As filed with the Securities and Exchange Commission on October 30, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE FIRST AMERICAN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
<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.)
114 East Fifth Street
Santa Ana, California 92701-4642
(800) 854-3643
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(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 Maximum Proposed Maximum
Title of Each Class of Securities Amount To Be Aggregate Price Aggregate Amount of
To Be Registered Registered Per Unit Offering Price Registration
Fee(1)
- ------------------------------------ ------------------- ------------------- -------------------- -------------------
- ------------------------------------ ------------------- ------------------- -------------------- ===================
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Common shares, $1.00 par value 3,000,000 shares $26.906 $80,718,750 $22,440
- ------------------------------------ ------------------- ------------------- -------------------- ===================
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act, based on the average
of the high and low prices of the Common shares registered on the New York
Stock Exchange as of October 26, 1998.
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>
The information in this Prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where their offer or sale is not permitted.
Subject to completion, dated October 30, 1998.
PROSPECTUS
3,000,000 COMMON SHARES
THE FIRST AMERICAN FINANCIAL CORPORATION
Acquisitions.
o The shares will be offered as full or partial consideration for our
acquisition of the assets or ownership interests of businesses which
primarily provide real estate-related financial and informational services.
o The specific terms of an acquisition will be determined through
negotiations with the target business.
Share Price.
o The shares issued pursuant to an acquisition will be valued at a price
reasonably related to their market value at one of the following times:
o When the terms of the acquisition transaction are tentatively agreed
upon.
o When the acquisition transaction is closed.
o During the period or periods prior to delivery of the shares.
Underwriting.
o Generally, no underwriting discounts or commissions will be paid by us.
Underwriting discounts or commissions may be paid by the Selling
Shareholders. See "Selling Shareholders" beginning on page 10.
o However, any recipient of a finders fee may be deemed an "underwriter"
under the securities laws.
Resales.
o Shares offered pursuant to this Prospectus may be reoffered by their
holders pursuant to this Prospectus. See "Selling Shareholders" beginning
on page 10.
o Reoffer share price may be negotiated, fixed by formula (possibly subject
to change), or determined by the market price of the shares at the time of
reoffering.
Our Business.
o We provide real estate-related financial and informational services to real
property buyers and mortgage lenders.
o The trading symbol for our Common shares on the New York Stock Exchange is
"FAF."
o On October 26, 1998, the closing price of our Common shares on the New York
Stock Exchange was $27.125.
o Before making an investment in our company, you should consider carefully
the "Risk Factors" beginning on page 1.
o The address and telephone number of our principal offices are: 114 East
Fifth Street, Santa Ana, California 92701, (714) 558-3211
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is , 1998.
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WHERE YOU CAN FIND MORE INFORMATION;
INCORPORATION BY REFERENCE
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy, upon payment of a fee set by the SEC, any document that we
file with the SEC at its public reference rooms in Washington, D.C. (450 Fifth
Street, N.W., 20549), New York, New York (Seven World Trade Center, 13th Floor,
Suite 1300, 10048) and Chicago, Illinois (Citicorp Center, 500 West Madison
Street, 14th Floor, Suite 1400, 60661). You may also call the SEC at
1-800-432-0330 for more information on the public reference rooms. Our filings
are also available to the public on the internet, through the SEC's EDGAR
database. You may access the EDGAR database at the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this Prospectus
the information we file with them. This means that we can disclose important
business, financial and other information in our SEC filings by referring you to
the documents containing this information. All information incorporated by
reference is part of this Prospectus, unless that information is updated and
superseded by the information contained in this Prospectus or by any information
filed subsequently that is incorporated by reference or by any prospectus
supplement. Any prospectus supplement or any information that we subsequently
file with the SEC that is incorporated by reference will automatically supersede
any prior information that is part of this Prospectus or any prior prospectus
supplement. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") until the earlier of (i)
the date on which all the securities offered with this Prospectus are sold by
the Selling Shareholders (as such term is defined below in the Section entitled
"Selling Shareholders") and (ii) the date that is one year following the date of
the issuance of the shares offered under this Prospectus:
o Annual Report on Form 10-K for the fiscal year ended December 31, 1997.
o Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1998
and June 30, 1998.
o Current Reports on Form 8-K dated January 23, 1998, January 27, 1998, March
18, 1998, March 31, 1998, April 7, 1998, June 26, 1998 and October 22,
1998.
o The description of our Common shares, $1.00 par value, contained in our
Registration Statement on Form 8-A, dated November 19, 1993, which
registers the shares under Section 12(b) of the Exchange Act.
o The description of Rights to Purchase Series A Junior Participating
Preferred Shares, which may be transferred with our Common shares,
contained in our Registration Statement on Form 8-A, dated November 7,
1997, which registers the rights under Section 12(b) of the Exchange Act.
This Prospectus is part of a registration statement (on Form S-4) we
have filed with the SEC relating to our Common shares registered under this
Prospectus. As permitted by SEC rules, this Prospectus does not contain all of
the information contained in the registration statement and accompanying
exhibits and schedules we file with the SEC. You may refer to the registration
statement, the exhibits and schedules for more information about us and our
Common shares. The registration statement, exhibits and schedules are also
available at the SEC's public reference rooms or through its EDGAR database on
the internet.
You may obtain a copy of these filings at no cost by writing to us at
The First American Financial Corporation, 114 East Fifth Street, Santa Ana,
California 92701-4642, Attention: Mark R Arnesen, or by telephoning us at (714)
558-3211.
SPECIAL NOTE OF CAUTION REGARDING
FORWARD-LOOKING STATEMENTS
Certain statements contained in (a) this Prospectus, (b) any applicable
prospectus supplement and (c) the documents incorporated by reference into this
Prospectus, may constitute "forward-looking statements" within the meaning of
the federal securities laws. Forward-looking statements are based on our
management's beliefs, assumptions, and expectations of our future economic
performance, taking into account the information currently available to them.
These statements are not statements of historical fact. Forward-looking
statements involve risks and uncertainties that may cause our actual results,
performance or financial condition to be materially different from the
expectations of future results, performance or financial condition we express or
imply in any forward-looking statements. Some of the important factors that
could cause our actual results, performance or financial condition to differ
materially from our expectations are:
o General volatility of the capital markets and the market price of our
shares.
o Changes in the real estate market, interest rates or the general economy.
o Our ability to identify and complete acquisitions and successfully
integrate businesses we acquire.
o Our ability to employ and retain qualified employees.
o Our ability to achieve Year 2000 compliance.
o Changes in government regulations, particularly those applicable to the
insurance industry.
o Changes in the demand for our products.
o Degree and nature of our competition.
When used in our documents or oral presentations, the words
"anticipate," "estimate," "expect," "objective," "projection," "forecast,"
"goal," or similar words are intended to identify forward-looking statements. We
qualify any such forward-looking statements entirely by these cautionary
factors.
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RISK FACTORS
In addition to the other information contained in this Prospectus, you
should carefully consider the following risk factors before investing in our
company.
Volatility of Share Price
The market price of our shares could be subject to significant
fluctuations in response to variations in financial results or announcements of
material events by ourselves or our 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 our shares.
Cyclical Nature of the Real Estate Market
Substantially all of the revenues from our title insurance and real
estate information segments result from resales and refinancings of real
estate, including residential and commercial properties, and from the
construction and sale of new properties. Revenues from our home warranty segment
result exclusively from residential resales. Accordingly, resales and
refinancings of real estate constitute the major source of our revenues.
Real estate refinancings and resales go through periods of activity and
inactivity based largely on the cost and availability of long-term mortgage
funds. Periods of inactivity often result when interest rates are high or there
is a limited money supply. As a result of the relationship between real estate
refinancings and resales and our revenues (discussed in the preceding
paragraph), our revenue base may be adversely affected during such periods.
However, we continue to diversify our operations into areas outside of our
traditional title insurance business in order to mitigate this adverse effect.
Risks Associated with Acquisition Strategy
We acquire other companies in the real estate-related financial
services industry as a key component of our growth strategy. Certain risks are
inherent in an acquisition strategy and could adversely affect our financial
position and operating results. These risks include:
o difficulty servicing debt incurred to facilitate acquisitions;
o difficulty in retaining key employees;
o difficulty combining disparate company cultures, personalities and
facilities;
o the possibility that suitable acquisition candidates may not be identified
or available,
o the possibility that affordable financing may not be available;
o the possibility that suitable acquisition terms may not be negotiable; and
o the possibility that completed acquisitions may not be successful.
Dependence on Key Personnel
We depend on the continued services of our executive officers and
senior management, particularly our President, Parker S. Kennedy, our Chairman
and Director, D. P. Kennedy, and our 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 our operations and financial
position. We also depend on our ability to attract and retain other highly
qualified managerial personnel and employees.
Year 2000 Problems
What is the Year 2000 Problem?
Much of today's information technology (e.g., computer systems) and
embedded technology (e.g., microcontrollers) identifies a particular year on the
basis of the last two digits of that year. For example, the year "1998" is
recognized by the digits "98." The inability of information technology and
embedded technology to properly recognize a year that begins with "20" instead
of "19," if not corrected, may result in the failure of systems (or the
production of erroneous results) which rely on information technology and
embedded technology. This failure of systems, production of erroneous results
and the resulting damages is commonly known as the "Year 2000 Problem."
How Does the Year 2000 Problem Impact the Company?
We are dependent, to a substantial degree, upon the proper functioning
of our computer systems as well as those of our vendors, suppliers and
customers. Most of our products and services rely on information and data
provided by others. Most of this information and data is provided electronically
and is dependent on information systems and telecommunications. For example, we
rely on governmental agencies to provide title and tax information. Similarly,
we deliver most of our products and services electronically. The inability of
our vendors and suppliers to provide accurate information in a timely manner,
our inability to accurately and timely process such information, the inability
of our customers to receive and use our products and services, and a general
disruption of telecommunications and utilities as a result of the Year 2000
Problem would most likely result in business interruption or shutdown, financial
loss, potential regulatory action, harm to our reputation and potential legal
liability.
What is our State of Readiness?
With the help of an outside consulting firm, we have created a Year
2000 Program Management Office and have adopted a five-step plan to address the
Year 2000 Problem. The five steps of our plan are: (1) awareness, (2)
inventory/assessment, (3) renovation, (4) testing, and (5) implementation. To
implement our plan, we have divided our company into "business units" comprised
of (a) the reporting regions of the title insurance subsidiaries, (b) the
subsidiary companies of our real estate information services business, (c) our
home warranty subsidiaries, (d) our trust and banking subsidiaries and (e) our
various other subsidiaries.
Our "awareness" phase involves communicating the nature and scope of
the Year 2000 Problem to the management of the business units in order to
engender strong management support for its resolution. Our
"inventory/assessment" phase involves the identification of our information
systems and non-information systems which require renovation or replacement to
become Year 2000 compliant. Our "renovation" phase involves the repair and/or
replacement of the systems identified in the prior phase. Our "testing" phase
involves the testing of repaired and replaced systems. Our "implementation"
phase involves the integration of tested systems into our daily operations.
All phases of our plan are currently active. The awareness phase will
continue throughout 1998 and 1999. June 30, 1998 was the target date for
completion of the inventory/assessment phase; that phase is substantially
complete. However, all of the phases of the plan must be revisited each time we
acquire a new business. Accordingly, the inventory/assessment phase remains
active. Based on our current knowledge, we have established the following target
dates: (1) December 31, 1998 for completion of renovation, (2) April 30, 1999
for completion of testing, and (3) June 30, 1999 for completion of
implementation. In each case, completion of the applicable phase is subject to
the limitation noted above for newly acquired businesses. We make no assurance
that we will be able to meet these target dates.
Our efforts to survey the Year 2000 readiness of our significant
vendors, suppliers and customers continues. To date, we have not received
sufficient information from these parties about their Year 2000 plans to predict
the outcome of their efforts. Even after responses are received, there can be no
assurance that the systems of our significant vendors, suppliers and customers
will be timely renovated.
What will it cost to implement the Year 2000 Plan?
To date we have spent approximately $5 million in implementing our Year
2000 plan. We expect to incur at least an additional $25 million to $35 million
in implementing our Year 2000 plan. About half the costs will be for hardware
and software replacement and about half will be for labor. The costs for
hardware and software will be capitalized and amortized over their estimated
useful lives. Labor costs will be expensed as incurred. Our Year 2000 plan costs
are being funded through operating cash flow.
Do we have Contingency Plans?
With the help of a professional disaster planner, we are in the
process of creating company-wide and business unit contingency plans for
unexpected systems failures as a result of the Year 2000 Problem. We hope to
have our contingency plans in effect by the end of 1998.
Will our Year 2000 Plan be reviewed?
We have engaged a consultant to review our Year 2000 plan. Under the
terms of this engagement, the consultant will (1) review the operations of the
Year 2000 Program Management Office, (2) review our Year 2000 plan, and (3)
review the implementation of the Year 2000 plan at selected locations. From time
to time during the review, the consultant will report its findings to the Audit
Committee of our Board of Directors.
No Assurances
The costs to implement our Year 2000 plan and our target dates for
completion of the various phases of our Year 2000 plan are based on current
estimates. These estimates reflect numerous assumptions about future events,
including the continued availability of certain resources, the timing and
effectiveness of third party renovation plans and other factors. We can give no
assurance that these estimates will be achieved, and actual results could differ
materially from these estimates.
Government Regulation
Various governmental agencies regulate the title insurance industry
extensively. The laws applicable to the industry and their interpretation vary
from state to state and are enforced with broad discretion. A review of our
operations and business relationships by courts or other regulatory authorities
could result in an adverse determination. Furthermore, the regulatory
environment could change in a manner that would restrict our existing or future
operations.
THE FIRST AMERICAN FINANCIAL CORPORATION
Overview
We 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, we commenced issuing title insurance policies. In
1986, we began a diversification program by acquiring and developing financial
service businesses closely related to the real estate transfer and closing
process. We are a California corporation. Our executive offices are located at
114 East Fifth Street, Santa Ana, California 92701-4642, and our telephone
number is (714) 558-3211.
Through our subsidiaries, we are primarily engaged in the business of
providing real estate-related financial and informational services to real
property buyers and mortgage lenders. Our products and services include, but are
not limited to, 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. We also provide investment, trust and thrift services.
Through growth and acquisitions, we believe we have become the United
States' largest provider of real estate-related financial and informational
services. We have 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.
Through our subsidiary, First American Title Insurance Company, and
other subsidiaries, we transact our title insurance business through a network
of more than 300 branch offices and more than 4,000 independent agents. In 1997,
our title insurance operations generated $1.46 billion in operating revenues.
Real Estate Information Services
In recent years we have developed a strategy to become a "one-stop"
real estate information service company. To that end, in 1991 we acquired what
we believe was, at that time, the second largest tax service company in the
United States. In 1995 acquired what we believe were, at that time, the largest
mortgage credit reporting company and the largest flood zone determination
company in the United States.
In general, our real estate information service products generate
higher margins than our title insurance products. The majority of pre-tax
profits generated from our 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 our pre-tax profits
in 1997 were derived from our real estate information services businesses. These
businesses are not regulated and hence are not constrained by dividend statutes
enforceable by the states in which we operate our title insurance business or by
constraints imposed by California on our trust and banking business.
Our wholly-owned subsidiary, 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
and 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. Now FAREIS's real estate information
services 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. FAREIS's tax service business
reports on approximately 13 million properties annually and works with over
22,000 taxing authorities nationwide. Overall, we believe it to be the second
largest provider of tax services to the real estate market in the United States.
The credit reporting business processes over 800,000 mortgage credit
reports per month, and is the largest provider of mortgage credit reporting
services in the United States. This business has recently expanded to include
consumer risk management, providing tenant and pre-employment screening
services, business reports, credit scoring tools and personal credit reports to
landlords, employers, automobile dealers and consumers.
We are the leading provider of flood zone determinations in the United
States. 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 600,000 flood zone 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. Our acquisition in December 1996 of Ward Associates places us
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, we 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, we purchased all of the operations of Strategic Mortgage
Services, Inc. ("SMS"), other than its flood zone determination business. SMS
was a leading provider of real estate information services to the U.S. mortgage
and title insurance industries. The acquired businesses, which have been
integrated into our existing operations, included SMS's credit division, which
we believe was the third largest provider of U.S. mortgage credit information;
SMS's property appraisal division, which we believe was the second largest
provider of U.S. appraisal services; SMS's title division, which provided 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 we believe was the
largest mortgage document preparation firm in the United States.
On January 1, 1998, together with our real estate information service
subsidiaries (other than Excelis Inc.) (the "Real Estate Information
Subsidiaries"), we 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. We
believe 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, we believe 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 also our Current Report on Form 8-K,
dated January 27, 1998, which is incorporated by reference in this Prospectus.
On April 16, 1998, we acquired Contour Software, the largest supplier
of mortgage loan origination software to the mortgage industry. Contour offers a
complete line of software products for every facet of mortgage lending, from
qualification to servicing.
On June 3, 1998, we acquired Data Tree Corporation, a supplier of
database management and document imaging systems to county recorders, other
governmental agencies and the title industry. See also our Current Report on
Form 8-K, dated March 31, 1998, which is incorporated by reference in this
Prospectus.
On July 31, 1998, we acquired ShadowNet Mortgage Technologies, LLC
("ShadowNet"). ShadowNet is a provider of electronic mortgage document
preparation and delivery systems and now conducts business under the First
American Nationwide Documents brand-name.
On August 31, 1998, we acquired CIC Inc. ("CIC"). CIC provides
pre-employment reporting services, including prior employment verification,
criminal records searches, motor vehicle reports, credit reports, educational
and professional license verification, workers' compensation records, and drug
testing, for private and public employers.
On September 30, 1998, we acquired The Registry, Inc., Southcoast
Industries, Inc., Trans Registry Corporation, Crim Check America, Inc. and Trans
Registry Limited (the "Registry Entities"). The Registry Entities provide
landlords with data on prospective tenants in order to allow them to better make
an informed screening decision; such data typically includes a report of prior
unlawful detainer actions against the prospective tenant, employment
verification, a credit report and rental payment history.
Home Warranty
We currently own 90.4% of our home warranty business, First American
Home Buyers Protection Corporation ("Home Buyers"), with the balance owned by
current and former management of that subsidiary. 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. Our home warranty business currently operates in certain
counties of Arizona, California, Nevada, North Carolina, South Carolina, Texas,
Utah and Washington and 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, we have conducted a general trust business in Southern
California. In 1985, we formed a banking subsidiary into which our 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, through a majority owned subsidiary, we 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.
Summary Historical Consolidated Financial Data
The following table sets forth summary historical consolidated
financial and other data for The First American Financial Corporation for the
five years ended December 31, 1997 and for the quarterly periods ended June 30,
1997 and 1998. The summary is qualified in its entirety by reference to the
financial statements and other information contained in our Annual Report on
Form 10-K for the year ended December 31, 1997 and our Quarterly Report on Form
10-Q for the quarter ended June 30, 1998, each of which is incorporated by
reference in this Prospectus.
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Year Ended December 31, Six Months Ended
June 30,
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1993 1994 1995 1996 1997 1997 1998
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(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues:
Operating revenues $1,379,781 $1,356,946 $1,227,185 $1,571,168 $1,860,205 $819,872 $1,257,077
Investment and other
income $18,645 $19,447 $23,031 $26,398 $27,256 $13,379 $52,255
------------ ------------- ------------- ------------- ------------- ------------ -----------
$1,398,426 $1,376,393 $1,250,216 $1,597,566 $1,887,461 $833,251 $1,309,332
Expenses:
Salaries and other
personnel costs $397,902 $423,328 $431,984 $531,250 $647,750 $298,599 $418,189
Premiums retained by
agents $504,375 $533,598 $413,444 $516,593 $563,137 $251,155 $335,027
Other operating
expenses $222,934 $232,532 $257,823 $322,709 $411,319 $175,649 $284,336
Provision for title
losses and other claims $125,588 $110,230 $90,387 $86,487 $90,323 $41,049 $59,531
Depreciation and
amortization $16,333 $19,796 $20,790 $27,242 $38,149 $18,141 $28,303
Interest $4,419 $6,267 $6,242 $4,796 $9,994 $3,660 $9,019
Minority interest $5,267 $2,944 $2,132 $2,624 $3,676 $1,294 $16,171
------------- ------------- ------------- ------------- ------------- ----------- ------------
$1,276,818 $1,328,695 $1,222,802 $1,491,701 $1,764,348 $789,547 $1,150,576
Income before premium
and income taxes $121,608 $47,698 $27,414 $105,865 $123,113 $43,704 $158,756
Premium taxes $17,617 $15,453 $13,627 $16,676 $16,904 $8,722 $9,385
--------- ------- ------- --------- --------- -------- ----------
Income before income
taxes $103,991 $32,245 $13,787 $89,189 $106,209 $34,982 $149,371
Income taxes $41,900 $13,300 $6,200 $35,600 $41,500 $13,600 $59,300
--------- ------- -------- ------- --------- ------- ---------
Income before cumulative
effect of a change in
accounting for income $62,091 $18,945 $7,587 $53,589 $64,709 $21,382 $90,071
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 $21,382 $90,071
Earnings Per Share
Data:
Basic (1)(2) $1.30 $0.37 $0.15 $1.04 $1.24 $0.41 $1.69
Diluted (1)(2) $1.30 $0.37 $0.15 $1.03 $1.21 $0.40 $1.63
- -----------------------
(1) Based upon the weighted average number of common shares outstanding.
(2) Adjusted to reflect our 3-for-2 stock split effected January 15, 1998 and our 3-for-1 stock split effected July 17, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31, Six Months Ended
June 30,
- ------------------------------------------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and invested assets $359,127 $368,999 $340,089 $364,620 $411,014 $610,702
Total assets $786,448 $828,649 $873,778 $979,794 $1,168,144 $1,598,282
Notes and contracts payable $85,022 $89,600 $77,206 $71,257 $41,973 $145,032
Guaranteed preferred -- -- -- -- $100,000 $100,000
beneficial interests in the
Company's junior
subordinated deferrable
interested debentures
Total stockholders' equity $283,718 $292,110 $302,767 $352,465 $411,412 $576,926
Other Data:
Loss ratio 9.1% 8.1% 7.4% 5.5% 4.9% 4.7%
Cash dividends per share(2) $0.11 $0.13 $0.13 $0.15 $0.17 $0.05
Ratio of debt to total
capitalization(3) 21.5% 22.1% 19.1% 16.0% 7.3% 16.0%
- -----------------------
(2) Adjusted to reflect our 3-for-2 stock split effected January 15, 1998 and our 3-for-1 stock split effected July 17, 1998.
(3) Capitalization includes minority interests and junior subordinated deferrable interest debentures.
</TABLE>
<PAGE>
SELLING SHAREHOLDERS
Shares issued pursuant to this Prospectus may be reoffered pursuant to
this Prospectus by the holders of such shares (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
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. We will not receive
any part of the proceeds from the resale by the Selling Shareholders of any
shares pursuant to this Prospectus. We 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 to this Prospectus, 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 of 1933 (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 our Common shares offered hereby will be passed upon
for us 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 included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
***
<PAGE>
(outside back cover page)
o We have not authorized anyone to give you any information that differs from
the information in this Prospectus. If you Prospectus receive any different
information, you should not rely on it.
o The delivery of this Prospectus shall not,under any circumstances, create
an 3,000,000 Common Shares implication that The First American Financial
Corporation is operating under the same conditions that it was operating
[GRAPHIC OMITTED] under when this Prospectus was written. Do not assume
that the information contained in this Prospectus is correct at any time
past the date indicated.
o 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.
o This Prospectus does not constitute an offer to sell, or the solicitation
of an offer to buy, the securities to which it relates in any circumstances
in which such offer or solicitation is unlawful.
-------------------
Prospectus
3,000,000 Common Shares
THE FIRST AMERICAN
FINANCIAL CORPORATION
Dated , 1998
Table of Contents
Where You Can Find More Information;
Incorporation by Reference.................(i)
Special Note of Caution Regarding
Forward-Looking Statements................(ii)
Risk Factors.................................1
The First American Financial Corporation.....4
Selling Shareholders........................10
Legal Matters...............................11
Experts.....................................11
<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 set forth 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.
<PAGE>
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 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
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 3.1 of the
Registrant's Post-Effective Amendment No. 1 to Registration Statement
on Form S-4 dated July 28, 1998.
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.
<PAGE>
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.
<PAGE>
(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 October 30, 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: October 30, 1998 By: /s/ D.P. Kennedy
-------------------------------------
D.P. Kennedy, Chairman and
Director
Date: October 30, 1998 By: /s/ Parker S. Kennedy
-------------------------------------
Parker S. Kennedy, President
and Director
Date: October 30, 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: October 30, 1998 By:/s/ George L. Argyros *
--------------------------------------
George L. Argyros, Director
Date: October 30, 1998 By:/s/ Gary J. Beban *
--------------------------------------
Gary J. Beban, Director
Date: October 30, 1998 By:/s/ J. David Chatham *
--------------------------------------
J. David Chatham, Director
Date: October 30, 1998 By:/s/ William G. Davis *
--------------------------------------
Willliam G. Davis, Director
Date: October 30, 1998 By:/s/ James L. Doti *
--------------------------------------
James L. Doti, Director
Date: October 30, 1998 By:/s/ Lewis W. Douglas, Jr. *
--------------------------------------
Lewis W. Douglas, Jr., Director
Date: October 30, 1998 By:/s/ Paul B. Fay, Jr. *
--------------------------------------
Paul B. Fay, Jr., Director
Date: October 30, 1998 By:/s/ Dale F. Frey *
--------------------------------------
Dale F. Frey, Director
Date: October 30, 1998 By:/s/ Anthony R. Moiso *
--------------------------------------
Anthony R. Moiso, Director
Date: October 30, 1998 By:/s/ Frank O'Bryan *
--------------------------------------
Frank O'Bryan, Director
Date: October 30, 1998 By:/s/ Roslyn B. Payne *
--------------------------------------
Roslyn B. Payne, Director
Date: October __, 1998 By:
--------------------------------------
D. Van Skilling, Director
Date: October 30, 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 3.1 of the
Registrant's Post-Effective Amendment No. 1 to Registration Statement
on Form S-4 dated July 28, 1998.
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]
October 30, 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 3,000,000 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
EXHIBIT 23. 1.
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/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Costa Mesa, California
October 30, 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: October 28, 1998 By:/s/ George L. Argyros
--------------------------------------
Geoorge L. Argyros, Director
Date: October 28, 1998 By:/s/ Gary J. Beban
--------------------------------------
Gary J. Beban, Director
Date: October 28, 1998 By:/s/ J. David Chatham
--------------------------------------
J. David Chatham, Director
Date: October 28, 1998 By:/s/ William G. Davis
--------------------------------------
William G. Davis, Director
Date: October 28, 1998 By:/s/ James L. Doti
--------------------------------------
James L. Doti, Director
Date: October 28, 1998 By:/s/ Lewis W. Douglas, Jr.
--------------------------------------
Lewis W. Douglas, Jr., Director
Date: October 28, 1998 By:/s/ Paul B. Fay, Jr.
--------------------------------------
Paul B. Fay, Jr., Director
Date: October 28, 1998 By:/s/ Dale F. Frey
--------------------------------------
Dale F. Frey, Director
Date: October 29, 1998 By:/s/ Anthony R. Moiso
--------------------------------------
Anthony R. Moiso, Director
Date: October 28, 1998 By:/s/ Frank O'Bryan
--------------------------------------
Frank O'Bryan, Director
Date: October 28, 1998 By:/s/ Roslyn B. Payne
--------------------------------------
Roslyn B. Payne, Director
Date: October __, 1998 By:
--------------------------------------
D. Van Skilling, Director
Date: October 28, 1998 By:/s/ Virginia Ueberroth
--------------------------------------
Virginia Ueberroth, Director
