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Exhibit 10.6
 
STOCK AWARD AGREEMENT
 
This STOCK AWARD AGREEMENT (“Agreement”), dated September 29, 2011 (the
“Effective Date”), by and between Avatar Holdings Inc., a Delaware corporation
(the “Company”) and Patricia K. Fletcher (the “Participant”).
 
1.             AWARD.  Pursuant to the provisions of the Avatar Holdings Inc.
Amended and Restated 1997 Incentive and Capital Accumulation Plan (2011
Restatement), as the same may be further amended, restated, modified or
supplemented (the “Plan”), the Committee (as defined in the Plan, the
“Committee”) hereby awards to the Participant, on the Effective Date, One
Hundred Forty Seven Thousand (147,000) shares of Common Stock (collectively, the
“Shares”) subject to the terms and conditions of the Plan and the terms and
conditions set forth herein, including forfeiture provisions and provisions
restricting transfer.  While the Shares are unvested, the Shares shall be
referred to herein as “Restricted Stock.”  Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Plan.  The Shares
are intended to constitute a Performance-Based Award within the meaning of the
Plan, to the extent such intent is consistent with the Performance Goals
pursuant to which the Restricted Stock vests.
 
2.             TERMS AND CONDITIONS.  The award evidenced by this Agreement is
subject to the following terms and conditions:
 
(a)           Recording of Ownership.  Participant’s ownership of the Restricted
Stock shall be recorded through book entry, bearing the legend pursuant to the
provisions of this Agreement, and shall remain so recorded until the
restrictions thereon shall have lapsed, at which time the legend shall be
removed.
 
(b)           Stock Dividends and Stock Splits.  In the event the Participant
receives a stock dividend on the Restricted Stock or the Restricted Stock is
split or the Participant receives any other shares, securities, moneys or
property representing a dividend on the Restricted Stock (other than regular
cash dividends on and after the date of this Agreement) or representing a
distribution or return of capital upon or in respect of the Restricted Stock or
any part thereof, or resulting from a split-up, reclassification or other like
changes of the Restricted Stock, or otherwise received in exchange therefore,
and any warrants, rights or options issued to the Participant in respect of the
Restricted Stock (collectively “RS Property”), the Participant will also
immediately deposit with and deliver to the Company any of such RS Property,
including any certificates representing shares duly endorsed in blank or
accompanied by stock powers duly executed in blank, and such RS Property shall
be subject to the same restrictions, including those of this Section 2, as the
shares of Restricted Stock with regard to which they are issued and shall herein
be encompassed within the term “Restricted Stock” and the term “Shares.”
 
(c)           Rights with Respect to Restricted Stock.  Upon issuance in the
Participant’s name pursuant to Section 2(a) above, the Restricted Stock will
constitute issued and outstanding shares of Common Stock for all corporate
purposes.  From and after the date of issuance, the Participant will have the
right to vote the Restricted Stock, to receive and retain all regular cash
dividends payable to holders of Common Stock of record on and after the issuance
of the Restricted Stock (although such dividends shall be treated, to the extent
required by law, as additional compensation for tax purposes if paid on
Restricted Stock) and to exercise all other rights, powers and privileges of a
holder of Common Stock with respect to the Restricted Stock, with the exceptions
that (i) the Participant will not be entitled to delivery of the stock
certificate or certificates representing the Restricted Stock until all the
vesting requirements with respect thereto shall have been fulfilled and all the
restrictions including those on transfer have lapsed, (ii) the Company (or its
designated agent) will retain custody of the stock certificate or certificates,
if any, representing the Restricted Stock and the other RS Property until all
the vesting requirements with respect thereto shall have been fulfilled and all
the restrictions including those on transfer have lapsed, (iii) no RS Property
shall bear interest or be segregated in separate accounts during the applicable
restriction period, (iv) except as set forth in the Plan or this Agreement, the
Participant may not sell, assign, transfer, pledge, exchange, encumber or
otherwise dispose of the Restricted Stock (other than by will or the laws of
descent and distribution) until all the vesting requirements with respect
thereto shall have been fulfilled, and (v) the Participant may not sell or
otherwise dispose of any shares of Common Stock subject to this Agreement to the
extent such sale or disposition does not comply with Minimum Shareholding
Requirement (as defined in the Employment Agreement) and any such sale or other
disposition of her shares of Common Stock shall be null and void
 
 
 

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(d)           Each reference contained in this Agreement to:
 
“API” shall mean Avatar Properties Inc., a wholly owned subsidiary of the
Company.
 
 “Change in Control” shall mean any of the following events:
 
(A)  A person or entity or group of persons or entities, acting in concert,
shall become the direct or indirect beneficial owner (within the meaning of
Rule 13d-3 of the Exchange Act) of securities of the Company representing
fifty-one percent (51%) or more of the combined voting power of the issued and
outstanding common stock of the Company (a “Significant Owner”), unless such
shares are originally issued to such Significant Owner by the Company; or
 
(B)  The majority of the Board is no longer comprised of the incumbent directors
who constitute the Board on the Effective Date1 (as defined in Section 22(a) of
the Plan) and any other individual(s) who becomes a director subsequent to the
Effective Date of the Plan whose initial election or nomination for election as
a director, as the case may be, was approved by at least a majority of the
directors who comprised the incumbent directors as of the date of such election
or nomination; or
 
(C)  A sale of all or substantially all of the assets of the Company; or
 
____________________________
1 Solely for purposes of Section 2(d) hereof, the term “Effective Date” shall
have the meaning ascribed to it in Section  22(a) of the Plan.
 
 
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(D)  The Board shall approve any merger, consolidation, or like business
combination or reorganization of the Company, the consummation of which would
result in the occurrence of any event described in clause (C) above, and such
transaction shall have been consummated.
 
 “Common Stock” shall mean common stock, par value $1.00 per share, of the
Company.
 
“Employment Agreement” shall mean the Participant’s employment agreement with
the Company and API dated September 23, 2011 as amended or restated from time to
time.
 
3.             VESTING.
 
(a)           General.  Subject to Section 4 hereof, shares of Restricted Stock
shall vest and cease to be Restricted Stock upon the satisfaction of the
performance based vesting requirements of Section 3(b).
 
(b)           Performance Based Vesting.  Shares of Restricted Stock shall vest
as set forth in this Section 3(b), following the achievement of the performance
goals set forth below (collectively the “Performance Goals”), provided that the
Participant remains continuously employed by the Company or API through December
31 of the year in which the Performance Goals in question are met (except as
otherwise provided in Section 4(c) below):
 
(i)      Twenty Four Thousand (24,000) shares of Restricted Stock shall vest on
December 31 of the year in which the price per share of Common Stock equals or
exceeds $20 for 20 trading days out of any consecutive 30-day period. In the
event that the Performance Goal referenced in this Section 3(b)(ii) is not
achieved prior to December 31, 2012, the shares of Restricted Stock described in
this Section 3(b)(ii) shall be immediately forfeited to the Company without any
compensation or remuneration due to the Participant with respect to such shares
of Restricted Stock.
 
(ii)     Twenty Four Thousand (24,000) shares of Restricted Stock shall vest on
December 31 of the year in which the Company invests One Hundred Million
($100,000,000) dollars or more (in the aggregate) for new assets, including
through a merger, acquisition or other corporate transaction. In the event that
the Performance Goal referenced in this Section 3(b)(iii) is not achieved prior
to December 31, 2013, the shares of Restricted Stock described in this Section
3(b)(iii) shall be immediately forfeited to the Company without any compensation
or remuneration due to the Participant with respect to such shares of Restricted
Stock.
 
(iii)    Thirty Six Thousand (36,000) shares of Restricted Stock shall vest on
December 31 of the year in which the price per share of Common Stock equals or
exceeds $24 for 20 trading days out of any consecutive 30-day period. In the
event that the Performance Goal referenced in this Section 3(b)(iv) is not
achieved prior to December 31, 2014, the shares of Restricted Stock described in
this Section 3(b)(iv) shall be immediately forfeited to the Company without any
compensation or remuneration due to the Participant with respect to such shares
of Restricted Stock.
 
 
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(iv)   Thirty Six Thousand (36,000) shares of Restricted Stock shall vest on
December 31 of the first fiscal year between 2012 and 2015 (including 2012 and
2015) in which the Company is profitable. In the event that the Performance Goal
referenced in this Section 3(b)(v) is not achieved on or before December 31,
2015, the shares of Restricted Stock described in this Section 3(b)(v) shall be
immediately forfeited to the Company without any compensation or remuneration
due to the Participant with respect to such shares of Restricted Stock.
 
For avoidance of doubt it is understood that: (i) the vesting conditions in
Section 3(b)(i)-(iv) are incremental and not cumulative, such that, provided all
the other vesting terms and conditions are met, the achievement of one
Performance Goal may lead to vesting of shares of Restricted Stock pursuant to
more than a single prong of Section 3(b); and (ii) shares of Restricted Stock
may vest only once pursuant to each prong of Section 3(b).
 
(c)           Time Based Vesting.  Twenty seven thousand (27,000) shares shall
vest, and all restrictions on such vested shares shall lapse, as follows:  (A)
9,000 shares on December 31, 2012, (B) 9,000 shares on December 31, 2013, and
(C) 9,000 shares on December 31, 2014, so long as, in each case, Participant
remains continuously employed through each applicable December 31.

 
4.             TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.
 
(a)           For purposes of this Section 4, the terms  Release, Term and Cause
shall have the meanings ascribed to such terms in the Employment Agreement;
provided, however, if the Participant is no longer employed pursuant to such
Employment Agreement, each such term shall have the meaning ascribed to it in
the Employment Agreement last in effect which contains such defined term.
 
(b)           Except as otherwise provided in this Section 4, upon termination
of employment with the Company and API the Participant shall forfeit to the
Company, without compensation, all the shares of Restricted Stock which have not
vested on the date of such termination of employment.
 
(c)           In the event the Participant’s employment is terminated, on or
after January 1, 2012, by the Company and API for any reason other than for
Cause or by the Participant for any reason, provided that the Participant
executes and delivers (and does not revoke) the Release as provided for in the
Employment Agreement, then the shares of Restricted Stock with respect to which
the Performance Goals in Sections 3(b)(i)-(iii) have been met as of the time of
termination of employment shall vest on such date of termination of employment.
 
(d)           In the event Change in Control occurs during the “Term” (as
defined in the Employment Agreement), the Restricted Stock outstanding (and
which has not been previously forfeited) at such time shall fully vest at the
time of the Change in Control.
 
 
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5.             TAXES.
 
(a)           Generally.  The Participant agrees that, subject to Section 5(b)
below, (i) no later than the date on which any Restricted Stock shall have
become taxable to the Participant as compensation, the Participant will pay to
the Company, or make arrangements satisfactory to the Company regarding payment
of, any federal, state or local, domestic or foreign taxes of any kind required
by law to be withheld with respect to any Restricted Stock which shall have
become so taxable, and (ii) the Company or API shall, to the extent permitted by
law, have the right to deduct from any payment of any kind otherwise due to the
Participant any federal, state or local taxes of any kind required by law to be
withheld with respect to any Restricted Stock which shall have become so
taxable.
 
(b)           Section 83(b) Election.  If the Participant properly elects within
thirty (30) days after the award of the Restricted Stock in accordance with Code
Section 83(b) to include in gross income for federal income tax purposes in the
year of issuance the fair market value of such Restricted Stock, the Participant
shall pay to the Company or API or make arrangements satisfactory to the Company
or API to pay to the Company or API upon such election, any federal, state or
local taxes required to be withheld with respect to such Restricted Stock.  If
the Participant shall fail to make such payment, the Company or API shall, to
the extent permitted by law, have the right to deduct from any payment of any
kind otherwise due to the Participant any federal, state or local taxes of any
kind required by law to be withheld with respect to such Restricted Stock.  The
Participant acknowledges that it is the Participant’s sole responsibility, and
not the Company’s or API's, to file timely and properly the election under
Section 83(b) of the Code and any corresponding provisions of state tax laws if
the Participant elects to utilize such election.
 
6.             LEGENDS.  All certificates representing the Shares shall have
endorsed thereon any legend required to be placed thereon by applicable laws as
well as the following legend:
 
“The shares of common stock represented hereby are subject to terms and
conditions (including forfeiture and restrictions on transfer) set forth in the
employment agreement, as the same may be amended, restated modified or
supplemented, between Avatar Holdings Inc. and the registered owner of the
shares represented hereby (or such owner’s predecessor in interest) which
agreement is binding upon any and all owners of any interests in such shares.
The shares of common stock represented hereby may be transferred only upon
specific instructions from Avatar Holdings Inc.”
 
7.             POWER OF ATTORNEY.  The Company, its successors and assigns, is
hereby appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof.  The Company’s
appointment as attorney-in-fact is irrevocable and coupled with an
interest.  The Company, as attorney-in-fact for the Participant, may in the name
and stead of the Participant, make and execute all conveyances, assignments and
transfers of the Restricted Stock and other RS Property, and the Participant
hereby ratifies and confirms all that the Company, as said attorney-in-fact,
shall do by virtue hereof.  Nevertheless, the Participant shall, if so requested
by the Company or API, execute and deliver to the Company or API all such
instruments as may, in the judgment of the Company or API, be advisable for this
purpose.
 
 
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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 securities association, 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 delivery thereof would constitute a violation
of any provision of any law or of any regulation of any governmental authority
or any national securities exchange or securities association.
 
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: Corporate Secretary, or such
other address as the Company may designate in writing to the Participant.
 
 
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13.           FAILURE TO ENFORCE NOT A WAIVER.  The failure of either party
hereto to enforce at any time any provision of this Agreement shall in no way be
construed to be a waiver of such provision or of any other provision hereof.
 
14.           GOVERNING LAW.  This Agreement shall be governed by and construed
according to the laws of the State of Delaware, without regard to the conflicts
of laws provisions thereof.
 
15.           INCORPORATION OF PLAN.  The Plan is hereby incorporated by
reference and made a part of this Agreement, and this Agreement shall be subject
to the terms of the Plan, as the Plan may be amended from time to time.
 
16.           COUNTERPARTS.  This Agreement may be executed in two or more
counterparts, each of which shall be an original but all of which together shall
represent one and the same agreement.
 
17.           MISCELLANEOUS.  This Agreement cannot be modified or terminated
orally.  This Agreement, the Employment 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/ Allen J. Anderson  
Name:
Allen J. Anderson  
Title:
CEO & President                
/s/ Patricia K. Fletcher
   
Patricia K. Fletcher

 
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