SECURITY NATIONAL FINANCIAL CORP 10-K

Item 9A. 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. (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: · 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. 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 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. · Creation of unique login credentials for system users. · Implementation of system change control processes, including the installation of a third-party database logging software. 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. 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. GAAP. 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 114 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. 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. 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. Item 9B. Other Information None 115 PART III Item 10. Directors, Executive Officers and Corporate Governance 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. Andrew Quist and Adam G. Quist are sons of Scott M. Quist, and Jason G. Overbaugh is a nephew of Scott M. Quist. The following table sets forth certain information with respect to the directors and executive officers of the Company. Name Age Position with the Company Scott M. Quist 67 Chairman of the Board, President, Chief Executive Officer, and Director Garrett S. Sill 50 Chief Financial Officer and Treasurer Jason G. Overbaugh 46 Vice President, National Marketing Director of Life Insurance and Director S. Andrew Quist 40 Vice President, General Counsel, and Director Jeffrey R. Stephens 67 Senior General Counsel and Secretary Stephen C. Johnson 64 Vice President - Mortgage Operations Adam G. Quist 35 Vice President - Memorial Services, Assistant Secretary, and General Counsel John L. Cook 66 Director Gilbert A. Fuller 80 Director Robert G. Hunter 61 Director H. Craig Moody 69 Director Norman G. Wilbur 82 Director Directors The following is a description of the business experience of each of the Company’s directors. Scott M. Quist has served as Chairman of the Board and Chief Executive Officer of the Company since 2012. Mr. 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. 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. Mr. Quist has been a member of the Board of Governors of the Forum 500 Section (representing small insurance companies) of the American Council of Life Insurance. He has also served as a regional director of Key Bank of Utah since 1993. Mr. Quist holds a B.S. degree in Accounting from Brigham Young University and received his law degree also from Brigham Young University. 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. 116 Jason G. Overbaugh has served as a director of the Company since 2013. Mr. Overbaugh has also served as a Vice President and the Assistant Secretary of the Company from 2002 to 2013. Mr. 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. Mr. Overbaugh has served since 2007 as a director of the LOMA Life Insurance Council, a trade association of life insurance companies. He is also a member of the NFDA Trade Association. Mr. Overbaugh received a B.S. degree in Finance from the University of Utah. Mr. 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. S. Andrew Quist has served as a director of the Company since 2013. Mr. Quist has also served as a Vice President of the Company since 2010. In addition, from 2007 to December 2017, he served as the Company’s Associate General Counsel and since December 2017 as the Company’s General Counsel, where his responsibilities have included the Company’s regulatory matters and acquisitions. 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. Mr. 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. From 2014 to 2016, he served as President of the NALC. Mr. Quist previously served as President of the Utah Life Convention, a consortium of Utah domestic life insurers. Mr. Quist holds a B.S. degree in Accounting from Brigham Young University and received his law degree from the University of Southern California. Mr. Quist is a member of the State Bar of California. Mr. Quist’s expertise in insurance, legal and regulatory matters led the Board of Directors to conclude that he should serve as a director of the Company. John L. Cook has served as a director of the Company since 2013. Mr. 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. Cook attended the University of Utah. As a director, Mr. 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. Mr. 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. Gilbert A. Fuller has served as a director of the Company since 2012. 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. Mr. 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. Mr. Fuller has served as a member of the Board of Directors of USANA since 2008. Mr. Fuller received a B.S. degree in Accounting and an M.B.A. degree from the University of Utah. Mr. 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. Robert G. Hunter, M.D. has served as a director of the Company since 1998. Dr. Hunter is currently a practicing physician in private practice. Dr. Hunter is Department Head of Otolaryngology, Head and Neck Surgery at Intermountain Medical Center and a past President of the medical staff of the Intermountain Medical Center. He is also a delegate to the Utah Medical Association and has served as a delegate representing the State of Utah to the American Medical Association. Dr. Hunter 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. Dr. 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. H. Craig Moody has served as a director of the Company since 1995. Mr. Moody is owner of Moody & Associates, a political consulting and real estate company. He is a former Speaker and House Majority Leader of 117 the House of Representatives of the State of Utah. From 1989 to 1992, Mr. Moody was Co-Chairman of the Utah Legislative Audit Committee. Mr. Moody holds a B.S. degree in Political Science from the University of Utah. Mr. 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. Norman G. Wilbur has served as a director of the Company since 1998. Mr. Wilbur worked for J.C. Penny's regional offices in budget and analysis. His final position was Manager of Planning and Reporting for J.C. Penny's stores. After 36 years with J.C. Penny's, Mr. Wilbur opted for early retirement in 1997. Mr. Wilbur holds a B.S. degree in Accounting from the University of Utah. Mr. Wilbur’s financial expertise and business experience from a successful career at JC Penny’s led the Board of Directors to conclude that he should serve as a director of the Company. In addition, the Board of Directors’ determination that Mr. Wilbur is the Audit Committee “financial expert” lends further support to his financial acumen and qualification for serving as a director of the Company. The Board of Directors, Board Committees, and Meetings 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. 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. 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. The Board of Directors has affirmatively determined that five of the eight members of the Board of Directors, namely Messrs. John L. Cook, Gilbert A. Fuller, Robert G. Hunter, M.D., H. Craig Moody and Norman G. 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 directs the auditing activities of the Company's internal auditors and outside public accounting firm and approves the services of the outside public accounting firm. The Audit Committee consists of Messrs. John L. Cook, Gilbert A. Fuller, H. Craig Moody, and Norman G. Wilbur (Chairman of the committee). 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 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. John L. Cook, Gilbert A. Fuller, Robert G. Hunter, M.D., H. Craig Moody and Norman G. Wilbur (Chairman of the committee). During 2020, the Compensation Committee met on two occasions. The Executive Committee reviews Company policy, major investment activities and other pertinent transactions of the Company. The Executive Committee consists of Messrs. Gilbert A. Fuller, H. Craig Moody, S. Andrew Quist and Scott M. Quist (Chairman of the committee). 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 consists of Messrs. John L. Cook, Gilbert A. Fuller, Robert G. Hunter, M.D., H. Craig Moody (Chairman of the committee), and Norman G. Wilbur. The Nominating and Corporate Governance Committee is composed solely of independent directors, as defined in the listing standards of the Nasdaq Stock Market. During 2020, the Nominating and Corporate Governance Committee met on two occasions. 118 Director Nominating Process The process for identifying and evaluating nominees for directors include the following steps: (1) the Nominating and Corporate Governance Committee, Chairman of the Board or other board members identify a need to fill vacancies or add newly created directorships; (2) the Chairman of the Nominating and Corporate Governance Committee initiates a search and seeks input from board members and senior management and, if necessary, obtains advice from legal or other advisors (but does not hire an outside search firm); (3) director candidates, including any candidates properly proposed by stockholders in accordance with the Company's Bylaws, are identified and presented to the Nominating and Corporate Governance Committee; (4) initial interviews with candidates are conducted by the Chairman of the Nominating and Corporate Governance Committee; (5) the Nominating and Corporate Governance Committee meets to consider and approve final candidate(s) and conduct further interviews as necessary; and (6) the Nominating and Corporate Governance Committee makes recommendations to the board for inclusion in the slate of directors at the annual meeting. The evaluation process will be the same whether the nominee is recommended by a stockholder or by a member of the Board of Directors. Meetings of Non-Management Directors The Company's independent directors meet regularly in executive session without management. The Board of Directors has designated a lead director to preside at executive sessions of independent directors. Mr. H. Craig Moody is currently the lead director. Executive Officers Garrett S. Sill has served as Chief Financial Officer and Treasurer since 2013. 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. From 2002 to 2011, Mr. Sill was Chief Financial Officer and Treasurer of SecurityNational Mortgage, a wholly owned subsidiary of the Company. Mr. Sill is a certified public accountant, having been licensed since 2002. He holds a B.A. degree in Accounting from Weber State University and a Master’s degree in Business Administration from the University of Utah. Mr. Sill also serves as a member of the Advisory Council of the School of Accounting and Taxation at Weber State University. Jeffrey R. 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. Mr. Stephens was in private practice from 1981 to 2006 in the states of Washington and Utah. Mr. Stephens holds a B.A. degree in Geography from the University of Utah and received his law degree from Brigham Young University. Mr. Stephens is a member of the Utah State Bar Association and the Washington State Bar Association. Stephen C. Johnson began serving as the Vice President of Mortgage Operations of the Company and as the President of SecurityNational Mortgage in 2016. Prior to Mr. Johnson’s appointment as President of SecurityNational Mortgage, Mr. Johnson served as Executive Vice President and Chief Operating Officer of SecurityNational Mortgage. Mr. Johnson has over 30 years of experience at the executive management level in the mortgage banking industry. Mr. 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). Adam G. 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. Since 2017, Mr. Quist has served as the Company’s General Counsel. Mr. 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. Additionally, Mr. Quist has further served since 2015 as Vice President of Memorial Mortuary, Inc. (“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. Mr. Quist hold a B.S. degree and a Master’s degree in Accounting with an emphasis on taxation from Brigham Young University. He received his law degree from the University of Utah. Mr. 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. 119 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. Corporate Governance Corporate Governance Guidelines . The Board of Directors has adopted the Security National Financial Corporation Corporate Governance Guidelines. These guidelines outline the functions of the board, director qualifications and responsibilities, and various processes and procedures designed to insure effective and responsive governance. The 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. 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. The Code includes an anti-retaliation statement. The full text of the Code of Business Conduct and Ethics is available on the Company’s website at www.securitynational.com . A copy of the Code of Business Conduct and Ethics may also be obtained at no charge by written request to the attention of Jeffrey R. Stephens, Secretary, Security National Financial Corporation, 121 West Election Road., Suite 100, Draper, Utah 84020. Item 11. Executive Compensation 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 Name and Principal Position Year Salary ($) Bonus ($) Options Awards ($) Non-Equity Incentive Plan Compen-sation ($) Change in Pension Value Non-qualified Deferred Compensation Earnings (1) ($) All Other Compen-sation (2) ($) Total ($) Scott M. Quist Chairman of the Board, President and Chief Executive Officer 2020 $ 558,950 $ 157,800 -- -- -- $ 49,969 $ 766,719 2019 528,498 151,300 -- -- -- 48,012 727,810 Garrett S. Sill Chief Financial Officer and Treasurer 2020 $ 239,333 $ 112,000 -- -- -- $ 37,986 $ 389,319 2019 223,373 36,200 -- -- -- 36,934 296,507 Stephen C. Johnson Vice President of Mortgage Operations 2020 $ 360,000 $ 284,828 -- -- -- $ 24,400 $ 669,228 2019 325,841 87,617 -- -- -- 11,706 425,164 S. Andrew Quist Vice President and General Counsel 2020 $ 265,667 $ 138,325 -- -- -- $ 33,561 $ 437,553 2019 245,440 92,325 -- -- -- 31,686 369,451 Jeffrey R. Stephens Senior General Counsel and Secretary 2020 $ 205,167 $ 30,275 -- -- -- $ 24,928 $ 260,370 2019 197,205 15,875 -- -- -- 23,201 236,281 _____________ (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. 120 (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: a) payments related to the operation of automobiles for Scott M. Quist ($7,200 for each of the years 2020 and 2019); Garrett S. Sill ($4,400 for 2020 and $5,400 for 2019) and, Stephen C. Johnson, S. Andrew Quist, and Jeffrey R. Stephens ($-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 officer; b) group life insurance premiums that the Company paid to a group life insurance plan for Scott M. Quist, Garrett S. Sill, Stephen C. Johnson, S. Andrew Quist, and Jeffrey R. Stephens ($114 for 2020 and $176 for 2019); c) life insurance premiums that the Company paid for the benefit of Scott M. Quist ($15,765 for 2020 and $14,934 for 2019); and Garrett S. Sill, Stephen C. Johnson, S. Andrew Quist, and Jeffrey R. Stephens ($-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); Garrett S. Sill ($21,756 for 2020 and $20,508 for 2019); Stephen C. Johnson ($11,764 for 2020 and $11,079 for 2019); S. Andrew Quist ($21,756 for 2020 and $20,508 for 2019); and Jeffrey R. Stephens ($15,118 for 2020 and $14,251 for 2019); 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); Garrett S. Sill ($11,400 for 2020 and $10,599 for 2019); Stephen C. Johnson ($11,400 for 2020 and $-0- for 2019); S. Andrew Quist ($10,927 for 2020 and $10,344 for 2019); and Jeffrey R. Stephens ($9,418 for 2020 and $8,523 for 2019); and g) contributions that the Company made to health savings accounts for Scott M. Quist, Garrett S. Sill, S. Andrew Quist and Jeffrey R. Stephens ($-0- for each of the years 2020 and 2019); and Stephen C. 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); S. 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 The following table sets forth all other compensation provided the Named Executive Officers for fiscal years 2020 and 2019. Name of Executive Officer Year Perks and Other Personal Benefits Tax Reimburse-ments Discounted Securities Purchases Payments/ Accruals on Termination Plans Registrant Contributions to Defined Contribution Plans Insurance Premiums Dividends or Earnings on Stock or Option Awards Other (1) Scott M. Quist 2020 $ 7,200 - - - $ 11,400 $ 31,369 - - 2019 7,200 - - - 11,200 29,612 - - Garrett S. Sill 2020 4,400 - - - $ 11,400 $ 22,186 - - 2019 5,400 - - - 10,599 20,935 - - Stephen C. Johnson 2020 - - - - $ 11,400 $ 13,000 - - 2019 - - - - - 11,706 - - S. Andrew Quist 2020 425 - - - $ 10,927 $ 22,209 - - 2019 407 - - - 10,344 20,935 - - Jeffrey R. Stephens 2020 - - - - $ 9,418 $ 15,510 - - 2019 - - - - 8,523 14,678 - - 121 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. Name of Executive Officer Grant Date Estimated Future Payouts Under Equity Incentive Plan Awards All Other Awards: Number of Securities Underlying Options (#) Exercise or Base Price of Option Awards ($/Sh) Closing Price on Grant Date ($/Sh) Grant Date Fair Value of Stock and Option Awards ($) Threshold ($) Target ($) Maximum ($) Scott M. Quist 3/27/20 -- -- -- 51,250 (1) $ 3.85 (2) 3.67 (2) $ 29,289 Garrett S. Sill 3/27/20 -- -- -- 25,625 (1) 3.67 (2) 3.67 (2) 17,243 Stephen C. Johnson 3/27/20 -- -- -- 10,250 (1) 3.67 (2) 3.67 (2) 6,896 S. Andrew Quist 3/27/20 -- -- -- 41,000 (1) 3.67 (2) 3.67 (2) 27,589 Jeffrey R. Stephens 3/27/20 -- -- -- 7,688 (1) 3.67 (2) 3.67 (2) 5,172 _________________________ (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. 122 OUTSTANDING EQUITY AWARDS The following table sets forth information concerning outstanding equity awards held by Named Executive Officers at December 31, 2020. Option Awards Stock Awards Name of Executive Officer Option Grant Date Number of Securities Underlying Unexercised Options Exercisable (1) (#) Number of Securities Underlying Unexercised Options Unexercisable (1) (#) Option Exercise Price (2) ($) Option Expiration Date Stock Award Grant Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) Scott M. Quist 12/2/16 99,672 (3) -- 6.14 12/02/21 -- -- -- -- -- 12/1/17 88,993 -- 4.65 12/02/22 -- -- -- -- -- 11/30/18 79,104 -- 5.34 11/30/23 -- -- -- -- -- 12/6/19 53,813 (6) -- 5.30 12/06/24 -- -- -- -- -- 3/27/20 38,438 (7) 12,812 (7)(8) 3.85 03/27/25 -- -- -- -- -- Garrett S. Sill 12/6/13 5,770 -- $ 3.30 12/06/23 -- -- -- -- -- 7/2/14 5,495 -- 3.08 07/02/24 -- -- -- -- -- 12/5/14 10,989 -- 3.61 12/05/24 -- -- -- -- -- 12/1/17 17,799 (4) -- 4.22 12/01/27 -- -- -- -- -- 11/30/18 22,601 (5) -- 4.86 11/30/28 -- -- -- -- -- 12/6/19 26,906 (6) -- 5.06 12/06/29 -- -- -- -- -- 3/27/20 19,219 (7) 6,406 (7)(8) 3.67 03/27/30 -- -- -- -- -- Stephen C. Johnson 4/13/12 4,543 -- $ 1.01 04/13/22 -- -- -- -- -- 12/6/13 4,327 -- 3.30 12/06/23 -- -- -- -- -- 7/2/14 4,121 -- 3.08 07/02/24 -- -- -- -- -- 12/5/14 8,242 -- 3.61 12/05/24 -- -- -- -- -- 12/4/15 13,082 -- 5.07 12/04/25 -- -- -- -- -- 12/2/16 6,230 -- 5.59 12/02/26 -- -- -- -- -- 12/1/17 11,865 -- 4.22 12/01/27 -- -- -- -- -- 12/6/19 10,763 -- 5.06 12/06/29 -- -- -- -- -- 3/27/20 7,688 2,562 (8) 3.67 03/27/30 -- -- -- -- -- S. Andrew Quist 4/13/12 22,716 -- $ 1.01 04/13/22 -- -- -- -- -- 12/6/13 14,423 -- 3.30 12/06/23 -- -- -- -- -- 7/2/14 13,736 -- 3.08 07/02/24 -- -- -- -- -- 12/5/14 27,473 -- 3.61 12/05/24 -- -- -- -- -- 12/4/15 26,165 -- 5.07 12/04/25 -- -- -- -- -- 12/2/16 24,919 -- 5.59 12/02/26 -- -- -- -- -- 12/1/17 23,732 (4) -- 4.22 12/01/27 -- -- -- -- -- 11/30/18 28,252 (5) -- 4.86 11/30/28 -- -- -- -- -- 12/6/19 43,050 (6) -- 5.06 12/06/29 -- -- -- -- -- 3/27/20 30,750 (7) 10,250 (7)(8) 3.67 03/27/30 -- -- -- -- -- Jeffrey R. Stephens 4/13/12 3,787 -- $ 1.01 04/13/22 -- -- -- -- -- 12/6/13 3,607 -- 3.30 12/06/23 -- -- -- -- -- 7/2/14 3,435 -- 3.08 07/02/24 -- -- -- -- -- 12/5/14 6,869 -- 3.61 12/05/24 -- -- -- -- -- 12/4/15 6,542 -- 5.07 12/04/25 -- -- -- -- -- 12/2/16 6,230 -- 5.59 12/02/26 -- -- -- -- -- 12/1/17 5,934 -- 4.22 12/01/27 -- -- -- -- -- 11/30/18 8,476 -- 4.86 11/30/28 -- -- -- -- -- 12/6/19 8,072 -- 5.06 12/06/29 -- -- -- -- -- 3/27/20 5,765 1,923 (8) 3.67 03/27/30 -- -- -- -- -- ________________ (1) Except for options granted to Scott M. Quist that have five-year terms, such grants have ten year terms. The vesting of any unvested shares is subject to the recipient’s continuous employment. This reflects the equivalent of Class A common shares. (2) Exercise prices have been adjusted for the effect of annual stock dividends. (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 $4.22 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 $4.22 per share or 20,000 shares of Class C common stock at an exercise price of $4.22 per share, or any combination thereof. 123 (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 $4.86 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 $4.86 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 $5.30 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 $5.06 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 $5.06 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 $3.67 per share, or any combination thereof. (8) Stock options vest at the rate of 25% of the total number of shares per quarter over a one year period after the grant date. OPTION AWARDS VESTING SCHEDULE The following table sets forth the vesting schedule of unexercisable options reported in the “Number of Securities Underlying Unexercised Options – Unexercisable” column of the table above. Grant Date Vesting 4/13/12 These options vested 25% per quarter over a one year period after the grant date. 12/06/13 These options vested 25% per quarter over a one year period after the grant date. 07/02/14 These options vested 25% per quarter over a one year period after the grant date. 12/05/14 These options vested 25% per quarter over a one year period after the grant date. 12/04/15 These options vested 25% per quarter over a one year period after the grant date. 12/02/16 These options vested 25% per quarter over a one year period after the grant date. 12/01/17 These options vested 25% per quarter over a one year period after the grant date. 11/30/18 These options vested 25% per quarter over a one year period after the grant date. 12/06/19 These options vested 25% per quarter over a one year period after the grant date. 03/27/20 These options vest 25% per quarter over a one year period after the grant date. 124 OPTION EXERCISES AND STOCK VESTED The following table sets forth all stock options exercised and value received upon exercise, and all stock awards vested and value realized upon vesting, by the Named Executive Officers during the year ended December 31, 2020. Option Awards Stock Awards Number of Shares Acquired on Exercise Value Realized on Exercise Number of Shares Acquired on Vesting Value Realized on Vesting Name of Executive Officer (#) ($) (#) ($) Scott M. Quist 130,820 $ 294,792 -- -- Garrett S. Sill 6,758 $ 13,963 -- -- Stephen C. Johnson -- -- -- -- S. Andrew Quist -- -- -- -- Jeffrey R. Stephens -- -- -- -- PENSION BENEFITS The following table sets forth the present value as of December 31, 2020 of the benefit of the Named Executive Officers under the defined benefit pension plan. Name of Executive Officer Plan Name Number of Years Credited Service (#) Present Value of Accumulated Benefit ($) Payments During Last Fiscal Year ($) Scott M. Quist None -- -- -- Garrett S. Sill None -- -- -- Stephen C. Johnson None -- -- -- S. Andrew Quist None -- -- -- Jeffrey R.Stephens None -- -- -- EQUITY COMPENSATION PLAN INFORMATION 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; and · All compensation plans not previously approved by security holders. A B C Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column A) Equity compensation plans approved by stockholders (1) 1,735,529 (2) $4.33 (2) 591,872 (3) Equity compensation plans not approved by stockholders 0 - 0 _____________________ (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 125 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. (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. Quist On December 4, 2012, the Company entered into an employment agreement with Scott M. 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. 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. Quist has continued to perform his duties with usual and customary care, diligence and prudence commensurate with his position with the Company. 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. 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. Mr. 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. 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, Mr. Quist’s salary would be continued for up to five years at 75% of its current level of compensation. In the event of a sale or merger of the Company and Mr. Quist is not retained in his current position, the Company would be obligated to continue paying Mr. Quist’s current compensation and benefits for seven years following the merger or sale. The 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. 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 $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. 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 $750 is paid to each audit committee member for each audit committee meeting attended. Each independent director is provided with an annual grant of stock options to purchase 1,000 shares of Class A common stock. During 2020 each independent director was granted additional 126 stock options to purchase 5,000 shares of Class A common stock. Upon retirement from the board, each independent director will receive “retirement compensation” equal to one month director’s fee for every year of service. DIRECTOR COMPENSATION The following table sets forth the compensation of the Company’s non-employee directors for fiscal 2020. Name Fees Earned or Paid in Cash ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings All Other Compensation ($) Total ($) John L. Cook (1) $23,850 -- $ 4,138 -- -- -- $27,988 Gilbert A. Fuller (2) 23,850 -- 4,138 -- -- -- 27,988 Robert G. Hunter, M.D. (3) 21,600 -- 4,138 -- -- -- 25,738 H. Craig Moody (4) 23,850 -- 4,138 -- -- -- 27,988 Norman G. Wilbur (5) 23,850 -- 4,138 -- -- -- 27,988 _______________________ (1) Mr. Cook has options to purchase 52,572 shares of the Company’s Class A common stock. (2) Mr. Fuller has options to purchase 52,572 shares of the Company’s Class A common stock. (3) Dr. Hunter has options to purchase 71,202 shares of the Company’s Class A common stock. (4) Mr. Moody has options to purchase 71,202 shares of the Company’s Class A common stock. (5) Mr. Wilbur has options to purchase 37,418 shares of the Company’s Class A common stock. Employee 401(k) Retirement Savings Plan In 1995, the Company’s Board of Directors adopted a 401(k) Retirement Savings Plan. Under the terms of the 401(k) plan, effective as of January 1, 1995, the Company 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. 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. Also, the Company may contribute at the discretion of the Company’s Board of Directors an Employer Profit Sharing Contribution to the 401(k) plan. The Employer Profit Sharing Contribution is to be divided among three different classes of participants in the plan based upon the participant’s title in the Company. All amounts contributed to the plan are deposited into a trust fund administered by an independent trustee. Beginning January 1, 2008, the Company elected to be a “Safe Harbor” Plan for its matching 401(k) contributions. The Company will match 100% of up to 3% of an employee’s total annual compensation and 50% of 4% to 5% of an employee’s annual compensation. The match is in shares of the Company’s Class A common stock. The Company’s contribution for 2020 and 2019 was $1,690,568 and $695,560 respectively, under the “Safe Harbor” plan. Stock Repurchase Plan 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. 127 Employee Stock Ownership Plan (ESOP) 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. 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. 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. 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, 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. Quist (Chairman), S. Andrew Quist, and Robert G. Hunter, who each serve as a director of the Company. Non-Qualified Deferred Compensation Plan 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. 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 did not make any contributions for 2020 and 2019. The investment committees of the Company’s Non-Qualified Deferred Compensation Plan consists of Scott M. Quist, Stephen C. Johnson, and Garrett S. Sill. NON-QUALIFIED DEFERRED COMPENSATION 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. Executive Registrant Aggregate Aggregate Aggregate Contributions Contributions Earnings Withdrawals Balance In Last FY In Last FY in last FY Distributions at last FYE Name ($) ($) ($) ($) ($) Scott M. Quist -- -- -- -- -- Garrett S. Sill -- -- -- -- 81,471 (1) Stephen C. Johnson -- -- -- -- 99,457 (2) S. Andrew Quist -- -- -- -- -- Jeffrey R. Stephens -- -- -- -- -- _______________________ (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. 128 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. 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 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. 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. In addition, the number of shares of common stock reserved for purposes of the plan shall be adjusted by the same proportion. No options may be exercised for a term of more than ten years from the date of grant. 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. 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. 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 replaces the Company’s 2006 Director Plan, which was terminated on July 2, 2014. On June 26, 2020, the stockholders approved 129 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. 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 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. 130 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, 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 Common Stock Class C Common Stock Class A and Class C Common Stock Name and Address (1) Amount Beneficially Owned Percent of Class Amount Beneficially Owned Percent of Class Amount Beneficially Owned Percent of Class 401(k) Retirement Savings Plan (2) 2,553,413 15.5% 212,058 8.1% 2,765,471 14.5% Scott M. and Lisa J. Quist Family Trust (3) 423,477 2.6% 1,467,026 55.9% 1,890,503 9.9% George R. and Shirley C. Quist Partnership, Ltd. (4) 1,068,883 6.5% 746,559 28.5% 1,815,442 9.5% M3 Funds, LLC (5) 1,427,060 8.7% - - 1,427,060 7.5% Non-Qualified Deferred Compensation Plan (6) 1,288,334 7.8% - - 1,288,334 6.7% Scott M. Quist (7)(8)(9)(10)(11)(12) 433,231 2.6% 281,602 10.0% 714,833 3.7% Jason G. Overbaugh (13) 269,068 1.6% 115,022 4.2% 384,090 2.0% S. Andrew Quist (7) (10)(14) 216,711 1.3% 136,034 4.9% 352,745 1.8% Employee Stock Ownership Plan (ESOP) (15) 189,053 1.1% 73,589 2.8% 262,642 1.4% Associated Investors (16) 87,214 * 136,174 5.2% 223,388 1.2% Estate of George R. Quist 130,895 * 83,355 3.2% 214,250 1.1% Garrett S. Sill (9)(11)(17) 102,064 * 92,931 3.4% 194,995 1.0% Adam G. Quist (7)(18) 45,546 * 113,944 4.2% 159,490 * Jeffrey R. Stephens (19) 155,414 * - - 155,414 * Stephen C. Johnson (9)(11)(20) 113,338 * - - 113,338 * H. Craig Moody (21) 84,802 * - - 84,802 * Robert G. Hunter, M.D. (10)(22) 92,560 * - - 92,560 * Gilbert A. Fuller (23) 53,681 * - - 53,681 * John L. Cook (24) 52,572 * - - 52,572 * Norman G. Wilbur (25) 33,268 * - - 33,268 * All directors and executive officers (12 persons) 1,652,255 9.5% 739,533 22.5% 2,391,788 11.6% * 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. 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. (4) This stock is owned by the George R. and Shirley C. 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; Jason A. Stock, Manager of M3 Funds, LLC; Jason A. Stock, Managing Director of M3F, Inc., a Utah corporation; Jason A. 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. Johnson, and Garrett S. Sill, who exercise shared voting and investment powers with respect to such shares. 131 (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. (8) Mr. Scott Quist is the Company’s Chairman of the Board, President, and Chief Executive Officer. 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. Mr. 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 204,735 shares of Class A common stock, or any combination thereof. Mr. 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. (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. (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. Quist, S. Andrew Quist and Robert G. Hunter are the trustees and, accordingly, exercise shared voting and investment powers with respect to such shares. (11) Does not include 1,288,334 shares of Class A common stock owned by the Company’s Non-Qualified Deferred Compensation 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. (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. (13) Mr. Overbaugh is the Company’s Vice President, National Marketing Director of Life Insurance, and a director. 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 78,557 shares of Class A common stock, or any combination thereof. Mr. 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. Overbaugh will elect to purchase shares of Class A common stock with respect to such options. (14) Mr. Andrew Quist is the Company’s Vice President, General Counsel, and a director. 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 136,034 shares of Class A common stock, or any combination thereof. Mr. 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. Quist, S. 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. Quist, who exercises sole voting and investment powers with respect to such shares. (17) Mr. Sill is the Company’s Chief Financial Officer and Treasurer. 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 92,931 shares of Class A common stock, or any combination thereof. Mr. 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. Otherwise, Mr. Sill will elect to purchase shares of Class A common stock with respect to such options. (18) Mr. Adam Quist is the Vice President – Memorial Services, Assistant Secretary, and General Counsel of the Company. 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 113,944 132 shares of Class A common stock, or any combination thereof. Mr. 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. (19) Mr. 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. Stephens that are currently exercisable. (20) Mr. 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. (21) Mr. 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. (22) Dr. 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. (23) Mr. 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. (24) Mr. 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. (25) Mr. 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. 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. Item 13. 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. 133 Item 14. 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: Fee Category 2020 2019 Audit Fees (1) $ 1,047,488 $ 917,200 Audit-Related Fees (2) 36,000 26,250 Tax Fees (3) 106,010 92,350 All Other Fees (4) 98,865 - $ 1,288,363 $ 1,035,800 _____________ (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. (3) Tax fees consist of aggregate fees billed for professional services for tax compliance, tax advice, and tax planning. (4) All other fees consist of aggregate fees billed for products and services by the independent auditors, other than those disclosed above. PART IV Item 15. Exhibits, Financial Statement Schedules (a)(1) Financial Statements See “Index to Consolidated Financial Statements” under Item 8 above. (a)(2) Financial Statement Schedules II. 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 IV. Reinsurance V. 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 omitted. 134 (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. 3.1 Amended and Restated Articles of Incorporation (5) 3.2 Amended and Restated Bylaws (8) 4.1 Specimen Class A Stock Certificate (1) 4.2 Specimen Class C Stock Certificate (1) 4.3 Specimen Preferred Stock Certificate and Certificate of Designation of Preferred Stock (1) 10.1 Employee Stock Ownership Plan, as amended and restated (ESOP) and Trust Agreement (1) 10.2 Amended and Restated 2013 Stock Option and Other Equity Incentive Awards Plan (3) 10.3 Amended and Restated 2014 Director Stock Option Plan (12) 10.4 Employment Agreement with Scott M. Quist (2) 10.5 Stock Repurchase Plan (6) 10.6 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, and Marsha J. Probst (7) 10.7 Coinsurance Agreement between Kilpatrick Life Insurance Company and Security National Life Insurance Company (9) 10.8 Stock Purchase Agreement among Security National Financial Corporation, Kilpatrick Life Insurance Company, and the shareholders of Kilpatrick Life Insurance Company (9) 10.9 Consolidated Statement of Assets Acquired and Liabilities Assumed at December 31, 2019 (10) 14 Code of Business Conduct and Ethics (8) 21 Subsidiaries of the Registrant 23.1 Consent of Eide Bailly LLP (4) 23.2 Consent of Mackey Price & Mecham (4) 31.1 Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.xml Instance Document 101.xsd Taxonomy Extension Schema Document 101.cal Taxonomy Extension Calculation Linkbase Document 101.def Taxonomy Extension Definition Linkbase Document 101.lab Taxonomy Extension Label Linkbase Document 101.pre Taxonomy Extension Presentation Linkbase Document (1) Incorporated by reference from Registration Statement on Form S-1, as filed on June 29, 1987 (2) Incorporated by reference from Report on Form 10-Q, as filed on November 13, 2015 (3) Incorporated by reference from Report on Form 10-Q, as filed on August 15, 2016 (4) Incorporated by reference from Registration Statement on Form S-8, as filed on September 7, 2016 (5) Incorporated by reference from Report on Form 10-K, as filed on March 31, 2017 (6) Incorporated by reference from Report on Form 10-Q, as filed on November 13, 2018 (7) Incorporated by reference from Report on Form 8-K, as filed on February 28, 2019 (8) Incorporated by reference from Report on Form 10-Q, as filed on May 15, 2019 (9) Incorporated by reference from Report on Form 8-K, as filed on November 12, 2019 (10) Incorporated by reference from Report on Form 8-K/A, as filed on February 26, 2020 (11) Incorporated by reference from Report on Form 10-Q, as filed on August 14, 2020 135 SIGNATURES 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 Dated: March 31, 2021 By: /s/ Scott M. Quist Scott M. Quist 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: SIGNATURE TITLE DATE /s/ Scott M. Quist Chairman of the Board, President, Scott M. Quist and Chief Executive Officer (Principal Executive Officer) March 31, 2021 /s/ Garrett S. Sill Chief Financial Officer and Garrett S. Sill Treasurer (Principal Financial and Accounting Officer) March 31, 2021 /s/ Jason G. Overbaugh Vice President and Director March 31, 2021 Jason G. Overbaugh /s/ S. Andrew Quist Vice President and Director March 31, 2021 S. Andrew Quist /s/ John L. Cook Director March 31, 2021 John L. Cook /s/ Gilbert A. Fuller Director March 31, 2021 Gilbert A. Fuller /s/ Robert G. Hunter Director March 31, 2021 Robert G. Hunter /s/ H. Craig Moody Director March 31, 2021 H. Craig Moody /s/ Norman G. Wilbur Director March 31, 2021 Norman G. Wilbur 136 Schedule II SECURITY NATIONAL FINANCIAL CORPORATION (Parent Company Only) Condensed Financial Information Condensed Balance Sheets December 31 2020 2019 Assets Mortgage loans held for investment $ 2,338,000 $ 2,952,000 Accrued investment income - 192,608 Cash 6,042,663 1,432,830 Investment in subsidiaries (equity method) 253,972,662 188,187,440 Receivable from affiliates 9,016,823 13,190,260 Restricted cash 3,180,382 3,180,382 Other 14,793 2,422 Total assets $ 274,565,323 $ 209,137,942 See accompanying notes to condensed financial statements. 137 Schedule II (Continued) SECURITY NATIONAL FINANCIAL CORPORATION (Parent Company Only) Condensed Financial Information Condensed Balance Sheets (Continued) December 31 2020 2019 Liabilities and Stockholders’ Equity Liabilities Bank and other loans payable: Current installments $ 1,408,141 $ 1,334,798 Long-term 2,482,862 3,903,821 Advances from affiliated companies 39,513 640,774 Other liabilities and accrued expenses 2,135,515 1,847,705 Income taxes 4,512,239 4,700,239 Total liabilities 10,578,270 12,427,337 Stockholders’ Equity Preferred stock - non-voting - $1.00 par value; 5,000,000 shares authorized; none issued or outstanding - - Class A common stock $2.00 par value; 20,000,000 shares authorized; issued 16,595,783 shares in 2020 and 16,107,779 shares in 2019 33,191,566 32,215,558 Class B non-voting common stock-$1.00 par value; 5,000,000 shares authorized; none issued or outstanding - - Class C convertible common stock, $2.00 par value; 3,000,000 shares authorized; issued 2,679,603 shares in 2020 and 2,500,887 shares in 2019 5,359,206 5,001,774 Additional paid-in capital 50,287,253 46,091,112 Accumulated other comprehensive income, net of taxes 23,243,133 13,726,514 Retained Earnings 153,739,167 101,256,229 Treasury stock at cost - 227,852 Class A shares and 10,985 Class C shares in 2020; 490,823 Class A shares and -0- Class C shares in 2019 (1,833,272) (1,580,582) Total stockholders’ equity 263,987,053 196,710,605 Total Liabilities and Stockholders’ Equity $ 274,565,323 $ 209,137,942 See accompanying notes to condensed financial statements. 138 Schedule II (Continued) SECURITY NATIONAL FINANCIAL CORPORATION (Parent Company Only) Condensed Financial Information Condensed Statements of Earnings Years Ended December 31 2020 2019 Revenue Net investment income $ 235,761 $ 260,022 Fees from affiliates 1,119,172 1,152,480 Other income 522 23,864 Total revenue 1,355,455 1,436,366 Benefits and Expenses: General and administrative expenses 1,797,872 1,100,010 Interest expense 179,799 68,821 Total benefits and expenses 1,977,671 1,168,831 Earnings before income taxes, and earnings of subsidiaries (622,216) 267,535 Income tax benefit 97,217 304,548 Equity in earnings of subsidiaries 56,121,612 10,321,436 Net earnings $ 55,596,613 $ 10,893,519 See accompanying notes to condensed financial statements. 139 Schedule II (Continued) SECURITY NATIONAL FINANCIAL CORPORATION (Parent Company Only) Condensed Financial Information Condensed Statements of Cash Flow Years Ended December 31 2020 2019 Cash flows from operating activities: Net earnings $ 55,596,613 $ 10,893,519 Adjustments to reconcile net earnings to net cash provided by operating activities: Undistributed earnings of affiliates 56,121,612 10,321,436 Provision for deferred and other income taxes (188,000) (1,508,011) Stock based compensation expense 358,878 256,996 Benefit plans funded with treasury stock 3,939,948 695,560 Change in assets and liabilities: Other assets (12,371) (2,422) Other liabilities 287,809 (44,558) Net cash provided by operating activities 116,104,489 20,612,520 - - Cash flows from investing activities: Investment in subsidiaries (112,390,215) (18,759,314) Mortgage loans held for investment made - (2,593,000) Payments received for mortgage loans held for investment 614,000 1,820,000 Net cash used in investing activities (111,776,215) (19,532,314) Cash flows from financing activities: Advances to affiliates 3,764,784 (8,694,702) Purchase of treasury stock (2,967,761) (1,539,888) Proceeds from stock options exercised 832,152 863,910 Repayment of bank loans (1,347,616) (579,286) Proceeds from borrowing on bank loans - 4,000,000 Net cash provided by (used in) financing activities 281,559 (5,949,966) Net change in cash, cash equivalents, restricted cash and restricted cash equivalents 4,609,833 (4,869,760) Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year 4,613,212 9,482,972 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of year $ 9,223,045 $ 4,613,212 See accompanying notes to condensed financial statements. 140 Schedule II (Continued) SECURITY NATIONAL FINANCIAL CORPORATION (Parent Company Only) Condensed Financial Information Notes to Condensed Financial Statements 1) Bank and Other Loans Payable December 31 2019 2019 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. $ 633,890 $ 1,238,619 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 3,257,113 4,000,000 Total bank and other loans 3,891,003 5,238,619 Less current installments 1,408,141 1,334,798 Bank and other loans, excluding current installments $ 2,482,862 $ 3,903,821 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: 2021 $ 1,408,141 2022 799,648 2023 825,877 2024 857,337 2025 - Thereafter - Total $ 3,891,003 141 Schedule II (Continued) SECURITY NATIONAL FINANCIAL CORPORATION (Parent Company Only) Condensed Financial Information Notes to Condensed Financial Statements 2) Advances from Affiliated Companies December 31 2020 2019 Non-interest bearing advances from affiliates: Cemetery and Mortuary subsidiary $ - $ 638,418 Life insurance subsidiaries 39,513 2,356 $ 39,513 $ 640,774 3) Dividends and Capital Contributions 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. 142 Schedule IV SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Reinsurance Percentage Ceded to Assumed of Amount Direct Other from Other Net Assumed Amount Companies Companies Amount to Net 2020 Life Insurance in force ($000) $ 2,795,019 $ 377,138 $ 95,772 $ 2,513,653 3.8% Premiums: Life Insurance $ 94,558,587 $ 2,275,654 $ 441,997 $ 92,724,930 0.5% Accident and Health Insurance 295,675 - 12 295,687 0.0% Total premiums $ 94,854,262 $ 2,275,654 $ 442,009 $ 93,020,617 0.5% 2019 Life Insurance in force ($000) $ 2,778,103 $ 465,460 $ 99,299 $ 2,411,942 4.1% Premiums: Life Insurance $ 81,825,194 $ 547,762 $ 472,886 $ 81,750,318 0.6% Accident and Health Insurance 110,282 - 10 110,292 0.0% Total premiums $ 81,935,476 $ 547,762 $ 472,896 $ 81,860,610 0.6% 143 Schedule V SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Valuation and Qualifying Accounts Additions Deductions Balance at Charged to Disposals Balance Beginning Costs and and at End of of Year Expenses Write-offs Reclassifications Year For the Year Ended December 31, 2020 Accumulated depreciation on real estate held for investment $ 12,788,739 $ 3,160,428 $ (1,237,500) $ (910,694) $ 13,800,973 Allowance for losses on mortgage loans held for investment 1,453,037 552,090 - - 2,005,127 Accumulated depreciation on property and equipment 19,518,891 2,078,738 (2,418,490) - 19,179,139 Allowance for doubtful accounts on receivables 1,724,156 142,946 (181,720) - 1,685,382 Allowance for doubtful accounts on other investments 1,448,026 882,334 (684,885) - 1,645,475 For the Year Ended December 31, 2019 Accumulated depreciation on real estate held for investment $ 16,739,578 $ 3,472,289 $ (2,093,633) $ (5,329,495) $ 12,788,739 Allowance for losses on mortgage loans held for investment 1,347,972 137,757 (32,692) - 1,453,037 Accumulated depreciation on property and equipment 17,496,601 1,711,369 (69,878) 380,799 19,518,891 Allowance for doubtful accounts on receivables 1,519,842 267,374 (63,060) - 1,724,156 Allowance for doubtful accounts on other investments 1,092,528 797,557 (442,059) - 1,448,026 144 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Year Ended December 31, 2020 SECURITY NATIONAL FINANCIAL CORPORATION Commission File No. 0-9341 E X H I B I T S Exhibit Index Exhibit No. Document Name 21 Subsidiaries of the Registrant 31.1 Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification pursuant to 18 U.S.C. Section 1350, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.xml Instance Document 101.xsd Taxonomy Extension Schema Document 101.cal Taxonomy Extension Calculation Linkbase Document 101.def Taxonomy Extension Definition Linkbase Document 101.lab Taxonomy Extension Label Linkbase Document 101.pre Taxonomy Extension Presentation Linkbase Document 145