|                                                          |
|----------------------------------------------------------|
|                                                          |  |
| California(State or other jurisdiction of incorporation) | 94-2723335(IRS Employer Identification No.) |

|                                |
|--------------------------------|
|                                |  |
| Title of Each Class            | Name of Each Exchange On Which Registered |
| Common Stock, Par Value $0.001 | NASDAQ Stock Market LLC |

|                                     |
|-------------------------------------|
|                                     |  |  |  |
| Large accelerated filer ¨ | Accelerated filer ý | Non-accelerated filer ¨ | Smaller reporting company ¨ |

----

|          |
|----------|
|          |  |  |
|     |   | Page No. |
|     |   |   |
|     | EXPLANATORY NOTE | 3 |
|     |   |   |
| PART III |
|     |   |   |
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE | 4 |
| ITEM 11. | EXECUTIVE COMPENSATION | 10 |
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 25 |
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE | 28 |
| ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES | 29 |
|     |   |   |
| PART IV  |
|     |   |   |
| ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 31 |
|     |   |   |
|     | SIGNATURES | 32 |

----

|          |
|----------|
|          |  |  |
| Item     |   | Description |
| Item 10. |   | DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE |
| Item 11. |   | EXECUTIVE COMPENSATION |
| Item 12. |   | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
| Item 13. |   | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |
| Item 14. |   | PRINCIPAL ACCOUNTING FEES AND SERVICES |

----

|                   |
|-------------------|
|                   |  |  |  |  |
| Director Name     |   | Business Experience |   | Age |
| Howard Brownstein |   | Howard Brownstein was appointed to our Board of Directors in February 2016. Mr. Brownstein has been the president of The Brownstein Corporation, a turnaround and crisis management consulting, advisory and investment banking firm, since 2010. From 1999 through 2009, Mr. Brownstein was a Principal of NachmanHaysBrownstein, Inc., a management consulting firm. Since 2010, Mr. Brownstein has served on the board of directors of P&F Industries, Inc., a publicly-held manufacturer/importer of air-powered tools and various residential hardware products and joined that board after being recommended by a significant shareholder of P&F. From 2003 through 2006, he served on the boards of directors and audit committees of Special Metals Corporation, a privately held nickel alloy producer (where he also chaired the audit committee) and Magnatrax Corporation, a privately held manufacturer of metal buildings. In 2010, he served on the board of directors of Betsey Johnson, a privately held apparel designer and retailer. Additionally, from January 2014 through April 2015, Mr. Brownstein served on the board of directors of LMG2, a privately-held Chicago-based parking facility operator. Additionally, Mr. Brownstein is a Board Leadership Fellow of the National Association of Corporate Directors (“NACD”), through which he completed NACD’s comprehensive program of study for corporate directors and continues to supplement his director skill sets through ongoing engagement with the director community, and access to leading practices. Mr. Brownstein is a graduate of Harvard University, where he obtained J.D. and M.B.A. degrees, and of the University of Pennsylvania, where he obtained B.S. and B.A. degrees from the Wharton School and the College of Arts and Sciences. Mr. Brownstein is admitted to the bars of Pennsylvania, Massachusetts and Florida, but does not actively practice law.We believe that Mr. Brownstein’s broad financial and management consulting background, including his extensive experience in finance, restructurings and turnarounds, strategic planning, valuing and selling businesses and corporate governance, as well as his public company board experience makes him a valuable member of our Board of Directors. This experience provides him keen insight into both the management and operations of a business and the governance and oversight matters facing companies and led to our conclusion that he should serve on our Board of Directors. |   | 65 |

----

|                     |
|---------------------|
|                     |  |  |  |  |
| Director Name       |   | Business Experience |   | Age |
| Carlos C. Campbell  |   | Carlos C. Campbell has served as a member of our Board of Directors since 1998. He is Chair of the Compensation Committee and a member of the Audit Committee and the Corporate Governance and Nominating Committee. He is the president of Global 21, LLC, a strategic advisory company, (Formerly C.C. Campbell & Co., 1985-2011) and Initiative Films, LLC (2011-Present). Mr. Campbell has served as a director of Resource America, Inc. since 1990. Mr. Campbell has also previously served as a director of eight other public corporations. Mr. Campbell has completed over two dozen seminars on director training. He has a Certificate of Director Education from the National Association of Corporate Directors and is a graduate of the Director’s Institute, University of California Los Angeles, where he was designated a Certified Corporate Director. He has completed seminars in corporate governance, auditing, and compensation at the Harvard Business School. Mr. Campbell is a member of the National Association of Corporate Directors and a member of the 2011 inaugural class of Board Leadership Fellows. He was also elected to the NACD Directorship 100, which recognizes the most influential directors of U.S. corporations. Mr. Campbell has participated in numerous professional forums with the NACD on governance, compensation, and mergers and acquisitions.Mr. Campbell served as the Assistant Secretary of Commerce for Economic Development, U.S. Department of Commerce (1981-1984) where he was the final authority for an annual program budget of $300 million and a loan portfolio in excess of $1 billion. Mr. Campbell has a B.S. in Construction Management from Michigan State University, a Certificate in Engineering Science from the U.S. Naval Post Graduate School, and a Master of City & Regional Planning from the School of Engineering & Architecture, Catholic University of America.  Mr. Campbell served on active duty as a Naval Flight Officer and Intelligence Officer. He has traveled to over fifty countries mainly on government business.We believe that Mr. Campbell’s extensive directorship training, strategic advisory and government experience, two areas of expertise that are important to certain of our operating segments, enrich the makeup of our Board of Directors and provide keen insight into our businesses. Mr. Campbell’s record of service as a director on public boards and with government agencies also gives him substantial experience on financial, governance and risk oversight matters leading to our conclusion that he should serve on our Board of Directors. |   | 78 |
| Kenneth J. Slepicka |   | Kenneth J. Slepicka has served as a member of our Board of Directors since 2005.  Mr. Slepicka is currently the chairman, chief executive officer, and acting chief financial officer of Synthonics, Inc., an early stage biotechnology company, and has served in such capacity since 2006.  Mr. Slepicka received a Master of Business Administration from Kellogg School of Management, Northwestern University.  Mr. Slepicka has also received a Master Director Certification from the National Association of Corporate Directors (NACD), is a member, and has earned certificates of director education in 2007, 2008, and 2009, as well as the status of Leadership Fellow from the NACD.  In addition, Mr. Slepicka served as president and treasurer of SBC Warburg Futures Inc. from 1994 to 1998, as executive director of Fixed Income Trading for O’Connor & Associates from 1985 to 1994, and has held risk advisor, consultant and strategic planning positions in the financial and healthcare industries.  Mr. Slepicka has served as a member of the FIA Steering Committee, the Federal Reserve FCM Working Group, and as a Governor of the Board of Trade Clearing Corporation.  He is also a former member of the Chicago Board of Trade, Chicago Mercantile Exchange, Chicago Board of Options Exchange, and Pacific Options Exchange.  In addition, Mr. Slepicka currently serves and has served on the boards of directors of several not-for-profit entities.Mr. Slepicka’s management and operational experience leads to our conclusion that he should serve on our Board of Directors. |   | 60 |

----

|                    |
|--------------------|
|                    |  |  |  |  |
| Director Name      |   | Business Experience |   | Age |
| John R. Hart       |   | John R. Hart has served as President, Chief Executive Officer and as a member of our Board of Directors since 1996.  Mr. Hart also serves as an officer and/or director of our most significant subsidiaries: Vidler Water Company, Inc. (director since 1995, chairman since 1997 and chief executive officer since 1998); and UCP, Inc. (since May 2013). From 1997 to 2006, Mr. Hart was a director of HyperFeed Technologies, Inc., an 80% owned subsidiary which was dissolved in 2009 following bankruptcy proceedings, where he served as chairman of the nominating committee and as a member of the compensation committee.  Mr. Hart received a B.A. in Economics from Pomona College.Mr. Hart has been our President, Chief Executive Officer and a member of our Board of Directors for almost twenty years and his leadership and strategic guidance over these years have been critical to our success.  Mr. Hart also brings the knowledge of the operations of our Company to the Board of Directors, which provides invaluable insight to our Board of Directors as it reviews our strategic and financial plans leading to our conclusion that he should serve on our Board of Directors. |   | 56 |
| Michael J. Machado |   | Michael J. Machado has served as a member of our Board of Directors since 2013.  Mr. Machado was a member of the California State Assembly from 1992 - 2000, a California State Senator from 2000 - 2008, and was appointed in 2015 to the Council of Economic Advisors on Tax Policy for the California State Controller.  Since 2008 Mr. Machado has been the owner and operator of a diversified farming operation in California’s Central Valley.  Mr. Machado is a board member of the California State Compensation Insurance Fund (2008 to present) where he chairs the investment committee and serves on the audit committee.  He also serves on the board of directors of P & M Farms (1985 to present) and is also a member of the non-profit boards for the San Joaquin Historical Society Board of Trustees (2012 to present) and Restore the Delta (since 2014).  He is a member of the National Association of Corporate Directors and is a Board Leadership Fellow.  Mr. Machado received an undergraduate degree in Economics from Stanford University and a Master’s degree in Agricultural Economics from the University of California, Davis.  In addition he attended Harvard University’s Agribusiness Executive Education Program.  As a state legislator in California, Mr. Machado was heavily involved in numerous issues, including water policy, agricultural policy and regulation of financial institutions.We believe that Mr. Machado’s extensive educational and legislative experience, and his continuing involvement in owning and operating a diversified farming operation, as well as his involvement in water policy issues make him a valuable addition to our Board of Directors. |   | 68 |
| Andrew F. Cates    |   | Andrew F. Cates was appointed to our Board of Directors in March 2016.  Mr. Cates is the general partner and chief executive officer of RVC Outdoor Destinations and managing member of Value Acquisition Fund, an acquisition, development, and asset management company he founded in 2004.  In 1999, Mr. Cates relocated to his hometown of Memphis, Tennessee, to develop the Soulsville Revitalization Project as its project developer and to serve as its initial board chairman.  The state of the art, six-acre campus continues to serve as an anchor for what is now one of the largest inner city revitalization projects in the country.  In the summer of 2000, Mr. Cates began working with a team of business and civic leaders to attract the Vancouver Grizzlies National Basketball Association franchise to Memphis, Tennessee, and to get public support for the team’s arena (FedExForum).  The “Pursuit Team” was successful in its efforts, and Mr. Cates became a member of the original local ownership group.  In 1996, Mr. Cates was a founding partner in Viceroy Investments, LLC based in Dallas, Texas.  Since 1998, Mr. Cates has continued his affiliation with Viceroy and is currently a partner in two Viceroy sponsored partnerships. Mr. Cates began his real estate career in Dallas, Texas, where he worked as an analyst at Trammell Crow Company Capital Markets Group and later an associate for Crow Investment Trust (now called Crow Family Holdings) as a member of a team responsible for partnership and loan workouts, office and industrial acquisitions, asset management, and commercial development.  Mr. Cates earned a Bachelor of Business Administration (Finance) degree at the University of Texas at Austin. In 2001, he was inducted into Lambda Alpha International, an honorary land economics society. Since 2009, he has served on the board of directors of Pioneer Natural Resources (NYSE:PXD). Mr. Cates also serves on the board of the Myelin Repair Foundation based in Saratoga, California.We believe that Mr. Cates' broad financial and management background, including extensive experience in real estate, partnerships, asset management, finance, strategic planning, valuing and selling businesses and corporate governance, as well as his public company board experience makes him a valuable member of our Board of Directors. This experience provides him valuable insight into both the management and operations of a business and the governance and oversight matters facing companies and led to our conclusion that he should serve on our Board of Directors. |   | 45 |

----

|                      |
|----------------------|
|                      |  |  |  |  |
| Director Name        |   | Business Experience |   | Age |
| Raymond V. Marino II |   | Raymond V. Marino II was appointed to our Board of Directors in February 2016 and elected Chair of our Board of Directors in March 2016. Since 2013, Mr. Marino has been in the investment advisory business where he is involved in researching, evaluating and negotiating a variety of investments for personal portfolio and third party investors involving real estate and non-real estate investments and has completed buy-side and sell-side real estate advisory assignments for third parties in excess of $130 million. From 2001 to 2013, Mr. Marino was the president and chief operating officer as well as a member of the board of directors of Mission West Properties, Inc., a publicly traded real estate investment trust involved in the development, investment and management of a portfolio that exceeded 9 million square feet. From November 1996 to August 2000, he was president, chief executive officer and a member of the board of directors of Pacific Gateway Properties, Inc. Earlier in his career, Mr. Marino, who is Certified Public Accountant in the State of California (inactive), worked at Coopers & Lybrand LLP, a predecessor firm to PriceWaterhouse Coopers LLP, where he serviced clients in the real estate investment and development, construction, energy, technology, and insurance industries, among others. Mr. Marino is a graduate of Golden Gate University, where he obtained an M.S. degree, and of Santa Clara University, where he obtained a B.S. degree.We believe that Mr. Marino brings extensive experience in real estate, investment management, executive-level management, risk oversight, strategic planning, financial reporting and corporate governance, as well as public company board experience.  Mr. Marino’s service for more than a decade as the president and chief operating officer and a member of the board of directors of Mission West Properties, Inc. and his experience in the investment advisory business gives him substantial experience on financial, governance and risk oversight matters leading to our conclusion that he should serve on our Board of Directors. |   | 57 |
| Eric H. Speron       |   | Eric H. Speron was appointed to our Board of Directors in January 2016.  Mr. Speron is currently an analyst and portfolio manager of three portfolios managed for clients of First Foundation.  He also serves as a member of the investment committee of First Foundation Advisors and, as a member of the First Foundation Advisors investment committee, assists in shaping the portfolio investment process and overall asset allocations.  Mr. Speron joined First Foundation Advisors in 2007 from JPMorgan’s Institutional Equity division.  Mr. Speron is currently a member of the CFA Institute and the Orange County Society of Financial Analysts.  He earned a Bachelor of Arts Degree with a double major from Georgetown University where he was also voted Academic All-American, Mid-Atlantic, for his academic and athletic accomplishments.We believe that Mr. Speron’s extensive familiarity with our Company gained from being an investor in our stock, his understanding of our business model, his experience analyzing investments and making investment decisions, and his perspective as a large shareholder can greatly benefit us and makes him a valuable addition to our Board of Directors. |   | 36 |
| Daniel B. Silvers    |   | Daniel B. Silvers was appointed to our Board of Directors in March 2016.  Mr. Silvers currently serves as managing member of Matthews Lane Capital Partners LLC, an investment firm, and has done so since June 2015.  From March 2009 to June 2015, Mr. Silvers served as president of SpringOwl Asset Management LLC, an investment management firm (including predecessor entities).   From April 2009 to October 2010, Mr. Silvers also served as president of Western Liberty Bancorp, an acquisition-oriented holding company that acquired and recapitalized a community bank in Las Vegas, Nevada.  Mr. Silvers joined a predecessor of SpringOwl from Fortress Investment Group, a leading global alternative asset manager, where he worked from 2005 to 2009.  At Fortress, Mr. Silvers' primary focus was to originate, oversee due diligence on and asset management for real estate and gaming investments in Fortress' Drawbridge Special Opportunities Fund.  Prior to joining Fortress, Mr. Silvers was a senior member of the real estate, gaming and lodging investment banking group at Bear, Stearns & Co. Inc., where he was from 1999 to 2005.  Mr. Silvers holds a B.S. in Economics and an M.B.A. in Finance from The Wharton School of the University of Pennsylvania. Mr. Silvers also serves on the board of directors of Forestar Group, Inc. and India Hospitality Corp. Mr. Silvers previously has served on the board of directors of International Game Technology, Universal Health Services, Inc. and bwin.party digital entertainment plc.We believe that Mr. Silvers' broad financial and management background, including extensive experience in investment and asset management, real estate, finance, valuing and selling businesses as well as his public company board experience makes him a valuable member of our Board of Directors. This experience provides him valuable insight into both the management and operations of a business and the governance and oversight matters facing companies and led to our conclusion that he should serve on our Board of Directors. |   | 39 |

----

|                  |
|------------------|
|                  |  |  |  |  |
| Name             |   | Age |   | Position |
| John R. Hart     |   | 56 |   | President, Chief Executive Officer and Director |
| Maxim C. W. Webb |   | 55 |   | Executive Vice President, Chief Financial Officer, Treasurer and Secretary |
| John T. Perri    |   | 46 |   | Vice President and Chief Accounting Officer |

----

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |  |
| Name of Director                |   | Audit |   | Compensation |   | Corporate Governance and Nominating |   | Strategy |
| Carlos C. Campbell*             |   | Member |   | Chair |   |   |   |   |
| Kenneth J. Slepicka             |   |   |   |   |   |   |   | Member |
| John R. Hart                    |   |   |   |   |   |   |   |   |
| Michael J. Machado*             |   | Member |   | Member |   | Chair |   |   |
| Raymond V. Marino II*           |   |   |   |   |   | Member |   |   |
| Daniel B. Silvers*              |   |   |   | Member |   | Member |   | Member |
| Howard B. Brownstein*           |   | Chair** |   |   |   | Member |   |   |
| Andrew F. Cates*                |   | Member |   |   |   | Member |   | Member |
| Eric H. Speron*                 |   |   |   | Member |   |   |   | Chair |
| Number of meetings held in 2015 |   | 7 |   | 5 |   | 4 |   | — |

----

|   |
|---|
|   |  |  |
| l | John R. Hart | President and Chief Executive Officer |
| l | Maxim C.W. Webb | Executive Vice President, Chief Financial Officer, Treasurer and Secretary |
| l | John T. Perri | Vice President and Chief Accounting Officer |

----

|    |
|----|
|    |  |
| 1. | Executive Compensation Overview. In this section, we highlight our business model, how we align our executive program to our business model, our response to the 2015 say-on-pay vote and certain governance aspects of our executive compensation program. |
| 2. | Executive Compensation Program. In this section, we describe our executive compensation philosophy and process and the material elements of our executive compensation program. |
| 3. | 2015 and 2016 Executive Compensation Decisions. In this section, we provide an overview of our Compensation Committee’s executive compensation decisions for 2015 and certain actions taken in 2016 when doing so enhances the understanding of our executive compensation program. |
| 4. | Other Executive Compensation Matters. In this section, we review certain governance aspects of our executive compensation program, the accounting and tax treatment of compensation and the relationship between our compensation program and risk. |

|     |                                                                                                                                                                     |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (i) | sought to evaluate, acquire and develop undervalued assets in strategic asset classes at valuations that we believed provided significant downside risk protection; |

|      |                                                                                                                                                                |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii) | sought to enhance the value of those assets through our operational expertise, development activities, transaction structure and efficient use of capital; and |

|       |                                                                                                                                   |
|-------|-----------------------------------------------------------------------------------------------------------------------------------|
| (iii) | attempted to achieve gains in book value per share through both operating returns and disposition of assets at appropriate times. |

----

|        |
|--------|
|        |  |  |  |  |
|   | What we do |   |   | What we don't do |
| ü | Design executive compensation programs to seek to align pay with performance so that a significant portion of compensation is "at-risk" based on corporate performance |   | ý | No guaranteed bonuses |
| ü | Use multi-year performance periods |   | ý | No hedging or pledging by executive officers or directors |
| ü | Provide "double-trigger" change in control benefits |   | ý | No tax gross-ups |
| ü | Maintain stock ownership guidelines |   | ý | No excessive perquisites |
| ü | Maintain claw back policy |   | ý | No repricing of underwater stock options |

----

|        |                                                              |
|--------|--------------------------------------------------------------|
| ü | Refresh peer groups for the executive compensation analysis; |

|        |                                                                                                                                                                               |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ü | Review and analysis related to our executive officers’ base salaries, annual cash incentive compensation, and equity incentive compensation levels and plan structures; |

|        |                                                                                  |
|--------|----------------------------------------------------------------------------------|
| ü | Assessment of industry trends, corporate governance and legislative environment; |

|        |                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ü | Develop “tally sheets” to provide a comprehensive view of our executive officers’ total compensation arrangements, including cash compensation (fixed and variable), equity incentive compensation (past awards and the current and projected values of these awards), and post-employment obligations (severance and change-of control-benefits); |

|        |                                                        |
|--------|--------------------------------------------------------|
| ü | Review of equity compensation design and strategy; and |

|        |                                                                |
|--------|----------------------------------------------------------------|
| ü | Review of our compensation discussion and analysis disclosure. |

----

|                           |
|---------------------------|
|                           |  |  |
| Biglari Holdings          | Hercules Technology Growth Cap | MCG Capital |
| Blackstone Mortgage Trust | ICG Group | Otter Tail |
| Capital Southwest         | KCAP Capital | Safeguard Scientifics |
| Harris & Harris Group | Main Street Capital | Triangle Capital |

|                          |
|--------------------------|
|                          |  |  |
| Biglari Holdings         | GFI Group | MCG Capital |
| Calamos Asset Management | Green Dot | Otter Tail |
| Capital Southwest        | Greenhill & Co | Piper Jaffray |
| Cowen Group              | Hercules Technology Growth Cap | Safeguard Scientifics |
| Encore Capital Group     | HFF | Triangle Capital |
| Evercore Partners        | Ladenburg Thalmann Financial | World Acceptance |
| FBR & Co             | Main Street Capital |   |

----

|                  |
|------------------|
|                  |  |  |  |  |  |  |  |  |
| Component        |   | Purpose |   | Form |   | Pay-for-Performance |   | Comment |
| Base salary      |   | Provide sufficient competitive pay to attract and retain experienced and successful executives. |   | Cash |   | Adjustments to base salary generally consider individual performance, contributions to the business, competitive practices and internal comparisons. |   | Annual fixed cash compensation. Base salary reflects the employee's level of responsibility, expertise, skills, knowledge and experience.  For our CEO, base salary is fixed for the term of his employment agreement, subject to annual cost of living adjustments. For our other NEOs, base salary is reviewed on an annual basis. |
| Cash incentive   |   | Encourage and reward contributions to our financial results.  Engage executives in execution of our business strategy.  Emphasize accountability for results. |   | Cash |   | The potential award amount varies with the degree to which we increase our book value per share in comparison to the performance of the S&P 500 over a five-year period.  Starting in 2016, our cash incentive awards are based on the value created from asset monetizations in excess of their book value and will be tied to the return of capital to shareholders. |   | Annual variable cash compensation.  The Compensation Committee determines and approves the actual amount earned after the close of the fiscal year. |
| Equity incentive |   | Encourage and reward building long-term shareholder value, employment retention and company stock ownership.  Align executives with shareholder interests and retain executive officers through long-term vesting. |   | RSU and PBO |   | RSU retain executives and align them with shareholders’ interests by awarding a fixed number of shares upon vesting. PBO reward building long-term shareholder value (see equity compensation section for a more detailed description of PBO). |   | The Compensation Committee, at its sole discretion, determines whether to grant stock-based awards in any year.  We require stock ownership through stock ownership guidelines applicable to our CEO, CFO and other designated executive officers.  The Compensation Committee did not grant any equity incentives to our NEO's in 2015 or 2016 and we do not anticipate granting any further equity incentives to our NEOs for the foreseeable future. |

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |
| Component                          |   | Objectives and Basis |   | Form |
| Retirement benefits                |   | Retain and recruit our executive officers. |   | 401(k) plan.  Provides a tax-deferred means to save for retirement.  The NEOs have the opportunity to participate in this Section 401(k) plan on the same basis as all of our other employees. |
| Deferred compensation opportunity  |   | Retain and recruit our executive officers by offering them an opportunity to defer income tax on amounts deferred. |   | Non-qualified deferred compensation plan.  We do not make any matching or other contributions to the nonqualified deferred compensation plan.  The amounts deferred under the plan are credited with interest, earnings, appreciation, losses and depreciation based on the performance of equities, bonds or cash selected by the participants, and are held in a grantor trust, the assets of which are subject to the claims of our creditors. |
| Insurance and other benefits       |   | Provide for the safety and wellness of all of our employees, including our executive officers. |   | These benefits include health insurance, life insurance, dental insurance, vision insurance, and disability insurance, which are available to all employees, including our NEOs, on a nondiscriminatory basis. |
| Termination and severance benefits |   | Retain and recruit our executive officers. |   | Various, including cash and accelerated vesting of equity incentives in certain circumstances. |

|         |                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------|
| • | Our CEO received a base salary increase of 3% to reflect cost of living adjustments effective as of January 1, 2015; |

|         |                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our CFO and Chief Accounting Officer (“CAO”) each received a 10% increase in base salary effective January 1, 2015. Our CFO's increase in salary was due to his increased responsibilities by assuming the position of Corporate Secretary when our previous Corporate Secretary retired and our CAO's increase in salary was a merit based increase; |

|         |                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------|
| • | None of our executive officers earned a cash incentive award in 2015 under our incentive plan; and |

|         |                                                                                                                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | None of our executive officers were granted any stock-based compensation in 2015 in contemplation of the modified executive compensation plan that was adopted in March 2016 to align with the revision to our business model. |

|                 |
|-----------------|
|                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Officer         |   | 2014 Salary |   | 2015 Change |   | 2015 Salary |   | 2016 Change |   | 2016 Salary |
| John R. Hart    |   | $ | 2,113,000 |  |   | 3 | % |   | $ | 2,176,390 |  |   | (54 | )% |   | $ | 1,000,000 |  |
| Maxim C.W. Webb |   | $ | 530,500 |  |   | 10 | % |   | $ | 583,550 |  |   | (15 | )% |   | $ | 496,000 |  |
| John T. Perri   |   | $ | 400,000 |  |   | 10 | % |   | $ | 440,000 |  |   | — |  % |   | $ | 440,000 |  |

----

|         |                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The amount of such payment was based on the achievement of certain financial results that were subsequently the subject of a restatement that occurs within 12 months of such payment; |

|         |                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The executive officer had engaged in theft, dishonesty or intentional falsification of our documents or records that resulted in the obligation to restate our financial results; and |

|         |                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------|
| • | A lower annual cash incentive would have been paid to the executive officer based upon the restated financial results. |

----

|                                     |
|-------------------------------------|
|                                     |  |  |
| Role                                |   | Ownership Guideline |
| CEO                                 |   | lesser of 275,000 shares or 3x base salary |
| CFO                                 |   | lesser of 18,000 shares or 1x base salary |
| Other designated executive officers |   | lesser of 10,000 shares or 1x base salary |

----

|   |
|---|
|   |  |
| l | Our focus is on long-term growth with reasonable leverage, and this philosophy is conducive to minimizing compensation related risks; |
| l | Our incentive plans are well designed, effectively administered, focused on relevant performance measures; |
| l | Our plans are reasonable with respect to potential compensation levels; |
| l | The elements of our compensation plan are appropriately weighted in our overall mix that achieves a balance of focus between operating results and strategic results; |
| l | Base salaries for executive officers are sufficiently competitive to eliminate the need for them to take unnecessary risk in order to earn large incentives necessary to provide adequate cash compensation; |
| l | Equity-based compensation levels are competitive and sufficient to provide a balanced focus between short- and long-term priorities and results and does not encourage the taking of short-term risks at the expense of long-term results; and |
| l | Our insider trading policies, independent oversight by the Compensation Committee, and our stock ownership guidelines and “claw back policy” mitigate any potential risks in our compensation programs. |

|        |
|--------|
|        |  |
|   | Compensation Committee: Carlos C. Campbell, ChairMichael J. Machado |

----

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Name and Principal Position                        |   | Year |   | Salary |   | Bonus |   | Stock Awards (1) |   | Option Awards(1) |   | Non-Equity Incentive Plan Compensation |   | All Other Compensation(2) |   | Total Compensation |
| John R. Hart, CEO                                  |   | 2015 |   | $ | 2,176,390 |  |   |   |   |   |   |   |   |   |   | $ | 19,800 |  |   | $ | 2,196,190 |  |
| President & Chief                              |   | 2014 |   | $ | 2,113,000 |  |   |   |   | $ | 1,393,580 |  |   | $ | 1,475,705 |  |   |   |   | $ | 40,300 |  |   | $ | 5,022,585 |  |
| Executive Officer                                  |   | 2013 |   | $ | 2,094,482 |  |   |   |   |   |   |   |   |   |   | $ | 39,700 |  |   | $ | 2,134,182 |  |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Maxim C. W. Webb, CFO                              |   | 2015 |   | $ | 583,550 |  |   |   |   |   |   |   |   |   |   | $ | 19,800 |  |   | $ | 603,350 |  |
| Executive Vice President, Chief Financial Officer, |   | 2014 |   | $ | 530,500 |  |   |   |   | $ | 464,533 |  |   | $ | 837,881 |  |   |   |   | $ | 40,300 |  |   | $ | 1,873,214 |  |
| Treasurer & Secretary                          |   | 2013 |   | $ | 525,789 |  |   |   |   |   |   |   |   |   |   | $ | 47,949 |  |   | $ | 573,738 |  |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| John T. Perri, CAO                                 |   | 2015 |   | $ | 440,000 |  |   |   |   |   |   |   |   |   |   | $ | 19,800 |  |   | $ | 459,800 |  |
| Vice President &                               |   | 2014 |   | $ | 400,000 |  |   |   |   | $ | 353,033 |  |   | $ | 636,791 |  |   |   |   | $ | 40,300 |  |   | $ | 1,430,124 |  |
| Chief Accounting Officer                           |   | 2013 |   | $ | 297,413 |  |   | $ | 125,000 |  |   |   |   |   |   |   |   | $ | 41,016 |  |   | $ | 463,429 |  |

|     |
|-----|
|     |  |
| (1) | The reported values reflect the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board, Accounting Standards Codification Topic 718. As these values reflect the aggregate grant date fair value, they do not necessarily correspond to the actual value that may be recognized. The assumptions that we made to determine the value of our awards for accounting purposes are described in detail in Note 8 titled Stock-Based Compensation in the notes to consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 14, 2016. |
| (2) | Amounts in this column include contributions made by us on behalf of the NEOs to the 401(k) plan, health savings account, and any expense reimbursements. |

----

|                 |
|-----------------|
|                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Name            |   | Executive ContributionsIn 2015 |   | Registrant ContributionsIn 2015 |   | Aggregate Earnings (Losses) In 2015(1) |   | Aggregate Withdrawals/Distributions |   | Aggregate Balance at December 31, 2015(1) |
| John R. Hart    |   |   |   |   |   | $ | 1,651,803 |  |   |   |   | $ | 20,241,912 |  |
| Maxim C.W. Webb |   |   |   |   |   | $ | (24,463 | ) |   |   |   | $ | 3,003,269 |  |
| John T. Perri   |   |   |   |   |   | $ | 28,193 |  |   | $ | 250,433 |  |   | $ | 323,237 |  |
|            |   | — |  |   | — |  |   | $ | 1,655,533 |  |   | $ | 250,433 |  |   | $ | 23,568,418 |  |

|     |
|-----|
|     |  |
| (1) | The balances shown in this table represent compensation previously reported in the Summary Compensation Table, except for amounts attributable to aggregate earnings, which are not reportable in the Summary Compensation Table because we do not provide above market or preferential earnings on non-qualified deferred compensation. |

|                  |
|------------------|
|                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|             |   | Option Awards |   | Stock Awards |
| Name             |   | Number of Securities Underlying Unexercised Options Exercisable |   | Number of Securities Underlying Unexercised Options Unexercisable |   | Option Exercise Price |   | Option Expiration Date |   | Number of Shares or Units of Stock That Have Not Vested |   | Market Value of Shares or Units of Stock That Have Not Vested |
| John R. Hart     |   |   |   |   |   |   |   |   |   |   |   |   |
| SAR (1)          |   | 419,178 |  |   |   |   | $ | 42.71 |  |   | 8/2/2017 |   |   |   |   |
| PBO (2)          |   |  |  |   | 285,714 |   |   | $ | 19.51 |  |   | 6/14/2019 |   |   |   |   |
| RSU (3)     |   |   |   |   |   |   |   |   |   | 53,572 |  |   | $ | 552,863 |  |
|             |   |   |   |   |   |   |   |   |   |   |   |   |
| Maxim. C.W. Webb |   |   |   |   |   |   |   |   |   |   |   |   |
| SAR (1)          |   | 17,292 |  |   |   |   | $ | 42.71 |  |   | 8/2/2017 |   |   |   |   |
| PBO (2)          |   |   |   | 95,238 |   |   | $ | 19.51 |  |   | 11/14/2024 |   |   |   |   |
| RSU (3)     |   |   |   |   |   |   |   |   |   | 17,857 |  |   | $ | 184,284 |  |
|             |   |   |   |   |   |   |   |   |   |   |   |   |
| John T. Perri    |   |   |   |   |   |   |   |   |   |   |   |   |
| SAR (1)          |   | 30,000 |  |   |   |   | $ | 42.71 |  |   | 8/2/2017 |   |   |   |   |
| PBO (2)          |   |   |   | 72,381 |   |   | $ | 19.51 |  |   | 11/14/2024 |   |   |   |   |
| RSU (3)     |   |   |   |   |   |   |   |   |   | 13,571 |  |   | $ | 140,053 |  |

|     |
|-----|
|     |  |
| (1) | Represents SAR held by each NEO as of December 31, 2015.  The actual number of shares to be issued to an NEO who exercises a SAR will be based on the net exercise value (that is, the market price per share of our stock on the date of exercise, minus the exercise price) times the number of SAR exercised, minus applicable taxes withheld in the form of shares.  At December 31, 2015, none of the outstanding SAR held by our NEOs were in-the-money. |
| (2) | Represents PBO granted on November 14, 2014, pursuant to our 2014 Equity Incentive Plan.  The PBO include a market condition based on the achievement of a stock price target during the contractual term and vest monthly over a three year period.  Any vested portion of the options may be exercised only if the 30-trading-day average closing sales price of our common stock equals or exceeds 125% of the grant date stock price.  The stock price contingency may be met any time before the options expire and it only needs to be met once for the PBO to remain exercisable for the remainder of the term.  Of the total unexercisable PBO, 103,175 for Mr. Hart, 34,391 for Mr. Webb, and 26,138 for Mr. Perri were vested but unexercisable as the stock price contingency had not been met as of December 31, 2015. |
| (3) | Represents RSU granted on November 14, 2014, pursuant to our 2014 Equity Incentive Plan.  These RSU are subject to the NEOs continued employment or service with us.  The RSU will vest annually in four equal installments beginning on November 14, 2015, and may also vest earlier in connection with certain terminations of employment.  The market value of the RSU reported above is based on $10.32 per share, which was the closing market price of our common stock on December 31, 2015. |

----

|         |                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------|
| • | provide for acceleration of the exercisability, vesting and/or settlement of any outstanding stock award or portion thereof; |

|         |                                                                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | provide for the assumption, continuation or substitution of an outstanding stock award or portion thereof by a surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof; or |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | provide for any outstanding stock award or portion thereof denominated in shares of common stock to be canceled in exchange for a payment with respect to each vested share (and each unvested share, if so determined) of common stock subject to such canceled stock award in (i) cash, (ii) stock of our Company or of a corporation or other business entity a party to the change in control, or (iii) other property which, in any such case, shall be in an amount having a fair market value equal to the fair market value of the consideration to be paid per share of common stock in the change in control, reduced (but not below zero) by the exercise or purchase price per share, if any, under such stock award. |

----

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Name & Triggering Event   |   | Cash Payments (1) |   | Cash Payments for Standard Severance |   | RSU that would Vest |   | Total |
| John R. Hart                  |   |   |   |   |   |   |   |   |
| Termination with cause        |   | $ | 719,883 |  |   |   |   |   |   | $ | 719,883 |  |
| Termination without cause (3) |   | $ | 5,612,663 |  |   |   |   | $ | 552,863 |  |   | $ | 6,165,526 |  |
| Change in control             |   |   |   |   |   | $ | 552,863 |  | (2)  | $ | 552,863 |  |
| Death / disability            |   | $ | 5,912,663 |  |   |   |   | $ | 552,863 |  |   | $ | 6,465,526 |  |
|                          |   |   |   |   |   |   |   |   |
| Maxim C. W. Webb              |   |   |   |   |   |   |   |   |
| Termination with cause        |   | $ | 204,243 |  |   |   |   |   |   | $ | 204,243 |  |
| Termination without cause     |   | $ | 1,399,470 |  |   |   |   | $ | 184,284 |  |   | $ | 1,583,754 |  |
| Change in control             |   |   |   |   |   | $ | 184,284 |  | (2)  | $ | 184,284 |  |
| Death / disability            |   | $ | 504,243 |  |   |   |   |   |   | $ | 504,243 |  |
|                          |   |   |   |   |   |   |   |   |
| John T. Perri                 |   |   |   |   |   |   |   |   |
| Termination with cause        |   | $ | 144,851 |  |   |   |   |   |   | $ | 144,851 |  |
| Termination without cause     |   | $ | 1,052,978 |  |   |   |   | $ | 140,053 |  |   | $ | 1,193,031 |  |
| Change in control             |   |   |   |   |   | $ | 140,053 |  | (2)  | $ | 140,053 |  |
| Death / disability            |   | $ | 444,851 |  |   |   |   |   |   | $ | 444,851 |  |

|     |
|-----|
|     |  |
| (1) | Cash payments include accrued vacation and personal days, payment of salary as stipulated by agreement, and life insurance in the case of death. |
| (2) | Assumes that the award is neither assumed or continued by the new controlling owner, nor replaced by a substituted award with respect to the new controlling owner’s stock. |
| (3) | Also represents payments due upon a change in control and a subsequent termination without cause. |

|         |                                            |
|---------|--------------------------------------------|
| • | a five year term ending on March 11, 2021; |

|         |                                                                                                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------|
| • | an annual base salary of $1 million including the standard benefits package made available to other full time employees of our Company; |

|         |                                                       |
|---------|-------------------------------------------------------|
| • | certain termination benefits, as described below; and |

|         |                                                                      |
|---------|----------------------------------------------------------------------|
| • | participation in the revised executive bonus plan (described below). |

----

----

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |
| Name                       |   | Fees Earned Or Paid In Cash |   | Stock Awards(1) |   | Total |
| Kristina M. Leslie (2)     |   | $ | 136,103 |  |   | $ | 49,990 |  |   | $ | 186,093 |  |
| Carlos C. Campbell         |   | $ | 109,949 |  |   | $ | 49,990 |  |   | $ | 159,939 |  |
| Julie H. Sullivan, PhD (2) |   | $ | 106,235 |  |   | $ | 49,990 |  |   | $ | 156,225 |  |
| Kenneth J. Slepicka        |   | $ | 88,866 |  |   | $ | 49,990 |  |   | $ | 138,856 |  |
| Robert G. Deuster (2)      |   | $ | 81,542 |  |   | $ | 49,990 |  |   | $ | 131,532 |  |
| Michael J. Machado         |   | $ | 81,370 |  |   | $ | 49,990 |  |   | $ | 131,360 |  |
|                       |   | $ | 604,065 |  |   | $ | 299,940 |  |   | $ | 904,005 |  |

|     |
|-----|
|     |  |
| (1) | Each director was granted 3,050 RSU in June 2015.  The total value of the stock awards is based on the closing market price of our common stock on the date of grant.  The directors held no other stock-based awards as of December 31, 2015. |
| (2) | Ms. Leslie and Mr. Deuster resigned as members of our Board of Directors and as members of all committees effective February 3, 2016.  Dr. Sullivan resigned as a member of our Board of Directors and as a member of all committees effective December 31, 2015.  The stock awards granted in June 2015 to each of these members of our Board of Directors were terminated upon each of their resignations and therefore such awards will not vest in June 2016. |

----

|                                                                                        |
|----------------------------------------------------------------------------------------|
|                                                                                        |  |  |  |  |  |
| Name and Address of Beneficial Owner                                                   | Number of Shares and Nature of Beneficial Ownership |   | Percentage Ownership |
| Named Executive Officers and Directors                                                 |   |   |   |
| John R. Hart(1) (14) (15)                                                              | 296,289 |  |   | 1.3 | % |
| Maxim C. W. Webb (2) (14) (15)                                                         | 76,676 |  |   | * |
| John T. Perri (3) (14) (15)                                                            | 28,073 |  |   | * |
| Raymond V. Marino II (16)                                                              | 5,000 |  |   | * |
| Carlos C. Campbell (4) (6)                                                             | 4,407 |  |   | * |
| Howard Brod Brownstein (16)                                                            | 10,100 |  |   | * |
| Michael J. Machado (6)                                                            | 4,407 |  |   | * |
| Kenneth J. Slepicka (6)                                                                | 9,493 |  |   | * |
| Eric Speron (5)                                                                        | 920,683 |  |   | 4.0 | % |
| Daniel B. Silvers(16)                                                                  | — |  |   | * |
| Andrew F. Cates(16)                                                                    | — |  |   | * |
| Current Executive Officers and Directors as a Group (11 persons)                       | 1,355,128 |  |   | 5.9 | % |
|                                                                                   |  |   |  |  |
| 5% Shareholders                                                                        |   |   |   |
| RHJ International SA (7)Avenue Louise 326 1050 Brussels, Belgium                       | 2,663,180 |  |   | 11.6 | % |
| River Road Asset Management, LLC(8)462 S. 4th St., Ste 1600 Louisville, KY 40202       | 1,908,618 |  |   | 8.3 | % |
| Royce & Associates, LLC (9)745 Fifth Avenue, New York, NY 10151                    | 1,542,389 |  |   | 6.7 | % |
| Van Den Berg Management I, Inc. (17)805 Las Cimas Parkway, Suite 430, Austin, TX 78746 | 1,424,634 |  |   | 6.2 | % |
| BlackRock, Inc. (10)55 East 52nd Street, New York, NY 10055                       | 1,408,573 |  |   | 6.1 | % |
| Central Square Management, LLC (11)1813 N. Mill Street, Suite F, Naperville, IL 60563  | 1,407,498 |  |   | 6.1 | % |
| Bank of Montreal(12)1 First Canadian Place Toronto, Ontario, Canada M5X 1A1            | 1,269,263 |  |   | 5.5 | % |
| The Vanguard Group (13)100 Vanguard Blvd. Malvern, PA 19355                            | 1,184,593 |  |   | 5.1 | % |

|     |
|-----|
|     |  |
| (1) | Represents 37,152 shares held in our 401(k) plan and 259,137 shares held directly.  The number of shares shown above does not include 53,996 shares held in a deferred compensation trust account.  U.S. Bank, N.A., as trustee of the grantor trust, has sole voting power over such shares.  This number also does not include 53,572 shares of RSU that will not vest within 60 days. |
| (2) | Represents 1,290 shares held in our 401(k) plan and 75,386 shares held directly.  The number of shares shown above does not include 1,375 shares held in a deferred compensation trust account.  U.S. Bank, N.A., as trustee of the grantor trust, has sole voting power over such shares.  This number also does not include 17,857 shares of RSU that will not vest within 60 days. |
| (3) | Represents 263 shares held in our 401(k) plan and 27,810 shares held directly.  This number does not include 13,571 shares of RSU that will not vest within 60 days. |
| (4) | Represents 4,407 shares held directly.  The number of shares shown above does not include 2,644 shares held in a deferred compensation trust account.  U.S. Bank, N.A., as trustee of the grantor trust, has sole voting power over such shares. |
| (5) | Represents 20,900 shares held in a personal IRA account, 39,100 shares held directly and 190 shares held by Mr. Speron's spouse in a personal IRA.  This number also includes 860,493 shares held on behalf of clients of First Foundation Advisors for which Mr. Speron has voting and dispositive power. |
| (6) | The number of shares does not include 3,050 shares of RSU that will not vest within 60 days. |

----

|      |
|------|
|      |  |
| (7)  | Beneficial ownership of shares as reported on Schedule 13G/A filed with the SEC on February 11, 2016.  Kleinwort Benson Investors Dublin Limited (“Kleinwort Investors”) and Calvert Investment Management Inc. ("Calvert") beneficially owned 2,663,180 shares, and 1,174,101 shares respectively, with shared voting and dispositive power over such shares.  Kleinwort Investors is a wholly owned subsidiary of Kleinwort Benson Group Limited (“Kleinwort Group”), which is a wholly owned subsidiary of RHJ International SA (“RHJ”).  Calvert is a wholly owned subsidiary of RHJI.  As such, RHJ, Kleinwort Group, and Calvert may be deemed to beneficially own all shares beneficially owned by Kleinwort Investors and Calvert. |
| (8)  | Beneficial ownership of shares as reported on Schedule 13G/A filed with the SEC on February 12, 2016.  River Road Asset Management, LLC beneficially owned 1,908,618 shares, with sole voting power over 1,566,081 shares and sole dispositive power over 1,908,618 shares. |
| (9)  | Beneficial ownership of shares as reported on Schedule 13G/A filed with the SEC on January 20, 2016. |
| (10) | Beneficial ownership of shares as reported on Schedule 13G/A filed with the SEC on January 27, 2016.  BlackRock, Inc. beneficially owned 1,408,573 shares, with sole voting power over 1,342,445 shares, and sole dispositive power over 1,408,573 shares, which shares are reported by BlackRock, Inc. as a parent holding company of its subsidiaries. |
| (11) | Beneficial ownership of shares as reported on Schedule 13D/A filed with the SEC on March 21, 2016.  Central Square Capital LP (“Central Square Capital”) beneficially owned 972,642 shares, with shared voting and dispositive power over 972,642 shares.  Central Square Capital Master LP (“Central Square Master”) beneficially owned 434,856 shares, with shared voting and dispositive power over 434,856 shares.  Central Square GP LLC (“Central Square GP”) as the general partner of Central Square Capital, may be deemed the beneficial owner of the 972,642 shares owned by Central Square Capital.  Central Square GP II LLC (“Central Square GP II”), as the general partner of Central Square Master, may be deemed the beneficial owner of the 434,856 shares owned by Central Square Master.  Central Square Management LLC (“Central Square Management”), as the investment manager of each of Central Square Capital and Central Square Master, may be deemed the beneficial owner of the (i) 972,642 shares owned by Central Square Capital and (ii) 434,856 shares owned by Central Square Master.  Mr. Cardwell, as the managing member of each of Central Square GP, Central Square GP II and Central Square Management, may be deemed the beneficial owner of the (i) 972,642 shares owned by Central Square Capital and (ii) 434,856 shares owned by Central Square Master. |
| (12) | Beneficial ownership of shares as reported on Schedule 13G/A filed with the SEC on February 16, 2016.  BMO Asset Management Corp. beneficially owned 1,255,869 shares, with sole voting power over 1,093,320 shares, shared voting power over 4,348 shares, sole dispositive power over 1,250,146 shares, and shared dispositive power over 3,170 shares.  BMO Harris Bank N.A. beneficially owned 13,394 shares, with sole voting power over 12,855 shares, and shared dispositive power over 13,394 shares.  Bank of Montreal is the ultimate parent company of BMO Asset Management, Corp., an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, and BMO Harris Bank N.A., a bank as defined in section 3(a)6 of the Securities Exchange Act of 1934, as amended.  As parent company, Bank of Montreal is deemed to beneficially own 1,269,263 shares held by its subsidiaries, with sole voting power over 1,106,205 shares, shared voting power over 4,348 shares, sole dispositive power over 1,250,146 shares, and shared dispositive power over 16,564 shares. |
| (13) | Beneficial ownership of shares as reported on Schedule 13G/A filed with the SEC on February 11, 2016.  The Vanguard Group, Inc. beneficially owned 1,184,593 shares, with sole voting power over 28,759 shares, sole dispositive power over 1,157,134 shares, and shared dispositive power over 27,459 shares.  Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 27,459 shares as a result of its serving as investment manager of collective trust accounts.  Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 1,300 shares as a result of its serving as investment manager of Australian investment offerings. |
| (14) | Shares shown as beneficially owned by the NEO do not include shares issuable upon exercise of SAR, which are exercisable or may be exercised within 60 days of April 1, 2016, because none of the outstanding SAR were in-the-money as of April 1, 2016.  As of April 1, 2016, the total number of SAR held by NEOs were 466,470 and held as follows: (a) 419,178 SAR for Mr. Hart, (b) 17,292 SAR for Mr. Webb, and (c) 30,000 SAR for Mr. Perri.  The actual number of shares to be issued to an NEO who exercises a SAR will be based on the net exercise value (that is, the market price per share of our stock on the date of exercise, minus the exercise price) times the number of SAR exercised, minus applicable taxes withheld in the form of shares. |
| (15) | Shares shown as beneficially owned by the NEO do not include shares issuable upon exercise of PBO (Performance Based Option), which may be exercisable within 60 days of April 1, 2016, because none of the vested PBO had met the stock price contingency as of April 1, 2016. As of April 1, 2016, the total number of PBO held by NEOs was 453,333, of which 201,482 had vested. The PBO were held as follows: (a) 285,714 total PBO (126,984 vested) for Mr. Hart, (b) 95,238 total PBO (42,328 vested) for Mr. Webb, and (c) 72,381 total PBO (32,170 vested) for Mr. Perri. |
| (16) | The number of shares does not include 4,868 RSU that will not vest within 60 days. |
| (17) | Beneficial ownership of shares as reported on Schedule 13G filed with the SEC on February 16, 2016.  Van Den Berg Management I, Inc. beneficially owned 1,424,634 shares, with sole voting and dispositive power over such shares. |

----

|                                                               |
|---------------------------------------------------------------|
|                                                               |  |  |  |  |  |  |  |  |  |  |
|                                                          |   | (a) |   | (b) |   | (c) |
| Plan Category                                                 |   | Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights |   | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights |   | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) |
| Equity compensation plans approved by security holders(1)     |   | 1,048,463 |  |   | $ | 28.25 |  |   | 1,974,902 |  |
| Equity compensation plans not approved by security holders(2) |   |   |   |   |   |   |

|     |
|-----|
|     |  |
| (1) | Column (a) represents the total number of underlying shares that could be issued upon the exercise of SAR, the vesting of RSU granted, the exercise of vested PBO, the vesting of PBO granted, and column (c) represents awards available for future issuances under our 2014 Equity Incentive Plan.  In accordance with SEC disclosure rules, the weighted-average exercise price reported in column (b) does not take into account RSU because they have no exercise price.  The actual number of shares to be issued to a grantee who exercises each SAR will be based on the net exercise value (that is, the market value price per share of our stock on the date of exercise, minus the exercise price) times the number of SAR exercised, minus applicable taxes withheld in the form of shares.  The actual number of shares to be issued to an employee upon vesting of an RSU will be based on the total number of shares of stock issued at vesting, minus applicable taxes withheld in the form of shares.  The actual number of shares to be issued to an employee who exercises vested PBO, after the price contingency has been met, will be based on the exercise value times the number of PBO exercised, minus applicable taxes withheld in the form of shares.  At December 31, 2015, none of the outstanding SAR issued were in-the-money and therefore no additional shares would be issued upon assumed exercise of the SAR.  As of December 31, 2015, there were no PBO exercisable as the market condition had not been met and therefore no additional shares would be issued upon assumed exercise of the PBO.  Of the 1 million shares of stock to be issued upon exercise of outstanding awards in column (a), 486,470 shares are underlying outstanding SAR that are fully vested and 163,703 shares are underlying PBO that are fully vested. |
| (2) | We have no equity compensation plans that have not been approved by our shareholders. |

----

|                    |
|--------------------|
|                    |  |  |  |  |  |  |  |
|               | 2015 |   | 2014 |
| Audit Fees         | $ | 1,816,902 |  |   | $ | 1,975,290 |  |
| Tax Fees           | 385,484 |  |   | 446,386 |  |
| Audit-Related Fees | 1,754 |  |   | 137,172 |  |
| Total              | $ | 2,204,140 |  |   | $ | 2,558,848 |  |

----

|    |
|----|
|    |  |
| 1. | At the earliest possible date, management shall inform the Audit Committee of each audit or non-audit service which management desires our independent registered public accounting firm to perform; |
| 2. | Management shall promptly provide to the Audit Committee detailed information about the particular services to be provided by our independent registered public accounting firm; |
| 3. | The supporting documentation provided to the Audit Committee by management shall be sufficiently detailed so that the Audit Committee knows precisely what services it is being asked to pre-approve; and |
| 4. | The Audit Committee has delegated pre-approval authority to the Chair of the Audit Committee.  All such pre-approvals shall be presented to the full Audit Committee at the Audit Committee’s next scheduled meeting. |

----

|               |
|---------------|
|               |  |  |  |
| ExhibitNumber |   | Description |
| 31.3          |  |   | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.4          |  |   | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |

----

|       |
|-------|
|       |  |  |
| Date: | April 22, 2016 | PICO Holdings, Inc.By:  /s/ John R. HartJohn R. HartPresident, Chief Executive Officer and Director |

|                          |
|--------------------------|
|                          |  |
| /s/ Raymond V. Marino II | Chair of the Board |
| Raymond V. Marino II     |   |
|                     |   |
| /s/ John R. Hart         | President, Chief Executive Officer and Director |
| John R. Hart             | (Principal Executive Officer) |
|                     |   |
| /s/ Maxim C. W. Webb     | Executive Vice President, Chief Financial Officer, Treasurer and Secretary |
| Maxim C. W. Webb         | (Principal Financial Officer) |
|                     |   |
| /s/ John T. Perri        | Vice President and Chief Accounting Officer |
| John T. Perri            | (Principal Accounting Officer) |
|                     |   |
| /s/ Howard B. Brownstein | Director |
| Howard B. Brownstein     |   |
|                     |   |
| /s/ Carlos C. Campbell   | Director |
| Carlos C. Campbell       |   |
|                     |   |
| /s/ Andrew F. Cates      | Director |
| Andrew F. Cates          |   |
|                     |   |
| /s/ Michael J. Machado   | Director |
| Michael J. Machado       |   |
|                     |   |
| /s/ Daniel B. Silvers    | Director |
| Daniel B. Silvers        |   |
|                     |   |
| /s/ Kenneth J. Slepicka  | Director |
| Kenneth J. Slepicka      |   |
|                     |   |
| /s/ Eric Speron          | Director |
| Eric Speron              |   |