This EMPLOYMENT AGREEMENT (“Agreement”) is made as of January 1, 2006, by and between
PICO Holdings, Inc., a diversified investment company formed under the laws of the state of California
(“Company”), and John R. Hart (“Employee”).
The Company believes it is prudent and appropriate to attempt to increase shareholder value through
strategic investments, acquisitions, business combinations, realization of market value of existing assets and
acquisitions of assets or companies below market value and in certain circumstances, below book value.
The Company believes that Employee possesses unique skills, knowledge, and experience and has
demonstrated such skills, knowledge and experience in pursuing the Company’s goals.
The Company believes that it is imperative that it be able to rely upon Employee’s skills and services
for a reasonable time in the future.
Employee has been President and Chief Executive Officer and a Director of the Company since
November 20, 1996, a Director of its predecessor company since December 10, 1993, and President and Chief
Executive Officer of its predecessor since July 15, 1995.
5. Employee has been instrumental in reorganizing the Company’s Board of Directors, management, and
Employee entered into a four-year Employment Agreement with the Company effective December 31,
1997. A further Employment Agreement was entered into for the period of January 1, 2002 through December
31, 2005. The Employment Agreement contained herein shall take effect on January 1, 2006.
In consideration of the foregoing, and of their mutual promises contained herein, the parties
agree and intend to be legally bound as follows:
Employment and Term .
The Company hereby engages Employee, and Employee hereby accepts such engagement, on
the terms and conditions set forth herein, for a five-year period commencing on January 1, 2006.