Notice of Performance Unit Grant – First American Financial Corp

Notice of Performance Unit Grant

Participant:

[]

Company:

First American Financial Corporation (the “Company”)

Notice:

You have been granted a Performance Unit in accordance with the terms of the Plan and the Performance Unit Award Agreement attached hereto.

Type of Award:

Performance Units

Plan:

First American Financial Corporation 2010 Incentive Compensation Plan

Grant:

Date of Grant: March 21, 2011

Number of Performance Units: []

Each Performance Unit has the value of $1

Performance

Period:

Subject to the terms of the Plan and this Agreement, the Performance Period applicable to the Performance Units shall be the calendar year 2011.

Performance

Condition:

Your right to the receipt of cash for your Performance Units is conditioned on the Company153s achievement of net income (as defined in accordance with generally acceptable accounting principles) for 2011 of $25 million or more, determined without regard to (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary, unusual and/or nonrecurring items of gain or loss, and (f) foreign exchange gains and losses. This condition is referred to as the “Performance Target.” Within a reasonable time after the determination of whether the Performance Target has been met, the Committee shall determine the final amount of Performance Units to which you shall be entitled, provided that the total amount thereof shall not exceed the amount set forth above. The Committee, in its sole and unfettered discretion, may decrease the number of Performance Units awarded to you at any time prior to the payment thereon.

Rejection:

If you wish to accept this Performance Unit Award, please return this Agreement, executed by you on the last page of this Agreement, at any time within forty-five (45) days after the Date of Grant, to First American Financial Corporation, 1 First American Way, Santa Ana, California 92707, Attn: Matthew MacDougall. Do not return a signed copy of this Agreement if you wish to reject this Performance Unit Award. If you do not return a signed copy of this Agreement within forty-five (45) days after the Date of Grant, you will have rejected this Performance Unit Award.

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Performance Unit Award Agreement

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

1.

Definitions .

Capitalized terms used but not defined in this Agreement (including the Grant
Notice) have the meaning set forth in the First American Financial Corporation
2010 Incentive Compensation Plan.

2.

Grant of the Performance Units .

Subject to the provisions of this Agreement and the provisions of the Plan,
the Company hereby grants to the Participant, pursuant to the Plan, the
contingent right to receive in cash an amount equal in value to the performance
units set forth in the Grant Notice, as such number of performance units may be
reduced by the Committee in its sole and unfettered discretion (the “Performance
Units”). Each Performance Unit has a value of $1.

3.

Vesting and Payment of Performance Units .

After the Performance Period (as specified in the Notice of Grant) has ended
and provided that the Committee has determined that the Performance Target (as
defined in the Notice of Grant) has been achieved, the Participant shall be
entitled to receive, and the Company shall pay to the Participant, the cash
value of the Performance Units; provided, however, that prior to
paying to the Participant such cash value, the Committee may, in its sole and
unfettered discretion, decrease the amount of Performance Units awarded to the
Participant. If the Performance Target is not met, the Participant shall forfeit
the Performance Units and the Participant shall not be entitled to any cash
payment in connection therewith.

4.

No Right to Continued Employment .

None of the Performance Units nor any terms contained in this Agreement shall
confer upon the Participant any express or implied right to be retained in the
employ of the Company or any Subsidiary or Affiliate for any period, nor
restrict in any way the right of the Company or any Subsidiary or any Affiliate,
which right is hereby expressly reserved, to terminate the Participant153s
employment at any time for any reason. For the avoidance of doubt, this
Section 4 is not intended to amend or modify any other agreement, including any
employment agreement, that may be in existence between the Participant and the
Company or any Subsidiary or Affiliate.

5.

The Plan .

In consideration for this grant, the Participant agrees to comply with the
terms of the Plan and this Agreement. This Agreement is subject to all the
terms, provisions and conditions of the Plan, which are incorporated herein by
reference, and to such regulations as may from time to time be adopted by the
Committee. In the event of any conflict between the

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provisions of the Plan and this Agreement, the provisions of the Plan shall
control, and this Agreement shall be deemed to be modified accordingly. The Plan
and the prospectus describing the Plan can be found on the Company153s HR
intranet. A paper copy of the Plan and the prospectus shall be provided to the
Participant upon the Participant153s written request to the Company at First
American Financial Corporation, 1 First American Way, Santa Ana, California
92707, Attention: Incentive Compensation Plan Administrator, or such other
address as the Company may from time to time specify.

6.

Notices .

All notices by the Participant shall be addressed to First American Financial
Corporation, 1 First American Way, Santa Ana, California 92707, Attention:
Incentive Compensation Plan Administrator, or such other address as the Company
may from time to time specify. All notices to the Participant shall be addressed
to the Participant at the Participant153s address in the Company153s records.

7.

Severability .

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

8.

Other Plans .

The Participant acknowledges that any income derived from the Performance
Units shall not affect the Participant153s participation in, or benefits under,
any other benefit plan or other contract or arrangement maintained by the
Company or any Subsidiary or Affiliate. For purposes of the Company153s Executive
Supplemental Benefit Plan and Management Supplemental Benefit Plan, as the same
may be amended from time to time, cash ultimately paid for any Performance Units
shall be deemed to be “Covered Compensation”.

9. Assignment. Participant may not transfer or assign this Agreement
or any part thereof. The Company reserves the right to transfer or assign this
Agreement to any of its Affiliates.

[SIGNATURES FOLLOW]

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FIRST AMERICAN FINANCIAL CORPORATION
By:
		Name:
		Title:

Date:

Acknowledged and agreed as of the Date of Grant:

Signature:

Printed Name:

Date:

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