Exhibit 10.1

AVATAR HOLDINGS INC.
AMENDED AND RESTATED 1997 INCENTIVE AND CAPITAL ACCUMULATION PLAN
(2005 RESTATEMENT)

1. Purpose. The Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement) (the "Plan") is intended to provide incentives which will attract, retain and motivate highly competent persons as directors, officers or employees of Avatar Holdings Inc. (the "Company") and of any subsidiary corporation now existing or hereafter formed or acquired, by providing them opportunities to acquire shares of the common stock, par value $1.00 per share, of the Company ("Common Stock") or to receive monetary payments based on the value of such shares pursuant to the Benefits (as defined below) described herein. Furthermore, the Plan is intended to assist in aligning the interests of the Company's employees to those of its stockholders.

2. Administration.

(a) The Plan will be administered by a committee or committees of the Board of Directors of the Company (the "Board") or a subcommittee of a committee of the Board, appointed by the Board from among its members (the "Committee"), and shall be comprised, unless otherwise determined by the Board, solely of not less than two members who shall be (i) "Non-Employee Directors" within the meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and (ii) "outside directors" within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). Benefits (as defined in Section 4 hereof) granted hereunder to non-employee directors of the Company shall be made by the Nominating and Corporate Governance Committee of the Board (or such other committee as may be determined by the Board). The Committee is authorized, subject to the provisions of the Plan, to establish such rules and regulations as it deems necessary for the proper administration of the Plan and to make such determinations and interpretations and to take such action in connection with the Plan and any Benefits (as defined in Section 4 hereof) granted hereunder as it deems necessary or advisable, including the right to establish the terms and conditions of Benefits, to accelerate the vesting or exercisability of Benefits and to cancel Benefits. The Committee may determine the extent to which any Benefit under the Plan is required to comply, or not comply, with Section 409A of the Code. All determinations and interpretations made by the Committee shall be binding and conclusive on all participants and their legal representatives. No member of the Board of Directors, no member of the Committee and no employee of the Company shall be liable for any act or failure to act hereunder, except in circumstances involving his or her bad faith, gross negligence or willful misconduct, or for any act or failure to act hereunder by any other member or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated. The Company shall indemnify members of the Committee and any agent of the Committee who is an employee of the Company or any of its subsidiaries, against any and all liabilities or expenses to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of the Plan, except in circumstances involving such person's bad faith, gross negligence or willful misconduct.

(b) The Committee may delegate to one or more of its members, or to one or more agents, such administrative duties as it may deem advisable, and the Committee, or any person to whom it has delegated duties as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan. The Committee may employ such legal or other counsel, consultants and agents as it may deem desirable for

the administration of the Plan and may rely upon any opinion or computation received from any such counsel, consultant or agent. Expenses incurred by the Committee in the engagement of such counsel, consultant or agent shall be paid by the Company, or the subsidiary or affiliate whose employees have participated in the Plan, as determined by the Committee.

3. Participants. Participants will consist of such directors, officers or employees of the Company and any subsidiary corporation of the Company as the Committee in its sole discretion determines to be in a position to impact the success and future growth and profitability of the Company and whom the Committee may designate from time to time to receive Benefits under the Plan. Designation of a participant in any year shall not require the Committee to designate such person to receive a Benefit in any other year or, once designated, to receive the same type or amount of Benefit as granted to the participant in any other year. The Committee shall consider such factors as it deems pertinent in selecting participants and in determining the type and amount of their respective Benefits.

4. Type of Benefits. Benefits under the Plan may be granted in any one or a combination of (a) Stock Options, (b) Stock Appreciation Rights, (c) Stock Awards, (d) Performance Awards, and (e) Stock Units (each as described below, and collectively, the "Benefits"). Stock Awards, Performance Awards, and Stock Units may, as determined by the Committee in its discretion, constitute Performance-Based Awards, as described in Section 11 hereof. Benefits shall be evidenced by agreements (which need not be identical) in such forms as the Committee may from time to time approve; provided, however, that in the event of any conflict between the provisions of the Plan and any such agreements, the provisions of the Plan shall prevail.

5. Common Stock Available Under the Plan. Subject to the provisions of this
Section 5 and any adjustments made in accordance with Section 12 hereof, the aggregate number of shares of Common Stock that may be subject to Benefits granted under this Plan shall be 1,300,000 shares of Common Stock, which may be authorized and unissued or treasury shares. The maximum number of shares of Common Stock with respect to which Benefits may be granted or measured to any individual participant under the Plan during the term of the Plan shall not exceed 750,000, subject to adjustments made in accordance with Section 12 hereof). Any shares of Common Stock subject to a Stock Option or Stock Appreciation Right which for any reason is cancelled or terminated without having been exercised, any shares subject to Stock Awards, Performance Awards or Stock Units which are forfeited, any shares subject to Performance Awards settled in cash or any shares delivered to the Company as part or full payment for the exercise of a Stock Option or Stock Appreciation Right, and any shares withheld by the Company to satisfy tax withholding with respect to Benefits shall again be available for Benefits under the Plan. The preceding sentence shall apply only for purposes of determining the aggregate number of shares of Common Stock subject to Benefits under the Plan but shall not apply for purposes of determining the maximum number of shares of Common Stock with respect to which Benefits (including the maximum number of shares of Common Stock subject to Stock Options and Stock Appreciation Rights) that may be granted to any individual participant under the Plan.

6. Stock Options. Stock Options will consist of awards from the Company that will enable the holder to purchase a number of shares of Common Stock, at set terms. Stock Options may be "incentive stock options" ("Incentive Stock Options"), within the meaning of Section 422 of the Code, or Stock Options which do not constitute Incentive Stock Options ("Nonqualified Stock Options"). The Committee will have the authority to grant to any participant one or more Incentive Stock Options, Nonqualified Stock Options, or both types of Stock Options (in each case with or without Stock Appreciation Rights). Each Stock Option shall be subject to such terms and conditions consistent with the Plan as

the Committee may impose from time to time, subject to the following limitations:

(a) Exercise Price. Each Stock Option granted hereunder shall have such per-share exercise price as the Committee may determine at the date of grant; provided, however, that the per-share exercise price shall not be less than 100% of the Fair Market Value (as defined below) of the Common Stock on the date the Stock Option is granted.

(b) Payment of Exercise Price. The option exercise price may be paid in cash or, in the discretion of the Committee, by the delivery of shares of Common Stock of the Company then owned by the participant, by the withholding of shares of Common Stock for which a Stock Option is exercisable, or by a combination of these methods, on such terms and conditions as the Committee shall determine in its sole discretion. In the discretion of the Committee, payment may also be made by delivering a properly executed exercise notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the exercise price. To facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. The Committee may prescribe any other method of paying the exercise price that it determines to be consistent with applicable law and the purpose of the Plan, including, without limitation, in lieu of the exercise of a Stock Option by delivery of shares of Common Stock of the Company then owned by a participant, providing the Company with a notarized statement attesting to the number of shares owned, where, upon verification by the Company, the Company would issue to the participant only the number of incremental shares to which the participant is entitled upon exercise of the Stock Option. In determining which methods a participant may utilize to pay the exercise price, the Committee may consider such factors as it determines are appropriate.

(c) Exercise Period. Stock Options granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee; provided, however, that no Stock Option shall be exercisable later than ten years after the date it is granted except in the event of a participant's death, in which case, the exercise period of such participant's Stock Options may be extended beyond such period but no later than one year after the participant's death. All Stock Options shall terminate at such earlier times and upon such conditions or circumstances as the Committee shall in its discretion set forth in such option agreement at the date of grant.

(d) Limitations on Incentive Stock Options. Incentive Stock Options may be granted only to participants who are employees of the Company or subsidiary corporation of the Company at the date of grant. The aggregate Fair Market Value (determined as of the time the Stock Option is granted) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under all option plans of the Company) shall not exceed $100,000. For purposes of the preceding sentence, Incentive Stock Options will be taken into account in the order in which they are granted. The per share exercise price of an Incentive Stock Option shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant, and no Incentive Stock Option may be exercised later than ten years after the date it is granted; provided, however, Incentive Stock Options may not be granted to any participant who, at the time of grant, owns stock possessing (after the application of the attribution rules of Section 424(d) of the Code) more than 10% of the total combined voting power of all

classes of stock of the Company or any subsidiary corporation of the Company, unless the exercise price is fixed at not less than 110% of the Fair Market Value of the Common Stock on the date of grant and the exercise of such option is prohibited by its terms after the expiration of five years from the date of grant of such option. In addition, no Incentive Stock Option may be issued to a participant in tandem with a Nonqualified Stock Option.

7. Stock Appreciation Rights. The Committee may, in its discretion, grant Stock Appreciation Rights to the holders of any Stock Options granted hereunder. In addition, Stock Appreciation Rights may be granted independently of, and without relation to, options. A Stock Appreciation Right means a right to receive a payment, in cash, Common Stock or a combination thereof, in an amount equal to the excess of (x) the Fair Market Value, or other specified valuation, of a specified number of shares of Common Stock on the date the right is exercised over (y) the Fair Market Value, or other specified valuation (which shall be no less than the Fair Market Value), of such shares of Common Stock on the date the right is granted, all as determined by the Committee; provided, however, that if a Stock Appreciation Right is granted in tandem with or in substitution for a Stock Option, the designated Fair Market Value in the award agreement may be the Fair Market Value on the date such Stock Option was granted. Each Stock Appreciation Right shall be subject to such terms and conditions as the Committee shall impose from time to time.

8. Stock Awards. The Committee may, in its discretion, grant Stock Awards (which may include mandatory payment of bonus incentive compensation in stock) consisting of Common Stock issued or transferred to participants with or without other payments therefor. Stock Awards may be subject to such terms and conditions as the Committee determines appropriate, including, without limitation, restrictions on the sale or other disposition of such shares, the right of the Company to reacquire such shares for no consideration upon termination of the participant's service within specified periods, and may constitute Performance-Based Awards, as described in Section 11 hereof. The Committee may require the participant to deliver a duly signed stock power, endorsed in blank, relating to the Common Stock covered by such an award. The Committee may also require that the stock certificates evidencing such shares be held in custody or bear restrictive legends until the restrictions thereon shall have lapsed. The Stock Award shall specify whether the participant shall have, with respect to the shares of Common Stock subject to a Stock Award, all of the rights of a holder of shares of Common Stock of the Company, including the right to receive dividends and to vote the shares.

9. Performance Awards.

(a) Performance Awards may be granted to participants at any time and from time to time, as shall be determined by the Committee. Performance Awards may constitute Performance-Based Awards, as described in Section 11 hereof. The Committee shall have complete discretion in determining the number, amount and timing of awards granted to each participant. Such Performance Awards may be in the form of shares of Common Stock or Stock Units. Performance Awards may be awarded as short-term or long-term incentives. Performance targets may be based upon, without limitation, Company-wide, divisional and/or individual performance.

(b) With respect to those Performance Awards that are not intended to constitute Performance-Based Awards, the Committee shall have the authority at any time to make adjustments to performance targets for any outstanding Performance Awards which the Committee deems necessary or desirable unless at the time of establishment of such targets the Committee shall have precluded its authority to make such adjustments.

(c) Payment of earned Performance Awards shall be made in accordance with terms and conditions prescribed or authorized by the Committee. The participant may elect to defer, or the Committee may require or permit the deferral of, the receipt of Performance Awards upon such terms as the Committee deems appropriate.

10. Stock Units.

(a) The Committee may, in its discretion, grant Stock Units to participants hereunder. The Committee shall determine the criteria for the vesting of Stock Units. Stock Units may constitute Performance-Based Awards as described in Section 11 hereof. A Stock Unit granted by the Committee shall provide payment in shares of Common Stock at such time as the award agreement shall specify. Shares of Common Stock issued pursuant to this Section 10 may be issued with or without other payments therefor as may be required by applicable law or such other consideration as may be determined by the Committee. The Committee shall determine whether a participant granted a Stock Unit shall be entitled to a Dividend Equivalent Right (as defined below).

(b) Upon vesting of a Stock Unit, unless the Committee has determined to defer payment with respect to such unit or a participant has elected to defer payment under subsection (c) below, shares of Common Stock representing the Stock Units shall be distributed to the participant unless the Committee, with the consent of the participant, provides for the payment of the Stock Units in cash or partly in cash and partly in shares of Common Stock equal to the value of the shares of Common Stock which would otherwise be distributed to the participant.

(c) The Committee may permit a participant to elect not to receive Common Stock upon the vesting of such Stock Unit and for the Company to continue to maintain the Stock Unit on its books of account. In such event, the value of a Stock Unit shall be payable in shares of Common Stock pursuant to the agreement of deferral.

(d) A "Stock Unit" means a notional account representing one share of Common Stock. A "Dividend Equivalent Right" means the right to receive the amount of any dividend paid on the share of Common Stock underlying a Stock Unit, which shall be payable in cash or in the form of additional Stock Units.

11. Performance-Based Awards. Certain Benefits granted under the Plan may be granted in a manner such that the Benefits qualify for the performance-based compensation exemption of Section 162(m) of the Code ("Performance-Based Awards"). As determined by the Committee in its sole discretion, either the granting or vesting of such Performance-Based Awards shall be based on achievement of amounts, hurdle rates, growth rates, and/or reductions in one or more business criteria that apply to the individual participant, one or more geographic or business segments, one or more business units of the Company or the Company as a whole. The business criteria shall be as follows, individually or in combination: net sales, pretax income before allocation of corporate overhead and bonus, budget, earnings per share, net income, division, group or corporate financial goals, return on stockholders' equity, return on assets, attainment of strategic and operational initiatives, appreciation in and/or maintenance of the price of the Common Stock or any other publicly-traded securities of the Company, market share, gross profits, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, net income before taxes, taxes, economic value-added models or reductions in costs. In addition, Performance-Based Awards may include comparisons to the performance of other companies or to market indices, such performance to be measured by one or more of the foregoing business criteria. Furthermore, the measurement of

performance against goals may exclude the impact of charges for restructurings, discontinued operations, extraordinary items and other unusual or non-recurring items, and the cumulative effects of accounting changes, each as defined by generally accepted accounting principles as identified in the financial statements, notes to the financial statements or management's discussion and analysis. With respect to Performance-Based Awards, (i) the Committee shall establish in writing (x) the performance goals applicable to a given period, and such performance goals shall state, in terms of an objective formula or standard, the method for computing the amount of compensation payable to the participant if such performance goals are obtained and (y) the individual employees or class of employees to which such performance goals apply no later than 90 days after the commencement of such period (but in no event after 25% of such period has elapsed) and (ii) no Performance-Based Awards shall be payable to or vest with respect to, as the case may be, any participant for a given period until the Committee certifies in writing that the objective performance goals (and any other material terms) applicable to such period have been satisfied. With respect to any Benefits intended to qualify as Performance-Based Awards, after establishment of a performance goal, the Committee shall not revise such performance goal or increase the amount of compensation payable thereunder (as determined in accordance with Section 162(m) of the Code) upon the attainment of such performance goal. Notwithstanding the preceding sentence, the Committee may reduce or eliminate the number of shares of Common Stock or cash granted or the number of shares of Common Stock vested upon the attainment of such performance goal.

12. Adjustment Provisions; Change in Control.

(a) If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, an adjustment shall be made to each outstanding Stock Option and Stock Appreciation Right such that each such Stock Option and Stock Appreciation Right shall thereafter be exercisable for such securities, cash and/or other property as would have been received in respect of the Common Stock subject to such Stock Option or Stock Appreciation Right had such Stock Option or Stock Appreciation Right been exercised in full immediately prior to such change or distribution, and such an adjustment shall be made successively each time any such change shall occur. In addition, in the event of any such change or distribution or any extraordinary dividend or distribution of cash or other assets, in order to prevent dilution or enlargement of participants' rights under the Plan, the Committee will have authority to adjust, in an equitable manner, the number and kind of shares that may be issued under the Plan, the number and kind of shares subject to outstanding Benefits, the exercise price applicable to outstanding Benefits, and the Fair Market Value of the Common Stock and other value determinations applicable to outstanding Benefits. Appropriate adjustments may also be made by the Committee in the terms of any Benefits under the Plan to reflect such changes or distributions (and any extraordinary dividend or distribution of cash or other assets) and to modify any other terms of outstanding Benefits on an equitable basis, including modifications of performance targets and changes in the length of performance periods. In addition, other than with respect to Stock Options, Stock Appreciation Rights and other awards intended to constitute Performance-Based Awards, the Committee is authorized to make adjustments to the terms and conditions of, and the criteria included in, Benefits in recognition of unusual or nonrecurring events affecting the Company or the financial statements of the Company, or in response to changes in applicable laws, regulations, or accounting principles.

(b) Notwithstanding any other provision of this Plan, in the event of a Change in Control (as defined below), the Committee, in its discretion, may take such actions as it deems appropriate with respect to outstanding Benefits, including, without limitation, accelerating the exercisability or vesting of such Benefits, or such other actions provided in an agreement approved by the Board in connection with a Change in Control and such Benefits shall be subject to the terms of such agreement as the Committee, in its discretion, shall determine. The Committee, in its discretion, may determine that, upon the occurrence of a Change in Control of the Company, each Stock Option and Stock Appreciation Right outstanding hereunder shall terminate within a specified number of days after notice to the holder, and such holder shall receive, with respect to each share of Common Stock subject to such Stock Option or Stock Appreciation Right, an amount equal to the excess of the Fair Market Value of such shares of Common Stock immediately prior to the occurrence of such Change in Control over the exercise price per share of such Stock Option or Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of property (including the property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall determine.

For purposes of this Section 12(b), a "Change in Control" of the Company shall be deemed to have occurred upon any of the following events:

(A) A person or entity or group of persons or entities, acting in concert, shall become the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Exchange Act) of securities of the Company representing fifty-one percent (51%) or more of the combined voting power of the issued and outstanding common stock of the Company (a "Significant Owner"), unless such shares are originally issued to such Significant Owner by the Company; or

(B) The majority of the Company's Board of Directors is no longer comprised of the incumbent directors who constitute the Board of Directors on the Effective Date (as defined in Section 22(a) hereof) and any other individual(s) who becomes a director subsequent to the Effective Date whose initial election or nomination for election as a director, as the case may be, was approved by at least a majority of the directors who comprised the incumbent directors as of the date of such election or nomination; or

(C) A sale of all or substantially all of the assets of the Company; or

(D) The Board of Directors shall approve any merger, consolidation, or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of any event described in clause (C) above, and such transaction shall have been consummated.

13. Nontransferability. Each Benefit granted under the Plan to a participant shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable, during the participant's lifetime, only by the participant. In the event of the death of a participant, each Stock Option or Stock Appreciation Right theretofore granted to him or her shall be exercisable during such period after his or her death as the Committee shall in its discretion set forth in such option or right at the date of grant and then only by the executor or administrator of the estate of the deceased participant or the person or persons to whom the deceased participant's rights under the

Stock Option or Stock Appreciation Right shall pass by will or the laws of descent and distribution. Notwithstanding the foregoing, at the discretion of the Committee, an award of a Benefit other than an Incentive Stock Option may permit the transferability of a Benefit by a participant solely to the participant's spouse, siblings, parents, children and grandchildren or trusts for the benefit of such persons or partnerships, corporations, limited liability companies or other entities owned solely by such persons, including trusts for such persons, subject to any restriction included in the award of the Benefit.

14. Other Provisions. The award of any Benefit under the Plan may also be subject to such other provisions (whether or not applicable to the Benefit awarded to any other participant) as the Committee determines appropriate, including, without limitation, for the installment purchase of Common Stock under Stock Options, for the installment exercise of Stock Appreciation Rights, for the forfeiture of, or restrictions on resale or other disposition of, Common Stock acquired under any form of Benefit, for the acceleration of exercisability or vesting of Benefits in the event of a change of control of the Company (whether or not a Change in Control), for the payment of the value of Benefits to participants in the event of a change of control of the Company (whether or not a Change in Control), or to comply with federal and state securities laws, or understandings or conditions as to the participant's employment or service in addition to those specifically provided for under the Plan.

15. Fair Market Value. For purposes of this Plan and any Benefits awarded hereunder, Fair Market Value shall be the closing price of the Company's Common Stock on the date of calculation (or on the last preceding trading date if Common Stock was not traded on such date) if the Company's Common Stock is readily tradeable on a national securities exchange or other market system, and if the Company's Common Stock is not readily tradeable, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

16. Withholding. All payments or distributions of Benefits made pursuant to the Plan shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements at the minimum statutory withholding rates. If the Company proposes or is required to distribute Common Stock pursuant to the Plan, it may require the recipient to remit to it or to the corporation that employs such recipient an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company or the employing corporation shall have the right to withhold the amount of such taxes from any other sums due or to become due from such corporation to the recipient as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit an optionee or award or right holder to pay all or a portion of the federal, state and local withholding taxes arising in connection with any Benefit consisting of shares of Common Stock by electing to have the Company withhold shares of Common Stock (or by electing to pay with already owned shares) having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at minimum statutory withholding rates.

17. Tenure. A participant's right, if any, to continue to serve the Company or any of its subsidiaries or affiliates as a director, officer, employee or otherwise, shall not be enlarged or otherwise affected by his or her designation as a participant under the Plan.

18. Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no

action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any participant, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.

19. No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Benefit. The Committee shall determine whether cash, or Benefits, or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

20. Duration, Amendment and Termination. No Benefit shall be granted more than ten years after the Effective Date. The Committee may amend the Plan from time to time or suspend or terminate the Plan at any time. However, no action authorized by this Section 20 shall reduce the amount of any existing Benefit or change the terms and conditions thereof without the participant's consent. No amendment of the Plan may be made without approval of the stockholders of the Company if the amendment will: (i) increase the aggregate number of shares of Common Stock which may be issued under the Plan; (ii) increase the maximum number of shares with respect to Benefits that may be granted to any individual under the Plan; (iii) change the types of business criteria on which Performance-Based Awards are to be based under the Plan; or (iv) modify the requirements as to eligibility for participation in the Plan.

21. Governing Law. This Plan, Benefits granted hereunder and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under applicable Delaware principles of conflict of laws).

22. Effective Date. The Plan shall be effective as of April 15, 2005, the date on which the Plan was adopted by the Committee (the "Effective Date"), provided that the Plan is approved by the stockholders of the Company at an annual meeting or any special meeting of stockholders of the Company within 12 months of the Effective Date, and such approval of stockholders shall be a condition to the right of each participant to receive any Benefits hereunder. Any Benefits granted under the Plan prior to such approval of stockholders shall be effective as of the date of grant (unless, with respect to any Benefit, the Committee specifies otherwise at the time of grant), but no such Benefit may be exercised or settled and no restrictions relating to any Benefit may lapse prior to such stockholder approval, and if stockholders fail to approve the Plan as specified hereunder, any such Benefit shall be cancelled.

(b) This Plan shall terminate on April 15, 2015 (unless sooner terminated by the Committee).

Exhibit 10.2

AVATAR HOLDINGS INC.

2005 EXECUTIVE INCENTIVE COMPENSATION PLAN

1. Purpose.

The Avatar Holdings Inc. 2005 Executive Incentive Compensation Plan (the "Plan") is intended to provide incentives which will attract, retain and motivate certain executive employees of Avatar Holdings Inc. (the "Company") and of any subsidiary corporation now existing or hereafter formed or acquired, by providing them opportunities in the form of periodic cash bonus awards ("Awards"), thereby motivating such executives to attain performance goals articulated under the Plan.

2. Administration.

(a) The Plan shall be administered by a committee (the "Committee") of the Company's Board of Directors (the "Board") and shall be comprised solely of not less than two members who shall be "outside directors" within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the United States Internal Revenue Code of 1986, as amended (the "Code").

(b) The Committee shall have the exclusive authority to select the executives to be granted Awards under the Plan, to determine the size and terms and conditions of the Awards (subject to the limitations imposed on Awards in
Section 4 below) including any restrictions or conditions on payment of Awards, to modify the terms and conditions of any Award that has been granted (except for any modification that would increase the amount of the Award payable to an executive), to determine the time when Awards will be made and the performance period to which they relate, to establish performance objectives in respect of such performance periods, and to certify that such performance objectives were attained. The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent that the Committee deems necessary or desirable. All determinations and interpretations made by the Committee shall be binding and conclusive on all Participants (as defined herein) and their legal representatives. No member of the Committee and no employee of the Company shall be liable for any act or failure to act hereunder, except in circumstances involving his or her bad faith, gross negligence or willful misconduct, or for any act or failure to act hereunder by any other member or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated. The Company shall indemnify members of the Committee and any agent of the Committee who is an employee of the Company or any of its subsidiaries, against any and all liabilities or expenses to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of the Plan, except in circumstances

involving such person's bad faith, gross negligence or willful misconduct. The costs and expenses of administering the Plan shall be borne by the Company.

(c) The Committee may delegate to one or more of its members, or to one or more agents, such administrative duties as it may deem advisable, and the Committee, or any person to whom it has delegated duties as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan; provided, however, that no delegation shall be made regarding the selection of executives who shall be granted Awards under the Plan, the amount and timing thereof, or the objectives and conditions relating thereto. The Committee may employ such legal or other counsel, consultants, advisors and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion or computation received from such counsel, consultant, advisor or agent. Expenses incurred by the Committee in the engagement of such counsel, consultant, advisor or agent shall be paid by the Company, or the subsidiary or affiliate whose employees have participated in the Plan, as determined by the Committee.

3. Participants.

Awards may be granted to executives of the Company or its subsidiaries or affiliates. An executive to whom an Award is granted shall be a "Participant." Designation of a Participant with respect to any Award shall not require the Committee to designate such person to receive any additional Awards. The Committee shall consider such factors as it deems pertinent in selecting Participants and in determining the type and amount of their respective Awards.

4. Awards.

(a) The terms and conditions of any Award shall be determined by the Committee in its sole discretion. As determined by the Committee in its sole discretion, either the granting or vesting of such Awards is to be based upon one or more of the following criteria: net sales, pretax income before allocation of corporate overhead and bonus, budget, earnings per share, net income, division, group or corporate financial goals, return on stockholders' equity, return on assets, appreciation in and/or maintenance of the price of common stock of the Company or any other publicly-traded securities of the Company, market share, net profits, gross profits, cash flow, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, net income before taxes, taxes, economic value-added models and comparisons with various stock market indices, reductions in costs, containment of costs or any combination of the foregoing. The foregoing criteria may relate to the Company, one or more of its subsidiaries or affiliates or one or more of its divisions, units, projects, developments or real estate communities, or any combination of the foregoing, and may be applied on an absolute basis or be relative to one or more peer group companies or indices, or any combination thereof, all as the Committee shall determine. Furthermore, as the Committee shall determine, the measurement of performance against goals may exclude the impact of charges for restructurings, discontinued operations, extraordinary items and other unusual or non-recurring items, and the cumulative effects of

accounting changes, each as defined by generally accepted accounting principles as identified in the financial statements, notes to the financial statements or management's discussion and analysis. With respect to a Participant's Award, (i) the Committee shall establish in writing (x) the performance goals applicable to a given period, and such performance goals shall state, in terms of an objective formula or standard, the method for computing the amount of compensation payable to the Participant if such performance goals are obtained and (y) the individual Participants to which such performance-based goals apply, no later than ninety
(90) days after the commencement of such period (but in no event after 25% of such period has elapsed) and while the outcome for that performance period is substantially uncertain. The maximum amount which may be paid to any individual Participant under the Plan shall not exceed $8 million.

(b) The Committee shall determine whether the performance goals have been met with respect to any Participant and, if they have, so certify and ascertain the amount of the applicable Award. No Awards shall be payable to or vest with respect to, as the case may be, any Participant for a given period until the Committee certifies in writing that the objective performance goals (and any other material terms) applicable to such period have been satisfied. After the establishment of a performance goal, the Committee shall not revise such performance goal or increase the amount of compensation payable thereunder (as determined in accordance with Section 162(m) of the Code) upon the attainment of such performance goal. The amount of the Award actually paid to any Participant (or, if such Participant is deceased, the Participant's estate) may be less than the amount determined by the applicable performance goal formula, at the discretion of the Committee. The amount of the Award determined by the Committee for a performance period shall be paid to the Participant within seventy-five (75) days after the end of that performance period or as otherwise determined by the Committee. Awards shall be payable in cash.

5. Amendment and Termination.

The Committee may, at any time or from time to time, suspend or terminate the Plan in whole or in part or amend it in such respects as the Committee may deem appropriate. However, no action authorized by this Section 5 shall reduce the amount of any existing Award or change the terms and conditions thereof without the affected Participant's consent. No amendment of the Plan may be made without the approval of the stockholders of the Company if the amendment will: (i) increase the maximum amount which can be paid to any Participant under the Plan; (ii) change the types of criteria on which Awards are to be based under the Plan; or (iii) modify the requirements as to eligibility for participation in the Plan.

6. Miscellaneous.

(a) Determinations made by the Committee under the Plan need not be uniform and may be made selectively among eligible individuals under the Plan, whether or not such eligible individuals are similarly situated. A Participant's right, if any, to continue to serve the Company or any of its subsidiaries or

affiliates as a director, officer, employee or otherwise, shall not be enlarged or otherwise affected by his or her designation as a Participant under the Plan and the right to terminate the employment of or performance of services by any Participant at any time and for any reason or no reason is specifically reserved to the Company and its subsidiaries and affiliates.

(b) No Award shall be considered as compensation under any employee benefit plan of the Company or any subsidiary or affiliate, except as otherwise may be provided in such employee benefit plan. No reference in the Plan to any other plan or program maintained by the Company shall be deemed to give any Participant or other person a right to benefits under such other plan or program.

(c) Except as otherwise may be required by law or approved by the Committee, a Participant's rights and interest under the Plan may not be assigned or transferred, hypothecated or encumbered in whole or in part either directly or by operation of law or otherwise (except in the event of a Participant's death) including, without limitation, execution, levy, garnishment, sale, transfer, attachment, pledge, bankruptcy or in any other manner; provided, however, that, subject to applicable law, any amounts payable to any Participant hereunder are subject to reduction to satisfy any liabilities owed by the Participant to the Company or any of its subsidiaries or affiliates.

(d) All payments and distributions of Awards made pursuant to the Plan shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements.

(e) Participants have no right, title, or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.

(f) The Plan, Awards granted hereunder and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under the applicable Delaware principles of conflict of laws).

(g) The Plan shall be effective as of April [15], 2005, the date on which the Plan was adopted by the Committee, provided that the Plan is approved by the stockholders of the Company at an annual meeting or any special meeting of stockholders of the Company prior to the date any compensation is first paid

with respect to any Award hereunder, and such approval of stockholders shall be a condition to the right of each Participant to receive any benefits hereunder. Any Awards granted under the Plan prior to such approval of stockholders shall be effective as of the date of grant (unless, with respect to any Award, the Committee specifies otherwise at the time of grant), but no such Award may be paid out prior to such stockholder approval, and if stockholders fail to approve the Plan as specified hereunder, any such Award shall be cancelled.

(h) No Awards shall be granted under the Plan after December 31, 2009.

Exhibit 10.3

May 20, 2005

Mr. Gerald D. Kelfer
President and Chief Executive Officer
Avatar Holdings Inc.
201 Alhambra Circle
12th Floor
Coral Gables, FL 33134

Dear Mr. Kelfer:

This letter agreement hereby amends, restates and supersedes in its entirety the letter agreement between you (the "Employee") and Avatar Holdings Inc. (the "Company"), dated as of April 15, 2005.

Reference is made to the following agreements (collectively, the "Compensation Agreements"), each dated as of April 15, 2005:

1. Amended and Restated Employment Agreement between the Employee and the Company;

2. Amended and Restated Earnings Participation Award Agreement between the Employee and the Company;

3. Change in Control Award Agreement between the Employee and the Company;

4. 2008-2010 Earnings Participation Award Agreement between the Employee and the Company;

5. Restricted Stock Unit Award Agreement between the Employee and the Company, relating to the opportunity to receive 30,000 restricted stock units of the Company subject to a hurdle price of $65.00 per share;

6. Restricted Stock Unit Award Agreement between the Employee and the Company, relating to the opportunity to receive 30,000 restricted stock units of the Company subject to a hurdle price of $72.50 per share; and

7. Restricted Stock Unit Award Agreement between the Employee and the Company, relating to the opportunity to receive 30,000 restricted stock units of the Company subject to a hurdle price of $80.00 per share.

Notwithstanding anything in the Compensation Agreements to the contrary, the effectiveness of each of the Compensation Agreements is subject (A) to the approval by the Company's stockholders at the 2005 Annual Meeting of Stockholders of the Company of each of (i) the Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement) and (ii) the 2005 Executive Incentive Compensation Plan (such approval of both such plans is referred to herein as the "Stockholder Approval"), (B) to the Employee's continuous employment with the Company through and including the Effective Date (as defined in the following clause (C)), and (C) until June 30, 2005, to the

effectiveness of a registration statement to be filed by the Company with the U.S. Securities and Exchange Commission on Form S-8 related to certain stock-based compensation awarded to the Employee pursuant to the Compensation Agreements (the earlier of June 30, 2005 and the date of such effectiveness herein being referred to as the "Effective Date"). In the case of clause (C), if the registration statement on Form S-8 is not effective on or prior to June 30, 2005 and all other conditions precedent in the preceding sentence have been satisfied, the restricted stock units awarded to the Employee in each of the Restricted Stock Unit Award Agreements referred to above will be awarded in accordance with Section 9 of such Restricted Stock Unit Award Agreements. In the event that the Stockholder Approval is not obtained on or prior to June 30, 2005, (i) each of the Compensation Agreements shall terminate automatically without any further action required by the Company or the Employee and the Company and the Employee shall have no liability with respect thereto and (ii) any agreement between the Company, on the one hand, and the Employee, on the other hand, intended to be amended, restated and superceded by any of the Compensation Agreements shall remain in full force and effect in accordance with, and subject to, the terms and conditions set forth therein.

This letter agreement may be executed in counterparts, each of which shall constitute an original, and all of which when taken together shall constitute one and the same.

(signature page follows)

Please evidence your agreement with the foregoing by executing a copy of this letter agreement and returning it to the Company.

Very truly yours,

AVATAR HOLDINGS INC.

By: /s/ Charles L. McNairy
    -----------------------------------
    Name: Charles L. McNairy
    Title: Executive Vice President

Acknowledged and agreed to
as of the date first written above:

/s/ Gerald D. Kelfer
--------------------------
Gerald D. Kelfer

Exhibit 10.4

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made as of April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Gerald D. Kelfer (the "Employee").

W I T N E S S E T H

WHEREAS, Employee is currently employed as President and Chief Executive Officer of the Company pursuant to the amended and restated employment agreement dated March 27, 2003 between the Company and Employee (the "Original Agreement"); and

WHEREAS, the Company and Employee wish to provide for certain modifications to the Original Agreement and wish to amend, restate and supersede the Original Agreement, all upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1. Employment. The Company agrees to employ Employee and Employee agrees to be employed by the Company commencing as of the date hereof and ending on June 30, 2011 (unless sooner terminated as hereinafter provided), on the terms and subject to the conditions set forth in this Agreement.

2. Duties. (a) Employee shall continue to be nominated as a director of the Company and, subject to Employee's election thereto by the Board of Directors or the stockholders of the Company, Employee shall be employed as the President and Chief Executive Officer of the Company. In such capacities, Employee shall serve as the senior executive officer of the Company and shall have the duties and responsibilities prescribed for such positions by the By-Laws of the Company, and shall have such other duties and responsibilities as may from time to time be prescribed by the Board of Directors of the Company or the Executive Committee of the Board of Directors, provided that such duties and responsibilities are consistent with Employee's position as the senior executive officer. In the event that during the term of Employee's employment hereunder Employee's duties and responsibilities are expanded or Employee's title is changed (without reduction in status), then in either or both events the rights and obligations under this Agreement shall not be affected. In the performance of Employee's duties, Employee shall be subject to the supervision and direction of the Board of Directors of the Company and the Executive Committee of the Board of Directors.

(b) Subject to the term of Employee's employment hereunder, Employee shall devote Employee's full working time and effort to the proper performance of Employee's duties and responsibilities as President and Chief Executive Officer. Employee hereby represents and warrants to the Company that Employee has no obligations under any existing employment or service agreement other than the Original Agreement and that Employee's performance of the services required of Employee hereunder will not conflict with any other existing obligations or commitments. Nothing in this Agreement shall preclude Employee from engaging, consistent with Employee's duties and responsibilities hereunder, in charitable and community affairs.

(c) Employee shall perform the services contemplated hereunder at the principal executive office of the Company and at such other locations as may be reasonably necessary to the performance of such services.

3. Compensation.

(a) Base Salary. During the term of Employee's employment hereunder, the Company shall pay Employee, and Employee shall accept from the Company for Employee's services, a salary at the rate of $500,000 per year ("Base Salary"). Such Base Salary shall be payable in accordance with the Company's policy with respect to the compensation of executives.

(b) Annual Bonus. During the term of Employee's employment hereunder, the Company shall pay Employee, and Employee shall accept from the Company for Employee's services, in addition to Employee's Base Salary, a calendar year annual cash bonus of $500,000 ("Annual Bonus"). Such Annual Bonus shall be payable in accordance with the Company's policy with respect to the compensation of executives, but no later than thirty (30) days after the end of each calendar year in respect of which the bonus is earned.

(c) Expenses. During Employee's employment, Employee will be entitled to receive prompt reimbursement for all reasonable expenses incurred by Employee in performing Employee's services hereunder, provided that Employee properly accounts therefor in accordance with Company policy.

4. Vacations. During Employee's employment, Employee shall be entitled to take such amount of vacation per year as is permitted pursuant to and in accordance with the Company's policies for its senior executives (as such policies may be amended from time to time or terminated in Avatar's sole discretion), without loss or diminution of compensation. Employee shall also be entitled to all paid holidays given by the Company to its senior executives.

5. Participation in Benefit Plans. Employee shall be entitled to participate in and to receive benefits under all the Company's employee benefit plans and arrangements in effect on the date hereof, and Employee shall also be entitled to participate in or receive benefits under any pension or retirement plan, savings plan, or health-and-accident plan made available by the Company in the future to its senior executives and other key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements and provided that Employee meets the eligibility requirements thereof.

6. Other Offices. Employee further agrees to serve without additional compensation, if elected or appointed thereto, as an officer or director of any of the Company's subsidiaries or affiliates or as any other officer of the Company.

7. Termination.

(a) Death. Employee's employment hereunder shall terminate upon Employee's death.

(b) Disability. In the event of Employee's Disability (as defined below) during the term of Employee's employment hereunder, the Company shall have the right, upon written notice to Employee, to terminate Employee's employment hereunder, effective upon the giving of such notice. For the purposes hereof, "Disability" shall be defined as any physical or mental disability or incapacity which renders Employee incapable of fully performing the services required of Employee in accordance with Employee's obligations hereunder for a period of 120 consecutive days or for shorter periods aggregating 120 days during any period of twelve (12) consecutive months.

(c) Cause. The Company may terminate Employee's employment hereunder for "Cause". For the purposes hereof, termination for "Cause" shall mean termination after:

(i) Employee's commission of a material act of fraud against the Company or its affiliates;

(ii) Employee's conviction of (or pleading by Employee of nolo contendere to) any crime which constitutes a felony that the Board of Directors of the Company determines in good faith is or may become materially harmful to the Company, any of its subsidiaries and/or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), either financially or with respect to such Avatar Entity's business reputation; or

(iii) the willful, repeated and demonstrable failure by Employee substantially to perform Employee's duties over a period of not less than 30 days, other than any such failure resulting from Employee's incapacity due to physical or mental illness, or material breach of any of Employee's obligations under this Agreement, and Employee's failure to cure such failure or breach within 30 days after receipt of written notice from the Chairman of the Board of Directors of the Company.

(d) Termination by Employee for Good Reason. Employee may terminate Employee's employment hereunder for Good Reason. For purposes of this Agreement, "Good Reason" shall mean (A) the failure of the Board of Directors to continue to recommend or elect, or the stockholders of the Company to continue to elect, Employee as a director of the Company throughout the term of Employee's employment hereunder, or the failure of the Board of Directors to elect Employee or continue to elect Employee to the Executive Committee of the Board, provided that if Employee is not so continued, the Company shall be entitled to cure such failure within thirty (30) days after Employee ceases to serve as a director or a member of the Executive Committee, as the case may be, (B) any assignment to Employee of any material duties other than those contemplated by, or any limitation of Employee's powers or in any respect not contemplated by, paragraph 2 hereof, provided that Employee first deliver written notice thereof to the Chairman of the Board of Directors of the Company and the Company shall have failed to cure such non-permitted assignment or limitation within thirty (30) days after receipt of such written notice, (C) a reduction in Employee's rate of compensation, or a material reduction in Employee's fringe benefits (other than a material reduction in fringe benefits generally applicable to senior executives of the Company) or any other material failure by the Company to

perform any of its material obligations hereunder, provided that Employee first deliver written notice thereof to the Chairman of the Board of the Company and the Company shall not have cured such reduction or failure within thirty (30) days after receipt of such written notice, or (D) the Company relocates its principal place of business to a place whose distance is further than a (i) 75-mile radius from Coral Gables, Florida or (ii) 75-mile radius from New York, New York.

(e) Termination by Employee Following a Change in Control. Employee may terminate Employee's employment hereunder at any time during the period beginning on the date of the consummation of a Change in Control (the "Change in Control Date") and ending on the first Anniversary of the Change in Control Date. For purposes of this Agreement, a "Change of Control" shall mean any of the following events:

(1) a person or entity or group of persons or entities, acting in concert, become the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; or

(2) the Board approves any merger, consolidation or like business combination or reorganization of Avatar, the consummation of which would result in the occurrence of the event described in clause
(1) above, and such transaction shall have been consummated.

(f) Any termination by the Company pursuant to paragraphs (b) or (c) above or by Employee pursuant to paragraph (d) or (e) above shall be communicated by written Notice of Termination to the other party hereto. For the purposes hereof, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee's employment under the provision so indicated.

(g) "Date of Termination" shall mean (i) if Employee's employment is terminated by Employee's death, the date of Employee's death, (ii) if Employee's employment is terminated for any other reason, the date on which a Notice of Termination is given, or (iii) absent a termination pursuant to clause (i) or
(ii) above, June 30, 2011.

(h) With respect to any date referred to in this Agreement, the term "Anniversary" shall mean the annual recurrence of such date.

8. Compensation Upon Termination or During Disability.

(a) If Employee's employment shall be terminated by reason of Employee's death, the Company shall pay, to such person as Employee shall designate in a notice filed with the Company, or, if no such person shall be designated, to Employee's estate as a lump sum death benefit, an amount equal to any accrued but unpaid Base Salary and a prorated Annual Bonus at the time of Employee's death. This amount shall be exclusive of and in addition to any payments that Employee's widow, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan maintained by the

Company. Employee's designated beneficiary or the executor of Employee's estate, as the case may be, shall accept the payment provided for in this paragraph 8 in full discharge and release of the Company of and from any further obligations under this Agreement, subject to payments, if any, provided for in paragraph 8(f) below.

(b) During any period that Employee fails to perform Employee's duties hereunder as a result of incapacity due to physical or mental illness, Employee shall continue to receive Employee's full Base Salary and a prorated Annual Bonus until, if applicable, Employee's employment is terminated pursuant to paragraph 7(b) hereof. If Employee's employment is terminated by the Company pursuant to paragraph 7(b), the Company shall be discharged and released of and from any further obligations under this Agreement, subject to payments, if any, provided for in paragraph 8(f) below. During any such period and thereafter Employee shall continue to bear the obligations provided for in paragraph 9 below in accordance with the terms of such paragraph 9.

(c) If Employee's employment shall be terminated for Cause or Employee shall terminate Employee's employment other than for Good Reason, the Company shall pay Employee Employee's full Base Salary and a prorated Annual Bonus through the Date of Termination at the rate in effect at the time Notice of Termination is given. The Company shall be discharged and released of and from any further obligations under this Agreement. Thereafter, Employee shall continue to have the obligations provided for in paragraph 9 below. Nothing contained herein shall be deemed to be a waiver by the Company of any rights that it may have against Employee in respect of Employee's actions which gave rise to the termination of Employee's employment for Cause.

(d) If the Company shall terminate Employee's employment other than pursuant to paragraphs 7(b) or 7(c) hereof or if Employee shall terminate Employee's employment for Good Reason, then

(i) The Company shall continue to pay Employee Employee's full Base Salary in accordance with normal payroll practices and without interest through the earlier of (x) June 30, 2011 and (y) the second Anniversary of the Date of Termination at the rate in effect at the time Notice of Termination is given in accordance with paragraph 7(f) hereof;

(ii) The Company shall continue to pay Employee Employee's Annual Bonus in accordance with normal payroll practices and without interest through the earlier of (x) June 30, 2011 and (y) the second Anniversary of the Date of Termination;

(iii) The Company shall pay Employee the severance payments described in paragraph 8(f) below; and

(iv) The Company shall maintain in full force and effect, for Employee's continued benefit, all employee benefit plans and programs to the extent applicable to other senior executives of the Company (provided that Employee's continued participation is

permissible under the general terms and provisions of such plans and programs) through the earlier of (x) June 30, 2011 and (y) the second Anniversary of the Date of Termination. In the event that Employee's participation in any such plan or program is not permitted, Employee shall be entitled to receive an amount equal to the annual contributions, payments, credits or allocations made by the Company to Employee's account or on Employee's behalf under such plans and programs.

(e) If Employee shall terminate Employee's employment hereunder pursuant to paragraph 7(e) hereof, then Employee shall continue to receive Employee's Base Salary and Annual Bonus through the earlier of (i) the first Anniversary of the Date of Termination or (ii) June 30, 2011.

(f) Severance Payments. If Employee's employment terminates on June 30, 2011 pursuant to paragraph 1 of this Agreement, Employee terminates his employment for Good Reason or Employee is terminated by the Company without Cause, the Company shall pay or provide to Employee beginning in the calendar year following the Date of Termination an annual payment of $250,000 for four
(4) years, payable within thirty (30) days following the beginning of each such calendar year. If Employee's employment with the Company is terminated by Employee's death or Disability prior to June 30, 2011 or Employee terminates his employment pursuant to paragraph 7(e) hereof, Employee (or the executor or administrator of the deceased Employee's estate or the person or persons to whom the deceased Employee's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive, beginning in the calendar year following the Date of Termination, an annual payment for four (4) years, payable within thirty (30) days following the beginning of each such calendar year, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed whole months elapsed from November 30, 2000 to the date of death, Disability or termination of employment, as the case may be (whichever is earliest), and the denominator of which is ninety-seven (97) and (y) $250,000.

(g) If the Company shall terminate Employee's employment hereunder other than pursuant to paragraphs 7(b) or 7(c) hereof, or if Employee shall terminate Employee's employment pursuant to paragraph 7(d) hereof, Employee agrees, during the entire period of time that Employee is entitled to receive any benefits pursuant to paragraph 8(d) above, to make known Employee's availability for employment involving services of a nature substantially similar and of a comparable stature to those performed by Employee on behalf of the Company in a manner customary for executives holding positions substantially similar and of a comparable stature to Employee's position with the Company. Employee agrees to keep the Chairman of the Board of the Company (or his designee) apprised of Employee's employment status during such period and, if requested, Employee will provide appropriate supporting documentation with respect to the salary, bonuses or other compensation earned by and benefits made available to Employee in respect of such employment. In the event Employee secures employment as described in this paragraph 7(g), the Company shall be entitled to (i) deduct from the amounts payable to Employee pursuant to paragraphs 8(d)(i) and 8(d)(ii) above (excluding any accrued but unpaid Annual Bonus through the Date of Termination) any salary, bonuses or other compensation paid to Employee in connection with such employment and (ii) terminate Employee's participation in (and shall not be required to pay Employee any sums in respect of) any employee benefit plans and programs described in paragraph

8(d)(iii) that are substantially similar to any employee benefit plans and programs in which Employee participates in connection with such new or existing employment. Employee agrees promptly to repay to the Company any amounts paid to Employee by the Company pursuant to paragraphs 8(d)(i) and 8(d)(ii) which the Company was entitled to deduct from such amounts pursuant to this paragraph 8(g).

9. Non-Competition and Protection of Confidential Information.

(a) Restrictive Covenants. Employee agrees, as a condition to the performance by the Company of its obligations hereunder, particularly its obligations under paragraph 3 hereof, that during the term of Employee's employment hereunder and through the first Anniversary of the Date of Termination, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation:

(i) Engage, participate, own or make any financial investments in, or become employed by or render (whether or not for compensation) any consulting, advisory or other services to or for the benefit of, any person, firm or corporation, that directly or indirectly, engages primarily in, the development of adult retirement communities and/or active adult communities; provided, however, that it shall not be a violation of this Agreement for Employee (i) to have beneficial ownership of less than 1% of the outstanding amount of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or quoted on an inter-dealer quotation system or (ii) to have beneficial ownership of less than 20% of the outstanding amount of any class of securities of any enterprise (but without otherwise participating in the activities or otherwise having influence or control of such enterprise) if such securities are not registered under Section 12 of the Exchange Act or quoted on an inter-dealer quotation system;

(ii) Solicit, raid, entice or induce any person, firm or corporation that presently is or at any time during the term of Employee's employment hereunder a customer of any of the Avatar Entities to become a customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or

(iii) Solicit, raid, entice or induce any person that presently is or at any time during the term of Employee's employment hereunder an employee of any of the Avatar Entities to become employed by any person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person.

(b) Confidential Information. Recognizing that the knowledge, information and relationship with customers, suppliers, and agents, and the knowledge of the Avatar Entities' business methods, systems, plans and policies

which Employee shall hereafter establish, receive or obtain as an employee of the Company or any other Avatar Entity, are valuable and unique assets of the respective businesses of the Avatar Entities, Employee agrees that, during and after the term of Employee's employment hereunder, Employee shall not (other than pursuant to Employee's duties hereunder) disclose, without the prior written approval of the Board of Directors of the Company, any such knowledge or information pertaining to any of the Avatar Entities, their business, personnel or policies, to any person, firm, corporation or other entity, for any reason or purpose whatsoever. The provisions of this paragraph 9 shall not apply to information (i) that is or shall become generally known to the public or the trade (except by reason of Employee's breach of Employee's obligations hereunder), (ii) that is or shall become available in trade or other publications, (iii) that is known to Employee prior to entering the employ of the Company, and (iv) that Employee is required to disclose by order of a court of competent jurisdiction (provided that prior to Employee's disclosure of any such information Employee shall provide the Company with reasonable notice and a reasonable opportunity to seek a protective order to prevent such disclosure).

(c) Geographic Scope. The provisions of this paragraph 9 (other than paragraphs 9(a)(ii) and (iii) and 9(b), which shall be in full force and effect without regard to the geographic limitations set forth in this paragraph 9(d)) shall be in full force and effect within a 100-mile radius of a site for which any Avatar Entity is preparing to develop, has commenced development of, or has a binding commitment or option to purchase, real estate. Employee and the Company expressly agree that the prohibitions set forth in paragraph 9(a)(i) shall be in full force and effect with respect to any services or business activity which competes in the above mentioned geographic area with the business operations or activities of any of the Avatar Entities, regardless of the geographic location of Employee in rendering such services or engaging in such business activity.

(d) Survival. The provisions of this paragraph 9 shall survive the termination of Employee's employment hereunder, irrespective of the reason therefor.

(e) Remedies. Employee acknowledges that his services are of a special, unique and extraordinary character and, his position with the Avatar Entities places him in a substantial relationship and a position of confidence and trust with specific prospective or existing customers, suppliers and employees of the Avatar Entities, and that in connection with his services to the Company, Employee will have access to confidential business or professional information vital to the Avatar Entities' businesses. Employee further acknowledges that in view of the nature of the business in which the Avatar Entities are engaged, the foregoing restrictive covenants in this paragraph 9 hereof are reasonable and necessary in order to protect the legitimate business interests of the Avatar Entities and that violation thereof would result in irreparable injury to the Avatar Entities. Accordingly, Employee consents and agrees that if Employee violates or threatens to violate any of the provisions of this paragraph 9 hereof the Avatar Entities would sustain irreparable harm and, therefore, the Avatar Entities shall be entitled to obtain from any court of competent jurisdiction, temporary, preliminary and/or permanent injunctive relief as well as damages, attorneys fees and costs, and an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies in law or equity to which the Avatar Entities may be entitled.

10. Deductions and Withholdings. The Company shall be entitled to withhold any amounts payable under this Agreement on account of payroll taxes and similar matters as are required by applicable law, rule or regulation of appropriate governmental authorities.

11. Successors; Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance reasonably satisfactory to Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Employee to compensation from the Company in the same amount and on the same terms as Employee would be entitled to hereunder if Employee terminated Employee's employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "Company" shall include any successor to the Company's business and/or assets as aforesaid which executes and delivers the agreement provided for in this paragraph 11 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. Except as set forth above, the Company may not assign this Agreement or any of its rights or obligations hereunder, without Employee's prior written consent.

(b) This Agreement and all Employee's rights hereunder shall inure to the benefit of and be enforceable by Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Employee should die while any amounts would still be payable to Employee hereunder if Employee had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Employee's devisee, legatee, or other designee or, if there be no such designee, to Employee's estate. Employee's obligations hereunder may not be delegated and except as otherwise provided herein relating to the designation of a devisee, legatee or other designee, Employee may not assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any of Employee's rights hereunder, and any such attempted delegation or disposition shall be null and void and without effect.

(c) This Agreement has been duly authorized by the Company, and constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms. Employee agrees that this Agreement constitutes Employee's legal, valid and binding obligation and is enforceable against Employee in accordance with its terms.

12. Notice. For the purposes of this Agreement, notices and all other communications provided for shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Employee:

Mr. Gerald D. Kelfer
7426 S.W. 49th Place
Miami, Florida 33143

If to the Company:

Avatar Holdings Inc.
201 Alhambra Circle, 12th Floor
Coral Gables, Florida 33134
Attention: Chairman of the Board
Facsimile: (305) 441-7876

and with a copy to:

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: R. Todd Lang, Esq.
Facsimile: (212) 310-8007

or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

13. Miscellaneous. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Employee and by the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

14. Entire Agreement. This Agreement and the letter agreement, dated as of the date hereof, between the Company and Employee, constitute the complete understanding between the parties with respect to Employee's employment and no agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Florida.

15. Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

16. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Charles L. McNairy
    -----------------------------------
    Name: Charles L. McNairy
    Title: Executive Vice President


    /s/ Gerald D. Kelfer
    -----------------------------------
    Gerald D. Kelfer

Exhibit 10.5

AMENDED AND RESTATED EARNINGS
PARTICIPATION AWARD AGREEMENT

THIS AMENDED AND RESTATED EARNINGS PARTICIPATION AWARD AGREEMENT, dated April 15, 2005 (the "Agreement"), is made by and between Avatar Holdings Inc., a Delaware corporation (the "Company"), and Gerald D. Kelfer (the "Participant") and amends and restates in its entirety the Earnings Participation Award Agreement (the "Original Agreement") between the Company and the Participant, dated March 27, 2003 (the "Award Date").

The Company and the Employee wish to provide for certain modifications to the Original Agreement and wish to amend, restate and supersede the Original Agreement, all upon the terms and conditions set forth herein.

The Cash Award and the Stock Award (each as defined in the Original Agreement) granted to the Participant pursuant to the Original Agreement remain in effect as amended and restated in this Agreement.

1. AWARD. Pursuant to the provisions of the (i) Avatar Holdings Inc. Executive Incentive Compensation Plan, as the same may be amended, restated, modified and supplemented from time to time (the "Executive Plan") the Committee (as defined in the Executive Plan) hereby awards to the Participant, as of the Award Date, subject to the terms and conditions of the Executive Plan and subject further to the other provisions herein set forth, the Cash Award and (ii) Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan, as the same may be amended, restated, modified and supplemented from time to time (the "1997 Plan" and together with the Executive Plan, collectively the "Plans") the Committee (as defined in the 1997 Plan) hereby awards to the Participant, as of the Award Date, subject to the terms and conditions of the 1997 Plan and subject further to the terms and conditions and other provisions herein set forth, the Stock Award if, as of an applicable Performance Goal Test Date (as defined below), the Performance Goal (as defined below) applicable to a Cash Award or the Stock Award, as the case may be, is satisfied.

2. CERTAIN DEFINITIONS.

(a) Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plans.

(b) Each reference contained in this Agreement to:

"Actual Gross Profit Amount" shall mean the Company's cumulative Gross Profit during the Performance Period.

"Business Plan" shall mean the Company's business plan for the period commencing on January 1, 2003 and ending on December 31, 2007, as submitted to the Compensation Committee on or prior to the Award Date.

"Cash Award" shall mean, with respect to each fiscal year during the Performance Period ending on a Performance Goal Test Date, a cash payment equal to two and one-half percent (2.5%) of the excess, if any, of (x) the Gross Profit earned by the Company for such fiscal year, over (y) the Minimum Gross Profit Level for such fiscal year.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Excluded Amounts" shall mean, with respect to a fiscal year of the Company, as at any date of determination, an amount equal to the dollar amount of any Gross Profit attributable to Harbor Islands and the Rio Rico Excluded Properties for such fiscal year.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen trading days ending with and including the measuring date on which such exchange or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradeable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

"Gross Profit" shall mean, with respect to a fiscal year of the Company, the excess, if any, of (x) the sum of (i) the amount set forth in the Company's audited Consolidated Statements of Operations as set forth in the Company's annual report on Form 10-K (the "Income Statement") for such fiscal year with respect to the line item "Net income (loss)" plus (ii) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iii) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (iv) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Income Statement less (v) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Income Statement, over (y) the Excluded Amounts for such fiscal year.

"Harbor Islands" shall mean the development and/or sale of the Company's property in Hollywood, Florida, generally known by the Company as parcels 1, 8 and 9 at "Harbor Islands."

"Minimum Cumulative Gross Profit Level" shall mean that as of the Last Day of the Performance Period (x) the Actual Gross Profit Amount is greater than (y) the Target Gross Profit Amount.

"Minimum Gross Profit Level" shall mean the Gross Profit set forth opposite each fiscal year ending on the dates set forth below:

 FISCAL YEAR END                      GROSS PROFIT
 ---------------                      ------------
December 31, 2003                     $10,000,000
December 31, 2004                     $12,000,000
December 31, 2005                     $14,400,000
December 31, 2006                     $17,280,000
December 31, 2007                     $20,736,000

"Payment Date" shall have the meaning ascribed to such term in Section 3(c).

"Performance Goal" shall mean (i) in the case of the Cash Award, the achievement of the Minimum Gross Profit Level in any fiscal year, ending on December 31, during the Performance Period and
(ii) in the case of the Stock Award, the achievement of the Minimum Cumulative Gross Profit Level for the entire Performance Period.

"Performance Goal Test Date" shall mean with respect to the Cash Award, December 31 of each year within the Performance Period and with respect to the Stock Award, the Last Day of the Performance Period.

"Performance Period" shall mean the period commencing January 1, 2003 and ending on December 31, 2007 (December 31, 2007, being the "Last Day of the Performance Period").

"Rio Rico Excluded Properties" shall mean those parcels of land not suitable for development in accordance with the Company's current Business Plan due to environmental factors located in the Company's property in Rio Rico, Arizona, generally known by the Company as "Rio Rico".

"Stock Award" shall mean a grant of a number of shares of Common Stock having a Fair Market Value on the Payment Date equal to two and one half percent (2.5%) of the excess, if any, of (x) the Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

"Target Gross Profit Amount" shall mean $186,956,000.

(c) For purposes of this Agreement, the terms "Cause", "Change in Control", "Change in Control Date", "Good Reason" and "Disability" shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with the Company, dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

3. TERMS AND CONDITIONS. The Cash Award and the Stock Award (together, the "Awards") evidenced by this Agreement are subject to the following terms and conditions:

(a) The payment of performance-based compensation described herein is contingent upon the achievement of the Performance Goal applicable to a Cash Award or the Stock Award, as the case may be.

(b) Subject to Section 4 hereof (i) the Participant shall be entitled to receive a payment on the related Payment Date pursuant to the Cash Award if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date and (ii) the Participant shall be entitled to receive on the related Payment Date the Common Stock pursuant to the Stock Award if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date.

(c) The applicable Committee shall determine whether a Performance Goal has been met as of the applicable Performance Goal Test Date and, (i) if it has, shall so certify in writing and ascertain the amount of cash to be paid, if any, or Common Stock to be issued, if any, to the Participant and (ii) if it has not, shall so certify in writing with a brief explanation as to the methodology and calculation of the Committee in determining that such Performance Goal has not been met. Payments of cash, if any, or the issuance of Common Stock, if any, pursuant to the Awards shall be made to the Participant, in each case within thirty (30) days following the filing with the Securities and Exchange Commission of an annual report on Form 10-K (which contains audited financial statements) for the year ended as of the applicable Performance Goal Test Date (each such date being a "Payment Date").

(d) Notwithstanding anything to the contrary contained in this Agreement, in the event a Change in Control occurs during the Performance Period, (i) the Participant shall no longer be entitled to receive any issuance of shares of Common Stock pursuant to the Stock Award and (ii) the Participant shall be entitled to receive a pro rata portion of the Cash Award (as of the Change in Control Date) for the fiscal year in which such Change in Control occurs. The Committee shall determine the basis, methodology and calculation for, and any estimates used in, determining the prorated Actual Gross Profit Amount and prorated Minimum Gross Profit Level for the portion of the fiscal year preceding the Change in Control Date. The determination of the Committee as to any such partial award shall be final and binding on all parties, including

the Participant and the Company. Such prorated Cash Award shall be paid to the Participant on or promptly following the Change in Control Date.

4. LIMITATIONS ON COMPENSATION. Notwithstanding anything to the contrary herein, the maximum payment of cash pursuant to the Cash Award or the issuance of Common Stock pursuant to the Stock Award to the Participant hereunder shall be subject to the limitations in the Plans and the Participant's employment agreement with the Company or a subsidiary thereof, each as may be amended from time to time.

5. TERMINATION OF EMPLOYMENT.

(a) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant for other than Good Reason, in addition to any other consequences of such termination provided for in this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to cash payments or Common Stock issuances that would otherwise accrue pursuant to this Agreement on or after the date of such termination.

(b) If the Participant's employment with the Company is terminated by the Company other than for Cause or by the Participant for Good Reason, the Participant shall be entitled to continue to receive such cash payments or Common Stock issuances as would otherwise be made pursuant to this Agreement as though the Participant's employment had not been terminated.

(c) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, notwithstanding Section 3 hereof:

(i) the Participant shall be entitled to receive only that portion of any cash payments or Common Stock issuances otherwise payable pursuant to Section 3(c) hereof following such termination, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed whole months elapsed after the first day of the Performance Period to the date of death or Disability, as the case may be, and the denominator of which is the number of whole months from the first day of the Performance Period until the applicable Performance Goal Test Date and (y) the amount of any cash payments or Common Stock issuances that would have been payable pursuant to Section 3(c) hereof if the Participant remained an employee of the Company through and including the Last Day of the Performance Period; provided, however, that with respect to cash payments pursuant to the Cash Award, the Participant shall only be eligible to receive a cash payment for the fiscal year in which the Participant's employment was terminated for death or Disability, as the case may be, and the Participant shall not be eligible for any additional cash payments; and

(ii) the Participant will have no right to any other payments hereunder.

Any payments shall be made to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent

or distribution, as applicable) no later than the relevant Payment Date.

6. FORFEITURE UPON BREACH OF RESTRICTIVE COVENANTS. Notwithstanding anything to the contrary set forth in this Agreement, if the Participant breaches any provision relating to the Participant's covenant to keep information confidential, not to compete, not to solicit or similar restrictive covenant contained in the Participant's employment or any other agreement with the Company or any of its subsidiaries or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), after the expiration of any notice and cure period, then in addition to any other rights or remedies arising from or relating to such breach the Participant shall forfeit any right to any cash payments or Common Stock issuances that would otherwise accrue pursuant to this Agreement on or after the date of such breach.

7. CLAWBACK; ADDITIONAL PAYMENTS; NO OFFSET BY PARTICIPANT; COMPANY OFFSET.

(a) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to the Cash Award or the issuance to the Participant of Common Stock pursuant to the Stock Award such that Gross Profit is less than previously reported, the Participant shall pay to the Company upon demand by the Company following the filing of such restated financial statements with the Securities and Exchange Commission, an amount equal to the sum of (i) the excess of (A) the Excess Bonus Payments (as defined below) over (B) the hypothetical income tax liability attributable to such Excess Bonus Payments (as determined by the Committee by applying the highest marginal United States federal, state and local individual income tax rates applicable to an individual resident of Coral Gables, Florida for the relevant taxable period, taking into account the deductibility of state and local income taxes for federal income tax purposes), and (ii) as determined by the Committee, the present value of any tax benefits accruing to the Participant as a result of making any payments pursuant to this
Section 7(a) to the Company. For purposes of the preceding sentence, "Excess Bonus Payments" shall mean an amount equal to the sum of (A) the difference between (x) the amount of the cash payment pursuant to the Cash Award paid to the Participant with respect to any fiscal year (or portion thereof) in which the audited financial statements have been restated and (y) the amount that cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the applicable Performance Goal Test Date and (B) the difference between (x) the Fair Market Value on the Payment Date of the Common Stock issued pursuant to the Stock Award and (y) the amount that the Fair Market Value of the Common Stock would have been on the Payment Date if the Company had used the restated financial statements to determine the amount of the Company's Actual Gross Profit Amount on the Last Day of the Performance Period.

(b) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to the Cash Award or issuance to the Participant of Common Stock pursuant to the Stock Award such that Gross Profit is greater than previously reported, the Company shall pay to the Participant upon demand by the Participant following the filing of such restated financial statements with the Securities and Exchange Commission, an amount (the "Lesser Bonus Payments") equal the sum of (A) the difference between (x) the amount that the cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the applicable Performance Goal Test Date less (y) the amount of the cash payment pursuant to the Cash Award paid to the Participant with respect to any fiscal year (or portion thereof) in which the audited financial statements have been restated and (B) the difference between (x) the amount that the Fair Market Value of the Common Stock issued to the Participant pursuant to the Stock Award would have been on the Payment Date if the Company had used the restated financial statements to determine the amount of the Company's Actual Gross Profit Amount on the Last Day of the Performance Period and (y) the Fair Market Value on the Payment Date of the Common Stock issued pursuant to the Stock Award. At the option of the Company, the amount of the Lesser Bonus Payments attributable to the Stock Award may be payable in cash or Common Stock.

(c) The Participant shall be obligated to pay to the Company any amount due pursuant to this Section 7 regardless of whether the Participant has or claims to have any claim against any of the Avatar Entities, and the Participant shall have no right to offset any amount due or claimed to be due from any of the Avatar Entities. The Company shall be obligated to pay to the Participant any amount due pursuant to this Section 7 regardless of whether the Company has or claims to have any claim against the Participant, and the Company shall have no right to offset any amount due or claimed to be due from the Participant or any of its affiliates.

(d) In the event that the Participant has failed to repay any amount required pursuant to Section 7(a) above, the Company shall be entitled to offset such amount against any amounts due from the Company to the Participant.

(e) The foregoing provisions of this Section 7 shall not be applicable to any restatement, after the consummation of a Change in Control, of the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period.

8. TAXES. Any cash payment pursuant to a Cash Award or Common Stock issuance pursuant to the Stock Award shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements. The Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. In connection with any issuance of Common Stock pursuant to the Stock Award, the Company may require the

Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state, local and foreign withholding taxes arising in connection with the Stock Award and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

9. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by any of the Avatar Entities, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

10. NO OBLIGATION TO PURSUE PROJECTS. This Agreement shall in no way obligate the Company to pursue any projects, developments or sales of any assets, and the Company may limit, abandon or change any projects, developments or sales of any assets at any time in its sole discretion and the Company shall have no obligation to take any action or provide any financing with respect to any projects, developments or sales of any assets.

11. UNSECURED CREDITOR STATUS; NO PARTNERSHIP. The Participant shall rely solely upon the unsecured promise of the Company, as set forth herein, for payment hereunder, and nothing herein contained shall be construed to give to or vest in the Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title, or interest, nor at any time in the future. This Agreement is an agreement to pay compensation for services provided by the Participant and is not a partnership or joint venture and is not intended to create a partnership or joint venture between the Company and the Participant or any other person. The Participant shall take no position inconsistent with this characterization.

12. ASSIGNMENT; SUCCESSORS.

(a) The Cash Award, Stock Award and any interest of the Participant in any such awards may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer any such Awards in contravention of this Section 12(a) is void ab initio. The Awards shall not be subject to execution, attachment or other process.

(b) The Company's rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and may inure to the benefit of any Avatar Entity or successor thereof. The term

"successor" shall mean, with respect to any Avatar Entity, any other corporation or other business entity which, by merger, consolidation, purchase of assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity.

(c) In the event of the Participant's death, the Participant's rights and obligations hereunder shall be binding upon and inure to the benefit of the Participant's heirs and legal representatives.

13. CONSTRUCTION. The Plans and this Agreement will be construed by and administered under the supervision of the applicable Committee in such Committee's sole and absolute discretion, and all determinations of such Committee will be final and binding on the Participant.

14. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in the Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, Coral Gables, Florida 33134, Attention: Chairman of the Board, with a copy to the Company's Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

15. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

16. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

17. INCORPORATION OF PLANS. Each of the Plans is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plans, as the Plans may be amended from time to time.

18. STOCKHOLDER APPROVAL OF 1997 PLAN. In the event that the requisite number of shares of Common Stock reserved for issuance under the 1997 Plan to issue the Common Stock pursuant to the Stock Award are not available, the Company shall undertake to submit an amendment to the 1997 Plan (the "1997 Plan Amendment"), which increases the number of shares available for issuance thereunder to satisfy the Company's obligations pursuant to the Stock Award for approval by stockholders at an annual meeting or meetings (or at a special meeting or special meetings) after it is determined that additional shares of Common Stock are needed for issuance pursuant to the Stock Award. The Participant agrees that the failure of the Company's stockholders to approve the 1997 Plan Amendment
(and any adverse financial consequences to Participant resulting therefrom) shall not constitute a "good reason" under the Participant's employment with the Company or any other Avatar Entity.

19. ATTORNEYS' FEES. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

20. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

21. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plans and the letter agreement, dated as of the date hereof, between the Company and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Charles L. McNairy
    --------------------------------------
    Name: Charles L. McNairy
    Title: Executive Vice President



    /s/ Gerald D. Kelfer
    --------------------------------------
    Gerald D. Kelfer

Exhibit 10.6

CHANGE IN CONTROL AWARD AGREEMENT

THIS CHANGE IN CONTROL AWARD AGREEMENT, dated April 15, 2005 (the "Agreement"), is made by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Gerald D. Kelfer (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. 2005 Executive Incentive Compensation Plan, as the same may be amended, restated, modified or supplemented from time to time (the "Executive Plan"), the Committee (as defined in the Executive Plan) hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Executive Plan and subject further to the terms and conditions and other provisions herein set forth, the Change in Control Award if (i) a Change in Control Date (as defined below) shall occur and
(ii) the Performance Goal (as defined below) is satisfied as of the Change in Control Date (as defined below).

2. CERTAIN DEFINITIONS.

(a) Capitalized terms used but not defined herein shall have the meanings assigned to them in the Executive Plan.

(b) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Actual Gross Profit Amount" shall mean the Company's cumulative Gross Profit during the Performance Period.

"Business Plan" shall mean the Company's business plan for the period commencing on January 1, 2003 and ending on December 31, 2007, as submitted to the Compensation Committee at a meeting held on March 3, 2005.

"Change in Control Award" shall mean a cash payment equal to two and one-half percent (2.5%) of the excess, if any, of (x) the Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Excluded Amounts" shall mean, with respect to a fiscal year of the Company, as at any date of determination, an amount equal to the dollar amount of any Gross Profit attributable to Harbor Islands and the Rio Rico Excluded Properties for such fiscal year.

"Gross Profit" shall mean:

(A) with respect to any full fiscal year of the Company during the Performance Period, the excess, if any, of (x) the sum of
(i) the amount set forth in the Company's audited Consolidated Statements of Operations as set forth in the Company's annual report on Form 10-K (the "Annual Income Statement") for such fiscal year with respect to the line item "Net income (loss)" plus (ii) the amount, if any, set forth in the Company's Annual Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iii) the amount, if any, set forth in the Company's Annual Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (iv) the amount(s), if any, set forth in the Company's Annual Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Income Statement less (v) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Income Statement, over (y) the Excluded Amounts for such fiscal year; and

(B) with respect to any full fiscal quarter of the Company during the Performance Period that does not constitute a portion of full fiscal year for purposes of paragraph (A ) above, the excess, if any, of (x) the sum of (i) the amount set forth in the Company's unaudited Consolidated Statements of Operations for the three month period of such fiscal quarter as set forth in the Company's quarterly report on Form 10-Q (the "Quarterly Income Statement") for such fiscal quarter with respect to the line item "Net income (loss)" plus
(ii) the amount, if any, set forth in the Company's Quarterly Income Statement for such fiscal quarter with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iii) the amount, if any, set forth in the Company's Quarterly Income Statement for such fiscal quarter with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (iv) the amount(s), if any, set forth in the Company's Quarterly Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Quarterly Income Statement less
(v) the amount(s), if any, set forth in the Company's Quarterly Income Statement for such fiscal quarter relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Quarterly Income Statement, over (y) the Excluded Amounts for such fiscal quarter.

"Harbor Islands" shall mean the development and/or sale of the Company's property in Hollywood, Florida, generally known by the Company as parcels 1, 8 and 9 at "Harbor Islands."

"Minimum Cumulative Gross Profit Level" shall mean that as of the Change in Control Date the Actual Gross Profit Amount is greater than the Target Gross Profit Amount.

"Performance Goal" shall mean the achievement of the Minimum Cumulative Gross Profit Level for the Performance Period.

"Performance Period" shall mean the period commencing April 1, 2005 and ending on the Change in Control Date.

"Rio Rico Excluded Properties" shall mean those parcels of land not suitable for development in accordance with the Company's Business Plan due to environmental factors located in the Company's property in Rio Rico, Arizona, generally known by the Company as "Rio Rico".

"Target Gross Profit Amount" shall mean $141,995,000.

(c) For purposes of this Agreement, the terms "Cause", "Change in Control", "Change in Control Date", "Good Reason" and "Disability" shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with the Company, dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

3. TERMS AND CONDITIONS. The Change in Control Award evidenced by this Agreement is subject to the following terms and conditions:

(a) The payment of performance-based compensation described herein is contingent upon (i) the consummation of a Change in Control on or before December 31, 2007, and (ii) the achievement of the Performance Goal.

(b) Subject to Section 3(c) and Section 4 hereof, on or promptly following the Change in Control Date, the Participant shall be entitled to receive the Change in Control Award if the Performance Goal is satisfied as of the Change in Control Date.

(c) The Committee shall determine whether the Performance Goal has been met as of the Change in Control Date and, (i) if it has, shall so certify in writing and ascertain the amount of cash to be paid, if any, to the Participant and, (ii) if it has not, shall so certify in writing with a brief explanation as to the methodology and calculation of the Committee in determining that the Performance Goal has not been met. The Committee shall determine the basis, methodology and calculation for, and any estimates used in, determining the Gross Profit for the portion of the fiscal year immediately preceding the Change in Control Date and following the most recent Annual Income Statement or Quarterly Income Statement of the Company, as applicable and such determination shall be final and binding on all parties, including the Company

and the Participant. Payments of cash, if any, pursuant to the Change in Control Award shall be made on or promptly following the Change in Control Date.

4. LIMITATION ON COMPENSATION. Notwithstanding anything to the contrary herein, the maximum payment of cash pursuant to the Change in Control Award to the Participant hereunder shall be $3,750,000.

5. TERMINATION OF EMPLOYMENT.

(a) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant for other than Good Reason, in addition to any other consequences of such termination provided for in this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to cash payments that would otherwise accrue pursuant to this Agreement on or after the date of such termination.

(b) If the Participant's employment with the Company is terminated by the Company other than for Cause or by the Participant for Good Reason, the Participant shall be entitled to receive such cash payments as would otherwise be made pursuant to this Agreement as though the Participant's employment had not been terminated.

(c) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, notwithstanding Section 3 hereof, the Participant shall be entitled to receive only that portion of any cash payments otherwise payable pursuant to Section 3(c) hereof following such termination, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed whole months elapsed after the first day of the Performance Period to the date of death or Disability, as the case may be, and the denominator of which is the number of whole months from the first day of the Performance Period until the Performance Goal Test Date and (y) the amount of any cash payments that would have been payable pursuant to Section 3(c) hereof if the Participant remained an employee of the Company through and including the Change in Control Date.

Any payments to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) pursuant to this Section 5(c) shall be made on or promptly following the Change in Control Date.

6. FORFEITURE UPON BREACH OF RESTRICTIVE COVENANTS. Notwithstanding anything to the contrary set forth in this Agreement, if the Participant breaches any provision relating to the Participant's covenant to keep information confidential, not to compete, not to solicit or similar restrictive covenant contained in the Participant's employment or other agreement with the Company or any of its subsidiaries or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), after the expiration of any notice and cure period, then in addition to any other rights or remedies arising from or relating to such breach the Participant

shall forfeit any right to any cash payments that would otherwise accrue pursuant to this Agreement on or after the date of such breach.

7. TAXES. Any cash payment pursuant to the Change in Control Award shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements. The Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe.

8. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by any of the Avatar Entities, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

9. NO OBLIGATION TO PURSUE PROJECTS. This Agreement shall in no way obligate the Company to pursue any projects, developments or sales of any assets, and the Company may limit, abandon or change any projects, developments or sales of any assets at any time in its sole discretion and the Company shall have no obligation to take any action or provide any financing with respect to any projects, developments or sales of any assets.

10. UNSECURED CREDITOR STATUS; NO PARTNERSHIP. The Participant shall rely solely upon the unsecured promise of the Company, as set forth herein, for payment hereunder, and nothing herein contained shall be construed to give to or vest in the Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title, or interest, nor at any time in the future. This Agreement is an agreement to pay compensation for services provided by the Participant and is not a partnership or joint venture and is not intended to create a partnership or joint venture between the Company and the Participant or any other person. The Participant shall take no position inconsistent with this characterization.

11. ASSIGNMENT; SUCCESSORS.

(a) The Change in Control Award and any interest of the Participant in such award may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer the Change in Control Award in contravention of this Section 11(a) is void ab initio. The Change in Control Award shall not be subject to execution, attachment or other process.

(b) The Company's rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and may inure to the benefit of any affiliate of or successor to the Company. The term "successor" shall mean, with respect to any Avatar Entity, any other

corporation or other business entity which, by merger, consolidation, purchase of assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity.

(c) In the event of the Participant's death, the Participant's rights and obligations hereunder shall be binding upon and inure to the benefit of the Participant's heirs and legal representatives.

12. CONSTRUCTION. The Executive Plan and this Agreement will be construed by and administered under the supervision of the Committee in the Committee's sole and absolute discretion, and all determinations of the Committee will be final and binding on the Participant.

13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in the Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, Coral Gables, Florida 33134, Attention: Chairman of the Board, with a copy to the Company's Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof. 16. INCORPORATION OF THE EXECUTIVE PLAN. The Executive Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Executive Plan.

17. ATTORNEYS' FEES. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

18. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

19. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Executive Plan and the letter agreement, dated as of the date hereof, between the Company and the Participant, contain the entire agreement

between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Charles L. McNairy
    -----------------------------------
    Name: Charles L. McNairy
    Title: Executive Vice President


    /s/ Gerald D. Kelfer
    -----------------------------------
    Gerald D. Kelfer

Exhibit 10.7

2008-2010 EARNINGS PARTICIPATION AWARD AGREEMENT

This 2008-2010 EARNINGS PARTICIPATION AWARD AGREEMENT, dated April 15, 2005 (the "Agreement"), is made by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Gerald D. Kelfer (the "Participant").

1. AWARD. Pursuant to the provisions of the (i) Avatar Holdings Inc. 2005 Executive Incentive Compensation Plan, as the same may be amended, restated, modified and supplemented from time to time (the "Executive Plan") the Committee (as defined in the Executive Plan) hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Executive Plan and subject further to the terms and conditions and other provisions herein set forth, the Cash Awards if, as of an applicable Performance Goal Test Date (as defined below), the Performance Goal (as defined below) applicable to such Cash Award is satisfied.

2. CERTAIN DEFINITIONS.

(a) Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plans.

(b) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Actual Gross Profit Amount" shall mean the Company's cumulative Gross Profit during the Performance Period.

"Annual Cash Award" shall mean, with respect to each fiscal year during the Performance Period ending on a Performance Goal Test Date, a cash payment equal to two and one-quarter percent (2.25%) of the excess, if any, of (x) the Gross Profit earned by the Company for such fiscal year, over (y) the Minimum Gross Profit Level for such fiscal year.

"Business Plan" shall mean the Company's business plan for the period commencing on January 1, 2005 and ending on December 31, 2010, as submitted to the Compensation Committee at a meeting held on March 3, 2005.

"Cash Awards" shall mean, collectively, the Annual Cash Award and the Cumulative Cash Award, and "Cash Award" shall mean each of the Annual Cash Award and the Cumulative Cash Award.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Cumulative Cash Award" shall mean a cash payment equal to one and one-half percent (1.5%) of the excess, if any, of (x) the Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

"Excluded Amounts" shall mean, with respect to a fiscal year of the Company, as at any date of determination, an amount equal to the dollar amount of any Gross Profit attributable to Harbor Islands and the Rio Rico Excluded Properties for such fiscal year.

"Gross Profit" shall mean, with respect to a fiscal year of the Company, the excess, if any, of (x) the sum of (i) the amount set forth in the Company's audited Consolidated Statements of Operations as set forth in the Company's annual report on Form 10-K (the "Income Statement") for such fiscal year with respect to the line item "Net income (loss)" plus (ii) the amount reflected in the Company's Income Statement for such fiscal year as compensation expense relating to the 2008-2010 Earnings Participation Award Agreements, dated the date hereof, between the Company and each of Gerald Kelfer, Jonathan Fels and Michael Levy, plus (iii) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iv) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (v) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Income Statement less (vi) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Income Statement plus (vii) for purposes of determining the Annual Cash Award, the Gross Profit Carry Forward Amount, if any, with respect to the Company's prior fiscal year, over (y) the Excluded Amounts for such fiscal year.

"Gross Profit Carry Forward Amount" shall mean an amount equal to (x) the excess of the amount of the Annual Cash Award that would otherwise be payable to the Participant but for the Annual Cap, over the amount of the Annual Cap, divided by (y) 2.25%; provided, that in no event shall the Gross Profit Carry Forward Amount exceed $20,000,000.

"Harbor Islands" shall mean the development and/or sale of the Company's property in Hollywood, Florida, generally known by the Company as parcels 1, 8 and 9 at "Harbor Islands."

"Minimum Cumulative Gross Profit Level" shall mean that, as of Performance Goal Test Date applicable to the Cumulative Cash Award, (x) the Actual Gross Profit Amount is greater than (y) the Target Gross Profit Amount.

"Minimum Gross Profit Level" shall mean the Gross Profit set forth opposite each fiscal year ending on the dates set forth below:

 FISCAL YEAR END                     GROSS PROFIT
 ---------------                     ------------
December 31, 2008                     $40,000,000
December 31, 2009                     $50,000,000
December 31, 2010                     $60,000,000

"Payment Date" shall have the meaning ascribed to such term in Section 3(c).

"Performance Goal" shall mean (i) in the case of the Annual Cash Award, the achievement of the Minimum Gross Profit Level in any fiscal year, ending on December 31, during the Performance Period and
(ii) in the case of the Cumulative Cash Award, the achievement of the Minimum Cumulative Gross Profit Level for the entire Performance Period.

"Performance Goal Test Date" shall mean with respect to the Annual Cash Award, December 31 of each year within the Performance Period and with respect to the Cumulative Cash Award, the earlier of
(i) a Change in Control Date and (ii) the Last Day of the Performance Period.

"Performance Period" shall mean the period commencing January 1, 2008 and ending on December 31, 2010 (December 31, 2010, being the "Last Day of the Performance Period").

"Rio Rico Excluded Properties" shall mean those parcels of land not suitable for development in accordance with the Company's current Business Plan due to environmental factors located in the Company's property in Rio Rico, Arizona, generally known by the Company as "Rio Rico".

"Target Gross Profit Amount" shall mean $390,000,000.

(c) For purposes of this Agreement, the terms "Cause", "Change in Control", "Change in Control Date", "Good Reason" and "Disability" shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with the Company, dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

3. TERMS AND CONDITIONS. The Cash Awards evidenced by this Agreement are subject to the following terms and conditions:

(a) The payment of performance-based compensation described herein is contingent upon the achievement of the Performance Goal applicable to each Cash Award.

(b) Subject to Section 4 hereof (i) the Participant shall be entitled to receive a payment on the related Payment Date pursuant to the Annual Cash Award if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date and (ii) the Participant shall be entitled to receive the Cumulative Cash Award on the related Payment Date if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date.

(c) The Committee shall determine whether a Performance Goal has been met as of the applicable Performance Goal Test Date and, (i) if it has, shall so certify in writing and ascertain the amount of cash to be paid, if any, to the Participant and (ii) if it has not, shall so certify in writing with a brief explanation as to the methodology and calculation of the Committee in determining that such Performance Goal has not been met. Payments of cash, if any, pursuant to the Cash Awards shall be made to the Participant, in each case within thirty (30) days following the filing with the Securities and Exchange Commission of an annual report on Form 10-K (which contains audited financial statements) for the year ended as of the applicable Performance Goal Test Date (each such date being a "Payment Date").

(d) Notwithstanding anything to the contrary contained in this Agreement, in the event a Change in Control Date occurs during the Performance Period, the Participant shall be entitled to receive (i) a pro rata portion of the Annual Cash Award (as of the Change in Control Date) for the fiscal year in which such Change in Control Date occurs and (ii) any cash payment pursuant to the Cumulative Cash Award. The Committee shall determine the basis, methodology and calculation for, and any estimates used in, determining the prorated Actual Gross Profit Amount and prorated Minimum Gross Profit Level for the portion of the fiscal year preceding the Change in Control Date. The determination of the Committee as to any such partial award shall be final and binding on all parties, including the Participant and the Company. Such Cash Awards shall be paid on or promptly following the Change in Control Date.

4. LIMITATIONS ON AWARDS. Notwithstanding anything to the contrary herein:

(a) The maximum cash amount that may be paid to the Participant pursuant to the Annual Cash Award (the "Annual Cap") shall be $1,800,000 for each fiscal year during the Performance Period; provided, however, that in the event that the Annual Cash Award is less than $1,800,000 with respect to either or both of the first two (2) fiscal years of the Performance Period (the amount by which such Annual Cash Awards are less than $1,800,000, in the aggregate, is referred to herein as the "Shortfall Amount"), the Annual Cap with respect to the third fiscal year of the Performance Period shall equal the sum of (x) $1,800,000 plus (y) the Shortfall Amount; provided, further, that in no event shall the Shortfall Amount exceed $400,000.

(b) The maximum cash amount that may be paid to the Participant pursuant to the Cumulative Cash Award shall be $1,200,000.

(c) The maximum payment of cash pursuant to the Cash Awards shall be subject to the limitations in the Executive Plan and the Participant's employment agreement with the Company or a subsidiary or affiliate thereof (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), each as may be amended, restated, modified or supplemented from time to time.

5. TERMINATION OF EMPLOYMENT.

(a) If the Participant's employment with Avatar Properties is terminated by Avatar Properties for Cause or by the Participant Without Good Reason, in addition to any other consequences of such termination provided for in this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to cash payments that would otherwise accrue pursuant to this Agreement on or after the date of such termination.

(b) If the Participant's employment with the Company is terminated by the Company other than for Cause or by the Participant for Good Reason, the Participant shall be entitled to continue to receive such cash payments as would otherwise be made pursuant to this Agreement as though the Participant's employment had not been terminated.

(c) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, subject to Section 3(d) hereof:

(i) the Participant shall be entitled to receive only that portion of any cash payments otherwise payable pursuant to Section 3(c) hereof following such termination, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed whole months elapsed after the first day of the Performance Period to the date of death or Disability, as the case may be, and the denominator of which is the number of whole months from the first day of the Performance Period until the applicable Performance Goal Test Date and (y) the amount of any cash payments that would have been payable pursuant to Section 3(c) hereof if the Participant remained an employee of the Company through and including the Last Day of the Performance Period; provided, however, that with respect to cash payments pursuant to the Annual Cash Award, the Participant shall only be eligible to receive a cash payment for the fiscal year in which the Participant's employment was terminated for death or Disability, as the case may be, and the Participant shall not be eligible for any additional cash payments; and

(ii) the Participant will have no right to any other payments hereunder.

Any payments to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution,

as applicable) pursuant to this Section 5(c) shall be made no later than the relevant Payment Date.

6. FORFEITURE UPON BREACH OF RESTRICTIVE COVENANTS. Notwithstanding anything to the contrary set forth in this Agreement, if the Participant breaches any provision relating to the Participant's covenant to keep information confidential, not to compete, not to solicit or similar restrictive covenant contained in the Participant's employment or other agreement with any of the Avatar Entities (after the expiration of any notice and cure period), then in addition to any other rights or remedies arising from or relating to such breach the Participant shall forfeit any right to any cash payments pursuant to this Agreement from and after the date of such breach.

7. CLAWBACK; ADDITIONAL PAYMENTS; NO OFFSET BY PARTICIPANT; COMPANY OFFSET.

(a) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to a Cash Award such that Gross Profit is less than previously reported, the Participant shall pay to the Company upon demand by the Company following the filing of such restated financial statements with the Securities and Exchange Commission, an amount equal to the sum of (i) the excess of (A) the Excess Bonus Payments (as defined below) over (B) the hypothetical income tax liability attributable to such Excess Bonus Payments (as determined by the Committee by applying the highest marginal United States federal, state and local individual income tax rates applicable to an individual resident of Coral Gables, Florida for the relevant taxable period, taking into account the deductibility of state and local income taxes for federal income tax purposes), and (ii) as determined by the Committee, the present value of any tax benefits accruing to the Participant as a result of making any payments pursuant to this
Section 7(a) to the Company. For purposes of the preceding sentence, "Excess Bonus Payments" shall mean an amount equal to the difference between (x) the amount of the cash payment pursuant to the Cash Award paid to the Participant and (y) the amount that cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the Performance Goal Test Date.

(b) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to a Cash Award such that Gross Profit is greater than previously reported, the Company shall pay to the Participant upon demand by the Participant following the filing of such restated financial statements with the Securities and Exchange Commission, an amount equal to the difference between
(x) the amount that the cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the Performance Goal Test Date less (y) the amount of the cash payment pursuant to the Cash Award paid to the Participant.

(c) The Participant shall be obligated to pay to the Company any amount due pursuant to this Section 7 regardless of whether the Participant has or claims to have any claim against the any of the Avatar Entities, and the Participant shall have no right to offset any amount due or claimed to be due from any of the Avatar Entities. The Company shall be obligated to pay to the Participant any amount due pursuant to this Section 7 regardless of whether the Company has or claims to have any claim against the Participant, and the Company shall have no right to offset any amount due or claimed to be due from the Participant or any of its affiliates.

(d) In the event that the Participant has failed to repay any amount required pursuant to Section 7(a) above, the Company shall be entitled to offset such amount against any amounts due from the Company to the Participant.

(e) The foregoing provisions of this Section 7 shall not be applicable to any restatement, after the consummation of a Change in Control, of the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period.

8. TAXES. Any cash payment pursuant to a Cash Award shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements. The Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe.

9. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by any of the Avatar Entities, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

10. NO OBLIGATION TO PURSUE PROJECTS. This Agreement shall in no way obligate the Company to pursue any projects, developments or sales of any assets, and the Company may limit, abandon or change any projects, developments or sales of any assets at any time in its sole discretion and the Company shall have no obligation to take any action or provide any financing with respect to any projects, developments or sales of any assets.

11. UNSECURED CREDITOR STATUS; NO PARTNERSHIP. The Participant shall rely solely upon the unsecured promise of the Company, as set forth herein, for payment hereunder, and nothing herein contained shall be construed to give to or vest in the Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title, or interest, nor at any time in the future. This Agreement is an agreement to pay compensation for services provided by the Participant and is not a partnership or joint venture and is not intended to create a partnership

or joint venture between the Company and the Participant or any other person. The Participant shall take no position inconsistent with this characterization.

12. ASSIGNMENT; SUCCESSORS.

(a) The Cash Awards and any interest of the Participant in any such awards may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer any such Cash Awards in contravention of this Section 12(a) is void ab initio. The Cash Awards shall not be subject to execution, attachment or other process.

(b) The Company's rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and may inure to the benefit of any affiliate of or successor to the Company. The term "successor" shall mean, with respect to any Avatar Entity, any other corporation or other business entity which, by merger, consolidation, purchase of assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity.

(c) In the event of the Participant's death, the Participant's rights and obligations hereunder shall be binding upon and inure to the benefit of the Participant's heirs and legal representatives.

13. CONSTRUCTION. The Plans and this Agreement will be construed by and administered under the supervision of the applicable Committee in such Committee's sole and absolute discretion, and all determinations of such Committee will be final and binding on the Participant.

14. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in the Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, Coral Gables, Florida 33134, Attention: Chairman of the Board, with a copy to the Company's Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

15. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

16. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

17. INCORPORATION OF EXECUTIVE PLAN. The Executive Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Executive Plan, as the Executive Plan may be amended from time to time.

18. ATTORNEYS' FEES. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

19. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

20. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Executive Plan and the letter agreement, dated as of the date hereof, between the Company and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Charles L. McNairy
    -----------------------------------
    Name: Charles L. McNairy
    Title: Executive Vice President



    /s/ Gerald D. Kelfer
    -----------------------------------
    Gerald D. Kelfer

Exhibit 10.8

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Gerald D. Kelfer (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated, modified or supplemented (the "Plan"), the Committee (as defined in the Plan, the "Committee") hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, an opportunity to receive 30,000 Performance Conditioned Restricted Stock Units ("Units"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This award is intended to constitute a Performance-Based Award within the meaning of the Plan.

2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to Section 4 hereof, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 30,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied is hereinafter referred to as the "Grant Date"): (i) the closing stock price of the Common Stock on its principal trading market shall have been at least $65.00 per share for twenty (20) trading days out of thirty (30) consecutive trading days or (ii) the Company consummates a transaction which results in the stockholders of the Company receiving cash, securities, or other property (or any combination thereof) having a "value" as determined by the Committee of at least $65.00 per share in either case, during the period beginning on the date immediately following the date hereof and ending on June 30, 2011 (the "Hurdle Price Condition"); provided, however, that, except as provided in Sections 4(c) and 4(d), no Units shall be granted if the Participant's employment with the Company has terminated for any reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of this
Section 2(a), "value" shall mean the amount received by the stockholders of the Company taking into account the net present value of any debt, securities, future payments, contingent rights or other non-cash consideration to be paid to such stockholders.

(b) The Participant shall not possess any incidents of ownership (including, without limitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Units or the Change in Control Amount, as applicable, until such Units or the Change in Control Amount, as applicable, shall have vested and been distributed to the Participant in the form of shares of Common Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, in accordance with Sections 3 and 4 hereof.

(c) Except as provided in this Section 2(c), the Units and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units in contravention of this Section 2(c) is void ab initio. Units shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, with the written consent of the Committee, the Participant shall be permitted to transfer such Units to members of his immediate family (i.e., children, grandchildren or spouse), trusts for the benefit of such family members, and partnerships whose only partners are such family members; provided, however, that no consideration can be paid for the transfer of the Units and the transferee of the Units shall be subject to all conditions applicable to the Units (including all of the terms and conditions of this Agreement) prior to transfer.

(d) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Change in Control Amount" shall have the meaning set forth in Section 4(e) hereof.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen (15) trading days ending with and including the measuring date on which such exchange or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

3. VESTING AND CONVERSION OF UNITS. On June 30, 2011, the Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall be converted into an equivalent number of shares of Common Stock that will be immediately distributed to the Participant; provided, however, that subject to the provisions of Section 4 hereof, no Units shall vest or be converted and distributed to the Participant unless the Participant is an employee of the Company or any of its subsidiaries or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity") on June 30, 2011.

Upon the distribution of the shares of Common Stock in respect of the Units, the Company shall issue to the Participant or the Participant's personal representative a stock certificate representing such shares of Common Stock, free of any restrictions.

4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.

(a) For purposes of this Section 4, the terms "Cause", "Change in Control", "Change in Control Date", "Good Reason" and "Disability" shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with the Company, dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant for other than Good Reason, the Participant shall forfeit all Units granted to the Participant pursuant to
Section 2(a) hereof (or, in the event a Change in Control has occurred, the Change in Control Amount), if any, as of the date of termination of employment.

(c) If the Participant's employment with the Company is terminated by the Company other than for Cause, or is terminated by the Participant for Good Reason, (i)(A) all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant, and (B) any additional Units that satisfy the Hurdle Price Condition on or before June 30, 2011, if any, shall vest on the date the Hurdle Price Condition is satisfied, be converted into shares of Common Stock and be immediately distributed to the Participant, or,
(ii) in the event a Change in Control has occurred, the Participant shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(d) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, the number of Units granted to the Participant pursuant to Section 2(a) hereof, if any, which equals the greater of
(i) the product of (x) a fraction the numerator of which is the number of completed whole months elapsed from January 1, 2005 to the date of death or Disability, as the case may be (whichever is sooner), and the denominator of which seventy-eight (78) and (y) 30,000 or (ii) 15,000 Units, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. If the Participant's employment with the Company is terminated by Participant's death or Disability prior to the Grant Date and the Hurdle Price Condition is satisfied on or before the first Anniversary of Participant's termination for death or Disability, 15,000 Units shall be granted and shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the

person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control has occurred prior to such termination for death or Disability, the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(e) In the event of a Change in Control, all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior to the consummation of the Change in Control and, upon consummation of the Change in Control, shall be converted into such amount of cash, securities or other property (or any combination thereof) received by the stockholders of the Company in connection with the Change in Control (the "Change in Control Amount"). The Change in Control Amount shall be distributed to the Participant on or promptly following the Change in Control Date.

5. DEFERRAL. With the prior written consent of the Committee, and on such terms as the Committee may prescribe (which terms shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stock upon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and for the Company to continue to maintain such Units on its books of account.

6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, in order to prevent dilution or enlargement of the Participant's rights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number and kind of shares that may be issued under this Agreement and make any other appropriate adjustments in the terms of the Units and this Agreement to reflect such changes or distributions.

7. TAXES. Any distribution of Common Stock pursuant to this Agreement shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. In connection with any such distribution, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or

non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with the Units granted hereunder and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

8. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificates representing shares of Common Stock issuable pursuant to this Agreement may be postponed by the Committee for such period as may be required to comply with any applicable requirements under the federal or state securities laws, any applicable listing requirements of any national securities exchange or the Nasdaq Stock Market, Inc., and any applicable requirements under any other law, rule or regulation applicable to the issuance or delivery of such shares, and the Company shall not be obligated to deliver any such shares of Common Stock to the Participant if either delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority, any national securities exchange or the Nasdaq Stock Market, Inc., or the Participant shall not yet have complied fully with the provisions of Section 7 hereof.

9. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents that the Common Stock issuable pursuant to this Agreement is being acquired for investment and not for sale or with a view to distribution thereof. The Participant acknowledges and agrees that any sale or distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Participant hereby consents to such action as the Committee or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Common Stock issued pursuant to this Agreement and delivering stop transfer instructions to the Company's stock transfer agent.

10. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

11. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Participant.

12. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134, Attention: Chairman of the Board, or such other address as the Company may designate in writing to the Participant.

13. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

14. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

15. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time.

16. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

17. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plan and the letter agreement, dated as of the date hereof, between the Company and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Charles L. McNairy
    ---------------------------------------
    Name: Charles L. McNairy
    Title: Executive Vice President


    /s/ Gerald D. Kelfer
    ---------------------------------------
    Gerald D. Kelfer

Exhibit 10.9

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Gerald D. Kelfer (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated, modified or supplemented (the "Plan"), the Committee (as defined in the Plan, the "Committee") hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, an opportunity to receive 30,000 Performance Conditioned Restricted Stock Units ("Units"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This award is intended to constitute a Performance-Based Award within the meaning of the Plan.

2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to Section 4 hereof, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 30,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied is hereinafter referred to as the "Grant Date"): (i) the closing stock price of the Common Stock on its principal trading market shall have been at least $72.50 per share for twenty (20) trading days out of thirty (30) consecutive trading days or (ii) the Company consummates a transaction which results in the stockholders of the Company receiving cash, securities, or other property (or any combination thereof) having a "value" as determined by the Committee of at least $72.50 per share in either case, during the period beginning on the date immediately following the date hereof and ending on June 30, 2011 (the "Hurdle Price Condition"); provided, however, that, except as provided in Sections 4(c) and 4(d), no Units shall be granted if the Participant's employment with the Company has terminated for any reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of this
Section 2(a), "value" shall mean the amount received by the stockholders of the Company taking into account the net present value of any debt, securities, future payments, contingent rights or other non-cash consideration to be paid to such stockholders.

(b) The Participant shall not possess any incidents of ownership (including, without limitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Units or the Change in Control Amount, as applicable, until such Units or the Change in Control Amount, as applicable, shall have vested and been distributed to the Participant in the form of shares of Common Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, in accordance with Sections 3 and 4 hereof.

(c) Except as provided in this Section 2(c), the Units and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units in contravention of this Section 2(c) is void ab initio. Units shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, with the written consent of the Committee, the Participant shall be permitted to transfer such Units to members of his immediate family (i.e., children, grandchildren or spouse), trusts for the benefit of such family members, and partnerships whose only partners are such family members; provided, however, that no consideration can be paid for the transfer of the Units and the transferee of the Units shall be subject to all conditions applicable to the Units (including all of the terms and conditions of this Agreement) prior to transfer.

(d) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Change in Control Amount" shall have the meaning set forth in Section 4(e) hereof.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen (15) trading days ending with and including the measuring date on which such exchange or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

3. VESTING AND CONVERSION OF UNITS. On June 30, 2011, the Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall be converted into an equivalent number of shares of Common Stock that will be immediately distributed to the Participant; provided, however, that subject to the provisions of Section 4 hereof, no Units shall vest or be converted and distributed to the Participant unless the Participant is an employee of the Company or any of its subsidiaries or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity") on June 30, 2011.

Upon the distribution of the shares of Common Stock in respect of the Units, the Company shall issue to the Participant or the Participant's personal representative a stock certificate representing such shares of Common Stock, free of any restrictions.

4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.

(a) For purposes of this Section 4, the terms "Cause", "Change in Control", "Change in Control Date", "Good Reason" and "Disability" shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with the Company, dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant for other than Good Reason, the Participant shall forfeit all Units granted to the Participant pursuant to
Section 2(a) hereof (or, in the event a Change in Control has occurred, the Change in Control Amount), if any, as of the date of termination of employment.

(c) If the Participant's employment with the Company is terminated by the Company other than for Cause, or is terminated by the Participant for Good Reason, (i)(A) all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant, and (B) any additional Units that satisfy the Hurdle Price Condition on or before June 30, 2011, if any, shall vest on the date the Hurdle Price Condition is satisfied, be converted into shares of Common Stock and be immediately distributed to the Participant, or,
(ii) in the event a Change in Control has occurred, the Participant shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(d) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, the number of Units granted to the Participant pursuant to Section 2(a) hereof, if any, which equals the greater of
(i) the product of (x) a fraction the numerator of which is the number of completed whole months elapsed from January 1, 2005 to the date of death or Disability, as the case may be (whichever is sooner), and the denominator of which seventy-eight (78) and (y) 30,000 or (ii) 15,000 Units, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. If the Participant's employment with the Company is terminated by Participant's death or Disability prior to the Grant Date and the Hurdle Price Condition is satisfied on or before the first Anniversary of Participant's termination for death or Disability, 15,000 Units shall be granted and shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the

person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control has occurred prior to such termination for death or Disability, the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(e) In the event of a Change in Control, all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior to the consummation of the Change in Control and, upon consummation of the Change in Control, shall be converted into such amount of cash, securities or other property (or any combination thereof) received by the stockholders of the Company in connection with the Change in Control (the "Change in Control Amount"). The Change in Control Amount shall be distributed to the Participant on or promptly following the Change in Control Date.

5. DEFERRAL. With the prior written consent of the Committee, and on such terms as the Committee may prescribe (which terms shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stock upon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and for the Company to continue to maintain such Units on its books of account.

6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, in order to prevent dilution or enlargement of the Participant's rights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number and kind of shares that may be issued under this Agreement and make any other appropriate adjustments in the terms of the Units and this Agreement to reflect such changes or distributions.

7. TAXES. Any distribution of Common Stock pursuant to this Agreement shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. In connection with any such distribution, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or

non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with the Units granted hereunder and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

8. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificates representing shares of Common Stock issuable pursuant to this Agreement may be postponed by the Committee for such period as may be required to comply with any applicable requirements under the federal or state securities laws, any applicable listing requirements of any national securities exchange or the Nasdaq Stock Market, Inc., and any applicable requirements under any other law, rule or regulation applicable to the issuance or delivery of such shares, and the Company shall not be obligated to deliver any such shares of Common Stock to the Participant if either delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority, any national securities exchange or the Nasdaq Stock Market, Inc., or the Participant shall not yet have complied fully with the provisions of Section 7 hereof.

9. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents that the Common Stock issuable pursuant to this Agreement is being acquired for investment and not for sale or with a view to distribution thereof. The Participant acknowledges and agrees that any sale or distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Participant hereby consents to such action as the Committee or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Common Stock issued pursuant to this Agreement and delivering stop transfer instructions to the Company's stock transfer agent.

10. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

11. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Participant.

12. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134, Attention: Chairman of the Board, or such other address as the Company may designate in writing to the Participant.

13. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

14. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

15. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time.

16. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

17. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plan and the letter agreement, dated as of the date hereof, between the Company and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Charles L. McNairy
    ---------------------------------------
    Name: Charles L. McNairy
    Title: Executive Vice President


    /s/ Gerald D. Kelfer
    ---------------------------------------
    Gerald D. Kelfer

Exhibit 10.10

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Gerald D. Kelfer (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated, modified or supplemented (the "Plan"), the Committee (as defined in the Plan, the "Committee") hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, an opportunity to receive 30,000 Performance Conditioned Restricted Stock Units ("Units"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This award is intended to constitute a Performance-Based Award within the meaning of the Plan.

2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to Section 4 hereof, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 30,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied is hereinafter referred to as the "Grant Date"): (i) the closing stock price of the Common Stock on its principal trading market shall have been at least $80.00 per share for twenty (20) trading days out of thirty (30) consecutive trading days or (ii) the Company consummates a transaction which results in the stockholders of the Company receiving cash, securities, or other property (or any combination thereof) having a "value" as determined by the Committee of at least $80.00 per share in either case, during the period beginning on the date immediately following the date hereof and ending on June 30, 2011 (the "Hurdle Price Condition"); provided, however, that, except as provided in Sections 4(c) and 4(d), no Units shall be granted if the Participant's employment with the Company has terminated for any reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of this
Section 2(a), "value" shall mean the amount received by the stockholders of the Company taking into account the net present value of any debt, securities, future payments, contingent rights or other non-cash consideration to be paid to such stockholders.

(b) The Participant shall not possess any incidents of ownership (including, without limitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Units or the Change in Control Amount, as applicable, until such Units or the Change in Control Amount, as applicable, shall have vested and been distributed to the Participant in the form of shares of Common Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, in accordance with Sections 3 and 4 hereof.

(c) Except as provided in this Section 2(c), the Units and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units in contravention of this Section 2(c) is void ab initio. Units shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, with the written consent of the Committee, the Participant shall be permitted to transfer such Units to members of his immediate family (i.e., children, grandchildren or spouse), trusts for the benefit of such family members, and partnerships whose only partners are such family members; provided, however, that no consideration can be paid for the transfer of the Units and the transferee of the Units shall be subject to all conditions applicable to the Units (including all of the terms and conditions of this Agreement) prior to transfer.

(d) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Change in Control Amount" shall have the meaning set forth in Section 4(e) hereof.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen (15) trading days ending with and including the measuring date on which such exchange or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

3. VESTING AND CONVERSION OF UNITS. On June 30, 2011, the Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall be converted into an equivalent number of shares of Common Stock that will be immediately distributed to the Participant; provided, however, that subject to the provisions of Section 4 hereof, no Units shall vest or be converted and distributed to the Participant unless the Participant is an employee of the Company or any of its subsidiaries or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity") on June 30, 2011.

Upon the distribution of the shares of Common Stock in respect of the Units, the Company shall issue to the Participant or the Participant's personal representative a stock certificate representing such shares of Common Stock, free of any restrictions.

4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.

(a) For purposes of this Section 4, the terms "Cause", "Change in Control", "Change in Control Date", "Good Reason" and "Disability" shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with the Company, dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant for other than Good Reason, the Participant shall forfeit all Units granted to the Participant pursuant to
Section 2(a) hereof (or, in the event a Change in Control has occurred, the Change in Control Amount), if any, as of the date of termination of employment.

(c) If the Participant's employment with the Company is terminated by the Company other than for Cause, or is terminated by the Participant for Good Reason, (i)(A) all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant, and (B) any additional Units that satisfy the Hurdle Price Condition on or before June 30, 2011, if any, shall vest on the date the Hurdle Price Condition is satisfied, be converted into shares of Common Stock and be immediately distributed to the Participant, or,
(ii) in the event a Change in Control has occurred, the Participant shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(d) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, the number of Units granted to the Participant pursuant to Section 2(a) hereof, if any, which equals the greater of
(i) the product of (x) a fraction the numerator of which is the number of completed whole months elapsed from January 1, 2005 to the date of death or Disability, as the case may be (whichever is sooner), and the denominator of which seventy-eight (78) and (y) 30,000 or (ii) 15,000 Units, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. If the Participant's employment with the Company is terminated by Participant's death or Disability prior to the Grant Date and the Hurdle Price Condition is satisfied on or before the first Anniversary of Participant's termination for death or Disability, 15,000 Units shall be granted and shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control has occurred prior to such termination for death or Disability, the Participant (or the executor or administrator of the deceased

Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(e) In the event of a Change in Control, all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior to the consummation of the Change in Control and, upon consummation of the Change in Control, shall be converted into such amount of cash, securities or other property (or any combination thereof) received by the stockholders of the Company in connection with the Change in Control (the "Change in Control Amount"). The Change in Control Amount shall be distributed to the Participant on or promptly following the Change in Control Date.

5. DEFERRAL. With the prior written consent of the Committee, and on such terms as the Committee may prescribe (which terms shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stock upon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and for the Company to continue to maintain such Units on its books of account.

6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, in order to prevent dilution or enlargement of the Participant's rights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number and kind of shares that may be issued under this Agreement and make any other appropriate adjustments in the terms of the Units and this Agreement to reflect such changes or distributions.

7. TAXES. Any distribution of Common Stock pursuant to this Agreement shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. In connection with any such distribution, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or

non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with the Units granted hereunder and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

8. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificates representing shares of Common Stock issuable pursuant to this Agreement may be postponed by the Committee for such period as may be required to comply with any applicable requirements under the federal or state securities laws, any applicable listing requirements of any national securities exchange or the Nasdaq Stock Market, Inc., and any applicable requirements under any other law, rule or regulation applicable to the issuance or delivery of such shares, and the Company shall not be obligated to deliver any such shares of Common Stock to the Participant if either delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority, any national securities exchange or the Nasdaq Stock Market, Inc., or the Participant shall not yet have complied fully with the provisions of Section 7 hereof.

9. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents that the Common Stock issuable pursuant to this Agreement is being acquired for investment and not for sale or with a view to distribution thereof. The Participant acknowledges and agrees that any sale or distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Participant hereby consents to such action as the Committee or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Common Stock issued pursuant to this Agreement and delivering stop transfer instructions to the Company's stock transfer agent.

10. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

11. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Participant.

12. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134, Attention: Chairman of the Board, or such other address as the Company may designate in writing to the Participant.

13. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

14. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

15. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time.

16. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

17. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plan and the letter agreement, dated as of the date hereof, between the Company and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Charles L. McNairy
    -------------------------------------
    Name: Charles L. McNairy
    Title: Executive Vice President


    /s/ Gerald D. Kelfer
    -------------------------------------
    Gerald D. Kelfer

Exhibit 10.11

May 20, 2005

Mr. Jonathan Fels
President
Avatar Properties Inc.
201 Alhambra Circle 12th
Floor Coral Gables, FL 33134

Dear Mr. Fels:

This letter agreement hereby amends, restates and supersedes in its entirety the letter agreement among you (the "Employee"), Avatar Holdings Inc. ("Avatar") and Avatar Properties Inc. (the "Company"), dated as of April 15, 2005.

Reference is made to the following agreements (collectively, the "Compensation Agreements"), each dated as of April 15, 2005:

1. Amended and Restated Employment Agreement between the Employee and the Company;

2. Amended and Restated Earnings Participation Award Agreement between the Employee and Avatar;

3. Change in Control Award Agreement between the Employee and Avatar;

4. 2008-2010 Earnings Participation Award Agreement between the Employee and Avatar;

5. Restricted Stock Unit Award Agreement between the Employee and Avatar, relating to the opportunity to receive 25,000 restricted stock units of Avatar subject to a hurdle price of $65.00 per share;

6. Restricted Stock Unit Award Agreement between the Employee and Avatar, relating to the opportunity to receive 25,000 restricted stock units of Avatar subject to a hurdle price of $72.50 per share; and

7. Restricted Stock Unit Award Agreement between the Employee and Avatar, relating to the opportunity to receive 25,000 restricted stock units of Avatar subject to a hurdle price of $80.00 per share.

Notwithstanding anything in the Compensation Agreements to the contrary, the effectiveness of each of the Compensation Agreements is subject (A) to the approval by Avatar's stockholders at the 2005 Annual Meeting of Stockholders of Avatar of each of (i) the Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement) and (ii) the 2005 Executive Incentive Compensation Plan (such approval of both such plans is referred to herein as the "Stockholder Approval"), (B) to the Employee's continuous employment with the Company through and including the Effective Date (as defined in the following clause (C)), and (C) until June 30, 2005, to the effectiveness

of a registration statement to be filed by Avatar with the U.S. Securities and Exchange Commission on Form S-8 related to certain stock-based compensation awarded to the Employee pursuant to the Compensation Agreements (the earlier of June 30, 2005 and the date of such effectiveness herein being referred to as the "Effective Date"). In the case of clause (C), if the registration statement on Form S-8 is not effective on or prior to June 30, 2005 and all other conditions precedent in the preceding sentence have been satisfied, the restricted stock units awarded to the Employee in each of the Restricted Stock Unit Award Agreements referred to above will be awarded in accordance with Section 9 of such Restricted Stock Unit Award Agreements. In the event that the Stockholder Approval is not obtained on or prior to June 30, 2005, (i) each of the Compensation Agreements shall terminate automatically without any further action required by Avatar, the Company or the Employee and none of Avatar, the Company or the Employee shall have any liability with respect thereto and (ii) any agreement between Avatar or the Company, on the one hand, and the Employee, on the other hand, intended to be amended, restated and superceded by any of the Compensation Agreements shall remain in full force and effect in accordance with, and subject to, the terms and conditions set forth therein.

This letter agreement may be executed in counterparts, each of which shall constitute an original, and all of which when taken together shall constitute one and the same.

(signature page follows)

Please evidence your agreement with the foregoing by executing a copy of this letter agreement and returning it to Avatar.

Very truly yours,

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    ----------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer

AVATAR PROPERTIES INC.

By: /s/ Gerald D. Kelfer
    ----------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer

Acknowledged and agreed to
as of the date first written above:

/s/ Jonathan Fels
------------------------------
Jonathan Fels

Exhibit 10.12

2005 AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This 2005 AMENDED AND RESTATED EMPLOYMENT AGREEMENT (including any schedule or annex hereto, this "Agreement") is made as of April 15, 2005, by and between Avatar Properties Inc., a Florida corporation (the "Company"), and Jonathan Fels (the "Employee"), and amends and restates in its entirety, the amended and restated employment agreement dated as of March 6, 2003 between the Company and the Employee (the "Original Agreement").

W I T N E S S E T H

WHEREAS, the Employee is currently employed as President of the Company pursuant to the Original Agreement; and

WHEREAS, the Company and the Employee wish to provide for certain modifications to the Original Agreement and wish to amend, restate and supersede the Original Agreement, all upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1. Employment and Term. The Company hereby employs the Employee, and the Employee hereby accepts employment by the Company, in the capacity and upon the terms and conditions set forth herein. The term of employment under this Agreement shall be for the period commencing as of January 1, 2005 and ending on December 31, 2010, unless extended pursuant to Section 5(a)(viii) or earlier terminated as herein provided (the "Term of Employment"; provided, that, for purposes of Sections 4, 6(h) and 8(a) hereof, the Term of Employment shall also include the period beginning on January 1, 2003 and ending on December 31, 2004). The last day of the Employee's Term of Employment shall be referred to in this Agreement as the "Date of Termination." With respect to any date referred to herein, the term "Anniversary" shall mean the annual recurrence of such date.

2. Duties. During the Term of Employment, the Employee shall serve as the Company's President, and shall perform such duties, functions and responsibilities as are customarily associated with and incident to the position of President and as the Company may, from time to time, require of him, including, but not limited to, the performance of such functions and duties for the Company, Avatar Holdings Inc., a Delaware corporation and the parent corporation of the Company ("Avatar"), or any of their subsidiaries or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity") as the Company may require, subject to the direction of the Company's Board of Directors. The Employee shall serve the Company faithfully, conscientiously and to the best of the Employee's ability and shall promote the interests and reputation of the Company. Unless prevented by sickness or disability, the Employee shall devote all of his time, attention, knowledge, energy and skills, during normal working hours, and at such other times as the Employee's duties may reasonably require, to the duties

of the Employee's employment. The principal place of employment of the Employee shall be the current principal executive offices of the Company and/or such other location within fifty (50) miles of Company's current principal place of business as shall be necessary for the Employee to discharge his duties hereunder. The Employee acknowledges that in the course of his employment he may be required, from time to time, to travel on behalf of the Company; provided, however, that the Employee shall not be required to spend more than 25% of his business time (determined on an annual basis) on overnight travel.

3. Compensation and Benefits. As full and complete compensation for the Employee's execution and delivery of this Agreement and performance of any services hereunder, the Company shall pay, grant or provide the Employee, and the Employee agrees to accept, the following compensation and benefits:

(a) Base Salary. Except as provided in Section 6(f)(ii) hereof, the Company shall pay the Employee a base salary ("Base Salary") at an annual rate of $500,000 payable at such times and in accordance with the standard payroll practices of the Company. On an annual basis or at such other times as the Company may determine, the Employee's Base Salary shall be reviewed, and in the sole discretion of the Board of Directors of the Company, the Company may increase (but not decrease) the Employee's Base Salary.

(b) Annual Bonus. Except as provided in Section 6(f)(ii) hereof, (i) during the Term of Employment, the Company shall pay the Employee, and the Employee shall accept from the Company for the Employee's services, in addition to the Employee's Base Salary, a calendar year annual cash bonus of $400,000 ("Annual Bonus"), and (ii) such Annual Bonus shall be payable in accordance with the Company's policy with respect to the compensation of executives, but no later than thirty (30) days after the end of each calendar year in respect of which the Annual Bonus is earned.

(c) Employee Benefits. The Company shall afford the Employee the opportunity to participate during the Term of Employment in any medical, dental, disability insurance, retirement, savings and any other employee benefits plans or programs (including perquisites) which Avatar maintains for senior executives of the Avatar Entities. Nothing in this Agreement shall require any Avatar Entity to establish, maintain or continue any benefit programs already in existence or hereafter adopted for senior executives of the Avatar Entities, and nothing in this Agreement shall restrict the right of the Avatar Entities to amend, modify or terminate any such benefit program.

(d) Expenses. The Employee shall be entitled to reimbursement or payment of reasonable business expenses (in accordance with Avatar's policies for its senior executives, as the same may be amended from time to time in Avatar's sole discretion), following the Employee's submission of appropriate receipts and/or vouchers to the Company.

(e) Vacations, Holidays or Temporary Leave. The Employee shall be entitled to take such amount of vacation per year as is permitted pursuant to and in accordance with the policies of Avatar for its senior executives (as such policies may be amended from time to time or terminated in Avatar's sole

discretion), without loss or diminution of compensation. Such vacation shall be taken at such time or times, and as a whole or in increments, as the Employee shall elect, consistent with the reasonable needs of the Company's business. The Employee shall further be entitled to the number of paid holidays, and leaves for illness or temporary disability in accordance with the policies of Avatar for its senior executives (as such policies may be amended from time to time or terminated in Avatar's sole discretion).

4. Non-Competition and Protection of Confidential Information:

(a) Restrictive Covenants.

(i) During the Term of Employment and for one year following the Date of Termination, the Employee shall not directly or indirectly engage, participate, own or make any financial investments in, or become employed by or render (whether or not for compensation) any consulting, advisory or other services to or for the benefit of, any person, firm or corporation, that directly or indirectly, engages primarily in, the development of adult retirement communities and/or active adult communities; provided, however, that it shall not be a violation of this Agreement for the Employee (i) to have beneficial ownership of less than 1% of the outstanding amount of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or quoted on an inter-dealer quotation system or
(ii) to have beneficial ownership of less than 20% of the outstanding amount of any class of securities of any enterprise (but without otherwise participating in the activities or otherwise having influence or control of such enterprise) if such securities are not registered under Section 12 of the Exchange Act or quoted on an inter-dealer quotation system.

(ii) During the Term of Employment and for one year following the Date of Termination, the Employee shall not, directly or indirectly, (A) solicit, in competition with the Avatar Entities, any person who is a customer of any business conducted by any of the Avatar Entities or (B) in any manner whatsoever induce, or assist others to induce, any supplier or contractor of any of the Avatar Entities to terminate its association with any such entity or do anything, directly or indirectly, to interfere with the business relationship between the Avatar Entities and any of their respective current or prospective suppliers or contractors.

(iii) During the Term of Employment and for one year following the Date of Termination, the Employee shall not, directly or indirectly, solicit or induce any employee of any of the Avatar Entities to terminate his or her employment for any purpose, including without limitation, in order to enter into employment with any entity which competes with any business conducted by any of the Avatar Entities.

(iv) The Employee recognizes and acknowledges that certain confidential and proprietary business and technical information used by the Employee in connection with the conduct of the business of the Avatar Entities which relates to the business practices, methods,

processes or other confidential or secret aspects of the business of the Avatar Entities, is a valuable, special and unique asset of the Company, such information collectively being referred to as the "Confidential Information." During the Term of Employment and for all time following the Date of Termination, the Employee shall not, directly or indirectly, furnish or make accessible to any person, firm, or corporation or other business entity, whether or not he, she, or it competes with the business of the Company, any Confidential Information without the prior written consent from the Company.

(v) Confidential Information shall not include any information or documents that (A) are or become publicly available without breach by the Employee of Section 4(a)(iv) hereof, (B) the Employee receives from any third party who, to the best of the Employee's knowledge upon reasonable inquiry, is not in breach of an obligation of confidence with any of the Avatar Entities, or (C) is required to be disclosed by law, statute, governmental or judicial proceeding; provided, however, that in the event the Employee is requested by any governmental or judicial authority to disclose any Confidential Information, the Employee shall give the Company and Avatar prompt notice of such request such that the Company and Avatar may seek a protective order or other appropriate relief, and in any such proceeding the Employee shall disclose only so much of the Confidential Information as is required to be disclosed.

(vi) Notwithstanding the foregoing, the Employee acknowledges that during the Term of Employment and for all time following the Date of Termination, the Employee shall not, and shall not cause or permit any of its affiliates to, use the name "Brookman-Fels" (or any derivative thereof) except as expressly permitted by those certain License Agreements, each dated as of December 4, 1997, by and between Brookman-Fels Jeff Ian, Inc., as licensor and the companies listed on Schedule I hereto, each as a licensee, or except as otherwise permitted in writing by Avatar.

(b) Geographic Scope. The provisions of this Section 4 (other than Sections 4(a)(ii), (iii), (iv), (v), and (vi), which shall be in full force and effect without regard to the geographic limitations set forth in this Section
4(b)) shall be in full force and effect within a 100-mile radius of any site at which any of the Avatar Entities is preparing to develop, has commenced development of, or has a binding commitment or option to purchase, real estate.

(c) Remedies. The Employee acknowledges that his services are of a special, unique and extraordinary character and, his position with the Avatar Entities places him in a substantial relationship and a position of confidence and trust with specific prospective or existing customers, suppliers and employees of the Avatar Entities, and that in connection with his services to the Avatar Entities, the Employee will have access to confidential business or professional information vital to the businesses of the Avatar Entities. The Employee further acknowledges that in view of the nature of the business in which the Avatar Entities are engaged, the foregoing restrictive covenants in this Section 4 are reasonable and necessary in order to protect the legitimate business interests of the Avatar Entities and that violation thereof would result in irreparable injury to the Avatar Entities. Accordingly, the Employee

consents and agrees that if the Employee violates or threatens to violate any of the provisions of this Section 4 the Avatar Entities would sustain irreparable harm and, therefore, any of the Avatar Entities shall be entitled to obtain from any court of competent jurisdiction, temporary, preliminary and/or permanent injunctive relief as well as damages, attorneys' fees and costs, and an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies in law or equity to which any of the Avatar Entities may be entitled.

5. Termination of Employment:

(a) The Employee's employment with the Company shall terminate upon the occurrence of any of the following events:

(i) on December 31, 2010 (absent a Change in Control (as defined below) and absent the parties having entered into a written agreement for the renewal or extension of this Agreement);

(ii) the death of the Employee during the Term of Employment;

(iii) at any time upon written notice to the Employee from the Company of termination of his employment due to Disability (as defined below) of the Employee during the Term of Employment;

(iv) at any time upon written notice to the Employee from the Company of termination of his employment for Cause (as defined below);

(v) at any time upon written notice to the Employee from the Company of termination of his employment Without Cause (as defined below);

(vi) the resignation by the Employee for Good Reason (as defined below) during the Term of Employment;

(vii) the resignation by the Employee Without Good Reason (as defined below) during the Term of Employment; or

(viii) in the event of a Change in Control (as defined below), on the date (the "Retention Date") that is the earlier of (A) the first Anniversary of the Change in Control Date (as defined below) and (B) June 30, 2011; provided, that the Change in Control Date shall be on or prior to December 31, 2010. If the Retention Date shall occur after December 31, 2010, the Term of Employment shall be extended through and until such Retention Date, unless otherwise terminated in accordance with this Agreement. The period beginning on the Change in Control Date and ending on the Retention Date is referred to herein as the "Retention Period".

(b) For purposes of this Agreement, the "Disability" of the Employee shall mean the Employee's inability, because of mental or physical illness or incapacity, whether total or partial, to perform one or more material functions of the Employee's employment under this Agreement with or without reasonable accommodation and which entitles the Employee to receive benefits under a

disability plan or program that is provided to the Employee pursuant to Section
3(c), if any.

(c) For purposes of this Agreement, the term "Cause" shall mean the Employee's (i) conviction or entry of a plea of guilty or nolo contendere, with respect to any felony, in each case that the Board of Directors of Avatar determines in good faith is or may become materially harmful to any Avatar Entity (either financially or with respect to such Avatar Entity's business reputation), (ii) commission of any act of willful misconduct, gross negligence, fraud or dishonesty, in each case that the Board of Directors of Avatar determines in good faith is or may become materially harmful to any Avatar Entity (either financially or with respect to such Avatar Entity's business reputation) or (iii) violation of any material term of this Agreement or any material written policy of the Company or Avatar; provided, that the Company first deliver written notice of such violation to the Employee and the Employee shall not have cured such violation within thirty (30) days after receipt of such written notice (the "Cure Period"); and provided further, that if upon expiration of the Cure Period such violation has not been cured and the Company determines, in its sole discretion, that the Employee is using his best efforts to cure such violation and such violation is capable of being cured, the Company shall provide the Employee, pursuant to a written notice, a reasonable amount of additional time (the "Extended Cure Period") to cure such violation but in no event shall such Extended Cure Period exceed forty-five (45) days from the date on which the initial Cure Period expired.

(d) For purposes of this Agreement, "Without Cause" shall mean any reason other than the reasons described in Sections 5(a)(i), 5(a)(ii),
5(a)(iii), 5(a)(iv) and 5(a)(viii) hereof. The parties expressly agree that a termination of employment Without Cause pursuant to Section 5(a)(v) hereof may be for any reason whatsoever, or for no reason, in the sole discretion of the Company.

(e) For purposes of this Agreement, "Good Reason" shall mean (i) any assignment of material duties to the Employee other than those contemplated by this Agreement, provided that the Company shall have thirty (30) days after receipt of written notice by the Employee to cure or (ii) a reduction in the rate of compensation, or a material reduction in fringe benefits (other than a material reduction in fringe benefits generally applicable to senior executives of Avatar) or any other material failure by the Company to perform its material obligations, provided that the Company shall have thirty (30) days after receipt of written notice by the Employee to cure. Employee acknowledges and agrees that a Change in Control (as defined below) may require adjustment to Employee's existing duties; however, such adjustment shall not constitute "Good Reason" provided that such adjusted duties are comparable to Employee's duties prior to such Change in Control.

(f) For purposes of this Agreement, "Without Good Reason" shall mean any reason other than that defined in this Agreement as constituting Good Reason.

(g) For purposes of this Agreement, "Change in Control" shall mean any of the following events: (a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner

(within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of Avatar representing ninety percent (90%) or more of the combined voting power of the issued and outstanding common stock of Avatar;
(b) the Board of Directors of Avatar approves any merger, consolidation or like business combination or reorganization of Avatar, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) Avatar ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause (c), is herein referred to as the "Change in Control Date."

(h) For purposes of this Agreement, "Administrator" and "Retention Account" shall have the respective meanings ascribed to such terms in the Retention Account Procedures.

(i) For purposes of this Agreement, "Retention Account Procedures" shall mean the procedures set forth in the Annex hereto.

6. Payments Upon Termination of Employment.

(a) Termination upon Expiration of Term of Employment. If the Employee's employment hereunder is terminated pursuant to Section 5(a)(i), the Company shall pay or provide to the Employee (i) all Base Salary and Annual Bonus payments pursuant to Sections 3(a) and 3(b) hereof, respectively, and any vacation pay pursuant to Section 3(e) hereof, in each case which has been earned but has not been paid as of the Date of Termination and (ii) any benefits to which the Employee may be entitled under any employee benefits plan or program pursuant to Section 3(c) hereof in which he is a participant in accordance with the terms of such plan or program up to and including the Date of Termination.

(b) Death or Disability.

(i) Subject to Section 6(b)(ii) below, if the Employee's employment hereunder is terminated due to the Employee's death or Disability pursuant to Sections 5(a)(ii) or (iii) hereof and a Change in Control Date shall not have occurred prior to such termination, the Company shall pay or provide to the Employee, his designated beneficiary or to his estate (i) all Base Salary pursuant to Section 3(a) hereof and any vacation pay pursuant to Section 3(e) hereof, in each case which has been earned but has not been paid as of the Date of Termination (ii) a prorated Annual Bonus as of Employee's termination due to death or Disability and (iii) any benefits to which the Employee may be entitled under any employee benefits plan or program pursuant to Section 3(c) hereof in which he is a participant in accordance with the terms of such plan or program up to and including the Date of Termination. Should the Company wish to purchase insurance to cover the costs associated with the Employee's termination of employment pursuant to Sections 5(a)(ii) or (iii), the Employee agrees to execute any and all necessary documents necessary to effectuate such insurance.

(ii) If the Employee's employment hereunder is terminated due to the Employee's death or Disability pursuant to Sections 5(a)(ii) or (iii) hereof and a Change in Control Date shall have occurred prior to such termination, (A) the Administrator shall disburse to the Employee, his designated beneficiary or to his estate a pro rata portion of the Retention Amount as of the Date of Termination equal to the Retention Amount multiplied by a fraction
(x) the numerator of which is the number of days elapsed in the Retention Period as of the Date of Termination and (y) the denominator of which is the total number of days in the Retention Period and (B) the remaining balance of the Retention Amount shall be disbursed by the Administrator as a donation to one or more charitable, not-for-profit organizations designated by the Board of Directors of Avatar, in its sole discretion, in each case subject to and in accordance with the Retention Account Procedures.

(c) Termination for Cause or Resignation Without Good Reason. If the Employee's employment hereunder is terminated pursuant to Section 5(a)(iv) or
Section 5(a)(vii), the Company shall pay or provide to the Employee (i) all Base Salary pursuant to Section 3(a) hereof and any vacation pay pursuant to Section 3(e) hereof, in each case which has been earned but has not been paid as of the Date of Termination and (ii) any benefits to which the Employee may be entitled under any employee benefits plan or program pursuant to Section 3(c) hereof in which he is a participant in accordance with the terms of such plan or program up to and including the Date of Termination, in each case subject to set-off, counterclaim, recoupment, defense or any other claim, right or cause of action which the Company may have against the Employee or others. Notwithstanding the foregoing, if a Change in Control Date has occurred and the Employee's employment hereunder is terminated pursuant to Section 5(a)(iv) or Section 5(a)(vii) during the Retention Period, Employee shall not be entitled to receive any portion of the Retention Amount and the entire balance of the Retention Amount shall be disbursed by the Administrator as a donation to one or more charitable, not-for-profit organizations designated by the Board of Directors of Avatar, in its sole discretion, subject to and in accordance with the Retention Account Procedures.

(d) Termination Without Cause or Resignation For Good Reason. If the Employee's employment hereunder is terminated by the Company Without Cause pursuant to Section 5(a)(v), or due to the Employee's resignation for Good Reason pursuant to Section 5(a)(vi), then:

(i) The Company shall continue to pay the Employee his full Base Salary and Annual Bonus in accordance with normal payroll practices and without interest through the earlier of (A) December 31, 2010 and (B) the second Anniversary of the Date of Termination, at the rate in effect at the time notice of the termination of the Employee's employment is given in accordance with Section 5(a)(v) or
Section 5(a)(vi) hereof, as the case may be; provided, however, that if a Change of Control Date shall have occurred prior to Employee's termination Without Cause or resignation for Good Reason, the Administrator shall disburse the Retention Amount (as defined in
Section 6(f) hereof) to the Employee on or promptly following the Date of Termination, subject to and in accordance with the Retention Account Procedures; and

(ii) The Employee shall be entitled to participate in all employee benefit plans and programs to the extent applicable to other senior executives of Avatar and the Company (provided that the Employee's continued participation is permissible under the general terms and provisions of such plans and programs) through the earlier of (A) December 31, 2010 and (B) the second Anniversary of the Date of Termination; provided, however, that if a Change of Control shall have been consummated prior to Employee's termination Without Cause or resignation for Good Reason, the Employee shall be entitled to participate in such benefit plans and programs through the Retention Date. In the event that the Employee's participation in any such plan or program is not permitted, the Employee shall be entitled to receive an amount equal to the annual contributions, payments, credits or allocations made by the Company to the Employee's account or on the Employee's behalf under such plans and programs.

(e) Duty to Seek Other Employment. If the Employee's employment hereunder is terminated by the Company Without Cause pursuant to Section
5(a)(v), or due to the Employee's resignation for Good Reason pursuant to
Section 5(a)(vi), the Employee agrees, during the entire period of time that the Employee is entitled to receive any benefits pursuant to Section 6(d) above, to make known the Employee's availability for employment involving services of a nature substantially similar and of a comparable stature to those performed by the Employee on behalf of the Company in a manner customary for executives holding positions substantially similar and of a comparable stature to the Employee's position with the Company; provided, however, that, subject to
Section 4 hereof, the Employee shall only be obligated to accept such employment if the principal office where the Employee will be employed is located within a fifty (50) mile radius of Coral Gables, Florida. The Employee agrees to keep the Chairman of the Board of Avatar (or his designee) apprised of the Employee's employment status during such period and, if requested, the Employee will provide appropriate supporting documentation with respect to the salary, bonuses or other compensation earned by and benefits made available to the Employee in respect of such employment. In the event the Employee secures employment as described in this Section 6(e), the Company shall be entitled to (i) deduct from the amounts payable to the Employee pursuant to Sections 6(c)(i) and 6(c)(ii) above (excluding any accrued but unpaid Annual Bonus through the date of termination) any salary, bonuses or other compensation paid to the Employee in connection with such employment and (ii) terminate the Employee's participation in (and shall not be required to pay the Employee any sums in respect of) any employee benefit plans and programs described in Section 6(d)(ii) that are substantially similar to any employee benefit plans and programs in which the Employee participates in connection with such new or existing employment. The Employee agrees promptly to repay to the Company any amounts paid to the Employee by the Company pursuant to Sections 6(d)(i) and 6(d)(ii) which the Company was entitled to deduct from such amounts pursuant to this Section 6(e).

(f) Change in Control; Termination Upon the Retention Date. In the event of a Change in Control during the Term of Employment:

(i) The Company shall pay or provide to the Employee (i) all Base Salary payments and a prorated Annual Bonus pursuant to Sections 3(a) and 3(b) hereof, respectively, and any vacation pay

pursuant to Section 3(e) hereof, in each case which has been earned but has not been paid as of the Date of Termination and (ii) any benefits to which the Employee may be entitled under any employee benefits plan or program pursuant to Section 3(c) hereof in which he is a participant in accordance with the terms of such plan or program up to and including the Change in Control Date.

(ii) Base Salary and Annual Bonus payments otherwise payable to the Employee during the Retention Period pursuant to Sections 3(a) and 3(b) hereunder, respectively, shall be subject to the Retention Account Procedures and the conditions set forth in this
Section 6(f)(ii). On the Change in Control Date, the Employee shall cease to receive Base Salary and Annual Bonus payments, and the Company shall deposit into the Retention Account an amount (the "Retention Amount") equal to (A) $1,800,000, if the Change in Control Date shall occur before June 30, 2010 or (B) if the Change in Control Date shall occur on or after June 30, 2010, the product of $1,800,000 multiplied by a fraction (x) the numerator of which is the number of days after the Change in Control Date through and including the Retention Date and (y) the denominator of which is 365. If the Employee's employment has not been otherwise terminated in accordance with this Agreement (except pursuant to Sections 5(a)(v) or 5(a)(vi)) and the Employee is continuously employed by the Company through the Retention Period such that the Employee's employment terminates upon the Retention Date pursuant to Section 5(a)(viii) hereof, the Administrator shall distribute the Retention Amount to the Employee on or promptly following the Retention Date, subject to and in accordance with the Retention Account Procedures.

(g) No Other Payments. Except as provided in this Section 6 and except as may otherwise be provided pursuant to any written incentive award agreement between the Employee and any Avatar Entity, the Employee shall not be entitled to receive any other payments or benefits from the Company due to the termination of his employment, including but not limited to, any employee benefits under any of the Company's or Avatar's employee benefits plans or programs (other than at the Employee's expense under the Consolidated Omnibus Budget Reconciliation Act of 1985 or pursuant to the terms of any pension plan which the Company or Avatar may have in effect from time to time) or any right to be paid severance pay. If the Employee is entitled to any notice or payment in lieu of any notice of termination required by Federal, State or local law, including but not limited to the Worker Adjustment and Retraining Notification Act, the Company's obligation to make payments pursuant to Section 6(d) shall be reduced by the amount of any such payment in lieu of notice.

(h) Conditions to Payments upon Termination of Employment. Notwithstanding anything to the contrary contained in this Agreement, all payments and benefits to the Employee provided pursuant to this Section 6 shall be subject to the Employee's compliance with Section 4.

7. Employment after the Employment Term. No later than January 2, 2009, the Company shall enter into negotiations, in good faith, with the Employee regarding the continued employment of the Employee with the Company after the Term of Employment.

8. No Conflicting Agreements; Indemnification.

(a) The Employee hereby represents and warrants that he is not a party to any agreement, or non-competition or other covenant or restriction contained in any agreement, commitment, arrangement or understanding (whether oral or written), which would in any way conflict with or limit his ability to commence work on the first day of the Term of Employment or would otherwise limit his ability to perform all responsibilities in accordance with the terms and subject to the conditions of this Agreement.

(b) The Employee agrees that the compensation provided in Section 3 represents the sole compensation to be paid to the Employee in respect of the services performed or to be performed for the Avatar Entities by the Employee (other than any incentive compensation paid or to be paid to the Employee pursuant to any written incentive award agreement between the Employee and any Avatar Entity). The Employee further agrees that should there be a determination that for federal, state, local and/or other tax purposes, the Employee's compensation for services performed for any of the Avatar Entities is greater than the amounts payable hereunder, the Employee will indemnify and hold harmless the Avatar Entities against any and all liabilities, losses, and expenses including, but not limited to, any additional taxes, penalties and interest, and attorneys' and accountants' fees arising out of, resulting from or relating to such determination.

9. Deductions and Withholding. The Employee agrees that the Company shall withhold from any and all compensation required to be paid to the Employee pursuant to this Agreement all federal, state, local and/or other taxes which the Company determines are required to be withheld in accordance with applicable statutes and/or regulations from time to time in effect and all amounts required to be deducted in respect of the Employee's coverage under applicable employee benefit plans.

10. Entire Agreement. This Agreement, the letter agreement, dated as of the date hereof, among the Company, Avatar and the Employee, and for purposes of the definition of "Retention Amount," the 2008-2010 Earnings Participation Award Agreement, dated as of the date hereof, between Avatar and the Employee, embody the entire agreement of the parties with respect to the Employee's employment and supersedes any other prior oral or written agreements between the Employee and any Avatar Entity. This Agreement may not be modified or terminated orally but only by an agreement in writing signed by the parties hereto.

11. Waiver. The waiver by the Company of a breach of any provision of this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach by the Employee. The waiver by the Employee of a breach of any provision of this Agreement by the Company shall not operate or be construed as a waiver of any subsequent breach by the Company.

12. Governing Law. This Agreement shall be subject to, and governed by, the laws of the State of Florida applicable to contracts made and to be performed in the State of Florida, regardless of where the Employee is in fact required to work.

13. Jurisdiction. Any legal suit, action or proceeding against any party hereto arising out of or relating to this Agreement (including the Retention Account Procedures) shall be instituted in a federal or state court in Dade County or Broward County in the State of Florida and each party hereto waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding and each party hereto irrevocably submits to the jurisdiction of any such court in any suit, action or proceeding.

14. Assignability. The obligations of the Employee may not be delegated and, except as expressly provided in Section 6(b) relating to the designation of beneficiaries, the Employee may not, without the Company's written consent thereto, assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any interest therein. Any such attempted delegation or disposition shall be null and void and without effect. The Company and the Employee agree that this Agreement and all of the Company's rights and obligations hereunder may be assigned or transferred by the Company to, and may be assumed by and become binding upon and may inure to the benefit of, any Avatar Entity or successor thereof. The term "successor" shall mean, with respect to any Avatar Entity, and any other corporation or other business entity which, by merger, consolidation, purchase of the assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity. Except as expressly provided in Section 6(f) hereof, any assignment by the Company of its rights and obligations hereunder to any affiliate of or successor shall not be considered a termination of employment for purposes of this Agreement.

15. Severability. If any provision of this Agreement as applied to either party or to any circumstances shall be adjudged by a court of competent jurisdiction to be void or unenforceable, the same shall in no way affect any other provision of this Agreement or the validity or enforceability of this Agreement. If any court construes any of the provisions of Section 4 hereof, or any part thereof, to be unreasonable because of the duration of such provision or the geographic or other scope thereof, such court may reduce the duration or restrict the geographic or other scope of such provision and enforce such provision as so reduced or restricted.

16. Notices. All notices to the Employee hereunder shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, to:

Jonathan Fels c/o Avatar Properties Inc. 12th Floor 201 Alhambra Circle Coral Gables, Florida 33134

with a copy to:

Kluger, Peretz, Kaplan & Berlin, P.L.

201 South Biscayne Blvd.
Suite 1700
Miami, FL 33131
Attention: Eliot Abbott, Esq.
Facsimile: (305) 379-3428

All notices to the Company hereunder shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, to:

Avatar Properties Inc. 12th Floor 201 Alhambra Circle Coral Gables, Florida 33134 Attention: Chairman of the Board Facsimile: (305) 441-7876

with a copy to:

Avatar Properties Inc. 201 Alhambra Circle 12th Floor Coral Gables, Florida 33134 Attention: General Counsel Facsimile: (305) 441-9927

with a copy to:

Avatar Holdings Inc. 201 Alhambra Circle 12th Floor Coral Gables, Florida 33134 Attention: Chairman of the Board Facsimile: (305) 448-7876

and with a copy to:

Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Attention: R. Todd Lang, Esq.

Facsimile: (212) 310-8007

Either party may change the address to which notices shall be sent by sending written notice of such change of address to the other party.

17. Separate Independent Agreements. Notwithstanding anything to the contrary contained in this Agreement, the terms of this Agreement shall not amend, supersede or alter in any way the terms of any other written agreement (other than the letter agreement, dated as of the date hereof, among Avatar, the Company and the Employee) between the Employee, on the one hand, and the Company or Avatar, on the other hand, except as expressly set forth in such other agreement.

18. Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument.

20. Attorneys' Fees. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

21. Neutral Construction. Each party to this Agreement was represented by counsel, or had the opportunity to consult with counsel. No party may rely on any drafts of this Agreement in any interpretation of the Agreement. Each party to this Agreement has reviewed this Agreement and has participated in its drafting and, accordingly, no party shall attempt to invoke the normal rule of construction to the effect that ambiguities are to be resolved against the drafting party in any interpretation of this Agreement.

(signature page follows)

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

AVATAR PROPERTIES INC.

By: /s/ Gerald D. Kelfer
    --------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Jonathan Fels
    --------------------------------
    Jonathan Fels

ANNEX

Retention Account Procedures

Capitalized terms used but not otherwise defined in this Annex shall have the meanings ascribed to such terms in the Amended and Restated Employment Agreement between Avatar Properties Inc. and Jonathan Fels, dated as of April 15, 2005 (the "Agreement").

In the event of a Change in Control, the Retention Amount to which the Employee may be entitled pursuant to (i) the Agreement and (ii) the 2008-2010 Earnings Participation Award Agreement between the Employee and Avatar, dated as of April 15, 2005 (collectively, the "Applicable Agreements"), are subject to the Retention Account Procedures as further described in this Annex.

1. Administrator. These Retention Account Procedures shall be administered by such person or entity as is designated by the Board of Directors of Avatar (the "Board") on or prior to the Change in Control Date (the "Administrator"); provided, that such Administrator shall be (i) a member of the Board as of the date of the Agreement who is "independent" as defined in the listing standards of The NASDAQ Stock Market, Inc. or (ii) a bank, trust company or similar custodial institution that is free from conflicts of interest with the Avatar Entities and the Employee.

2. Retention Account.

(a) Upon a Change in Control, the Retention Amount shall be deposited into a separate account under the exclusive control of the Administrator (the "Retention Account").

(b) Any cash to be deposited into the Retention Account may be held in an interest-bearing bank account, invested by the Administrator in short-term U.S. government securities or other short-term investments to be determined by the Administrator in its sole discretion. Any income derived from such deposits or investments shall be deposited in the Retention Account and shall be distributed in accordance with these Retention Account Procedures.

(c) If (i) the Employee is continuously employed by any of the Avatar Entities through the Retention Period until the Retention Date, then on or promptly following the Retention Date, the Administrator shall distribute the Retention Amount to the Employee, or (ii) the Employee's employment is terminated for any reason prior to the Retention Date, subject to paragraph (d) below, Avatar (or its successor) and the Employee shall notify the Administrator, in a writing signed by the Employee and Chairman of the Board of Avatar (or its successor) (the "Joint Notice"), of the agreement between Avatar and the Employee directing the Administrator to disburse the Retention Amount pursuant to the Applicable Agreements.

(d) The Administrator shall have no right to make an independent determination as to the circumstances in which the Employee's employment was terminated or as to its duty to disburse monies or other property from the

Retention Account. If, at any time, there shall exist any dispute between Avatar (or its successor) and the Employee as to the employment status of the Employee, the circumstances in which such employment was terminated or the holding or disposition of monies and/or property from the Retention Account, the Administrator may (i) refrain from disbursing any monies and/or property from the Retention Account until (x) the rights of Avatar (and any successor) and the Employee (or Employee's heirs, executors or administrators) with respect to such monies and/or property shall have been fully and finally adjudicated by a non-appealable final order, decree or judgment of a court of competent jurisdiction or (y) all such disputes shall have been resolved and the Administrator shall have received a Joint Notice to that effect or (ii) deposit the monies and/or property held in the Retention Account in the registry of a court of competent jurisdiction pending full and final adjudication pursuant to the rules of procedure governing practice in such court.

3. Administration of the Retention Account by the Administrator.

(a) Prior to the Change in Control Date, the Board shall establish a cash reserve fund in an amount to be available to the Administrator for any and all of its expenses or costs incurred in connection with these Retention Account Procedures. All expenses and costs shall be paid out of the reserve fund, and to the extent that the amount in the reserve fund is insufficient to cover such expenses and costs, Avatar (or its successor) shall promptly make the requisite payment to cover such expenses and costs.

(b) The Administrator shall have the right to engage counsel and otherwise seek advice with respect to these Retention Account Procedures and the obligations of the Administrator hereunder.

(c) The Administrator shall have no obligation or liability to the Employee or Avatar (or its successor) except for acts or omissions not in good faith. Avatar (and its successor) shall indemnify the Administrator and hold the Administrator harmless against any liability arising out of these Retention Account Procedures except in the case of acts or omissions not in good faith.

(d) Avatar and the Employee agree to execute such agreements, documents or certificates as are reasonably necessary or advisable in order to effect these Retention Account Procedures.

SCHEDULE I

Existing Brookman-Fels Projects and Licensees

1. Brookman-Fels at Harbor Islands, Inc.
2. Brookman-Fels Organization, Inc.
3. Brookman-Fels and Associates, Inc.
4. Brookman-Fels at Treasure Trove, Inc.
5. Brookman-Fels at Country Club Estates, Inc.
6. Brookman and Fels at the Sanctuary, Inc.
7. Brookman-Fels of South Florida, Inc.
8. Brookman-Fels Custom Builders, Inc.
9. Brookman-Fels Home and Design, Inc.
10. Brookman-Fels Management Corporation
11. Brookman-Fels at Presidential Estates, Inc.
12. Brookman-Fels Construction Corp.
13. Brookman-Fels Builders, Inc.
14. Sunset Point at Silver Lakes, Ltd. (d/b/a Brookman-Fels - Zuckerman Group)
15. Parkland Communities, Inc. (d/b/a Brookman-Fels - Zuckerman Group)

Exhibit 10.13

AMENDED AND RESTATED EARNINGS
PARTICIPATION AWARD AGREEMENT

THIS AMENDED AND RESTATED EARNINGS PARTICIPATION AWARD AGREEMENT, dated April 15, 2005 (the "Agreement"), is made by and between Avatar Holdings Inc., a Delaware corporation (the "Company"), and Jonathan Fels (the "Participant") and amends and restates in its entirety the Earnings Participation Award Agreement (the "Original Agreement") between the Company and the Participant, dated March 6, 2003 (the "Award Date").

The Company and the Employee wish to provide for certain modifications to the Original Agreement and wish to amend, restate and supersede the Original Agreement, all upon the terms and conditions set forth herein.

The Cash Award and the Stock Award (each as defined in the Original Agreement) granted to the Participant pursuant to the Original Agreement remain in effect as amended and restated in this Agreement.

1. AWARD. Pursuant to the provisions of the (i) Avatar Holdings Inc. Executive Incentive Compensation Plan, as the same may be amended, restated, modified and supplemented from time to time (the "Executive Plan") the Committee (as defined in the Executive Plan) hereby awards to the Participant, as of the Award Date, subject to the terms and conditions of the Executive Plan and subject further to the other provisions herein set forth, the Cash Award and (ii) Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan, as the same may be amended, restated, modified and supplemented from time to time (the "1997 Plan" and together with the Executive Plan, collectively the "Plans") the Committee (as defined in the 1997 Plan) hereby awards to the Participant, as of the Award Date, subject to the terms and conditions of the 1997 Plan and subject further to the terms and conditions and other provisions herein set forth, the Stock Award if, as of an applicable Performance Goal Test Date (as defined below), the Performance Goal (as defined below) applicable to a Cash Award or the Stock Award, as the case may be, is satisfied.

2. CERTAIN DEFINITIONS.

(a) Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plans.

(b) Each reference contained in this Agreement to:

"Actual Gross Profit Amount" shall mean the Company's cumulative Gross Profit during the Performance Period.

"Business Plan" shall mean the Company's business plan for the period commencing on January 1, 2003 and ending on December 31, 2007, as submitted to the Compensation Committee on or prior to the Award Date.

"Cash Award" shall mean, with respect to each fiscal year during the Performance Period ending on a Performance Goal Test Date, a cash payment equal to two percent (2%) of the excess, if any, of
(x) the Gross Profit earned by the Company for such fiscal year, over
(y) the Minimum Gross Profit Level for such fiscal year.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Excluded Amounts" shall mean, with respect to a fiscal year of the Company, as at any date of determination, an amount equal to the dollar amount of any Gross Profit attributable to Harbor Islands and the Rio Rico Excluded Properties for such fiscal year.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen trading days ending with and including the measuring date on which such exchange or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradeable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

"Gross Profit" shall mean, with respect to a fiscal year of the Company, the excess, if any, of (x) the sum of (i) the amount set forth in the Company's audited Consolidated Statements of Operations as set forth in the Company's annual report on Form 10-K (the "Income

Statement") for such fiscal year with respect to the line item "Net income (loss)" plus (ii) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iii) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (iv) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Income Statement less (v) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Income Statement, over (y) the Excluded Amounts for such fiscal year.

"Harbor Islands" shall mean the development and/or sale of the Company's property in Hollywood, Florida, generally known by the Company as parcels 1, 8 and 9 at "Harbor Islands."

"Minimum Cumulative Gross Profit Level" shall mean that as of the Last Day of the Performance Period (x) the Actual Gross Profit Amount is greater than (y) the Target Gross Profit Amount.

"Minimum Gross Profit Level" shall mean the Gross Profit set forth opposite each fiscal year ending on the dates set forth below:

 FISCAL YEAR END                         GROSS PROFIT
 ---------------                         ------------
December 31, 2003                        $10,000,000
December 31, 2004                        $12,000,000
December 31, 2005                        $14,400,000
December 31, 2006                        $17,280,000
December 31, 2007                        $20,736,000

"Payment Date" shall have the meaning ascribed to such term in Section 3(c).

"Performance Goal" shall mean (i) in the case of the Cash Award, the achievement of the Minimum Gross Profit Level in any fiscal year, ending on December 31, during the Performance Period and
(ii) in the case of the Stock Award, the achievement of the Minimum Cumulative Gross Profit Level for the entire Performance Period.

"Performance Goal Test Date" shall mean with respect to the Cash Award, December 31 of each year within the Performance Period and with respect to the Stock Award, the Last Day of the Performance Period.

"Performance Period" shall mean the period commencing January 1, 2003 and ending on December 31, 2007 (December 31, 2007, being the "Last Day of the Performance Period").

"Rio Rico Excluded Properties" shall mean those parcels of land not suitable for development in accordance with the Company's current Business Plan due to environmental factors located in the Company's property in Rio Rico, Arizona, generally known by the Company as "Rio Rico".

"Stock Award" shall mean a grant of a number of shares of Common Stock having a Fair Market Value on the Payment Date equal to two percent (2%) of the excess, if any, of (x) the Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

"Target Gross Profit Amount" shall mean $186,956,000.

3. TERMS AND CONDITIONS. The Cash Award and the Stock Award (together, the "Awards") evidenced by this Agreement are subject to the following terms and conditions:

(a) The payment of performance-based compensation described herein is contingent upon the achievement of the Performance Goal applicable to a Cash Award or the Stock Award, as the case may be.

(b) Subject to Section 4 hereof (i) the Participant shall be entitled to receive a payment on the related Payment Date pursuant to the Cash Award if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date and (ii) the Participant shall be entitled to receive on the related Payment Date the Common Stock pursuant to the Stock Award if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date.

(c) The applicable Committee shall determine whether a Performance Goal has been met as of the applicable Performance Goal Test Date and, (i) if it has, shall so certify in writing and ascertain the amount of cash to be paid, if any, or Common Stock to be issued, if any, to the Participant and (ii) if it has not, shall so certify in writing with a brief explanation as to the methodology and calculation of the Committee in determining that such Performance Goal has not been met. Payments of cash, if any, or the issuance of Common Stock, if any, pursuant to the Awards shall be made to the Participant, in each case within thirty (30) days following the filing with the Securities and Exchange Commission of an annual report on Form 10-K (which contains audited financial statements) for the year ended as of the applicable Performance Goal Test Date (each such date being a "Payment Date").

(d) Notwithstanding anything to the contrary contained in this Agreement, in the event a Change in Control occurs during the Performance Period, (i) the Participant shall no longer be entitled to receive any issuance of shares of Common Stock pursuant to the Stock Award and (ii) the Participant

shall be entitled to receive a pro rata portion of the Cash Award (as of the Change in Control Date) for the fiscal year in which such Change in Control occurs. The Committee shall determine the basis, methodology and calculation for, and any estimates used in, determining the prorated Actual Gross Profit Amount and prorated Minimum Gross Profit Level for the portion of the fiscal year preceding the Change in Control Date. The determination of the Committee as to any such partial award shall be final and binding on all parties, including the Participant and the Company. Such prorated Cash Award shall be paid to the Participant on or promptly following the Change in Control Date.

4. LIMITATIONS ON COMPENSATION. Notwithstanding anything to the contrary herein, the maximum payment of cash pursuant to the Cash Award or the issuance of Common Stock pursuant to the Stock Award to the Participant hereunder shall be subject to the limitations in the Plans and the Participant's employment agreement with the Company or a subsidiary thereof, each as may be amended from time to time.

5. TERMINATION OF EMPLOYMENT.

(a) For purposes of this Section 5, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc. ("Avatar Properties"), dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with Avatar Properties is terminated by Avatar Properties for Cause or by the Participant Without Good Reason, in addition to any other consequences of such termination provided for in this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to cash payments or Common Stock issuances that would otherwise accrue pursuant to this Agreement on or after the date of such termination.

(c) If the Participant's employment with Avatar Properties is terminated by Avatar Properties Without Cause or by the Participant for Good Reason, the Participant shall be entitled to continue to receive such cash payments or Common Stock issuances as would otherwise be made pursuant to this Agreement as though the Participant's employment had not been terminated.

(d) If the Participant's employment with Avatar Properties is terminated due to the Participant's death or Disability, notwithstanding Section 3 hereof:

(i) the Participant shall be entitled to receive only that portion of any cash payments or Common Stock issuances otherwise payable pursuant to Section 3(c) hereof following such termination, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed

whole months elapsed after the first day of the Performance Period to the date of death or Disability, as the case may be, and the denominator of which is the number of whole months from the first day of the Performance Period until the applicable Performance Goal Test Date and (y) the amount of any cash payments or Common Stock issuances that would have been payable pursuant to Section 3(c) hereof if the Participant remained an employee of Avatar Properties through and including the Last Day of the Performance Period; provided, however, that with respect to cash payments pursuant to the Cash Award, the Participant shall only be eligible to receive a cash payment for the fiscal year in which the Participant's employment was terminated for death or Disability, as the case may be, and the Participant shall not be eligible for any additional cash payments; and

(ii) the Participant will have no right to any other payments hereunder.

Any payments shall be made to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) no later than the relevant Payment Date.

6. FORFEITURE UPON BREACH OF RESTRICTIVE COVENANTS. Notwithstanding anything to the contrary set forth in this Agreement, if the Participant breaches any provision relating to the Participant's covenant to keep information confidential, not to compete, not to solicit or similar restrictive covenant contained in the Participant's employment agreement or any other agreement with the Company or any of its subsidiaries or affiliates (each of the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), after the expiration of any notice and cure period, then in addition to any other rights or remedies arising from or relating to such breach the Participant shall forfeit any right to any cash payments or Common Stock issuances that would otherwise accrue pursuant to this Agreement on or after the date of such breach.

7. CLAWBACK; ADDITIONAL PAYMENTS; NO OFFSET BY PARTICIPANT; COMPANY OFFSET.

(a) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to the Cash Award or the issuance to the Participant of Common Stock pursuant to the Stock Award such that Gross Profit is less than previously reported, the Participant shall pay to the Company upon demand by the Company following the filing of such restated financial statements with the Securities and Exchange Commission, an amount equal to the sum of (i) the excess of (A) the Excess Bonus Payments (as defined below) over (B) the hypothetical income tax liability attributable to such Excess Bonus Payments (as determined by the Committee by applying the highest marginal United States federal, state and local individual income tax rates applicable to an individual resident of Coral Gables, Florida for the relevant taxable period, taking into account the deductibility of state and local income taxes for federal income tax purposes), and (ii) as determined by the Committee, the present value of any tax benefits

accruing to the Participant as a result of making any payments pursuant to this
Section 7(a) to the Company. For purposes of the preceding sentence, "Excess Bonus Payments" shall mean an amount equal to the sum of (A) the difference between (x) the amount of the cash payment pursuant to the Cash Award paid to the Participant with respect to any fiscal year (or portion thereof) in which the audited financial statements have been restated and (y) the amount that cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the applicable Performance Goal Test Date and (B) the difference between (x) the Fair Market Value on the Payment Date of the Common Stock issued pursuant to the Stock Award and (y) the amount that the Fair Market Value of the Common Stock would have been on the Payment Date if the Company had used the restated financial statements to determine the amount of the Company's Actual Gross Profit Amount on the Last Day of the Performance Period.

(b) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to the Cash Award or issuance to the Participant of Common Stock pursuant to the Stock Award such that Gross Profit is greater than previously reported, the Company shall pay to the Participant upon demand by the Participant following the filing of such restated financial statements with the Securities and Exchange Commission, an amount (the "Lesser Bonus Payments") equal the sum of (A) the difference between (x) the amount that the cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the applicable Performance Goal Test Date less (y) the amount of the cash payment pursuant to the Cash Award paid to the Participant with respect to any fiscal year (or portion thereof) in which the audited financial statements have been restated and (B) the difference between (x) the amount that the Fair Market Value of the Common Stock issued to the Participant pursuant to the Stock Award would have been on the Payment Date if the Company had used the restated financial statements to determine the amount of the Company's Actual Gross Profit Amount on the Last Day of the Performance Period and (y) the Fair Market Value on the Payment Date of the Common Stock issued pursuant to the Stock Award. At the option of the Company, the amount of the Lesser Bonus Payments attributable to the Stock Award may be payable in cash or Common Stock.

(c) The Participant shall be obligated to pay to the Company any amount due pursuant to this Section 7 regardless of whether the Participant has or claims to have any claim against any of the Avatar Entities, and the Participant shall have no right to offset any amount due or claimed to be due from any of the Avatar Entities. The Company shall be obligated to pay to the Participant any amount due pursuant to this Section 7 regardless of whether the Company has or claims to have any claim against the Participant, and the Company shall have no right to offset any amount due or claimed to be due from the Participant or any of its affiliates.

(d) In the event that the Participant has failed to repay any amount required pursuant to Section 7(a) above, the Company shall be entitled to offset such amount against any amounts due from the Company to the Participant.

(e) The foregoing provisions of this Section 7 shall not be applicable to any restatement, after the consummation of a Change in Control (as defined in clauses (a) and (b) of the definition of "Change in Control" above), of the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period.

8. TAXES. Any cash payment pursuant to a Cash Award or Common Stock issuance pursuant to the Stock Award shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements. The Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. In connection with any issuance of Common Stock pursuant to the Stock Award, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state, local and foreign withholding taxes arising in connection with the Stock Award and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

9. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by any of the Avatar Entities, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

10. NO OBLIGATION TO PURSUE PROJECTS. This Agreement shall in no way obligate the Company to pursue any projects, developments or sales of any assets, and the Company may limit, abandon or change any projects, developments or sales of any assets at any time in its sole discretion and the Company shall have no obligation to take any action or provide any financing with respect to any projects, developments or sales of any assets.

11. UNSECURED CREDITOR STATUS; NO PARTNERSHIP. The Participant shall rely solely upon the unsecured promise of the Company, as set forth herein, for payment hereunder, and nothing herein contained shall be construed to give to or vest in the Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title, or interest, nor at any time in the future. This Agreement is an

agreement to pay compensation for services provided by the Participant and is not a partnership or joint venture and is not intended to create a partnership or joint venture between the Company and the Participant or any other person. The Participant shall take no position inconsistent with this characterization.

12. ASSIGNMENT; SUCCESSORS.

(a) The Cash Award, Stock Award and any interest of the Participant in any such awards may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer any such Awards in contravention of this Section 12(a) is void ab initio. The Awards shall not be subject to execution, attachment or other process.

(b) The Company's rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and may inure to the benefit of any Avatar Entity or successor thereof. The term "successor" shall mean, with respect to any Avatar Entity, any other corporation or other business entity which, by merger, consolidation, purchase of assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity.

(c) In the event of the Participant's death, the Participant's rights and obligations hereunder shall be binding upon and inure to the benefit of the Participant's heirs and legal representatives.

13. CONSTRUCTION. The Plans and this Agreement will be construed by and administered under the supervision of the applicable Committee in such Committee's sole and absolute discretion, and all determinations of such Committee will be final and binding on the Participant.

14. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in the Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, Coral Gables, Florida 33134, Attention: Chief Executive Officer, with a copy to the Company's Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

15. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

16. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

17. INCORPORATION OF PLANS. Each of the Plans is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plans, as the Plans may be amended from time to time.

18. STOCKHOLDER APPROVAL OF 1997 PLAN. In the event that the requisite number of shares of Common Stock reserved for issuance under the 1997 Plan to issue the Common Stock pursuant to the Stock Award are not available, the Company shall undertake to submit an amendment to the 1997 Plan (the "1997 Plan Amendment"), which increases the number of shares available for issuance thereunder to satisfy the Company's obligations pursuant to the Stock Award for approval by stockholders at an annual meeting or meetings (or at a special meeting or special meetings) after it is determined that additional shares of Common Stock are needed for issuance pursuant to the Stock Award. The Participant agrees that the failure of the Company's stockholders to approve the 1997 Plan Amendment
(and any adverse financial consequences to Participant resulting therefrom) shall not constitute a "good reason" under the Participant's employment with the Company or any other Avatar Entity.

19. ATTORNEYS' FEES. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

20. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

21. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plans and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    ------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Jonathan Fels
    ------------------------------------
    Jonathan Fels

Exhibit 10.14

CHANGE IN CONTROL AWARD AGREEMENT

THIS CHANGE IN CONTROL AWARD AGREEMENT, dated April 15, 2005 (the "Agreement"), is made by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Jonathan Fels (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. 2005 Executive Incentive Compensation Plan, as the same may be amended, restated, modified or supplemented from time to time (the "Executive Plan"), the Committee (as defined in the Executive Plan) hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Executive Plan and subject further to the terms and conditions and other provisions herein set forth, the Change in Control Award if (i) a Change in Control Date (as defined below) shall occur and
(ii) the Performance Goal (as defined below) is satisfied as of the Change in Control Date (as defined below).

2. CERTAIN DEFINITIONS.

(a) Capitalized terms used but not defined herein shall have the meanings assigned to them in the Executive Plan.

(b) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Actual Gross Profit Amount" shall mean the Company's cumulative Gross Profit during the Performance Period.

"Business Plan" shall mean the Company's business plan for the period commencing on January 1, 2003 and ending on December 31, 2007, as submitted to the Compensation Committee at a meeting held on March 3, 2005.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with

respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Change in Control Award" shall mean a cash payment equal to two percent (2%) of the excess, if any, of (x) the Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Excluded Amounts" shall mean, with respect to a fiscal year of the Company, as at any date of determination, an amount equal to the dollar amount of any Gross Profit attributable to Harbor Islands and the Rio Rico Excluded Properties for such fiscal year.

"Gross Profit" shall mean:

(A) with respect to any full fiscal year of the Company during the Performance Period, the excess, if any, of (x) the sum of
(i) the amount set forth in the Company's audited Consolidated Statements of Operations as set forth in the Company's annual report on Form 10-K (the "Annual Income Statement") for such fiscal year with respect to the line item "Net income (loss)" plus (ii) the amount, if any, set forth in the Company's Annual Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iii) the amount, if any, set forth in the Company's Annual Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (iv) the amount(s), if any, set forth in the Company's Annual Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Income Statement less (v) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Income Statement, over (y) the Excluded Amounts for such fiscal year; and

(B) with respect to any full fiscal quarter of the Company during the Performance Period that does not constitute a portion of full fiscal year for purposes of paragraph (A ) above, the excess, if any, of (x) the sum of (i) the amount set forth in the Company's unaudited Consolidated Statements of Operations for the three month period of such fiscal quarter as set forth in the Company's quarterly report on Form 10-Q (the "Quarterly Income Statement") for such fiscal quarter with respect to the line item "Net income (loss)" plus
(ii) the amount, if any, set forth in the Company's Quarterly Income Statement for such fiscal quarter with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iii) the amount, if any, set forth in the

Company's Quarterly Income Statement for such fiscal quarter with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (iv) the amount(s), if any, set forth in the Company's Quarterly Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Quarterly Income Statement less
(v) the amount(s), if any, set forth in the Company's Quarterly Income Statement for such fiscal quarter relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Quarterly Income Statement, over (y) the Excluded Amounts for such fiscal quarter.

"Harbor Islands" shall mean the development and/or sale of the Company's property in Hollywood, Florida, generally known by the Company as parcels 1, 8 and 9 at "Harbor Islands."

"Minimum Cumulative Gross Profit Level" shall mean that as of the Change in Control Date the Actual Gross Profit Amount is greater than the Target Gross Profit Amount.

"Performance Goal" shall mean the achievement of the Minimum Cumulative Gross Profit Level for the Performance Period.

"Performance Period" shall mean the period commencing April 1, 2005 and ending on the Change in Control Date.

"Rio Rico Excluded Properties" shall mean those parcels of land not suitable for development in accordance with the Company's current Business Plan due to environmental factors located in the Company's property in Rio Rico, Arizona, generally known by the Company as "Rio Rico".

"Target Gross Profit Amount" shall mean $141,995,000.

3. TERMS AND CONDITIONS. The Change in Control Award evidenced by this Agreement is subject to the following terms and conditions:

(a) The payment of performance-based compensation described herein is contingent upon (i) the consummation of a Change in Control on or before December 31, 2007, and (ii) the achievement of the Performance Goal.

(b) Subject to Section 3(c) and Section 4 hereof, on or promptly following the Change in Control Date, the Participant shall be entitled to receive the Change in Control Award if the Performance Goal is satisfied as of the Change in Control Date.

(c) The Committee shall determine whether the Performance Goal has been met as of the Change in Control Date and, (i) if it has, shall so certify in writing and ascertain the amount of cash to be paid, if any, to the

Participant and, (ii) if it has not, shall so certify in writing with a brief explanation as to the methodology and calculation of the Committee in determining that the Performance Goal has not been met. The Committee shall determine the basis, methodology and calculation for, and any estimates used in, determining the Gross Profit for the portion of the fiscal year immediately preceding the Change in Control Date and following the most recent Annual Income Statement or Quarterly Income Statement of the Company, as applicable and such determination shall be final and binding on all parties, including the Company and the Participant. Payments of cash, if any, pursuant to the Change in Control Award shall be made on or promptly following the Change in Control Date.

4. LIMITATION ON COMPENSATION. Notwithstanding anything to the contrary herein, the maximum payment of cash pursuant to the Change in Control Award to the Participant hereunder shall be $3,000,000.

5. TERMINATION OF EMPLOYMENT.

(a) For purposes of this Agreement, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties, Inc. ("Avatar Properties"), dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with Avatar Properties is terminated by Avatar Properties for Cause or by the Participant Without Good Reason, in addition to any other consequences of such termination provided for in this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to cash payments pursuant to this Agreement from and after the date of such termination.

(c) If the Participant's employment with Avatar Properties is terminated by Avatar Properties Without Cause or by the Participant for Good Reason, the Participant shall be entitled to receive such cash payments as would otherwise be made pursuant to this Agreement as though the Participant's employment had not been terminated.

(d) If the Participant's employment with Avatar Properties is terminated due to the Participant's death or Disability, notwithstanding Section 3 hereof, the Participant shall be entitled to receive only that portion of any cash payments otherwise payable pursuant to Section 3(c) hereof following such termination, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed whole months elapsed after the first day of the Performance Period to the date of death or Disability, as the case may be, and the denominator of which is the number of whole months from the first day of the Performance Period until the Performance Goal Test Date and (y) the amount of any cash payments that would have been

payable pursuant to Section 3(c) hereof if the Participant remained an employee of Avatar Properties through and including the Change in Control Date.

Any payments to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) pursuant to this Section 5(d) shall be made on or promptly following the Change in Control Date.

6. FORFEITURE UPON BREACH OF RESTRICTIVE COVENANTS. Notwithstanding anything to the contrary set forth in this Agreement, if the Participant breaches any provision relating to the Participant's covenant to keep information confidential, not to compete, not to solicit or similar restrictive covenant contained in the Participant's employment agreement or other agreement with the Company or any of its subsidiaries or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), after the expiration of any notice and cure period, then in addition to any other rights or remedies arising from or relating to such breach the Participant shall forfeit any right to any cash payments that would otherwise accrue pursuant to this Agreement on or after the date of such breach.

7. TAXES. Any cash payment pursuant to the Change in Control Award shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements. The Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe.

8. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by any of the Avatar Entities, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

9. NO OBLIGATION TO PURSUE PROJECTS. This Agreement shall in no way obligate the Company to pursue any projects, developments or sales of any assets, and the Company may limit, abandon or change any projects, developments or sales of any assets at any time in its sole discretion and the Company shall have no obligation to take any action or provide any financing with respect to any projects, developments or sales of any assets.

10. UNSECURED CREDITOR STATUS; NO PARTNERSHIP. The Participant shall rely solely upon the unsecured promise of the Company, as set forth herein, for payment hereunder, and nothing herein contained shall be construed to give to or vest in the Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title, or interest, nor at any time in the future. This Agreement is an agreement to pay compensation for services provided by the Participant and is not a partnership or joint venture and is not intended to create a partnership

or joint venture between the Company and the Participant or any other person. The Participant shall take no position inconsistent with this characterization.

11. ASSIGNMENT; SUCCESSORS.

(a) The Change in Control Award and any interest of the Participant in such award may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer the Change in Control Award in contravention of this Section 11(a) is void ab initio. The Change in Control Award shall not be subject to execution, attachment or other process.

(b) The Company's rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and may inure to the benefit of any affiliate of or successor to the Company. The term "successor" shall mean, with respect to any Avatar Entity, any other corporation or other business entity which, by merger, consolidation, purchase of assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity.

(c) In the event of the Participant's death, the Participant's rights and obligations hereunder shall be binding upon and inure to the benefit of the Participant's heirs and legal representatives.

12. CONSTRUCTION. The Executive Plan and this Agreement will be construed by and administered under the supervision of the Committee in the Committee's sole and absolute discretion, and all determinations of the Committee will be final and binding on the Participant.

13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in the Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, Coral Gables, Florida 33134, Attention: Chief Executive Officer, with a copy to the Company's Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

16. INCORPORATION OF THE EXECUTIVE PLAN. The Executive Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Executive Plan.

17. ATTORNEYS' FEES. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

18. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

19. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Executive Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    -------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Jonathan Fels
    -------------------------------------
    Jonathan Fels

Exhibit 10.15

2008-2010 EARNINGS PARTICIPATION AWARD AGREEMENT

This 2008-2010 EARNINGS PARTICIPATION AWARD AGREEMENT, dated April 15, 2005 (the "Agreement"), is made by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Jonathan Fels (the "Participant").

1. AWARD. Pursuant to the provisions of the (i) Avatar Holdings Inc. 2005 Executive Incentive Compensation Plan, as the same may be amended, restated, modified and supplemented from time to time (the "Executive Plan") the Committee (as defined in the Executive Plan) hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Executive Plan and subject further to the terms and conditions and other provisions herein set forth, the Cash Awards if, as of an applicable Performance Goal Test Date (as defined below), the Performance Goal (as defined below) applicable to such Cash Award is satisfied.

2. CERTAIN DEFINITIONS.

(a) Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plans.

(b) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Actual Gross Profit Amount" shall mean the Company's cumulative Gross Profit during the Performance Period.

"Annual Cash Award" shall mean, with respect to each fiscal year during the Performance Period ending on a Performance Goal Test Date, a cash payment equal to two percent (2%) of the excess, if any, of (x) the Gross Profit earned by the Company for such fiscal year, over (y) the Minimum Gross Profit Level for such fiscal year.

"Business Plan" shall mean the Company's business plan for the period commencing on January 1, 2005 and ending on December 31, 2010, as submitted to the Compensation Committee at a meeting held on March 3, 2005.

"Cash Awards" shall mean, collectively, the Annual Cash Award and the Cumulative Cash Award, and "Cash Award" shall mean each of the Annual Cash Award and the Cumulative Cash Award.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent

(90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Cumulative Cash Award" shall mean a cash payment equal to one and one-quarter percent (1.25%) of the excess, if any, of (x) the Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

"Excluded Amounts" shall mean, with respect to a fiscal year of the Company, as at any date of determination, an amount equal to the dollar amount of any Gross Profit attributable to Harbor Islands and the Rio Rico Excluded Properties for such fiscal year.

"Gross Profit" shall mean, with respect to a fiscal year of the Company, the excess, if any, of (x) the sum of (i) the amount set forth in the Company's audited Consolidated Statements of Operations as set forth in the Company's annual report on Form 10-K (the "Income Statement") for such fiscal year with respect to the line item "Net income (loss)" plus (ii) the amount reflected in the Company's Income Statement for such fiscal year as compensation expense relating to the 2008-2010 Earnings Participation Award Agreements, dated the date hereof, between the Company and each of Gerald Kelfer, Jonathan Fels and Michael Levy, plus (iii) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iv) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (v) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Income Statement less (vi) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Income Statement plus (vii) for purposes of determining the Annual Cash Award, the Gross Profit Carry Forward Amount, if any, with respect to the Company's prior fiscal year, over (y) the Excluded Amounts for such fiscal year.

"Gross Profit Carry Forward Amount" shall mean an amount equal to (x) the excess of the amount of the Annual Cash Award that would otherwise be payable to the Participant but for the Annual Cap, over the amount of the Annual Cap, divided by (y) 2%; provided, that in no event shall the Gross Profit Carry Forward Amount exceed $20,000,000.

"Harbor Islands" shall mean the development and/or sale of the Company's property in Hollywood, Florida, generally known by the Company as parcels 1, 8 and 9 at "Harbor Islands."

"Minimum Cumulative Gross Profit Level" shall mean that, as of Performance Goal Test Date applicable to the Cumulative Cash Award, (x) the Actual Gross Profit Amount is greater than (y) the Target Gross Profit Amount.

"Minimum Gross Profit Level" shall mean the Gross Profit set forth opposite each fiscal year ending on the dates set forth below:

 FISCAL YEAR END                    GROSS PROFIT
 ---------------                    ------------
December 31, 2008                    $40,000,000
December 31, 2009                    $50,000,000
December 31, 2010                    $60,000,000

"Payment Date" shall have the meaning ascribed to such term in Section 3(c).

"Performance Goal" shall mean (i) in the case of the Annual Cash Award, the achievement of the Minimum Gross Profit Level in any fiscal year, ending on December 31, during the Performance Period and
(ii) in the case of the Cumulative Cash Award, the achievement of the Minimum Cumulative Gross Profit Level for the entire Performance Period.

"Performance Goal Test Date" shall mean with respect to the Annual Cash Award, December 31 of each year within the Performance Period and with respect to the Cumulative Cash Award, the earlier of
(i) a Change in Control Date and (ii) the Last Day of the Performance Period.

"Performance Period" shall mean the period commencing January 1, 2008 and ending on December 31, 2010 (December 31, 2010, being the "Last Day of the Performance Period").

"Rio Rico Excluded Properties" shall mean those parcels of land not suitable for development in accordance with the Company's current Business Plan due to environmental factors located in the Company's property in Rio Rico, Arizona, generally known by the Company as "Rio Rico".

"Target Gross Profit Amount" shall mean $390,000,000.

(c) For purposes of this Agreement, the terms Administrator, Cause, Without Cause, Good Reason, Without Good Reason, Disability, Retention Account, Retention Account Procedures and Retention Date shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc. ("Avatar Properties"), dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

3. TERMS AND CONDITIONS. The Cash Awards evidenced by this Agreement are subject to the following terms and conditions:

(a) The payment of performance-based compensation described herein is contingent upon the achievement of the Performance Goal applicable to each Cash Award.

(b) Subject to Section 4 hereof (i) the Participant shall be entitled to receive a payment on the related Payment Date pursuant to the Annual Cash Award if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date and (ii) the Participant shall be entitled to receive the Cumulative Cash Award on the related Payment Date if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date.

(c) The Committee shall determine whether a Performance Goal has been met as of the applicable Performance Goal Test Date and, (i) if it has, shall so certify in writing and ascertain the amount of cash to be paid, if any, to the Participant and (ii) if it has not, shall so certify in writing with a brief explanation as to the methodology and calculation of the Committee in determining that such Performance Goal has not been met. Payments of cash, if any, pursuant to the Cash Awards shall be made to the Participant, in each case within thirty (30) days following the filing with the Securities and Exchange Commission of an annual report on Form 10-K (which contains audited financial statements) for the year ended as of the applicable Performance Goal Test Date (each such date being a "Payment Date").

(d) Notwithstanding anything to the contrary contained in this Agreement, in the event a Change in Control Date occurs during the Performance Period, (i) on the Change in Control Date, the Company shall deposit into the Retention Account any cash payment pursuant to the Cumulative Cash Award (and such amount shall be added to the Retention Amount) and, if the Employee's employment has not been otherwise terminated by Avatar Properties for Cause or by Participant Without Good Reason and the Employee is continuously employed by Avatar Properties through the Retention Period such that the Employee's employment terminates upon the Retention Date, the Administrator shall distribute the Retention Amount to the Employee on or promptly following the Retention Date, subject to and in accordance with the Retention Account Procedures; provided, however, that if the Participant's employment with Avatar Properties is terminated due to the Participant's death or Disability during the Retention Period, (A) the Administrator shall disburse to the Employee, his

designated beneficiary or to his estate a pro rata portion of the Retention Amount as of the Date of Termination equal to the Retention Amount multiplied by a fraction (x) the numerator of which is the number of days elapsed in the Retention Period as of the Date of Termination and (y) the denominator of which is the total number of days in the Retention Period and (B) the remaining balance of the Retention Amount shall be disbursed by the Administrator as a donation to one or more charitable, not-for-profit organizations designated by the Board of Directors of Avatar, in its sole discretion, in each case subject to and in accordance with the Retention Account Procedures, and (ii) the Participant shall be entitled to receive a pro rata portion of the Annual Cash Award (as of the Change in Control Date) for the fiscal year in which such Change in Control Date occurs. The Committee shall determine the basis, methodology and calculation for, and any estimates used in, determining the prorated Actual Gross Profit Amount and prorated Minimum Gross Profit Level for the portion of the fiscal year preceding the Change in Control Date. The determination of the Committee as to any such partial award shall be final and binding on all parties, including the Participant and the Company. Such prorated Annual Cash Award shall be paid on or promptly following the Change in Control Date.

4. LIMITATIONS ON AWARDS. Notwithstanding anything to the contrary herein:

(a) The maximum cash amount that may be paid to the Participant pursuant to the Annual Cash Award (the "Annual Cap") shall be $1,600,000 for each fiscal year during the Performance Period; provided, however, that in the event that the Annual Cash Award is less than $1,600,000 with respect to either or both of the first two (2) fiscal years of the Performance Period (the amount by which such Annual Cash Awards are less than $1,600,000, in the aggregate, is referred to herein as the "Shortfall Amount"), the Annual Cap with respect to the third fiscal year of the Performance Period shall equal the sum of (x) $1,600,000 plus (y) the Shortfall Amount; provided, further, that in no event shall the Shortfall Amount exceed $400,000.

(b) The maximum cash amount that may be paid to the Participant pursuant to the Cumulative Cash Award shall be $900,000.

(c) The maximum payment of cash pursuant to the Cash Awards shall be subject to the limitations in the Executive Plan and the Participant's employment agreement with the Company or a subsidiary or affiliate thereof (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), each as may be amended, restated, modified or supplemented from time to time.

5. TERMINATION OF EMPLOYMENT.

(a) If the Participant's employment with Avatar Properties is terminated by Avatar Properties for Cause or by the Participant Without Good Reason, in addition to any other consequences of such termination provided for in this Agreement or any other agreement, notwithstanding Section 3 hereof,

Participant shall forfeit any right to cash payments that would otherwise accrue pursuant to this Agreement on or after the date of such termination.

(b) If the Participant's employment with Avatar Properties is terminated by Avatar Properties Without Cause or by the Participant for Good Reason, the Participant shall be entitled to continue to receive such cash payments as would otherwise be made pursuant to this Agreement as though the Participant's employment had not been terminated.

(c) If the Participant's employment with Avatar Properties is terminated due to the Participant's death or Disability, subject to Section 3(d) hereof:

(i) the Participant shall be entitled to receive only that portion of any cash payments otherwise payable pursuant to Section 3(c) hereof following such termination, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed whole months elapsed after the first day of the Performance Period to the date of death or Disability, as the case may be, and the denominator of which is the number of whole months from the first day of the Performance Period until the applicable Performance Goal Test Date and (y) the amount of any cash payments that would have been payable pursuant to Section 3(c) hereof if the Participant remained an employee of Avatar Properties through and including the Last Day of the Performance Period; provided, however, that with respect to cash payments pursuant to the Annual Cash Award, the Participant shall only be eligible to receive a cash payment for the fiscal year in which the Participant's employment was terminated for death or Disability, as the case may be, and the Participant shall not be eligible for any additional cash payments; and

(ii) the Participant will have no right to any other payments hereunder.

Any payments to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) pursuant to this Section 5(c) shall be made no later than the relevant Payment Date.

6. FORFEITURE UPON BREACH OF RESTRICTIVE COVENANTS. Notwithstanding anything to the contrary set forth in this Agreement, if the Participant breaches any provision relating to the Participant's covenant to keep information confidential, not to compete, not to solicit or similar restrictive covenant contained in the Participant's employment agreement or other agreement with any of the Avatar Entities (after the expiration of any notice and cure period), then in addition to any other rights or remedies arising from or relating to such breach the Participant shall forfeit any right to any cash payments pursuant to this Agreement from and after the date of such breach.

7. CLAWBACK; ADDITIONAL PAYMENTS; NO OFFSET BY PARTICIPANT; COMPANY OFFSET.

(a) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to a Cash Award such that Gross Profit is less than previously reported, the Participant shall pay to the Company upon demand by the Company following the filing of such restated financial statements with the Securities and Exchange Commission, an amount equal to the sum of (i) the excess of (A) the Excess Bonus Payments (as defined below) over (B) the hypothetical income tax liability attributable to such Excess Bonus Payments (as determined by the Committee by applying the highest marginal United States federal, state and local individual income tax rates applicable to an individual resident of Coral Gables, Florida for the relevant taxable period, taking into account the deductibility of state and local income taxes for federal income tax purposes), and (ii) as determined by the Committee, the present value of any tax benefits accruing to the Participant as a result of making any payments pursuant to this
Section 7(a) to the Company. For purposes of the preceding sentence, "Excess Bonus Payments" shall mean an amount equal to the difference between (x) the amount of the cash payment pursuant to the Cash Award paid to the Participant and (y) the amount that cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the Performance Goal Test Date.

(b) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to a Cash Award such that Gross Profit is greater than previously reported, the Company shall pay to the Participant upon demand by the Participant following the filing of such restated financial statements with the Securities and Exchange Commission, an amount equal to the difference between
(x) the amount that the cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the Performance Goal Test Date less (y) the amount of the cash payment pursuant to the Cash Award paid to the Participant.

(c) The Participant shall be obligated to pay to the Company any amount due pursuant to this Section 7 regardless of whether the Participant has or claims to have any claim against the any of the Avatar Entities, and the Participant shall have no right to offset any amount due or claimed to be due from any of the Avatar Entities. The Company shall be obligated to pay to the Participant any amount due pursuant to this Section 7 regardless of whether the Company has or claims to have any claim against the Participant, and the Company shall have no right to offset any amount due or claimed to be due from the Participant or any of its affiliates.

(d) In the event that the Participant has failed to repay any amount required pursuant to Section 7(a) above, the Company shall be entitled to offset such amount against any amounts due from the Company to the Participant.

(e) The foregoing provisions of this Section 7 shall not be applicable to any restatement, after the consummation of a Change in Control (as defined in clauses (a) and (b) of the definition of "Change in Control" above), of the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period.

8. TAXES. Any cash payment pursuant to a Cash Award shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements. The Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe.

9. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by any of the Avatar Entities, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

10. NO OBLIGATION TO PURSUE PROJECTS. This Agreement shall in no way obligate the Company to pursue any projects, developments or sales of any assets, and the Company may limit, abandon or change any projects, developments or sales of any assets at any time in its sole discretion and the Company shall have no obligation to take any action or provide any financing with respect to any projects, developments or sales of any assets.

11. UNSECURED CREDITOR STATUS; NO PARTNERSHIP. The Participant shall rely solely upon the unsecured promise of the Company, as set forth herein, for payment hereunder, and nothing herein contained shall be construed to give to or vest in the Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title, or interest, nor at any time in the future. This Agreement is an agreement to pay compensation for services provided by the Participant and is not a partnership or joint venture and is not intended to create a partnership or joint venture between the Company and the Participant or any other person. The Participant shall take no position inconsistent with this characterization.

12. ASSIGNMENT; SUCCESSORS.

(a) The Cash Awards and any interest of the Participant in any such awards may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer any such Cash Awards in contravention of this Section 12(a) is void ab initio. The Cash Awards shall not be subject to execution, attachment or other process.

(b) The Company's rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and

may inure to the benefit of any affiliate of or successor to the Company. The term "successor" shall mean, with respect to any Avatar Entity, any other corporation or other business entity which, by merger, consolidation, purchase of assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity.

(c) In the event of the Participant's death, the Participant's rights and obligations hereunder shall be binding upon and inure to the benefit of the Participant's heirs and legal representatives.

13. CONSTRUCTION. The Plans and this Agreement will be construed by and administered under the supervision of the applicable Committee in such Committee's sole and absolute discretion, and all determinations of such Committee will be final and binding on the Participant.

14. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in the Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, Coral Gables, Florida 33134, Attention: Chief Executive Officer, with a copy to the Company's Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

15. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

16. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

17. INCORPORATION OF EXECUTIVE PLAN. The Executive Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Executive Plan, as the Executive Plan may be amended from time to time.

18. ATTORNEYS' FEES. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

19. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

20. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Executive Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    --------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Jonathan Fels
    --------------------------------------
    Jonathan Fels

Exhibit 10.16

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Jonathan Fels (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated, modified or supplemented (the "Plan"), the Committee (as defined in the Plan, the "Committee") hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, an opportunity to receive 25,000 Performance Conditioned Restricted Stock Units ("Units"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This award is intended to constitute a Performance-Based Award within the meaning of the Plan.

2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to Section 4 hereof, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 25,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied is hereinafter referred to as the "Grant Date"): (i) the closing stock price of the Common Stock on its principal trading market shall have been at least $65.00 per share for twenty (20) trading days out of thirty (30) consecutive trading days or (ii) the Company consummates a transaction which results in the stockholders of the Company receiving cash, securities, or other property (or any combination thereof) having a "value" as determined by the Committee of at least $65.00 per share in either case, during the period beginning on the date immediately following the date hereof and ending on December 31, 2010 (the "Hurdle Price Condition"); provided, however, that, except as provided in Sections 4(c) and 4(d), no Units shall be granted if the Participant's employment with the Company has terminated for any reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of this Section 2(a), "value" shall mean the amount received by the stockholders of the Company taking into account the net present value of any debt, securities, future payments, contingent rights or other non-cash consideration to be paid to such stockholders.

(b) The Participant shall not possess any incidents of ownership (including, without limitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Units or the Change in Control Amount, as applicable, until such Units or the Change in Control Amount, as applicable, shall have vested and been distributed to the Participant in the form of shares of Common Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, in accordance with Sections 3 and 4 hereof.

(c) Except as provided in this Section 2(c), the Units and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units in contravention of this Section 2(c) is void ab initio. Units shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, with the written consent of the Committee, the Participant shall be permitted to transfer such Units to members of his immediate family (i.e., children, grandchildren or spouse), trusts for the benefit of such family members, and partnerships whose only partners are such family members; provided, however, that no consideration can be paid for the transfer of the Units and the transferee of the Units shall be subject to all conditions applicable to the Units (including all of the terms and conditions of this Agreement) prior to transfer.

(d) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Change in Control Amount" shall have the meaning set forth in Section 4(e) hereof.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen (15) trading days ending with and including the measuring date on which such exchange

or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

3. VESTING AND CONVERSION OF UNITS. On December 31, 2010, the Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall be converted into an equivalent number of shares of Common Stock that will be immediately distributed to the Participant; provided, however, that subject to the provisions of Section 4 hereof, no Units shall vest or be converted and distributed to the Participant unless the Participant is an employee of the Company on December 31, 2010.

Upon the distribution of the shares of Common Stock in respect of the Units, the Company shall issue to the Participant or the Participant's personal representative a stock certificate representing such shares of Common Stock, free of any restrictions, subject to Section 8 hereof.

4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.

(a) For purposes of this Section 4, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc., dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant Without Good Reason, the Participant shall forfeit all Units granted to the Participant pursuant to Section 2(a) hereof (or, in the event a Change in Control has occurred, the Change in Control Amount), if any, as of the date of termination of employment.

(c) If the Participant's employment with the Company is terminated by the Company Without Cause, or is terminated by the Participant for Good Reason,
(i)(A) all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant, and (B) any additional Units that satisfy the Hurdle Price Condition on or before December 31, 2010, if any, shall vest on the date the Hurdle Price Condition is satisfied, be converted into shares of Common Stock and be immediately distributed to the Participant, or, (ii) in the event a Change in Control has occurred, the Participant shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(d) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, the number of Units granted to the Participant pursuant to Section 2(a) hereof, if any, which equals the greater of
(i) the product of (x) a fraction the numerator of which is the number of completed whole months elapsed from January 1, 2005 to the date of death or Disability, as the case may be (whichever is sooner), and the denominator of which seventy-two (72) and (y) 25,000 or (ii) 12,500 Units, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. If the Participant's employment with the Company is terminated by Participant's death or Disability prior to the Grant Date and the Hurdle Price Condition is satisfied on or before the first Anniversary of Participant's termination for death or Disability, 12,500 Units shall be granted and shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control has occurred prior to such termination for death or Disability, the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(e) In the event of a Change in Control, all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior to the consummation of the Change in Control and, upon consummation of the Change in Control, shall be converted into such amount of cash, securities or other property (or any combination thereof) received by the stockholders of the Company in connection with the Change in Control (the "Change in Control Amount"). The Change in Control Amount shall be distributed to the Participant on or promptly following the Change in Control Date.

5. DEFERRAL. With the prior written consent of the Committee, and on such terms as the Committee may prescribe (which terms shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stock upon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and for the Company to continue to maintain such Units on its books of account.

6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, in order to prevent dilution or

enlargement of the Participant's rights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number and kind of shares that may be issued under this Agreement and make any other appropriate adjustments in the terms of the Units and this Agreement to reflect such changes or distributions.

7. TAXES. Any distribution of Common Stock pursuant to this Agreement shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. In connection with any such distribution, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with the Units granted hereunder and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

8. FORFEITURE OF UNITS AND PROFITS. At the discretion of the Committee, all or any portion of the shares of Common Stock issued to the Participant in respect of Units awarded pursuant to Section 2(a) hereof, if any, and all or any portion of the proceeds received from the sale of such shares of Common Stock (or, in the event of Change in Control, all or any portion of the Change in Control Amount) shall be subject to forfeiture in accordance with the provisions of 15 U.S.C. ss. 7243 (Section 304 of the Sarbanes-Oxley Act of 2002), or any successor statute, as if the Participant were subject to such statute; provided, however, that the provisions of this Section 8 shall no be applicable on or after a Change in Control Date.

9. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificates representing shares of Common Stock issuable pursuant to this Agreement may be postponed by the Committee for such period as may be required to comply with any applicable requirements under the federal or state securities laws, any applicable listing requirements of any national securities exchange or the NASDAQ Stock Market Inc., and any applicable requirements under any other law, rule or regulation applicable to the issuance or delivery of such shares, and the Company shall not be obligated to deliver any such shares of Common Stock to the Participant if either delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority, any national securities exchange or the NASDAQ Stock Market Inc., or the Participant shall not yet have complied fully with the provisions of Section 7 hereof.

10. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents that the Common Stock issuable pursuant to this Agreement is being acquired for investment and not for sale or with a view to distribution thereof. The Participant acknowledges and agrees that any sale or distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Participant hereby consents to such action as the Committee or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Common Stock issued pursuant to this Agreement and delivering stop transfer instructions to the Company's stock transfer agent.

11. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

12. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Participant.

13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134, Attention: Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

16. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time.

17. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

18. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    --------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Jonathan Fels
    --------------------------------------
    Jonathan Fels

Exhibit 10.17

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Jonathan Fels (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated, modified or supplemented (the "Plan"), the Committee (as defined in the Plan, the "Committee") hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, an opportunity to receive 25,000 Performance Conditioned Restricted Stock Units ("Units"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This award is intended to constitute a Performance-Based Award within the meaning of the Plan.

2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to Section 4 hereof, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 25,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied is hereinafter referred to as the "Grant Date"): (i) the closing stock price of the Common Stock on its principal trading market shall have been at least $72.50 per share for twenty (20) trading days out of thirty (30) consecutive trading days or (ii) the Company consummates a transaction which results in the stockholders of the Company receiving cash, securities, or other property (or any combination thereof) having a "value" as determined by the Committee of at least $72.50 per share in either case, during the period beginning on the date immediately following the date hereof and ending on December 31, 2010 (the "Hurdle Price Condition"); provided, however, that, except as provided in Sections 4(c) and 4(d), no Units shall be granted if the Participant's employment with the Company has terminated for any reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of this Section 2(a), "value" shall mean the amount received by the stockholders of the Company taking into account the net present value of any debt, securities, future payments, contingent rights or other non-cash consideration to be paid to such stockholders.

(b) The Participant shall not possess any incidents of ownership (including, without limitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Units or the Change in Control Amount, as applicable, until such Units or the Change in Control Amount, as applicable, shall have vested and been distributed to the Participant in the form of shares of Common Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, in accordance with Sections 3 and 4 hereof.

(c) Except as provided in this Section 2(c), the Units and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units in contravention of this Section 2(c) is void ab initio. Units shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, with the written consent of the Committee, the Participant shall be permitted to transfer such Units to members of his immediate family (i.e., children, grandchildren or spouse), trusts for the benefit of such family members, and partnerships whose only partners are such family members; provided, however, that no consideration can be paid for the transfer of the Units and the transferee of the Units shall be subject to all conditions applicable to the Units (including all of the terms and conditions of this Agreement) prior to transfer.

(d) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Change in Control Amount" shall have the meaning set forth in Section 4(e) hereof.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen (15) trading days ending with and including the measuring date on which such exchange

or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

3. VESTING AND CONVERSION OF UNITS. On December 31, 2010, the Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall be converted into an equivalent number of shares of Common Stock that will be immediately distributed to the Participant; provided, however, that subject to the provisions of Section 4 hereof, no Units shall vest or be converted and distributed to the Participant unless the Participant is an employee of the Company on December 31, 2010.

Upon the distribution of the shares of Common Stock in respect of the Units, the Company shall issue to the Participant or the Participant's personal representative a stock certificate representing such shares of Common Stock, free of any restrictions, subject to Section 8 hereof.

4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.

(a) For purposes of this Section 4, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc., dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant Without Good Reason, the Participant shall forfeit all Units granted to the Participant pursuant to Section 2(a) hereof (or, in the event a Change in Control has occurred, the Change in Control Amount), if any, as of the date of termination of employment.

(c) If the Participant's employment with the Company is terminated by the Company Without Cause, or is terminated by the Participant for Good Reason,
(i)(A) all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant, and (B) any additional Units that satisfy the Hurdle Price Condition on or before December 31, 2010, if any, shall vest on the date the Hurdle Price Condition is satisfied, be converted into shares of Common Stock and be immediately distributed to the Participant, or, (ii) in the event a Change in Control has occurred, the Participant shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(d) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, the number of Units granted to the Participant pursuant to Section 2(a) hereof, if any, which equals the greater of
(i) the product of (x) a fraction the numerator of which is the number of completed whole months elapsed from January 1, 2005 to the date of death or Disability, as the case may be (whichever is sooner), and the denominator of which seventy-two (72) and (y) 25,000 or (ii) 12,500 Units, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. If the Participant's employment with the Company is terminated by Participant's death or Disability prior to the Grant Date and the Hurdle Price Condition is satisfied on or before the first Anniversary of Participant's termination for death or Disability, 12,500 Units shall be granted and shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control has occurred prior to such termination for death or Disability, the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(e) In the event of a Change in Control, all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior to the consummation of the Change in Control and, upon consummation of the Change in Control, shall be converted into such amount of cash, securities or other property (or any combination thereof) received by the stockholders of the Company in connection with the Change in Control (the "Change in Control Amount"). The Change in Control Amount shall be distributed to the Participant on or promptly following the Change in Control Date.

5. DEFERRAL. With the prior written consent of the Committee, and on such terms as the Committee may prescribe (which terms shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stock upon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and for the Company to continue to maintain such Units on its books of account.

6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, in order to prevent dilution or

enlargement of the Participant's rights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number and kind of shares that may be issued under this Agreement and make any other appropriate adjustments in the terms of the Units and this Agreement to reflect such changes or distributions.

7. TAXES. Any distribution of Common Stock pursuant to this Agreement shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. In connection with any such distribution, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with the Units granted hereunder and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

8. FORFEITURE OF UNITS AND PROFITS. At the discretion of the Committee, all or any portion of the shares of Common Stock issued to the Participant in respect of Units awarded pursuant to Section 2(a) hereof, if any, and all or any portion of the proceeds received from the sale of such shares of Common Stock (or, in the event of Change in Control, all or any portion of the Change in Control Amount) shall be subject to forfeiture in accordance with the provisions of 15 U.S.C. ss. 7243 (Section 304 of the Sarbanes-Oxley Act of 2002), or any successor statute, as if the Participant were subject to such statute; provided, however, that the provisions of this Section 8 shall no be applicable on or after a Change in Control Date.

9. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificates representing shares of Common Stock issuable pursuant to this Agreement may be postponed by the Committee for such period as may be required to comply with any applicable requirements under the federal or state securities laws, any applicable listing requirements of any national securities exchange or the NASDAQ Stock Market Inc., and any applicable requirements under any other law, rule or regulation applicable to the issuance or delivery of such shares, and the Company shall not be obligated to deliver any such shares of Common Stock to the Participant if either delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority, any national securities exchange or the NASDAQ Stock Market Inc., or the Participant shall not yet have complied fully with the provisions of Section 7 hereof.

10. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents that the Common Stock issuable pursuant to this Agreement is being acquired for investment and not for sale or with a view to distribution thereof. The Participant acknowledges and agrees that any sale or distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Participant hereby consents to such action as the Committee or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Common Stock issued pursuant to this Agreement and delivering stop transfer instructions to the Company's stock transfer agent.

11. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

12. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Participant.

13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134, Attention: Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

16. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time.

17. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

18. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    -----------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Jonathan Fels
    -----------------------------------------
    Jonathan Fels

Exhibit 10.18

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Jonathan Fels (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated, modified or supplemented (the "Plan"), the Committee (as defined in the Plan, the "Committee") hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, an opportunity to receive 25,000 Performance Conditioned Restricted Stock Units ("Units"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This award is intended to constitute a Performance-Based Award within the meaning of the Plan.

2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to Section 4 hereof, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 25,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied is hereinafter referred to as the "Grant Date"): (i) the closing stock price of the Common Stock on its principal trading market shall have been at least $80.00 per share for twenty (20) trading days out of thirty (30) consecutive trading days or (ii) the Company consummates a transaction which results in the stockholders of the Company receiving cash, securities, or other property (or any combination thereof) having a "value" as determined by the Committee of at least $80.00 per share in either case, during the period beginning on the date immediately following the date hereof and ending on December 31, 2010 (the "Hurdle Price Condition"); provided, however, that, except as provided in Sections 4(c) and 4(d), no Units shall be granted if the Participant's employment with the Company has terminated for any reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of this Section 2(a), "value" shall mean the amount received by the stockholders of the Company taking into account the net present value of any debt, securities, future payments, contingent rights or other non-cash consideration to be paid to such stockholders.

(b) The Participant shall not possess any incidents of ownership (including, without limitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Units or the Change in Control Amount, as applicable, until such Units or the Change in Control Amount, as applicable, shall have vested and been distributed to the Participant in the form of shares of Common Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, in accordance with Sections 3 and 4 hereof.

(c) Except as provided in this Section 2(c), the Units and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units in contravention of this Section 2(c) is void ab initio. Units shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, with the written consent of the Committee, the Participant shall be permitted to transfer such Units to members of his immediate family (i.e., children, grandchildren or spouse), trusts for the benefit of such family members, and partnerships whose only partners are such family members; provided, however, that no consideration can be paid for the transfer of the Units and the transferee of the Units shall be subject to all conditions applicable to the Units (including all of the terms and conditions of this Agreement) prior to transfer.

(d) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Change in Control Amount" shall have the meaning set forth in Section 4(e) hereof.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen (15) trading days ending with and including the measuring date on which such exchange

or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

3. VESTING AND CONVERSION OF UNITS. On December 31, 2010, the Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall be converted into an equivalent number of shares of Common Stock that will be immediately distributed to the Participant; provided, however, that subject to the provisions of Section 4 hereof, no Units shall vest or be converted and distributed to the Participant unless the Participant is an employee of the Company on December 31, 2010.

Upon the distribution of the shares of Common Stock in respect of the Units, the Company shall issue to the Participant or the Participant's personal representative a stock certificate representing such shares of Common Stock, free of any restrictions, subject to Section 8 hereof.

4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.

(a) For purposes of this Section 4, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc., dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant Without Good Reason, the Participant shall forfeit all Units granted to the Participant pursuant to Section 2(a) hereof (or, in the event a Change in Control has occurred, the Change in Control Amount), if any, as of the date of termination of employment.

(c) If the Participant's employment with the Company is terminated by the Company Without Cause, or is terminated by the Participant for Good Reason,
(i)(A) all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant, and (B) any additional Units that satisfy the Hurdle Price Condition on or before December 31, 2010, if any, shall vest on the date the Hurdle Price Condition is satisfied, be converted into shares of Common Stock and be immediately distributed to the Participant, or, (ii) in the event a Change in Control has occurred, the Participant shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(d) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, the number of Units granted to the Participant pursuant to Section 2(a) hereof, if any, which equals the greater of
(i) the product of (x) a fraction the numerator of which is the number of completed whole months elapsed from January 1, 2005 to the date of death or Disability, as the case may be (whichever is sooner), and the denominator of which seventy-two (72) and (y) 25,000 or (ii) 12,500 Units, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. If the Participant's employment with the Company is terminated by Participant's death or Disability prior to the Grant Date and the Hurdle Price Condition is satisfied on or before the first Anniversary of Participant's termination for death or Disability, 12,500 Units shall be granted and shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control has occurred prior to such termination for death or Disability, the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(e) In the event of a Change in Control, all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior to the consummation of the Change in Control and, upon consummation of the Change in Control, shall be converted into such amount of cash, securities or other property (or any combination thereof) received by the stockholders of the Company in connection with the Change in Control (the "Change in Control Amount"). The Change in Control Amount shall be distributed to the Participant on or promptly following the Change in Control Date.

5. DEFERRAL. With the prior written consent of the Committee, and on such terms as the Committee may prescribe (which terms shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stock upon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and for the Company to continue to maintain such Units on its books of account.

6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, in order to prevent dilution or

enlargement of the Participant's rights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number and kind of shares that may be issued under this Agreement and make any other appropriate adjustments in the terms of the Units and this Agreement to reflect such changes or distributions.

7. TAXES. Any distribution of Common Stock pursuant to this Agreement shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. In connection with any such distribution, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with the Units granted hereunder and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

8. FORFEITURE OF UNITS AND PROFITS. At the discretion of the Committee, all or any portion of the shares of Common Stock issued to the Participant in respect of Units awarded pursuant to Section 2(a) hereof, if any, and all or any portion of the proceeds received from the sale of such shares of Common Stock (or, in the event of Change in Control, all or any portion of the Change in Control Amount) shall be subject to forfeiture in accordance with the provisions of 15 U.S.C. ss. 7243 (Section 304 of the Sarbanes-Oxley Act of 2002), or any successor statute, as if the Participant were subject to such statute; provided, however, that the provisions of this Section 8 shall no be applicable on or after a Change in Control Date.

9. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificates representing shares of Common Stock issuable pursuant to this Agreement may be postponed by the Committee for such period as may be required to comply with any applicable requirements under the federal or state securities laws, any applicable listing requirements of any national securities exchange or the NASDAQ Stock Market Inc., and any applicable requirements under any other law, rule or regulation applicable to the issuance or delivery of such shares, and the Company shall not be obligated to deliver any such shares of Common Stock to the Participant if either delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority, any national securities exchange or the NASDAQ Stock Market Inc., or the Participant shall not yet have complied fully with the provisions of Section 7 hereof.

10. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents that the Common Stock issuable pursuant to this Agreement is being acquired for investment and not for sale or with a view to distribution thereof. The Participant acknowledges and agrees that any sale or distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Participant hereby consents to such action as the Committee or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Common Stock issued pursuant to this Agreement and delivering stop transfer instructions to the Company's stock transfer agent.

11. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

12. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Participant.

13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134, Attention: Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

16. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time.

17. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

18. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    ----------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Jonathan Fels
    ----------------------------------------
    Jonathan Fels

Exhibit 10.19

May 20, 2005

Mr. Michael F. Levy
Executive Vice President and Chief Operating Officer Avatar Properties Inc.
201 Alhambra Circle
12th Floor
Coral Gables, FL 33134

Dear Mr. Levy:

This letter agreement hereby amends, restates and supersedes in its entirety the letter agreement among you (the "Employee"), Avatar Holdings Inc. ("Avatar") and Avatar Properties Inc. (the "Company"), dated as of April 15, 2005.

Reference is made to the following agreements (collectively, the "Compensation Agreements"), each dated as of April 15, 2005:

1. Amended and Restated Employment Agreement between the Employee and the Company;

2. Amended and Restated Earnings Participation Award Agreement between the Employee and Avatar;

3. Change in Control Award Agreement between the Employee and Avatar;

4. 2008-2010 Earnings Participation Award Agreement between the Employee and Avatar;

5. Restricted Stock Unit Award Agreement between the Employee and Avatar, relating to the opportunity to receive 25,000 restricted stock units of Avatar subject to a hurdle price of $65.00 per share;

6. Restricted Stock Unit Award Agreement between the Employee and Avatar, relating to the opportunity to receive 25,000 restricted stock units of Avatar subject to a hurdle price of $72.50 per share; and

7. Restricted Stock Unit Award Agreement between the Employee and Avatar, relating to the opportunity to receive 25,000 restricted stock units of Avatar subject to a hurdle price of $80.00 per share.

Notwithstanding anything in the Compensation Agreements to the contrary, the effectiveness of each of the Compensation Agreements is subject (A) to the approval by Avatar's stockholders at the 2005 Annual Meeting of Stockholders of Avatar of each of (i) the Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement) and (ii) the 2005 Executive Incentive Compensation Plan (such approval of both such plans is referred to herein as the "Stockholder Approval"), (B) to the Employee's continuous employment with the Company through and including the Effective Date (as defined in the following clause (C)), and (C) until June 30, 2005, to the effectiveness

of a registration statement to be filed by Avatar with the U.S. Securities and Exchange Commission on Form S-8 related to certain stock-based compensation awarded to the Employee pursuant to the Compensation Agreements (the earlier of June 30, 2005 and the date of such effectiveness herein being referred to as the "Effective Date"). In the case of clause (C), if the registration statement on Form S-8 is not effective on or prior to June 30, 2005 and all other conditions precedent in the preceding sentence have been satisfied, the restricted stock units awarded to the Employee in each of the Restricted Stock Unit Award Agreements referred to above will be awarded in accordance with Section 9 of such Restricted Stock Unit Award Agreements. In the event that the Stockholder Approval is not obtained on or prior to June 30, 2005, (i) each of the Compensation Agreements shall terminate automatically without any further action required by Avatar, the Company or the Employee and none of Avatar, the Company or the Employee shall have any liability with respect thereto and (ii) any agreement between Avatar or the Company, on the one hand, and the Employee, on the other hand, intended to be amended, restated and superceded by any of the Compensation Agreements shall remain in full force and effect in accordance with, and subject to, the terms and conditions set forth therein.

This letter agreement may be executed in counterparts, each of which shall constitute an original, and all of which when taken together shall constitute one and the same.

(signature page follows)

Please evidence your agreement with the foregoing by executing a copy of this letter agreement and returning it to Avatar.

Very truly yours,

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    ------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer

AVATAR PROPERTIES INC.

By: /s/ Gerald D. Kelfer
    ------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer

Acknowledged and agreed to
as of the date first written above:

/s/ Michael F. Levy
-------------------------------
Michael F. Levy

Exhibit 10.20

2005 AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This 2005 AMENDED AND RESTATED EMPLOYMENT AGREEMENT (including any schedule or annex hereto, this "Agreement") is made as of April 15, 2005, by and between Avatar Properties Inc., a Florida corporation (the "Company"), and Michael F. Levy (the "Employee"), and amends and restates in its entirety, the amended and restated employment agreement dated as of March 6, 2003 between the Company and the Employee (the "Original Agreement").

W I T N E S S E T H

WHEREAS, the Employee is currently employed as Chief Operating Officer and Executive Vice President of the Company pursuant to the Original Agreement; and

WHEREAS, the Company and the Employee wish to provide for certain modifications to the Original Agreement and wish to amend, restate and supersede the Original Agreement, all upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1. Employment and Term. The Company hereby employs the Employee, and the Employee hereby accepts employment by the Company, in the capacity and upon the terms and conditions set forth herein. The term of employment under this Agreement shall be for the period commencing as of January 1, 2005 and ending on December 31, 2010, unless extended pursuant to Section 5(a)(viii) or earlier terminated as herein provided (the "Term of Employment"; provided, that, for purposes of Sections 4, 6(h) and 8(a) hereof, the Term of Employment shall also include the period beginning on January 1, 2003 and ending on December 31, 2004). The last day of the Employee's Term of Employment shall be referred to in this Agreement as the "Date of Termination." With respect to any date referred to herein, the term "Anniversary" shall mean the annual recurrence of such date.

2. Duties. During the Term of Employment, the Employee shall serve as the Company's Chief Operating Officer and Executive Vice President, and shall perform such duties, functions and responsibilities as are customarily associated with and incident to the position of Chief Operating Officer and Executive Vice President and as the Company may, from time to time, require of him, including, but not limited to, the performance of such functions and duties for the Company, Avatar Holdings Inc., a Delaware corporation and the parent corporation of the Company ("Avatar"), or any of their subsidiaries or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity") as the Company may require, subject to the direction of the Company's Board of Directors. The Employee shall serve the Company faithfully, conscientiously and to the best of the Employee's ability and shall promote the interests and reputation of the Company. Unless prevented by sickness or disability, the Employee shall devote all of his time, attention, knowledge, energy and skills, during normal working hours, and at

such other times as the Employee's duties may reasonably require, to the duties of the Employee's employment. The principal place of employment of the Employee shall be the current principal executive offices of the Company and/or such other location within fifty (50) miles of Company's current principal place of business as shall be necessary for the Employee to discharge his duties hereunder. The Employee acknowledges that in the course of his employment he may be required, from time to time, to travel on behalf of the Company; provided, however, that the Employee shall not be required to spend more than 25% of his business time (determined on an annual basis) on overnight travel.

3. Compensation and Benefits. As full and complete compensation for the Employee's execution and delivery of this Agreement and performance of any services hereunder, the Company shall pay, grant or provide the Employee, and the Employee agrees to accept, the following compensation and benefits:

(a) Base Salary. Except as provided in Section 6(f)(ii) hereof, the Company shall pay the Employee a base salary ("Base Salary") at an annual rate of $500,000 payable at such times and in accordance with the standard payroll practices of the Company. On an annual basis or at such other times as the Company may determine, the Employee's Base Salary shall be reviewed, and in the sole discretion of the Board of Directors of the Company, the Company may increase (but not decrease) the Employee's Base Salary.

(b) Annual Bonus. Except as provided in Section 6(f)(ii) hereof, (i) during the Term of Employment, the Company shall pay the Employee, and the Employee shall accept from the Company for the Employee's services, in addition to the Employee's Base Salary, a calendar year annual cash bonus of $400,000 ("Annual Bonus"), and (ii) such Annual Bonus shall be payable in accordance with the Company's policy with respect to the compensation of executives, but no later than thirty (30) days after the end of each calendar year in respect of which the Annual Bonus is earned.

(c) Employee Benefits. The Company shall afford the Employee the opportunity to participate during the Term of Employment in any medical, dental, disability insurance, retirement, savings and any other employee benefits plans or programs (including perquisites) which Avatar maintains for senior executives of the Avatar Entities. Nothing in this Agreement shall require any Avatar Entity to establish, maintain or continue any benefit programs already in existence or hereafter adopted for senior executives of the Avatar Entities, and nothing in this Agreement shall restrict the right of the Avatar Entities to amend, modify or terminate any such benefit program.

(d) Expenses. The Employee shall be entitled to reimbursement or payment of reasonable business expenses (in accordance with Avatar's policies for its senior executives, as the same may be amended from time to time in Avatar's sole discretion), following the Employee's submission of appropriate receipts and/or vouchers to the Company.

(e) Vacations, Holidays or Temporary Leave. The Employee shall be entitled to take such amount of vacation per year as is permitted pursuant to and in accordance with the policies of Avatar for its senior executives (as such policies may be amended from time to time or terminated in Avatar's sole discretion), without loss or diminution of compensation. Such vacation shall be taken at such time or times, and as a whole or in increments, as the Employee shall elect, consistent with the reasonable needs of the Company's business. The Employee shall further be entitled to the number of paid holidays, and leaves for illness or temporary disability in accordance with the policies of Avatar for its senior executives (as such policies may be amended from time to time or terminated in Avatar's sole discretion).

4. Non-Competition and Protection of Confidential Information:

(a) Restrictive Covenants.

(i) During the Term of Employment and for one year following the Date of Termination, the Employee shall not directly or indirectly engage, participate, own or make any financial investments in, or become employed by or render (whether or not for compensation) any consulting, advisory or other services to or for the benefit of, any person, firm or corporation, that directly or indirectly, engages primarily in, the development of adult retirement communities and/or active adult communities; provided, however, that it shall not be a violation of this Agreement for the Employee (i) to have beneficial ownership of less than 1% of the outstanding amount of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or quoted on an inter-dealer quotation system or
(ii) to have beneficial ownership of less than 20% of the outstanding amount of any class of securities of any enterprise (but without otherwise participating in the activities or otherwise having influence or control of such enterprise) if such securities are not registered under Section 12 of the Exchange Act or quoted on an inter-dealer quotation system.

(ii) During the Term of Employment and for one year following the Date of Termination, the Employee shall not, directly or indirectly, (A) solicit, in competition with the Avatar Entities, any person who is a customer of any business conducted by any of the Avatar Entities or (B) in any manner whatsoever induce, or assist others to induce, any supplier or contractor of any of the Avatar Entities to terminate its association with any such entity or do anything, directly or indirectly, to interfere with the business relationship between the Avatar Entities and any of their respective current or prospective suppliers or contractors.

(iii) During the Term of Employment and for one year following the Date of Termination, the Employee shall not, directly or indirectly, solicit or induce any employee of any of the Avatar Entities to terminate his or her employment for any purpose, including without limitation, in order to enter into employment with any entity which competes with any business conducted by any of the Avatar Entities.

(iv) The Employee recognizes and acknowledges that certain confidential and proprietary business and technical information used by the Employee in connection with the conduct of the business of the Avatar Entities which relates to the business practices, methods, processes or other confidential or secret aspects of the business of the Avatar Entities, is a valuable, special and unique asset of the Company, such information collectively being referred to as the "Confidential Information." During the Term of Employment and for all time following the Date of Termination, the Employee shall not, directly or indirectly, furnish or make accessible to any person, firm, or corporation or other business entity, whether or not he, she, or it competes with the business of the Company, any Confidential Information without the prior written consent from the Company.

(v) Confidential Information shall not include any information or documents that (A) are or become publicly available without breach by the Employee of Section 4(a)(iv) hereof, (B) the Employee receives from any third party who, to the best of the Employee's knowledge upon reasonable inquiry, is not in breach of an obligation of confidence with any of the Avatar Entities, or (C) is required to be disclosed by law, statute, governmental or judicial proceeding; provided, however, that in the event the Employee is requested by any governmental or judicial authority to disclose any Confidential Information, the Employee shall give the Company and Avatar prompt notice of such request such that the Company and Avatar may seek a protective order or other appropriate relief, and in any such proceeding the Employee shall disclose only so much of the Confidential Information as is required to be disclosed.

(vi) Notwithstanding the foregoing, the Employee acknowledges that during the Term of Employment and for all time following the Date of Termination, the Employee shall not, and shall not cause or permit any of its affiliates to, use the name "Brookman-Fels" (or any derivative thereof) except as expressly permitted by those certain License Agreements, each dated as of December 4, 1997, by and between Brookman-Fels Jeff Ian, Inc., as licensor and the companies listed on Schedule I hereto, each as a licensee, or except as otherwise permitted in writing by Avatar.

(b) Geographic Scope. The provisions of this Section 4 (other than Sections 4(a)(ii), (iii), (iv), (v), and (vi), which shall be in full force and effect without regard to the geographic limitations set forth in this Section
4(b)) shall be in full force and effect within a 100-mile radius of any site at which any of the Avatar Entities is preparing to develop, has commenced development of, or has a binding commitment or option to purchase, real estate.

(c) Remedies. The Employee acknowledges that his services are of a special, unique and extraordinary character and, his position with the Avatar Entities places him in a substantial relationship and a position of confidence and trust with specific prospective or existing customers, suppliers and employees of the Avatar Entities, and that in connection with his services to the Avatar Entities, the Employee will have access to confidential business or professional information vital to the businesses of the Avatar Entities. The Employee further acknowledges that in view of the nature of the business in which the Avatar Entities are engaged, the foregoing restrictive covenants in

this Section 4 are reasonable and necessary in order to protect the legitimate business interests of the Avatar Entities and that violation thereof would result in irreparable injury to the Avatar Entities. Accordingly, the Employee consents and agrees that if the Employee violates or threatens to violate any of the provisions of this Section 4 the Avatar Entities would sustain irreparable harm and, therefore, any of the Avatar Entities shall be entitled to obtain from any court of competent jurisdiction, temporary, preliminary and/or permanent injunctive relief as well as damages, attorneys' fees and costs, and an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies in law or equity to which any of the Avatar Entities may be entitled.

5. Termination of Employment:

(a) The Employee's employment with the Company shall terminate upon the occurrence of any of the following events:

(i) on December 31, 2010 (absent a Change in Control (as defined below) and absent the parties having entered into a written agreement for the renewal or extension of this Agreement);

(ii) the death of the Employee during the Term of Employment;

(iii) at any time upon written notice to the Employee from the Company of termination of his employment due to Disability (as defined below) of the Employee during the Term of Employment;

(iv) at any time upon written notice to the Employee from the Company of termination of his employment for Cause (as defined below);

(v) at any time upon written notice to the Employee from the Company of termination of his employment Without Cause (as defined below);

(vi) the resignation by the Employee for Good Reason (as defined below) during the Term of Employment;

(vii) the resignation by the Employee Without Good Reason (as defined below) during the Term of Employment; or

(viii) in the event of a Change in Control (as defined below), on the date (the "Retention Date") that is the earlier of (A) the first Anniversary of the Change in Control Date (as defined below) and (B) June 30, 2011; provided, that the Change in Control Date shall be on or prior to December 31, 2010. If the Retention Date shall occur after December 31, 2010, the Term of Employment shall be extended through and until such Retention Date, unless otherwise terminated in accordance with this Agreement. The period beginning on the Change in Control Date and ending on the Retention Date is referred to herein as the "Retention Period".

(b) For purposes of this Agreement, the "Disability" of the Employee shall mean the Employee's inability, because of mental or physical illness or incapacity, whether total or partial, to perform one or more material functions of the Employee's employment under this Agreement with or without reasonable accommodation and which entitles the Employee to receive benefits under a disability plan or program that is provided to the Employee pursuant to Section
3(c), if any.

(c) For purposes of this Agreement, the term "Cause" shall mean the Employee's (i) conviction or entry of a plea of guilty or nolo contendere, with respect to any felony, in each case that the Board of Directors of Avatar determines in good faith is or may become materially harmful to any Avatar Entity (either financially or with respect to such Avatar Entity's business reputation), (ii) commission of any act of willful misconduct, gross negligence, fraud or dishonesty, in each case that the Board of Directors of Avatar determines in good faith is or may become materially harmful to any Avatar Entity (either financially or with respect to such Avatar Entity's business reputation) or (iii) violation of any material term of this Agreement or any material written policy of the Company or Avatar; provided, that the Company first deliver written notice of such violation to the Employee and the Employee shall not have cured such violation within thirty (30) days after receipt of such written notice (the "Cure Period"); and provided further, that if upon expiration of the Cure Period such violation has not been cured and the Company determines, in its sole discretion, that the Employee is using his best efforts to cure such violation and such violation is capable of being cured, the Company shall provide the Employee, pursuant to a written notice, a reasonable amount of additional time (the "Extended Cure Period") to cure such violation but in no event shall such Extended Cure Period exceed forty-five (45) days from the date on which the initial Cure Period expired.

(d) For purposes of this Agreement, "Without Cause" shall mean any reason other than the reasons described in Sections 5(a)(i), 5(a)(ii),
5(a)(iii), 5(a)(iv) and 5(a)(viii) hereof. The parties expressly agree that a termination of employment Without Cause pursuant to Section 5(a)(v) hereof may be for any reason whatsoever, or for no reason, in the sole discretion of the Company.

(e) For purposes of this Agreement, "Good Reason" shall mean (i) any assignment of material duties to the Employee other than those contemplated by this Agreement, provided that the Company shall have thirty (30) days after receipt of written notice by the Employee to cure or (ii) a reduction in the rate of compensation, or a material reduction in fringe benefits (other than a material reduction in fringe benefits generally applicable to senior executives of Avatar) or any other material failure by the Company to perform its material obligations, provided that the Company shall have thirty (30) days after receipt of written notice by the Employee to cure. Employee acknowledges and agrees that a Change in Control (as defined below) may require adjustment to Employee's existing duties; however, such adjustment shall not constitute "Good Reason" provided that such adjusted duties are comparable to Employee's duties prior to such Change in Control.

(f) For purposes of this Agreement, "Without Good Reason" shall mean any reason other than that defined in this Agreement as constituting Good Reason.

(g) For purposes of this Agreement, "Change in Control" shall mean any of the following events: (a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of Avatar representing ninety percent (90%) or more of the combined voting power of the issued and outstanding common stock of Avatar;
(b) the Board of Directors of Avatar approves any merger, consolidation or like business combination or reorganization of Avatar, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) Avatar ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause (c), is herein referred to as the "Change in Control Date."

(h) For purposes of this Agreement, "Administrator" and "Retention Account" shall have the respective meanings ascribed to such terms in the Retention Account Procedures.

(i) For purposes of this Agreement, "Retention Account Procedures" shall mean the procedures set forth in the Annex hereto.

6. Payments Upon Termination of Employment.

(a) Termination upon Expiration of Term of Employment. If the Employee's employment hereunder is terminated pursuant to Section 5(a)(i), the Company shall pay or provide to the Employee (i) all Base Salary and Annual Bonus payments pursuant to Sections 3(a) and 3(b) hereof, respectively, and any vacation pay pursuant to Section 3(e) hereof, in each case which has been earned but has not been paid as of the Date of Termination and (ii) any benefits to which the Employee may be entitled under any employee benefits plan or program pursuant to Section 3(c) hereof in which he is a participant in accordance with the terms of such plan or program up to and including the Date of Termination.

(b) Death or Disability.

(i) Subject to Section 6(b)(ii) below, if the Employee's employment hereunder is terminated due to the Employee's death or Disability pursuant to Sections 5(a)(ii) or (iii) hereof and a Change in Control Date shall not have occurred prior to such termination, the Company shall pay or provide to the Employee, his designated beneficiary or to his estate (i) all Base Salary pursuant to Section 3(a) hereof and any vacation pay pursuant to Section 3(e) hereof, in each case which has been earned but has not been paid as of the Date of Termination (ii) a prorated Annual Bonus as of Employee's termination due to death or Disability and (iii) any benefits to which the Employee may be entitled under any employee benefits plan or program pursuant to Section 3(c) hereof in which he is a

participant in accordance with the terms of such plan or program up to and including the Date of Termination. Should the Company wish to purchase insurance to cover the costs associated with the Employee's termination of employment pursuant to Sections 5(a)(ii) or (iii), the Employee agrees to execute any and all necessary documents necessary to effectuate such insurance.

(ii) If the Employee's employment hereunder is terminated due to the Employee's death or Disability pursuant to Sections 5(a)(ii) or (iii) hereof and a Change in Control Date shall have occurred prior to such termination, (A) the Administrator shall disburse to the Employee, his designated beneficiary or to his estate a pro rata portion of the Retention Amount as of the Date of Termination equal to the Retention Amount multiplied by a fraction
(x) the numerator of which is the number of days elapsed in the Retention Period as of the Date of Termination and (y) the denominator of which is the total number of days in the Retention Period and (B) the remaining balance of the Retention Amount shall be disbursed by the Administrator as a donation to one or more charitable, not-for-profit organizations designated by the Board of Directors of Avatar, in its sole discretion, in each case subject to and in accordance with the Retention Account Procedures.

(c) Termination for Cause or Resignation Without Good Reason. If the Employee's employment hereunder is terminated pursuant to Section 5(a)(iv) or
Section 5(a)(vii), the Company shall pay or provide to the Employee (i) all Base Salary pursuant to Section 3(a) hereof and any vacation pay pursuant to Section 3(e) hereof, in each case which has been earned but has not been paid as of the Date of Termination and (ii) any benefits to which the Employee may be entitled under any employee benefits plan or program pursuant to Section 3(c) hereof in which he is a participant in accordance with the terms of such plan or program up to and including the Date of Termination, in each case subject to set-off, counterclaim, recoupment, defense or any other claim, right or cause of action which the Company may have against the Employee or others. Notwithstanding the foregoing, if a Change in Control Date has occurred and the Employee's employment hereunder is terminated pursuant to Section 5(a)(iv) or Section 5(a)(vii) during the Retention Period, Employee shall not be entitled to receive any portion of the Retention Amount and the entire balance of the Retention Amount shall be disbursed by the Administrator as a donation to one or more charitable, not-for-profit organizations designated by the Board of Directors of Avatar, in its sole discretion, subject to and in accordance with the Retention Account Procedures.

(d) Termination Without Cause or Resignation For Good Reason. If the Employee's employment hereunder is terminated by the Company Without Cause pursuant to Section 5(a)(v), or due to the Employee's resignation for Good Reason pursuant to Section 5(a)(vi), then:

(i) The Company shall continue to pay the Employee his full Base Salary and Annual Bonus in accordance with normal payroll practices and without interest through the earlier of (A) December 31, 2010 and (B) the second Anniversary of the Date of Termination, at the rate in effect at the time notice of the termination of the Employee's employment is given in accordance with Section 5(a)(v) or
Section 5(a)(vi) hereof, as the case may be; provided, however, that

if a Change of Control Date shall have occurred prior to Employee's termination Without Cause or resignation for Good Reason, the Administrator shall disburse the Retention Amount (as defined in
Section 6(f) hereof) to the Employee on or promptly following the Date of Termination, subject to and in accordance with the Retention Account Procedures; and

(ii) The Employee shall be entitled to participate in all employee benefit plans and programs to the extent applicable to other senior executives of Avatar and the Company (provided that the Employee's continued participation is permissible under the general terms and provisions of such plans and programs) through the earlier of (A) December 31, 2010 and (B) the second Anniversary of the Date of Termination; provided, however, that if a Change of Control shall have been consummated prior to Employee's termination Without Cause or resignation for Good Reason, the Employee shall be entitled to participate in such benefit plans and programs through the Retention Date. In the event that the Employee's participation in any such plan or program is not permitted, the Employee shall be entitled to receive an amount equal to the annual contributions, payments, credits or allocations made by the Company to the Employee's account or on the Employee's behalf under such plans and programs.

(e) Duty to Seek Other Employment. If the Employee's employment hereunder is terminated by the Company Without Cause pursuant to Section
5(a)(v), or due to the Employee's resignation for Good Reason pursuant to
Section 5(a)(vi), the Employee agrees, during the entire period of time that the Employee is entitled to receive any benefits pursuant to Section 6(d) above, to make known the Employee's availability for employment involving services of a nature substantially similar and of a comparable stature to those performed by the Employee on behalf of the Company in a manner customary for executives holding positions substantially similar and of a comparable stature to the Employee's position with the Company; provided, however, that, subject to
Section 4 hereof, the Employee shall only be obligated to accept such employment if the principal office where the Employee will be employed is located within a fifty (50) mile radius of Coral Gables, Florida. The Employee agrees to keep the Chairman of the Board of Avatar (or his designee) apprised of the Employee's employment status during such period and, if requested, the Employee will provide appropriate supporting documentation with respect to the salary, bonuses or other compensation earned by and benefits made available to the Employee in respect of such employment. In the event the Employee secures employment as described in this Section 6(e), the Company shall be entitled to (i) deduct from the amounts payable to the Employee pursuant to Sections 6(c)(i) and 6(c)(ii) above (excluding any accrued but unpaid Annual Bonus through the date of termination) any salary, bonuses or other compensation paid to the Employee in connection with such employment and (ii) terminate the Employee's participation in (and shall not be required to pay the Employee any sums in respect of) any employee benefit plans and programs described in Section 6(d)(ii) that are substantially similar to any employee benefit plans and programs in which the Employee participates in connection with such new or existing employment. The Employee agrees promptly to repay to the Company any amounts paid to the Employee by the Company pursuant to Sections 6(d)(i) and 6(d)(ii) which the Company was entitled to deduct from such amounts pursuant to this Section 6(e).

(f) Change in Control; Termination Upon the Retention Date. In the event of a Change in Control during the Term of Employment:

(i) The Company shall pay or provide to the Employee (i) all Base Salary payments and a prorated Annual Bonus pursuant to Sections 3(a) and 3(b) hereof, respectively, and any vacation pay pursuant to Section 3(e) hereof, in each case which has been earned but has not been paid as of the Date of Termination and (ii) any benefits to which the Employee may be entitled under any employee benefits plan or program pursuant to Section 3(c) hereof in which he is a participant in accordance with the terms of such plan or program up to and including the Change in Control Date.

(ii) Base Salary and Annual Bonus payments otherwise payable to the Employee during the Retention Period pursuant to Sections 3(a) and 3(b) hereunder, respectively, shall be subject to the Retention Account Procedures and the conditions set forth in this
Section 6(f)(ii). On the Change in Control Date, the Employee shall cease to receive Base Salary and Annual Bonus payments, and the Company shall deposit into the Retention Account an amount (the "Retention Amount") equal to (A) $1,800,000, if the Change in Control Date shall occur before June 30, 2010 or (B) if the Change in Control Date shall occur on or after June 30, 2010, the product of $1,800,000 multiplied by a fraction (x) the numerator of which is the number of days after the Change in Control Date through and including the Retention Date and (y) the denominator of which is 365. If the Employee's employment has not been otherwise terminated in accordance with this Agreement (except pursuant to Sections 5(a)(v) or 5(a)(vi)) and the Employee is continuously employed by the Company through the Retention Period such that the Employee's employment terminates upon the Retention Date pursuant to Section 5(a)(viii) hereof, the Administrator shall distribute the Retention Amount to the Employee on or promptly following the Retention Date, subject to and in accordance with the Retention Account Procedures.

(g) No Other Payments. Except as provided in this Section 6 and except as may otherwise be provided pursuant to any written incentive award agreement between the Employee and any Avatar Entity, the Employee shall not be entitled to receive any other payments or benefits from the Company due to the termination of his employment, including but not limited to, any employee benefits under any of the Company's or Avatar's employee benefits plans or programs (other than at the Employee's expense under the Consolidated Omnibus Budget Reconciliation Act of 1985 or pursuant to the terms of any pension plan which the Company or Avatar may have in effect from time to time) or any right to be paid severance pay. If the Employee is entitled to any notice or payment in lieu of any notice of termination required by Federal, State or local law, including but not limited to the Worker Adjustment and Retraining Notification Act, the Company's obligation to make payments pursuant to Section 6(d) shall be reduced by the amount of any such payment in lieu of notice.

(h) Conditions to Payments upon Termination of Employment. Notwithstanding anything to the contrary contained in this Agreement, all payments and benefits to the Employee provided pursuant to this Section 6 shall be subject to the Employee's compliance with Section 4.

7. Employment after the Employment Term. No later than January 2, 2009, the Company shall enter into negotiations, in good faith, with the Employee regarding the continued employment of the Employee with the Company after the Term of Employment.

8. No Conflicting Agreements; Indemnification.

(a) The Employee hereby represents and warrants that he is not a party to any agreement, or non-competition or other covenant or restriction contained in any agreement, commitment, arrangement or understanding (whether oral or written), which would in any way conflict with or limit his ability to commence work on the first day of the Term of Employment or would otherwise limit his ability to perform all responsibilities in accordance with the terms and subject to the conditions of this Agreement.

(b) The Employee agrees that the compensation provided in Section 3 represents the sole compensation to be paid to the Employee in respect of the services performed or to be performed for the Avatar Entities by the Employee (other than any incentive compensation paid or to be paid to the Employee pursuant to any written incentive award agreement between the Employee and any Avatar Entity). The Employee further agrees that should there be a determination that for federal, state, local and/or other tax purposes, the Employee's compensation for services performed for any of the Avatar Entities is greater than the amounts payable hereunder, the Employee will indemnify and hold harmless the Avatar Entities against any and all liabilities, losses, and expenses including, but not limited to, any additional taxes, penalties and interest, and attorneys' and accountants' fees arising out of, resulting from or relating to such determination.

9. Deductions and Withholding. The Employee agrees that the Company shall withhold from any and all compensation required to be paid to the Employee pursuant to this Agreement all federal, state, local and/or other taxes which the Company determines are required to be withheld in accordance with applicable statutes and/or regulations from time to time in effect and all amounts required to be deducted in respect of the Employee's coverage under applicable employee benefit plans.

10. Entire Agreement. This Agreement, the letter agreement, dated as of the date hereof, among the Company, Avatar and the Employee, and for purposes of the definition of "Retention Amount," the 2008-2010 Earnings Participation Award Agreement, dated as of the date hereof, between Avatar and the Employee, embody the entire agreement of the parties with respect to the Employee's employment and supersedes any other prior oral or written agreements between the Employee and any Avatar Entity. This Agreement may not be modified or terminated orally but only by an agreement in writing signed by the parties hereto.

11. Waiver. The waiver by the Company of a breach of any provision of this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach by the Employee. The waiver by the Employee of a breach of

any provision of this Agreement by the Company shall not operate or be construed as a waiver of any subsequent breach by the Company.

12. Governing Law. This Agreement shall be subject to, and governed by, the laws of the State of Florida applicable to contracts made and to be performed in the State of Florida, regardless of where the Employee is in fact required to work.

13. Jurisdiction. Any legal suit, action or proceeding against any party hereto arising out of or relating to this Agreement (including the Retention Account Procedures) shall be instituted in a federal or state court in Dade County or Broward County in the State of Florida and each party hereto waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding and each party hereto irrevocably submits to the jurisdiction of any such court in any suit, action or proceeding.

14. Assignability. The obligations of the Employee may not be delegated and, except as expressly provided in Section 6(b) relating to the designation of beneficiaries, the Employee may not, without the Company's written consent thereto, assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any interest therein. Any such attempted delegation or disposition shall be null and void and without effect. The Company and the Employee agree that this Agreement and all of the Company's rights and obligations hereunder may be assigned or transferred by the Company to, and may be assumed by and become binding upon and may inure to the benefit of, any Avatar Entity or successor thereof. The term "successor" shall mean, with respect to any Avatar Entity, and any other corporation or other business entity which, by merger, consolidation, purchase of the assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity. Except as expressly provided in Section 6(f) hereof, any assignment by the Company of its rights and obligations hereunder to any affiliate of or successor shall not be considered a termination of employment for purposes of this Agreement.

15. Severability. If any provision of this Agreement as applied to either party or to any circumstances shall be adjudged by a court of competent jurisdiction to be void or unenforceable, the same shall in no way affect any other provision of this Agreement or the validity or enforceability of this Agreement. If any court construes any of the provisions of Section 4 hereof, or any part thereof, to be unreasonable because of the duration of such provision or the geographic or other scope thereof, such court may reduce the duration or restrict the geographic or other scope of such provision and enforce such provision as so reduced or restricted.

16. Notices. All notices to the Employee hereunder shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, to:

Michael F. Levy c/o Avatar Properties Inc. 12th Floor 201 Alhambra Circle Coral Gables, Florida 33134

with a copy to:

Kluger, Peretz, Kaplan & Berlin, P.L.

201 South Biscayne Blvd.
Suite 1700
Miami, FL 33131
Attention: Eliot Abbott, Esq.
Facsimile: (305) 379-3428

All notices to the Company hereunder shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, to:

Avatar Properties Inc. 12th Floor 201 Alhambra Circle Coral Gables, Florida 33134 Attention: Chairman of the Board Facsimile: (305) 441-7876

with a copy to:

Avatar Properties Inc. 201 Alhambra Circle 12th Floor Coral Gables, Florida 33134 Attention: General Counsel Facsimile: (305) 441-9927

with a copy to:

Avatar Holdings Inc. 201 Alhambra Circle 12th Floor Coral Gables, Florida 33134 Attention: Chairman of the Board Facsimile: (305) 448-7876

and with a copy to:

Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Attention: R. Todd Lang, Esq.

Facsimile: (212) 310-8007

Either party may change the address to which notices shall be sent by sending written notice of such change of address to the other party.

17. Separate Independent Agreements. Notwithstanding anything to the contrary contained in this Agreement, the terms of this Agreement shall not amend, supersede or alter in any way the terms of any other written agreement (other than the letter agreement, dated as of the date hereof, among Avatar, the Company and the Employee) between the Employee, on the one hand, and the Company or Avatar, on the other hand, except as expressly set forth in such other agreement.

18. Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument.

20. Attorneys' Fees. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

21. Neutral Construction. Each party to this Agreement was represented by counsel, or had the opportunity to consult with counsel. No party may rely on any drafts of this Agreement in any interpretation of the Agreement. Each party to this Agreement has reviewed this Agreement and has participated in its drafting and, accordingly, no party shall attempt to invoke the normal rule of construction to the effect that ambiguities are to be resolved against the drafting party in any interpretation of this Agreement.

(signature page follows)

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

AVATAR PROPERTIES INC.

By: /s/ Gerald D. Kelfer
    -------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Michael F. Levy
    -------------------------------------
    Michael F. Levy

ANNEX

Retention Account Procedures

Capitalized terms used but not otherwise defined in this Annex shall have the meanings ascribed to such terms in the Amended and Restated Employment Agreement between Avatar Properties Inc. and Michael F. Levy, dated as of April 15, 2005 (the "Agreement").

In the event of a Change in Control, the Retention Amount to which the Employee may be entitled pursuant to (i) the Agreement and (ii) the 2008-2010 Earnings Participation Award Agreement between the Employee and Avatar, dated as of April 15, 2005 (collectively, the "Applicable Agreements"), are subject to the Retention Account Procedures as further described in this Annex.

1. Administrator. These Retention Account Procedures shall be administered by such person or entity as is designated by the Board of Directors of Avatar (the "Board") on or prior to the Change in Control Date (the "Administrator"); provided, that such Administrator shall be (i) a member of the Board as of the date of the Agreement who is "independent" as defined in the listing standards of The NASDAQ Stock Market, Inc. or (ii) a bank, trust company or similar custodial institution that is free from conflicts of interest with the Avatar Entities and the Employee.

2. Retention Account.

(a) Upon a Change in Control, the Retention Amount shall be deposited into a separate account under the exclusive control of the Administrator (the "Retention Account").

(b) Any cash to be deposited into the Retention Account may be held in an interest-bearing bank account, invested by the Administrator in short-term U.S. government securities or other short-term investments to be determined by the Administrator in its sole discretion. Any income derived from such deposits or investments shall be deposited in the Retention Account and shall be distributed in accordance with these Retention Account Procedures.

(c) If (i) the Employee is continuously employed by any of the Avatar Entities through the Retention Period until the Retention Date, then on or promptly following the Retention Date, the Administrator shall distribute the Retention Amount to the Employee, or (ii) the Employee's employment is terminated for any reason prior to the Retention Date, subject to paragraph (d) below, Avatar (or its successor) and the Employee shall notify the Administrator, in a writing signed by the Employee and Chairman of the Board of Avatar (or its successor) (the "Joint Notice"), of the agreement between Avatar and the Employee directing the Administrator to disburse the Retention Amount pursuant to the Applicable Agreements.

(d) The Administrator shall have no right to make an independent determination as to the circumstances in which the Employee's employment was terminated or as to its duty to disburse monies or other property from the Retention Account. If, at any time, there shall exist any dispute between Avatar (or its successor) and the Employee as to the employment status of the Employee, the circumstances in which such employment was terminated or the holding or disposition of monies and/or property from the Retention Account, the Administrator may (i) refrain from disbursing any monies and/or property from the Retention Account until (x) the rights of Avatar (and any successor) and the Employee (or Employee's heirs, executors or administrators) with respect to such monies and/or property shall have been fully and finally adjudicated by a non-appealable final order, decree or judgment of a court of competent jurisdiction or (y) all such disputes shall have been resolved and the Administrator shall have received a Joint Notice to that effect or (ii) deposit the monies and/or property held in the Retention Account in the registry of a court of competent jurisdiction pending full and final adjudication pursuant to the rules of procedure governing practice in such court.

3. Administration of the Retention Account by the Administrator.

(a) Prior to the Change in Control Date, the Board shall establish a cash reserve fund in an amount to be available to the Administrator for any and all of its expenses or costs incurred in connection with these Retention Account Procedures. All expenses and costs shall be paid out of the reserve fund, and to the extent that the amount in the reserve fund is insufficient to cover such expenses and costs, Avatar (or its successor) shall promptly make the requisite payment to cover such expenses and costs.

(b) The Administrator shall have the right to engage counsel and otherwise seek advice with respect to these Retention Account Procedures and the obligations of the Administrator hereunder.

(c) The Administrator shall have no obligation or liability to the Employee or Avatar (or its successor) except for acts or omissions not in good faith. Avatar (and its successor) shall indemnify the Administrator and hold the Administrator harmless against any liability arising out of these Retention Account Procedures except in the case of acts or omissions not in good faith.

(d) Avatar and the Employee agree to execute such agreements, documents or certificates as are reasonably necessary or advisable in order to effect these Retention Account Procedures.

SCHEDULE I

Existing Brookman-Fels Projects and Licensees

1. Brookman-Fels at Harbor Islands, Inc.
2. Brookman-Fels Organization, Inc.
3. Brookman-Fels and Associates, Inc.
4. Brookman-Fels at Treasure Trove, Inc.
5. Brookman-Fels at Country Club Estates, Inc.
6. Brookman and Fels at the Sanctuary, Inc.
7. Brookman-Fels of South Florida, Inc.
8. Brookman-Fels Custom Builders, Inc.
9. Brookman-Fels Home and Design, Inc.
10. Brookman-Fels Management Corporation
11. Brookman-Fels at Presidential Estates, Inc.
12. Brookman-Fels Construction Corp.
13. Brookman-Fels Builders, Inc.
14. Sunset Point at Silver Lakes, Ltd. (d/b/a Brookman-Fels - Zuckerman Group)
15. Parkland Communities, Inc. (d/b/a Brookman-Fels - Zuckerman Group)

Exhibit 10.21

AMENDED AND RESTATED EARNINGS
PARTICIPATION AWARD AGREEMENT

THIS AMENDED AND RESTATED EARNINGS PARTICIPATION AWARD AGREEMENT, dated April 15, 2005 (the "Agreement"), is made by and between Avatar Holdings Inc., a Delaware corporation (the "Company"), and Michael F. Levy (the "Participant") and amends and restates in its entirety the Earnings Participation Award Agreement (the "Original Agreement") between the Company and the Participant, dated March 6, 2003 (the "Award Date").

The Company and the Employee wish to provide for certain modifications to the Original Agreement and wish to amend, restate and supersede the Original Agreement, all upon the terms and conditions set forth herein.

The Cash Award and the Stock Award (each as defined in the Original Agreement) granted to the Participant pursuant to the Original Agreement remain in effect as amended and restated in this Agreement.

1. AWARD. Pursuant to the provisions of the (i) Avatar Holdings Inc. Executive Incentive Compensation Plan, as the same may be amended, restated, modified and supplemented from time to time (the "Executive Plan") the Committee (as defined in the Executive Plan) hereby awards to the Participant, as of the Award Date, subject to the terms and conditions of the Executive Plan and subject further to the other provisions herein set forth, the Cash Award and (ii) Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan, as the same may be amended, restated, modified and supplemented from time to time (the "1997 Plan" and together with the Executive Plan, collectively the "Plans") the Committee (as defined in the 1997 Plan) hereby awards to the Participant, as of the Award Date, subject to the terms and conditions of the 1997 Plan and subject further to the terms and conditions and other provisions herein set forth, the Stock Award if, as of an applicable Performance Goal Test Date (as defined below), the Performance Goal (as defined below) applicable to a Cash Award or the Stock Award, as the case may be, is satisfied.

2. CERTAIN DEFINITIONS.

(a) Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plans.

(b) Each reference contained in this Agreement to:

"Actual Gross Profit Amount" shall mean the Company's cumulative Gross Profit during the Performance Period.

"Business Plan" shall mean the Company's business plan for the period commencing on January 1, 2003 and ending on December 31, 2007, as submitted to the Compensation Committee on or prior to the Award Date.

"Cash Award" shall mean, with respect to each fiscal year during the Performance Period ending on a Performance Goal Test Date, a cash payment equal to two percent (2%) of the excess, if any, of
(x) the Gross Profit earned by the Company for such fiscal year, over
(y) the Minimum Gross Profit Level for such fiscal year.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Excluded Amounts" shall mean, with respect to a fiscal year of the Company, as at any date of determination, an amount equal to the dollar amount of any Gross Profit attributable to Harbor Islands and the Rio Rico Excluded Properties for such fiscal year.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen trading days ending with and including the measuring date on which such exchange or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradeable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

"Gross Profit" shall mean, with respect to a fiscal year of the Company, the excess, if any, of (x) the sum of (i) the amount set forth in the Company's audited Consolidated Statements of Operations as set forth in the Company's annual report on Form 10-K (the "Income

Statement") for such fiscal year with respect to the line item "Net income (loss)" plus (ii) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iii) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (iv) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Income Statement less (v) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Income Statement, over (y) the Excluded Amounts for such fiscal year.

"Harbor Islands" shall mean the development and/or sale of the Company's property in Hollywood, Florida, generally known by the Company as parcels 1, 8 and 9 at "Harbor Islands."

"Minimum Cumulative Gross Profit Level" shall mean that as of the Last Day of the Performance Period (x) the Actual Gross Profit Amount is greater than (y) the Target Gross Profit Amount.

"Minimum Gross Profit Level" shall mean the Gross Profit set forth opposite each fiscal year ending on the dates set forth below:

 FISCAL YEAR END                        GROSS PROFIT
 ---------------                        ------------
December 31, 2003                       $10,000,000
December 31, 2004                       $12,000,000
December 31, 2005                       $14,400,000
December 31, 2006                       $17,280,000
December 31, 2007                       $20,736,000

"Payment Date" shall have the meaning ascribed to such term in Section 3(c).

"Performance Goal" shall mean (i) in the case of the Cash Award, the achievement of the Minimum Gross Profit Level in any fiscal year, ending on December 31, during the Performance Period and
(ii) in the case of the Stock Award, the achievement of the Minimum Cumulative Gross Profit Level for the entire Performance Period.

"Performance Goal Test Date" shall mean with respect to the Cash Award, December 31 of each year within the Performance Period and with respect to the Stock Award, the Last Day of the Performance Period.

"Performance Period" shall mean the period commencing January 1, 2003 and ending on December 31, 2007 (December 31, 2007, being the "Last Day of the Performance Period").

"Rio Rico Excluded Properties" shall mean those parcels of land not suitable for development in accordance with the Company's current Business Plan due to environmental factors located in the Company's property in Rio Rico, Arizona, generally known by the Company as "Rio Rico".

"Stock Award" shall mean a grant of a number of shares of Common Stock having a Fair Market Value on the Payment Date equal to two percent (2%) of the excess, if any, of (x) the Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

"Target Gross Profit Amount" shall mean $186,956,000.

3. TERMS AND CONDITIONS. The Cash Award and the Stock Award (together, the "Awards") evidenced by this Agreement are subject to the following terms and conditions:

(a) The payment of performance-based compensation described herein is contingent upon the achievement of the Performance Goal applicable to a Cash Award or the Stock Award, as the case may be.

(b) Subject to Section 4 hereof (i) the Participant shall be entitled to receive a payment on the related Payment Date pursuant to the Cash Award if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date and (ii) the Participant shall be entitled to receive on the related Payment Date the Common Stock pursuant to the Stock Award if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date.

(c) The applicable Committee shall determine whether a Performance Goal has been met as of the applicable Performance Goal Test Date and, (i) if it has, shall so certify in writing and ascertain the amount of cash to be paid, if any, or Common Stock to be issued, if any, to the Participant and (ii) if it has not, shall so certify in writing with a brief explanation as to the methodology and calculation of the Committee in determining that such Performance Goal has not been met. Payments of cash, if any, or the issuance of Common Stock, if any, pursuant to the Awards shall be made to the Participant, in each case within thirty (30) days following the filing with the Securities and Exchange Commission of an annual report on Form 10-K (which contains audited financial statements) for the year ended as of the applicable Performance Goal Test Date (each such date being a "Payment Date").

(d) Notwithstanding anything to the contrary contained in this Agreement, in the event a Change in Control occurs during the Performance Period, (i) the Participant shall no longer be entitled to receive any issuance of shares of Common Stock pursuant to the Stock Award and (ii) the Participant

shall be entitled to receive a pro rata portion of the Cash Award (as of the Change in Control Date) for the fiscal year in which such Change in Control occurs. The Committee shall determine the basis, methodology and calculation for, and any estimates used in, determining the prorated Actual Gross Profit Amount and prorated Minimum Gross Profit Level for the portion of the fiscal year preceding the Change in Control Date. The determination of the Committee as to any such partial award shall be final and binding on all parties, including the Participant and the Company. Such prorated Cash Award shall be paid to the Participant on or promptly following the Change in Control Date.

4. LIMITATIONS ON COMPENSATION. Notwithstanding anything to the contrary herein, the maximum payment of cash pursuant to the Cash Award or the issuance of Common Stock pursuant to the Stock Award to the Participant hereunder shall be subject to the limitations in the Plans and the Participant's employment agreement with the Company or a subsidiary thereof, each as may be amended from time to time.

5. TERMINATION OF EMPLOYMENT.

(a) For purposes of this Section 5, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc. ("Avatar Properties"), dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with Avatar Properties is terminated by Avatar Properties for Cause or by the Participant Without Good Reason, in addition to any other consequences of such termination provided for in this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to cash payments or Common Stock issuances that would otherwise accrue pursuant to this Agreement on or after the date of such termination.

(c) If the Participant's employment with Avatar Properties is terminated by Avatar Properties Without Cause or by the Participant for Good Reason, the Participant shall be entitled to continue to receive such cash payments or Common Stock issuances as would otherwise be made pursuant to this Agreement as though the Participant's employment had not been terminated.

(d) If the Participant's employment with Avatar Properties is terminated due to the Participant's death or Disability, notwithstanding Section 3 hereof:

(i) the Participant shall be entitled to receive only that portion of any cash payments or Common Stock issuances otherwise payable pursuant to Section 3(c) hereof following such termination, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed whole months elapsed after the first day of the Performance Period to

the date of death or Disability, as the case may be, and the denominator of which is the number of whole months from the first day of the Performance Period until the applicable Performance Goal Test Date and (y) the amount of any cash payments or Common Stock issuances that would have been payable pursuant to Section 3(c) hereof if the Participant remained an employee of Avatar Properties through and including the Last Day of the Performance Period; provided, however, that with respect to cash payments pursuant to the Cash Award, the Participant shall only be eligible to receive a cash payment for the fiscal year in which the Participant's employment was terminated for death or Disability, as the case may be, and the Participant shall not be eligible for any additional cash payments; and

(ii) the Participant will have no right to any other payments hereunder.

Any payments shall be made to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) no later than the relevant Payment Date.

6. FORFEITURE UPON BREACH OF RESTRICTIVE COVENANTS. Notwithstanding anything to the contrary set forth in this Agreement, if the Participant breaches any provision relating to the Participant's covenant to keep information confidential, not to compete, not to solicit or similar restrictive covenant contained in the Participant's employment agreement or any other agreement with the Company or any of its subsidiaries or affiliates (each of the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), after the expiration of any notice and cure period, then in addition to any other rights or remedies arising from or relating to such breach the Participant shall forfeit any right to any cash payments or Common Stock issuances that would otherwise accrue pursuant to this Agreement on or after the date of such breach.

7. CLAWBACK; ADDITIONAL PAYMENTS; NO OFFSET BY PARTICIPANT; COMPANY OFFSET.

(a) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to the Cash Award or the issuance to the Participant of Common Stock pursuant to the Stock Award such that Gross Profit is less than previously reported, the Participant shall pay to the Company upon demand by the Company following the filing of such restated financial statements with the Securities and Exchange Commission, an amount equal to the sum of (i) the excess of (A) the Excess Bonus Payments (as defined below) over (B) the hypothetical income tax liability attributable to such Excess Bonus Payments (as determined by the Committee by applying the highest marginal United States federal, state and local individual income tax rates applicable to an individual resident of Coral Gables, Florida for the relevant taxable period, taking into account the deductibility of state and local income taxes for federal income tax purposes), and (ii) as determined by the Committee, the present value of any tax benefits

accruing to the Participant as a result of making any payments pursuant to this
Section 7(a) to the Company. For purposes of the preceding sentence, "Excess Bonus Payments" shall mean an amount equal to the sum of (A) the difference between (x) the amount of the cash payment pursuant to the Cash Award paid to the Participant with respect to any fiscal year (or portion thereof) in which the audited financial statements have been restated and (y) the amount that cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the applicable Performance Goal Test Date and (B) the difference between (x) the Fair Market Value on the Payment Date of the Common Stock issued pursuant to the Stock Award and (y) the amount that the Fair Market Value of the Common Stock would have been on the Payment Date if the Company had used the restated financial statements to determine the amount of the Company's Actual Gross Profit Amount on the Last Day of the Performance Period.

(b) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to the Cash Award or issuance to the Participant of Common Stock pursuant to the Stock Award such that Gross Profit is greater than previously reported, the Company shall pay to the Participant upon demand by the Participant following the filing of such restated financial statements with the Securities and Exchange Commission, an amount (the "Lesser Bonus Payments") equal the sum of (A) the difference between (x) the amount that the cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the applicable Performance Goal Test Date less (y) the amount of the cash payment pursuant to the Cash Award paid to the Participant with respect to any fiscal year (or portion thereof) in which the audited financial statements have been restated and (B) the difference between (x) the amount that the Fair Market Value of the Common Stock issued to the Participant pursuant to the Stock Award would have been on the Payment Date if the Company had used the restated financial statements to determine the amount of the Company's Actual Gross Profit Amount on the Last Day of the Performance Period and (y) the Fair Market Value on the Payment Date of the Common Stock issued pursuant to the Stock Award. At the option of the Company, the amount of the Lesser Bonus Payments attributable to the Stock Award may be payable in cash or Common Stock.

(c) The Participant shall be obligated to pay to the Company any amount due pursuant to this Section 7 regardless of whether the Participant has or claims to have any claim against any of the Avatar Entities, and the Participant shall have no right to offset any amount due or claimed to be due from any of the Avatar Entities. The Company shall be obligated to pay to the Participant any amount due pursuant to this Section 7 regardless of whether the Company has or claims to have any claim against the Participant, and the Company shall have no right to offset any amount due or claimed to be due from the Participant or any of its affiliates.

(d) In the event that the Participant has failed to repay any amount required pursuant to Section 7(a) above, the Company shall be entitled to offset such amount against any amounts due from the Company to the Participant.

(e) The foregoing provisions of this Section 7 shall not be applicable to any restatement, after the consummation of a Change in Control (as defined in clauses (a) and (b) of the definition of "Change in Control" above), of the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period.

8. TAXES. Any cash payment pursuant to a Cash Award or Common Stock issuance pursuant to the Stock Award shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements. The Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. In connection with any issuance of Common Stock pursuant to the Stock Award, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state, local and foreign withholding taxes arising in connection with the Stock Award and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

9. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by any of the Avatar Entities, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

10. NO OBLIGATION TO PURSUE PROJECTS. This Agreement shall in no way obligate the Company to pursue any projects, developments or sales of any assets, and the Company may limit, abandon or change any projects, developments or sales of any assets at any time in its sole discretion and the Company shall have no obligation to take any action or provide any financing with respect to any projects, developments or sales of any assets.

11. UNSECURED CREDITOR STATUS; NO PARTNERSHIP. The Participant shall rely solely upon the unsecured promise of the Company, as set forth herein, for payment hereunder, and nothing herein contained shall be construed to give to or vest in the Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title, or interest, nor at any time in the future. This Agreement is an

agreement to pay compensation for services provided by the Participant and is not a partnership or joint venture and is not intended to create a partnership or joint venture between the Company and the Participant or any other person. The Participant shall take no position inconsistent with this characterization.

12. ASSIGNMENT; SUCCESSORS.

(a) The Cash Award, Stock Award and any interest of the Participant in any such awards may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer any such Awards in contravention of this Section 12(a) is void ab initio. The Awards shall not be subject to execution, attachment or other process.

(b) The Company's rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and may inure to the benefit of any Avatar Entity or successor thereof. The term "successor" shall mean, with respect to any Avatar Entity, any other corporation or other business entity which, by merger, consolidation, purchase of assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity.

(c) In the event of the Participant's death, the Participant's rights and obligations hereunder shall be binding upon and inure to the benefit of the Participant's heirs and legal representatives.

13. CONSTRUCTION. The Plans and this Agreement will be construed by and administered under the supervision of the applicable Committee in such Committee's sole and absolute discretion, and all determinations of such Committee will be final and binding on the Participant.

14. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in the Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, Coral Gables, Florida 33134, Attention: Chief Executive Officer, with a copy to the Company's Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

15. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

16. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

17. INCORPORATION OF PLANS. Each of the Plans is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plans, as the Plans may be amended from time to time.

18. STOCKHOLDER APPROVAL OF 1997 PLAN. In the event that the requisite number of shares of Common Stock reserved for issuance under the 1997 Plan to issue the Common Stock pursuant to the Stock Award are not available, the Company shall undertake to submit an amendment to the 1997 Plan (the "1997 Plan Amendment"), which increases the number of shares available for issuance thereunder to satisfy the Company's obligations pursuant to the Stock Award for approval by stockholders at an annual meeting or meetings (or at a special meeting or special meetings) after it is determined that additional shares of Common Stock are needed for issuance pursuant to the Stock Award. The Participant agrees that the failure of the Company's stockholders to approve the 1997 Plan Amendment
(and any adverse financial consequences to Participant resulting therefrom) shall not constitute a "good reason" under the Participant's employment with the Company or any other Avatar Entity.

19. ATTORNEYS' FEES. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

20. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

21. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plans and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    -----------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Michael F. Levy
    -----------------------------------
    Michael F. Levy

Exhibit 10.22

CHANGE IN CONTROL AWARD AGREEMENT

THIS CHANGE IN CONTROL AWARD AGREEMENT, dated April 15, 2005 (the "Agreement"), is made by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Michael F. Levy (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. 2005 Executive Incentive Compensation Plan, as the same may be amended, restated, modified or supplemented from time to time (the "Executive Plan"), the Committee (as defined in the Executive Plan) hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Executive Plan and subject further to the terms and conditions and other provisions herein set forth, the Change in Control Award if (i) a Change in Control Date (as defined below) shall occur and
(ii) the Performance Goal (as defined below) is satisfied as of the Change in Control Date (as defined below).

2. CERTAIN DEFINITIONS.

(a) Capitalized terms used but not defined herein shall have the meanings assigned to them in the Executive Plan.

(b) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Actual Gross Profit Amount" shall mean the Company's cumulative Gross Profit during the Performance Period.

"Business Plan" shall mean the Company's business plan for the period commencing on January 1, 2003 and ending on December 31, 2007, as submitted to the Compensation Committee at a meeting held on March 3, 2005.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with

respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Change in Control Award" shall mean a cash payment equal to two percent (2%) of the excess, if any, of (x) the Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Excluded Amounts" shall mean, with respect to a fiscal year of the Company, as at any date of determination, an amount equal to the dollar amount of any Gross Profit attributable to Harbor Islands and the Rio Rico Excluded Properties for such fiscal year.

"Gross Profit" shall mean:

(A) with respect to any full fiscal year of the Company during the Performance Period, the excess, if any, of (x) the sum of
(i) the amount set forth in the Company's audited Consolidated Statements of Operations as set forth in the Company's annual report on Form 10-K (the "Annual Income Statement") for such fiscal year with respect to the line item "Net income (loss)" plus (ii) the amount, if any, set forth in the Company's Annual Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iii) the amount, if any, set forth in the Company's Annual Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (iv) the amount(s), if any, set forth in the Company's Annual Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Income Statement less (v) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Income Statement, over (y) the Excluded Amounts for such fiscal year; and

(B) with respect to any full fiscal quarter of the Company during the Performance Period that does not constitute a portion of full fiscal year for purposes of paragraph (A ) above, the excess, if any, of (x) the sum of (i) the amount set forth in the Company's unaudited Consolidated Statements of Operations for the three month period of such fiscal quarter as set forth in the Company's quarterly report on Form 10-Q (the "Quarterly Income Statement") for such fiscal quarter with respect to the line item "Net income (loss)" plus
(ii) the amount, if any, set forth in the Company's Quarterly Income Statement for such fiscal quarter with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iii) the amount, if any, set forth in the

Company's Quarterly Income Statement for such fiscal quarter with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (iv) the amount(s), if any, set forth in the Company's Quarterly Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Quarterly Income Statement less
(v) the amount(s), if any, set forth in the Company's Quarterly Income Statement for such fiscal quarter relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Quarterly Income Statement, over (y) the Excluded Amounts for such fiscal quarter.

"Harbor Islands" shall mean the development and/or sale of the Company's property in Hollywood, Florida, generally known by the Company as parcels 1, 8 and 9 at "Harbor Islands."

"Minimum Cumulative Gross Profit Level" shall mean that as of the Change in Control Date the Actual Gross Profit Amount is greater than the Target Gross Profit Amount.

"Performance Goal" shall mean the achievement of the Minimum Cumulative Gross Profit Level for the Performance Period.

"Performance Period" shall mean the period commencing April 1, 2005 and ending on the Change in Control Date.

"Rio Rico Excluded Properties" shall mean those parcels of land not suitable for development in accordance with the Company's current Business Plan due to environmental factors located in the Company's property in Rio Rico, Arizona, generally known by the Company as "Rio Rico".

"Target Gross Profit Amount" shall mean $141,995,000.

3. TERMS AND CONDITIONS. The Change in Control Award evidenced by this Agreement is subject to the following terms and conditions:

(a) The payment of performance-based compensation described herein is contingent upon (i) the consummation of a Change in Control on or before December 31, 2007, and (ii) t he achievement of the Performance Goal.

(b) Subject to Section 3(c) and Section 4 hereof, on or promptly following the Chang e in Control Date, the Participant shall be entitled to receive the Change in Control Award if the Performance Goal is satisfied as of the Change in Control Date.

(c) The Committee shall determine whether the Performance Goal has been met as of the Change in Control Date and, (i) if it has, shall so certify in writing and ascertain the amount of cash to be paid, if any, to the

Participant and, (ii) if it has not, shall so certify in writing with a brief explanation as to the methodology and calculation of the Committee in determining that the Performance Goal has not been met. The Committee shall determine the basis, methodology and calculation for, and any estimates used in, determining the Gross Profit for the portion of the fiscal year immediately preceding the Change in Control Date and following the most recent Annual Income Statement or Quarterly Income Statement of the Company, as applicable and such determination shall be final and binding on all parties, including the Company and the Participant. Payments of cash, if any, pursuant to the Change in Control Award shall be made on or promptly following the Change in Control Date.

4. LIMITATION ON COMPENSATION. Notwithstanding anything to the contrary herein, the maximum payment of cash pursuant to the Change in Control Award to the Participant hereunder shall be $3,000,000.

5. TERMINATION OF EMPLOYMENT.

(a) For purposes of this Agreement, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties, Inc. ("Avatar Properties"), dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with Avatar Properties is terminated by Avatar Properties for Cause or by the Participant Without Good Reason, in addition to any other consequences of such termination provided for in this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to cash payments pursuant to this Agreement from and after the date of such termination.

(c) If the Participant's employment with Avatar Properties is terminated by Avatar Properties Without Cause or by the Participant for Good Reason, the Participant shall be entitled to receive such cash payments as would otherwise be made pursuant to this Agreement as though the Participant's employment had not been terminated.

(d) If the Participant's employment with Avatar Properties is terminated due to the Participant's death or Disability, notwithstanding Section 3 hereof, the Participant shall be entitled to receive only that portion of any cash payments otherwise payable pursuant to Section 3(c) hereof following such termination, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed whole months elapsed after the first day of the Performance Period to the date of death or Disability, as the case may be, and the denominator of which is the number of whole months from the first day of the Performance Period until the Performance Goal Test Date and (y) the amount of any cash payments that would have been

payable pursuant to Section 3(c) hereof if the Participant remained an employee of Avatar Properties through and including the Change in Control Date.

Any payments to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) pursuant to this Section 5(d) shall be made on or promptly following the Change in Control Date.

6. FORFEITURE UPON BREACH OF RESTRICTIVE COVENANTS. Notwithstanding anything to the contrary set forth in this Agreement, if the Participant breaches any provision relating to the Participant's covenant to keep information confidential, not to compete, not to solicit or similar restrictive covenant contained in the Participant's employment agreement or other agreement with the Company or any of its subsidiaries or affiliates (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), after the expiration of any notice and cure period, then in addition to any other rights or remedies arising from or relating to such breach the Participant shall forfeit any right to any cash payments that would otherwise accrue pursuant to this Agreement on or after the date of such breach.

7. TAXES. Any cash payment pursuant to the Change in Control Award shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements. The Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe.

8. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by any of the Avatar Entities, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

9. NO OBLIGATION TO PURSUE PROJECTS. This Agreement shall in no way obligate the Company to pursue any projects, developments or sales of any assets, and the Company may limit, abandon or change any projects, developments or sales of any assets at any time in its sole discretion and the Company shall have no obligation to take any action or provide any financing with respect to any projects, developments or sales of any assets.

10. UNSECURED CREDITOR STATUS; NO PARTNERSHIP. The Participant shall rely solely upon the unsecured promise of the Company, as set forth herein, for payment hereunder, and nothing herein contained shall be construed to give to or vest in the Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title, or interest, nor at any time in the future. This Agreement is an agreement to pay compensation for services provided by the Participant and is not a partnership or joint venture and is not intended to create a partnership

or joint venture between the Company and the Participant or any other person. The Participant shall take no position inconsistent with this characterization.

11. ASSIGNMENT; SUCCESSORS.

(a) The Change in Control Award and any interest of the Participant in such award may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer the Change in Control Award in contravention of this Section 11(a) is void ab initio. The Change in Control Award shall not be subject to execution, attachment or other process.

(b) The Company's rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and may inure to the benefit of any affiliate of or successor to the Company. The term "successor" shall mean, with respect to any Avatar Entity, any other corporation or other business entity which, by merger, consolidation, purchase of assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity.

(c) In the event of the Participant's death, the Participant's rights and obligations hereunder shall be binding upon and inure to the benefit of the Participant's heirs and legal representatives.

12. CONSTRUCTION. The Executive Plan and this Agreement will be construed by and administered under the supervision of the Committee in the Committee's sole and absolute discretion, and all determinations of the Committee will be final and binding on the Participant.

13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in the Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, Coral Gables, Florida 33134, Attention: Chief Executive Officer, with a copy to the Company's Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

16. INCORPORATION OF THE EXECUTIVE PLAN. The Executive Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Executive Plan.

17. ATTORNEYS' FEES. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

18. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

19. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Executive Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    ------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Michael F. Levy
    ------------------------------------
    Michael F. Levy

Exhibit 10.23

2008-2010 EARNINGS PARTICIPATION AWARD AGREEMENT

This 2008-2010 EARNINGS PARTICIPATION AWARD AGREEMENT, dated April 15, 2005 (the "Agreement"), is made by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Michael F. Levy (the "Participant").

1. AWARD. Pursuant to the provisions of the (i) Avatar Holdings Inc. 2005 Executive Incentive Compensation Plan, as the same may be amended, restated, modified and supplemented from time to time (the "Executive Plan") the Committee (as defined in the Executive Plan) hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Executive Plan and subject further to the terms and conditions and other provisions herein set forth, the Cash Awards if, as of an applicable Performance Goal Test Date (as defined below), the Performance Goal (as defined below) applicable to such Cash Award is satisfied.

2. CERTAIN DEFINITIONS.

(a) Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plans.

(b) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Actual Gross Profit Amount" shall mean the Company's cumulative Gross Profit during the Performance Period.

"Annual Cash Award" shall mean, with respect to each fiscal year during the Performance Period ending on a Performance Goal Test Date, a cash payment equal to two percent (2%) of the excess, if any, of (x) the Gross Profit earned by the Company for such fiscal year, over (y) the Minimum Gross Profit Level for such fiscal year.

"Business Plan" shall mean the Company's business plan for the period commencing on January 1, 2005 and ending on December 31, 2010, as submitted to the Compensation Committee at a meeting held on March 3, 2005.

"Cash Awards" shall mean, collectively, the Annual Cash Award and the Cumulative Cash Award, and "Cash Award" shall mean each of the Annual Cash Award and the Cumulative Cash Award.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent

(90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Cumulative Cash Award" shall mean a cash payment equal to one and one-quarter percent (1.25%) of the excess, if any, of (x) the Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

"Excluded Amounts" shall mean, with respect to a fiscal year of the Company, as at any date of determination, an amount equal to the dollar amount of any Gross Profit attributable to Harbor Islands and the Rio Rico Excluded Properties for such fiscal year.

"Gross Profit" shall mean, with respect to a fiscal year of the Company, the excess, if any, of (x) the sum of (i) the amount set forth in the Company's audited Consolidated Statements of Operations as set forth in the Company's annual report on Form 10-K (the "Income Statement") for such fiscal year with respect to the line item "Net income (loss)" plus (ii) the amount reflected in the Company's Income Statement for such fiscal year as compensation expense relating to the 2008-2010 Earnings Participation Award Agreements, dated the date hereof, between the Company and each of Gerald Kelfer, Jonathan Fels and Michael Levy, plus (iii) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax expense" less (iv) the amount, if any, set forth in the Company's Income Statement for such fiscal year with respect to the line item "Income tax expense (benefit)", to the extent that there is "Income tax (benefit)" plus (v) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax expense included in any income or (loss) attributable to the discontinued operations and/or extraordinary items set forth in the Income Statement less (vi) the amount(s), if any, set forth in the Company's Income Statement for such fiscal year relating to any income tax (benefit) included in any income or (loss) attributable to such discontinued operations and/or extraordinary items set forth in the Income Statement plus (vii) for purposes of determining the Annual Cash Award, the Gross Profit Carry Forward Amount, if any, with respect to the Company's prior fiscal year, over (y) the Excluded Amounts for such fiscal year.

"Gross Profit Carry Forward Amount" shall mean an amount equal to (x) the excess of the amount of the Annual Cash Award that would otherwise be payable to the Participant but for the Annual Cap, over the amount of the Annual Cap, divided by (y) 2%; provided, that in no event shall the Gross Profit Carry Forward Amount exceed $20,000,000.

"Harbor Islands" shall mean the development and/or sale of the Company's property in Hollywood, Florida, generally known by the Company as parcels 1, 8 and 9 at "Harbor Islands."

"Minimum Cumulative Gross Profit Level" shall mean that, as of Performance Goal Test Date applicable to the Cumulative Cash Award, (x) the Actual Gross Profit Amount is greater than (y) the Target Gross Profit Amount.

"Minimum Gross Profit Level" shall mean the Gross Profit set forth opposite each fiscal year ending on the dates set forth below:

 FISCAL YEAR END                         GROSS PROFIT
 ---------------                         ------------
December 31, 2008                        $40,000,000
December 31, 2009                        $50,000,000
December 31, 2010                        $60,000,000

"Payment Date" shall have the meaning ascribed to such term in Section 3(c).

"Performance Goal" shall mean (i) in the case of the Annual Cash Award, the achievement of the Minimum Gross Profit Level in any fiscal year, ending on December 31, during the Performance Period and
(ii) in the case of the Cumulative Cash Award, the achievement of the Minimum Cumulative Gross Profit Level for the entire Performance Period.

"Performance Goal Test Date" shall mean with respect to the Annual Cash Award, December 31 of each year within the Performance Period and with respect to the Cumulative Cash Award, the earlier of
(i) a Change in Control Date and (ii) the Last Day of the Performance Period.

"Performance Period" shall mean the period commencing January 1, 2008 and ending on December 31, 2010 (December 31, 2010, being the "Last Day of the Performance Period").

"Rio Rico Excluded Properties" shall mean those parcels of land not suitable for development in accordance with the Company's current Business Plan due to environmental factors located in the Company's property in Rio Rico, Arizona, generally known by the Company as "Rio Rico".

"Target Gross Profit Amount" shall mean $390,000,000.

(c) For purposes of this Agreement, the terms Administrator, Cause, Without Cause, Good Reason, Without Good Reason, Disability, Retention Account, Retention Account Procedures and Retention Date shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc. ("Avatar Properties"), dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

3. TERMS AND CONDITIONS. The Cash Awards evidenced by this Agreement are subject to the following terms and conditions:

(a) The payment of performance-based compensation described herein is contingent upon the achievement of the Performance Goal applicable to each Cash Award.

(b) Subject to Section 4 hereof (i) the Participant shall be entitled to receive a payment on the related Payment Date pursuant to the Annual Cash Award if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date and (ii) the Participant shall be entitled to receive the Cumulative Cash Award on the related Payment Date if the applicable Performance Goal is satisfied on the applicable Performance Goal Test Date.

(c) The Committee shall determine whether a Performance Goal has been met as of the applicable Performance Goal Test Date and, (i) if it has, shall so certify in writing and ascertain the amount of cash to be paid, if any, to the Participant and (ii) if it has not, shall so certify in writing with a brief explanation as to the methodology and calculation of the Committee in determining that such Performance Goal has not been met. Payments of cash, if any, pursuant to the Cash Awards shall be made to the Participant, in each case within thirty (30) days following the filing with the Securities and Exchange Commission of an annual report on Form 10-K (which contains audited financial statements) for the year ended as of the applicable Performance Goal Test Date (each such date being a "Payment Date").

(d) Notwithstanding anything to the contrary contained in this Agreement, in the event a Change in Control Date occurs during the Performance Period, (i) on the Change in Control Date, the Company shall deposit into the Retention Account any cash payment pursuant to the Cumulative Cash Award (and such amount shall be added to the Retention Amount) and, if the Employee's employment has not been otherwise terminated by Avatar Properties for Cause or by Participant Without Good Reason and the Employee is continuously employed by Avatar Properties through the Retention Period such that the Employee's employment terminates upon the Retention Date, the Administrator shall distribute the Retention Amount to the Employee on or promptly following the Retention Date, subject to and in accordance with the Retention Account Procedures; provided, however, that if the Participant's employment with Avatar Properties is terminated due to the Participant's death or Disability during the Retention Period, (A) the Administrator shall disburse to the Employee, his

designated beneficiary or to his estate a pro rata portion of the Retention Amount as of the Date of Termination equal to the Retention Amount multiplied by a fraction (x) the numerator of which is the number of days elapsed in the Retention Period as of the Date of Termination and (y) the denominator of which is the total number of days in the Retention Period and (B) the remaining balance of the Retention Amount shall be disbursed by the Administrator as a donation to one or more charitable, not-for-profit organizations designated by the Board of Directors of Avatar, in its sole discretion, in each case subject to and in accordance with the Retention Account Procedures, and (ii) the Participant shall be entitled to receive a pro rata portion of the Annual Cash Award (as of the Change in Control Date) for the fiscal year in which such Change in Control Date occurs. The Committee shall determine the basis, methodology and calculation for, and any estimates used in, determining the prorated Actual Gross Profit Amount and prorated Minimum Gross Profit Level for the portion of the fiscal year preceding the Change in Control Date. The determination of the Committee as to any such partial award shall be final and binding on all parties, including the Participant and the Company. Such prorated Annual Cash Award shall be paid on or promptly following the Change in Control Date.

4. LIMITATIONS ON AWARDS. Notwithstanding anything to the contrary herein:

(a) The maximum cash amount that may be paid to the Participant pursuant to the Annual Cash Award (the "Annual Cap") shall be $1,600,000 for each fiscal year during the Performance Period; provided, however, that in the event that the Annual Cash Award is less than $1,600,000 with respect to either or both of the first two (2) fiscal years of the Performance Period (the amount by which such Annual Cash Awards are less than $1,600,000, in the aggregate, is referred to herein as the "Shortfall Amount"), the Annual Cap with respect to the third fiscal year of the Performance Period shall equal the sum of (x) $1,600,000 plus (y) the Shortfall Amount; provided, further, that in no event shall the Shortfall Amount exceed $400,000.

(b) The maximum cash amount that may be paid to the Participant pursuant to the Cumulative Cash Award shall be $900,000.

(c) The maximum payment of cash pursuant to the Cash Awards shall be subject to the limitations in the Executive Plan and the Participant's employment agreement with the Company or a subsidiary or affiliate thereof (the foregoing entities being referred to herein collectively as the "Avatar Entities" and each as an "Avatar Entity"), each as may be amended, restated, modified or supplemented from time to time.

5. TERMINATION OF EMPLOYMENT.

(a) If the Participant's employment with Avatar Properties is terminated by Avatar Properties for Cause or by the Participant Without Good Reason, in addition to any other consequences of such termination provided for in this Agreement or any other agreement, notwithstanding Section 3 hereof,

Participant shall forfeit any right to cash payments that would otherwise accrue pursuant to this Agreement on or after the date of such termination.

(b) If the Participant's employment with Avatar Properties is terminated by Avatar Properties Without Cause or by the Participant for Good Reason, the Participant shall be entitled to continue to receive such cash payments as would otherwise be made pursuant to this Agreement as though the Participant's employment had not been terminated.

(c) If the Participant's employment with Avatar Properties is terminated due to the Participant's death or Disability, subject to Section 3(d) hereof:

(i) the Participant shall be entitled to receive only that portion of any cash payments otherwise payable pursuant to Section 3(c) hereof following such termination, equal to the product of (x) a fraction (which in no event shall exceed one (1)) the numerator of which is the number of completed whole months elapsed after the first day of the Performance Period to the date of death or Disability, as the case may be, and the denominator of which is the number of whole months from the first day of the Performance Period until the applicable Performance Goal Test Date and (y) the amount of any cash payments that would have been payable pursuant to Section 3(c) hereof if the Participant remained an employee of Avatar Properties through and including the Last Day of the Performance Period; provided, however, that with respect to cash payments pursuant to the Annual Cash Award, the Participant shall only be eligible to receive a cash payment for the fiscal year in which the Participant's employment was terminated for death or Disability, as the case may be, and the Participant shall not be eligible for any additional cash payments; and

(ii) the Participant will have no right to any other payments hereunder.

Any payments to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) pursuant to this Section 5(c) shall be made no later than the relevant Payment Date.

6. FORFEITURE UPON BREACH OF RESTRICTIVE COVENANTS. Notwithstanding anything to the contrary set forth in this Agreement, if the Participant breaches any provision relating to the Participant's covenant to keep information confidential, not to compete, not to solicit or similar restrictive covenant contained in the Participant's employment agreement or other agreement with any of the Avatar Entities (after the expiration of any notice and cure period), then in addition to any other rights or remedies arising from or relating to such breach the Participant shall forfeit any right to any cash payments pursuant to this Agreement from and after the date of such breach.

7. CLAWBACK; ADDITIONAL PAYMENTS; NO OFFSET BY PARTICIPANT; COMPANY OFFSET.

(a) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to a Cash Award such that Gross Profit is less than previously reported, the Participant shall pay to the Company upon demand by the Company following the filing of such restated financial statements with the Securities and Exchange Commission, an amount equal to the sum of (i) the excess of (A) the Excess Bonus Payments (as defined below) over (B) the hypothetical income tax liability attributable to such Excess Bonus Payments (as determined by the Committee by applying the highest marginal United States federal, state and local individual income tax rates applicable to an individual resident of Coral Gables, Florida for the relevant taxable period, taking into account the deductibility of state and local income taxes for federal income tax purposes), and (ii) as determined by the Committee, the present value of any tax benefits accruing to the Participant as a result of making any payments pursuant to this
Section 7(a) to the Company. For purposes of the preceding sentence, "Excess Bonus Payments" shall mean an amount equal to the difference between (x) the amount of the cash payment pursuant to the Cash Award paid to the Participant and (y) the amount that cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the Performance Goal Test Date.

(b) In the event that the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period are restated within eighteen (18) months following the payment to the Participant of cash pursuant to a Cash Award such that Gross Profit is greater than previously reported, the Company shall pay to the Participant upon demand by the Participant following the filing of such restated financial statements with the Securities and Exchange Commission, an amount equal to the difference between
(x) the amount that the cash payment pursuant to the Cash Award would have been if the Company had used the restated financial statements to determine the amount of the Company's Gross Profit for the Performance Goal Test Date less (y) the amount of the cash payment pursuant to the Cash Award paid to the Participant.

(c) The Participant shall be obligated to pay to the Company any amount due pursuant to this Section 7 regardless of whether the Participant has or claims to have any claim against the any of the Avatar Entities, and the Participant shall have no right to offset any amount due or claimed to be due from any of the Avatar Entities. The Company shall be obligated to pay to the Participant any amount due pursuant to this Section 7 regardless of whether the Company has or claims to have any claim against the Participant, and the Company shall have no right to offset any amount due or claimed to be due from the Participant or any of its affiliates.

(d) In the event that the Participant has failed to repay any amount required pursuant to Section 7(a) above, the Company shall be entitled to offset such amount against any amounts due from the Company to the Participant.

(e) The foregoing provisions of this Section 7 shall not be applicable to any restatement, after the consummation of a Change in Control (as defined in clauses (a) and (b) of the definition of "Change in Control" above), of the Company's financial statements with respect to any fiscal year (or portion thereof) within the Performance Period.

8. TAXES. Any cash payment pursuant to a Cash Award shall be net of any amounts required to be withheld pursuant to applicable federal, state, local and foreign tax withholding requirements. The Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe.

9. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by any of the Avatar Entities, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

10. NO OBLIGATION TO PURSUE PROJECTS. This Agreement shall in no way obligate the Company to pursue any projects, developments or sales of any assets, and the Company may limit, abandon or change any projects, developments or sales of any assets at any time in its sole discretion and the Company shall have no obligation to take any action or provide any financing with respect to any projects, developments or sales of any assets.

11. UNSECURED CREDITOR STATUS; NO PARTNERSHIP. The Participant shall rely solely upon the unsecured promise of the Company, as set forth herein, for payment hereunder, and nothing herein contained shall be construed to give to or vest in the Participant or any other person now or at any time in the future, any right, title, interest, or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title, or interest, nor at any time in the future. This Agreement is an agreement to pay compensation for services provided by the Participant and is not a partnership or joint venture and is not intended to create a partnership or joint venture between the Company and the Participant or any other person. The Participant shall take no position inconsistent with this characterization.

12. ASSIGNMENT; SUCCESSORS.

(a) The Cash Awards and any interest of the Participant in any such awards may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer any such Cash Awards in contravention of this Section 12(a) is void ab initio. The Cash Awards shall not be subject to execution, attachment or other process.

(b) The Company's rights and obligations hereunder may be assigned or transferred by the Company to and may be assumed by and become binding upon and

may inure to the benefit of any affiliate of or successor to the Company. The term "successor" shall mean, with respect to any Avatar Entity, any other corporation or other business entity which, by merger, consolidation, purchase of assets, or otherwise, acquires all or a material part of the assets of such Avatar Entity.

(c) In the event of the Participant's death, the Participant's rights and obligations hereunder shall be binding upon and inure to the benefit of the Participant's heirs and legal representatives.

13. CONSTRUCTION. The Plans and this Agreement will be construed by and administered under the supervision of the applicable Committee in such Committee's sole and absolute discretion, and all determinations of such Committee will be final and binding on the Participant.

14. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in the Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, Coral Gables, Florida 33134, Attention: Chief Executive Officer, with a copy to the Company's Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

15. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

16. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

17. INCORPORATION OF EXECUTIVE PLAN. The Executive Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Executive Plan, as the Executive Plan may be amended from time to time.

18. ATTORNEYS' FEES. In the event that either party hereto commences litigation against the other to enforce such party's rights hereunder, the prevailing party shall be entitled to recover all costs, expenses and fees, including reasonable attorneys' fees (including in-house counsel), paralegals' fees, and legal assistants' fees through all appeals.

19. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

20. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Executive Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

/s/ Michael F. Levy
----------------------------------
Michael F. Levy

Exhibit 10.24

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Michael F. Levy (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated, modified or supplemented (the "Plan"), the Committee (as defined in the Plan, the "Committee") hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, an opportunity to receive 25,000 Performance Conditioned Restricted Stock Units ("Units"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This award is intended to constitute a Performance-Based Award within the meaning of the Plan.

2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to Section 4 hereof, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 25,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied is hereinafter referred to as the "Grant Date"): (i) the closing stock price of the Common Stock on its principal trading market shall have been at least $65.00 per share for twenty (20) trading days out of thirty (30) consecutive trading days or (ii) the Company consummates a transaction which results in the stockholders of the Company receiving cash, securities, or other property (or any combination thereof) having a "value" as determined by the Committee of at least $65.00 per share in either case, during the period beginning on the date immediately following the date hereof and ending on December 31, 2010 (the "Hurdle Price Condition"); provided, however, that, except as provided in Sections 4(c) and 4(d), no Units shall be granted if the Participant's employment with the Company has terminated for any reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of this Section 2(a), "value" shall mean the amount received by the stockholders of the Company taking into account the net present value of any debt, securities, future payments, contingent rights or other non-cash consideration to be paid to such stockholders.

(b) The Participant shall not possess any incidents of ownership (including, without limitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Units or the Change in Control Amount, as applicable, until such Units or the Change in Control Amount, as applicable, shall have vested and been distributed to the Participant in the form of shares of Common Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, in accordance with Sections 3 and 4 hereof.

(c) Except as provided in this Section 2(c), the Units and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units in contravention of this Section 2(c) is void ab initio. Units shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, with the written consent of the Committee, the Participant shall be permitted to transfer such Units to members of his immediate family (i.e., children, grandchildren or spouse), trusts for the benefit of such family members, and partnerships whose only partners are such family members; provided, however, that no consideration can be paid for the transfer of the Units and the transferee of the Units shall be subject to all conditions applicable to the Units (including all of the terms and conditions of this Agreement) prior to transfer.

(d) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Change in Control Amount" shall have the meaning set forth in Section 4(e) hereof.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen (15) trading days ending with and including the measuring date on which such exchange

or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

3. VESTING AND CONVERSION OF UNITS. On December 31, 2010, the Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall be converted into an equivalent number of shares of Common Stock that will be immediately distributed to the Participant; provided, however, that subject to the provisions of Section 4 hereof, no Units shall vest or be converted and distributed to the Participant unless the Participant is an employee of the Company on December 31, 2010.

Upon the distribution of the shares of Common Stock in respect of the Units, the Company shall issue to the Participant or the Participant's personal representative a stock certificate representing such shares of Common Stock, free of any restrictions, subject to Section 8 hereof.

4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.

(a) For purposes of this Section 4, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc., dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant Without Good Reason, the Participant shall forfeit all Units granted to the Participant pursuant to Section 2(a) hereof (or, in the event a Change in Control has occurred, the Change in Control Amount), if any, as of the date of termination of employment.

(c) If the Participant's employment with the Company is terminated by the Company Without Cause, or is terminated by the Participant for Good Reason,
(i)(A) all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant, and (B) any additional Units that satisfy the Hurdle Price Condition on or before December 31, 2010, if any, shall vest on the date the Hurdle Price Condition is satisfied, be converted into shares of Common Stock and be immediately distributed to the Participant, or, (ii) in the event a Change in Control has occurred, the Participant shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(d) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, the number of Units granted to the Participant pursuant to Section 2(a) hereof, if any, which equals the greater of
(i) the product of (x) a fraction the numerator of which is the number of completed whole months elapsed from January 1, 2005 to the date of death or Disability, as the case may be (whichever is sooner), and the denominator of which seventy-two (72) and (y) 25,000 or (ii) 12,500 Units, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. If the Participant's employment with the Company is terminated by Participant's death or Disability prior to the Grant Date and the Hurdle Price Condition is satisfied on or before the first Anniversary of Participant's termination for death or Disability, 12,500 Units shall be granted and shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control has occurred prior to such termination for death or Disability, the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(e) In the event of a Change in Control, all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior to the consummation of the Change in Control and, upon consummation of the Change in Control, shall be converted into such amount of cash, securities or other property (or any combination thereof) received by the stockholders of the Company in connection with the Change in Control (the "Change in Control Amount"). The Change in Control Amount shall be distributed to the Participant on or promptly following the Change in Control Date.

5. DEFERRAL. With the prior written consent of the Committee, and on such terms as the Committee may prescribe (which terms shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stock upon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and for the Company to continue to maintain such Units on its books of account.

6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, in order to prevent dilution or

enlargement of the Participant's rights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number and kind of shares that may be issued under this Agreement and make any other appropriate adjustments in the terms of the Units and this Agreement to reflect such changes or distributions.

7. TAXES. Any distribution of Common Stock pursuant to this Agreement shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. In connection with any such distribution, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with the Units granted hereunder and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

8. FORFEITURE OF UNITS AND PROFITS. At the discretion of the Committee, all or any portion of the shares of Common Stock issued to the Participant in respect of Units awarded pursuant to Section 2(a) hereof, if any, and all or any portion of the proceeds received from the sale of such shares of Common Stock (or, in the event of Change in Control, all or any portion of the Change in Control Amount) shall be subject to forfeiture in accordance with the provisions of 15 U.S.C. ss. 7243 (Section 304 of the Sarbanes-Oxley Act of 2002), or any successor statute, as if the Participant were subject to such statute; provided, however, that the provisions of this Section 8 shall no be applicable on or after a Change in Control Date.

9. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificates representing shares of Common Stock issuable pursuant to this Agreement may be postponed by the Committee for such period as may be required to comply with any applicable requirements under the federal or state securities laws, any applicable listing requirements of any national securities exchange or the NASDAQ Stock Market Inc., and any applicable requirements under any other law, rule or regulation applicable to the issuance or delivery of such shares, and the Company shall not be obligated to deliver any such shares of Common Stock to the Participant if either delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority, any national securities exchange or the NASDAQ Stock Market Inc., or the Participant shall not yet have complied fully with the provisions of Section 7 hereof.

10. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents that the Common Stock issuable pursuant to this Agreement is being acquired for investment and not for sale or with a view to distribution thereof. The Participant acknowledges and agrees that any sale or distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Participant hereby consents to such action as the Committee or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Common Stock issued pursuant to this Agreement and delivering stop transfer instructions to the Company's stock transfer agent.

11. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

12. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Participant.

13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134, Attention: Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

16. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time.

17. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

18. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    ------------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Michael F. Levy
    ------------------------------------------
    Michael F. Levy

Exhibit 10.25

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Michael F. Levy (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated, modified or supplemented (the "Plan"), the Committee (as defined in the Plan, the "Committee") hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, an opportunity to receive 25,000 Performance Conditioned Restricted Stock Units ("Units"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This award is intended to constitute a Performance-Based Award within the meaning of the Plan.

2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to Section 4 hereof, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 25,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied is hereinafter referred to as the "Grant Date"): (i) the closing stock price of the Common Stock on its principal trading market shall have been at least $72.50 per share for twenty (20) trading days out of thirty (30) consecutive trading days or (ii) the Company consummates a transaction which results in the stockholders of the Company receiving cash, securities, or other property (or any combination thereof) having a "value" as determined by the Committee of at least $72.50 per share in either case, during the period beginning on the date immediately following the date hereof and ending on December 31, 2010 (the "Hurdle Price Condition"); provided, however, that, except as provided in Sections 4(c) and 4(d), no Units shall be granted if the Participant's employment with the Company has terminated for any reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of this Section 2(a), "value" shall mean the amount received by the stockholders of the Company taking into account the net present value of any debt, securities, future payments, contingent rights or other non-cash consideration to be paid to such stockholders.

(b) The Participant shall not possess any incidents of ownership (including, without limitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Units or the Change in Control Amount, as applicable, until such Units or the Change in Control Amount, as applicable, shall have vested and been distributed to the Participant in the form of shares of Common Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, in accordance with Sections 3 and 4 hereof.

(c) Except as provided in this Section 2(c), the Units and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units in contravention of this Section 2(c) is void ab initio. Units shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, with the written consent of the Committee, the Participant shall be permitted to transfer such Units to members of his immediate family (i.e., children, grandchildren or spouse), trusts for the benefit of such family members, and partnerships whose only partners are such family members; provided, however, that no consideration can be paid for the transfer of the Units and the transferee of the Units shall be subject to all conditions applicable to the Units (including all of the terms and conditions of this Agreement) prior to transfer.

(d) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Change in Control Amount" shall have the meaning set forth in Section 4(e) hereof.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen (15) trading days

ending with and including the measuring date on which such exchange or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

3. VESTING AND CONVERSION OF UNITS. On December 31, 2010, the Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall be converted into an equivalent number of shares of Common Stock that will be immediately distributed to the Participant; provided, however, that subject to the provisions of Section 4 hereof, no Units shall vest or be converted and distributed to the Participant unless the Participant is an employee of the Company on December 31, 2010.

Upon the distribution of the shares of Common Stock in respect of the Units, the Company shall issue to the Participant or the Participant's personal representative a stock certificate representing such shares of Common Stock, free of any restrictions, subject to Section 8 hereof.

4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.

(a) For purposes of this Section 4, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc., dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant Without Good Reason, the Participant shall forfeit all Units granted to the Participant pursuant to Section 2(a) hereof (or, in the event a Change in Control has occurred, the Change in Control Amount), if any, as of the date of termination of employment.

(c) If the Participant's employment with the Company is terminated by the Company Without Cause, or is terminated by the Participant for Good Reason,
(i)(A) all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant, and (B) any additional Units that satisfy the Hurdle Price Condition on or before December 31, 2010, if any, shall vest on the date the Hurdle Price Condition is satisfied, be converted into shares of Common Stock and be immediately distributed to the Participant, or, (ii) in the event a Change in Control has occurred, the Participant shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(d) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, the number of Units granted to the Participant pursuant to Section 2(a) hereof, if any, which equals the greater of
(i) the product of (x) a fraction the numerator of which is the number of completed whole months elapsed from January 1, 2005 to the date of death or Disability, as the case may be (whichever is sooner), and the denominator of which seventy-two (72) and (y) 25,000 or (ii) 12,500 Units, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. If the Participant's employment with the Company is terminated by Participant's death or Disability prior to the Grant Date and the Hurdle Price Condition is satisfied on or before the first Anniversary of Participant's termination for death or Disability, 12,500 Units shall be granted and shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control has occurred prior to such termination for death or Disability, the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(e) In the event of a Change in Control, all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior to the consummation of the Change in Control and, upon consummation of the Change in Control, shall be converted into such amount of cash, securities or other property (or any combination thereof) received by the stockholders of the Company in connection with the Change in Control (the "Change in Control Amount"). The Change in Control Amount shall be distributed to the Participant on or promptly following the Change in Control Date.

5. DEFERRAL. With the prior written consent of the Committee, and on such terms as the Committee may prescribe (which terms shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stock upon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and for the Company to continue to maintain such Units on its books of account.

6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, in order to prevent dilution or

enlargement of the Participant's rights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number and kind of shares that may be issued under this Agreement and make any other appropriate adjustments in the terms of the Units and this Agreement to reflect such changes or distributions.

7. TAXES. Any distribution of Common Stock pursuant to this Agreement shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. In connection with any such distribution, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with the Units granted hereunder and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

8. FORFEITURE OF UNITS AND PROFITS. At the discretion of the Committee, all or any portion of the shares of Common Stock issued to the Participant in respect of Units awarded pursuant to Section 2(a) hereof, if any, and all or any portion of the proceeds received from the sale of such shares of Common Stock (or, in the event of Change in Control, all or any portion of the Change in Control Amount) shall be subject to forfeiture in accordance with the provisions of 15 U.S.C. ss. 7243 (Section 304 of the Sarbanes-Oxley Act of 2002), or any successor statute, as if the Participant were subject to such statute; provided, however, that the provisions of this Section 8 shall no be applicable on or after a Change in Control Date.

9. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificates representing shares of Common Stock issuable pursuant to this Agreement may be postponed by the Committee for such period as may be required to comply with any applicable requirements under the federal or state securities laws, any applicable listing requirements of any national securities exchange or the NASDAQ Stock Market Inc., and any applicable requirements under any other law, rule or regulation applicable to the issuance or delivery of such shares, and the Company shall not be obligated to deliver any such shares of Common Stock to the Participant if either delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority, any national securities exchange or the NASDAQ Stock Market Inc., or the Participant shall not yet have complied fully with the provisions of Section 7 hereof.

10. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents that the Common Stock issuable pursuant to this Agreement is being acquired for investment and not for sale or with a view to distribution thereof. The Participant acknowledges and agrees that any sale or distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Participant hereby consents to such action as the Committee or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Common Stock issued pursuant to this Agreement and delivering stop transfer instructions to the Company's stock transfer agent.

11. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

12. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Participant.

13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134, Attention: Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

16. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time.

17. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

18. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    --------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Michael F. Levy
    --------------------------------------
    Michael F. Levy

Exhibit 10.26

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated April 15, 2005, by and between Avatar Holdings Inc., a Delaware corporation (the "Company") and Michael F. Levy (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated, modified or supplemented (the "Plan"), the Committee (as defined in the Plan, the "Committee") hereby awards to the Participant, on the date hereof, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, an opportunity to receive 25,000 Performance Conditioned Restricted Stock Units ("Units"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. This award is intended to constitute a Performance-Based Award within the meaning of the Plan.

2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to Section 4 hereof, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 25,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied is hereinafter referred to as the "Grant Date"): (i) the closing stock price of the Common Stock on its principal trading market shall have been at least $80.00 per share for twenty (20) trading days out of thirty (30) consecutive trading days or (ii) the Company consummates a transaction which results in the stockholders of the Company receiving cash, securities, or other property (or any combination thereof) having a "value" as determined by the Committee of at least $80.00 per share in either case, during the period beginning on the date immediately following the date hereof and ending on December 31, 2010 (the "Hurdle Price Condition"); provided, however, that, except as provided in Sections 4(c) and 4(d), no Units shall be granted if the Participant's employment with the Company has terminated for any reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of this Section 2(a), "value" shall mean the amount received by the stockholders of the Company taking into account the net present value of any debt, securities, future payments, contingent rights or other non-cash consideration to be paid to such stockholders.

(b) The Participant shall not possess any incidents of ownership (including, without limitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Units or the Change in Control Amount, as applicable, until such Units or the Change in Control Amount, as applicable, shall have vested and been distributed to the Participant in the form of shares of Common Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, in accordance with Sections 3 and 4 hereof.

(c) Except as provided in this Section 2(c), the Units and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units in contravention of this Section 2(c) is void ab initio. Units shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, with the written consent of the Committee, the Participant shall be permitted to transfer such Units to members of his immediate family (i.e., children, grandchildren or spouse), trusts for the benefit of such family members, and partnerships whose only partners are such family members; provided, however, that no consideration can be paid for the transfer of the Units and the transferee of the Units shall be subject to all conditions applicable to the Units (including all of the terms and conditions of this Agreement) prior to transfer.

(d) Each reference contained in this Agreement to:

"Anniversary" shall mean, with respect to any date, the annual recurrence of such date.

"Change in Control" shall mean any of the following events:
(a) a person or entity or group of persons or entities, acting in concert, becomes the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of the Company representing ninety percent (90%) or more of the combined voting power of the issued and outstanding Common Stock; (b) the Board of Directors of the Company approves any merger, consolidation or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of the event described in clause (a) above, and such transaction shall have been consummated; or (c) the Company ceases to be engaged, directly or indirectly, and does not intend to be engaged at any time in the foreseeable future, in any real estate business. The date on which a Change in Control is consummated, with respect to clauses (a) and (b), or occurs, with respect to clause
(c), is herein referred to as the "Change in Control Date."

"Change in Control Amount" shall have the meaning set forth in Section 4(e) hereof.

"Common Stock" shall mean common stock, par value $1.00 per share, of the Company.

"Fair Market Value" shall mean the average of the closing prices of the Common Stock for the fifteen trading days ending with and including the measuring date if the Common Stock is readily tradeable on a national securities exchange, the National Association of Securities Dealers Automated Quotation System or other national market system, provided, however, if such exchange or system is not open for business on any day during such period or the Common Stock was not traded on any day during such period, the Fair Market Value shall be determined as of the most recent fifteen (15) trading days ending with and including the measuring date on which such exchange

or system shall have been open for business and the Common Stock was traded, and if the Common Stock is not readily tradable as set forth above, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock of the Company.

3. VESTING AND CONVERSION OF UNITS. On December 31, 2010, the Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall be converted into an equivalent number of shares of Common Stock that will be immediately distributed to the Participant; provided, however, that subject to the provisions of Section 4 hereof, no Units shall vest or be converted and distributed to the Participant unless the Participant is an employee of the Company on December 31, 2010.

Upon the distribution of the shares of Common Stock in respect of the Units, the Company shall issue to the Participant or the Participant's personal representative a stock certificate representing such shares of Common Stock, free of any restrictions, subject to Section 8 hereof.

4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.

(a) For purposes of this Section 4, the terms Cause, Without Cause, Good Reason, Without Good Reason and Disability shall have the meanings ascribed to such terms in the Participant's amended and restated employment agreement with Avatar Properties Inc., dated as of the date hereof, as amended or restated from time to time; provided, however, if the Participant is no longer employed pursuant to such employment agreement, each such term shall have the meaning ascribed to it in the employment agreement last in effect which contains such defined term.

(b) If the Participant's employment with the Company is terminated by the Company for Cause or by the Participant Without Good Reason, the Participant shall forfeit all Units granted to the Participant pursuant to Section 2(a) hereof (or, in the event a Change in Control has occurred, the Change in Control Amount), if any, as of the date of termination of employment.

(c) If the Participant's employment with the Company is terminated by the Company Without Cause, or is terminated by the Participant for Good Reason,
(i)(A) all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant, and (B) any additional Units that satisfy the Hurdle Price Condition on or before December 31, 2010, if any, shall vest on the date the Hurdle Price Condition is satisfied, be converted into shares of Common Stock and be immediately distributed to the Participant, or, (ii) in the event a Change in Control has occurred, the Participant shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(d) If the Participant's employment with the Company is terminated due to the Participant's death or Disability, the number of Units granted to the Participant pursuant to Section 2(a) hereof, if any, which equals the greater of
(i) the product of (x) a fraction the numerator of which is the number of completed whole months elapsed from January 1, 2005 to the date of death or Disability, as the case may be (whichever is sooner), and the denominator of which seventy-two (72) and (y) 25,000 or (ii) 12,500 Units, shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. If the Participant's employment with the Company is terminated by Participant's death or Disability prior to the Grant Date and the Hurdle Price Condition is satisfied on or before the first Anniversary of Participant's termination for death or Disability, 12,500 Units shall be granted and shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable), and any portion of the Units then remaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control has occurred prior to such termination for death or Disability, the Participant (or the executor or administrator of the deceased Participant's estate or the person or persons to whom the deceased Participant's rights shall pass by will or the laws of descent or distribution, as applicable) shall be entitled to receive the Change in Control Amount, if any, upon the date of termination of employment.

(e) In the event of a Change in Control, all Units granted to the Participant pursuant to Section 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior to the consummation of the Change in Control and, upon consummation of the Change in Control, shall be converted into such amount of cash, securities or other property (or any combination thereof) received by the stockholders of the Company in connection with the Change in Control (the "Change in Control Amount"). The Change in Control Amount shall be distributed to the Participant on or promptly following the Change in Control Date.

5. DEFERRAL. With the prior written consent of the Committee, and on such terms as the Committee may prescribe (which terms shall be in compliance with Section 409A of the Internal Revenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stock upon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and for the Company to continue to maintain such Units on its books of account.

6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to stockholders of the Company, in order to prevent dilution or

enlargement of the Participant's rights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number and kind of shares that may be issued under this Agreement and make any other appropriate adjustments in the terms of the Units and this Agreement to reflect such changes or distributions.

7. TAXES. Any distribution of Common Stock pursuant to this Agreement shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. In connection with any such distribution, the Company may require the Participant to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company shall have the right to withhold the amount of such taxes from any other sums due or to become due from the Company to the Participant as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit the Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with the Units granted hereunder and any distribution of shares of Common Stock in respect thereof by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, such tax calculated at rates prescribed by statute or regulation.

8. FORFEITURE OF UNITS AND PROFITS. At the discretion of the Committee, all or any portion of the shares of Common Stock issued to the Participant in respect of Units awarded pursuant to Section 2(a) hereof, if any, and all or any portion of the proceeds received from the sale of such shares of Common Stock (or, in the event of Change in Control, all or any portion of the Change in Control Amount) shall be subject to forfeiture in accordance with the provisions of 15 U.S.C. ss. 7243 (Section 304 of the Sarbanes-Oxley Act of 2002), or any successor statute, as if the Participant were subject to such statute; provided, however, that the provisions of this Section 8 shall no be applicable on or after a Change in Control Date.

9. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificates representing shares of Common Stock issuable pursuant to this Agreement may be postponed by the Committee for such period as may be required to comply with any applicable requirements under the federal or state securities laws, any applicable listing requirements of any national securities exchange or the NASDAQ Stock Market Inc., and any applicable requirements under any other law, rule or regulation applicable to the issuance or delivery of such shares, and the Company shall not be obligated to deliver any such shares of Common Stock to the Participant if either delivery thereof would constitute a violation of any provision of any law or of any regulation of any governmental authority, any national securities exchange or the NASDAQ Stock Market Inc., or the Participant shall not yet have complied fully with the provisions of Section 7 hereof.

10. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents that the Common Stock issuable pursuant to this Agreement is being acquired for investment and not for sale or with a view to distribution thereof. The Participant acknowledges and agrees that any sale or distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) a registration statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has become effective and is current with regard to the shares being sold, or (b) a specific exemption from the registration requirements of the Securities Act that is confirmed in a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, prior to any such sale or distribution. The Participant hereby consents to such action as the Committee or the Company deems necessary or appropriate from time to time to prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act or to implement the provisions of this Agreement, including but not limited to placing restrictive legends on certificates evidencing shares of Common Stock issued pursuant to this Agreement and delivering stop transfer instructions to the Company's stock transfer agent.

11. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant any right to continued employment by the Company or any of its subsidiaries or affiliated companies, nor shall it interfere in any way with the right of the Participant's employer to terminate the Participant's employment at any time for any reason or no reason.

12. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under the supervision of the Committee, and all determinations of the Committee will be final and binding on the Participant.

13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, (i) to the Participant at the last address specified in Participant's employment records, or such other address as the Participant may designate in writing to the Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134, Attention: Corporate Secretary, or such other address as the Company may designate in writing to the Participant.

14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

16. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part of this Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may be amended from time to time.

17. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be an original but all of which together shall represent one and the same agreement.

18. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the Plan and the letter agreement, dated as of the date hereof, among the Company, Avatar Properties and the Participant, contain the entire agreement between the parties relating to the subject matter hereof. The section headings herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

AVATAR HOLDINGS INC.

By: /s/ Gerald D. Kelfer
    ---------------------------------------
    Name: Gerald D. Kelfer
    Title: Chief Executive Officer


    /s/ Michael F. Levy
    ---------------------------------------
    Michael F. Levy