NEWHALL LAND & FARMING CO /CA/, S-8, 1995-03-22

NEWHALL LAND & FARMING CO /CA/
S-8, 1995-03-22
OPERATIVE BUILDERS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON MARCH 22, 1995
REGISTRATION NO. ________________
___________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________________________
THE NEWHALL LAND AND FARMING COMPANY
(A CALIFORNIA LIMITED PARTNERSHIP)
(Exact name of Registrant as specified in its charter)
_______________________________________

CALIFORNIA 95-3931727
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)

23823 VALENCIA BOULEVARD
VALENCIA, CALIFORNIA 91355
(Address of principal executive offices) (zip code)
________________________________________

THE NEWHALL LAND AND FARMING COMPANY
1995 OPTION/AWARD PLAN
(Full title of the plan)
_________________________________________

Thomas L. Lee
Chairman and Chief Executive Officer
NEWHALL MANAGEMENT CORPORATION
23823 Valencia Boulevard, Valencia, California 91355
(Name and address of agent for service)
(805) 255-4000
(Telephone number, including area code, of agent for service)

Copies to:

Barry W. Homer, Esq.
George D. Tuttle, Esq.
Brobeck, Phleger & Harrison
One Market Plaza, Spear Street Tower
San Francisco, California 94105
_______________________________________
This Registration Statement shall become effective immediately upon
filing with the Securities and Exchange Commission, and sales of the
registered securities will begin as soon as reasonably practicable
after such effective date.

<TABLE>

CALCULATION OF REGISTRATION FEE

<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered <F1> Registered <F2> per Unit <F3> Price <F3> Fee
<S> <C> <C> <C> <C>

Depositary Units:

The Newhall Land and Farming 600,000 $14.75 $8,850,000.00 $3,052.00
Company 1995 Option/Award Plan

<FN>
<F1> In addition, pursuant to Rule 416(c) under the Securities
Act of 1933, this registration statement also covers an
indeterminate amount of interests to be offered or sold pursuant to
the employee benefit plan described herein.

<F2> This Registration Statement also covers any additional
Depositary Units that are acquired under The Newhall Land and
Farming Company 1995 Option/Award Plan by reason of any Depositary
Unit dividend, Depositary Unit split, recapitalization or other
similar transaction effected without the receipt of consideration
which results in an increase in the number of the Registrant's
outstanding Depositary Units.

<F3> Calculated solely for purposes of this offering under Rule
457(h) of the Securities Act of 1933 on the basis of the average of
the high and low selling price per Depositary Unit of The Newhall
Land and Farming Company on March 20, 1995 as reported by the New
York Stock Exchange.

</TABLE>

<PAGE>

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

The Newhall Land and Farming Company (a California Limited
Partnership)(the "Registrant") files this Registration Statement with
the Securities and Exchange Commission (the "Commission") on Form S-8
(the "Registration Statement") to register 600,000 depositary units
of the Registrant (the "Depositary Units") to be acquired from the
Registrant or on the open market pursuant to The Newhall Land and
Farming Company 1995 Option/Award Plan (the "Plan").

Item 3. Incorporation of Certain Documents by Reference

The Registrant and the Plan hereby incorporate by reference
into this Registration Statement the following documents previously
filed with the Commission by the Registrant:

(a) The Registrant's Quarterly Report on Form 10-Q, File No.
01-08885, filed with the Commission for the quarter ended September
30, 1994;

(b) The Registrant's Quarterly Report on Form 10-Q, File No.
01-08885, filed with the Commission for the quarter ended June 30,
1994;

(c) The Registrant's Quarterly Report on Form 10-Q, File No.
01-08885, filed with the Commission for the quarter ended March 31,
1994;

(d) The Registrant's Annual Report on Form 10-K, File No. 01-
08885, filed with the Commission for the year ended December 31,
1993;

(e) The Registrant's Registration Statement on Form 8-A, File
No. 01-08885, filed with the Commission on November 18, 1986, which
describes the terms, rights and provisions applicable to the
Depositary Units.

All reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to
be incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing of such documents.

Item 4. Description of Securities

Not applicable.

Item 5. Interests of Named Experts and Counsel

Not applicable.

Item 6. Indemnification of Directors and Officers

The Limited Partnership Agreement of the Registrant
provides for indemnification by the Registrant of its general
partners and their present or former partners, shareholders,
directors and officers (collectively, the "Indemnitees") in certain
circumstances. The limited partnership agreement of Newhall
Management Limited Partnership, a California Limited Partnership
("NMLP") and the managing general partner of the Registrant, and the
Articles of Incorporation and Bylaws of Newhall Management
Corporation, a California Corporation ("NMC") and the managing
general partner of NMLP, provide for similar indemnification of such
Indemnitees. In addition, the Registrant has entered into
indemnification agreements ("Indemnification Agreements") with the
directors and certain officers of NMC, which describe with more
specificity the indemnification obligations of the Registrant.

<PAGE>

The Registrant has purchased liability insurance to
supplement the protection afforded to Indemnitees by their indemnity
rights under the terms of such charter documents and the
Indemnification Agreements, and to cover the Registrant's indemnity
obligations. However, liability insurance is not necessarily
available to cover the unlimited liability of the Indemnitees in
certain circumstances. In addition, NMC's Articles of Incorporation
provide that the liability of directors of NMC for monetary damages
shall be eliminated to the fullest extent permissible under
California law.

Item 7. Exemption from Registration Claimed

Not Applicable.

Item 8. Exhibits

Exhibit Number Exhibit

5 Opinion of Brobeck, Phleger & Harrison.
23.1 Consent of Independent Auditors - KPMG Peat Marwick
LLP.
23.2 Consent of Brobeck, Phleger & Harrison is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of
this Registration Statement.
99.1 The Newhall Land and Farming Company 1995 Option/Award
Plan.
99.2 Form of Notice of Grant and Option Agreement.
99.3 Form of Notice of Grant and Option Agreement for
Independent Directors.
99.4 Form of Notice of Grant and Restricted Units Agreement.
99.5 Form of Notice of Grant and Unit Rights Agreement.
99.6 Form of Notice of Grant and Appreciation Rights
Agreement.
99.7 Form of Independent Director Fee Election.

Item 9. Undertakings.

A. The undersigned Registrant hereby undertakes: (1) to
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement (i) to
include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933, (ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement, and (iii) to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement; provided, however, that clauses (1)(i) and (1)(ii) shall
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference into the Registration Statement; and
(2) that for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and (3)
to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

B. The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference into the Registration
Statement shall be deemed to be a new Registration Statement

II-2.

<PAGE>

relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

C. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.

II-3.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of
1933, as amended, Registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City
of Universal City, State of California, on this 15th day of March,
1995.

The Newhall Land and Farming Company
(a California Limited Partnership)
Registrant

By Newhall Management Limited
Partnership,
Managing General Partner

By Newhall Management Corporation,
Managing General Partner

By THOMAS L. LEE
Thomas L. Lee
Chairman and Chief Executive
Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

That the undersigned officers and directors of The Newhall
Land and Farming Company, a California Limited Partnership, do hereby
constitute and appoint Thomas L. Lee, Chairman and Chief Executive
Officer, the lawful attorney-in-fact and agent, with full power and
authority to do any and all acts and things and to execute any and
all instruments which said attorney and agent determines may be
necessary or advisable or required to enable said corporation to
comply with the Securities Act of 1933, as amended, and any rules or
regulation or requirements of the Commission in connection with this
Registration Statement. Without limiting the generality of the
foregoing power and authority, the powers granted include the power
and authority to sign the names of the undersigned officers and
directors in the capacities indicated below to this Registration
Statement, to any and all amendments, both pre-effective and post-
effective, and supplements to this Registration Statement and to any
and all instruments or documents filed as part of or in conjunction
with this Registration Statement or amendments or supplements
thereof, and each of the undersigned hereby ratifies and confirms all
that said attorney and agent shall do or cause to be done by virtue
hereof. This Power of Attorney may be signed in several counterparts.

II-4.

<PAGE>

IN WITNESS WHEREOF, each of the undersigned has executed
this Power of Attorney as of the date indicated.

Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

Signatures Title Date

THOMAS L. LEE Chairman and Chief March 15, 1995
Thomas L. Lee Executive Officer of
Newhall Management
Corporation (Principal
Executive Officer) and
Director

STUART R. MORK Vice President and March 15, 1995
Stuart R. Mork Chief Financial Officer
of Newhall Management
Corporation (Principal
Financial Officer)

DONALD L. KIMBALL Vice President - March 15, 1995
Donald L. Kimball Controller of
Newhall Management
Corporation
(Principal
Accounting Officer)

JAMES F. DICKASON Director March 15, 1995
James F. Dickason

GEORGE C. DILLON Director March 15, 1995
George C. Dillon

THOMAS V. MCKERNAN, JR. Director March 15, 1995
Thomas V. McKernan, Jr.

<PAGE>
PAUL A. MILLER Director March 15, 1995
Paul A. Miller

HENRY K. NEWHALL Director March 15, 1995
Henry K. Newhall

II-5.

<PAGE>

Signatures Title Date

JANE NEWHALL Director March 15, 1995
Jane Newhall

PETER T. POPE Director March 15, 1995
Peter T. Pope

CARL E. REICHARDT Director March 15, 1995
Carl E. Reichardt

THOMAS C. SUTTON Director March 15, 1995
Thomas C. Sutton

LAWRENCE R. TOLLENAERE Director March 15, 1995
Lawrence R. Tollenaere

EDWIN NEWHALL WOODS Director March 15, 1995
Edwin Newhall Woods

EZRA K. ZILKHA Director March 15, 1995
Ezra K. Zilkha

II-6.

<PAGE>

<PAGE>
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

EXHIBITS

FORM S-8

UNDER

SECURITIES ACT OF 1933

THE NEWHALL LAND AND FARMING COMPANY

<PAGE>

<PAGE>
EXHIBIT INDEX

Exhibit
Number Exhibit

Exhibit 5

Opinion of Brobeck, Phleger & Harrison.

<PAGE>

Brobeck, Phleger & Harrison
One Market
Spear Street Tower
San Francisco, CA 94105
Telephone: (415) 442-0900

March 17, 1995

The Newhall Land and Farming Company (a California Limited
Partnership)
23823 Valencia Boulevard
Valencia, California 91355

Re: Registration Statement for Offering of
600,000 Depositary Units

Ladies and Gentlemen:

In connection with your registration of 600,000
Depositary Units of The Newhall Land and Farming Company (a
California Limited Partnership) ("Company") on Form S-8 under the
Securities Act of 1933, as amended, we advise you that, in our
opinion, when such Depositary Units have been issued and sold
pursuant to the provisions of the Company's 1995 Option/Award Plan
and in accordance with the Registration Statement, such Depositary
Units will be duly-authorized, validly-issued, fully-paid and non-
assessable with no personal liability attaching to the ownership
thereof except as may otherwise be provided for in the California
Revised Limited Partnership Act and Section 5.1 of the Company's
Limited Partnership Agreement.

We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement.

Very truly yours,

BROBECK, PHLEGER & HARRISON

By
George D. Tuttle

Exhibit 23.1

Consent of Independent Auditors - KPMG Peat
Marwick LLP.

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors of Newhall Management Corporation and
Partners of the Newhall Land and Farming Company:

We consent to the use of our report incorporated herein by
reference.

KPMG Peat Marwick LLP

Los Angeles, California
March 17, 1995

Exhibit 23.2

Consent of Brobeck, Phleger & Harrison is contained
in Exhibit 5.

Exhibit 24

Power of Attorney. Reference is made to page II-4
of this Registration Statement.

Exhibit 99.1

The Newhall Land and Farming Company 1995 Option/Award Plan.

<PAGE>

THE NEWHALL LAND AND FARMING COMPANY
1995 OPTION/AWARD PLAN

EFFECTIVE JANUARY 18, 1995

ARTICLE ONE

GENERAL PROVISIONS

1.1 PURPOSE OF THE PLAN

The Newhall Land and Farming Company 1995 Option/Award Plan
("Plan") is implemented as of January 18, 1995, to enable The
Newhall Land and Farming Company (a California Limited
Partnership) ("Partnership") to offer options, appreciation
rights, restricted units and unit rights ("Awards") to key
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 supersede The
Newhall Land and Farming Company Option, Appreciation Rights and
Restricted Units Plan as amended and restated ("Prior Plan") on
January 18, 1995. Awards granted under the Prior Plan will
continue in accordance with the terms of the agreements
evidencing such Awards and the Prior Plan. No further Awards
will be granted under the Prior Plan.

1.2 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 composition of any
committee responsible for administration of the Plan for 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

- 1 -

<PAGE>

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.

1.3 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 600,000, 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 Plan 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 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 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 Award under the Plan and
(iii) the maximum number of depositary units issuable to one
individual pursuant to Paragraph 1.3.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 1.3.C.).

- 2 -

<PAGE>

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.

ARTICLE TWO

DISCRETIONARY AWARDS

2.1 ELIGIBILITY

Awards may be granted under this Article Two 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 Two to an
individual who is a non-employee Board member ("Independent
Director").

2.2 OPTIONS

A. Type and Term. Options granted pursuant to the Plan
shall be authorized by the Committee and shall be either options
intended to meet the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended ("Code"), if and to the extent
permissible under Code Section 422 ("Incentive Options"), or,
nonstatutory options. 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.
However, no options shall have a maximum term in excess of ten
(10) years. Options will be evidenced by instruments in such
form as the Committee may from time to time approve.

B. Price. The option price per depositary unit will be
not less than one hundred percent (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 as of the Exercise Date
(as defined below) and held for the requisite period in order to
avoid a charge to earnings;

- 3 -

<PAGE>

(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 to the Partnership the amount of sale proceeds to pay the
option price; or

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

For purposes of Subparagraph (2) 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.

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.

F. Incentive Options. Options granted under the Plan
which are intended to be Incentive Options are subject to the
following additional terms and conditions:

(1) Dollar Limitation. To the extent that the
aggregate Fair Market Value of depositary units (determined as of
the date or dates of grant) covered by options under the Plan (or
any other plan of the Partnership or any parent or subsidiary or
predecessor thereof) which were granted as Incentive Options, are
exercisable for the first time by the optionee during any
calendar year, exceeds the sum of $100,000 (or such greater
amount as may be permitted under the Code), whether by reason of
acceleration or otherwise, such options shall lose their
Incentive Option designation and shall be "nonstatutory" options.
Such options shall be taken into account in the order in which
they were granted.

(2) 10% Unitholder. If any employee to whom an
Incentive Option is to be granted pursuant to the provisions of
the Plan is on the date of grant the owner of depositary units
(determined by application of the ownership attribution rules of
Section 425(d) of the Code) possessing more than 10% of the total
combined voting power of all classes of securities of his or her
employer or of its parent or subsidiary then the following
special provisions will apply to the option:

- 4 -

<PAGE>

(i) The option price per depositary units subject
to such Incentive Option may not be less than 110% of the Fair
Market Value of one depositary unit on the date of grant; and

(ii) The option may not have a term in excess of
five (5) years from the date of grant.

(3) Eligible Employees. Individuals who are not
employees of the Partnership or one of its parents or
subsidiaries, or who are otherwise ineligible to receive an
Incentive Option under Section 422 of the Code, may not be
granted Incentive Options.

(4) Parent and Subsidiary. For purposes of this
Paragraph F., "parent" and "subsidiary" will have the meaning
attributed to those terms as they are used in Section 422 of the
Code (or a successor provision).

2.3 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 (i) the
Fair Market Value of one depositary unit on the date of the
exercise of the right and (ii) 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 (10) years.

2.4 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
is 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 instruments 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

- 5 -

<PAGE>

to be received by the Partnership or its affiliates as a
condition precedent to the issuance of restricted units.

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.

2.5 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.

2.6 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, thereby accelerating the
vesting of any or all of the purchased depositary units.

2.7 ADJUSTMENTS UPON CHANGES IN PARTNERSHIP STRUCTURE OR CONTROL

A. Acceleration of Awards. In the event of a "Structural
Transaction" or "Change in Control" (as defined below), the
vesting of each Award will be automatically accelerated so that
(1) each option or appreciation right at the time outstanding
under the Plan and not then otherwise fully vested shall become
fully vested for up to 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

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<PAGE>

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 occur if and to the extent (i) such
Award 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, 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 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, all outstanding
options, appreciation rights, restricted units and 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, 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 (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, (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 (at the effective date of the Structural Transaction)
subject to the restricted unit or unit right.

D. 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 options, appreciation rights and
unit rights and all outstanding rights of the Partnership to the
return or repurchase of depositary units awarded pursuant to
restricted units pursuant to the provisions of this Paragraph
2.7.D., the Committee may adjust the maximum number of depositary
units issuable

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<PAGE>

under the Plan, the number of depositary units subject to Awards,
and the option price, as provided in Paragraph 1.3.C.

E. Structural Transaction. A "Structural Transaction" is
any of the following transactions to which the Partnership is a
party:

(1) a merger or consolidation in which the Partnership
is not the surviving entity,

(2) 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;

(3) 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

(4) the complete liquidation or dissolution of the
Partnership.

F. Change in Control. A "Change in Control" occurs when:

(1) Any "person" (as defined below), 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" (as defined below), 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"
(as defined below);

(2) the "continuing managing general partner" (as
defined below) is removed.

For purposes of this subparagraph, "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).

For purposes of this subparagraph, "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

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<PAGE>

agreement, arrangement or understanding, directly or indirectly,
for the purposes of acquiring, holding, voting or disposing of
Partnership interests.

For purposes of this subparagraph, a person shall be a
beneficial owner of any Partnership interest (i) which such
person or any of its Affiliates or Associates (as defined in Rule
12b-2 under the Securities Act of 1933, reading the term
"registrant" to mean the Partnership, and 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)
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.

G. 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.

2.8 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.

2.9 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)
any or all grantees under the Plan to elect 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 Federal,
state and local employment and income taxes ("Taxes") incurred in
connection with the

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<PAGE>

acquisition of such depositary units. 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 on
the applicable determination date for such Taxes.

2.10 VALUATION

For purposes of this Article Two, the "Fair Market Value" of
a depositary unit will be determined as follows:

A. Stock Exchange. 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.

B. NASDAQ National Market System. 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 the closing selling price on the next preceding day for which
such quotation exists.

C. Neither Stock Exchange nor NASDAQ. 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.

D. Committee Discretion. 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.

- 10 -

<PAGE>

2.11 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 Two and to grant in substitution therefor 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.

ARTICLE THREE

GRANTS TO INDEPENDENT DIRECTORS

3.1 AUTOMATIC OPTION GRANTS

Independent Directors who are serving on the Board will
automatically be granted a nonstatutory option ("Automatic
Option") for the number of depositary units set forth below
(subject to adjustment under Paragraph 1.3.C. of this Plan) on
the dates and terms set forth below.

A. Initial Grant. Each Independent Director serving on
the Board on January 18, 1995, will, on that date, be granted an
Automatic Option to purchase 1500 depositary units.

B. 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 1500 depositary units.

C. Annual Grants. On the third Wednesday of July of each
fiscal year of the Partnership that occurs after the Plan
effective date, each continuing Independent Director will
automatically receive an Automatic Option to purchase 500
depositary units.

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

(1) Price. The option price per depositary unit will
be equal to one hundred percent (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 (10) years from the date
of grant ("Expiration Date"). Each Automatic Option will be
immediately exercisable.

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<PAGE>

(3) Payment. Upon exercise of the option, the option
price for the purchased depositary units will become payable
immediately 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 to the Partnership the amount of sale
proceeds to pay the option price.

(4) Cessation. In the event the optionee ceases to
serve as an Independent Director for any reason other than death
or retirement (as defined below), any outstanding Automatic
Options may be exercised within a period of three (3) 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 (3)
months following cessation of service as an Independent Director,
any outstanding Automatic Options may be exercised within twelve
(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 thirty-six (36) months of the
date of "retirement," but in no event shall this option be
exercisable after the Expiration Date of the Automatic Option.
For purposes of this Article Three, the Independent Director's
date of "retirement" will be the first day the Independent
Director ceases to serve as an Independent Director after serving
as an Independent Director for at least five (5) years.

E. Structural Transactions. Upon consummation of a
Structural Transaction, all outstanding Automatic Options granted
under the Plan shall, to the extent not previously exercised or
paid in full or assumed by the successor entity or an affiliate,
terminate.

3.2 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.

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

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<PAGE>

amount of his or her 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 the 1996 calendar year. The
Independent Director may file a standing election to be in effect
for two (2) or more consecutive calendar years or to remain in
effect indefinitely until revoked by written notice filed with
the Committee at least six (6) months 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 (1/4) 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).

3.3 NO DISCRETION

No person will have any discretion to select which
Independent Directors will be granted depositary units or to
determine the number of depositary units to be granted to
Independent Directors under this Article Three; provided,
however, that nothing in this Plan will be construed to prevent
an Independent Director from declining to receive depositary
units under this Plan.

3.4 VALUATION

B. NASDAQ National Market System. 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 Common
Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the next preceding day for which
such quotation exists.

- 13 -

<PAGE>

ARTICLE FOUR

MISCELLANEOUS

4.1 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 Three may not be amended at intervals more
frequently than once every six (6) 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 Plan (other than an Award pursuant to Article Three),
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.

4.2 EFFECTIVE DATE AND TERM

A. Effective Date. This Plan will become effective on
January 18, 1995.

B. 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) January 17, 2005, 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.

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

4.3 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.

4.4 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

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<PAGE>

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.

4.5 USE OF PROCEEDS

Any cash proceeds received by the Partnership from the sale
of depositary units pursuant to Awards under the Plan will be
used for general Partnership purposes.

4.6 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.

4.7 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.

4.8 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.

- 15 -

Exhibit 99.2

Form of Notice of Grant and Option Agreement.

<PAGE>

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 Partnership's 1995 Option/Award Plan (the
"Plan"):

OPTIONEE: ________________________________________________

GRANT DATE: ______________________________________________

NUMBER OF OPTIONED DEPOSITARY UNITS: _____________________

GRANT NUMBER: ____________________________________________

EXERCISE PRICE PER DEPOSITARY UNIT: $_____________________

EXPIRATION DATE: _________________________________________

TYPE OF OPTION: ___ Incentive Option

___ Non-Statutory Option

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. Optionee
should keep a copy of the attached Agreement for reference, since no
new Agreement will be distributed with subsequent Notices of Grant
unless the material provisions of the Plan or Agreement change.

<PAGE>

SUBSEQUENT GRANT

THE NEWHALL LAND AND FARMING COMPANY
NOTICE OF GRANT OF OPTION

OPTIONEE: ________________________________________________

GRANT DATE: ______________________________________________

NUMBER OF OPTIONED DEPOSITARY UNITS: _____________________

EXERCISE PRICE PER DEPOSITARY UNIT: $_____________________

EXPIRATION DATE: _________________________________________

TYPE OF OPTION: ___ Incentive Option

___ Non-Statutory Option

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
______________________, distributed with the Initial Notice of Grant.

<PAGE>

Dated: _______________, _____

THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)

By: _____________________________________

Title: __________________________________

__________________________________________
OPTIONEE

Address: _________________________________

___________________________________________

I designate the following beneficiary(ies):

____________________________________ Relationship: _________________

Address: ___________________________________________________________

___________________________________________________________

<PAGE>

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 1995 Option/Award
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 Section 2.9 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 grant date (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

<PAGE>

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 become 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 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 (i) 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"

<PAGE>

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.

<PAGE>

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 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

<PAGE>

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. The Committee administering the Plan 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) Grantee to 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 connection with the
acquisition of such depositary units. Grantee 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 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:

<PAGE>

(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.

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.

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.

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.

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 LAWS 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

<PAGE>

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.

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 all 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. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the
event this option is designated an incentive option in the

<PAGE>

Grant Notice, the following terms and conditions shall also apply to
the grant:

a. This option shall cease to qualify for favorable tax
treatment as an incentive option under the Federal tax laws if (and
to the extent) this option is exercised for one or more depositary
units: (i) more than three (3) months after the date Optionee ceases
to be an Employee for any reason other than death or (ii) more than
one (1) year after the date Optionee ceases to be an Employee by
reason of death.

b. To the extent that the aggregate Fair Market Value of
depositary units (determined as of the date or dates of grant)
covered by options under the Plan (or any other plan of the
Partnership or any parent or subsidiary or predecessor thereof) which
were granted as Incentive Options, are exercisable for the first time
by Optionee during any calendar year, exceeds the sum of $100,000 (or
such greater amount as may be permitted under the Code), whether by
reason of acceleration or otherwise, such options shall lose their
Incentive Option designation and shall be "nonstatutory" options.
Such options shall be taken into account in the order in which they
were granted.

c. To the extent this option should fail to qualify as an
incentive option under the Federal tax laws, Optionee will recognize
compensation income in connection with the acquisition of one or more
depositary unit hereunder, and Optionee must make appropriate
arrangement for the satisfaction of all Federal, state and local
income and employment tax withholding requirements applicable to such
compensation income.

24. ADDITIONAL TERMS APPLICABLE TO A NONSTATUTORY OPTION. In
the event this option is designated a nonstatutory option in the
Grant Notice, 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.

25. 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 therefor 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.

<PAGE>

EXHIBIT I
NOTICE OF EXERCISE OF OPTION

I hereby notify The Newhall Land and Farming Company (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 Partnership's 1995
Option/Award Plan on _____________________________.

Concurrently with the delivery of this Exercise Notice to the
Secretary of Newhall Management Corporation, I hereby pay to the
Partnership the Exercise Price for the Purchased 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: _________________________________________________

Address to which depositary receipt
is to be sent, if different
from address above: _________________________________________________

_________________________________________________

Social Security Number: ___________________________________________

Exhibit 99.3

Form of Notice of Grant and Option Agreement for Independent
Directors.

<PAGE>

INITIAL GRANT

THE NEWHALL LAND AND FARMING COMPANY
NOTICE OF GRANT OF INDEPENDENT DIRECTOR
AUTOMATIC OPTION

OPTIONEE: _________________________________________________

GRANT DATE: ___________________________________________

NUMBER OF OPTIONED DEPOSITARY UNITS: _____________________

TYPE OF OPTION: Non-Statutory Option

EXERCISE PRICE PER DEPOSITARY UNIT: $_____________________

EXPIRATION DATE: _________________________________________

EXERCISE SCHEDULE: The Option is exercisable immediately
upon grant.

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 attached hereto as Exhibit A, dated
_______________________________. Optionee should keep a copy of the
attached Agreement for reference, since no new Agreement will be
distributed with subsequent Notices of Grant unless the material
provisions of the Plan or Agreement change.

DATED: ____________________, ______

THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)

By: _______________________________________

Title: ____________________________________

__________________________________________
OPTIONEE

Address: __________________________________

___________________________________________

<PAGE>

SUBSEQUENT GRANT

THE NEWHALL LAND AND FARMING COMPANY
NOTICE OF GRANT OF INDEPENDENT DIRECTOR
AUTOMATIC OPTION

OPTIONEE: ___________________________________________

GRANT DATE: ___________________________________________

NUMBER OF OPTIONED DEPOSITARY UNITS: _____________________

TYPE OF OPTION: Non-Statutory Option

EXERCISE PRICE PER DEPOSITARY UNIT: $_____________________

EXPIRATION DATE: _________________________________________

EXERCISE SCHEDULE: The Option is exercisable immediately.

DATED: ____________________, ______

THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)

By: _______________________________________

Title: ____________________________________

__________________________________________
OPTIONEE

Address: __________________________________

___________________________________________

<PAGE>

I designate the following beneficiary(ies):

___________________________________ Relationship: __________________

Address: ___________________________________________________________

___________________________________________________________

<PAGE>

EXHIBIT A

THE NEWHALL LAND AND FARMING COMPANY
AUTOMATIC OPTION AGREEMENT

DATED:_________________________

A. The Newhall Land and Farming Company ("Partnership") has
implemented an automatic option grant program under The Newhall Land
and Farming Company 1995 Option/Award 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 or 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.

B. 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.

C. 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.

D. 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 Independent Director 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 maximum term of
ten (10) 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.

<PAGE>

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 death) while holding this option, then the
option shall be exercisable for a three (3)-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 (3)-month period or (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 (3)-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 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
twelve (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
thirty-six (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 (5) 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.

<PAGE>

(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 to the Partnership the amount of sale or
loan proceeds to pay the option 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 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.

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.

<PAGE>

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, CA 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.

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, distributees,
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.

<PAGE>

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 Partnership's 1995
Option/Award 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 Purchased 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: ________________________________________________

Address to which depositary
receipt is to be sent, if different
from address above: ________________________________________________

_______________________________________________________

Social Security Number: ____________________________________________

Exhibit 99.4

Form of Notice of Grant and Restricted Units Agreement.

<PAGE>

INITIAL GRANT

THE NEWHALL LAND AND FARMING COMPANY
NOTICE OF GRANT OF RESTRICTED UNITS

Notice is hereby given of the following grant of restricted units
(the "Restricted Units") with respect to depositary units of The
Newhall Land & Farming Company (a California Limited Partnership)
(the "Partnership") pursuant to The Newhall Land and Farming Company
1995 Option/Award Plan (the "Plan"):

GRANTEE: _________________________________________________

GRANT DATE: ______________________________________________

NUMBER OF RESTRICTED UNITS: _______________________________

EXPIRATION DATE: __________________________________________

VESTING SCHEDULE:

-- The Grantee shall not acquire any vested interest in
any depositary units during the initial twenty-four (24) month period
measured from the Grant Date.

-- Upon the second anniversary of the Grant Date, the
Grantee shall acquire a vested interest in twenty-five percent (25%)
of the total depositary units.

-- Upon the fourth anniversary of the Grant Date, the
Grantee shall acquire a vested interest in an additional twenty-five
percent (25%) of the total depositary units, for a cumulative total
of fifty percent (50%) of the depositary units.

-- Upon the sixth anniversary of the Grant Date, the
Grantee shall acquire a vested interest in an additional twenty-five
percent (25%) of the total depositary units, for a cumulative total
of seventy-five percent (75%) of the depositary units.

-- Upon the eighth anniversary of the Grant Date, the
Grantee shall acquire a vested interest in an additional twenty-five
percent (25%) of the total depositary units, for a cumulative total
of one hundred percent (100%) of the depositary units.

The initial twenty-four (24) month vesting schedule above
shall be accelerated if two-year performance goals, as defined below
("Goals"), are met, as follows:

-- If the Goal for the two-fiscal-year period preceding
the second anniversary of the Grant Date, the Grantee shall acquire
a vested interest in

<PAGE>

fifty percent (50%) of the total depositary units as
of the second anniversary of the Grant Date.

-- If the Goal for the two-fiscal-year period preceding
the fourth anniversary of the Grant Date is achieved, the Grantee
shall acquire a vested interest in fifty percent (50%) of the total
depositary units as of the fourth anniversary of the Grant Date.

-- To the extent the depositary units have not previously
fully vested, if the Goal for the two-fiscal-year period preceding
the sixth anniversary of the Grant Date is achieved, the Grantee
shall acquire a vested interest in fifty percent (50%) of the total
depositary units as of the sixth anniversary of the Grant Date.

The Goal shall be considered met for the two-fiscal-year
period preceding the second anniversary of the Grant date if, at the
end of the two-fiscal-year period, a twenty percent (20%) compound
annual increase in net income per depositary unit has occurred, based
on the net income for the fiscal year immediately preceding the two-
fiscal-year period. Goals for subsequent two-fiscal-year periods
shall be determined by the Committee administering the Plan.

Grantee understands that the Restricted Units 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 conditions
of the Plan and the terms and conditions of the Agreement dated
_________________________, attached hereto as Exhibit A. Grantee
should keep a copy of the attached Agreement for reference, since no
new Agreement will be distributed with subsequent Notices of Grant
unless the material provisions of the Plan or Agreement change.

DATED: ____________________, ______

THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)

By: _______________________________________

Title: ____________________________________

__________________________________________
OPTIONEE

Address: __________________________________

___________________________________________

<PAGE>

I designate the following beneficiary(ies):

___________________________________ Relationship: __________________

Address: ___________________________________________________________

___________________________________________________________

<PAGE>

SUBSEQUENT GRANT

THE NEWHALL LAND AND FARMING COMPANY
NOTICE OF GRANT OF UNIT RIGHTS

GRANTEE: _________________________________________________

GRANT DATE: ______________________________________________

NUMBER OF RESTRICTED UNITS: _______________________________

EXPIRATION DATE: __________________________________________

VESTING SCHEDULE:

-- The Grantee shall not acquire any vested interest in
any depositary units during the initial twenty-four (24) month period
measured from the Grant Date.

-- Upon the second anniversary of the Grant Date, the
Grantee shall acquire a vested interest in twenty-five percent (25%)
of the total depositary units.

The initial twenty-four (24) month vesting schedule above
shall be accelerated if two-year performance goals, as defined below
("Goals"), are met, as follows:

-- If the Goal for the two-fiscal-year period preceding
the second anniversary of the Grant Date,

<PAGE>

the Grantee shall acquire a vested interest in fifty
percent (50%) of the total depositary units as of the second
anniversary of the Grant Date.

DATED: ____________________, ______

THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)

By: _______________________________________

Title: ____________________________________

__________________________________________
OPTIONEE

Address: __________________________________

___________________________________________

<PAGE>

I designate the following beneficiary(ies):

___________________________________ Relationship: __________________

Address: ___________________________________________________________

___________________________________________________________

<PAGE>

EXHIBIT A

THE NEWHALL LAND AND FARMING COMPANY
RESTRICTED UNITS AGREEMENT

DATED: _____________________________

A. The Newhall Land and Farming Company ("Partnership") has
implemented The Newhall Land and Farming Company 1995 Option/Award
Plan (the "Plan") for the purpose of attracting and retaining the
services of key employees (including officers) of the Partnership and
other affiliated entities, and non-employee Board members of the
Partnership, the managing general partner of the Partnership or its
managing general partner.

B. Grantee 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 granting
of restricted units.

C. Except as otherwise indicated, all capitalized terms shall have
the meaning assigned to those terms in the Plan. For purposes of
this Agreement, "Fair Market Value" shall have the meaning assigned
to that term in Section 2.9 of the Plan.

1. GRANT OF RESTRICTED UNIT. Subject to and upon the terms
and conditions set forth in this Agreement, the Partnership hereby
grants to Grantee, as of the date of grant (the "Grant Date")
specified in the accompanying Notice of Grant (the "Grant Notice"),
the number of Restricted Units as is specified in the Grant Notice.
The Restricted Units shall vest in installments during Grantees
period of Service.

2. RETURN RIGHT. The Partnership is hereby granted the right
(the "Return Right"), exercisable at any time during the sixty (60)
day period following the date Grantee ceases for any reason to
provide Service to the Partnership, or any affiliated entity, to
reacquire for no consideration all or (at the discretion of the
Partnership and with the consent of Grantee) any portion of the
depositary units in which Grantee has not acquired a vested interest
in accordance with the vesting provisions of the appropriate Grant
Notice (hereinafter called "Unvested Depositary Units").

3. EXERCISE OF THE RETURN RIGHT. The Return Right shall be
exercisable by written notice delivered to the Owner of the Unvested
Depositary Units prior to the expiration of the applicable sixty (60)
day period specified in paragraph 2.a. The notice shall indicate the
number of Unvested Depositary Units to be reacquired and the date on
which the reacquisition is to be effected, such date to be not more
than thirty (30) days after the date of notice. Owner shall, prior
to the close of business

<PAGE>

on the date specified for the reacquisition, deliver to the
Partnership the certificates representing the Unvested Depositary
Units to be reacquired, each certificate to be properly endorsed for
transfer.

4. TERMINATION OF THE RETURN RIGHT. The Return Right shall
terminate with respect to any Unvested Depositary Units for which it
is not timely exercised pursuant to Paragraph 2, and shall terminate
in accordance with the vesting provisions specified in the Grant
Notice.

5. ACCELERATION OF RESTRICTED UNITS. In the event of a
Structural Transaction or Change in Control, the vesting of each
Restricted Unit will be automatically accelerated so that all
depositary units and cash payments to which Grantee is entitled under
any Restricted Unit grant under this Plan shall be delivered to
Grantee and all of the Partnership's rights to the return or
repurchase of depositary units awarded pursuant to any such grant of
Restricted Unit shall terminate.

6. NO ACCELERATION OF RESTRICTED UNITS. In no event shall any
such acceleration of vesting or termination of repurchase rights in
connection with a Structural Transaction occur if and to the extent
(i) such Restricted Unit 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 Restricted Unit
of the successor entity or affiliate thereof, (ii) such Restricted
Unit 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
Restricted Unit, or (iii) the acceleration of such Restricted Unit is
subject to other limitations imposed by the Committee at the time of
the Restricted Unit grant. The determination of Restricted Unit
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 Restricted
Units under the Plan shall, to the extent not previously exercised,
purchased or assumed by the successor entity or an affiliate,
terminate.

7. CANCELLATION OF AWARDS. Notwithstanding the above, in the
event of any Structural Transaction, the Committee shall have the
discretion to cancel outstanding Restricted Units, in whole or in
part, subject to such conditions as the Committee may determine, upon
payment to Grantee with respect to all cancelled Restricted Units, an
amount in cash equal to the Fair Market Value (as defined in the
Plan) of the Restricted Unit.

8. ADJUSTMENT. If any change is made to the depositary units
issued under the Plan by reason of a Structural Transaction or a
Change in Control that does not result in the termination of

<PAGE>

all outstanding rights of the Partnership to the return or repurchase
of depositary units awarded pursuant to Restricted Units, the
Committee may adjust the number of Restricted Units granted pursuant
to the Grant Notice.

9. PARTNERSHIP STRUCTURE. The grant of Restricted Units 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.

10. TRANSFER RESTRICTIONS

A. Grantee shall not transfer, assign, encumber or
otherwise dispose of any of the depositary units which are subject to
the Partnership's Return Right under Paragraph 4. Such restrictions
on transfer, however, shall not be applicable to (i) a gratuitous
transfer of the depositary units made to Grantee's spouse or issue,
including adopted children, or to a trust for the exclusive benefit
of Grantee or Grantee's spouse or issue, (ii) a transfer of title to
the depositary units effected pursuant to Grantee's will or the laws
of intestate succession, or (iii) a transfer to a designated
beneficiary upon the death of Grantee.

B. Each person (other than the Partnership) to whom the
depositary units are transferred by means of one of the permitted
transfers specified in paragraph 10.A. must, as a condition precedent
to the validity of such transfer, acknowledge in writing to the
Partnership that such person is bound by the provisions of this
Agreement and that the transferred Depositary Units are subject to
the Partnership's Return Right granted hereunder, to the same extent
such depositary units would be so subject if retained by Grantee.

11. GENERAL PROVISIONS

A. The Partnership may assign its Return Right under
Paragraph 2 to any person or entity selected by the Partnership,
including (without limitation) one or more holders of depositary
units of the Partnership.

B. Except to the extent the terms of any written
employment contract with Grantee may expressly provide otherwise, the
Partnership and other affiliates are not 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.

C. The failure of the Partnership (or its assignees) in
any instance to exercise the Return Right granted under Paragraph 2,
shall not constitute a waiver of any other

<PAGE>

reacquisition rights that may subsequently arise under the provisions
of this Agreement or any other agreement between the Partnership and
Grantee. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.

D. If the Partnership (or its assignees) shall give
written notice, at the time and place and in the form provided in
this Agreement, that Unvested Depositary Units are to be reacquired
in accordance with the provisions of this Agreement, then from and
after such time, the person from whom such Unvested Depositary Units
are to be reacquired shall no longer have any rights as a holder of
such Unvested Depositary Units, and such Unvested Depositary Units
shall be deemed reacquired in accordance with the applicable
provisions hereof and the Partnership (or its assignees) shall be
deemed the owner and holder of such Unvested Depositary Units,
whether or not the certificates therefor have been delivered as
required by this Agreement.

E. All certificates representing the Unvested Depositary
Units shall be endorsed with the following legend:

THIS DEPOSITARY RECEIPT MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT IN
CONFORMITY WITH THE TERMS OF A WRITTEN AGREEMENT, DATED
________________________, BETWEEN THE PARTNERSHIP AND THE REGISTERED
HOLDER OF THE DEPOSITARY UNITS (OR THE PREDECESSOR IN INTEREST TO THE
DEPOSITARY UNITS). SUCH AGREEMENT GRANTS CERTAIN REACQUISITION
RIGHTS TO THE PARTNERSHIP (OR ITS ASSIGNEES) UPON THE SALE,
ASSIGNMENT, TRANSFER, ENCUMBRANCE OR OTHER DISPOSITION OF THE
PARTNERSHIP'S DEPOSITARY UNITS. THE PARTNERSHIP WILL UPON WRITTEN
REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT
CHARGE.

12. CANCELLATION AND NEW GRANT OF RESTRICTED UNITS. The
Committee shall have the authority to effect, at any time and from
time to time, with the consent of the affected Restricted Unit
holders, the cancellation of any or all outstanding Restricted Units
under this Agreement and to grant in substitution therefor new
Restricted Units under the Plan covering the same or different number
and class of depositary units.

13. GRANTEE OBLIGATIONS. Grantee hereby agrees to take
whatever additional action and execute whatever additional documents
the Partnership may in its judgment deem necessary or advisable in
order to carry out or effect one or more of the obligations or
restrictions imposed on either Grantee or the

<PAGE>

Depositary Units pursuant to the express provisions of this
Agreement.

14. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.

15. COMPLIANCE WITH LAWS AND REGULATIONS. Under no
circumstances shall the Partnership's depositary receipts or other
assets be issued or delivered to Grantee pursuant to the provisions
of this Agreement unless and until, in the opinion of counsel for the
Partnership or its successors, there shall have been compliance with
all applicable requirements of the Federal and state securities laws,
all applicable listing requirements of any securities exchange on
which the depositary units are at the time listed for trading and all
other requirements of law or of any regulatory bodies having juris-
diction over such issuance and delivery.

16. 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 designated
beneficiary, legal representatives, heirs, legatees, distributees,
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.

17. 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, CA 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.

18. 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.

19. POWER OF ATTORNEY. Grantee's spouse hereby appoints
Grantee his or her true and lawful attorney in fact, for him or her
and in his or her name, place and stead, and for his or her use and
benefit, to agree to any amendment or modification of this Agreement
and to execute such further instruments and take such further actions
as may reasonably be necessary to carry out the intent of this
Agreement. Grantee's spouse further gives and grants unto Grantee as
his or her attorney in fact full power and

<PAGE>

authority to do and perform every act necessary and proper to be done
in the exercise of any of the foregoing powers as fully as he or she
might or could do if personally present, with full power of
substitution and revocation, hereby ratifying and confirming all that
Grantee shall lawfully do and cause to be done by virtue of this
power of attorney.

Exhibit 99.5

Form of Notice of Grant and Unit Rights Agreement.

<PAGE>

INITIAL GRANT

THE NEWHALL LAND & FARMING COMPANY
NOTICE OF GRANT OF UNIT RIGHTS

Notice is hereby given of the following grant of a right to receive
The Newhall Land & Farming Company (a California Limited Partnership)
(the "Partnership") depositary units ("Unit Rights") pursuant to the
terms of The Newhall Land and Farming Company 1995 Option/Award 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 the Partnership or its affiliated entities, Grantee shall
vest in equal successive annual installments over five years at a
rate of 20% 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 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

<PAGE>

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 will no longer be eligible to receive Unit Rights
under the Agreement upon exceeding the unit ownership target
established by the Partnership for Grantee.

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 conditions
of the Plan and the terms and conditions of the Unit Rights Agreement
dated __________________________, attached hereto as Exhibit A.
Grantee should keep a copy of the attached Agreement since no new
Agreement will be distributed with subsequent Notices of Grant unless
the material provisions of the Plan or Agreement change.

Dated: _______________, ______

THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)

By: ______________________________________

Title: ___________________________________

___________________________________________
OPTIONEE

Address: _________________________________

___________________________________________

I designate the following beneficiary(ies):

___________________________________ Relationship: __________________

Address: ___________________________________________________________

___________________________________________________________

<PAGE>

SUBSEQUENT GRANT

THE NEWHALL LAND & FARMING COMPANY
NOTICE OF GRANT OF UNIT RIGHTS

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.

<PAGE>

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 will no longer be eligible to receive Unit Rights
under the Agreement upon exceeding the unit ownership target
established by the Partnership for Grantee.

Dated: _______________, ______

THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)

By: ______________________________________

Title: ___________________________________

___________________________________________
OPTIONEE

Address: _________________________________

___________________________________________

I designate the following beneficiary(ies):

___________________________________ Relationship: __________________

Address: ___________________________________________________________

___________________________________________________________

<PAGE>

EXHIBIT A

THE NEWHALL LAND AND FARMING COMPANY
UNIT RIGHTS AGREEMENT

DATED:_____________________________________

A. The Newhall Land and Farming Company (a California Limited
Partnership) ("Partnership") has adopted The Newhall Land and Farming
Company 1995 Option/Award Plan ("Plan") for the purpose of attracting
and retaining the services of key employees (including officers) of
the Partnership and affiliated entities, and non-employee Board
members of the Partnership, its managing general partner or its
managing general partner.

B. 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.

C. Except as indicated otherwise, all capitalized terms shall
have the meaning assigned to those terms in the Plan. For purposes
of this Agreement, "Fair Market Value" shall have the meaning
assigned to that term in Section 2.9 of the Plan.

1. 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 of Unit Rights (the "Grant
Notice"), Unit Rights in the number as is specified in the Grant
Notice.

2. 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.

3. 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 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.

<PAGE>

4. OWNERSHIP TARGET. Grantee will no longer be eligible
to receive Unit Rights under this Agreement upon attaining the unit
ownership target established by the Partnership for Grantee.

5. 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.

6. 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.

7. NO ACCELERATION OF AWARDS. In no event shall any such
acceleration or termination of any unvested Unit Rights in connection
with a Structural Transaction occur if and to the extent (i) such
Unit Right 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 Unit Right to purchase or receive
securities of the successor entity or affiliate thereof, (ii) such
Unit 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 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, all outstanding Units
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.

8. CANCELLATION OF AWARDS. Notwithstanding the above, in
the event of any Structural Transaction, 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 Right.

9. 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

<PAGE>

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 1.3.C of the Plan.

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 Unit Right holders, the
cancellation of any or all outstanding Unit Rights covered by this
Agreement and to grant in substitution therefor new Unit Rights under
the Plan covering the same or different number and class of
depositary units.

11. 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.

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

<PAGE>

17. 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
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.

18. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of
California.

19. 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.

20. 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, distributees, 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.

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.

Exhibit 99.6

Form of Notice of Grant and Appreciation Rights Agreement.

<PAGE>

INITIAL GRANT

THE NEWHALL LAND AND FARMING COMPANY
NOTICE OF GRANT OF APPRECIATION RIGHT

Notice is hereby given of the following appreciation right grant (the
"Appreciation Right") related to the number of depositary units of
The Newhall Land and Farming Company (a California Limited
Partnership) (the "Partnership") pursuant to the terms of The Newhall
Land and Farming Company 1995 Option/Award Plan (the "Plan"), set
forth below:

GRANTEE: _________________________________________________

GRANT DATE: ______________________________________________

NUMBER OF DEPOSITARY UNITS: ______________________________

EXERCISE PRICE PER DEPOSITARY UNIT: $_____________________

EXPIRATION DATE: _________________________________________

TANDEM OPTION/APPRECIATION RIGHT: ___ Yes

___ No

PAYABLE IN: ___ Cash

___ Depositary Units

___ Combination of Cash and Depositary Units

EXERCISE SCHEDULE: The Appreciation Right shall become
exercisable over a four year period at a rate of twenty-five percent
(25%) of the depositary units per year of Service measured from the
Grant Date. In no event shall the Appreciation Right become
exercisable for any additional depositary units following Grantee's
cessation of Service.

Grantee understands and agrees that the Appreciation Right is granted
subject to and in accordance with the express terms and conditions of
the Plan. Grantee further agrees to be bound by the terms and
conditions of the Plan and the terms and conditions of the
Appreciation Right Agreement dated __________________________,
attached hereto as Exhibit A. Grantee should keep a copy of the
attached Agreement, since no new Agreement will be distributed with
subsequent Notices of Grant unless the material provisions of the
Plan or the Agreement change.

<PAGE>

SUBSEQUENT GRANT

THE NEWHALL LAND AND FARMING COMPANY
NOTICE OF GRANT OF APPRECIATION RIGHT

Notice is hereby given of the following appreciation right
grant (the "Appreciation Right") related to the number of depositary
units of The Newhall Land and Farming Company (a California Limited
Partnership) (the "Partnership") pursuant to the terms of The Newhall
Land and Farming Company 1995 Option/Award Plan (the "Plan"), set
forth below:

GRANTEE: _________________________________________________

GRANT DATE: ______________________________________________

NUMBER OF DEPOSITARY UNITS: ______________________________

EXERCISE PRICE PER DEPOSITARY UNIT: $_____________________

EXPIRATION DATE: _________________________________________

TANDEM OPTION/APPRECIATION RIGHT: ___ Yes

___ No

PAYABLE IN: ___ Cash

___ Depositary Units

___ Combination of Cash and Depositary Units

<PAGE>

Dated: ________________________, ______

THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)

By: ______________________________________

Title: ___________________________________

___________________________________________
GRANTEE

Address: _________________________________

___________________________________________

I designate the following beneficiary(ies):

_____________________________________________________________________

Address: ___________________________________________________________

___________________________________________________________

<PAGE>

EXHIBIT A

THE NEWHALL LAND AND FARMING COMPANY
APPRECIATION RIGHTS AGREEMENT

DATED: __________________________________

A. The Newhall Land and Farming Company ("Partnership") has
implemented The Newhall Land and Farming Company 1995 Option/Award
Plan (the "Plan") for the purpose of attracting and retaining the
services of key employees (including officers) of the Partnership and
affiliated entities, and non-employee Board members of the
Partnership, the managing general partner of the Partnership or its
managing general partner.

B. Grantee 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 appreciation right to Grantee.

1. GRANT OF APPRECIATION RIGHT. 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 of Appreciation Right
(the "Grant Notice") an appreciation right with respect to the number
of depositary units set forth in the Grant Notice. Each such
appreciation right entitles the Grantee to receive a cash payment or
depositary units from the Partnership equal in value to the
appreciation, if any, of one depositary unit of the Partnership
between the date of grant set forth in the Grant Notice ("Date of
Grant") and the date of exercise of the appreciation right. For
these purposes, appreciation is defined as the difference between (a)
the Fair Market Value of a depositary unit of the Partnership on the
date of exercise of the appreciation right and (b) the Exercise Price
per depositary unit of the Partnership set forth in the Grant Notice.
Each appreciation right is subject to the terms and conditions of
this Grant and of the Partnership's 1995 Option/Award Plan ("Plan"),
the provisions of which are incorporated into this Grant by this
reference.

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

<PAGE>

3. APPRECIATION RIGHT TERM. This appreciation right
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 or 9.

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

5. DATES OF EXERCISE. This appreciation right shall
become exercisable for the depositary units in accordance with the
installment schedule specified in the Grant Notice. The appreciation
right shall remain exercisable for the accumulated installments until
the Expiration Date or sooner termination of the appreciation right
term under Paragraph 6 or 9. In no event shall this appreciation
right become exercisable for any additional depositary units
following Grantee's cessation of Service.

6. CESSATION OF SERVICE. The appreciation right term
specified in Paragraph 3 shall terminate (and this appreciation right
shall cease to be outstanding) prior to the Expiration Date in
accordance with the following provisions:

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

b. Should Grantee cease Service for any reason
other than death or retirement while this appreciation right is
outstanding, then this appreciation right shall be exercisable for
all of the depositary units for which this appreciation right is
exercisable at the time of such cessation of Service. Such right
shall lapse, and this appreciation right shall terminate and cease to
remain outstanding, upon the earlier of (i) the expiration of the
three (3)-month period measured from the date of Grantee's cessation
of Service, or (ii) the Expiration Date.

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

<PAGE>

d. Should Grantee retire while this appreciation
right is outstanding, then this appreciation right shall be
exercisable for all of the depositary units for which this
appreciation right is exercisable at the time of such "retirement."
Such right shall lapse, and this appreciation right 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 Grantee's retirement, or (ii) the Expiration Date. For purposes
of this Paragraph 6, "retirement" shall mean the Grantee's cessation
of Service on or after either of the following:

(i) the first day of the month coinciding
with or next following Grantee'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: Grantee's years of Service meet or exceed ten (10) years of
Service, and Grantee has attained age 55.

e. Should (i) Grantee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty,
willful misconduct, fraud or embezzlement) or (ii) Grantee 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 appreciation right shall terminate immediately and
cease to be outstanding.

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
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 appreciation
right holders', then the Committee shall make appropriate adjustments
to the number and/or class of securities and price per depositary
unit in effect under each outstanding appreciation right under the
Plan 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 appreciation rights.

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 appreciation rights, the Committee may adjust the maximum
number of depositary units subject to appreciation rights, and the
Exercise Price, as provided in Paragraph 1.3.C of the Plan.

<PAGE>

8. ACCELERATION OF APPRECIATION RIGHTS. In the event of
a Structural Transaction or Change in Control, each appreciation
right will be automatically accelerated so that each appreciation
right 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 appreciation right is so accelerated.

9. NO ACCELERATION OF APPRECIATION RIGHTS. In no event
shall any such acceleration in connection with a Structural
Transaction occur if and to the extent (i) such appreciation right
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 appreciation right relating to securities
of the successor entity or affiliate thereof, (or surrendered for
such payment in depositary units and/or cash as the appreciation
right may provide), (ii) such appreciation 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 and provides for subsequent payout in accordance with the
same vesting schedule applicable to such appreciation right, or (iii)
the acceleration of such appreciation right is subject to other
limitations imposed by the Committee at the time of the appreciation
right grant. The determination of appreciation 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, all outstanding
appreciation 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.

10. PARTNERSHIP STRUCTURE. The grant of appreciation
rights 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.

11. PRIVILEGE OF UNITHOLDER RIGHTS. The holder of this
appreciation right shall not have any of the rights of a unitholder
with respect to the depositary units underlying the appreciation
right. However, if the appreciation right is paid in the form of
depositary units, Grantee will have all of the rights of a unitholder
with respect to those depositary units received.

12. MANNER OF EXERCISING APPRECIATION RIGHT. In order to
exercise this appreciation right with respect to all or any part of
the depositary units for which this appreciation right is at the time
exercisable, Grantee (or in the case of exercise after Grantee's
death, Grantee's designated beneficiary, executor, administrator,
heir or legatee, as the case may be) must take the following actions:

<PAGE>

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 underlying the appreciation right
which are to be exercised;

b. as a condition to the exercise of the
appreciation right, to make appropriate arrangements with the
Partnership or subsidiary or affiliated entity employing Grantee, for
the satisfaction of any Federal, state or local income tax
withholding requirements and federal social security employment tax
requirements applicable to the exercise;

c. furnish to the Partnership appropriate
documentation that the person or persons exercising the appreciation
right (if other than Grantee) have the right to exercise this
appreciation right;

d. as soon as practical after receipt of the
Exercise Notice, the Partnership shall mail or deliver to or on
behalf of Grantee (or any other person or persons exercising this
appreciation right in accordance herewith) a depositary receipt
and/or cash representing the exercised appreciation right.

13. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the
State of California.

14. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of
this appreciation right and the issuance of depositary units, if any,
upon such exercise shall be subject to compliance by the Partnership
and Grantee 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. The Partnership's obligation to make a cash
payment upon exercise of an appreciation right shall be unfunded. To
the extent that any person acquires a right to receive appreciation
right payments from the Partnership, such right shall be no greater
than the right of any unsecured general creditor of the Partnership.

15. SUCCESSORS AND ASSIGNS. Except to the extent
otherwise provided in Paragraph 4 or 6, 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 Grantee and the successors and assigns of the
Partnership.

16. 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
appreciation right shall relieve the Partnership of any liability

<PAGE>

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 all such approvals.

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

18. 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 Grantee shall be in writing and addressed to Grantee 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.

19. CONSTRUCTION. This Agreement and the appreciation
right 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 appreciation right.

20. 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.

21. CANCELLATION 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 therefor 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.

<PAGE>

EXHIBIT I

NOTICE OF EXERCISE
OF APPRECIATION RIGHT

I hereby notify The Newhall Land and Farming Company (the
"Partnership") that I elect to exercise _______________ appreciation
rights at the exercise price of $___________ per depositary unit (the
"Exercise Price") pursuant to that certain appreciation right granted
to me under the Partnership's 1995 Option/Award Plan on
______________________. The terms and conditions of the Agreement
and the Plan are incorporated into and made a part of this Notice by
this reference.

I shall deliver this Exercise Notice to the Corporate
Secretary of Newhall Management Corporation, and I shall deliver
whatever additional documents may be required by my Agreement with
the Partnership as a condition for exercise. I have made provisions
for the satisfaction of any federal, state or local income tax
withholding requirements and federal social security employment tax
requirements applicable, if any.

_________________________, ____
Date

Optionee: ___________________________

Address: ___________________________

______________________________

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

Address to which depositary
receipt is to be sent, if different
from address above: ________________________________________________

_____________________________________________________

Social Security Number: ____________________________________________

Exhibit 99.7

Form of Independent Director Fee Election.

<PAGE>

THE NEWHALL LAND AND FARMING COMPANY
DEPOSITARY UNITS IN LIEU OF CASH FEE ELECTION

I understand that pursuant to the provisions of the 1995
Option/Award Plan, I may elect to apply all or part of the annual
retainer fee otherwise payable in cash to me for service on the Board
of Directors during the 1996 calendar year to the acquisition of
depositary units of The Newhall Land and Farming Company. To the
extent I so elect, the elected portion of my retainer fee will, on
the first trading day of each calendar quarter beginning in March,
1996, be applied to the acquisition of The Newhall Land and Farming
Company depositary units at the closing selling price per depositary
unit in effect on that day. The issued depositary units will be held
in escrow by the Company, and depositary units will be released as
soon as practicable after the end of each calendar quarter.

I hereby make the following election with respect to my
retainer fee for Board service during the 1996 calendar year:

_____ % in cash

_____ % in depositary units (to be issued on the basis of
the closing selling price on the date of the issuance and the
percentage of the annual retainer fee elected to be paid in
depositary units).

I understand that my election must be filed by
September 30, 1995 in order for the issuance of the depositary units
on April 1, 1996 to be an exempt transaction under the short-swing
profit rules of the federal securities laws; otherwise, the
acquisition of the depositary units on April 1, 1996 will be treated
as a purchase for short-swing liability purposes and will be matched
against any sales of The Newhall Land and Farming Company depositary
units made 6 months before or after such purchase date. In all
events this election must be filed with the Company no later than
December 31, 1995 in order to be effective for the 1996 calendar
year.

____________________________________
Director's Name

____________________________________
Director's Signature

DATED: ______________________, 1995