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            EMPLOYMENT AGREEMENT


 THIS EMPLOYMENT AGREEMENT, dated March 3,
1998, is entered into by and between R.H. Phillips, Inc., a
California corporation (the "Company"), and John Giguiere, an
individual (the "Executive"), with respect to the following
facts:

  The Company owns and operates a vineyard and
 winery in the Dunnigan Hills Area of Yolo
 County in California. The Executive currently
 serves as the Co-Chief Executive Officer and
 President of the Company.  There is currently in
 place no agreement between the Executive and
 the Company to employ the Executive for any
 specific term nor is there any written agreement
 setting forth the terms and conditions under
 which the Executive is employed by the
 Company.  The parties believe it is in their best
 interests to enter into such an agreement.

IN VIEW OF THE FOREGOING, the parties hereby agree as
follows:

I.  Agreement of Employment.  The Company agrees to employ
the Executive, and the Executive agrees to accept such
employment, subject to the terms and conditions set forth
below.

II.  Duties.  The Executive shall serve as the President and Co-
Chief Executive Officer of the Company during the term set
forth in Section 8 of this Agreement.  The Executive shall be
responsible for the administration and general supervision of
the Company's business and shall perform those other duties of
the President as set forth in the Bylaws of the Company.  The
Executive shall devote full time and effort to the performance
of his duties and shall perform his duties in a capable and
competent manner.

III.  Salary.

 A.  Base Salary.  The Company shall pay the Executive a
base salary, payable semi-monthly or in such other installments
as the Company generally pays its employees (the "Base
Salary") .  The Base Salary shall equal $150,000 multiplied by
a fraction, the numerator of which is the CPI (as defined below)
as of January of the year the Base Salary is being paid and the
denominator of which is the CPI as of January 1, 1997.  The
Base Salary shall be adjusted on January 1 of each year during
the Term to reflect changes in the CPI  over the prior year.  The
foregoing notwithstanding, the Base Salary shall not be
decreased to reflect any decline in the CPI.  For the purposes of
this Agreement, the "CPI" shall be the Consumer Price Index
for Region IX of the United States as defined and calculated by
the U.S. Bureau of Labor Statistics.

 B.  Additional Payment.  In addition to the Base Salary,
the Executive shall receive an additional payment for services
rendered to the Company in 1997.  The amount of this payment
shall equal the difference between $150,000 and (i) the total
salary the Executive received during 1997 (but not including
any bonus attributable to 1996 which was paid in 1997), plus
(ii) the total bonus
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paid to the Executive in 1998 which was attributable to
services rendered in 1997.  The additional payment shall be
paid in two equal installments, beginning on the date that the
first installment of the Base Salary is to be paid.

IV.  Reimbursement for Expenses.  The parties understand that
the Executive may incur substantial expenses in the
performance of his duties.  The Company shall promptly
reimburse the Executive for expenses incurred by him in the
performance of his duties under this Agreement, including but
not limited to travel, lodging, entertainment and similar
expenses, which are reasonable in view of the duties the
Executive is responsible for performing.  In addition, the
Company shall provide the Executive with an automobile
allowance as determined from time to time by the Board of
Directors.

V.  Vacation.  The Executive shall be entitled to a paid
vacation of four weeks per year.  Accrual of vacation time,
timing of vacations and other matters related to vacations shall
be governed by the vacation policies of the Company.

VI.  Other Benefits.  The Executive shall be entitled to health
insurance, disability insurance, life insurance, retirement and
other benefits as are granted by the Company to its officers in
general and such other benefits as the Board of Directors may
provide.  In addition, the Company acknowledges that it
intends to obtain directors and officers liability insurance and
that the Executive shall be entitled to coverage under that
policy to the same extent as all other directors and officers.

VII.  Stock Options.  The Company shall grant to the Executive
an option to purchase 75,000 shares of the Company's
Common Stock under the Company's 1995 Stock Option Plan
(the "Plan").  The parties have executed a certain Stock Option
Agreement concurrently with this Agreement, and that Stock
Option Agreement, and not this Agreement, shall govern the
terms and conditions of that option.

VIII.  Term.  Unless the Executive's employment is earlier
terminated by the Company, or the Executive resigns his
employment for good cause, as provided elsewhere in this
Agreement, the Executive shall serve as the Company's
President and Co-Chief Executive Officer  pursuant to and in
accordance with this Agreement until December 31, 1999 (the
"Term").

IX.  Termination by Company for Cause.  Section 8
notwithstanding, the Company may terminate the Executive's
employment for cause at any time upon granting notice to the
Executive.  For the purposes of this Agreement, "cause" is
defined as follows:

 A.  Fraud perpetrated on the Company, theft or
embezzlement of the Company's property or assets;

 B. Intentional misconduct or gross negligence by the
Executive in the performance of his duties;
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 C.  Failure by the Executive to perform his duties under
this Agreement if such failure constitutes willful misconduct or
gross negligence;

 D.  The commission by the Executive of a misdemeanor
involving dishonesty or a felony;

 E.  A material breach of this Agreement by the
Executive; or

  F.   The death or disability of the Executive.

 For the purposes of this Agreement, "disability" is
defined as a physical or mental impairment which renders the
Executive materially unable to perform his duties under this
Agreement for a period of no less than 180 days.  In the event
of the Executive's disability, the Company shall provide
uninterrupted health insurance benefits to the Executive for the
duration of his disability, regardless of whether the Company
terminates his employment pursuant to this Section 9.

X.  Termination for Good Reason.  Section 8 notwithstanding,
the Executive may cease providing the services for the
Company specified in this Agreement upon notice to the
Company for good reason.  For the purposes of this Agreement,
"good reason" is defined as

 A.  A material breach of the employment agreement by
the Company; or

 b..  A material diminution in the duties assigned to the
Executive by the Company or the assignment to the Executive
of duties materially inconsistent with those set forth in this
Agreement.

XI.  Termination Other Than for Cause.  Section 8
notwithstanding and in addition to its rights to terminate the
Executive's employment for cause, the Company may
terminate the Executive's employment in its sole discretion at
any time other than for cause at any time upon granting 30 days
notice to the Executive.

XII. Severance Payments.  If during the Term the Company
terminates the Executive's employment other than for cause or
if the Executive terminates his employment for good reason,
the Company shall continue to pay the Executive's Base Salary
(including the annual increases thereof) and shall continue to
provide health insurance benefits to the Executive for a period
of two years following the effective date of termination.

XIII.    Required Residence.  In view of the responsibilities
which the Executive is to perform, the Executive understands
that it is vital he reside close to the Company's place of
business.  As a consequence, the Executive agrees to reside as a
condition of his employment at the farm house located on the
Company's property during the term of his employment, for the
convenience of the Company, on a rent free basis.  The
Company agrees to pay all taxes on and maintain the farm
house for such period as the Executive resides there, and shall
reimburse the Executive for all repairs which the Executive
makes to the farm house.  If the Executive's employment is
terminated during the Term other than for cause or if the
Executive resigns from his
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employment for good reason, the Executive will be allowed to
remain at the farmhouse for a period of six months from the
date of termination of employment and will be reimbursed for
moving expenses, not to exceed $10,000, for relocating from
the farmhouse.

XIV.  Confidential Information.  The Executive recognizes that
he possesses and will continue to possess confidential
information relating to the business of the Company.  This
confidential information includes, but is not limited to,
customer and distribution lists, sales reports, financial data,
improvements, discoveries, trade secrets and other proprietary
information which relate to the Company's products, processes
or business practices.  Immediately upon the termination or
expiration of his employment, the Executive shall return to the
Company all records in his possession which contain such
confidential information, including but not limited to written
records or information recorded on computer disk or other
electro-magnetic media, whether or not The Executive prepared
such records.  The Executive agrees that he will limit
disclosure of confidential information to those with a need to
know such information and only for the purpose of performing
his duties under this Agreement.

XV.  Non-Competition.

 A.  Definition.  For the purposes of this Agreement,
"Competitive Business Activity" shall mean: (i) acting or
serving as a principal, agent, proprietor, officer, director,
employee, consultant  or advisor to any business (other than the
Company) which operates, owns or invests in one or more
vineyards or wineries; or (ii) owning or acquiring, directly or
indirectly, shares, membership interests, limited partnership
interests or other ownership interest of any business (other than
the Company) which operates, owns or invests in one or more
vineyards or wineries.

 B.  No Competitive Business Activities.  During such
period as the Executive is employed by the Company pursuant
to this Agreement and during such period as the Executive is
receiving any severance payments, the Executive will not
engage in any Competitive Business Activities.  If the
Executive engages in any Competitive Business Activity during
such period as he is receiving severance payments, the
Executive will relinquish all rights to any further severance
payments.  Nothing in this Section 15.b shall limit any remedy
available to the Company for a breach of any provision of this
Agreement.

 C. Passive Investments Permitted.  The Executive shall
not be deemed to be engaged in a Competitive Business
Activity solely because he owns or acquires shares,
membership interests or limited partnership interests of a
business if : (i) those ownership interests are traded on a
national securities exchange, the Nasdaq National Market or
the Nasdaq SmallCap Market; and (ii) the Executive, together
with the Executive's spouse and immediate family members,
owns no more than 1% of any class of equity security of that
business and controls no more than 1% of the total voting
power of that business.

XVI.  Indemnification.  The Company and the Executive are
parties to an indemnification agreement  which provides,
among its other terms, that the Company will indemnify,
defend and hold the
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Executive harmless for various actions performed by the
Executive on behalf of the Company in connection with the
performance of his duties.  Nothing in this Agreement shall
amend or modify the rights and obligations of the parties
pursuant to that indemnification agreement.

XVII.  Miscellaneous.

 A.  With the exception of matters pertaining to the stock
options described in Section 7 and the right of the Executive to
indemnification as described in Section 16, this Agreement
constitutes the entire understanding of the parties with respect
to the subject matter described herein.  With the exception of
the stock option and indemnification agreements described in
this Agreement, this Agreement supersedes in its entirety all
prior and contemporaneous written and oral agreements with
respect to that subject matter.

 B.  This Agreement may not be modified or amended
except through a written instrument signed by both parties.  No
right of any party under this Agreement will be deemed waived
unless that waiver is in the form of a writing which has been
signed by the party who has waived that right.  The waiver of a
right under this Agreement shall not constitute a waiver of any
other right under this Agreement.

 C.  All notices required or contemplated under this
Agreement shall be in writing and delivered either personally
or by certified mail, return receipt requested.  Notices shall be
sent to the addresses set forth below each party's signature or to
such other address or addresses as the parties may advise each
other in writing.

IN WITNESS WHEREOF, the parties have entered into this
Agreement as of the date written above.


R.H. PHILLIPS, INC.

//s// Michael J. Motroni     //s//John Giguiere
_________________________    _____________________
Michael J. Motroni,          John Giguiere
Chief Financial Officer

Address:                     Address:

26836 County Road 12A        26836 County Road 12A
Esparto, CA 95627            Esparto, CA   95627