Exhibit 10(z)

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT ("AGREEMENT") is made as of November 30, 2000, 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, the Employee is currently employed as President and Chief Executive Officer of the Company pursuant to the employment agreement dated February 13, 1997 between the Company and the Employee (the "ORIGINAL AGREEMENT"); and

WHEREAS, the Company and the Employee wish to terminate the Original Agreement and enter into the Agreement all upon the terms hereinafter set forth;

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 on the date hereof (the "COMMENCEMENT DATE") and ending on December 31, 2005 (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. Notwithstanding anything contained in this Agreement or any other agreement between Employee and the Company, for calendar year 2000 Employee's Base Salary shall not exceed $500,000.

(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 30 days after the end of each calendar year in respect of which the bonus is earned. Notwithstanding the foregoing, the Annual Bonus in respect of calendar year 2000 shall be $439,726.

(c) DEFERRED COMPENSATION. Employee shall have the right to defer receipt of some or all of the compensation which Employee is entitled to receive hereunder by written notice to the Company, which notice shall set forth the date to which Employee wishes to defer receipt of such compensation. If Employee elects to defer receipt of all or any portion of the Base Salary and/or Annual Bonus ("DEFERRED COMPENSATION"), the amount due Employee shall be adjusted periodically to reflect any interest that would be realized with respect to the Deferred Compensation had it been invested at the rate of interest announced publicly by Citibank, N.A. in New York, New York, from time to time, as Citibank's base rate. No specific assets of the Company shall be allocated or segregated with respect to the Deferred Compensation and the foregoing shall not be construed to create a trust of any kind or a fiduciary relationship between the Company and Employee, the executor or administrator of Employee's estate or any other person. Employee's right, or the right of Employee's estate, to receive the Deferred Compensation, as adjusted in accordance with this paragraph 3(c), shall be no greater than the right of an unsecured general creditor of the Company.

(d) 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. CASH COMPENSATION CAP. Notwithstanding anything contained above or in any other agreement between Employee and the Company, the "cash

compensation" paid to Employee from January 1, 2001 through and including December 31, 2005 may not exceed ten million dollars ($10,000,000). "CASH COMPENSATION" shall mean the cumulative sum of all cash payments made to the Employee in respect of salary, bonus and any other incentive awards (including, but not limited to the cash bonus award granted pursuant to the Avatar Holdings Inc. Executive Incentive Compensation Plan (the "EXECUTIVE INCENTIVE PLAN") and any amount paid pursuant to paragraph 9(f) below). It is understood that "cash compensation" shall not include any securities of the Company granted to Employee (e.g., stock options and restricted stock units granted pursuant to the Company's Incentive and Capital Accumulation Plan). For purposes of this paragraph 4, amounts paid pursuant to paragraph 9(f) below shall be deemed to have been made on December 31, 2005.

5. VACATIONS. During Employee's employment, Employee shall be entitled to four weeks paid vacation per year plus any additional time, if any, as the Board of Directors or a committee of the Board of Directors may determine, in its sole discretion, to be taken at times consistent with the proper performance of Employee's duties on behalf of the Company. Employee shall also be entitled to all paid holidays given by the Company to its senior executives.

6. 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 (other than plans relating to stock options, restricted stock, stock appreciation rights, "phantom stock" or similar plans) 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.

7. 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.

8. TERMINATION.

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

(b) DISABILITY. In the event of Employee's permanent disability (as hereinafter defined) 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, "PERMANENT 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 in the jurisdiction involved; 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 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, within twelve (12) months following a Change in Control. 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 (a "SIGNIFICANT OWNER"); 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 (A) 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.

9. 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 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 9 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 9(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 8(b) hereof. If Employee's employment is terminated by the Company pursuant to paragraph 8(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 9(f) below. During any such period and thereafter Employee shall continue to bear the obligations provided for in paragraph 10 below in accordance with the terms of such paragraph 10.

(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 or the date on which Employee terminates

Employee's employment at the rate in effect at the time Notice of Termination is given or the date on which Employee terminates Employee's employment. 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 paragraphs 9 and 10 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 8(b) or 8(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 December 31, 2005 at the rate in effect at the time Notice of Termination is given in accordance with paragraph 8(f) hereof;

(ii) The Company shall continue to pay Employee Employee's Annual Bonus in accordance with normal payroll practices and without interest through December 31, 2005;

(iii) The Company shall pay Employee the severance payment in paragraph 9(f) below; and

(iv) The Company shall maintain in full force and effect, for Employee's continued benefit for the full term of this Agreement, all employee benefit plans and programs in which Employee was entitled to participate immediately prior to the Date of Termination provided that Employee's continued participation is possible under the general terms and provisions of such plans and programs. In the event that Employee's participation in any such plan or program is barred, Employee shall be entitled to receive an amount equal to the annual contributions, payments, credits or allocations made by the Company to Employee, to Employee's account or on Employee's behalf under such plans and programs from which Employee's continued participation is barred.

(e) If Employee shall terminate Employee's employment hereunder pursuant to paragraph 8(e) hereof, then Employee shall continue to receive Employee's Base Salary and Annual Bonus for a period of the lesser of (i) one year from the Date of Termination or (ii) the remainder of the employment term.

(f) SEVERANCE PAYMENT. If the Employee's employment terminates on December 31, 2005 pursuant to Section 1 of this Agreement, the Employee terminates his employment for Good Reason or Employee is terminated by the Company without Cause, the Company shall pay or provide to the Employee beginning in the calendar year following the Date of Termination an annual payment of $200,000 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 Permanent Disability prior to December 31, 2005 or Employee terminates his employment pursuant to

paragraph 8(e) hereof, the 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 the numerator of which is the number of completed whole months elapsed from the Commencement Date to the date of death, Permanent Disability or termination of employment, as the case may be (whichever is sooner), and the denominator of which is the number of whole months from the date hereof until December 31, 2005 and (y) $200,000.

(g) If the Company shall terminate Employee's employment hereunder other than pursuant to paragraphs 8(b) or 8(c) hereof, or if Employee shall terminate Employee's employment pursuant to paragraph 8(d) hereof, Employee agrees, during the entire period of time that Employee is entitled to receive any benefits pursuant to paragraph 9(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 (e), the Company shall be entitled to (i) deduct from the amounts payable to Employee pursuant to paragraphs 9(d)(i) and 9(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 9(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 9(d)(i) and 9(d)(ii) which the Company was entitled to deduct from such amounts pursuant to this paragraph (e).

10. 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 during the further period of one (1) year after the termination of such employment, 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 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 listed on a national securities exchange 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 Securities Exchange Act of 1934, as amended;

(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 the Company, or any of its subsidiary companies, 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 the Company, or any of its subsidiary companies, 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 Company's and its subsidiary companies' business methods, systems, plans and policies which Employee shall hereafter establish, receive or obtain as an employee of the Company or its subsidiary companies, are valuable and unique assets of the respective businesses of the Company and its subsidiary companies, Employee agrees that, during and after the term of Employee's employment hereunder, Employee shall not (otherwise 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 the Company or any of its subsidiary companies, their business, personnel or policies, to any person, firm, corporation or other entity, for any reason or purpose whatsoever. The provisions of this paragraph 10 shall not apply to information which is or shall become generally known to the public or the trade (except by reason of Employee's breach of Employee's obligations hereunder), information which is or shall become available in trade or other publications, information known to Employee prior to entering the employ of the Company, and information which 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 Section 10 (other than Sections 10(a)(iii) and (b), which shall be in full force and effect without regard to the geographic limitations set forth in this Section 10(d)) shall be

in full force and effect within a 100-mile radius of a site for which the Company or any Avatar Entity has commenced development or has a binding commitment therefor. The Employee and the Company expressly agree that the prohibitions set forth in Sections 10(a)(i) and (ii) 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 the Company, its subsidiaries and/or affiliates (each of the foregoing entities being referred to herein, collectively and individually, as the "AVATAR ENTITIES"), regardless of the geographic location of the Employee in rendering such services or engaging in such business activity.

(d) SURVIVAL. The provisions of this paragraph 10 shall survive the termination of Employee's employment hereunder, irrespective of the reason therefor.

(e) 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 Company, the Employee will have access to confidential business or professional information vital to the Avatar Entities' businesses. 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 10 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, the Employee consents and agrees that if the Employee violates or threatens to violate any of the provisions of this Section 10 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.

11. 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.

12. 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 12 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.

13. 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

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.

14. 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.

15. OTHER AGREEMENTS BETWEEN EMPLOYEE AND THE COMPANY. Employee and the Company hereby acknowledge that upon execution of this Agreement, the Original Agreement shall be terminated and the provisions thereof shall be given no force or effect. This Agreement constitutes 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.

16. VALIDITY; STOCKHOLDER APPROVAL OF EXECUTIVE INCENTIVE PLAN AND CAPITAL ACCUMULATION PLAN AMENDMENT.

(a) 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.

(b) The Company hereby undertakes to submit the Executive Incentive Plan and an amendment to the Company's Incentive and Capital Accumulation Plan (the "CAPITAL ACCUMULATION PLAN AMENDMENT") for approval by stockholders at the Company's next annual meeting or at a special meeting on or before December 31, 2001. Employee agrees that the failure of the Company's stockholders to approve the Executive Incentive Plan and the Capital Accumulation Plan Amendment (and any adverse financial consequences to Employee resulting therefrom) shall not constitute a "Good Reason" as defined in paragraph 8(d) hereof.

17. 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.

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

AVATAR HOLDINGS INC.

By: /s/ LEON LEVY
  ------------------------
  Leon Levy
  Chairman of the Board

 /s/ GERALD D. KELFER
  ------------------------
  Gerald D. Kelfer

Exhibit 10 (aa)

CASH BONUS AWARD AGREEMENT

THIS CASH BONUS AWARD AGREEMENT, dated October 20, 2000 (the "Agreement"), is made 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. Executive Incentive Compensation Plan, as the same may be amended, modified and supplemented from time to time (the "Plan"), the Committee (as defined in the Plan) 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 and other provisions herein set forth, an opportunity to receive the performance based compensation described herein (the "Award") if, as of a Performance Goal Test Date (as defined below), the Performance Goal (as defined below) is satisfied. For all purposes of this Agreement, the "Performance Goal" hereunder shall have been satisfied as of a Performance Goal Test Date, if and only if Cash Flow (as defined below) on such date shall exceed the Hurdle Level (as defined below) on such date.

2. CERTAIN DEFINITIONS.

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

(b) Each reference contained in this Agreement to:

"10% Return Measurement Amount" shall mean, as at the end of any month, the excess, if any of (A) the sum of (x) the Property Amount and (y) the sum of the Monthly 10% Returns Included In Hurdle Level for all months during the period from and including the First Day of the Performance Period and through and including the end of such month over (B) Adjusted Cash Flow at the end of such month.

"Adjusted Cash Flow" shall mean, as at any date of determination, Cash Flow at such date, but without giving any effect to either of the provisos contained in the definition of "Cash Flow" herein.

"Bonus Measurement Amount" shall mean, as at any date of determination, the excess, if any, of Cash Flow at such date over the Property Amount.

"Bonus Percentage" shall mean eight (8) percent.

"Cash Flow" shall mean, as at any date of determination, an amount equal to (i) total cumulative cash receipts less total cumulative cash disbursements, in each case, by or on behalf of the

Company or any of its subsidiaries, with respect to the Project, during the period from and including the First Day of the Performance Period through and including such date of determination (it being understood that: such cash receipts shall include funds received from a sale of the Project or any part thereof; such cash receipts shall not include any interest received on any funds attributable to the Project (other than on a purchaser's promissory note received as sale proceeds); such cash disbursements for any month shall include the Inflation Adjustment in respect of such month; such cash disbursements shall not include the Property Amount; and such cash disbursements shall not include amounts paid in respect of deficit funding of the home owners' association at the Project), MINUS (ii) reserves with respect to the Project as the Committee deems appropriate, including, without limitation, reserves for costs, expenses, and contingencies, MINUS (iii) the product of (A) the amount of monies funded by the Company or any of its subsidiaries (in lieu of from third-party lenders) with respect to the Project and (B) the greater of (x) 10% per annum compounded monthly and (y) the Company's "cost of capital" for funds at the relevant times; PROVIDED, HOWEVER, that "cash receipts" and "cash disbursements" shall not include any principal amounts borrowed from, or repaid to, third party lenders, or advanced from, or repaid to, the Company or any of its subsidiaries; PROVIDED FURTHER, HOWEVER, that cash disbursements shall not include In-Process Hard Construction Costs (until such time as the sale of the unit to which any such cost relates has closed).

"First Day of the Performance Period" shall mean November 1, 2000.

"In-Process Hard Construction Costs" shall mean the materials costs, labor costs, architectural costs and other similar direct costs related to units in the Project the sales of which have not closed (it being understood that In-Process Hard Construction Costs shall not include indirect costs (e.g., general and administrative costs, sales and marketing costs and other overhead costs)).

"Inflation Measurement Amount" shall mean, as at any date of determination, an amount equal to (i) if Cash Flow is a negative value (or zero) at the beginning of the month in which there is a date of determination, the Property Amount plus the absolute value of such Cash Flow amount; (ii) if Cash Flow is a positive value (but does not exceed the Property Amount) at the beginning of the month in which there is a date of determination, the Property Amount minus such Cash Flow amount; or (iii) if Cash Flow exceeds the Property Amount at the beginning of the month in which there is a date of determination, zero.

"Inflation Adjustment" in respect of any month shall mean an amount equal to the product of (x) the Inflation Measurement Amount at the beginning of such month and (y) the percentage rate change in the consumer price index for all urban consumers (CPI-U) during such month, without seasonal adjustment, as reported by the Bureau of Labor Statistics of the U.S. Department of Labor (using all items and the reference date of 1982-84 for the index); PROVIDED, HOWEVER, the Inflation Adjustment for such month shall not be a negative value (i.e., "deflation") except to the extent cumulative Inflation Adjustments as of the end of the prior month is a positive value.

"Monthly 10% Return Included in Hurdle Level" in respect of any month shall mean the product of (A) 0.833333% (i.e., 10% per annum) and (B) the 10% Return Measurement Amount as at the end of the prior month (it being understood that for purposes of determining the 10% Return Included in Hurdle Level as at the end of the first month following the First Day of the Performance Period, the 10% Return Measurement Amount as at the end of the prior month shall be deemed equal to the Property Amount).

"Performance Goal Test Date" shall mean (i) the last day of each calendar quarter following the First Day of the Performance Period and prior to the Last Day of the Performance Period (as defined below) and (ii) the Last Day of the Performance Period.

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

"Property Amount" shall mean $17 million or, in the discretion of the Committee, the current value of the land on which the Project is located, as determined (prior to December 31, 2000) by the Committee, if higher.

3. TERMS AND CONDITIONS. The 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 the achievement of the Performance Goal during the period (the "Performance Period") beginning on the First Day of the Performance Period and ending on the earlier of (i) the last day of the month in which the Project has been substantially completed, as determined by the Committee and (ii) October 31, 2008 (such earlier date being the "Last Day of the Performance Period").

(b) The Award is subject to, and no amount shall be payable pursuant to the Award unless and until, the following conditions have been satisfied:
(i) the Plan shall have been approved by the Company's stockholders at any annual or special meeting held prior to or on December 31, 2001; and (ii) the Participant shall have entered into a new employment agreement with the Company or a subsidiary of the Company (or an amendment to the Participant's existing employment agreement) not later than December 15, 2000, providing for a term of employment ending not earlier than December 31, 2005, and on other terms satisfactory to the Company and the Participant.

(c) No amount shall be payable pursuant to the Award on any Payment Date (as defined below) unless and until Cash Flow on the Performance Goal Test Date immediately preceding such Payment Date exceeds an amount (the "Hurdle Level") equal to the sum of (i) the Property Amount and (ii) the sum of the Monthly 10% Returns Included in Hurdle Level for all months during the period from and including the First Day of the Performance Period and through and including such Performance Goal Test Date.

(d) Subject to Sections 3(c), 4 and 5 hereof, if Cash Flow exceeds the Hurdle Level as of a Performance Goal Test Date, then the Participant shall be entitled to receive a bonus payment on the related Payment Date, in an amount equal to the excess of (i) the Bonus Percentage multiplied by the Bonus Measurement Amount as of such Performance Goal Test Date over (ii) the aggregate amount of bonus payments paid to the Participant pursuant to this Agreement prior to such Performance Goal Test Date; PROVIDED, HOWEVER, that notwithstanding the foregoing, the sum of all bonus payments for all awards under the Plan granted with respect to the Project in respect of any Performance Goal Test Date (such sum being referred to as the "Formula Payment Amount") shall not exceed the excess, if any, of (A) Cash Flow as of such Performance Goal Test Date over (B) the sum of (x) the Hurdle Level as of such date and (y) the aggregate amount of bonus payments previously paid pursuant to all awards under the Plan granted with respect to the Project (such excess being referred to as the "Bonus Pool Amount"). If as of a Performance Goal Test Date the Formula Payment Amount exceeds the Bonus Pool Amount, then subject to Sections 3(c), 4 and 5 hereof, the Participant shall be entitled to receive a bonus payment on the related Payment Date, in an amount equal to the product of (A) a fraction, the numerator of which is the amount that the Participant would have received if the Formula Payment Amount did not exceed the Bonus Pool Amount on such date and the denominator of which is the Formula Payment Amount on such date and (B) the Bonus Pool Amount.

(e) The Committee shall determine whether the Performance Goal has been met as of the applicable Performance Goal Test Date and, if it has, shall so certify in writing and ascertain the amount of the bonus, if any, payable to the Participant. The amount of the bonus shall be paid to the Participant in cash within 75 days after the Committee makes its determination (each such date being a "Payment Date"); PROVIDED, HOWEVER, if a material change occurs in the business plan of the Project (as determined by the Committee in its sole discretion), the Committee may defer the payment of such bonus amount to such date and to such extent as the Committee determines in its sole discretion.

4. CAP ON COMPENSATION. Notwithstanding anything to the contrary herein, the maximum bonus amounts payable to the Participant shall be subject to the limitations in the Plan and the Participant's employment agreement with the Company or a subsidiary thereof, as the case may be, as amended from time to time.

5. CLAWBACK; NO OFFSET BY PARTICIPANT.

(a) The Participant shall pay to the Company upon demand by the Company following the Last Day of the Performance Period 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 Florida for the relevant taxable period, taking into account the deductibility of state and local income taxes for federal income tax purposes), (ii) interest on such excess (at a rate of 10% per annum compounded monthly from the date of receipt of the relevant Excess Bonus Payments until the date of refund), and (iii) 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 5(a) to the Company. For purposes of the preceding sentence, "Excess Bonus Payments" shall mean the greater of (AA) the amount equal to the excess, if any, of (i) the aggregate amount of all bonus payments paid to the Participant pursuant to this Agreement

(including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period) over (ii) the product of the Bonus Percentage multiplied by the Bonus Measurement Amount as of the close of business on the Last Day of the Performance Period and (BB) the amount equal to the product of (x) a fraction, the numerator of which is the aggregate amount of all bonus payments paid to the Participant pursuant to this Agreement (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period) and the denominator of which is the aggregate amount of all bonus payments paid pursuant to all awards under the Plan granted with respect to the Project (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period) and (y) the excess, if any, of (i) the aggregate amount of all bonus payments paid pursuant to all awards under the Plan granted with respect to the Project (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period)over (ii) the amount equal to the excess, if any, of (1) Cash Flow as of the close of business on the Last Day of the Performance Period over (2) the Hurdle Level as of the close of business on the Last Day of the Performance Period .

(b) The Participant shall be obligated to pay to the Company any amount due pursuant to this Section 5 regardless of whether the Participant has or claims to have any claim against the Company or any of its subsidiaries, and the Participant shall have no right to offset any amount due or claimed to be due from the Company or any of its subsidiaries.

6. TERMINATION OF EMPLOYMENT.

(a) Subject to Sections 3 and 5 hereof:

(i) if the Participant's employment with the Company is terminated by the Company for "cause" (as defined below) or by the Participant, prior to December 31, 2005, for other than "good reason" (as defined below), in addition to any other consequences of such termination provided for by this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to future bonus payments pursuant to this Agreement from and after the date of such termination;

(ii) 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 bonus payments as would otherwise be payable pursuant to this Agreement as though the Participant's employment had not been terminated; and

(iii) if the Participant dies while employed by the Company or in the event the Participant's employment with the Company is terminated by the Company by reason of the Participant's "permanent disability" (as defined below), notwithstanding Section 3 hereof:

(A) the Participant shall be entitled to receive only that portion of the bonus payments otherwise payable pursuant to Section 3(d) 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 permanent 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 December 31, 2005 and (y) the amount of bonus payments that would have been payable pursuant to Section 3(d) hereof if the Participant remained an employee of the Company through and including the Last Day of the Performance Period; PROVIDED, HOWEVER, subject to Section 5(a) hereof, on the last Payment Date following the Last Day of the Performance Period, the Participant shall be entitled to receive a bonus payment in an amount equal to the excess, if any, of (A) the lesser of (i) $500,000 or (ii) the cumulative amount of bonus payments that were paid to the Participant (in respect of periods prior to the Participant's death or permanent disability) pursuant to
Section 3(d) hereof and that would have been payable to the Participant (in respect of periods subsequent to the Participant's death or permanent disability) pursuant to Section 3(d) hereof if the Participant remained an employee of the Company through and including the Last Day of the Performance Period, over (B) the aggregate amount of all bonus payments paid to the Participant pursuant to this Agreement (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period); and

(B) 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) on the Payment Date.

(b) For purposes of Section 6(a) hereof, the terms "cause", "good reason" and "permanent disability", shall have the meanings ascribed to such terms in the Participant's employment agreement with the Company or a subsidiary thereof, as the case may be, as amended from time to time; PROVIDED, HOWEVER, if the Participant is no longer employed pursuant to an employment agreement but is continuing in employ, such terms shall have the meanings ascribed to such terms in the employment agreement last in effect.

7. 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 (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 future bonus payments pursuant to this Agreement from and after the date of such breach.

8. TAXES. Any bonus payment pursuant to the 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 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.

10. NO OBLIGATION TO PURSUE PROJECT. This Agreement shall in no way obligate the Company to pursue the Project, and the Company may limit, abandon or change the Project 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 the Project.

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 Award and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer the Award in contravention of this Section 12(a) is void AB INITIO. The 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 the Company or any of its subsidiaries, 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 the Company.

(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 Plan and this Agreement will be construed by and administered under the supervision of the Committee in its sole and absolute discretion, and all determinations of the 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 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.

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 changed or terminated orally. This Agreement and the Plan 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.

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

AVATAR HOLDINGS INC.

By:    /s/ LEON LEVY
   ---------------------------------
     Name: Leon Levy
     Title: Chairman of the Board

       /s/ GERALD D. KELFER
     -------------------------------
          Gerald D. Kelfer

Exhibit 10 (ab)

AMENDED AND RESTATED
RESTRICTED STOCK UNIT AGREEMENT

This AMENDED AND RESTATED RESTRICTED STOCK UNIT AGREEMENT ("AGREEMENT") is made as of October 20, 2000, between Avatar Holdings Inc., a Delaware corporation (the "COMPANY") and Gerald D. Kelfer (the "PARTICIPANT") and amends and restates in its entirety, the restricted stock unit agreement dated December 7, 1998 between the Company and the Participant (the "ORIGINAL AGREEMENT").

W I T N E S S E T H

WHEREAS, the Participant is currently employed as President and Chief Executive Officer of the Company;

WHEREAS, the Participant was awarded an opportunity to receive 100,000 Performance Conditioned Restricted Stock Units pursuant to the Original Agreement; and

WHEREAS, the Company and the Participant wish to amend and restate the terms of the Original Agreement, all upon the terms hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto agree that the Original Agreement is amended and restated in its entirety to read as follows:

1. AWARD. Pursuant to the provisions of the Amended and Restated 1997 Incentive and Capital Accumulation Plan, as the same may be amended, modified and supplemented (the "PLAN"), the Incentive Plan Committee (the "COMMITTEE") of the Board of Directors of the Company (the "BOARD") awards to the Participant, as of December 7, 1998, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth (and subject to the approval of an amendment to the Plan (the "PLAN AMENDMENT") by the Company's stockholders at the 2001 Annual Meeting or at a special meeting of stockholders on or before December 31, 2001 (the STOCKHOLDER APPROVAL"), an opportunity to receive 100,000 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. It is understood and agreed that the award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to obtaining the Stockholder Approval, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 100,000 Units upon satisfaction of the following condition

(the date on which such condition is satisfied being hereinafter referred to as the "GRANT DATE"): the closing stock price of the Common Stock on its principal trading market shall have been at least $25 per share for 20 trading days out of 30 consecutive trading days or 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 $25 per share in either case, during the period beginning on the date immediately following the date hereof and ending on December 31, 2005 (the "HURDLE PRICE CONDITION"); PROVIDED, HOWEVER, that subject to Section 4 hereof, 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 and voting rights) in shares of Common Stock in respect of the Units until such Units have vested and been distributed to the Participant in the form of shares of Common Stock 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.

3. VESTING AND CONVERSION OF UNITS. On December 31, 2005, 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, 2005.

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 OF CONTROL.

(a) Notwithstanding any other provision contained herein:

(i) if the Participant's employment with the Company is terminated by the Company for "cause" (as defined below) or by the Participant for other than "good reason" (as defined below), the Participant shall forfeit all Units granted to the Participant pursuant to Section 2(a) hereof, if any, as of the date of termination of employment.

(ii) 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", 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.

(iii) if the Participant dies or in the event the Participant's employment with the Company is terminated by the Company for reason of the Participant's "permanent disability" (as defined below), 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 December 7, 1998 to the date of death or permanent disability, as the case may be (whichever is sooner), and the denominator of which is the number of whole months from December 7, 1998 to December 31, 2005 and (y) 100,000 or (ii) 50,000 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 "permanent disability" prior to the Grant Date and Stockholder Approval has been obtained on or before December 31, 2001, and the Hurdle Price Condition is satisfied on or before the one year anniversary of Participant's termination for death or "permanent disability", 50,000 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.

For purposes of this Section 4(a), the terms "CAUSE", "GOOD REASON" and "PERMANENT DISABILITY", shall have the meanings ascribed to such terms in the Participant's employment agreement with the Company, dated as of November 30, 2000, as amended or restated from time to time.

(b) In the event of a Change of Control (as defined below), all Units granted to the Participant pursuant to Section 2(a) hereof shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant. For purposes of this Section 4(b), the term "CHANGE OF CONTROL" shall mean any of the following events:

(A) 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 (a "SIGNIFICANT OWNER"); or

(B) 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 (A) above, and such transaction shall have been consummated.

5. DEFERRAL. 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 if the Participant delivers to the Company a written notice of such election at least six months prior to such vesting and enters into a deferral agreement with the Company on terms satisfactory to the Committee.

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. In addition, the Committee may make adjustments to the terms and conditions of the Units and this Agreement 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.

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 (as defined in the Plan) 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 National Market System, 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 National Market System, 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. STOCKHOLDER APPROVAL OF THE PLAN AMENDMENT. The Company hereby undertakes to submit an amendment to the Plan for approval by stockholders at the Company's next annual meeting or at a special meeting on or before December 31, 2001. If the stockholders fail to approve the Plan Amendment at such annual meeting or special meeting (or any adjournment thereof) on or before December 31, 2001, this Agreement will be terminated effective immediately following such annual meeting or special meeting (or any adjournment thereof) at which stockholders failed to approve the Plan Amendment. If this Agreement is so terminated, the Participant and the Company shall be discharged and released of and from any further obligations under this Agreement, and the Original Agreement shall continue to be in full force and effect.

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 changed or terminated orally. This Agreement and the Plan 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.

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

AVATAR HOLDINGS INC.

By:     /s/ LEON LEVY
   ---------------------------------
     Name: Leon Levy
     Title: Chairman of the Board

       /s/ GERALD D. KELFER
     -------------------------------
          Gerald D. Kelfer

Exhibit 10 (ac)

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT ("AGREEMENT"), dated October 20, 2000, between Avatar Holdings Inc., a Delaware corporation (the "COMPANY") and Gerald D. Kelfer (the "PARTICIPANT").

1. AWARD. Pursuant to the provisions of the Amended and Restated 1997 Incentive and Capital Accumulation Plan, as the same may be amended, modified and supplemented (the "PLAN"), the Incentive Plan Committee (the "COMMITTEE") of the Board of Directors of the Company (the "BOARD") 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 (and subject to the approval of an amendment to the Plan (the "PLAN AMENDMENT") by the Company's stockholders at the 2001 Annual Meeting or at a special meeting of stockholders on or before December 31, 2001 (the "STOCKHOLDER APPROVAL")), an opportunity to receive 50,000 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. It is understood and agreed that the award evidenced by this Agreement is subject to the following terms and conditions:

(a) Subject to obtaining the Stockholder Approval, the Participant shall be granted, automatically and without further authorization on the part of the Committee, 50,000 Units upon satisfaction of the following condition (the date on which such condition is satisfied being 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 $25 per share for 20 trading days out of 30 consecutive trading days or 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 $25 per share in either case, during the period beginning on the date immediately following the date hereof and ending on December 31, 2005 (the "HURDLE PRICE CONDITION"); PROVIDED, HOWEVER, that subject to Section 4 hereof, 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 and voting rights) in shares of Common Stock in respect of the Units until such Units have vested and been distributed

to the Participant in the form of shares of Common Stock 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.

3. VESTING AND CONVERSION OF UNITS. On December 31, 2005, 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, 2005.

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 OF CONTROL.

(a) Notwithstanding any other provision contained herein:

(i) if the Participant's employment with the Company is terminated by the Company for "cause" (as defined below) or by the Participant for other than "good reason" (as defined below), the Participant shall forfeit all Units granted to the Participant pursuant to Section 2(a) hereof, if any, as of the date of termination of employment.

(ii) 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", 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.

(iii) if the Participant dies or in the event the Participant's employment with the Company is terminated by the Company for reason of the Participant's "permanent disability" (as defined below), 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 the date hereof to the date of death or permanent disability, as the case may be (whichever is sooner), and the denominator of which is the number of whole months from the date hereof to December 31, 2005 and (y) 50,000 or (ii) 25,000 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 permanent disability prior to the Grant Date and Stockholder Approval has been obtained on or before December 31, 2001, and the Hurdle Price Condition is satisfied on or before the one year anniversary of Participant's termination for death or "permanent disability", 25,000 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.

For purposes of this Section 4(a), the terms "CAUSE", "GOOD REASON" and "PERMANENT DISABILITY", shall have the meanings ascribed to such terms in the Participant's employment agreement with the Company, dated as of November 30, 2000, as amended or restated from time to time.

(b) In the event of a Change of Control (as defined below), all Units granted to the Participant pursuant to Section 2(a) hereof shall vest, be converted into shares of Common Stock and be immediately distributed to the Participant. For purposes of this Section 4(b), the term "CHANGE OF CONTROL" shall mean any of the following events:

(A) 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 (a "SIGNIFICANT OWNER"); or

(B) 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 (A) above, and such transaction shall have been consummated.

5. DEFERRAL. 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 if the Participant delivers to the Company a written notice of such election at least six months prior to such vesting and enters into a deferral agreement with the Company on terms satisfactory to the Committee.

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. In addition, the Committee may make adjustments to the terms and conditions of the Units and this Agreement 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.

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 (as defined in the Plan) 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 National Market System, 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 National Market System, 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. STOCKHOLDER APPROVAL OF THE PLAN AMENDMENT. The Company hereby undertakes to submit an amendment to the Plan for approval by stockholders at the Company's next annual meeting or at a special meeting on or before December 31, 2001. If the stockholders fail to approve the Plan Amendment at such annual meeting or special meeting (or any adjournment thereof) on or before December 31, 2001, this Agreement will be terminated effective immediately following such annual meeting or special meeting (or any adjournment thereof) at which stockholders failed to approve the Plan Amendment. If this Agreement is so terminated, the Participant and the Company shall be discharged and released of and from any further obligations under this Agreement.

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 changed or terminated orally. This Agreement and the Plan 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.

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

AVATAR HOLDINGS INC.

By:   /s/ LEON LEVY
   ----------------------------------
     Name: Leon Levy
     Title: Chairman of the Board

      /s/ GERALD D. KELFER
     --------------------------------
         Gerald D. Kelfer

Exhibit 10 (ad)

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("AGREEMENT") is made as of November 30, 2000, between Avatar Properties Inc., a Florida corporation (the "COMPANY") and Jonathan Fels (the "EMPLOYEE") and amends and restates in its entirety, the employment agreement dated December 4, 1997 between the Company and 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, all upon the terms hereinafter set forth;

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 hereinafter set forth. The term of employment under this Agreement shall be for the period commencing as of December 5, 1997 (the "COMMENCEMENT DATE") and ending on December 31, 2004, unless earlier terminated as herein provided (the "TERM OF EMPLOYMENT"). The last day of the Employee's Term of Employment shall be referred to in this Agreement as the "DATE OF TERMINATION."

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's subsidiaries and affiliates 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; PROVIDED, HOWEVER, that nothing contained herein shall prevent the Employee from engaging in Permitted

Activities (as defined below). The principal place of employment of the Employee shall be the current principal executive offices of the Company and/or such other location within 50 miles of Company's current principal place of business as shall be necessary for the Employee to discharge his duties hereunder and the Permitted Activities. For purposes of this Agreement, "PERMITTED ACTIVITIES" shall mean an ownership interest in, or the provision of services in connection with the design, development, construction, sales and marketing, operation and management, solely to or in connection with, the existing Brookman-Fels projects conducted by the companies set forth on SCHEDULE I hereto, the Harbor Islands Joint Venture between Avatar Harbor Islands, Inc. and Brookman-Fels at Harbor Islands, Inc., and the Presidential Estate Joint Venture between Avatar at Presidential Estates, Inc. and Brookman-Fels at Presidential Estates, Inc. 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 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. The Company shall pay the Employee a base salary at an annual rate of $400,000 payable at such times and in accordance with the standard payroll practices of Avatar Holdings Inc., a Delaware corporation ("AVATAR"). 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) 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 its senior executives. Nothing in this Agreement shall require the Company, Avatar or their affiliates to establish, maintain or continue any benefit programs already in existence or hereafter adopted for senior executives of Avatar, and nothing in the Agreement shall restrict the right of Avatar or any of its affiliates to amend, modify or terminate any such benefit program.

(c) 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.

(d) VACATIONS, HOLIDAYS OR TEMPORARY LEAVE: The Employee shall be entitled to take four (4) weeks of vacation per year, plus any additional time, if any, as the Board of Directors of the Company or a committee of the Board of Directors of the Company may determine, in its 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. CASH COMPENSATION CAP. Notwithstanding anything contained above or in any other agreement between Employee and the Company or Avatar, the "cash compensation" paid to Employee from January 1, 2001 through December 31, 2004 may not exceed seven million dollars ($7,000,000). "Cash compensation" shall mean the cumulative sum of all cash payments made to the Employee in respect of salary, bonus and any other incentive awards (including, but not limited to the cash bonus award granted pursuant to the Avatar Holdings Inc. Executive Incentive Compensation Plan (the "Executive Incentive Plan") and any other project award granted under the Executive Incentive Plan). It is understood that "cash compensation" shall not include any securities of Avatar granted to Employee (e.g., stock options granted pursuant to the Avatar Holdings Inc. Incentive and Capital Accumulation Plan) and any cash payments made to Employee (not in his capacity as an employee of the Company) in respect of Permitted Activities.

5. 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 listed on a national securities exchange 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 Securities Exchange Act of 1934, as amended;

(ii) During the Term of Employment the Employee shall not, directly or indirectly, (A) solicit, in competition with the Company or Avatar (their subsidiaries and/or affiliates (each of the foregoing entities being referred to herein, collectively and individually, as the "AVATAR ENTITIES"), any person who is a customer of any business conducted by the Avatar Entities or (B) in any manner whatsoever induce, or assist others to induce, any supplier of the Company to terminate its association with such entity or do anything, directly or indirectly, to interfere with the business relationship between the Company, Avatar and any of their respective current or prospective suppliers.

(iii) During the Term of Employment the Employee shall not, directly or indirectly, solicit or induce any employee 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 the Avatar Entities.

(iv) The Employee recognizes and acknowledges that certain confidential business and technical information used by the Employee in connection with the Permitted Activities that includes, without limitation, certain confidential and proprietary information relating to the designing, development, construction and marketing of real estate, is a valuable, special and unique asset of the Company, such information, subject to Section 5(a)(vi) below, collectively being referred to as the "CONFIDENTIAL INFORMATION." During the Term of Employment the Employee shall not (A) use Confidential Information, or any part thereof other than in connection with his duties hereunder or Permitted Activities, nor (B) disclose such information to any person, firm, corporation, association or other entity for any purpose or reason whatsoever.

(v) 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 trade secret or know-how acquired by the Employee during his employment by the Company which relates to the business practices, methods, processes or other confidential or secret aspects of the business of the Avatar Entities without the prior written consent from the Company (such information, subject to Section 5(a)(vi) below, being referred to as the "COMPANY CONFIDENTIAL INFORMATION").

(vi) Confidential Information and Company Confidential Information shall not include any information or documents that (A) are or become publicly available without breach by the Employee of Sections 5(a)(iv) and (v) hereof, respectively, (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 the Company, Avatar or their respective affiliates, or (C) is required to be disclosed by law, statute, governmental or judicial proceeding; PROVIDED, HOWEVER, that in the event that 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.

(vii) 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 5 (other than Sections 5(a)(iii), (iv), (v), and (vi), which shall be in full force and effect without regard to the geographic limitations set forth in this Section
5(b)) shall be in full force and effect within a 100-mile radius of a site for which the Avatar Entities has commenced development or has a binding commitment therefor.

(c) REMEDIES. The Employee acknowledges that his services are of a special, unique and extraordinary character and, his position with the Company and Avatar places him in a substantial relationship and a position of confidence and trust with specific prospective or existing customers, suppliers and employees of the Company and Avatar, and that in connection with his services to the Company, the Employee will have access to confidential business or professional information vital to the Company's and Avatar's businesses. The Employee further acknowledges that in view of the nature of the business in which the Company and Avatar are engaged, the foregoing restrictive covenants in this Section 5 hereof are reasonable and necessary in order to protect the legitimate business interests of the Company and Avatar and that violation thereof would result in irreparable injury to the Company and Avatar. Accordingly, the Employee consents and agrees that if the Employee violates or threatens to violate any of the provisions of this Section 5 hereof the Company and Avatar would sustain irreparable harm and, therefore, the Company and Avatar 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.

6. TERMINATION OF EMPLOYMENT:

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

(i) the termination of the Employee's employment upon and at any time following the Date of Termination and absent the parties having entered into a written agreement for the renewal of this Agreement;

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

(iii) the Disability (as defined below) of 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; or

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

(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(b).

(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; (ii) commission of any act of willful misconduct, gross negligence, fraud or dishonesty; or (iii) violation of any material term of this Agreement or any material written policy of the Company, PROVIDED that the Company first deliver written notice thereof to the Employee and the Employee shall not have cured such violation within thirty (30) days after receipt of such written notice.

(d) For purposes of this Agreement, "WITHOUT CAUSE" shall mean any reason other than the reasons described in Sections 6(a)(i), 6(a)(ii), 6(a)(iii) and 6(a)(iv) hereof. The parties expressly agree that a termination of employment Without Cause pursuant to Section 6(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 a willful and material breach of the provisions of this Agreement by the Company.

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

7. PAYMENTS UPON TERMINATION OF EMPLOYMENT:

(a) DEATH OR DISABILITY: If the Employee's employment hereunder is terminated due to the Employee's death or Disability pursuant to Sections 6(a)(ii) or (iii) hereof, 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 unpaid 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(b) 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 6(a)(ii) or (iii), the Employee agrees to execute any and all necessary documents necessary to effectuate said insurance.

Upon termination of the Employee's employment due to the Employee's Disability, the Employee shall continue to have the obligations provided for in Section 4 hereof.

(b) TERMINATION FOR CAUSE, RESIGNATION WITHOUT GOOD REASON, OR EXPIRATION OF TERM OF EMPLOYMENT: If the Employee's employment hereunder is terminated due to the termination of the Employee's employment by the Company for Cause pursuant to Section 6(a)(iv) or due to the Employee's resignation Without Good Reason pursuant to Section 6(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 unpaid 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(b) 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.

(c) TERMINATION WITHOUT CAUSE; RESIGNATION FOR GOOD REASON:
If the Employee's employment hereunder is terminated by the Company Without Cause pursuant to Section 6(a)(v), or due to the Employee's resignation for Good Reason pursuant to Section 6(a)(vi), the Company shall continue to pay to the Employee, in lieu of any other payments or benefits and on the regular payroll dates of the Company for a period of six (6) months following Date of Termination his current base salary, at the rate provided in Section 3(a) hereof; PROVIDED, HOWEVER, if the Employee's employment hereunder is terminated by the Company Without Cause pursuant to Section 6(a)(v) or due to Employee's resignation for Good Reason pursuant to Section 6(a)(vi) prior to the second anniversary of the Commencement Date, the Company shall continue to pay to the Employee, through the second anniversary of the Commencement Date and for a period of six (6) months following such second anniversary, his current base salary, at the rate provided in Section 3(a) hereof, in lieu of any other payments or benefits, and on the regular payment dates of the Company. The Company's obligation to make the payment pursuant to this Section 7(c) shall be conditioned upon the Company's prior receipt of an executed general release of claims which the Employee may have against the Company, its affiliates and their respective shareholders, directors, officers, employees and agents, to the maximum extent permitted by law.

(d) NO OTHER PAYMENTS. Except as provided in this Section 7, 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 7(c) shall be reduced by the amount of any such payment in lieu of notice.

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 for in
Section 3 represents the sole compensation to be paid to Employee in respect of the services performed or to be performed for the Company and/or its affiliates by such Employee. The Employee further agrees that should there be a determination that for federal, state, local and/or other tax purposes, Employee's compensation for services performed for the Company and its affiliates is greater than the amounts payable hereunder, Employee will indemnify and hold harmless the Company and its affiliates 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 embodies 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 the Company and its affiliates. This Agreement may not be changed 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 shall be instituted in a federal or state court 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 7(a) 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 affiliate of or successor to the Company. The term "SUCCESSOR" shall mean, with respect to the Company or any of its subsidiaries, 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 the Company. 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 5 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. STOCKHOLDER APPROVAL OF INCENTIVE PLAN. Avatar hereby undertakes to submit the Executive Incentive Plan for approval by stockholders at Avatar's next annual meeting or at a special meeting on or before December 31, 2001. If the stockholders fail to approve the Executive Incentive Plan at such annual meeting or special meeting (or any adjournment thereof) on or before December 31, 2001, Employee may terminate Employee's employment hereunder by communicating a written Notice of Termination to the Company within thirty (30) days following such annual meeting (or any adjournment thereof) at which stockholders failed to approve the Executive Incentive Plan. If Employee so terminates Employee's employment, Employee will be bound by the terms of the Original Agreement, and Employee and the Company shall be discharged and released of and from any further obligations under this Agreement. If Employee shall not provide a written Notice of Termination on a timely basis, then this Agreement shall remain in full force and effect.

17. 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 3800 South Ocean Drive Suite G-9
Hollywood, Florida 33019

with a copy to:

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

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. 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 Coral Gables, Florida 33134 Attention: General Counsel Facsimile: (305) 448-9927

and with a copy to:

Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Attention: Simeon Gold, 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.

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: Chairman of the Board

    /s/ JONATHAN E. FELS
    -------------------------------
    Employee: Jonathan Fels

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 (ae)

CASH BONUS AWARD AGREEMENT

THIS CASH BONUS AWARD AGREEMENT, dated October 20, 2000 (the "Agreement"), is made 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. Executive Incentive Compensation Plan, as the same may be amended, modified and supplemented from time to time (the "Plan"), the Committee (as defined in the Plan) 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 and other provisions herein set forth, an opportunity to receive the performance based compensation described herein (the "Award") if, as of a Performance Goal Test Date (as defined below), the Performance Goal (as defined below) is satisfied. For all purposes of this Agreement, the "Performance Goal" hereunder shall have been satisfied as of a Performance Goal Test Date, if and only if Cash Flow (as defined below) on such date shall exceed the Hurdle Level (as defined below) on such date.

2. CERTAIN DEFINITIONS.

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

(b) Each reference contained in this Agreement to:

"10% Return Measurement Amount" shall mean, as at the end of any month, the excess, if any of (A) the sum of (x) the Property Amount and (y) the sum of the Monthly 10% Returns Included In Hurdle Level for all months during the period from and including the First Day of the Performance Period and through and including the end of such month over (B) Adjusted Cash Flow at the end of such month.

"Adjusted Cash Flow" shall mean, as at any date of determination, Cash Flow at such date, but without giving any effect to either of the provisos contained in the definition of "Cash Flow" herein.

"Bonus Measurement Amount" shall mean, as at any date of determination, the excess, if any, of Cash Flow at such date over the Property Amount.

"Bonus Percentage" shall mean six (6) percent.

"Cash Flow" shall mean, as at any date of determination, an amount equal to (i) total cumulative cash receipts less total cumulative cash disbursements, in each case, by or on behalf of the Company or any of its subsidiaries, with respect to the Project,

during the period from and including the First Day of the Performance Period through and including such date of determination (it being understood that: such cash receipts shall include funds received from a sale of the Project or any part thereof; such cash receipts shall not include any interest received on any funds attributable to the Project (other than on a purchaser's promissory note received as sale proceeds); such cash disbursements for any month shall include the Inflation Adjustment in respect of such month; such cash disbursements shall not include the Property Amount; and such cash disbursements shall not include amounts paid in respect of deficit funding of the home owners' association at the Project), MINUS (ii) reserves with respect to the Project as the Committee deems appropriate, including, without limitation, reserves for costs, expenses, and contingencies, MINUS (iii) the product of (A) the amount of monies funded by the Company or any of its subsidiaries (in lieu of from third-party lenders) with respect to the Project and (B) the greater of (x) 10% per annum compounded monthly and (y) the Company's "cost of capital" for funds at the relevant times; PROVIDED, HOWEVER, that "cash receipts" and "cash disbursements" shall not include any principal amounts borrowed from, or repaid to, third party lenders, or advanced from, or repaid to, the Company or any of its subsidiaries; PROVIDED FURTHER, HOWEVER, that cash disbursements shall not include In-Process Hard Construction Costs (until such time as the sale of the unit to which any such cost relates has closed).

"First Day of the Performance Period" shall mean November 1, 2000.

"In-Process Hard Construction Costs" shall mean the materials costs, labor costs, architectural costs and other similar direct costs related to units in the Project the sales of which have not closed (it being understood that In-Process Hard Construction Costs shall not include indirect costs (e.g., general and administrative costs, sales and marketing costs and other overhead costs)).

"Inflation Measurement Amount" shall mean, as at any date of determination, an amount equal to (i) if Cash Flow is a negative value (or zero) at the beginning of the month in which there is a date of determination, the Property Amount plus the absolute value of such Cash Flow amount; (ii) if Cash Flow is a positive value (but does not exceed the Property Amount) at the beginning of the month in which there is a date of determination, the Property Amount minus such Cash Flow amount; or (iii) if Cash Flow exceeds the Property Amount at the beginning of the month in which there is a date of determination, zero.

"Inflation Adjustment" in respect of any month shall mean an amount equal to the product of (x) the Inflation Measurement Amount at the beginning of such month and (y) the percentage rate change in the consumer price index for all urban consumers (CPI-U) during such month, without seasonal adjustment, as reported by the Bureau of Labor Statistics of the U.S. Department of Labor (using all items and the reference date of 1982-84 for the index); PROVIDED, HOWEVER, the Inflation Adjustment for such month shall not be a negative value (i.e., "deflation") except to the extent cumulative Inflation Adjustments as of the end of the prior month is a positive value.

"Monthly 10% Return Included in Hurdle Level" in respect of any month shall mean the product of (A) 0.833333% (i.e., 10% per annum) and (B) the 10% Return Measurement Amount as at the end of the

prior month (it being understood that for purposes of determining the 10% Return Included in Hurdle Level as at the end of the first month following the First Day of the Performance Period, the 10% Return Measurement Amount as at the end of the prior month shall be deemed equal to the Property Amount).

"Performance Goal Test Date" shall mean (i) the last day of each calendar quarter following the First Day of the Performance Period and prior to the Last Day of the Performance Period (as defined below) and (ii) the Last Day of the Performance Period.

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

"Property Amount" shall mean $17 million or, in the discretion of the Committee, the current value of the land on which the Project is located, as determined (prior to December 31, 2000) by the Committee, if higher.

3. TERMS AND CONDITIONS. The 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 the achievement of the Performance Goal during the period (the "Performance Period") beginning on the First Day of the Performance Period and ending on the earlier of (i) the last day of the month in which the Project has been substantially completed, as determined by the Committee and (ii) October 31, 2008 (such earlier date being the "Last Day of the Performance Period").

(b) The Award is subject to, and no amount shall be payable pursuant to the Award unless and until, the following conditions have been satisfied:
(i) the Plan shall have been approved by the Company's stockholders at any annual or special meeting held prior to or on December 31, 2001; and (ii) the Participant shall have entered into a new employment agreement with the Company or a subsidiary of the Company (or an amendment to the Participant's existing employment agreement) not later than December 15, 2000, providing for a term of employment ending not earlier than December 31, 2004, and on other terms satisfactory to the Company and the Participant.

(c) No amount shall be payable pursuant to the Award on any Payment Date (as defined below) unless and until Cash Flow on the Performance Goal Test Date immediately preceding such Payment Date exceeds an amount (the "Hurdle Level") equal to the sum of (i) the Property Amount and (ii) the sum of the Monthly 10% Returns Included in Hurdle Level for all months during the period from and including the First Day of the Performance Period and through and including such Performance Goal Test Date.

(d) Subject to Sections 3(c), 4 and 5 hereof, if Cash Flow exceeds the Hurdle Level as of a Performance Goal Test Date, then the Participant shall be entitled to receive a bonus payment on the related Payment Date, in an amount equal to the excess of (i) the Bonus Percentage multiplied by the Bonus Measurement Amount as of such Performance Goal Test Date over (ii) the aggregate amount of bonus payments paid to the Participant pursuant to this

Agreement prior to such Performance Goal Test Date; PROVIDED, HOWEVER, that notwithstanding the foregoing, the sum of all bonus payments for all awards under the Plan granted with respect to the Project in respect of any Performance Goal Test Date (such sum being referred to as the "Formula Payment Amount") shall not exceed the excess, if any, of (A) Cash Flow as of such Performance Goal Test Date over (B) the sum of (x) the Hurdle Level as of such date and (y) the aggregate amount of bonus payments previously paid pursuant to all awards under the Plan granted with respect to the Project (such excess being referred to as the "Bonus Pool Amount"). If as of a Performance Goal Test Date the Formula Payment Amount exceeds the Bonus Pool Amount, then subject to Sections 3(c), 4 and 5 hereof, the Participant shall be entitled to receive a bonus payment on the related Payment Date, in an amount equal to the product of (A) a fraction, the numerator of which is the amount that the Participant would have received if the Formula Payment Amount did not exceed the Bonus Pool Amount on such date and the denominator of which is the Formula Payment Amount on such date and (B) the Bonus Pool Amount.

(e) The Committee shall determine whether the Performance Goal has been met as of the applicable Performance Goal Test Date and, if it has, shall so certify in writing and ascertain the amount of the bonus, if any, payable to the Participant. The amount of the bonus shall be paid to the Participant in cash within 75 days after the Committee makes its determination (each such date being a "Payment Date"); PROVIDED, HOWEVER, if a material change occurs in the business plan of the Project (as determined by the Committee in its sole discretion), the Committee may defer the payment of such bonus amount to such date and to such extent as the Committee determines in its sole discretion.

4. CAP ON COMPENSATION. Notwithstanding anything to the contrary herein, the maximum bonus amounts payable to the Participant shall be subject to the limitations in the Plan and the Participant's employment agreement with the Company or a subsidiary thereof, as the case may be, as amended from time to time.

5. CLAWBACK; NO OFFSET BY PARTICIPANT.

(a) The Participant shall pay to the Company upon demand by the Company following the Last Day of the Performance Period 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 Florida for the relevant taxable period, taking into account the deductibility of state and local income taxes for federal income tax purposes), (ii) interest on such excess (at a rate of 10% per annum compounded monthly from the date of receipt of the relevant Excess Bonus Payments until the date of refund), and (iii) 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 5(a) to the Company. For purposes of the preceding sentence, "Excess Bonus Payments" shall mean the greater of (AA) the amount equal to the excess, if any, of (i) the aggregate

amount of all bonus payments paid to the Participant pursuant to this Agreement (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period) over (ii) the product of the Bonus Percentage multiplied by the Bonus Measurement Amount as of the close of business on the Last Day of the Performance Period and (BB) the amount equal to the product of (x) a fraction, the numerator of which is the aggregate amount of all bonus payments paid to the Participant pursuant to this Agreement (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period) and the denominator of which is the aggregate amount of all bonus payments paid pursuant to all awards under the Plan granted with respect to the Project (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period) and (y) the excess, if any, of (i) the aggregate amount of all bonus payments paid pursuant to all awards under the Plan granted with respect to the Project (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period)over (ii) the amount equal to the excess, if any, of (1) Cash Flow as of the close of business on the Last Day of the Performance Period over (2) the Hurdle Level as of the close of business on the Last Day of the Performance Period .

(b) The Participant shall be obligated to pay to the Company any amount due pursuant to this Section 5 regardless of whether the Participant has or claims to have any claim against the Company or any of its subsidiaries, and the Participant shall have no right to offset any amount due or claimed to be due from the Company or any of its subsidiaries.

6. TERMINATION OF EMPLOYMENT.

(a) Subject to Sections 3 and 5 hereof:

(i) if the Participant's employment with the Company is terminated by the Company for "cause" (as defined below) or by the Participant, prior to December 31, 2004, for other than "good reason" (as defined below), in addition to any other consequences of such termination provided for by this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to future bonus payments pursuant to this Agreement from and after the date of such termination;

(ii) 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 bonus payments as would otherwise be payable pursuant to this Agreement as though the Participant's employment had not been terminated; and

(iii) if the Participant dies while employed by the Company or in the event the Participant's employment with the Company is terminated by the Company by reason of the Participant's "permanent disability" (as defined below), notwithstanding Section 3 hereof:

(A) the Participant shall be entitled to receive only that portion of the bonus payments otherwise payable pursuant to Section 3(d) 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 permanent 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 December 31, 2004 and (y) the amount of bonus payments

that would have been payable pursuant to Section 3(d) hereof if the Participant remained an employee of the Company through and including the Last Day of the Performance Period; and

(B) 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) on the Payment Date.

(b) For purposes of Section 6(a) hereof, the terms "cause", "good reason" and "permanent disability", shall have the meanings ascribed to such terms in the Participant's employment agreement with the Company or a subsidiary thereof, as the case may be, as amended from time to time; PROVIDED, HOWEVER, if the Participant is no longer employed pursuant to an employment agreement but is continuing in employ, such terms shall have the meanings ascribed to such terms in the employment agreement last in effect.

7. 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 (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 future bonus payments pursuant to this Agreement from and after the date of such breach.

8. TAXES. Any bonus payment pursuant to the 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 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.

10. NO OBLIGATION TO PURSUE PROJECT. This Agreement shall in no way obligate the Company to pursue the Project, and the Company may limit, abandon or change the Project 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 the Project.

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 Award and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer the Award in contravention of this Section 12(a) is void AB INITIO. The 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 the Company or any of its subsidiaries, 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 the Company.

(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 Plan and this Agreement will be construed by and administered under the supervision of the Committee in its sole and absolute discretion, and all determinations of the 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 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.

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 changed or terminated orally. This Agreement and the Plan 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.

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:   President

      /s/ JONATHAN E. FELS
     ------------------------------
          Jonathan Fels

Exhibit 10 (af)

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("AGREEMENT") is made as of November 30, 2000, between Avatar Properties Inc., a Florida corporation (the "COMPANY") and Michael Levy (the "EMPLOYEE") and amends and restates in its entirety, the employment agreement dated December 4, 1997 between the Company and 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, all upon the terms hereinafter set forth;

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 hereinafter set forth. The term of employment under this Agreement shall be for the period commencing as of December 5, 1997 (the "COMMENCEMENT DATE") and ending on December 31, 2004, unless earlier terminated as herein provided (the "TERM OF EMPLOYMENT"). The last day of the Employee's Term of Employment shall be referred to in this Agreement as the "DATE OF TERMINATION."

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's subsidiaries and affiliates 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; PROVIDED, HOWEVER, that nothing contained herein shall prevent the Employee from engaging in Permitted Activities (as defined below). The principal place of employment of the Employee shall be the current principal executive offices of the Company and/or such other location within 50 miles of Company's current principal place of business as shall be necessary for the Employee to discharge his duties hereunder and the Permitted Activities. For purposes of this Agreement, "PERMITTED ACTIVITIES" shall mean an ownership interest in, or the provision of services in connection with the design, development, construction, sales and marketing, operation and management, solely to or in connection with, the existing Brookman-Fels projects conducted by the companies set forth on SCHEDULE I hereto, the Harbor Islands Joint Venture between Avatar Harbor Islands, Inc. and Brookman-Fels at Harbor Islands, Inc., and the Presidential Estate Joint Venture between Avatar at Presidential Estates, Inc. and Brookman-Fels at Presidential Estates, Inc. 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 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. The Company shall pay the Employee a base salary at an annual rate of $400,000 payable at such times and in accordance with the standard payroll practices of Avatar Holdings Inc., a Delaware corporation ("AVATAR"). 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) 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 its senior executives. Nothing in this Agreement shall require the Company, Avatar or their affiliates to establish, maintain or continue any benefit programs already in existence or hereafter adopted for senior executives of Avatar, and nothing in the Agreement shall restrict the right of Avatar or any of its affiliates to amend, modify or terminate any such benefit program.

(c) 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.

(d) VACATIONS, HOLIDAYS OR TEMPORARY LEAVE: The Employee shall be entitled to take four (4) weeks of vacation per year, plus any additional time, if any, as the Board of Directors of the Company or a committee of the Board of Directors of the Company may determine, in its 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. CASH COMPENSATION CAP. Notwithstanding anything contained above or in any other agreement between Employee and the Company or Avatar, the "cash compensation" paid to Employee from January 1, 2001 through December 31, 2004 may not exceed seven million dollars ($7,000,000). "Cash compensation" shall mean the cumulative sum of all cash payments made to the Employee in respect of salary, bonus and any other incentive awards (including, but not limited to the cash bonus award granted pursuant to the Avatar Holdings Inc. Executive Incentive Compensation Plan (the "Executive Incentive Plan") and any other project award granted under the Executive Incentive Plan). It is understood that "cash compensation" shall not include any securities of Avatar granted to Employee (e.g., stock options granted pursuant to the Avatar Holdings Inc. Incentive and Capital Accumulation Plan) and any cash payments made to Employee (not in his capacity as an employee of the Company) in respect of Permitted Activities.

5. 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 listed on a national securities exchange 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 Securities Exchange Act of 1934, as amended;

(ii) During the Term of Employment the Employee shall not, directly or indirectly, (A) solicit, in competition with the Company or Avatar (their subsidiaries and/or affiliates (each of the foregoing entities being referred to herein, collectively and individually, as the "AVATAR ENTITIES"), any person who is a customer of any business conducted by the Avatar Entities or (B) in any manner whatsoever induce, or assist others to induce, any supplier of the Company to terminate its association with such entity or do anything, directly or indirectly, to interfere with the business

relationship between the Company, Avatar and any of their respective current or prospective suppliers.

(iii) During the Term of Employment the Employee shall not, directly or indirectly, solicit or induce any employee 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 the Avatar Entities.

(iv) The Employee recognizes and acknowledges that certain confidential business and technical information used by the Employee in connection with the Permitted Activities that includes, without limitation, certain confidential and proprietary information relating to the designing, development, construction and marketing of real estate, is a valuable, special and unique asset of the Company, such information, subject to Section 5(a)(vi) below, collectively being referred to as the "CONFIDENTIAL INFORMATION." During the Term of Employment the Employee shall not (A) use Confidential Information, or any part thereof other than in connection with his duties hereunder or Permitted Activities, nor (B) disclose such information to any person, firm, corporation, association or other entity for any purpose or reason whatsoever.

(v) 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 trade secret or know-how acquired by the Employee during his employment by the Company which relates to the business practices, methods, processes or other confidential or secret aspects of the business of the Avatar Entities without the prior written consent from the Company (such information, subject to Section 5(a)(vi) below, being referred to as the "COMPANY CONFIDENTIAL INFORMATION").

(vi) Confidential Information and Company Confidential Information shall not include any information or documents that (A) are or become publicly available without breach by the Employee of Sections 5(a)(iv) and (v) hereof, respectively, (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 the Company, Avatar or their respective affiliates, or (C) is required to be disclosed by law, statute, governmental or judicial proceeding; PROVIDED, HOWEVER, that in the event that 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.

(vii) 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 5 (other than Sections 5(a)(iii), (iv), (v), and (vi), which shall be in full force and effect without regard to the geographic limitations set forth in this Section
5(b)) shall be in full force and effect within a 100-mile radius of a site for which the Avatar Entities has commenced development or has a binding commitment therefor.

(c) REMEDIES. The Employee acknowledges that his services are of a special, unique and extraordinary character and, his position with the Company and Avatar places him in a substantial relationship and a position of confidence and trust with specific prospective or existing customers, suppliers and employees of the Company and Avatar, and that in connection with his services to the Company, the Employee will have access to confidential business or professional information vital to the Company's and Avatar's businesses. The Employee further acknowledges that in view of the nature of the business in which the Company and Avatar are engaged, the foregoing restrictive covenants in this Section 5 hereof are reasonable and necessary in order to protect the legitimate business interests of the Company and Avatar and that violation thereof would result in irreparable injury to the Company and Avatar. Accordingly, the Employee consents and agrees that if the Employee violates or threatens to violate any of the provisions of this Section 5 hereof the Company and Avatar would sustain irreparable harm and, therefore, the Company and Avatar 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.

6. TERMINATION OF EMPLOYMENT:

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

(i) the termination of the Employee's employment upon and at any time following the Date of Termination and absent the parties having entered into a written agreement for the renewal of this Agreement;

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

(iii) the Disability (as defined below) of 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; or

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

(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(b).

(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; (ii) commission of any act of willful misconduct, gross negligence, fraud or dishonesty; or (iii) violation of any material term of this Agreement or any material written policy of the Company, PROVIDED that the Company first deliver written notice thereof to the Employee and the Employee shall not have cured such violation within thirty (30) days after receipt of such written notice.

(d) For purposes of this Agreement, "WITHOUT CAUSE" shall mean any reason other than the reasons described in Sections 6(a)(i), 6(a)(ii), 6(a)(iii) and 6(a)(iv) hereof. The parties expressly agree that a termination of employment Without Cause pursuant to Section 6(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 a willful and material breach of the provisions of this Agreement by the Company.

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

7. PAYMENTS UPON TERMINATION OF EMPLOYMENT:

(a) DEATH OR DISABILITY: If the Employee's employment hereunder is terminated due to the Employee's death or Disability pursuant to Sections 6(a)(ii) or (iii) hereof, 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 unpaid 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(b) 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 6(a)(ii) or (iii), the Employee agrees to execute any and all necessary documents necessary to effectuate said insurance. Upon termination of the Employee's employment due to the Employee's Disability, the Employee shall continue to have the obligations provided for in Section 4 hereof.

(b) TERMINATION FOR CAUSE, RESIGNATION WITHOUT GOOD REASON, OR EXPIRATION OF TERM OF EMPLOYMENT: If the Employee's employment hereunder is terminated due to the termination of the Employee's employment by the Company for Cause pursuant to Section 6(a)(iv) or due to the Employee's resignation Without Good Reason pursuant to Section 6(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 unpaid 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(b) 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.

(c) TERMINATION WITHOUT CAUSE; RESIGNATION FOR GOOD REASON:
If the Employee's employment hereunder is terminated by the Company Without Cause pursuant to Section 6(a)(v), or due to the Employee's resignation for Good Reason pursuant to Section 6(a)(vi), the Company shall continue to pay to the Employee, in lieu of any other payments or benefits and on the regular payroll dates of the Company for a period of six (6) months following Date of Termination his current base salary, at the rate provided in Section 3(a) hereof; PROVIDED, HOWEVER, if the Employee's employment hereunder is terminated by the Company Without Cause pursuant to Section 6(a)(v) or due to Employee's resignation for Good Reason pursuant to Section 6(a)(vi) prior to the second anniversary of the Commencement Date, the Company shall continue to pay to the Employee, through the second anniversary of the Commencement Date and for a period of six (6) months following such second anniversary, his current base salary, at the rate provided in Section 3(a) hereof, in lieu of any other payments or benefits, and on the regular payment dates of the Company. The Company's obligation to make the payment pursuant to this Section 7(c) shall be conditioned upon the Company's prior receipt of an executed general release of claims which the Employee may have against the Company, its affiliates and their respective shareholders, directors, officers, employees and agents, to the maximum extent permitted by law.

(d) NO OTHER PAYMENTS. Except as provided in this Section 7, 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 7(c) shall be reduced by the amount of any such payment in lieu of notice.

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 for in
Section 3 represents the sole compensation to be paid to Employee in respect of the services performed or to be performed for the Company and/or its affiliates by such Employee. The Employee further agrees that should there be a determination that for federal, state, local and/or other tax purposes, Employee's compensation for services performed for the Company and its affiliates is greater than the amounts payable hereunder, Employee will indemnify and hold harmless the Company and its affiliates 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 embodies 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 the Company and its affiliates. This Agreement may not be changed 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 shall be instituted in a federal or state court 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 7(a) 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 affiliate of or successor to the Company. The term "SUCCESSOR" shall mean, with respect to the Company or any of its subsidiaries, 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 the Company. 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 5 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. STOCKHOLDER APPROVAL OF INCENTIVE PLAN. Avatar hereby undertakes to submit the Executive Incentive Plan for approval by stockholders at Avatar's next annual meeting or at a special meeting on or before December 31, 2001. If the stockholders fail to approve the Executive Incentive Plan at such annual meeting or special meeting (or any adjournment thereof) on or before December 31, 2001, Employee may terminate Employee's employment hereunder by communicating a written Notice of Termination to the Company within thirty (30) days following such annual meeting (or any adjournment thereof) at which stockholders failed to approve the Executive Incentive Plan. If Employee so terminates Employee's employment, Employee will be bound by the terms of the Original Agreement, and Employee and the Company shall be discharged and released of and from any further obligations under this Agreement. If Employee shall not provide a written Notice of Termination on a timely basis, then this Agreement shall remain in full force and effect.

17. 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 Levy
3800 South Ocean Drive Suite G-9
Hollywood, Florida 33019

with a copy to:

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

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. 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 Coral Gables, Florida 33134 Attention: General Counsel Facsimile: (305) 448-9927

and with a copy to:

Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Attention: Simeon Gold, 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.

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: Chairman of the Board

  /s/ MICHAEL LEVY
  ---------------------------------
 Employee: Michael Levy

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 (ag)

CASH BONUS AWARD AGREEMENT

THIS CASH BONUS AWARD AGREEMENT, dated October 20, 2000 (the "Agreement"), is made between Avatar Holdings Inc., a Delaware corporation (the "Company") and Michael Levy (the "Participant").

1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Executive Incentive Compensation Plan, as the same may be amended, modified and supplemented from time to time (the "Plan"), the Committee (as defined in the Plan) 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 and other provisions herein set forth, an opportunity to receive the performance based compensation described herein (the "Award") if, as of a Performance Goal Test Date (as defined below), the Performance Goal (as defined below) is satisfied. For all purposes of this Agreement, the "Performance Goal" hereunder shall have been satisfied as of a Performance Goal Test Date, if and only if Cash Flow (as defined below) on such date shall exceed the Hurdle Level (as defined below) on such date.

2. CERTAIN DEFINITIONS.

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

(b) Each reference contained in this Agreement to:

"10% Return Measurement Amount" shall mean, as at the end of any month, the excess, if any of (A) the sum of (x) the Property Amount and (y) the sum of the Monthly 10% Returns Included In Hurdle Level for all months during the period from and including the First Day of the Performance Period and through and including the end of such month over (B) Adjusted Cash Flow at the end of such month.

"Adjusted Cash Flow" shall mean, as at any date of determination, Cash Flow at such date, but without giving any effect to either of the provisos contained in the definition of "Cash Flow" herein.

"Bonus Measurement Amount" shall mean, as at any date of determination, the excess, if any, of Cash Flow at such date over the Property Amount.

"Bonus Percentage" shall mean six (6) percent.

"Cash Flow" shall mean, as at any date of determination, an amount equal to (i) total cumulative cash receipts less total cumulative cash disbursements, in each case, by or on behalf of the Company or any of its subsidiaries, with respect to the Project, during the period from and including the First Day of the Performance

Period through and including such date of determination (it being understood that: such cash receipts shall include funds received from a sale of the Project or any part thereof; such cash receipts shall not include any interest received on any funds attributable to the Project (other than on a purchaser's promissory note received as sale proceeds); such cash disbursements for any month shall include the Inflation Adjustment in respect of such month; such cash disbursements shall not include the Property Amount; and such cash disbursements shall not include amounts paid in respect of deficit funding of the home owners' association at the Project), MINUS (ii) reserves with respect to the Project as the Committee deems appropriate, including, without limitation, reserves for costs, expenses, and contingencies, MINUS (iii) the product of (A) the amount of monies funded by the Company or any of its subsidiaries (in lieu of from third-party lenders) with respect to the Project and (B) the greater of (x) 10% per annum compounded monthly and (y) the Company's "cost of capital" for funds at the relevant times; PROVIDED, HOWEVER, that "cash receipts" and "cash disbursements" shall not include any principal amounts borrowed from, or repaid to, third party lenders, or advanced from, or repaid to, the Company or any of its subsidiaries; PROVIDED FURTHER, HOWEVER, that cash disbursements shall not include In-Process Hard Construction Costs (until such time as the sale of the unit to which any such cost relates has closed).

"First Day of the Performance Period" shall mean November 1, 2000.

"In-Process Hard Construction Costs" shall mean the materials costs, labor costs, architectural costs and other similar direct costs related to units in the Project the sales of which have not closed (it being understood that In-Process Hard Construction Costs shall not include indirect costs (e.g., general and administrative costs, sales and marketing costs and other overhead costs)).

"Inflation Measurement Amount" shall mean, as at any date of determination, an amount equal to (i) if Cash Flow is a negative value (or zero) at the beginning of the month in which there is a date of determination, the Property Amount plus the absolute value of such Cash Flow amount; (ii) if Cash Flow is a positive value (but does not exceed the Property Amount) at the beginning of the month in which there is a date of determination, the Property Amount minus such Cash Flow amount; or (iii) if Cash Flow exceeds the Property Amount at the beginning of the month in which there is a date of determination, zero.

"Inflation Adjustment" in respect of any month shall mean an amount equal to the product of (x) the Inflation Measurement Amount at the beginning of such month and (y) the percentage rate change in the consumer price index for all urban consumers (CPI-U) during such month, without seasonal adjustment, as reported by the Bureau of Labor Statistics of the U.S. Department of Labor (using all items and the reference date of 1982-84 for the index); PROVIDED, HOWEVER, the Inflation Adjustment for such month shall not be a negative value (i.e., "deflation") except to the extent cumulative Inflation Adjustments as of the end of the prior month is a positive value.

"Monthly 10% Return Included in Hurdle Level" in respect of any month shall mean the product of (A) 0.833333% (i.e., 10% per

annum) and (B) the 10% Return Measurement Amount as at the end of the prior month (it being understood that for purposes of determining the 10% Return Included in Hurdle Level as at the end of the first month following the First Day of the Performance Period, the 10% Return Measurement Amount as at the end of the prior month shall be deemed equal to the Property Amount).

"Performance Goal Test Date" shall mean (i) the last day of each calendar quarter following the First Day of the Performance Period and prior to the Last Day of the Performance Period (as defined below) and (ii) the Last Day of the Performance Period.

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

"Property Amount" shall mean $17 million or, in the discretion of the Committee, the current value of the land on which the Project is located, as determined (prior to December 31, 2000) by the Committee, if higher.

3. TERMS AND CONDITIONS. The 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 the achievement of the Performance Goal during the period (the "Performance Period") beginning on the First Day of the Performance Period and ending on the earlier of (i) the last day of the month in which the Project has been substantially completed, as determined by the Committee and (ii) October 31, 2008 (such earlier date being the "Last Day of the Performance Period").

(b) The Award is subject to, and no amount shall be payable pursuant to the Award unless and until, the following conditions have been satisfied:
(i) the Plan shall have been approved by the Company's stockholders at any annual or special meeting held prior to or on December 31, 2001; and (ii) the Participant shall have entered into a new employment agreement with the Company or a subsidiary of the Company (or an amendment to the Participant's existing employment agreement) not later than December 15, 2000, providing for a term of employment ending not earlier than December 31, 2004, and on other terms satisfactory to the Company and the Participant.

(c) No amount shall be payable pursuant to the Award on any Payment Date (as defined below) unless and until Cash Flow on the Performance Goal Test Date immediately preceding such Payment Date exceeds an amount (the "Hurdle Level") equal to the sum of (i) the Property Amount and (ii) the sum of the Monthly 10% Returns Included in Hurdle Level for all months during the period from and including the First Day of the Performance Period and through and including such Performance Goal Test Date.

(d) Subject to Sections 3(c), 4 and 5 hereof, if Cash Flow exceeds the Hurdle Level as of a Performance Goal Test Date, then the Participant shall be entitled to receive a bonus payment on the related Payment Date, in an amount equal to the excess of (i) the Bonus Percentage multiplied by the Bonus

Measurement Amount as of such Performance Goal Test Date over (ii) the aggregate amount of bonus payments paid to the Participant pursuant to this Agreement prior to such Performance Goal Test Date; PROVIDED, HOWEVER, that notwithstanding the foregoing, the sum of all bonus payments for all awards under the Plan granted with respect to the Project in respect of any Performance Goal Test Date (such sum being referred to as the "Formula Payment Amount") shall not exceed the excess, if any, of (A) Cash Flow as of such Performance Goal Test Date over (B) the sum of (x) the Hurdle Level as of such date and (y) the aggregate amount of bonus payments previously paid pursuant to all awards under the Plan granted with respect to the Project (such excess being referred to as the "Bonus Pool Amount"). If as of a Performance Goal Test Date the Formula Payment Amount exceeds the Bonus Pool Amount, then subject to Sections 3(c), 4 and 5 hereof, the Participant shall be entitled to receive a bonus payment on the related Payment Date, in an amount equal to the product of (A) a fraction, the numerator of which is the amount that the Participant would have received if the Formula Payment Amount did not exceed the Bonus Pool Amount on such date and the denominator of which is the Formula Payment Amount on such date and (B) the Bonus Pool Amount.

(e) The Committee shall determine whether the Performance Goal has been met as of the applicable Performance Goal Test Date and, if it has, shall so certify in writing and ascertain the amount of the bonus, if any, payable to the Participant. The amount of the bonus shall be paid to the Participant in cash within 75 days after the Committee makes its determination (each such date being a "Payment Date"); PROVIDED, HOWEVER, if a material change occurs in the business plan of the Project (as determined by the Committee in its sole discretion), the Committee may defer the payment of such bonus amount to such date and to such extent as the Committee determines in its sole discretion.

4. CAP ON COMPENSATION. Notwithstanding anything to the contrary herein, the maximum bonus amounts payable to the Participant shall be subject to the limitations in the Plan and the Participant's employment agreement with the Company or a subsidiary thereof, as the case may be, as amended from time to time.

5. CLAWBACK; NO OFFSET BY PARTICIPANT.

(a) The Participant shall pay to the Company upon demand by the Company following the Last Day of the Performance Period 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 Florida for the relevant taxable period, taking into account the deductibility of state and local income taxes for federal income tax purposes), (ii) interest on such excess (at a rate of 10% per annum compounded monthly from the date of receipt of the relevant Excess Bonus Payments until the date of refund), and (iii) 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 5(a) to the Company. For purposes of the preceding sentence, "Excess Bonus Payments" shall mean the greater of (AA) the amount equal to the excess, if any, of (i) the aggregate amount of all bonus payments paid to the Participant pursuant to this Agreement (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period) over (ii) the product of the Bonus Percentage multiplied by the Bonus Measurement Amount as of the close of business on the Last Day of the

Performance Period and (BB) the amount equal to the product of (x) a fraction, the numerator of which is the aggregate amount of all bonus payments paid to the Participant pursuant to this Agreement (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period) and the denominator of which is the aggregate amount of all bonus payments paid pursuant to all awards under the Plan granted with respect to the Project (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period) and (y) the excess, if any, of (i) the aggregate amount of all bonus payments paid pursuant to all awards under the Plan granted with respect to the Project (including any such bonus payments paid or to be paid with respect to the Performance Goal Test Date relating to such Last Day of the Performance Period)over (ii) the amount equal to the excess, if any, of (1) Cash Flow as of the close of business on the Last Day of the Performance Period over (2) the Hurdle Level as of the close of business on the Last Day of the Performance Period.

(b) The Participant shall be obligated to pay to the Company any amount due pursuant to this Section 5 regardless of whether the Participant has or claims to have any claim against the Company or any of its subsidiaries, and the Participant shall have no right to offset any amount due or claimed to be due from the Company or any of its subsidiaries.

6. TERMINATION OF EMPLOYMENT.

(a) Subject to Sections 3 and 5 hereof:

(i) if the Participant's employment with the Company is terminated by the Company for "cause" (as defined below) or by the Participant, prior to December 31, 2004, for other than "good reason" (as defined below), in addition to any other consequences of such termination provided for by this Agreement or any other agreement, notwithstanding Section 3 hereof, Participant shall forfeit any right to future bonus payments pursuant to this Agreement from and after the date of such termination;

(ii) 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 bonus payments as would otherwise be payable pursuant to this Agreement as though the Participant's employment had not been terminated; and

(iii) if the Participant dies while employed by the Company or in the event the Participant's employment with the Company is terminated by the Company by reason of the Participant's "permanent disability" (as defined below), notwithstanding Section 3 hereof:

(A) the Participant shall be entitled to receive only that portion of the bonus payments otherwise payable pursuant to Section 3(d) 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 permanent 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 December 31, 2004 and (y) the amount of bonus payments that would have been payable pursuant to Section 3(d) hereof if the Participant remained an employee of the Company through and including the Last Day of the Performance Period; and

(B) 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) on the Payment Date.

(b) For purposes of Section 6(a) hereof, the terms "cause", "good reason" and "permanent disability", shall have the meanings ascribed to such terms in the Participant's employment agreement with the Company or a subsidiary thereof, as the case may be, as amended from time to time; PROVIDED, HOWEVER, if the Participant is no longer employed pursuant to an employment agreement but is continuing in employ, such terms shall have the meanings ascribed to such terms in the employment agreement last in effect.

7. 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 (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 future bonus payments pursuant to this Agreement from and after the date of such breach.

8. TAXES. Any bonus payment pursuant to the 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 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.

10. NO OBLIGATION TO PURSUE PROJECT. This Agreement shall in no way obligate the Company to pursue the Project, and the Company may limit, abandon or change the Project 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 the Project.

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 Award and any interest of the Participant therein may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Any attempt to transfer the Award in contravention of this Section 12(a) is void AB INITIO. The 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 the Company or any of its subsidiaries, 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 the Company.

(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 Plan and this Agreement will be construed by and administered under the supervision of the Committee in its sole and absolute discretion, and all determinations of the 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 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.

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 changed or terminated orally. This Agreement and the Plan 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.

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: President

       /s/ MICHAEL LEVY
     --------------------------------
         Michael Levy