As filed with the Securities and Exchange Commission on January 10, 2002
Registration No. 333-75288
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE FIRST AMERICAN CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
California 6361 95-1068610
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
1 First American Way
Santa Ana, California 92707-5913
(714) 800-3000
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Mark R Arnesen, Esq.
Secretary
The First American Corporation
1 First American Way
Santa Ana, California 92707-5913
(714) 800-3000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)
With a copy to:
Neil W. Rust, Esq.
White & Case LLP
633 West Fifth Street
Los Angeles, California 90071
(213) 620-7700
Approximate date of commencement of proposed
sale to the public: From time to time after this
Registration Statement becomes effective.
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, check the following box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| __________________
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. |_| ________________
CALCULATION OF REGISTRATION FEE
========================= ====================== ======================= ====================== ======================
Title Of Each Class Of Amount Proposed Proposed Maximum Amount of
Securities To Be To Be Maximum Offering Aggregate Registration
Registered Registered(2)(3) Price Per Share(4) Offering Price(4) Fee(2)(5)
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Common shares,
$1.00 par value(1) 3,000,000 shares $17.96 $53,880,000 $12,877.32
========================= ====================== ======================= ====================== ======================
(1) The common shares being registered hereunder include the associated rights to purchase First American's Series A
Junior Participating Preferred Shares. Such rights initially are attached to and trade with the common shares being
registered hereunder.
(2) Pursuant to Rule 429 of the Securities Act, the prospectus contained herein also relates to 621,773 common shares
of First American (and associated preferred stock purchase rights) contained in Registration Statement No.
333-66431 on Form S-4 (the "Earlier Registration Statement"), which amount is being carried forward in this
Registration Statement. First American paid the registration fee with respect to the shares carried forward at the
time of the filing of the Earlier Registration Statement.
(3) Pursuant to Rule 416 under the Securities Act, this Registration Statement shall include any additional shares that
may become issuable as a result of any stock split, stock dividend, recapitalization or other similar transaction
effected without the receipt of consideration that results in an increase in the number of First American's
outstanding common shares.
(4) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457 under the
Securities Act. The price and fee are computed based upon the average of the high and low sale prices of First
American's common stock on December 14, 2001, as reported on the New York Stock Exchange. The fee was previously
paid.
(5) Calculated in accordance with Section 6 of the Securities Act and Rule 457 under the Securities Act by multiplying
0.000239 and the proposed maximum aggregate offering price.
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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, as amended,
or until this registration statement shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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PROSPECTUS
[LOGO OF THE FIRST AMERICAN CORPORATION]
THE FIRST AMERICAN CORPORATION
3,621,773 SHARES OF COMMON STOCK
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We are offering up to 3,621,773 of our common shares, par value $1 per
share, for issuance from time to time as full or partial consideration for the
acquisition of businesses, assets or securities of other business entities.
People who receive shares of our common stock in connection with an
acquisition may be permitted by us to use this prospectus and a prospectus
supplement to resell their shares. You should read the section titled "Selling
Shareholders" to find out more information about resales, if any, including the
amount of securities being resold.
The specific terms of each acquisition will be determined at or near the
time of the acquisition by negotiations with the owners of the businesses,
assets or securities to be acquired. Shares of our common stock issued hereunder
will be valued at approximately the market value at the time the terms of the
acquisition are tentatively or finally agreed to, when the acquisition is
completed, or during a specific period of time before we deliver the shares.
We may be required to provide further information by means of a
post-effective amendment to the registration statement of which this prospectus
forms a part or a prospectus supplement once we know the actual information
concerning a specific acquisition. We urge you to read this prospectus, any
accompanying prospectus supplement and the information described under the
heading "Documents Incorporated By Reference" before you make your investment
decision.
We do not expect to receive any cash proceeds from the sale of our common
shares pursuant to this prospectus, or to use an underwriter or pay underwriting
discounts or commissions with respect to such shares.
Our common shares are traded on the New York Stock Exchange under the
trading symbol "FAF." On January 8, 2002, the closing price of one of our common
shares on the New York Stock Exchange was $18.70.
-------------------------------------------------
An investment in our company involves risk.
You should read carefully the "Risk Factors" beginning on page 4
before deciding whether to purchase shares of our common stock.
-------------------------------------------------
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.
This prospectus is dated January 10, 2002.
__________________
TABLE OF CONTENTS
Page
----
Prospectus Summary.................................................1
Risk Factors.......................................................4
Selected Financial Data............................................6
Selling Shareholders...............................................8
Where You Can Find More Information................................9
Documents Incorporated by Reference................................9
Special Note of Caution Regarding
Forward-Looking Statements.....................................10
Legal Matters.....................................................10
Experts...........................................................10
__________________
This prospectus incorporates important business and financial information
about First American that is not included in or delivered with this document.
This means that we may satisfy our disclosure obligations to you by referring
you to one or more documents separately filed with the SEC. See "Documents
Incorporated By Reference" on page 9 for a list of documents that we have
incorporated by reference into this prospectus. This information is available to
shareholders without charge upon written or oral request to:
The First American Corporation
Mark R Arnesen
1 First American Way
Santa Ana, California 92707-5913
(714) 800-3000
To obtain timely delivery, you must request the information at least five
business days before the date on which you must make a decision on whether to
invest in our company.
(i)
PROSPECTUS SUMMARY
Our Company
We are a leading provider of business information, providing products and
services in connection with the major economic events in a consumer's life. We
provide information and related services in connection with:
o Getting a job o Arranging a mortgage
o Renting an apartment o Opening or buying a business
o Buying a car o Retirement
o Buying a house, boat or
airplane
Our largest segment is title insurance. We entered this business in 1889
and have a national market share of 23% as of December 31, 2000. We have broad
geographic coverage, with strong market shares in all the states and in many
foreign countries. Our title insurance revenues in 2000 were $2.1 billion and
have grown at an annual rate of 13% over the five year period ended December 31,
2000. The pre-tax margins for our title insurance segment were 4.5% in 2000. For
the first nine months of 2001, title insurance revenues were $1.9 billion
compared to $1.6 billion for the year before period. In the early 1990s, we
began a more aggressive plan to develop and acquire operations that enable us to
provide a range of title insurance, real estate-related services, and
information services to major residential lenders and loan servicers. Given our
strong relationships with these major lenders and the fact that in most
refinance transactions the lender selects the title insurer, we believe we are
well positioned from a competitive standpoint to benefit from an increase in
refinancing activity.
During the last decade we have developed a complete set of real
estate-related services. We now provide all information and services needed to
close a home sale and a mortgage, including credit information, flood zone
information and real estate tax information. We offer the broadest array of
services and have the first or second largest market share in almost all the
product categories.
Our real estate information and services segment has experienced higher
growth in revenues and higher margins than our title insurance segment. Revenues
from our real estate information and services segment in 2000 were $573 million
and have grown at an annual rate of 24% over the five years ended December 31,
2000. The pre-tax margin in our real estate information and services segments
was 10.4% in 2000. For the first nine months of 2001, revenues in this segment
were $555 million.
During the last decade, we developed and purchased extensive databases used
in producing our real estate-related products. Included are:
o Data Trace, the nation's largest provider of title information systems;
o Data Tree, the nation's largest database of image recorded documents;
and
o First American RES, the nation's largest provider of real estate
property characteristic and valuation information.
Our expertise that we developed in producing real estate-related products
led to our entry into businesses less sensitive to real estate cycles, such as
tenant screening and pre-employment screening. Most significantly, we developed
a set of products used by auto lending and leasing companies to originate and
service auto loans and leases. We are the nation's largest provider of
specialized automotive credit reports. Between auto and mortgage credit reports,
we have issued over 2 million credit reports per month in recent months. The
pre-tax margin of our consumer information services segment was 13.9% in 2000.
Our revenues in this segment have grown from $80 million in 1996 to $263 million
in 2000--an annual growth rate of 33%. Revenues in this segment through the
first three quarters of 2001 were $220 million.
We have developed sophisticated systems to streamline the processes
relating to title and real estate information. We have also built sophisticated
electronic delivery systems.
-1-
The following is a list of our businesses:
Title Insurance and Services
----------------------------
o Equity loan services o Subdivision title insurance
o Lenders Services o 1031 tax-deferred exchange services
o National/Commercial title insurance o Title and escrow systems
o Residential title insurance o Aircraft and vessel title insurance
Real Estate Information and Services
------------------------------------
o Default management services o Mortgage origination/servicing software
systems
o Credit reporting and information o Appraisal and property valuation
management
o Residential and commercial real estate tax o Property characteristic and valuation
reporting and valuation services information
o Flood determination and compliance o Title plant and document imaging services
o Mortgage document services o Field inspections
Consumer Information and Services
---------------------------------
o Pre-employment screening o Banking services
o Resident screening o Consumer credit reports
o Specialized credit reporting o Home warranty
o Sub-prime consumer information o Investment services
o Vehicle information and insurance tracking o Property and casualty insurance
o Trust services
Our principal executive office is located at 1 First American Way, Santa
Ana, California 92707-5913, and our telephone number is (714) 800-3000.
-2-
About This Prospectus
This prospectus and each prospectus supplement (if any) is part of a
registration statement on Form S-4 that we filed with the Securities and
Exchange Commission using a "shelf" registration process. Under the shelf
registration process, we may offer and sell, from time to time, in one or more
offerings, up to a total of 3,621,773 of our common shares for use in connection
with acquisitions by us of other businesses, assets or securities of other
business entities. The consideration offered by us in such acquisitions, in
addition to any shares of common stock offered by this prospectus, may include
cash, certain assets and/or assumption by First American of liabilities of the
businesses, assets or securities being acquired.
The terms of acquisitions involving the issuance of the shares of common
stock covered by this prospectus are expected to be determined by direct
negotiations with the owners or controlling persons of the assets, businesses or
securities to be acquired. Factors taken into account in acquisitions may
include, among other factors, the quality and reputation of the business to be
acquired and its management, the strategic market position of the business to be
acquired, its proprietary assets, earning power, cash flow and growth potential,
and the market value of its equity securities when pertinent. It is anticipated
that shares of our common stock issued in any such acquisition will be offered
at approximately the then current market value of the common stock. The value
will be determined either when the terms of the acquisition are tentatively or
finally agreed to, when the acquisition is completed, or during a period of time
before we deliver the shares.
We do not expect to pay underwriting discounts or commissions, although we
may pay finders' fees from time to time in connection with certain acquisitions.
Any person receiving finders' fees may be deemed to be an "underwriter" within
the meaning of the Securities Act, and any profit on the resale of shares of
common stock purchased by them may be considered underwriting commissions or
discounts under the Securities Act.
This prospectus provides you with a general description of the securities
we may sell. If necessary, each time we sell securities under this prospectus,
we will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read this
prospectus, the applicable prospectus supplement and the information
incorporated by reference. See "Documents Incorporated by Reference" on page 9.
We may also permit individuals or entitles who have received or will
receive shares of our common stock in connection with the acquisitions described
above, or their transferees or successors-in-interest, to use this prospectus to
cover their resale of such shares. See "Selling Shareholders," as it may be
amended or supplemented from time to time, for a list of those individuals or
entities who are authorized to use this prospectus to sell their shares of our
common stock.
In making your investment decision, you should rely only on the information
contained or incorporated by reference in this prospectus. We have not
authorized anyone to provide you with any other information. If you receive any
unauthorized information, you must not rely on it. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state or jurisdiction where the offer or sale of these
securities is not permitted. You should not assume that the information
contained or incorporated by reference in this prospectus is accurate as of any
date other than the date on which it is released by First American.
-3-
RISK FACTORS
You should consider carefully the following risk factors, as well as the
other information contained elsewhere in this prospectus, each prospectus
supplement and the information incorporated by reference before deciding to
purchase any of our common shares.
OUR REVENUES MAY DECLINE DURING PERIODS WHEN THE DEMAND FOR OUR PRODUCTS
DECREASES
Our revenues decrease as the number of real estate transactions in which
our products are purchased decreases. We have found that the number of real
estate transactions in which our products are purchased decreases in the
following situations:
o when mortgage rates are high;
o when the mortgage fund supply is limited; and
o when the United States economy is weak.
We believe that this trend will recur.
CHANGES IN GOVERNMENT REGULATION COULD PROHIBIT OR LIMIT OUR OPERATIONS
Our title insurance, property and casualty insurance, home warranty,
thrift, trust and investment businesses are regulated by various federal, state
and local governmental agencies. Many of our other businesses operate within
statutory guidelines. Changes in the applicable regulatory environment or
statutory guidelines could prohibit or restrict our existing or future
operations. Such restrictions may restrict our ability to implement rate
increases, acquire assets or businesses or otherwise have a negative impact on
our ability to increase our operating results. Such regulation may adversely
affect our financial performance.
AS A HOLDING COMPANY, WE DEPEND ON DISTRIBUTIONS FROM OUR SUBSIDIARIES, AND IF
DISTRIBUTIONS FROM OUR SUBSIDIARIES ARE MATERIALLY IMPAIRED, OUR ABILITY TO
DECLARE AND PAY DIVIDENDS MAY BE ADVERSELY AFFECTED
First American is a holding company whose primary assets are the securities
of its operating subsidiaries. Our ability to pay dividends is dependent on the
ability of our subsidiaries to pay dividends or repay funds to us. If our
operating subsidiaries are not able to pay dividends or repay funds to us, we
may not be able to declare and pay dividends to you. Moreover, pursuant to
insurance and other regulations under which our insurance subsidiaries operate,
the amount of dividends, loans and advances available to us is limited. Under
such regulations, the maximum amount of dividends, loans and advances available
to us from our insurance subsidiaries in 2001 is $138.2 million.
OUR EARNINGS MAY BE REDUCED IF ACQUISITION PROJECTIONS ARE INACCURATE
Our earnings have improved since 1991 in large part because of our
acquisition and integration of non-title insurance businesses. These businesses
generally have higher margins than our title insurance businesses. For example,
pre-tax margins for our title insurance segment were 4.5% in 2000, while pre-tax
margins for our real estate information and services and consumer information
services segments in the same year were 10.4% and 13.9%, respectively. The
success or failure of acquisitions in these lines has depended in large measure
upon the accuracy of our projections. These projections are not always accurate.
Inaccurate projections have historically led to lower than expected earnings.
-4-
CURRENT LEGAL PROCEEDINGS MAY HAVE A MATERIAL ADVERSE AFFECT ON OUR FINANCIAL
CONDITION OR RESULTS OF OPERATIONS
On May 19, 1999, the controller and insurance commissioner of the State of
California filed a class action suit in the Sacramento state court. The action
seeks to certify as a class of defendants all title and escrow companies doing
business in California from 1970 to the present, including certain of our
subsidiaries. The plaintiffs allege that the defendants:
o failed to give unclaimed property to the State of California on a
timely basis;
o charged California home buyers and other escrow customers fees
for services that were never performed or which cost less than
the amount charged; and
o devised and carried out schemes, known as earnings credits, with
financial institutions to receive interest on escrow funds
deposited by defendants with financial institutions in demand
deposits.
In February 2000, we entered into an administrative settlement with the
California Department of Insurance, known as the DOI. The DOI released us from
any further claim of liability as to its receipt of earnings credits or any
alleged overcharges for miscellaneous escrow fee items, such as courier or wire
service fees. The DOI further agreed to direct the California attorney general
to dismiss the insurance commissioner as a plaintiff from the lawsuit. In the
settlement with the DOI, we were directed by the insurance commissioner and
agreed to make a contribution to a consumer education fund and accept a new
regulation in the form drafted by the DOI, whereby earnings credit programs will
be authorized and regulated by the DOI and rate filings will be required for
escrow fees. In July 2000, then insurance commissioner Chuck Quackenbush, who
had approved the administrative settlement, resigned. The new insurance
commissioner has not yet indicated whether he will re-examine the previously
agreed upon administrative settlement. We do not believe our settlement will be
affected.
Subsequent to the filing of this lawsuit, our subsidiary First American
Title Insurance Company was named and served as a defendant in two private class
actions in California courts. The allegations in those actions include some, but
not all, of the allegations contained in the lawsuit discussed above. The
private class actions independently seek injunctive relief, attorneys' fees,
damages and penalties in unspecified amounts. One of the private class actions
has been dismissed. The remaining private class action was stayed by court order
pending settlement negotiations relating to the class action filed by the
California controller and insurance commissioner. The stay was recently lifted.
An adverse decision in these lawsuits may have a material adverse effect on
our financial condition or results of operations.
CERTAIN PROVISIONS OF OUR CHARTER AND RIGHTS PLAN MAY MAKE A TAKEOVER OF OUR
COMPANY DIFFICULT EVEN IF SUCH TAKEOVER COULD BE BENEFICIAL TO SOME OF OUR
SHAREHOLDERS
Our restated articles of incorporation authorize the issuance of "blank
check" preferred stock with such designations, rights and preferences as may be
determined from time to time by our board of directors. Accordingly, our board
is empowered, without further shareholder action, to issue shares or series of
preferred stock with dividend, liquidation, conversion, voting or other rights
that could adversely affect the voting power or other rights, including the
ability to receive dividends, of our common shareholders. The issuance of such
preferred stock could be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control. In conjunction with
the rights plan discussed below, we have authorized the issuance of our Series A
Junior Participating Preferred Shares. Although we have no present intention of
issuing any additional shares or series of preferred stock, we cannot guarantee
that we will not make such an issuance in the future.
We have adopted a rights plan which could, alone or in combination with our
restated articles of incorporation, discourage transactions involving actual or
potential changes of control, including transactions that otherwise could
involve payment of a premium over prevailing market prices to our shareholders
for their common shares.
-5-
SELECTED FINANCIAL DATA
The following table sets forth our selected historical consolidated
financial and other data for the five years ended December 31, 2000. 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, 2000, which is incorporated by reference into this prospectus. All
data are in thousands except percentages, per share data and employee data.
Year Ended
December 31
------------------------------------------------------------------------------
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
Revenues....................... $1,654,976 $1,962,001 $2,943,880 $2,988,169 $2,934,255
Income before cumulative effect
of a change in accounting for
tax service contracts (1)... 55,766 67,765 201,527 88,643 82,223
Cumulative effect of a change
in accounting for tax
service contracts (1)....... -- -- -- (55,640) --
Net income..................... 55,766 67,765 201,527 33,003 82,223
Total assets................... 1,010,556 1,220,377 1,852,731 2,116,414 2,199,737
Notes and contracts payable.... 72,761 51,720 143,466 196,815 219,838
Mandatorily redeemable
preferred securities........ -- 100,000 100,000 100,000 100,000
Stockholders' equity........... 384,931 442,783 762,265 815,991 870,237
Return on average stockholders'
equity (2).................. 15.4% 16.4% 33.4% 10.9% 9.8%
Cash dividends on common
shares...................... 7,928 14,035 13,894 15,840 15,256
Per share of common stock (3)
Basic:
Income before cumulative
effect of a change in
accounting for tax
service contracts......... .98 1.19 3.35 1.37 1.29
Cumulative effect of a change
in accounting for tax
service contracts......... -- -- -- (.86) --
------------------------------------ -------------- --------------- --------------- --------------- ---------------
Net income................... $ .98 $ 1.19 $ 3.35 $ .51 $ 1.29
------------------------------------ -------------- --------------- --------------- --------------- ---------------
Diluted:
Income before cumulative effect
of a change in accounting for
tax service contracts..... $ .98 $ 1.16 $ 3.21 $ 1.34 $ 1.24
Cumulative effect of a change in
accounting for tax service
contracts................. -- -- -- (.84) --
------------------------------------ -------------- --------------- --------------- --------------- ---------------
Net income................... $ .98 $ 1.16 $ 3.21 $ .50 $ 1.24
------------------------------------ -------------- --------------- --------------- --------------- ---------------
Stockholders' equity......... $ 6.76 $ 7.74 $ 12.08 $ 12.54 $ 13.62
Cash dividends............... $ .14 $ .25 $ .23 $ .24 $ .24
Number of common shares outstanding:
Weighted average during the year:
Basic..................... 56,652 57,092 60,194 64,669 63,680
Diluted................... 57,112 58,482 62,720 66,351 66,050
End of year................. 56,965 57,186 63,120 65,068 63,887
Title orders opened (4)........ 1,027 1,173 1,585 1,334 1,241
Title orders closed (4)........ 775 886 1,210 1,120 975
Number of employees............ 11,611 13,156 19,669 20,065 20,346
All consolidated results reflect the 1999 acquisition of National Information Group accounted for under the
pooling-of-interests method of accounting.
(1) In December 1999, First American adopted Staff Accounting Bulletin No. 101 (SAB), "Revenue Recognition in Financial
Statements." The SAB, which became effective January 1, 1999, applies to First American's tax service operations
and requires the deferral of the tax service fee and the recognition of that fee as revenue ratably over the
expected service period. The amortization rates applied to recognize the revenues assume a 10-year contract life
and are adjusted to reflect prepayments. First American periodically reviews its tax service contract portfolio to
determine if there have been changes in contract lives and/or changes in the
-6-
number and/or timing of prepayments. Accordingly, First American may adjust the rates to reflect current trends.
The SAB finalizes a series of changes instituted by the Securities and Exchange Commission concerning revenue
recognition policies. As a result of adopting the SAB, in 1999, First American reported a charge of $55.6 million,
net of income taxes and minority interests, as a cumulative change in accounting principle, reduced net income by
$10.9 million, or $0.16 per diluted share and restated its quarterly information. During the year ended December
31, 2000, First American recognized $38.6 million in revenues that were included in the cumulative effect
adjustment. Revenues earned by the other products in the real estate information segment are recognized at the time
of delivery, as First American has no significant ongoing obligation after delivery.
(2) Return on average stockholders' equity for 1999 excludes the cumulative effect of a change in accounting for tax
service contracts from both net income and stockholders' equity.
(3) Per share information relating to net income is based on weighted-average number of shares outstanding for the
years presented. Per share information relating to stockholders' equity is based on shares outstanding at the end
of each year.
(4) Title order volumes are those processed by the direct title operations of First American and do not include orders
processed by agents.
-7-
SELLING SHAREHOLDERS
In general, the persons to whom we issue shares of common stock under this
prospectus will be able to resell such shares in the public market without
further registration and without being required to deliver a prospectus.
However, certain persons who receive our common shares may want to resell those
securities in distributions that would require the delivery of a prospectus.
With our consent, this prospectus may be used by certain shareholders who wish
to sell our common stock. As used in this prospectus, "selling shareholders" may
include shareholders who receive our common shares hereunder in connection with
an acquisition and donees and pledgees selling shares received from such people.
We may limit our consent to a specified time period and subject our consent to
certain limitations and conditions, which may vary by agreement.
Selling shareholders may sell our common shares in any combination of the
following:
o through the New York Stock Exchange or any national securities exchange
on which our common stock has been approved for listing in the future;
o directly to purchasers in negotiated transactions;
o by or through brokers or dealers, in ordinary brokerage transactions or
transactions in which the broker solicits purchases;
o in block trades in which the broker or dealer will attempt to sell
securities as an agent but may position and resell a portion of the
block as principal;
o in a transaction in which a broker or dealer purchases as principal for
resale for its own account; or
o through underwriters or agents.
Resales by selling shareholders may be made directly to investors or
through securities firms acting as underwriters, brokers or dealers. The fees
earned by or paid to the securities firm may be the normal stock exchange
commission or negotiated commissions or underwriting discounts to the extent
permissible. Shares of our common stock may be sold at a fixed offering price,
which may be changed, at the prevailing market price at the time of sale, at
prices related to such prevailing market price or at negotiated prices. The
securities firm may resell the shares through other securities dealers, and
commissions or concessions to those other dealers may be allowed. Such selling
shareholders may indemnify any securities firm participating in such
transactions against certain liabilities, including liabilities under the
Securities Act and to reimburse them for any expenses in connection with an
offering or sale of securities.
The selling shareholders and any broker-dealers who act in connection with
the sale of shares hereunder may be deemed to be an "underwriter" within the
meaning of the Securities Act. 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.
Selling shareholders may also offer shares of common stock covered by this
prospectus by means of prospectuses under other registration statements or
pursuant to exemptions from the registration requirements of the Securities Act,
including sales that meet the requirements of Rule 144 or Rule 145(d) under the
Securities Act. Selling shareholders should seek the advice of their own counsel
about the legal requirements for such sales.
This prospectus will be amended or supplemented, if required by the
Securities Act and the rules of the SEC, to disclose identity of the selling
shareholders, the number of shares to be sold by the selling shareholders, any
material relationship a selling shareholder may have with us, and other details
of the resale to the extent appropriate.
We will not receive any part of the proceeds from the resale by the selling
shareholders of any shares under 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.
-8-
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information and documents with the SEC. You may read and copy any document we
file with the SEC at the SEC's Public Reference Room located at 450 Fifth
Street, N.W., Washington, D.C. 20549. The SEC may charge a fee for making
copies. You may call the SEC at (800) 732-0330 for more information on the
operation of the Public Reference Room, and on the availability of other Public
Reference Rooms. Our filings with the SEC 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 www.sec.gov.
We have filed a registration statement on Form S-4 with the SEC to register
the common stock offered by this prospectus. This prospectus is part of the
registration statement. As allowed by SEC rules, this prospectus does not
contain all of the information that is in the registration statement and the
exhibits to the registration statement. For further information about First
American, investors should refer to the registration statement and its exhibits.
A copy of the registration statement and its exhibits may be inspected, without
charge, at a Public Reference Room or on the SEC's web site.
You should analyze the information in this prospectus, each prospectus
supplement and the additional information described under the heading "Documents
Incorporated By Reference" below before you make a decision about investing in
our common shares.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" certain information in
documents we file with them, which means that we can disclose important
information to you in this prospectus by referring you to another document filed
separately with the SEC. The information incorporated by reference is deemed to
be part of this prospectus, except for any information superseded by information
in this prospectus, information filed subsequently that is incorporated by
reference and information in any prospectus supplement. These documents contain
important business and financial information about our company, including
information concerning its financial performance, and we urge you to read them.
We incorporate by reference into this prospectus all of the following documents:
o our annual report on Form 10-K for the fiscal year ended December 31,
2000;
o our quarterly reports on Form 10-Q for the quarters ended March 31,
2001, June 30, 2001 and September 30, 2001, as amended;
o our current reports on Form 8-K filed January 31, 2001, February 21,
2001, April 11, 2001, April 16, 2001, May 7, 2001, May 8, 2001, May
10, 2001, May 17, 2001, August 1, 2001 and October 25, 2001;
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; and
o the description of Rights to Purchase Series A Junior Participating
Preferred Shares, which may be transferred with First American's
common shares, contained in its registration statement on Form 8-A,
dated November 7, 1997, which registers the rights under Section 12(b)
of the Exchange Act.
We also incorporate into this prospectus all of our filings with the SEC
made pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act that we
file between the date of this prospectus and the earlier of the following dates:
o the date on which all of the shares offered by this prospectus are
resold by the persons or entities who acquire them from us; and
o the date that is one year after the last date on which shares offered
by this prospectus are issued by us.
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SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain
"forward-looking statements" within the meaning of the federal securities laws.
These forward-looking statements are based on our management's estimates and
assumptions and take into account only the information available at the time the
forward-looking statements are made. Although we believe these estimates and
assumptions are and will be reasonable, forward-looking statements involve
risks, uncertainties and other factors that could cause our actual results to
differ materially from those suggested in the forward-looking statements.
Forward-looking statements include the information concerning future financial
performance, business strategy, projected plans and objectives of First American
set forth in this prospectus, including:
o statements about any future increase in refinancing activity;
o continued strong relationships with lenders and our ability to
leverage such relationships; and
o the scope of our services;
The words "anticipates," "estimates," "projects," "forecasts," "goals,"
"believes," "expects," "intends," and similar expressions are intended to
identify such forward-looking statements. Forward-looking statements are subject
to numerous risks and uncertainties. The following are some important factors
that could cause actual results to differ materially from those in
forward-looking statements:
o changes in the real estate market, interest rates or the general
economy;
o changes in government regulations that are applicable to our regulated
businesses;
o the impact of the legal proceedings commenced by the California
attorney general and related litigation and the status of our
settlement with the California Department of Insurance;
o our continued ability to identify businesses to be acquired;
o changes in our ability to integrate businesses which we acquire;
o an increase in our expenses;
o consolidation among our significant competitors or customers; and
o other factors described in our annual report on Form 10-K for the
fiscal year ended December 31, 2000.
Our actual results, performance or achievement could differ materially from
those expressed in, or implied by, forward-looking statements and, accordingly,
no assurances can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of them do so,
what impact they will have on the results of operations and financial condition
of First American. The forward-looking statements speak only as of the date they
are made. We do not undertake to update forward-looking statements to reflect
circumstances or events that occur after the date the forward-looking statements
are made.
LEGAL MATTERS
The validity of the common stock offered hereunder will be passed upon
by White & Case LLP, 633 West Fifth Street, Los Angeles, California 90071.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference to our annual report on Form 10-K
for the year ended December 31, 2000, have been audited by
PricewaterhouseCoopers LLP, independent accountants, as stated in the report of
said firm, which report is also incorporated herein by reference, given on the
authority of said firm as experts in auditing and accounting.
-10-
THE FIRST AMERICAN CORPORATION
3,621,773 SHARES OF COMMON STOCK
[LOGO OF THE FIRST AMERICAN CORPORATION]
------------------
PROSPECTUS
------------------
We have not authorized anyone to give you any information that differs from
the information in this prospectus. If you receive any different information,
you should not rely on it.
The delivery of this prospectus shall not, under any circumstances, create
an implication that THE FIRST AMERICAN CORPORATION is operating under the same
conditions that it was operating under on the date of this prospectus. Do not
assume that the information contained in this prospectus is correct at any time
past the date indicated.
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.
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.
DATED JANUARY 10, 2002
PART II
Information Not Required in Prospectus
Item 20. Indemnification of Directors and Officers.
Subject to certain limitations, Section 317 of the California Corporations
Code provides in part that a corporation shall have the power to indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of the corporation to
procure a judgment in its favor) by reason of the fact that the person is or was
an agent (which term includes officers and directors) of the corporation,
against expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with the proceeding if that person acted in
good faith and in a manner the person reasonably believed to be in the best
interests of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe the conduct of the person was unlawful.
The California indemnification statute, as provided in Section 317 of the
California Corporations Code (noted above), is nonexclusive and allows a
corporation to expand the scope of indemnification provided, whether by
provisions in its Bylaws or by agreement, to the extent authorized in the
corporation's articles.
The Restated Articles of Incorporation of the Registrant provide that: "The
liability of the directors of the Corporation for monetary damages shall be
eliminated to the fullest extent permissible under California law." The effect
of this provision is to exculpate directors from any liability to the
Registrant, or anyone claiming on the Registrant's behalf, for breaches of the
directors' duty of care. However, the provision does not eliminate or limit the
liability of a director for actions taken in his capacity as an officer. In
addition, the provision applies only to monetary damages and is not intended to
impair the rights of parties suing on behalf of the Registrant to seek equitable
remedies (such as actions to enjoin or rescind a transaction involving a breach
of the directors' duty of care or loyalty).
The Bylaws of the Registrant provide that, subject to certain
qualifications, "(i) The corporation shall indemnify its Officers and Directors
to the fullest extent permitted by law, including those circumstances in which
indemnification would otherwise be discretionary; (ii) the corporation is
required to advance expenses to its Officers and Directors as incurred,
including expenses relating to obtaining a determination that such Officers and
Directors are entitled to indemnification, provided that they undertake to repay
the amount advanced if it is ultimately determined that they are not entitled to
indemnification; (iii) an Officer or Director may bring suit against the
corporation if a claim for indemnification is not timely paid; (iv) the
corporation may not retroactively amend this Section 1 in a way which is adverse
to its Officers and Directors; (v) the provisions of subsections (i) through
(iv) above shall apply to all past and present Officers and Directors of the
corporation." "Officer" includes the following officers of the Registrant:
Chairman of the Board, President, Vice President, Secretary, Assistant
Secretary, Chief Financial Officer, Treasurer, Assistant Treasurer and such
other officers as the board shall designate from time to time. "Director" of the
Registrant means any person appointed to serve on the Registrant's board of
directors either by its shareholders or by the remaining board members.
Each of the Registrant's 1996 Stock Option Plan, 1997 Directors' Stock
Plan, 401(k) Savings Plan, Pension Plan, Pension Restoration Plan and Employee
Profit Sharing and Stock Ownership Plan (for purposes of this paragraph only,
each individually, the "Plan") provides that, subject to certain conditions, the
Registrant may, through the purchase of insurance or otherwise, indemnify each
member of the Board (or board of directors of any affiliate), each member of the
committee charged with administering the Plan, 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
Registrant'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.
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The Registrant's Deferred Compensation Plan (for purposes of this paragraph
only, the "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."
Each of the Registrant's Management Supplemental Benefit Plan and Executive
Supplemental Benefit Plan (for purposes of this paragraph only, each
individually, the "Plan") provides that, subject to certain conditions, the
Registrant may, through the purchase of insurance or otherwise, indemnify and
hold harmless, to the extent permitted by law, the members of the Board of
Directors and any other employees to whom any responsibility with respect to the
administration of the Plan has been delegated against any and all costs,
expenses and liabilities (including attorneys' fees) incurred by such parties in
performing their duties and responsibilities under the Plan, provided that such
party or parties were not guilty of willful misconduct.
The Registrant has a policy of liability insurance which insures its
directors and officers against the cost of defense, settlement or payment of a
judgment under certain circumstances.
Item 21. Exhibits and Financial Statements.
Exhibit
Number Description
------ -----------
3.1 Restated Articles of Incorporation of Registrant, dated July 14, 1998
(incorporated by reference from Exhibit 3.1 of Amendment No. 1, dated
July 28, 1998, to Registrant's Registration Statement No. 333-53681 on
Form S-4).
3.2 Certificate of Amendment of Restated Articles of Incorporation of
Registrant, dated April 23, 1999 (incorporated by reference from
Exhibit (3) to Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999).
3.3 Certificate of Amendment of Restated Articles of Incorporation of
Registrant, dated May 11, 2000 (incorporated by reference from Exhibit
3.1 to Registrant's Current Report on Form 8-K dated June 12, 2000).
3.4 Bylaws of Registrant, as amended (incorporated by reference from
Exhibit 3(d) to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000).
4.1 Description of Registrant's capital stock in Article Sixth of
Registrant's Restated Articles of Incorporation (contained in Exhibits
3.1, 3.2 and 3.3).
4.2 Rights Agreement (incorporated by reference from Exhibit 4 of
Registrant's Registration Statement on Form 8-A dated November 7,
1997).
5 Opinion of White & Case LLP regarding validity of the common shares.
23.1* Consent of PricewaterhouseCoopers LLP, independent accountants to
Registrant.
23.2 Consent of White & Case LLP (contained in Exhibit 5).
II-2
24* Power of Attorney.
------------------------
* Previously filed.
Item 22. 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 to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) 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) 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 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.
(3) 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.
(4) That every prospectus: (i) that is filed pursuant to paragraph (3)
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.
(5) 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 provisions described in Item 20 above, 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
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,
II-3
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(6) 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.
(7) 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.
(8) 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.
* * *
II-4
Signatures
Pursuant to the requirements of the Securities Act of 1933, 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 January 10, 2002.
THE FIRST AMERICAN 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: January 10, 2002 By: /s/ Parker S. Kennedy
----------------------------------
Parker S. Kennedy, President
and Director
Date: January 10, 2002 By: /s/ Thomas A. Klemens
----------------------------------
Thomas A. Klemens, Executive Vice
President, Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: January 10, 2002 By: /s/ Max Valdes
----------------------------------
Max Valdes, Vice President
Chief Accounting Officer
(Principal Accounting Officer)
II-5
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: By:
----------------------------------
D. P. Kennedy, Chairman
and Director
Date: By:
----------------------------------
Parker S. Kennedy, President
and Director
Date: January 10, 2002 By: *
----------------------------------
Gary J. Beban, Director
Date: January 10, 2002 By: *
----------------------------------
J. David Chatham, Director
Date: January 10, 2002 By: *
----------------------------------
Hon. William G. Davis, Director
Date: January 10, 2002 By: *
----------------------------------
James L. Doti, Director
Date: January 10, 2002 By: *
----------------------------------
Lewis W. Douglas, Jr., Director
Date: January 10, 2002 By: *
----------------------------------
Paul B. Fay, Jr., Director
Date: January 10, 2002 By: *
----------------------------------
Frank E. O'Bryan, Director
Date: January 10, 2002 By: *
----------------------------------
Roslyn B. Payne, Director
Date: January 10, 2002 By: *
----------------------------------
D. Van Skilling, Director
Date: January 10, 2002 By: *
----------------------------------
Virginia Ueberroth, Director
* By: /s/ Parkey
-----------------------------------------------------------------------
Parker S. Kennedy
Attorney-in-Fact
II-7
Exhibit
Number Description
3.1 Restated Articles of Incorporation of Registrant, dated July 14, 1998
(incorporated by reference from Exhibit 3.1 of Amendment No. 1, dated
July 28, 1998, to Registrant's Registration Statement No. 333-53681 on
Form S-4).
3.2 Certificate of Amendment of Restated Articles of Incorporation of
Registrant, dated April 23, 1999 (incorporated by reference from
Exhibit (3) to Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999).
3.3 Certificate of Amendment of Restated Articles of Incorporation of
Registrant, dated May 11, 2000 (incorporated by reference from Exhibit
3.1 to Registrant's Current Report on Form 8-K dated June 12, 2000).
3.4 Bylaws of Registrant, as amended (incorporated by reference from
Exhibit 3(d) to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000).
4.1 Description of Registrant's capital stock in Article Sixth of
Registrant's Restated Articles of Incorporation (contained in Exhibits
3.1, 3.2 and 3.3).
4.2 Rights Agreement (incorporated by reference from Exhibit 4 of
Registrant's Registration Statement on Form 8-A dated November 7,
1997).
5 Opinion of White & Case LLP regarding validity of the common shares.
23.1* Consent of PricewaterhouseCoopers LLP, independent accountants to
Registrant.
23.2 Consent of White & Case LLP (contained in Exhibit 5).
24* Power of Attorney.
-------------------------
* Previously filed.
II-8