Exhibit 10.9

Notice of Restricted Stock Unit Grant

 

Participant:    [Participant Name] Company:    First American Financial
Corporation Notice:    You have been granted the following Restricted Stock
Units in accordance with the terms of the Plan and the Restricted Stock Unit
Award Agreement (the “Award Agreement”) attached hereto. Type of Award:   
Restricted Stock Units Plan:    First American Financial Corporation 2010
Incentive Compensation Plan Grant:    Date of Grant: June 1, 2010    Restricted
Stock Units: [                    ] Period of Restriction:    As specified in
the Award Agreement. Rejection:    If you wish to accept this Restricted Stock
Unit Award, please access Fidelity NetBenefits® at www.netbenefits.com and
follow the steps outlined under the “Accept Grant” link at any time within
forty-five (45) days after the Date of Grant. If you do not accept your grant
via Fidelity NetBenefits® within forty-five (45) days after the Date of Grant,
you will have rejected this Restricted Stock Unit Award.

 

© First American Financial Corporation 2010

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Restricted Stock Unit Award Agreement

This Restricted Stock Unit Award Agreement (this “Agreement”), dated as of the
Date of Grant set forth in the Notice of Restricted Stock Unit Grant attached
hereto (the “Grant Notice”), is made between First American Financial
Corporation (the “Company”) and the Participant set forth in the Grant Notice.
The Grant Notice is included in and made part of this Agreement.

1. Definitions.

Capitalized terms used but not defined in this Agreement (including the Grant
Notice) have the meaning set forth in the Plan.

“Cause,” shall be defined as: (i) embezzlement, theft or misappropriation by the
Participant of any property of any of the Company or its affiliates;
(ii) Participant’s breach of any fiduciary duty to the Company or its
affiliates; (iii) Participant’s failure or refusal to comply with laws or
regulations applicable to the Company or its affiliates and their businesses or
the policies of the Company and its affiliates governing the conduct of its
employees or directors; (iv) Participant’s gross incompetence in the performance
of Participant’s job duties; (v) commission by Participant of a felony or of any
crime involving moral turpitude, fraud or misrepresentation; (vi) the failure of
Participant to perform duties consistent with a commercially reasonable standard
of care; (vii) Participant’s failure or refusal to perform Participant’s job
duties or to perform specific directives of Participant’s supervisor or
designee, or the senior officers or Board of Directors of the Company; or
(viii) any gross negligence or willful misconduct of Participant resulting in
loss to the Company or its affiliates, or damage to the reputation of the
Company or its affiliates.

“Outstanding Restricted Stock Units” shall mean the number of Restricted Stock
Units specified in the Grant Notice reduced by any Restricted Stock Units for
which the Period of Restriction has lapsed and/or any Restricted Stock Units
which have been cancelled or otherwise terminated.

2. Grant of the Restricted Stock Units.

Subject to the provisions of this Agreement and the provisions of the Plan, the
Company hereby grants to the Participant, pursuant to the Plan, a right to
receive the number of Shares set forth in the Grant Notice (“Restricted Stock
Units”).

3. Dividend Equivalents.

Each Outstanding Restricted Stock Unit shall accrue Dividend Equivalents with
respect to dividends that would otherwise be paid on the Shares underlying such
Restricted Stock Units during the period from the Grant Date to the date such
Shares are delivered in accordance with Section 6. As of any date that the
Company pays any cash dividend on its Shares, the Company shall credit the
Participant with any additional number of Restricted Stock Units equal to:

(a) the product resulting from the multiplication of the per Share cash dividend
paid by the Company on its common stock on such date by the total number of
Outstanding Restricted Stock Units subject to the Award as of the related
dividend payment record date (including any Dividend Equivalents previously
credited hereunder), divided by

(b) the Fair Market Value.

Any Restricted Stock Units credited pursuant to this Section 3 shall be subject
to the same Period of Restriction, payment, delivery and other terms, conditions
as restrictions as the original Restricted Stock Units to which they relate. Any
such crediting of Dividend Equivalents shall be conclusively determined by the
Committee.

 

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Calculations made in this Agreement with respect to Restricted Stock Units
(other than this Section 3), including, without limitation, Sections 4(a), 4(f)
and 5(a), are made on the Restricted Stock Units specified in the Grant Notice
or Outstanding Restricted Stock Units, as applicable, and not on any Dividend
Equivalents, provided, that any adjustment to or any determination as to the
Period of Restriction on such Restricted Stock Units or Outstanding Restricted
Stock Units shall apply in the same fashion to the related Dividend Equivalents.
For purposes of illustration only, the computation in Section 4 below of the
number of Restricted Stock Units as to which the Period of Restriction elapses
on Date II and Date III shall be initially computed without regard to Dividend
Equivalents; once the correct number of Restricted Share Units is calculated,
however, the actual Shares to be delivered shall be determined by increasing the
number of Restricted Stock Units by an amount that reflects the Dividend
Equivalents that would be credited on such Shares through Date II or Date III,
respectively.

4. Performance Criteria; Vesting.

(a) The Period of Restriction applicable to the Restricted Stock Units shall
commence on the Date of Grant and shall lapse as follows:

(i) On June 1, 2013 (“Date I”), in an amount equal to the product resulting from
the multiplication of the total Restricted Stock Units specified in the Grant
Notice and the Target Decimal for Date I;

 

  (ii) On June 1, 2014 (“Date II”), in an amount equal to

 

  (A) the product resulting from the multiplication of the total Restricted
Stock Units specified in the Grant Notice and the Target Decimal for Date II,
minus

 

  (B) any Restricted Stock Units for which the Period of Restriction lapsed
pursuant to Section 4(a)(i);

 

  (iii) On June 1, 2015 (“Date III”), in an amount equal to

 

  (A) the product resulting from the multiplication of the total Restricted
Stock Units specified in the Grant Notice and the Target Decimal for Date III,
minus

 

  (B) any Restricted Stock Units for which the Period of Restriction lapsed
pursuant to Sections 4(a)(i) and (ii).

(b) For purposes of this Agreement, a “Measurement Date” means any of Date I,
Date II or Date III.

(c) For purposes of this Agreement, “TSR” means with respect to any period from
the Date of Grant up to and including the applicable Measurement Date, the
highest 20 Trading Day average of the amount (expressed as a decimal) resulting
from the calculation (on each Trading Day) of the following formula:

LOGO [g20250ex10-9_003.jpg]

where:

 

  (i) “CSP” equals the last sale price reported for a Share on the New York
Stock Exchange on such day;

 

  (ii) “ASP” equals an amount equal to the average of the last sale price
reported for the Shares on the New York Stock Exchange for all Trading Days from
and including June 2, 2010 to and including July 31, 2010; and

 

  (ii) “DIV” equals the aggregate cash dividends per Share paid by the Company
from June 2, 2010 through and including such day.

 

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(d) For purposes of this Agreement, “Trading Day” means any day on which the New
York Stock Exchange is open for trading for at least 5 hours.

(e) For purposes of this Agreement, “Target Decimal” means:

 

  (i) For Date I, if

 

  (A) TSR is less than 0.331, zero (0).

 

  (B) if TSR is equal to or greater than 0.331, the amount resulting from the
calculation of the following formula:

LOGO [g20250pg004a.jpg]

where (1) “u” equals TSR minus 0.331 (provided that “u” shall not exceed 0.405)
and (2) “v” equals 0.074;

 

  (ii) For Date II, if

 

  (A) TSR is less than 0.464, zero (0).

 

  (B) if TSR is equal to or greater than 0.464, the amount resulting from the
calculation of the following formula:

LOGO [g20250pg004b.jpg]

where (1) “w” equals TSR minus 0.464 (provided that “w” shall not exceed 0.574)
and (2) “x” equals 0.110;

 

  (iii) For Date III, if

 

  (A) TSR is less than 0.611, zero (0).

 

  (B) if TSR is equal to or greater than 0.611, the amount resulting from the
calculation of the following formula:

LOGO [g20250pg004c.jpg]

where (1) “y” equals TSR minus 0.611 (provided that “y” shall not exceed 0.762)
and (2) “z” equals 0.151;

(f) Subject to the terms of the Plan and the remaining provisions of this
Section 4(f), all Outstanding Restricted Stock Unit as of the Participant’s
Termination shall be immediately forfeited. Notwithstanding the foregoing to the
contrary, in the event the Participant’s Termination is due to his or her death,
Disability or Termination by the Company, a Subsidiary or an Affiliate without
Cause, the Participant shall be entitled to receive a prorated number of
Restricted Stock Units in an amount equal to (X) the product resulting from the
multiplication of the Restricted Stock Units originally granted hereunder by a
fraction the numerator of which is the total number of days elapsed between
June 1, 2010 and the date of such Termination and the denominator of which is
1,826, minus (Y) any Restricted Stock Units for which the Period of Restriction
has lapsed pursuant to Section 4(a). Notwithstanding the preceding sentence, the
lapse of any Period of Restriction with respect to such Restricted Stock Units
shall remain subject to Sections 4(a) and 5. After the adjustment contemplated
above in this Section 4(f), for all purposes under this Agreement the number of
Restricted Stock Units originally granted under this Agreement shall be deemed
to be the number resulting from the calculation set forth in Section 4(f)(X).

(i) Notwithstanding the preceding sentences of Section 4(f), in the event of the
Participant’s Termination due to his or her Disability or Termination by the
Company, a

 

© First American Financial Corporation 2010

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Subsidiary or an Affiliate without Cause, the Participant shall be entitled to
receive such prorated number of Restricted Stock Units only if he or she has
signed and delivered to the Company a signed separation agreement (in the form
established by the Company) within 60 days of such Termination (or such longer
period of time required by applicable law) and such separation agreement is not
subsequently revoked.

(ii) In the event of Participant’s Termination for any other reason, including,
without limitation, for Cause or voluntarily by the Participant for any reason
(including retirement), any Outstanding Restricted Stock Units shall be
immediately forfeited.

5. Change of Control.

(a) In the event of a Change of Control the Outstanding Restricted Stock Units
as of the date of such Change of Control to which the Participant may
subsequently be entitled to receive shall be adjusted as follows:

(i) if the TSR as of the date of such Change of Control (the “COC TSR”) is less
than the amount resulting from the calculation of the following formula (the
“Threshold COC Target”), then all Outstanding Restricted Stock Units shall be
immediately forfeited:

LOGO [g20250ex10-9_005a.jpg]

or

(ii) if the COC TSR equals the Threshold COC Target, then the Outstanding
Restricted Stock Units shall be adjusted to an amount equal to

(X) 50% of the Restricted Stock Units specified in the Grant Notice minus

(Y) the amount of any Restricted Stock Units for which the Period of Restriction
lapsed pursuant to Section 4(a),

and the Period of Restriction with respect to such Restricted Stock Units shall
lapse as provided in Section 5(b) (notwithstanding anything in Section 4(a) to
the contrary);

or

(iii) if the COC TSR equals or exceeds the amount resulting from the calculation
of the following formula (the “High COC Target”), then the Outstanding
Restricted Stock Units shall be adjusted to an amount equal to the Outstanding
Restricted Stock Units minus the amount of any Restricted Stock Units for which
the Period of Restriction lapsed pursuant to Section 4(a), and the Period of
Restriction with respect to such Restricted Stock Units shall lapse as provided
in Section 5(b) (notwithstanding anything in Section 4(a) to the contrary):

LOGO [g20250ex10-9_005b.jpg]

or

 

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(iv) in the event the COC TSR is less than the High COC Target and greater than
the Threshold COC Target, then the Outstanding Restricted Stock Units shall be
adjusted to an amount equal to

(X) the product resulting from the multiplication of the number of Restricted
Stock Units specified in the Grant Notice by the decimal resulting from the
calculation of the following formula minus

(Y) the amount of any Restricted Stock Units for which the Period of Restriction
lapsed pursuant to Section 4(a),

and the Period of Restriction with respect to any such Restricted Stock Units
shall lapse as provided in Section 5(b) (notwithstanding anything in
Section 4(a) to the contrary):

LOGO [g20250pg006.jpg]

For purposes of this Section 5(a):

 

  (1) “ASP” equals the amount provided in Section 4(c)(2), above;

 

  (2) “n” equals an amount equal (expressed to three decimal places) the
quotient resulting from the division of (I) the number of days between and
including June 1, 2010 and the date on which the Change of Control occurs by
(II) 365;

 

  (3) “f” equals the COC TSR;

 

  (4) “g” equals the Threshold COC Target;

 

  (5) “h” equals the High COC Target.

(b) Following the adjustment set forth in Section 5(a), the Period of
Restriction for any Outstanding Restricted Stock Units shall lapse as follows:

(i) if the Participant has not experienced a Termination and the Change of
Control occurs on or before Date I, 33% on Date I, 34% on Date II and the
balance on Date III; or

(ii) if the Participant has not experienced a Termination and the Change of
Control occurs after Date I and on or before Date II, 50% on Date II and 50% on
Date III,; or

(iii) if the Participant has not experienced a Termination and the Change of
Control occurs after Date II and on or before Date III, 100% on Date III,
assuming continued employment through such date; or

(iv) if as a result of such Change of Control the Company ceases to publicly
trade on the New York Stock Exchange (or other comparable national exchange in
the United States of America) or the Company is not the surviving company as a
result of such Change of Control and the surviving Company does not trade on the
New York Stock Exchange (or other comparable national exchange in the United
States of America) or the Company is not the surviving Company and the surviving
Company refuses to assume the Company’s obligations under this Agreement,
immediately upon such Change of Control; or

(v) immediately following the Participant’s Termination following a Change of
Control due to his or her death, Disability or Termination by the Company (or a

 

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successor in interest), a Subsidiary or an Affiliate without Cause; provided in
the event of the Participants Termination due to his or her Disability or
Termination by the Company (or a successor in interest), a Subsidiary or an
Affiliate without Cause, the Participant has signed and delivered to the Company
a signed separation agreement (in the form established by the Company) within 60
days of such Termination (or such longer period of time required by applicable
law) and such separation agreement is not subsequently revoked; provided,
further, that if the Participant’s Termination following a Change of Control is
for a reason other than his or her death, Disability or Termination by the
Company (or a successor in interest), a Subsidiary or an Affiliate without
Cause, then all Outstanding Restricted Stock Unit as of such Termination shall
be immediately forfeited; or

(vi) immediately upon a Change of Control if, prior to such Change of Control,
the Participant experienced a Termination due to his or her death, Disability or
Termination by the Company (or a successor in interest), a Subsidiary or an
Affiliate without Cause, provided in the event of the Participants Termination
due to his or her Disability or Termination by the Company (or a successor in
interest), a Subsidiary or an Affiliate without Cause, the Participant had
signed and delivered to the Company a signed separation agreement (in the form
established by the Company) within 60 days of such Termination (or such longer
period of time required by applicable law) and such separation agreement was not
subsequently revoked.

For the purpose of Section 5(b)(iv), a surviving company shall only be deemed to
have assumed the Company’s obligations under this Agreement if it substitutes
equivalent or better (from the perspective of the Participant) restricted stock
units in the surviving company’s stock for the Outstanding Restricted Stock
Units.

6. Delivery of Shares.

As soon as reasonably practicable following the lapse of the applicable portion
of the Period of Restriction, but in no event later than 60 days following the
date of such lapse, the Company shall cause to be delivered to the Participant
the full number of Shares underlying the Restricted Stock Units as to which such
portion of the Period of Restriction has so lapsed, together with Shares
comprising all accrued Dividend Equivalents with respect to such Restricted
Stock Units, subject to satisfaction of applicable tax withholding obligations
with respect thereto pursuant to Article XVII of the Plan; provided, however,
that if the Participant’s Termination occurs due to Disability, such delivery of
Shares shall be delayed for six months from the date of such Participant’s
Termination if the Participant is a “specified employee” (as such term is
defined in Section 409A(a)(2)(B)(i) of the Code) and if necessary to avoid the
imposition of taxes on the Participant pursuant to Section 409A of the Code.

7. No Ownership Rights Prior to Issuance of Shares.

Neither the Participant nor any other person shall become the beneficial owner
of the Shares underlying the Restricted Stock Units, nor have any rights to
dividends (other than the right to Dividend Equivalents pursuant to Section 3)
or other rights as a shareholder with respect to any such Shares, until and
after such Shares have been actually issued to the Participant and transferred
on the books and records of the Company or its agent in accordance with the
terms of the Plan and this Agreement.

8. Detrimental Activity.

(a) Notwithstanding any other provisions of this Agreement to the contrary, if
at any time prior to the delivery of Shares with respect to the Restricted Stock
Units, the Participant engages in Detrimental Activity, such Restricted Stock
Units shall be cancelled and rescinded without any payment or consideration
therefor. The determination of whether the Participant has engaged in
Detrimental Activity shall be made by the Committee in its good faith
discretion, and lapse of the Period of Restriction and delivery of Shares with
respect to the Restricted Stock Units shall be suspended pending resolution to
the Committee’s satisfaction of any investigation of the matter.

(b) For purposes of this Agreement, “Detrimental Activity” means at any time
(i) using information received during the Participant’s employment with the
Company and/or its Subsidiaries and

 

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Affiliates relating to the business affairs of the Company or any such
Subsidiaries or Affiliates, in breach of the Participant’s express or implied
undertaking to keep such information confidential; (ii) directly or indirectly
persuading or attempting to persuade, by any means, any employee of the Company
or any of its Subsidiaries or Affiliates to breach any of the terms of his or
her employment with Company, its Subsidiaries or its Affiliates; (iii) directly
or indirectly making any statement that is, or could be, disparaging of the
Company or any of its Subsidiaries or Affiliates, or any of their respective
employees (except to the extent necessary to respond truthfully to any inquiry
from applicable regulatory authorities or to provide information pursuant to
legal process); (iv) directly or indirectly engaging in any illegal, unethical
or otherwise wrongful activity that is, or could be, substantially injurious to
the financial condition, reputation or goodwill of the Company or any of its
Subsidiaries or Affiliates; or (v) directly or indirectly engaging in an act of
misconduct such as, embezzlement, fraud, dishonesty, nonpayment of any
obligation owed to the Company or any of its Subsidiaries or Affiliates, breach
of fiduciary duty or disregard or violation of rules, policies or procedures of
the Company or any of its Subsidiaries or Affiliates, an unauthorized disclosure
of any trade secret or confidential information of the Company or any of its
Subsidiaries or Affiliates, any conduct constituting unfair competition, or
inducing any customer to breach a contract with the Company or any of its
Subsidiaries or Affiliates, in each case as determined by the Committee in its
good faith discretion.

9. No Right to Continued Employment.

None of the Restricted Stock Units nor any terms contained in this Agreement
shall confer upon the Participant any express or implied right to be retained in
the employ of the Company or any Subsidiary or Affiliate for any period, nor
restrict in any way the right of the Company or any Subsidiary or any Affiliate,
which right is hereby expressly reserved, to terminate the Participant’s
employment at any time for any reason. For the avoidance of doubt, this
Section 9 is not intended to amend or modify any other agreement, including any
employment agreement, that may be in existence between the Participant and the
Company or any Subsidiary or Affiliate.

10. The Plan.

In consideration for this grant, the Participant agrees to comply with the terms
of the Plan and this Agreement. This Agreement is subject to all the terms,
provisions and conditions of the Plan, which are incorporated herein by
reference, and to such regulations as may from time to time be adopted by the
Committee. In the event of any conflict between the provisions of the Plan and
this Agreement, the provisions of the Plan shall control, and this Agreement
shall be deemed to be modified accordingly. The Plan and the prospectus
describing the Plan can be found on Fidelity NetBenefits® at www.netbenefits.com
under Plan Information and Documents. A paper copy of the Plan and the
prospectus shall be provided to the Participant upon the Participant’s written
request to the Company at First American Financial Corporation, 1 First American
Way, Santa Ana, California 92707, Attention: Incentive Compensation Plan
Administrator, or such other address as the Company may from time to time
specify.

11. Compliance with Laws and Regulations.

(a) The Restricted Stock Units and the obligation of the Company to sell and
deliver Shares hereunder shall be subject in all respects to (i) all applicable
Federal and state laws, rules and regulations and (ii) any registration,
qualification, approvals or other requirements imposed by any government or
regulatory agency or body which the Committee shall, in its discretion,
determine to be necessary or applicable. Moreover, the Company shall not deliver
any certificates for Shares to the Participant or any other person pursuant to
this Agreement if doing so would be contrary to applicable law. If at any time
the Company determines, in its discretion, that the listing, registration or
qualification of Shares upon any national securities exchange or under any state
or Federal law, or the consent or approval of any governmental regulatory body,
is necessary or desirable, the Company shall not be required to deliver any
certificates for Shares to the Participant or any other person pursuant to this
Agreement unless and until such listing, registration, qualification, consent or
approval has been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Company.

 

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(b) It is intended that the Shares received in respect of the Restricted Stock
Units shall have been registered under the Securities Act. If the Participant is
an “affiliate” of the Company, as that term is defined in Rule 144 under the
Securities Act (“Rule 144”), the Participant may not sell the Shares received
except in compliance with Rule 144. Certificates representing Shares issued to
an “affiliate” of the Company may bear a legend setting forth such restrictions
on the disposition or transfer of the Shares as the Company deems appropriate to
comply with Federal and state securities laws.

(c) If, at any time, the Shares are not registered under the Securities Act,
and/or there is no current prospectus in effect under the Securities Act with
respect to the Shares, the Participant shall execute, prior to the delivery of
any Shares to the Participant by the Company pursuant to this Agreement, an
agreement (in such form as the Company may specify) in which the Participant
represents and warrants that the Participant is purchasing or acquiring the
shares acquired under this Agreement for the Participant’s own account, for
investment only and not with a view to the resale or distribution thereof, and
represents and agrees that any subsequent offer for sale or distribution of any
kind of such Shares shall be made only pursuant to either (i) a registration
statement on an appropriate form under the Securities Act, which registration
statement has become effective and is current with regard to the Shares being
offered or sold, or (ii) a specific exemption from the registration requirements
of the Securities Act, but in claiming such exemption the Participant shall,
prior to any offer for sale of such Shares, obtain a prior favorable written
opinion, in form and substance satisfactory to the Company, from counsel for or
approved by the Company, as to the applicability of such exemption thereto.

12. Notices.

All notices by the Participant or the Participant’s assignees shall be addressed
to The First American Corporation, 1 First American Way, Santa Ana, California
92707, Attention: Incentive Compensation Plan Administrator, or such other
address as the Company may from time to time specify. All notices to the
Participant shall be addressed to the Participant at the Participant’s address
in the Company’s records.

13. Severability.

In the event any provision of this Agreement shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
parts of this Agreement, and this Agreement shall be construed and enforced as
if the illegal or invalid provision had not been included.

14. Other Plans.

The Participant acknowledges that any income derived from the Restricted Stock
Units shall not affect the Participant’s participation in, or benefits under,
any other benefit plan or other contract or arrangement maintained by the
Company or any Subsidiary or Affiliate. For purposes of the Company’s Executive
Supplemental Benefit Plan and Management Supplemental Benefit Plan, as the same
may be amended from time to time, the Restricted Stock Units (and Dividend
Equivalents paid with respect thereto) shall not be included in or otherwise be
deemed to be “Covered Compensation”.

 

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15. Section 409A.

The provisions of this Agreement shall be construed and interpreted to be exempt
from or comply with Section 409A of the Code so as to avoid the imposition of
any penalties, taxes or interest thereunder.

 

FIRST AMERICAN FINANCIAL CORPORATION

By:

 

 

 

Name:

 

Title:

Date:

  [Grant Date]

Acknowledged and agreed as of the Date of Grant:

 

Printed Name:

   [Participant Name]

Date:

   [Acceptance Date]

 

© First American Financial Corporation 2010

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