Exhibit (10)(mm)

The First American Corporation

Deferred Compensation Plan

(Amended and Restated

Effective as of January 1, 2009)

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

Contents

 

 

 

Introduction

   1

Background and History

   1

Restatement of Plan

   1

Application of Plan

   1

Article 1. Title, Definitions and Construction

   2

1.1 Title

   2

1.2 Definitions

   2

1.3 Gender and Number

   10

1.4 Headings

   10

1.5 Requirement to Be in “Written Form”

   10

Article 2. Participation

   11

2.1 Participation

   11

Article 3. Deferral Elections

   12

3.1 Elections to Defer Compensation

   12

3.2 Distribution Elections

   13

3.3 Investment Elections

   14

Article 4. Participant Accounts and Trust Funding

   16

4.1 Participant Accounts

   16

4.2 Funding of Trust

   16

Article 5. Vesting

   18

Article 6. Distributions

   19

6.1 Scheduled Distributions

   19

6.2 Post-2004 Early Distributions of Pre-2005 Plan Year Balances

   19

6.3 Distribution Upon Separation from Service

   19

6.4 Death Benefit

   19

6.5 Inability to Locate Participant

   22

6.6 No Acceleration of Payments

   22

6.7 Tax Withholding

   23

6.8 Six-Month Delay for Specified Employee

   23

6.9 Distributions Upon Unforeseeable Financial Emergency

   23

 

i

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

Article 7. Administration

   24

7.1 Plan Committee

   24

7.2 Operation of the Plan Committee

   24

7.3 Agents

   25

7.4 Compensation and Expenses

   25

7.5 Plan Committee’s Powers and Duties

   25

7.6 Plan Committee’s Decisions Conclusive/Exclusive Benefit

   26

7.7 Indemnity

   26

7.8 Insurance

   28

7.9 Quarterly Statements and Notices

   28

7.10 Data

   29

7.11 Claims Procedure

   29

Article 8. Adoption And Withdrawal By Participating Companies

   32

8.1 Adoption of the Plan

   32

8.2 Withdrawal From the Plan

   33

8.3 Cessation of Future Contributions

   33

Article 9. Amendment and Termination

   34

9.1 Amendment and Termination Generally

   34

9.2 Amendment and Termination Following a Change of Control

   34

Article 10. Miscellaneous

   35

10.1 No Enlargement of Employee Rights

   35

10.2 Leave of Absence

   35

10.3 Withholding

   35

10.4 No Examination or Accounting

   35

10.5 Records Conclusive

   35

10.6 Service of Legal Process

   35

10.7 Governing Law

   35

10.8 Severability

   36

10.9 Facility of Payment

   36

10.10 General Restrictions Against Alienation

   36

10.11 Excise Tax for Code Section 409A Violations

   37

10.12 Counterparts

   37

10.13 Assignment

   37

Appendix A. The First American Corporation Deferred Compensation Plan Effective
as of January 1, 1998

   38

 

ii

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

Introduction

Background and History

Effective as of January 1, 1998, the First American Corporation (“Company”)
originally established The First American Corporation Deferred Compensation Plan
(“Plan”), formerly known as The First American Financial Corporation Deferred
Compensation Plan.

The Plan is intended to constitute a plan which is unfunded and maintained
primarily for the purpose of providing deferred compensation to a select group
of management or highly compensated employees and is intended to meet the
exemptions provided in ERISA sections 201(2), 301(a)(3), and 401(a)(1), as well
as the requirements of Department of Labor Regulations section 2520.104-23. The
Plan shall be administered and interpreted so as to meet the requirements of
these exemptions and the regulations.

Restatement of Plan

The Company is now amending the Plan to comply with the requirements of Code
section 409A and the guidance issued by the Internal Revenue Service and the
U.S. Treasury Department thereunder and to make certain other clarifying or
technical amendments to the Plan.

Plan provisions in effect prior to 2005 are reflected in Appendix A to this Plan
and are referenced in this restatement as the Pre-409A Plan Document. Nothing
contained in this restatement shall be interpreted as amending or otherwise
modifying any provision under the Pre-409A Plan Document. For ease of reference,
however, certain provisions in the restated Plan document other than Appendix A
do make reference to or describe Plan provisions in effect prior to 2005.

Application of Plan

Certain amounts, designated as amounts in a “Grandfathered Account” were earned
and vested under this Plan on or before December 31, 2004. As a result, such
amounts are not subject to Code section 409A. Amounts that are earned and vested
after December 31, 2004 are subject to Code section 409A. Since January 1, 2005,
the Plan has been administered in good-faith compliance with all available Code
section 409A guidance, including, but not limited to, proposed regulations
issued September 29, 2005 and final regulations issued April 17, 2007. On or
after the Effective Date, the Plan Committee shall administer this Plan in a
manner designed to comply with Code section 409A and the Plan Committee shall
disregard any Plan provision if the Plan Committee determines that application
of such provision would subject the Participant to an additional excise tax
under Code section 409(a)(1)(B).

 

1

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

Article 1. Title, Definitions and Construction

1.1 Title

This Plan shall be known as “The First American Corporation Deferred
Compensation Plan.”

1.2 Definitions

Whenever the following words and phrases are used in this Plan, with the first
letter capitalized, they shall have the meanings specified below.

 

(a) “Account” means a Participant’s post-2004 Deferral Account.

 

(b) “Affiliate” means:

 

  (1) Any entity or organization that, together with the Company, is part of a
controlled group of corporations, within the meaning of Code section 414(b);

 

  (2) Any trade or business that, together with the Company, is under common
control, within the meaning of Code section 414(c); and

 

  (3) Any entity or organization that is required to be aggregated with the
Company, pursuant to Code sections 414(m) or 414(o).

For purposes of this Plan, however, the term “Affiliate” shall be interpreted
such that the phrase “at least 50 percent” will be substituted for the phrase
“at least 80 percent” in each place that it appears in Code section 1563.
Additionally, an entity shall be an Affiliate only during the period when the
entity has the required relationship, under this Plan section 1.2, with the
Company.

 

(c) “Base Salary” means a Participant’s annual base salary and all other
remuneration for services rendered to a Participating Company, prior to
reduction for any salary contributions to a plan established pursuant to Code
sections 125 or 401(k), including payments from other non-qualified deferred
compensation plans sponsored by a Participating Company, but excluding bonus or
other incentive payments or income derived from equity-based compensation.

 

(d) “Beneficiary” means the person, persons or entity designated by a
Participant to receive the benefits described in this Plan in the event of the
Participant’s death.

Each Participant shall designate in writing consistent with Plan section 1.5 and
in accordance with procedures established by the Plan Committee the person or
persons, including a trustee, personal representative or other fiduciary, to
receive the benefits specified hereunder in the event of the Participant’s
death. No Beneficiary designation shall become effective until it is filed with
the Plan Committee. Any designation shall be revocable at any time through a
written instrument filed by the Participant with the Plan Committee with or
without the consent of the previous

 

2

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

Beneficiary. If there is no Beneficiary designation in effect, then the person
designated to receive the death benefit specified in Plan section 6.4 shall be
the Beneficiary. However, no designation of a Beneficiary other than the
Participant’s spouse shall be valid unless the spouse has consented to such
designation in writing in accordance with procedures established by the Plan
Committee or its designee. If there is no such designation or if there is no
surviving designated Beneficiary, then the Participant’s surviving spouse shall
be the Beneficiary. If there is no surviving spouse to receive any benefits
payable in accordance with the preceding sentence, the duly appointed and
currently acting personal representative of the Participant’s estate (which
shall include either the Participant’s probate estate or living trust) shall be
the Beneficiary. In any case where there is no such personal representative of
the Participant’s estate duly appointed and acting in that capacity within 90
days after the Participant’s death (or such extended period as the Plan
Committee determines is reasonably necessary to allow such personal
representative to be appointed, but not to exceed 180 days after the
Participant’s death), then Beneficiary shall mean the person or persons who can
verify by affidavit or court order to the satisfaction of the Plan Committee
that they are legally entitled to receive the benefits specified hereunder. In
the event any amount is payable under the Plan to a minor, payment shall not be
made to the minor, but instead be paid:

 

  (1) To that person’s living parent(s) to act as custodian;

 

  (2) If that person’s parents are then divorced, and one parent is the sole
custodial parent, to such custodial parent; or

 

  (3) If no parent of that person is then living, to a custodian selected by the
Plan Committee to hold the funds for the minor under the Uniform Transfers or
Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If
no parent is living and the Plan Committee decides not to select another
custodian to hold the funds for the minor, then payment shall be made to the
duly appointed and currently acting guardian of the estate for the minor or, if
no guardian of the estate for the minor is duly appointed and currently acting
within 60 days after the date the amount becomes payable, payment shall be
deposited with the court having jurisdiction over the estate of the minor. Any
and all liability of the Company shall terminate upon payment by the Company of
all benefits owed hereunder pursuant to any unrevoked Beneficiary designation or
to the Participant’s estate if no such designation exists.

 

(e) “Board” means the Board of Directors of The First American Corporation.

 

(f) “Bonuses” means such additional amounts of income or incentive pay as a
Participating Company may determine to pay to an employee, as determined in the
sole and absolute discretion of such Participating Company. Income attributable
to equity-based compensation will not be included in this definition.

 

3

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

(g) “Change of Control” means the occurrence of any of the following:

 

  (1) The acquisition by any person, entity or “group” (as defined in section
13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)) as
beneficial owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the then outstanding
securities of the Company.

 

  (2) A change in the composition of the Board occurring within a two-year
period, as a result of which fewer than a majority of the directors are
Incumbent Directors; or

 

  (3) Any other event constituting a change in control required to be reported
in response to item 6(e) of Schedule 14A of Regulation 14A under the Exchange
Act.

Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred by reason of the acquisition of Company securities by the Company, any
entity controlled by the Company or any plan sponsored by the Company which is
qualified under Code section 401(a) or by reason of the acquisition of Company
securities (either directly or indirectly as a result of a merger, consolidation
or otherwise) or other corporate restructuring event of the Company in a
transaction approved by the Incumbent Directors.

 

(h) “Code” means the Internal Revenue Code of 1986, as amended.

 

(i) “Commissions” means a Participant’s remuneration earned from a Participating
Company that is dependent on sales activity and is not related to Base Salary or
Bonuses.

 

(j) “Company” means The First American Corporation and any successor corporation
or corporations.

 

(k) “Compensation” means the Base Salary, Commissions and Bonuses that the
Participant is entitled to receive for services rendered to the Company. All
deferral elections are applied to the Plan Year in which the Compensation is
earned, regardless of when it is paid. Deferral elections covered under
subsection (w) shall not include Compensation earned prior to the expiration of
the 30-day period reflected at subsection (w).

 

(l) “Deferral Account” means the bookkeeping account maintained by the Plan
Committee for each Participant that is credited with amounts earned and vested
on and after December 31, 2004 equal to

 

4

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

  (1) The portion of the Participant’s Compensation that the Participant elects
to defer, and

 

  (2) Interest pursuant to Plan section 4.1.

 

(m) “Deferral Amount” means the amount of the Participant’s Compensation that
the Participant elects to defer each Plan Year pursuant to Article 3 of the
Plan.

 

(n) “Disability” means a physical or mental condition which renders the
Participant eligible for disability payments under the Social Security Act.

 

(o) “Distributable Amount” means the balance in the Participant’s Deferral
Account provided that such balance in the Deferral Account has also satisfied
all requirements in Article 6 of the Plan necessary to be distributable.

 

(p) “Early Distribution” means an election by a Participant, with respect to the
Participant’s pre-2005 Plan Year balances as set forth in the Pre-409A Plan
Document at Appendix A, and in accordance with Plan section 6.2 to accelerate or
otherwise change the time or form (or time and form) of payment with respect to
such pre-2005 deferrals.

 

(q) “Effective Date” means January 1, 2009.

 

(r) “Eligible Employee” means such management and highly compensated employees
as are designated by the Plan Committee or its designee for participation in
this Plan.

 

(s) “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

 

(t) “Fund” means one or more of the investment funds selected by the Plan
Committee pursuant to Plan section 3.3.

 

(u) “Grandfathered Account” means the Account of a Participant composed entirely
of deferred compensation that was earned and vested prior to 2005. Amounts
designated to the Grandfathered Account are not subject to Code section 409A and
are governed solely by the terms of the Pre-409A Plan Document as set forth at
Appendix A.

 

(v) “Incumbent Directors” means directors who either are:

 

  (1) Directors of the Company as of January 1, 2009; or

 

  (2)

Elected, or nominated for election, to the Board with the affirmative votes of
at least two-thirds of the Incumbent Directors at the time of such election or
nomination, but shall not include an individual not otherwise an Incumbent

 

5

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

 

Director whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors to the Company.

 

(w) “Initial Election Period” means the 30-day period immediately following the
date an employee shall first be designated by the Company as an Eligible
Employee for purposes of Article 2 of the Plan or any other account based plan
established or maintained by the Company or any Affiliate that allows for the
elective deferral of compensation, as determined under Treasury Regulations
section 1.409A-1(c)(2)(i)(A).

 

(x) “Investment Return” means, for each Fund, an amount equal to the net rate of
gain or loss on the assets of such Fund during each business day.

 

(y) “Key Employee Policy” means the policy used by the Company to identify
Specified Employees consistent with the requirements of Treasury Regulations
section 1.409A-1(i).

 

(z) “Military Leave” means leave subject to reemployment rights under the
Uniformed Services Employment and Reemployment Rights Act of 1994, as amended.

 

(aa) “Participant” means any Eligible Employee who becomes a Participant in
accordance with Article 2 of the Plan.

 

(bb) “Participating Company” means the Company and each Affiliate that the Board
of the Company or its designee authorizes to participate in this Plan provided
that each such Affiliate’s governing body has accepted such offer to have
certain of its employees to be eligible to participate.

 

(cc) “Payment Date” means the first month following the end of the calendar
quarter in which the Participant has a Separation from Service or a Scheduled
Withdrawal Date. Notwithstanding the above, the Payment Date for a Specified
Employee on account of a Separation from Service will not be prior to the
expiration of the six-month anniversary of such Specified Employee’s Separation
from Service.

 

(dd) “Payment Event” means the Participant’s Separation from Service, including
a Separation from Service caused by the Participant’s death, the Participant’s
elected Scheduled Withdrawal Date or a qualifying Unforeseeable Financial
Emergency as set forth in Plan section 6.9.

 

(ee) “Plan” means The First American Corporation Deferred Compensation Plan, as
amended from time to time.

 

(ff) “Plan Committee” means the Plan Committee appointed by the Board to
administer the Plan in accordance with Article 7 of the Plan.

 

6

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

(gg) “Plan Year” means the 12-consecutive month period beginning on each
January 1 and ending on December 31.

 

(hh) “Policy” means the life insurance policy or policies purchased in
accordance with the terms of this Plan.

 

(ii) “Pre-409A Plan Document” means the Plan document as in effect on or before
December 31, 2004 and prior to the application of Code section 409A.

 

(jj) “Qualified Divorce Order” means a divorce order that:

 

  (1) Creates or recognizes the existence of an alternate payee’s right to, or
assigns to an alternate payee the right to, receive all or a portion of the
benefits payable to a Participant under this Plan;

 

  (2) Clearly specifies:

 

  (A) The name and the last known mailing address of the Participant and the
name and mailing address of the alternate payee covered by the order;

 

  (B) The amount or percentage of the Participant’s benefits to be paid by this
Plan to the alternate payee, or the manner in which such amount or percentage is
to be determined;

 

  (C) That the alternate payee will receive a lump sum distribution; and

 

  (D) That it applies to this Plan; and

 

  (3) Does not:

 

  (A) Require this Plan to provide any type or form of benefit, or any option,
not otherwise provided under the Plan;

 

  (B) Require this Plan to provide increased benefits;

 

  (C) Require the payment of benefits to an alternate payee that are required to
be paid to another alternate payee under another divorce order previously
determined to be a Qualified Divorce Order; or

 

  (D) Require the payment of benefits under this Plan at a time or in a manner
that would cause the Plan to fail to satisfy the requirements of Code
section 409A (or other applicable section) and any regulations promulgated
thereunder or that would otherwise jeopardize the deferred taxation treatment of
any amounts under this Plan.

 

(kk)

“Scheduled Withdrawal” means the amount of Compensation deferred by a
Participant in a given Plan Year, and earnings and losses attributable thereto,
which

 

7

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

 

the Participant elected at the time that the corresponding deferral election was
made to have distributed in-service at a Scheduled Withdrawal Date. A
Participant may not elect to receive a Scheduled Withdrawal equal to an amount
other than the total amount of Compensation (and related earnings or losses)
deferred during the Plan Year to which the Scheduled Withdrawal relates.

 

(ll) “Scheduled Withdrawal Date” means the distribution date elected by the
Participant at the time that the corresponding Plan Year deferral election was
made for a Scheduled Withdrawal. A Participant’s Scheduled Withdrawal Date with
respect to amounts of Compensation deferred in a given Plan Year cannot be paid
until after the expiration of two Plan Years from the last day of the Plan Year
for which the corresponding deferrals of Compensation were made (e.g., 2012 for
deferrals made in 2009).

 

(mm) “Separation from Service” means the date on which a Participant ceases to
be an employee of the Company (or any Affiliate) on account of the Participant’s
retirement, death, or other termination of employment. Whether or not a
Participant has incurred a Separation from Service will be based on all
surrounding relevant circumstances, including, but not limited to, the
reasonable belief of both the Participant and the Company (or Affiliate) that
the Participant will perform no future services for the Company (or Affiliate)
as an employee, as a contractor or in any other capacity. The Plan will treat an
anticipated permanent reduction in the level of bona fide services provided by
the Participant to the Company or an Affiliate as a Separation from Service
provided that it is reasonable for the Company or the Affiliate to anticipate
that the Participant’s reduced level of bona fide services will not exceed
49 percent of the average level of bona fide services provided by such
Participant within the immediately preceding applicable 36 months within the
meaning of Treasury Regulations section 1.409A-1(h)(1)(ii).

For purposes of this defined term, no Separation from Service will be deemed to
have occurred if the Participant (1) transfers employment from the Company or an
Affiliate to another member of the Company’s Code section 414 controlled group;
or (2) experiences a Military Leave. For this purpose, controlled group
membership will include the Company and each Affiliate whether or not such
Affiliate is also a Participating Company.

Notwithstanding the foregoing, in the event that all or substantially all of the
assets of the Company are acquired by an unrelated third-party buyer, the
Company and such buyer will have the discretionary authority consistent with the
requirements of Treasury Regulations section 1.409A-1(h)(4) to determine whether
or not such asset transaction results in a Separation from Service for
Participants from the Company.

 

(nn)

“Specified Employee” means a Participant qualifying as a “key employee” for
purposes of Code section 416 (determined without regard to Code
section 416(i)(5)

 

8

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

 

by satisfying any one of the following conditions at any time during the
12-month period ending on each December 31 (“Identification Date”):

 

  (1) The Participant is among the top-paid 50 officers of the Company with
annual compensation (within the meaning of Code section 415(c)(3)) in excess
of $145,000 (subject to cost-of-living adjustments);

 

  (2) The Participant is a five-percent owner; or

 

  (3) The Participant is a one-percent owner and has annual compensation in
excess of $150,000.

If an individual is a key employee as of an Identification Date, including an
individual who acknowledges his Specified Employee status to the Company
immediately prior to the date of his Separation from Service, the individual
shall be treated as a Specified Employee for the 12-month period beginning on
April 1 following the Identification Date. For the limited purpose of applying
the “one-percent” and “five-percent” ownership rules, ownership is determined
with respect to the entity for which the Eligible Employee provides services.
The Code’s controlled and affiliated service group rules do not apply when
determining a Participant’s ownership interests. Notwithstanding the foregoing,
an individual shall not be treated as a Specified Employee unless any stock of
the Company or any Affiliate is publicly traded on an established securities
market or otherwise.

For purposes of making its annual Specified Employee determination, the Company
shall consider compensation treated as recognizable pay under the so-called
“Code section 415 general” definition of pay.

Notwithstanding the above, the Company may (but is not required to) adopt an
alternative method for identifying Specified Employees, provided such method
satisfies the requirements set forth at Treasury Regulations
section 1.409A-1(i)(5).

 

(oo) “Subsequent Election Period” means any election period after the expiration
of the Participant’s Initial Election Period.

 

(pp) “Trust” means The First American Corporation Deferred Compensation Plan
Trust.

 

(qq) “Unforeseeable Financial Emergency” means an unanticipated emergency that
is caused by an event beyond the control of the Participant that would result in
severe financial hardship to the Participant, which the Participant cannot
satisfy through insurance reimbursements, the liquidation of other assets (but
only if such liquidation would not itself cause a hardship) or by stopping
deferrals under this Plan, and resulting from:

 

9

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

  (1) A sudden and unexpected illness or accident of the Participant or a
dependent of the Participant (as defined in Code section 152(a));

 

  (2) A casualty loss involving the Participant’s property; or

 

  (3) Such other extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant, all as determined in the
sole discretion of the Plan Committee.

1.3 Gender and Number

Any masculine or feminine terminology shall also include the opposite gender,
and the definition of any term in the singular or plural shall also include the
opposite number.

1.4 Headings

The headings of this Plan are inserted for convenience or reference only, and
they are not to be used in the construction of the Plan.

1.5 Requirement to Be in “Written Form”

Various notices provided by the Company, the Plan Committee, or any duly
authorized agent of either of them and various elections made by Participants,
Beneficiaries or other payees are required to be in written form.
Notwithstanding anything to the contrary in this Plan, any notices and elections
related to, or that may constitute part of, the Plan may be conveyed through an
electronic system or any other system approved by the Plan Committee unless
otherwise provided under applicable law or regulatory guidance.

 

10

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

Article 2. Participation

2.1 Participation

An Eligible Employee shall become a Participant in the Plan by electing to defer
a portion of his Compensation in accordance with Plan section 3.1. If a
Participant has a Separation from Service and is subsequently reemployed, the
Participant may not reenter the Plan until the Plan Year that follows a period
of twenty-four (24) months from the Participant’s date of reemployment. If a
Participant transfers to an entity that is not an Affiliate, such Participant’s
participation in this Plan shall cease upon such transfer. If the Participant
transfers to an Affiliate, whether or not such Affiliate is also a Participating
Company, the deferral election made by a Participant for the Plan Year which
includes the date of transfer shall remain in effect for the remainder of such
Plan Year. Participants who transfer to an Affiliate which is not a
Participating Company shall not be eligible to make a deferral election with
respect to any Plan Year following the Plan Year in which their transfer to such
Affiliate was first effective until such time (if ever) that such Participant’s
employment is transferred back to the Company or a Participating Company or
until such time (if ever) that such nonparticipating Affiliate becomes a
Participating Company.

 

11

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

Article 3. Deferral Elections

3.1 Elections to Defer Compensation

Each Eligible Employee may elect to defer Compensation in accordance with this
Plan section 3.1.

 

(a) Initial Election Period. Subject to the provisions of Article 2 of the Plan,
each Eligible Employee may elect to defer Compensation not yet earned by filing
with the Plan Committee an election that conforms to the requirements of this
Plan section 3.1, in a manner provided by the Plan Committee, no later than the
last day of his Initial Election Period. Each Participant’s election made during
his Initial Election Period (if any) will remain in effect from Plan Year to
Plan Year until the Participant changes such election pursuant to
subsection (d).

 

(b) Subsequent Election Periods. Any Eligible Employee who fails to elect to
defer Compensation during his Initial Election Period may subsequently become a
Participant by filing an election, in a manner provided by the Plan Committee,
to defer Compensation as described in subsection (a), above, on or before
December 31 of a Plan Year with respect to Compensation to be earned in the next
following Plan Year. Each Participant’s election during any Subsequent Election
Period (if any) will remain in effect from Plan Year to Plan Year until the
Participant changes such election pursuant to subsection (d).

 

(c) Required Deferral Amount. The amount of Compensation which an Eligible
Employee may elect to defer shall be a whole percentage or a specified dollar
amount which shall not exceed 100% of the Eligible Employee’s Compensation or
applicable component of Compensation, and provided that the total amount
deferred by a Participant shall be limited in any calendar year, if necessary,
to satisfy Social Security tax and Medicare, income tax, employee benefit plan
and other withholding requirements as determined in the sole and absolute
discretion of the Plan Committee. If a Participant elects to defer a specified
dollar amount from one or more eligible sources of Compensation (Base Salary,
Bonuses, Commissions) and the specified dollar amount exceeds the amount of
Compensation in one or more of the eligible sources of Compensation as
previously elected by the Participant, a deferral of up to 100% of the Eligible
Employee’s Compensation or applicable component of Compensation, consistent with
the tax, withholding and benefit plan requirements set forth in the preceding
sentence, shall be deemed to satisfy such previously elected specified dollar
deferral.

 

(d)

Modification of Deferral Election Generally. A Participant may increase,
decrease or terminate a deferral election with respect to Compensation for any
subsequent Plan Year by filing a new election on or before December 31, which
election shall be effective on the first day of the next following Plan Year. If
no such modification of

 

12

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

 

a prior deferral election is made on or before each successive December 31, then
the standing deferral election, as described in subsections (a) and (b) above
shall continue in effect until it is modified under this subsection.

 

(e) Modification of Deferral Election Upon Unforeseeable Financial Emergency. A
Participant may request to suspend their deferral election due to an
Unforeseeable Financial Emergency. The Plan Committee will make a determination
of whether or not to grant such Participant’s request. If the Plan Committee
determines a Participant experienced an Unforeseeable Financial Emergency, the
Participant’s standing election covering the Initial Election Period or
Subsequent Election Period, as applicable, will be suspended for the remainder
of the period covered by such Initial Election Period or Subsequent Election
Period.

 

(f) Transfers. A Participant who transfers from the Company or a Participating
Company to a non-participating Affiliate shall have his deferral election remain
in place for the remainder of the Plan Year in which such transfer was first
effective.

3.2 Distribution Elections

 

(a) Form of Distribution. Concurrently with the filing of a Participant’s Plan
Year election to defer, a Participant shall elect the form of distribution from
among the following options in a manner provided by the Plan Committee:

 

  (1) A lump sum distribution beginning on the Participant’s Payment Date; or

 

  (2) Substantially equal quarterly installments over five (5), ten (10), or
fifteen (15) years beginning on the Participant’s Payment Date.

A distribution election made with respect to a Deferral Amount will not remain
in effect beyond the Plan Year for which the distribution election was
originally made. If a Participant fails to elect an optional form of benefit as
provided above by the due date determined for making such election, the
Participant’s Distributable Amount will be distributed in a lump sum beginning
on the Participant’s Payment Date. If a Participant makes an election to receive
installments with respect to deferrals that apply to one or more Plan Years and
later experiences a Separation from Service, and begins to receive such
installment payments and is then later rehired, such installment payments
related to the Participant’s prior period of service must continue to be paid as
if the Participant was never rehired.

 

(b)

Post-2004 Plan Year Deferrals. For the deferrals that relate to each successive
Plan Year after 2004, a Participant may make a one-time election to change the
time or form (or time and form) of distribution of the Participant’s
corresponding Plan Year balance so long as such election is not effective for
twelve months, does not accelerate the time in which the distribution is to be
received, is made not less than twelve (12) months prior to the Scheduled
Withdrawal Date for a Scheduled

 

13

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

 

Withdrawal), and results in a delay in the Scheduled Withdrawal Date of not less
than five (5) years. Any such one-time election change made with respect to
deferrals relating to a specific Plan Year after 2004 will not change the
original election made with respect to the deferrals for any other specific Plan
Year after 2004.

 

(c) $25,000 Lump Sum. In the case of a Participant with an Account balance of
less than $25,000 at his Separation from Service, the Distributable Amount shall
be paid to the Participant by the Payment Date (and after his death to his
Beneficiary) in a lump sum, regardless of the election made by the Participant,
provided further that such accelerated lump sum payout will only apply if such
payout results in the termination of the Participant’s entire interest in this
Plan and all other account-based elective deferral plans aggregated with this
Plan under Code section 409A.

 

(d) Earnings. The Participant’s Account shall continue to be credited with
earnings pursuant to Plan section 4.1 until all amounts credited to the
Participant’s Account under the Plan have been distributed. For lump sum
distributions, a Participant’s Account will be credited with earnings through
the last day of the calendar quarter in which the Participant has a Separation
from Service. Lump sum distributions that are payable to a Specified Employee,
as defined in Plan section 1.2(nn), and, therefore, subject to a six-month delay
shall be credited with earnings through the last day of the calendar month
coincident with or immediately following the expiration of such six-month
period. For installment payments, a Participant’s Account will be credited with
earnings through the last day of the calendar quarter which includes the last
remaining installment payment, For Scheduled Withdrawals, a Participant’s
Account will be credited with earnings through the applicable December 31
immediately preceding the Scheduled Withdrawal Date.

3.3 Investment Elections

 

(a) At the time of making the deferral elections described in Plan section 3.1,
the Participant shall designate, in a manner provided by the Plan Committee, the
types of investment funds in which the Participant’s Account will be deemed to
be invested for purposes of determining the amount of earnings to be credited to
his Account. In making the designation pursuant to this Plan section 3.3, the
Participant may specify that all or any percentage of his Account (in whole
percentage increments) be deemed to be invested in one or more of the types of
investment funds provided under the Plan as communicated from time to time by
the Plan Committee. A Participant may change the designation made under this
Plan section 3.3, any day by filing an election, in a manner provided by the
Plan Committee. If a Participant fails to elect a type of fund under this Plan
section 3.3, the Participant shall be deemed to have elected the Money Market
type of investment fund.

 

(b)

Although the Participant may designate the type of investments, the Plan
Committee shall not be bound by such designation. The Plan Committee shall
select from time

 

14

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

 

to time, in its sole discretion, certain investment crediting options, all of
which are communicated by the Plan Committee to the Participant pursuant to
subsection (a), above, and such designated investments shall constitute the
Funds. The Investment Return of each such commercially available investment fund
shall be used to determine the amount of earnings or losses to be credited to
Participant’s Account under Article 4 of the Plan.

 

15

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

Article 4. Participant Accounts and Trust Funding

4.1 Participant Accounts

The Plan Committee shall establish and maintain a Deferral Account for each
Participant under the Plan. Each Participant’s Deferral Account and Company
Contribution Account shall be further divided into separate subaccounts
(“investment fund subaccounts”), each of which corresponds to an investment fund
elected by the Participant pursuant to Plan section 3.3(a). A Participant’s
Deferral Account shall be credited as follows:

 

(a) Within five business days of Compensation being withheld, the Plan Committee
shall credit the investment fund subaccounts of the Participant’s Deferral
Account with an amount equal to the Compensation deferred by the Participant
during each pay period in accordance with the Participant’s election under Plan
section 3.3(a); that is, the portion of the Participant’s deferred Compensation
that the Participant has elected to be deemed to be invested in a certain type
of investment fund shall be credited to the investment fund subaccount
corresponding to that investment fund. Deferrals of Base Salary will be deducted
from each applicable paycheck. Deferrals of Commissions and Bonuses will be
deducted when paid.

 

(b) At the end of every business day, each investment fund subaccount of a
Participant’s Deferral Account shall be credited with earnings or losses in an
amount equal to that determined by multiplying the balance credited to such
investment fund subaccount as of each preceding business day by the Investment
Return for the corresponding fund selected by the Company pursuant to Plan
section 3.3(b).

 

(c) In the event that a Participant elects to defer Compensation for a given
Plan Year, all amounts attributed to the deferral of Compensation for such Plan
Year shall be accounted for in a manner which allows separate accounting for the
deferral of such Compensation and investment gains and losses associated with
such Plan Year’s deferral of Compensation.

4.2 Funding of Trust

 

(a) The Company has created a Trust with First American Trust, FSB serving as
the initial trustee. The Company shall cause the Trust to be funded each year.
Each Participating Company shall contribute to the Trust an amount equal to the
amount deferred by each Participant for the Plan Year. Each Participating
Company may also contribute such additional amounts as it shall deem necessary
or appropriate.

 

(b)

Although the principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of a Participating Company and shall be used
exclusively for the uses and purposes of Plan Participants and Beneficiaries as
set forth therein, neither the Participants nor their Beneficiaries shall have
any preferred claim on, or any beneficial ownership in, any assets of the Trust
prior to the time such assets are

 

16

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

 

paid to the Participants or Beneficiaries as benefits and all rights created
under this Plan shall be unsecured contractual rights of Plan Participants and
Beneficiaries against the Participating Company.

 

(c) Prior to an event of insolvency, as defined in the Trust, the assets of the
Plan and Trust shall never inure to the benefit of the Participating Company and
the same shall be held for the exclusive purpose of providing benefits to
Participants and their beneficiaries, including the payment of reasonable
expenses of administering the Plan and Trust. Upon an event of insolvency, as
defined in the Trust, assets held in the Trust will be subject to the claims of
a Participating Company’s general creditors under federal and state law as
further specified in the Trust.

 

17

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

Article 5. Vesting

A Participant’s Deferral Account shall be 100% vested at all times.

 

18

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

Article 6. Distributions

6.1 Scheduled Distributions

In the case of a Participant who has elected a Scheduled Withdrawal while still
in the employ of a Participating Company, such Participant shall receive his
Scheduled Withdrawal amount in a lump sum on the Payment Date following the
Scheduled Withdrawal Date specified in his deferral election. If a Participant
elects to modify a previously elected Scheduled Withdrawal Date with respect to
post-2004 deferrals, the modification of the Participant’s Scheduled Withdrawal
Date will not take effect for 12 months after the date the Participant modified
his Scheduled Withdrawal Date and no payment will be made pursuant to the
revised Scheduled Withdrawal Date prior to the expiration of a period equal to
five years from the date the payment or payments would have commenced under the
Scheduled Withdrawal Date originally elected by the Participant as required by
the subsequent deferral election rules under Code section 409A. If a Participant
has a Separation from Service prior to a Scheduled Withdrawal Date, other than
by reason of death, the portion of the Participant’s Account associated with the
Participant’s selected Scheduled Withdrawal Dates which have not occurred prior
to such Separation from Service shall be distributed in a lump sum, provided,
however, such lump sum will be delayed for six (6) months following the
Participant’s Separation from Service consistent with Plan sections 1.2(cc) and
1.2(nn).

6.2 Post-2004 Early Distributions of Pre-2005 Plan Year Balances

Except as specified below, the Participant’s right to elect an Early
Distribution from the portion of his Deferral Account that represents pre-2005
Plan Year balances is not amended and the Plan terms governing such Early
Distribution, including the ten percent payment forfeiture provision, are
reflected in Appendix A of this Plan. On or after the Effective Date, a
Participant making an election to take an Early Distribution will result in the
Participant being suspended from making a Deferral Amount for two Plan Years
commencing with the January 1 next following the date on which the Participant
makes such Early Distribution election. Deferrals (and investment earnings on
such deferrals) made to this Plan after 2004 are not eligible for an Early
Distribution.

6.3 Distribution Upon Separation from Service

Upon the Participant’s Separation from Service, whether by reason of retirement
or for any reason other than death, a Participant shall receive his
Distributable Amount (or in the case of a Participant who has elected to receive
his Distributable Amount in installments, begin to receive such installments) in
the form elected by the Participant pursuant to Plan section 3.2 on the Payment
Date following such Separation from Service.

6.4 Death Benefit

 

(a) Death Benefit While Still Employed. In the case of a Participant who dies
while employed by a Participating Company, the following benefits shall be
provided:

 

19

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

  (1) The Account Balance in a lump sum or installments as previously elected by
the Participant and, subject to the provisions of this Article 6 of the Plan but
without regard to the six-month payment delay for Specified Employees;

 

  (2) In the case of an employee who became a Participant prior to January 1,
2002, that portion of the death benefit of any life insurance policy purchased
by the Trust to insure the life of the Participant and which is subject to a
“Split-Dollar Life Insurance Agreement” (as described therein) equal to the
amounts described in subsections (a)(2)(A) through (D) and not to exceed
$2 million. Furthermore, if the Participant dies while in service on or after
attainment of age 61, the benefit under this Plan section, after application of
the $2 million limit described above, shall be reduced by 20% for each full year
after the Participant’s attainment of age 60. Provided, however, that if the
Participant is over age 61 as of February 1, 2003, the benefit will be reduced
by 20% for each full year after February 1, 2002 and not as described in the
preceding sentence.

 

  (A) If a Participant elects during his first twelve months of Plan
participation (whether or not such election occurs during more than one Plan
Year) to defer Base Salary only, such Participant’s death benefit shall equal
his Base Salary deferrals annualized over the first twelve months of Plan
participation multiplied by fifteen. This amount shall constitute the
Participant’s death benefit for the remainder of his participation in the Plan.

 

  (B) If a Participant elects during his first twelve months of Plan
participation (whether or not such election occurs during more than one Plan
Year) to defer Bonuses and/or Commissions only, such Participant’s death benefit
during the first twelve months of Plan participation shall be $0. At the end of
the initial twelve-month period (which may or may not span more than one Plan
Year) the amount of the Participant’s deferral of Bonuses and/or Commissions
shall be aggregated and multiplied by fifteen, which amount shall constitute the
Participant’s death benefit for the remainder of his participation in this Plan.

 

  (C)

If a Participant elects during his first twelve months of Plan participation
(whether or not such election occurs during more than one Plan Year) to defer
Base Salary and Bonuses and/or Commissions, then the Participant’s death benefit
during his first twelve months of Plan participation shall equal his Base Salary
deferrals annualized over twelve months multiplied by fifteen. At the end of the
initial twelve-month period (which may or may not span more than one Plan Year)
the Participant’s death benefit shall equal the amount of Base Salary deferrals
annualized during the first twelve months multiplied by fifteen

 

20

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

 

plus the aggregate amount of all deferrals of Bonuses and/or Commissions which
occurred during the first twelve months multiplied by fifteen. This amount shall
constitute the Participant’s death benefit for the remainder of his
participation in the Plan.

 

  (D) If a Participant suspends contributions of Base Salary during the first
twelve (12) months of Plan participation, then the Participant’s death benefit
calculated in accordance with subsections (a)(2)(A) and (C) shall be determined
by multiplying the actual amount of Base Salary deferred during the initial
twelve-month period multiplied by fifteen.

 

  (3) Any such Policy shall be subject to certain conditions as set forth in a
“split-dollar life insurance agreement” between the Participant, Trustee and the
Participating Company, pursuant to which the Participant may designate a
beneficiary with respect to the portion of the Policy proceeds described in this
Plan section 6.4 in the event the Participant dies prior to otherwise incurring
a Separation from Service. The Participant may designate and change such
beneficiary (which need not be his Beneficiary) at any time on a form provided
by and filed with the insurance company. If no such form is on file with the
insurance company, the insurance proceeds designated in this paragraph shall be
paid to the Beneficiary. The benefit payable pursuant to this paragraph shall
only be paid if the insurance company agrees that the Participant is insurable
and shall be subject to all conditions and exceptions set forth in the
applicable insurance policy.

 

  (4) Notwithstanding any provision of this Plan or any other document to the
contrary, the Participating Company shall not have any obligation to pay the
Participant or his beneficiary any amounts described in subsection (a)(2); all
such amounts due pursuant to subsection (a)(2) shall be payable solely from the
proceeds of the Policy, if any. Furthermore, the Participating Company is not
obligated to maintain the Policy; no death benefit shall be payable hereunder if
the Company has discontinued the Policy for the Participant. In addition, no
Policy shall be allocated to any Participant Account.

 

  (5) So long as the Participating Company Trust maintains a Policy for a
Participant, the Company shall pay to the Trustee amounts necessary to pay
premiums on the Policy insuring the Participant’s life as soon as practicable
after the end of each Plan Year, or such earlier time as the Company shall
determine (but no later than the tax return due date for the Company for such
year), in amounts equal to the amount deferred by the Participant for the Plan
Year. The Company may allocate such premium expenses amongst Participating
Companies.

 

21

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

  (6) Notwithstanding any provision of this Plan to the contrary, and effective
January 1, 2002, no death benefit will be payable to any Eligible Employee who
became a Participant after December 31, 2001.

 

(b) Death After Benefit Commencement. In the event a Participant dies after he
has had a Separation from Service and begins to receive installment payments
pursuant to Plan section 3.2 but while he still has a balance in his Account,
the balance shall continue to be paid in installments to the Beneficiary for the
remainder of the period as elected by the Participant.

 

(c) Death Benefit Reduction. In the event a Participant elects an Early
Distribution from his Deferral Account for a percentage of his Account
representing his pre-2005 Plan Year balances, the Participant’s death benefit as
computed in accordance with this Plan section 6.4 shall be reduced by
multiplying said death benefit by a fraction the numerator of which shall be the
sum of the Participant’s Early Distributions and the denominator of which shall
be the Participant’s Deferral Account representing his pre-2005 Plan Year
balances without reduction for any Early Distributions taken. For purposes of
calculating the denominator of the fraction set forth above, a Participant’s
Early Distributions shall be credited with earnings and losses in accordance
with Plan section 4.1.

6.5 Inability to Locate Participant

If the Plan Committee is unable to locate a Participant or Beneficiary within
three years following the required Payment Date, the amount allocated to the
Participant’s Deferral Account shall be forfeited. If, after such forfeiture,
the Participant or Beneficiary later claims, within three years of the
forfeiture, such benefit, such benefit shall be reinstated but without interest
or earnings from the date of forfeiture forward.

6.6 No Acceleration of Payments

The Plan Committee shall not permit the acceleration of the time or schedule of
payments except as provided in this Plan section.

As of January 1, 2009, acceleration of the time or schedule of payments shall be
permitted only in the following instances:

 

(a) A payment to an alternate payee to the extent necessary to fulfill a
Qualified Divorce Order;

 

(b) A payment that is necessary to comply with a certificate of divestiture as
defined in Code section 1043(b)(2);

 

(c)

A payment to pay the Federal Insurance Contributions Act (FICA) tax imposed
under Code sections 3101 and 3121(v)(2) on amounts held by the Plan as well as a
payment to pay any income tax at source on wages imposed under Code section 3401

 

22

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

 

(i.e., wage withholding) on the FICA tax amount and any income tax at source
attributable to the pyramiding of wages and taxes. The total payment under this
subsection may not exceed the aggregate FICA tax amount and the income tax
withholding related to such FICA tax amount; or

 

(d) A small amount cashout pursuant to Treasury Regulations
section 1.409A-3(j)(4)(v).

6.7 Tax Withholding

Any federal, state or local taxes, including FICA tax amounts, required by law
to be withheld with respect to benefits earned and vested under this Plan or any
other compensation arrangement may be withheld from the Participant’s benefit,
salary, wages or other amounts paid by the Company or any employer and
reasonably available for withholding. Prior to making or authorizing any benefit
payment under this Plan, the Company may require such documents from any taxing
authority, or may require such indemnities or a surety bond from any Participant
or Beneficiary, as the Company shall reasonably consider necessary for its
protection.

6.8 Six-Month Delay for Specified Employee

If the Company determines that a Participant is a Specified Employee, payment of
the Participant’s Account will not commence prior to the first day of the month
following the six-month anniversary of the Participant’s Separation from
Service. Additionally, a Participant must notify the Company to affirm whether
or not he is a Specified Employee by virtue of the one-percent and five-percent
ownership thresholds set forth at Treasury Regulations section 1.409A-1(i) and
the Company will not be responsible for any consequences to the Participant as a
result of a Participant’s failure to so notify the Company. The above six-month
payment delay will not apply to a Participant who is a Specified Employee if the
Participant’s Separation from Service is on account of his death. The above
six-month payment delay will also not apply to a Participant who incurs and
receives a payment pursuant to a qualifying Disability. If a Participant’s
benefits under this Plan are subject to such six-month payment delay, the
Participant will be entitled to receive a one-time lump sum payment equal to the
payments which were delayed by the above six-month delay.

6.9 Distributions Upon Unforeseeable Financial Emergency

A Participant may request an accelerated distribution from his Deferral Account
that does not exceed an amount necessary to satisfy an Unforeseeable Financial
Emergency experienced by the Participant. The Plan Committee will make a
determination of whether or not to grant such Participant’s request. In making
this determination, the Plan Committee is not required to consider payments that
may be available to the Participant due to the Unforeseeable Financial Emergency
under any other qualified or nonqualified retirement plans maintained by the
Company.

 

23

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

Article 7. Administration

7.1 Plan Committee

 

(a) Except as otherwise provided in the Plan, the Plan Committee shall be the
administrator of the Plan, within the meaning of ERISA section 3(16)(A). The
Plan Committee shall generally administer the Plan.

 

(b) The Plan Committee may be composed of as many members as the Board may
appoint in writing from time to time. The Board may also delegate to another
person the power to appoint and remove members of the Plan Committee.

 

(c) The Company by action of an officer or the Chairperson of the Plan
Committee, or if there is no Chairperson, then by unanimous consent of the
members of the Plan Committee, may appoint Plan Committee members from time to
time. Members of the Plan Committee may, but need not, be Employees.

 

(d) A member of the Plan Committee may resign by delivering his written
resignation to the Plan Committee. The resignation shall be effective as of the
date it is received by the Plan Committee or such other later date as is
specified in the resignation notice. A Plan Committee member may be removed at
any time and for any reason by the Company by action of any of its officers, the
Chairman of the Plan Committee, or by unanimous consent of the remaining members
of the Plan Committee. Any Employee appointed to the Plan Committee shall
automatically cease to be a member of the Plan Committee, effective on the date
that he ceases to be an Employee, unless the Chairman of the Plan Committee, an
officer of the Company, or all of the Plan Committee members unanimously specify
otherwise in writing.

7.2 Operation of the Plan Committee

 

(a) A majority of the members of the Plan Committee at the time in office shall
constitute a quorum for the transaction of business. All resolutions adopted and
other actions taken by the Plan Committee at any meeting shall be by the vote of
a majority of those present at any such meeting. Upon the concurrence of all of
the members in office at the time, action by the Plan Committee may be taken
otherwise than at a meeting.

 

(b) The members of the Plan Committee may elect one of their members as Chair
and may elect a Secretary who may, but need not, be a member of the Plan
Committee.

 

(c) The members of the Plan Committee may authorize one or more of their members
or any agent to execute or deliver any instrument or instruments on their
behalf. The members of the Plan Committee may allocate any of the Plan
Committee’s powers and duties among individual members of the Plan Committee.

 

24

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

(d) The Plan Committee may appoint one or more subcommittees and delegate any of
its discretionary authority and such of its powers and duties, as it deems
desirable to any such subcommittee. The members of any such subcommittee shall
consist of such persons as the Plan Committee may appoint.

 

(e) All resolutions, proceedings, acts, and determinations of the Plan
Committee, with respect to the administration of the Plan, shall be recorded;
and all such records, together with such documents and instruments as may be
necessary for the administration of the Plan, and shall be preserved by the Plan
Committee.

 

(f) Subject to the limitations contained in the Plan, the Plan Committee shall
be empowered from time to time in its discretion to establish rules for the
exercise of the duties imposed upon the Plan Committee under the Plan.

7.3 Agents

 

(a) The Board, the Company, or the Plan Committee may delegate such of its
powers and duties as it deems desirable to any person, in which case every
reference herein made to the Board, Company, or the Plan Committee (as
applicable) shall be deemed to mean or include the delegated persons as to
matters within their jurisdiction.

 

(b) The Board, the Company, or the Plan Committee may also appoint one or more
persons or agents to aid it in carrying out its duties and delegate such of its
powers and duties as it deems desirable to such persons or agents.

 

(c) The Board, the Company, or the Plan Committee may employ such counsel,
auditors, and other specialists and such clerical and other services as it may
require in carrying out the provisions of the Plan, with the expenses therefore
paid, as provided in Plan section 7.4.

7.4 Compensation and Expenses

 

(a) A member of the Plan Committee shall serve without compensation for services
as a member. Any member of the Plan Committee may receive reimbursement of
expenses properly and actually incurred in connection with his services as a
member of the Plan Committee, as provided in this Article 7.

 

(b) All expenses of administering the Plan shall be paid by the Company.

7.5 Plan Committee’s Powers and Duties

Except as otherwise provided in this Plan, the Company shall have responsibility
for any settlor duties, powers or functions (e.g., the right to amend and
terminate the Plan) and except as otherwise provided in the Plan, the Plan
Committee shall have responsibility for the general administration of the Plan
and for carrying out its provisions. The Plan Committee shall have such powers
and duties as may be necessary to discharge its functions hereunder, including
the following:

 

25

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

(a) To establish rules, policies, and procedures for administration of the Plan;

 

(b) To construe and interpret the Plan, to decide all questions of eligibility,
and to determine the amount, manner, and time of payment of any benefits
hereunder;

 

(c) To make a determination as to the right of any person to a benefit and the
amount thereof;

 

(d) To obtain from the Company such information as shall be necessary for the
proper administration of the Plan;

 

(e) To prepare and distribute information explaining the Plan;

 

(f) To keep all records necessary for the operation and administration of the
Plan;

 

(g) To prepare and file any reports, descriptions, or forms required by the Code
or ERISA; and

 

(h) To designate or employ agents and counsel (who may also be persons employed
by the Company) and direct them to exercise the powers of the Plan Committee.

7.6 Plan Committee’s Decisions Conclusive/Exclusive Benefit

The Plan Committee shall have the exclusive right and discretionary authority to
interpret the terms and provisions of the Plan and to resolve all questions
arising thereunder, including the right to resolve and remedy ambiguities,
inconsistencies, or omissions in the Plan, provided, however, that the
construction necessary for the Plan to conform to the Code and ERISA shall in
all cases control. Benefits under this Plan will be paid only if the Committee
decides in its discretion that the Participant, surviving spouse or Beneficiary
is entitled to them. The Plan Committee shall endeavor to act in such a way as
not to discriminate in favor of any class of Participants or other persons. Any
and all disputes with respect to the Plan that may arise involving Participants
will be referred to the Committee, and its decisions shall be final, conclusive,
and binding. All findings of fact, interpretations, determinations, and
decisions of the Plan Committee in respect of any matter or question arising
under the Plan shall be final, conclusive, and binding upon all persons,
including, without limitation, Participants, and any and all other persons
having, or claiming to have, any interest in or under the Plan and shall be
given the maximum possible deference allowed by law.

The Plan Committee shall administer the Plan for the exclusive benefit of
Participants and their Beneficiaries.

7.7 Indemnity

 

(a) The Company (including any successor employer, as applicable) shall
indemnify and hold harmless each of the following persons (“Indemnified
Persons”) under the terms and conditions of subsection (b).

 

26

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

  (1) The Committee; and

 

  (2) Each Eligible Employee, former Eligible Employee, current and former
members of the Plan Committee, or current or former members of the Board who
have, or had, responsibility (whether by delegation from another person, an
allocation of responsibilities under the terms of this Plan document, or
otherwise) for a fiduciary duty, a non-fiduciary settlor function (such as
deciding whether to approve a plan amendment), or a non-fiduciary administrative
task relating to the Plan.

 

(b) The Company shall indemnify and hold harmless each Indemnified Person
against any and all claims, losses, damages, and expenses, including reasonable
attorneys’ fees and court costs, incurred by that person on account of his
good-faith actions or failures to act with respect to his responsibilities
relating to the Plan. The Company’s indemnification shall include payment of any
amounts due under a settlement of any lawsuit or investigation, but only if the
Company agrees to the settlement.

 

  (1) An Indemnified Person shall be indemnified under this Plan section 7.7
only if he notifies an Appropriate Person (defined below) at the Company of any
claim asserted against or any investigation of the Indemnified Person that
relates to the Indemnified Person’s responsibilities with respect to the Plan.

 

  (A) An “Appropriate Person” is one or more of the following individuals at the
Company:

 

  (i) The Chief Executive Officer,

 

  (ii) The Chief Financial Officer, or

 

  (iii) Its General Counsel.

 

  (B) The notice may be provided orally or in writing. The notice must be
provided to the Appropriate Person promptly after the Indemnified Person becomes
aware of the claim or investigation. No indemnification shall be provided under
this Plan section 7.7 to the extent that the Company is materially prejudiced by
the unreasonable delay of the Indemnified Person in notifying an Appropriate
Person of the claim or investigation.

 

  (2) An Indemnified Person shall be indemnified under this Plan section 7.7
with respect to attorneys’ fees, court costs, or other litigation expenses or
any settlement of such litigation only if the Indemnified Person agrees to
permit the Company to select counsel and to conduct the defense of the lawsuit
and agrees not to take any action in the lawsuit that the Company believes would
be prejudicial to the Company’s interests.

 

27

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

  (3) No Indemnified Person, including an Indemnified Person who is a former
Employee, shall be indemnified under this Plan section 7.7 unless he makes
himself reasonably available to assist the Company with respect to the matters
in issue and agrees to provide whatever documents, testimony, information,
materials, or other forms of assistance that the Company shall reasonably
request.

 

  (4) No Indemnified Person shall be indemnified under this Plan section 7.7
with respect to any action or failure to act that is judicially determined to
constitute or be attributable to the gross negligence or willful misconduct of
the Indemnified Person.

 

  (5) Payments of any indemnity under this Plan section 7.7 shall only be made
from assets of the Company. The provisions of this Plan section 7.7 shall not
preclude or limit such further indemnities or reimbursement under this Plan as
allowable under applicable law, as may be available under insurance purchased by
the Company, or as may be provided by the Company under any by-law, agreement or
otherwise, provided that no expense shall be indemnified under this Plan
section 7.7 that is otherwise indemnified by the Company, by an insurance
contract purchased by the Company, or by this Plan.

7.8 Insurance

The Plan Committee may authorize the purchase of insurance to cover any
liabilities or losses occurring by reason of the act or omission of any Plan
Committee member or its designee. To the extent permitted by law, the Plan
Committee may purchase insurance covering any member (or its designee) for any
personal liability of such Plan Committee member (or its designee) with respect
to any administrative responsibilities under this Plan. Any Plan Committee
member (or its designee) may also purchase insurance for his own account
covering any personal liability under this Plan.

7.9 Quarterly Statements and Notices

Under procedures established by the Plan Committee, a Participant shall receive
a statement with respect to such Participant’s Accounts on a quarterly basis as
of each March 31, June 30, September 30 and December 31.

Each Participant shall be responsible for furnishing to the Company his current
address. The Participant shall also be responsible for notifying the Company of
any change in the above information. If a Participant does not provide the above
information to the Company, the Plan Committee may rely on the address of record
of the Participant on file with the Company’s personnel office.

All notices or other communications from the Plan Committee to a Participant
(who is a current Eligible Employee) shall be deemed given and binding upon that
person for all purposes of the Plan when delivered by e-mail to the
Participant’s individually designated

 

28

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

e-mail address at the Company and all notices or other communications from the
Plan Committee to a Participant (who is a former Eligible Employee) shall be
deemed given and binding upon that person for all purposes of the Plan when
delivered to, or when mailed first-class mail, postage prepaid, and addressed to
that person at his address last appearing on the Plan Committee’s records, and
the Plan Committee, and the Company shall not be obliged to search for or
ascertain his whereabouts.

All notices or other communications from the Participant required or permitted
under this Plan shall be provided to the person specified by the Plan Committee,
using such procedures as are prescribed by the Plan Committee. The Plan
Committee may require that the oral notice or communication be provided by
telephoning a specific telephone number and, after calling that telephone
number, by following a specified procedure. Any oral notice or oral
communication from a Participant that is made in accordance with procedures
prescribed by the Plan Committee shall be deemed to have been duly given when
all information requested by the person specified by the Plan Committee is
provided to such person, in accordance with the specified procedures.

7.10 Data

All persons entitled to benefits from the Plan must furnish to the Plan
Committee such documents, evidence, or information, as the Plan Committee
considers necessary or desirable for the purpose of administering the Plan, and
it shall be a condition of the Plan that each such person must furnish such
information and sign such documents as the Plan Committee may require before any
benefits become payable from the Plan.

7.11 Claims Procedure

All decisions made under the procedure set out in this Plan section 7.11 shall
be final, and there shall be no further right of appeal. No lawsuit may be
initiated by any person before fully pursuing the procedures set out in this
Plan section 7.11, including the appeal permitted pursuant to subsection (c)
below.

 

(a) The right of a Participant or any other person entitled to claim a benefit
under the Plan (collectively “Claimants”) to a benefit shall be determined by
the Plan Committee, provided, however, that the Plan Committee may delegate its
responsibility to any person.

 

  (1) The Claimant (or an authorized representative of a Claimant) may file a
claim for benefits by written notice to the Plan Committee. The Plan Committee
shall establish procedures for determining whether a person is authorized to
represent a Claimant.

 

  (2) Any claim for benefits under the Plan, pursuant to this Plan section 7.11,
shall be filed with the Plan Committee no later than three months after the date
of the Participant’s Separation from Service. The Plan Committee in its sole
discretion shall determine whether this limitation period has been exceeded.

 

29

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

  (3) Notwithstanding anything to the contrary in this Plan, the following shall
not be a claim for purposes of this Plan section 7.11:

 

  (A) A request for determination of eligibility, participation, or benefit
calculation under the Plan without an accompanying claim for benefits under the
Plan. The determination of eligibility, participation, or benefit calculation
under the Plan may be necessary to resolve a claim, in which case such
determination shall be made in accordance with the claims procedures set forth
in this Plan section 7.11.

 

  (B) Any casual inquiry relating to the Plan, including an inquiry about
benefits or the circumstances under which benefits might be paid under the Plan.

 

  (C) A claim that is defective or otherwise fails to follow the procedures of
the Plan (e.g., a claim that is addressed to a party other than the Plan
Committee or an oral claim).

 

  (D) An application or request for benefits under the Plan.

 

(b) If a claim for benefits is wholly or partially denied, the Plan Committee
shall, within a reasonable period of time, but no later than 90 days after
receipt of the claim, notify the Claimant of the denial of benefits. If special
circumstances justify extending the period up to an additional 90 days, the
Claimant shall be given written notice of this extension within the initial
90-day period, and such notice shall set forth the special circumstances and the
date a decision is expected. A notice of denial

 

  (1) Shall be written in a manner calculated to be understood by the Claimant;
and

 

  (2) Shall contain

 

  (A) The specific reasons for denial of the claim;

 

  (B) Specific reference to the Plan provisions on which the denial is based;

 

  (C) A description of any additional material or information necessary for the
Claimant to perfect the claim, along with an explanation as to why such material
or information is necessary; and

 

  (D) An explanation of the Plan’s claim review procedures and the time limits
applicable to such procedures, including a statement of the Claimant’s right to
bring a civil action under ERISA section 502(a) following an adverse
determination on review.

 

30

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

(c) Within 60 days of the receipt by the Claimant of the written denial of his
claim or, if the claim has not been granted, within a reasonable period of time
(which shall not be less than the 90 or 180 days described in subsection (b)
above), the Claimant (or an authorized representative of a Claimant) may file a
written request with the Plan Committee that it conduct a full review of the
denial of the claim. In connection with the Claimant’s appeal, upon request, the
Claimant may review and obtain copies of all documents, records and other
information relevant to the Claimant’s claim for benefits (but not including any
document, record or information that is subject to any attorney–client or
work–product privilege) and may submit issues and comments in writing. The
Claimant may submit written comments, documents, records, and other information
relating to the claim for benefits. All comments, documents, records, and other
information submitted by the Claimant shall be taken into account in the appeal
without regard to whether such information was submitted or considered in the
initial benefit determination.

 

(d) The Plan Committee shall deliver to the Claimant a written decision on the
claim promptly, but no later than 60 days after the receipt of the Claimant’s
request for such review, unless special circumstances exist that justify
extending this period up to an additional 60 days. If the period is extended,
the Claimant shall be given written notice of this extension during the initial
60-day period and such notice shall set forth the special circumstances and the
date a decision is expected. The decision on review of the denial of the claim

 

  (1) Shall be written in a manner calculated to be understood by the Claimant;

 

  (2) Shall include specific reasons for the decision;

 

  (3) Shall contain specific references to the Plan provisions on which the
decision is based;

 

  (4) Shall contain a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to, and other information relevant
to the Claimant’s claim for benefits. Whether a document, record, or other
information is relevant to a claim for benefits shall be determined by reference
to U.S. Department of Labor Regulations section 2560; and

 

  (5) Shall contain a statement of the Claimant’s right to bring a civil action
under ERISA section 502(a) following an adverse determination on review.

 

(e) No lawsuit may be initiated by any person before fully pursuing the
procedures set out in this Plan section 7.11, including the appeal permitted
pursuant to subsection (c) above. In addition, no legal action may be commenced
later than 365 days subsequent to the date of the written response of the Plan
Committee to a Claimant’s request for review pursuant to subsection (d) above.

 

31

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

Article 8. Adoption And Withdrawal By Participating Companies

8.1 Adoption of the Plan

Any entity which is a subsidiary for which more than fifty percent (50%) of the
value of the stock or other interest of such entity is owned by the Company may,
with the consent and approval of the Company, adopt this Plan as a Participating
Company for a select group of management and highly compensated employees. The
adoption of this Plan by a Participating Company shall be effected by resolution
of its board of directors or equivalent governing body. It shall not be
necessary for any adopting Participating Company to formally execute the Plan as
then in effect. As to the Participating Company, the effective date of the Plan
shall be stated in its resolutions, and it shall assume all the rights,
obligations and liabilities of a Participating Company under the Plan.

As an express condition of its of adoption of the Plan, each Participating
Company agrees to each of the following conditions:

 

(a) The Participating Company is bound by the terms and conditions of the Plan
as the Company or the Plan Committee may reasonably require;

 

(b) The Participating Company must comply with all requirements and employee
benefit rules of the Code, ERISA and applicable regulations for nonqualified
retirement plans;

 

(c) The Participating Company acknowledges the authority of the Company and the
Plan Committee to review the Participating Company’s compliance with the Plan
procedures and to require changes in such procedures as the Company and the Plan
Committee may reasonably deem appropriate;

 

(d) The Participating Company authorizes the Company and the Plan Committee to
act on its behalf with respect to matters pertaining to the Plan and Trust,
including making any and all Plan and Trust amendments;

 

(e) The Participating Company will cooperate fully with Plan officials and
agents by providing information and taking actions as directed by the Plan
Committee or the Company so as to allow for the efficient administration of the
Plan and Trust; and

 

(f) The Participating Company’s status as a Participating Company is expressly
conditioned on its being and continuing to be an Affiliate of the Company.

 

32

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

8.2 Withdrawal From the Plan

A Participating Company may by resolution of its board of directors or
equivalent governing body and approval by the Company, withdraw from
participation under the Plan. A withdrawing Participating Company may arrange
for the continuation by itself or its successor of this Plan in a separate form
for its own employees. The withdrawing Participating Company may arrange for
continuation of the Plan by merger with an existing plan and request, subject to
the Company’s consent, the transfer to such plan of all Plan assets representing
the benefits of its employees.

8.3 Cessation of Future Contributions

A Participating Company may, by resolution of its board of directors or
equivalent governing body, cease to allow Participants in its employ to continue
to make deferrals pursuant to Article 3 of the Plan. If a Participating Company
makes the determination to cease Participant deferrals, the remaining provisions
of this Plan shall continue to apply.

 

33

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

Article 9. Amendment and Termination

9.1 Amendment and Termination Generally

The Plan may be amended or terminated by the Company, acting through its Board
(or the Plan Committee or other designee of the Board) at any time.
Notwithstanding the preceding sentence, benefits may be distributed to
Participants on account of the termination only if:

 

(a) The termination does not occur proximate to a downturn in the financial
health of the Company;

 

(b) All nonqualified, elective, account-based retirement plans maintained by the
Company and all Participating Companies that would be aggregated with the Plan
under Code section 409A are terminated when the Plan is terminated;

 

(c) No payments are made within 12 months after the date when the Company takes
all steps necessary to terminate and liquidate the Plan, other than payments
made pursuant to the Plan’s otherwise applicable distribution provisions;

 

(d) All benefits are distributed within 24 months after the date when the
Company takes all steps necessary to terminate and liquidate the Plan; and

 

(e) Neither the Company nor any Participating Company establishes a new
nonqualified, elective, account-based plan that would be aggregated with the
Plan under Code section 409A at any time within three years after the date when
the Company takes all steps necessary to terminate and liquidate the Plan.

Such amendment or termination may modify or eliminate any benefits hereunder
other than a benefit that is in pay status, or the vested portion of a benefit
that is not in pay status.

9.2 Amendment and Termination Following a Change of Control

Notwithstanding the Company’s general right to amend or terminate the Plan at
any time, the Company, including any successor entity to the Company, may not
amend or terminate this Plan in any manner following a Change of Control that
would adversely affect the rights of a Participant to benefits under this Plan.

 

34

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

Article 10. Miscellaneous

10.1 No Enlargement of Employee Rights

This Plan is strictly a voluntary undertaking on the part of the Company and
shall not be deemed to constitute a contract between the Company and any
Eligible Employee or to be consideration for, or an inducement to, or a
condition of, the employment of any Eligible Employee. Nothing contained in the
Plan shall be deemed to give any Eligible Employee the right to be retained in
the service of the Company or any Participating Company or to interfere with the
right of any of them to discharge or retire any person at any time. No one shall
have any right to benefits, except to the extent provided in this Plan.

10.2 Leave of Absence

A Participant who is on an approved leave of absence with salary, or on an
approved leave of absence without salary for a period of not more than six
months, shall be deemed to be a Participant during such leave of absence. A
Participant who is on an approved leave of absence without salary for a period
in excess of six months shall be deemed to have voluntarily incurred a
Separation from Service as of the end of such six-month period, provided that,
based on all relevant facts and circumstances, neither the Participant nor the
Company has a reasonable expectation that the Participant will provide future
services to the Company or a Participating Company.

10.3 Withholding

Benefit payments hereunder shall be subject to applicable federal, state or
local withholding for taxes.

10.4 No Examination or Accounting

Neither this Plan nor any action taken thereunder shall be construed as giving
any person the right to an accounting or to examine the books or affairs of the
Company, or any Participating Company.

10.5 Records Conclusive

The records of the Company shall be conclusive in respect to all matters
involved in the administration of the Plan.

10.6 Service of Legal Process

The members of the Plan Committee (or if there is no such Plan Committee then
the Company) are hereby designated as agent(s) of the Plan for the purpose of
receiving legal process.

10.7 Governing Law

The Plan shall be construed, administered, and governed in all respects under
the applicable laws of the State of California, except to the extent pre-empted
by federal law. Upon any change in the law or other determination that any term,
condition or other provision of the

 

35

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

Plan has been altered in any way, the Plan Committee shall administer this Plan
in accordance with such change notwithstanding the terms of the Plan pending an
amendment to this Plan.

10.8 Severability

If any provision of this Plan is held illegal or invalid for any reason, such
illegality or invalidity will not affect the remaining provisions; instead, each
provision is fully severable and the Plan will be construed and enforced as if
any illegal or invalid provision had never been included.

10.9 Facility of Payment

Every person receiving or claiming benefits under this Plan is presumed to be
mentally competent and of age until the date on which the Plan Committee
receives a written notice, in a form and manner acceptable to it, that such
person is mentally incompetent or a minor, and that a guardian or other person
legally vested with the care of such person or his estate has been appointed.

However, if the Plan Committee should find that any person to whom a benefit is
payable under this Plan is unable to care for his affairs because of any
incompetency or is a minor, any payment due (unless a prior claim shall have
been made by a duly appointed legal representative) may be paid to the spouse, a
child, a parent, or a brother or sister, or to any other person or institution
that the Plan Committee determines to have incurred expense for such person
otherwise entitled to payment. To the extent permitted by law, any such payment
so made shall be a complete discharge of any liability therefor under the Plan.

If a guardian of the estate or other person legally vested with the care of the
estate of any person receiving or claiming benefits under the Plan is appointed
by a court of competent jurisdiction, payments shall be made to such guardian or
other person provided that proper proof of appointment and continuing
qualification is furnished in a form and manner suitable to the Plan Committee.
To the extent permitted by law, such guardian or other person may act for the
Participant and make any election required of or permitted by the Participant
under this Plan, and such action or election shall be deemed to have been done
by the Participant, and benefit payments may be made to such guardian or other
person and any such payment shall be a complete discharge of any such liability
under the Plan.

10.10 General Restrictions Against Alienation

The interest of any Participant under this Plan shall not in any event be
subject to sale, assignment, or transfer, and each Participant is hereby
prohibited from anticipating, encumbering, assigning, or in any manner
alienating his interest hereunder and is without power to do so; provided,
however, that this provision shall not restrict the power or authority of the
Plan Committee, in accordance with the applicable provisions of the Plan, to
disburse funds to the legally appointed guardian, executor, administrator, or
personal representative of any Participant or pursuant to a valid Qualified
Divorce Order.

 

36

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

If any person attempts to take any action contrary to this Plan section 10.10,
such action shall be void and the Company may disregard such action and is not
in any manner bound thereby, and they shall suffer no liability for any such
disregard thereof. If the Plan Committee is notified that any Participant has
been adjudicated bankrupt or has purported to anticipate, sell, transfer,
assign, or encumber any Plan distribution or payment, voluntarily or
involuntarily, the Plan Committee shall hold or apply such distribution or
payment or any part thereof to, or for the benefit of, such Participant in such
manner as the Plan Committee finds appropriate.

10.11 Excise Tax for Code Section 409A Violations

While the Company intends that the Plan meet the requirements of Code
section 409A and related Treasury Regulations, the Participant shall be liable
for any excise tax (including interest and penalties thereon) which results from
a violation of the requirements of Code section 409A and related Treasury
Regulations.

10.12 Counterparts

This Plan may be executed in any number of counterparts, each of which shall be
deemed to be an original. All the counterparts shall constitute but one and the
same instrument and may be sufficiently evidenced by any one counterpart.

10.13 Assignment

The Company shall have the right to assign its obligations under the Plan,
either in whole or in part, to any Participating Company of the Company.

In Witness Whereof, the authorized officers of the Company have signed this
document and have affixed the corporate seal on December 29, 2008, but generally
effective as of January 1, 2009.

 

      The First American Corporation Attest:     By  

/s/ PARKER S. KENNEDY

        Its Chairman and Chief Executive Officer By  

/s/ KENNETH D. DEGIORGIO

        Its General Counsel               (Corporate Seal)

 

37

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

Appendix A. The First American Corporation Deferred Compensation Plan Effective
as of January 1, 1998

 

38

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

THE FIRST AMERICAN FINANCIAL CORPORATION

DEFERRED COMPENSATION PLAN

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

TABLE OF CONTENTS

 

          Page

ARTICLE I TITLE AND DEFINITIONS

   1

1.1

  

Title

   1

1.2

  

Definitions

   1

ARTICLE II PARTICIPATION

   4

ARTICLE III DEFERRAL ELECTIONS

   4

3.1

  

Elections to Defer Compensation

   4

3.2

  

Investment Elections

   5

ARTICLE IV DEFERRAL ACCOUNTS AND TRUST FUNDING

   6

4.1

  

Deferral Accounts

   6

4.2

  

Trust Funding

   7

ARTICLE V VESTING

   7

ARTICLE VI DISTRIBUTIONS

   7

6.1

  

Distribution of Deferred Compensation and Discretionary Company Contributions

   7

6.2

  

Early Distributions

   10

6.3

  

Inability to Locate Participant

   11

6.4

  

Payment of Policy Premiums

   11

ARTICLE VII ADMINISTRATION

   11

7.1

  

Committee

   11

7.2

  

Committee Action

   11

7.3

  

Powers and Duties of the Committee

   12

7.4

  

Construction and Interpretation

   12

7.5

  

Information

   13

7.6

  

Compensation, Expenses and Indemnity

   13

 

(i)

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

          Page

7.7

  

Quarterly Statements

   13

7.8

  

Disputes

   13

ARTICLE VIII PROCEDURE FOR ADOPTION AND WITHDRAWAL BY PARTICIPATING EMPLOYERS

   14

8.1

  

Adoption of the Plan

   14

8.2

  

Withdrawal From the Plan

   15

8.3

  

Cessation of Future Contributions

   15

ARTICLE IX MISCELLANEOUS

   15

9.1

  

Unsecured General Creditor

   15

9.2

  

Restriction Against Assignment

   15

9.3

  

Withholding

   16

9.4

  

Amendment, Modification, Suspension or Termination

   16

9.5

  

Governing Law

   16

9.6

  

Receipt or Release

   16

9.7

  

Payments on Behalf of Persons Under Incapacity

   16

9.8

  

Limitation of Rights and Employment Relationship

   16

9.9

  

Headings

   17

 

(ii)

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

THE FIRST AMERICAN FINANCIAL CORPORATION

DEFERRED COMPENSATION PLAN

WHEREAS, The First American Financial Corporation (the “Company”) has previously
desires to established The First American Financial Corporation Deferred
Compensation Plan (the “Plan”) to provide supplemental retirement income
benefits for a select group of management and or highly compensated employees
through deferrals of salary, commissions and bonuses effective as of January 1,
1998; and

WHEREAS, Company desires to amend and restate in its entirety the Plan to
provide for the participation of a select group of management and highly
compensated employees of entities of which Company has a greater than fifty
percent (50%) but less than eighty percent (80%) ownership interest.

NOW, THEREFORE, effective as of January 1, 2000, the Plan is hereby amended
adopted to read as follows:

ARTICLE I

TITLE AND DEFINITIONS

1.1 Title.

This Plan shall be known as The First American Financial Corporation Deferred
Compensation Plan.

1.2 Definitions.

Whenever the following words and phrases are used in this Plan, with the first
letter capitalized, they shall have the meanings specified below.

(a) “Account” or “Accounts” shall mean a Participant’s Deferral Ac count.

(b) “Base Salary” shall mean a Participant’s annual base salary, excluding
bonus, incentive and all other remuneration for services rendered to
Participating Company and prior to reduction for any salary contributions to a
plan established pursuant to Section 125 of the Code or qualified pursuant to
Section 401(k) of the Code.

(c) “Beneficiary” or “Beneficiaries” shall mean the person or persons, including
a trustee, personal representative or other fiduciary, last designated in
writing by a Participant in accordance with procedures established by the
Committee to receive the benefits specified hereunder in the event of the
Participant’s death (other than the death benefits described in
Section 6.1(b)(1) unless such person is designated as a beneficiary under the
Policy described therein). No beneficiary designation shall become effective
until it is filed with the Committee. Any designation shall be revocable at any
time through a written instrument filed by the Participant with the Committee
with or without the consent of the previous Beneficiary. If there is no
Beneficiary designation in effect, then the person designated to receive the
death benefit

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

specified in Section 6.1(c)(1) shall be the Beneficiary. However, no designation
of a Beneficiary other than the Participant’s spouse shall be valid unless
consented to in writing by such spouse. If there is no such designation or if
there is no surviving designated Beneficiary, then the Participant’s surviving
spouse shall be the Beneficiary. If there is no surviving spouse to receive any
benefits payable in accordance with the preceding sentence, the duly appointed
and currently acting personal representative of the Participant’s estate (which
shall include either the Participant’s probate estate or living trust) shall be
the Beneficiary. In any case where there is no such personal representative of
the Participant’s estate duly appointed and acting in that capacity within 90
days after the Participant’s death (or such extended period as the Committee
determines is reasonably necessary to allow such personal representative to be
appointed, but not to exceed 180 days after the Participant’s death), then
Beneficiary shall mean the person or persons who can verify by affidavit or
court order to the satisfaction of the Committee that they are legally entitled
to receive the benefits specified hereunder. In the event any amount is payable
under the Plan to a minor, payment shall not be made to the minor, but instead
be paid (a) to that person’s living parent(s) to act as custodian, (b) if that
person’s parents are then divorced, and one parent is the sole custodial parent,
to such custodial parent, or (c) if no parent of that person is then living, to
a custodian selected by the Committee to hold the funds for the minor under the
Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which
the minor resides. If no parent is living and the Committee decides not to
select another custodian to hold the funds for the minor, then payment shall be
made to the duly appointed and currently acting guardian of the estate for the
minor or, if no guardian of the estate for the minor is duly appointed and
currently acting within 60 days after the date the amount becomes payable,
payment shall be deposited with the court having jurisdiction over the estate of
the minor. Payment by Company pursuant to any unrevoked Beneficiary designation,
or to the Participant’s estate if no such designation exists, of all benefits
owed hereunder shall terminate any and all liability of Company.

(d) “Board of Directors” or “Board” shall mean the Board of Directors of The
First American Financial Corporation.

(e) “Bonuses” shall mean such additional amounts of income as Participating
Company may determine to pay to an employee, as determined in the sole and
absolute discretion of Participating Company.

(f) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(g) “Commitee” shall mean the Committee appointed by the Board to administer the
Plan in accordance with Article VII.

(h) “Commissions” shall mean a Participant’s remuneration earned from
Participating Company which is dependent on sales activity and is not related to
Base Salary or Bonuses.

(i) “Company” shall mean The First American Financial Corporation and any
successor corporations.

 

-2-

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

(j) “Compensation” shall mean Base Salary, Commissions and Bonuses that the
Participant is entitled to receive for services rendered to the Participating
Company.

(k) “Deferral Account” shall mean the bookkeeping account maintained by the
Committee for each Participant that is credited with amounts equal to (1) the
portion of the Participant’s Compensation that he or she elects to defer, and
(2) interest pursuant to Section 4.1.

(l) “Distributable Amount” shall mean the balance in the Participant’s Deferral
Account.

(m) “Early Distribution” shall mean an election by a Participant in accordance
with Section 6.2 to receive a withdrawal of amounts from his or her Deferral
Account prior to the time in which such Participant would otherwise be entitled
to such amounts.

(n) “Effective Date” and “Amended Effective Date” shall mean January 1, 1998 and
January 1, 1999.

(o) “Eligible Employee” shall mean such management and highly compensated
employees as are designated by the Participating Company for participation in
this Plan.

(p) “Fund” or “Funds” shall mean one or more of the investment funds selected by
the Committee pursuant to Section 3.2(b).

(q) “Initial Election Period” for an Eligible Employee shall mean the 30-day
period immediately prior to November 14, 1997 or the 30-day period following the
time an employee shall be designated by the Company as an Eligible Employee.

(r) “Interest Rate” shall mean, for each Fund, an amount equal to the net rate
of gain or loss on the assets of such Fund during each month.

(s) “Participant” shall mean any Eligible Employee who becomes a Participant in
accordance with Section 2.1.

(t) “Participating Company” shall mean Company and (i) each corporation or other
entity which is a member of a controlled group of corporations or other entities
(within the meaning of Sections 414(b) and 414(c) of the Code of which Company
is a component member and (ii) such other entities which are not part of a
controlled group of corporations or other entities, where Company has a fifty
percent (50%) or more, but less than eighty percent (80%) ownership interest,
provided that the Board of Directors of Company or its designee authorizes such
entity’s participation in this Plan and such entity’s governing body requests
participation in this Plan.

(u) “Payment Date” shall mean the time as soon as practicable after the earlier
of (1) the first day of the month following the end of the calendar quarter in
which the Participant’s employment terminates for any reason, or (2) the
Scheduled Withdrawal Date.

 

-3-

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

(v) “Plan” shall mean The First American Financial Corporation Deferred
Compensation Plan set forth herein, now in effect, or as amended from time to
time.

(w) “Plan Year” shall mean the 12 consecutive month period beginning on each
January 1 and ending on December 31.

(x) “Policy” shall mean an insurance policy purchased in accordance with the
terms of this Plan.

(y) “Scheduled Withdrawal Date” shall mean the distribution date elected by the
Participant for an in-service withdrawal of all amounts of Compensation deferred
in a given Plan Year, and earnings and losses attributable thereto, as set forth
on the election form for such Plan Year.

(z) “Sponsoring Company” shall mean Company.

(aa) “Trust” shall mean The First American Financial Corporation Deferred
Compensation Plan Trust.

ARTICLE II

PARTICIPATION

An Eligible Employee shall become a Participant in the Plan by (1) electing to
defer a portion of his or her Compensation in accordance with Section 3.1,
(2) filing a life insurance application form along with his or her deferral
election form, and (3) complying with such medical underwriting requirements as
determined by the life insurance carrier selected by the Company. An Eligible
Employee who completes the requirements of the preceding sentence shall commence
participation in this Plan as of the first day of the month in which
Compensation is deferred. In the event it is determined by the Committee, that
the proposed life insurance policy cannot be obtained in a cost efficient manner
after medical underwriting requirements have been met, the Participant shall not
be eligible to receive death benefits in accordance with Section 6.1(c) of the
Plan. Notwithstanding any provision to the contrary, if it is determined or
reasonably believed, based on a judicial or administrative determination or an
opinion of Company’s legal counsel that a Plan Participant is not a management
or highly compensated employee, such individual shall cease to be a Participant
and his Distributable Amount shall be paid to him in a lump sum as soon as
practicable after the determination is made that he is not a management or
highly compensated employee.

ARTICLE III

DEFERRAL ELECTIONS

3.1 Elections to Defer Compensation. A Participant who has elected to suspend
his deferrals of or Base Salary or Commissions may make deferrals in future Plan
Years in accordance with this Section 3.1.

 

-4-

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

(a) Initial Election Period. Subject to the provisions of Article II, each
Eligible Employee may elect to defer Base Salary, Bonuses and/or Commissions by
filing with the Committee an election that conforms to the requirements of this
Section 3.1, on a form provided by the Committee, no later than the last day of
his or her Initial Election Period.

(b) General Rule. The amount of Compensation which an Eligible Employee may
elect to defer is such Compensation earned on or after the time at which the
Eligible Employee elects to defer in accordance with Sections 1.2(q) and 3.1(a)
and shall be a flat dollar amount or percentage which shall not exceed 100% of
the Eligible Employee’s Base Salary, Bonuses and Commissions, provided that the
total amount deferred by a Participant shall be limited in any calendar year, if
necessary, to satisfy Social Security tax (including Medicare), income tax and
employee benefit plan withholding requirements as determined in the sole and
absolute discretion of the Committee. The minimum contribution which may be made
in any Plan Year by an Eligible Employee shall not be less than $5,000, provided
such minimum contribution can be satisfied from either Base Salary and/or Bonus
and/or Commission deferrals.

(c) Duration of Compensation Deferral Election. An Eligible Employee’s initial
election to defer Base Salary, Bonuses and Commissions must be filed on or
before each November 1, 14, 1997 and is to be effective on the first day of the
next following Plan Year.January 1, 1998. A Participant may elect to suspend his
election to defer Base Salary or Commissions once during any Plan Year with
respect to amounts of Base Salary or Commissions which have not been paid,
provided said Participant gives the Company 20 days prior written notice of his
election. A Participant may increase, decrease or terminate a deferral election
with respect to Base Salary or Commissions for any subsequent Plan Year by
filing a new election on or before November 1, which election shall be effective
on the first day of the next following Plan Year. An Eligible Employee may make
an An Eligible Employee’s Initial Election to defer Bonuses must be filed by
November 14, 1997. Any subsequent election with respect to Bonuses which must be
filed by November 1 of the year prior to the year that the Bonus is earned.
Bonuses are deemed earned at such time as Company communicates its determination
of Bonuses to the affected Eligible Employee. All elections with respect to
Bonuses are for one Plan Year. In the case of an employee who becomes an
Eligible Employee after any November 1, 1997, such Eligible Employee shall have
30 days from the date he or she has become an Eligible Employee to make an
Initial Election with respect to Base Salary, Bonuses and/or Commissions. Such
election shall be for the remainder of the Plan Year, in the event the Plan Year
has commenced.

(d) Elections other than Elections during the Initial Election

Period. Subject to the limitations of Section 3.1(b) above, any Eligible
Employee who fails to elect to defer Compensation during his or her Initial
Election Period may subsequently become a Participant, and any Eligible Employee
who has terminated a prior Compensation deferral election may elect to again
defer Compensation, by filing an election, on a form provided by the Committee,
to defer Compensation as described in Sections 3.1(b) and 3.1(c) above. An
election to defer Compensation must be filed in a timely manner in accordance
with Section 3.1(c).

3.2 Investment Elections.

(a) At the time of making the deferral elections described in Section 3.1, the
Participant shall designate, on a form provided by the Committee, the types of
investment funds the Participant’s Account will be deemed to be invested in for
purposes of determining the

 

-5-

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

amount of earnings to be credited to that Account. In making the designation
pursuant to this Section 3.2, the Participant may specify that all or any
multiple of his Deferral Account (equal to or greater than 10% in whole
percentage increments) be deemed to be invested in one or more of the types of
investment funds provided under the Plan as communicated from time to time by
the Committee. Effective as of the end of any calendar month, a Participant may
change the designation made under this Section 3.2 by filing an election, on a
form provided by the Committee, at least 30 days prior to the end of such month.
quarter. If a Participant fails to elect a type of fund under this Section 3.2,
he or she shall be deemed to have elected the Money Market type of investment
fund.

(b) Although the Participant may designate the type of investments, , the
Committee shall not be bound by such designation. The Committee shall select
from time to time, in its sole discretion, commercially available investments of
each of the types communicated by the Committee to the Participant pursuant to
Section 3.2(a) above to be the Funds. The Interest Rate of each such
commercially available investment fund shall be used to determine the amount of
earnings or losses to be credited to Participant’s Account under Article IV.

ARTICLE IV

DEFERRAL ACCOUNTS AND TRUST FUNDING

4.1 Deferral Accounts.

The Committee shall establish and maintain a Deferral Account for each
Participant under the Plan. Each Participant’s Deferral Account shall be further
divided into separate subaccounts (“investment fund subaccounts”), each of which
corresponds to an investment fund elected by the Participant pursuant to
Section 3.2(a). A Participant’s Deferral Account shall be credited as follows:

(a) As of the last day of each month, the Committee shall credit the investment
fund subaccounts of the Participant’s Deferral Account with an amount equal to
Compensation deferred by the Participant during each pay period ending in that
month in accordance with the Participant’s election under Section 3.2(a); that
is, the portion of the Participant’s deferred Compensation that the Participant
has elected to be deemed to be invested in a certain type of investment fund
shall be credited to the investment fund subaccount corresponding to that
investment fund;

(b) As of the last day of each month, each investment fund subaccount of a
Participant’s Deferral Account shall be credited with earnings or losses in an
amount equal to that determined by multiplying the balance credited to such
investment fund subaccount as of the last day of the preceding month by the
Interest Rate for the corresponding fund selected by the Company pursuant to
Section 3.2(b).

(c) In the event that a Participant elects for a given Plan Year’s deferral of
Compensation to have a Scheduled Withdrawal Date, all amounts attributed to the
deferral of Compensation for such Plan Year shall be accounted for in a manner
which allows separate

 

-6-

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

accounting for the deferral of Compensation and investment gains and losses
associated with such Plan Year’s deferral of Compensation.

4.2 Trust Funding.

Company has created a Trust with First American Trust Company serving as initial
trustee. The Company shall cause the Trust to be funded each year. Each
Participating The Company shall contribute to the Trust an amount equal to the
amount deferred by each Participant for the Plan Year. Each Participating The
Company may also contribute such additional amounts as it shall deem necessary
or appropriate.

Although the principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Participating Company and shall be used
exclusively for the uses and purposes of Plan Participants and Beneficiaries as
set forth therein, neither the Participants nor their Beneficiaries shall have
any preferred claim on, or any beneficial ownership in, any assets of the Trust
prior to the time such assets are paid to the Participants or Beneficiaries as
benefits and all rights created under this Plan shall be unsecured contractual
rights of Plan Participants and Beneficiaries against the Participating Company.
Any assets held in the Trust will be subject to the claims of Participating
Company’s general creditors under federal and state law in the event of
insolvency as defined in Section 4.2(a) of the Trust.

The assets of the Plan and Trust shall never inure to the benefit of the
Participating Company and the same shall be held for the exclusive purpose of
providing benefits to Participants and their beneficiaries, deferring reasonable
expenses of administering the Plan and Trust.

ARTICLE V

VESTING

A Participant’s Deferral Account shall be 100% vested at all times.

ARTICLE VI

DISTRIBUTIONS

6.1 Distribution of Deferred Compensation and Discretionary Company
Contributions.

(a) Distribution Without Scheduled Withdrawal Date. In the case of a Participant
who terminates employment with a Participating Company and has an Account
balance of $25,000 or more, the Distributable Amount shall be paid to the
Participant (and after his or her death to his or her Beneficiary) from among
the following optional forms of benefit as elected by the Participant on the
form provided by Participating Company during his or her Initial Election
Period:

(1) A lump sum distribution beginning on the Participant’s Payment Date.

 

-7-

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

(2) Substantially equal quarterly installments over five (5) years beginning on
the Participant’s Payment Date.

(3) Substantially equal quarterly installments over ten (10) years beginning on
the Participant’s Payment Date.

(4) Substantially equal quarterly installments over fifteen (15) years beginning
on the Participant’s Payment Date.

A Participant may modify the optional form of benefit that he or she has
previously elected, provided such modification occurs at least one (1) year
before the Participant terminates employment with Participating Company.

In the event a Participant fails to elect an optional form of benefit during his
or her Initial Election Period, the Participant’s Distributable Amount will be
distributed in a lump sum beginning on his or her Payment Date.

In the case of a Participant who terminates with Participating Company and has
an Account balance of less than $25,000, the Distributable Amount shall be paid
to the Participant (and after his or her death to his or her Beneficiary) in a
lump sum distribution on the Participant’s Payment Date.

The Participant’s Account shall continue to be credited with earnings pursuant
to Section 4.1 of the Plan until all amounts credited to his or her Account
under the Plan have been distributed.

(b) Distribution With Scheduled Withdrawal Date. In the case of a Participant
who has elected a Scheduled Withdrawal Date for a distribution while still in
the employ of the Participating Company, such Participant shall receive his or
her Distributable Amount, but only with respect to those deferrals of
Compensation and earnings on such deferrals of Compensation as shall have been
elected by the Participant to be subject to the Scheduled Withdrawal Date in
accordance with Section 1.2(yx) of the Plan. A Participant’s Scheduled
Withdrawal Date with respect to amounts of Compensation deferred in a given Plan
Year can be no earlier than two years from the last day of the Plan Year for
which the deferrals of Compensation are made. A Participant may extend the
Scheduled Withdrawal Date for the deferral of Compensation for any Plan Year,
provided such extension occurs at least one year before the Scheduled Withdrawal
Date and is for a period of not less than two years from the Scheduled
Withdrawal Date. The Participant shall have the right to twice modify any
Scheduled Withdrawal Date, provided the second such modification shall only be
effective if consented to by Company. In the event a Participant terminates
employment with Participating Company prior to a Scheduled Withdrawal Date,
other than by reason of death, the portion of the Participant’s Account
associated with Scheduled Withdrawal Dates which have not occurred prior to such
termination shall be distributed in a lump sum.

(c) Death Benefit. In the case of a Participant who dies while employed by a
Participating the Company, the following benefits shall be provided:

 

-8-

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

(1) that portion of the death benefit of any life insurance policy purchased by
the Trust Company to insure the life of the Participant and which is subject to
a “Split-Dollar Life Insurance Agreement” (as described therein) (the “Policy”)
which is equal to the following amounts:

(i) If a Participant elects during his first twelve months of Plan Participation
(whether or not such election occurs during more than one Plan Year) to defer
Base Salary only, such Participant’s death benefit shall equal his Base Salary
deferrals annualized over the first twelve months of Plan Participation
multiplied by fifteen. This amount shall constitute the Participant’s death
benefit for the remainder of his participation in the Plan.

(ii) If a Participant elects during his first twelve months of Plan
Participation (whether or not such election occurs during more than one Plan
Year) to defer Bonuses and/or Commissions only, such Participant’s death benefit
during the first twelve months of Plan Participation shall be $0. At the end of
the initial twelve month period (which may or may not span more than one Plan
Year) the amount of the Participant’s deferral of Bonuses and/or Commissions
shall be aggregated and multiplied by fifteen, which amount shall constitute the
Participant’s death benefit for the remainder of his or her participation in
this Plan.

(iii) If a Participant elects during his first twelve months of Plan
Participation (whether or not such election occurs during more than one Plan
Year) to defer Base Salary and Bonuses and/or Commissions, then the
Participant’s death benefit during his first twelve months of Plan Participation
shall equal his Base Salary deferrals annualized over twelve months multiplied
by fifteen. At the end of the initial twelve month period (which may or may not
span more than one Plan Year) the Participant’s death benefit shall equal the
amount of Base Salary deferrals annualized during the first twelve months
multiplied by fifteen plus the aggregate amount of all deferrals of Bonuses
and/or Commissions which occurred during the first twelve months multiplied by
fifteen. This amount shall constitute the Participant’s death benefit for the
remainder of his participation in the Plan.

Any such Policy shall be subject to certain conditions set forth in a
“split-dollar life insurance agreement” between the Participant, Trustee and the
Participating Company, pursuant to which the Participant may designate a
beneficiary with respect to the portion of the Policy proceeds described in this
Section 6.1(c)(1) in the event the Participant dies prior to terminating
employment with the Participating Company. The Participant shall have the right
to designate and change such beneficiary (which need not be his or her
Beneficiary) at any time on a form provided by and filed with the insurance
company. If no such form is on file with the insurance company, the insurance
proceeds designated in this paragraph (1) shall be paid to the Beneficiary. The
benefit payable pursuant to this paragraph (1) shall only be paid if the
insurance company agrees that the Participant is insurable and shall be subject
to all conditions and exceptions set forth in the applicable insurance policy.
Notwithstanding the provision of this Plan or any other document to the
contrary, the Participating Company shall not have any obligation to pay the
Participant or his or her beneficiary any amounts described in
Section 6.1(c)(1); all such amounts due pursuant to Section 6.1(c)(1) shall be
payable solely from the proceeds of the Policy, if any. Furthermore, the
Participating Company is not obligated to maintain the Policy; no death benefit
shall be payable hereunder if the Company has

 

-9-

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

discontinued the Policy for the Participant. In addition, no Policy shall be
allocated to any Participating Account.

(2) The Account Balance in a lump sum or installments as previously elected by
the Participant.

(d) Death After Benefit Commencement. In the event a Participant dies after he
has retired from the employ of the Company and still has a balance in his or her
Account, the balance shall continue to be paid in quarterly installments for the
remainder of the period as elected by the Participant.

(e) Death Benefit Reduction. In the event a Participant elects an Early
Distribution from his or her Deferral Account, the Participant’s death benefit
as computed in accordance with Section 6.1(c)(1) of the Plan shall be reduced by
multiplying said death benefit by a fraction the numerator of which shall be the
sum of the Participant’s Early Distributions and the denominator of which shall
be the Participant’s Deferral Account, after plus Early Distributions, plus
Early Distributions. For purposes of calculating the denominator of the fraction
set forth above, a Participant’s Early Distributions shall be credited with
earnings in accordance with Section 4.1 of the Plan.

In the event a Participant suspends contributions of Base Salary during the
first twelve (12) months of Plan participation, then the Participant’s death
benefit calculated in accordance with Sections 6.1(c)(1)(i) and (iii) shall be
determined by multiplying the actual amount of Base Salary deferred during the
initial twelve (12) month period multiplied by fifteen (15).

6.2 Early Distributions.

A Participant shall be permitted to elect an Early Distribution from his or her
Deferral Account prior to the Payment Date, subject to the following
restrictions:

(a) The election to take an Early Distribution shall be made by filing a form
provided by and filed with the Committee prior to the end of any calendar month.

(b) The amount of the Early Distribution shall in all cases be an amount not
less than the greater of 50% of the Deferral Account as of the end of the
calendar month as of which the distribution is to be made, or $25,000.

(c) The amount described in subsection (b) above shall be paid in a single cash
lump sum as soon as practicable after the end of the calendar month in which the
Early Distribution election is made.

(d) If a Participant receives an Early Distribution of his entire Deferral
Account, the remaining balance of his or her Deferral Account (10% of the
Deferral Account) shall be permanently forfeited and the Company shall have no
obligation to the Participant or his Beneficiary with respect to such forfeited
amount. If a Participant receives an Early Distribution of 50% or more of his
Deferral Account, such Participant shall forfeit 10% of the gross amount to be
distributed from the Participant’s Deferral Account.

 

-10-

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

(e) If a Participant receives an Early Distribution of either all or a part of
his Deferral Account, the following rules will apply for the balance of the Plan
Year and for the following Plan Year: (i) the Participant will be ineligible to
participate in the Plan, and (ii) neither the Participant (nor his Beneficiary
or beneficiaries) shall be entitled to death benefits under Section 6.1(c)(1) or
(2).

6.3 Inability to Locate Participant.

In the event that the Committee is unable to locate a Participant or Beneficiary
within three two years following the required Payment Date, the amount allocated
to the Participant’s Deferral Account, shall be forfeited. If, after such
forfeiture, the Participant or Beneficiary later claims, within three years of
the forfeiture, such benefit, such benefit shall be reinstated without interest
or earnings.

6.4 Payment of Policy Premiums.

So long as the Participating Company Trust maintains a Policy for a Participant,
the Participating Company shall pay to the Trustee amounts necessary to pay
premiums on the Policy insuring the Participant’s life from as soon as practical
after the end of each Plan Year, or such earlier time as the Participating
Company shall determine (but no later than the tax return due date for the
Participating Company for such year), in amounts equal to the amount deferred by
the Participant for the Plan Year.

ARTICLE VII

ADMINISTRATION

7.1 Committee.

A committee shall be appointed by, and serve at the pleasure of, the Board of
Directors. The number of members comprising the Committee shall be determined by
the Board which may from time to time vary the number of members. A member of
the Committee may resign by delivering a written notice of resignation to the
Board. The Board may remove any member by delivering a certified copy of its
resolution of removal to such member. Vacancies in the membership of the
Committee shall be filled promptly by the Board.

7.2 Committee Action.

The Committee shall act at meetings by affirmative vote of a majority of the
members of the Committee. Any action permitted to be taken at a meeting may be
taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee. A member of the
Committee shall not vote or act upon any matter which relates solely to himself
or herself as a Participant. The Chairman or any other member or members of the
Committee designated by the Chairman may execute any certificate or other
written direction on behalf of the Committee.

 

-11-

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

7.3 Powers and Duties of the Committee.

(a) The Committee, on behalf of the Participants and their Beneficiaries, shall
enforce the Plan in accordance with its terms, shall be charged with the general
administration of the Plan, and shall have all powers necessary to accomplish
its purposes, including, but not by way of limitation, the following:

(1) To select the Funds in accordance with Section 3.2(b) hereof;

(2) To construe and interpret the terms and provisions of this Plan;

(3) To compute and certify to the amount and kind of benefits payable to
Participants and their Beneficiaries;

(4) To maintain all records that may be necessary for the administration of the
Plan;

(5) To provide for the disclosure of all information and the filing or provision
of all reports and statements to Participants, Beneficiaries or governmental
agencies as shall be required by law;

(6) To make and publish such rules for the regulation of the Plan and procedures
for the administration of the Plan as are not inconsistent with the terms
hereof;

(7) To appoint a plan administrator or any other agent, and to delegate to them
such powers and duties in connection with the administration of the Plan as the
Committee may from time to time prescribe;

(8) To take all actions necessary for the administration of the Plan, including
determining whether to hold or discontinue the Policies; and

(9) If a Policy is discontinued or a Participant has terminated employment with
the Company for a reason other than death, (A) to notify the insurance company
that no death benefits are payable to the beneficiaries of the applicable
Participant under the Policy (and that neither the Participant nor his or her
beneficiary has any rights under the Policy or to any benefits under the Policy)
and (B) to file a new beneficiary designation with the insurance company naming
the Participating Company as beneficiary or to cash in the Policy.

7.4 Construction and Interpretation.

The Committee shall have full discretion to construe and interpret the terms and
provisions of this Plan, which interpretations or construction shall be final
and binding on all parties, including but not limited to the Participating
Company and any Participant or Beneficiary. The Committee shall administer such
terms and provisions in a uniform and nondiscriminatory manner and in full
accordance with any and all laws applicable to the Plan.

 

-12-

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

7.5 Information.

To enable the Committee to perform its functions, the Company shall supply full
and timely information to the Committee on all matters relating to the
Compensation of all Participants, their death or other events which cause
termination of their participation in this Plan, and such other pertinent facts
as the Committee may require.

7.6 Compensation, Expenses and Indemnity.

(a) The members of the Committee shall serve without compensation for their
services hereunder.

(b) The Committee is authorized at the expense of the Company to employ such
legal counsel as it may deem advisable to assist in the performance of its
duties hereunder. Expenses and fees in connection with the administration of the
Plan shall be paid by the Company. Company may allocate such expenses and fees
amongst Participating Companies.

(c) 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.

7.7 Quarterly Statements.

Under procedures established by the Committee, a Participant shall receive a
statement with respect to such Participant’s Accounts on a quarterly basis as of
each March 31, June 30, September 30 and December 31.

7.8 Disputes.

(a) Claim.

A person who believes that he or she is being denied a benefit to which he or
she is entitled under this Agreement (hereinafter referred to as “Claimant”)
must file a written request for such benefit with the Company, setting forth his
or her claim. The request must be addressed to the President of the Company at
its then principal place of business.

(b) Claim Decision.

Upon receipt of a claim, the Company shall advise the Claimant that a reply will
be forthcoming within ninety (90) days and shall, in fact, deliver such reply
within such period. The Company may, however, extend the reply period for an
additional ninety (90) days for special circumstances.

 

-13-

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

If the claim is denied in whole or in part, the Company shall inform the
Claimant in writing, using language calculated to be understood by the Claimant,
setting forth: (A) the specified reason or reasons for such denial; (B) the
specific reference to pertinent provisions of this Agreement on which such
denial is based; (C) a description of any additional material or information
necessary for the Claimant to perfect his or her claim and an explanation of why
such material or such information is necessary; (D) appropriate information as
to the steps to be taken if the Claimant wishes to submit the claim for review;
and (E) the time limits for requesting a review under subsection (c).

(c) Request For Review.

Within sixty (60) days after the receipt by the Claimant of the written opinion
described above, the Claimant may request in writing that the Committee review
the determination of the Company. Such request must be addressed to the
Secretary of the Company, at its then principal place of business. The Claimant
or his or her duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Committee. If the Claimant does not request a review within such sixty
(60) day period, he or she shall be barred and estopped from challenging the
Company’s determination.

(d) Review of Decision.

Within sixty (60) days after the Committee’s receipt of a request for review,
after considering all materials presented by the Claimant, the Committee will
inform the Participant in writing, in a manner calculated to be understood by
the Claimant, the decision setting forth the specific reasons for the decision
containing specific references to the pertinent provisions of this Agreement on
which the decision is based. If special circumstances require that the sixty
(60) day time period be extended, the Committee will so notify the Claimant and
will render the decision as soon as possible, but no later than one hundred
twenty (120) days after receipt of the request for review.

ARTICLE VIII

PROCEDURE FOR ADOPTION AND WITHDRAWAL BY PARTICIPATING EMPLOYERS

8.1 Adoption of the Plan.

Any entity which is a subsidiary for which more than fifty percent (50%) of the
value of the stock or other interest of such entity is owned by the Sponsoring
Company may, with the consent and approval of the Sponsoring Company, adopt this
Plan as a Participating Company for a select group of management and highly
compensated employees. The adoption of this Plan by a Participating Company
shall be effected by resolution of its board of directors or equivalent
governing body. It shall not be necessary for any adopting Participating Company
to formally execute the Plan as then in effect. As to the Participating Company,
the effective date of the Plan shall be stated in its resolutions, and it shall
assume all the rights, obligations and liabilities of a Participating Company
under the Plan.

 

-14-

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

8.2 Withdrawal From the Plan.

A Participating Employer may by resolution of its board of directors or
equivalent governing body and approval by the Sponsoring Employer, withdraw from
participation under the Plan. A Withdrawing Participating Employer may arrange
for the continuation by itself or its successor of this Plan in a separate form
for its own employees. The Withdrawing Participating Employer may arrange for
continuation of the Plan by merger with an existing plan and request, subject to
the Sponsoring Employer’s consent the transfer to such plan of all Plan Assets
representing the benefits of its employees.

8.3 Cessation of Future Contributions.

A Participating Employer may by resolution of its board of directors or
equivalent governing body cease to allow Participants in its employ to continue
to make deferrals pursuant to Section 3.1 of the Plan. In the event a
Participating Company makes the determination to cease Participant deferrals the
remaining provisions of this Plan shall continue to apply.

ARTICLE IX

MISCELLANEOUS

9.1 Unsecured General Creditor.

Participants and their Beneficiaries, heirs, successors, and assigns shall have
no legal or equitable rights, claims, or interest in any specific property or
assets of the Participating Company. No assets of the Participating Company
shall be held in any way as collateral security for the fulfilling of the
obligations of the Participating Company under this Plan. Any and all of the
Participating Company’s assets shall be, and remain, the general unpledged,
unrestricted assets of the Participating Company. The Participating Company’s
obligation under the Plan shall be merely that of an unfunded and unsecured
promise of the Participating Company to pay money in the future, and the rights
of the Participants and Beneficiaries shall be no greater than those of
unsecured general creditors. It is the intention of the Participating Company
that this Plan be unfunded for purposes of the Code and for purposes of Title 1
of ERISA.

9.2 Restriction Against Assignment.

The Participating Company shall pay all amounts payable hereunder only to the
person or persons designated by the Plan and not to any other person or
corporation. No part of a Participant’s Accounts shall be liable for the debts,
contracts, or engagements of any Participant, his or her Beneficiary, or
successors in interest, nor shall a Participant’s Accounts be subject to
execution by levy, attachment, or garnishment or by any other legal or equitable
proceeding, nor shall any such person have any right to alienate, anticipate,
sell, transfer, commute, pledge, encumber, or assign any benefits or payments
hereunder in any manner whatsoever. If any Participant, Beneficiary or successor
in interest is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, commute, assign, pledge, encumber or charge any distribution or
payment from the Plan, voluntarily or involuntarily, the Committee, in its
discretion, may cancel such distribution or payment (or any part thereof) to or
for the benefit of such Participant, Beneficiary or successor in interest in
such manner as the Committee shall direct.

 

-15-

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

9.3 Withholding.

There shall be deducted from each payment made under the Plan or any other
Compensation payable to the Participant (or Beneficiary) all taxes which are
required to be withheld by the Participating Company in respect to such payment
or this Plan. The Participating Company shall have the right to reduce any
payment (or compensation) by the amount of cash sufficient to provide the amount
of said taxes.

9.4 Amendment, Modification, Suspension or Termination.

The Committee may amend, modify, suspend or terminate the Plan in whole or in
part, except that no amendment, modification, suspension or termination shall
have any retroactive effect to reduce any amounts allocated to a Participant’s
Accounts (neither the Policies themselves, nor the death benefit described in
Section 6.1(c)(1) shall be treated as allocated to Accounts). In addition, the
Committee has the right to amend or terminate Section 6.1(c)(1). In the event
that this Plan is terminated, the amounts allocated to a Participant’s Accounts
shall be distributed to the Participant or, in the event of his or her death,
his or her Beneficiary in a lump sum within thirty (30) days following the date
of termination.

9.5 Governing Law.

This Plan shall be construed, governed and administered in accordance with the
laws of the State of California.

9.6 Receipt or Release.

Any payment to a Participant or the Participant’s Beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be in full satisfaction
of all claims against the Committee and the Company. The Committee may require
such Participant or Beneficiary, as a condition precedent to such payment, to
execute a receipt and release to such effect.

9.7 Payments on Behalf of Persons Under Incapacity.

In the event that any amount becomes payable under the Plan to a person who, in
the sole judgment of the Committee, is considered by reason of physical or
mental condition to be unable to give a valid receipt therefore, the Committee
may direct that such payment be made to any person found by the Committee, in
its sole judgment, to have assumed the care of such person. Any payment made
pursuant to such determination shall constitute a full release and discharge of
the Committee and the Company.

9.8 Limitation of Rights and Employment Relationship.

Neither the establishment of the Plan and Trust nor any modification thereof,
nor the creating of any fund or account, nor the payment of any benefits shall
be construed as giving to any Participant or other person any legal or equitable
right against the Company or the trustee of the Trust except as provided in the
Plan and Trust; and in no event shall the terms of employment of any Employee or
Participant be modified or in any way be affected by the provisions of the Plan
and Trust.

 

-16-

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

9.9 Headings.

Headings and subheadings in this Plan are inserted for convenience of reference
only and are not to be considered in the construction of the provisions hereof.

IN WITNESS WHEREOF, the Company has caused this document to be executed by its
duly authorized officer on this 10th day of March, 2000.

 

THE FIRST AMERICAN FINANCIAL CORPORATION By  

/s/ Drew Cree

Its:   Vice President Human Resources

 

-17-

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

Amendment No. 1

to

The First American Financial Corporation Deferred Compensation Plan

The following amendment is hereby made to The First American Financial
Corporation Deferred Compensation Plan (effective as of January 1, 1998)
(hereinafter referred to as the “Plan”). This amendment is effective as of
May 12, 2000, and is made for the purpose of reflecting the change in the name
of the sponsor of the Plan (the “Company” as defined therein) from “The First
American Financial Corporation” to “The First American Corporation,” which
change became effective on said date.

1. Plan section 1.1, relating to the name of the Plan, is amended to read in its
entirety as follows:

1.1 Title.

This Plan shall be known as The First American Corporation Deferred Compensation
Plan.

2. All references to the name of the Plan that are made in the introductory
paragraphs or elsewhere in the Plan document and in any previous amendment
thereto shall be deemed to refer to the new name of the Plan as set forth in
this Amendment No. 1.

3. Except as amended above, the Plan as in effect prior to this amendment shall
continue unchanged.

In Witness Whereof, The First American Corporation has caused its duly
authorized officers to execute this Plan amendment on July 19, 2000.

 

The First American Corporation By:  

/s/ Parker S. Kennedy

  Parker S. Kennedy Its:   President By:  

/s/ Mark R Arnesen

  Mark R Arnesen Its:   Secretary

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

Amendment No. 2

To

The First American Corporation

Deferred Compensation Plan

The following amendment is hereby made to The First American Corporation
Deferred Compensation Plan (the Plan), effective as of January 1, 1998. This
amendment is effective as of the follow date and is made for the purpose of
reflecting the change in the death benefit provided under the plan.

Plan Section 6.1(c)(1) is amended to eliminate the death benefit for employees
who became Participants in the Plan on or after January 1, 2002.

Plan Section 6.1(c)(1) is amended to add to the end of Section, effective
February 1, 2003.

“Notwithstanding anything in the Plan to the contrary, the death benefit under
this Section 6.1(c)(1) shall be limited as follows:

 

  •  

The maximum death benefit payable to a Participant’s Beneficiary under this
section shall be $2 million.

 

  •  

If the Participant dies while in service on or after attainment of age 61, the
benefit under this section, after application of the $2 million limit described
above, shall be further reduced by 20% for each full year after age 60. If the
Participant is over age 61 as of February 1, 2003, the benefit will be reduced
by 20% for each full year after February 1, 2002.

IN WITNESS HEREOF, the Company hereby causes this amendment to be adopted,
effective February 1, 2003.

 

The First American Corporation By:  

/s/ ELIZABETH M. BRANDON

  Elizabeth M. Brandon Its:   Vice President, Administration By:  

/s/ KATHLEEN M. COLLINS

  Kathleen M. Collins Its:   Vice President, Special Counsel