EXHIBIT 3(a)
RESTATED ARTICLES OF INCORPORATION
OF
THE FIRST AMERICAN FINANCIAL CORPORATION
Thomas A. Klemens certifies that:
1. He is an executive vice president and the chief financial officer of
The First American Financial Corporation, a California corporation.
2. The entire text of the articles of incorporation of said corporation
as amended to date is amended and restated as follows:
FIRST: That the name of said Corporation shall be The First American
Financial Corporation.
SECOND: The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the trust
company business or the practice of a profession permitted to be
incorporated by the California Corporations Code.
THIRD: That the place where the principal business of said
Corporation is to be transacted is Santa Ana, Orange County, State of
California.
FOURTH: This Corporation shall have perpetual existence.
FIFTH: The number of directors of this Corporation shall be no less
than nine (9) nor more than seventeen (17).
SIXTH: This Corporation is authorized to issue two classes of shares,
to be designated Common and Preferred, respectively. The number of Common
shares authorized to be issued is 36,000,000. The aggregate par value of
such Common shares is $36,000,000 and the par value of each such
share is $1.00. Each Common share shall have one vote per share. Each $1.00
par value Common share outstanding immediately preceding the effective date
of these Restated Articles of Incorporation is split up and converted into
one and one-half (1.5) $1.00 par value Common shares. The number of
Preferred shares authorized to be issued is 500,000. The aggregate par
value of such Preferred shares is $500,000 and the par value of each such
share is $1.00. The Board of Directors may fix by resolution the rights,
preferences, privileges and restrictions of any wholly unissued class or
series of shares other than the Common shares, and the series designation
and number of shares to constitute any series (which number may thereafter
in the same manner be increased or decreased), and a certificate of
determination shall then be filed with the California Secretary of State.
Pursuant to the authority vested in the Board of Directors of
this Corporation in accordance with the provisions of this Article Sixth of
these Restated Articles of Incorporation, the Board of Directors has
created a series of preferred shares of the Corporation, the amount,
designation, rights, preferences and privileges of which are as follows:
Section 1. Designation and Amount. The shares of such series shall
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be designated as "Series A Junior Participating Preferred Shares" and
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the number of shares constituting such series shall initially be one
thousand (1,000), $1.00 par value, such number of shares to be subject
to increase or decrease by action of the Board of Directors as
evidenced by a certificate of determination.
Section 2. Dividends and Distributions.
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(A) Subject to the prior and superior rights of the holders
of any shares of any series of preferred shares ranking prior and
superior to the shares of Series A Junior Participating Preferred
Shares with respect to dividends, the holders of Series A Junior
Participating Preferred Shares shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in
cash on the last day of March, June, September and December in
each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first
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Quarterly Dividend Payment Date after the first issuance of
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a share or fraction of a share of Series A Junior Participating
Preferred Shares, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100,000 times the
aggregate per share amount of all cash dividends, and 100,000
times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend
payable in Common Shares or a subdivision of the outstanding
Common Shares (by reclassification or otherwise), declared on the
common shares, $1.00 par value, of the Corporation (the "Common
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Shares") since the immediately preceding Quarterly Dividend
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Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction
of a share of Series A Junior Participating Preferred Shares. In
the event the Corporation shall at any time after October 23,
1997 (the "Rights Declaration Date") (i) declare any dividend on
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Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding
Common Shares into a smaller number of shares, then in each such
case the amount to which holders of Series A Junior Participating
Preferred Shares were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of Common Shares outstanding immediately after such
event and the denominator of which is the number of Common Shares
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Shares as provided
in paragraph (A) above immediately after it declares a dividend
or distribution on the Common Shares (other than a dividend
payable in Common Shares); provided that, in the event no
dividend or distribution shall have been declared on the Common
Shares during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $10.00 per share on the Series A Junior Participating
Preferred Shares shall
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nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding Series A Junior Participating Preferred Shares from
the Quarterly Dividend Payment Date next preceding the date of
issue of such Series A Junior Participating Preferred Shares,
unless the date of issue of such share is prior to the record
date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of Series A Junior Participating
Preferred Shares entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the Series A
Junior Participating Preferred Shares in an amount less than the
total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders
of Series A Junior Participating Preferred Shares entitled to
receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of Series A Junior
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Participating Preferred Shares shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each Series A Junior Participating Preferred Share shall
entitle the holder thereof to 100,000 votes on all matters
submitted to a vote of the shareholders of the Corporation. In
the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Shares
payable in Common Shares, (ii) subdivide the
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outstanding Common Shares, or (iii) combine the outstanding
Common Shares into a smaller number of shares, then in each such
case the number of votes per share to which holders of Series A
Junior Participating Preferred Shares were entitled immediately
prior to such event shall be adjusted by multiplying such number
by a fraction the numerator of which is the number of Common
Shares outstanding immediately after such event and the
denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of Series A Junior Participating Preferred Shares and the
holders of Common Shares shall vote together as one class on all
matters submitted to a vote of shareholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Shares shall be in arrears in an
amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a
period (herein called a "default period") which shall extend
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until such time when all accrued and unpaid dividends for
all previous quarterly dividend periods and for the current
quarterly dividend period on all Series A Junior
Participating Preferred Shares then outstanding shall have
been declared and paid or set apart for payment. During
each default period, the right to elect two (2) of the
Corporation's directors then authorized pursuant to Article
Fifth of the Corporation's Restated Articles of
Incorporation shall become vested in the holders of
preferred shares (including holders of the Series A Junior
Participating Preferred Shares) (collectively, the
"Preferred Shares") with dividends in arrears in an amount
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equal to (6) quarterly dividends thereon, voting as a class
and irrespective of series.
(ii) During any default period, such voting right of
the holders of Series A Junior Participating Pre-
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ferred Shares may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of shareholders, and
thereafter at annual meetings of shareholders, provided that
such voting right shall not be exercised unless the holders
of ten percent in number of Preferred Shares outstanding
shall be present in person or by proxy. The absence of a
quorum of the holders of Common Shares shall not affect the
exercise by the holders of Preferred Shares of such voting
right. At any meeting at which the holders of Preferred
Shares shall exercise such voting right initially during an
existing default period, they shall have the right, voting
as a class, to fill such vacancies, if any, in the Board of
Directors as may then exist up to two (2) Directors or, if
such right is exercised at an annual meeting, to elect two
(2) Directors. If the number of Directors which may be so
elected at any special meeting exceeds the vacancies, if
any, then existing in the Board of Directors, the terms of
one (1) or two (2), as the case may be, of the Directors
having served as such for the least amount of time shall
terminate in order to permit the election by the holders of
the Preferred Shares the required number of Directors. After
the holders of the Preferred Shares shall have exercised
their right to elect Directors in any default period and
during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote
of the holders of Preferred Shares as herein provided or
pursuant to the rights of any equity securities ranking
senior to or pari passu with Series A Junior Participating
Preferred Shares.
(iii) Unless the holders of Preferred Shares shall,
during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may
order, or any shareholder or shareholders owning in the
aggregate not less than ten percent (10)% of the total
number of Preferred Shares outstanding, irrespective of
series, may request, the calling of a
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special meeting of the holders of Preferred Shares, which
meeting shall thereupon be called by the Chairman of the
Board, the President or the Secretary of the Corporation.
Notice of such meeting and of any annual meeting at which
holders of Preferred Shares are entitled to vote pursuant to
this paragraph (C)(iii) shall be given to each holder of
record of Preferred Shares by mailing a copy of such notice
to him at his last address as the same appears on the books
of the Corporation. Such meeting shall be called for a time
not earlier than 10 days and not later than 60 days after
such order or request, such meeting may be called on similar
notice by any shareholder or shareholders owning in the
aggregate not less than ten percent (10)% of the total
number of Preferred Shares outstanding. Notwithstanding the
provisions of this paragraph (C)(iii), no such special
meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual
meeting of the shareholders.
(iv) In any default period, the holders of Common
Shares, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Shares
shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the
Directors so elected by the holders of Preferred Shares
shall continue in office until their successors shall have
been elected by such holders or until the expiration of the
default period, and (y) any vacancy in the Board of
Directors may (except as provided in paragraph (C)(ii) of
this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of
the class of stock which elected the Director whose office
shall have become vacant. References in this paragraph (C)
to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to
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fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Shares as
a class to elect Directors shall cease and (y) the term of
any Directors elected by the holders of Preferred Shares as
a class shall terminate. Any vacancies in the Board of
Directors effected by clause (y) in the preceding sentence
may be filled by a majority of the remaining Directors.
(D) Except as provided in this Section 3, in Section
10, or as required by law, holders of Series A Junior
Participating Preferred Shares shall have no special voting
rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common
Shares as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
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(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating
Preferred Shares as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on Series A Junior
Participating Preferred Shares outstanding shall have been paid
in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Junior Participating Preferred Shares;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a
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parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior
Participating Preferred Shares, except dividends paid
ratably on the Series A Junior Participating Preferred
Shares and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred
Shares, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such
parity stock in ex change for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
disso lution, liquidation or winding up) to the Series A
Junior Participating Preferred Shares; or
(iv) redeem or purchase or otherwise acquire for
consideration any Series A Junior Participating Preferred
Shares, or any shares of stock ranking on a parity with the
Series A Junior Participating Preferred Shares, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
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Section 5. Reacquired Shares. Any Series A Junior Participating
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Preferred Shares purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and cancelled promptly after
the acquisition thereof. All such shares upon their cancellation
become authorized but unissued Preferred Shares and may be reissued as
part of a new series of Preferred Shares to be created by resolution
or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
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(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Shares
unless, prior thereto, the holders of Series A Junior
Participating Preferred Shares shall have received $100,000 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following
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the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the
holders of Series A Junior Participating Preferred Shares unless,
prior thereto, the holders of Common Shares shall have received
an amount per share (the "Common Adjustment") equal to the
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quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100,000 (as appropriately adjusted as set
forth in subparagraph C below to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the
Common Shares) (such number in clause (ii), the "Adjustment
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Number"). Following the payment of the full amount of the Series
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A Liquidation Preference and the Common Adjustment in respect of
all outstanding Series A Junior Participating Preferred Shares
and Common Shares, respectively, holders of Series A Junior
Participating Preferred Shares and holders of Common Shares shall
receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment
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Number to 1 with respect to such Preferred Shares and Common
Shares, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all
other series of preferred stock, if any, which rank on a parity
with the Series A Junior Participating Preferred Shares, then
such remaining assets shall be distributed ratably to the holders
of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Shares.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common
Shares, or (iii) combine the outstanding Common Shares into a
smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior
to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
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enter into any consolidation, merger, combination or other transaction
in which the Common Shares are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such
case the Series A Junior Participating Preferred Shares shall at the
same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal
to 100,000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into
which or for which each Common Share is changed or exchanged. In the
event the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Shares payable in Common
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Shares, (ii) subdivide the outstanding Common Shares, or (iii) combine
the outstanding Common Shares into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of Series A Junior Participating
Preferred Shares shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which
is the number of Common Shares that were outstanding immediately prior
to such event.
Section 8. No Redemption. The Series A Junior Participating
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Preferred Shares shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating Preferred
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Shares shall rank junior to all other series of the Corporation's
Preferred Shares as to the payment of dividends and the distribution
of assets, unless the terms of any such series shall provide
otherwise.
Section 10. Amendment. The Restated Articles of Incorporation of the
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Corporation and this Certificate of Determination shall not be
amended, nor shall any other Certificate of Determination be issued or
amended, as the case may be, so as to materially and adversely alter
or change the powers, preferences or special rights of the Series A
Junior Participating Preferred Shares without the affirmative vote of
the holders of two-thirds (2/3) or more of the outstanding Series A
Junior Participating Preferred Shares, voting separately as a class.
Section 11. Fractional Shares. Series A Junior Participating
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Preferred Shares may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares,
to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders
of Series A Junior Participating Preferred Shares.
SEVENTH: That the amount of said capital stock which has been
actually subscribed is one hundred and thirty-five thousand Dollars and the
following are the names of the persons by whom the same has been
subscribed, and the amount subscribed by each of them, to wit:
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NAMES OF SUBSCRIBERS NO. OF SHARES AMOUNT
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W. S. Bartlett 50 $ 5,000.00
W. S. Bartlett, Trustee 10 1,000.00
Hiram Mabury
by W.S. Bartlett, his agent 100 10,000.00
M. M. Crookshank 30 3,000.00
C. W. Humphreys 20 2,000.00
Thos. McKeever 10 1,000.00
Victor Montgomery 30 3,000.00
Bank of America,
by Geo. H. Stewart, Cash 50 5,000.00
Frank A. Gibson 22 2,200.00
Mrs. Mary E. Fox 75 7,500.00
C. E. DeCamp 30 3,000.00
Fred 'k Stephens 20 2,000.00
C. W. Wilcox 10 1,000.00
Geo. W. Minter 20 2,000.00
C. F. Mansur 5 500.00
Joseph Yoch 20 2,000.00
The First National Bank of
Santa Ana, Cal., by J. A.
Turner, Cash 10 1,000.00
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H. J. Blee 5 500.00
J. F. Kendall 5 500.00
H. K. Snow 10 1,000.00
A. Guy Smith 10 1,000.00
Bank of Anaheim, by W. S.
Bartlett, its Pres. 10 1,000.00
James McFadden 30 3,000.00
O. F. Brant 140 14,000.00
F. G. Smythe 10 1,000.00
C. H. Parker 184 18,400.00
Geo. Taylor 10 1,000.00
C. E. Parker 428 42,800.00
A. B. Harris 96 9,600.00
EIGHTH: The Corporation elects to be governed by all of the
provisions of the California General Corporation Law of 1977 not otherwise
applicable to it under Chapter 23 thereof.
NINTH: The liability of the directors of the Corporation for monetary
damages shall be eliminated to the fullest extent permissible under
California law.
Any repeal of modification of the provisions of this Article by the
shareholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
TENTH: The Corporation is authorized to provide indemnification of
agents (as defined in Section 317 of the Corporations Code) for breach of
duty
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to the Corporation and its shareholders through bylaw provisions or through
agreements with the agents, or both, in excess of the indemnification
otherwise permitted by Section 317 of the Corporations Code, subject to the
limits on such excess indemnification set forth in Section 204 of the
Corporations Code.
Any repeal of modification of the provisions of this Article by the
shareholders of the Corporation shall not adversely affect any right or
protection of a director or other agent of the Corporation existing at the
time of such repeal of modification.
3. The foregoing amendment and restatement of the articles of
incorporation has been duly approved by the board of directors.
4. The Company has only one class of shares outstanding, its $1.00 par
value Common shares. No Series A Junior Participating Preferred Shares have
been issued. The amendment to Article Sixth effects only a stock split and
incorporation of prior amendments and certificates of determination and is an
amendment that may be adopted with approval by the Board of Directors alone
pursuant to Sections 902(c) and 910 of the California Corporations Code.
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IN WITNESS WHEREOF, the undersigned has executed this Certificate on
December 31, 1997.
/s/ THOMAS A. KLEMENS
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Thomas A. Klemens, Executive Vice President
/s/ THOMAS A. KLEMENS
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Thomas A. Klemens, Chief Financial Officer
The undersigned, Thomas A. Klemens, an Executive Vice President and the Chief
Financial Officer of The First American Financial Corporation, declares under
penalty of perjury that the matters set out in the foregoing Certificate are
true of his own knowledge.
Executed at Santa Ana, California on December 31, 1997.
/s/ THOMAS A. KLEMENS
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Thomas A. Klemens, Executive Vice President
/s/ THOMAS A. KLEMENS
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Thomas A. Klemens, Chief Financial Officer
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