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<SEC-DOCUMENT>0000318673-03-000023.txt : 20030605
<SEC-HEADER>0000318673-03-000023.hdr.sgml : 20030605
<ACCEPTANCE-DATETIME>20030605115748
ACCESSION NUMBER:		0000318673-03-000023
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20030605
FILED AS OF DATE:		20030605
EFFECTIVENESS DATE:		20030605

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:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-09341
		FILM NUMBER:		03733588

	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>DEF 14A
<SEQUENCE>1
<FILENAME>snfcprxy03.txt
<TEXT>
                     SECURITY NATIONAL FINANCIAL CORPORATION

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


                                  June 5, 2003






Dear Stockholder:

     On behalf of the Board of  Directors,  it is my  pleasure  to invite you to
attend the  Annual  Meeting  of  Stockholders  of  Security  National  Financial
Corporation (the "Company") to be held on July 11, 2003, at 10:00 a.m., Mountain
Daylight Time, at 5300 South 360 West, Suite 250, Salt Lake City, Utah.

     The formal notice of the Annual  Meeting and the Proxy  Statement have been
made a part of  this  invitation.  A copy  of the  Company's  Annual  Report  to
Stockholders is also enclosed.

     The matters to be  addressed  at the meeting  will  include the election of
seven  directors,   the  approval  of  the  2003  Stock  Option  Plan,  and  the
ratification  of the  appointment  of Tanner + Co. as the Company's  independent
accountants  for the fiscal year ending December 31, 2003. I will also report on
the Company's business activities and answer any stockholder questions.

     Your vote is very important.  We hope you will take a few minutes to review
the Proxy  Statement  and  complete,  sign,  and  return  your Proxy Card in the
envelope  provided,  even if you plan to attend the  meeting.  Please  note that
sending us your Proxy will not prevent you from voting in person at the meeting,
should you wish to do so.

     Thank you for your support of Security National Financial  Corporation.  We
look forward to seeing you at the Annual Meeting.

                             Sincerely yours,

                             SECURITY NATIONAL FINANCIAL CORPORATION


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


<PAGE>


                     SECURITY NATIONAL FINANCIAL CORPORATION

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




                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

     NOTICE IS HEREBY GIVEN that the Annual Meeting of  Stockholders of Security
National Financial Corporation (the "Company"), a Utah corporation, will be held
on July 11, 2003, at 5300 South 360 West,  Suite 250,  Salt Lake City,  Utah, at
10:00 a.m., Mountain Daylight Time, to consider and act upon the following:

1.   To elect a Board of Directors  consisting of seven directors (two directors
     to be  elected  exclusively  by the  Class  A  common  stockholders  voting
     separately as a class and the remaining five directors to be elected by the
     Class A and Class C common stockholders voting together) to serve until the
     next Annual Meeting of Stockholders  and until their successors are elected
     and qualified;

2.   To approve the 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 for issuance thereunder;

3.   To ratify  the  appointment  of Tanner + Co. as the  Company's  independent
     accountants for the fiscal year ending December 31, 2003;

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

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

     The Board of Directors  has fixed the close of business on May 9, 2003,  as
the record date for determining  stockholders  entitled to notice of and to vote
at the Annual Meeting and any adjournment thereof.

     STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. A PROXY STATEMENT
AND PROXY  CARD ARE  ENCLOSED  HEREWITH.  WHETHER  OR NOT YOU PLAN TO ATTEND THE
MEETING,  PLEASE SIGN,  DATE AND RETURN THE PROXY CARD IN THE  ENCLOSED  POSTAGE
PAID  ENVELOPE SO THAT YOUR SHARES MAY BE VOTED AT THE MEETING.  THE GIVING OF A
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.

                                    By order of the Board of Directors,



                                    G. Robert Quist
                                    First Vice President and Secretary



June 5, 2003
Salt Lake City, Utah


<PAGE>


                     SECURITY NATIONAL FINANCIAL CORPORATION
                         5300 South 360 West, Suite 250
                           Salt Lake City, Utah 84123

                                 PROXY STATEMENT

                         Annual Meeting of Stockholders
                           To Be Held on July 11. 2003

                               GENERAL INFORMATION

     This Proxy  Statement is furnished in connection  with the  solicitation of
proxies by the Board of Directors  of Security  National  Financial  Corporation
(the "Company") for use at the Annual Meeting of Stockholders to be held on July
11, 2003,  at 5300 South 360 West,  Suite 250,  Salt Lake City,  Utah,  at 10:00
a.m.,  Mountain  Daylight Time, or at any adjournment or  postponements  thereof
(the "Annual  Meeting").  The shares covered by the enclosed  Proxy,  if such is
properly  executed and received by the Board of Directors  prior to the meeting,
will be voted in favor of the proposals to be considered at the Annual  Meeting,
and in favor of the  election  of the  nominees to the Board of  Directors  (two
nominees to be elected by the Class A common stockholders voting separately as a
class  and  five  nominees  to be  elected  by the  Class A and  Class C  common
stockholders  voting together) as listed unless such Proxy specifies  otherwise,
or the  authority to vote in the election of directors is withheld.  A Proxy may
be revoked at any time before it is  exercised by giving  written  notice to the
Secretary  of the  Company  at the above  address.  Stockholders  may vote their
shares in person if they attend the Annual  Meeting,  even if they have executed
and returned a Proxy. This Proxy Statement and accompanying Proxy Card are being
mailed to stockholders on or about June 5, 2003.

     Your vote is important.  Please  complete and return the Proxy Card so your
shares can be represented at the Annual  Meeting,  even if you plan to attend in
person.

     If a  shareholder  wishes  to  assign a proxy  to  someone  other  than the
Directors' Proxy Committee,  all three names appearing on the Proxy Card must be
crossed out and the name(s) of another  person or persons  (not more than three)
inserted.  The signed card must be  presented  at the  meeting by the  person(s)
representing the shareholder.

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

     The  matters to be  brought  before  the  Annual  Meeting  are (1) to elect
directors to serve for the ensuing year; (2) to approve the 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 for issuance  thereunder;  (3) to
ratify the appointment of Tanner + Co. as the Company's independent  accountants
for the fiscal year ending  December  31, 2003;  and (4) to transact  such other
business as may properly come before the Annual Meeting.

                                VOTING SECURITIES

     Only  holders of record of Common  Stock at the close of business on May 9,
2003,  will be entitled  to vote at the Annual  Meeting.  As of March 31,  2003,
there were  issued and  outstanding  4,705,586  shares of Class A Common  Stock,
$2.00 par value per share, and 6,105,726 shares of Class C Common Stock $.20 par
value per share  resulting in a total of  10,811,312  shares of both Class A and
Class  C  Common  Stock  outstanding.  A  majority  of  the  outstanding  shares
(5,405,657) of Class A and Class C Common Stock will constitute a quorum for the
transaction of business at the meeting.

     The holders of each class of Common  Stock of the  Company are  entitled to
one vote per  share.  Cumulative  voting is not  permitted  in the  election  of
directors.



<PAGE>


     The  Company's  Articles of  Incorporation  provide that the Class A common
stockholders and Class C common stockholders have different voting rights in the
election of directors.  The Class A common  stockholders  voting separately as a
class will be entitled to vote for two of the seven directors to be elected (the
nominees  to be voted  upon by the Class A  stockholders  separately  consist of
Messrs. Charles L. Crittenden and J. Lynn Beckstead, Jr.).

     The  remaining  five  directors  will be elected by the Class A and Class C
common stockholders voting together (the nominees to be so voted upon consist of
Messrs.  Robert G. Hunter, M.D, H. Craig Moody, George R. Quist, Scott M. Quist,
and Norman G.  Wilbur).  For the other  business to be  conducted  at the Annual
Meeting,  the Class A and Class C common  stockholders  will vote together,  one
vote per share.  Class A common  stockholders  will receive a different  form of
Proxy than the Class C common stockholders.

                              ELECTION OF DIRECTORS

                                   PROPOSAL 1

     There  are  three  committees  of  the  Board  of  Directors,   which  meet
periodically during the year: the Audit Committee,  the Compensation  Committee,
and the Executive  Committee.  The Board of Directors does not have a Nominating
Committee.

     The Compensation  Committee is responsible for recommending to the Board of
Directors for approval the annual  compensation of each executive officer of the
Company and the  executive  officers of the Company's  subsidiaries,  developing
policy in the areas of compensation and fringe benefits, contributions under the
Employee Stock Ownership Plan,  contribution under the 401(k) Retirement Savings
Plan,  Deferred  Compensation  Plan,  granting of options under the stock option
plans,  and  creating  other  employee   compensation  plans.  The  Compensation
Committee  consists of Messrs.  Charles L.  Crittenden,  Norman G.  Wilbur,  and
George R. Quist. During 2002, the Compensation Committee met on three occasions.

     The Audit  Committee  directs  the  auditing  activities  of the  Company's
internal  auditors and outside public  accounting firm and approves the services
of the outside public  accounting firm. The Audit Committee  consists of Messrs.
Charles L. Crittenden,  H. Craig Moody,  and Norman G. Wilbur.  During 2002, the
Audit Committee met on two occasions.

     The Executive Committee reviews Company policy, major investment activities
and  other  pertinent  transactions  of the  Company.  The  Executive  Committee
consists of Messrs.  George R. Quist, Scott M. Quist, and H. Craig Moody. During
2002, the Executive  Committee met on four  occasions.  During 2002,  there were
five meetings of the Company's Board of Directors.

     The Company's  Bylaws provide that the Board of Directors  shall consist of
not less than  three nor more than  eleven  members.  The term of office of each
director is for a period of one year or until the election and  qualification of
his successor.  A director is not required to be a resident of the State of Utah
but must be a stockholder of the Company.

     The size of the Board of  Directors  of the  Company for the coming year is
seven members.  Unless  authority is withheld by your Proxy, it is intended that
the Common  Stock  represented  by your  Proxy will be voted for the  respective
nominees listed below. If any nominee should not serve for any reason, the Proxy
will be voted for such person as shall be  designated  by the Board of Directors
to replace such nominee. The Board of Directors has no reason to expect that any
nominee  will be unable to serve.  There is no  arrangement  between  any of the
nominees  and any other  person or persons  pursuant to which he was or is to be
selected as a director.  There is no family relationship between or among any of
the nominees, except that Scott M. Quist is the son of George R. Quist.


The Nominees

     The  nominees to be elected by the  holders of Class A Common  Stock are as
follows:

     Name                Age   Director Since     Position(s) with the Company
 ------------            ---   ----------------   ----------------------------
J. Lynn Beckstead, Jr.   47     March 2002         Vice President and Director
Charles L. Crittenden    83     October 1979       Director


<PAGE>



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

     Name                 Age    Director Since    Position(s) with the Company
 ------------             ---    ----------------  ----------------------------
 Robert G. Hunter, M.D.   43     October 1998      Director
 H. Craig Moody           49     September 1995    Director
 George R. Quist          82     October 1979      Chairman of the Board and
                                                     Chief Executive Officer
 Scott M. Quist           49     May 1986          President, General Counsel,
                                                     Chief Operating Officer
                                                     and Director
 Norman G. Wilbur         64     October 1998      Director

     The  following is a description  of the business  experience of each of the
nominees and directors.

     George R. Quist has been Chairman of the Board and Chief Executive  Officer
of the Company since  October  1979. In addition,  he served as President of the
Company from October 1979 until July 2002. Mr. Quist has also served as Chairman
of the Board and Chief  Executive  Officer of Southern  Security Life  Insurance
Company since  December  1998,  and as its President  from December 1998 to July
2002.  From 1960 to 1964,  he was  Executive  Vice  President  and  Treasurer of
Pacific  Guardian Life  Insurance  Company.  From 1946 to 1960, he was an agent,
District Manager and Associate  General Agent for various  insurance  companies.
Mr.  Quist  also  served  from  1981 to 1982 as the  President  of The  National
Association  of  Life  Companies,  a trade  association  of 642  life  insurance
companies, and from 1982 to 1983 as its Chairman of the Board.

     Scott M. Quist has been President of the Company since July 2002, its Chief
Operating  Officer since October  2001,  and its General  Counsel and a director
since May 1986. Mr. Quist served as First Vice President of the Company from May
1986 to July 2002.  Mr. Quist has also served as President of Southern  Security
Life  Insurance  Company  since July 2002,  its Chief  Operating  Officer  since
October 2001,  and its General  Counsel and a director  since December 1998. Mr.
Quist also served as First Vice  President of Southern  Security Life  Insurance
Company from December 1998 to July 2002.  From 1980 to 1982, Mr. Quist was a tax
specialist with Peat, Marwick,  Mitchell, & Co., in Dallas,  Texas. From 1986 to
1991,  he was  Treasurer  and a director  of The  National  Association  of Life
Companies,  a trade association of 642 insurance companies until its merger with
the American Council of Life Companies. Mr. Quist has been a member of the Board
of Governors of the Forum 500 Section  (representing small insurance  companies)
of the  American  Council  of Life  Insurance.  Mr.  Quist has also  served as a
regional  director  of Key  Bank of Utah  since  November  1993.  Mr.  Quist  is
currently  a  director  and past  president  of the  National  Alliance  of Life
Companies, a trade association of over 200 life companies.

     J. Lynn  Beckstead  Jr. has been a Vice  President  and a  director  of the
Company since March 2002. Mr.  Beckstead has also served as Vice President and a
director  of Southern  Security  Life  Insurance  Company  since March 2002.  In
addition, he is President of Security National Mortgage Company, an affiliate of
the Company,  having served in this position since July 1993. From 1980 to 1993,
Mr.   Beckstead  was  Vice  President  and  a  director  of  Republic   Mortgage
Corporation.  From 1983 to 1990, Mr. Beckstead was Vice President and a director
of Richards Woodbury Mortgage Corporation. From 1980 to 1983, he was a principal
broker  for  Boardwalk  Properties.  From  1978 to  1980,  Mr.  Beckstead  was a
residential loan officer for Medallion  Mortgage Company.  From 1977 to 1978, he
was a residential construction loan manager of Citizens Bank.

     Charles L.  Crittenden  has been a director  of the Company  since  October
1979.  Mr.  Crittenden is also a director of Southern  Security  Life  Insurance
Company and has served in this position since December 1998. Mr.  Crittenden has
been sole stockholder of Crittenden Paint & Glass Company since 1958. He is also
an owner of  Crittenden  Enterprises,  a real estate  development  company,  and
Chairman of the Board of Linco, Inc.

     Robert G.  Hunter,  M.D. has been a director of the Company  since  October
1998. Dr. Hunter is also a director of Southern  Security Life Insurance Company
and has served in this position  since  December 1998. Dr. Hunter is currently a
practicing  physician in private  practice.  Dr.  Hunter  created the  statewide
E.N.T. Organization (Rocky Mountain E.N.T., Inc.) where he is currently a member
of the  Executive  Committee.  He is also  Chairman  of  Surgery  at  Cottonwood
Hospital, a delegate to the Utah Medical Association and a delegate representing
the State of Utah to the American Medical  Association,  and a member of several
medical advisory boards.

     H. Craig Moody has been a director of the Company since September 1995. Mr.
Moody is also a director of Southern  Security  Life  Insurance  Company and has
served in this  position  since  December  1998.  Mr.  Moody is owner of Moody &
Associates,  a  political  consulting  and real estate  company.  He is a former
Speaker and House Majority Leader of the House of  Representatives  of the State
of Utah.


<PAGE>



     Norman G. Wilbur has been a director of the Company since October 1998. Mr.
Wilbur is also a director of Southern  Security Life  Insurance  Company and has
served in this position since December 1998. Mr. Wilbur worked for J.C.  Penny's
regional  offices in budget and  analysis.  His final  position  was  Manager of
Planning  and  Reporting  for J.C.  Penney's  stores.  After 36 years  with J.C.
Penny's,  he took an option of an early retirement in 1997. Mr. Wilbur is a past
board member of a homeless organization in Plano, Texas.

Executive Officers

     The  following  table sets forth  certain  information  with respect to the
executive  officers of the Company (the business  biographies  for the first two
individuals are set forth above):

     Name            Age             Title
George R. Quist1      82      Chairman of the Board and Chief Executive Officer

Scott M. Quist1       49      President and Chief Operating Officer

G. Robert Quist1      51      First Vice President and Secretary

Stephen M. Sill       57      Vice President and Treasurer

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

     Stephen  M. Sill has been Vice  President,  Treasurer  and Chief  Financial
Officer of the Company since March 2002.  From 1997 to March 2002,  Mr. Sill was
Vice  President  and  Controller  of the  Company.  He has also  served  as Vice
President,  Treasurer  and Chief  Financial  Officer of Southern  Security  Life
Insurance  Company  since  March 2002.  From 1998 to March  2002,  Mr. Sill also
served as Vice  President  and  Controller of Southern  Security Life  Insurance
Company.  From 1994 to 1997,  Mr.  Sill was Vice  President  and  Controller  of
Security National Life Insurance  Company.  From 1989 to 1993, he was Controller
of Flying J. Inc.  From 1978 to 1989,  Mr.  Sill was Senior Vice  President  and
Controller  of Surety Life  Insurance  Company.  From 1975 to 1978,  he was Vice
President and Controller of Sambo's Restaurant, Inc. From 1974 to 1975, Mr. Sill
was Director of Reporting for Northwest Pipeline Corporation. From 1970 to 1974,
he was an auditor  with Arthur  Andersen & Co. Mr. Sill is the  President  and a
director of the Insurance  Accounting and Systems Association (IASA), a national
association of over 1,300 insurance companies and associate members.

     G. Robert Quist has been First Vice  President and Secretary of the Company
since March 2002. Mr. Quist also served as a director of Southern  Security Life
Insurance Company since April 1999 and as its First Vice President and Secretary
since March 2002.  He has also served as First Vice  President of Singing  Hills
Memorial  Park since 1996.  Mr.  Quist has served as Vice  President of Memorial
Estates since 1982; he began  working for Memorial  Estates in 1978.  Also since
1987,  Mr.  Quist has served as  President  and a director  of Big Willow  Water
Company  and  as  Secretary-Treasurer  and  a  director  of  the  Utah  Cemetery
Association.  From 1987 to 1988,  he was a director  of  Investors  Equity  Life
Insurance Company of Hawaii.

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

     No director,  officer or 5% stockholder of the Company or its subsidiaries,
or any  affiliate  thereof  has had any  transactions  with the  Company  or its
subsidiaries during 2002 or 2001.

     Each of the  directors of the Company are  directors  of Southern  Security
Life Insurance Company,  which has a class of equity securities registered under
the Securities Exchange Act of 1934, as amended. In addition,  Scott M. Quist is
a regional director of Key Bank of Utah.

     All  directors of the Company hold office until the next Annual  Meeting of
Stockholders and until their successors have been elected and qualified.


<PAGE>



         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table  sets forth  security  ownership  information  of the
Company's Class A and Class C Common Stock as of March 31, 2003, (i) for persons
who own beneficially more than 5% of the Company's  outstanding Class A or Class
C Common Stock,  (ii) each director of the Company,  and (iii) for all executive
officers and directors of the Company as a group.
<TABLE>
<CAPTION>

                                                                                                          Class A and
                                              Class A                     Class C                           Class C
                                           Common Stock                Common Stock                      Common Stock
                                           ------------                ------------                      ------------
                                    Amount                         Amount                           Amount
                                Beneficially        Percent     Beneficially      Percent        Beneficially         Percent
Name and Address (1)                Owned          of Class         Owned        of Class            Owned           of Class
- ----------------                   -------         --------         -----        --------            -----           --------
<S>                              <C>                <C>         <C>               <C>            <C>                <C>
George R. and Shirley C. Quist
  Family Partnership, Ltd. (2)     383,899            7.0%       3,045,052         49.9%          3,428,951          29.7%
  4491 Wander Lane
  Salt Lake City, UT 84117
Employee Stock
  Ownership Plan (ESOP) (3)        507,490            9.3%       1,408,653         23.1%          1,916,143          16.6%
George R. Quist (4)(5)(6)(7)(8)    388,728            7.1%         428,207          7.0%            816,935           7.1%
Associated Investors (9)            84,170            1.5%         594,658          9.7%            678,828           5.9%
Scott M. Quist (4)(6)(7)(10)       299,106            5.5%         233,178          3.8%            532,284           4.6%
G. Robert Quist (11)               103,794            1.9%         221,363          3.6%            325,157           2.8%
Ault Glazer & Co.  Investment
  Management LLC (12)              308,863            5.7%            --             *              308,863           2.7%
  100 Wilshire Blvd., 15th Floor
  Santa Monica, CA 80401
J. Lynn Beckstead, Jr. (13)         89,449            1.6%            --             *               89,449            *
Stephen M. Sill (14)                45,261            *               --             *               45,261            *
Robert G. Hunter, M.D (4)(6)(15)     4,563            *               --             *                4,563            *
Norman G. Wilbur (16)                3,357            *               --             *                3,357            *
Charles L. Crittenden (17)           3,321            *               --             *                3,321            *
H. Craig Moody (18)                  3,100            *               --             *                3,100            *
All directors and executive officers
  as a group (9 persons)
    (4)(5)(6)(7)                 1,324,578        24.3%          3,927,800         64.3%          5,252,378          45.4%
- ----------------
*   Less than 1%
</TABLE>

(1)  Unless otherwise  indicated,  the address of each listed stockholder is c/o
     5300 South 360 West, Suite 250, Salt Lake City, Utah 84123.

(2)  This  stock  is  owned  by the  George  R.  and  Shirley  C.  Quist  Family
     Partnership, Ltd., of which George R. Quist is the general partner.

(3)  The  trustees of the  Employee  Stock  Ownership  Plan (ESOP) are George R.
     Quist, Scott M. Quist, and Robert G. Hunter, who exercise shared voting and
     investment powers.

(4)  Does not  include  507,490  shares of Class A Common  Stock  and  1,408,653
     shares  of  Class C Common  Stock  owned by the  Company's  Employee  Stock
     Ownership Plan (ESOP), of which George R. Quist, Scott M. Quist, and Robert
     G. Hunter are the  trustees and  accordingly,  exercise  shared  voting and
     investment powers with respect to such shares.

(5)  Does not include  84,170 shares of Class A Common Stock and 594,658  shares
     of Class C Common  Stock  owned by  Associated  Investors,  a Utah  general
     partnership,  of  which  George  R.  Quist  is the  managing  partner  and,
     accordingly,  exercises  voting and investment  powers with respect to such
     shares.


<PAGE>



(6)  Does not  include  171,222  shares  of Class A  Common  Stock  owned by the
     Company's 401(k) Retirement  Savings Plan, of which George R. Quist,  Scott
     M. Quist, and Robert G. Hunter are members of the Investment Committee and,
     accordingly,  exercise shared voting and investment  powers with respect to
     such shares.

(7)  Does  not  include  76,997  shares  of Class A  Common  Stock  owned by the
     Company's Deferred Compensation Plan, of which George R. Quist and Scott M.
     Quist are members of the Investment  Committee and,  accordingly,  exercise
     shared voting and investment powers with respect to such shares.

(8)  Includes options to purchase 184,000 shares of Class A Common Stock granted
     to  George  R.  Quist  that  are  currently   exercisable  or  will  become
     exercisable within 60 days of March 31, 2003.

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

(10) Includes options to purchase 112,000 shares of Class A Common Stock granted
     to Scott M. Quist that are currently exercisable or will become exercisable
     within 60 days of March 31, 2003.

(11) Includes  options to purchase 40,250 shares of Class A Common Stock granted
     to  G.  Robert  Quist  that  are  currently   exercisable  or  will  become
     exercisable within 60 days of March 31, 2003.

(12) Based on a Schedule 13D dated January 8, 2003, filed jointly by Ault Glazer
     & Company  Investment  Company LLC ("Ault  Glazer & Company") and Milton C.
     Ault, III, Managing Director and Chief Investment  Officer of Ault Glazer &
     Company.  According to the Schedule 13D, Ault Glazer & Company reported the
     beneficiary  ownership  of  308,863  shares  of  Class A Common  Stock  (as
     adjusted to reflect the 5% stock dividend issued on February 28, 2003). Mr.
     Ault has sole voting and investment powers with respect to such shares.

(13) Includes  options to purchase 58,076 shares of Class A Common Stock granted
     to Mr. Beckstead that are currently  exercisable or will become exercisable
     within 60 days of March 31, 2003.

(14) Includes  options to purchase 15,250 shares of Class A Common Stock granted
     to Mr.  Sill that are  currently  exercisable  or will  become  exercisable
     within 60 days of March 31, 2003.

(15) Includes  options to purchase  2,261 shares of Class A Common Stock granted
     to Mr. Hunter that are  currently  exercisable  or will become  exercisable
     within 60 days of March 31, 2003.

(16) Includes  options to purchase  2,261 shares of Class A Common Stock granted
     to Mr. Wilbur that are  currently  exercisable  or will become  exercisable
     within 60 days of March 31, 2003.

(17) Includes  options to purchase  2,261 shares of Class A Common Stock granted
     to Mr. Crittenden that are currently exercisable or will become exercisable
     within 60 days of March 31, 2003.

(18) Includes  options to purchase  2,261 shares of Class A Common Stock granted
     to Mr.  Moody that are  currently  exercisable  or will become  exercisable
     within 60 days of March 31, 2003.

     The  Company's  officers  and  directors,  as  a  group,  own  beneficially
approximately 45.4% of the outstanding shares of the Company's Class A and Class
C Common Stock.


<PAGE>
<TABLE>
<CAPTION>



                COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

Executive Officer Compensation

     The  following  table sets forth,  for each of the last three fiscal years,
the  compensation  received by George R. Quist,  the  Company's  Chairman of the
Board  and  Chief  Executive   Officer,   and  all  other   executive   officers
(collectively,  the "Named  Executive  Officers")  at December 31,  2002,  whose
salary and bonus for all  services in all  capacities  exceed  $100,000  for the
fiscal year ended December 31, 2002.

                                      Summary Compensation Table
                                  Annual Compensation                          Long-Term Compensation
                                                    Other
                                                   Annual        Restricted   Securities    Long-Term    All Other
    Name and                                      Compen-          Stock     Underlying     Incentive     Compen-
Principal Position   Year  Salary($)  Bonus($)    sation($)(2)    Awards($) Options/SARs(#) Payout($)   sation($)(3)
- ------------------   ----  ---------  --------    ------------    --------- --------------- ---------   ------------
<S>                  <C>   <C>        <C>           <C>             <C>      <C>             <C>        <C>
George R. Quist (1)  2002  $165,600   $25,000       $2,400            0            0           0         $31,186
  Chairman of the    2001   148,737    20,200        2,400            0       50,000           0          37,358
  Board and Chief    2000   147,204    20,200        2,400            0       50,000           0           5,281
  Executive Officer

Scott M. Quist (1)   2002  $179,400   $35,000       $7,200            0            0           0         $24,066
  President, Chief   2001   152,525    20,000        7,200            0       35,000           0          34,739
  Operating Officer
  and Director       2000   140,400    18,770        7,200            0       35,000           0             637
</TABLE>

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

(2)  The amounts indicated under "Other Annual Compensation" consist of payments
     related to the operation of  automobiles by the Named  Executive  Officers.
     However,  such  payments do not include the  furnishing of an automobile by
     the  Company  to George R.  Quist and  Scott M.  Quist nor the  payment  of
     insurance and property  taxes with respect to the  automobiles  operated by
     the Named Executive Officers.

(3)  The amounts indicated under "All Other Compensation" consist of (a) amounts
     contributed  by the  Company  into a trust  for the  benefit  of the  Named
     Executive  Officers  under  the  Security  National  Financial  Corporation
     Deferred Compensation Plan (for the years 2002, 2001, and 2000 such amounts
     were George R. Quist, $16,207,  $32,077, and $0 respectively;  and Scott M.
     Quist, $19,219, $34,102, and $0 respectively);  (b) insurance premiums paid
     by the Company with respect to a group life  insurance plan for the benefit
     of the Named  Executive  Officers (for the years 2002,  2001 and 2000, such
     amounts were for George R. Quist $125,  $637,  and $637  respectively;  for
     Scott M. Quist  $642,  $637,  and $637  respectively);  (c) life  insurance
     premiums  paid by the  Company  for the  benefit of the family of George R.
     Quist  ($4,644 for each of the years 2002,  2001 and 2000);  Scott M. Quist
     ($4,205 for the year 2002, $0 for 2001 and $0 for 2000);  (d)  compensation
     paid for the cashless  exercise of 50,000 shares of Company stock exercised
     by George R. Quist ($10,210) The amounts under "All Other  Compensation" do
     not include the no interest loan in the amount of $172,000 that the Company
     made to George R. Quist on April 29, 1998, to exercise stock  options.  See
     "Item 13 Certain Relationships and Related Transactions".


<PAGE>


     The  following  table sets forth  information  concerning  the  exercise of
options to acquire shares of the Company's  Common Stock by the Named  Executive
Officers  during  the  fiscal  year  ended  December  31,  2002,  as well as the
aggregate  number and value of unexercised  options held by the Named  Executive
Officers on December 31, 2002.

     Aggregated  Option/SAR  Exercised  in Last Fiscal Year and Fiscal  Year-End
Option/SAR Values:
<TABLE>
<CAPTION>


                                                Number of
                                               Securities
                                               Underlying                         Value of
                                               Unexercised                       Unexercised
                                               Options/SARs                      In-the-Money
              Shares                               at                            Options/SARs at
            Acquired on                        December 31,                     December 31,
             Exercise       Value                2002(#)                           2002
Name           (#)        Realized    Exercisable      Unexercisable     Exercisable    Unexercisable
- ----         --------     --------    -----------      -------------     -----------    -------------
<S>           <C>       <C>            <C>               <C>             <C>             <C>
George R.
  Quist       44,946    $233,719        84,000            44,100          $192,120        $192,075
Scott M.
  Quist       56,341    $292,975        42,000            44,100          $113,100        $201,675
</TABLE>

Retirement Plans

     George R. Quist,  who has been Chairman and Chief Executive  Officer of the
Company  since  1979,  and  President  from 1979 to July  2002,  has a  Deferred
Compensation   Agreement,   dated  December  8,  1988,  with  the  Company  (the
"Compensation  Agreement").  This  Compensation  Agreement was amended effective
January 2, 2001, to reflect the following  benefits.  The employment  agreements
between the Company  and George R. Quist be amended to adjust for  inflation  in
accordance with the United States Consumer Index commencing January 2, 2002, and
for each year thereafter of the term of the agreement and that for the year 2001
the  adjustment  for his  retirement  is $60,000 per year instead of $50,000 per
year. The agreements  shall also be amended to provide his spouse,  in the event
of his  pre-mature  death,  with health  insurance  coverage  equivalent to that
carried on executive  personnel  with the coverage for the entire  period of the
agreement.  In the event of death of George R. Quist and his spouse prior to the
expiration of the terms of the  agreement,  payments shall be paid to his estate
or as otherwise directed by him in writing.

     The Compensation Agreement further provides that the Board of Directors may
elect to pay the entire amount of deferred  compensation in the form of a single
lump-sum  payment  or other  installment  payments,  so long as the term of such
payments does not exceed 10 years.  However, in the event Mr. Quist's employment
with the Company is terminated  for any reason other than  retirement,  death or
disability,  the entire  deferred  compensation  shall be  forfeited by him. The
Company has accrued a liability for the  Compensation  Agreement at December 31,
2002 of $294,000.

Employment Agreement

     The Company  maintains an  employment  agreement  with Scott M. Quist.  The
agreement,  which has a five-year term, was entered into in 1996, and renewed in
1997 and 2002. Under the terms of the agreement, Mr. Quist is to devote his full
time  to the  Company  serving  as its  President,  General  Counsel  and  Chief
Operating  Officer  at not less than his  current  salary and  benefits,  and to
include $500,000 of life insurance protection.  In the event of disability,  Mr.
Quist's  salary  would be  continued  for up to five years at 50% of its current
level.  In the event of a sale or merger of the Company,  and Mr. Quist were not
retained in his current position, the Company would be obligated to continue Mr.
Quist's current  compensation  and benefits for seven years following the merger
or sale.



<PAGE>


Director Compensation

     Directors of the Company (but not including  directors  who are  employees)
are paid a director's  fee of $12,000 per year by the Company for their services
and are reimbursed for their expenses in attending board and committee meetings.
No  additional  fees are paid by the  Company  for  committee  participation  or
special assignments.  However, each director is provided with an annual grant of
stock  options to purchase  1,000  shares of Class A Common Stock under the 2000
Director Stock Option Plan.

Employee 401(k) Retirement Savings Plan

     In 1995,  the  Company's  Board of  Directors  adopted a 401(k)  Retirement
Savings  Plan.  Under the terms of the 401(k)  plan,  effective as of January 1,
1995, the Company may make discretionary  employer matching contributions to its
employees who choose to  participate  in the plan.  The plan allows the board to
determine  the amount of the  contribution  at the end of each  year.  The Board
adopted a  contribution  formula  specifying  that such  discretionary  employer
matching   contributions  would  equal  50%  of  the  participating   employee's
contribution to the plan to purchase Company stock up to a maximum discretionary
employee  contribution of 1/2% of a participating  employee's  compensation,  as
defined by the plan.

     All persons who have completed at least one year's service with the Company
and satisfy other plan  requirements  are eligible to  participate in the 401(k)
plan. All Company matching  contributions  are invested in the Company's Class A
Common Stock. The Company's matching contributions for 2002, 2001, and 2000 were
approximately  $7,975,  $18,458,  and 0,  respectively.  Also,  the  Company may
contribute at the  discretion  of the  Company's  Board of Directors an Employer
Profit  Sharing  Contribution  to the 401(k) plan.  The Employer  Profit Sharing
Contribution  shall be divided among three different  classes of participants in
the  plan  based  upon  the  participant's  title in the  Company.  All  amounts
contributed  to the plan are  deposited  into a trust  fund  administered  by an
independent trustee. The Company's  contributions to the plan for 2002, 2001 and
2000, were $142,218, $260,350, and $0, respectively.

Employee Stock Ownership Plan

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

     Under the  Ownership  Plan,  the  Company has  discretionary  power to make
contributions on behalf of all eligible employees into a trust created under the
Ownership Plan.  Employees  become eligible to participate in the Ownership Plan
when they have attained the age of 19 and have  completed one year of service (a
twelve-month  period in which the  Employee  completes  at least  1,040 hours of
service). The Company's  contributions under the Ownership Plan are allocated to
eligible employees on the same ratio that each eligible employee's  compensation
bears to total  compensation  for all eligible  employees  during each year.  To
date,  the Ownership Plan has  approximately  170  participants  and had $99,612
contributions  payable to the Plan in 2002.  Benefits  under the Ownership  Plan
vest as follows: 20% after the third year of eligible service by an employee, an
additional 20% in the fourth, fifth, sixth and seventh years of eligible service
by an employee.

     Benefits  under the  Ownership  Plan will be paid out in one lump sum or in
installments in the event the employee becomes disabled,  reaches the age of 65,
or is  terminated  by the  Company  and  demonstrates  financial  hardship.  The
Ownership Plan  Committee,  however,  retains  discretion to determine the final
method of payment. Finally, the Company reserves the right to amend or terminate
the  Ownership  Plan at any  time.  The  trustees  of the trust  fund  under the
Ownership  Plan are George R. Quist,  Scott M. Quist and Robert G.  Hunter,  who
each serve as a director of the Company.

Deferred Compensation Plan

     In 2001, the Company's Board of Directors  adopted a Deferred  Compensation
Plan.  Under the terms of the  Deferred  Compensation  Plan,  the  Company  will
provide  deferred  compensation  for a select  group  of  management  or  highly
compensated  employees,  within the meaning of Sections  201(2),  301(a)(3)  and
401(a)(1) of the Employee  Retirement  Income  Security Act of 1974, as amended.
The board has appointed a committee of the Company to be the plan  administrator
and to determine the employees who are eligible to  participate in the plan. The
employees  who  participate  may elect to defer a portion of their  compensation
into the plan. The Company may contribute into the plan at the discretion of the
Company's Board of Directors.  The Company's  contribution for 2002 and 2001 was
$100,577 and $220,038, respectively.

1987 Incentive Stock Option Plan

     In 1987, the Company adopted the 1987 Incentive Stock Option Plan (the 1987
Plan).  The 1987 Plan  provides  that shares of the Class A Common  Stock of the
Company may be optioned to certain  officers  and key  employees of the Company.
The Plan establishes a Stock Option Plan Committee,  which selects the employees
to whom the options will be granted,  and determines the price of the stock. The
Plan  establishes the minimum  purchase price of the stock at an amount which is
not less than 100% of the fair  market  value of the stock  (110% for  employees
owning  more than 10% of the  total  combined  voting  power of all  classes  of
stock).

     The Plan  provides  that if  additional  shares of Class A Common Stock are
issued  pursuant to a stock split or a stock  dividend,  the number of shares of
Class A Common Stock then covered by each outstanding  option granted  hereunder
shall be increased  proportionately with no increase in the total purchase price
of the shares then so covered,  and the number of shares of Class A Common Stock
reserved for the purpose of the Plan shall be increased by the same  proportion.
In the event that the shares of Class A Common Stock of the Company from time to
time issued and outstanding  are reduced by a combination of shares,  the number
of  shares of Class A Common  Stock  then  covered  by each  outstanding  option
granted  hereunder  shall be reduced  proportionately  with no  reduction in the
total price of the shares  then so covered,  and the number of shares of Class A
Common Stock  reserved for the purposes of the Plan shall be reduced by the same
proportion.

     The Plan terminated in 1997 and options granted are  non-transferable.  The
Plan permits the holder of the option to elect to receive cash, amounting to the
difference  between the option  price and the fair market  value of the stock at
the time of the  exercise,  or a lesser amount of stock  without  payment,  upon
exercise of the option.

1993 Stock Option Plan

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

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

     The 1993  Plan is to be  administered  by the  Board of  Directors  or by a
committee  designated by the Board. The terms of options granted or stock awards
or sales  affected  under  the 1993  Plan are to be  determined  by the Board of
Directors or its committee. The Plan provides that if the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company  shall issue any shares of Common  Stock as a stock  dividend on its
outstanding  Common Stock, the number of shares of Common Stock deliverable upon
the exercise of Options  shall be increased  or decreased  proportionately,  and
appropriate adjustments shall be made in the purchase price per share to reflect
such  subdivision,  combination or stock  dividend.  In addition,  the number of
shares of Common  Stock  reserved  for purposes of the Plan shall be adjusted by
the same  proportion.  No options may be  exercised  for a term of more than ten
years from the date of grant.


<PAGE>


     Options  intended  as  incentive  stock  options  may  be  issued  only  to
employees,  and must meet certain  conditions  imposed by the code,  including a
requirement that the option exercise price be no less than the fair market value
of the  option  shares on the date of grant.  The 1993  Plan  provides  that the
exercise price for  non-qualified  options will be not less than at least 50% of
the fair  market  value of the stock  subject  to such  option as of the date of
grant of such options, as determined by the Company's Board of Directors.

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

2000 Director Stock Option Plan

     On October 16, 2000, the Company  adopted the 2000  Directors  Stock Option
Plan (the  "Director  Plan")  effective  November  1, 2000.  The  Director  Plan
provides  for the grant by the Company of options to purchase up to an aggregate
of 50,000 shares of Class A Common Stock for issuance  thereunder.  The Director
Plan provides that each member of the Company's Board of Directors who is not an
employee or paid consultant of the Company  automatically is eligible to receive
options to purchase the Company's Class A Common Stock under the Director Plan.

     Effective  as of November 1, 2000,  and on each  anniversary  date  thereof
during the term of the Director Plan, each outside director shall  automatically
receive an option to purchase 1,000 shares of Class A Common Stock. In addition,
each new outside  director  who shall  first join the Board after the  effective
date shall be granted an option to  purchase  1,000  shares  upon the date which
such person first  becomes an outside  director and an annual grant of an option
to purchase 1,000 shares on each anniversary date thereof during the term of the
Director  Plan.  The options  granted to outside  directors  shall vest in their
entirety on the first anniversary date of the grant. The primary purposes of the
Director  Plan are to  enhance  the  Company's  ability  to  attract  and retain
well-qualified  persons for service as directors  and to provide  incentives  to
such directors to continue their association with the Company.

     In the event of a merger of the Company with or into another company,  or a
consolidation,  acquisition  of  stock or  assets  or other  change  in  control
transaction  involving the Company,  each option  becomes  exercisable  in full,
unless such  option is assumed by the  successor  corporation.  In the event the
transaction  is not  approved by a majority of the  "Continuing  Directors"  (as
defined in the Director Plan),  each option becomes fully vested and exercisable
in full immediately  prior to the consummation of such  transaction,  whether or
not assumed by the successor corporation.

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

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers,  directors and persons who own more than 10% of any class of
the Company's  common stock to file reports of ownership and periodic changes in
ownership  of the  Company's  common  stock  with the  Securities  and  Exchange
Commission. Such persons are also required to furnish the Company with copies of
all Section 16(a) reports they file.

     Based  solely on its review of the copies of stock  reports  received by it
with respect to fiscal 2002, or written  representations  from certain reporting
persons,  the Company  believes that all filing  requirements  applicable to its
directors,  officers and greater than 10% beneficial  owners were compiled with,
except that Charles L. Crittenden and H. Craig Moody,  directors of the Company,
through  an  oversight,  each  filed  one late  report on Form 4  reporting  the
purchases of shares of Class A Common Stock.


<PAGE>

                     APPROVAL OF THE 2003 STOCK OPTION PLAN

                                   PROPOSAL 2

     Management has prepared for approval by the Company's  stockholders  of the
Security National Financial Corporation 2003 Stock Option Plan (the "2003 Plan")
and  proposes  the  reservation  of 500,000  shares of Class A Common  Stock and
1,000,000 shares of Class C Common Stock for issuance thereunder.  The 2003 Plan
has been  approved by the Board of  Directors on May 9, 2003.  The  stockholders
will be asked to approve the  adoption of the 2003 Plan and the  reservation  of
shares of issuance thereunder at the Annual Meeting of Stockholders.  Management
recommends that  stockholders  vote for the approval of the adoption of the 2003
Plan so as to allow the grant of options  and the  issuance of shares as a means
of providing  equity  incentives  to key  personnel,  giving them a  proprietary
interest in the Company and its success and progress.  The  affirmative  vote of
the  holders  of a  majority  of the  outstanding  shares  entitled  to vote and
represented  at the Annual  Meeting  will be required to approve the adoption of
the 2003 Plan.

     The 2003 Plan  provides  for the grant of options  and the award or sale of
stock to officers,  directors,  and  employees of the Company.  Both  "incentive
stock  options",  as defined under Section 422A of the Internal  Revenue Code of
1986 (the  "Code") and  "non-qualified  options"  may be granted  under the 2003
Plan.

     The 2003  Plan is to be  administered  by the  Board of  Directors  or by a
committee  designated by the Board. The terms of options granted or stock awards
or sales  affected  under  the 2003  Plan are to be  determined  by the Board of
Directors or its committee.  No options may be exercised for a term of more than
ten years from the date of grant.  Options  intended as incentive  stock options
may be issued only to employees, and must meet certain conditions imposed by the
code,  including a requirement  that the option  exercise  price be no less than
then fair market value of the option shares on the date of grant.  The 2003 Plan
provides that the exercise price for non-qualified options will be not less than
at least 50% of the fair market value of the stock  subject to such option as of
the date of grant of such  options,  as  determined  by the  Company's  Board of
Directors.

     The 2003 Plan has a term of ten years.  The Board of Directors may amend or
terminate the 2003 Plan at any time,  from time to time,  subject to approval of
certain modifications to the 2003 Plan by the shareholders of the Company as may
be required by law or the 2003 Plan.


           The Board of Directors unanimously recommends a vote "FOR"
                 the approval of the 2003 Stock Option Plan and
              reservation of 500,000 shares of Class A Common Stock
      and 1,000,000 shares of Class C Common Stock for issuance thereunder


                      REPORT OF THE COMPENSATION COMMITTEE


     Under rules  established  by the Securities  and Exchange  Commission  (the
"Commission"),  the Company is required to provide  certain data and information
in regard to the compensation and benefits provided to the Company's Chairman of
the Board of  Directors  and Chief  Executive  Officer  and the four  other most
highly compensated executive officers.  In fulfillment of this requirement,  the
Compensation Committee, at the direction of the Board of Directors, has prepared
the following report for inclusion in this Proxy Statement.

     Executive Compensation Philosophy.  The Compensation Committee of the Board
of  Directors  is  composed  of three  directors,  two of whom are  independent,
outside  directors.  The  Compensation  Committee is responsible for setting and
administering the policies and programs that govern both annual compensation and
stock  ownership  programs  for  the  executive  officers  of the  Company.  The
Company's  executive  compensation  policy is based on  principles  designed  to
ensure  that  an  appropriate  relationship  exists  between  executive  pay and
corporate performance, while at the same time motivating and retaining executive
officers.

     Executive  Compensation  Components.  The key  components  of the Company's
compensation  program are base salary,  an annual  incentive  award,  and equity
participation.  These  components  are  administered  with the goal of providing
total  compensation that is competitive in the marketplace,  rewards  successful
financial  performance and aligns  executive  officers'  interests with those of
stockholders.  The  Compensation  Committee  reviews each component of executive
compensation on an annual basis.


<PAGE>


     Base  Salary.  Base  salaries  for  executive  officers  are set at  levels
believed by the  Compensation  Committee to be  sufficient to attract and retain
qualified  executive  officers.  Base pay  increases  are  provided to executive
officers based on an evaluation of each executive's performance,  as well as the
performance  of the  Company as a whole.  In  establishing  base  salaries,  the
Compensation  Committee  not only  considers the  financial  performance  of the
Company,  but also the  success of the  executive  officers  in  developing  and
executing the Company's  strategic plans,  developing  management  employees and
exercising  leadership.  The  Compensation  Committee  believes  that  executive
officer base  salaries for 2002 were  reasonable  as compared to amounts paid by
companies of similar size.

     Annual Incentive.  The Compensation  Committee  believes that a significant
proportion of total cash  compensation for executive  officers should be subject
to attainment of specific Company financial performance. This approach creates a
direct incentive for executive officers to achieve desired performance goals and
places a significant  percentage of each  executive  officer's  compensation  at
risk.  Consequently,  each year the Compensation Committee establishes potential
bonuses for executive  officers  based on the Company's  achievement  of certain
financial  performance.  The  Compensation  Committee  believes  that  executive
officer  annual  bonuses for 2002 were  reasonable as compare to amounts paid by
companies of similar size.

     Stock   Options.   The   Compensation   Committee   believes   that  equity
participation is a key component of its executive  compensation  program.  Stock
options are  granted to  executive  officers  primarily  based on the  officer's
actual and potential  contribution to the Company's growth and profitability and
competitive  marketplace  practices.   Option  grants  are  designed  to  retain
executive  officers and motivate them to enhance  stockholder  value by aligning
the financial interests of executive officers with those of stockholders.  Stock
options also provide an effective incentive for management to create stockholder
value over the long term  since the full  benefit  of the  compensation  package
cannot be realized  unless an appreciation in the price of the Company's Class A
Common Stock occurs over a number of years.

     Compensation  of Chief  Executive  Officer.  Consistent  with the executive
compensation policy and components  described above, the Compensation  Committee
determined the salary,  bonus and stock options received by George R. Quist, the
Chairman of the Board and Chief Executive  Officer of the Company,  for services
rendered in 2002. Mr. Quist received a base salary of $165,600 for 2002. He also
received an annual bonus of $25,000 and stock options to purchase  80,000 shares
of the Company's Class A Common Stock.

                                            COMPENSATION COMMITTEE

                                            George R. Quist, Chairman
                                            Charles L. Crittenden
                                            Norman G. Wilbur

                          REPORT OF THE AUDIT COMMITTEE

     The  Company  has an Audit  Committee  consisting  of three  non-management
directors,  Charles L. Crittenden,  H. Craig Moody,  and Norman G. Wilbur.  Each
member of the  Audit  Committee  is  considered  independent  and  qualified  in
accordance with  applicable  independent  director and audit  committee  listing
standards.  The Company's  Board of Directors has adopted a written  charter for
the Audit Committee.

     During  the year  2002,  the  Audit  Committee  met two  times.  The  Audit
Committee has met with management and discussed the Company's internal controls,
the quality of the Company's  financial  reporting,  the results of internal and
external audit examinations,  and the audited financial statements. In addition,
the Audit Committee has met with the Company's  independent  auditors,  Tanner +
Co., and discussed all matters required to be discussed by the auditors with the
Audit Committee under Statement on Auditing Standards No. 61 (communication with
audit committees).  The Audit Committee reviewed and discussed with the auditors
their  annual  written  report on their  independence  from the  Company and its
management,  which is made under  Independence  Standards  Board  Standard No. 1
(independence  discussions  with  audit  committees),  and  considered  with the
auditors  whether the  provision of  financial  information  systems  design and
implementation  and other  non-audit  services  provided  by them to the Company
during 2002 was compatible with the auditors' independence.

     In  performing  these  functions,  the  Audit  Committee  acts  only  in an
oversight  capacity.  In its oversight role, the Audit  Committee  relies on the
work and assurances of the Company's  management,  which is responsible  for the
integrity of the Company's  internal  controls and its financial  statements and
reports,  and  the  Company's  independent  auditors,  who are  responsible  for
performing  an  independent  audit  of the  Company's  financial  statements  in
accordance with generally  accepted auditing  standards and for issuing a report
on these financial statements.


<PAGE>



     Pursuant  to  the  reviews  and  discussions  described  above,  the  Audit
Committee  recommended  to the Board of  Directors  that the  audited  financial
statements  be  included  in the  Company's  Annual  Report on Form 10-K for the
fiscal year ended December 31, 2002, for filing with the Securities and Exchange
Commission.

                                                 AUDIT COMMITTEE

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


                         COMPANY STOCK PRICE PERFORMANCE

     This graph below compares the cumulative  total  stockholder  return of the
Company's Class A Common Stock with the cumulative  total return on the Standard
& Poor's  500 Stock  Index and the  Standard  & Poor's  Insurance  Index for the
period from December 31, 1997 through  December 31, 2002. The graph assumes that
the value of the investment in the Company's Class A Common Stock and in each of
the  indexes  was  $100 at  December  31,  1997,  and that  all  dividends  were
reinvested.

     The comparisons in the graph below are based on historical data and are not
intended to forecast the possible  future  performance of the Company's  Class A
Common Stock.
<TABLE>
<CAPTION>

                        December 31      December 31       December 31       December 31      December 31     December 31
                            1997             1998             1999               2000             2001           2002
                            ----             ----             ----               ----             ----           ----
<S>                         <C>             <C>               <C>                <C>              <C>              <C>
Security National
   Financial Corporation     100               75               93                 65                75             200
S&P 500                      100              127              151                136               118              91
S&P Insurance Index          100              108              115                154               133             105

</TABLE>

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


<PAGE>



          RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

                                   PROPOSAL 3

     The  independent  public  accounting  firm of  Tanner  + Co.  has  been the
Company's  independent  accountants since December 31, 1999. The Audit Committee
has  recommended  and the Board of  Directors  has  appointed  Tanner + Co.  for
purposes of auditing the  consolidated  financial  statements of the Company for
the fiscal year ending December 31, 2003. It is anticipated that representatives
of Tanner + Co.  will be present at the Annual  Meeting  and will be provided an
opportunity  to make a statement if they desire,  and to be available to respond
to appropriate questions.

      The Board of Directors recommends that stockholders vote "FOR"
ratification of the appointment of Tanner + Co. as the Company's independent
accountants for fiscal year ending December 31, 2003.

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

     Fees  for the  year  2002  annual  audit of the  financial  statements  and
employee  benefit  plans  and  related  quarterly  reviews  were   approximately
$194,195. There were $6,390 other fees during 2002.

                                  OTHER MATTERS

     The  Company  knows of no other  matters  to be  brought  before the Annual
Meeting,  but if other  matters  properly  come  before the  meeting,  it is the
intention of the persons  named in the enclosed form of Proxy to vote the shares
they represent in accordance with their judgment.

                     ANNUAL REPORT AND FINANCIAL STATEMENTS

     You are  referred  to the  Company's  annual  report,  including  financial
statements,  for the fiscal year ended  December 31, 2002.  The annual report is
incorporated  in this Proxy  Statement and is not to be  considered  part of the
soliciting  material.   The  Company  will  provide,   without  charge  to  each
stockholder  upon written  request,  a copy of the Company's  Annual Report Form
10-K as filed with the  Securities  and Exchange  Commission for the fiscal year
ended  December  31,  2002.  Such  requests  should be directed to Mr. G. Robert
Quist,  First Vice President and Secretary,  at P.O. Box 57250,  Salt Lake City,
Utah 84157-0250.

                 DEADLINE FOR RECEIPT OF STOCKHOLDER'S PROPOSALS
                   FOR ANNUAL MEETING TO BE HELD IN JULY 2004

     Any proposal by a stockholder  to be presented at the Company's next Annual
Meeting of Stockholders expected to be held in July 2004 must be received at the
offices of the Company,  P.O. Box 57250,  Salt Lake City,  Utah  84157-0250,  no
later than March 31, 2004.

                                      By order of the Board of Directors,



                                      G. Robert Quist
                                      First Vice President and Secretary

June 5,  2003
Salt Lake City, Utah


<PAGE>



                     SECURITY NATIONAL FINANCIAL CORPORATION

                             2003 STOCK OPTION PLAN


1.   Purpose.  This 2003 Stock  Option Plan (the  "Plan") is intended to provide
     incentives:  (a) to the officers and other  employees of Security  National
     Financial Corporation,  a Utah corporation (the "Company"), and any present
     or   future   subsidiaries   of   the   Company   (collectively,   "Related
     Corporations")  by providing them with  opportunities  to purchase stock in
     the  Company  pursuant  to  options  granted  hereunder  which  qualify  as
     "incentive  stock  options" under Section  422A(b) of the Internal  Revenue
     Code of 1986 (the "Code")  ("ISO" or "ISOs");  (b) to directors,  officers,
     employees  and  consultants  of the  Company and  Related  Corporations  by
     providing them with opportunities to purchase stock in the Company pursuant
     to options granted  hereunder which do not qualify as ISOs  ("Non-Qualified
     Option" or "Non-Qualified Options"); (c) to directors,  officers, employees
     and  consultants of the Company and Related  Corporations by providing them
     with  awards  of stock in the  Company  ("Awards");  and (d) to  directors,
     officers, employees and consultants of the Company and Related Corporations
     by providing them with  opportunities  to make direct purchases of stock in
     the Company ("Purchases"). Both ISOs and Non-Qualified Options are referred
     to hereafter  individually  as an "Option" and  collectively  as "Options."
     Options,  Awards and  authorizations  to make  Purchases  are  referred  to
     hereafter  collectively  as  "Stock  Rights."  As used  herein,  the  terms
     "parent"  and  "subsidiary"  mean  "parent   corporation"  and  "subsidiary
     corporation,"  respectively,  as those  terms are defined in Section 425 of
     the Code.

2.   Administration of the Plan.

     (a)  Board or  Committee  Administration.  The Plan  shall be  administered
solely by the Board of Directors of the Company (the "Board") or a  Compensation
Committee  (the  "Committee")  of not less  than  two  members  of the  Board of
Directors.  Hereinafter,  all references in this Plan to the  "Committee"  shall
mean the Board if no Committee has been  appointed.  Subject to  ratification of
the grant or  authorization  of each Stock Right by the Board (if so required by
applicable state law), and subject to the terms of the Plan, the Committee shall
have the  authority to (i)  determine  the  employees of the Company and Related
Corporations  (from among the class of employees  eligible under  paragraph 3 to
receive  ISOs) to whom ISOs may be  granted,  and to  determine  (from among the
class  of  individuals  and  entities  eligible  under  paragraph  3 to  receive
Non-Qualified  Options and Awards and to make  Purchases) to whom  Non-Qualified
Options,  Awards and  authorizations  to make  Purchases  may be  granted;  (ii)
determine  the time or times  at which  Options  or  Awards  may be  granted  or
Purchases  made;  (iii)  determine  the option  price of shares  subject to each
Option,  which  price  shall not be less than the  minimum  price  specified  in
paragraph 6, and the purchase  price of shares  subject to each  Purchase;  (iv)
determine whether each Option granted shall be an ISO or a Non-Qualified Option;
(v) determine  (subject to paragraph 7) the time or times when each Option shall
become  exercisable  and the duration of the  exercise  period;  (vi)  determine
whether  restrictions  such as  repurchase  options  are to be imposed on shares
subject to Options, Awards and Purchases and the nature of such restrictions, if
any,  and  (vii)  interpret  the  Plan  and  prescribe  and  rescind  rules  and
regulations relating to it. If the Committee determines to issue a Non-Qualified
Option, it shall take whatever actions it deems necessary, under Section 422A of
the Code and the regulations promulgated thereunder,  to ensure that such Option
is not treated as an ISO. The  interpretation  and construction by the Committee
of any  provisions  of the Plan or of any Stock Right  granted under it shall be
final unless  otherwise  determined by the Board. The Committee may from time to
time adopt such rules and  regulations  for carrying out the Plan as it may deem
best. No member of the Board or the Committee  shall be liable for any action or
determination  made in good  faith with  respect to the Plan or any Stock  Right
granted under it.

     (b) Committee  Actions.  The Committee may select one of its members as its
chairman,  and shall hold meetings at such times and places as it may determine.
Acts by a majority of the  Committee,  or acts reduced to or approved in writing
by a majority  of the members of the  Committee,  shall be the valid acts of the
Committee.  From time to time the Board may increase  the size of the  Committee
and appoint additional  members thereof,  remove members (with or without cause)
and  appoint new  members in  substitution  therefore,  fill  vacancies  however
caused,  or  remove  all  members  of  the  Committee  and  thereafter  directly
administer the Plan.

     (c) Grant of Stock Rights to Board Members.  Stock Rights may be granted to
members  of the  Board,  but any  such  grant  shall  be made  and  approved  in
accordance  with paragraph  2(d), if  applicable.  All grants of Stock Rights to
members of the Board shall in all other respects be made in accordance  with the
provisions of this Plan  applicable to other  eligible  persons.  Members of the
Board who are either (i) eligible for Stock Rights  pursuant to the Plan or (ii)
have  been  granted  Stock  Rights  may  vote  on  any  matters   affecting  the
administration  of the Plan or the grant of any  Stock  Rights  pursuant  to the
Plan, except that no such member shall act upon the granting to himself of Stock
Rights,  but any such member may be counted in  determining  the  existence of a
quorum at any meeting of the Board  during which action is taken with respect to
the granting to him of Stock Rights.

     (d) Compliance with Federal Securities Laws. Various  restrictions apply to
officers and directors and others who may be deemed  insiders.  Holders of Stock
Rights should consult with legal and tax advisors  regarding the securities law,
tax law and other effects of transactions  under this Plan.  These  restrictions
relate to  holding  periods,  alternative  minimum  tax  calculations  and other
matters and should be clearly understood by the Stock Rights holder.

     (e) Intent of Plan. This Plan is intended to be an "employee  benefit plan"
under Rule 16b-3 promulgated under Section 16(b) of the Securities  Exchange Act
of 1934, as amended.  This Plan is also intended to be a  "compensatory  benefit
plan" under Rule 701  promulgated  under the Securities Act of 1933, as amended.
Transactions  under the Plan are  intended  to comply with these  rules.  To the
extent any  provisions  of the Plan or any action by the  Committee or the Board
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Commission or Board.

     (f) Shareholder Approval. Grants of incentive stock options hereunder shall
be subject to  shareholder  approval  of this Plan  within  twelve  (12)  months
following the date this Plan is approved by the Board.

3. Eligible  Employees  and Others.

     ISOs  may  be  granted  to  any  employee  of the  Company  or any  Related
Corporation.  Those  officers and directors of the Company who are not employees
may not be  granted  ISOs  under the Plan.  Non-Qualified  Options,  Awards  and
authorizations  to make  Purchases  may be granted to any  employee,  officer or
director  (whether or not also an employee) or  consultant of the Company or any
Related  Corporation.  The Committee may take into  consideration  a recipient's
individual circumstances in determining whether to grant an ISO, a Non-Qualified
Option,  an Award or an authorization to make a Purchase.  Granting of any Stock
Right to any  individual  or entity shall  neither  entitle that  individual  or
entity to, nor  disqualify him from,  participation  in any other grant of Stock
Rights.

4. Stock.

     The stock subject to Options,  Awards and Purchases shall be authorized but
unissued  shares of Class A Common  Stock of the  Company,  par value  $2.00 per
share,  and  Class C Common  Stock of the  Company,  par  value  $.20 per  share
(collectively  referred to as the  "Common  Stock"),  or shares of Common  Stock
reacquired by the Company in any manner.  The  aggregate  number of shares which
may be issued pursuant to the Plan is 500,000 shares of Class A Common Stock and
1,000,000  shares of Class C Common Stock,  subject to adjustment as provided in
paragraph  13. Any such shares may be issued as ISOs,  Non-Qualified  Options or
Awards,  or to persons or entities  making  Purchases,  so long as the number of
shares so issued does not exceed such number, as adjusted. If any Option granted
under the Plan shall  expire or  terminate  for any reason  without  having been
exercised in full or shall cease for any reason to be exercisable in whole or in
part, or if the Company shall  reacquire any unvested  shares issued pursuant to
Awards or  Purchases,  the  unpurchased  shares  subject to such Options and any
unvested shares so reacquired by the Company shall again be available for grants
of Stock Rights under the Plan.

5. Granting of Stock Rights.

     Stock  Rights  may be  granted  under the Plan at any time  until ten years
after the date of the  adoption of the Plan.  The date of grant of a Stock Right
under the Plan will be the date specified by the Committee at the time it grants
the Stock  Right;  provided,  however,  that such date shall not be prior to the
date on which the Committee acts to approve the grant.  The Committee shall have
the right, with the consent of the optionee, to convert an ISO granted under the
Plan to a Non-Qualified Option pursuant to paragraph 16.

6. Minimum Option Price; ISO Limitations.

     (a) Price for Non-Qualified Options. The exercise price per share specified
in the agreement  relating to each  Non-Qualified  Option granted under the Plan
shall in no event be less  than the  lesser  of (i) the book  value per share of
Common  Stock  as of the  end of the  fiscal  year  of the  Company  immediately
preceding the date of such grant, or (ii) fifty percent (50%) of the fair market
value  per  share of  Common  Stock on the date of such  grant.  Subject  to the
foregoing  sentence,   the  exercise  price  and  nature  of  consideration  for
Non-Qualified  Options granted hereunder shall be determined by the Committee or
Board in its sole discretion, taking into account factors it deems relevant.

     (b) Price for ISOs. The exercise price per share specified in the agreement
relating  to each ISO  granted  under  the Plan  shall not be less than the fair
market value per share of Common Stock on the date of such grant. In the case of
an ISO to be  granted  to an  employee  owning  stock  possessing  more than ten
percent (10%) of the total combined  voting power of all classes of stock of the
Company  or any  Related  Corporation,  the  price per  share  specified  in the
agreement  relating  to such ISO shall not be less than one  hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of grant.

     (c) $100,000  Annual  Limitation  on ISOs.  Each  eligible  employee may be
granted ISOs only to the extent that, in the  aggregate  under this Plan and all
incentive  stock option plans of the Company and any Related  Corporation,  such
ISOs do not become  exercisable  for the first time by such employee  during any
calendar year in a manner which would entitle the employee to purchase more than
$100,000 in fair market value  (determined at the time the ISOs were granted) of
Common Stock in that year. Any options  granted to an employee in excess of such
amount will be granted as Non-Qualified Options.

     (d) Awards and  Purchases.  Awards and  Purchases  under this Plan shall be
made at prices equal to the fair market value of the  Company's  Common Stock on
the date of such Award or Purchase. Fair Market Value shall be determined by the
Committee  or Board in its sole  discretion  in  accordance  with  Section  6(e)
hereof.  Shares of Common stock may be issued in Award and Purchase transactions
for any lawful consideration  determined by the Board or Committee,  in its sole
discretion.

     (e)  Determination  of Fair  Market  Value.  If,  at the time an  Option is
granted under the Plan,  the Company's  Common Stock is publicly  traded,  "fair
market  value"  shall be  determined  as of the last  business day for which the
prices or quotes discussed in this sentence are available prior to the date such
Option is granted  and shall mean (i) the average (on that date) of the high and
low prices of the Common Stock on the principal national  securities exchange on
which the  Common  Stock is  traded,  if the  Common  Stock is then  traded on a
national  securities  exchange;  or (ii) the last  reported  sale price (on that
date) of the Common  Stock on the NASDAQ  National  Market  List,  if the Common
Stock is not then traded on a national securities exchange; or (iii) the closing
bid  price  (or  average  of bid  prices)  last  quoted  (on  that  date)  by an
established  quotation service for  over-the-counter  securities,  if the Common
Stock is not reported on the NASDAQ National Market List. However, if the Common
Stock is not  publicly  traded at the time an Option is granted  under the Plan,
"fair market  value" shall be deemed to be the fair value of the Common Stock as
determined by the Committee after taking into consideration all factors which it
deems appropriate,  including, without limitation,  recent sale and offer prices
of the Common Stock in private transactions negotiated at arm's length.

7. Option Duration.

     Subject to earlier  termination  as provided in  paragraphs  9 and 10, each
Option shall expire on the date  specified by the  Committee,  but not more than
(i)  ten  (10)  years  and  one day  from  the  date  of  grant  in the  case of
Non-Qualified Options, (ii) ten (10) years from the date of grant in the case of
ISOs  generally,  and (iii) five (5) years from the date of grant in the case of
ISOs granted to an employee owning stock  possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or any
Related Corporation.  Subject to earlier termination as provided in paragraphs 9
and 10,  the term of each  ISO  shall  be the  term  set  forth in the  original
instrument  granting such ISO,  except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.

8. Exercise of Option.

     Subject to the  provisions of paragraphs 9 through 12, each Option  granted
under the Plan shall be exercisable as follows:

     (a) Vesting.  The Option shall either be fully  exercisable  on the date of
grant  or  shall  become  exercisable  thereafter  in such  installments  as the
Committee may specify.

     (b) Full Vesting of Installments.  Once an installment  becomes exercisable
it shall remain  exercisable  until  expiration  or  termination  of the Option,
unless otherwise specified by the Committee.

     (c) Partial  Exercise.  Each Option or installment  may be exercised at any
time or from time to time,  in whole or in part,  for up to the total  number of
shares with respect to which it is then exercisable.

     (d)  Acceleration  of  Vesting.  The  Committee  shall  have  the  right to
accelerate the date of exercise of any installment of any Option;  provided that
the  Committee  shall not,  without the consent of an optionee,  accelerate  the
exercise date of any installment of any Option granted to any employee as an ISO
(and not previously  converted into a Non-Qualified Option pursuant to paragraph
16) if such acceleration would violate the annual vesting  limitation  contained
in Section 422A(d) of the Code, as described in paragraph 6(c).

9. Termination of Employment.

     If an ISO  optionee  ceases to be  employed  by the Company and all Related
Corporations other than by reason of death or disability as defined in paragraph
10, no further  installments of such  optionee's ISOs shall become  exercisable,
and such  optionee's  ISOs shall terminate after the passage of ninety (90) days
from the date of  termination  of such  optionee's  employment,  but in no event
later than on their specified  expiration dates,  except to the extent that such
ISOs  (or   unexercised   installments   thereof)  have  been   converted   into
Non-Qualified  Options pursuant to paragraph 16.  Employment shall be considered
as continuing uninterrupted during any bona fide leave of absence (such as those
attributable to illness,  military obligations or governmental service) provided
that the period of such leave  does not exceed  ninety  (90) days or, if longer,
any period during which such  optionee's  right to reemployment is guaranteed by
statute. A bona fide leave of absence with the written approval of the Committee
shall not be considered an interruption of employment  under the Plan,  provided
that such written  approval  contractually  obligates the Company or any Related
Corporation to continue the employment of the optionee after the approved period
of absence.  ISOs granted  under the Plan shall not be affected by any change of
employment within or among the Company and Related Corporations,  so long as the
optionee continues to be an employee of the Company or any Related  Corporation.
Nothing in the Plan shall be deemed to give any  grantee of any Stock  Right the
right to be  retained  in  employment  or other  service  by the  Company or any
Related Corporation for any period of time.

10.      Death; Disability.

     (a) Death.  If an ISO optionee ceases to be employed by the Company and all
Related  Corporations  by  reason  of  such  optionee's  death,  any ISO of such
optionee may be exercised, to the extent of the number of shares with respect to
which the optionee could have exercised on the date of the optionee's  death, by
the optionee's estate,  personal  representative or beneficiary who has acquired
the ISO by will or by the laws of descent and distribution, at any time prior to
the  earlier of the  specified  expiration  date of the ISO or one year from the
date of the optionee's death.

     (b) Disability. If an ISO optionee ceases to be employed by the Company and
all  Related  Corporations  by  reason of  disability,  such  optionee  (or such
optionee's  custodian)  shall  have the right to  exercise  any ISO held by such
optionee on the date of termination  of employment,  to the extent of the number
of shares with respect to which the optionee  could have exercised on that date,
at any time prior to the earlier of the specified  expiration date of the ISO or
one year from the date of the termination of the optionee's employment.  For the
purposes of the Plan,  the term  "disability"  shall mean  "permanent  and total
disability" as defined in Section 22(e)(3) of the Code or any successor statute.

11. Assignability.

     No Option  or  Derivative  Security  as  defined  in Rule  16b-3  under the
Securities  Exchange  Act of 1934,  as amended  (the  "Exchange  Act")  shall be
assignable or  transferable by the optionee except as permitted under Rule 16b-3
under the  Exchange  Act or by will or by the laws of descent and  distribution,
and during the lifetime of the optionee each Option shall be exercisable only by
the optionee.

12. Terms and Conditions of Options.

     Options shall be evidenced by instruments  (which need not be identical) in
such forms as the  Committee  may from time to time  approve.  Such  instruments
shall conform to the terms and  conditions  set forth in paragraphs 6 through 11
hereof and may contain such other  provisions as the Committee  deems  advisable
which are not inconsistent with the Plan, including  restrictions  applicable to
shares of Common  Stock  issuable  upon  exercise  of Options.  In granting  any
Non-Qualified  Option, the Committee may specify that such Non-Qualified  Option
shall be subject to the  restrictions  set forth herein with respect to ISOs, or
to such other  termination  and  cancellation  provisions  as the  Committee may
determine.   The  Committee   may  from  time  to  time  confer   authority  and
responsibility  on one or more of its own members and/or one or more officers of
the Company to execute and deliver such instruments.  The proper officers of the
Company are  authorized  and  directed to take any and all action  necessary  or
advisable from time to time to carry out the terms of such instruments.

13.  Adjustments.

     Upon the occurrence of any of the following  events,  an optionee's  rights
with respect to Options  granted to the optionee  hereunder shall be adjusted as
hereinafter  provided,  unless  otherwise  specifically  provided in the written
agreement between the optionee and the Company relating to such Option:

     (a) Stock  Dividends and Stock Splits.  If the shares of Common Stock shall
be subdivided  or combined into a greater or smaller  number of shares or if the
Company  shall  issue  any  shares of Common  Stock as a stock  dividend  on its
outstanding  Common Stock, the number of shares of Common Stock deliverable upon
the  exercise  of  Options  shall  be   appropriately   increased  or  decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.

     (b) Assumption of Options by  Successors.  In the event of a dissolution or
liquidation  of the Company,  a merger in which the Company is not the surviving
corporation,  or the sale of substantially all of the assets of the Company, the
Committee may in its sole discretion accelerate the exercisability of any or all
outstanding  Options so that such Options would be  exercisable in full prior to
the consummation of such dissolution,  liquidation,  merger or sale of assets at
such times and on such conditions as the Committee shall  determine,  unless the
successor  corporation,  if any, assumes the outstanding  Options or substitutes
substantially equivalent options.


<PAGE>



     (c) Recapitalization or Reorganization.  In the event of a recapitalization
or  reorganization  of the  Company  (other  than  a  transaction  described  in
subparagraph  (b)  above)  pursuant  to which  securities  of the  Company or of
another  corporation are issued with respect to the outstanding shares of Common
Stock,  an optionee  upon  exercising an Option shall be entitled to receive for
the purchase  price paid upon such exercise the  securities  the optionee  would
have   received  if  the  optionee  had  exercised  the  Option  prior  to  such
recapitalization or reorganization.

     (d) Modification of ISOs.  Notwithstanding  the foregoing,  any adjustments
made  pursuant to  subparagraphs  (a),  (b) or (c) with respect to ISOs shall be
made only after the Committee,  after  consulting  with counsel for the Company,
determines  whether such adjustments  would constitute a "modification"  of such
ISOs (as that term is  defined in  Section  425 of the Code) or would  cause any
adverse  tax  consequences  for the  holders  of  such  ISOs.  If the  Committee
determines that such  adjustments  made with respect to ISOs would  constitute a
modification of such ISOs, it may refrain from making such adjustments.

     (e) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company,  each Option will terminate immediately prior to the
consummation  of such proposed  action or at such other time and subject to such
other conditions as shall be determined by the Committee.

     (f)  Issuances of  Securities.  Except as  expressly  provided  herein,  no
issuance  by the  Company  of  shares  of  stock  of any  class,  or  securities
convertible into shares of stock of any class,  shall affect,  and no adjustment
by reason  thereof  shall be made with respect to, the number of price of shares
subject to Options.  No adjustments  shall be made for dividends paid in cash or
in property other than securities of the Company.

     (g) Fractional  Shares. No fractional shares shall be issued under the Plan
and the optionee shall receive from the Company cash in lieu of such  fractional
shares.

     (h)  Adjustments.  Upon  the  happening  of  any of  the  foregoing  events
described in subparagraphs (a), (b) or (c) above, the class and aggregate number
of shares set forth in paragraph 4 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan shall also be
appropriately  adjusted to reflect the events  described in such  subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 13 and,  subject to paragraph 2, its  determination
shall be conclusive.

     If any person or entity owning restricted Common Stock obtained by exercise
of a Stock  Right  made  hereunder  receives  shares  or  securities  or cash in
connection with a corporate  transaction  described in subparagraphs (a), (b) or
(c) above as a result of owning such  restricted  Common  Stock,  such shares or
securities or cash shall be subject to all of the  conditions  and  restrictions
applicable to the  restricted  Common Stock with respect to which such shares or
securities or cash were issued,  unless otherwise determined by the Committee or
the Successor Board.

14. Means of Exercising Stock Rights.

     A Stock Right (or any part or  installment  thereof)  shall be exercised by
giving  written  notice to the Company at its  principal  office  address.  Such
notice shall identify the Stock Right being  exercised and specify the number of
shares as to which  such Stock  Right is being  exercised,  accompanied  by full
payment of the purchase price  therefore  either (a) in United States dollars in
cash or by check, or (b) at the discretion of the Committee, through delivery of
shares of Common  Stock  having a fair market  value equal as of the date of the
exercise to the cash exercise price of the Stock Right, or (c) at the discretion
of the Committee,  by delivery of the grantee's  personal  recourse note bearing
interest  payable  not less than  annually  at no less  than 100% of the  lowest
applicable  Federal rate,  as defined in Section  1274(d) of the Code, or (d) at
the  discretion  of the  Committee,  through  the use of some of the shares in a
fully  vested  account  of the  grantee  in a  pension  or profit  sharing  plan
including  a  401(k)  plan  or  employee  stock  ownership  plan,  or (e) at the
discretion of the Committee, through the use of some of the shares or the rights
to purchase some of the shares for which the Option is being  exercised,  or (f)
at the discretion of the committee, by any combination of (a), (b), (c), (d) and
(e) above. If any while payment of the purchase price with stock or stock rights
is  permitted  in  accordance  with the  foregoing  provisions,  the person then
entitled  to  exercise  the  option  may,  in lieu of using  such stock or stock
rights,  direct  the  Company  to  withhold  so many of the  shares  that  would
otherwise  have been  delivered upon exercise of his option as equals the number
of shares that would have been  transferred to the Company if the purchase price
had been paid with previously  issued stock or stock rights.  For example,  if a
person  qualifies to pay for five shares of stock under a Stock Right under (b),
(d) or (e) with four shares of stock or stock rights, said person may direct the
Company to simply issue him one new share of stock instead of said


<PAGE>


person  delivering  four shares of stock or stock  rights to the Company and the
Company  transferring  five shares to said  person.  The holder of a Stock Right
shall not have the rights of a shareholder with respect to the shares covered by
his Stock Right until the date of  issuance  of a stock  certificate  to him for
such shares.  Except as expressly provided above in paragraph 13 with respect to
changes in capitalization  and stock dividends,  no adjustment shall be made for
dividends  or similar  rights for which the record  date is before the date such
stock  certificate is issued.  The Committee may provide the grantee with a form
for exercising his Stock Rights. An acceptable form is attached hereto,  but the
Committee,  in its  discretion,  may from time to time make such  changes in the
form as it may determine are necessary or desirable.

15. Term and Amendment of Plan.

     This Plan was adopted by the Board on May 9, 2003, subject (with respect to
the  validation  of ISOs granted  under the Plan) to approval of the Plan by the
stockholders of the Company.  If the approval of stockholders is not obtained by
May 9,  2003,  any grants of ISOs under the Plan made prior to that date will be
rescinded.  The  Plan  shall  expire  on  May  9,  2013  (except  as to  Options
outstanding on that date). Subject to the provisions of paragraph 5 above, Stock
Rights may be granted under the Plan prior to the date of  stockholder  approval
of the Plan.  The Board may  terminate  or amend the Plan in any  respect at any
time,  except that,  without the approval of the  stockholders  obtained  within
twelve (12) months before or after the Board adopts a resolution authorizing any
of the  following  actions:  (a) the total  number of shares  that may be issued
under the Plan may not be increased (except by adjustment  pursuant to paragraph
13); (b) the provisions of paragraph 3 regarding  eligibility for grants of ISOs
may not be modified; (c) the provisions of paragraph 6(b) regarding the exercise
price  at which  shares  may be  offered  pursuant  to ISOs may not be  modified
(except by adjustment  pursuant to paragraph 13); and (d) the expiration date of
the Plan may not be extended. Except as otherwise provided in this paragraph 15,
in no event may action of the Board or  stockholders  alter or impair the rights
of a grantee,  without such grantee's consent,  under any Stock Right previously
granted to such  grantee.  The  Committee may amend the terms of any Stock Right
granted if such amendment is agreed to by the recipient of such Stock Right.

16. Conversion of ISOs Into Non-Qualified Options; Termination of ISOs.

     The  Committee,  at  the  written  request  of  any  optionee,  may  in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any  installments  or portions of  installments  thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the  expiration  of such ISOs,  regardless  of  whether  the  optionee  is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include,  but shall not be limited to,  extending  the exercise
period or reducing the exercise price of the  appropriate  installments  of such
Options. At the time of such conversion,  the Committee (with the consent of the
Optionee)  may  impose  such   conditions  on  the  exercise  of  the  resulting
Non-Qualified Options as the Committee in its discretion may determine, provided
that such conditions shall not be inconsistent  with this Plan.  Nothing in this
Plan shall be deemed to give any optionee the right to have such optionee's ISOs
converted into Non-Qualified  Options,  and no such conversion shall occur until
and unless the Committee  takes  appropriate  action.  The  Committee,  with the
consent of the optionee,  may also terminate any portion of any ISO that has not
been exercised at the time of such termination.

17.  Application of Funds.

     The proceeds  received by the Company  from the sale of shares  pursuant to
Options  granted  and  Purchases  authorized  under  the Plan  shall be used for
general corporate purposes.

18. Governmental  Regulation.

     The Company's  obligation to sell and deliver  shares of Common Stock under
this Plan is subject to the approval of any governmental  authority  required in
connection with the authorization, issuance or sale of such shares.

19. Withholding of Additional Income Taxes.

     Upon the exercise of a  Non-Qualified  Option,  the grant of an Award,  the
making of a Purchase of Common  Stock for less than its fair market  value,  the
making of a  Disqualifying  Disposition  (as  defined  in  paragraph  20) or the
vesting of  restricted  Common  Stock  acquired on the exercise of a Stock Right
hereunder,  the Company,  in accordance  with Section  3402(a) of the Code,  may
require the optionee, Award recipient or purchaser to pay additional withholding
taxes in respect of the amount that is  considered  compensation  includable  in
such person's  gross income.  The Committee in its  discretion may condition (i)
the  exercise  of an Option,  (ii) the grant of an Award,  (iii) the making of a
Purchase  of  Common  Stock  for less than its fair  market  value,  or (iv) the
vesting of restricted  Common Stock acquired by exercising a Stock Right, on the
grantee's payment of such additional withholding taxes.


<PAGE>


20. Notice to Company of Disqualifying Disposition.

     Each  employee  who  receives  an ISO must agree to notify  the  Company in
writing immediately after the employee makes a Disqualifying  Disposition of any
Common  Stock  acquired  pursuant  to the  exercise  of an ISO. A  Disqualifying
Disposition is any disposition  (including any sale) of such Common Stock before
the later of (a) two years after the date the  employee  was granted the ISO, or
(b) one year after the date the employee acquired Common Stock by exercising the
ISO. If the employee has died before such stock is sold,  these  holding  period
requirements do not apply and no Disqualifying Disposition can occur thereafter.

21. Governing Law; Construction.

     The validity and  construction of the Plan and the  instruments  evidencing
Stock Rights shall be governed by the laws of the State of Utah.  In  construing
this Plan, the singular shall include the plural and the masculine  gender shall
include the feminine and neuter, unless the context otherwise requires.

22. Financial Assistance.

     The Company is vested with authority under this Plan to assist any employee
to whom an Option is granted hereunder (including any director or officer of the
Company  or any of its  Related  Corporations  who is also an  employee)  in the
payment of the purchase price payable on exercise of that Option, by lending the
amount of such  purchase  price to such employee on such terms and at such rates
of interest and upon such security (or unsecured) as shall have been  authorized
by or under authority of the Board or the Committee.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



<PAGE>


             PROXY - SECURITY NATIONAL FINANCIAL CORPORATION - PROXY
                THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
                              CLASS C COMMON STOCK

     The undersigned Class C common  stockholder of Security National  Financial
Corporation (the "Company") acknowledges receipt of the Notice of Annual Meeting
of the  Stockholders to be held on July 11, 2003, at 5300 South 360 West,  Suite
250, Salt Lake City,  Utah, at 10:00 a.m.  Mountain  Daylight  Time,  and hereby
appoints Messrs.  George R. Quist, Scott M. Quist and G. Robert Quist, or any of
them, each with full power of substitution, as attorneys and proxies to vote all
the shares of the undersigned at said Annual Meeting of Stockholders  and at all
adjournments or postponements  thereof,  hereby ratify and confirm all that said
attorneys  and  proxies  may do or  cause  to be  done  by  virtue  hereof.  The
above-named   attorneys   and  proxies  are   instructed  to  vote  all  of  the
undersigned's shares as follows:

1.   To elect five of the seven  directors to be voted upon by Class A and Class
     C common stockholders together:

         [ ] FOR all nominees listed below (except as marked to the contrary
         below) [ ] WITHHOLD AUTHORITY to vote for all nominees listed below.

(INSTRUCTION: to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below.)

             Robert G. Hunter, M.D., H. Craig Moody, Scott M. Quist
                      George R. Quist and Norman G. Wilbur

2.   To approve the 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 for the issuance thereunder;

                               [ ] FOR [ ] AGAINST

3    To ratify  the  appointment  of Tanner + Co. as the  Company's  independent
     accountants for the fiscal year ending December 31, 2003;

                               [ ] FOR [ ] AGAINST

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


THIS PROXY,  WHEN  PROPERLY  EXECUTED,  WILL BE VOTED AS DIRECTED  HEREIN BY THE
UNDERSIGNED  STOCKHOLDER.  IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 and 3.

Dated  ___________________________________, 2003


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

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

     Please sign your name exactly as it appears on your share  certificate.  If
shares are held jointly, each holder should sign. Executors, trustees, and other
fiduciaries should so indicate when signing.  Please sign, date, and return this
Proxy Card immediately.

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


<PAGE>


             PROXY - SECURITY NATIONAL FINANCIAL CORPORATION - PROXY
                THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
                              CLASS A COMMON STOCK

     The undersigned Class A common  stockholder of Security National  Financial
Corporation (the "Company") acknowledges receipt of the Notice of Annual Meeting
of the  Stockholders to be held on July 11, 2003, at 5300 South 360 West,  Suite
250, Salt Lake City,  Utah, at 10:00 a.m.,  Mountain  Daylight  Time, and hereby
appoints Messrs.  George R. Quist, Scott M. Quist and G. Robert Quist, or any of
them, each with full power of substitution, as attorneys and proxies to vote all
the shares of the undersigned at said Annual Meeting of Stockholders  and at all
adjournments  or  postponements  thereof,  hereby ratify and confirming all that
said  attorneys  and  proxies may do or cause to be done by virtue  hereof.  The
above-named   attorneys   and  proxies  are   instructed  to  vote  all  of  the
undersigned's shares as follows:

1.   To elect  two  directors  to be voted  upon by Class A common  stockholders
     voting separately as a class:

    [ ] FOR all nominees listed below (except as marked to the contrary below)
    [ ] WITHHOLD AUTHORITY to vote for all nominees listed below

(INSTRUCTION: to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below.)  Charles L.  Crittenden and
J. Lynn Beckstead, Jr.

     To elect the remaining five directors to be voted upon by Class A and Class
C common stockholders together:

    [ ] FOR all nominees listed below (except as marked to the contrary below)
    [ ] WITHHOLD AUTHORITY to vote for all nominees listed below

(INSTRUCTION: to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below.) Robert G. Hunter,  M.D., H.
Craig Moody, George R. Quist Scott M. Quist, and Norman G. Wilbur

2.   To approve the 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 for the issuance thereunder;

                           [  ]  FOR                 [  ]  AGAINST

3.   To ratify  the  appointment  of Tanner + Co. as the  Company's  independent
     accountants for the fiscal year ending December 31, 2003;

                           [  ]  FOR                 [  ]  AGAINST

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

THIS PROXY,  WHEN  PROPERLY  EXECUTED,  WILL BE VOTED AS DIRECTED  HEREIN BY THE
UNDERSIGNED  STOCKHOLDER.  IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE NOMINEES LISTED IN PROPOSALS 1 AND 2 ABOVE AND FOR PROPOSAL 3 and 4.

Dated  ____________________________________, 2003


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

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

     Please sign your name exactly as it appears on your share  certificate.  If
shares are held jointly, each holder should sign. Executors, trustees, and other
fiduciaries should so indicate when signing.  Please sign, date, and return this
Proxy Card immediately.

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

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