exhibit1019.htm


    EXHIBIT
10.19

    


    AMENDMENT TO EMPLOYMENT
AGREEMENT

    


    


    This Amendment to Employment Agreement
(this “Amendment”) is effective as of January 1, 2009, by and between PICO Holdings, Inc., a
diversified holding company formed under the laws of the state of California
(the “Company”), and John R.
Hart, an individual (“Employee”).

     

    RECITALS

    


    WHEREAS, the Company and Employee
entered into a certain written Employment Agreement dated and effective as of
May 7, 2007 (the “Agreement”);

    WHEREAS, in accordance with Section 14
of the Agreement, the Company has determined that modifications to the Agreement
are necessary to facilitate compliance with the requirements of Section 409A of
the United States Internal Revenue Code of 1986, as amended (“Section 409A”);
and

    WHEREAS, pursuant to Section 14 of the
Agreement, the Company and Employee agreed to cooperate and assist one another
in order to adopt and implement such modifications.

    NOW THEREFORE, in consideration of the
foregoing, and their mutual promises contained herein, the parties agree to
amend the Agreement to comply with the provisions of Section 409A as more
specifically provided herein below.

     

    
      	
              1.  

            	
              Section
      3. Compensation
      shall be amended as follows:

            


    

    


    
      	
              a.  

            	
              Subsection
      3B. Incentive
      Award shall be amended by adding the following to the end of the
      last sentence:

            


    

    
      	
               
      

            	
              “,
      within 2-1/2 months after the end of the fiscal year in which Employee
      performed the services to which the Incentive Award
    relates.”

            


    

    


    
      	
              b.  

            	
              Subsection
      3C. Stock
      Appreciation Rights shall be amended by adding the following to the
      end of the subsection:

            


    

    
      	
               
      

            	
              “The
      stock appreciation rights shall be exercised in accordance with the terms
      of the stock appreciation award.  In compliance with Section
      409A, the compensation payable under such stock appreciation rights cannot
      be greater than (1) the excess of the fair market value of such rights on
      the date of exercise, as determined by the closing market price on the
      NASDAQ Global Market on such date, over (2)  the exercise price
      described herein.  Notwithstanding the foregoing, the Company
      may, in its sole discretion, determine the fair market value of the stock
      appreciation rights at exercise using any other reasonable valuation
      method that also complies with Section
409A.”

            


    

    


    
      	
              2.  

            	
              Section
      5.  Death or Disability of
      Employee shall be amended by adding the following sentence to the
      end of the section:

            


    

    


    
      	
              a.  

            	
              “Any
      payment made in accordance with this Section 5 shall be paid no later
      than  2-1/2 months after the end of the year in which occurs
      Employee’s termination of employment for whatever reason described
      hereunder.”

            


    

    


    
      	
              3.  

            	
              Section
      6.  Termination by
      Employee shall be amended by adding the following sentence to the
      end of the section:

            


    

    


    
      	
              a.  

            	
              “Any
      payment made in accordance with this Section 6 shall be paid no later
      than  2-1/2 months after the end of the year in which occurs
      Employee’s termination of employment described
  hereunder.

            


    

    


    
      	
              4.  

            	
              Section
      19.  Compliance with Code
      409A shall be added to the Agreement as follows in its
      entirety:

            


    

    


    
      	
              a.  

            	
              This
      Agreement is intended to comply with, or otherwise be exempt from, Code
      Section 409A.

            


    

    


    
      	
              b.  

            	
              The
      Company shall undertake to administer, interpret and construe this
      Agreement in a manner that does not result in the imposition on Employee
      of any additional tax, penalty, or interest under Code Section
      409A.  This provision shall not be construed as a guarantee by
      the Company of any particular tax effect to Employee under this
      Agreement.  The Company shall not be liable to Employee for any
      payment made under this Agreement that is determined to result in an
      additional tax, penalty, or interest under Code Section 409A, nor for
      reporting in good faith any payment made under this Agreement as an amount
      includible in gross income under Code Section
  409A.

            


    

    


    
      	
              c.  

            	
              “Termination
      of employment”, or words of similar import, as used in this Agreement
      means, for purposes of any payments under this Agreement that are payments
      of deferred compensation subject to Code Section 409A, the employee’s
      “separation from service” as defined in Code Section
  409A.

            


    

    


    
      	
              d.  

            	
              Notwithstanding
      any other provisions herein, if a payment obligation under this Agreement
      arises on account of Employee’s separation from service while the Employee
      is a “specified employee” (as defined under Code Section 409A and
      determined in good faith by the Company), any payment of deferred
      compensation subject to Code Section 409A, after giving effect to any
      exemptions provided thereunder, that is scheduled to be paid within six
      (6) months after such separation from service shall be paid within fifteen
      (15) days after the end of the six (6) month period beginning on the date
      of such separation from service, or, if earlier, within fifteen (15) days
      after the appointment of the personal representative or executor of
      Employee’s estate following his
death.

            


    

    
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on December 23,
2008, effective as of January 1, 2009.

    


    


    PICO
HOLDINGS, INC.

    


    /s/  James F. Mosier_

    Name

    


    General Counsel and
Secretary

    Title

    


    


    EMPLOYEE:

    


    /s/John R.
Hart_____________

    John
R. Hart