-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, mKsnsu7lLmvGAgt2NhtiIOk6kOHF63K4MXWCb9c9SU1dN/UzMMuUe+UuAz16/DYA d77QmPzKebdXoBX0QHQjsQ== 0000910473-95-000010.txt : 19950616 0000910473-95-000010.hdr.sgml : 19950616 ACCESSION NUMBER: 0000910473-95-000010 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19950322 EFFECTIVENESS DATE: 19950410 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEWHALL LAND & FARMING CO /CA/ CENTRAL INDEX KEY: 0000751976 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 953931727 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-58171 FILM NUMBER: 95522259 BUSINESS ADDRESS: STREET 1: 23823 VALENCIA BLVD CITY: VALENCIA STATE: CA ZIP: 91355 BUSINESS PHONE: 8052554000 MAIL ADDRESS: STREET 2: 23823 VALENCIA BLVD CITY: VALENCIA STATE: CA ZIP: 91355 S-8 1 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. CALCULATION OF REGISTRATION FEE
Proposed Proposed Title of Maximum Maximum Securities Amount Offering Aggregate Amount of to be to be Price Offering Registration Registered Registered per Unit Price Fee Depositary Units: The Newhall Land and Farming 600,000 $14.75 $8,850,000.00 $3,052.00 Company 1995 Option/Award Plan 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. 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. 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.
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. 1. 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. 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. 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. 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. PAUL A. MILLER Director March 15, 1995 Paul A. Miller HENRY K. NEWHALL Director March 15, 1995 Henry K. Newhall II-5. 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. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. EXHIBITS TO FORM S-8 UNDER SECURITIES ACT OF 1933 THE NEWHALL LAND AND FARMING COMPANY EXHIBIT INDEX 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. EX-5 2 Exhibit 5 Opinion of Brobeck, Phleger & Harrison. 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 EX-23 3 Exhibit 23.1 Consent of Independent Auditors - KPMG Peat Marwick LLP. 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 EX-23 4 Exhibit 23.2 Consent of Brobeck, Phleger & Harrison is contained in Exhibit 5. EX-24 5 Exhibit 24 Power of Attorney. Reference is made to page II-4 of this Registration Statement. EX-99 6 Exhibit 99.1 The Newhall Land and Farming Company 1995 Option/Award Plan. 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 - 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 - 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 - (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 - (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 - 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 - 6 - 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 - 7 - 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 - 8 - 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 - 9 - 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 - 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. - 11 - (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 - 12 - 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 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 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. 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 an independent third party. - 13 - 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 - 14 - 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 - EX-99 7 Exhibit 99.2 Form of Notice of Grant and Option Agreement. 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. 1. SUBSEQUENT GRANT THE NEWHALL LAND AND FARMING COMPANY NOTICE OF GRANT OF OPTION Notice is hereby given of the following option (the "Option") to purchase depositary units of The Newhall Land and Farming Company (a California Limited Partnership) (the "Partnership") which has been granted pursuant to the Partnership's 1995 Option/Award Plan (the "Plan"): 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. 1. Dated: _______________, _____ THE NEWHALL LAND AND FARMING COMPANY (a California Limited Partnership) By: _____________________________________ Title: __________________________________ __________________________________________ OPTIONEE Address: _________________________________ ___________________________________________ I designate the following beneficiary(ies): ____________________________________ Relationship: _________________ Address: ___________________________________________________________ ___________________________________________________________ 2. 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 1. 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" 2. shall mean the Optionee's cessation of Service on or after either of the following: (i) the first day of the month coinciding with or next following Optionee's sixty-fifth (65) birthday. (ii) the first day of a calendar month after meeting the age and service requirements for early retirement, which are: Optionee's years of service for the Partnership or an affiliated entity meet or exceed ten (10) years of service, and Optionee has attained age 55. e. Should (i) Optionee's Service be terminated for misconduct (including, but not limited to, any act of dishonesty, willful misconduct, fraud or embezzlement) or (ii) Optionee make any unauthorized use or disclosure of confidential information or trade secrets of the Partnership or any parent or subsidiary, then in any such event this option shall terminate immediately and cease to be outstanding. f. For purposes of this Agreement, the following definitional provisions shall be in effect: (i) Optionee shall be deemed to remain in SERVICE for so long as such individual renders services on a periodic basis to the Partnership (or any subsidiary or other affiliated entity) in the capacity of an employee or a non-employee member of the Board. (ii) An entity shall be considered to be a SUBSIDIARY of the Partnership if it is a member of an unbroken chain of entities beginning with the Partnership, provided each such entity in the chain (other than the last entity) owns, at the time of determination, securities possessing fifty percent (50%) or more of the total combined voting power of all classes of securities in one of the other entities in such chain. (iii) An entity shall be considered to be a PARENT of the Partnership if it is a member of an unbroken chain ending with the Partnership, provided each such entity in the chain (other than the Partnership) owns, at the time of determination, securities possessing fifty percent (50%) or more of the total combined voting power of all classes of securities in one of the other entities in such chain. 7. ADJUSTMENT IN DEPOSITARY UNITS. a. If any change is made to the depositary units issuable under the Plan (whether by reason of merger, consolidation, reorganization, recapitalization, depositary unit distribution, depositary unit split, combination of depositary units, exchange of depositary units, or other change in partnership or capital structure of the Partnership), or if the 3. 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 4. 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: 5. (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 6. 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 7. 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. 8. 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: ___________________________________________ 9. EX-99 8 Exhibit 99.3 Form of Notice of Grant and Option Agreement for Independent Directors. INITIAL GRANT THE NEWHALL LAND AND FARMING COMPANY NOTICE OF GRANT OF INDEPENDENT DIRECTOR AUTOMATIC OPTION Notice is hereby given of the following option (the "Option") to purchase depositary units of The Newhall Land and Farming Company (a California Limited Partnership) (the "Partnership") which has been granted pursuant to the automatic option grant program in effect under the Partnership's 1995 Option/Award Plan (the "Plan"): 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: __________________________________ ___________________________________________ 1. SUBSEQUENT GRANT THE NEWHALL LAND AND FARMING COMPANY NOTICE OF GRANT OF INDEPENDENT DIRECTOR AUTOMATIC OPTION Notice is hereby given of the following option (the "Option") to purchase depositary units of The Newhall Land and Farming Company (a California Limited Partnership) (the "Partnership") which has been granted pursuant to the automatic option grant program in effect under the Partnership's 1995 Option/Award Plan (the "Plan"): 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. Optionee understands and agrees that the Option is granted subject to and in accordance with the express terms and conditions of the Plan governing automatic option grants to Board members. Optionee further agrees to be bound by the terms and conditions of the Plan and the terms and conditions of the Option as set forth in the Automatic Option Agreement dated ____________________________ distributed with the Initial Notice of Grant. DATED: ____________________, ______ THE NEWHALL LAND AND FARMING COMPANY (a California Limited Partnership) By: _______________________________________ Title: ____________________________________ __________________________________________ OPTIONEE Address: __________________________________ ___________________________________________ 1. I designate the following beneficiary(ies): ___________________________________ Relationship: __________________ Address: ___________________________________________________________ ___________________________________________________________ 2. 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. 1. 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. 2. (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. 3. 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. 4. 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: ____________________________________________ EX-99 9 Exhibit 99.4 Form of Notice of Grant and Restricted Units Agreement. 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 1. 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: __________________________________ ___________________________________________ 2. I designate the following beneficiary(ies): ___________________________________ Relationship: __________________ Address: ___________________________________________________________ ___________________________________________________________ 3. SUBSEQUENT GRANT THE NEWHALL LAND AND FARMING COMPANY NOTICE OF GRANT OF UNIT RIGHTS 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, 1. 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. -- 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 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 Agreement dated _________________________, distributed with the Initial Notice of Grant. DATED: ____________________, ______ THE NEWHALL LAND AND FARMING COMPANY (a California Limited Partnership) By: _______________________________________ Title: ____________________________________ __________________________________________ OPTIONEE Address: __________________________________ ___________________________________________ 2. I designate the following beneficiary(ies): ___________________________________ Relationship: __________________ Address: ___________________________________________________________ ___________________________________________________________ 3. 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 1. 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 2. 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 3. 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 4. 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 5. 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. 6. EX-99 10 Exhibit 99.5 Form of Notice of Grant and Unit Rights Agreement. 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 1. 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: ___________________________________________________________ ___________________________________________________________ 2. SUBSEQUENT 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 1. 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 __________________________, distributed with the Initial Notice of Grant. Dated: _______________, ______ THE NEWHALL LAND AND FARMING COMPANY (a California Limited Partnership) By: ______________________________________ Title: ___________________________________ ___________________________________________ OPTIONEE Address: _________________________________ ___________________________________________ I designate the following beneficiary(ies): ___________________________________ Relationship: __________________ Address: ___________________________________________________________ ___________________________________________________________ 2. 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. 1. 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 2. 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. 3. 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. 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. 4. EX-99 11 Exhibit 99.6 Form of Notice of Grant and Appreciation Rights Agreement. 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. 1. 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 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 __________________________, distributed with the Initial Notice of Grant. 1. Dated: ________________________, ______ THE NEWHALL LAND AND FARMING COMPANY (a California Limited Partnership) By: ______________________________________ Title: ___________________________________ ___________________________________________ GRANTEE Address: _________________________________ ___________________________________________ ___________________________________________ I designate the following beneficiary(ies): _____________________________________________________________________ Address: ___________________________________________________________ ___________________________________________________________ 2. 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. 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 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. 1. 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. 2. 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. 3. 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: 4. 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 5. 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. 6. 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: ____________________________________________ EX-99 12 Exhibit 99.7 Form of Independent Director Fee Election. 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 -----END PRIVACY-ENHANCED MESSAGE-----