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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
SCHEDULE
14A
(Rule
14a-101)
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a)
of
the
Securities Exchange Act of 1934
Filed
by
Registrant x
Filed
by
a Party other than the Registrant o
Check
the
appropriate box:
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x
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Preliminary
Proxy Statement
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o
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(3)(2))
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o
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Definitive
Proxy Statement
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o
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Definitive
Additional Materials
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o
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Soliciting
Material Pursuant to
§240.14a-12
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SECURITY
NATIONAL FINANCIAL CORPORATION
(Name
of
Registrant as Specified In Its Charter)
_______________________________________________________
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the Appropriate box):
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x
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No
fee
required.
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o
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Fee
computed on table below per Securities Exchange Act Rules 15a-6(i)(4)
and
0-11.
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o
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Fee
paid previously with preliminary
materials.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant
to
Securities Exchange Act Rule 0-11 (set forth the amount on which
the
filing fee is calculated and state how it was
determined):
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(4)
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Proposed
maximum aggregate value of
transaction:
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(5)
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Total
fee paid:
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o
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Check
box if any part of the fee is offset as provided by Securities
Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee
was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement
No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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SECURITY
NATIONAL FINANCIAL CORPORATION
5300
South 360 West, Suite 250
Salt
Lake
City, Utah 84123
August
17, 2007
Dear
Stockholder:
On
behalf
of the Board of Directors, it is my pleasure to invite you to attend the Special
Meeting of Stockholders of Security National Financial Corporation (the
"Company") to be held on Friday, September 21, 2007, at 10:00 a.m., Mountain
Daylight Time, at 5300 South 360 West, Suite 250, Salt Lake City,
Utah. The formal notice of the Special Meeting and the Proxy
Statement have been made a part of this invitation.
The
matter to be addressed at the
meeting is the approval of the proposed amendment to the Company's Articles
of
Incorporation to increase the authorized capital stock of the Company from
27,500,000 shares to 45,000,000 shares, to increase the number of authorized
shares of Class A common stock from 10,000,000 shares to 20,000,000 shares,
and
to increase the number of authorized shares of Class C common stock from
7,500,000 shares to 15,000,000 shares. The Board of Directors
recommends that you vote FOR the amendment to the Articles of Incorporation
to
increase the number of authorized shares of Class A and Class C common
stock. Please refer to the Proxy Statement for detailed information
on the proposal and the Special Meeting of Stockholders.
Your
vote
is very important. We hope you will take a few minutes to review the
Proxy Statement and complete, sign, date and return your Proxy Card in the
envelope provided, even if you plan to attend the meeting. Please
note that sending us your Proxy will not prevent you from voting in person
at
the meeting, should you wish to do so.
Thank
you
for your support of Security National Financial Corporation. We look
forward to seeing you at the Special Stockholders Meeting.
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Sincerely
yours,
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/s/
George R. Quist
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George
R. Quist
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Chairman
of the Board and
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Chief
Executive Officer
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SECURITY
NATIONAL FINANCIAL CORPORATION
5300
South 360 West, Suite 250
Salt
Lake
City, Utah 84123
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
TO
BE HELD SEPTEMBER 21, 2007
Dear
Stockholders:
NOTICE
IS
HEREBY GIVEN that the Special Meeting of Stockholders of Security National
Financial Corporation (the "Company"), a Utah corporation, will be held on
Friday, September 21, 2007, at 5300 South 360 West, Suite 250, Salt Lake City,
Utah, at 10:00 a.m., Mountain Daylight Time, to consider and act upon the
following:
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1.
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To
approve the proposed amendment to the Company's Articles of Incorporation
to increase the authorized capital stock of the Company from 27,500,000
shares to 45,000,000 shares, to increase the number of authorized
shares
of Class A common stock from 10,000,000 shares to 20,000,000 shares,
and
to increase the number of authorized shares of Class C common stock
from
7,500,000 shares to 15,000,000
shares.
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2.
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To
transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
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The
foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice.
The
Board
of Directors has fixed the close of business on August 8, 2007, as the record
date for determining stockholders entitled to notice of and to vote at the
Special Meeting and any adjournment thereof. A list of such
stockholders will be available for examination by a stockholder for any purpose
relevant to the meeting during ordinary business hours at the offices of the
Company at 5300 South 360 West, Suite 250, Salt Lake City, Utah during the
20
days prior to the meeting.
If
you do not expect to attend the meeting in person, it is important that your
shares be represented. Please use the enclosed proxy card to vote on
the matters to be considered at the meeting, sign and date the proxy card and
mail it promptly in the enclosed envelope, which requires no postage if mailed
in the United States. You may revoke your proxy at any time before
the meeting by written notice to such effect, by submitting a subsequently
dated
proxy or by attending the meeting and voting in person. If
your shares are held in “street name,” you should instruct your broker how to
vote in accordance with your voting instruction form.
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By
order of the Board of Directors,
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/s/
G. Robert Quist
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G.
Robert Quist
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First
Vice President and Secretary
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August
17, 2007
Salt
Lake
City, Utah
SECURITY
NATIONAL FINANCIAL CORPORATION
5300
South 360 West, Suite 250
Salt
Lake
City, Utah 84123
PROXY
STATEMENT
For
Special Meeting of Stockholders
To
Be Held on September 21, 2007
GENERAL
INFORMATION
This
Proxy Statement is furnished in
connection with the solicitation of proxies by the Board of Directors of
Security National Financial Corporation (the "Company") for use at the Special
Meeting of Stockholders to be held on Friday, September 21, 2007 at 5300
South
360 West, Suite 250, Salt Lake City, Utah, at 10:00 a.m., Mountain Daylight
Time, or at any adjournment or postponements thereof (the "Special
Meeting"). The shares covered by the enclosed Proxy, if such is
properly executed and received by the Board of Directors prior to the meeting,
will be voted in favor of the proposals to be considered at the Special Meeting,
and in favor of the approval of the proposed amendment to the Company's Articles
of Incorporation to increase the authorized capital stock of the Company
from
27,500,000 shares to 45,000,000 shares, to increase the number of authorized
shares of Class A common stock from 10,000,000 shares to 20,000,000 shares,
and
to increase the number of authorized shares of Class C common stock from
7,500,000 shares to 15,000,000 shares.
A
Proxy
may be revoked at any time before it is exercised by giving written notice
to
the Secretary of the Company at 5300 South 360 West, Suite 250, Salt Lake City,
Utah 84123, Attention: G. Robert Quist, by submitting in writing a Proxy bearing
a later date, or by attending the Special Meeting and voting in
person. Stockholders may vote their shares in person if they attend
the Special Meeting, even if they have executed and returned a
Proxy. This Proxy Statement and accompanying Proxy Card are being
mailed to stockholders on or about August 17, 2007.
If
a
stockholder wishes to assign a proxy to someone other than the Directors' Proxy
Committee, all three names appearing on the Proxy Card must be crossed out
and
the name(s) of another person or persons (not more than three)
inserted. The signed card must be presented at the meeting by the
person(s) representing the shareholder.
The
cost
of this solicitation will be borne by the Company. The Company may
reimburse brokerage firms and other persons representing beneficial owners
of
shares for their expenses in forwarding solicitation materials to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers, and regular employees, without additional
compensation.
The
matters to be brought before the Special Meeting are (1) to approve the proposed
amendment to the Articles of Incorporation to increase the authorized capital
stock of the Company from 27,500,000 shares to 45,000,000 shares, to increase
the number of authorized shares of Class A common stock from 10,000,000 shares
to 20,000,000 shares, and to increase the number of authorized shares of Class
C
common stock from 7,500,000 shares to 15,000,000 shares; and (2) to transact
such other business as may properly come before the Special
Meeting.
RECORD
DATE AND VOTING INFORMATION
Only
holders of record of common stock at the close of business on August 8, 2007,
will be entitled to vote at the Special Meeting. As of August 8,
2007, there were issued and outstanding 6,297,729 shares of Class A common
stock, $2.00 par value per share, and 7,500,000 shares of Class C common stock,
$.20 par value per share, resulting in a total of 13,797,729 shares of both
Class A and Class C common shares. A majority of the outstanding
shares (or 6,898,865 shares) of common stock will constitute a quorum for the
transaction of business at the meeting.
A
list of
the Company's stockholders will be available for review at the Company’s
corporate offices during regular business hours for a period of 20 days before
the Special Meeting. The holders of Class A and Class C common stock
are each entitled to one vote per share.
After
carefully reading and considering the information contained in this Proxy
Statement, each holder of the Company’s Class A and Class C common stock should
complete, date and sign the Proxy Card and mail the Proxy Card in the enclosed
return envelope as soon as possible so that those shares of the Company’s Class
A and Class C common stock can be voted at the Special Meeting, even if the
holders plan to attend the Special Meeting in person.
Proxies
received at any time before the Special Meeting, and not revoked or superseded
before being voted, will be voted at the Special Meeting. If a Proxy
indicates a specification, it will be in accordance with the
specification. If no specification is indicated, the Proxy will be
voted for approval of the proposed amendment to the Articles of Incorporation
to
increase the authorized capital stock of the Company from 27,500,000 shares
to
45,000,000 shares, to increase the number of authorized shares of Class A common
stock from 10,000,000 shares to 20,000,000 shares, and to increase the number
of
authorized shares of Class C common stock from 7,500,000 shares to 15,000,000
shares and, in the discretion of the persons named in the Proxy, with
respect to other business that may properly come before the meeting or any
adjournments of the meeting. You may also vote in person by ballot at
the Special Meeting.
Your
vote is important. Please complete and return the Proxy Card so your
shares can be represented at the Special Meeting, even if you plan to attend
in
person.
APPROVAL
OF INCREASE IN THE NUMBER OF AUTHORIZED SHARES
PROPOSAL
The
Company's Articles of
Incorporation currently authorizes the issuance of 10,000,000 shares of Class
A
common stock and 7,500,000 shares of Class C common stock. As of the
record date, there were issued and outstanding 6,297,729 shares of Class A
common stock, $2.00 par value per share, and 7,500,000 shares of Class C common
stock, $.20 par value per share. In addition, between May 14,
1998 and August 8, 2007, the Company granted stock options that are currently
outstanding to officers, directors and employees to purchase 736,822 shares
of
Class A common stock, as adjusted for stock dividends, at exercise prices
ranging from $1.79 per share to $5.19 per share, and to purchase 624,474 shares
of Class C common stock, as adjusted for stock dividends, at exercise prices
ranging from $.28 per share to $.31 per share.
As
a
result of the Company's prior stock dividends, financings, acquisitions and
efforts to provide incentives to officers, directors and employees, the Board
of
Directors has determined that it is in the best interest of the Company and
its
stockholders to amend Article IV of the Company's Articles of Incorporation
(the
"Amendment") to increase the authorized capital stock of the Company from
27,500,000 shares to 45,000,000 shares, to increase the number of authorized
shares of Class A common stock from 10,000,000 shares to 20,000,000 shares,
and
to increase the number of authorized shares of Class C common stock from
7,500,000 shares to 15,000,000 shares, and hereby solicits stockholders'
approval of the Amendment. The text of the proposed Amendment is
attached hereto as Exhibit I. If the stockholders approve the
Amendment, the Board of Directors intends to file an Amendment to the Company's
Articles of Incorporation reflecting the Amendment with the Utah Division of
Corporations and Commercial Code of the State of Utah as soon as practicable
following such stockholder approval.
The
objective of the increase in the number of authorized shares of Class A and
Class C common stock is to insure that the Company will have sufficient shares
available for future issuances. The Board of Directors believes that
it is necessary and prudent to increase the authorized number of shares of
Class
A and Class C common stock to the proposed levels in order to provide a reserve
of shares available for issuance to meet the Company's business needs as they
arise. Although the Board of Directors has no immediate plans to
issue a significant number of additional shares of Class A or Class C common
stock, except for shares issuable upon the exercise of stock options previously
granted to the Company's officers and employees, such future business needs
may
include, without limitation, paying stock dividends, funding future financings
and acquisitions, and providing equity incentives to the Company's officers,
directors and employees through stock option and employee stock ownership
plans. The Board of Directors has declared 5% stock dividends payable
to the holders of shares of Class A and Class C common stock each year since
1992.
2
Possible
Effects of Proposed Amendment to Articles of Incorporation
All
authorized but unissued shares of Class A and Class C common stock will be
available for issuance from time to time for any proper purpose approved by
the
Board of Directors. There are currently no arrangements, agreements
or understandings for the issuance or use of the additional shares of the
authorized Class A or Class C common stock, except for shares issuable upon
the
exercise of stock options previously granted to the Company's
officers and employees under stock option plans. However, inasmuch as
the Board of Directors has declared 5% stock dividends payable to the holders
of
Class A and Class C common stock each year since 1992, it is likely that
the Board of Directors will continue this practice in the future even though
there are currently no express arrangements, agreements or understandings by
the
Board to declare any stock dividends in the future.
The
Company's Class A and Class C stockholders do not currently have any preemptive
or similar rights to subscribe for or purchase any additional shares of Class
A
or Class C common stock that may be issued in the future. Thus, future issuances
of common stock may, depending on the circumstances, have a dilutive effect
on
the earnings per share, voting power and other interests of the existing Class
A
and Class C stockholders.
This
proposed increase in authorized shares of Class A and Class C common stock
is
not intended to have any anti-takeover effect and is not part of any series
of
anti-takeover measures contained in any debt instruments or the Articles of
Incorporation or the Bylaws of the Company in effect on the date of this Proxy
Statement. However, stockholders should note that the availability of
authorized but unissued shares of Class A and Class C common stock could make
any attempt to gain control of the Company or the Board more difficult or time
consuming and might make it more difficult to remove current
management.
Although
the Board of Directors currently has no intention of doing so, shares of Class
A
and Class C common stock could be issued by the Board to dilute the percentage
of Class A and Class C common stock owned by a significant stockholder and
increase the cost of, or the number of, voting shares necessary to acquire
control of the Board or to meet the voting requirements imposed by Utah law
with
respect to a merger or other business combination involving the
Company. The Company is not aware of any proposed attempt to take
over the Company or of any attempt to acquire a large block of the Company's
Class A or Class C common stock. The Company has no present intention
to use the authorized Class A or Class C common stock for anti-takeover
purposes.
Voted
Required and Recommendation of the Board of Directors.
The
affirmative vote of the holders of a majority of the outstanding 6,297,729
shares of Class A common stock and the outstanding 7,500,000 shares of Class
C
common stock will be required to approve the proposed amendment to the Company's
Articles of Incorporation, assuming a quorum is present. Accordingly,
a majority of the combined total of 13,797,729 shares of both Class A and Class
C common stock, or 6,898,865 shares, will be required for approval of the
proposed Amendment.
The
Board of Directors recommends that the Class A and Class C shareholders vote
"FOR" approval of the Amendment to the Articles of Incorporation to increase
the
authorized capital stock of the Company from 27,500,000 shares to 45,000,000
shares, to increase the number of authorized shares of Class A common
stock from 10,000,000 shares to 20,000,000 shares, and to increase the number
of
authorized shares of Class C common stock from 7,500,000 shares to 15,000,000
shares.
OTHER
MATTERS
The
Company knows of no other matters to be brought before the Special Meeting,
but
if other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent
in
accordance with their judgment.
3
ANNUAL
REPORT AND FINANCIAL STATEMENTS
Stockholders
are referred to the Company's Annual Report, including financial statements,
for
the fiscal year ended December 31, 2006; and the Company's Quarterly Report,
including unaudited financial statements, for the period ended March 31,
2007. The Company will provide, without charge to each stockholder
upon written request, a copy of the Annual Report on Form 10-K as filed with
the
Securities and Exchange Commission for the fiscal year ended December 31,
2006, and the Quarterly Report on Form 10-Q as filed with the Securities and
Exchange Commission for the period ended March 31, 2007. Such
requests should be directed to G. Robert Quist, First Vice President and
Secretary, Security National Financial Corporation, at P.O. Box 57250, Salt
Lake
City, Utah 84157-0250.
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By
order of the Board of Directors,
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/s/
G. Robert Quist
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G.
Robert Quist
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First
Vice President and Secretary
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August
17, 2007
Salt
Lake
City, Utah
4
EXHIBIT
I
TEXT
OF PROPOSED AMENDMENT
TO
ARTICLES
OF INCORPORATION
OF
SECURITY
NATIONAL FINANCIAL CORPORATION
ARTICLE
IV
Capital
Stock
The
authorized capital stock of the Corporation shall consist of 45,000,000 shares
divided into 20,000,000 shares of $2.00 par value Common Stock, 5,000,000
shares
of $1.00 par value Common Stock, 15,000,000 shares of $0.20 par value Common
Stock, and 5,000,000 shares of $1.00 par value Preferred Stock. The
Common Stock which the Corporation is authorized to issue is divided as
follows:
Twenty
Million (20,000,000) shares of $2.00 par value Class A Common
Stock;
Five
Million (5,000,000) shares of $1.00 par value Class B Common Stock;
and
Fifteen
Million (15,000,000) shares of $0.20 par value Class C Common
Stock.
The
Preferred Stock may be issued:
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(a)
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Subject
to the right of the Corporation to redeem any of such shares
at a price
not less than the par value
thereof;
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(b)
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Entitling
the holders thereof to cumulative, non-cumulative or partially
cumulative
dividends;
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(c)
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Having
preference over any other class or series of shares as to payment
of
dividends;
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(d)
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Having
preference in the assets of the Corporation over any other class
or
classes of shares upon the voluntary or involuntary liquidation
of the
Corporation;
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(e)
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Being
convertible into shares of any other class or into shares of
any series of
the same or any other class, except a class having prior or superior
rights and preferences as to dividends or distribution of assets
upon
liquidation.
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The
Board
of Directors shall have authority to divide and issue the Preferred Stock
in
series and to establish variations in relative rights and preferences between
such series as provided by the Utah Revised Business Corporation
Act. All shares of Preferred Stock shall be identical except as to
any variations established by the Board of Directors pursuant to the preceding
sentence. Except as may be provided for by law, the Preferred Stock
shall be non-voting stock and the holders of such stock shall not be entitled
to
any voice in the management of the Corporation, nor to any voting powers
at any
stockholders meeting, by virtue thereof.
PROXY
- SECURITY NATIONAL FINANCIAL CORPORATION - PROXY
THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
CLASS
A
OR CLASS C COMMON STOCK
The
undersigned Class A or Class C common stockholder of Security National Financial
Corporation (the "Company") acknowledges receipt of the Notice of Special
Meeting of the Stockholders to be held on Friday, September 21, 2007, at
5300 South 360 West, Suite 250, Salt Lake City, Utah, at 10:00 a.m., Mountain
Daylight Time, and hereby appoints Messrs. George R. Quist, Scott M. Quist
and
G. Robert Quist, or any of them, each with full power of substitution, as
attorneys and proxies to vote all the shares of the undersigned at said Special
Meeting of Stockholders and at all adjournments or postponements thereof, hereby
ratify and confirming all that said attorneys and proxies may do or cause to
be
done by virtue hereof. The above-named attorneys and proxies are
instructed to vote all of the undersigned's shares as follows:
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1.
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To
approve the proposed amendment to the Company's Articles of Incorporation
to increase the
authorized capital stock of the Company from 27,500,000 shares
to
45,000,000 shares, to increase the number of authorized shares of
Class A common stock from 10,000,000 to 20,000,000 shares, and
to increase
the number of authorized shares of Class C common stock from 7,500,000
shares to 15,000,000
shares.
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[ ] FOR [ ] AGAINST
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2.
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To
transact such other business as may properly come before the meeting
or
any adjournment thereof.
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THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2 ABOVE.
Dated
____________________________________, 2007
_________________________________________
Signature
of Stockholder
_________________________________________
Signature
of Stockholder
Please
sign your name exactly as it appears on your share certificate. If
shares are held jointly, each holder should sign. Executors,
trustees, and other fiduciaries should so indicate when
signing. Please sign, date, and return this Proxy Card
immediately.
NOTE: Securities
dealers or other representatives please state the number of shares voted by
this
Proxy.