Exhibit 10.4**RESTRICTED STOCK UNIT AGREEMENT**     This RESTRICTED STOCK UNIT AGREEMENT (“Agreement”), dated June 26, 2007, by andbetween Avatar Holdings Inc., a Delaware corporation (the “Company”) and Randy Kotler (the“Participant”).     1. AWARD. Pursuant to the provisions of the Avatar Holdings Inc. Amended and Restated 1997Incentive and Capital Accumulation Plan (2005 Restatement), as the same may be amended, restated,modified or supplemented (the “Plan”), the Committee (as defined in the Plan, the“Committee”) hereby awards to the Participant, on July 9, 2007, subject to the Participantcommencing employment with the Company pursuant to the employment agreement between the Company andthe Employee, dated as of the date hereof, and further subject to the terms and conditions of thePlan and the terms and conditions set forth herein, an opportunity to receive 2,500 PerformanceConditioned Restricted Stock Units (“Units”). Capitalized terms used but not definedherein shall have the meanings assigned to them in the Plan. This award is intended to constitutea Performance-Based Award within the meaning of the Plan.     2. TERMS AND CONDITIONS. The award evidenced by this Agreement is subject to the followingterms and conditions:     (a) Subject to Section 4 hereof, the Participant shall be granted, automatically and withoutfurther authorization on the part of the Committee, 2,500 Units upon satisfaction of the followingcondition (the date on which such condition is satisfied is hereinafter referred to as the“Grant Date”): (i) the closing stock price of the Common Stock on its principal tradingmarket shall have been at least $83.89 per share for twenty (20) trading days out of thirty (30)consecutive trading days or (ii) the Company consummates a transaction which results in thestockholders of the Company receiving cash, securities, or other property (or any combinationthereof) having a “value” as determined by the Committee of at least $83.89 per share in eithercase, during the period beginning on July 9, 2007 and ending on July 8, 2010 (the “Hurdle PriceCondition”); provided, however, that, except as provided in Sections 4(c) and4(d), no Units shall be granted if the Participant’s employment with the Company has terminated forany reason on or prior to the time the Hurdle Price Condition is satisfied. For purposes of thisSection 2(a), “value” shall mean the amount received by the stockholders of the Companytaking into account the net present value of any debt, securities, future payments, contingentrights or other non-cash consideration to be paid to such stockholders.     (b) The Participant shall not possess any incidents of ownership (including, withoutlimitation, dividend, interest and voting rights) in shares of Common Stock in respect of the Unitsor the Change in Control Amount, as applicable, until such Units or the Change in Control Amount,as applicable, shall have vested and been distributed to the Participant in the form of shares ofCommon Stock or, in the case of a Change in Control Amount, a single, lump sum cash payment, inaccordance with Sections 3 and 4 hereof.
 

 
     (c) Except as provided in this Section 2(c), the Units and any interest of the Participanttherein 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 theforegoing, with the written consent of the Committee, the Participant shall be permitted totransfer such Units to members of his immediate family (i.e., children, grandchildren orspouse), trusts for the benefit of such family members, and partnerships whose only partners aresuch family members; provided, however, that no consideration can be paid for thetransfer of the Units and the transferee of the Units shall be subject to all conditions applicableto the Units (including all of the terms and conditions of this Agreement) prior to transfer.     (d) Each reference contained in this Agreement to:     “Anniversary” shall mean, with respect to any date, the annual recurrence ofsuch date.     “Change in Control” shall mean any of the following events: (a) a person orentity or group of persons or entities, acting in concert, becomes the direct or indirectbeneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,as amended) of securities of the Company representing 50.1% or more of the combined votingpower of the issued and outstanding Common Stock; (b) the Board of Directors of the Companyapproves any merger, consolidation or like business combination or reorganization of theCompany, the consummation of which would result in the occurrence of the event described inclause (a) above, and such transaction shall have been consummated; (c) the Company ceasesto be engaged, directly or indirectly, and does not intend to be engaged at any time in theforeseeable future, in any real estate business; or (d) the Company sells, transfers orotherwise disposes of all or substantially all of its assets in one transaction or a seriesof transactions. The date on which a Change in Control is consummated, with respect toclauses (a) and (b), or occurs, with respect to clauses (c) and (d), is herein referred toas the “Change in Control Date.”     “Change in Control Amount” shall have the meaning set forth in Section 4(e)hereof.     “Common Stock” shall mean common stock, par value $1.00 per share, of theCompany.     “Fair Market Value” shall mean the average of the closing prices of the CommonStock for the fifteen trading days ending with and including the measuring date if theCommon Stock is readily tradeable on a national securities exchange, the NationalAssociation of Securities Dealers Automated Quotation System or other national marketsystem, provided, however, if such exchange or system is not open for business on any dayduring such period or the Common
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Stock was not traded on any day during such period, theFair Market Value shallbe determined as of the most recent fifteen (15) trading days ending with andincluding the measuring date on which such exchange or system shall have been open forbusiness and the Common Stock was traded, and if the Common Stock is not readily tradableas set forth above, Fair Market Value shall mean the amount determined in good faith by theCommittee as the fair market value of the Common Stock of the Company.     3. VESTING AND CONVERSION OF UNITS. On July 8, 2010, the Units granted to the Participantpursuant to Section 2(a) hereof, if any, shall vest in full and such vested Units shall beconverted into an equivalent number of shares of Common Stock that will be immediately distributedto the Participant; provided, however, that subject to the provisions of Section 4hereof, no Units shall vest or be converted and distributed to the Participant unless theParticipant is an employee of the Company on July 8, 2010.     Upon the distribution of the shares of Common Stock in respect of the Units, the Company shallissue to the Participant or the Participant’s personal representative a stock certificaterepresenting such shares of Common Stock, free of any restrictions, subject to Section 8 hereof.     4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.     (a) For purposes of this Section 4, the terms Cause, Without Cause, Good Reason, Without GoodReason and Disability shall have the meanings ascribed to such terms in the Participant’semployment agreement with the Company, dated as of the date hereof, as amended or restated fromtime to time; provided, however, if the Participant is no longer employed pursuantto such employment agreement, each such term shall have the meaning ascribed to it in theemployment agreement last in effect which contains such defined term.     (b) If the Participant’s employment with the Company is terminated by the Company for Cause orby the Participant Without Good Reason, the Participant shall forfeit all Units granted to theParticipant pursuant to Section 2(a) hereof (or, in the event a Change in Control has occurred, theChange in Control Amount), if any, as of the date of termination of employment.     (c) If the Participant’s employment with the Company is terminated by the Company WithoutCause, or is terminated by the Participant for Good Reason, (i)(A) all Units granted to theParticipant pursuant to Section 2(a) hereof, if any, shall vest, be converted into shares of CommonStock and be immediately distributed to the Participant, and (B) any additional Units that satisfythe Hurdle Price Condition on or before July 8, 2010, if any, shall vest on the date the HurdlePrice Condition is satisfied, be converted into shares of Common Stock and be immediatelydistributed to the Participant, or, (ii) in the event a Change in Control has occurred, theParticipant shall be entitled to receive the Change in Control Amount, if any, upon the date oftermination of employment.
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     (d) If the Participant’s employment with the Company is terminated due to the Participant’sdeath or Disability, the number of Units granted to the Participant pursuant to Section 2(a)hereof, if any, which equals the greater of (i) the product of (x) a fraction the numerator ofwhich is the number of completed whole months elapsed from July 9, 2007 to the date of death orDisability, as the case may be (whichever is sooner), and the denominator of which thirty-six (36)and (y) 2,500 or (ii) 1,250 Units, shall vest, be converted into shares of Common Stock and beimmediately distributed to the Participant (or the executor or administrator of the deceasedParticipant’s estate or the person or persons to whom the deceased Participant’s rights shall passby will or the laws of descent or distribution, as applicable), and any portion of the Units thenremaining unvested shall be forfeited. If the Participant’s employment with the Company isterminated by Participant’s death or Disability prior to the Grant Date and the Hurdle PriceCondition is satisfied on or before the first Anniversary of Participant’s termination for death orDisability, 1,250 Units shall be granted and shall vest, be converted into shares of Common Stockand be immediately distributed to the Participant (or the executor or administrator of the deceasedParticipant’s estate or the person or persons to whom the deceased Participant’s rights shall passby will or the laws of descent or distribution, as applicable), and any portion of the Units thenremaining unvested shall be forfeited. Notwithstanding the foregoing, if a Change in Control hasoccurred prior to such termination for death or Disability, the Participant (or the executor oradministrator of the deceased Participant’s estate or the person or persons to whom the deceasedParticipant’s rights shall pass by will or the laws of descent or distribution, as applicable)shall be entitled to receive the Change in Control Amount, if any, upon the date of termination ofemployment.     (e) In the event of a Change in Control, all Units granted to the Participant pursuant toSection 2(a) hereof, if any, shall be converted into shares of Common Stock immediately prior tothe consummation of the Change in Control and, upon consummation of the Change in Control, shall beconverted into such amount of cash, securities or other property (or any combination thereof)received by the stockholders of the Company in connection with the Change in Control (the“Change in Control Amount”). The Change in Control Amount shall be distributed to theParticipant on or promptly following the Change in Control Date.     5. DEFERRAL. With the prior written consent of the Committee, and on such terms as theCommittee may prescribe (which terms shall be in compliance with Section 409A of the InternalRevenue Code of 1986, as amended), the Participant may elect to defer the receipt of Common Stockupon the vesting of the Units granted to the Participant pursuant to Section 2(a) hereof and forthe Company to continue to maintain such Units on its books of account.
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     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 kindor other like change in capital structure or distribution (other than normal cash dividends) tostockholders of the Company, in order to prevent dilution or enlargement of the Participant’srights under this Agreement and the Plan, the Committee may, in an equitable manner, adjust the number andkind of shares that may be issued under this Agreement and make any other appropriate adjustmentsin 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 anyamounts required to be withheld pursuant to applicable federal, state and local tax withholdingrequirements. In connection with any such distribution, the Company may require the Participant toremit to it an amount sufficient to satisfy such tax withholding requirements prior to the deliveryof any certificates for such Common Stock. In lieu thereof, the Company shall have the right towithhold the amount of such taxes from any other sums due or to become due from the Company to theParticipant as the Committee shall prescribe. The Committee may, in its discretion and subject tosuch rules as it may adopt (including any as may be required to satisfy applicable tax and/ornon-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 anydistribution of shares of Common Stock in respect thereof by electing to have the Company withholdshares of Common Stock having a Fair Market Value equal to the amount of tax to be withheld, suchtax calculated at rates prescribed by statute or regulation.     8. FORFEITURE OF UNITS AND PROFITS. At the discretion of the Committee, all or any portionof the shares of Common Stock issued to the Participant in respect of Units awarded pursuant toSection 2(a) hereof, if any, and all or any portion of the proceeds received from the sale of suchshares of Common Stock (or, in the event of Change in Control, all or any portion of the Change inControl Amount) shall be subject to forfeiture in accordance with the provisions of 15 U.S.C. §7243 (Section 304 of the Sarbanes-Oxley Act of 2002), or any successor statute, as if theParticipant were subject to such statute; provided, however, that the provisions ofthis Section 8 shall no be applicable on or after a Change in Control Date.     9. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any stock certificatesrepresenting shares of Common Stock issuable pursuant to this Agreement may be postponed by theCommittee for such period as may be required to comply with any applicable requirements under thefederal or state securities laws, any applicable listing requirements of any national securitiesexchange or securities association, and any applicable requirements under any other law, rule orregulation applicable to the issuance or delivery of such shares, and the Company shall not beobligated to deliver any such shares of Common Stock to the Participant if either delivery thereofwould constitute a violation of any provision of any law or of any regulation of any governmentalauthority, any national securities exchange or securities association, or the Participant shall notyet have complied fully with the provisions of Section 7 hereof.
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     10. INVESTMENT REPRESENTATIONS AND RELATED MATTERS. The Participant hereby represents thatthe Common Stock issuable pursuant to this Agreement is being acquired for investment and not forsale or with a view to distribution thereof. The Participant acknowledges and agrees that any saleor distribution of shares of Common Stock issued pursuant to this Agreement may be made only pursuant to either (a) aregistration 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 withregard to the shares being sold, or (b) a specific exemption from the registration requirements ofthe Securities Act that is confirmed in a favorable written opinion of counsel, in form andsubstance satisfactory to counsel for the Company, prior to any such sale or distribution. TheParticipant hereby consents to such action as the Committee or the Company deems necessary orappropriate from time to time to prevent a violation of, or to perfect an exemption from, theregistration 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 ofCommon Stock issued pursuant to this Agreement and delivering stop transfer instructions to theCompany’s stock transfer agent.     11. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not confer upon the Participant anyright 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 theParticipant’s employment at any time for any reason or no reason.     12. CONSTRUCTION. The Plan and this Agreement will be construed by and administered under thesupervision of the Committee, and all determinations of the Committee will be final and binding onthe Participant.     13. NOTICES. Any notice required or permitted under this Agreement shall be deemed given whendelivered 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 employmentrecords, 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 tothe Participant.     14. FAILURE TO ENFORCE NOT A WAIVER. The failure of either party hereto to enforce at anytime any provision of this Agreement shall in no way be construed to be a waiver of such provisionor of any other provision hereof.     15. GOVERNING LAW. This Agreement shall be governed by and construed according to the laws ofthe State of Delaware, without regard to the conflicts of laws provisions thereof.
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     16. INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part ofthis Agreement, and this Agreement shall be subject to the terms of the Plan, as the Plan may beamended from time to time.     17. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of whichshall be an original but all of which together shall represent one and the same agreement.     18. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement,the Plan and the letter agreement, dated as of the date hereof, among the Company, AvatarProperties and the Participant, contain the entire agreement between the parties relating to thesubject matter hereof. The section headings herein are intended for reference only and shall notaffect the interpretation hereof.(signature page follows)
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     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first writtenabove.      AVATAR HOLDINGS INC.