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                                                                    Exhibit 10.4

                         RESTRICTED STOCK UNIT AGREEMENT

                  This RESTRICTED STOCK UNIT AGREEMENT ("Agreement"), dated
March 27, 2003, 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 Compensation 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, 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) 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 $34.00 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 $34.00 per share in
either case, during the period beginning on the date immediately following the
date hereof and ending on December 31, 2008 (the "Hurdle Price Condition");
provided, however, that 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)

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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, 2008, 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, 2008.

         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 January 1, 2003
                           to the date of death or

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                           permanent disability, as the case may be (whichever
                           is sooner), and the denominator of which seventy-two
                           (72) 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 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 amended and restated employment agreement with the
Company, dated as of March 27, 2003, 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, if any, 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

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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.

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

         8.       REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of
any stock certificates representing shares of Common Stock issuable pursuant to
this Agreement may be postponed by the Committee for such period as may be
required to comply with any applicable requirements under the federal or state
securities laws, any applicable listing requirements of any national securities
exchange or the NASDAQ 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

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

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

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

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

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

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

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

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

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

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