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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 Karl 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
     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:

XVIII.  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.

XIX.  Duties.  The Executive shall serve as
the 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
vineyard operations.   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.

XX.  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 paid to the Executive in 1998
which was attributable to services rendered
in 1997.  The additional
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payment shall be paid in two equal
installments, beginning on the date that the
first installment of the Base Salary is to be
paid.

XXI.  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.

XXII.  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.

XXIII.  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.

XXIV.  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.

XXV.  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 Co-Chief
Executive Officer  pursuant to and in
accordance with this Agreement until
December 31, 1999 (the "Term").

XXVI.  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;

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

XXVII.  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.

XXVIII.  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.

XXIX. 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.

XXX.  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.
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XXXI.  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 14.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.

XXXII.  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
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.

XXXIII.  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 15,
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.
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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//Karl Giguiere
________________________       _________________________
Michael J. Motroni,            Karl Giguiere
Chief Financial Officer

Address:                       Address:

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