The First American Financial Corporation board of directors adopts plan that ...


August 25, 1992, SANTA ANA, CALIFORNIA

The First American Financial Corporation (NASDAQ: FAMRA and FAMRB) announced today that its board of directors has adopted a plan which will result in a single class of common shares and eliminate the voting differences between the Class A and Class B shares. Subject to shareholder approval of the plan, the board also approved the offering of 2,250,000 of the new common shares through an underwritten offering to be made only by means of a prospectus.

The company is seeking written consent from a majority of the shareholders to eliminate the voting differences between the Class A shares, which have one vote per share, and the Class B shares, which have 1/10th of one vote per share. The plan requires an amendment to the company's Articles of Incorporation, and, if approved by the shareholders, will result in the current dual class common stock capital structure being replaced with a single class of common shares. Each Class A share and Class B share will be converted into one share of the new single class and each Class A shareholder will receive an additional 0.04 share of the new class for each Class A share held. This exchange ratio reflects in part the average historical difference in the trading values of the two classes.

According to President D.P. Kennedy, the board believes that combining the Class A shares and Class B shares into a single class of common shares will be in the best interests of the company and its shareholders because doing so may encourage both a greater number and a broader range of investors in the company.

In connection with the equity offering, the company has filed a registration statement with respect to the common shares to be sold in the public offering with the Securities and Exchange Commission and expects the offering to close, subject to market and other considerations, sometime in September of this year. The managing underwriters for this prospective offering will be Smith Barney; Harris Upham & Co., Inc.; Merrill Lynch & Co.; and Van Kasper & Company.

"The company intends to use the proceeds of the offering for general corporate purposes, including increasing the statutory capital and liquidity of its title insurance subsidiary in order to enhance its competitive position and, as opportunities arise, acquiring title insurance operations and/or related businesses," Kennedy said.

The First American Financial Corporation, based in Santa Ana, Calif., is a leading provider of real estate financial services, including title insurance, tax monitoring and home warranty services. The company offers its services through a network of more than 7,000 offices or agents in all 50 states. It also provides title services abroad in the Bahamas, Bermuda, Canada, Guam, Mexico, Puerto Rico, the U.S. Virgin Islands and the United Kingdom.

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