Exhibit (10)(p)
CHANGE IN CONTROL AGREEMENT
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EXECUTIVE FORM
This CHANGE IN CONTROL AGREEMENT is entered into as of the 12/th/ day
of November, 1999 (this "Agreement"), by and between THE FIRST AMERICAN
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FINANCIAL CORPORATION, a California corporation (the "Company"), and __________
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(the "Executive").
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W I T N E S S E T H:
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WHEREAS, the Compensation Committee (the "Committee") of the Board of
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Directors (the "Board") of the Company has determined that it is in the best
interests of the Company, its subsidiaries and the Company's shareholders to
assure that the Company and its subsidiaries will have the continued dedication
of the Executive, notwithstanding the possibility, threat or occurrence of a
Change in Control (as defined below) of the Company;
WHEREAS, the Committee believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change in Control and to encourage the
Executive's full attention and dedication to the Company and its subsidiaries
currently and in the event of any threatened or pending Change in Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change in Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of other
corporations; and
WHEREAS, the Company and the Executive accordingly desire to enter into
this Agreement on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, it is hereby agreed by and between the parties as follows:
1. Term of Agreement. This Agreement shall commence on the date
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hereof and shall continue through December 31, 2002 (the "Original Term");
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provided, however, that on such date and on each December 31 thereafter, the
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Original Term of this Agreement shall automatically be extended for one
additional year (each, an "Extended Term") unless, not later than the preceding
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January 1 either party shall have given notice that such party does not wish to
extend the term of this Agreement beyond the Original Term and any Extended
Term; and provided, further, that if a Change in Control (as defined in
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paragraph 3 below) shall have occurred during the Original Term or any Extended
Term of this Agreement, the term of this Agreement shall continue for a period
of thirty-six calendar months beyond the calendar month in which such Change in
Control occurs (the Original Term, each Extended Term, if any, and such thirty-
six month period, collectively, the "Term").
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2. Employment After a Change in Control. If the Executive is in the
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employ of the Company (which for this purpose shall also include any subsidiary
of the Company) on the date of a Change in Control, the Company hereby agrees to
continue the Executive in its employ (and/or, in the case of any subsidiary of
the Company, the employ of such subsidiary) for the period commencing on the
date of the Change in Control and ending on the last day of the Term
of this Agreement. During the period of employment described in the foregoing
provision of this paragraph 2 (the "Employment Period"), the Executive shall
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hold such position with the Company (which for this purpose shall also include
any subsidiary of the Company) and exercise such authority and perform such
executive duties as are commensurate with the Executive's position, authority
and duties immediately prior to the Change in Control. The Executive agrees that
during the Employment Period the Executive shall devote full business time
exclusively to the executive duties described herein and perform such duties
faithfully and efficiently; provided, however, that nothing in this Agreement
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shall prevent the Executive from voluntarily resigning from employment upon 60
days' written notice to the Company under circumstances which do not constitute
a Termination (as defined below in paragraph 5).
3. Change in Control. For purposes of this Agreement, a "Change in
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Control" means the happening of any of the following:
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(a) The consummation of a merger or consolidation of the Company with
or into another entity or any other corporate reorganization, if 50% or
more of the combined voting power of the continuing or surviving entity's
securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not shareholders of the
Company immediately prior to such merger, consolidation or other
reorganization.
(b) The sale, transfer or other disposition of all or substantially
all of the Company's assets or the complete liquidation or dissolution of
the Company.
(c) A change in the composition of the Board occurring within a two-
year period, as a result of which fewer than a majority of the directors
are Incumbent Directors. "Incumbent Directors" shall mean directors who
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either (i) are directors of the Company as of the date of this Agreement,
or (ii) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the
time of such election or nomination (but shall not include an individual
not otherwise an Incumbent Director whose election or nomination is in
connection with an actual or threatened proxy contest relating to the
election of directors to the Company).
(d) Any transaction as a result of which any person or group is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
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Securities Exchange Act of 1934), directly or indirectly, of securities of
the Company representing at least 25% of the total voting power of the
Company's then outstanding voting securities. For purposes of this
paragraph, the term "person" shall have the same meaning as when used in
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sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but shall
exclude (i) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or of a subsidiary of the Company;
(ii) so long as a person does not thereafter increase such person's
beneficial ownership of the total voting power represented by the Company's
then outstanding voting securities, a person whose beneficial ownership of
the total voting power represented by the Company's then outstanding voting
securities increases to 25% or more as a result of the acquisition of
voting securities of the Company by the Company which reduces the number of
such voting securities then outstanding; or (iii) so
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long as a person does not thereafter increase such person's beneficial
ownership of the total voting power represented by the Company's then
outstanding voting securities, a person that acquires directly from the
Company securities of the Company representing at least 25% of the total
voting power represented by the Company's then outstanding voting
securities.
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
4. Compensation During the Employment Period. During the Employment
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Period, the Executive shall be compensated as follows:
(a) the Executive shall receive an annual salary which is not less
than his or her annual salary immediately prior to the Employment Period
and shall be eligible to receive an increase in annual salary which is not
materially less favorable to the Executive than increases in salary granted
by the Company for executives with comparable duties;
(b) the Executive shall be eligible to participate in short-term and
long-term cash-based incentive compensation plans which, in the aggregate,
provide bonus opportunities which are not materially less favorable to the
Executive than the greater of (i) the opportunities provided by the Company
for executives with comparable duties; and (ii) the opportunities provided
to the Executive under all such plans in which the Executive was
participating prior to the Employment Period;
(c) the Executive shall be eligible to participate in stock option,
performance awards, restricted stock and other equity-based incentive
compensation plans on a basis not materially less favorable to the
Executive than that applicable (i) to the Executive immediately prior to
the Employment Period or (ii) to other executives of the Company with
comparable duties; and
(d) the Executive shall be eligible to receive employee benefits
(including, but not limited to, tax-qualified and nonqualified savings plan
benefits, medical insurance, disability income protection, life insurance
coverage and death benefits) and perquisites (including, without
limitation, a Company vehicle and Company paid or assisted membership dues)
which are not materially less favorable to the Executive than (i) the
employee benefits and perquisites provided by the Company to executives
with comparable duties or (ii) the employee benefits and perquisites to
which the Executive would be entitled under the Company's employee benefit
plans and perquisites as in effect immediately prior to the Employment
Period.
5. Termination. For purposes of this Agreement, the term
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"Termination" shall mean: (a) termination of the employment of the Executive
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during the Employment Period by the Company for any reason other than death,
Disability (as defined below) or Cause (as defined
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below); (b) termination of the employment of the Executive during the Window
Period by the Executive for any reason whatsoever; or (c) termination of the
employment of the Executive during the Employment Period (other than during the
Window Period) by the Executive for Good Reason (as defined below).
Notwithstanding anything in this Agreement to the contrary, if (i) the
Executive's employment is terminated prior to the actual occurrence of a Change
in Control for reasons that would constitute a Termination if they had occurred
following a Change in Control; (ii) the Executive reasonably demonstrates that
such termination (or Good Reason event) was at the request of a third party who
had indicated an intention or had taken steps reasonably calculated to effect a
Change in Control; and (iii) a Change in Control involving such third party (or
a party competing with such third party to effectuate a Change in Control) does
occur, then for purposes of this Agreement, the date immediately prior to the
date of such termination of employment or event constituting Good Reason shall
be treated as a Change in Control and such termination shall be treated as a
Termination. For purposes of determining the timing of payments and benefits to
the Executive under this Agreement as a result of this paragraph, the date of
the actual Change in Control shall be treated as the Executive's date of
Termination.
Except as provided in the last sentence of the immediately preceding
paragraph, the date of the Executive's Termination under this paragraph 5 shall
be the date specified by the Executive or the Company, as the case may be, in a
written notice to the other party complying with the requirements of paragraph
11 below.
For purposes of this Agreement, "Disability" means such physical or
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mental disability or infirmity of the Executive which, in the opinion of a
competent physician, renders the Executive unable to perform properly his or her
duties set forth in paragraph 2 of this Agreement, and as a result of which, the
Executive is unable to perform such duties for 6 consecutive calendar months or
for shorter periods aggregating 180 business days in any 12 month period. For
purposes of this paragraph a competent physician shall be a physician mutually
agreed upon by the Executive and the Board. If a mutual agreement cannot be
reached, the Executive shall designate a physician and the Board shall designate
a physician and these two physicians shall select a third physician who shall be
the "competent physician."
For purposes of this Agreement, the term "Cause" means (i) the willful
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and continued failure by the Executive to substantially perform the Executive's
duties with the Company (which for purposes of this paragraph shall also include
subsidiaries of the Company) after written notification by the Board, (ii) the
willful engaging by the Executive in conduct which is demonstrably injurious to
the Company, monetarily or otherwise, or (iii) the engaging by the Executive in
egregious misconduct involving serious moral turpitude. For purposes of this
Agreement, no act, or failure to act, on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that such action was in the best interest of the
Company.
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For purposes of this Agreement, the term "Window Period" means the
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period commencing on the first anniversary of the Change in Control and ending
at 5:00 p.m., Los Angeles time, on the thirtieth day thereafter.
For purposes of this Agreement, the term "Good Reason" means, without
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the Executive's express written consent, the occurrence after a Change in
Control of any of the following circumstances:
(i) the assignment to the Executive by the Company of duties which,
in the reasonable determination of the Executive, are a significant adverse
alteration in the nature or status of the Executive's position,
responsibilities, duties or conditions of employment from those in effect
immediately prior to the occurrence of the Change in Control; or any other
action by the Company that, in the reasonable determination of the
Executive, results in a material diminution in the Executive's position,
authority, duties or responsibilities from those in effect immediately
prior to the occurrence of the Change in Control;
(ii) a reduction in the Executive's annual base compensation as in
effect on the occurrence of the Change in Control;
(iii) the relocation of the Company's offices at which the Executive
is principally employed immediately prior to the Change in Control (the
"Principal Location") to a location more than 50 miles from such location
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or the Company's requiring the Executive to be based anywhere other than
the Principal Location, except for required travel on the Company's
business to an extent substantially consistent with the Executive's
business travel obligations prior to the Change in Control;
(iv) the Company's failure to pay to the Executive any portion of
the Executive's compensation or to pay to the Executive any portion of an
installment of deferred compensation under any deferred compensation
program of the Company within ten days of the date such compensation is
due; or
(v) the Company's failure to continue in effect any material
compensation or benefit plan or practice in which the Executive is eligible
to participate on the occurrence of the Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan or practice, or the Company's
failure to continue the Executive's participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable,
both in terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants, as existed at the
time of the Change in Control.
6. Severance Payments and Benefits. Subject to the provisions of
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paragraph 8 below, in the event of a Termination, in lieu of the amount
otherwise payable under paragraph 4 above, the Company shall:
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(a) pay the Executive a lump sum payment in cash no later than ten
business days after the date of Termination equal to the sum of:
(i) the sum of (A) the Executive's base salary through and
including the date of Termination and any bonus amounts which have
become payable, to the extent not theretofore paid, (B) a pro rata
portion of the Executive's annual bonus for the fiscal year in which
the date of Termination occurs in an amount equal to (1) the
Executive's Bonus Amount (as defined below), multiplied by (2) a
fraction, the numerator of which is the number of days in the fiscal
year in which the date of Termination occurs through and including the
date of Termination, and the denominator of which is 365, (C) any
compensation previously deferred by the Executive other than pursuant
to a tax-qualified plan (together with any interest and earnings
thereon), (D) accrued and unpaid vacation pay through and including
the date of Termination and (E) unreimbursed business expenses through
and including the date of Termination;
(ii) an amount equal to the product of the Applicable
Multiple (as defined below) and the Executive's annual salary in
effect immediately prior to the date of Termination; and
(iii) an amount equal to the product of the Applicable
Multiple and the Executive's Bonus Amount; and
(b) continue to provide the Executive (and, if applicable, the
Executive's dependent's), for a 24 month period following the date of
Termination, with the same level of benefits described in paragraph 4(d) of
this Agreement upon substantially the same terms and conditions (including
contributions required by the Executive for such benefits) as existed
immediately prior to the date of Termination (or, if more favorable to the
Executive, as such benefits and terms and conditions existed immediately
prior to the Change of Control), provided, that, if the Executive cannot
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continue to participate in the Company plans providing such benefits, the
Company shall otherwise provide such benefits on the same after-tax basis
as if continued participation had been permitted. Notwithstanding the
foregoing provisions of this paragraph, in the event the Executive becomes
reemployed with another employer and becomes eligible to receive welfare
benefits from such employer, the welfare benefits described in this
Agreement shall be secondary to such benefits during the period of the
Executive's eligibility, but only to the extent that the Company reimburses
the Executive for any increased cost and provides any additional benefits
necessary to give the Executive the benefits provided hereunder.
For purposes of this Agreement, the term "Applicable Multiple" means
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(i) in the case of termination of the employment of the Executive during the
Window Period by the Executive for any reason whatsoever, two or (ii) in the
case of (x) termination of the employment of the Executive during the Employment
Period by the Company for any reason other than death, Disability or Cause and
(y) termination of the employment of the Executive during the
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Employment Period (other than during the Window Period) by the Executive for
Good Reason, three.
For purposes of this Agreement, the term "Bonus Amount" means the
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greater of (x) the highest annual discretionary incentive bonus (including cash
bonuses and stock bonuses) earned by the Executive from the Company and its
subsidiaries during the last 4 completed fiscal years of the Company immediately
preceding the date of Termination (annualized in the event the Executive was not
employed by the Company and/or any of its subsidiaries for the whole of any such
fiscal year) and (y) the Executive's anticipated bonus for the fiscal year of
the Company which includes the date of Termination.
7. Make-Whole Payments.
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(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payments and/or benefits to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with (i) the Company, (ii) any person whose actions
result in a change in ownership or effective control, or in the ownership of a
substantial portion of the assets, of the Company, covered by Section 280G(b)(2)
of the Code or (iii) any person affiliated with the Company or any such person)
as a result of such a change (collectively, the "Payments") would be subject to
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the excise tax imposed by Section 4999 of the Code and/or any similar tax that
may hereafter be imposed under any successor provision or by any taxing
authority (collectively, the "Excise Tax"), the Company shall pay the Executive
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an additional amount (a "Gross-Up Payment") such that after payment by the
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Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) For purposes of determining whether any of the Payments and the
Gross-Up Payment (collectively the "Total Payments") will be subject to the
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Excise Tax and the amount of such Excise Tax, (i) the Total Payments shall be
treated as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise
Tax, unless and except to the extent that, in the opinion of tax counsel
selected by the Executive and approved by the Company (which approval shall not
be unreasonably withheld) ("Tax Counsel") such Total Payments (in whole or in
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part) either do not constitute "parachute payments," represent reasonable
compensation for services actually rendered before the change referred to in
subparagraph (a) of this paragraph 7, within the meaning of Section 280G(b)(4)
of the Code, in excess of the "base amount," or are otherwise not subject to the
Excise Tax, and (ii) the value of any non-cash benefits or any deferred payment
or benefit shall be determined by an internationally-recognized firm of
independent public accountants selected by the Executive and approved by the
Company (which approval shall not be unreasonably withheld) (the "Accountants")
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in accordance with the principles of Section 280G of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay U.S. Federal income taxes at the highest marginal rate of U.S. Federal
income taxation in the calendar
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year in which the Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the state and locality of the
Executive's residence for the calendar year in which the Payments are to be
made, net of the maximum reduction in U.S. Federal income taxes which could be
obtained from deduction of such state and local taxes if paid in such year. All
determinations required to be made under this paragraph 7 shall be made by Tax
Counsel and, if determined by Tax Counsel, the Accountants, which shall provide
detailed supporting calculations both to the Company and the Executive within 15
business days of the receipt by the Company of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the Company.
All fees and expenses of Tax Counsel and the Accountants shall be borne solely
by the Company. Any Gross-Up Payment, as determined pursuant to this paragraph
7, shall be paid by the Company to the Executive within 5 days of the receipt of
Tax Counsel's determination; provided, however, that if the amount of such
Gross-Up Payment or portion thereof cannot be finally determined on or before
such day, the Company shall pay to the Executive on such day an estimate, as
determined in good faith by Tax Counsel or the Accountant, of the minimum amount
of such payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code), subject to
further payments pursuant to subparagraph (d) of this paragraph 7, promptly
following such time as the amount thereof can be determined. In the event that
the amount of the estimated payments exceeds the amount subsequently determined
to have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth day after demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code). Any
determination hereunder by Tax Counsel or the Accountants shall be binding upon
the Company and the Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than 10 business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company, which may
be Tax Counsel,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
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(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all costs and
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expenses (including additional interest and penalties), incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.
Without limitation on the foregoing provisions of this paragraph 7(c),
the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
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Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.
(d) In the event that the Excise Tax is subsequently determined by the
Accountants or Tax Counsel to be less than the amount taken into account
hereunder at the time the Gross-Up Payment is made, the Executive shall repay to
the Company, at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the prior Gross-Up Payment attributable to
such reduction (plus the portion of the Gross-Up Payment attributable to the
Excise Tax and the U.S. Federal, state and local income tax imposed on the
portion of the Gross-Up Payment being repaid by the Executive if such repayment
results in a reduction in Excise Tax or a U.S. Federal, state and local income
tax deduction), plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the foregoing,
in the event any portion of the Gross-Up Payment to be refunded to the Company
has been paid to any U.S. Federal, state or local tax authority, repayment
thereof (and related amounts) shall not be required until actual refund or
credit of such portion has been made to the Executive, and interest payable to
the Company shall not exceed the interest received or credited to the Executive
by such tax authority for the period it held such portion. The Executive and
the Company shall mutually agree upon the course of action to be pursued (and
the method of allocating the expense thereof) if the Executive's claim for
refund or credit is denied. In the event that the Excise Tax is later
determined by the Accountants or Tax Counsel or the Internal Revenue Service to
exceed the amount taken into account hereunder at the time the Gross-Up
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Payment is made (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such excess (plus any
interest or penalties payable with respect to such excess) at the time that the
amount of such excess is finally determined.
8. Withholding. All payments to the Executive under this Agreement
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will be subject to all applicable withholding of state and federal taxes.
9. Arbitration of All Disputes. Any controversy or claim arising
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out of or relating to this Agreement or the breach thereof shall be settled by
arbitration in Santa Ana, California, in accordance with the laws of the State
of California, by three arbitrators appointed by the parties. If the parties
cannot agree on the appointment of the arbitrators, one shall be appointed by
the Company and one by the Executive and the third shall be appointed by the
first two arbitrators. The arbitration shall be conducted in accordance with the
rules of the American Arbitration Association, except with respect to the
selection of arbitrators which shall be as provided in this paragraph 9.
Judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. In the event that it shall be necessary or
desirable, as determined by the Executive in his or her sole discretion, for the
Executive to retain legal counsel or incur other costs and expenses in
connection with interpretation or enforcement of his or her rights under this
Agreement, the Company shall pay (or the Executive shall be entitled to recover
from the Company, as the case may be) his or her reasonable attorneys' fees and
costs and expenses in connection with interpretation or enforcement of his or
her rights (including the enforcement of any arbitration award in court).
Payments shall be made to the Executive at the time such fees, costs and
expenses are incurred. If, however, the arbitrators shall determine that, under
the circumstances, payment by the Company of all or a part of any such fees and
costs and expenses would be unjust, the Executive shall repay such amounts to
the Company in accordance with the order of the arbitrators. Any award of the
arbitrators shall include interest at a rate or rates considered just under the
circumstances by the arbitrators.
10. Mitigation and Set-Off. The Executive shall not be required to
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mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise. The Company shall not be entitled to set off
against the amounts payable to the Executive under this Agreement any amounts
owed to the Company by the Executive, any amounts earned by the Executive in
other employment after termination of his employment with the Company, or any
amounts which might have been earned by the Executive in other employment had he
or she sought such other employment.
11. Notices. Any notice of Termination of the Executive's employment
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by the Company or the Executive for any reason shall be upon no less than 10
days' and no greater than 30 days' advance written notice to the other party.
Any notices, requests, demands and other communications provided for by this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail to the Executive at the last address he has filed in writing with
the Company or, in the case of the Company, to the attention of the Secretary of
the Company, at its principal executive offices.
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12. Non-Alienation. The Executive shall not have any right to
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pledge, hypothecate, anticipate or in any way create a lien upon any amounts
provided under this Agreement; and no benefits payable hereunder shall be
assignable in anticipation of payment either by voluntary or involuntary acts,
or by operation of law. Nothing in this paragraph shall limit the Executive's
rights or powers to dispose of his property by will or limit any rights or
powers which his or her executor or administrator would otherwise have.
13. Governing Law. THE PROVISIONS OF THIS AGREEMENT SHALL BE
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
APPLICATION OF CONFLICT OF LAWS PROVISIONS THEREUNDER.
14. Amendment. This Agreement may not be amended, modified, waived
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or terminated except by mutual agreement of the parties in writing.
15. Heirs of the Executive. This Agreement shall inure to the benefit of
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and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to the
Executive hereunder, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such designee, to the
Executive's estate.
16. Successors to the Company. This Agreement shall be binding upon and
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inure to the benefit of the Company and any successor of the Company. The
Company shall require (a) any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place and (b) the
parent entity of any successor in such business combination to guarantee the
performance of such successor hereunder. Failure of the Company to obtain such
assumption and agreement (and, if applicable, such guarantee) prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to receive compensation from the Company in the same
amount and on the same terms to which the Executive would be entitled hereunder
if the Executive terminated the Executive's employment for Good Reason following
a Change in Control, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the date of
Termination. Unless expressly provided otherwise, the term "Company" as used
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herein shall mean the Company as defined in this Agreement and any successor to
its business and/or assets as aforesaid.
17. Employment Status. Nothing herein contained shall be deemed to create
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an employment agreement between the Company and the Executive, providing for the
employment of the Executive by the Company for any fixed period of time. The
Executive's employment with the Company is terminable at will by the Company or
the Executive and each shall have the right to terminate the Executive's
employment with the Company at any time, with or without Cause, subject to (i)
the notice provisions of paragraphs 2, 5 and 11, and (ii) the Company's
obligation to provide severance payments as required by paragraph 6. Except as
otherwise provided in
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paragraph 5 of this Agreement, upon a termination of the Executive's employment
prior to the date of a Change in Control, there shall be no further rights under
this Agreement.
18. Severability. In the event that any provision or portion of this
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Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect.
19. Counterparts. This Agreement may be executed in two or more
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counterparts, any one of which shall be deemed the original without reference to
the other.
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IN WITNESS WHEREOF, the Executive has hereunto set his or her hand and,
pursuant to the authorization from the Committee, the Company has caused these
presents to be executed in its name and on its behalf, all as of the day and
year first above written.
"Executive"
_________________________________
THE FIRST AMERICAN FINANCIAL CORPORATION
/s/Parker S. Kennedy
PARKER S. KENNEDY
PRESIDENT
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