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                                                                   Exhibit 10(b)

                                 AMENDMENT NO 2

                                       TO

           THE NEWHALL LAND AND FARMING COMPANY EMPLOYEE SAVINGS PLAN

                  The Newhall Land and Farming Company Employee Savings Plan, as
restated in its entirety effective January 1,1989, and subsequently amended, is
hereby further amended as follows:

                  FIRST: That portion of Section 11.01 consisting of the lead-in
paragraph and subsections (a) through (b) is amended, effective January 1, 1998,
to read in full as follows:

                  "11.01 General. Upon the termination of employment of a 
                         Participant, except by death:

                          (a)    If the Participant's Vested Value does not
                                 exceed $3,500 ($5,000 on and after July 15,
                                 1998), such Vested Value shall be distributed
                                 to such Participant in a lump sum within 60
                                 days following the Accounting Date which
                                 coincides with or next follows his termination
                                 of employment.

                          (b)   If such Participant's Vested Value. exceeds
                                $3,500 ($5,000 on and after July 15, 1998), the
                                Committee shall distribute such Vested Value in
                                a lump sum upon such Participant's attainment of
                                age 65 or, if later, within 60 days following
                                the Accounting Date which coincides with or next
                                follows his termination of employment."

                  SECOND:  Section 11.04 is hereby amended effective January 1,
1997 to read in full as follows:

                  "11.04 Required Distributions to Certain Participants.

                          (a)      Effective January 1, 1985, distributions will
                                   be made in accordance with the Regulations
                                   under Section 401 (a) (9), including the
                                   minimum distribution incidental benefit
                                   requirement of Section 401(a)(9)(G) of the
                                   Code.

                          (b)      Notwithstanding Section 11.01 or any
                                   Participant's consent, distribution shall
                                   occur no later than April 1 of the calendar
                                   year following the later of: (i) the
                                   calendar year in which the Participant
                                   attains age 70 1/2 or, if the Participant
                                   attains age 70 1/2 after December 31, 1999,
                                   and is not, with respect to the Plan Year
                                   ending in the calendar year in which he
                                   attains age 70 1/2, a Five Percent Owner,
                                   (ii) the calendar year in which the
                                   Participant retires; provided, however, that:

                                   (1)     Any Participant who has not at any
                                           time been a Five Percent Owner and
                                           who has attained age 70 1/2 before
                                           January 1, 1988 may elect to defer
                                           distribution of his benefits until
                                           his actual retirement, and


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                                   (2)     Any Participant who attains age 70
                                           1/2 during 1988 shall be treated for
                                           purposes of this Section as having
                                           attained age 70 1/2 in 1989."

                  THIRD:   Except as modified by this Amendment, all the terms 
and provisions of the Plan (as previously amended) shall continue in full force
and effect.

                  IN WITNESS WHEREOF, Newhall Management Corporation, managing
general partner of Newhall Management Limited Partnership, managing general
partner of The Newhall Land and Farming Company, a California limited
partnership, has caused this Amendment No. I to be executed on behalf of such
partnership by its duly authorized officer this 15th day of July, 1998.

                                           THE NEWHALL LAND AND FARMING COMPANY
                                           (A CALIFORNIA LIMITED PARTNERSHIP)

                                           BY:  NEWHALL MANAGEMENT LIMITED 
                                                PARTNERSHIP
                                                MANAGING GENERAL PARTNER

                                           BY:  NEWHALL MANAGEMENT CORPORATION
                                                MANAGING GENERAL PARTNER


                                           By:
                                               ------------------------------
                                               Thomas H. Almas
                                                SECRETARY