**Exhibit 10 (a)**

 

**THENEWHALL LAND AND FARMING COMPANY2002 EQUITY COMPENSATION PLAN**

 

**AMENDMENTNO. 1**

 

This Amendment No. 1 (“Amendment”) to The Newhall Landand Farming Company 2002 Equity Compensation Plan (“Plan”) is implemented as ofJuly 1, 2003 (“Effective Date”), to amend the Plan to provide that eachDirector shall receive an Annual Equity Retainer instead of an Annual CashRetainer.

 

# **ARTICLE I**

 

# **DEFINITIONS**

 

“Annual Cash Retainer” means the amount designated asthe annual cash retainer portion of the total annual compensation paid to eachIndependent Director, which is $24,000 as of the Effective Date.

 

“Annual Equity Retainer” shall have the meaning setforth in Article 4.2A.

 

“Depositary Units” shall mean equity security limitedpartnership interests in the Partnership represented by transferable depositaryunits.

 

“Independent Director Unit Rights” shall have themeaning set forth in Paragraph A of the Independent Director Unit RightsAgreement attached as Exhibit A to this Amendment.

 

“Initial Grant” shall have the meaning set forth inParagraph A of the Independent Director Unit Rights Agreement attached asExhibit A to this Amendment.

 

All terms defined in the Plan, unless otherwisedefined herein, shall have the same meaning in this Amendment.

 

# **ARTICLE II**

 

Section 4.2 of the Plan is hereby deleted and restatedin its entirety as follows:

 

4.2                                 **INDEPENDENT DIRECTOR UNITS FEE PROGRAM**

 

A.                                   ***Eligibility*.**  Each Independent Director, in lieu ofreceiving the Annual Cash Retainer, shall receive an Annual Equity Retainer andInitial Grant upon the terms and conditions of the independent director unitsfee program described in the Independent Director Unit Rights Agreement,attached as Exhibit A to this Amendment (“Annual Equity Retainer”).

 

# **ARTICLE III**

 

Section 4.3 of the Plan is hereby deleted in itsentirety.

 

# **ARTICLE IV**

 

Except as otherwise provided in this Amendment, all ofthe terms and conditions of the Plan shall remain in full force andeffect.  Nothing in this Amendment shallbe construed to affect Independent Directors’ cash or equity compensation otherthan the Annual Cash Retainer, including without limitation the grant ofAutomatic Options under Article 4.1 of the Plan, and the receipt of cashcompensation for attending meetings in an amount determined by the Board fromtime to time.  Nothing in this Amendmentshall be construed to affect Unit Rights granted to employees pursuant toArticle 3.5 of the Plan, which shall continue to be governed by the Plan, the UnitRights 

 

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Agreement and exhibits attached thereto.  In the event of any conflict between the Plan and this Amendment,this Amendment shall control.

 

To record the adoption of Amendment No. 1, NewhallManagement Corporation, a California corporation, managing general partner ofNewhall Management Limited Partnership, a California limited partnership,managing general partner of The Newhall Land and Farming Company, a Californialimited partnership, has caused this Amendment No. 1 to be executed on behalfof such partnership by its duly authorized officer this 15th day ofApril, 2003.

 

 
|   | THE NEWHALL LAND AND FARMING COMPANY |
|--------|--------------------------------------|
|   | (A CALIFORNIA LIMITED  PARTNERSHIP)  |
|   |                                 |
|   | By:                                  | NEWHALL MANAGEMENT  LIMITED  PARTNERSHIP, A CALIFORNIA LIMITED  PARTNERSHIP, MANAGING GENERAL  PARTNER |
|   |                                 |   |
|   | By:                                  | NEWHALL MANAGEMENT  CORPORATION,  A CALIFORNIA CORPORATION,  MANAGING GENERAL PARTNER |
|   |                                 |   |
|   |                                 |   |
|   | By:                                  | /s/ Edward C.  Giermann |
|   |                                 |   |
|   |                                 |   |
|   | Its:                                 | Secretary and  General Counsel |

 

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***GRANT***

 

**THENEWHALL LAND AND FARMING COMPANY**

 

***NOTICE OF GRANT OF UNIT RIGHTSPURSUANT TOTHE INDEPENDENT DIRECTOR UNIT RIGHTS AGREEMENT***

 

Notice is hereby given of the following grant of a right to receive TheNewhall Land and Farming Company (a California Limited Partnership) (the“Partnership”) depositary units (“Independent Director Unit Rights”) pursuantto the terms of The Newhall Land and Farming Company 2002 Equity CompensationPlan (the “Plan”), Amendment No. 1 to the Plan and the Independent Director UnitRights Agreement, attached as Exhibit A to the Amendment (collectively “AmendedPlan”):

 
| ***Grantee:***               |   |
|------------------------------|--------|
|                         |   |
| ***Grant Date:***            |   |
|                         |   |
| ***Number of Unit Rights:*** |   |

 

***Receipt of Depositary Unit Certificate:***  Grantee shall receive a certificate forDepositary Units (as defined in the Amended Plan) of the Partnership withrespect to his or her vested Independent Director Unit Rights on the dateGrantee becomes fully vested in all Independent Director Unit Rights grantedpursuant to this Notice of Grant in accordance with the Independent DirectorUnit Rights Agreement.  Grantee shallreceive one Depositary Unit for each vested Independent Director Unit Right.

 

Grantee understands that the Independent Director UnitRights are granted pursuant to and in accordance with the express terms andconditions of the Amended Plan.  Bysigning below, Grantee agrees to be bound by the terms and conditions of theAmended Plan and the terms and conditions of the Independent Director UnitRights Agreement dated as of July 1, 2003, distributed with this Notice ofGrant.

 
| Dated:                                       |                                |          | **THE  NEWHALL LAND AND FARMING COMPANY** |
|----------------------------------------------|-------------------------------------|---------------|-------------------------------------------|
|                                         | (a California Limited  Partnership) |
|                                         |                                |
|                                         |                                |
|                                         | By:                                 |          |                                      |
|                                         |                                |
|                                         | Title:                              | Secretary     |                                      |
|                                         |                                |
|                                         |                                |
|                                         | **GRANTEE**                         |
|                                         |                                |
|                                         | Address:                            |          |                                      |
|                                         |                                |          |                                      |
|                                         |                                |          |                                      |
|                                         |                                |
| I designate the  following beneficiary(ies): |                                |
|                                         |                                |
|                                         |                                | Relationship: |                                      |   |
|                                         |
| Address:                                     |                                |          |
|                                         |                                |
|                                         |                                |
|                                              |                                     |               |                                           |  |  |  |  |  |  |  |  |  |

 

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**EXHIBITA TO AMENDMENT**

 

**THENEWHALL LAND AND FARMING COMPANY**

 

***INDEPENDENT DIRECTOR UNIT RIGHTS AGREEMENT***

 

The Newhall Land and Farming Company (a CaliforniaLimited Partnership) (“Partnership”) has adopted The Newhall Land and FarmingCompany 2002 Equity Compensation Plan (“Plan”) for among other purposesattracting and retaining the services of non-employee Board members of thePartnership or its managing general partner.

 

Grantee is an Independent Director who rendersvaluable services to the Partnership and is entitled to a grant of IndependentDirector Unit Rights, and this Agreement is executed pursuant to, and isintended to carry out the purposes of, the Plan in connection with thePartnership’s grant of Independent Director Unit Rights to Grantee.

 

A.                                   ***Grant of Independent Director UnitRights*.**  On July 1, 2003,and on each anniversary thereafter (“Grant Date”) the Partnership shall granteach Independent Director (“Grantee”) the right to receive Eight Hundred (800)Depositary Units (“Independent Director Unit Rights”).

 

The Partnership shall also make an initial grant ofIndependent Director Unit Rights to each new Director of the Partnership(“Initial Grant”), prorated from the first day of the calendar quarter in whichsuch Director’s election or appointment occurs (“Initial Grant Date”) until thefollowing June 30, in an amount equal each quarter to the Independent DirectorUnit Rights granted to each other Independent Director for that quarter.

* *

*Example:  An Independent Director who is appointed orelected during the month of January would receive prorated Independent DirectorUnit Rights based on having become an Independent Director during the entirethird quarter of a plan year; accordingly, such an Independent Director wouldobtain the right to receive one-half of the total number of IndependentDirector Unit Rights such Independent Director would have obtained had suchIndependent Director been an Independent Director on July 1 of the precedingyear, and on June 30 next following, one Depositary Unit for each such right,and thereafter, on the following July 1, such Independent Director wouldreceive Independent Director Unit Rights pursuant hereto*.

 

B.                                     ***Unit Rights and Vesting*.**  On June 30, 2004, and on each anniversarythereafter (“Exercise Date”) Grantee shall be entitled to receive oneDepositary Unit for each vested Independent Director Unit Right.  The Independent Director Unit Rights shallvest at the expiration of twelve (12) months after the respective Grant Date,subject to termination of service or acceleration in accordance with theprovisions of this Amendment.  ThePartnership may issue a certificate to Grantee evidencing the vested DepositaryUnits.  Notwithstanding the foregoing,the Initial Grant shall vest on June 30 next following the Initial Grant Date.

 

C.                                     ***Distributions*.**  If the Partnership declares a distributionto Depositary Unit holders during the period during which the IndependentDirector Unit Rights remain unvested, upon vesting of the Independent DirectorUnit Rights, Grantee will receive a check for the amount of such distributions,without premium or markup of any kind.

 

D.                                    ***Effect of Termination of Service asIndependent Director*.**  IfGrantee ceases to serve as an Independent Director of Newhall ManagementCorporation for any reason, the Independent Director Unit Rights shall beprorated as of the end of the calendar quarter in which the date of terminationoccurs in an amount equal to one quarter of the total number of IndependentDirector Unit Rights granted to Grantee for each whole or partial calendarquarter from the Grant Date, and those Independent Director Unit Rights shallvest on the date of termination.  Insuch event, Grantee shall also receive a check for the distributions referredto in paragraph C above, declared through the end of the calendar quarter inwhich the date of termination occurs. Independent Director Unit Rights that have not vested in accordance withthis paragraph shall be cancelled automatically and no Depositary Units shallbe issued pursuant to the cancelled Independent Director Unit Rights.

 

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*Example:  An Independent Director who terminatesservice on November 1, 2003 would receive prorated units based on a terminationdate of December 31, 2003, i.e. 400 Independent Director Unit Rights for theperiod July 1, 2003 to December 31, 2003. The remaining 400unvested Unit Rights would be cancelled.*

 

E.                                      ***Taxes*.**  Each Independent Director must arrange withthe Partnership for the payment of any federal, state or local income tax orother tax applicable to the grant of Independent Director Unit Rights hereunderbefore the Partnership shall be required to deliver to the Independent Directorthe certificate for the Depositary Units.

 

F.                                      ***Incorporation of Miscellaneous Terms*.**  The following paragraphs of the Unit RightsAgreement attached as Exhibit A to the Plan are incorporated by this referenceas if fully set forth herein, substituting “Independent Director Unit(s)Rights” for “Unit(s) Rights” and adding “as amended” after “Plan”:  F. (Acceleration of Awards), G. (NoAcceleration of Awards), H. (Cancellation of Awards), I. (Adjustment), J.(Cancellation and New Grant of Awards), K. (Partnership Structure), M.(Nontransferability), N. (Privilege of Unitholder Rights), O. (Modifications),Q. (Grantee Undertaking), R. (Governing Law), S. (Counterparts), T. (Successorsand Assigns), U. (Notices) and V. (Construction).

 

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