As filed with the Securities and Exchange Commission on May 27, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE FIRST AMERICAN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
CALIFORNIA 6361 95-1068610
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation of Organization) Classification Code No.) Identification No.)
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114 EAST FIFTH STREET
SANTA ANA, CALIFORNIA 92701-4642
(800) 854-3643
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
MARK R ARNESEN, ESQ. (Copy to)
SECRETARY NEIL W. RUST, ESQ.
THE FIRST AMERICAN FINANCIAL CORPORATION WHITE & CASE LLP
114 EAST FIFTH STREET 633 WEST FIFTH STREET
SANTA ANA, CALIFORNIA 92701 LOS ANGELES, CALIFORNIA 90071
(714) 558-3211 (213) 620-7700
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as the
Registrant shall determine.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [__]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [__] Registration No.__.
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [__] Registration No.___
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CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of Securities To Be Aggregate Price Aggregate Registration
To Be Registered Registered Per Unit(1) Offering Price(1) Fee(1)
- ------------------------------------------------------------------------------------------------------------------------------------
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Common stock, $1.00 par value 1,000,000 shares $78.46875 $78,437,500 $23,148.28
====================================================================================================================================
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(1) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE IN
ACCORDANCE WITH RULES 457(C) UNDER THE SECURITIES ACT OF 1933, BASED ON
THE AVERAGE OF THE HIGH AND LOW PRICES OF THE COMMON STOCK REGISTERED
ON THE NEW YORK STOCK EXCHANGE AS OF MAY 20, 1998.
<PAGE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 27, 1998.
PROSPECTUS
1,000,000 COMMON SHARES
THE FIRST AMERICAN FINANCIAL CORPORATION
This prospectus (this "Prospectus") relates to the offering from time
to time by The First American Financial Corporation (the "Company"), a
California corporation, of up to 1,000,000 aggregate amount of its Common
shares, $1.00 par value (the "Shares") upon terms to be determined at the time
of each such offering.
The Shares are to be offered directly by the Company in connection with
the acquisition from time to time of the assets of, or ownership interests in,
certain entities engaged in the same or similar lines of business as the Company
or any of its subsidiaries. The consideration for such acquisitions will consist
of Shares, cash, notes or other evidences of indebtedness, guarantees,
assumption of liabilities, tangible or intangible property, or a combination
thereof, as determined from time to time by negotiations between the Company and
the owners or controlling persons of the assets or ownership interests to be
acquired.
The Company contemplates that the specific terms of an acquisition will
be determined by negotiations between the Company and the owners or controlling
persons of the assets or ownership interests to be acquired. Factors taken into
account in selecting an acquisition include, among other relevant factors, the
quality and reputation of the business to be acquired, the assets, liabilities,
results of operations and cash flows of the business, the quality of its
management and employees, its earnings potential, the geographic locations of
the business and the current market value of the Shares. The Company anticipates
that Shares issued in any such acquisition will be valued at a price reasonably
related to the market value of the Shares, either at the time the terms of the
acquisitions are tentatively agreed upon, or at or about the time of closing, or
during the period or periods prior to the delivery of the Shares.
<PAGE>
(cover page continued)
The Company does not expect that underwriting discounts or commissions
will be paid, except that finders fees may be paid to persons from time to time
in connection with specific acquisitions. Any person receiving such fees may be
deemed an "underwriter" within the meaning of the Securities Act of 1933 (the
"Securities Act").
Shares issued pursuant to this Prospectus, and any applicable
supplement to this Prospectus (a "Supplement") or post-effective amendment (a
"Post-Effective Amendment") may be reoffered pursuant hereto by the holders
thereof (the "Selling Shareholders") from time to time in transactions on the
open market, in negotiated transactions, through the writing of options on such
Shares or through a combination of such methods of sale, at negotiated prices,
fixed prices which may be changed, market prices prevailing at the time of sale
or prices relating to such prevailing prices. See "Selling Shareholders."
THE SHARES ARE TRADED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL
"FAF." ON MAY 20, 1998, THE CLOSING PRICE OF THE SHARES ON THE NEW YORK STOCK
EXCHANGE WAS $77-9/16 PER SHARE.
SEE "RISK FACTORS" BEGINNING ON PAGE 1 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS BEFORE MAKING AN INVESTMENT IN THE
SHARES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS [__________] , 1998.
<PAGE>
(inside cover page)
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549; and at the following Regional Offices of the Commission: New York
Regional Office, Seven World Trade Center, 13th Floor, Suite 1300, New York, New
York 10048; and Chicago Regional Office, Citicorp Center, 500 West Madison
Street, 14th Floor, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. The Commission also maintains a site on the World Wide Web
(http://www.sec.gov) that contains reports, proxy statements and other
information regarding the Company. In addition, such reports, proxy statements
and other information can also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, on which the Shares
listed.
This Prospectus constitutes part of a Registration Statement on Form
S-4 (the "Registration Statement") filed by the Company with the Commission
under the Securities Act. In accordance with the rules and regulations of the
Commission, this Prospectus does not contain all of the information contained in
the Registration Statement and the exhibits and schedules thereto. For further
information concerning the Company and the Shares offered hereby, reference is
hereby made to the Registration Statement and the exhibits and schedules filed
therewith which may be obtained at the Commission's offices whose addresses are
listed above. The Registration Statement has been filed electronically and may
be obtained at the Commission's Web site listed above. Any statements contained
herein concerning the provisions of any document are not necessarily complete,
and, in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (1), (2), (3), (4), (5), (6), (7), (8) and (9)
below are incorporated by reference in this Prospectus, and all documents filed
by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, subsequent to the date of this Prospectus and prior
to the termination of any offering of securities made by this Prospectus, shall
be deemed to be incorporated by reference in this Prospectus and to be part
hereof from the date of filing of such documents. Any statement contained
herein, or in a document all or a portion of which is incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997.
(2) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1998.
(3) The Company's Report on Form 8-K dated January 23, 1998.
(4) The Company's Report on Form 8-K dated January 27, 1998.
(5) The Company's Report on Form 8-K dated March 18, 1998.
(6) The Company's Report on Form 8-K dated March 31, 1998.
(7) The Company's Report on Form 8-K dated April 7, 1998.
(8) The description of the Shares contained in the Company's
Registration Statement on Form 8-A registering its Common
shares, par value $1.00 per share, under Section 12(b) of the
Exchange Act, dated November 23, 1993.
(9) The description of certain Rights to Purchase Series A Junior
Participating Preferred Shares which may be transferred with
the Company's Common shares, which description is contained in
the Company's Registration Statement on Form 8-A, under
Section 12(b) of the Exchange Act, dated November 7, 1997.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE WITHOUT
CHARGE TO ANY PERSON TO WHOM THIS PROSPECTUS IS DELIVERED UPON FIVE BUSINESS
DAYS' WRITTEN OR ORAL REQUEST OF MARK R ARNESEN, VICE PRESIDENT AND SECRETARY,
THE FIRST AMERICAN FINANCIAL CORPORATION, 114 EAST FIFTH STREET, SANTA ANA,
CALIFORNIA 92701-4642; TELEPHONE NUMBER (714) 558-3211.
FORWARD-LOOKING STATEMENTS
Except for historical information contained in this Prospectus and in
the documents incorporated in this Prospectus by reference, the matters
discussed herein and therein contain forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially
from those suggested in the forward-looking statements, including, without
limitation, the effect of economic conditions, interest rates, market demand,
competition and other risks detailed herein and in the Company's other filings
with the Commission.
RISK FACTORS
In addition to the other information contained in this Prospectus,
investors should consider carefully the following risk factors before making an
investment in the Shares. To the extent any of the information contained or
incorporated by reference in this Prospectus constitutes a "forward-looking
statement" as defined in Section 21E(i)(1) of the Exchange Act, the risk factors
set forth below are cautionary statements identifying important factors that
could cause actual results to differ materially from those in the
forward-looking statement. See "Forward-Looking Statements."
VOLATILITY OF SHARE PRICE
The market price of the Shares could be subject to significant
fluctuations in response to variations in financial results or announcements of
material events by the Company or its competitors. Regulatory changes,
developments in the real estate services industry or changes in general
conditions in the economy or the financial markets could also adversely affect
the market price of the Shares.
CYCLICAL NATURE OF REAL ESTATE MARKET
Substantially all of the Company's title insurance, tax monitoring,
credit reporting, flood zone determination and property information business
results from resales and refinancings of real estate, including residential and
commercial properties, and from the construction and sale of new properties. The
Company's home warranty business results from residential resales and does not
benefit from refinancings or commercial transactions. Resales and refinancings
of residential properties constitute the major source of the Company's revenues.
Real estate activity is cyclical in nature and is affected greatly by the cost
and availability of long term mortgage funds. Real estate activity and, in turn,
the Company's revenue base, can be adversely affected during periods of high
interest rates and/or limited money supply. However, this adverse effect is
mitigated in part by the continuing diversification of the Company's operations
into areas outside of its traditional title insurance business.
RISKS ASSOCIATED WITH ACQUISITION STRATEGY
As a key component of its growth strategy, the Company has pursued and
is pursuing acquisitions in the real estate-related financial services industry.
Certain risks are inherent in an acquisition strategy, such as increasing
leverage and debt service requirements and combining disparate company cultures
and facilities, which could adversely affect the Company's financial position
and operating results. The success of any completed acquisition will depend in
part on the Company's ability to integrate effectively the acquired businesses
into the Company. This process may involve unforeseen difficulties and may
require a disproportionate amount of management's attention and the Company's
financial and other resources. No assurance can be given that additional
suitable acquisition candidates will be identified, financed and purchased on
acceptable terms, or that recent acquisitions or future acquisitions, if
completed, will be successful.
DEPENDENCE ON KEY PERSONNEL
The success of the Company is dependent upon the continued services of
the Company's senior management, particularly its President, Parker S. Kennedy,
its Chairman and Director, D.P. Kennedy, and its Executive Vice President and
Chief Financial Officer, Thomas A. Klemens. The loss of the services of any of
these individuals could have a material adverse effect on the Company's
financial position and results of operations. The Company's success also depends
on its ability to attract and retain other highly qualified managerial
personnel.
YEAR 2000 COSTS
Currently, many computer systems and software products are coded to
accept only two digit entries in the date code field. These date code fields
will need to accept four digit entries to distinguish 21st century dates from
20th century dates. As a result, many companies' software and computer systems
may need to be upgraded or replaced in order to comply with such "Year 2000"
requirements. The Company and third parties with which the Company does business
rely on numerous computer programs in their day to day operations. The Company
is evaluating the Year 2000 issue as it relates to the Company's internal
computer systems and third party computer systems with which the Company
interacts. The Company expects to incur internal staff costs as well as
consulting and other expenses related to these issues; these costs will be
expensed as incurred. In addition, the appropriate course of action may include
replacement or an upgrade of certain systems or equipment at a substantial cost
to the Company. There can be no assurance that the Year 2000 issues will be
resolved in 1998 or 1999. The Company may incur significant costs in resolving
its Year 2000 issues. If not resolved, this issue could have a significant
adverse impact on the Company's operations.
GOVERNMENT REGULATION
The title insurance industry is subject to extensive governmental
regulation. Applicable laws and their interpretation vary from state to state
and are enforced with broad discretion. There can be no assurance that any
review of the Company's operations and business relationships by courts or other
regulatory authorities will not result in determinations that could adversely
affect the Company or that the regulatory environment will not change to
restrict the Company's existing or future operations.
THE FIRST AMERICAN FINANCIAL CORPORATION
OVERVIEW
The Company was organized in 1894 as Orange County Title Company,
succeeding to the business of two title abstract companies founded in 1889 and
operating in Orange County, California. In 1924, the Company commenced issuing
title insurance policies. In 1986, the Company began a diversification program
by acquiring and developing financial service businesses closely related to the
real estate transfer and closing process. The Company is a California
corporation whose executive offices are located at 114 East Fifth Street, Santa
Ana, California 92701-4642, and its telephone number is (714) 558-3211.
The Company, through its subsidiaries, is engaged in the business of
providing real estate-related financial and informational services to real
property buyers and mortgage lenders. The Company's products and services
include title insurance, tax monitoring, credit reporting, property data
services, flood certification, field inspection services, appraisal services,
mortgage loan servicing systems, mortgage document preparation and home warranty
services. The Company also provides investment, trust and thrift services.
Through growth and acquisitions, the Company believes it has become the
United States' largest provider of real estate-related financial and
informational services. The Company has assembled an array of companies which,
together, provide comprehensive services to the mortgage industry, commercial
and residential real estate developers, home buyers and other customers.
BUSINESS SEGMENTS
TITLE INSURANCE
Title insurance policies are insured statements of the condition of
title to real property, showing priority of ownership as indicated by public
records, as well as outstanding liens, encumbrances and other matters of record,
and certain other matters not of public record. Policies are issued based on a
title report prepared after a search of public records, maps, and documents and
are typically issued when a title is transferred.
Before issuing title policies, title insurers seek to limit their risk
of loss by accurately performing title searches and examinations. The major
expenses of a title company relate to such searches and examinations, the
preparation of preliminary reports or commitments and the maintenance of title
plants, and not from claim losses as in the case of property and casualty
insurers.
As of the date of this Prospectus, the Company, through its subsidiary,
First American Title Insurance Company, and its other subsidiaries, transacts
its title insurance business through a network of more than 300 branch offices
and more than 4,000 independent agents. In 1997, the Company's title insurance
operations generated $1.46 billion in operating revenues.
REAL ESTATE INFORMATION SERVICES
In recent years management has developed a strategy to be a "one-stop"
real estate information service company. To this end, in 1991 the Company
acquired what was believed to be the second largest tax service company, and in
1995 acquired what were believed to be, in each case, the largest mortgage
credit reporting company and the largest flood zone determination company, in
the United States.
In general, the Company's real estate information service products
generate higher margins than its title insurance products. The majority of
pre-tax profits generated by the Company from non-title business is derived from
the real estate services business, which generated $45.3 million in pre-tax
profits in 1997 and $331.4 million in operating revenues. Approximately 29% of
the Company's pre-tax profits in 1997 were derived from its real estate
information services businesses. These businesses are not regulated and hence
not constrained by dividend statutes enforceable by the states in which the
Company operates its title business or by constraints imposed by California on
the Company's trust and banking business.
First American Real Estate Information Services, Inc. ("FAREIS") has
grown from its tax service origins into a diversified mortgage services company.
FAREIS and its subsidiaries serve mortgage originators, mortgage servicers,
title companies, real estate attorneys, consumers as well as non-lending
entities. The business was initially established in 1987 to advise mortgage
lenders as to the status of tax payments on real property securing their loans.
The Company's real estate information services also includes mortgage and other
credit reporting services, flood zone determinations, mortgage loan servicing
systems, property inspections, appraisal services and mortgage document
preparation.
The tax service business includes both real estate tax reporting as
well as tax outsourcing and tax certification. The Company's tax service
business reports on approximately 11 million properties annually and is believed
to be the second largest provider of tax services to the real estate market. The
Company works with over 22,000 taxing authorities nationwide.
First American CREDCO, Inc. ("CREDCO"), the Company's mortgage credit
reporting entity, is believed by the Company to be the largest provider of these
services in the United States and processes over 600,000 credit reports per
month. CREDCO provides residential mortgage credit reports, prequalifying
reports, merged credit data, resident screening services, business reports,
credit scoring tools and personal credit reports. CREDCO has recently branched
into the consumer lending and risk scoring areas, providing credit reporting and
information management services to automobile dealers, consumers and home equity
lenders nationwide. Approximately 25% of CREDCO's 1997 revenues were from
non-real estate related sources.
The Company is the leading provider of flood zone determinations. Flood
reporting services consist of a broad range of information required by
regulatory agencies regarding properties in relation to flood zones. This
business currently processes over 400,000 flood determinations per month.
The property/field services business consists of processing single
family home inspections, conducting field interviews with delinquent mortgagors,
monitoring the condition of properties and assuring timely property
preservation. The Company's acquisition in December 1996 of Ward Associates
places the Company among the leaders in this business.
The appraisal services business utilizes leading technology to provide
national mortgage lenders with property-relative value assessments. The
appraisal services business operates throughout the United States. Electronic
appraisals are supplemented with qualified local appraisers.
In April 1996, the Company acquired the Excelis Mortgage Loan Servicing
System ("Excelis MLS"), now known as Excelis, Inc. Excelis MLS is the only
commercially available real-time on-line servicing system that has been
developed since 1990 to meet increasingly sophisticated market demands. The
software employs rules-based technology, which enables the user to customize the
system to fit its individual servicing criteria and policies.
In May 1997, the Company purchased all of the operations of Strategic
Mortgage Services, Inc. ("SMS"), other than SMS's flood zone determination
business. SMS is a leading provider of real estate information services to the
U.S. mortgage and title insurance industries. The acquired businesses include
SMS's credit division, which the Company believes is the third largest provider
of U.S. mortgage credit information; SMS's property appraisal division, which
the Company believes is the second largest provider of U.S. appraisal services;
SMS's title division, which provides title and closing services throughout the
United States, servicing primarily second mortgage originators; SMS's settlement
services business, which provides title plant systems and accounting services,
as well as escrow closing software, to the title industry; and a controlling
interest in what is believed by the Company to be the largest mortgage document
preparation firm.
On January 1, 1998, the Company and its real estate information service
subsidiaries (other than Excelis Inc.) (the "Real Estate Information
Subsidiaries") consummated a joint venture with Experian Information Solutions,
Inc. ("Experian"), pursuant to which First American Real Estate Solutions LLC
("FARES") was established. Under the joint venture, the Real Estate Information
Subsidiaries contributed substantially all of their assets and liabilities to
FARES in exchange for an 80% ownership interest and Experian transferred
substantially all of the assets and liabilities of its Real Estate Solutions
division ("RES") to FARES in exchange for a 20% ownership interest. The Company
believes that RES is the nation's foremost supplier of core real estate data,
providing, among other things, property valuation information, title
information, tax information and imaged title documents. As a result of this
joint venture, the Company believes that FARES is the nation's largest and most
diverse provider of information technology and decision support solutions for
the mortgage and real estate industries. See the Company's Report on Form 8-K
dated January 27, 1998, which is incorporated by reference herein.
On April 16, 1998, the Company acquired Contour Software, the largest
supplier of mortgage origination software to the mortgage loan industry.
HOME WARRANTY
The Company currently owns 79% of its home warranty business, First
American Home Buyers Protection Corporation ("Home Buyers"), with the remaining
balance owned by current and former management of this subsidiary. Pursuant to a
pending exchange offer, the Company likely will acquire an additional 10.6%
ownership interest in Home Buyers. The home warranty business issues one-year
warranties which protect homeowners against defects in household systems and
appliances such as plumbing, water heaters, and furnaces. The warranties issued
are for household systems and appliances only, not for the homes themselves. The
Company's home warranty business currently operates in certain counties of
Arizona, California, Nevada, North Carolina, South Carolina, Texas, Utah and
Washington. The Company's home warranty business is one of the largest in the
United States based on contracts under service, with $46.9 million in operating
revenues in 1997.
TRUST AND THRIFT
Since 1960, the Company has conducted a general trust business in
Southern California. In 1985, the Company formed a banking subsidiary into which
its subsidiary trust operation was merged. As of December 31, 1997, the trust
operations were administering fiduciary and custodial assets having a market
value in excess of $1.3 billion.
During 1988, the Company, through a majority owned subsidiary, acquired
an industrial loan corporation (the "Thrift") that accepts thrift deposits and
uses deposited funds to originate and purchase loans secured by commercial
properties in Southern California. The loans made by the Thrift currently range
in amount from $20,000 to $1,105,000, with an average loan balance of $270,500.
Loans are made only on a secured basis, at loan-to-value percentages no greater
than 75%. The Thrift specializes in making commercial real estate loans and
financing commercial equipment leases. In excess of 93% of the Thrift's loans
are made on a variable rate basis. The average yield on the Thrift's loan
portfolio as of December 31, 1997, was 11%. The Thrift's average loan is 60
months in duration. Current deposits total $62.5 million and the loan portfolio
totals $65.5 million.
RECENT DEVELOPMENTS
On March 31, 1998, the Company announced a definitive agreement to
acquire by merger Data Tree Corporation, a supplier of database management and
document imaging systems to county recorders, governmental agencies and the
title industry. See also the Company's Report on Form 8-K dated March 31, 1998
and incorporated by reference herein.
On April 7, 1998, the Company announced the issuance of $100,000,000
aggregate principal amount of its 7.55% senior debentures due 2028. The terms of
the senior debentures are defined under an indenture dated as of April 7, 1998
between the Company and The Wilmington Trust Company, as trustee. See also the
Company's Report on Form 8-K dated April 7, 1998.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth summary historical consolidated
financial and other data for the Company for the five years ended December 31,
1997 and for the quarterly periods ended March 31, 1997 and 1998. The summary is
qualified in its entirety by reference to the financial statements and other
information contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 and Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, incorporated by reference herein.
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Year Ended December 31, Three Months Ended
March 31,
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1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ---- ----
(Dollars in thousands, except per share data)
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INCOME STATEMENT DATA:
Revenues:
Operating revenues $1,379,781 $1,356,946 $1,227,185 $1,571,168 $1,860,205 $376,425 $561,614
Investment and other
income $18,645 $19,447 $23,031 26,398 27,256 $6,452 $43,435
---------- ---------- ---------- ---------- --------- -------- -------
$1,398,426 $1,376,393 $1,250,216 $1,597,566 $1,887,461 $382,877 $605,049
---------- ---------- ---------- ---------- ---------- -------- --------
Expenses:
Salaries and other
personnel costs $397,902 $423,328 $431,984 $531,250 $647,750 $140,787 $199,122
Premiums retained by
agents $504,375 $533,598 $413,444 $516,593 $563,137 $122,193 $140,045
Other operating $222,934 $232,532 $257,823 $322,709 $411,319 $82,347 $135,000
expenses
Provision for title losses
and other claims $125,588 $110,230 $90,387 $86,487 $90,323 $18,592 $27,328
Depreciation and
amortization $16,333 $19,796 $20,790 $27,242 $38,149 $8,598 $13,706
Interest $4,419 $6,267 $6,242 $4,796 $9,994 $1,122 $3,576
Minority interest $5,267 $2,944 $2,132 $2,624 $3,676 $311 $7,753
---------- ----------- ----------- ---------- --------- -------- ------
$1,276,818 $1,328,695 $1,222,802 $1,491,701 $1,764,348 $373,950 $526,530
---------- ----------- ---------- ---------- ---------- -------- --------
Income before premium
and income taxes $121,608 $47,698 $27,414 $105,865 $123,113 $8,927 $78,519
Premium taxes $17,617 $15,453 $13,627 $16,676 $16,904 $4,161 $4,154
--------- --------- ---------- ---------- -------- ------ ------
Income before income $103,991 $32,245 $13,787 $89,189 $106,209 $4,766 $74,365
taxes
Income taxes $41,900 $13,300 $6,200 $35,600 $41,500 $1,900 $29,400
--------- --------- --------- ---------- -------- ------ -------
Income before cumulative
effect of a change in
accounting for income $62,091 $18,945 $7,587 $53,589 $64,709 $2,866 $44,965
taxes
Cumulative effect of a
change in accounting for $4,200 -- -- -- -- -- --
---------- ---------- ----------- ----------- --------- ------- -------
income taxes
Net income $66,291 $18,945 $7,587 $53,589 $64,709 $2,866 $44,965
======= ======= ====== ======= ======= ====== =======
EARNINGS PER SHARE
DATA:*
Basic $3.89 $1.10 $0.44 $3.12 $3.73 $0.17 $2.57
===== ===== ===== ===== ===== ===== =====
Diluted $3.89 $1.10 $0.44 $3.09 $3.64 $0.16 $2.49
===== ===== ===== ===== ===== ===== =====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
December 31, March 31,
---------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and invested assets $359,127 $368,999 $340,089 $364,620 $411,014 $435,948
Total assets $786,448 $828,649 $873,778 $979,794 $1,168,144 $1,298,955
Notes and contracts payable $85,022 $89,600 $77,206 $71,257 $41,973 $39,149
Guaranteed preferred -- -- -- -- $100,000 $100,000
beneficial interests in the
Company's junior
subordinated deferrable
interest debentures
Total stockholders' equity $283,718 $292,110 $302,767 $352,465 $411,412 $463,349
OTHER DATA:
Loss ratio 9.1% 8.1% 7.4% 5.5% 4.9% 4.9%
Ratio of debt to total
capitalization** 21.5% 22.1% 19.1% 16.0% 7.3% 5.9%
Cash dividends per share $0.34 $0.40 $0.40 $0.46 $0.51 $0.15
- ----------------------------------
<FN>
* Based upon the weighted average number of common shares outstanding.
** Capitalization includes minority interests and junior subordinated deferrable interest debentures.
</FN>
</TABLE>
<PAGE>
SELLING SHAREHOLDERS
Shares issued pursuant to this Prospectus, and any applicable Supplement
or Post-Effective Amendment, may be reoffered pursuant hereto by the Selling
Shareholders from time to time in transactions on the open market, in negotiated
transactions, through the writing of options on such Shares through a
combination of such methods of sale, at negotiated prices, fixed prices which
may be changed, market prices prevailing at the time of sale or prices relating
to such prevailing market prices. The Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders, the purchasers of shares for whom
such broker-dealer may act as agent or to whom they may sell as principal or
both. The Company will not receive any part of the proceeds from the resale by
the Selling Shareholders of any Shares pursuant hereto. The Company will bear
all expenses (other than selling discounts and commissions and fees and expenses
of the Selling Shareholders) in connection with the registration of the Shares
being reoffered by the Selling Shareholders.
The identity of the Selling Shareholders, the number of Shares to be sold
by the Selling Shareholders and the price per Share will be determined at the
time of the consummation of the particular transaction. Specific information
regarding the transaction, the identity of the Selling Shareholders and the
number of Shares to be resold may be provided at the time of such transaction by
means of a Supplement or a Post-Effective Amendment hereto, as applicable.
The Selling Shareholders and any broker-dealers who act in connection
with the sale of such Shares hereunder may be deemed to be an "underwriter"
within the meaning of Section 2(11) of the Securities Act, and any commissions
received by them and profit on any resale of such Shares as principal may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Company intends to make available public information concerning itself in
compliance with the Securities Act and the regulations thereunder, and
accordingly, Rule 144 or Rule 145 under the Securities Act may be available for
use by holders of Shares to effect transfers of such securities, subject to
compliance with the remaining provisions of such rules.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by White & Case LLP, Los Angeles, California.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 1997, have been
so incorporated in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
* * *
<PAGE>
(outside back cover page)
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR
AN APPLICABLE SUPPLEMENT OR POST EFFECTIVE AMENDMENT, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES, OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES, IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
- --------------------------------------------------------------------------------
Prospectus
1,000,000 Common Shares
- --------------------------------------------------------------------------------
THE FIRST AMERICAN
FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Available Information (i)
Incorporation of Documents by Reference (i)
Forward-Looking Statements (ii)
Risk Factors 1
The First American Financial Corporation 3
Selling Shareholders 9
Legal Matters 9
Experts 9
Dated [___________], 1998
<PAGE>
PART II
Information Not Required in Prospectus
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subject to certain limitations, Section 317 of the California
Corporations Code provides in part that a corporation shall have the 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 Restated 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 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 intended 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 shall 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, Chief Financial Officer, 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."
The Registrant's Deferred Compensation Plan provides that, "To the
extent permitted by applicable state law, the Company shall indemnify and save
harmless the Committee and each member thereof, the Board of Directors and any
delegate of the Committee who is an employee of the Company against any and all
expenses, liabilities and claims, including legal fees to defend against such
liabilities and claims arising out of their discharge in good faith of
responsibilities under or incident to the Plan, other than expenses and
liabilities arising out of willful misconduct. This indemnity shall not preclude
such further indemnities as may be available under insurance purchased by the
Company or provided by the Company under any bylaw, agreement or otherwise, as
such indemnities are permitted under state law."
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
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim of 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
4.1. Description of the Registrant's capital stock in Article Sixth of the
Restated Articles of Incorporation of The First American Financial
Corporation, incorporated by reference to Exhibit 3(a) of the
Registrants report on Form 10-K for the fiscal year ended December 31,
1997.
4.2. Rights Agreement, incorporated by reference to Exhibit 4 of the
Registrant's Registration Statement on 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 23. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during the 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;
(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.
(4) 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
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(5) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(6) That every prospectus: (i) that is filed pursuant to paragraph (5)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act of 1933 and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes 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.
(7) To respond to requests for information that is incorporated by
reference into this prospectus pursuant to Item 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.
(8) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
* * *
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant 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 May 27, 1998.
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: May 27, 1998 By:/s/ D.P. Kennedy
-------------------------------
D.P. Kennedy, Chairman and Director
Date: May 27, 1998 By:/s/ Parker S. Kennedy
-------------------------------
Parker S. Kennedy, President and Director
Date: May 27, 1998 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: May 27, 1998 By: /s/ George L. Argyros
-----------------------
George L. Argyros, Director
Date: May 27, 1998 By: /s/ Gary J. Beban
------------------------
Gary J. Beban, Director
Date: May 27, 1998 By: /s/ J. David Chatham
----------------------
J. David Chatham, Director
Date: May 27, 1998 By: /s/ William G. Davis
-----------------------
William G. Davis, Director
Date: May 27, 1998 By: /s/ James L. Doti
------------------------
James L. Doti, Director
Date: May 27, 1998 By: /s/ Lewis W. Douglas, Jr.
------------------------
Lewis W. Douglas, Jr., Director
Date: May 27, 1998 By: /s/ Paul B. Fay, Jr.
----------------------
Paul B. Fay, Jr., Director
Date: May 27, 1998 By: /s/ Dale F. Frey
----------------------
Dale F. Frey, Director
Date: May 27, 1998 By: /s/ Anthony R. Moiso
-----------------------
Anthony R. Moiso, Director
Date: May 27, 1998 By: /s/ Rudolph J. Munzer
-----------------------
Rudolph J. Munzer, Director
Date: May 27, 1998 By: /s/ Frank O'Bryan
-----------------------
Frank O'Bryan, Director
Date: May 27, 1998 By: /s/ Roslyn B. Payne
-----------------------
Roslyn B. Payne, Director
Date: May 27, 1998 By: /s/ D. Van Skilling
-----------------------
D. Van Skilling, Director
Date: May 27, 1998 By: /s/ Virginia Ueberroth
------------------------
Virginia Ueberroth, Director
*By:/s/ Mark R. Arnesen
-------------------
Mark R Arnesen
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
4.1. Description of the Registrant's capital stock in Article Sixth
of the Restated Articles of Incorporation of The First
American Financial Corporation, incorporated by reference to
Exhibit 3(a) of the Registrants report on Form 10-K for the
fiscal year ended December 31, 1997.
4.2. Rights Agreement, incorporated by reference to Exhibit 4 of
the Registrant's Registration Statement on 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.
EXHIBIT 5
[LETTERHEAD OF WHITE & CASE LLP]
May 27, 1998
The First American Financial Corporation
114 East Fifth Street
Santa Ana, CA 92701
Ladies and Gentlemen:
We have acted as counsel to The First American Financial Corporation, a
California corporation (the "Company"), and are familiar with the proceedings
and documents relating to the proposed registration by the Company, through a
Registration Statement on Form S-4 (the "Registration Statement"), to be filed
by the Company with the Securities and Exchange Commission, of 1,000,000 Common
shares, $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").
For the purposes of rendering this opinion, we have examined originals or
photostatic copies of certified copies of such corporate records, agreements and
other documents of the Company as we have deemed relevant and necessary as a
basis for the opinion hereinafter set forth.
Based on the foregoing, we are of the opinion that the Shares, when issued and
paid for in accordance with the terms and conditions set forth in the
Registration Statement, will be duly authorized, validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and we further consent to the use of our name under the heading
"Legal Matters" in the Prospectus which is a part of the Registration Statement.
Very truly yours,
/s/ White & Case LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of The First
American Financial Corporation of our report dated February 9, 1998, appearing
on page 21 of The First American Financial Corporation's Annual Report on Form
10-K for the year ended December 31, 1997. We also consent to the reference to
us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
Costa Mesa, California
May 27, 1998
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-4 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 shares, par value $1.00 per share, of the Corporation to be offered
thereunder, and the undersigned ratify and confirm all acts taken by such agents
and attorneys-in-fact, or either or both of them, as herein authorized. This
Power of Attorney may be executed in one or more counterparts.
Date: April 15, 1998 By:/s/ George L. Argyros
---------------------
George L. Argyros, Director
Date: April 15, 1998 By:/s/ Gary J. Beban
-----------------
Gary J. Beban, Director
Date: April 13, 1998 By:/s/ J. David Chatham
--------------------
J. David Chatham, Director
Date: April 14, 1998 By:/s/ William G. Davis
--------------------
William G. Davis, Director
Date: April 15, 1998 By:/s/ James L. Doti
-----------------
James L. Doti, Director
Date: April 13, 1998 By:/s/ Lewis W. Douglas, Jr.
-------------------------
Lewis W. Douglas, Jr., Director
Date: April 13, 1998 By:/s/ Paul B. Fay, Jr.
--------------------
Paul B. Fay, Jr., Director
Date: April 18, 1998 By:/s/ Dale F. Frey
----------------
Dale F. Frey, Director
Date: April 20, 1998 By:/s/ Anthony R. Moiso
--------------------
Anthony R. Moiso, Director
Date: April 14, 1998 By:/s/ Rudolph J. Munzer
---------------------
Rudolph J. Munzer, Director
Date: April 15, 1998 By:/s/ Frank O'Bryan
-----------------
Frank O'Bryan, Director
Date: April 13, 1998 By:/s/ Roslyn B. Payne
-------------------
Roslyn B. Payne, Director
Date: April 14, 1998 By:/s/ D. Van Skilling
-------------------
D. Van Skilling, Director
Date: April 15, 1998 By:/s/ Virginia Ueberroth
----------------------
Virginia Ueberroth, Director
