As filed with the Securities and Exchange Commission on June 10, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
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: as
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or reinvestment plans, check the following box. [X]
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(c)
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.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE>
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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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<S> <C> <C> <C> <C>
Common stock, $1.00 par value 335,832 shares $72-11/16 $24,400,210 $7,198.09
====================================================================================================================================
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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 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 JUNE 8, 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>
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 JUNE 10, 1998.
PROSPECTUS
335,832 COMMON SHARES
THE FIRST AMERICAN FINANCIAL CORPORATION
This Prospectus relates to the public offering and sale of up to
335,832 Common shares, $1.00 par value (the "Shares"), of The First American
Financial Corporation (the "Company"), by certain shareholders of the Company
identified herein under the caption "Selling Shareholders" or by pledgees,
donees, transferees or other successors in interest that receive such shares as
a gift, partnership distribution or other non-sale related transfer
(collectively, the "Selling Shareholders"). The Company will receive no part of
the proceeds of such sales. None of the Shares offered pursuant to this
Prospectus have been registered prior to the filing of the Registration
Statement of which this Prospectus is a part.
The Shares may be offered by the Selling Shareholders from time to time
in one or more transactions on the New York Stock Exchange, in negotiated
transactions or otherwise. See "Plan of Distribution." The price at which any of
the Shares may be sold, and the commissions, if any, paid in connection with any
such sale, are unknown and may vary from transaction to transaction. The Company
will pay all expenses incident to the offering and sale of the Shares to the
public other than any commissions and discounts of underwriters, dealers or
agents and any transfer taxes. See "Selling Shareholders" and "Plan of
Distribution."
The Securities and Exchange Commission (the "Commission") may take the
view that, under certain circumstances, the Selling Shareholders and any
broker-dealers or agents that participate with the Selling Shareholders in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, as amended. Commissions, discounts or concessions
received by any such broker-dealer or agent may be deemed to be underwriting
commissions under the Securities Act. See "Plan of Distribution."
The Company has informed the Selling Shareholders that the
anti-manipulation provisions of Rules 10b-6 and 10b-7 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") may apply to the public
offering and sale of the Shares included in this Prospectus. The Company also
has advised the Selling Shareholders of the requirements for delivery of this
Prospectus in connection with any sale of the Shares.
THE SHARES ARE TRADED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL
"FAF." ON JUNE 10, 1998, THE CLOSING PRICE OF THE SHARES ON THE NEW YORK STOCK
EXCHANGE WAS $71-3/4 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-3 (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.
<PAGE>
(inside cover page continued)
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.
<PAGE>
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.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of the
Selling Shareholders, as described below. See "Selling Shareholders" and "Plan
of Distribution."
SELLING SHAREHOLDERS
The following table sets forth as of the date of this Prospectus, the
name of each of the Selling Shareholders, the number of Shares that each such
Selling Shareholder owns as of such date, the number of Shares owned by each
Selling Shareholder that may be offered for sale from time to time by this
Prospectus, the number of Shares to be held by each such Selling Shareholder
assuming the sale of all the Shares offered hereby and, by footnote, any
position or office held or material relationship with the Company or any of its
affiliates within the past three years other than as a result of the ownership
of Shares. The Company may amend or supplement this Prospectus from time to time
to update the disclosure set forth therein.
<TABLE>
<CAPTION>
====================================================================================================================================
NUMBER OF
SHARES TO BE SHARES OWNED OF RECORD
SHARES OWNED OF RECORD OFFERED FOR AFTER COMPLETION OF THE
PRIOR TO THE OFFERING THE SELLING OFFERING
SHAREHOLDER'S
NAME OF SELLING SHAREHOLDER ACCOUNT
-------------------------------------- ------------------------------
NUMBER PERCENTAGE NUMBER PERCENTAGE
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<S> <C> <C> <C> <C> <C>
Scott Cooley(1) 242,188 1.3% 242,188 0 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Stephen Evans(2) 43,020 * 41,925 1,095 *
- ------------------------------------------------------------------------------------------------------------------------------------
Florida Title & Abstract Company 37,013 * 37,013 0 *
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The First American Financial
Foundation(3) 14,742 * 14,742 0 0.00%
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- ------------------------------------------
* Less than one percent.
(1) Mr. Cooley is the President of Contour Software, Inc., an indirectly
wholly-owned subsidiary of the Company.
(2) Mr. Evans is the President of Evans Title Companies, Inc., an indirect
wholly-owned subsidiary of the Company.
(3) D.P. Kennedy, Parker S. Kennedy and Thomas A. Klemens, Chairman, President
and Executive Vice President and Chief Financial Officer, respectively, of
the Company serve as three of the five directors of The First American
Financial Foundation. D.P. Kennedy and Parker S. Kennedy are also directors
of the Company.
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time
to time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and price of each sale. The Selling Shareholders may sell the Shares
being offered hereby on the New York Stock Exchange, or otherwise, at prices and
under terms then prevailing or at prices related to the then current market
price, at varying prices or at negotiated prices. The Shares may be sold,
without limitation, by one or more of the following means of distribution: (a) a
block trade in which the broker-dealer so engaged will attempt to sell Shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker-dealer as principal and
resale by such broker-dealer for its own account pursuant to this Prospectus;
(c) a distribution in accordance with the rules of the New York Stock Exchange;
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and (e) in privately negotiated transactions. To the extent
required, this Prospectus may be amended and supplemented from time to time to
describe a specific plan of distribution.
In connection with distributions of the Shares or otherwise, the
Selling Shareholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of the
Shares in the course of hedging the positions they assume with Selling
Shareholders. The Selling Shareholders may also sell the Shares short and
deliver the Shares offered hereby to close out such short positions. The Selling
Shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of Shares offered hereby,
which Shares such broker-dealer or other financial institution may resell
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). The Selling Shareholders may also pledge Shares to a broker-dealer
or other financial institution, and, upon a default, such broker-dealer or other
financial institution, may effect sales of the pledged Shares pursuant to this
Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Shares that qualify for sale pursuant to Rule 144 may, at the
option of the holder thereof, be sold under Rule 144 rather than pursuant to
this Prospectus.
Any broker-dealer participating in such transactions as agent may
receive commissions from the Selling Shareholder and/or purchasers of the Shares
offered hereby (and, if it acts as agent for the purchaser of such Shares, from
such purchaser). Usual and customary brokerage fees will be paid by the Selling
Shareholder. Broker-dealers may agree with the Selling Shareholder to sell a
specified number of Shares at a stipulated price per Share, and, to the extent
such a broker-dealer is unable to do so acting as agent for the Selling
Shareholder, to purchase as principal any unsold Shares at the price required to
fulfill the broker-dealer commitment to the Selling Shareholder. Broker-dealers
who acquire Shares as principal may thereafter resell such Shares from time to
time in transactions (which may involve cross and block transactions and which
may involve sales to and through other broker-dealers, including transactions of
the nature described above) in the market, in negotiated transactions or
otherwise at market prices prevailing at the time of sale or at negotiated
prices, and in connection with such resales may pay to, or receive from the
purchasers of such Shares commissions computed as described above.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only though registered
or licensed brokers or dealers. In addition, in certain states the Shares may
not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Company has advised the Selling Shareholders that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of Shares in the market and to the activities of the Selling Shareholders
and their affiliates. In addition, the Company will make copies of this
Prospectus available to the Selling Shareholders and has informed them of the
need for delivery of copies of this Prospectus to purchasers at or prior to the
time of any sale of the Shares offered hereby. The Selling Shareholders may
indemnify any broker-dealer that participates in transactions involving the sale
of the Shares against certain liabilities, including liabilities arising under
the Securities Act.
At the time a particular offer of Shares is made, if required, a
Prospectus Supplement will be distributed that will set forth the number of
Shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or re-allowed or paid to any dealer, and the
proposed selling price to the public.
The Company has agreed with the Selling Shareholders to keep the
Registration Statement of which this Prospectus constitutes a part effective
until the first to occur of (i) June 10, 1999 and (ii) such time as all of
Shares offered by the Selling Shareholders listed above have been sold. The
Company intends to de-register any of the Shares not sold by the Selling
Shareholders by June 10, 1999.
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,
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.
TABLE OF CONTENTS
Available Information....................................................... (i)
Incorporation of Documents by Reference..................................... (i)
Forward-Looking Statements..................................................(ii)
Risk Factors................................................................ 1
Use of Proceeds............................................................. 2
Selling Shareholders........................................................ 3
Plan of Distribution........................................................ 4
Legal Matters............................................................... 5
Experts..................................................................... 5
<PAGE>
Prospectus
335,832 COMMON SHARES
THE FIRST AMERICAN
FINANCIAL CORPORATION
Dated [_________], 1998
<PAGE>
PART II
Information Not Required in Prospectus
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company will pay all expenses incident to the offering and sale to
the public of the shares being registered other than any commissions and
discounts of underwriters, dealers or agents and any transfer taxes. Such
expenses are set forth in the following table. All of the amounts shown are
estimates except for the Securities and Exchange Commission ("Commission")
registration fee.
Commission registration fee............................................ $7,198
Printing expenses...................................................... $1,000
Transfer Agent fees and expenses....................................... $1,000
Accounting fees and expenses........................................... $5,000
Legal fees and expenses................................................$10,000
"Blue Sky" fees and expenses .......................................... $2,000
Miscellaneous.......................................................... $3,869
--------------
Total.........................................................$30,067
ITEM 15. 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."
ITEM 16. 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
Registrant's 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 17. 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) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
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.
* * *
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has 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 June 10, 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: June 10, 1998 By:/s/ D.P. Kennedy
----------------
D.P. Kennedy, Chairman and Director
Date: June 10, 1998 By:/s/ Parker S. Kennedy
---------------------
Parker S. Kennedy, President and Director
Date: June 10, 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: June 10, 1998 By:/s/ George L. Argyros
---------------------
George L. Argyros, Director
Date: June 10, 1998 By:/s/ Gary J. Beban
-----------------
Gary J. Beban, Director
Date: June 10, 1998 By:/s/ J. David Chatham
--------------------
J. David Chatham, Director
Date: June 10, 1998 By:/s/ William G. Davis
--------------------
William G. Davis, Director
Date: June 10, 1998 By:/s/ James L. Doti
-----------------
James L. Doti, Director
Date: June 10, 1998 By:/s/ Lewis W. Douglas, Jr.
-------------------------
Lewis W. Douglas, Jr., Director
Date: June 10, 1998 By:/s/ Paul B. Fay, Jr.
--------------------
Paul B. Fay, Jr., Director
Date: June 10, 1998 By:/s/ Dale F. Frey
----------------
Dale F. Frey, Director
Date: June 10, 1998 By:/s/ Anthony R. Moiso
--------------------
Anthony R. Moiso, Director
Date: June 10, 1998 By:/s/ Rudolph J. Munzer
---------------------
Rudolph J. Munzer, Director
Date: June 10, 1998 By:/s/ Frank O'Bryan
-----------------
Frank O'Bryan, Director
Date: June 10, 1998 By:/s/ Roslyn B. Payne
-------------------
Roslyn B. Payne, Director
Date: June 10, 1998 By:/s/ D. Van Skilling
-------------------
D. Van Skilling, Director
Date: June 10, 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
Registrant's 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]
June 10, 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-3 (the "Registration Statement"), to be filed
by the Company with the Securities and Exchange Commission, of 335,832 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-3 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.
By: /s/ Price Waterhouse LLP
------------------------
Price Waterhouse LLP
Costa Mesa, California
June 10, 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-3 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
