As filed with the Securities and Exchange Commission on December 11, 1997
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE FIRST AMERICAN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<C> <C> <C>
CALIFORNIA 95-1068610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
114 EAST FIFTH STREET
SANTA ANA, CALIFORNIA 92701-4622
(Address of principal executive offices)
</TABLE>
<PAGE>
THE FIRST AMERICAN FINANCIAL CORPORATION 1997 DIRECTORS' STOCK PLAN
(Full title of the plan)
<TABLE>
<C> <C>
MARK R ARNESEN, ESQ. (Copy to)
SECRETARY NEIL W. RUST, ESQ.
THE FIRST AMERICAN FINANCIAL CORPORATION WHITE & CASE
114 EAST FIFTH STREET 633 WEST FIFTH STREET
SANTA ANA, CALIFORNIA 92701 LOS ANGELES, CALIFORNIA 90071
(714) 558-3211 (213) 620-7700
(Name, address and telephone
number of agent for service)
</TABLE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE<F1> OFFERING PRICE<F1> FEE<F1>
<S> <C> <C> <C> <C>
Common stock, $1.00 par value 400,000 shares $62.625 $24,414,750 $7,202.35
<F1> Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(h) under the Act, based
(i) on the $32.375 per share exercise price of 21,000 shares subject to options granted prior to the filing of this
Registration Statement and (ii) as to the remaining 379,000 shares on the average of the high and low prices of the Common
stock registered on the New York Stock Exchange as of December 5, 1997.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Registrant hereby states that the documents listed in (1), (2), (3),
(4), (5), (6) and (7) below are incorporated by reference in this Registration
Statement and all documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the filing of a post-effective
amendment that indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
(1) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;
(2) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997;
(3) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997;
(4) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997;
(5) The Registrant's Report on Form 8-K dated November 7, 1997;
(6) The description of the Common stock contained in the Registrant's
Registration Statement on Form 8-A registering its Common stock,
par value $1.00 per share, under Section 12(b) of the Exchange Act,
dated November 23, 1983; and
(7) The description of certain Rights to Purchase Series A Junior
Participating Preferred Shares which may be transferred with the
Registrant's Common stock, which description is contained in the
Registrant's Registration Statement on Form 8-A, under Section
12(b) of the Exchange Act, dated November 7, 1997.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subject to certain limitations, Section 317 of the California
Corporations Code provides in part that a corporation shall have power to
indemnify any person who was or is a party or is threatened to be made a party
to any proceeding (other than an action by or in the right of the corporation
to procure a judgment in its favor) by reason of the fact that the person is
or was an agent (which term includes officers and directors) of the
corporation, against expenses, judgments, fines, settlements, and other
amounts actually and reasonably incurred in connection with the proceeding if
that person acted in good faith and in a manner the person reasonably believed
to be in the best interests of the corporation and, in the case of a criminal
proceeding, had no reasonable cause to believe the conduct of the person was
unlawful.
The California indemnification statute, as provided in Section 317 of
the California Corporations Code (noted above), is nonexclusive and allows a
corporation to expand the scope of indemnification provided, whether by
provisions in its Bylaws or by agreement, to the extent authorized in the
corporation's articles.
The Articles of Incorporation of the Registrant provide that: "The
liability of the directors of the Corporation for monetary damages shall be
eliminated to the fullest extent permissible under California law." The
<PAGE>
effect of this provision is to exculpate directors from any liability to the
Registrant, or anyone claiming on the Registrant's behalf, for breaches of the
directors' duty of care. However, the provision does not eliminate or limit
the liability of a director for actions taken in his capacity as an officer.
In addition, the provision applies only to monetary damages and is not in-
tended to impair the rights of parties suing on behalf of the Registrant to
seek equitable remedies (such as actions to enjoin or rescind a transaction
involving a breach of the directors' duty of care or loyalty).
The Bylaws of the Registrant provide that, subject to certain
qualifications, "(i) the corporation shall indemnify its Officers and
Directors to the fullest extent permitted by law, including those
circumstances in which indemnification would otherwise be discretionary; (ii)
the corporation is required to advance expenses to its Officers and Directors
as incurred, including expenses relating to obtaining a determination that
such Officers and Directors are entitled to indemnification, provided that
they undertake to repay the amount advanced if it is ultimately determined
that they are not entitled to indemnification; (iii) an Officer or Director
may bring suit against the corporation if a claim for indemnification is not
timely paid; (iv) the corporation may not retroactively amend this Section 1
in a way which is adverse to its Officers and Directors; (v) the provisions of
subsections (i) through (iv) above apply to all past and present Officers and
Directors of the corporation." "Officer" includes the following officers of
the Registrant: Chairman of the Board, President, Vice President, Secretary,
Assistant Secretary, Treasurer, Assistant Treasurer and such other officers as
the board shall designate from time to time. "Director" of the Registrant
means any person appointed to serve on the Registrant's board of directors
either by its shareholders or by the remaining board members.
Each of the Registrant's 1996 Stock Option Plan and its 1997 Directors'
Stock Plan (each individually, the "Plan") provides that, subject to certain
conditions, "The Company shall, through the purchase of insurance or
otherwise, indemnify each member of the Board (or board of directors of any
affiliate), each member of the [Compensation] Committee, and any [other]
employees to whom any responsibility with respect to the Plan is allocated or
delegated, from and against any and all claims, losses, damages, and expenses,
including attorneys' fees, and any liability, including any amounts paid in
settlement with the Company's approval, arising from the individual's action
or failure to act, except when the same is judicially determined to be
attributable to the gross negligence or willful misconduct of such person."
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Registrant, however, the Registrant has been informed that, in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is therefore
unenforceable.
<PAGE>
ITEM 8. EXHIBITS.
4.1. The First American Financial Corporation 1997 Directors'
Stock Plan.
4.2. Rights Agreements are incorporated by reference to Exhibit
4 to the Registrant's Registration Statement Form 8-A
dated November 7, 1997.
5. Opinion of counsel regarding legality.
23.1. Consent of independent accountants.
23.2. Consent of counsel (contained in Exhibit 5).
24. Power of Attorney.
ITEM 9. UNDERTAKINGS.
(a) Rule 415 Offering. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
<PAGE>
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(h) Securities and Exchange Commission Position on Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Ana, State of California, on
December 11, 1997.
THE FIRST AMERICAN FINANCIAL CORPORATION
By:/s/ Parker S. Kennedy
-----------------------------------------
Parker S. Kennedy, President
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Date: December 11, 1997 By:/s/ D.P. Kennedy
-----------------------------------------
D.P. Kennedy, Chairman and Director
Date: December 11, 1997 By:/s/ Parker S. Kennedy
-----------------------------------------
Parker S. Kennedy, President and Director
Date: December 11, 1997 By:/s/ Thomas A. Klemens
-----------------------------------------
Thomas A. Klemens, Executive Vice
President, Chief Financial Officer
(Principal Financial and Accounting
Officer)
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Date: December 11, 1997 By:/s/ Gary J. Beban*
------------------------------------------
Gary J. Beban, Director
Date: December 11, 1997 By:/s/ J. David Chatham*
------------------------------------------
J. David Chatham, Director
Date: December 11, 1997 By:/s/ William G. Davis*
------------------------------------------
William G. Davis, Director
Date: December 11, 1997 By:/s/ James L. Doti*
------------------------------------------
James L. Doti, Director
Date: December 11, 1997 By:/s/ Lewis W. Douglas, Jr.*
------------------------------------------
Lewis W. Douglas, Jr., Director
Date: December 11, 1997 By:/s/ Paul B. Fay, Jr.*
------------------------------------------
Paul B. Fay, Jr., Director
Date: December 11, 1997 By:/s/ Dale F. Frey*
------------------------------------------
Dale F. Frey, Director
Date: December 11, 1997 By:/s/ Anthony R. Moiso*
------------------------------------------
Anthony R. Moiso, Director
Date: December 11, 1997 By:/s/ Roslyn B. Payne*
------------------------------------------
Roslyn B. Payne, Director
Date: December , 1997 By:/s/ Virginia Ueberroth*
------------------------------------------
Virginia Ueberroth, Director
*By:/s/ Mark R Arnesen
-----------------------------
Mark R Arnesen
Attorney-in-Fact
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
4.1. The First American Financial Corporation 1997 Directors' Stock Plan.
4.2. Rights Agreements are incorporated by reference to Exhibit 4 to the
Registrant's Form 8-A dated November 7, 1997.
5. Opinion of counsel regarding legality.
23.1. Consent of independent accountants.
23.2. Consent of counsel.<F1>
24. Power of Attorney.
- --------------------------
<F1> Included in Exhibit 5.
</TABLE>
EXHIBIT 4.1
THE FIRST AMERICAN FINANCIAL CORPORATION
1997 DIRECTORS' STOCK PLAN
SECTION 1
PURPOSE
The purpose of The First American Financial Corporation 1997 Directors'
Stock Plan (the "Plan") is to maintain the ability of The First American
Financial Corporation (the "Company") to attract and retain the services of
experienced and highly qualified individuals to serve as directors of the
Company and to create a proprietary interest of such directors in the
Company's continued success.
SECTION 2
DEFINITIONS
2.1 Definitions. Whenever used herein, the following terms shall have the
respective meanings set forth below:
(a) "Act" means the Securities Exchange Act of 1934, as amended.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" means the occurrence, following the grant of an
Option, of any of the following events:
(i) the acquisition by any person, entity or group (within the
meaning of Section 13(d)(3) of the Act) as beneficial owner,
directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the
then outstanding securities of the Company; or
(ii) a change, during any period of two consecutive years, of a
majority of the Board as constituted at the beginning of such
period, unless the election of each director who was not a
director at the beginning of such period was approved by a vote
of at least two-thirds of the directors then in office who were
<PAGE>
directors at the beginning of such period; or
(iii) any other event constituting a change in control required to be
reported in response to Item 6(e) of Schedule 14A of Regulation
14A under the Act.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation Committee of the Board, which
shall consist of two or more members, each of whom shall be Non-
Employee Directors, or any other committee appointed by the Board to
administer the Plan.
(f) "Company" means The First American Financial Corporation, a
California corporation, and any successor thereto.
(g) "Director" means a member of the Board.
(h) "Disability" means, with respect to any Director, an inability, as
determined by the Board, to perform duties and services as a
Director by reason of a medically determinable physical or mental
impairment, supported by medical evidence, that can be expected to
last for a continuous period of not less than six months.
(i) "Fair Market Value" means, on any date, the average of the bid and
asked for price of a share of Stock as reported on the New York
Stock Exchange ("NYSE") (or on such other recognized market or
quotation system on which shares of the Stock are traded or quoted
at the relevant time) on such date. In the event that there are no
Stock transactions reported on NYSE (or such other market or system)
on such date, Fair Market Value shall mean the closing price on the
immediately preceding date on which Stock transactions were so
reported.
(j) "Incentive Stock Option" means an Option that is an Incentive Stock
Option within the requirements of Section 422 of the Code.
(k) "Non-Employee Director" means a Director who is a "Non-Employee
Director" within the meaning of Rule 16b-3 promulgated under the
Act.
(l) "Nonstatutory Stock Option" means an Option that is not an Incentive
Stock Option.
(m) "Option" means the right to purchase Stock at a stated price for a
specified period of time.
(n) "Optionee" means a Non-Employee Director to whom one or more Options
has been granted pursuant to the Plan.
(o) "Plan" means The First American Financial Corporation 1997
Directors' Stock Plan, as in effect from time to time.
(p) "Retirement" means, with respect to any Director, termination of
such Director's directorship at the written election of such
Director on or after the date such Director attains age 65.
(q) "Stock" means the Common shares of the Company, par value $1.00 per
share.
2.2 Gender and Number. Except when otherwise indicated by the context, words
in the masculine gender used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall
include the singular.
<PAGE>
SECTION 3
ELIGIBILITY AND PARTICIPATION
Only Non-Employee Directors may participate in the Plan.
SECTION 4
POWERS OF THE COMMITTEE
The Committee shall be responsible for the administration of the Plan.
The Committee, by majority action thereof, is authorized to prescribe, amend,
and rescind rules and regulations relating to the Plan, to provide for
conditions deemed necessary or advisable to protect the interests of the
Company, and to make all other determinations necessary or advisable for the
administration and interpretation of the Plan with a view to carrying out its
provisions and purposes. All determinations, decisions, interpretations and
other actions made or taken by the Committee pursuant to the provisions of the
Plan shall be final, binding and conclusive for all purposes and upon all
persons.
SECTION 5
STOCK OPTIONS
5.1 Grants of Options. The Committee may, if it so determines, grant Options
to Non-Employee Directors, provided that, (a) if any grant of Options is
so made, such Options shall (i) be granted to all individuals who are
Non-Employee Directors at the time of such grant and (ii) contain
identical terms (including, without limitation, the number of shares of
Stock that may be purchased pursuant thereto), and (b) the number of
shares of Stock that may be purchased pursuant to Options granted to any
Non-Employee Director under this Plan shall not exceed 1,500 shares
during any twelve consecutive month period. Notwithstanding any other
provision of this Plan, no Option shall be granted hereunder unless
sufficient shares of Stock are available therefor under Section 7.
5.2 Option Agreement. Each Option shall be a Nonstatutory Stock Option
evidenced by an Option agreement that shall specify the exercise price,
the duration of the Option, the number of shares of Stock to which the
Option pertains, and such other terms and conditions not inconsistent
with the Plan as the Committee shall determine.
5.3 Option Price. Options granted pursuant to the Plan shall have an
exercise price that is not less than the Fair Market Value on the date
the Option is granted.
5.4 Exercise of Options. Each Option shall be subject to the following
restrictions on exercise:
(a) An Option shall not be exercisable, in whole or in part, after the
expiration of 10 years from the date the Option was granted. To the
extent that an Option is not exercised within the ten-year period of
exercisability, it shall expire as to the then unexercised part.
(b) An Option shall not be exercisable with respect to a fractional
share or with respect to the lesser of 100 shares or the full number
of shares then subject to the Option. If a fractional share shall
become subject to an Option by reason of a stock dividend or
otherwise, the Optionee shall not be entitled to exercise the Option
with respect to such fractional share.
(c) Except as provided in Sections 5.5 and 8, an Option shall not be
exercisable in whole or in part unless the Optionee, at the time the
<PAGE>
Optionee exercises the Option, is, and has been at all times since
the date of grant of the Option, a Non-Employee Director.
(d) The Committee shall establish procedures governing the exercise of
Options, which shall require that written notice of exercise be
given and that the Option price be paid in full in cash or cash
equivalents, including by personal check, at the time of exercise.
The Committee may, in its discretion, permit a Non-Employee Director
to make payment in Stock already owned by him or her, valued at its
Fair Market Value on the date of exercise, as partial or full
payment of the exercise price. As soon as practicable after receipt
of a written exercise notice and full payment of the exercise price,
the Company shall deliver to the Non-Employee Director a certificate
or certificates representing the acquired shares of Stock.
(e) If at any time the Board shall determine, in its discretion, that
the listing, registration or qualification of shares of Stock upon
any national securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the
sale or purchase of shares of Stock hereunder, such Option may not
be exercised in whole or in part unless and until such listing,
registration, qualification, consent or approval shall have been
effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Board in the exercise of its
reasonable judgment.
Notwithstanding the foregoing, no Option shall be exercisable more
than 10 years after the date on which it is granted.
5.5 Change in Control. In the event of a Change in Control, unless directed
otherwise by a resolution of the Board adopted prior to and specifically
relating to the occurrence of such Change in Control, each outstanding
Option shall, notwithstanding anything to the contrary contained in this
Section 5 or Section 8, immediately become fully exercisable and may be
exercised at any time prior to the earlier of (a) the expiration of the
term of such Option and (b) the date that is one year following such
Change in Control.
SECTION 6
STOCK COMPENSATION
The Committee, by majority action thereof, may prescribe rules and
regulations that permit Non-Employee Directors to elect to receive shares of
Stock in lieu of cash compensation payable to Non-Employee Directors by the
Company for their services as Directors. All determinations, decisions,
interpretations and other actions made or taken by the Committee pursuant to
the provisions of this Section 6 shall be final, binding and conclusive for
all purposes and upon all persons.
SECTION 7
STOCK SUBJECT TO PLAN
7.1 Number. Subject to the provisions of Section 7.3, the aggregate number
of shares of Stock subject to Options awarded under Section 5.1 of the
Plan and issued in lieu of cash compensation under Section 6 of the Plan
may not exceed 400,000 shares. The shares to be delivered under the Plan
may consist, in whole or in part, of treasury Stock or authorized but
unissued Stock, not reserved for any other purpose.
7.2 Canceled, Terminated, or Forfeited Options. Any shares of Stock subject
to an Option which for any reason is canceled, terminated, expires or
<PAGE>
otherwise settled without the issuance of any Stock shall again be
available for Options subsequently granted under the Plan.
7.3 Adjustment in Capitalization. In the event of any Stock dividend or
Stock split, recapitalization (including, without limitation, the payment
of an extraordinary dividend), merger, consolidation, combination,
spin-off, distribution of assets to stockholders, exchange of shares, or
other similar corporate change, the aggregate number of shares of Stock
available under Section 7.1 for Options or for compensation in lieu of
cash or subject to outstanding Options, and the respective prices and/or
performance criteria applicable to outstanding Options, may be appro-
priately adjusted by the Committee, whose determination shall be
conclusive.
SECTION 8
TERMINATION OF SERVICE
8.1 Termination of Service Due to Retirement. In the event an Optionee
ceases to be a Non-Employee Director by reason of Retirement, any Options
granted to such Optionee which are not then exercisable shall be canceled
and any Options granted to such Optionee which are then exercisable and
outstanding may be exercised at any time prior to the earlier of (a) the
expiration of the term of the Options and (b) the date that is 90 days
following Retirement.
8.2 Termination of Service Due to Death or Disability. In the event an
Optionee ceases to be a Non-Employee Director by reason of death or
Disability, any Options granted to such Optionee which are then
outstanding may be exercised by the Optionee or the Optionee's designated
beneficiary, and if none is named, in accordance with Section 10.2, at
any time prior to the earlier of (a) the expiration of the term of the
Options and (b) the date that is one year following death or Disability.
8.3 Termination of Service For Other Reasons. In the event an Optionee
ceases to be a Non-Employee Director for any reason other than one
described in Section 8.1 or 8.2, any Options granted to such Optionee
which are not exercisable shall be canceled, and any Options granted to
such Optionee which are exercisable and outstanding at the date such
Optionee ceases to be a Non-Employee Director shall be exercisable at any
time prior to the earlier of (a) the expiration of the term of such
Options and (b) the fifth day following the date such Optionee ceases to
be a Non-Employee Director.
SECTION 9
AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
The Board may at any time terminate or suspend the Plan, and from time to
time may amend or modify the Plan. No amendment, modification, or termination
of the Plan shall in any manner adversely affect any Option theretofore
granted under the Plan, without the consent of the applicable Optionee.
SECTION 10
MISCELLANEOUS PROVISIONS
10.1 Nontransferability of Options. No Options granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution to an Optionee's designated beneficiary upon such Optionee's
death, provided that the deceased Optionee's beneficiary or the
representative of his estate shall acknowledge and agree in writing, in a
form prescribed by the Committee, to be bound by the provisions of the
<PAGE>
Plan as if such beneficiary or the estate were the Optionee. All rights
with respect to Options granted to an Optionee under the Plan shall be
exercisable during his lifetime only by such Optionee.
10.2 Beneficiary Designation. Each Optionee may from time to time name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid or by whom
any right under the Plan is to be exercised in the event of the
Optionee's death. Each designation will revoke all prior designations by
the same Optionee, shall be in a form prescribed by the Committee, and
will be effective only when filed by the Optionee in writing with the
Committee during his lifetime. In the absence of any such designation,
benefits remaining unpaid at the Optionee's death shall be paid to or
exercised by the Optionee's surviving spouse, or, if the Optionee has no
surviving spouse, then to or by the Optionee's estate.
10.3 No Guarantee of Directorship. Nothing in the Plan shall interfere with
or limit in any way the right of the Company's stockholders to terminate
any Non-Employee Director's directorship at any time or for any reason,
nor confer upon any Non-Employee Director any right to continue to serve
as a Director of the Company.
10.4 Tax Withholding. Any Federal, state, and local taxes, required by law to
be withheld with respect to Stock received upon the exercise of an Option
under the Plan or benefits earned and vested under any other compensation
arrangement may, if not remitted by an Optionee, be withheld from Stock
otherwise issuable to such Optionee or from such Optionee's other
compensation for serving as a Director and which is available for
withholding. Prior to issuing Stock or authorizing the issuance of Stock
under this Plan, the Company may require such documents from any taxing
authority, or may require such indemnities or surety bond from any
Optionee or beneficiary, as the Company shall reasonably consider
necessary for its protection.
10.5 Indemnification. The Company shall, through the purchase of insurance or
otherwise, indemnify each member of the Board (or board of directors of
any affiliate), each member of the Committee, and any employees to whom
any responsibility with respect to the Plan is allocated or delegated,
from and against any and all claims, losses, damages, and expenses,
including attorneys' fees, and any liability, including any amounts paid
in settlement with the Company's approval, arising from the individual's
action or failure to act, except when the same is judicially determined
to be attributable to the gross negligence or willful misconduct of such
person. The right of indemnity described in the preceding sentence shall
be conditioned upon (i) the timely receipt of notice by the Company of
any claim asserted against the individual, which notice, in the event of
a lawsuit, shall be given within ten days after receipt by the individual
of the complaint, and (ii) the receipt by the Company from the individual
of an offer for the Company to participate in the settlement or defense
of such claim.
10.6 No Limitation on Compensation. Nothing in the Plan shall be construed to
limit the right of the Company to establish other plans or to pay
compensation to its Directors in cash, Stock or property, in a manner
differing from that authorized under the Plan.
10.7 Requirements of Law. The granting of Options and the issuance of shares
of Stock shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
10.8 Term of Plan. The Plan shall be effective upon its adoption by the Board
and approval by the shareholders of the Company. The Plan shall continue
in effect, unless sooner terminated pursuant to Section 9, until April
24, 2007.
<PAGE>
10.9 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of
California.
EXHIBIT 5
[LETTERHEAD OF THE FIRST AMERICAN FINANCIAL CORPORATION]
December 10, 1997
The First American Financial Corporation
114 East Fifth Street
Santa Ana, CA 92701
Ladies and Gentlemen:
I am corporate counsel to The First American Financial Corporation, a
California corporation (the "Company"), and am familiar with the proceedings
and documents relating to the proposed registration by the Company, through a
Registration Statement on Form S-8 (the "Registration Statement"), to be filed
by the Company with the Securities and Exchange Commission, of: (a) 400,000
shares of Common stock, $1.00 par value, of the Company and an equal number of
Rights to purchase $1.00 par value Series A Junior Participating Preferred
Shares (collectively, the "Shares"), to be issued and sold under the Company's
1997 Directors' Stock Plan (the "Plan"), and (b) the options to be issued to
those directors of the Company who participate in the Plan (the "Options").
For the purposes of rendering this opinion, I have examined originals or
photostatic copies of certified copies of such corporate records, agreements
and other documents of the Company as I have deemed relevant and necessary as
a basis for the opinion hereinafter set forth.
Based on the foregoing, I am of the opinion that the Shares, when issued
and paid for in accordance with the terms and conditions set forth in the Plan
and the Registration Statement, will be duly authorized, validly issued, fully
paid and nonassessable, and that the Options, when issued in accordance with
the terms and conditions of the Plan and the Registration Statement, will be
validly issued.
I consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
By:/s/ Mark R Arnesen
-----------------------------------------------
Mark R Arnesen
Vice President, Secretary and Corporate Counsel
EXHIBIT 23.1
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 11, 1997, appearing on page
21 of The First American Financial Corporation's Annual Report on Form 10-K
for the year ended December 31, 1996.
By:/s/ Price Waterhouse LLP
---------------------------------------
Price Waterhouse LLP
Costa Mesa, California
Date: December 11, 1997
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors of The
First American Financial Corporation, a California corporation (the
"Corporation"), hereby constitute and appoint Parker S. Kennedy and Mark R
Arnesen, and each of them, the true and lawful agents and attorneys-in-fact of
the undersigned, with full power and authority in said agents and attorneys-
in-fact, and in either or both of them, to sign for the undersigned and in
their respective names as directors of the Corporation the Registration
Statement on Form S-8 to be filed with the United States Securities and
Exchange Commission, Washington, D.C., under the Securities Act of 1933, as
amended, and any amendment or amendments to such Registration Statement,
relating to the Common Stock, par value $1.00 per share, of the Corporation to
be offered under The First American Financial Corporation 1997 Directors'
Stock Plan, and the undersigned ratify and confirm all acts taken by such
agents and attorney-in-facts, or either or both of them, as herein authorized.
Date: August 28, 1997 By:
------------------------------------------
George L. Argyros
Date: August 28, 1997 By:/s/ Gary J. Beban
------------------------------------------
Gary J. Beban
Date: August 28, 1997 By:/s/ J. David Chatham
------------------------------------------
J. David Chatham
Date: August 28, 1997 By:/s/ William G. Davis
------------------------------------------
William G. Davis
Date: August 28, 1997 By:/s/ James L. Doti
------------------------------------------
James L. Doti
Date: August 28, 1997 By:/s/ Lewis W. Douglas, Jr.
------------------------------------------
Lewis W. Douglas, Jr.
Date: August 28, 1997 By:/s/ Paul B. Fay, Jr.
------------------------------------------
Paul B. Fay, Jr.
<PAGE>
Date: August 28, 1997 By:/s/ Dale F. Frey
------------------------------------------
Dale F. Frey
Date: August 28, 1997 By:
------------------------------------------
Robert B. McLain
Date: August 28, 1997 By:/s/ Anthony R. Moiso
------------------------------------------
Anthony R. Moiso
Date: August 28, 1997 By:
------------------------------------------
Rudolph J. Munzer
Date: August 28, 1997 By:
------------------------------------------
Frank O'Bryan
Date: August 28, 1997 By:/s/ Roslyn B. Payne
------------------------------------------
Roslyn B. Payne
Date: August 28, 1997 By:/s/ Virginia Ueberroth
------------------------------------------
Virginia Ueberroth
