Edgar Filing: FIRST AMERICAN FINANCIAL CORP

As filed with the Securities and Exchange Commission on August 8, 2001

Registration No. 333-65216

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE FIRST AMERICAN CORPORATION
(Exact Name of Registrant as Specified in its Charter)

California 95-1068610
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

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)
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Mark R Arnesen, Esq. With Copy to:
Secretary Neil W. Rust, Esq.
1 First American Way White & Case LLP
Santa Ana, California 92707-5913 633 West Fifth Street
(714) 800-3000 Los Angeles, California 90071
(213) 620-7700
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)

Approximate date of commencement of proposed sale to the public: From time
to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box:[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 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(c)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

CALCULATION OF REGISTRATION FEE

Proposed Proposed
Amount Maximum Maximum Amount of
Title of each Class of To Be Aggregate Price Aggregate Registration
Securities To Be Registered Registered per unit Offering Price Fee
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4.50% Senior Convertible Debentures Due
2008....................................... $210,000,000 100% $210,000,000 $52,500
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Common shares, $1.00 par value per share.... 7,500,000(1) N/A N/A N/A(2)
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Total................................... $52,500(3)
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(1) Plus such additional indeterminate number of shares as may become issuable
upon conversion of the senior convertible debentures registered hereunder
by means of adjustment to the conversion price applicable thereto.

(2) The common shares registered hereunder are issuable upon conversion of the
senior convertible debentures registered hereunder. Pursuant to Rule 457(i)
under the Securities Act, there is no filing fee with respect to the common
shares issuable upon exercise of the conversion privilege.

(3) Registration fee was previously paid.

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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

[First American Logo]

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$210,000,000 Principal Amount of
4.50% Senior Convertible Debentures Due 2008
(Interest Payable April 15 and October 15)

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7,500,000 Common Shares
(subject to adjustment)

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On April 24, 2001, we issued and sold $210,000,000 principal amount of our
4.50% senior convertible debentures due 2008 in a private offering. The initial
purchasers of the senior convertible debentures subsequently transferred their
senior convertible debentures to various other holders. In connection with the
private offering, we agreed to register the senior convertible debentures and
the common shares into which the senior convertible debentures are convertible
to facilitate secondary trading by these holders, who we refer to as selling
securityholders. This prospectus is part of a registration statement that
fulfills that obligation. All securities offered by this prospectus are offered
by selling securityholders. The principal terms of the senior convertible
debentures include the following:

Aggregate Principal Amount: $210,000,000
Interest Rate: 4.50% per year
Maturity Date: April 15, 2008, unless earlier redeemed
Conversion Rate: $28.00 in principal amount per common share,
for a total of 7,500,000 common shares
(subject to adjustment)

In addition, at certain times and under certain circumstances some or all of
the senior convertible debentures may be redeemed by us and upon a change in
control of The First American Corporation, holders of the senior convertible
debentures will have the right to require us to repurchase the senior
convertible debentures. You can find a more extensive description of the senior
convertible debentures beginning on page 6.

The senior convertible debentures are not secured and are senior to all of
our existing or future indebtedness that is by its terms expressly subordinated
to the senior convertible debentures. The senior convertible debentures will
rank equally with all of our senior unsecured indebtedness, including
approximately $99,504,000 of 7.55% senior debentures maturing in 2028, but will
be effectively subordinate to the indebtedness of our subsidiaries. The senior
convertible debentures do not restrict us or our subsidiaries from incurring
additional debt.

The senior convertible debentures have been designated eligible for trading
on the Private Offerings, Resales and Trading through Automated Linkages, or
PORTAL, Market. However, any senior convertible debentures sold under this
prospectus will no longer trade in the PORTAL Market. Our common shares are
traded on the New York Stock Exchange under the trading symbol "FAF." The
securities offered by this prospectus may be offered in negotiated transactions
or otherwise, at negotiated prices or at the market prices prevailing at the
time of sale.

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YOU SHOULD READ CAREFULLY THE "RISK FACTORS"

BEGINNING ON PAGE 4 BEFORE DECIDING

WHETHER TO INVEST IN OUR SENIOR CONVERTIBLE DEBENTURES OR COMMON SHARES.

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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 August 8, 2001

TABLE OF CONTENTS

Page
----

Prospectus Summary......................................................... 1

Risk Factors............................................................... 4

Ratio of Earnings to Fixed Charges......................................... 6

Use of Proceeds............................................................ 6

Description of Senior Convertible Debentures............................... 6

Description of Capital Stock............................................... 23

Selling Securityholders.................................................... 25

Plan of Distribution....................................................... 30

About this Prospectus...................................................... 32

Documents Incorporated by Reference........................................ 33

Special Note of Caution Regarding Forward-Looking Statements .............. 33

Legal Matters.............................................................. 34

Experts.................................................................... 34

PROSPECTUS SUMMARY

This summary highlights information described more fully elsewhere in this
prospectus. It may not contain all the information you should consider before
investing in our senior convertible debentures or common shares. You should
read this entire prospectus and the registration statement of which this
prospectus is a part before making an investment decision.

The First American Corporation

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:

. Getting a job

. Renting an apartment

. Buying a car

. Buying a house, boat or airplane

. Arranging a mortgage

. Opening or buying a business

. Retirement

The following is a list of our major products and services, categorized by
business segment:

Title Insurance and Services
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. Equity loan services . Subdivision title insurance
. Lender services . 1031 tax-deferred exchange services
. National/Commercial title . Title and escrow systems
insurance . Aircraft and vessel title insurance
. Residential title insurance

Real Estate Information and Services
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. Default management services . Field inspections
. Credit reporting and information . Mortgage origination/servicing
management software systems
. Residential and commercial . Appraisal and property valuation
real estate tax reporting and . Property characteristic and
valuation services valuation information
. Flood determination and . Title plant and document imaging
compliance services
. Mortgage document services

Consumer Information and Services
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. Pre-employment screening . Banking services
. Resident screening . Consumer credit reports
. Specialized credit reporting . Home warranty
. Sub-prime consumer information . Investment services
. Vehicle information and . Property and casualty insurance
insurance tracking
. 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.

The Senior Convertible Debentures

Securities Offered............ $210,000,000 in aggregate principal amount of
4.50% senior convertible debentures due 2008.
The senior convertible debentures are
convertible into our common shares. Each of our
common shares includes a right to purchase a
fraction of a Series A Participating Preferred
Share under certain circumstances. See
"Description of Capital Stock--Rights to
Purchase Preferred Shares."

Maturity...................... April 15, 2008, unless earlier redeemed,
repurchased or converted.

Interest Payment Dates........ April 15 and October 15 of each year, beginning
October 15, 2001.

Interest Rate................. 4.50% per year, subject to adjustment under
certain circumstances. See "Description of
Senior Convertible Debentures--Interest."

Optional Conversion by Holders may convert the senior convertible
Holders....................... debentures into our common shares at any time
prior to or on the first business day preceding
April 15, 2008, unless previously redeemed or
repurchased, initially at a conversion price of
$28.00 per common share (equal to a conversion
rate of 35.7143 shares per $1,000 principal
amount of senior convertible debentures),
subject to adjustment under certain
circumstances. See "Description of Senior
Convertible Debentures--Conversion Rights."

Optional Redemption by First On or after April 15, 2004, we may redeem some
American...................... or all of the senior convertible debentures at
the redemption prices, plus accrued and unpaid
interest to but excluding the redemption date,
set forth under "Description of Senior
Convertible Debentures--Optional Redemption by
First American."

Right of Holders to Require Each holder of the senior convertible
Repurchase.................... debentures may require us to repurchase some or
all of the holder's senior convertible
debentures at 100% of their principal amount
plus accrued and unpaid interest in certain
circumstances involving a change of control.
See "Description of Senior Convertible
Debentures--Repurchase at Option of Holders
upon a Change of Control."

Form, Denomination and The senior convertible debentures have been
Registration.................. issued in fully registered form in
denominations of $1,000.

Senior convertible debentures sold by the
selling securityholders pursuant to the
registration statement of which this prospectus
forms a part will be represented by a global
senior convertible debenture deposited with the
trustee as custodian for The

Depository Trust Company and registered in the
name of Cede & Co., DTC's nominee. Investors
may hold their interests in the global senior
convertible debenture directly through DTC if
they are DTC participants, or indirectly
through organizations that are DTC
participants.

Investors who purchase senior convertible
debentures in offshore transactions in reliance
on Regulation S under the Securities Act may
hold their interests in the global senior
convertible debenture directly through the
Euroclear System and Clearstream Banking, if
they are participants in these systems, or
indirectly through organizations that are
participants in these systems. Euroclear and/or
Clearstream hold interests in the global senior
convertible debenture on behalf of their
participants through their respective
depositaries, which in turn hold the interests
in the global senior convertible debenture in
customers' securities accounts in the
depositaries' names on the books of DTC.

See "Description of Senior Convertible
Debentures--Form, Denomination and
Registration."

Use of Proceeds............... We will not receive any of the proceeds from
the sale of the securities covered by this
prospectus.

Absence of a Public Market The senior convertible debentures are new
for the Senior Convertible securities. We cannot assure you that any
Debentures.................... active or liquid market will develop or be
sustained for the senior convertible
debentures. See "Plan of Distribution."

Trading....................... The senior convertible debentures have been
declared eligible for trading in the Private
Offerings, Resales and Trading through
Automated Linkages market, known as PORTAL.
However, any senior convertible debentures sold
under this prospectus will no longer trade in
the PORTAL market.

NYSE Symbol for Our Common Our common shares are traded on the New York
Shares........................ Stock Exchange under the trading symbol "FAF."

RISK FACTORS

You should carefully consider the risks described below and other
information contained in this prospectus and the registration statement of
which this prospectus is a part before making an investment decision. We cannot
assure you that any of the events discussed in the risk factors below will not
occur. If they do, our business, financial condition or results of operations
could be materially adversely affected. In such case, the trading price of our
securities could decline, and you might lose all or part of your investment.

Our revenues may decline during periods when the demand for our products
decreases

Our revenues derived from real-estate related products 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:

. when mortgage rates are high;

. when the mortgage fund supply is limited; and

. when the United States economy is weak.

We believe that this trend will recur.

As a holding company, we depend on distributions from our subsidiaries, and if
distributions from our subsidiaries are materially impaired, our ability to pay
interest on or repay principal of the senior convertible debentures and to
declare and pay dividends on our common shares may be adversely affected

We are a holding company whose primary assets are the securities of our
operating subsidiaries. Our ability to pay interest on and repay principal of
the senior convertible debentures and to pay dividends on our common shares 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 pay interest or repay principal on the senior
convertible debentures or declare and pay dividends on our common shares.
Moreover, pursuant to insurance and other regulations under which our insurance
subsidiaries operate, the amount of dividends, loans and advances available to
us from our regulated subsidiaries 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.

As we are a holding company, the senior convertible debentures will effectively
be junior to all prior claims of creditors of our subsidiaries

Our status as a shareholder of our subsidiaries means that we will be
subject to the prior claims of creditors of our subsidiaries, except to the
extent that we have a claim as a creditor. For example, we would be a creditor
of a subsidiary if we make a loan to that subsidiary. As a result, the senior
convertible debentures will effectively be junior to all existing and future
liabilities and obligations of our subsidiaries and you should look only to the
assets of our company for payments on the senior convertible debentures. As of
December 31, 2000, our subsidiaries had liabilities and obligations of
approximately $1.07 billion to creditors other than us.

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 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 adversely
affect our financial performance.

Current legal proceedings may have a material adverse effect on our financial
condition or results of operations

On May 19, 1999, the State of California and the controller and insurance
commissioner of the State of California filed a class action suit in the state
court in Sacramento. Initially, the action sought 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:

. failed to give unclaimed property to the State of California on a timely
basis;

. charged California home buyers and other escrow customers fees for
services that were never performed or which cost less than the amount
charged; and

. 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.

Since the initial filing of the suit, the California Attorney General's
Office, on behalf of the State, the controller and the insurance commissioner,
indicated that it would not seek to certify a class of defendants, but would
instead amend its suit to name an unspecified number of title underwriters and
underwritten title companies. To date, the Attorney General has neither amended
the suit, nor to our knowledge taken steps to progress with it, including the
service of process on any party. The Attorney General, however, has entered
into settlement discussions with various title insurance underwriters,
including certain of our subsidiaries. Additionally, the Attorney General
indicated that it will address issues pertaining to escheat obligations through
routine audits conducted by the controller's office, rather than through
litigation.

Subsequent to the filing of this lawsuit, First American Title Insurance
Company, a subsidiary of ours, 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 has not progressed beyond limited document production.

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 our rights plan may make a takeover of us
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.

Our ability to repurchase the senior convertible debentures upon a change of
control may be limited

In certain circumstances involving a change of control, you may require us
to repurchase some or all of your senior convertible debentures. We cannot
assure you that we will have sufficient financial resources at such time or
would be able to arrange financing to pay the repurchase price of the senior
convertible debentures. Our ability to repurchase the senior convertible
debentures in such event may be limited by law or by the terms of such
agreements as we may enter into from time to time. We may be required to
refinance our other debts or incur new debts in order to make such payments.

You may not be able to sell your senior convertible debentures

The senior convertible debentures are not currently traded on any
securities exchange. Although the senior convertible debentures have been
declared eligible for trading in the PORTAL market, any senior convertible
debentures sold under this prospectus will no longer trade in the PORTAL
market. We cannot predict whether an active trading market for the senior
convertible debentures will develop or be sustained. If an active market for
the senior convertible debentures fails to develop or be sustained, the
trading price of the senior convertible debentures could fall. If an active
trading market were to develop, the senior convertible debentures could trade
at prices that may be lower than the initial offering price. Whether or not
the senior convertible debentures trade at lower prices depends on many
factors, including:

. prevailing interest rates;

. the markets for similar securities;

. general economic conditions; and

. our financial condition, historical financial performance and future
prospects.

RATIO OF EARNINGS TO FIXED CHARGES

Our consolidated ratio of earnings to fixed charges is set forth below for
each of the periods indicated:

Three Months
Year Ended December 31 Ended
------------------------ March 31
1996 1997 1998 1999 2000 2001
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Earnings to Fixed Charges.............. 5.80 5.25 9.95 4.59 3.72 3.70

For purposes of computing the ratio of earnings to fixed charges, earnings
represent net income before cumulative effect of a change in accounting
principle plus applicable income taxes, minority interests and fixed charges.
Fixed charges represent interest expense, capitalized interest and the
interest factor of rent expense.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of the securities
covered by this prospectus.

DESCRIPTION OF SENIOR CONVERTIBLE DEBENTURES

We have issued the senior convertible debentures under an indenture between
us and Wilmington Trust Company, as trustee. The terms of the senior
convertible debentures include those provided in the indenture and those
provided in the registration rights agreement, which we have entered into with
the initial purchasers.

The following description is only a summary of the material provisions of
the senior convertible debentures, the indenture and the registration rights
agreement. We urge you to read these documents in their entirety because they,
and not this description, define your rights as holders of these senior
convertible debentures. You may request copies of these documents at our
address set forth under the caption "Prospectus Summary" above.

When we refer to First American in this section, we refer only to The First
American Corporation, a corporation organized under the laws of California, and
not its subsidiaries.

Brief Description of the Senior Convertible Debentures

The senior convertible debentures are:

. limited to $210,000,000;

. general unsecured senior obligations;

. convertible into our common shares at a conversion price of $28.00 per
share, subject to adjustment as described under "--Conversion Rights";

. redeemable at our option in whole or in part beginning on April 15, 2004
upon the terms and at the redemption prices set forth under "--Optional
Redemption by First American," plus accrued and unpaid interest;

. subject to repurchase by us at your option if a change of control of
First American, as described under "--Repurchase at Option of Holders
upon a Change of Control" below, occurs; and

. due on April 15, 2008, unless earlier redeemed by us at our option or
converted or repurchased by us at your option.

The indenture does not contain any financial covenants and does not restrict
us from paying dividends, incurring other indebtedness or issuing or
repurchasing our other securities. The indenture also does not protect you in
the event of a highly leveraged transaction or a change of control of First
American except to the extent described under "--Repurchase at Option of
Holders upon a Change of Control" below.

You may present definitive senior convertible debentures for conversion,
registration of transfer and exchange, without service charge, at our office or
agency in New York City, which will initially be the office or agency of the
trustee or its correspondent in New York City. For information regarding
conversion, registration of transfer and exchange of the global senior
convertible debenture, see "--Form, Denomination and Registration."

Interest

The senior convertible debentures bear interest from April 24, 2001 at the
rate of 4.50% per year, subject to adjustment upon the occurrence of a Reset
Transaction. See "--Interest Rate Adjustments" below. We will pay interest
semiannually in arrears on April 15 and October 15 of each year to the holders
of record at the close of business on the preceding April 1 and October 1,
respectively, beginning October 15, 2001. There are two exceptions to the
preceding sentence:

(1) In general, we will not pay interest accrued and unpaid on any senior
convertible debenture that is converted into our common shares. See "--
Conversion Rights." Consequently, if a holder of senior convertible debentures
converts after a record date for an interest payment but prior to the
corresponding interest payment date, it will receive on the interest payment
date interest accrued and unpaid on such senior convertible debentures,
notwithstanding the conversion of such senior convertible debentures prior to
such interest payment date, because such holder will have been the holder of
record on the corresponding record date. However, at the time such holder
surrenders such senior convertible debentures for conversion, it must pay us an
amount equal to the interest that has accrued and will be paid on the interest
payment date. However, the preceding sentence does not apply if we call the
senior convertible debentures for redemption, and the redemption date is after
a record date for an interest payment but prior to the corresponding interest
payment date and a holder chooses to convert such senior convertible debentures
prior to the redemption date. In such case, the holder will not be required to
pay us, at the time it surrenders such senior convertible debentures for
conversion, the amount of interest on such senior convertible debentures it
will receive on the interest payment date.

(2) We will pay interest to a person other than the holder of record on the
record date if we redeem the senior convertible debentures on a date that is
after the record date and prior to the corresponding interest payment date. In
this instance, we will pay interest accrued and unpaid on the senior
convertible debentures being redeemed to but not including the redemption date
to the same person to whom we pay the principal of such senior convertible
debentures.

Except as provided below, we will pay interest on:

. the global senior convertible debenture to DTC in immediately available
funds;

. any definitive senior convertible debentures having an aggregate
principal amount of $5,000,000 or less by check mailed to the holders of
these senior convertible debentures; and

. any definitive senior convertible debentures having an aggregate
principal amount of more than $5,000,000 by wire transfer in immediately
available funds at the election of the holders of these senior
convertible debentures.

At maturity, we will pay interest on the definitive senior convertible
debentures at our office or agency in New York City, which initially will be
the office or agency of the trustee or its correspondent in New York City.

We will pay principal and premium, if any, on:

. the global senior convertible debenture to DTC in immediately available
funds; and

. any definitive senior convertible debentures at our office or agency in
New York City, which initially will be the office or agency of the
trustee or its correspondent in New York City.

Interest generally will be computed on the basis of a 360-day year
comprised of twelve 30-day months.

Interest Rate Adjustments

If a Reset Transaction occurs, the interest rate will be adjusted to equal
the Adjusted Interest Rate from the effective date of such Reset Transaction
to, but not including, the effective date of any succeeding Reset Transaction.

A "Reset Transaction" means:

. a merger, consolidation or statutory share exchange to which the entity
that is the issuer of the common shares into which the senior
convertible debentures are then convertible is a party;

. a sale of all or substantially all the assets of that entity;

. a recapitalization of those common shares; or

. a transaction or distribution described in clause (4) of the seventh
paragraph under "--Conversion Rights" below, after the effective date of
which transaction or distribution the senior convertible debentures
would be convertible into:

. shares of an entity the common stock of which had a dividend yield
for the four fiscal quarters of such entity immediately preceding the
public announcement of the transaction or distribution that was more
than 2.5 percentage points higher than the dividend yield on our
common shares (or other common stock then issuable upon conversion of
the senior convertible debentures) for the four fiscal quarters
preceding the public announcement of the transaction or distribution;
or

. shares of an entity that announces a dividend policy prior to the
effective date of the transaction or distribution which policy, if
implemented, would result in a dividend yield on that entity's common
stock for the next four fiscal quarters that would result in such a
2.5 percentage point increase over the dividend yield on our common
shares (or other common stock then issuable upon conversion of the
senior convertible debentures) for the four fiscal quarters preceding
such announcement.

The "Adjusted Interest Rate" with respect to any Reset Transaction will be
the rate per year that is the arithmetic average of the rates quoted by two
dealers engaged in the trading of convertible securities selected by us or our
successor as the rate at which interest should accrue so that the fair market
value, expressed in dollars, of a senior convertible debenture immediately
after the later of:

. the public announcement of the Reset Transaction; or

. the public announcement of a change in dividend policy in connection
with the Reset Transaction,

will most closely equal the average Trading Price of a senior convertible
debenture for the 20 trading days preceding the date of public announcement of
the Reset Transaction. However, the Adjusted Interest Rate will not be less
than 4.50% per year.

For purposes of the definition of Reset Transaction, the dividend yield on
any security for any period means the dividends paid or proposed to be paid
pursuant to an announced dividend policy on the security for that period
divided by, if with respect to dividends paid on that security, the average
Trading Price of the security during that period and, if with respect to
dividends proposed to be paid on the security, the Trading Price of such
security on the effective date of the related Reset Transaction.

The "Trading Price" of a security on any date of determination means:

. the closing sale price (or, if no closing sale price is reported, the
last reported sale price) of a security (regular way) on the New York
Stock Exchange on that date;

. if that security is not listed on the NYSE on that date, the closing
sale price as reported on that date by the Nasdaq National Market;

. if that security is not listed on the NYSE and not quoted on the Nasdaq
National Market on that date, the closing sale price as reported on that
date in the composite transactions for the principal U.S. securities
exchange on which that security is listed;

. if that security is not so reported, the last price quoted by
Interactive Data Corporation for that security on that date or, if
Interactive Data Corporation is not quoting such price, a similar
nationally recognized quotation service selected by us;

. if that security is not so quoted, the average of the mid-point of the
last bid and ask prices for that security on that date from at least two
dealers recognized as market-makers for that security selected by us for
this purpose; or

. if that security is not so quoted, the average of that last bid and ask
prices for that security on that date from a dealer engaged in the
trading of convertible securities selected by us for this purpose.

Conversion Rights

You may convert any outstanding senior convertible debentures (or portions
of outstanding senior convertible debentures) into our common shares, initially
at the conversion price of $28.00 per share (equal to a conversion rate of
35.7143 shares per $1,000 principal amount of senior convertible debentures).
The conversion price is, however, subject to adjustment as described below. You
will not receive fractional common shares upon conversion of senior convertible
debentures. Instead, we will pay a cash adjustment based upon the Trading Price
of our common shares on the business day immediately preceding the conversion
date. You may convert the senior convertible debentures only in denominations
of $1,000 and whole multiples of $1,000.

You may exercise conversion rights at any time prior to the close of
business on the business day preceding the maturity date of the senior
convertible debentures. However, if you are a holder of senior convertible
debentures that have been called for redemption, you must exercise your
conversion rights prior to the close of business on the second business day
preceding the redemption date, unless we default in payment of the redemption
price. In addition, if you have exercised your right to require us to
repurchase your senior

convertible debentures because a change of control has occurred, you may
convert your senior convertible debentures into our common shares only if you
withdraw your notice and convert your senior convertible debentures prior to
the close of business on the business day immediately preceding the change of
control repurchase date.

Except as provided below, if you convert your senior convertible debentures
into our common shares on any day other than an interest payment date, you will
not receive any interest that has accrued on those senior convertible
debentures. By delivering to the holder the number of common shares issuable
upon conversion, determined by dividing the principal amount of the senior
convertible debentures being converted by the conversion price, together with a
cash payment, if any, in lieu of fractional shares, we will satisfy our
obligation with respect to the senior convertible debentures. That is, accrued
but unpaid interest will be deemed to be forfeited. If you convert after a
record date for an interest payment but prior to the corresponding interest
payment date, you will receive on the interest payment date interest accrued
and unpaid on such senior convertible debentures, notwithstanding the
conversion of such senior convertible debentures prior to such interest payment
date, because you will have been the holder of record on the corresponding
record date. However, at the time you surrender such senior convertible
debentures for conversion, you must pay us an amount equal to the interest that
has accrued and will be paid on the senior convertible debentures being
converted on the interest payment date. However, the preceding sentence does
not apply to senior convertible debentures that have been converted after being
called by us for redemption. Accordingly, if we call your senior convertible
debentures for redemption, and the redemption date is after a record date for
an interest payment but prior to the corresponding interest payment date and
you choose to convert your senior convertible debentures prior to the
redemption date, you will not be required to pay us at the time you surrender
such senior convertible debentures for conversion the amount of interest on
such senior convertible debentures you will receive on the date that has been
fixed for redemption. Furthermore, if we call your senior convertible
debentures for redemption on a date that is prior to a record date for an
interest payment date, and prior to the redemption date you choose to convert
your senior convertible debentures, you will receive on the date that has been
fixed for redemption the amount of interest you would have received if you had
not converted your senior convertible debentures.

You will not be required to pay any taxes or duties relating to the issuance
or delivery of our common shares if you exercise your conversion rights, but
you will be required to pay any tax or duty which may be payable relating to
any transfer involved in the issuance or delivery of the common shares in a
name other than yours. Certificates representing common shares will be issued
or delivered only after all applicable taxes and duties, if any, payable by you
have been paid.

To convert interests in the global senior convertible debenture, you must
deliver to DTC the appropriate instruction form for conversion pursuant to
DTC's conversion program. If application has been made to make the underlying
common shares eligible for trading on Euroclear or Clearstream, the normal
operating procedures of Euroclear or Clearstream, as applicable, shall be
followed. To convert a definitive senior convertible debenture, you must:

. complete the conversion notice on the back of the senior convertible
debenture (or a facsimile thereof);

. deliver the completed conversion notice and the senior convertible
debentures to be converted to the specified office of the conversion
agent;

. pay all funds required, if any, relating to interest on the senior
convertible debentures to be converted to which you are not entitled, as
described in the second preceding paragraph; and

. pay all taxes or duties, if any, as described in the preceding
paragraph.

The conversion date will be the date on which all of the foregoing
requirements have been satisfied. The senior convertible debentures will be
deemed to have been converted immediately prior to the close of business on the
conversion date. A certificate for the number of common shares into which the
senior convertible

debentures are converted (and cash in lieu of any fractional shares) will be
delivered as soon as practicable on or after the conversion date.

We will adjust the initial conversion price for certain events, including:

(1) issuances of our common shares as a dividend or distribution on our
common shares;

(2) certain subdivisions, splits and combinations of our common shares;

(3) issuances to all holders of our common shares of rights or warrants to
purchase our common shares (or securities convertible into our common
shares) at less than (or having a conversion price per share less than)
the current market price (calculated as provided in the indenture) of
our common shares, other than pursuant to our existing rights plan
referred to in "Description of Capital Stock--Rights to purchase
preferred shares";

(4) distributions to all holders of our common shares of shares of our
capital stock (other than our common shares), evidences of our
indebtedness or assets (including securities, but excluding:

(a) the rights and warrants referred to in clause (3) above,

(b) any dividends and distributions in connection with a
reclassification, change, consolidation, merger, combination, sale
or conveyance resulting in a change in the conversion consideration
pursuant to the second succeeding paragraph, or

(5) distributions consisting exclusively of cash to all holders of our
common shares to the extent that such distributions, combined together
with:

(a) all other such cash distributions made within the preceding 12
months for which no adjustment has been made, plus

(b) any cash and the fair market value of other consideration paid for
any tender offers by us or any of our subsidiaries for our common
shares expiring within the preceding 12 months for which no
adjustment has been made,

exceed 10% of our market capitalization on the record date for such
distribution; market capitalization is the product of the then current market
price of our common shares times the number of our common shares then
outstanding; and

(6) purchases of our common shares pursuant to a tender offer made by us or
any of our subsidiaries to the extent that the same involves an
aggregate consideration that, together with:

(a) any cash and the fair market value of any other consideration paid
in any other tender offer by us or any of our subsidiaries for our
common shares expiring within the 12 months preceding such tender
offer for which no adjustment has been made, plus

(b) the aggregate amount of any all-cash distributions referred to in
clause (5) above to all holders of our common shares within 12
months preceding the expiration of tender offer for which no
adjustments have been made,

exceeds 10% of our market capitalization on the expiration of such tender
offer.

We will not make an adjustment in the conversion price unless such
adjustment would require a change of at least 1% in the conversion price then
in effect at such time. We will carry forward and take into account in any
subsequent adjustment any adjustment that would otherwise be required to be
made. Except as stated above, we will not adjust the conversion price for the
issuance of our common shares or any securities convertible into or
exchangeable for our common shares or carrying the right to purchase any of the
foregoing.

If we:

. reclassify or change our common shares (other than changes resulting
from a subdivision, split or combination); or

. consolidate or combine with or merge into any person, or sell or convey
to another person all or substantially all of our property and assets,
or liquidate, dissolve or wind up,

and the holders of our common shares receive stock, other securities or other
property or assets (including cash or any combination thereof) with respect to
or in exchange for their common shares, the holders of the senior convertible
debentures may convert the senior convertible debentures into the consideration
they would have received if they had converted their senior convertible
debentures immediately prior to such reclassification, change, consolidation,
combination, merger, sale or conveyance. We may not become a party to any such
transaction unless its terms are consistent with the foregoing.

If we distribute shares of capital stock of a subsidiary of ours, the
conversion price will be adjusted, if at all, based on the market value of the
subsidiary stock so distributed relative to the market value of our common
shares, in each case over a measurement period following the distribution.

The conversion price at which, and the property or assets into which, the
senior convertible debentures are convertible after an adjustment described in
this section "--Conversion Rights" will be subject to further adjustment in the
same manner when subsequent events of the type described in this section occur.

If a taxable distribution to holders of our common shares or other
transaction occurs which results in any adjustment of the conversion price, you
may, in certain circumstances, be deemed to have received a distribution
subject to U.S. income tax as a dividend. In certain other circumstances, the
absence of an adjustment may result in a taxable dividend to the holders of our
common shares.

We may from time to time, to the extent permitted by law, reduce the
conversion price of the senior convertible debentures by any amount for any
period of at least 20 days. In that case, we will give at least 15 days' notice
of such decrease. We may make such reductions in the conversion price, in
addition to those set forth above, as our board of directors deems advisable to
avoid or diminish any income tax to holders of our common shares resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.

Optional Redemption by First American

We may not redeem the senior convertible debentures in whole or in part at
any time prior to April 15, 2004. At any time on or after April 15, 2004, we
may redeem some or all of the senior convertible debentures on at least 20 but
not more than 60 days' notice, at the following redemption prices (expressed in
percentages of the principal amount).

Redemption
During the Twelve Months Commencing Price
----------------------------------- ----------

April 15, 2004.................................................... 102.250%
April 15, 2005.................................................... 101.500%
April 15, 2006.................................................... 100.750%
April 15, 2007.................................................... 100.000%

In addition, we will pay interest on the senior convertible debentures being
redeemed, including those senior convertible debentures which are converted
into our common shares after the date the notice of the redemption is mailed
and prior to the redemption date. This interest will include interest accrued
and unpaid to, but excluding, the redemption date. If the redemption date is an
interest payment date, we will pay the interest to the holder of record on the
corresponding record date, which may or may not be the same person to whom we
will pay the redemption price.

If we do not redeem all of the senior convertible debentures, the trustee
will select the senior convertible debentures to be redeemed in principal
amounts of $1,000 or whole multiples of $1,000 by lot or on a pro rata basis.
If any senior convertible debentures are to be redeemed in part only, we will
issue a new senior convertible debenture or senior convertible debentures equal
in principal amount to the unredeemed principal portion thereof. If a portion
of your senior convertible debentures is selected for partial redemption and
you convert a portion of your senior convertible debentures, the converted
portion will be deemed to be taken from the portion selected for redemption.

Repurchase at Option of Holders upon a Change of Control

If a change of control occurs, you will have the right to require us to
repurchase all of your senior convertible debentures not previously called for
redemption, or any portion of those senior convertible debentures that is equal
to $1,000 or a whole multiple of $1,000. The repurchase price of a senior
convertible debenture will be equal to 100% of its principal amount plus
accrued and unpaid interest.

Payment of the purchase price for a senior convertible debenture for which a
purchase notice has been delivered and not validly withdrawn is conditioned
upon delivery of the senior convertible debenture, together with necessary
endorsements, to the paying agent, who initially is Wilmington Trust Company,
at any time after delivery of the purchase notice. Payment of the purchase
price for the senior convertible debenture will be made promptly following the
later of the purchase date or the time of delivery of the senior convertible
debenture.

Holders may surrender a senior convertible debenture for purchase by us by
means of book entry delivery in accordance with the provisions set forth in the
indenture and the regulations of DTC. A senior convertible debenture will be
considered to have been surrendered to a paying agent upon receipt by such
paying agent of a copy of an irrevocable notice given by DTC to the holder of
the certificate corresponding to such senior convertible debenture instructing
it to deliver such certificate to the relevant registrar for cancellation.

If the paying agent holds money or securities sufficient to pay the purchase
price of the senior convertible debenture on the business day following the
purchase date in accordance with the terms of the indenture, then, immediately
after the purchase date, the senior convertible debenture will cease to be
outstanding and interest on such senior convertible debenture will cease to
accrue, whether or not the senior convertible debenture is delivered to the
paying agent. Thereafter, all other rights of the holder shall terminate, other
than the right to receive the purchase price upon delivery of the senior
convertible debenture.

No senior convertible debentures may be purchased at the option of holders
if there has occurred and is continuing an Event of Default with respect to the
senior convertible debentures described under "--Events of Default" other than
a default in the payment of the purchase price with respect to such senior
convertible debentures.

Within 30 days after the occurrence of a change of control, we are required
to give you notice of the occurrence of the change of control and of your
resulting repurchase right. The repurchase date is 30 days after we give notice
of a change of control.

To exercise the repurchase right, you must deliver, prior to the close of
business on the business day immediately preceding the repurchase date, written
notice to the trustee of your exercise of your repurchase right.

The repurchase notice given by each holder electing to require us to
repurchase senior convertible debentures must state:

. the certificate numbers of the holder's senior convertible debentures to
be delivered for purchase;

. the portion of the principal amount of senior convertible debentures to
be purchased, which must be $1,000 or an integral multiple of $1,000;
and

. that the senior convertible debentures are to be purchased by us
pursuant to the applicable provisions of the senior convertible
debentures.

You may withdraw a repurchase notice by delivering to the paying agent a
notice of withdrawal prior to the close of business on the business day
immediately preceding the repurchase date.

The notice of withdrawal must state:

. the principal amount of senior convertible debentures being withdrawn;

. the certificate numbers of the senior convertible debentures being
withdrawn; and

. the principal amount, if any, of the senior convertible debentures that
remains subject to the repurchase notice.

A "change of control" will be deemed to have occurred at such time after the
original issuance of the senior convertible debentures when any of the
following has occurred:

. the acquisition by any person, including any syndicate or group deemed
to be a "person" under Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended, of beneficial ownership, directly or indirectly,
through a purchase, merger or other acquisition transaction or series of
transactions of shares of our capital stock entitling that person to
exercise 50% or more of the total voting power of all shares of our
capital stock entitled to vote generally in elections of directors,
other than any acquisition by us, any of our subsidiaries, or any of our
employee benefit plans (except that such person shall be deemed to have
beneficial ownership of all securities that such person has the right to
acquire, whether such right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition); or

. the first day on which a majority of the members of the board of
directors of First American are not continuing directors or directors
nominated by continuing directors; or

. our consolidation or merger with or into any other person, any merger of
another person into us, or any conveyance, transfer, sale, lease or
other disposition of all or substantially all of our properties and
assets to another person, other than any transaction (A) that does not
result in any reclassification, conversion, exchange or cancellation of
outstanding shares of our capital stock and (B) pursuant to which
holders of our capital stock immediately prior to the transaction have
the entitlement to exercise, directly or indirectly, 50% or more of the
total voting power of all shares of our capital stock entitled to vote
generally in the election of directors of the continuing or surviving
person immediately after the transaction.

However, a change of control will be deemed not to have occurred if:

(1) at least 90% of the consideration in the transaction or transactions
constituting a change of control consists of securities traded or to be
traded immediately following such change of control on a national
securities exchange or the Nasdaq National Market and, as a result of
such transaction or transactions, the senior convertible debentures
become convertible solely into such security; or

(2) the closing sale price per share of our common shares for any five
trading days within:

. the period of 10 consecutive trading days ending immediately after
the later of the change of control or the public announcement of the
change of control, in the case of a change of control under the
first clause under the definition of "change of control" above; or

. the period of 10 consecutive trading days ending immediately before
the change of control, in the case of a change of control under the
second clause under the definition of "change of control" above,

equals or exceeds 110% of the conversion price of the senior convertible
debentures in effect on each such trading day. Beneficial ownership shall be
determined in accordance with Rule 13d-3 promulgated by the SEC under the
Exchange Act. The term "person" includes any syndicate or group which would be
deemed to be a "person" under Section 13(d)(3) of the Exchange Act.

In connection with any purchase offer, we will:

. comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then be applicable;
and

. file Schedule TO or any other required schedule under the Exchange Act.

We may, to the extent permitted by applicable law, at any time purchase the
senior convertible debentures in the open market or by tender at any price or
by private agreement. Any senior convertible debenture so purchased by us may,
to the extent permitted by applicable law, be reissued or resold or may be
surrendered to the trustee for cancellation. Any senior convertible debentures
surrendered to the trustee may not be reissued or resold and will be canceled
promptly.

The change of control feature of the senior convertible debentures may in
certain circumstances make more difficult or discourage a takeover of First
American and thus, the removal of incumbent management. The repurchase right is
not the result of our knowledge of any effort to accumulate any common shares
or to obtain control of First American by means of a merger, tender offer,
solicitation or otherwise, or part of a plan by us to adopt a series of anti-
takeover provisions. Instead, this right is the result of negotiations between
us and the initial purchasers.

The foregoing provisions would not necessarily protect holders of the senior
convertible debentures if highly leveraged or other transactions involving us
occur that may adversely affect holders.

Our ability to repurchase senior convertible debentures upon the occurrence
of a change of control is subject to important limitations. The occurrence of a
change of control could cause an event of default under, or be prohibited or
limited by, the terms of debt that we have or may incur in the future. Further,
we cannot assure you that we would have the financial resources, or would be
able to arrange financing, to pay the repurchase price for all the senior
convertible debentures that might be delivered by holders of senior convertible
debentures seeking to exercise the repurchase right. Any failure by us to
repurchase the senior convertible debentures when required following a change
of control would result in an event of default under the indenture. Any such
default may, in turn, cause a default under other debt of ours that we may
incur in the future.

Ranking

The senior convertible debentures will be unsecured and will rank senior to
all of our existing or future indebtedness that is by its terms expressly
subordinated to the senior convertible debentures. The senior convertible
debentures will rank equally with all of our other indebtedness, including
approximately $99,504,000 of 7.55% senior debentures maturing 2028.

The senior convertible debentures will be effectively subordinated to all
existing and future liabilities and obligations of our subsidiaries and holders
of the senior convertible debentures should look only to the assets of First
American for payments on the senior convertible debentures. The indenture does
not limit the amount of indebtedness or other liabilities our subsidiaries may
incur. Our ability to make required interest, principal, repurchase, cash
conversion or redemption payments on the senior convertible debentures may be
impaired as a result of the obligations of our subsidiaries. Our subsidiaries
are separate and distinct legal entities and have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the senior convertible debentures
or to make any funds available therefor, whether by dividends, loans or other
payments. Any right we have to receive assets of any of our subsidiaries upon
the latter's liquidation or reorganization (and the consequent right of the
holders of the senior convertible debentures to participate in those assets)
will be effectively subordinated to the claims of that subsidiary's creditors,
except to the extent that we are ourselves recognized as a creditor of that
subsidiary, in which case our claims would still be subordinate to any security
interests in the assets of that subsidiary and any indebtedness of that
subsidiary senior to that held by us. At December 31, 2000, our subsidiaries
had aggregate liabilities and obligations of approximately $1.07 billion net of
intercompany indebtedness.

Events of Default

Each of the following constitutes an event of default under the indenture:

(1) our failure to pay when due the principal of or premium, if any, on any
of the senior convertible debentures at maturity, upon redemption or
exercise of a repurchase right or otherwise;

(2) our failure to pay an installment of interest on any of the senior
convertible debentures for 30 days after the date when due;

(3) our failure to perform or observe any other term, covenant or agreement
contained in the senior convertible debentures or the indenture for a
period of 60 days after written notice of such failure, requiring us to
remedy the same, shall have been given to us by the trustee or to us
and the trustee by the holders of at least 25% in aggregate principal
amount of the senior convertible debentures then outstanding;

(4) we or any of our subsidiaries fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any
Indebtedness aggregating $25 million or more, when and as the same
shall become due and payable (beyond any applicable grace period
expressly set forth in the documents governing such Indebtedness); or
any event or condition occurs that results in any such Indebtedness
becoming due prior to its scheduled maturity or that enables or permits
(with or without the giving of notice, the lapse of time or both) the
holder or holders of any such Indebtedness or any trustee or agent on
its or their behalf to cause any such Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; or

(5) certain events of bankruptcy, insolvency or reorganization with respect
to us or any of our subsidiaries that is a significant subsidiary or
any group of two or more subsidiaries that, taken as a whole, would
constitute a significant subsidiary.

The indenture provides that the trustee shall, within 90 days of the
occurrence of a default, give to the registered holders of the senior
convertible debentures notice of all uncured defaults known to it, but the
trustee shall be protected in withholding such notice if it, in good faith,
determines that the withholding of such notice is in the best interest of such
registered holders, except in the case of a default in the payment of the
principal of, or premium, if any, or interest on, any of the senior convertible
debentures when due or in the payment of any redemption or repurchase
obligation.

If an event of default specified in clause (5) above occurs and is
continuing, then automatically the principal of all the senior convertible
debentures and the interest thereon will become immediately due and payable. If
any other event of default occurs and is continuing (the default not having
been cured or waived), the trustee or the holders of at least 25% in aggregate
principal amount of the senior convertible debentures then outstanding may
declare the principal amount of the senior convertible debentures due and
payable together with accrued interest, and thereupon the trustee may, at its
discretion, proceed to protect and enforce the rights of the holders of the
senior convertible debentures by appropriate judicial proceedings. Such
declaration may be rescinded or annulled either with the written consent of the
holders of a majority in aggregate principal amount of the senior convertible
debentures then outstanding or a majority in aggregate principal amount of the
senior convertible debentures represented at a meeting at which a quorum (as
specified under "--Modifications, Amendments and Meetings" below) is present,
in each case upon the conditions provided in the indenture.

The indenture contains a provision entitling the trustee, subject to the
duty of the trustee during default to act with the required standard of care,
to be indemnified by the holders of the senior convertible debentures before
proceeding to exercise any right or power under the indenture at the request of
such holders. The indenture provides that the holders of a majority in
aggregate principal amount of the senior convertible debentures then
outstanding through their written consent, or the holders of a majority in
aggregate principal

amount of the senior convertible debentures then outstanding represented at a
meeting at which a quorum is present by a written resolution, may direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee or exercising any trust or power conferred upon the trustee.

We are required to furnish annually to the trustee a statement as to the
fulfillment of our obligations under the indenture.

"Indebtedness" of any person means, without duplication:

(1) all obligations of such person for borrowed money or with respect to
deposits or advances of any kind; and

(2) all obligations of such person evidenced by bonds, debentures, notes or
similar instruments (including surplus debentures or notes whether or
not characterized as liabilities for purposes of generally accepted
accounting principles or statutory accounting principles and non-
perpetual preferred stock requiring redemption or repurchase and any
option exercisable in respect thereof to the extent of such redemption
or repurchase).

Consolidation, Merger or Assumption

We may, without the consent of the holders of the senior convertible
debentures, consolidate with, merge into or transfer all or substantially all
of our assets to any other corporation organized under the laws of the United
States or any of its political subdivisions provided that:

. the surviving corporation assumes all our obligations under the
indenture and the senior convertible debentures;

. at the time of such transaction, no event of default, and no event
which, after notice or lapse of time, would become an event of default,
shall have happened and be continuing; and

. certain other conditions are met.

Modifications, Amendments and Meetings

Changes Requiring Approval of Each Affected Holder

The indenture (including the terms and conditions of the senior convertible
debentures) cannot be modified or amended without the written consent or the
affirmative vote of the holder of each senior convertible debenture affected by
such change to:

. change the maturity of the principal of or any installment of interest
on that senior convertible debenture;

. reduce the principal amount of, or any premium or interest, on that
senior convertible debenture;

. change the currency of payment of that senior convertible debenture or
interest thereon;

. impair the right to institute suit for the enforcement of any payment on
or with respect to that senior convertible debenture;

. modify our obligations to maintain an office or agency in New York City;

. except as otherwise permitted or contemplated by provisions concerning
corporate reorganizations, adversely affect the repurchase option of
holders upon a change of control or the conversion rights of holders of
the senior convertible debentures;

. modify the redemption provisions of the indenture in a manner adverse to
the holders of the senior convertible debentures;

. reduce the percentage in aggregate principal amount of the senior
convertible debentures outstanding necessary to modify or amend the
indenture or to waive any past default; or

. reduce the percentage in aggregate principal amount of the senior
convertible debentures outstanding required for the adoption of a
resolution or the quorum required at any meeting of holders of the
senior convertible debentures at which a resolution is adopted.

Changes Requiring Majority Approval

Except with respect to changes requiring approval of each affected holder,
as discussed above, the indenture (including the terms and conditions of the
senior convertible debentures) may be modified or amended either:

. with the written consent of the holders of at least a majority in
aggregate principal amount of the senior convertible debentures at the
time outstanding; or

. by the adoption of a resolution at a meeting of holders by at least a
majority in aggregate principal amount of the senior convertible
debentures represented at such meeting.

Changes Requiring No Approval

The indenture (including the terms and conditions of the senior convertible
debentures) may be modified or amended by us and the trustee, without the
consent of the holder of any senior convertible debenture, for the purposes of,
among other things:

. adding to our covenants for the benefit of the holders of the senior
convertible debentures;

. surrendering any right or power conferred upon us;

. providing for conversion rights of holders of the senior convertible
debentures if any reclassification or change of our common shares or any
consolidation, merger or sale of all or substantially all of our assets
occurs;

. providing for the assumption of our obligations to the holders of the
senior convertible debentures in the case of a merger, consolidation,
conveyance, transfer or lease;

. reducing the conversion price, provided that the reduction will not
adversely affect the interests of the holders of the senior convertible
debentures;

. complying with the requirements of the SEC in order to effect or
maintain the qualification of the indenture under the Trust Indenture
Act of 1939, as amended;

. making any changes or modifications necessary in connection with the
registration of the senior convertible debentures under the Securities
Act as contemplated in the registration rights agreement; provided that
such change or modification does not, in the good faith opinion of our
board of directors and the trustee, adversely affect the interests of
the holders of the senior convertible debentures in any material
respect;

. curing any ambiguity or correcting or supplementing any defective
provision contained in the indenture; provided that such modification or
amendment does not, in the good faith opinion of our board of directors
and the trustee, adversely affect the interests of the holders of the
senior convertible debentures in any material respect; or

. adding or modifying any other provisions which we and the trustee may
deem necessary or desirable and which will not adversely affect the
interests of the holders of the senior convertible debentures.

Meetings

The indenture contains provisions for convening meetings of the holders of
the senior convertible debentures to consider matters affecting their
interests.

Quorum

The quorum at any meeting called to adopt a resolution will be persons
holding or representing a majority in aggregate principal amount of the senior
convertible debentures at the time outstanding and, at any reconvened meeting
adjourned for lack of a quorum, 25% of the aggregate principal amount.

Satisfaction and Discharge

We may satisfy and discharge our obligations under the indenture while the
senior convertible debentures remain outstanding, subject to certain
conditions, if:

. all outstanding senior convertible debentures will become due and
payable at their scheduled maturity within one year; or

. all outstanding senior convertible debentures are scheduled for
redemption within one year,

and, in either case, we have deposited with the trustee an amount sufficient to
pay and discharge all outstanding senior convertible debentures on the date of
their scheduled maturity or the scheduled date of redemption.

Governing Law

The indenture and the senior convertible debentures will be governed by, and
construed in accordance with, the law of the State of New York.

Information Concerning the Trustee

Wilmington Trust Company, as trustee under the indenture, has been appointed
by us as paying agent, conversion agent, registrar and custodian with regard to
the senior convertible debentures. The trustee and its affiliates provide, and
may from time to time in the future provide, banking, trust and other services
to us in the ordinary course of their business.

We will be obligated to pay reasonable compensation to the trustee and to
indemnify the trustee against any losses, liabilities or expenses incurred by
it in connection with its duties relating to the senior convertible debentures.
The trustee's claims for such payments will be senior to those of holders of
the senior convertible debentures in respect of all funds collected or held by
the trustee.

Form, Denomination and Registration

Denomination and Registration

The senior convertible debentures have been issued in fully registered form,
without coupons, in denominations of $1,000 principal amount and whole
multiples of $1,000.

Global Senior Convertible Debenture; Book-Entry Form

We issued the senior convertible debentures sold in the United States in
reliance on Rule 144A under the Securities Act, or in offshore transactions in
reliance on Regulation S under the Securities Act in the form of a single,
permanent global debenture in definitive, fully-registered form without
interest coupons. The global senior convertible debenture has been deposited
with the trustee as custodian for DTC and registered in the name of a nominee
of DTC in New York, New York for the accounts of participants in DTC. The
senior convertible debentures sold by the selling securityholders pursuant to
the registration statement of which this prospectus forms a part will be
represented by the global senior convertible debenture. Investors may hold
their interests in the global senior convertible debenture directly through DTC
if they are DTC participants, or indirectly through organizations that are DTC
participants.

Investors who purchase senior convertible debentures in offshore
transactions in reliance on Regulation S under the Securities Act may hold
their interests in the global senior convertible debenture directly through the
Euroclear System and Clearstream Banking, if they are participants in these
systems, or indirectly through organizations that are participants in these
systems. Euroclear and/or Clearstream hold interests in the global senior
convertible debenture on behalf of their participants through their respective
depositaries, which in turn hold the interests in the global senior convertible
debenture in customers' securities accounts in the depositaries' names on the
books of DTC. Citibank, N.A., is acting initially as depositary for
Clearstream, and The Chase Manhattan Bank is acting initially as depositary for
Euroclear.

Except as set forth below, the global senior convertible debenture may be
transferred, in whole or in part, only to another nominee of DTC or to a
successor of DTC or its nominee.

DTC has advised us that it is:

. a limited purpose trust company organized under the laws of the State of
New York;

. a member of the Federal Reserve System;

. a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and

. a "clearing agency" registered pursuant to the provisions of Section 17A
of the Exchange Act.

DTC was created to hold securities of institutions that have accounts with
DTC and to facilitate the clearance and settlement of securities transactions
among its participants in securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include:

. securities brokers and dealers;

. banks;

. trust companies;

. clearing corporations; and

. certain other organizations.

Access to DTC's book-entry system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, whether directly or indirectly.

Upon the issuance of the global senior convertible debenture, DTC credited,
on its book-entry registration and transfer system, the respective principal
amounts of the individual beneficial interests represented by the global senior
convertible debenture to the accounts of participants. The accounts credited
have been designated by the initial purchasers of the beneficial interests.
Ownership of beneficial interests in the global senior convertible debenture is
limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests in the global senior
convertible debenture are shown on, and the transfer of those ownership
interests will be effected only through, records maintained by DTC (with
respect to participants' interests) and the participants (with respect to the
owners of beneficial interests in the global senior convertible debenture other
than participants).

So long as DTC or its nominee is the registered holder and owner of the
global senior convertible debenture, DTC or its nominee, as the case may be,
will be considered the sole legal owner of the senior convertible debentures
represented by the global senior convertible debenture for all purposes under
the indenture and the senior convertible debentures. Except as set forth below,
owners of beneficial interests in the global senior convertible debenture are
not entitled to receive definitive senior convertible debentures and are not
considered to be the owners or holders of any senior convertible debentures
under the global senior

convertible debenture. We understand that under existing industry practice, in
the event an owner of a beneficial interest in the global senior convertible
debenture desires to take any action that DTC, as the holder of the global
senior convertible debenture, is entitled to take, DTC would authorize the
participants to take the action, and that participants would authorize
beneficial owners owning through the participants to take the action or would
otherwise act upon the instructions of beneficial owners owning through them.
No beneficial owner of an interest in the global senior convertible debenture
will be able to transfer the interest except in accordance with DTC's
applicable procedures, in addition to those provided for under the indenture
and, if applicable, those of Euroclear and Clearstream.

We will make payments of the principal, premium, if any, and interest on the
senior convertible debentures represented by the global senior convertible
debenture registered in the name of and held by DTC or its nominee to DTC or
its nominee, as the case may be, as the registered owner and holder of the
global senior convertible debenture.

We expect that DTC or its nominee, upon receipt of any payment of principal,
premium or interest in respect of the global senior convertible debenture, will
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global senior
convertible debenture as shown on the records of DTC or its nominee. We also
expect that payments by participants and indirect participants to owners of
beneficial interests in the global senior convertible debenture held through
such participants will be governed by standing instructions and customary
practices, as is now the case with securities held for accounts of customers
registered in the names of nominees for these customers. The payments, however,
will be the responsibility of the participants and indirect participants, and
neither we, the trustee nor any paying agent or conversion agent will have any
responsibility or liability for:

. any aspect of the records relating to, or payments made on account of,
beneficial ownership interests in the global senior convertible
debenture;

. maintaining, supervising or reviewing any records relating to the
beneficial ownership interests;

. any other aspect of the relationship between DTC and its participants;
or

. the relationship between the participants and indirect participants and
the owners of beneficial interests in the global senior convertible
debenture.

Unless and until it is exchanged in whole or in part for definitive senior
convertible debentures, the global senior convertible debenture may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC
to DTC or another nominee of DTC.

We believe participants in DTC will effect transfers with other participants
in the ordinary way in accordance with DTC rules and will settle transfers in
same-day funds. We believe participants in Euroclear and Clearstream will
effect transfers with other participants in the ordinary way in accordance with
the rules and operating procedures of Euroclear and Clearstream, as applicable.
If a holder requires physical delivery of a definitive senior convertible
debenture for any reason, including to sell senior convertible debentures to
persons in jurisdictions which require physical delivery or to pledge senior
convertible debentures, the holder must transfer its interest in the global
senior convertible debenture in accordance with the normal procedures of DTC
and the procedures set forth in the indenture.

Cross-market transfers between DTC, on the one hand, and directly or
indirectly through Euroclear or Clearstream participants, on the other, will be
effected in DTC in accordance with DTC rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, these
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in the system in
accordance with its rules and procedures and within its established deadlines
(Brussels time). Euroclear or Clearstream, as the case may be, will, if the
transaction meets its settlement requirements, deliver instructions to its
respective depositary to take action to effect final settlement on its behalf
by delivering or receiving interests in the global senior convertible debenture
in DTC, and making or

receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Euroclear participants and Clearstream
participants may not deliver instructions directly to the depositaries for
Euroclear or Clearstream.

Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in the global senior convertible
debenture from a DTC participant will be credited during the securities
settlement processing day (which must be a business day for Euroclear or
Clearstream, as the case may be) immediately following the DTC settlement date,
and the credit of any transactions interests in the global senior convertible
debenture settled during the processing day will be reported to the relevant
Euroclear or Clearstream participant on that day. Cash received by Euroclear or
Clearstream as a result of sales of interests in the global senior convertible
debenture by or through a Euroclear or Clearstream participant to a DTC
participant will be received with value on the DTC settlement date, but will be
available in the relevant Euroclear or Clearstream cash account only as of the
business day following settlement in DTC.

We expect that DTC will take any action permitted to be taken by a holder of
senior convertible debentures (including the presentation of senior convertible
debentures for exchange as described below) only at the direction of one or
more participants to whose accounts at DTC interests in the global senior
convertible debenture are credited and only in respect of the portion of the
aggregate principal amount of the senior convertible debentures as to which the
participant or participants has or have given direction. However, if there is
an event of default under the senior convertible debentures, DTC will exchange
the global senior convertible debenture for definitive debentures, which it
will distribute to its participants. These definitive debentures are subject to
certain restrictions on registration of transfers and will bear appropriate
legends restricting their transfer.

Although we expect that DTC, Euroclear and Clearstream will agree to the
foregoing procedures in order to facilitate transfers of interests in the
global senior convertible debenture among participants of DTC, Euroclear, and
Clearstream, DTC, Euroclear and Clearstream are under no obligation to perform
or continue to perform these procedures, and these procedures may be
discontinued at any time. Neither we nor the trustee have any responsibility
for the performance by DTC, Euroclear or Clearstream or their participants or
indirect participants of their obligations under the rules and procedures
governing their operations.

If DTC is at any time unwilling or unable to continue as a depositary for
the global senior convertible debenture or ceases to be a clearing agency
registered under the Exchange Act and we do not appoint a successor depositary
within 90 days, we will issue definitive senior convertible debentures in
exchange for the global senior convertible debenture. The definitive senior
convertible debentures will be subject to certain restrictions on registration
of transfers and will bear appropriate legends concerning these restrictions.

Registration Rights

On April 24, 2001, we entered into a registration rights agreement with the
initial purchasers for the benefit of the holders of the senior convertible
debentures and the common stock issuable upon the conversion of the senior
convertible debentures. Pursuant to the registration rights agreement, we filed
with the SEC a shelf registration statement of which this prospectus is a part
to cover resales of the senior convertible debentures and the shares of common
stock issuable upon the conversion thereof by the holders thereof who satisfy
certain conditions relating to the provision of information in connection with
the shelf registration statement.

We agreed pursuant to the registration rights agreement to use our best
efforts to cause the registration statement to which this prospectus relates to
become effective as promptly as is practicable and to keep the registration
statement effective until the earliest of:

. two years after the last date of original issuance of any of the senior
convertible debentures;

. the date when the holders of the senior convertible debentures and the
common shares issuable upon conversion of the senior convertible
debentures are able to sell all such securities immediately without
restriction pursuant to the volume limitation provisions of Rule 144
under the Securities Act; or

. the date when all of the senior convertible debentures and common shares
into which the senior convertible debentures are convertible that are
owned by the holders who complete and deliver in a timely manner the
selling security holder election and questionnaire described in the
offering memorandum associated with the senior convertible debentures
are registered under the shelf registration statement and sold in
accordance with it.

The registration rights agreement provides that we may suspend the use of
this prospectus in connection with sales of senior convertible debentures and
common shares issuable upon conversion of the senior convertible debentures by
holders for a period not to exceed an aggregate of 45 days in any 90 day
period, under certain circumstances relating to pending corporate developments,
public filings with the Commission and similar events. In certain circumstances
involving pending material business transactions, we may extend such a
suspension period to up to 60 days. The total of all suspension periods may not
exceed 120 days in any 360-day period. We will bear the expenses of preparing
and filing the registration statement and all post-effective amendments.

A holder who elects to sell any securities pursuant to the shelf
registration statement:

. will be required to be named as selling securityholder;

. will be required to deliver a prospectus to purchasers;

. will be subject to the civil liability provisions under the Securities
Act in connection with any sales; and

. will be bound by the provisions of the registration rights agreement
which are applicable, including indemnification obligations.

We refer to the senior convertible debentures and the common stock issuable
on conversion of the senior convertible debentures as "registrable securities."
Promptly upon request from any holder of registrable securities, we will
provide a form of notice and questionnaire to be completed and delivered by
that holder to us before any intended distribution of registrable securities
under the shelf registration statement. If we receive from a holder of
registrable securities a completed questionnaire, together with such other
information as may be reasonably requested by us, after the effectiveness of
the shelf registration statement, we will file an amendment to the shelf
registration statement or supplement to the related prospectus to permit the
holder to deliver a prospectus to purchasers of registrable securities. Any
holder that does not complete and deliver a questionnaire or provide such other
information will not be named as a selling securityholder in the prospectus and
therefore will not be permitted to sell any registrable securities under the
shelf registration statement.

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock currently consists of 180,000,000 common shares
and 500,000 preferred shares, each class of shares having a $1.00 par value per
share. Of the preferred shares, 1,000 shares have been designated Series A
Junior Participating Preferred Shares. Each of our common shares has the same
relative rights and is identical in all respects with every other common share.
First American Trust Company is the transfer agent and registrar for our common
shares.

Voting rights

Each shareholder is entitled to one vote for each share of common stock
held. Each Series A Junior Participating Preferred Share would entitle its
holder to 100,000 votes on all matters submitted to a vote of our shareholders.
Shareholders are entitled to vote on all matters requiring shareholder approval
under California law and our restated articles of incorporation and bylaws,
including the election of members of the board of directors. At each annual
meeting of our shareholders, the entire board of directors is put up for
election by the shareholders.

Shareholders may "cumulate" their votes in elections for directors, which
means that each shareholder has a number of votes equal to the number of shares
owned, multiplied by the number of directors to be elected (currently 13), and
the shareholder may cumulate such votes for a single candidate, or distribute
such votes among as many candidates as such shareholder deems appropriate.

Dividends

We pay dividends out of statutory surplus or from net profits if, as and
when declared by our board of directors. If we issue preferred shares, the
holders of the preferred shares may have a priority over the holders of the
common shares with respect to dividends.

Liquidation

If we are liquidated or dissolved, holders of common shares are entitled to
receive all of our assets which remain after our debts and liabilities are
paid. If we issue preferred shares, the holders of our preferred shares may
have a priority over the holders of common shares in the event of our
liquidation or dissolution. As of the date of this prospectus, we have not
issued any preferred shares.

Preemptive rights; redemption; non-accessibility

Our common shares have no preemptive rights. This means that our
shareholders do not have a right to buy their proportional share of any
additional shares we issue. There are no provisions for redemption, conversion
rights, sinking funds, or liability for further calls or assessments on our
common shares. This means that we cannot ask you for more money for your
shares, we cannot force you to sell your shares back to us (absent a separate
agreement to do so) and your shares cannot be exchanged for a different
security. It also means that we do not set aside any money to buy your shares
from you.

Amendments to articles of incorporation or bylaws

Our restated articles of incorporation do not specify the approvals
necessary to adopt amendments to the articles. Therefore, under the California
General Corporation Law, except for certain amendments as prescribed therein
for which the approval of the board of directors alone is required, any
amendment to our restated articles of incorporation must be approved by the
holders of a majority of our outstanding common shares.

Rights to purchase preferred shares

Each of our common shares has attached to it a right which, subject to the
terms and conditions of the rights agreement between First American and
Wilmington Trust Company, dated October 23, 1997, entitles the holder to
purchase a fraction of a Series A Junior Participating Preferred Share upon the
occurrence of certain change of control events which are defined in the rights
agreement. As of the date of this prospectus, such rights are not exercisable.
See Description of the Stock and the description of Rights to Purchase Series A
Junior Participating Preferred Shares contained in our Registration Statement
on Form 8-A, dated November 7, 1997, and incorporated by reference herein.

SELLING SECURITYHOLDERS

The senior convertible debentures were originally purchased from First
American on April 24, 2001. The initial purchasers of the senior convertible
debentures have advised First American that the senior convertible debentures
were resold in transactions exempt from the registration requirements of the
Securities Act to "qualified institutional buyers," defined in Rule 144A of the
Securities Act and to buyers outside the United States in accordance with
Regulation S under the Securities Act. These subsequent purchasers, or their
transferees, pledgees, donees or successors, may from time to time offer and
sell any or all of the senior convertible debentures and/or First American
common shares issuable upon conversion of the senior convertible debentures
pursuant to this prospectus.

The selling securityholders may choose to sell senior convertible debentures
and/or common shares issuable upon conversion of the senior convertible
debentures from time to time. See "Plan of Distribution."

The following table sets forth:

. the name of each selling securityholder who has provided First American
with notice as of the date of this prospectus pursuant to the
registration rights agreement of its intent to sell or otherwise dispose
of senior convertible debentures and/or common shares issuable upon
conversion of the senior convertible debentures pursuant to the
registration statement;

. the principal amount of senior convertible debentures and the number of
common shares issuable upon conversion of the senior convertible
debentures which it may sell from time to time pursuant to the
registration statement; and

. the amount of outstanding senior convertible debentures and common
shares beneficially owned by the selling securityholder prior to the
offering (assuming no conversion of the senior convertible debentures).

No selling securityholder, and no affiliate of a selling securityholder, has
held any position or office with, been employed by or otherwise has had any
material relationship with First American or First American's affiliates,
during the three years prior to the date of this prospectus.

A selling securityholder may offer all or some portion of the senior
convertible debentures and common shares issuable upon conversion of the senior
convertible debentures. Accordingly, no estimate can be given as to the amount
or percentage of senior convertible debentures or common shares that will be
held by the selling securityholders upon termination of sales pursuant to this
prospectus. In addition, the selling securityholders identified below may have
sold, transferred or disposed of all or a portion of their senior convertible
debentures since the date on which they provided the information regarding
their holdings in transactions exempt from the registration requirements of the
Securities Act.

Amount of Senior Amount of Senior Shares
Convertible Convertible that Common Shares
Debentures that Debentures Owned may be Owned Before
Selling Security Holder* may be Sold Before the Offering Sold the Offering
----------------------- ---------------- ------------------- ------- -------------

Acacia Life Insurance
Company................ $ 220,000 $ 220,000 7,857 0
Aftra Health Fund....... $ 285,000 $ 285,000 10,178 0
AIG/National Union Fire
Insurance.............. $ 600,000 $ 600,000 21,428 0
Alpine Associates....... $4,350,000 $4,350,000 155,357 0
Alpine Partners, L.P. .. $ 650,000 $ 650,000 23,214 0
American Country
Insurance Company...... $ 400,000 $ 400,000 14,285 0
American Fidelity
Assurance Company...... $ 150,000 $ 150,000 5,357 0
American Founders Life
Insurance Company...... $ 250,000 $ 250,000 8,928 0
American Motorist
Insurance Company...... $ 575,000 $ 575,000 20,535 0
American Pioneer Life
Insurance Co. of
New York............... $ 80,000 $ 80,000 2,857 0

Amount of Senior Amount of Senior Shares
Convertible Convertible that Common Shares
Debentures that Debentures Owned may be Owned Before
Selling Security Holder may be Sold Before the Offering Sold the Offering
----------------------- ---------------- ------------------- ------- -------------

American Progressive
Life and Health
Insurance Company of
New York............... $ 80,000 $ 80,000 2,857 0
American Public Entity
Excess Pool............ $ 80,000 $ 80,000 2,857 0
Amerisure Companies /
Michigan Mutual
Insurance Company...... $ 300,000 $ 300,000 10,714 0
Ameritas Life Insurance
Company................ $ 450,000 $ 450,000 16,071 0
Amwest Surety Insurance
Company................ $ 370,000 $ 370,000 13,214 0
Arbitex Master Fund,
L.P. .................. $6,775,000 $6,775,000 241,964 0
Arkansas PERS........... $1,150,000 $1,150,000 41,071 0
Baltimore Life
Insurance.............. $ 300,000 $ 300,000 10,714 0
Banc of America
Securities LLC......... $7,430,000 $7,430,000 265,357 0
Bankers Trust Company
Trustee for
DaimlerChrysler Corp
Emp.#1 Pension Plan Dtd
4/1/89................. $5,250,000 $5,250,000 187,500 0
Bay County PERS......... $ 155,000 $ 155,000 5,535 0
BayState Health System,
Inc.................... $ 15,000 $ 15,000 535 0
BCS Life Insurance
Company................ $ 600,000 $ 600,000 21,428 0
Bear, Stearns & Co.
INC.................... $3,000,000 $3,000,000 107,142 0
Blue Cross Blue Shield
of Florida............. $ 750,000 $ 750,000 26,785 0
Boilermakers Blacksmith
Pension Trust.......... $1,575,000 $1,575,000 56,250 0
British Virgin Island
Social Security Board.. $ 54,000 $ 54,000 1,928 0
Buckeye State Mutual
Insurance Co........... $ 25,000 $ 25,000 892 0
CapitalCare, Inc........ $ 35,000 $ 35,000 1,250 0
CareFirst of Maryland,
Inc.................... $ 150,000 $ 150,000 5,357 0
Catholic Mutual Relief
Society of America..... $ 700,000 $ 700,000 25,000 0
Catholic Mutual Relief
Society of America
Retirement Plan and
Trust.................. $ 300,000 $ 300,000 10,714 0
Catholic Relief
Insurance Company of
America................ $ 550,000 $ 550,000 19,642 0
Celina Mutual Insurance
Company................ $ 20,000 $ 20,000 714 0
Central States Health
and Life Company of
Omaha.................. $ 260,000 $ 260,000 9,285 0
Chicago Mutual Insurance
Company................ $ 70,000 $ 70,000 2,500 0
Chrysler Insurance
Company................ $2,000,000 $2,000,000 71,428 0
City of Birmingham
Retirement & Relief
System................. $ 750,000 $ 750,000 26,785 0
Clinton Riverside
Convertible Portfolio
Limited................ $7,025,000 $7,025,000 250,892 0
Colonial Life Insurance
Company of Texas....... $ 45,000 $ 45,000 1,607 0
Colonial Lloyd Insurance
Company................ $ 15,000 $ 15,000 535 0
Commonwealth Dealers--
CDLIC.................. $ 180,000 $ 180,000 6,428 0
Concord Life Insurance
Company................ $ 180,000 $ 180,000 6,428 0
Condor Insurance
Company................ $ 160,000 $ 160,000 5,714 0
CSA Fraternal Life
Insurance Company...... $ 130,000 $ 130,000 4,642 0
CSFB Convertible &
Quantitative
Strategies............. $2,500,000 $2,500,000 89,285 0
Cumberland Insurance
Company................ $ 100,000 $ 100,000 3,571 0
Cumberland Mutual Fire
Insurance Company...... $ 400,000 $ 400,000 14,285 0
Dakota Truck
Underwriters........... $ 25,000 $ 25,000 892 0
Delaware PERS........... $1,725,000 $1,725,000 61,607 0

DLB High Yield Fund..... $ 40,000 $ 40,000 1,428 0
Dorinco Reinsurance
Company................ $ 800,000 $ 800,000 28,571 0
Educators Mutual Life
Insurance Company...... $ 230,000 $ 230,000 8,214 0
F.R. Convt. Sec. Fn..... $ 300,000 $ 300,000 10,714 0
Farmers Home Mutual
Insurance Company...... $ 450,000 $ 450,000 16,071 0
Farmers Mutual
Protective Association
of Texas............... $ 130,000 $ 130,000 4,642 0
Federated Rural Electric
Insurance Exchange..... $ 450,000 $ 450,000 16,071 0
First Dakota Indemnity
Company................ $ 15,000 $ 15,000 535 0
First Mercury Insurance
Company................ $ 600,000 $ 600,000 21,428 0
Founders Insurance
Company................ $ 40,000 $ 40,000 1,428 0
Franklin and Marshall
College................ $ 220,000 $ 220,000 7,857 0
FreeState Health Plan,
Inc.................... $ 45,000 $ 45,000 1,607 0
Genessee County
Employees' Retirement
System................. $ 275,000 $ 275,000 9,821 0
Global Bermuda Limited
Partnership............ $ 1,000,000 $ 1,000,000 35,714 0
Goldman Sachs and
Company................ $ 500,000 $ 500,000 17,857 0
Goodville Mutual
Casualty Company....... $ 50,000 $ 50,000 1,785 0
Grain Dealers Mutual
Insurance.............. $ 170,000 $ 170,000 6,071 0
Green Tree Perpetual
Assurance Company...... $ 250,000 $ 250,000 8,928 0
Group Hospitalization
and Medical
Services, Inc.......... $ 175,000 $ 175,000 6,250 0
Guarantee Trust Life
Insurance Company...... $ 1,000,000 $ 1,000,000 35,714 0
Guaranty Income Life
Insurance Company...... $ 400,000 $ 400,000 14,285 0
Gulf Investment
Corporation............ $ 350,000 $ 350,000 12,500 0
Hannover Life
Reassurance Company of
America................ $ 400,000 $ 400,000 14,285 0
HealthNow New York,
Inc.................... $ 100,000 $ 100,000 3,571 0
HFR Master Fund LTD..... $ 200,000 $ 200,000 7,142 0
Highbridge International
LLC.................... $ 4,000,000 $ 4,000,000 142,857 0
Holy Family Society..... $ 100,000 $ 100,000 3,571 0
ICI American Holdings
Trust.................. $ 650,000 $ 650,000 23,214 0
Independence Blue
Cross.................. $ 115,000 $ 115,000 4,107 0
Indiana Lumbermens
Mutual Insurance
Company................ $ 450,000 $ 450,000 16,071 0
Integrity Mutual
Insurance Company...... $ 300,000 $ 300,000 10,714 0
ISBA Mutual Insurance
Company................ $ 210,000 $ 210,000 7,500 0
Jackson County
Employees' Retirement
System................. $ 150,000 $ 150,000 5,357 0
JMG Capital Partners,
LP..................... $ 500,000 $ 500,000 17,857 0
Kanawha Insurance
Company................ $ 1,000,000 $ 1,000,000 35,714 0
Kerr-McGee Corporation.. $ 400,000 $ 400,000 14,285 0
Lakeshore International
Ltd.................... $ 2,000,000 $ 2,000,000 71,428 0
Landesbank Schleswig-
Holstein
International S.A...... $ 1,000,000 $ 1,000,000 35,714 0
Landmark Life Insurance
Company................ $ 60,000 $ 60,000 2,142 0
Lebanon Mutual Insurance
Company................ $ 140,000 $ 140,000 5,000 0
Lehman Brothers Inc.**.. $24,500,000 $24,500,000 875,000 0
Lincoln Memorial Life
Insurance Company...... $ 225,000 $ 225,000 8,035 0

Lions Club International
Foundation.............. $ 200,000 $ 200,000 7,142 0
Local Initiatives
Support Corporation.... $ 60,000 $ 60,000 2,142 0
Loyal Christian Benefit
Association............ $ 70,000 $ 70,000 2,500 0
Lutheran Brotherhood.... $1,000,000 $1,000,000 35,714 0
Lyxor Master Fund....... $5,000,000 $5,000,000 178,571 0
Macomb County Employees'
Retirement System...... $ 350,000 $ 350,000 12,500 0
Mainstay Convertible
Fund................... $4,115,000 $4,115,000 146,964 0
Mainstay VP Convertible
Portfolio.............. $1,045,000 $1,045,000 37,321 0
Marquette Indemnity and
Life Insurance
Company................ $ 60,000 $ 60,000 2,142 0
Massachusetts Mutual
Life Insurance
Company................ $1,300,000 $1,300,000 46,428 0
MassMutual Asia
Limited................ $ 15,000 $ 15,000 535 0
MassMutual Corporate
Investors.............. $ 220,000 $ 220,000 7,857 0
MassMutual Diversified
Bond Fund.............. $ 15,000 $ 15,000 535 0
MassMutual High Yield
Partners II LLC........ $ 775,000 $ 775,000 27,678 0
MassMutual Participation
Investors.............. $ 120,000 $ 120,000 4,285 0
Medico Life Insurance
Company................ $ 800,000 $ 800,000 28,571 0
MEDMARC Insurance
Company................ $ 600,000 $ 600,000 21,428 0
Merrill Lynch Insurance
Group.................. $ 284,000 $ 284,000 10,142 0
Michigan Mutual
Insurance Company...... $ 850,000 $ 850,000 30,357 0
Michigan Professional
Insurance Exchange..... $ 100,000 $ 100,000 3,571 0
Mid America Life
Insurance Company...... $ 60,000 $ 60,000 2,142 0
Middle Cities Risk
Management Trust....... $ 200,000 $ 200,000 7,142 0
Midwest Security Life... $ 260,000 $ 260,000 9,285 0
Morgan Stanley Dean
Witter Convertible
Securities Trust....... $2,000,000 $2,000,000 71,428 0
Mutual Protective
Insurance Company...... $1,000,000 $1,000,000 35,714 0
Nabisco Holdings........ $ 34,000 $ 34,000 1,214 0
Nashville Electric
Service................ $ 125,000 $ 125,000 4,464 0
National Mutual
Insurance Company...... $ 30,000 $ 30,000 1,071 0
NCMIC................... $ 500,000 $ 500,000 17,857 0
New Era Life Insurance
Company................ $ 270,000 $ 270,000 9,642 0
New York Life Insurance
and Annuity
Corporation............ $1,200,000 $1,200,000 42,857 0
New York Life Insurance
Company................ $3,300,000 $3,300,000 117,857 0
New York Life Separate
Account #7............. $ 555,000 $ 555,000 19,821 0
NORCAL Mutual Insurance
Company................ $ 225,000 $ 225,000 8,035 0
Oak Casualty Insurance
Company................ $ 40,000 $ 40,000 1,428 0
Ohio Bureau of Workers
Compensation........... $ 149,000 $ 149,000 5,321 0
Ondeo Nalco............. $ 200,000 $ 200,000 7,142 0
Penn Treaty Network
America Insurance
Company................ $ 275,000 $ 275,000 9,821 0
Phico Insurance
Company................ $ 600,000 $ 600,000 21,428 0
Physicians Mutual
Insurance Company...... $ 600,000 $ 600,000 21,428 0
Physicians' Reciprocal
Insurers Account #7.... $1,000,000 $1,000,000 35,714 0
Pioneer Insurance
Company................ $ 90,000 $ 90,000 3,214 0
Premera Blue Cross...... $1,600,000 $1,600,000 57,142 0

R.J.R. Reynolds......... $ 102,000 $ 102,000 3,642 0
Republic Mutual
Insurance Company...... $ 15,000 $ 15,000 535 0
Salomon Smith Barney
Inc.................... $1,600,000 $1,600,000 57,142 0
Shell Pension Trust..... $ 217,000 $ 217,000 7,750 0
Southern Farm Bureau
Life Insurance......... $ 600,000 $ 600,000 21,428 0
Southern Farm Bureau
Life Insurance
Company................ $ 750,000 $ 750,000 26,785 0
Standard Mutual
Insurance Company...... $ 250,000 $ 250,000 8,928 0
Starvest Combined
Portfolio.............. $ 655,000 $ 655,000 23,392 0
Starvest Managed
Portfolio.............. $ 60,000 $ 60,000 2,142 0
State National Insurance
Company................ $ 100,000 $ 100,000 3,571 0
State of Florida
Division Treasury...... $1,575,000 $1,575,000 56,250 0
State of Florida, Office
of the Treasurer....... $3,000,000 $3,000,000 107,142 0
State of Oregon/Equity.. $5,625,000 $5,625,000 200,892 0
State Street Bank
Custodian for GE
Pension Trust.......... $1,655,000 $1,655,000 59,107 0
Syngenta AG............. $ 300,000 $ 300,000 10,714 0
Texas Builders Insurance
Company................ $ 130,000 $ 130,000 4,642 0
Texas Hospital Insurance
Exchange............... $ 25,000 $ 25,000 892 0
The Brakle Foundation... $ 135,000 $ 135,000 4,821 0
The Cockrell
Foundation............. $ 75,000 $ 75,000 2,678 0
The Northwestern Mutual
Life Insurance
Company................ $3,750,000 $3,750,000 133,928 0
The Northwestern Mutual
Life Insurance Company
Group Annuity Separate
Account................ $ 250,000 $ 250,000 8,928 0
Transguard Insurance
Company of America,
Inc.................... $ 900,000 $ 900,000 32,142 0
Tuscarora Wayne Mutual
Insurance Company...... $ 90,000 $ 90,000 3,214 0
UBS O'Connor LLC F/B/O
O'Connor Global
Convertible Portfolio.. $ 500,000 $ 500,000 17,857 0
UBS O'Connor LLC F/B/O/
UBS Global equity
Artibrage Master LTD... $3,000,000 $3,000,000 107,142 0
United National
Insurance Company...... $ 700,000 $ 700,000 25,000 0
Vesta-Inex Insurance
Exchange IASA.......... $ 500,000 $ 500,000 17,857 0
Victory Capital
Management as
Investment Manager for
Health Foundation of
Greater Cincinnati..... $ 75,000 $ 75,000 2,678 0
Victory Capital
Management as Agent for
the Charitable
Convertible Securities
Fund................... $ 645,000 $ 645,000 23,035 0
Victory Capital
Management as Agent for
the Charitable Income
Fund................... $ 105,000 $ 105,000 3,750 0
Victory Capital
Management as Agent for
the EB Convertible
Securities Fund........ $ 670,000 $ 670,000 23,928 0
Victory Capital
Management as Agent for
the Field Foundation of
Illinois............... $ 35,000 $ 35,000 1,250 0
Victory Capital
Management as Agent for
the GenCorp
Foundation............. $ 35,000 $ 35,000 1,250 0
Victory Capital
Management as Agent for
the Key Trust
Convertible Securities
Fund................... $ 110,000 $ 110,000 3,928 0

Victory Capital
Management as Agent for
the Key Trust Fixed
Income Fund............ $ 160,000 $ 160,000 5,714 0
Victory Capital
Management as Agent for
the Parker/Key
Convertible............ $ 170,000 $ 170,000 6,071 0
Victory Capital
Management as Agent for
the Union Security Life
Insurance Co........... $ 40,000 $ 40,000 1,428 0
Victory Capital
Management as Agent for
the Victory Convertible
Securities Fdn......... $ 575,000 $ 575,000 20,535 0
Victory Capital
Management as Agent for
the Victory Invest
Quality Bond........... $ 65,000 $ 65,000 2,321 0
Victory Capital
Management as
Investment Manager for
Potlatch............... $ 325,000 $ 325,000 11,607 0
Victory Capital
Management as
Investment Manager for
the California State
Auto Assoc Inter-
Insurance.............. $ 465,000 $ 465,000 16,607 0
Victory Capital
Management as
Investment Manager for
the California State
Auto Assoc Retirement
Pension Plan........... $ 75,000 $ 75,000 2,678 0
Victory Capital
Management as
Investment Manager for
the JC Penney Life
Insurance Co. ......... $ 700,000 $ 700,000 25,000 0
West Virginia Fire
Insurance Company...... $ 10,000 $ 10,000 357 0
Western Home Insurance
Company................ $ 190,000 $ 190,000 6,785 0
Westward Life Insurance
Company................ $ 160,000 $ 160,000 5,714 0
White River Securities
L.L.C. ................ $3,000,000 $3,000,000 107,142 0
Wisconsin Lawyers Mutual
Insurance Company...... $ 200,000 $ 200,000 7,142 0
Wisconsin Mutual
Insurance Company...... $ 150,000 $ 150,000 5,357 0
World Insurance
Company................ $ 500,000 $ 500,000 17,857 0
Zazove Convertible
Securities Fund Inc.... $1,000,000 $1,000,000 35,714 0
Zeneca Holdings Trust... $ 430,000 $ 430,000 15,357 0
Zurich Institutional
Benchmarks Master
Fund LTD............... $1,000,000 $1,000,000 35,714 0

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* This prospectus may also be used by the donees and pledgees of each named
selling securityholder after the date of this prospectus.

** Lehman Brothers Inc. was an initial purchaser, and acted as lead underwriter
in connection with the original sale, of the senior convertible debentures.

PLAN OF DISTRIBUTION

First American is registering the senior convertible debentures and the
common shares issuable upon conversion of the senior convertible debentures to
permit public secondary trading of such securities by the holders from time to
time after the date of this prospectus. First American has agreed, among other
things, to bear all expenses (other than underwriting discounts and selling
commissions) in connection with the registration and sale of the senior
convertible debentures and the common shares issuable upon conversion of the
senior convertible debentures covered by this prospectus.

First American will not receive any of the proceeds from the offering of the
senior convertible debentures or the common shares issuable upon conversion of
the senior convertible debentures by the selling

securityholders. The senior convertible debentures and common shares issuable
upon conversion of the senior convertible debentures may be sold from time to
time directly by any selling securityholder or, alternatively, through
underwriters, broker-dealers or agents. If senior convertible debentures or
common shares issuable upon conversion of the senior convertible debentures are
sold through underwriters or broker-dealers, the selling securityholder will be
responsible for underwriting discounts or commissions or agents' commissions.

The senior convertible debentures or common shares issuable upon conversion
of the senior convertible debentures may be sold:

. in one or more transactions at fixed prices;

. at prevailing market prices at the time of sale;

. at varying prices determined at the time of sale; or

. at negotiated prices.

Such sales may be effected in transactions (which may involve crosses or
block transactions):

. on any national securities exchange or quotation service on which the
senior convertible debentures or common shares issuable upon conversion
of the senior convertible debentures may be listed or quoted at the time
of sale;

. in the over-the-counter market;

. in transactions otherwise than on such exchanges or services or in the
over-the-counter market;

. through the writing of options; or

. through other types of transactions.

In connection with sales of the senior convertible debentures or common
shares issuable upon conversion of the senior convertible debentures or
otherwise, any selling securityholder may:

. enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the senior convertible debentures or common
shares issuable upon conversion of the senior convertible debentures in
the course of hedging the positions they assume;

. sell short and deliver senior convertible debentures or common shares
issuable upon conversion of the senior convertible debentures to close
out such short positions; or

. loan or pledge senior convertible debentures or common shares issuable
upon conversion of the senior convertible debentures to broker-dealers
that in turn may sell such securities.

Our common shares are publicly traded on the New York Stock Exchange. The
senior convertible debentures are a new issue of securities for which there is
currently no trading market. Although the senior convertible debentures have
been declared eligible for trading in the PORTAL market, any convertible senior
debentures sold under this prospectus will no longer trade in the PORTAL
market. We cannot predict whether an active trading market for the senior
convertible debentures will develop or be sustained. If an active market for
the senior convertible debentures fails to develop or be sustained, the trading
price of the senior convertible debentures could fall. If an active trading
market were to develop, the senior convertible debentures could trade at prices
that may be lower than the inital offering price. See "Risk Factors--You may
not be able to sell your senior convertible debentures."

The selling securityholders and any broker-dealers, agents or underwriters
that participate with the selling securityholders in the distribution of the
senior convertible debentures or the common shares issuable upon conversion of
the senior convertible debentures may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any commissions received by such
broker-dealers, agents or underwriters and any profits realized by the selling
securityholders on the resales of the senior convertible debentures or the
shares may be deemed to be underwriting commissions or discounts under the
Securities Act.

In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144, Rule 144A or any other available exemption from
registration under the Securities Act may be sold under Rule 144, Rule 144A or
such other available exemption rather than pursuant to this prospectus. There
is no assurance that any selling securityholder will sell any or all of the
senior convertible debentures or common shares issuable upon conversion of the
senior convertible debentures described herein, and any selling securityholder
may transfer, devise or gift such securities by other means not described
herein.

We originally sold the senior convertible debentures to the initial
purchasers on April 24, 2001 in a private placement. We agreed to indemnify and
hold the initial purchasers of the senior convertible debentures harmless
against certain liabilities under the Securities Act that could arise in
connection with the sale of the senior convertible debentures by their initial
purchasers. The registration rights agreement provides for us and the selling
securityholders to indemnify each other against certain liabilities arising
under the Securities Act.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, utilizing a "shelf" registration
process. Under the shelf registration process, the selling securityholders may
offer from time to time any combination of the securities described in this
prospectus, either separately or in units. This prospectus provides only a
general description of those securities. It is important for you to analyze the
information in this prospectus and the additional information described under
"Documents Incorporated by Reference" below.

We file annual, quarterly and current reports, proxy statements and other
information and documents with the SEC. You may read and copy, upon payment of
a fee set by the SEC, any document that we file with the SEC at any of its
public reference rooms in the following locations:

450 Fifth Street, N.W. Seven World Trade Center Citicorp Center
Washington, D.C. 20549 13th Floor, Suite 1300 500 West Madison Street
New York, NY 10048 14th Floor, Suite 1400
Chicago, IL 60661

You may also call the SEC at 1-800-432-0330 for more information on the
public reference rooms. Our filings 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 website.

This prospectus is one part of a registration statement filed on Form S-3
with the SEC under the Securities Act of 1933, as amended. This prospectus does
not contain all of the information set forth in the registration statement and
the exhibits and schedules thereto. For further information concerning our
company, the senior convertible debentures and the common shares, you should
read the entire registration statement. The registration statement has been
filed electronically and may be obtained in any manner listed above. Any
statements contained herein concerning the provisions of any document are not
necessarily complete, and, in each instance, reference is made to the copy of
such document filed as an exhibit to the registration statement or otherwise
filed with the SEC. Each such statement is qualified in its entirety by such
reference.

You should rely only on information provided in this prospectus, the
information incorporated by reference and the other parts of the registration
statement. We have not authorized any person to disseminate any information or
to make any representations other than those contained or incorporated by
reference in this prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by our
company. This prospectus does not constitute an offer to sell or the
solicitation of an offer to buy such securities in any circumstances in which
such offer or solicitation is unlawful. Neither the delivery of this
prospectus, nor any sale hereunder or thereunder, shall, under any
circumstances, create any implication that there has been no change in our
affairs or business since the date of this prospectus or that the information
contained or incorporated by reference is correct as of any time subsequent to
the date of such information.

Unless the context requires otherwise, whenever a reference is made in this
prospectus to the "company" or to "us," "we" or "our," such reference is to The
First American Corporation only and not its subsidiaries.

DOCUMENTS INCORPORATED BY REFERENCE

The SEC allows us to "incorporate by reference" certain information into
this prospectus. This means that we can disclose important information to you
by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus.
This prospectus incorporates by reference the documents set forth below that we
have previously filed with the SEC. These documents contain important business
and financial information about our company, including information concerning
its financial performance.

We incorporate by reference the following documents into this prospectus:

. annual report on Form 10-K for the fiscal year ended December 31, 2000;

. quarterly report on Form 10-Q for the fiscal quarter ended March 31,
2001;

. current reports on Form 8-K filed with the SEC on April 11, 2001, April
16, 2001, May 7, 2001, May 8, 2001, May 10, 2001, May 17, 2001 and
August 1, 2001;

. 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

. the description of rights to purchase Series A Junior Participating
Preferred Shares, which may be transferred with our common shares,
contained in our 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 by reference 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 after the date of this prospectus but prior to the termination of
any offering made pursuant to this prospectus. Information in this prospectus
and incorporated by reference is only current as of the date it is made.
Information in documents that we subsequently file with the SEC will
automatically update and supersede any previously disclosed information.

You may obtain a copy of our SEC filings at no cost by writing to us at The
First American Corporation, 1 First American Way, Santa Ana, California 92707-
5913, Attention: Mark R Arnesen, Esq., Secretary, or by telephoning us at (714)
800-3000.

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.

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 our operations and financial condition.
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.

The words "anticipates," "estimates," "prospects," "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. These risks, uncertainties and
factors include, among other things:

. general volatility of the capital markets and the market price of our
common shares;

. changes in the real estate market, interest rates or the general
economy;

. our ability to identify and complete acquisitions and successfully
integrate businesses we acquire;

. changes in government regulations that are applicable to our regulated
businesses;

. the degree and nature of our competition;

. an increase in our expenses;

. continued consolidation among our competitors and customers;

. technological changes may be more difficult or expensive than
anticipated;

. legal proceedings commenced by the California attorney general and
related litigation; or

. other factors described in our annual report on Form 10-K for the fiscal
year ended December 31, 2000.

LEGAL MATTERS

Certain legal matters with respect to the legality of the sale and issuance
of the securities offered hereby will be passed upon for First American by
White & Case LLP, 633 West Fifth Street, Los Angeles, California 90071.

EXPERTS

The consolidated financial statements of The First American Corporation
incorporated herein by reference to its Annual Report on Form 10-K for the
fiscal year ended December 31, 2000 have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, included
therein and given on the authority of such firm as experts in accounting and
auditing.

* * *

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. 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.

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The First American Corporation

$210,000,000 4.50% Senior Convertible Debentures Due 2008

7,500,000 Common Shares(subject to adjustment)

[LOGO OF FIRST AMERICAN]

----------------

PROSPECTUS

----------------

Dated August 8, 2001

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and commissions,
are estimated to be as follows:

Securities and Exchange Commission registration fee.................. $ 52,500
Trustee's fees....................................................... $ 15,000*
Accounting fees and expenses......................................... $ 10,000*
Legal fees and expenses.............................................. $ 25,000*
Printing expenses.................................................... $ 10,000*
Miscellaneous........................................................ $ 5,000*
--------
Total................................................................ $117,500*
========

--------
* Estimated.

Item 15. Indemnification of Directors and Officers.

Subject to certain limitations, Section 317 of the California Corporations
Code provides in part that a corporation shall have the power to indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of the corporation to
procure a judgment in its favor) by reason of the fact that the person is or
was an agent (which term includes officers and directors) of the corporation,
against expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with the proceeding if that person acted in
good faith and in a manner the person reasonably believed to be in the best
interests of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe the conduct of the person was unlawful.

The California indemnification statute, as provided in Section 317 of the
California Corporations Code (noted above), is nonexclusive and allows a
corporation to expand the scope of indemnification provided, whether by
provisions in its Bylaws or by agreement, to the extent authorized in the
corporation's articles.

The Restated Articles of Incorporation of the Registrant provide that: "The
liability of the directors of the Corporation for monetary damages shall be
eliminated to the fullest extent permissible under California law." The effect
of this provision is to exculpate directors from any liability to the
Registrant, or anyone claiming on the Registrant's behalf, for breaches of the
directors' duty of care. However, the provision does not eliminate or limit the
liability of a director for actions taken in his capacity as an officer. In
addition, the provision applies only to monetary damages and is not intended to
impair the rights of parties suing on behalf of the Registrant to seek
equitable remedies (such as actions to enjoin or rescind a transaction
involving a breach of the directors' duty of care or loyalty).

The Bylaws of the Registrant provide that, subject to certain
qualifications, "(i) The corporation shall indemnify its Officers and Directors
to the fullest extent permitted by law, including those circumstances in which
indemnification would otherwise be discretionary; (ii) the corporation is
required to advance expenses to its Officers and Directors as incurred,
including expenses relating to obtaining a determination that such Officers and
Directors are entitled to indemnification, provided that they undertake to
repay the amount advanced if it is ultimately determined that they are not
entitled to indemnification; (iii) an Officer or Director may bring suit
against the corporation if a claim for indemnification is not timely paid; (iv)
the corporation may not retroactively amend this Section 1 in a way which is
adverse to its Officers and Directors; (v) the provisions of subsections (i)
through (iv) above shall apply to all past and present Officers and Directors
of the corporation." "Officer" includes the following officers of the
Registrant: Chairman of the Board, President, Vice President, Secretary,
Assistant Secretary, Chief Financial Officer, Treasurer, Assistant Treasurer
and such

II-1

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, 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.

The Registrant's Deferred Compensation Plan (for purposes of this paragraph,
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, 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.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

Item 16. Exhibits.

Exhibit
Number Description
------- -----------

4.1 Description of First American's capital stock in Article Six of First
American's Restated Articles of Incorporation (incorporated by
reference from Exhibit 3.1 of Amendment No. 1, dated July 28, 1998, to
First American's Registration Statement No. 333-53681 on Form S-4).

4.2 Registration Rights Agreement dated as of April 24, 2001.*

II-2

Exhibit
Number Description
------- -----------

4.3 Indenture dated as of April 24, 2001.*

4.4 Form of Senior Convertible Debenture (contained in Exhibit 4.3).*

4.5 Rights Agreement (incorporated by reference from Exhibit 4 of First
American's Registration Statement on Form 8-A dated November 7, 1997).

5 Opinion of White & Case LLP.*

12 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges.*

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.*

25 Statement of Eligibility of Trustee under the Trust Indenture Act of
1939 on Form T-1.*
--------
* Previously filed.

Item 17. Undertakings.

The undersigned Registrant hereby undertakes:

(1) To file, during the period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
SEC by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.

II-3

The undersigned registrant hereby undertakes 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.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions described in Item 15 above, 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 the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.

* * *

II-4

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has 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 August 8, 2001.

THE FIRST AMERICAN CORPORATION

/s/ Parker S. Kennedy
By: _________________________________
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.

Signature Title Date
--------- ----- ----

/s/ D. P. Kennedy Chairman and Director August 8, 2001
______________________________________
D. P. Kennedy

/s/ Parker S. Kennedy President and Director August 8, 2001
______________________________________
Parker S. Kennedy

/s/ Thomas A. Klemens Executive Vice President, August 8, 2001
______________________________________ Chief Financial Officer
Thomas A. Klemens (Principal Financial
Officer)

/s/ Max O. Valdes Vice President (Principal August 8, 2001
______________________________________ Accounting Officer)
Max O. Valdes

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.

Signature Title Date
--------- ----- ----

* Director August 8, 2001
______________________________________
George L. Argyros

* Director August 8, 2001
______________________________________
Gary J. Beban

* Director August 8, 2001
______________________________________
J. David Chatham

Director August , 2001
______________________________________
Hon. William G. Davis

* Director August 8, 2001
______________________________________
James L. Doti

Director August , 2001
______________________________________
Lewis W. Douglas, Jr.

* Director August 8, 2001
______________________________________
Paul B. Fay, Jr.

* Director August 8, 2001
______________________________________
Frank E. O'Bryan

* Director August 8, 2001
______________________________________
Roslyn B. Payne

* Director August 8, 2001
______________________________________
D. Van Skilling

* Director August 8, 2001
______________________________________
Virginia Ueberroth

/s/ Parker S. Kennedy
*By: ____________________________
Parker S. Kennedy
Attorney-in-Fact

II-6

EXHIBIT INDEX

Exhibit
Number Description
------- -----------

4.2 Registration Rights Agreement dated as of April 24, 2001.*

4.3 Indenture dated as of April 24, 2001.*

4.4 Form of Senior Convertible Debenture (contained in Exhibit 4.3).*

4.5 Rights Agreement (incorporated by reference from Exhibit 4 of First
American's Registration Statement on Form 8-A dated November 7, 1997).

5 Opinion of White & Case LLP.*

12 Statement Regarding Computation of Ratio of Earnings to Fixed
Charges.*

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.*

25 Statement of Eligibility of Trustee under the Trust Indenture Act of
1939 on Form T-1.*
--------
* Previously filed.

II-7