What changed in this filing

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Item 9A. Controls and Procedures

2021-03-31 compared with 2020-03-30 · 410 added, 507 removed, 592 unchanged (61% of the section changed)

Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company has evaluated the

effectiveness of its disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded

that these disclosure controls and procedures are effective.

Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

(a) Management’s annual report on internal control over financial reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting.

The Company's internal control over financial reporting is a process

that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), and includes

those policies and procedures that:

The Company's internal control over financial reporting is a process that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), and includes those policies and procedures that:

· Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company,

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in

accordance with authorizations of management and the Board of Directors of the Company, and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that

could have a material effect on the financial statements.

· Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors of the Company, and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

As disclosed in Item 8:

Financial Statements, the Company acquired Kilpatrick Life in December 2019.

Prior to the acquisition, the Company identified a material weakness in Kilpatrick

Life’s internal control over financial reporting.

The material weakness identified had not been remediated as of December 31, 2019.

Specifically, the Company determined that Kilpatrick Life’s controls related to Change Management and Segregation of

Duties for the Policy Administration System did not operate effectively.

As a result of the control deficiency, a risk exists that inappropriate system changes could potentially result in a material misstatement of Kilpatrick Life’s financial

information, which is consolidated with the Company’s 2019 year-end results.

Prior to the closing of the acquisition, the Company’s management developed and initiated a plan to remediate these internal control deficiencies

As of March 30, 2020, management has not fully assessed Kilpatrick Life’s internal controls over financial reporting and is currently testing new and revised internal controls for

design and operating effectiveness.

The Securities and Exchange Commission permits companies to exclude acquisitions from their assessment of internal control over financial reporting during the first year of an acquisition, and management has

elected to exclude Kilpatrick Life from our assessment.

Kilpatrick Life accounted for approximately 15% of total assets as of December 31, 2019.

Management has performed additional analysis and procedures to conclude that it believes the

consolidated financial statements included in this Form 10-K present fairly, in all material respects, the Company’s financial position, results of operations, comprehensive income (loss) and cash flows for the periods presented in conformity with

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future

periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management performed an assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2019 based on the framework in “Internal

Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The objective of this assessment was to determine whether the Company's internal control over financial reporting was effective as of

December 31, 2019.

Based on that assessment management believes that due to the acquisition of Kilpatrick Life on December 13, 2019, the Company’s internal control over financial reporting was not effective as of December 31, 2019.

This annual report on internal control over financial reporting does not include an attestation report of the Company’s registered public accounting firm regarding internal control

over financial reporting.

Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in

this annual report.

(b) Changes in internal control over financial reporting.

There have been significant changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended)

in the first quarter of 2020 that are reasonably likely to materially affect, the Company’s internal control over financial reporting in future reporting periods.

These changes are a direct result of remediation efforts undertaken by the Company to

address the material weakness in Kilpatrick Life’s financial reporting as discussed above.

Remediation Efforts to Address the Material Weakness

The Company implemented controls to remediate the underlying causes that gave rise to the material weakness.

The following controls have been implemented by management:

Prior to the acquisition, the Company identified a material weakness in Kilpatrick Life’s internal control over financial reporting related to change management and segregation of duties for the policy administration system.

As of December 31, 2020, the known deficiencies have been remediated to the extent that they no longer give rise to a material weakness with the following controls implemented by management.

· Execution of a formal consultant agreement with the former system developer.

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In addition to the steps taken above, the Company will also transition Kilpatrick Life’s policies to its own Policy Administration System, which has appropriate controls in place.

The Company is committed to continuous improvement of its internal control processes and will continue to diligently review its financial reporting controls and procedures as it works

to remedy Kilpatrick Life’s material weakness in internal controls.

As of March 31, 2021, the Company has performed additional analysis and procedures to conclude that it believes the consolidated financial statements included in this Form 10-K present fairly, in all material respects, the Company’s financial position, results of operations, comprehensive income (loss) and cash flows for the periods presented in conformity with U.S.

The Company is committed to continuous improvement of its internal control processes and will continue to diligently review its financial reporting controls and procedures as it works to remedy Kilpatrick Life’s internal controls.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become

inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management performed an assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2020 based on the framework in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The objective of this assessment was to determine whether the Company's internal control over financial reporting was effective as of December 31, 2020.

Based on that assessment management believes that at December 31, 2020, the Company’s internal control over financial reporting was effective.

This annual report on internal control over financial reporting does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.

(b) Changes in internal control over financial reporting.

Except for the remediation steps taken to address the material weakness related to the acquisition of Kilpatrick Life, there have not been significant changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other Information

1 unchanged sentence

The Company’s Board of Directors consists of eight persons, five of whom are not employees of the Company.

There are no family relationships between or among any of the directors and executive

officers, except that S.

There are no family relationships between or among any of the directors and executive officers, except that S.

Andrew Quist and Adam G.

2 unchanged sentences

Overbaugh is a nephew of Scott M.

The following table sets forth certain information with respect to the directors and executive officers of the

The following table sets forth certain information with respect to the directors and executive officers of the Company.

Position with the Company

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Quist has served as Chairman of the Board and Chief Executive Officer of the Company since 2012.

Quist also serves as the

Company’s President, a position he has held since 2002.

Quist also serves as the Company’s President, a position he has held since 2002.

He has additionally served as a director of the Company since 1986.

From 1993 to 2013, Mr.

Quist served as Treasurer and a director of the National Alliance of Life Companies (NALC), a national

trade association of over 200 life insurance companies, and as its President from 1990 to 2000.

Quist served as Treasurer and a director of the National Alliance of Life Companies (NALC), a national trade association of over 200 life insurance companies, and as its President from 1990 to 2000.

From 1986 to 1991, Mr.

Quist 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.

Quist 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.

Quist has been a member of the Board of Governors of the Forum 500 Section (representing small insurance companies) of the American Council of Life Insurance.

He has also served as a

regional director of Key Bank of Utah since 1993.

He has also served as a regional director of Key Bank of Utah since 1993.

Quist holds a B.S.

degree in Accounting from Brigham Young University and received his law degree also from Brigham Young University.

Quist’s significant expertise and deep understanding of

the technical, organizational and strategic business aspects of the insurance industry, his management expertise, his 18 year tenure as President of the Company and 33 year tenure as a director, and his years of business and leadership experience led

the Board of Directors to conclude that Mr.

Quist’s significant expertise and deep understanding of the technical, organizational and strategic business aspects of the insurance industry, his management expertise, his 19 year tenure as President of the Company and 34 year tenure as a director, and his years of business and leadership experience led the Board of Directors to conclude that Mr.

Quist should serve as Chairman of the Board, President, and Chief Executive Officer of the Company.

Overbaugh has served as a director of the Company since 2013.

Overbaugh has also served as a Vice President and the Assistant

Secretary of the Company from 2002 to 2013.

Overbaugh has also served as a Vice President and the Assistant Secretary of the Company from 2002 to 2013.

Overbaugh has additionally served as Vice President and National Marketing Director of Security National Life Insurance Company since 2006.

From 2003 to 2006, he served as a Vice President of Security

National Life Insurance Company with responsibilities as an investment manager over construction lending and commercial real estate investments.

From 2000 to 2003, he served as a Vice President of Memorial Estates, Inc., with responsibilities over

operations and sales.

From 2003 to 2006, he served as a Vice President of Security National Life Insurance Company with responsibilities as an investment manager over construction lending and commercial real estate investments.

From 2000 to 2003, he served as a Vice President of Memorial Estates, Inc., with responsibilities over operations and sales.

Overbaugh has served since 2007 as a director of the LOMA Life Insurance Council, a trade association of life insurance companies.

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Overbaugh received a B.S.

Finance from the University of Utah.

Overbaugh’s expertise in insurance and marketing, and his 23 years of experience with the Company in its insurance, real estate, and mortuary and cemetery operations led the Board of Directors to conclude that

he should serve as a director of the Company.

degree in Finance from the University of Utah.

Overbaugh’s expertise in insurance and marketing, and his 24 years of experience with the Company in its insurance, real estate, and mortuary and cemetery operations led the Board of Directors to conclude that he should serve as a director of the Company.

Andrew Quist has served as a director of the Company since 2013.

2 unchanged sentences

In addition, Mr.

Quist has served as Executive Vice President and Chief Operating Officer since 2010, and as Vice President from 2008 to 2010, of C&J Financial, LLC, which funds the purchase of funeral and burial policies from funeral homes after

the death of the insureds.

Quist has also served since 2013 as a director of the National Alliance of Life Companies (NALC), a national trade association of over 200 life insurance companies.

2 unchanged sentences

Quist holds a B.S.

degree in Accounting from Brigham Young University and received his law degree from the University of Southern

degree in Accounting from Brigham Young University and received his law degree from the University of Southern California.

Quist is a member of the State Bar of California.

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Cook has served as a director of the Company since 2013.

Cook has served since 1982 as co-owner and operator of Cook Brothers

Painting, Inc., a company that provides painting services for contractors and builders of residential and commercial properties.

Cook has served since 1982 as co-owner and operator of Cook Brothers Painting, Inc., a company that provides painting services for contractors and builders of residential and commercial properties.

In addition, Mr.

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As a director, Mr.

Cook advised the Board concerning the Company’s

investments in commercial and residential real estate projects.

Cook advised the Board concerning the Company’s investments in commercial and residential real estate projects.

Moreover, Mr.

Cook’s extensive background in construction and building is important as the Company continues to acquire new real estate holdings and develop its current portfolio of

undeveloped land.

Cook’s extensive background in construction and building is important as the Company continues to acquire new real estate holdings and develop its current portfolio of undeveloped land.

Cook’s years of experience in the construction industry and with construction projects led the Board of Directors to conclude that he should serve as a director of the Company.

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From 2006 until his retirement in 2008, Mr.

Fuller served as

Executive Vice President, Chief Financial Officer and Secretary of USANA Health Sciences, Inc., a multinational manufacturer and direct seller of nutritional supplements.

Fuller joined USANA in 1996 as the Vice President of Finance and served in

that role until 1999 when he was appointed as its Senior Vice President.

Fuller served as Executive Vice President, Chief Financial Officer and Secretary of USANA Health Sciences, Inc., a multinational manufacturer and direct seller of nutritional supplements.

Fuller joined USANA in 1996 as the Vice President of Finance and served in that role until 1999 when he was appointed as its Senior Vice President.

Fuller has served as a member of the Board of Directors of USANA since 2008.

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degree in Accounting and an M.B.A.

degree from the University of

Exchange, where he served as an executive officer and continues to serve as a director, led the Board of Directors to conclude that he should serve as a director of the Company.

degree from the University of Utah.

Fuller’s accounting, finance and corporate strategy expertise and his years of financial, accounting and business experience with public and private companies, including USANA Health Sciences, Inc., which is listed on the New York Stock Exchange, where he served as an executive officer and continues to serve as a director, led the Board of Directors to conclude that he should serve as a director of the Company.

has served as a director of the Company since 1998.

Hunter is currently a practicing physician in private

Hunter is currently a practicing physician in private practice.

Hunter is Department Head of Otolaryngology, Head and Neck Surgery at Intermountain Medical Center and a past President of the medical staff of the Intermountain Medical Center.

He is also a delegate to the Utah Medical Association and

has served as a delegate representing the State of Utah to the American Medical Association.

He is also a delegate to the Utah Medical Association and has served as a delegate representing the State of Utah to the American Medical Association.

Hunter holds a B.S.

degree in Microbiology from the University of Utah and received his medical degree from the University of Utah College of Medicine.

Hunter’s medical expertise and experience, and his administrative and leadership experience from serving in a number of administrative positions in the medical profession led the Board of Directors to conclude that he should serve as a director

of the Company.

Craig Moody has served as a director of the Company since 1995.

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.

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.

From 1989 to 1992, Mr.

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Moody holds a B.S.

Political Science from the University of Utah.

degree in Political Science from the University of Utah.

Moody’s real estate and governmental affairs expertise and years of business and leadership experience led the Board of Directors to conclude that he should serve as a director of the Company.

1 unchanged sentence

Wilbur worked for J.C.

Penny's regional offices in budget and

Penny's regional offices in budget and analysis.

His final position was Manager of Planning and Reporting for J.C.

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The Company's Bylaws provide that the Board of Directors shall consist of not less than five or more than twelve members.

The term of office of each director is for a period of one year or until the

election and qualification of his successor.

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 or a stockholder of the Company.

The Board of Directors held a total of five meetings during the fiscal year ended December 31, 2020.

of the directors attended 75% or more of the meetings of the Board of Directors during 2019.

Each of the directors attended 75% or more of the meetings of the Board of Directors during 2020.

The size of the Board of Directors of the Company is eight members.

A majority of the Board of Directors must qualify as "independent" as that term is defined in Rule 4200 of the listing standards

of the Nasdaq Stock Market.

A majority of the Board of Directors must qualify as "independent"

as that term is defined in Rule 4200 of the listing standards of the Nasdaq Stock Market.

The Board of Directors has affirmatively determined that five of the eight members of the Board of Directors, namely Messrs.

3 unchanged sentences

Craig Moody and Norman G.

are independent under the listing standards of the Nasdaq Stock Market.

Wilbur, are independent under the listing standards of the Nasdaq Stock Market.

There are four committees of the Board of Directors, which meet periodically during the year:

the Audit Committee, the Compensation Committee, the Executive Committee, and the Nominating and

Corporate Governance Committee.

the Audit Committee, the Compensation Committee, the Executive Committee, and the Nominating and Corporate Governance Committee.

The Audit Committee directs the auditing activities of the Company's internal auditors and outside public accounting firm and approves the services of the outside public accounting firm.

Committee consists of Messrs.

The Audit Committee consists of Messrs.

Cook, Gilbert A.

2 unchanged sentences

During 2020, the Audit Committee met on three occasions.

The Compensation Committee is responsible for recommending to the Board of Directors for approval the annual compensation of each executive officer of the Company and the executive officers of the

Company's subsidiaries, developing policy in the areas of compensation and fringe benefits, contributions under the Employee Stock Ownership Plan, contributions under the 401(k) Retirement Savings Plans, Non-Qualified Deferred Compensation Plan,

granting of options under the stock option plans, and creating other employee compensation plans.

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 401(k) Retirement Savings Plans, Non-Qualified Deferred Compensation Plan, granting of options under the stock option plans, and creating other employee compensation plans.

The Compensation Committee consists of Messrs.

3 unchanged sentences

Craig Moody and Norman G.

Wilbur (Chairman

of the committee).

Wilbur (Chairman of the committee).

During 2020, the Compensation Committee met on two occasions.

1 unchanged sentence

The Executive Committee consists of Messrs.

Craig Moody, S.

Andrew Quist and Scott M.

1 unchanged sentence

During 2020, the Executive Committee met on one occasion.

The Nominating and Corporate Governance Committee identifies individuals qualified to become Board members consistent with criteria approved by the Board, recommends to the Board the persons to be

nominated by the Board for election as directors at a meeting of stockholders, and develops and recommends to the Board a set of corporate governance principles.

The Nominating and Corporate Governance Committee identifies individuals qualified to become Board members consistent with criteria approved by the Board, recommends to the Board the persons to be nominated by the Board for election as directors at a meeting of stockholders, and develops and recommends to the Board a set of corporate governance principles.

The Nominating and Corporate Governance Committee consists of Messrs.

Cook, Gilbert A.

Fuller, Robert G.

1 unchanged sentence

Craig Moody (Chairman of the committee), and Norman G.

The Nominating and Corporate Governance Committee is composed solely of independent directors, as defined in the listing standards of the

Nasdaq Stock Market.

The Nominating and Corporate Governance Committee is composed solely of independent directors, as defined in the listing standards of the Nasdaq Stock Market.

During 2020, the Nominating and Corporate Governance Committee met on two occasions.

1 unchanged sentence

The process for identifying and evaluating nominees for directors include the following steps:

(1) the Nominating and Corporate Governance Committee, Chairman of the Board or other board members

identify a need to fill vacancies or add newly created directorships;

(2) the Chairman of the Nominating and Corporate Governance Committee initiates a search and seeks input from board members and senior management and, if necessary, obtains advice

from legal or other advisors (but does not hire an outside search firm);

(3) director candidates, including any candidates properly proposed by stockholders in accordance with the Company's Bylaws, are identified and presented to the Nominating and

Corporate Governance Committee;

(1) the Nominating and Corporate Governance Committee, Chairman of the Board or other board members identify a need to fill vacancies or add newly created directorships;

(2) the Chairman of the Nominating and Corporate Governance Committee initiates a search and seeks input from board members and senior management and, if necessary, obtains advice from legal or other advisors (but does not hire an outside search firm);

(3) director candidates, including any candidates properly proposed by stockholders in accordance with the Company's Bylaws, are identified and presented to the Nominating and Corporate Governance Committee;

(4) initial interviews with candidates are conducted by the Chairman of the Nominating and Corporate Governance Committee;

(5) the Nominating and Corporate Governance Committee meets to consider and approve final

candidate(s) and conduct further interviews as necessary;

(5) the Nominating and Corporate Governance Committee meets to consider and approve final candidate(s) and conduct further interviews as necessary;

and (6) the Nominating and Corporate Governance Committee makes recommendations to the board for inclusion in the slate of directors at the annual meeting.

The evaluation process will be the

same whether the nominee is recommended by a stockholder or by a member of the Board of Directors.

The evaluation process will be the same whether the nominee is recommended by a stockholder or by a member of the Board of Directors.

Meetings of Non-Management Directors

The Company's independent directors meet regularly in executive session without management.

The Board of Directors has designated a lead director to preside at executive sessions of independent

The Board of Directors has designated a lead director to preside at executive sessions of independent directors.

Craig Moody is currently the lead director.

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From 2011 to 2013, Mr.

Sill served as Vice President and

Assistant Treasurer of Security National Life Insurance Company, a wholly owned subsidiary of the Company.

Sill served as Vice President and Assistant Treasurer of Security National Life Insurance Company, a wholly owned subsidiary of the Company.

From 2002 to 2011, Mr.

3 unchanged sentences

degree in Accounting from Weber State University and a Master’s degree in Business Administration from the University of Utah.

Sill also serves as a

member of the Advisory Council of the School of Accounting and Taxation at Weber State University.

Stephens has served as Senior General Counsel of the Company since 2017, as General Counsel from 2006 to 2017, and as Secretary

of the Company since 2008.

Sill also serves as a member of the Advisory Council of the School of Accounting and Taxation at Weber State University.

Stephens has served as Senior General Counsel of the Company since 2017, as General Counsel from 2006 to 2017, and as Secretary of the Company since 2008.

Stephens was in private practice from 1981 to 2006 in the states of Washington and Utah.

Stephens holds a B.A.

degree in Geography from the University of Utah and received his law degree from Brigham Young

degree in Geography from the University of Utah and received his law degree from Brigham Young University.

Stephens is a member of the Utah State Bar Association and the Washington State Bar Association.

Johnson began serving as the Vice President of Mortgage Operations of the Company and as the President of SecurityNational

Mortgage in 2016.

Johnson began serving as the Vice President of Mortgage Operations of the Company and as the President of SecurityNational Mortgage in 2016.

Johnson’s appointment as President of SecurityNational Mortgage, Mr.

Johnson served as Executive Vice President and Chief Operating Officer of SecurityNational Mortgage.

Johnson has over 30 years of experience at

the executive management level in the mortgage banking industry.

Johnson has over 30 years of experience at the executive management level in the mortgage banking industry.

Johnson holds a B.A.

degree in International Relations from Brigham Young University and Master's degree in International Management and Finance from the American Graduate School of

International Management (Thunderbird).

degree in International Relations from Brigham Young University and Master's degree in International Management and Finance from the American Graduate School of International Management (Thunderbird).

Quist has served as Vice President – Memorial Services and Assistant Secretary of the Company since 2015.

From 2015 to 2017, he

also served as the Company’s Associate General Counsel.

From 2015 to 2017, he also served as the Company’s Associate General Counsel.

Since 2017, Mr.

1 unchanged sentence

Quist has also served since 2015 as Vice President of Memorial Estates, Inc.

(“Memorial Estates”) and since 2016 as Chief

Operating Officer of Memorial Estates.

(“Memorial Estates”) and since 2016 as Chief Operating Officer of Memorial Estates.

Additionally, Mr.

1 unchanged sentence

(“Memorial Mortuary”) and since 2016 as Chief Operating Officer of Memorial Mortuary.

Both Memorial Estates and

Memorial Mortuary are wholly owned subsidiaries of the Company.

Both Memorial Estates and Memorial Mortuary are wholly owned subsidiaries of the Company.

Quist hold a B.S.

2 unchanged sentences

Quist is a member of the Utah State Bar.

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 Company’s interests.

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 Company’s interests.

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

2 unchanged sentences

The Board of Directors has adopted the Security National Financial Corporation Corporate Governance Guidelines.

guidelines outline the functions of the board, director qualifications and responsibilities, and various processes and procedures designed to insure effective and responsive governance.

The Board of Directors has also adopted a written committee

charter for its Audit Committee and Compensation Committee.

These guidelines outline the functions of the board, director qualifications and responsibilities, and various processes and procedures designed to insure effective and responsive governance.

The Board of Directors has also adopted a written committee charter for its Audit Committee and Compensation Committee.

The guidelines and committee charters are reviewed from time to time in response to regulatory requirements and best practices and are revised accordingly.

The full text of the guidelines

and the committee charters are available on the Company’s website at www.securitynational.com.

A copy of the Corporate Governance Guidelines may also be obtained at no charge by written request to the

attention of Jeffrey R.

The full text of the guidelines and the committee charters are available on the Company’s website at www.securitynational.com .

A copy of the Corporate Governance Guidelines may also be obtained at no charge by written request to the attention of Jeffrey R.

Stephens, Secretary, Security National Financial Corporation, 121 West Election Road., Suite 100, Draper, Utah 84020.

Code of Business Conduct and Ethics .

All of the Company’s officers, employees, and directors are required to comply with the Company’s Code of Business Conduct

and Ethics to help ensure that the Company’s business is conducted in accordance with appropriate standards of ethical behavior.

The Company’s Code of Business Conduct and Ethics covers all areas of professional conduct, including customer

relationships, conflicts of interest, insider trading, financial disclosures, intellectual property, and confidential information, as well as requiring adherence to all laws and regulations applicable to the Company’s business.

Employees are required

to report any violations or suspected violations of the Code.

All of the Company’s officers, employees, and directors are required to comply with the Company’s Code of Business Conduct and Ethics to help ensure that the Company’s business is conducted in accordance with appropriate standards of ethical behavior.

The Company’s Code of Business Conduct and Ethics covers all areas of professional conduct, including customer relationships, conflicts of interest, insider trading, financial disclosures, intellectual property, and confidential information, as well as requiring adherence to all laws and regulations applicable to the Company’s business.

Employees are required to report any violations or suspected violations of the Code.

The Code includes an anti-retaliation statement.

1 unchanged sentence

A copy of the Code of Business Conduct and Ethics may also be obtained at no charge by written request to the attention of Jeffrey R.

Stephens, Secretary, Security National Financial Corporation, 121 West Election

Road., Suite 100, Draper, Utah 84020.

Stephens, Secretary, Security National Financial Corporation, 121 West Election Road., Suite 100, Draper, Utah 84020.

Executive Compensation

three other most highly compensated executive officers who were serving as executive officers at the end of 2019 (collectively, the “Named Executive Officers”).

The following table sets forth, for each of the last two fiscal years, the compensation received by the Company’s Chief Executive Officer, the Company’s Chief Financial Officer, and the Company’s three other most highly compensated executive officers who were serving as executive officers at the end of 2020 (collectively, the “Named Executive Officers”).

SUMMARY COMPENSATION TABLE

1 unchanged sentence

Options Awards

Non-Equity Incentive Plan Compensation

Non-Equity Incentive Plan Compen-sation

Change in Pension Value Non-qualified Deferred Compensation Earnings (1)

All Other Compensation (2)

Chairman of the

Board, President

All Other Compen-sation (2)

Chairman of the Board, President

and Chief Executive Officer

Chief Financial

Officer and Treasurer

Vice President of

Chief Financial Officer

and Treasurer

Vice President of Mortgage

Vice President and

General Counsel

Senior General

Senior General Counsel and

_____________

The amounts indicated under “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” consist of amounts that the Company contributed into a trust for the benefit of the Named Executive

Officers under the Company’s Non-Qualified Deferred Compensation Plan.

(1) The amounts indicated under “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” consist of amounts that the Company contributed into a trust for the benefit of the Named Executive Officers under the Company’s Non-Qualified Deferred Compensation Plan.

(2) The amounts indicated under “All Other Compensation” consist of the following amounts that the Company paid for the benefit of the Named Executive Officers:

payments related to the operation of automobiles for Scott M.

a) payments related to the operation of automobiles for Scott M.

Quist ($7,200 for each of the years 2020 and 2019);

and Garrett S.

Sill, Stephen C.

Sill ($4,400 for 2020 and $5,400 for 2019) and, Stephen C.

Andrew Quist, and Jeffrey R.

Stephens ($-0- for each

of the years 2019 and 2018).

Stephens ($-0- for each of the years 2020 and 2019).

However, such payments do not include the furnishing of an automobile by the Company to Scott M.

Quist, nor the payment of insurance and property taxes with respect to the automobile operated by such executive

group life insurance premiums that the Company paid to a group life insurance plan for Scott M.

Quist, nor the payment of insurance and property taxes with respect to the automobile operated by such executive officer;

b) group life insurance premiums that the Company paid to a group life insurance plan for Scott M.

Quist, Garrett S.

2 unchanged sentences

Stephens ($114 for 2020 and $176 for 2019);

life insurance premiums that the Company paid for the benefit of Scott M.

Quist ($14,934 for each of the years 2019 and 2018);

c) life insurance premiums that the Company paid for the benefit of Scott M.

Quist ($15,765 for 2020 and $14,934 for 2019);

and Garrett S.

1 unchanged sentence

Andrew Quist, and Jeffrey R.

($-0- for each of the years 2019 and 2018);

medical insurance premiums that the Company paid to a medical insurance plan for Scott M.

Stephens ($-0- for each of the years 2020 and 2019);

d) medical insurance premiums that the Company paid to a medical insurance plan for Scott M.

Quist ($15,118 for 2020 and $14,251 for 2019);

4 unchanged sentences

Stephens ($15,118 for 2020 and $14,251 for 2019);

long term disability insurance premiums that the Company paid to a provider of such insurance for Scott M.

Quist, Garrett S.

Sill, Stephen C.

Andrew Quist, and Jeffrey R.

Stephens ($251 for each of

the years 2019 and 2018);

contributions that the Company made to defined contribution plans for Scott M.

e) long term disability insurance premiums that the Company paid to a provider of such insurance for Scott M.

Quist ($372 for 2020 and $251 for 2019), Garrett S.

Sill ($316 for 2020 and $251 for 2019), Stephen C.

Johnson ($372 for 2020 and $251 for 2019), S.

Andrew Quist ($339 for 2020 and $251 for 2019), and Jeffrey R.

Stephens ($278 for 2020 and $251 for 2019);

f) contributions that the Company made to defined contribution plans for Scott M.

Quist ($11,400 for 2020 and $11,200 for 2019);

Sill ($11,400 for 2020 and $10,599 for 2019);

Johnson ($-0- for

2019 and $10,838 for 2018);

Johnson ($11,400 for 2020 and $-0- for 2019);

Andrew Quist ($10,927 for 2020 and $10,344 for 2019);

1 unchanged sentence

Stephens ($9,418 for 2020 and $8,523 for 2019);

contributions that the Company made to health savings accounts for Scott M.

g) contributions that the Company made to health savings accounts for Scott M.

Quist, Garrett S.

2 unchanged sentences

and Stephen C.

($200 for each of the years 2019 and 2018);

Johnson ($750 for 2020 and $200 for 2019);

h) gym membership incentives for Scott M.

Quist, Garrett S.

Sill, and Stephen C.

Johnson ($-0- for each of the years 2020 and 2019);

Andrew Quist ($425 for 2020 and $407 for 2019);

and Jeffrey R.

Stephens ($-0- for each of the years 2020 and 2019);

SUPPLEMENTAL ALL OTHER COMPENSATION TABLE

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Name of Executive Officer

Perks and Other Personal

Reimbursements

Discounted Securities

Perks and Other Personal Benefits

Tax Reimburse-ments

Discounted Securities Purchases

Payments/ Accruals on Termination Plans

Registrant Contributions to Defined Contribution

Dividends or Earnings on

Stock or Option Awards

Registrant Contributions to Defined Contribution Plans

Insurance Premiums

Dividends or Earnings on Stock or Option Awards

GRANTS OF PLAN-BASED AWARDS

The following table sets forth certain information regarding options granted to the Named Executive Officers during the fiscal year ended December 31, 2020.

Estimated Future

Payouts Under

Equity Incentive

Name of Executive Officer

Estimated Future Payouts Under Equity Incentive Plan Awards

All Other Awards:

Number of Securities Underlying

Exercise or Base Price of Option

Closing Price on Grant

Grant Date Fair Value of Stock and Option

Number of Securities Underlying Options

Exercise or Base Price of Option Awards

Closing Price on Grant Date ($/Sh)

Grant Date Fair Value of Stock and Option Awards

_________________________

The stock options have been adjusted for the 5% annual stock dividend declared on December 6, 2019 and paid on February 7, 2020.

Prices have been adjusted for the effect of the 5% annual stock dividend declared on December 6, 2019 and paid on February 7, 2020.

(1) The stock options have been adjusted for the 2.5% annual stock dividend declared on June 26, 2020 and paid on July 17, 2020.

(2) The stock options have been adjusted for the 2.5% annual stock dividend declared on June 26, 2020 and paid on July 17, 2020.

OUTSTANDING EQUITY AWARDS

1 unchanged sentence

Option Awards

Executive Officer

Name of Executive Officer

Option Grant Date

Number of Securities Underlying Unexercised Options Exercisable (1)

1 unchanged sentence

Option Exercise Price (2)

Option Expiration Date

Stock Award Grant

9 unchanged sentences

The vesting of any unvested shares is subject to the recipient’s continuous employment.

This reflects the

equivalent of Class A common shares.

This reflects the equivalent of Class A common shares.

(2) Exercise prices have been adjusted for the effect of annual stock dividends.

On December 4, 2015, Scott Quist was granted stock options to purchase 100,000 shares of Class A common stock at an exercise price of $5.72 per share or 100,000 shares of Class C common stock at an exercise

price of $5.72 per share, or any combination thereof.

On December 2, 2016, Scott Quist was granted stock options to purchase 80,000 shares of Class A common stock at an exercise price of $6.30 per share or 80,000 shares of Class C common stock at an exercise price

of $6.30 per share, or any combination thereof.

(3) On December 2, 2016, Scott Quist was granted stock options to purchase 80,000 shares of Class A common stock at an exercise price of $6.14 per share or 80,000 shares of Class C common stock at an exercise price of $6.14 per share, or any combination thereof.

(4) On December 1, 2017, Garrett S.

Sill was granted stock options to purchase 15,000 shares of Class A common stock at an exercise price of $4.33 per share or 15,000 shares of Class C common stock at an exercise

price of $4.33 per share, or any combination thereof.

Sill was granted stock options to purchase 15,000 shares of Class A common stock at an exercise price of $4.22 per share or 15,000 shares of Class C common stock at an exercise price of $4.22 per share, or any combination thereof.

Also, on December 1, 2017, S.

Andrew Quist was granted stock options to purchase 20,000 shares of Class A common stock at an exercise price of $4.33 per share or 20,000 shares of Class C

common stock at an exercise price of $4.33 per share, or any combination thereof.

Andrew Quist was granted stock options to purchase 20,000 shares of Class A common stock at an exercise price of $4.22 per share or 20,000 shares of Class C common stock at an exercise price of $4.22 per share, or any combination thereof.

(5) On November 30, 2018, Garrett S.

Sill was granted stock options to purchase 20,000 shares of Class A common stock at an exercise price of $4.98 per share or 20,000 shares of Class C common stock at an exercise

price of $4.98 per share, or any combination thereof.

Sill was granted stock options to purchase 20,000 shares of Class A common stock at an exercise price of $4.86 per share or 20,000 shares of Class C common stock at an exercise price of $4.86 per share, or any combination thereof.

Also, on November 30, 2018, S.

Andrew Quist was granted stock options to purchase 25,000 shares of Class A common stock at an exercise price of $4.98 per share or 20,000 shares of Class C

common stock at an exercise price of $4.98 per share, or any combination thereof.

Andrew Quist was granted stock options to purchase 25,000 shares of Class A common stock at an exercise price of $4.86 per share or 20,000 shares of Class C common stock at an exercise price of $4.86 per share, or any combination thereof.

(6) On December 6, 2019, Scott M.

Quist was granted stock options to purchase 50,000 shares of Class A common stock at an exercise price of $5.44 per share or 50,000 shares of Class C common stock at an exercise

price of $5.44 per share, or any combination thereof.

Quist was granted stock options to purchase 50,000 shares of Class A common stock at an exercise price of $5.30 per share or 50,000 shares of Class C common stock at an exercise price of $5.30 per share, or any combination thereof.

Also, on December 6, 2019, Garrett S.

Sill was granted stock options to purchase 25,000 shares of Class A common stock at an exercise price of $5.19 per share or 25,000 shares of Class C

common stock at an exercise price of $5.19 per share, or any combination thereof.

Sill was granted stock options to purchase 25,000 shares of Class A common stock at an exercise price of $5.06 per share or 25,000 shares of Class C common stock at an exercise price of $5.06 per share, or any combination thereof.

Also, on December 6, 2019, S.

Andrew Quist was granted stock options to purchase 40,000 shares of Class A common stock at an exercise price of $5.19 per share

or 40,000 shares of Class C common stock at an exercise price of $5.19 per share, or any combination thereof.

Stock options vest at the rate of 25% of the total number of shares subject to the options on March 1, 2020 and 25% of the total number of shares on the last day of each three month period thereafter.

Andrew Quist was granted stock options to purchase 40,000 shares of Class A common stock at an exercise price of $5.06 per share or 40,000 shares of Class C common stock at an exercise price of $5.06 per share, or any combination thereof.

(7) On March 27, 2020, Scott M.

Quist was granted stock options to purchase 50,000 shares of Class A common stock at an exercise price of $3.85 per share or 50,000 shares of Class C common stock at an exercise price of $3.85 per share, or any combination thereof.

Also, on March 27, 2020, Garrett S.

Sill was granted stock options to purchase 25,000 shares of Class A common stock at an exercise price of $3.67 per share or 25,000 shares of Class C common stock at an exercise price of $3.67 per share, or any combination thereof.

Also, on March 27, 2020, S.

Andrew Quist was granted stock options to purchase 40,000 shares of Class A common stock at an exercise price of $3.67 per share or 40,000 shares of Class C common stock at an exercise price of $3.67 per share, or any combination thereof.

(8) Stock options vest at the rate of 25% of the total number of shares per quarter over a one year period after the grant date.

OPTION AWARDS VESTING SCHEDULE

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These options vested 25% per quarter over a one year period after the grant date.

These options vest 25% per quarter over a one year period after the grant date.

OPTION EXERCISES AND STOCK VESTED

The following table sets forth all stock options exercised and value received upon exercise, and all stock awards vested and value realized upon vesting, by the Named Executive Officers during the

year ended December 31, 2019.

The following table sets forth all stock options exercised and value received upon exercise, and all stock awards vested and value realized upon vesting, by the Named Executive Officers during the year ended December 31, 2020.

Option Awards

12 unchanged sentences

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information as of December 31, 2019 with respect to compensation plans (including individual compensation arrangements) under which the Company’s equity securities are authorized

for issuance, aggregated as follows:

All compensation plans previously approved by security holders;

The following table sets forth certain information as of December 31, 2020 with respect to compensation plans (including individual compensation arrangements) under which the Company’s equity securities are authorized for issuance, aggregated as follows:

· All compensation plans previously approved by security holders;

· All compensation plans not previously approved by security holders.

Plan Category

3 unchanged sentences

Equity compensation plans approved by stockholders (1)

1,735,529 (2)

Equity compensation plans not approved by stockholders

This reflects the 2013 Stock Option Plan (the "2013 Plan") and the 2014 Director Stock Option Plan (the "2014 Director Plan").

The 2013 Plan was approved by the stockholders at the annual stockholders meeting

held on July 12, 2013, which reserved 450,000 shares of Class A common stock of which 150,000 shares of Class A common stock could be issued in place of up to 150,000 shares of Class C common stock for issuance thereunder.

The 2014 Director

Plan was approved by stockholders at the annual stockholders meeting held on July 2, 2014, which reserved 150,000 shares of Class A common stock for issuance thereunder.

The 2013 Plan was amended by the stockholders at the annual stockholders

meeting held on July 1, 2015 to authorize an additional 450,000 shares of Class A common stock to be available for issuance under the Plan, of which up to 200,000 Class A common shares may be issued as up to 200,000 shares of Class C common

to 250,000 Class A common shares may be issued in place of up to 250,000 shares of Class C common stock.

_____________________

(1) This reflects the 2013 Stock Option Plan (the "2013 Plan") and the 2014 Director Stock Option Plan (the "2014 Director Plan").

The 2013 Plan was approved by the stockholders at the annual stockholders meeting held on July 12, 2013, which reserved 450,000 shares of Class A common stock of which 150,000 shares of Class A common stock could be issued in place of up to 150,000 shares of Class C common stock for issuance thereunder.

The 2014 Director Plan was approved by stockholders at the annual stockholders meeting held on July 2, 2014, which reserved 150,000 shares of Class A common stock for issuance thereunder.

The 2013 Plan was amended by the stockholders at the annual stockholders meeting held on July 1, 2015 to authorize an additional 450,000 shares of Class A common stock to be available for issuance under the Plan, of which up to 200,000 Class A common shares may be issued as up to 200,000 shares of Class C common stock.

The 2013 Plan was further amended by the stockholders at the annual stockholders meeting held on June 29, 2017 to authorize an additional 500,000 shares of Class A common stock to be available for issuance under the Plan, of which up to 250,000 Class A common shares may be issued in place of up to 250,000 shares of Class C common stock.

The 2013 Plan was further amended by the stockholders at the annual stockholders meeting

held on June 26, 2020 to authorize an additional 500,000 shares of Class A common stock to be available for issuance under the Plan, of which up to 350,000 Class A common shares may be issued in place of up to 350,000 shares of Class C common stock.

The 2014 Director Plan was amended by the stockholders at the annual stockholders meeting held on June 26, 2020 to authorize an additional 100,000 shares of Class A common stock to be available for issuance under the Plan.

(2) The weighted average exercise prices reflect solely the shares of Class A common stock that will be issued upon exercise of outstanding options.

This number includes 188,054 shares of Class A common stock available for future issuance under the 2013 Plan, and 17,610 shares of Class A common stock available for future issuance under the 2014 Director

(3) This number includes 502,072 shares of Class A common stock available for future issuance under the 2013 Plan, and 89,800 shares of Class A common stock available for future issuance under the 2014 Director Plan.

Employment Agreement with Scott M.

1 unchanged sentence

Quist, Chairman of the Board, President, and Chief Executive Officer of the Company.

The agreement was for a

six-year term beginning on December 4, 2012 and ending on December 4, 2018.

The agreement was for a six-year term beginning on December 4, 2012 and ending on December 4, 2018.

Under the terms of the Agreement, the Board of Directors may, in its sole discretion, extend the term of the agreement for an additional four-year term provided that Mr.

1 unchanged sentence

In addition, Mr.

Quist is required to perform such additional duties as may be assigned to him from time

to time by the Company’s Board of Directors.

Quist is required to perform such additional duties as may be assigned to him from time to time by the Company’s Board of Directors.

Effective December 4, 2018, the Board members approved a motion to extend Mr.

Quist’s employment agreement for an additional four-year term ending December 2022.

Quist abstained from voting on

the motion to extend his employment agreement for the additional four-year term.

Quist abstained from voting on the motion to extend his employment agreement for the additional four-year term.

Under the terms of the agreement, Mr.

Quist is to devote his full time to the Company, serving as Chairman of the Board, President and Chief Executive Officer at not

less than his current salary and benefits.

Quist is to devote his full time to the Company, serving as Chairman of the Board, President and Chief Executive Officer at not less than his current salary and benefits.

The Company also agrees to maintain a group term life insurance policy of not less than $1,000,000 and a whole life insurance policy in the amount of $500,000 on Mr.

Quist’s life.

In the event of disability,

In the event of disability, Mr.

Quist’s salary would be continued for up to five years at 75% of its current level of compensation.

1 unchanged sentence

Quist is not retained in his current position, the Company would be obligated to continue paying Mr.

Quist’s current compensation and benefits

for seven years following the merger or sale.

Quist’s current compensation and benefits for seven years following the merger or sale.

The employment agreement further provides that Mr.

Quist is entitled to receive annual retirement benefits beginning (i) one month from the date of his retirement (to commence no sooner than age 65), (ii)

five years following complete disability, or (iii) upon termination of his employment without cause.

These retirement benefits are to be paid for a period of twenty years in annual installments in the amount equal to 75% of his then current level of

compensation.

Quist is entitled to receive annual retirement benefits beginning (i) one month from the date of his retirement (to commence no sooner than age 65), (ii) five years following complete disability, or (iii) upon termination of his employment without cause.

These retirement benefits are to be paid for a period of twenty years in annual installments in the amount equal to 75% of his then current level of compensation.

In the event that Mr.

Quist dies prior to receiving all retirement benefits thereunder, the remaining benefits are to be paid to his heirs.

The Company expensed $660,000 and $660,000 during the years ended December 31, 2019 and 2018,

respectively, to cover the present value of anticipated retirement benefits under the employment agreement.

The Company expensed $900,000 and $660,000 during the years ended December 31, 2020 and 2019, respectively, to cover the present value of anticipated retirement benefits under the employment agreement.

The liability accrued was $6,656,363 and $5,851,670 as of December 31, 2020 and 2019, respectively.

Director Compensation

Directors of the Company (but not including directors who are employees) are currently paid a director’s fee of $21,600 per year by the Company for their services and are reimbursed for their

expenses in attending board and committee meetings.

Independent Director Compensation

Independent directors of the Company (but not including directors who are employees) are currently paid a director’s fee of $21,600 per year ($1,800 monthly) by the Company for their services and are reimbursed for their expenses in attending board and committee meetings.

An additional fee of $750 is paid to each audit committee member for each audit committee meeting attended.

Each director is provided with an annual grant of stock options to purchase 1,000 shares

of Class A common stock, which occurred under the 2000 Director Stock Option Plan for years 2000 to 2005, under the 2006 Director Stock Option Plan and under the 2014 Director Plan for years 2006 to 2019.

During 2019 each director was granted

additional stock options to purchase 1,000 shares of Class A common stock.

Each independent director is provided with an annual grant of stock options to purchase 1,000 shares of Class A common stock.

During 2020 each independent director was granted additional

stock options to purchase 5,000 shares of Class A common stock.

Upon retirement from the board, each independent director will receive “retirement compensation” equal to one month director’s fee for every year of service.

DIRECTOR COMPENSATION

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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 made discretionary employer

matching contributions to its employees who choose to participate in the plan.

Under the terms of the 401(k) plan, effective as of January 1, 1995, the Company made discretionary employer matching contributions to its employees who choose to participate in the plan.

The plan allowed the board to determine the amount of the contribution at the end of each year.

During the period from January 1, 1995 to December 31, 2007 the Board had

adopted a contribution formula specifying that such discretionary employer matching contributions would equal 50% of the participating employee’s contribution to the plan to purchase the Company’s stock up to a maximum discretionary employee

contribution of 1/2 of 1% of participating employees’ compensation, as defined by the plan.

During the period from January 1, 1995 to December 31, 2007 the Board had adopted a contribution formula specifying that such discretionary employer matching contributions would equal 50% of the participating employee’s contribution to the plan to purchase the Company’s stock up to a maximum discretionary employee contribution of 1/2 of 1% of participating employees’ 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.

All Company matching contributions are invested in the Company’s Class A common stock.

Also, the Company may contribute at the discretion of the Company’s Board of Directors an Employer Profit Sharing Contribution to the 401(k) plan.

The Employer Profit Sharing Contribution is to be

divided among three different classes of participants in the plan based upon the participant’s title in the Company.

The Employer Profit Sharing Contribution is to be divided among three different classes of participants in the plan based upon the participant’s title in the Company.

All amounts contributed to the plan are deposited into a trust fund administered by an independent trustee.

Beginning January 1, 2008, the Company elected to be a “Safe Harbor” Plan for its matching 401(k) contributions.

The Company will match 100% of up to 3% of an employee’s total annual compensation and

50% of 4% to 5% of an employee’s annual compensation.

The Company will match 100% of up to 3% of an employee’s total annual compensation and 50% of 4% to 5% of an employee’s annual compensation.

The match is in shares of the Company’s Class A common stock.

1 unchanged sentence

Stock Repurchase Plan

On September 7, 2018, the Board approved the Security National Financial Stock Repurchase Plan that authorized the repurchase of 300,000 shares of the Company's Class A Common Stock in the open

On September 7, 2018, the Board of Directors of the Company approved a Stock Repurchase Plan that authorized the repurchase of 300,000 shares of the Company's Class A Common Stock in the open market.

The Stock Repurchase Plan was amended on December 4, 2020.

The amendment authorized the repurchase of a total of 1,000,000 shares of the Company’s Class A Common Stock in the open market.

The repurchased shares of Class A common stock will be held as treasury shares to be used as the Company's employer matching contribution to the Employee 401(k) Retirement Savings Plan.

1 unchanged sentence

Effective January 1, 1980, the Company adopted an employee stock ownership plan (the “ESOP Plan”) for the benefit of career employees of the Company and its subsidiaries.

Under the ESOP Plan, the

Company used discretionary power to make contributions on behalf of all eligible employees into a trust created under the ESOP Plan.

Employees became eligible to participate in the ESOP Plan when they attained the age of 19 and 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 ESOP Plan were 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.

Under the ESOP Plan, the Company used discretionary power to make contributions on behalf of all eligible employees into a trust created under the ESOP Plan.

Employees became eligible to participate in the ESOP Plan when they attained the age of 19 and 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 ESOP Plan were 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.

Benefits under the ESOP Plan vested as follows:

20% after the second year of eligible service by an employee and an additional 20% each year thereafter of eligible service until 100% vested.

Benefits under the ESOP 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 or demonstrates financial hardship.

Benefits under the ESOP 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 or demonstrates financial hardship.

On November 25, 2019, the Company distributed a “Notice of Intent to Terminate” the ESOP Plan to all current plan participants.

The Company also filed Form 5310 “Application for Determination for

Terminating Plan”, with the IRS on December 6, 2019.

The Company also filed Form 5310 “Application for Determination for Terminating Plan”, with the IRS on December 6, 2019.

Beginning in the 4th quarter of 2020, the Company began to distribute the ESOP Plan assets to participants that had made a distribution election.

The Company is awaiting approval of its application from the IRS prior to its final distribution of the ESOP Plan assets to the participants.

At December 31, 2019, the ESOP Plan had 495,618 shares

of SNFC Class A and 307,491 shares of Class C Stock.

At December 31, 2020, the ESOP held 231,312 shares of Class A and 118,880 shares of Class C common stock of the Company.

The trustees of the trust fund under the ESOP Plan are Scott M.

4 unchanged sentences

In 2001, the Company’s Board of Directors adopted a Non-Qualified Deferred Compensation Plan, and this plan was amended in 2005 and later in 2019.

Under the terms of the 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.

Under the terms of the 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 may contribute into the plan at the discretion of the Company’s Board of Directors.

The Company did not make any contributions for 2020 and 2019.

3 unchanged sentences

NON-QUALIFIED DEFERRED COMPENSATION

The following table sets forth contributions to the non-qualified deferred compensation account of the Named Executive Officers in fiscal 2019 and the aggregate balance of deferred compensation of

the Named Executive Officers at December 31, 2019.

The following table sets forth the balances of the non-qualified deferred compensation account of the Named Executive Officers in fiscal 2020 and the aggregate balance of deferred compensation of the Named Executive Officers at December 31, 2020.

Contributions

1 unchanged sentence

Distributions

_______________________

(1) Includes 9,757 shares of the Company’s Class A common stock, based on the closing price of $8.35 at December 31, 2020.

(2) Includes 11,911 shares of the Company’s Class A common stock, based on the closing price of $8.35 at December 31, 2020.

2013 Stock Option Plan

On August 24, 2013, the Company adopted the Security National Financial Corporation 2013 Stock Option Plan (the “2013 Plan”), which reserved 450,000 shares of Class A common stock to be made

available for issuance thereunder, of which up to 150,000 shares of Class C common stock could be issued in place of up to 150,000 shares of Class A common stock.

The 2013 Plan provides for the grant of options and the award or sale of stock to

officers, directors, and employees of the Company.

On August 24, 2013, the Company adopted the Security National Financial Corporation 2013 Stock Option Plan (the “2013 Plan”), which reserved 450,000 shares of Class A common stock to be made available for issuance thereunder, of which up to 150,000 shares of Class C common stock could be issued in place of up to 150,000 shares of Class A common stock.

The 2013 Plan provides for the grant of options and the award or sale of stock to officers, directors, and employees of the Company.

Both “incentive stock options”, as defined under Section 422A of the Internal Revenue Code of 1986 and “non-qualified options” may be granted under the 2013 Plan.

On July 1, 2015, the stockholders approved an amendment to the 2013 Plan to authorize an additional 450,000 shares of Class A common stock under the Plan, of which up to 200,000 Class C common stock

may be issued in place of up to 200,000 shares of Class A common stock.

On June 29, 2017, the stockholders approved an amendment to the 2013 Plan to authorize an additional 500,000 shares of Class A common stock under the Plan, of which up to 250,000

Class C common stock may be issued in place of up to 250,000 shares of Class A common stock.

On July 1, 2015, the stockholders approved an amendment to the 2013 Plan to authorize an additional 450,000 shares of Class A common stock under the Plan, of which up to 200,000 Class C common stock may be issued in place of up to 200,000 shares of Class A common stock.

On June 29, 2017, the stockholders approved an amendment to the 2013 Plan to authorize an additional 500,000 shares of Class A common stock under the Plan, of which up to 250,000 Class C common stock may be issued in place of up to 250,000 shares of Class A common stock.

On June 26, 2020, the stockholders approved an amendment to the 2013 Plan to authorize an additional 500,000 shares of Class A common stock under the Plan, of which up to 350,000 Class C common stock may be issued in place of up to 350,000 shares of Class A common stock.

The 2013 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 2013 Plan are to be

determined by the Board of Directors or its committee.

The terms of options granted or stock awards or sales affected under the 2013 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 the grant.

Options intended as incentive stock options may be issued only to employees, and must meet certain

conditions imposed by the Internal Revenue 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 2013 Plan provides that the exercise price for non-qualified

options will not be less than at least 50% of the fair market value of the stock subject to such option as of the date of grant of such options, as determined by the Company’s Board of Directors.

The 2013 Plan also 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, an appropriate adjustments shall be made in the purchase prices to reflect

such subdivision, combination or stock dividend.

Options intended as incentive stock options may be issued only to employees, and must meet certain conditions imposed by the Internal Revenue 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 2013 Plan provides that the exercise price for non-qualified options will not be less than at least 50% of the fair market value of the stock subject to such option as of the date of grant of such options, as determined by the Company’s Board of Directors.

The 2013 Plan also 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, an appropriate adjustments shall be made in the purchase prices 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

No options may be exercised for a term of more than ten years from the date of grant.

On December 4, 2015, the Board of Directors approved a resolution to amend the Company’s 2013 Stock Option Plan to include additional equity incentive awards.

These additional incentive awards in the

plan consist of Stock Appreciation Rights (SARs), Restricted Stock Units (RSUs) and Performance Share Awards.

Stock Appreciation Rights are awards that entitle the recipient to receive cash or stock equal to the excess of the Company’s stock price on

the date the SAR is exercised.

Restricted Stock Units entitle the recipient to receive RSUs that require the Company on the distribution dates to transfer to the recipient one unrestricted, fully transferable share of stock for each RSU scheduled to

be paid out on that date.

These additional incentive awards in the plan consist of Stock Appreciation Rights (SARs), Restricted Stock Units (RSUs) and Performance Share Awards.

Stock Appreciation Rights are awards that entitle the recipient to receive cash or stock equal to the excess of the Company’s stock price on the date the SAR is exercised.

Performance Share Awards entitle the recipient to receive stock based on the Company meeting certain performance goals.

The 2013 Plan has a term of ten years.

The Board of Directors may amend or terminate the 2013 Plan at any time, from time to time, subject to approval of certain modifications to the 2013 Plan by the

stockholders of the Company as may be required by law or the 2013 Plan.

The Board of Directors may amend or terminate the 2013 Plan at any time, from time to time, subject to approval of certain modifications to the 2013 Plan by the stockholders of the Company as may be required by law or the 2013 Plan.

2014 Director Stock Option Plan

On May 16, 2014, the Company adopted the 2014 Director Stock Option Plan (the “2014 Director Plan”).

The 2014 Director Plan provides for the grant by the Company of options to purchase up to an

aggregate of 150,000 shares of Class A common stock for issuance there under.

The 2014 Director Plan provides that each member of the Company’s Board of Directors who is not an employee or paid consultant of the Company is automatically eligible to

receive options to purchase the Company’s Class A common stock under the plan.

The 2014 Director Plan provides for the grant by the Company of options to purchase up to an aggregate of 150,000 shares of Class A common stock for issuance there under.

The 2014 Director Plan provides that each member of the Company’s Board of Directors who is not an employee or paid consultant of the Company is automatically eligible to receive options to purchase the Company’s Class A common stock under the plan.

The 2014 Director Plan replaces the Company’s 2006 Director Plan, which was terminated on July 2, 2014.

In addition, the 2014 Director Plan provides that beginning on December 7, 2014, and on each anniversary date thereof during the term plan, each outside director shall automatically receive an option

to purchase 1,000 shares of Class A common stock.

Also, each new outside director who joins the Board after the effective date shall be granted an option to purchase 1,000 shares of Class A common stock upon the date which such person first becomes

an outside director and an annual grant of an option to purchase 1,000 shares of Class A common stock on each anniversary date thereof during the term of the 2014 Director Plan.

The options granted to outside directors shall vest in four equal

quarterly installments over a one year period from the date of grant, until such shares are fully vested.

The primary purposes of the 2014 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

granted under the 2014 Director Plan 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 2014 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.

On June 26, 2020, the stockholders approved

an amendment to the 2014 Director Plan to authorize an additional 100,000 shares of Class A common stock under the Plan.

In addition, the 2014 Director Plan provides that beginning on December 7, 2014, and on each anniversary date thereof during the term plan, each outside director shall automatically receive an option to purchase 1,000 shares of Class A common stock.

Also, each new outside director who joins the Board after the effective date shall be granted an option to purchase 1,000 shares of Class A common stock upon the date which such person first becomes an outside director and an annual grant of an option to purchase 1,000 shares of Class A common stock on each anniversary date thereof during the term of the 2014 Director Plan.

The options granted to outside directors shall vest in four equal quarterly installments over a one year period from the date of grant, until such shares are fully vested.

The primary purposes of the 2014 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 granted under the 2014 Director Plan 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 2014 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.

Stock Purchase Plan

On September 11, 2015, the Board approved the Security National Financial Corporation Stock Purchase Plan for the mutual benefit of the Company and its stockholders.

Under the terms of the Plan, the

Company has the option to purchase shares of Class A common stock from its officers and directors who exercise the stock options granted to them under any of the Company’s stock option plans with the proceeds from such purchase to be used to pay the

taxes owed by such officers and directors as a result of the exercise of their stock options.

Additionally, the officers and directors who exercise their stock options may, in their discretion, request that the Company purchase shares of their Class

A common stock with the proceeds from such sale to be used to pay the taxes owed by such officers and directors as a result of the exercise of their stock options.

The Company is authorized under the plan to purchase no more than 60,000 shares of Class A common stock in any calendar year to pay the taxes owed by the officers and directors who exercise their

stock options under the Stock Purchase Plan.

Market on the day that the applicable stock options are exercised by such officers and directors.

The Company may only purchase shares of Class A common stock from the officers and directors exercising their stock options under the Stock Purchase

Plan during the “Trading Window” as defined in the Company’s Insider Trading Policy and Guidelines.

Under the terms of the Plan, the Company has the option to purchase shares of Class A common stock from its officers and directors who exercise the stock options granted to them under any of the Company’s stock option plans with the proceeds from such purchase to be used to pay the taxes owed by such officers and directors as a result of the exercise of their stock options.

Additionally, the officers and directors who exercise their stock options may, in their discretion, request that the Company purchase shares of their Class A common stock with the proceeds from such sale to be used to pay the taxes owed by such officers and directors as a result of the exercise of their stock options.

The Company is authorized under the plan to purchase no more than 60,000 shares of Class A common stock in any calendar year to pay the taxes owed by the officers and directors who exercise their stock options under the Stock Purchase Plan.

The Company’s purchase price for the Class A common stock under the Stock Purchase Plan shall be equal to the closing sales price of the Company’s Class A common stock as reported by The Nasdaq National Market on the day that the applicable stock options are exercised by such officers and directors.

The Company may only purchase shares of Class A common stock from the officers and directors exercising their stock options under the Stock Purchase Plan during the “Trading Window” as defined in the Company’s Insider Trading Policy and Guidelines.

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

securities to file reports of ownership and periodic changes in ownership of the Company’s Class A and Class C 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 the Company with respect to fiscal 2019, or written representations from certain reporting persons, the Company believes that its

directors, executive officers and greater than 10% beneficial owners complied with all Section 16(a) filing requirements applicable to them, except that each of the executive officers and directors, through an oversight, filed one late Form 4 report

disclosing the granting of stock options on December 6, 2019.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers, directors and persons who own more than 10% of a registered class of the Company’s equity securities to file reports of ownership and periodic changes in ownership of the Company’s Class A and Class C 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 the Company with respect to fiscal 2020, or written representations from certain reporting persons, the Company believes that its directors, executive officers and greater than 10% beneficial owners complied with all Section 16(a) filing requirements applicable to them, except the timely filing of Form 4 reports disclosing the granting and exercise of stock options.

Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth security ownership information of the Company’s Class A and Class C common stock as of March 31, 2020, (i) for persons who own beneficially more than 5% of the

Company’s outstanding Class A or Class C common stock, (ii) for each director of the Company, and (iii) for all executive officers and directors of the Company as a group.

The following table sets forth security ownership information of the Company’s Class A and Class C common stock as of March 31, 2021, (i) for persons who own beneficially more than 5% of the Company’s outstanding Class A or Class C common stock, (ii) for each director of the Company, and (iii) for all executive officers and directors of the Company as a group.

Class A and Class C

Name and Address (1)

and Shirley C.

Quist Family Partnership, Ltd.

Amount Beneficially Owned

401(k) Retirement Savings Plan (2)

Quist (4)(5)(6)(7)(8)

Quist Family Trust (3)

and Shirley C.

Quist Partnership, Ltd.

M3 Funds, LLC (5)

Non-Qualified Deferred Compensation Plan (6)

Employee Stock Ownership Plan (ESOP) (11)

Quist (7)(8)(9)(10)(11)(12)

Overbaugh (13)

Andrew Quist (7) (10)(14)

Employee Stock Ownership Plan (ESOP) (15)

Associated Investors (16)

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Sill (9)(11)(17)

Quist (7)(18)

Stephens (19)

Craig Moody (18)

Johnson (9)(11)(20)

All directors and executive officers (12 persons)

Craig Moody (21)

All directors and executive officers

* Less than 1%

(1) Unless otherwise indicated, the address of each listed stockholder is c/o Security National Financial Corporation, 121 West Election Road, Suite 100, Draper, Utah 84020.

(2) The investment committee of the 401(k) Retirement Savings Plan consists of Scott M.

Quist, Stephen C.

Johnson and Garrett S.

Sill, who exercise shared voting and investment powers with respect to such shares.

(3) This stock is owned by the Scott M.

Quist Family Trust, of which S.

Andrew Quist, Amanda J.

Nelson and Adam G.

Quist are the trustees and, accordingly, exercise shared voting and investment powers with respect to such shares.

(4) This stock is owned by the George R.

and Shirley C.

Quist Family Partnership, Ltd., of which Scott M.

Quist is the managing general partner and, accordingly, exercises sole voting and investment powers with

respect to such shares.

The investment committee of the 401(k) Retirement Savings Plan consists of Scott M.

Quist Partnership, Ltd., of which Scott M.

Quist is the managing general partner and, accordingly, exercises sole voting and investment powers with respect to such shares.

(5) Based solely on the Schedule 13G/A filed on February 12, 2021, Jason A.

Stock, Manager of M3 Partners, LP, a Delaware limited partnership, and M3 Funds, LLC, a Delaware limited liability company, General Partner of M3 Partners, LP;

Stock, Manager of M3 Funds, LLC;

Stock, Managing Director of M3F, Inc., a Utah corporation;

Stock, individually, and William C.

Waller, individually, exercise shared voting and investment powers with respect to 1,427,060 shares of the Company’s Class A common stock, or 8.7% of the outstanding shares of the Company’s Class A common stock.

The address of all entities and individuals filing the Schedule 13G/A is 10 Exchange Place, Suite 510, Salt Lake City, Utah 84111.

(6) The investment committee of the Company’s Non-Qualified Deferred Compensation Plan consists of Scott M.

Quist, Stephen C.

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Sill, who exercise shared voting and investment powers with respect to such shares.

(7) Does not include 423,477 of Class A common stock and 1,467,026 shares of Class C common stock owned by the Scott M.

Quist and Lisa J.

Quist Family Trust, of which S.

Andrew Quist, Amanda J.

Nelson and Adam G.

Quist are the trustees and, accordingly, exercise shared voting and investment powers with respect to such shares.

Scott Quist is the Company’s Chairman of the Board, President, and Chief Executive Officer.

Includes options to purchase 163,997 shares of Class A common stock and 237,995 shares of Class C common stock

that are currently exercisable or will become exercisable within 60 days of March 31, 2020.

Includes options to purchase 168,097 shares of Class A common stock and 204,735 shares of Class C common stock that are currently exercisable.

Quist’s options to purchase 204,735 shares of Class C common stock may also, at Mr.

Quist’s election, consist of options to purchase 237,995

shares of Class A common stock, or any combination thereof.

Quist has elected to purchase Class C common shares with such options to the extent there are sufficient authorized but unissued Class C common shares available for issuance with

respect to such options.

Quist’s election, consist of options to purchase 204,735 shares of Class A common stock, or any combination thereof.

Quist has elected to purchase Class C common shares with such options to the extent there are sufficient authorized but unissued Class C common shares available for issuance with respect to such options.

Otherwise, Mr.

Quist will elect to purchase shares of Class A common stock with respect to such options.

Does not include 2,132,195 shares of Class A common stock owned by the Company’s 401(k) Retirement Savings Plan, of which Scott M.

(9) Does not include 2,550,857 shares of Class A common stock and 212,058 shares of Class C common stock owned by the Company’s 401(k) Retirement Savings Plan, of which Scott M.

Quist, Stephen C.

Johnson and Garrett S.

Sill are members of the investment

committee and, accordingly, exercise shared voting and investment powers with respect to such shares.

Sill are members of the investment committee and, accordingly, exercise shared voting and investment powers with respect to such shares.

(10) Does not include 189,053 shares of Class A common stock and 73,589 shares of Class C common stock owned by the Company’s Employee Stock Ownership Plan (ESOP), of which Scott M.

Andrew Quist and

Andrew Quist and Robert G.

Hunter are the trustees and, accordingly, exercise shared voting and investment powers with respect to such shares.

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Johnson and Garrett S.

Sill are members of the

investment committee and, accordingly, exercise shared voting and investment powers with respect to such shares.

Sill are members of the investment committee and, accordingly, exercise shared voting and investment powers with respect to such shares.

(12) Does not include 87,214 shares of Class A common stock and 136,174 shares of Class C common stock owned by Associated Investors, a Utah general partnership, of which Scott M.

Quist is the managing partner and,

accordingly, exercises sole voting and investment powers with respect to such shares.

Based solely on the Schedule 13G/A filed on February 12, 2020, Jason A.

Stock, Manager of M3 Partners, LP, a Delaware limited partnership, and M3 Funds, LLC, a Delaware limited liability company, General

Partner of M3 Partners, LP;

Stock, Manager of M3 Funds, LLC;

Stock, Managing Director of M3F, Inc., a Utah corporation;

Stock, individually, and William C.

Waller, individually, exercise shared voting and

investment powers with respect to 1,073,409 shares of the Company’s Class A common stock, or 6.7% of the outstanding shares of the Company’s Class A common stock.

The address of all entities and individuals filing the Schedule 13G/A is 10

Exchange Place, Suite 510, Salt Lake City, Utah 84111.

The investment committee of the Company’s Non-Qualified Deferred Compensation Plan consists of Scott M.

Quist, Stephen C.

Johnson, and Garrett S.

Sill, who exercise shared voting and investment powers with

respect to such shares.

The trustees of the Employee Stock Ownership Plan (ESOP) consist of Scott M.

Andrew Quist, and Robert G.

Hunter who exercise shared voting and investment powers with respect to such shares.

Quist is the managing partner and, accordingly, exercises sole voting and investment powers with respect to such shares.

Overbaugh is the Company’s Vice President, National Marketing Director of Life Insurance, and a director.

Includes options to purchase 104,113 shares of Class A common stock and options to purchase 58,591

shares of Class C common stock that are currently exercisable or will become exercisable within 60 days of March 31, 2020.

Includes options to purchase 78,557 shares of Class A common stock and options to purchase 115,022 shares of Class C common stock that are currently exercisable.

The options to purchase 78,557 shares of Class C common stock may also, at Mr.

Overbaugh’s election, consist of options

to purchase 58,591 shares of Class A common stock, or any combination thereof.

Overbaugh has elected to purchase Class C common shares with such options to the extent there are sufficient authorized but unissued Class C common shares

available for issuance with respect to such options.

Overbaugh’s election, consist of options to purchase 78,557 shares of Class A common stock, or any combination thereof.

Overbaugh has elected to purchase Class C common shares with such options to the extent there are sufficient authorized but unissued Class C common shares available for issuance with respect to such options.

Otherwise, Mr.

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Andrew Quist is the Company’s Vice President, General Counsel, and a director.

Includes options to purchase 126,275 shares of Class A common stock and options to purchase 61,216 shares of Class C common

stock that are currently exercisable or will become exercisable within 60 days of March 31, 2020.

Includes options to purchase 129,432 shares of Class A common stock and options to purchase 136,034 shares of Class C common stock that are currently exercisable.

The options to purchase 136,034 shares of Class C common stock may also, at Mr.

Quist’s election, consist of options to purchase 61,216 shares of

Class A common stock, or any combination thereof.

Andrew Quist has elected to purchase Class C common shares with such options to the extent there are sufficient authorized but unissued Class C common shares available for issuance with

respect to such options.

Quist’s election, consist of options to purchase 136,034 shares of Class A common stock, or any combination thereof.

Andrew Quist has elected to purchase Class C common shares with such options to the extent there are sufficient authorized but unissued Class C common shares available for issuance with respect to such options.

Otherwise, Mr.

Quist will elect to purchase shares of Class A common stock with respect to such options.

(15) The trustees of the Employee Stock Ownership Plan (ESOP) consist of Scott M.

Andrew Quist, and Robert G.

Hunter who exercise shared voting and investment powers with respect to such shares.

(16) The managing general partner of Associated Investors is Scott M.

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Sill is the Company’s Chief Financial Officer and Treasurer.

Includes options to purchase 46,629 shares of Class A common stock and options to purchase 45,977 shares of Class C common stock that are

currently exercisable or will become exercisable within 60 days of March 31, 2020.

Includes options to purchase 22,254 shares of Class A common stock and options to purchase 92,931 shares of Class C common stock that are currently exercisable.

The options to purchase 92,931 shares of Class C common stock may also, at Mr.

Sill’s election, consist of options to purchase 45,977 shares of Class A common

stock, or any combination thereof.

Sill’s election, consist of options to purchase 92,931 shares of Class A common stock, or any combination thereof.

Sill has elected to purchase Class C common shares with such options to the extent there are sufficient authorized but unissued Class C common shares available for issuance with respect to such options.

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Sill will elect to purchase shares of Class A common stock with respect to such options.

Stephens is the Company’s Senior General Counsel and Secretary.

Includes options to purchase 45,752 shares of Class A common stock granted to Mr.

Stephens that are currently exercisable or will become

exercisable within 60 days of March 31, 2020.

Adam Quist is the Vice President – Memorial Services, Assistant Secretary, and General Counsel of the Company.

Includes options to purchase 23,770 shares of Class A common stock and options to purchase

48,602 shares of Class C common stock that are currently exercisable or will become exercisable within 60 days of March 31, 2020.

Includes options to purchase 28,289 shares of Class A common stock and options to purchase 113,944 shares of Class C common stock that are currently exercisable.

The options to purchase 113,944 shares of Class C common stock may also, at Mr.

Quist’s election, consist of

options to purchase 48,602 shares of Class A common stock, or any combination thereof.

Adam Quist has elected to purchase Class C common shares with such options to the extent there are sufficient authorized but unissued Class C common

shares available for issuance with respect to such options.

Quist’s election, consist of options to purchase 113,944

shares of Class A common stock, or any combination thereof.

Adam Quist has elected to purchase Class C common shares with such options to the extent there are sufficient authorized but unissued Class C common shares available for issuance with respect to such options.

Otherwise, Mr.

Quist will elect to purchase shares of Class A common stock with respect to such options.

Moody is a director of the Company.

Stephens is the Company’s Senior General Counsel and Secretary.

Includes options to purchase 60,640 shares of Class A common stock granted to Mr.

Moody that are currently exercisable or will become exercisable within 60 days of March

Stephens that are currently exercisable.

Johnson is the Company’s Vice President of Mortgage Operations.

Includes options to purchase 73,423 shares of Class A common stock granted to Mr.

Johnson that are currently exercisable or will become

exercisable within 60 days of March 31, 2020.

Johnson that are currently exercisable.

Moody is a director of the Company.

Includes options to purchase 71,202 shares of Class A common stock granted to Mr.

Moody that are currently exercisable.

Hunter is a director of the Company.

Includes options to purchase 71,202 shares of Class A common stock granted to Dr.

Hunter that are currently exercisable or will become exercisable within 60 days of

March 31, 2020.

Hunter that are currently exercisable.

Fuller is a director of the Company.

Includes options to purchase 52,572 shares of Class A common stock granted to Mr.

Fuller that are currently exercisable or will become exercisable within 60 days of

March 31, 2020.

Fuller that are currently exercisable.

Cook is a director of the Company.

Includes options to purchase 52,572 shares of Class A common stock granted to Mr.

Cook that are currently exercisable or will become exercisable within 60 days of March

Cook that are currently exercisable.

Wilbur is a director of the Company.

Includes options to purchase 30,103 shares of Class A common stock granted to Mr.

Wilbur that are currently exercisable or will become exercisable within 60 days of

March 31, 2020.

Wilbur that are currently exercisable.

The Company’s executive officers and directors, as a group, own beneficially approximately 11.6% of the outstanding shares of the Company’s Class A and Class C common stock.

Certain Relationships and Related Transactions and Director Independence

The Company’s Board of Directors has a written procedure, which requires disclosure to the Board of any material interest or any affiliation on the part of any of its officers, directors or employees

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

Principal Accounting Fees and Services

The following table summarizes the fees of the Company’s current independent auditors, billed to the Company for each of the last two fiscal years for audit and other services.

All of these fees were

reviewed and approved by the Audit Committee of the Board of Directors:

All of these fees were reviewed and approved by the Audit Committee of the Board of Directors:

Audit Fees (1)

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_____________

Audit fees consist of aggregate fees billed for professional services rendered for the audit of the Company’s annual financial statements and review of the interim financial statements included in quarterly

reports or services that are normally provided by the independent auditor in connection with statutory and regulatory filings for the years ended December 31, 2019 and 2018.

Audit related fees consist of aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not

reported under “Audit Fees”.

(1) Audit fees consist of aggregate fees billed for professional services rendered for the audit of the Company’s annual financial statements and review of the interim financial statements included in quarterly reports or services that are normally provided by the independent auditor in connection with statutory and regulatory filings for the years ended December 31, 2020 and 2019.

(2) Audit related fees consist of aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees”.

These fees include review of registration statements, and audits of the Company’s ESOP and 401(k) Plans.

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(a)(2) Financial Statement Schedules

Condensed Balance Sheets as of December 31, 2019 and 2018

and Condensed

Condensed Balance Sheets as of December 31, 2020 and 2019 and Condensed

Statement of Earnings and Cash Flows for the years ended 2020 and 2019

Valuation and Qualifying Accounts

All other schedules to the consolidated financial statements required by Article 7 of Regulation S‑X are not required under the related instructions or are inapplicable and therefore have been

All other schedules to the consolidated financial statements required by Article 7 of Regulation S-X are not required under the related instructions or are inapplicable and therefore have been omitted.

(a)(3) Exhibits

The following Exhibits are filed herewith pursuant to Rule 601 of Regulation S-K or are incorporated by reference to previous filings.

Articles of Incorporation, as amended and restated (6)

Bylaws, as amended and restated (10)

Amended and Restated Articles of Incorporation (5)

Amended and Restated Bylaws (8)

Specimen Class A Stock Certificate (1)

2 unchanged sentences

Employee Stock Ownership Plan, as amended and restated (ESOP) and Trust Agreement (1)

2013 Stock Option and Other Equity Incentive Awards Plan, as amended and restated (4)

2014 Director Stock Option Plan (2)

Amended and Restated 2013 Stock Option and Other Equity Incentive Awards Plan (3)

Amended and Restated 2014 Director Stock Option Plan (12)

Employment Agreement with Scott M.

Stock Purchase Agreement among Security National Financial Corporation, Beta Capital Corp., and Ronald D.

Maxson, sole shareholder (7)

Stock Repurchase Plan (6)

Asset Purchase Agreement among SN Probst LLC, Probst Family Funerals and Cremations, LLC, Heber Valley Funeral Home, Inc., Joe T.

Probst, Clinton Wayne

Probst, Calle J.

Probst, Clinton Wayne Probst, Calle J.

Probst, and Marsha J.

Coinsurance Agreement between Kilpatrick Life Insurance Company and Security National Life Insurance Company (9)

Stock Purchase Agreement among Security National Financial Corporation, Kilpatrick Life Insurance Company, and the shareholders of Kilpatrick Life

Insurance Company (11)

Stock Purchase Agreement among Security National Financial Corporation, Kilpatrick Life Insurance Company, and the shareholders of Kilpatrick Life Insurance Company (9)

Consolidated Statement of Assets Acquired and Liabilities Assumed at December 31, 2019 (10)

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(1) Incorporated by reference from Registration Statement on Form S-1, as filed on June 29, 1987

Incorporated by reference from Schedule 14A Definitive Proxy Statement, as filed on June 2, 2014, related to Company’s Annual Meeting of Stockholders

(2) Incorporated by reference from Report on Form 10-Q, as filed on November 13, 2015

2 unchanged sentences

(5) Incorporated by reference from Report on Form 10-K, as filed on March 31, 2017

Incorporated by reference from Report on Form 8-K, as filed on June 6, 2018

(6) Incorporated by reference from Report on Form 10-Q, as filed on November 13, 2018

3 unchanged sentences

(10) Incorporated by reference from Report on Form 8-K/A, as filed on February 26, 2020

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly

(11) Incorporated by reference from Report on Form 10-Q, as filed on August 14, 2020

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SECURITY NATIONAL FINANCIAL CORPORATION

March 31, 2021

Chairman of the Board, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates

Chairman of the Board, President, and

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Chairman of the Board, President,

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Restricted cash

Property and equipment, at cost, net of accumulated depreciation of $1,659,613 for 2019 and $1,659,613 for 2018

$ 274,565,323

$ 209,137,942

See accompanying notes to condensed financial statements.

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5,000,000 shares authorized;

none issued or outstanding

none issued or

Class A common stock $2.00 par value;

20,000,000 shares authorized;

issued 16,107,779 shares in 2019 and 15,304,798 shares in 2018

issued 16,595,783 shares in 2020 and

16,107,779 shares in 2019

Class B non-voting common stock-$1.00 par value;

5,000,000 shares authorized;

none issued or outstanding

none issued or

Class C convertible common stock, $2.00 par value;

3,000,000 shares authorized;

issued 2,500,887 shares in 2019 and 2,193,643 shares in 2018

issued 2,679,603

shares in 2020 and 2,500,887 shares in 2019

Additional paid-in capital

1 unchanged sentence

Retained Earnings

Treasury stock at cost - 490,823 Class A shares and -0- Class C shares in 2019;

302,541 Class A shares and -0- Class C shares in 2018, held by affiliated companies

Treasury stock at cost - 227,852 Class A shares

and 10,985 Class C shares in 2020;

Class A shares and -0- Class C shares

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

$ 274,565,323

$ 209,137,942

See accompanying notes to condensed financial statements.

4 unchanged sentences

Condensed Statements of Earnings

Years Ended December 31

Net investment income

5 unchanged sentences

Total benefits and expenses

Earnings before income taxes, and earnings of subsidiaries

Earnings before income taxes,

and earnings of subsidiaries

Income tax benefit

18 unchanged sentences

Investment in subsidiaries

(112,390,215)

Mortgage loans held for investment made

1 unchanged sentence

Net cash used in investing activities

(111,776,215)

Cash flows from financing activities:

5 unchanged sentences

Net cash provided by (used in) financing activities

Net change in cash, cash equivalents, restricted cash and restricted cash equivalents

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of year

Net change in cash, cash equivalents, restricted cash and

restricted cash equivalents

Cash, cash equivalents, restricted cash and restricted cash

equivalents at beginning of year

Cash, cash equivalents, restricted cash and restricted

cash equivalents at end of year

See accompanying notes to condensed financial statements.

5 unchanged sentences

1) Bank and Other Loans Payable

4.27% fixed note payable in monthly installments of $53,881 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due December 2021.

Prime rate note payable in monthly installements of $75,108 including principal and interest, collateralized by shares of Security National Life Insurance Company stock, due December 2024

4.27% fixed note payable in monthly installments of $53,881 including

principal and interest, collateralized by shares of Security National

Life Insurance Company stock, due December 2021.

Prime rate note payable in monthly installements of $75,108 including

principal and interest, collateralized by shares of Security National

Life Insurance Company stock, due December 2024

Total bank and other loans

1 unchanged sentence

Bank and other loans, excluding current installments

The Company has a $2,000,000 revolving line-of-credit with a bank with interest payable at the prime rate minus .75%, secured by the capital stock of Security National Life and

maturing September 30, 2020, renewable annually.

At December 31, 2019, the Company was contingently liable under a standby letter of credit aggregating $625,405, to be used as collateral to cover any contingency related to additional risk assessments

pertaining to the Company's captive insurance program.

The Company does not expect any material losses to result from the issuance of the standby letter of credit.

This standby letter of credit will draw on the line of credit if necessary.

Company does not expect any material losses to result from the issuance of the standby letter of credit because claims are not expected to exceed premiums paid.

As of December 31, 2019, there were no amounts outstanding under the revolving

line-of-credit.

The Company has a $2,000,000 revolving line-of-credit with a bank with interest payable at the prime rate minus .75%, secured by the capital stock of Security National Life and maturing September 30, 2021, renewable annually.

At December 31, 2020, the Company was contingently liable under a standby letter of credit aggregating $348,183, to be used as collateral to cover any contingency related to additional risk assessments pertaining to the Company's captive insurance program and was contingently liable under standby letters of credit aggregating $1,585,063, to be used as collateral for residential subdivision land developments.

The standby letters of credit will draw on the line of credit if necessary.

The Company does not expect any material losses to result from the issuance of the standby letters of credit.

As of December 31, 2020, there were no amounts outstanding under the revolving line-of-credit.

The following tabulation shows the combined maturities of bank and other loans payable:

9 unchanged sentences

3) Dividends and Capital Contributions

In 2019, SecurityNational Mortgage Company paid cash dividends of $1,199,865 and declared cash dividends of $2,435,605 to be paid to the registrant at a future date to be determined by the Board of

In 2018, SecurityNational Mortgage Company, a wholly owned subsidiary of the Registrant, paid to the registrant cash dividends of $204,886 and declared cash dividends of $3,195,841 to be paid to the registrant at a future date to be

determined by the Board of Directors.

In 2019, the Company made capital contributions to its subsidiaries in the amounts of $2,983,493 to Memorial Estates, Inc., $37,430 to Memorial Mortuary, Inc., $160,799 to Greer Wilson Funeral Home,

Inc., $150,000 to Beta Capital Corp., $550,000 to C&J Financial, LLC and $4,000,000 to Security National Life.

In 2020 and 2019, SecurityNational Mortgage Company paid the Company cash dividends of $5,894,018 and $1,199,865, respectively.

In 2020, the Company made capital contributions to its subsidiaries in the amounts of $1,371,958 to Memorial Estates, Inc.

and $500,000 to C&J Financial, LLC.

In 2019, the Company made capital contributions to its subsidiaries in the amounts of $2,983,493 to Memorial Estates, Inc., $37,430 to Memorial Mortuary, Inc., $160,799 to Greer Wilson Funeral Home, Inc., $150,000 to Beta Capital Corp., $550,000 to C&J Financial, LLC and $4,000,000 to Security National Life.

SECURITY NATIONAL FINANCIAL CORPORATION

13 unchanged sentences

For the Year Ended December 31, 2020

Accumulated depreciation on real estate held for investment

Allowance for losses on mortgage loans held for investment

Accumulated depreciation on property and equipment

Allowance for doubtful accounts on receivables

Allowance for doubtful accounts on other investments

Accumulated depreciation on real estate

held for investment

$ (1,237,500)

Allowance for losses on mortgage loans

held for investment

Accumulated depreciation

on property and equipment

Allowance for doubtful accounts

on receivables

Allowance for doubtful accounts

on other investments

For the Year Ended December 31, 2019

Accumulated depreciation on real estate held for investment

Allowance for losses on mortgage loans held for investment

Accumulated depreciation on property and equipment

Allowance for doubtful accounts on receivables

Allowance for doubtful accounts on other investments

Accumulated depreciation on real estate

held for investment

$ (2,093,633)

$ (5,329,495)

Allowance for losses on mortgage loans

held for investment

Accumulated depreciation

on property and equipment

Allowance for doubtful accounts

on receivables

Allowance for doubtful accounts

on other investments

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

Year Ended December 31, 2020

SECURITY NATIONAL FINANCIAL CORPORATION

Commission File No.

E X H I B I T S

Exhibit Index

Document Name

Subsidiaries of the Registrant

Certification pursuant to 18 U.S.C.

Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002

Certification pursuant to 18 U.S.C.

Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002

Certification pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Instance Document

Taxonomy Extension Schema Document

Taxonomy Extension Calculation Linkbase Document

Taxonomy Extension Definition Linkbase Document

Taxonomy Extension Label Linkbase Document

Taxonomy Extension Presentation Linkbase Document

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What changed 10-K

Item 9A. Controls and Procedures