existence  is  noted
conspicuously on the front or back of the certificate,  or if the restriction is
contained in the information statement that is sent to shareholders whose shares
are not  represented  by  certificates  pursuant to Section 7.2 of these amended
bylaws.

7.5  Regulations . Subject to the  provisions of these amended bylaws and of the
articles  of  incorporation,  the Board of  Directors  may make  such  rules and
regulations  as  it  may  deem  expedient  concerning  the  issuance,  transfer,
redemption,  and  registration  of  certificates  for shares of the stock of the
Corporation.

7.6 Transfer Agent(s) and  Registrar(s).  The Board of Directors may appoint one
or more  transfer  agent(s)  and one or more  registrar(s)  with  respect to the
certificates  representing  shares of stock of the Corporation,  and may require
all such  certificates  to bear the  signature  of either or both.  The Board of
Directors  may from time to time define the  respective  duties of such transfer
agent(s) and registrar(s).








                                       12


<PAGE>


7.7 Lost or Destroyed  Certificates.  In the event of the loss or destruction of
any  certificate  of stock,  another may be issued in its place pursuant to such
regulations  as the Board of Directors  may establish  concerning  proof of such
loss,  theft, or destruction and concerning the giving of a satisfactory bond or
bonds of indemnity.

7.8 Consideration for Shares.  The Board of Directors may authorize the issuance
of shares for consideration consisting of any tangible or intangible property or
benefit  to  the  Corporation,   including  cash,   promissory  notes,  services
performed,  contracts or  arrangements  for services to be  performed,  or other
securities  of the  Corporation.  The terms and  conditions  of any  tangible or
intangible  property or benefit to be provided in the future to the Corporation,
including  contracts or arrangements for services to be performed,  shall be set
forth  in  writing.  The  Corporation  may  place in  escrow  shares  issued  in
consideration for contracts, arrangements for future services or benefits, or in
consideration  of a  promissory  note,  or make other  arrangements  to restrict
transfer  of the  shares  issued  for any  such  consideration,  and may  credit
distributions  in respect of the shares  against  the  purchase  price until the
services are performed,  the note is paid, or the benefits are received.  If the
specified  future  services  are not  performed,  the note is not  paid,  or the
benefits  are  not  received,   the  shares   escrowed  or  restricted  and  the
distributions credited may be cancelled in whole or in part.

                                    ARTICLE 8
INDEMNIFICATION

8.1 Indemnification.  Except as provided in Section 8.2 of these amended bylaws,
the  Corporation  may, to the maximum extent and in the manner  permitted by the
Revised Act,  indemnify an individual made a party to a proceeding because he is
or was a director,  against liability  incurred in the proceeding if his conduct
was in good  faith,  he  reasonably  believed  that his  conduct  was in, or not
opposed to, the  Corporation's  best interests,  and in the case of any criminal
proceeding,  he had no  reasonable  cause to believe his  conduct was  unlawful.
Termination of the proceeding by judgment, order, settlement, conviction, upon a
plea of nolo contendere or its equivalent, is not, of itself, determinative that
the director did not meet the standard of conduct described in this section.

8.2 Certain Restrictions on Indemnification. The Corporation may not indemnify a
director  under  Section  8.1 of these  amended  bylaws,  in  connection  with a
proceeding  by or in the  right of a  Corporation  in  which  the  director  was
adjudged liable to the  Corporation,  or in connection with any other proceeding
charging that the director derived an improper personal benefit,  whether or not
involving action in his official  capacity,  in which proceeding he was adjudged
liable on the basis that he derived an improper personal benefit.

8.3 Mandatory  Indemnification  . The Corporation shall indemnify a director who
was successful, on the merits or otherwise, in the defense of any proceeding, or
in the defense of any claim, issue, or matter in the proceeding, to which he was
a party because he is or was a director of the Corporation,  against  reasonable
expenses incurred by him in connection with the proceeding or claim with respect
to which he has been successful.





                                       13


<PAGE>


8.4  Determination  . The Corporation may not indemnify a director under Section
8.1 of these amended bylaws unless  authorized and a determination has been made
in a specific case that  indemnification  of the director is  permissible in the
circumstances  because the director has met the  applicable  standard of conduct
set forth in Section 8.1 of these amended bylaws.  Such  determination  shall be
made either (a) by the Board of Directors by majority vote of those present at a
meeting at which a quorum is present,  and only those  directors  not parties to
the proceedings shall be counted in satisfying the quorum requirement,  (b) if a
quorum  cannot be  obtained,  by majority  vote of a  committee  of the Board of
Directors designated by the Board of Directors, which committee shall consist of
two or more directors not parties to the  proceeding,  except that the directors
who are not parties to the  proceeding  may  participate  in the  designation of
directors for the committee,  (c) by special legal counsel selected by the Board
of Directors  or a committee of the Board of Directors in the manner  prescribed
by the  Revised  Act,  or (d) by the  shareholders,  by a majority  of the votes
entitled to be cast by holders of qualified shares present in person or by proxy
at a meeting.  The  majority of the votes  entitled to be cast by the holders of
all qualified  shares  constitutes a quorum for purposes of action that complies
with this  Section.  Shareholders'  action  that  otherwise  complies  with this
Section is not  affected by the  presence of holders,  or the voting,  of shares
that are not qualified shares as determined under the Revised Act.

8.5 General  Indemnification . The  indemnification  and advancement of expenses
provided by this  Article 8 shall not be  construed to be exclusive of any other
rights to which a person seeking  indemnification or advancement of expenses may
be entitled  under the articles of  incorporation,  these  amended  bylaws,  any
agreement,  any vote of shareholders or disinterested  directors,  or otherwise,
both as to action in his official  capacity and as to action in another capacity
while holding such office.

8.6 Advances . The Corporation in accordance with the Revised Act may pay for or
reimburse the reasonable  expenses  incurred by any director who is a party to a
proceeding in advance of final disposition of the proceeding if (a) the director
furnishes the Corporation a written affirmation of his good faith belief that he
has met the  applicable  standard of conduct  described  in Section 8.1 of these
amended  bylaws,  (b)  the  director  furnishes  to the  Corporation  a  written
undertaking in the form required by the Revised Act,  executed  personally or on
his behalf, to repay the advance if it is ultimately  determined that he did not
meet the  standard of conduct,  and (c) a  determination  is made that the facts
then known to those making a  determination  would not preclude  indemnification
under this Article 8.

8.7 Scope of Indemnification . The  indemnification  and advancement of expenses
authorized by this Article 8 is intended to permit the  Corporation to indemnify
to the fullest  extent  permitted by the laws of the state of Utah,  any and all
persons whom it shall have power to  indemnify  under such laws from and against
any and all of the expenses,  liabilities,  or other  matters  referred to in or
covered by such laws. Any  indemnification  or advancement of expenses hereunder
shall,  unless  otherwise  provided when the  indemnification  or advancement of
expenses is authorized or ratified, continue as to a person who has ceased to be
a director,  officer,  employee,  or agent of the Corporation and shall inure to
the benefit of such person's heirs, executors and administrators. This Article 8
is a summary of the indemnification  provisions of the Revised Act. In the event
of a conflict  between the  provisions of this Article 8 and the Revised Act, as
the case may be, shall control.






                                       14


<PAGE>


8.8 Insurance . The Corporation may purchase and maintain liability insurance on
behalf of a person who is or was a director,  officer,  employee,  fiduciary, or
agent  of the  Corporation,  or  who,  while  serving  as a  director,  officer,
employee,  fiduciary,  or agent of the  Corporation,  is or was  serving  at the
request of the Corporation as a director,  officer, partner, trustee,  employee,
fiduciary, or agent of another foreign or domestic Corporation, or other person,
or of an employee benefit plan,  against liability  asserted against or incurred
by him in any such  capacity or arising out of his status in any such  capacity,
whether or not the Corporation would have the power to indemnify him against the
liability  under the  provisions  of this  Article 8 or the laws of the state of
Utah, as the same may hereafter be amended or modified.


                                    ARTICLE 9
                                  FISCAL YEAR

The fiscal year of the Corporation  shall be fixed by resolution of the Board of
Directors.


                                   ARTICLE 10
                                   DIVIDENDS

     The Board of Directors may from time to time declare,  and the  Corporation
may pay,  dividends on its  outstanding  shares in the manner and upon the terms
and conditions provided by law.


                                   ARTICLE 11
                                   AMENDMENTS

     These amended  bylaws may be amended by a two-thirds  majority of the Board
of  Directors  at  any  time,   except  to  the  extent  that  the  articles  of
incorporation,  these  amended  bylaws or the  Revised  Act  reserve  this power
exclusively to the shareholders, in whole or part. These amended bylaws may also
be amended at any time by the shareholders.















                                       15


<PAGE>


                                   ARTICLE 12

                         CONTROL SHARES ACQUISITIONS ACT

12.1 Shares  Subject to Redemption.  If a person  proposes to make or has made a
control share acquisition, as defined under the Utah Control Shares Acquisitions
Act (the "Act"),  and no acquiring  person  statement has been  delivered to the
Corporation by such acquiring  person  pursuant to Section 61-6-7 of the Act, or
if the acquiring person has filed the acquiring person statement but the control
shares  have not been  accorded  full  voting  rights by the  shareholders,  the
Corporation  shall have the right to redeem, at fair market value, as defined in
the Act,  the  control  shares of the  acquiring  person,  as defined in Section
61-6-2 of the Act. Any such redemption hereunder shall take place within 60 days
after the last  acquisition of control shares by the acquiring  person.  Control
shares acquired in a control share  acquisition are not subject to redemption by
the Corporation  after a statement by the acquiring person has been delivered to
the  Corporation,  unless the shares are not accorded  full voting rights by the
shareholders as provided in Section 61-6-10 of the Act.

12.2 Dissenter's Rights. In the event control shares required in a control share
acquisition  are accorded full voting rights  pursuant to provisions of the Act,
and the acquiring  person has acquired control shares with a majority or more of
the voting power, the shareholders of the Corporation shall not have dissenter's
rights as provided in Section 61-6-12 of the Act.





                                       16


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>stckprchs0903.txt
<TEXT>

                        STOCK PURCHASE AND SALE AGREEMENT


     THIS  STOCK  PURCHASE  AND SALE  AGREEMENT  (the  "Agreement")  is made and
entered into this 27th day of August,  2003,  by and between  SECURITY  NATIONAL
FINANCIAL CORPORATION,  a Utah corporation ("Security National") and AULT GLAZER
& CO. INVESTMENT  MANAGEMENT LLC, a Delaware limited liability company,  and any
related  entities,  whether  directly or indirectly  owned or controlled by Ault
Glazer & Co  Investment  Management  LLC or Milton  T.  Ault,  III  (hereinafter
collectively referred to as "Ault Glazer").

                               W I T NE S S E T H:

     WHEREAS,  Ault Glazer either owns or controls  approximately 424,000 shares
of Class A Common Stock of Security National  Financial  Corporation  ("Security
National");

     WHEREAS,  Ault  Glazer is  desirous  of  reducing  its  holdings of Class A
Security National Common Stock; and

     WHEREAS,  Security  National,  in order to attempt to  maintain  an orderly
market,  is willing to purchase a certain number of its shares of Class A Common
Stock held by Ault Glazer and to enter into the other  covenants and obligations
relating to the purchase of shares of Class A Common Stock held by Ault Glazer;

     NOW,  THEREFORE,  in  consideration  of the mutual  promises and  covenants
contained herein, and intending to be legally bound, the parties hereby agree as
follows:



<PAGE>



1. Purchase and Sale of Shares. Ault Glazer agrees to sell and Security National
agrees to purchase  124,000 shares of Class A Common Stock of Security  National
at $6.00 per share,  the closing of said stock purchase and sale  transaction to
occur within fifteen (15) days from the date of this Agreement.

2.  Agreement  Not to Purchase  Additional  Shares.  Ault  Glazer  agrees not to
purchase or control, directly or indirectly, any additional shares of Class A or
Class C Common  Stock of Security  National  for a period of four (4) years from
the date of this Agreement.

3. Option to Purchase and Sell Additional  Shares.  Security National agrees for
the next three (3) years from the date hereof,  on the anniversary  date of this
Agreement, that Ault Glazer may, but is not obligated, to sell 100,000 shares of
Class A Common  Stock of  Security  National on each such  anniversary  date and
Security  National  agrees to purchase,  if  requested  by Ault Glazer,  100,000
shares  of Class A Common  Stock of  Security  National  at a price of $6.00 per
share.  This  paragraph  is subject to the approval of the Board of Directors of
Security  National,  which  approval  Scott M. Quist,  the President of Security
National, will use his best efforts to obtain (and will favorably recommend this
paragraph)  at the next board  meeting.  If the Board of  Directors  of Security
National shall  disapprove this  paragraph,  and the paragraph shall be rendered
void  and of no  effect,  then the  immediately  preceding  paragraph  2 of this
Agreement  shall  also be void  and of no  effect,  but  the  remainder  of this
Agreement  shall  remain in effect and  continue to be binding  upon the parties
hereto.

4. Review of  Agreement  by  Counsel.  This  Agreement  is subject to review and
amendment  by  securities  counsel  for  Security  National  and Ault Glazer for
necessary  disclosures in order to comply with federal and state securities laws
and  regulations  thereunder  and otherwise in conformity  with such federal and
state securities laws and regulations thereunder.

1.

<PAGE>



5. Waiver.  Any term or condition of this Agreement may be waived at any time by
the party that is  entitled to benefit  thereof.  Such waiver must be in writing
and must be executed  by an  executive  officer of such  party.  A waiver on one
occasion  will not be deemed  to be a waiver of the same or any other  breach or
nonfulfillment on a future occasion. All remedies,  either under this Agreement,
or by law or, otherwise afforded, will be cumulative and not alternative.

6.  Amendment.  This  Agreement  may be modified or amended only in writing duly
executed by all parties.

7. Counterparts.  This Agreement may be executed simultaneously in any number of
counterparts,  each of which will be deemed an original,  but all of which, when
taken together, will constitute one and the same instrument.

8.  Governing Law. This Agreement will be governed by and construed and enforced
in  accordance  with  the  laws of the  State  of Utah  (without  regard  to the
principles  of  conflicts  of  law)  applicable  to  a  contract   executed  and
performable in such state.

9. Binding Effect.  This Agreement is binding upon and will inure to the benefit
of the parties and their respective successors and permitted assigns.

10. No Assignment.  Neither this Agreement nor any right or obligation hereunder
or part  hereof may be assigned by any party  hereto  without the prior  written
consent of the other party hereto (and any attempt to do so will be void).

11. Due Diligence.  All parties to this Agreement  hereby  acknowledge that they
have received from the others all information requested and have had an adequate
opportunity to investigate all aspects of this transaction.  Each party has done
its own due diligence with respect to this transaction.

12. Invalid Provision. If any provision of this Agreement is held to be illegal;
invalid,  or unenforceable under any present or future law, and if the rights or
obligations  under this Agreement of Security  National and Ault Glazer will not
be materially and adversely  affected thereby,  (i) such provision will be fully
severable;  (ii)  this  Agreement  will be  construed  and  enforced  as if such
illegal,  invalid, or unenforceable provision had never comprised a part hereof;
and (iii) the remaining  provisions of this  Agreement will remain in full force
and effect and will not be affected by the illegal,  invalid,  or  unenforceable
provision or by its severance from this Agreement.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by the respective officers authorized to act in the premises, as of the
date first written.

                     SECURITY NATIONAL FINANCIAL CORPORATION



                                        By: /s/ Scott M. Quist
                                        ----------------------
                                        Scott M. Quist, President


                     AULT GLAZER & CO. INVESTMENT MANAGEMENT LLC



                                        By: /s/ Milton T. Ault
                                           ------------------
                                           Milton T. Ault, III, Chief
                                           Investment Officer
                                           and Managing Director








                                        2

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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