Document:

<PAGE>

                                  EXHIBIT 10.2

                                     FORM OF
                          NOTICE OF STOCK OPTION GRANT

Mr. Roger S. Mertz 1448 Industrial Ave Sebastopol, CA 95472

You have been granted an option to purchase Common Stock of SonomaWest Holdings,
Inc., a California corporation (the "Company") as follows:

<TABLE>
<CAPTION>
<S>                                                              <C>
                 Grant Number                                    181

                 Date of Grant                                   July 17, 2001

                 Option Price Per Share                          $7.48

                 Total Number of Shares Granted                  5,000

                 Total Price Of Shares Granted                   $37,400

                 Type of Option                                  [ ] Incentive Stock Option
                                                                 [X] Non-Qualified Stock Option

                 Term/Expiration Date                            July 17, 2011
</TABLE>

EXERCISE SCHEDULE

This  Option  may be  exercised  in  whole or in part,  in  accordance  with the
following vesting schedule:

VESTING SCHEDULE

DATE OF VESTING                NUMBER OF SHARES            TOTAL VESTED

July 17, 2001                  5,000                       5,000

This option may be exercised for three months after  membership on the Company's
Board of  Directors  terminates  except as set out in Sections 6, 7 and 8 of the
Stock Option Agreement (but in no event later than the Expiration Date).

By your signature and the signature of the Company's  representative  below, you
and the  Company  agree that this  Option is granted  under and  governed by the
terms and conditions of the SonomaWest  Holdings 1996, Stock Option Plan and the
Stock  Option  Agreement,  all of  which  are  attached  and made a part of this
document.

OPTIONEE:                              SONOMAWEST HOLDINGS, INC.

                                       By:
---------------------------              ---------------------------------
Signature                                Names:
                                              ----------------------------
                                         Title:
                                              ----------------------------

<PAGE><PAGE>

                                  EXHIBIT 10.4

                                   SONOMAWEST
                                  HOLDINGS INC

                         NOTICE OF GRANT OF STOCK OPTION

         Notice  is  hereby  given of the  following  stock  option  grant  (the
"Option") to purchase shares (the "Option Shares") of Common Stock of SonomaWest
Holdings, Inc., a California corporation (the "Corporation"):

<TABLE>
<CAPTION>
<S>                                         <C>                                   <C>
         Option Number:                     2002-1

         Optionee:                          Roger S. Mertz

         Grant Date:                        07/31/02

         Number of Option Shares:           7,500

         Date Exercisable:                  Immediately Exercisable

         Expiration Date:                   07/30/12

         Exercise Price:                    $7.20 per share

         Type of Option:                    [  ] Incentive Stock Option         [ x ] Non-Statutory Stock Option

         Vesting Schedule: This option may be  exercised  in whole or in part,  in  accordance  with the  following
         vesting schedule:

                  DATE OF VESTING                      NUMBER OF SHARES                      TOTAL VESTED
                  ---------------                      ----------------                      ------------
                      07/31/02                              7,500                               7,500

</TABLE>
         In no event  shall the Option  become  exercisable  for any  additional
Option Shares after Optionee's cessation of Service.

         The Optionee  understands and agrees that the Option is granted subject
to and in accordance with the terms of the SonomaWest Holdings,  Inc. 2002 Stock
Incentive  Plan (the  "Plan").  The Optionee  further  agrees to be bound by the
terms of the Plan and the terms of the  Option as set forth in the Stock  Option
Agreement attached hereto as Exhibit A (the "Stock Option Agreement").  Optionee
hereby acknowledges receipt of a copy of the official prospectus for the Plan in
the form  attached  hereto as  Exhibit B. A copy of the Plan is  available  upon
request made to the Corporate Secretary at the Corporation's principal offices.

         NO  EMPLOYMENT  OR SERVICE  CONTRACT.  Nothing in this Notice or in the
attached  Stock  Option  Agreement or in the Plan shall confer upon the Optionee
any right to  continue  in  Service  for any  period  of  specific  duration  or
interfere  with or otherwise  restrict in any way the rights of the  Corporation
(or any Parent or  Subsidiary  employing  or retaining  the  Optionee) or of the
Optionee,  which  rights are hereby  expressly  reserved by each,  to  terminate
Optionee's Service at any time for any reason whatsoever, with or without cause.

<PAGE>

         DEFINITIONS.  All  capitalized  terms  in this  Notice  shall  have the
meanings  assigned  to them in  this  Notice  or in the  attached  Stock  Option
Agreement.

     Dated:  July 31, 2002

SONOMAWEST HOLDINGS, INC.,
a California corporation

By:
   --------------------------------
      Roger S. Mertz
      Chairman of the Board
                                    Name:    Roger S. Mertz
                                    Address: 333 Bush Street, Suite 1700, San
                                             Francisco, CA 95472-2662

ATTACHMENTS

EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - PLAN SUMMARY AND PROSPECTUS

                                       2
<PAGE><PAGE>

                                  EXHIBIT 10.5

                                   SONOMAWEST
                                  HOLDINGS INC

                         NOTICE OF GRANT OF STOCK OPTION

         Notice  is  hereby  given of the  following  stock  option  grant  (the
"Option") to purchase shares (the "Option Shares") of Common Stock of SonomaWest
Holdings, Inc., a California corporation (the "Corporation"):

<TABLE>
<CAPTION>
<S>                                      <C>                                      <C>
         Option Number:                  2003-1

         Optionee:                       Roger S. Mertz

         Grant Date:                     07/30/03

         Number of Option Shares:        7,500

         Date Exercisable:               Immediately Exercisable

         Expiration Date:                07/29/13

         Exercise Price:                 $5.05 per share

         Type of Option:                 [  ] Incentive Stock Option   [ x ] Non-Statutory Stock Option

         Vesting Schedule: This option may be  exercised  in whole or in part,  in  accordance  with the  following
         vesting schedule:

                  DATE OF VESTING                      NUMBER OF SHARES                      TOTAL VESTED
                  ---------------                      ----------------                      ------------
                      07/30/03                              7,500                               7,500

</TABLE>
         In no event  shall the Option  become  exercisable  for any  additional
Option Shares after Optionee's cessation of Service.

         The Optionee  understands and agrees that the Option is granted subject
to and in accordance with the terms of the SonomaWest Holdings,  Inc. 2002 Stock
Incentive  Plan (the  "Plan").  The Optionee  further  agrees to be bound by the
terms of the Plan and the terms of the  Option as set forth in the Stock  Option
Agreement attached hereto as EXHIBIT A (the "Stock Option Agreement").  Optionee
hereby acknowledges receipt of a copy of the official prospectus for the Plan in
the form  attached  hereto as  EXHIBIT B. A copy of the Plan is  available  upon
request made to the Corporate Secretary at the Corporation's principal offices.

         NO  EMPLOYMENT  OR SERVICE  CONTRACT.  Nothing in this Notice or in the
attached  Stock  Option  Agreement or in the Plan shall confer upon the Optionee
any right to  continue  in  Service  for any  period  of  specific  duration  or
interfere  with or otherwise  restrict in any way the rights of the  Corporation
(or any Parent or  Subsidiary  employing  or retaining  the  Optionee) or of the
Optionee,  which  rights are hereby  expressly  reserved by each,  to  terminate
Optionee's Service at any time for any reason whatsoever, with or without cause.

<PAGE>

         DEFINITIONS.  All  capitalized  terms  in this  Notice  shall  have the
meanings  assigned  to them in  this  Notice  or in the  attached  Stock  Option
Agreement.

<TABLE>
<CAPTION>
<S>     <C>                                                 <C>

Dated:  July 30, 2003

SONOMAWEST HOLDINGS, INC.,                                   OPTIONEE:
a California corporation

By:
     ---------------------------------------                 ----------------------------------------
      Roger S. Mertz                                         Name:       Roger S. Mertz
      Chairman of the Board                                  Address:    333 Bush Street, Suite 1700
                                                                         San Francisco, CA 94104-2806

</TABLE>

ATTACHMENTS

EXHIBIT A - STOCK OPTION AGREEMENT
EXHIBIT B - PLAN SUMMARY AND PROSPECTUS

                                       2
<PAGE><PAGE>

                                  EXHIBIT 10.6

                                   SONOMAWEST
                                  HOLDINGS INC

                           2002 STOCK OPTION AGREEMENT

                                R E C I T A L S :
                                 ---------------

         WHEREAS the Board has adopted the Plan for the purpose of retaining the
services of selected Employees,  Officers,  members of the Board or of the board
of directors of any Parent or Subsidiary and consultants  and other  independent
advisors who provide services to the Corporation (or any Parent or Subsidiary);

         WHEREAS the Optionee is to render valuable  services to the Corporation
(or a Parent or Subsidiary),  and this Agreement is executed pursuant to, and is
intended  to  carry  out the  purposes  of,  the  Plan in  connection  with  the
Corporation's grant of an option to Optionee; and

         WHEREAS all capitalized  terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.

         NOW, THEREFORE, it is hereby agreed as follows:

         1. GRANT OF OPTION.  The Corporation  hereby grants to Optionee,  as of
the Grant  Date,  an  option  to  purchase  up to the  number  of Option  Shares
specified in the Grant Notice.  The Option Shares shall be purchasable from time
to time during the option  term  specified  in Section 2 hereof at the  Exercise
Price.

         2. OPTION TERM. This Option shall have a maximum term of ten (10) years
measured  from the  Grant  Date and  shall  accordingly  expire  at the close of
business on the Expiration  Date,  unless sooner  terminated in accordance  with
Sections 5 or 6 hereof.

         3. LIMITED  TRANSFERABILITY.  This Option shall be neither transferable
nor  assignable  by  Optionee  other than by will or by the laws of descent  and
distribution following Optionee's death and may be exercised,  during Optionee's
lifetime,  only by  Optionee.  However,  if this  Option  is  designated  a Non-
Statutory  Option in the Grant  Notice,  then this Option may, (i) in connection
with the  Optionee's  estate  plan,  be  assigned  in  whole  or in part  during
Optionee's lifetime to one or more members of the Optionee's Immediate Family or
to a trust  established for the exclusive  benefit of the Optionee and/or one or
more  such  family  members  or  (ii) be  assigned  in  whole  or in part to the
Optionee's  former spouse pursuant to a domestic  relations  order. The assigned
portion  shall be  exercisable  only by the  person  or  persons  who  acquire a
proprietary  interest  in the  Option  pursuant  to such  assignment.  The terms
applicable to the assigned portion shall be the same as those in effect for this
Option immediately prior to such assignment.  Notwithstanding the foregoing, the
Optionee  may  also  designate  one  or  more  persons  as  the  beneficiary  or
beneficiaries  of his or her  outstanding  options  under this  Article Two, and
those options  shall,  in accordance  with such  designation,  automatically  be
transferred to such beneficiary or beneficiaries upon the Optionee's death while
holding  those  options.  Such  beneficiary  or  beneficiaries  shall  take  the
transferred  option subject to all the terms and  conditions of this  Agreement,
including  (without  limitation) the limited time period during which the option
may be exercised following the Optionee's death.

                                       1
<PAGE>

         4. DATES OF  EXERCISE.  This Option shall  become  exercisable  for the
Option  Shares in one or more  installments  as specified  in the Grant  Notice,
subject to the special  vesting  acceleration  provisions of Paragraph 6. As the
Option becomes  exercisable  for such  installments,  those  installments  shall
accumulate  and  the  Option  shall  remain   exercisable  for  the  accumulated
installments  until the Expiration Date or sooner termination of the option term
under Sections 5 or 6 hereof.

         5. CESSATION OF SERVICE.  The option term specified in Section 2 hereof
shall  terminate  (and this Option shall cease to be  outstanding)  prior to the
Expiration Date should any of the following provisions become applicable:

                  (a) Should  Optionee cease to remain in Service for any reason
(other than death,  Permanent  Disability  or  Misconduct)  while this Option is
outstanding,  then the period for  exercising  this Option shall be reduced to a
three (3) month period  commencing  with the date of such  cessation of Service,
but in no  event  shall  this  Option  be  exercisable  at any  time  after  the
Expiration Date.

                  (b) Should Optionee die while this Option is outstanding, then
the personal  representative  of  Optionee's  estate or the person or persons to
whom the Option is transferred pursuant to Optionee's will or in accordance with
the laws of descent  and  distribution,  or any person or trust to whom all or a
portion of this Option was previously  transferred in accordance  with Section 3
hereof or the designated  beneficiary or beneficiaries of this option shall have
the right to exercise this Option. Such right shall lapse, and this Option shall
cease to be  outstanding,  upon the earlier of: (i) the expiration of the twelve
(12)  month  period  measured  from the date of  Optionee's  death;  or (ii) the
Expiration Date.

                  (c)  Should  Optionee  cease  Service  by reason of  Permanent
Disability while this Option is outstanding, then the period for exercising this
Option shall be reduced to a twelve (12) month period  commencing  with the date
of such  cessation of Service,  but in no event shall this Option be exercisable
at any time after the Expiration Date.

                  (d) During the limited period of post-Service  exercisability,
this Option may not be  exercised in the  aggregate  for more than the number of
vested  Option  Shares  for  which  the  Option  is  exercisable  at the time of
Optionee's  cessation of Service.  Upon the expiration of such limited  exercise
period or (if earlier) upon the Expiration Date, this Option shall terminate and
cease to be outstanding  for any otherwise  exercisable  Option Shares for which
the Option has not been exercised.  However, this Option shall, immediately upon
Optionee's  cessation  of  Service  for any  reason,  terminate  and cease to be
outstanding  with  respect  to any Option  Shares  for which this  Option is not
otherwise at that time exercisable.

                                       2
<PAGE>

                  (e) Except as otherwise  determined  in the  discretion of the
Plan Administrator,  either at the time the option is granted or at any time the
option  remains  outstanding,   should  Optionee's  Service  be  terminated  for
Misconduct or should Optionee  otherwise  engage in Misconduct while this option
is outstanding, then this Option shall terminate immediately and cease to remain
outstanding.

         6.       SPECIAL ACCELERATION OF OPTION.

                  (a) The  Option,  to the extent  outstanding  at the time of a
Change  in  Control  transaction  but not  otherwise  fully  exercisable,  shall
automatically  accelerate  so that this Option shall,  immediately  prior to the
effective  date of such Change in  Control,  become  exercisable  for all of the
Option Shares at the time subject to this option and may be exercised for any or
all  of  those  Option   Shares  as  fully  vested   shares  of  Common   Stock.
Notwithstanding the foregoing,  this Option shall not become exercisable on such
an  accelerated  basis if and to the extent:  (i) this Option is, in  connection
with the  Change in  Control,  to be assumed by the  successor  corporation  (or
Parent thereof) or otherwise  continued in full force and effect pursuant to the
terms of the Change in Control;  or (ii) this  Option is to be  replaced  with a
cash incentive  program of the successor  corporation which preserves the spread
existing  at the time of the Change in  Control  on the Option  Shares for which
this Option is not  otherwise at that time  exercisable  (the excess of the Fair
Market Value of those Option  Shares over the aggregate  Exercise  Price payable
for such shares) and provides for subsequent  payout in accordance with the same
option exercise/vesting schedule set forth in the Grant Notice.

                  (b) Immediately  following the Change in Control,  this Option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor  corporation (or Parent thereof) or otherwise  continued in full force
and effect pursuant to the terms of the Change in Control transaction.

                  (c) If this Option is assumed in  connection  with a Change in
Control (or  otherwise  continued  in full force and  effect),  then this Option
shall be appropriately  adjusted,  immediately after such Change in Control,  to
apply to the number and class of securities or other  property  which would have
been  issuable  to Optionee  in  consummation  of such Change in Control had the
Option  been  exercised  immediately  prior  to  such  Change  in  Control,  and
appropriate  adjustments shall also be made to the Exercise Price,  provided the
aggregate Exercise Price shall remain the same.

                  (d)  Notwithstanding   the  foregoing,   immediately  upon  an
Involuntary  Termination  of  Optionee's  Service  within  eighteen  (18) months
following a Change in Control transaction, the Option, to the extent outstanding
at the time but not otherwise fully exercisable,  shall automatically accelerate
so that the  Option  shall  become  immediately  exercisable  for all the Option
Shares at the time subject to the Option and may be exercised  for any or all of
those Option  Shares as fully vested  shares.  The Option as  accelerated  shall
remain so exercisable until the earlier of: (i) the Expiration Date; or (ii) the
expiration of the one (1) year period  measured from the date of the  Optionee's
Involuntary Termination.

                                       3
<PAGE>

                  (e)  This  Option  may  also be  subject  to  acceleration  in
accordance with the terms of any special Addendum attached to this Agreement.

         7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the Common
Stock  by  reason  of  any  stock  split,   stock  dividend,   recapitalization,
combination  of  shares,  exchange  of  shares  or other  change  affecting  the
outstanding  Common  Stock  as a class  without  the  Corporation's  receipt  of
consideration,  appropriate  adjustments  shall be made to: (i) the total number
and/or class of securities  subject to this Option;  and (ii) the Exercise Price
in order to reflect such change and thereby  preclude a dilution or  enlargement
of benefits hereunder.

         8.  STOCKHOLDER  RIGHTS.  The holder of this Option  shall not have any
stockholder  rights with  respect to the Option  Shares  until such person shall
have exercised the Option, paid the Exercise Price and become a holder of record
of the purchased shares.

         9. MANNER OF EXERCISING OPTION.

         (a) In order to exercise this Option with respect to all or any part of
the Option Shares for which this Option is at the time exercisable, Optionee (or
any other  person or persons  exercising  the  Option)  must take the  following
actions:

                  (i) To the extent the Option is  exercised  for vested  Option
Shares,  execute and  deliver to the  Corporation  a Notice of Exercise  for the
Option  Shares  for which the Option is  exercised.  To the extent the Option is
exercised for unvested  Option Shares,  execute and deliver to the Corporation a
Purchase  Agreement for those  unvested  Option Shares.  In connection  with the
Purchase Agreement, any certificate issued upon the exercise of the Option shall
bear legends as set forth in the Purchase Agreement.

                  (ii) Pay the aggregate Exercise Price for the purchased shares
in one or more of the following forms:

                                    (A)  cash  or  check  made  payable  to  the
Corporation; or

                                    (B)  a   promissory   note  payable  to  the
Corporation,  but only to the extent  authorized  by the Plan  Administrator  in
accordance with Section 14 hereof; or

                                    (C) shares of Common  Stock held by Optionee
(or any other person or persons  exercising the option) for the requisite period
necessary  to  avoid  a  charge  to the  Corporation's  earnings  for  financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or

                                    (D)  through a special  sale and  remittance
procedure  pursuant to which Optionee (or any other person or persons exercising
the  option)  shall   concurrently   provide   irrevocable   instructions  to  a
Corporation-designated  brokerage  firm  to  effect  the  immediate  sale of the
purchased  shares  and  remit  to the  Corporation,  out of  the  sale  proceeds
available  on the  settlement  date,  sufficient  funds to cover  the  aggregate
Exercise  Price payable for the purchased  shares plus all  applicable  Federal,
state and local  income and  employment  taxes  required  to be  withheld by the
Corporation  by reason of such  exercise and to the  Corporation  to deliver the
certificates  for the purchased  shares directly to such brokerage firm in order
to complete the sale.

                                       4
<PAGE>

                           Except  to  the  extent   the  sale  and   remittance
procedure is utilized in  connection  with the Option  exercise,  payment of the
Exercise Price must accompany the Notice of Exercise or Purchase  Agreement,  as
applicable, delivered to the Corporation in connection with the Option exercise.

                           (iii)   Furnish   to  the   Corporation   appropriate
documentation  that the person or persons  exercising  the Option (if other than
Optionee) have the right to exercise this Option.

                           (iv)   Make   appropriate   arrangements   with   the
Corporation  (or Parent or Subsidiary  employing or retaining  Optionee) for the
satisfaction  of  all  Federal,  state  and  local  income  and  employment  tax
withholding requirements applicable to the option exercise.

                  (b)  As  soon  as  practical  after  the  Exercise  Date,  the
Corporation  shall  issue to or on behalf of  Optionee  (or any other  person or
persons  exercising this Option) a certificate for the purchased  Option Shares,
with the appropriate legends affixed thereto.

                  (c)  In  no  event  may  this  Option  be  exercised  for  any
fractional shares.

         10. NO IMPAIRMENT OF RIGHTS. This Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize or otherwise make
changes in its capital or business structure or to merge, consolidate, dissolve,
liquidate  or sell or transfer  all or any part of its  business  or assets.  In
addition,  this Agreement shall not in any way be construed or interpreted so as
to affect  adversely or otherwise  impair the rights of the  Corporation (or any
Parent or  Subsidiary  employing  or retaining  Optionee) or of Optionee,  which
rights are hereby expressly reserved by each, to terminate Optionee's Service at
any time for any reason, with or without cause.

         11. COMPLIANCE WITH LAWS AND REGULATIONS.

                  (a) The exercise of this Option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the  Corporation and
Optionee with all applicable  requirements of law relating  thereto and with all
applicable  regulations of the Nasdaq SmallCap Market (or any Stock Exchange, if
applicable)  on which the Common  Stock may be listed for trading at the time of
such exercise and issuance.

                  (b) The inability of the  Corporation to obtain  approval from
any regulatory body having  authority  deemed by the Corporation to be necessary
to the lawful  issuance  and sale of any Common  Stock  pursuant  to this Option
shall relieve the Corporation of any liability with respect to the  non-issuance
or sale of the  Common  Stock as to which  such  approval  shall  not have  been
obtained.  The  Corporation,  however,  shall use its best efforts to obtain all
such approvals.

         12. SUCCESSORS AND ASSIGNS.  Except to the extent otherwise provided in
Sections 3 and 6 hereof,  the  provisions of this  Agreement  shall inure to the
benefit of, and be binding upon, the  Corporation and its successors and assigns
and  Optionee,  Optionee's  assigns  and the  legal  representatives,  heirs and
legatees of Optionee's estate.

                                       5
<PAGE>

         13.  NOTICES.  Any  notice  required  to be given or  delivered  to the
Corporation  under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee  shall be in writing and addressed to Optionee at
the address indicated below Optionee's  signature line on the Grant Notice.  All
notices shall be deemed effective upon personal  delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

         14. FINANCING.  The Plan Administrator may, in its absolute  discretion
and without any  obligation to do so, permit  Optionee to pay the Exercise Price
for the purchased  Option Shares by delivering a  full-recourse  promissory note
payable to the Corporation. The terms of any such promissory note (including the
interest rate, the requirements for collateral and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion.

         15.  CONSTRUCTION.  This Agreement and the Option  evidenced hereby are
made and  granted  pursuant to the Plan and are in all  respects  limited by and
subject to the terms of the Plan. All decisions of the Plan  Administrator  with
respect to any question or issue arising under the Plan or this Agreement  shall
be conclusive and binding on all persons having an interest in this Option.

         16. GOVERNING LAW. The  interpretation,  performance and enforcement of
this Agreement shall be governed by the laws of the State of California  without
resort to that State's conflict-of-laws rules.

         17.  EXCESS  SHARES.  If the Option  Shares  covered by this  Agreement
exceed,  as of the Grant  Date,  the number of shares of Common  Stock which may
without stockholder approval be issued under the Plan, then this Option shall be
void with  respect to those excess  shares,  unless  stockholder  approval of an
amendment sufficiently  increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.

         18.  OPTIONEE  UNDERTAKING.  Optionee  hereby  agrees to take  whatever
additional action and execute whatever additional  documents the Corporation may
deem  necessary  or advisable in order to carry out or effect one or more of the
obligations  or  restrictions  imposed on either  Optionee or the Option  Shares
pursuant to the provisions of this Agreement.

         19.   REPRESENTATION   BY  COUNSEL.   Each  party  hereby   agrees  and
acknowledges  that  (i) such  party  has had the  opportunity  to  consult  with
independent legal, tax and financial counsel of each party's choice, in order to
be advised with respect to the effect of this Agreement,  the Notice of Exercise
and the Purchase  Agreement and (ii) neither the  Corporation  nor its attorneys
have provided legal, tax or financial advice of any nature to Optionee.

         20.  ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE  OPTION.  In the event
this Option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:

                  (a) This  option  shall  cease to qualify  for  favorable  tax
treatment as an Incentive Option if (and to the extent) this Option is exercised
for one or more  Option  Shares:  (i) more than three (3) months  after the date
Optionee  ceases to be an Employee  for any reason other than death or Permanent
Disability;  or (ii) more than twelve (12) months after the date Optionee ceases
to be an Employee by reason of death or Permanent Disability.

                                       6
<PAGE>

                  (b)  No  installment  under  this  Option  shall  qualify  for
favorable  tax  treatment  as an  Incentive  Option if (and to the  extent)  the
aggregate  Fair Market Value  (determined at the Grant Date) of the Common Stock
for which such installment first becomes exercisable hereunder would, when added
to the aggregate value  (determined as of the respective date or dates of grant)
of the  Common  Stock or other  securities  for which  this  option or any other
Incentive Options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the  Corporation  or any Parent or  Subsidiary)
first  become  exercisable  during the same  calendar  year,  exceed One Hundred
Thousand  Dollars  ($100,000.00)  in the  aggregate.  Should  such  One  Hundred
Thousand Dollar ($100,000.00)  limitation be exceeded in any calendar year, this
Option  shall  nevertheless  become  exercisable  for the excess  shares in such
calendar year as a Non-Statutory Option.

                  (c) Should the  exercisability  of this Option be  accelerated
upon a Change  in  Control  transaction,  then this  Option  shall  qualify  for
favorable tax treatment as an Incentive  Option only to the extent the aggregate
Fair Market Value  (determined  at the Grant Date) of the Common Stock for which
this Option first becomes  exercisable  in the calendar year in which the Change
in Control occurs does not, when added to the aggregate value  (determined as of
the respective  date or dates of grant) of the Common Stock or other  securities
for which this Option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether  under the Plan or any other option plan of the
Corporation or any Parent or  Subsidiary)  first become  exercisable  during the
same calendar year,  exceed One Hundred  Thousand  Dollars  ($100,000.00) in the
aggregate.  Should the  applicable  One Hundred  Thousand  Dollar  ($100,000.00)
limitation  be exceeded  in the  calendar  year of such  Change in Control,  the
Option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.

                  (d) Should  Optionee hold, in addition to this Option,  one or
more other  options to purchase  Common Stock which become  exercisable  for the
first  time in the  same  calendar  year  as this  Option,  then  the  foregoing
limitations on the  exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.

                                       7
<PAGE>

                                    APPENDIX

         The following definitions shall be in effect under the Agreement:

         A. AGREEMENT shall mean this 2002 Stock Option Agreement.

         B. BOARD shall mean the Corporation's Board of Directors.

         C. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through any of the following transactions:

                  (i) a merger,  consolidation or reorganization approved by the
         Corporation's  stockholders,  unless securities  representing more than
         fifty percent (50%) of the total combined voting power of the successor
         corporation are immediately thereafter  beneficially owned, directly or
         indirectly and in substantially the same proportion, by the persons who
         beneficially  owned the  Corporation's  outstanding  voting  securities
         immediately prior to such transaction, or

                  (ii)  a  sale,   transfer  or  other  disposition  of  all  or
         substantially all of the Corporation's assets, or

                  (iii) the acquisition,  directly or indirectly,  by any person
         or related  group of persons  (other than the  Corporation  or a person
         that directly or  indirectly  controls,  is controlled  by, or is under
         common control with, the Corporation) of beneficial  ownership  (within
         the  meaning  of Rule 13d-3 of the 1934 Act) of  securities  possessing
         more than fifty percent (50%) of the total combined voting power of the
         Corporation's  outstanding  securities pursuant to a tender or exchange
         offer made directly to the Corporation's  stockholders  which the Board
         recommends such stockholders accept;

                  PROVIDED,  however,  the  Plan  Administrator  shall  have the
         discretionary  authority to determine  that a transaction  or series of
         transactions   does  not   constitute   a  Change  in   Control.   Such
         determination by the Plan  Administrator  shall govern  notwithstanding
         the fact that the  determination  is contrary to paragraphs (i) through
         (iii) set forth above.

         D. CODE shall mean the Internal Revenue Code of 1986, as amended.

         E. COMMON STOCK shall mean shares of the Corporation's common stock.

         F.  CORPORATION  shall mean  SonomaWest  Holdings,  Inc.,  a California
corporation.

         G. EMPLOYEE shall mean an "employee" of the  Corporation (or any Parent
or  Subsidiary)  within  the  meaning  of  Section  3401(c)  of the Code and the
regulations thereunder.

         H.  EXERCISE  DATE shall  mean the date on which the Option  shall have
been exercised in accordance with Section 4 of the Agreement.

                                       1
<PAGE>

         I.  EXERCISE  PRICE shall mean the  exercise  price per Option Share as
specified in the Grant Notice.

         J.  EXPIRATION  DATE shall mean the date on which the Option expires as
specified in the Grant Notice.

         K. FAIR MARKET  VALUE per share of Common  Stock on any  relevant  date
shall be determined in accordance with the following provisions:

                  (i) If the  Common  Stock is at the time  traded on the NASDAQ
         SmallCap  Market,  then the Fair Market  Value shall be deemed equal to
         the  closing  selling  price per  share of Common  Stock on the date in
         question,  as the price is  reported  by the  National  Association  of
         Securities  Dealers  on the  NASDAQ  SmallCap  Market.  If  there is no
         closing  selling  price for the Common  Stock on the date in  question,
         then the Fair Market  Value shall be the closing  selling  price on the
         last preceding date for which such quotation exists.

                  (ii) If the  Common  Stock is at the time  listed on any Stock
         Exchange,  then the Fair  Market  Value  shall be  deemed  equal to the
         closing selling price per share of Common Stock on the date in question
         on the Stock Exchange  determined by the Plan  Administrator  to be the
         primary market for the Common Stock, as such price is officially quoted
         in the composite tape of transactions on such exchange.  If there is no
         closing  selling  price for the Common  Stock on the date in  question,
         then the Fair Market  Value shall be the closing  selling  price on the
         last preceding date for which such quotation exists.

         L. GRANT  DATE shall mean the date of grant of the Option as  specified
in the Grant Notice.

         M.  GRANT  NOTICE  shall  mean the  Notice  of  Grant  of Stock  Option
accompanying the Agreement,  pursuant to which Optionee has been informed of the
basic terms of the Option evidenced hereby.

         N.  IMMEDIATE  FAMILY  shall  mean any  child,  stepchild,  grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law,  father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include
adoptive relationships.

         O.  INCENTIVE   OPTION  shall  mean  an  option  which   satisfies  the
requirements of Code Section 422.

         P.  INVOLUNTARY  TERMINATION  shall mean the  termination of Optionee's
Service by reason of:

                  (i)  Optionee's  involuntary  dismissal  or  discharge  by the
         Corporation for reasons other than Misconduct, or

                  (ii) Optionee's voluntary  resignation  following (A) a change
         in Optionee's  position with the  Corporation  (or Parent or Subsidiary
         employing  Optionee) which  materially  reduces  Optionee's  duties and
         responsibilities  or the level of management to which Optionee reports,
         (B) a reduction in Optionee's  level of  compensation  (including  base
         salary,   fringe   benefits  and  target  bonus  under  any   corporate

                                       2
<PAGE>

         performance  based bonus or  incentive  programs)  by more than fifteen
         percent (15%) or (C) a relocation of Optionee's  place of employment by
         more than fifty (50) miles, provided and only if such change, reduction
         or  relocation  is  effected  by  the  Corporation  without  Optionee's
         consent.

         Q.  MISCONDUCT   shall  mean  the  commission  of  any  act  of  fraud,
embezzlement or dishonesty by Optionee,  any  unauthorized  use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or  Subsidiary),  or any intentional  wrongdoing by Optionee,  whether by
omission or commission,  which adversely  affects the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material  manner.  This shall not
limit the  grounds  for the  dismissal  or  discharge  of  Optionee or any other
individual in the Service of the Corporation (or any Parent or Subsidiary).

         R. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.

         S.  NON-STATUTORY  OPTION  shall mean an option not intended to satisfy
the requirements of Code Section 422.

         T.  NOTICE OF  EXERCISE  shall mean the notice of  exercise in the form
attached hereto as Exhibit I.

         U.  OFFICER  shall mean any  person  serving  as the  president,  chief
executive officer, chief financial officer, chief operating officer,  treasurer,
secretary  or in  any  other  managerial  or  administrative  capacity  for  the
Corporation or a Parent or Subsidiary of the  Corporation,  as determined in the
Administrator's discretion.

         V. OPTION shall mean the Option granted pursuant to this Agreement.

         W.  OPTION  SHARES  shall  mean the  number of  shares of Common  Stock
subject to the Option as specified in the Grant Notice.

         X.  OPTIONEE  shall  mean the  person to whom the  Option is granted as
specified in the Grant Notice.

         Y. PARENT shall mean any corporation (other than the Corporation) in an
unbroken  chain of  corporations  ending  with the  Corporation,  provided  each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination,  stock possessing fifty percent (50%) or more of the total
combined  voting power of all classes of stock in one of the other  corporations
in such chain.

         Z. PERMANENT  DISABILITY shall mean the inability of Optionee 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 has
lasted or can be expected to last for a continuous  period of twelve (12) months
or more.

         AA. PLAN shall mean the Corporation's 2002 Stock Incentive Plan.

                                       3
<PAGE>

         BB. PLAN  ADMINISTRATOR  shall mean either the Board or a committee  of
the Board acting in its capacity as administrator of the Plan.

         CC. SERVICE shall mean the  Optionee's  performance of services for the
Corporation  (or any Parent or  Subsidiary)  in the capacity of an Employee,  an
Officer,  a member of the board of  directors  or a  consultant  or  independent
advisor.

         DD. STOCK  EXCHANGE  shall mean the American  Stock Exchange or the New
York Stock Exchange.

         EE. SUBSIDIARY shall mean any corporation  (other than the Corporation)
in an unbroken chain of corporations  beginning with the  Corporation,  provided
each corporation  (other than the last  corporation) in the unbroken chain owns,
at the time of the  determination,  stock possessing fifty percent (50%) or more
of the total  combined  voting power of all classes of stock in one of the other
corporations in such chain.

                                       4
<PAGE>

                                    EXHIBIT I

                               NOTICE OF EXERCISE

         I hereby notify SonomaWest  Holdings,  Inc. (the  "Corporation") that I
elect to purchase _____________________ shares of the Corporation's Common Stock
(the "Purchased Shares") at the option exercise price of _____________ per share
(the "Exercise Price") pursuant to that certain option (the "Option") granted to
me under the Corporation's  2002 Stock Incentive Plan on  _____________________,
200_.

         Concurrently  with the  delivery  of this  Notice  of  Exercise  to the
Corporation,  I shall hereby pay to the  Corporation  the Exercise Price for the
Purchased  Shares in accordance  with the  provisions  of my agreement  with the
Corporation  (or other  documents)  evidencing  the  Option  and  shall  deliver
whatever  additional  documents may be required by such agreement as a condition
for exercise.  Alternatively,  I may utilize the special  broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.

____________________ , 200_
Date

                                     ------------------------------------
                                     Optionee

                                     Address:

Print name in exact manner it is to
appear on the stock certificate:
                                     ------------------------------------

Address to which certificate is to
be sent, if different from address   ------------------------------------
above:                               ------------------------------------

Social Security Number:              ------------------------------------

Employee Number                      ------------------------------------

                                   EXHIBIT 1

<PAGE>

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