Document:

Exhibit 10.15

 

PRUDENTIAL SAVINGS BANK

EMPLOYMENT AGREEMENT

 

 

This
employment agreement (the “Agreement”) dated May 20, 2013 between Prudential Savings Bank, a Pennsylvania-chartered,
stock-form savings bank (the “Bank” or the “Employer”), and Jack Rothkopf (the “Executive”).

 

WHEREAS,
the Executive is presently employed as Senior Vice President and Treasurer of the Bank; 

 

WHEREAS,
the Employer desires to be ensured of the Executive’s continued active participation in the business of the Employer; and

 

WHEREAS,
the Executive is willing to serve the Bank on the terms and conditions hereinafter set forth.

 

NOW
THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereby agree as follows:

 

1.     Definitions.
The following words and terms shall have the meanings set forth below for the purposes of this Agreement:

 

(a)     Average
Annual Compensation. The Executive’s “Average Annual Compensation” for purposes of this Agreement shall be
deemed to mean the average amount of Base Salary and cash bonus received by the Executive from the Employer or any subsidiary thereof
(excluding any deferred amounts) during the most recent five calendar years immediately preceding the Date of Termination (or such
shorter period as the Executive was employed).

 

(b)     Base
Salary. “Base Salary” shall have the meaning set forth in Section 3(a) hereof.

 

(c)     Cause.
Termination of the Executive’s employment for “Cause” shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist
order, willful conduct which is materially detrimental (monetarily or otherwise) to the Employer or material breach of any provision
of this Agreement.

 

(d)     Change in Control.
“Change in Control” shall mean a change in the ownership of the Corporation or the Bank, a change in the effective
control of the Corporation or the Bank or a change in the ownership of a substantial portion of the assets of the Corporation or
the Bank, in each case as provided under Section 409A of the Code and the regulations thereunder; provided, however, that neither
any second-step conversion and reorganization in which the MHC ceases to exist nor any increase in the ownership of the Corporation
by the MHC shall be deemed to constitute a Change in Control.

 

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

 

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(f)     Corporation.
“Corporation” shall mean Prudential Bancorp, Inc. of Pennsylvania, the “mid-tier” holding company for the
Bank, or any successor thereto.

 

(g)     Date
of Termination. “Date of Termination” shall mean (i) if the Executive’s employment is terminated for Cause,
the date on which the Notice of Termination is given, and (ii) if the Executive’s employment is terminated for any other
reason, the date specified in such Notice of Termination.

 

(h)     Disability. “Disability”
shall mean the Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than
twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement
benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank.

 

(i)      Good Reason. “Good
Reason” means the occurrence of any of the following events:

 

(i)                
any material breach of this Agreement by the Employer, including without limitation any of the following: (A) a material
diminution in the Executive’s base compensation, (B) a material diminution in the Executive’s authority, duties or
responsibilities, or (C) a material diminution in the authority, duties or responsibilities of the supervisor to whom the Executive
is required to report, or

 

(ii)              
any material change in the geographic location at which the Executive must perform his services under this Agreement;

 

provided, however, that prior to
any termination of employment for Good Reason, the Executive must first provide written notice to the Employer within ninety (90)
days of the initial existence of the condition, describing the existence of such condition, and the Employer shall thereafter have
the right to remedy the condition within thirty (30) days of the date the Employer received the written notice from the Executive.
If the Employer remedies the condition within such thirty (30) day cure period, then no Good Reason shall be deemed to exist with
respect to such condition. If the Employer does not remedy the condition within such thirty (30) day cure period, then the Executive
may deliver a Notice of Termination for Good Reason at any time within sixty (60) days following the expiration of such cure period.

 

(j)     MHC.
“MHC” shall mean Prudential Mutual Holding Company, the parent mutual holding company for the Corporation and the Bank.

 

 
 

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(k)    Notice
of Termination. Any purported termination of the Executive’s employment by the Employer for any reason, including without
limitation for Cause, Disability or Retirement, or by the Executive for any reason, including without limitation for Good Reason,
shall be communicated by a written “Notice of Termination” to the other party hereto. For purposes of this Agreement,
a “Notice of Termination” shall mean a dated notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provision so indicated, (iii) specifies a Date of Termination, which shall be not
less than thirty (30) nor more than ninety (90) days after such Notice of Termination is given, except in the case of the Employer’s
termination of the Executive’s employment for Cause, which shall be effective immediately; and (iv) is given in the manner
specified in Section 10 hereof.

 

(l)     Retirement.
“Retirement” shall mean voluntary termination by the Executive in accordance with the Employer’s retirement policies,
including early retirement, generally applicable to the Employer’s salaried employees.

 

2.     Term
of Employment.

 

(a)     The
Employer hereby employs the Executive as Senior Vice President and Treasurer, and the Executive hereby accepts said employment
and agrees to render such services to the Employer on the terms and conditions set forth in this Agreement. Subject to the terms
hereof, the term of this Agreement shall terminate on December 31, 2014. Beginning on December 31, 2013 and on each December 31st
thereafter, the term of this Agreement shall be extended for a period of one additional year, provided that the Employer has not
given notice to the Executive in writing at least 30 days prior to such day that the term of this Agreement shall not be extended
further and/or the Executive has not given notice to the Employer of his election not to extend the term at least thirty (30) days
prior to any such December 31st. If any party gives timely notice that the term will not be extended as of any such
December 31st, then this Agreement shall terminate at the conclusion of its remaining term. References herein to the
term of this Agreement shall refer both to the initial term and successive terms.

 

(b)     During
the term of this Agreement, the Executive shall perform such executive services for the Employer as is consistent with his title
of Senior Vice President and Treasurer and from time to time assigned to him by the Chairman, President and Chief Executive Officer,
the Executive Vice President and Chief Financial Officer or the Employer’s Board of Directors.

 

3.     Compensation
and Benefits.

 

(a)     The
Employer shall compensate and pay the Executive for his services during the term of this Agreement at a minimum base salary of
$143,864 per year (“Base Salary”), which may be increased from time to time in such amounts as may be determined by
the Board of Directors of the Employer and may not be decreased without the Executive’s express written consent. In addition
to his Base Salary, the Executive shall be entitled to receive during the term of this Agreement such bonus payments as may be
determined by the Board of Directors of the Employer. 

 

 

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(b)     During
the term of this Agreement, the Executive shall be entitled to participate in and receive the benefits of any pension or other
retirement benefit plan, profit sharing, stock option, restricted stock, employee stock ownership, or other plans, benefits and
privileges given to employees and executives of the Employer, to the extent commensurate with his then duties and responsibilities,
as fixed by the Board of Directors of the Employer. The Employer shall not make any changes in such plans, benefits or privileges
which would adversely affect the Executive’s rights or benefits thereunder, unless such change occurs pursuant to a program
applicable to all executive officers of the Employer and does not result in a proportionately greater adverse change in the rights
of or benefits to the Executive as compared with any other executive officer of the Employer. Nothing paid to the Executive under
any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the salary payable
to the Executive pursuant to Section 3(a) hereof.

 

(c)     During
the term of this Agreement, the Executive shall be entitled to paid annual vacation in accordance with the policies as established
from time to time by the Board of Directors of the Employer. The Executive shall not be entitled to receive any additional compensation
from the Employer for failure to take a vacation, nor shall the Executive be able to accumulate unused vacation time from one year
to the next, except to the extent authorized by the Board of Directors of the Employer.

 

4.     Expenses.
The Employer shall reimburse the Executive or otherwise provide for or pay for all reasonable expenses incurred by the Executive
in furtherance of or in connection with the business of the Employer, including, but not by way of limitation, automobile and traveling
expenses, subject to such reasonable documentation and other limitations as may be established by the Board of Directors of the
Employer. If such expenses are paid in the first instance by the Executive, the Employer shall reimburse the Executive therefor.
Such reimbursement shall be made promptly by the Bank and, in any event, no later than March 15th of the year immediately
following the year in which such expenses were incurred.

 

5.     Termination.

 

(a)     The
Employer shall have the right, at any time upon prior Notice of Termination, to terminate the Executive’s employment hereunder
for any reason, including without limitation termination for Cause, Disability or Retirement, and the Executive shall have the
right, upon prior Notice of Termination, to terminate his employment hereunder for any reason.

 

(b)     In
the event that (i) the Executive’s employment is terminated by the Employer for Cause, or (ii) the Executive terminates
his employment hereunder other than for Good Reason, the Executive shall have no right pursuant to this Agreement to compensation
or other benefits for any period after the applicable Date of Termination.

 

(c)     In
the event that the Executive’s employment is terminated as a result of Disability, Retirement or the Executive’s death
during the term of this Agreement, the Executive shall have no right pursuant to this Agreement to compensation or other benefits
for any period after the applicable Date of Termination.

 

(d)     In
the event that before or after a Change in Control (i) the Executive’s employment is terminated by the Employer for other
than Cause, Disability, Retirement or the Executive’s death or (ii) such employment is terminated by the Executive for Good
Reason, then the Employer shall:

 

 

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(A)     pay
to the Executive, in a lump sum within five (5) business days following the Date of Termination, a cash severance amount equal
to one (1) times the Executive’s Average Annual Compensation;

 

(B)     maintain
and provide for a period ending at the earlier of (i) one (1) year subsequent to the Date of Termination or (ii) the date of the
Executive’s full-time employment by another employer (provided that the Executive is entitled under the terms of such employment
to benefits substantially similar to those described in this subparagraph (B)), at no cost to the Executive, the Executive’s
continued participation in all group insurance, life insurance, health, dental and accident insurance, and disability insurance
plans offered by the Employer in which the Executive was participating immediately prior to the Date of Termination; in each case
subject to clauses (C) and (D) of this Section 5(d);

 

(C)     in the
event that the continued participation of the Executive in any group insurance plan as provided in clause (B) of this Section 5(d)
is barred or would trigger the payment of an excise tax under Section 4980D of the Code, or during the period set forth in Section
5(d)(B) any such group insurance plan is discontinued, then the Bank shall at its election either (A) arrange to provide the Executive
with alternative benefits substantially similar to those which the Executive was entitled to receive under such group insurance
plans immediately prior to the Date of Termination, provided that the alternative benefits do not trigger the payment of an excise
tax under Section 4980D of the Code, or (B) pay to the Executive within 10 business days following the Date of Termination (or
within 10 business days following the discontinuation of the benefits if later) a lump sum cash amount equal to the projected cost
to the Bank of providing continued coverage to the Executive until the one-year anniversary of his Date of Termination, with the
projected cost to be based on the costs being incurred immediately prior to the Date of Termination (or the discontinuation of
the benefits if later);

 

(D)     any insurance premiums
payable by the Bank pursuant to Section 5(d)(B) or (C) shall be payable at such times and in such amounts (except that the Employer
shall also pay any employee portion of the premiums) as if the Executive was still an employee of the Bank, subject to any increases
in such amounts imposed by the insurance company or COBRA, and the amount of insurance premiums required to be paid by the Bank
in any taxable year shall not affect the amount of insurance premiums required to be paid by the Bank in any other taxable year;
and

 

(E)     pay to the Executive,
in a lump sum within five (5) business days following the Date of Termination, a cash amount equal to the projected cost to the
Employer of providing benefits to the Executive for a period of twelve (12) months pursuant to any other employee benefit plans,
programs or arrangements offered by the Employer in which the Executive was entitled to participate immediately prior to the Date
of Termination (other than stock option plans, restricted stock plans or retirement plans of the Employer or the Corporation),
with the projected cost to the Employer to be based on the costs incurred for the calendar year immediately preceding the year
in which the Date of Termination occurs, and with any automobile-related costs to exclude any depreciation on Bank-owned automobiles.

 

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(e)     Notwithstanding
any other provision contained in this Agreement, if the time period for making any cash payment under Section 5(d) commences in
one calendar year and ends in the succeeding calendar year, then the payment shall not be paid until the succeeding calendar year.

 

6.     Limitation
of Benefits under Certain Circumstances. If the payments and benefits pursuant to Section 5 hereof, either alone or together
with other payments and benefits which the Executive has the right to receive from the Employer and the Corporation, would constitute
a “parachute payment” under Section 280G of the Code, then the payments and benefits payable by the Employer pursuant
to Section 5 hereof shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits payable
by the Employer under Section 5 being non-deductible to the Employer pursuant to Section 280G of the Code and subject to the excise
tax imposed under Section 4999 of the Code. If the payments and benefits under Section 5 are required to be reduced, the cash severance
shall be reduced first, followed by a reduction in the fringe benefits. The determination of any reduction in the payments and
benefits to be made pursuant to Section 5 shall be based upon the opinion of independent tax counsel selected by the Employer and
paid by the Employer. Such counsel shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from
the Date of Termination, and may use such actuaries as such counsel deems necessary or advisable for the purpose. Nothing contained
in this Section 6 shall result in a reduction of any payments or benefits to which the Executive may be entitled upon termination
of employment under any circumstances other than as specified in this Section 6, or a reduction in the payments and benefits specified
in Section 5 below zero.

 

7.     Mitigation;
Exclusivity of Benefits.

 

(a)     The
Executive shall not be required to mitigate the amount of any benefits hereunder by seeking other employment or otherwise, nor
shall the amount of any such benefits be reduced by any compensation earned by the Executive as a result of employment by another
employer after the Date of Termination or otherwise, except as set forth in Sections 5(d)(B)(ii) above.

 

(b)     The
specific arrangements referred to herein are not intended to exclude any other benefits which may be available to the Executive
upon a termination of employment with the Employer pursuant to employee benefit plans of the Employer or otherwise.

 

8.     Withholding.
All payments required to be made by the Employer hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employer may reasonably determine should be withheld pursuant to any
applicable law or regulation.

 

9.     Assignability.
The Employer may assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employer may hereafter merge or consolidate or to which the Employer may transfer all
or substantially all of its assets, if in any such case said corporation, bank or other entity shall by operation of law or expressly
in writing assume all obligations of the Employer hereunder as fully as if it had been originally made a party hereto, but may
not otherwise assign this Agreement or its rights and obligations hereunder. The Executive may not assign or transfer this Agreement
or any rights or obligations hereunder.

 

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10.     Notice.
For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below:

 

	 	To the Employer:		President and Chief
Executive Officer
 Prudential Savings Bank 
1834 Oregon Avenue
Philadelphia, Pennsylvania 19145

 

	 	To
the Executive:		Jack Rothkopf
 At
the address last appearing on the
personnel records of the Employer

 

11.     Amendment;
Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by the Executive and such officer or officers as may be specifically designated by the Board
of Directors of the Employer to sign on its behalf. No waiver by any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. In addition, notwithstanding
anything in this Agreement to the contrary, the Employer may amend in good faith any terms of this Agreement, including retroactively,
in order to comply with Section 409A of the Code.

 

12.     Governing
Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the United
States where applicable and otherwise by the substantive laws of the Commonwealth of Pennsylvania.

 

13.     Nature
of Obligations. Nothing contained herein shall create or require the Employer to create a trust of any kind to fund any benefits
which may be payable hereunder, and to the extent that the Executive acquires a right to receive benefits from the Employer hereunder,
such right shall be no greater than the right of any unsecured general creditor of the Employer.

 

14.     Headings.
The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

15.     Validity.
The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.

 

16.     Changes
in Statutes or Regulations.  If any statutory or regulatory provision referenced herein is subsequently changed or re-numbered,
or is replaced by a separate provision, then the references in this Agreement to such statutory or regulatory provision shall be
deemed to be a reference to such section as amended, re-numbered or replaced.

 

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17.     Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together
will constitute one and the same instrument.

 

18.     Regulatory
Prohibition. Notwithstanding any other provision of this Agreement to the contrary, any payments made to the Executive pursuant
to this Agreement, or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the FDIA (12 U.S.C.
§1828(k)) and the regulations promulgated thereunder, including 12 C.F.R. Part 359. In the event of the Executive’s
termination of employment with the Bank for Cause, all employment relationships and managerial duties with the Bank shall immediately
cease regardless of whether the Executive is in the employ of the Corporation following such termination. Furthermore, following
such termination for Cause, the Executive will not, directly or indirectly, influence or participate in the affairs or the operations
of the Bank.

 

19.     Payment
of Costs and Legal Fees and Reinstatement of Benefits. In the event any dispute or controversy arising under or in connection
with the Executive’s termination is resolved in favor of the Executive, whether by judgment, arbitration or settlement, the
Executive shall be entitled to the payment of (a) all legal fees incurred by the Executive in resolving such dispute or controversy,
and (b) any back-pay, including Base Salary, bonuses and any other cash compensation, fringe benefits and any compensation and
benefits due to the Executive under this Agreement.

 

20.     Entire
Agreement. This Agreement embodies the entire agreement between the Employer and the Executive with respect to the matters
agreed to herein. All prior agreements between the Employer and the Executive with respect to the matters agreed to herein are
hereby superseded and shall have no force or effect.

 

[signature page follows]

 

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IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first written above.

 

	ATTEST:	 	PRUDENTIAL SAVINGS BANK
	 	 	 	 
	By:	 /s/Regina Wilson	 	By:  	/s/Thomas A. Vento
	Name:  	 Regina Wilson	 	 	Thomas A. Vento
	Title:	 Vice President-Secretary	 	 	Chairman, President and Chief Executive Officer
	 	 	 	  
	 	 	 	 
	 	 	EXECUTIVE
	 	 	 	 
	 	 	By:	/s/Jack Rothkopf
	 	 	 	Jack
Rothkopf

 

    	9EX 4.2 FORM OF INVESTOR RIGHTS AGREEMENT

EXHIBIT 4.2
INVESTOR RIGHTS AGREEMENT (this “Agreement”), dated as of               , 2013, among UCP, Inc. a Delaware corporation (the “Company”), and PICO Holdings, Inc., a California corporation (“PICO”) and the sole stockholder of the Company, Dustin L. Bogue, James W. Fletcher and William J. La Herran (each a “Holder” and collectively, the “Holders”).
WHEREAS, in connection with the IPO (as defined herein), the Company intends to consummate the transactions described in the Registration Statement on Form S-1 (Registration Statement No. 333-187735), as amended (the “IPO Registration Statement”); 
WHEREAS, as an inducement to PICO to take such actions as may be necessary or appropriate to cause the IPO to be consummated, the Company and PICO hereby agree that this Agreement shall govern the rights of PICO to nominate up to two director nominees selected by PICO on the terms set forth herein; 
WHEREAS, the Holders expect to receive Voting Securities in the Company in connection with the consummation of the IPO and as a further inducement to PICO to take such actions as may be necessary or appropriate to cause the IPO to be consummated, the Holders hereby agree that this Agreement shall govern their obligation to vote any Voting Securities (as defined herein) acquired by them in favor of the election of the nominees selected by PICO;
WHEREAS, the Company and PICO desire to address herein certain relationships between themselves with respect to the composition of the Board (as defined herein); and
WHEREAS, the Company and PICO desire to confirm PICO's access to information and receipt of financial statements of the Company that are required for PICO to comply with its reporting obligations under applicable securities laws.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1  Definitions. As used in this Agreement, the following terms shall have the following meanings:
“Agreement” has the meaning set forth in the recitals to this Agreement.
“Beneficial Owner” of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power, which includes the power to dispose, or to direct the disposition of, such security. The terms “Beneficially Own” and “Beneficial Ownership” shall have correlative meanings.
“Board” means the Board of Directors of the Company.
“Company” has the meaning set forth in the preamble to this Agreement.

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“Class A Common Stock” means the Class A common stock, $0.01 par value per share, of the Company and any equity securities issued or issuable in exchange for or with respect to such Class A Common Stock by way of a dividend, split or combination of shares of stock or in connection with a reclassification, recapitalization, merger, consolidation or other reorganization.
“Class B Common Stock” means the Class B common stock, $0.01 par value per share, of the Company and any equity securities issued or issuable in exchange for or with respect to such Class B Common Stock by way of a dividend, split or combination of shares of stock or in connection with a reclassification, recapitalization, merger, consolidation or other reorganization.
“Holder” has the meaning set forth in the preamble to this Agreement.
“IPO” means the initial public offering of Common Stock, as described in the IPO Registration Statement.
“IPO Registration Statement” has the meaning set forth in the recitals to this Agreement.
“Permitted Transferee” shall mean, with respect to PICO and its Permitted Transferees, a corporation, limited liability company or partnership, of which all of the outstanding shares of capital stock or interests therein are owned directly or indirectly by PICO; provided, however, that any subsequent transfer of any portion of the Beneficial Ownership of the entity such that it is Beneficially Owned in any part by a Person other than PICO will not be deemed to be a transfer to a Permitted Transferee.
“Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, court, administrative agency, regulatory body, commission or other governmental authority, board, bureau or instrumentality, domestic or foreign and any subdivision thereof or other entity.
“PICO” has the meaning set forth in the preamble to this Agreement.
“Total Voting Power of the Company” means the total number of votes that may be cast in the election of directors of the Company if all Voting Securities outstanding were present and voted at a meeting held for such purpose. For the avoidance of doubt, the Voting Securities Beneficially Owned by any Person that are not outstanding and are subject to issuance upon the exercise or exchange of rights of conversion or any options, warrants or other rights Beneficially Owned by such Person shall not be deemed to be outstanding for this purpose.
“Voting Period” has the meaning set forth in Section 3.1 of this Agreement.
“Voting Securities” means the Class A Common Stock, Class B Common Stock and any other securities of the Company entitled to vote generally in the election of directors of the Company.  For the avoidance of doubt, the Voting Securities Beneficially Owned by any Person that are not outstanding and are subject to issuance upon the exercise or exchange of rights of conversion or any options, warrants or other rights Beneficially Owned by such Person shall not be deemed to be outstanding for purposes of this Agreement.
SECTION 1.2  Gender.  For the purposes of this Agreement, the words “he,” “his” or “himself” shall be interpreted to include the masculine, feminine and corporate, other entity or trust form.

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ARTICLE II
PICO'S BOARD REPRESENTATION
SECTION 2.1  Nominees.
(a)    So long as PICO Beneficially Owns:
(i)    Voting Securities representing 25% or more of the Total Voting Power of the Company, the Board shall nominate two individuals selected by PICO to serve as directors, provided that the Board shall not be required to nominate any individual whose election would result in PICO nominees comprising more than two directors;
(ii)    Voting Securities representing 10% or more, but less than 25%, of the Total Voting Power of the Company, the Board shall nominate one individual selected by PICO, provided that the Board shall not be required to nominate any individual whose election would result in PICO nominees comprising more than one director; and
(iii)    Voting Securities representing less than 10% of the Total Voting Power of the Company, the Board shall have no obligation to nominate any individual that is selected by PICO.
(b)    In the event that any member of the Board nominated by PICO under this Section 2.1 shall for any reason cease to serve as a member of the Board during his or her term of office, the resulting vacancy on the Board shall be filled by an individual selected by PICO.
ARTICLE III
AGREEMENT TO VOTE
SECTION 3.1  Agreement to Vote Voting Securities.  During the period commencing on the date a Holder acquires any Voting Securities and for as long as PICO owns Voting Securities representing 10% or more of the Total Voting Power of the Company (the “Initial Voting Period”) and if the Initial Voting Period ends prior to the termination of this Agreement, during any other period during the term of this Agreement during which PICO owns 10% or more of the Total Voting Power of the Company (each such subsequent period and Initial Voting Period together referred to as a “Voting Period”), at every meeting of the stockholders of the Company called with respect to the election of nominees to the Board, and on every action or approval by written consent of the stockholders of the Company or in any other circumstance in which the vote, consent or approval of the stockholders of the Company is sought with respect to the election of nominees to the Board, such Holder shall appear at the meeting or otherwise cause Voting Securities that he Beneficially Owns (including any Voting Securities later acquired) to be counted as present thereat for purposes of establishing a quorum and agrees to vote (or cause to be voted) any and all of his Voting Securities or give consent with respect thereto, or cause consent to be given with respect thereto, in favor of the election to the Board the nominee or nominees selected by PICO in accordance with Section 2.1 hereof. During the Voting Period, each Holder agrees that such Holder will not (A) grant any proxy, power-of-attorney or other authorization, in or with respect to any Voting Securities, or take any other action that would in any way restrict, limit or interfere with the performance of the Holder's obligations hereunder, or (B) directly or indirectly, solicit, initiate, seek, encourage or support or take any other action the effect of which would be inconsistent with or violative of any provision contained in this Section 3.1. Each Holder may vote his Voting Securities on all other matters. This agreement shall not, and shall not be construed to, restrict the ability of any Holder to sell or dispose of any Voting Securities, in the open market or otherwise.

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SECTION 3.2  Stockholder Capacity.  To the extent a Holder acquires Voting Securities, such Holder will be deemed to have entered into this Agreement solely in the capacity of a stockholder of the Company. Notwithstanding any other provision of this Agreement, including without limitation Section 3.1, to the extent a Holder serves as an officer or director of the Company, nothing contained herein shall limit his ability to exercise his ordinary and customary duties as an officer or director of the Company, including, without limitation, the exercise of his fiduciary obligations to the Company and its stockholders.
ARTICLE IV
INFORMATION AND INSPECTION RIGHTS.
SECTION 4.1  Financial Reporting Requirements.  The Company understands and acknowledges that, based upon PICO's percentage of equity ownership of the Company as well as applicable accounting rules, PICO may be required to (i) consolidate or equity account for the financial condition and results of operations of the Company in the financial statements of PICO, (ii) provide other required disclosures in its financial statements or (iii) respond to regulatory inquiries (such as comment letters from the Securities and Exchange Commission (“SEC”)) or other legal requirements.  The Company acknowledges that, based upon applicable rules adopted by the SEC, PICO may be required make periodic filings with the SEC, including its financial statements, prior to the time when the Company is required by applicable law or regulation to make financial statement disclosures.  Notwithstanding anything in Section 7.2 hereof, any information provided to PICO, or its representatives or independent accountants for purposes of facilitating compliance by PICO with its SEC reporting obligations (including responding to regulatory inquiries) or other legal requirements shall not be subject to any confidentiality restrictions to the extent such information is required to be publicly disclosed.  In the event the deadline for PICO to make a required filing following the end of a fiscal period is changed, whether as a result of a revision in SEC reporting requirements or a change in the classification of PICO, the Company and PICO will cooperate in good faith to make appropriate adjustments to the deadlines provided in Section 4.3.
SECTION 4.2  Inspection and Audit Rights.  The Company shall permit PICO and PICO's independent accountants, at PICO's expense, to examine the Company's books of account and records and to discuss the Company's affairs, finances and accounts with its officers, all at such reasonable times as may be requested by PICO.  These rights may be exercised by PICO in connection with an annual audit, quarterly review or otherwise at reasonable times.
SECTION 4.3  Financial Statements and Reports.  The Company shall deliver to PICO:
(a)    following such time as PICO is no longer providing services for the preparation of the Company's financial statements under the Transition Services Agreement of even date herewith by and between PICO and the Company (the “TSA”), as soon as reasonably practicable after the end of each fiscal year of the Company, and in any event within 15 days thereafter, a balance sheet as of the end of such year, statements of income and of cash flows for such year and a statement of shareholders' equity as of the end of such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”) including all associated support and work papers related to the GAAP financial statements;

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(b)    following such time as PICO is no longer providing services for the preparation of the Company's financial statements under the TSA, as soon as reasonably practicable after the end of the first three quarters of each fiscal year of the Company, and in any event within 15 days thereafter, an unaudited balance sheet as of the end of each such quarterly period and unaudited statements of income and cash flows for such period, all in reasonable detail and prepared in accordance with GAAP  including all associated support and work papers related to the GAAP financial statements; 
(c)    following such time as PICO is no longer providing services to the Company on internal control matters under the TSA, as soon as reasonably practicable after the end of each quarter of each fiscal year of the Company, and in any event within 25 days thereafter, an internal control report summarizing the design, testing and documentation of the internal control structure of the Company that would be suitable for its own Section 404(a) certifications; provided, however, that the Company recognizes that PICO may require additional information regarding internal control matters to allow PICO to satisfy its own internal control officer certification and audit requirements, and the Company will provide any such additional information reasonably required by PICO; and
(d)    with respect to the financial statements called for in subsections (a) and (b) of this Section 4.3, or the report called for in subsection (c) of this Section 4.3, an instrument executed by the Chief Financial Officer or President of the Company certifying that (i) such financial statements were prepared in accordance with GAAP consistently applied with prior practice for earlier periods and fairly present the financial condition of the Company and its results of operation for the period specified, or (ii) such internal control reports were prepared in accordance with Section 404(a) of the Sarbanes Oxley Act consistently applied with prior practice for earlier periods.
PICO will provide information to the Company with respect to any corrections or changes noted in its review of the information provided to it under this Section 4.3.  PICO understands that information provided to it pursuant to this Section 4.3 will likely be supplemented or revised in the normal course of business, including as a result of audit or review processes.   The Company will promptly provide any such supplemental information or revisions to PICO, which will be deemed to amend the information previously provided by the Company, and the certifications provided pursuant to subsection (d) of this Section 4.3 shall apply to the information as amended.  The information provided, as amended, will be considered final upon the inclusion by PICO of such information in a filing with the SEC.
ARTICLE V
TERMINATION
SECTION 5.1  Term. This Agreement shall automatically terminate upon the later of (i) the date on which PICO, together with its Permitted Transferees, holds shares of stock representing less than 10% of the Total Voting Power of the Company based on the aggregate amount of stock issued and outstanding as of that date; and (ii) the date on which PICO is no longer required to include the Company's GAAP financial statements in its consolidated financial statements.
SECTION 5.2  Survival. If this Agreement is terminated pursuant to Section 4.1, this Agreement shall become void and of no further force and effect.

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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1  Representations and Warranties of PICO. PICO represents and warrants to the Company and the Holders that (a) PICO is duly authorized to execute, deliver and perform this Agreement; (b) this Agreement has been duly executed and delivered by PICO and is a valid and binding agreement of PICO, enforceable against PICO in accordance with its terms; and (c) the execution, delivery and performance by PICO of this Agreement does not violate or conflict with or result in a breach by PICO of or constitute (or with notice or lapse of time or both would constitute) a default by PICO under any agreement to which PICO is a party or the organizational documents of PICO.
SECTION 6.2  Representations and Warranties of the Company. The Company represents and warrants to PICO and the Holders that (a) the Company is duly authorized to execute, deliver and perform this Agreement; (b) this Agreement has been duly executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms; and (c) the execution, delivery and performance by the Company of this Agreement does not violate or conflict with or result in a breach by the Company of or constitute (or with notice or lapse of time or both would constitute) a default by the Company under its certificate of incorporation, any existing applicable law of any court, administrative agency, regulatory body, commission or other governmental authority, board, bureau or instrumentality, domestic or foreign and any subdivision thereof, exercising any statutory or regulatory authority of any of the foregoing, domestic or foreign, having jurisdiction over the Company, or any agreement or instrument by which the Company or any of its assets may be bound.
SECTION 6.3  Representations and Warranties of Holders.  Each Holder represents and warrants to the Company and PICO that (a) he is legally competent to execute this Agreement; (b) this Agreement has been duly executed and delivered by such Holder and is a valid and binding agreement of such Holder, enforceable against such Holder in accordance with its terms; and (c) the execution, delivery and performance by such Holder of this Agreement does not violate or conflict with or result in a breach by such Holder of or constitute (or with notice or lapse of time or both would constitute) a default by such Holder under any agreement to which such Holder is a party.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1  Notices. All notices, requests, consents and other communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or sent by facsimile (provided a copy is thereafter promptly delivered as provided in this Section 6.1) or nationally recognized overnight courier, addressed to such party at the address or facsimile number set forth below or such other address or facsimile number as may hereafter be designated in writing by such party to the other parties:

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(a) if to the Company, to:
UCP, Inc. 
6489 Camden Avenue, Suite 204
San Jose, California 95120 
(Telephone) (408) 323-1113
(Facsimile) (408) 323-1114
Attention:  General Counsel
(b) if to PICO, to:
Pico Holdings, Inc.
7979 Ivanhoe Avenue, Suite 300 
La Jolla, California 92037

(Telephone) (888) 389-3222
(Facsimile) (858) 456-6480
Attention: President
(c) if to any Holder, to:
c/o UCP, Inc. 
6489 Camden Avenue, Suite 204
San Jose, California 95120 
(Telephone) (408) 323-1113
(Facsimile) (408) 323-1114
Attention: Holder
SECTION 7.2  Confidentiality.  PICO covenants that it will (a) accord the Confidential Information (as defined below) of UCP the same degree of confidential treatment that it accords its similar proprietary and confidential information, (b) not use such Confidential Information for any purpose other than those contemplated by this Agreement, and (c) not disclose such Confidential Information unless such disclosure is made in the ordinary course of PICO's conduct of its business and is subject to protections, at least as stringent as those herein, and comparable to those PICO would apply in connection with a comparable disclosure of its own Confidential Information.  Notwithstanding any other provision of this Agreement, PICO may disclose Confidential Information UCP, without liability for such disclosure, to the extent PICO demonstrates that such disclosure is (x) required to be made pursuant to applicable law (including, PICO's obligations under the Securities Exchange Act of 1934, as amended), government authority, duly authorized subpoena, or court order, (y) required to be made to a court or other tribunal in connection with the enforcement of PICO's rights under this Agreement or to contest claims between the parties hereto, or (z) approved by the prior written consent of UCP.  PICO will promptly notify UCP if it receives a subpoena or otherwise becomes aware of events that may legally require it to disclose Confidential Information of UCP, and will cooperate with UCP (at UCP's expense) to obtain an order quashing or otherwise modifying the scope of such subpoena or legal requirement, in an effort to prevent the disclosure of such Confidential Information.  For purposes of this Agreement, “Confidential Information” means all confidential or proprietary information and documentation of UCP made available to PICO under this Agreement that is either identified in writing as confidential or which PICO should reasonably have recognized at the time of disclosure as being of a confidential nature; provided, however, that information required to be disclosed by PICO in a report or filing under applicable securities laws shall not be considered Confidential Information.

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SECTION 7.3  Insider Trading Policy. PICO shall instruct its affiliates, officers, directors, controlling persons, partners, employees, agents, advisors and representatives (collectively, “Representatives”) who are provided access to Confidential Information that it is a violation of applicable law for any Representative to purchase or sell securities of UCP based on non-public information obtained in connection with the performance of this Agreement. 
SECTION 7.4  Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “included,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”
SECTION 7.5  Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.
SECTION 7.6  Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement.
SECTION 7.7  Adjustments Upon Change of Capitalization. In the event of any change in the outstanding Common Stock by reason of dividends, splits, reverse splits, spin-offs, split-ups, recapitalizations, combinations, exchanges of shares of stock and the like, the term “Common Stock” shall refer to and include the securities received or resulting therefrom, but only to the extent such securities are received in exchange for or in respect of Common Stock.
SECTION 7.8  Entire Agreement; No Third Party Beneficiaries. This Agreement (a) constitutes the entire agreement and supersedes all other prior agreements, both written and oral, among the parties with respect to the subject matter hereof and (b) is not intended to confer upon any Person, other than the parties hereto, any rights or remedies hereunder.
SECTION 7.9  Further Assurances. Each party shall execute, deliver, acknowledge and file such other documents and take such further actions as may be reasonably requested from time to time by the other party hereto to give effect to and carry out the transactions contemplated herein.

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SECTION 7.10  Governing Law; Equitable Remedies. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF). The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to an injunction or injunctions and other equitable remedies to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any of the Selected Courts (as defined below), this being in addition to any other remedy to which they are entitled at law or in equity. Any requirements for the securing or posting of any bond with respect to such remedy are hereby waived by each of the parties hereto. Each party further agrees that, in the event of any action for an injunction or other equitable remedy in respect of such breach or enforcement of specific performance, it will not assert the defense that a remedy at law would be adequate.
SECTION 7.11  Consent To Jurisdiction. With respect to any suit, action or proceeding (“Proceeding”) arising out of or relating to this Agreement or any transaction contemplated hereby each of the parties hereto hereby irrevocably (i) submits to the exclusive jurisdiction of the United States District Court for the Northern District of California or the Superior Court of the State of California located in the County of Santa Clara (the “Selected Courts”) and waives any objection to venue being laid in the Selected Courts whether based on the grounds of forum non conveniens or otherwise and hereby agrees not to commence any such Proceeding other than before one of the Selected Courts; provided, however, that a party may commence any Proceeding in a court other than a Selected Court solely for the purpose of enforcing an order or judgment issued by one of the Selected Courts; (ii) consents to service of process in any Proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized international express carrier or delivery service, to the Company, PICO or any Holder at their respective addresses referred to in Section 6.1 hereof; provided, however, that nothing herein shall affect the right of any party hereto to serve process in any other manner permitted by law; and (iii) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
SECTION 7.12  Amendments; Waivers.
(a)    No provision of this Agreement may be amended or waived unless such amendment or waiver is in writing and signed, in the case of an amendment, by the parties hereto, or in the case of a waiver, by the party against whom the waiver is to be effective.

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(b)    No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 7.13  Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above.
	
	
	UCP, Inc.
By:________________
      Name:
      Title:

	 

	PICO Holdings, Inc.
By:________________  
      Name:
      Title:

	 

	Dustin L. Bogue

By:________________  
      Name:
      Title:

	 

	James W. Fletcher 
By:________________  
      Name:
      Title:

	 

	William J. La Herran 
By:________________  
      Name:
      Title:

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