Document:

Exhibit 10.b  

THE NEWHALL LAND AND FARMING COMPANY

2002 EQUITY COMPENSATION PLAN  

        This Newhall Land and Farming Company 2002 Equity Compensation Plan (the "Plan") is implemented as of September 1, 2002 (the "Effective Date"), to enable
The Newhall Land and Farming Company (a California Limited Partnership) (the "Partnership"), to offer Options, appreciation rights, restricted units and unit rights ("Awards") to employees of the
Partnership and any affiliates thereof as an incentive for them to remain in the service of the Partnership (or its affiliated entities). In addition, this Plan provides for automatic grants to
non-employee members of the Board of Directors of the managing general partner or its managing general partner ("Board"). 

        The
Plan will become effective and will supercede The Newhall Land and Farming Company 1995 Option/Award Plan, as amended (the "1995 Plan") on the Effective Date. Awards granted under
the 1995 Plan and The Newhall Land and Farming Company Option, Appreciation Rights and Restricted Units Plan, as amended and restated (together with the 1995 Plan, the "Prior Plans") will continue in
accordance with the terms of the agreements evidencing such Awards and the Prior Plans. No further awards will be granted under the Prior Plans. 

ARTICLE I.  

DEFINITIONS

        "1933
Act" shall mean the Securities Act of 1933. 

        "1934
Act" shall have the meaning set forth in Paragraph 2.1. 

        "1995
Plan" shall have the meaning set forth in the Preamble. 

        "Affiliate"
shall have the meaning set forth in Rule 12b-2 of the 1933 Act, reading the term "registrant" to mean the Partnership. 

        "Associate"
shall have the meaning set forth in Rule 12b-2 under the 1933 Act, reading the term "registrant" to mean the Partnership, except that "Associate", as used
herein, shall not include any relative or spouse of such Person, or any relative of such spouse, who is also a director or officer of the managing general partner or its managing general partner,
merely because of such directorship or officership). 

        "Automatic
Option" shall have the meaning set forth in Paragraph 4.1. 

        "Awards"
shall have the meaning set forth in the Preamble. 

        "Beneficial
Owner" shall mean, with respect to any Person, any Partnership interest or other ownership interest (i) which such Person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; (ii) with regard to which such Person or any of its Affiliates or Associates, has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or subject only to the passage of time) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (B) the right to vote pursuant to any agreement, arrangement or understanding; or (iii) which is beneficially owned, directly or indirectly, by any
other Person with which such Person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any Partnership
interest. 

        "Black-Scholes
Value" shall mean an amount, as of any date, equal to the estimated value of an Option to purchase one depositary unit with an exercise price equal to the Fair Market
Value of a depositary unit as of such date and a term of ten years, determined using the Black-Scholes option 

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pricing formula in a manner consistent with the methodology employed in the Partnership's annual report to partners. 

        "Board"
shall have the meaning set forth in the Preamble. 

        "Change
in Control" shall occur when (i) any Person, other than a trustee or other fiduciary holding securities under an employee benefit plan of the Partnership or an entity
owned directly or indirectly by the holders of depositary units of the Partnership in substantially the same proportions as their ownership of depositary units of the Partnership, becomes the
Beneficial Owner, directly or indirectly, of securities representing 25% or more of the total voting power represented by the Partnership's then outstanding voting securities, which has not been
approved by the Continuing Managing General Partner; or (ii) the Continuing Managing General Partner is removed. 

        "Committee"
shall have the meaning set forth in Paragraph 2.1. 

        "Continuing
Managing General Partner" means (i) the managing general partner that was serving as managing general partner prior to the Change in Control, or (ii) any
successor of the managing general partner that is recommended to succeed the managing general partner by the managing general partner in clause (i). 

        "Director"
shall mean any Person that is a member of the Board of Directors of Newhall Management Corporation, the managing general partner of the Partnership's managing general partner. 

        "Effective
Date" shall have the meaning set forth in the Preamble. 

        "Exercise
Date" shall mean the date on which written notice of the exercise of an Option is delivered to the Partnership for purposes of Paragraph 1.3.C(2). In all other cases,
the Exercise Date is the date on which written notice and actual payment is received by the Partnership. 

        "Expiration
Date" shall have the meaning set forth in Paragraph 4.1.C(2). 

        "Fair
Market Value" shall mean with respect to a depositary unit: 

        (i)    If
the depositary units are at the time listed or admitted to trading on any stock exchange, the "Fair Market Value" of the depositary unit will be its closing selling
price, as quoted on the New York Stock Exchange Composite Tape, on the date in question. If there is no quotation available for such day, then the Fair Market Value shall be the closing selling price
on the next preceding day for which such quotation exists. 

        (ii)  If
the depositary units are not at the time listed or admitted to trading on any stock exchange but are traded on the NASDAQ National Market System, the Fair Market
Value shall be the closing selling price per depositary unit on the date in question, as such price is reported by the National Association of Securities Dealers through the NASDAQ National Market
System or any successor system. If there is no closing selling price for the depositary units on the date in question, then the Fair Market Value shall be closing selling price on the next preceding
day for which such quotation exists. 

        (iii)  If
the depositary units are at the time neither listed nor admitted to trading on any stock exchange nor traded on the NASDAQ National Market System, then the Fair
Market Value will be determined by the Committee after taking into account such factors as the Committee deems appropriate; provided, however, that if the depositary units are to be issued to a
Director, then the Fair Market Value will be determined by an independent third party and the Committee shall have no authority to determine the Fair Market Value in accordance with the next sentence. 

        If
the Committee determines that the above methods of calculation do not accurately reflect the Fair Market Value of a depositary unit on a relevant day, it may determine the Fair Market
Value on any relevant day in accordance with such method of valuation as it determines to be reasonable and appropriate. 

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        "Independent
Director" shall have the meaning set forth in Paragraph 3.1. 

        "Option"
shall have the meaning set forth in Paragraph 3.2.A. 

        "Partnership"
shall have the meaning set forth in the Preamble. 

        "Person"
shall mean any individual, firm, company or other entity and shall include any group comprised of any Person and any other Person with whom such Person or an Affiliate or
Associate of such Person has any agreement, arrangement or understanding, directly or indirectly, for the purposes of acquiring, holding, voting or disposing of Partnership interests. 

        "Plan"
shall have the meaning set forth in the Preamble. 

        "Prior
Plans" shall have the meaning set forth in the Preamble. 

        "Retirement",
with respect to all Automatic Option Grants, shall occur on the first day an Independent Director ceases to serve as an Independent Director after serving as an Independent
Director for at least five (5) years. 

        "Structural
Transaction" shall mean any of the following transactions to which the Partnership is a party: (i) a merger or consolidation in which the Partnership is not the
surviving entity; (ii) any other merger or consolidation of the Partnership with any other entity, approved by the holders of the voting securities of the Partnership, other than a merger or
consolidation which would result in the voting securities of the Partnership outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 75% of the total voting power represented by the voting securities of the Partnership or such surviving entity outstanding immediately after such
merger or consolidation; (iii) a sale, transfer or other disposition of all or substantially all of the Partnership's assets (in one transaction or a series of transactions); or (iv) the
complete liquidation or dissolution of the Partnership. 

        "Taxes"
shall mean all Federal, state and local employment and income taxes and any other tax the Partnership may be obligated to withhold with respect to any Award. 

ARTICLE II.  

GENERAL PROVISIONS

        2.1    ADMINISTRATION OF THE PLAN.    The Plan will be administered by a committee or
committees (which term includes subcommittees) appointed by, and consisting of three or more members of, the Board (the "Committee"). The composition of any Committee responsible for administration of
the Plan with respect to Persons who are subject to the restrictions of Section 16(b) of the Securities Exchange Act of 1934 ("1934 Act") shall comply with the applicable requirements of
Rule 16b-3 of the 1934 Act (or a successor provision) with respect to securities of the Partnership. The Board may delegate the responsibility for administration of the Plan with
respect to designated classes of grantees to different Committees, subject to such limitations as the Board deems appropriate. The members of a Committee will serve for such term as the Board may
determine, and are subject to removal by the Board at any time. Any Committee appointed by the Board shall have full authority to administer the Plan within the scope of its delegated
responsibilities, including authority to interpret and construe any relevant provision of the Plan and to adopt such rules and regulations, as it may deem necessary. Decisions of a Committee made
within the discretionary authority delegated to it by the Board are final and binding on all Persons who have an interest in the Plan. With respect to any matter, the term "Committee" refers to the
Committee that has been delegated authority with respect to such matter, or the Board if no Committee has been appointed. 

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        2.2    DEPOSITARY UNITS.    

        A.    Number of Depositary Units.    The equity securities to be subject to Awards under the
Plan shall be limited partnership interests in the Partnership represented by transferable depositary units. The aggregate number of depositary units that may be issued under the Plan will not exceed
1,720,000, subject to adjustment in accordance with the terms of the Plan. 

        B.    Expired Grants and Awards.    If any outstanding Award under the Plan or the Prior Plans
expires, is terminated, is cancelled or is forfeited for any reason before the full number of depositary units governed by the Award are issued, those remaining depositary units will not be charged
against the limit in Paragraph 2.2.A above and will become available for subsequent Awards under the Plan. Notwithstanding the foregoing, depositary units for which a cash payment is made in
lieu of payment in depositary units as provided under this Plan and restricted units forfeited to or repurchased by the Partnership pursuant to its forfeiture and repurchase rights under this Plan
will not be available for subsequent Awards under this Plan. 

        C.    Adjustments.    If any change is made to the depositary units issuable under the Plan
(whether by reason of merger, consolidation, reorganization, recapitalization, depositary unit distribution, depositary unit split, combination of depositary units, exchange of depositary units, or
other change in partnership or capital structure of the Partnership), or if the Partnership makes a distribution to holders of depositary units which results from the sale or disposition of a major
asset or separate operating division of the Partnership, which would materially dilute the rights of Award holders', then the Committee shall made appropriate adjustments to (i) the maximum
number and/or class of securities issuable under the Plan, (ii) the number and/or class of securities and price per depositary unit in effect under each outstanding Award under the Plan and
(iii) the maximum number of depositary units issuable to one individual pursuant to Paragraph 2.2.D. The purpose of these adjustments will be to preclude the enlargement or dilution of
rights and benefits under the Awards. 

        D.    Individual Limit.    No individual may be granted Options, appreciation rights,
restricted units, unit rights or any combination thereof under the Plan covering or related to more than twenty-five percent (25%) of the number of depositary units initially authorized
for issuance under the Plan, plus twenty-five percent (25%) of any additional depositary units subsequently authorized for issuance under the Plan (subject, in each case, to adjustment as
provided in Paragraph 2.2.C. 

        E.    Restrictions.    Depositary units issued under the Plan may be subject to such
restrictions on transfer, repurchase rights, or other restrictions as shall be determined by the Committee and as set forth in this Plan. 

ARTICLE III.  

DISCRETIONARY AWARDS  

        3.1    ELIGIBILITY.    Awards may be granted under this Article III to those employees
(including officers, whether or not they are Directors) who provide services to the Partnership and its affiliated entities as the Committee from time to time selects. However, in no event shall an
Award be made under this Article III to an individual who is a non-employee Board member ("Independent Director"). 

        3.2    OPTIONS.    

        A.    Type and Term.    Options granted pursuant to the Plan shall be authorized by the
Committee and shall be nonstatutory options ("Options") not intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended. The Committee has full authority
to determine the time or times at which Options become exercisable, and the maximum term for which Options remain outstanding. 

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        B.    Price.    The Option price per depositary unit will be not less than 100% of the Fair
Market Value of a depositary unit on the date of grant. 

        C.    Exercise and Payment.    After any Option, which has been granted under the Plan,
becomes exercisable, it may be exercised by a written notice to the Partnership at any time before termination of the Option. The Option price will be immediately due upon exercise and shall be
payable in the Committee's discretion, and subject to such restrictions as the Committee shall determine, in one or more of the following alternative forms: 

        (1)  in
cash or cash equivalents made payable to the Partnership; 

        (2)  in
depositary units valued at their Fair Market Value as of the Exercise Date and held for the requisite period in order to avoid a charge to earnings; 

        (3)  through
a sale and remittance procedure under which the optionee delivers a properly executed exercise notice together with irrevocable instructions to a broker to
promptly deliver depositary units with a Fair Market Value equal to the Option price to the Partnership; or 

        (4)  such
other lawful consideration as the Committee shall determine. 

        D.    Depositary Unit Holder Rights.    An optionee will have no depositary unit holder rights
with respect to any depositary units covered by an Option before the optionee exercises the Option and is issued depositary units for those exercised Options. 

        E.    Separation from Service.    The Committee will determine and set forth in each Option
whether the Option will continue to be exercisable, and the terms of such exercise, on and after the date that an optionee ceases to be employed by or to provide services to the Partnership or an
affiliate. The date of termination of an optionee's employment or services will be determined by the Committee, which determination will be final. 

        3.3    APPRECIATION RIGHTS.    Upon such terms, conditions and restrictions as the Committee
shall determine in its discretion, an appreciation right shall consist of the right to receive an appreciation distribution in an amount equal to the difference between (1) the Fair Market
Value of one depositary unit on the date of the exercise of the right and (2) an amount not less than the Fair Market Value of one depositary unit on the date that the right is granted (or, in
the case of an appreciation right granted in tandem with or in substitution for a previously granted Option, an amount not less than the Fair Market Value of a depositary unit on the date that the
Option was granted). The appreciation distribution may be made in the form of depositary units, cash or a combination thereof. An appreciation right may provide for the payment, either currently or at
the time of exercise, of distribution equivalents for the period the right is held before exercise, subject to such requirements and limits as the Committee may specify. Appreciation rights will be
evidenced by instruments in such form as the Committee may from time to time approve. No appreciation right shall have a maximum term in excess of ten years. 

        3.4    RESTRICTED UNITS.    Restricted units granted under the Plan consist of depositary
units (together with cash distributions if so determined by the Committee), the retention and transfer of which are subject to such terms, conditions and restrictions (whether based on performance
standards or periods of service or otherwise and including repurchase and/or forfeiture rights in favor of the Partnership) as the Committee shall determine in its discretion. The terms, conditions
and restrictions to which restricted units are subject will be evidenced by such instructions as the Committee may from time to time approve and may vary from grant to grant. The Committee has the
absolute discretion to determine whether any consideration (other than the services of the potential grantee) is to be received by the Partnership or its affiliates as a condition precedent to the
issuance of restricted units. 

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        The
Committee may require a grantee to receive a portion of the total value, or the total value of the depositary units subject to restricted units in the form of a cash payment, subject
to such terms, conditions and restrictions as the Committee may specify. 

        3.5    UNIT RIGHTS.    Unit rights granted under the Plan consist of the right, subject to
such terms, conditions and restrictions as the Committee may determine (including, but not limited to performance standards) to receive a depositary unit. Unit rights will be evidenced by such
instruments as the Committee may from time to time approve. The Committee has the absolute discretion to determine whether any consideration (other than the services of the potential grantee) is to be
received by the Partnership as a condition precedent to the issuance of depositary units pursuant to unit rights. The terms, conditions and restrictions to which unit rights are subject may vary from
grant to grant. 

        The
Committee may require a grantee to receive a portion of the total value, or the total value of the depositary units subject to unit rights in the form of a cash payment, subject to
such terms, conditions and restrictions as the Committee may specify. 

        3.6    REPURCHASE RIGHTS.    The Committee may in its discretion determine that it shall be a
term and condition of one or more Awards exercised under the Plan that the Partnership or its assigns will have the right, exercisable upon the grantee's separation from service with the Partnership
and/or its affiliates, to repurchase any or all of the depositary units previously acquired by the grantee upon the exercise of that Award. Any such repurchase right will be exercisable on such terms
and conditions (including the establishment of the appropriate vesting schedule and other provisions for the expiration of the repurchase right in one or more installments) as the Committee may
specify in the instrument evidencing the right. The Committee will also have full power and authority to provide for the automatic termination of repurchase rights, in whole or in part. 

        3.7    ADJUSTMENTS UPON CHANGES IN PARTNERSHIP STRUCTURE OR CONTROL.    

        A.    Acceleration of Awards.    In the event of a Structural Transaction or Change in
Control, the vesting of each Award will be automatically accelerated so that (1) each Option, appreciation right or unit right outstanding under the Plan at the time of the Structural
Transaction or Change in Control and not then otherwise fully vested shall become fully vested for the total number of depositary units purchasable or issuable thereunder and each Option may be
exercised for all or any portion of the depositary units for which the Option is so accelerated (or surrendered for such payment in depositary units and/or cash as the appreciation right or unit right
may provide) and (2) all depositary units and cash payments to which the grantee of a restricted unit is entitled under any restricted unit granted under this Plan shall be delivered to the
grantee and all of the Partnership's rights to the return or repurchase of depositary units awarded pursuant to any restricted unit shall terminate. 

        B.    No Acceleration of Awards.    In no event shall any such acceleration or termination of
repurchase rights in connection with a Structural Transaction or Change in Control occur if and to the extent (i) such Award is, in connection with the Structural Transaction or Change in
Control, either to be assumed by the successor entity or affiliate thereof or to be replaced with a comparable Option, appreciation right, restricted unit or unit right to purchase or receive
securities of the successor entity or affiliate thereof, (ii) such Award is to be replaced with a cash incentive program of the successor entity which preserves the depositary unit spread
existing at the time of the Structural Transaction or Change in Control and provides for subsequent payout in accordance with the same vesting schedule applicable to such Award, or (iii) the
acceleration of such Award is subject to other limitations imposed by the Committee at the time of the Award grant. The determination of Award comparability under clause (i) above shall be made
by the Committee and its determination shall be final, binding and conclusive. Upon consummation of a Structural Transaction or Change in Control, all outstanding Options, appreciation rights,
restricted units and 

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unit rights under the Plan shall, to the extent not previously exercised or paid in full or assumed by the successor entity or an affiliate, terminate. 

        C.    Cancellation of Awards.    Notwithstanding the above, in the event of any Structural
Transaction or Change in Control, the Committee shall have the discretion to cancel vested and outstanding Options, vested restricted units, or vested unit rights for which depositary units have not
been issued, in whole or in part, subject to such conditions as the Committee may determine, upon payment to (1) optionees with respect to each cancelled Option, an amount in cash not less than
the difference between (i) the Fair Market Value (as of the effective date of such Structural Transaction or Change in Control) of the consideration the optionee would have received if the
Option had been exercised immediately prior to the effective date of such Structural Transaction or Change in Control and (ii) the exercise price of such Option, (2) holders of
restricted units and unit rights, with respect to all cancelled restricted units and unit rights, an amount in cash equal to the Fair Market Value of the depositary units and unit rights (as of the
effective date of the Structural Transaction or Change in Control) subject to the restricted unit or unit right. 

        D.    Adjustment.    In the event of any Structural Transaction or Change in Control that does
not result in the complete termination of all outstanding Options, appreciation rights and units rights and complete termination of all repurchase rights and forfeiture provisions with respect to
restricted units, the Committee shall adjust the maximum number of depositary units issuable under the Plan, the number of depositary units subject to Awards and the Option price, as provided in
Paragraph 2.2.C. 

        E.    Partnership Structure.    The grant of Awards under the Plan shall in no way affect the
Partnership's right to adjust, reclassify, reorganize, or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate, or sell or transfer any part of its business
or assets. 

        3.8    ELECTIVE AND TANDEM AWARDS.    The Committee may grant Awards independently of other
compensation or in lieu of other compensation whether at the election of the potential grantee or otherwise. The number of depositary units subject to Options, appreciation rights, restricted units or
unit rights to be awarded in lieu of other compensation will be determined by the Committee in its sole
discretion and need not be equal to the foregone compensation's Fair Market Value. In addition, Awards may be granted in tandem, so that a portion of the Award becomes payable or becomes free of
restrictions only if and to the extent that the tandem Award is not exercised or is forfeited, subject to such terms and conditions as the Committee may specify. 

        3.9    WITHHOLDING.    The Committee may require or permit, in its discretion and upon such
terms and conditions as it may deem appropriate (including the applicable safe-harbor provisions of Rule 16b-3) to have the Partnership withhold, from the depositary
units otherwise issuable pursuant to such Award, one or more of such depositary units with an aggregate Fair Market Value equal to the Taxes incurred in connection with the acquisition of such
depositary units. All Award grantees shall be deemed to have consented to such withholding upon acceptance of an Award. Grantees under the Plan may also be granted the right to deliver previously
acquired depositary units held for the requisite period to avoid a charge to earnings in satisfaction of such Taxes. The withheld or delivered depositary units will be valued at Fair Market Value
determined at the time of withholding. 

        3.10    CANCELLATION AND NEW GRANT OF AWARDS.    The Committee shall have the authority to
effect, at any time and from time to time, with the consent of the affected grantees, the cancellation of any or all outstanding Awards under this Article III and to grant in substitution
therefore new Awards under the Plan covering the same or different number and class of depositary units but (if the Award is an Option) having a price per depositary unit not less than the Fair Market
Value on the new grant date. 

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ARTICLE IV.  

GRANTS TO INDEPENDENT DIRECTORS  

        4.1    AUTOMATIC OPTION GRANTS.    Independent Directors who are serving on the Board will
automatically be granted an Option ("Automatic Option") for the number of depositary units set forth below (subject to adjustment under Paragraphs 2.2.C and 3.7 of this Plan) on the dates and terms
set forth below. 

        A.    New Independent Directors.    Each Person who becomes a newly appointed or elected
Independent Director shall, on the date such Person becomes an Independent Director (or, if later, the next trading day), automatically receive an Automatic Option to purchase 1,500 depositary units. 

        B.    Annual Grants.    On the third Tuesday of July of each fiscal year of the Partnership
that occurs after the Plan Effective Date, each continuing Independent Director shall automatically receive an Automatic Option to purchase 500 depositary units. 

        C.    Terms and Conditions.    The terms and conditions applicable to each Automatic Option
shall be as follows: 

        (1)  Price. The Option price per depositary unit will be equal to 100% of the Fair Market Value of one depositary unit on the
date of grant. 

        (2)  Term. Each Automatic Option will terminate and cease to be outstanding on the date ten years from the date of grant
("Expiration Date"). Each Automatic Option will be immediately exercisable. 

        (3)  Payment. Upon exercise of the Option, the Option price for the purchased depositary units will become payable immediately
in cash or cash equivalents made payable to the Partnership or in depositary units valued as of the Exercise Date that the optionee has held for the requisite period to avoid a charge to earnings.
Payment may also be made by delivery of a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver depositary units with a Fair Market Value equal to
the Option price to the Partnership. 

        (4)  Cessation. In the event the optionee ceases to serve as an Independent Director for any reason other than death or
Retirement, any outstanding Automatic Options may be exercised within a period of three months after the date of such cessation. In no event, however, shall this Automatic Option be exercisable after
the Expiration Date of the Option. 

        (i)    In
the case of death either during the Independent Director's period of service or within three months following cessation of service as an Independent Director, any
outstanding Automatic Options may be exercised within 12 months of the date of death by the designated beneficiary, or, if no beneficiary is designated, the estate or heirs of the optionee. In
no event, however, shall this Automatic Option be exercisable after the Expiration Date of the Option. 

        (ii)  In
the case of Retirement while this Automatic Option is outstanding, any outstanding Automatic Options may be exercised within 36 months of the date of
Retirement, but in no event shall this Option be exercisable after the Expiration Date of the Automatic Option. 

        4.2    UNIT FEE PROGRAM.    

        A.    Eligibility.    Each Independent Director shall be eligible to elect to apply all or any
portion of the annual retainer fee otherwise payable to such individual in cash to the acquisition of depositary units upon the terms and conditions of this unit fee program. 

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        B.    Election.    The election to apply all or any portion of the Independent Director's
annual retainer fee otherwise payable to the Independent Director in cash to the acquisition of depositary units under the unit fee program must be made before the start of the calendar year for which
the election is to be effective. The election must be made on the form provided by the Committee and must specify the percentage or dollar amount of his annual retainer fee to be applied to the
acquisition of the depositary units. The election, once filed, shall be irrevocable. The first calendar year for which any such election may be filed shall be for the 2003 calendar year. The
Independent Director may file a standing election to be in effect for one or more consecutive calendar years or to remain in effect indefinitely until revoked by written notice filed with the
Committee prior to the start of the first calendar year for which such standing election is no longer to remain in effect. 

        C.    Unit Fee Issuance.    On the first trading day of each calendar quarter during the year
for which the election is effective, one-quarter of the portion of the annual retainer fee subject to such election shall automatically be applied to the acquisition of depositary units by
dividing the elected portion of the fee by the Fair Market Value per depositary unit on that day (and rounding down to the next whole depositary unit). 

        4.3    OPTION FEE PROGRAM.    

        A.    Eligibility.    Each Independent Director shall be eligible to receive, in lieu of
receiving all or any portion of the annual retainer fee otherwise payable to such individual, Options with terms and conditions substantially similar to those set forth in Paragraph 4.1.C of
this Plan. 

        B.    Election.    The election to receive options in lieu of all or any portion of the
Independent Director's annual retainer fee otherwise payable to the Independent Director in cash under this option fee program must be made before the start of the calendar year for which the election
is to be effective. The election must be made on the form provided by the Committee and must specify the percentage or dollar amount of his or her annual retainer fee to be applied to this option fee
program. The election, once filed, shall be irrevocable. The Independent Director may file a standing election to be in effect for more than one consecutive calendar year or to remain in effect
indefinitely until revoked by written notice file with the Committee at least six months prior to the start of the first calendar year for which such standing election is no longer in effect. 

        C.    Option Issuance.    On the first trading day of each calendar quarter during a year for
which the election to receive options is effective, an option shall be issued to such Independent Director to purchase a number of depositary units equal to (1) one-quarter,
multiplied by (2) the amount of annual retainer fee for such year which the Independent Director elects to receive in the form of Options, divided by (3) the Black-Scholes Value as of
such date. The exercise price of such Option shall be equal to the Fair Market Value of one depositary unit on the date of grant. 

ARTICLE V.  

MISCELLANEOUS  

        5.1    AMENDMENT AND TERMINATION.    

        A.    Amendment and Termination of the Plan.    The managing general partner or its managing
general partner may amend, suspend or discontinue the Plan in whole or in part at any time; provided, however, that (1) such action shall not adversely affect a grantee's rights and obligations
with respect to Awards at the time outstanding under the Plan and (2) the substantive provisions of Article IV may not be amended at intervals more frequently than once every six months,
other than to the extent necessary to comply with applicable Federal income tax laws and regulations. 

        B.    Modification of Awards.    The Committee has full power and authority to modify or waive
any or all of the terms, conditions or restrictions applicable to any outstanding Award under the 

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Plan (other than an Award pursuant to Article III), to the extent not inconsistent with the Plan; provided, however, that no such modification or waiver shall, without the consent of the
grantee, adversely affect the grantee's rights thereunder. 

        5.2    EFFECTIVE DATE AND TERM.    

        A.    Term of Plan.    Unless the Plan is sooner terminated in accordance with
Paragraph 2.7, or by the managing general partner or its managing general partner, the Plan will terminate upon the earlier of (i) August 31, 2012, or (ii) the date on
which all depositary units available for issuance under the Plan have been issued or their availability cancelled by the exercise of Awards granted hereunder. 

        B.    Term of Awards.    No Award shall have a term exceeding ten years from the date of
grant. 

        5.3    10% OWNER.    Notwithstanding any other provision of this Plan, in the event the
recipient of an Award is the owner of interests representing more than 10% of the total combined voting power of all classes of securities of the Partnership, then the exercise price or purchase price
with respect to such Award, as the case may be, shall be no less than 110% of the Fair Market Value of a depositary unit multiplied by the relevant number of units. 

        5.4    TAX WITHHOLDING.    The Partnership's obligation to deliver depositary units or cash
upon the exercise of Awards under the Plan is subject to the satisfaction of all applicable Federal, state and local income and employment tax withholding requirements. 

        5.5    TRANSFERABILITY.    During the lifetime of the grantee, Awards will be exercisable only
by the grantee and will not be assignable or transferable by the grantee otherwise than by will or by the laws of descent and distribution following the grantee's death. However, an Award may permit
the grantee to designate a beneficiary or beneficiaries, who may exercise the Award and/or receive compensation under the Award after the grantee's death. 

        5.6    USE OF PROCEEDS.    Any cash proceeds received by the Partnership from the sale of
depositary units pursuant to Awards under the Plan will be useful for general Partnership purposes. 

        5.7    REGULATORY APPROVALS.    The implementation of the Plan, any Awards under the Plan, and
the issuance of depositary units pursuant to any Award is subject to the procurement by the Partnership of all approvals and permits required by regulatory authorities having jurisdiction over the
Plan, Awards made under the Plan, and depositary units issued pursuant to the Plan. 

        5.8    NO EMPLOYMENT/SERVICE RIGHTS.    Neither the establishment of this Plan, nor any action
taken under the terms of this Plan, nor any provision of this Plan will be construed to grant any individual the right to remain in the employ or service of the Partnership (or any parent, subsidiary
or affiliated entity) for any period of specific duration, and the Partnership (or any parent, subsidiary or affiliated entity retaining the services of such individual) may terminate such
individual's employment or service at any time and for any reason, with or without cause. Nothing contained in this Plan or in any Award under this Plan will affect any contractual rights of an
employee pursuant to a written employment agreement. 

        5.9    GOVERNING LAW.    To the extent not otherwise governed by federal law, the Plan and its
implementation shall be governed by and construed in accordance with the laws of the State of California. 

        5.10    GENDER.    Whenever the masculine gender is used in this Plan it shall include the
feminine and neutral genders and vice versa. 

        5.11    PARTICIPATION AND ELIGIBILITY.    All of the full-time employees
(including officers) of the Partnership who are "exempt employees," as defined under the Fair Labor Standards Act of 1939, and Directors are eligible to receive Awards under the Plan. More than 50% of
the depositary units underlying Awards granted pursuant to the Plan during any three-year period will be granted to eligible persons other than officers (as defined in
Rule 16a-1(f) of the 1934 Act Rules) or Directors. 

10

   DEFERRED BONUS  

THE NEWHALL LAND AND FARMING COMPANY  

NOTICE OF DEFERRAL OF PARTNERSHIP UNITS

RECEIVED IN LIEU OF CASH BONUS AND GRANT OF UNIT RIGHTS  

        Notice is hereby given of the following grant of a right to receive The Newhall Land and Farming Company (a California Limited Partnership) (the "Partnership")
Partnership Units ("Unit Rights") pursuant to the terms of The Newhall Land and Farming Company Management Unit Ownership Program, as amended ("MUOP") and The Newhall Land and Farming Company 2002
Equity Compensation Plan (the "Plan"): 

	Grantee:    _________________________________________________________________________________
	
Grant Date:    _______________________________________________________________________________
	
Number of Unit Rights:    _____________________________________________________________________

	

 	
 	

A.    Deferral of units in lieu of cash bonus	
 	

 
	 	 	 	 	

	

 	
 	

B.    Unit Rights Pursuant to Paragraph 6 of the MUOP ("MUOP Unit Rights")	
 	

 
	 	 	 	 	

	

 	
 	

C.    Total Unit Rights Granted	
 	

 
	 	 	 	 	

        Receipt of Partnership Unit Certificate:    Grantee has elected to receive Partnership Units with
respect to his or her vested Unit Rights as follows: 

	 	 	D.    Unit Rights received in lieu of cash bonus (fully-vested) and vested MUOP Unit Rights (331/3% a year)—
	

 	
 	

E.    January 1, 2004____  January 1, 2006____	
 	

January 1, 2008____
	

 	
 	

F.    January 1, 2005____  January 1, 2007____	
 	

 

        If
the date you selected is less than three years from the Grant Date, then the unvested MUOP Unit Rights will be distributed when they
vest as follows (select one): 

	 	 	G.    ____ the date Grantee becomes fully vested in the remaining MUOP Unit Rights granted pursuant to this Notice of Grant; or
	

 	
 	

H.    ____ at the end of any quarter in which Grantee is vested in 100 or more MUOP Unit Rights.

        Upon
termination, Grantee will receive 100% of the Depositary Units for vested Unit Rights granted by this Notice. If upon termination of employment, Grantee is bested in fewer than 100
Unit Rights, Grantee will receive cash equal to the Fair Market Value, as defined in the Plan, of the Depositary Units underlying vested Unit Rights. 

        Vesting Schedule:    Unit Rights granted for Depositary Units received in lieu of cash bonus are 100%
vested. 

11

 

        Grantee
is entitled to receive an additional Unit Right for every five Depositary Units acquired through bonus payments. So long as Grantee remains employed by the Partnership or its
affiliated entities, Grantee shall vest in these units in equal successive annual installments over three years at a rate of 331/3% of the granted Unit Rights per year of Service
measured from the Grant Date, provided that the Unit Rights have not been terminated or cancelled before such date in accordance with the terms set forth in the MUOP, the Plan and the Unit Right
Agreement. 

        If
Unit Rights for which Depositary Units have not yet been issued are outstanding as of the record date of a cash distribution by the Partnership with respect to Depositary Units,
Grantee will be credited with an additional number of Unit Rights. The number of additional Unit Rights shall be equal to one hundred twenty percent (120%) of the aggregate cash distribution that
would have been made with respect to such outstanding Unit Rights had they been Depositary Units on such record date, divided by the Fair Market Value, as defined in the Plan, of one depositary unit
on such record date. Grantee shall vest in such additional Unit Rights as in the underlying Unit Rights. 

        Grantee
understands that the Unit Rights are granted pursuant to and in accordance with the express terms and conditions of the Plan. By signing below, Grantee agrees to be bound by the
terms and conditions of the MUOP, the Plan and the Unit Rights Agreement dated                        . 

        All
terms used but not defined herein shall have the meaning set forth in the MUOP. 

	Dated: _______________________	 	THE NEWHALL LAND AND FARMING COMPANY

(a California Limited Partnership)
	

 	
 	

By:	

 
	 	 	 	

	 	 	Title:	Secretary
	 	 	 	 
	

 	
 	

 OPTIONEE
	 	 	 	 
	

 	
 	

Address:	

 
	 	 	 	

	 	 	 	 
	 	 	

I
designate the following beneficiary(ies): 

	  
	 	Relationship:	  

	 	 	 	 	 
	Address:	 	 	 	 
	 	

	 	 	 	 	 
	

12

 
Exhibit A  

THE NEWHALL LAND AND FARMING COMPANY  

UNIT RIGHTS AGREEMENT  

 DATED:  

        The Newhall Land and Farming Company (a California Limited Partnership) (the "Partnership") has adopted The Newhall Land and Farming Company 2002 Equity
Compensation Plan (the "Plan") for the purpose of attracting and retaining the services of employees (including officers) of the Partnership and affiliated entities, and non-employee Board
members of the Partnership or its managing general partner. 

        Grantee
is an individual who is to render valuable services to the Partnership or its affiliates and is entitled to a grant of Unit Rights, and this Agreement is executed pursuant to,
and is intended to carry out the purposes of, the Plan in connection with the Partnership's grant of Unit Rights to Grantee. 

        Except
as indicated otherwise, all capitalized terms shall have the meaning assigned to those terms in the Plan. 

        I.    Grant of Unit Rights.    Subject to and upon the terms and conditions set forth in this
Agreement, the Partnership hereby grants to Grantee, as of the grant date, (the "Grant Date") specified in the accompanying Notice of Grant Unit Rights (the "Grant Notice"), Unit Rights in the number
as is specified in the Grant Notice. 

        J.    Unit Rights and Vesting.    Grantee shall be entitled to receive one Partnership
depositary unit for each vested Unit Right. Such depositary units shall be issued pursuant to Grantee's election in the Grant Notice. Unit Rights shall vest in accordance with the schedule specified
in the Grant Notice, subject to acceleration in accordance with the remaining terms of this Agreement. 

        K.    Phantom Partnership Distributions.    If Unit rights for which depositary units have not
yet been issued are outstanding as of the record date of a cash distribution by the Partnership with respect to depositary units, Grantee will be credited with an additional number of Unit Rights. The
number of additional Unit Rights shall be equal to one hundred twenty percent (120%) of the aggregate cash distribution that would have been made with respect to such outstanding Unit Rights had they
been depositary units on such record date, divided by the Fair Market Value of one depositary unit on such record date. Grantee shall vest in such additional Unit Rights as in the underlying Unit
Rights. 

        L.    Ownership Target.    Grantee will continue to be eligible to receive Unit Rights under
this Agreement even after attaining the unit ownership target established by the Partnership for Grantee. 

        M.    Effect of Termination of Employment.    If Grantee ceases to be employed by or provide
services to the Partnership or any of its affiliates for any reason, any Unit Rights that have not yet vested as of the date of termination shall be cancelled automatically and no depositary units
shall be issued pursuant to such cancelled Unit Rights. 

        N.    Acceleration of Awards.    In the event of a Structural Transaction or Change in
Control, each Unit Right will be automatically accelerated so that all depositary units and cash payments to which Grantee is entitled under any Unit Right granted under this Plan shall be delivered
to Grantee and all of the Partnership's rights to the return or cancellation of unvested Unit Rights shall terminate. 

        O.    No Acceleration of Awards.    In no event shall any such acceleration or termination of
any unvested Unit Rights in connection with a Structural Transaction or Change in Control occur if and to the extent (i) such Unit Right is, in connection with the Structural Transaction or
Change in Control, either to be assumed by the successor entity or affiliate thereof or to be replaced with a comparable Unit Right to purchase or receive securities of the successor entity or
affiliate thereof, (ii) such Unit 

13

 

Right is to be replaced with a cash incentive program of the successor entity which preserves the depositary unit spread existing at the time of the Structural Transaction or Change in Control and
provides for subsequent payout in accordance with the same vesting schedule applicable to such Unit Right, or (iii) the acceleration of such Unit Right is subject to other limitations imposed
by the Committee at the time of the Unit Right grant. The determination of Unit Right comparability under clause (i) above shall be made by the committee and its determination shall be final,
binding and conclusive. Upon consummation of a Structural Transaction or Change in Control, all outstanding Unit Rights under the Plan shall, to the extent not previously exercised or paid in full or
assumed by the successor entity or an affiliate, terminate. 

        P.    Cancellation of Awards.    Notwithstanding the above, in the event of any Structural
Transaction or Change in Control, the Committee shall have the discretion to cancel outstanding Unit Rights, in whole or in part, subject to such conditions as the Committee may determine, upon
payment to Grantee with respect to all cancelled Unit Rights, an amount in cash equal to the Fair Market Value of the depositary units subject to the Unit Rights. 

        Q.    Adjustment.    If any change is made to the depositary units issuable under the Plan by
reason of a Structural Transaction or a Change in Control that does not result in the termination of all outstanding rights of the Partnership to the return or cancellation of unvested Unit Rights,
the Committee may adjust the maximum number of depositary units subject to Unit Rights, as provided in Paragraph 2.2.C. of the Plan. 

        R.    Cancellation and New Grant of Awards.    The Committee shall have the authority to
effect, at any time and from time to time, with the consent of the affected Unit Right holders, the cancellation of any or all outstanding Unit Rights covered by this Agreement and to grant in
substitution therefore new Unit Rights under the Plan covering the same or different number and class of depositary units. 

        S.    Partnership Structure.    The grant of Awards under the Plan shall in no way affect the
Partnership's right to adjust, reclassify, reorganize, or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate, or sell or transfer any part of its business
or assets. 

        T.    Withholding.    No depositary units shall be issued hereunder unless and until all
applicable Federal, state and local income and employment tax withholding obligations have been satisfied. 

        U.    Nontransferability.    A Grantee's Unit Rights hereunder are not assignable or
transferable in any manner other than by will or the laws of descent and distribution. In the event of Grantee's death prior to the issuance of depositary units hereunder, Grantee's beneficiary, for
purposes hereof, shall be the designated beneficiary or, if no beneficiary has been designated, the person to whom Grantee's rights hereunder pass pursuant to Grantee's will or by the laws of descent
and distribution. 

        V.    Privilege of Unitholder Rights.    Subject to Paragraph 14, neither Grantee nor
Grantee's beneficiary shall have any unitholder rights with respect to the depositary units issuable hereunder until Grantee or Grantee's beneficiary has been issued a certificate for such depositary
units. 

        W.    Modifications.    The Committee, as defined in the Plan, may, in its discretion, modify
or waive any or all of the terms, conditions or restrictions hereof, provided, however, that no such modification or waiver may, without Grantee or, if applicable, Grantee's beneficiary's consent,
adversely affect the rights of Grantee or Grantee's beneficiary hereunder. 

        X.    No Employment or Service Rights.    Except to the extent the terms or any written
employment contract with Grantee may expressly provide otherwise, neither the Partnership nor any of its affiliates, is under any obligation to continue the employee status of Grantee for any period
of specific duration and may terminate such employee status at any time, with or without cause. 

        Y.    Grantee Undertaking.    Grantee hereby agrees to take whatever additional action and
execute whatever additional documents the Partnership may in its judgment deem necessary or advisable in 

14

 

order to carry out or effect one or more of the obligations or restrictions imposed on either Grantee or the depositary units pursuant to the express provisions of this Agreement. 

        Z.    Governing Law.    This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California. 

        AA.    Counterparts.    The Grant Notice may be executed in counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and the same instrument. 

        BB.    Successors and Assigns.    The provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Partnership and its successors and assigns and Grantee and Grantee's legal representatives, heirs, legatees, distributes, assigns and transferees by operation of law,
whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms and conditions hereof. 

        CC.    Notices.    Any notice required to be given or delivered to the Partnership under the
terms of this Agreement shall be in writing and addressed to the Partnership in care of the Corporate Secretary at Newhall Management Corporation, 23823 Valencia Boulevard, Valencia, California 91355.
Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated on the Grant Notice. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the U.S. mail, by registered or certified mail, postage prepaid and properly addressed to the party to be notified. 

        DD.    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 express terms provisions of the Plan. All decisions of the Committee 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. 

15

   SUBSEQUENT GRANT

THE NEWHALL LAND AND FARMING COMPANY  

NOTICE OF GRANT OF UNIT RIGHTS  

        Notice is hereby given of the following grant of a right to receive The Newhall Land and Farming Company (a California Limited Partnership) (the "Partnership")
depositary units ("Unit Rights") pursuant to the terms of The Newhall Land and Farming Company 2002 Equity Compensation Plan (the "Plan"): 

	Grantee:    _________________________________________________________________________________
	
Grant Date:    _______________________________________________________________________________
	
Number of Unit Rights:    _____________________________________________________________________

        Receipt of Depositary Unit Certificate:    Grantee elects to receive depositary units of the Partnership
with respect to his or her vested Unit Rights as soon as practical following: 

        ______
the date Grantee becomes fully vested in all Unit Rights granted pursuant to this Notice of Grant; or 

        ______
at the end of any quarter in which Grantee is vested in 100 or more Unit Rights. 

        If
upon termination of employment, Grantee is vested in fewer than 100 Unit Rights, Grantee will receive cash equal to the Fair Market Value of the depositary units underlying vested
Unit Rights. 

        Vesting Schedule:    Grantee will receive one Unit Right for every five depositary units acquired
through open market purchases, exercise of options, or bonus payments. So long as Grantee remains employed by Partnership or its affiliated entities, and Grantee continues to own the depositary units
on which this Unit Right Grant is made, Grantee shall vest in equal successive annual installments over three years at a rate of 331/3% of the granted Unit Rights per year of Service
measured from the Grant Date, provided that the Unit Rights have not been terminated or canceled before such date in accordance with the terms set forth in the Plan and the Unit Rights Agreement. 

        If
Unit Rights for which depositary units have not yet been issued are outstanding as of the record date of a cash distribution by the Partnership with respect to depositary units,
Grantee will be credited with an additional number of Unit Rights. The number of additional Unit Rights shall be equal to one hundred twenty per cent (120%) of the aggregate cash distribution that
would have been made with respect to such outstanding Unit Rights had they been depositary units on such record date, divided by the Fair Market Value of one depositary unit on such record date.
Grantee shall vest in such additional Unit Rights as in the underlying Unit Rights. 

        Grantee
understands that the Unit Rights are granted pursuant to and in accordance with the express terms and conditions of Plan. By signing below, Grantee agrees to be bound by the
terms and 

16

 

conditions of the Plan and the terms and conditions of the Unit Rights Agreement dated                        , distributed with
the Initial Notice of Grant. 

	Dated: _______________________	 	THE NEWHALL LAND AND FARMING COMPANY

(a California Limited Partnership)
	

 	
 	

By:	

 
	 	 	 	

	 	 	Title:	Secretary
	 	 	 	 
	

 	
 	

GRANTEE
	 	 	 	 
	

 	
 	

Address:	

 
	 	 	 	

	 	 	 	 
	 	 	

I
designate the following beneficiary(ies): 

	  
	 	Relationship:	  

	 	 	 	 	 
	Address:	 	 	 	 
	 	

	 	 	 	 	 
	

17

 
INITIAL GRANT

THE NEWHALL LAND AND FARMING COMPANY  

NOTICE OF GRANT OF AUTOMATIC OPTION  

        Notice is hereby given of the following option (the "Option") to purchase depositary units of The Newhall Land and Farming Company (a California Limited
Partnership) (the "Partnership"), which has been granted pursuant to the automatic option grant program in effect under The Newhall Land and Farming Company 2002 Equity Compensation Plan (the "Plan"): 

	Optionee:    _________________________________________________________________________________
	
Grant Date:    _______________________________________________________________________________
	
Number of Optioned Depositary Units:    __________________________________________________________
	
Exercise Price Per Depositary Unit:    ____________________________________________________________
	
Expiration Date:    ___________________________________________________________________________
	
Exercise Schedule:    The Option is exercisable immediately.

        Optionee
understands and agrees that the Option is granted subject to and in accordance with the express terms and conditions of the Plan governing automatic option grants to Board
members. Optionee further agrees to be bound by the terms and conditions of the Plan and the terms and conditions of the Option as set forth in the Automatic Option Agreement (the "Agreement") dated
                        ,            , attached hereto as
Exhibit A. Optionee should keep a copy of the attached Agreement for reference, since no new Agreement will be distributed with subsequent
Notices of Grant of Automatic Option unless the material terms of the Plan change. 

	Dated: _______________________	 	THE NEWHALL LAND AND FARMING COMPANY

(a California Limited Partnership)
	

 	
 	

By:	

 
	 	 	 	

	 	 	Title:	Secretary
	 	 	 	 
	

 	
 	

 OPTIONEE
	 	 	 	 
	

 	
 	

Address:	

 
	 	 	 	

	 	 	 	 
	 	 	

I
designate the following beneficiary(ies): 

	  
	 	Relationship:	  

	 	 	 	 	 
	Address:	 	 	 	 
	 	

	 	 	 	 	 
	

18

   THE NEWHALL LAND AND FARMING COMPANY  

AUTOMATIC OPTION AGREEMENT  

 DATED:  

        The Newhall Land and Farming Company (the "Partnership") has implemented an automatic option grant program under The Newhall Land and Farming Company 2002 Equity
Compensation Plan (the "Plan"), pursuant to which special option grants are to be made to eligible members of the Board of Directors of the managing general partner and its managing general partner,
at periodic intervals over their period of Board service in order to encourage such individuals to remain in the Partnership's Service. 

        Optionee
is an eligible member of the Board and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the automatic grant of
an option to purchase depositary units of the Partnership. 

        The
granted option is intended to be a nonstatutory option which does not meet the requirements of Section 422 of the Internal Revenue Code and is designed to provide Optionee
with a meaningful incentive to continue to serve as a member of the Board. 

        Except
as indicated otherwise, all capitalized terms shall have the meaning assigned to those terms in the Plan. 

        1.    Grant of Option.    Subject to and upon the terms and conditions set forth in this
Agreement, the Partnership hereby grants to Optionee, as of the date of grant (the "Grant Date") specified in the accompanying Notice of Grant of Automatic Option (the "Grant Notice"), an option to
purchase up to that number of depositary units as is specified in the Grant Notice. The option shall be exercisable and the depositary units purchasable from time to time during the option term at the
price per depositary unit (the "Exercise Price") specified in the Grant Notice. 

        2.    Option Term.    This option shall have a term of ten years measured from the Grant Date
and shall expire at the close of business on the Expiration Date specified in the Grant Notice, unless sooner terminated under Paragraph 5. 

        3.    Limited Transferability.    During the lifetime of Optionee, this option will be
exercisable only by Optionee and will not be assignable or transferable by Optionee otherwise than by will or by the laws of descent and distribution following Optionee's death. However, an option may
permit Optionee to designate a beneficiary who may exercise the option or receive compensation under the option after Optionee's death. 

        4.    Date of Exercise.    This option is exercisable immediately upon grant. 

        5.    Cessation of Board Service.    Should Optionee's service as a Board member cease while
this option remains outstanding, then the option term specified in Paragraph 2 shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date in accordance with
the following provisions: 

        a.    Should
Optionee cease to serve as a Board member for any reason (other than retirement or death) while holding this option, then the option shall be exercisable for a
three month period commencing with the date of such cessation of Board service, but in no event shall this option be exercisable after the Expiration Date. Upon the earlier  of (i) the expiration of
such three-month period of (ii) the specified Expiration Date, the option shall terminate and cease to be exercisable.
 

        b.    Should
Optionee die while serving as a Board member (or within the three month period following cessation of Board service) while holding this option, then the designated
beneficiary, or, if no beneficiary is designated, Optionee's estate or heirs shall have the right to exercise this 

19

 

option for any or all of the depositary units for which the option is exercisable at the time of Optionee's death. Such right of exercise shall terminate, and this option shall accordingly cease to
be exercisable for such depositary units, upon the earlier of (i) the expiration of the 12-month period measured from the date of
Optionee's death or (ii) the specified Expiration Date. 

        c.    Should
Optionee retire after serving as a Board member while holding this option, the option may be exercised within 36-months of the date of "retirement."
For purposes of this section, Optionee's date of "retirement" will be the first day Optionee ceases to serve as an Independent Director after serving as an Independent Director for at least five
years. 

        6.    Manner of Exercising Option.    

        a.    In
order to exercise this option with respect to all or any part of the depositary units for which this option is at the time exercisable, Optionee (or in the case of
exercise after Optionee's death, Optionee's designated beneficiary, executor, administrator, heir or legatee, as the case may be) must take the following actions: 

        (i)    Deliver
to the Secretary of Newhall Management Corporation an executed notice of exercise in substantially the form of Exhibit I to this Agreement (the "Exercise
Notice") in which there is specified the number of depositary units which are to be purchased under the exercised option. 

        (ii)  Pay
the aggregate Exercise Price for the purchased depositary units in cash or in depositary units that the Optionee has held for the requisite period to avoid a charge
to earnings. Payment may also be made by delivery of a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver depositary units with a Fair Market
Value equal to the Exercise Price. 

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

        b.    Except
to the extent the sale and remittance procedure specified above is utilized in connection with the option exercise, payment of the Exercise Price for the purchased
depositary units must accompany the Exercise Notice. 

        c.    As
soon as practical after receipt of the Exercise Notice, the Partnership shall mail or deliver to or on behalf of Optionee (or any other person or persons exercising
this option in accordance herewith) a depositary receipt representing the purchased depositary units. 

        d.    In
no event may this option be exercised for any fractional depositary units. 

        7.    Unitholder Rights.    Optionee shall not have any of the rights of a unitholder with
respect to the depositary units until Optionee shall have exercised this option and paid the Exercise Price for the purchased depositary units. 

        8.    No Impairment of Rights.    This Agreement shall not in any way affect the right of the
Partnership 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. Nor shall this Agreement in any way be construed or interpreted so as to affect adversely or otherwise impair the
right of the Partnership or the unitholders to remove Optionee from the Board at any time in accordance with the provisions of applicable law. 

        9.    Compliance With Laws and Regulations.    The exercise of this option and the issuance of
the depositary units upon such exercise shall be subject to the compliance by the Partnership and Optionee with all applicable requirements of law relating thereto and with all applicable regulations
of any stock exchange on which the Partnership's depositary units may be listed at the time of such exercise and issuance. 

20

 

        10.    Successors and Assigns.    Except to the extent otherwise provided in
Paragraph 3, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Optionee and the
Partnership's successors and assigns. 

        11.    Discharge of Liability.    The inability of the Partnership to obtain approval from any
regulatory body having authority deemed by the Partnership to be necessary to the lawful issuance and sale of any depositary units pursuant to this option shall relieve the Partnership of any
liability with respect to the non-issuance or sale of the depositary units as to which such approval shall not have been obtained. However, the Partnership shall use its best efforts to
obtain all such applicable approvals. 

        12.    Notices.    Any notice required to be given or delivered to the Partnership under the
terms of this Agreement shall be in writing and addressed to the Partnership in care of the Corporate Secretary of Newhall Management Corporation, 23823 Valencia Boulevard, Valencia, California 91355.
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 to have been given or delivered upon personal delivery or upon deposit in the U.S. mail, by registered or certified mail, postage prepaid and properly addressed to the party to be notified. 

        13.    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 express terms and provisions of the Plan, including the automatic option grant provisions of Article Three of the Plan. 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-interest
rules. 

        14.    Successors and Assigns.    The provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Partnership and its successors and assigns and Optionee and Optionee's legal representatives, heirs, legatees, distributes, assigns and transferees by operation of law,
whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms and conditions hereof. 

        15.    Plan.    This option is subject to all the terms of the Plan whether or not referenced
or incorporated herein. 

21

   EXHIBIT I  

NOTICE OF EXERCISE OF OPTION  

        I hereby notify The Newhall Land and Farming Company (a California limited Partnership) (the "Partnership") that I elect to
purchase            depositary
units of the Partnership (the "Purchased Depositary Units") at the option exercise price of $                        per
depositary unit (the "Exercise Price") pursuant to that certain option (the "Option")
granted to me under The Newhall Land and Farming Company 2002 Equity Compensation Plan on                        ,
            . 

        Concurrently
with the delivery of this Exercise Notice to the Secretary of Newhall Management Corporation, I shall hereby pay to the Partnership the Exercise Price for the Purchase
Depositary Units in accordance with the provisions of my agreement with the Partnership 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 the payment of the Exercise Price for the Purchased
Depositary Units. 

Date:
_______________, _______ 

	 	 	
 Optionee
	 	 	 	 
	 	 	Address:	 
	 	 	 	

	 	 	 	 
	 	 	 	

Print
name in exact manner it is to appear on the depositary receipt: 

________________________________________________

________________________________________________

	Social Security Number:	 
	 	

22

 
SUBSEQUENT GRANT  

THE NEWHALL LAND AND FARMING COMPANY  

NOTICE OF GRANT OF AUTOMATIC OPTION  

        Notice is hereby given of the following option (the "Option") to purchase depositary units of The Newhall Land and Farming Company (a California Limited
Partnership) (the "Partnership"), which has been granted pursuant to the automatic option grant program in effect under The Newhall Land and Farming Company 2002 Equity Compensation Plan (the "Plan"): 

	Optionee:    _________________________________________________________________________________
	
Grant Date:    _______________________________________________________________________________
	
Number of Optioned Depositary Units:    __________________________________________________________
	
Exercise Price Per Depositary Unit:    ____________________________________________________________
	
Expiration Date:    ___________________________________________________________________________
	
Exercise Schedule:    The Option is exercisable immediately.

        Optionee
understands and agrees that the Option is granted subject to and in accordance with the express terms and conditions of the Plan governing automatic option grants to Board
members. Optionee further agrees to be bound by the terms and conditions of the Plan and the terms and conditions of the Option as set forth in the Automatic Option Agreement
dated                        ,
which as distributed with the Initial Notice of Grant of Automatic Option. 

	Dated: _______________________	 	THE NEWHALL LAND AND FARMING COMPANY

(a California Limited Partnership)
	

 	
 	

By:	

 
	 	 	 	

	 	 	Title:	Secretary
	 	 	 	 
	

 	
 	

 OPTIONEE
	 	 	 	 
	

 	
 	

Address:	

 
	 	 	 	

	 	 	 	 
	 	 	

I
designate the following beneficiary(ies): 

	  
	 	Relationship:	  

	 	 	 	 	 
	Address:	 	 	 	 
	 	

	 	 	 	 	 
	

23

 
INITIAL GRANT  

THE NEWHALL LAND AND FARMING COMPANY  

NOTICE OF GRANT OF OPTION  

        Notice is hereby given of the following option (the "Option") to purchase depositary units of The Newhall Land and Farming Company (a California Limited
Partnership) (the "Partnership") which has been granted pursuant to The Newhall Land and Farming Company 2002 Equity Compensation Plan (the "Plan"): 

	Optionee:    _________________________________________________________________________________
	
Grant Date:    _______________________________________________________________________________
	
Number of Optioned Depositary Units:    __________________________________________________________
	
Exercise Price Per Depositary Unit:    ____________________________________________________________
	
Expiration Date:    ___________________________________________________________________________
	
Tandem Option/Appreciation Right:	
Yes ______
	

 	
No ______

        Exercise Schedule:    The Option shall become exercisable in four equal and successive annual
installments for twenty-five percent (25%) of the Optioned Depositary Units upon Optionee's completion of each year of Service (as defined in the attached Option Agreement dated
                        ) measured from the Grant Date. In no event shall the Option become exercisable for any additional
Optioned Depositary Units following Optionee's cessation of Service. 

Optionee
understands and agrees that the Option is granted subject to and in accordance with the terms and conditions of the Plan. Optionee further agrees to be bound by the terms and conditions of
the Option as set forth in the Option Agreement dated                        attached hereto as Exhibit A and the Plan.
Optionee should keep a copy of the attached Option Agreement for reference,
since no new Option Agreement will be distributed with subsequent Notices of Grant of Option unless the material terms of the Plan change. 

	Dated: _______________________	 	THE NEWHALL LAND AND FARMING COMPANY

(a California Limited Partnership)
	

 	
 	

By:	

 
	 	 	 	

	 	 	Title:	Secretary
	 	 	 	 
	

 	
 	

 OPTIONEE
	 	 	 	 
	

 	
 	

Address:	

 
	 	 	 	

	 	 	 	 
	 	 	

I
designate the following beneficiary(ies): 

	  
	 	Relationship:	  

	 	 	 	 	 
	Address:	 	 	 	 
	 	

	 	 	 	 	 
	

24

   EXHIBIT A  

 THE NEWHALL LAND AND FARMING COMPANY  

OPTION AGREEMENT

 DATED:  

        A.    The
Newhall Land and Farming Company ("Partnership") has implemented The Newhall Land and Farming Company 2002 Equity Compensation Plan (the "Plan") for the purpose of
attracting and retaining the services of key employees (including officers) of the Partnership and any affiliated entities thereof, and non-employee Board members of the managing general
partner of the Partnership, and its managing general partner. 

        B.    Optionee
is an individual who is to render valuable services to the Partnership or one or more affiliated entities thereof, and this Agreement is executed pursuant to,
and is intended to carry out the purposes of the Plan in connection with the Partnership's grant of an option to Optionee. 

        C.    All
capitalized terms shall have the meaning as those terms are defined in the Plan unless otherwise indicated. "Fair Market Value" shall have the meaning assigned to
that term in Article I of the Plan. 

        1.    Grant of Option.    Subject to and upon the terms and conditions set forth in this
Agreement, the Partnership hereby grants to Optionee, as of the date of grant (the "Grant Date") specified in the accompanying Notice of Grant of Option (the "Grant Notice"), an option to purchase up
to that number of the Partnership's depositary units as is specified in the Grant Notice. Such depositary units shall be purchasable from the Partnership from time to time during the option term at
the option price (the "Exercise Price") specified in the Grant Notice. 

        2.    Tandem Option/Appreciation Rights.    The Grant Notice may reflect that the option is
granted in tandem with an appreciation right, which means that either the option or the appreciation right may be exercised, but not both. If this option is granted in tandem with an appreciation
right, you will also receive a Notice of Grant of Appreciation Right and an Appreciation Right Agreement. 

        3.    Option Term.    This option shall expire at the close of business on the expiration date
(the "Expiration Date") specified in the Grant Notice, unless sooner terminated in accordance with Paragraph 6, 9, or 10. 

        4.    Limited Transferability.    This option shall be exercisable only by Optionee during
Optionee's lifetime and shall not be transferable or assignable by Optionee other than by will or by the laws of descent and distribution following Optionee's death. However, Optionee may designate a
beneficiary who may exercise the option or receive compensation under the option after Optionee's death. 

        5.    Dates of Exercise.    This option shall be exercisable for the depositary units in
accordance with the Exercise Schedule specified in the Grant Notice. The option shall remain exercisable for the accumulated installments until the Expiration Date or sooner termination of the option
term under Paragraph 6. In no event shall this option become exercisable for any additional depositary units following Optionee's cessation of Service. 

        6.    Cessation of Service.    The option term specified in Paragraph 3 shall terminate
(and this option shall cease to be outstanding) prior to the Expiration Date in accordance, with the following provisions: 

        a.    This
option shall immediately terminate and cease to be outstanding for any depositary units for which it is not exercisable at the time of Optionee's cessation of
Service. 

        b.    Should
Optionee cease Service for any reason other than death or retirement while this option is outstanding, then this option shall be exercisable for all of the
depositary units for which this option is exercisable at the time of such cessation of Service. Such right shall lapse, and this option shall terminate and cease to remain outstanding, upon the
earlier of (i) the expiration of 

25

 

the three (3)-month period measured from the date of Optionee's cessation of Service, or (ii) the Expiration Date. 

        c.    Should
Optionee die while this option is outstanding, or within three (3) months after Optionee ceases Service, then Optionee's designated beneficiary, or, if no
beneficiary has been designated, Optionee's estate or heirs shall have the right to exercise the option for any or all of the depositary units for which this option is exercisable at the time of
Optionee's death. Such right shall lapse, and this option shall terminate and cease to remain outstanding, upon the earlier of (1) the expiration of the twelve (12)-month period measured from
the date of Optionee's death, or (ii) the Expiration Date. 

        d.    Should
Optionee retire while this option is outstanding, then this option shall be exercisable for all of the depositary units for which this option is exercisable at the
time of such "retirement." Such right shall lapse, and this option shall terminate and cease to remain outstanding, upon the earlier of (i) the expiration of the thirty-six
(36)-month period measured from the date of Optionee's retirement, or (ii) the Expiration Date. For purposes of this Paragraph 5, "retirement" shall mean the Optionee's cessation of
Service on or after either of the following: 

        (i)    the
first day of the month coinciding with or next following Optionee's sixty-fifth (65) birthday. 

        (ii)  the
first day of a calendar month after meeting the age and service requirements for early retirement, which are: Optionee's years of service for the Partnership or an
affiliated entity meet or exceed ten (10) years of service, and Optionee has attained age 55. 

        e.    Should
(i) Optionee's Service be terminated for misconduct (including, but not limited to, any act of dishonesty, willful misconduct, fraud or embezzlement) or
(ii) Optionee make any unauthorized use or disclosure of confidential information or trade secrets of the Partnership or any parent or subsidiary, then in any such event this option shall
terminate immediately and cease to be outstanding. 

        f.      For
purposes of this Agreement, the following definitional provisions shall be in effect: 

        (i)    Optionee
shall be deemed to remain in Service for so long as such individual renders services on a periodic basis to the Partnership (or any subsidiary or other
affiliated entity) in the capacity of an employee or a non-employee member of the Board. 

        (ii)  An
entity shall be considered to be a subsidiary of the Partnership if it is a member of an unbroken chain of entities beginning with the Partnership, provided each
such entity in the chain (other than the last entity) owns, at the time of determination, securities possessing fifty percent (50%) or more of the total combined voting power of all classes of
securities in one of the other entities in such chain. 

        (iii)  An
entity shall be considered to be a parent of the Partnership if it is a member of an unbroken chain ending with the Partnership, provided each such entity in the
chain (other than the Partnership) owns, at the time of determination, securities possessing fifty percent (50%) or more of the total combined voting power of all classes of securities in one of the
other entities in such chain. 

        7.    Adjustment in Depositary Units.    

        a.    If
any change is made to the depositary units issuable under the Plan (whether by reason of merger, consolidation, reorganization, recapitalization, depositary unit
distribution, depositary unit split, combination of depositary units, exchange of depositary units, or other change in partnership or capital structure of the Partnership), or if the Partnership makes
a distribution to 

26

 

holders of depositary units which results from the sale or disposition of a major asset or separate operating division of the Partnership, which would materially dilute the rights of option holders,
then the Committee shall make appropriate adjustments to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the number and/or class of securities and price
per depositary unit in effect under each outstanding option under the Plan and (iii) the maximum number of depositary units issuable to one individual pursuant to Paragraph 1.3.D of the
Plan. The purpose of these adjustments will be to preclude the enlargement or dilution of rights and benefits under the options. 

        b.    If
any change is made to the depositary units issuable under the Plan by reason of a Structural Transaction or a Change in Control that does not result in the termination
of all outstanding options, the Committee may adjust the maximum number of depositary units issuable under the Plan, the number of depositary units subject to options, and the option price, as
provided in Paragraph 1.3.C. of the plan. 

        8.    Acceleration of Options.    In the event of a Structural Transaction or Change in
Control, each option will be automatically accelerated so that each option at the time outstanding under the Plan and not then otherwise fully exercisable shall become fully exercisable for up to the
total number of depositary units purchasable or issuable thereunder and may be exercised for all or any portion of the depositary units for which the option is so accelerated. 

        9.    No Acceleration of Options.    In no event shall any such acceleration or termination of
repurchase rights in connection with a Structural Transaction occur if and to the extent (i) such option is, in connection with the Structural Transaction, either to be assumed by the successor
entity or affiliate thereof or to be replaced with a comparable option to purchase or receive securities of the successor entity or affiliate thereof, (ii) such option is to be replaced with a
cash incentive program of the successor entity which preserves the depositary unit spread existing at the time of the Structural Transaction and provides for subsequent payout in accordance with the
same vesting schedule applicable to such option, or (iii) the acceleration of such option is subject to other limitations imposed by the Committee at the time of the option grant. The
determination of option comparability under clause (i) above shall be made by the Committee and its determination shall be final, binding and conclusive. Upon consummation of a Structural
Transaction, all outstanding options under the Plan shall, to the extent not previously exercised or paid in full or assumed by the successor entity or an affiliate, terminate. 

        10.    Cancellation of Options.    Notwithstanding the above, in the event of any Structural
Transaction, the Committee shall have the discretion to cancel outstanding options in whole or in part, subject to such conditions as the Committee may determine, upon payment to optionees with
respect to each cancelled option, an amount in cash not less than the difference between (i) the Fair Market Value (at the effective date of such Structural Transaction) of the consideration
the optionee would have received if the option had been exercised immediately prior to the effective date of such Structural Transaction and:(ii) the exercise price of such option. 

        11.    Partnership Structure.    The grant of options under the Plan shall in no way affect
the Partnership's right to adjust, reclassify, reorganize, or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate, or sell or transfer any part of its
business or assets. 

        12.    Privilege of Unitholder Rights.    The holder of this option shall not have any of the
rights of a unitholder with respect to the depositary units until such individual shall have exercised the option and paid the Exercise Price for the purchased depositary units. 

        13.    Withholding.    Grantee may elect to have the Partnership withhold, from the depositary
units otherwise issuable pursuant to such option, one or more of such depositary units with an aggregate Fair Market Value equal to the Federal, state and local employment and income taxes ("Taxes")
incurred in 

27

 

connection with the acquisition of such depositary units. Grantee may also deliver previously acquired depositary units held for the requisite period to avoid a charge to earnings in satisfaction of
such Taxes. The withheld or delivered depositary units will be valued at Fair Market Value on the applicable determination date for such Taxes. 

        14.    Manner of Exercising Option.    In order to exercise this option with respect to all or
any part of the depositary units for which this option is at the time exercisable, Optionee (or in the case of exercise after Optionee's death, Optionee's designated beneficiary, executor,
administrator, heir or legatee, as the case may be) must take the following actions: 

        a.    Deliver
to the Secretary of the Partnership an executed notice of exercise in substantially the form of Exhibit I to this Agreement (the "Exercise Notice") in
which there is specified the number of depositary units which are to be purchased under the exercised option. 

        b.    Pay
the aggregate Exercise Price for the purchased depositary units through one or more of the following alternatives: 

        (i)    in
cash or cash equivalents made payable to the Partnership; 

        (ii)  in
depositary units valued at their Fair Market Value as of the Exercise Date (defined below) and held for the requisite period in order to avoid a charge to earnings
(currently six (6) months, but subject to change); 

        (iii)  through
a sale and remittance procedure under which the optionee delivers a properly executed exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Partnership the amount of sale proceeds to pay the option price; or 

        (iv)  such
other lawful consideration as the Committee shall determine. 

        For
purposes of clause (ii) immediately above, the "Exercise Date" is the date on which written notice of the exercise of the option is delivered to the Partnership. In all other
cases, the Exercise Date is the date on which written notice and actual payment is received by the Partnership. 

        Except
to the extent the sale and remittance procedure specified above is utilized in connection with the option exercise, payment of the Exercise Price for the purchased depositary
units must accompany the Exercise Notice. 

        c.    Furnish
to the Partnership appropriate documentation that the person or persons exercising the option (if other than Optionee) have the right to exercise this option. 

        d.    As
soon as practical after receipt of the Exercise Notice, the Partnership shall mail or deliver to or on behalf of Optionee (or any other person or persons exercising
this option in accordance herewith) a depositary receipt representing the purchased depositary units. 

        e.    In
no event may this option be exercised for any fractional depositary units. 

        15.    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. 

        16.    Counterparts.    The Grant Notice may be executed in counterparts each of which shall
be deemed to be an original, but all of which together shall constitute one and the same instrument. 

        17.    Compliance with Law and Regulations.    The exercise of this option and the issuance of
depositary units upon such exercise shall be subject to compliance by the Partnership and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any
stock exchange on which the Partnership's depositary units may be listed at the time of such exercise and issuance. 

28

 

        18.    Successors and Assigns.    Except to the extent otherwise provided in
Paragraph 4, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the designated beneficiaries, successors, administrators, heirs and legal representatives of
Optionee and the successors and assigns of the Partnership. 

        19.    Liability of Partnership.    The inability of the Partnership to obtain approval from
any regulatory body having authority deemed by the Partnership to be necessary to the lawful issuance and sale of any depositary units pursuant to this option shall relieve the Partnership of any
liability with respect to the non-issuance or sale of the depositary units as to which such approval shall not have been obtained. The Partnership shall, however, use its best efforts to
obtain such approvals. 

        20.    No Employment/Service Contract.    Nothing in this Agreement or in the Plan shall
confer upon Optionee any right to continue in the Service of the Partnership (or any subsidiary or other affiliated entity employing or retaining Optionee) for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Partnership (or any affiliated entity) or Optionee, which rights are hereby expressly reserved by each party, to terminate Optionee's
Service at any time for any reason whatsoever, with or without cause. 

        21.    Notices.    Any notice required to be given or delivered to the Partnership under the
terms of this Agreement shall be in writing and addressed to the Partnership in care of the Corporate Secretary at Newhall Management Corporation, 23823 Valencia Boulevard, Valencia, CA 91355. Any
notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated on the Grant Notice. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the U.S. mail, by registered or certified mail, postage prepaid and properly addressed to the party to be notified, 

        22.    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 express terms and provisions of the Plan. All decisions of the Committee 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. 

        23.    Payroll Tax Withholding.    Optionee shall make appropriate arrangements with the
Partnership or any parent, subsidiary or affiliated entity employing Optionee for the satisfaction of all Federal, state or local income and employment tax withholding requirements applicable to the
exercise of this option. 

        24.    Cancellation and New Grant of Awards.    The Committee shall have the authority to
effect, at any time and from time to time, with the consent of the affected Optionees, the cancellation of any or all outstanding options and to grant in substitution therefore, new options under the
Plan covering the same or different number and class of depositary units having a price per depositary unit not less than the Fair Market Value on the new grant date. 

29

 
SUBSEQUENT GRANT

THE NEWHALL LAND AND FARMING COMPANY  

NOTICE OF GRANT OF OPTION  

        Notice is hereby given of the following option (the "Option") to purchase depositary units of The Newhall Land and Farming Company (a California Limited
Partnership) (the "Partnership") which has been granted pursuant to The Newhall Land and Farming Company 2002 Equity Compensation Plan (the "Plan"): 

	Optionee:    _________________________________________________________________________________
	
Grant Date:    _______________________________________________________________________________
	
Number of Optioned Depositary Units:    __________________________________________________________
	
Exercise Price Per Depositary Unit:    ____________________________________________________________
	
Expiration Date:    ___________________________________________________________________________
	
Tandem Option/Appreciation Right:	
Yes ______
	

 	
No ______

        Exercise Schedule:    The Option shall become exercisable in four equal and successive annual
installments for twenty-five percent (25%) of the Optioned Depositary Units upon Optionee's completion of each year of Service (as defined in the Option Agreement
dated                        )
measured from the Grant Date. In no event shall the Option become exercisable for any additional Optioned Depositary Units following Optionee's cessation of Service. 

        Optionee
understands and agrees that the Option is granted subject to and in accordance with the express terms and conditions of the Plan. Optionee further agrees to be bound by the
terms and conditions of the Option as set forth in the Option Agreement dated                        ,
            which was distributed with the Initial Notice of Grant of Option and the Plan. 

	Dated: _______________________	 	THE NEWHALL LAND AND FARMING COMPANY

(a California Limited Partnership)
	

 	
 	

By:	

 
	 	 	 	

	 	 	Title:	Secretary
	 	 	 	 
	

 	
 	

 OPTIONEE
	 	 	 	 
	

 	
 	

Address:	

 
	 	 	 	

	 	 	 	 
	 	 	

I
designate the following beneficiary(ies): 

	  
	 	Relationship:	  

	 	 	 	 	 
	Address:	 	 	 	 
	 	

	 	 	 	 	 
	

30QuickLinks
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Exhibit 10.1    
  

 
 

ON COMMAND CORPORATION
  2002 EXECUTIVE SEVERANCE PAY PLAN
  
    EFFECTIVE DATE: MAY 1, 2002    
  

        

 
 

TABLE OF CONTENTS    
  

	ARTICLE I        DEFINITIONS	 	1
	 	1.1	 	"Affiliated Company"	 	1
	 	1.2	 	"Appeals Committee"	 	1
	 	1.3	 	"Board"	 	1
	 	1.4	 	"Code"	 	1
	 	1.5	 	"Company"	 	1
	 	1.6	 	"Compensation"	 	1
	 	1.7	 	"Eligible Employee"	 	1
	 	1.8	 	"Plan"	 	1
	 	1.9	 	"Plan Administrator"	 	1
	 	1.10	 	"Severance Pay"	 	1
	 	1.11	 	"Termination Date"	 	1
	 	1.12	 	"Waiver and Release Agreement"	 	1
	

ARTICLE II        ELIGIBILITY FOR BENEFITS	
 	

2
	 	2.1	 	Eligibility for Severance Pay	 	2
	

ARTICLE III        AMOUNT OF SEVERANCE PAY	
 	

3
	 	3.1	 	Severance Pay Benefit	 	3
	 	3.2	 	Reduction of Severance Pay Benefits in Certain Circumstances	 	3
	 	3.2	 	Outplacement Counseling	 	3
	

ARTICLE IV        PAYMENT OF SEVERANCE PAY	
 	

3
	 	4.1	 	Payment of Severance Pay Benefit	 	3
	 	4.2	 	Cancellation of Payment Upon Ineligibility	 	3
	

ARTICLE V        ADMINISTRATION	
 	

4
	 	5.1	 	Named Fiduciary	 	4
	 	5.2	 	Discretionary Authority	 	4
	 	5.3	 	Funding	 	4
	 	5.4	 	Interest in Severance Pay Nonassignable	 	4
	

ARTICLE VI        CLAIMS PROCEDURE	
 	

4
	 	6.1	 	Filing and Initial Determination of Claim	 	4
	 	6.2	 	Duty of Plan Administrator Upon Denial of Claim	 	4
	 	6.3	 	Request for Review of Claim Denial	 	4
	

ARTICLE VII        AMENDMENT AND TERMINATION	
 	

5
	

ARTICLE VIII        MISCELLANEOUS	
 	

5
	 	8.1	 	Withholdings	 	5
	 	8.2	 	Amount Payable Upon Death of Eligible Employee	 	5
	 	8.3	 	Right of Offset	 	5
	 	8.4	 	Termination of Service	 	5
	 	8.5	 	Payments Due Minors or Incapacitated Persons	 	5
	 	8.6	 	Severability	 	6
	 	8.7	 	Applicable Law	 	6
	 	8.8	 	Effect of Agreement	 	6

 

 
 

ON COMMAND CORPORATION
  2002 EXECUTIVE SEVERANCE PAY PLAN    
  

        On Command Corporation ("On Command"), a Delaware corporation (the "Company"), approves and adopts this On Command Corporation 2002 Executive Severance Pay Plan
(the "Plan"), effective May 1, 2002. 

 
 

ARTICLE I
  DEFINITIONS    
  

        1.1  "Affiliated Company" means every entity in which On Command Corporation beneficially owns (as defined in
Rule 13d-3 of the Securities Exchange Act of 1934, as amended) 80% or more of the voting securities of such entity. For purposes of this Section 1.1, "voting securities"
means the capital stock or other ownership interests of an entity having voting power under ordinary circumstances to vote in the election of directors or similar officials of such entity, but will
not include any capital stock that will have such voting power solely by reason of the happening of any contingency. 

        1.2  "Appeals Committee" means the committee appointed by the Board to perform the functions specified in Article VII.
If the Board does not appoint an Appeals Committee, the Plan Administrator will appoint the Appeals Committee and, if no such Appeals Committee is appointed, the Plan Administrator will serve as the
Appeals Committee under Article VII. 

        1.3  "Board" means the Board of Directors of On Command Corporation. 

        1.4  "Code" means the Internal Revenue Code of 1986, as amended. 

        1.5  "Company" means On Command Corporation. 

        1.6  "Compensation" means the Employee's monthly base wage at the rate in effect at the Termination Date, excluding for this
purpose all categories of pay that are not base wages, including but not limited
to overtime, bonuses, commissions, piece rate, incentive pay and any taxable or nontaxable fringe benefit or payment. 

        1.7  "Eligible Employee" is defined in Section 2.1. 

        1.8  "Plan" means this On Command Corporation 2002 Executive Severance Pay Plan, as amended from time to time. 

        1.9  The
"Plan Administrator" means the administrative committee for the Plan appointed by the Board. 

        1.10 "Severance Pay" means the total amount payable to an Eligible Employee in accordance with the provisions of
Article III of this Plan. 

        1.11 "Termination Date" means the last day of work for which an Eligible Employee will be paid for work as designated in the
letter or other communication advising the employee of his or her termination of employment. Neither unused time off benefits nor the payment of Severance Pay under this Plan will extend an Eligible
Employee's Termination Date. 

        1.12 "Waiver and Release Agreement" means a written document prepared by and acceptable to the Plan Administrator intended to
be legally binding on an Eligible Employee and the Company governing the termination of the Eligible Employee's employment with the Company and, among other things, providing for a full release and
waiver by the Eligible Employee of all possible claims against the Company, any and all directors, officers, employees, agents, or representatives of the Company, and each of their predecessors,
successors, and assigns arising out of the Eligible Employee's employment with, and termination of employment by, the Company.

 

 
 

ARTICLE II
  ELIGIBILITY FOR BENEFITS    
  

        2.1    Eligibility for Severance Pay.    

        (a)  Eligible
Employees include only those employees of the Company whose title, as of the employee's Termination Date, is Senior Vice President, Executive Vice President,
President, or Chief Executive Officer. Employees of any Affiliated Company are not eligible to participate in this Plan. 

        (b)  Only
Eligible Employees whose employment is terminated for any of the following reasons, as determined in the sole discretion of the Plan Administrator, will be eligible
for Severance Pay: 

	(1)
	A
termination by the Company in a layoff or reduction in force (and the Eligible Employee must remain employed through his or her Termination Date in order to be eligible for
Severance Pay);

	(2)
	A
termination by the Company as part of a corporate transaction involving the Company (and the Eligible Employee must remain employed through his or her Termination Date in order to
be eligible for Severance Pay) where the Eligible Employee is NOT offered comparable employment with the entity involved in the corporate transaction with the Company; or

	(3)
	A
termination by the Eligible Employee for Good Reason. 

        (c)  A
termination of employment by the Eligible Employee will be considered for "Good Reason" if the Eligible Employee terminates his or her employment for one of the
following reasons: 

	(1)
	the
Eligible Employee is relocated by the Company to a primary job location which is more than 50 miles from the Eligible Employee's primary job location immediately prior to such
relocation;

	(2)
	the
Eligible Employee is relocated by any successor in interest to the Company (which will include any surviving entity in a merger with the Company, and any purchaser of any
business, division, interest, or assets of the Company) within one year after the transaction with the Company which results in such successor in interest becoming a successor in interest, to a
primary job location which is more than 50 miles from the Eligible Employee's job location immediately prior to the entity becoming a successor in interest.

	(3)
	the
Eligible Employee's base wage rate is reduced by any amount from the Eligible Employee's base wage rate as of the date of eligibility under this Plan. 

        (d)  "Comparable
employment" is a job position, regardless of title, with (1) substantially similar duties and responsibilities as the Eligible Employee's position as
of the date of eligibility under this Plan; (2) if the primary job location is within 50 miles from the Eligible Employee's primary job location with the Company as of the date of eligibility
under this Plan; and (3) if the Eligible Employee's base wage rate is not less than the Eligible Employee's base wage rate as of the date of eligibility under this Plan. 

        (e)  Notwithstanding
any other provision of this Plan, Severance Pay will NOT be paid: 

	(1)
	if
an Eligible Employee's employment with the Company is terminated because of voluntary resignation (that is not considered for "Good Reason"), retirement, death, disability, or
discharge for misconduct or poor performance;

	(2)
	if
an Eligible Employee is terminated by the Company as part of a corporate transaction involving the Company and the Eligible Employee accepts any position of employment (whether a
comparable position or a noncomparable position) with the entity involved in 

 

the
corporate transaction with the Company prior to the closing of the corporate transaction or within 60 days thereafter; or 

	(3)
	more
than once to any Eligible Employee in the same 24-month period. 

 
 

ARTICLE III
  AMOUNT OF SEVERANCE PAY    
  

        3.1    Severance Pay Benefit.    If an Eligible Employee delivers to the Company, within the time parameters
established by the Company for this purpose, an executed Waiver and Release Agreement (and does not revoke the Waiver and Release Agreement during the period specified by the Company following
delivery of the Waiver and Release, if revocation is permitted), the Eligible Employee will be entitled to Severance Pay determined as follows: 

	(a)
	for
Eligible Employees whose title is Senior Vice President, 12 months of Compensation;

	(b)
	for
Eligible Employees whose title is Executive Vice President, 18 months of Compensation; and

	(c)
	for
Eligible Employees whose title is President or Chief Executive Officer, 24 months of Compensation. 

        3.2    Reduction of Severance Pay Benefits in Certain Circumstances.    If an Eligible Employee is entitled to receive
severance payments from the Company pursuant to (a) a separate employment agreement between the Company and the Eligible Employee; (b) a collective bargaining agreement covering a unit
of employees which includes the Eligible Employee; (c) another severance pay plan maintained by the Company; or (d) pursuant to any other agreement (including any merger agreement, asset
purchase agreement, or acquisition agreement) between the Company and the Eligible Employee or any other entity, and if Severance Pay also would be payable to the Eligible Employee under this Plan
under the same circumstances, the amount payable to the Eligible Employee under this Plan will be reduced, but not below zero, by the amount of such other payment. In addition, the amount of Severance
Pay will be reduced by any amounts owed by the Eligible Employee to the Company for any reason. 

        3.2    Outplacement Counseling.    Any Eligible Employee who receives Severance Pay under this Article also will be
provided with outplacement counseling services, such services to be provided by the entity selected by the Plan Administrator and for outplacement service levels established by the Plan Administrator
based on the Eligible Employee's position with the Company. 

 
 

ARTICLE IV
  PAYMENT OF SEVERANCE PAY    
  

        4.1    Payment of Severance Pay Benefit.    Severance Pay under this Plan will be paid in one lump sum cash payment as
soon as administratively feasible and permitted under applicable law after the Termination Date of the Eligible Employee and after the expiration of any applicable waiting periods set forth in the
Waiver and Release Agreement, and that payment will be subject to all applicable tax and other withholdings, except that no withholdings will be made for any 401(k) plan maintained by the Company or
for premiums for continued insurance coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act ("COBRA"). 

        4.2    Cancellation of Payment Upon Ineligibility.    Notwithstanding any other provision of this Plan if, prior to an
Eligible Employee's receipt of any portion of the Severance Pay payment under Section 4.1, the Eligible Employee becomes re-employed with the Company in any position or category of
employment, the employee will not be paid any remaining portion of such Severance Pay payment,

  
such Severance Pay payment will be canceled, and such employee will again be subject to the terms of this Plan. 

 
 

ARTICLE V
  ADMINISTRATION    
  

        5.1    Named Fiduciary.    The Plan Administrator of this Plan will be the Named Fiduciary of this Plan under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). 

        5.2    Discretionary Authority.    The Plan Administrator as Named Fiduciary has full discretionary authority to
determine Eligible Employee status, to determine eligibility for Severance Pay (including the determination of the reason for an Eligible Employee's termination of employment, the Eligible Employee's
position and title with the Company, and any other determination necessary under this Plan), to calculate the amount of Severance Pay payable to an Eligible Employee, to interpret and construe the
terms of the Plan and to take all action necessary or appropriate for the administration or implementation of the Plan. 

        5.3    Funding.    Nothing contained in this Plan and no action taken pursuant to the provisions of this Plan will
create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Eligible Employee or any other person. The Company will not be required to fund its
obligations under this Plan in any manner, and an Eligible Employee may look only to the Company's unsecured promise to pay benefits from its general assets in accordance with the provisions of this
Plan. 

        5.4    Interest in Severance Pay Nonassignable.    An Eligible Employee will not have any right to commute, sell,
assign, transfer, or otherwise convey the right to receive any payments under this Plan. Payments will not be subject to the claim of any creditor of an Eligible Employee, nor can payments be taken in
execution by attachment or garnishment or by any other legal or equitable proceeding, except as may be provided by Section 9.3 of this Plan. 

 
 

ARTICLE VI
  CLAIMS PROCEDURE    
  

        6.1    Filing and Initial Determination of Claim.    The Eligible Employee or his duly authorized representative may
file a claim for a benefit to which the claimant believes that he or she is entitled. Such a claim must be in writing and delivered to the Plan Administrator by certified mail. Within ninety
days after receipt of a claim, the Plan Administrator will send to the claimant by first class mail, postage prepaid, notice of the granting or denying, in whole or in part, of such claim, unless
special circumstances require an extension of time for processing the claim. In no event may the extension exceed ninety days from the end of the initial period. If such extension is necessary, the
claimant will be given a written notice to this effect prior to the expiration of the initial ninety-day period. The Plan Administrator will have full discretion to deny or grant a claim
in whole or in part. If notice of the denial of a claim is not furnished in accordance with this Section 6.1, the claim will be deemed denied and the claimant will be permitted to exercise his
right to review pursuant to Section 6.3. 

        6.2    Duty of Plan Administrator Upon Denial of Claim.    If a claim for benefits is denied, the Plan Administrator
will provide to the claimant written notice setting forth in a manner calculated to be understood by the claimant: (a) the specific reason or reasons for the denial; (b) specific
reference to pertinent Plan provisions on which the denial is based; (c) a description of any additional material or information necessary for the claimant to perfect the claim and an
explanation of why such material is necessary; and (d) an explanation of the claim review procedure. 

        6.3    Request for Review of Claim Denial.    Within sixty days after receipt by the claimant of written notification
of the denial in whole or in part of his claim, the claimant or his duly authorized

  
representative, upon written application to the Plan Administrator in person or by certified mail, postage prepaid, may request a review of such denial, may review pertinent documents, and may submit
issues and comments in writing. Upon receipt of the request for review, the Appeals Committee will review the claim. The decision on review will be written in a manner calculated to be understood by
the claimant and will include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based. The decision on review will be made not later
than sixty days after the Plan Administrator's receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision will be rendered not
later than 120 days after receipt of a request for review. If such extension is necessary, the claimant will be given written notice of the extension prior to the expiration of the initial
sixty-day period. If notice of the decision on the review is not furnished in accordance with this Section 6.3, the claim will be deemed denied. 

 
 

ARTICLE VII
  AMENDMENT AND TERMINATION    
  

        Because future conditions affecting the Company cannot be foreseen, the right is reserved to amend, modify, suspend or terminate the Plan with future or with
retroactive effect by action of the President of On Command taken in an appropriate written instrument. Any such amendment, modification, suspension or termination of the Plan will be effective as of
the date specified in the instrument of amendment, suspension, or termination. An amendment or modification may affect all Eligible Employees and Severance Pay payable to any Eligible Employee, but
may not reduce the amount of
any Severance Pay already paid to an Eligible Employee before the execution date of an instrument of amendment, suspension or termination. 

 
 

ARTICLE VIII
  MISCELLANEOUS    
  

        8.1    Withholdings.    All payments pursuant to this Plan will be subject to all legally required tax and other
withholdings. Other withholdings will specifically not include withholdings for any Company 401(k) Plan, or for premiums for continued insurance coverage pursuant to the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"). 

        8.2    Amount Payable Upon Death of Eligible Employee.    If an Eligible Employee becomes currently entitled to
Severance Pay under Article II, but such Eligible Employee dies before receiving full payment of the amount due hereunder, such amount will be paid, in a cash lump sum, to the Eligible
Employee's estate. 

        8.3    Right of Offset.    To the extent permitted by applicable law, the Company may, at its sole discretion, apply
any Severance Pay amounts otherwise due and payable under this Plan against any Eligible Employee loans outstanding to the Company or other debts of the Eligible Employee to the Company existing at
the Termination Date. 

        8.4    Termination of Service.    Nothing in this Plan will be construed to give an Eligible Employee the right to be
retained as an employee of the Company or to impair the right of the Company to terminate an Eligible Employee's services at any time with or without cause. 

        8.5    Payments Due Minors or Incapacitated Persons.    If any person entitled to a payment under the Plan is a minor,
or if the Plan Administrator determines that any such person is incapacitated by reason of physical or mental disability, whether or not legally adjudicated as an incompetent, the Plan Administrator
will have the power to cause the payment becoming due to such person to be made to another for his benefit, without responsibility of the Plan Administrator, the Company, or any other person or entity
to see to the application of such payment. Payments made pursuant to such power will operate as a complete discharge of the Company, the Plan, and the Plan Administrator of any liability under this
Plan.

 

        8.6    Severability.    If any provision of this Plan is held illegal or invalid, the remaining provisions of the Plan
will not be effected thereby. 

        8.7    Applicable Law.    This Plan will be construed in accordance with and governed by the provisions of ERISA,
except to the extent ERISA does not preempt the laws of the State of Colorado, in which case the laws of the State of Colorado will govern. 

        8.8    Effect of Agreement.    This Plan will be binding upon and inure to the benefit of the Company, its successors
and assigns, and Eligible Employees and their heirs, personal representatives, and legal representatives. 

        IN
WITNESS WHEREOF, the undersigned, being duly authorized by the Company, hereby approves and adopts this Plan. 

	 	 	ON COMMAND CORPORATION
	

 	
 	

By:	

/s/  CHRIS SOPHINOS      

	

 	
 	

Date:	

May 14, 2002

QuickLinks

Exhibit 10.1

ON COMMAND CORPORATION 2002 EXECUTIVE SEVERANCE PAY PLAN EFFECTIVE DATE: MAY 1, 2002

TABLE OF CONTENTS

ON COMMAND CORPORATION 2002 EXECUTIVE SEVERANCE PAY PLAN

ARTICLE I DEFINITIONS

ARTICLE II ELIGIBILITY FOR BENEFITS

ARTICLE III AMOUNT OF SEVERANCE PAY

ARTICLE IV PAYMENT OF SEVERANCE PAY

ARTICLE V ADMINISTRATION

ARTICLE VI CLAIMS PROCEDURE

ARTICLE VII AMENDMENT AND TERMINATION

ARTICLE VIII MISCELLANEOUS

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