Document:

EX-10.9

EXHIBIT 10.9

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (including any schedule or annex hereto, this
“Agreement”), is made as of December 22, 2008, by and between Avatar Properties Inc., a
Florida corporation (the “Company”), and Michael F. Levy (the “Employee”), and
amends and restates in its entirety the amended and restated employment agreement dated as of April
15, 2005 between the Company and the Employee and as further amended on September 28, 2005 and
December 26, 2006 (the “Original Agreement”).

W I T N E S S E T H

WHEREAS, the Employee is currently employed by the Company;

WHEREAS, the Company desires to amend the Original Agreement to comply with Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) as permitted under the guidance
promulgated thereunder (collectively “Section 409A”); and

WHEREAS, such Agreement shall supersede the Original Agreement.

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

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

2. Duties. During the Term of Employment, the Employee shall serve as the Company’s
Chief Operating Officer and Executive Vice President, and shall perform such duties, functions and
responsibilities as are customarily associated with and incident to the position of Chief Operating
Officer and Executive Vice President and as the Company may, from time to time, require of him,
including, but not limited to, the performance of such functions and duties for the Company, Avatar
Holdings Inc., a Delaware corporation and the parent corporation of the Company (“Avatar”),
or any of their subsidiaries or affiliates (the foregoing entities being referred to herein
collectively as the “Avatar Entities” and each as an “Avatar Entity”) as the
Company may require, subject to the direction of the Company’s Board of Directors. The Employee
shall serve the Company faithfully, conscientiously and to the best of the Employee’s ability and
shall promote the interests and reputation of the Company. Unless prevented by sickness or
disability, the Employee shall devote all of his time, attention, knowledge, energy and skills,
during normal working hours, and at such other times as the Employee’s duties may reasonably
require, to the duties of the Employee’s employment. The principal place of employment of the
Employee shall be the current principal executive offices of the Company and/or such other location
within fifty (50) miles of Company’s current principal place of business as shall be necessary for
the Employee to discharge his duties hereunder. The Employee acknowledges that in the course of
his employment he may be required, from time to time, to travel on behalf of the Company;
provided, however, that the Employee shall not be required to spend more than 25%
of his business time (determined on an annual basis) on overnight travel.

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

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

(b) Annual Bonus. Except as provided in Section 6(f)(ii) hereof, (i) during the Term
of Employment, the Company shall pay the Employee, and the Employee shall accept from the Company
for the Employee’s services, in addition to the Employee’s Base Salary, a calendar year annual cash
bonus of $400,000 (“Annual Bonus”), and (ii) such Annual Bonus shall be payable on the last
business day of the calendar year to which the Annual Bonus relates.

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

(d) Expenses. The Employee shall be entitled to reimbursement or payment of
reasonable business expenses (in accordance with Avatar’s policies for its senior executives, as
the same may be amended from time to time in Avatar’s sole discretion), following the Employee’s
submission of appropriate receipts and/or vouchers to the Company. Notwithstanding anything in
this Agreement to the contrary, expense reimbursements shall be made by the Company no later than
the end of the calendar year following the calendar year in which the expense is incurred.

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

4. Non-Competition and Protection of Confidential Information:

(a) Restrictive Covenants.

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

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

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

(iv) The Employee recognizes and acknowledges that certain confidential and proprietary
business and technical information used by the Employee in connection with the conduct of the
business of the Avatar Entities which relates to the business practices, methods, processes or
other confidential or secret aspects of the business of the Avatar Entities, is a valuable, special
and unique asset of the Company, such information collectively being referred to as the
“Confidential Information.” During the Term of Employment and for all time following the
Date of Termination, the Employee shall not, directly or indirectly, furnish or make accessible to
any person, firm, or corporation or other business entity, whether or not he, she, or it competes
with the business of the Company, any Confidential Information without the prior written consent
from the Company.

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

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

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

(c) Remedies. The Employee acknowledges that his services are of a special, unique
and extraordinary character and, his position with the Avatar Entities places him in a substantial
relationship and a position of confidence and trust with specific prospective or existing
customers, suppliers and employees of the Avatar Entities, and that in connection with his services
to the Avatar Entities, the Employee will have access to confidential business or professional
information vital to the businesses of the Avatar Entities. The Employee further acknowledges that
in view of the nature of the business in which the Avatar Entities are engaged, the foregoing
restrictive covenants in this Section 4 are reasonable and necessary in order to protect the
legitimate business interests of the Avatar Entities and that violation thereof would result in
irreparable injury to the Avatar Entities. Accordingly, the Employee consents and agrees that if
the Employee violates or threatens to violate any of the provisions of this Section 4 the Avatar
Entities would sustain irreparable harm and, therefore, any of the Avatar Entities shall be
entitled to obtain from any court of competent jurisdiction, temporary, preliminary and/or
permanent injunctive relief as well as damages, attorneys’ fees and costs, and an equitable
accounting of all earnings, profits and other benefits arising from such violation, which rights
shall be cumulative and in addition to any other rights or remedies in law or equity to which any
of the Avatar Entities may be entitled.

5. Termination of Employment:

(a) The Employee’s employment with the Company shall terminate upon the occurrence of any of
the following events (the date of each such event, the “Date of Termination”):

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

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

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

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

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

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

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

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

(b) For purposes of this Agreement, the “Disability” of the Employee shall mean the
Employee’s inability, because of mental or physical illness or incapacity, whether total or
partial, to perform one or more material functions of the Employee’s employment under this
Agreement with or without reasonable accommodation and which entitles the Employee to receive
benefits under a disability plan or program that is provided to the Employee pursuant to Section
3(c), if any.

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

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

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

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

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

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

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

6. Payments Upon Termination of Employment.

(a) Termination upon Expiration of Term of Employment. If the Employee’s employment
hereunder is terminated pursuant to Section 5(a)(i), the Company shall pay or provide to the
Employee (i) in a lump sum payment within thirty (30) days following the Date of Termination, all
Base Salary pursuant to Section 3(a) hereof and any vacation pay pursuant to Section 3(e) hereof,
in each case which has been earned but has not been paid as of the Date of Termination, (ii) any
Annual Bonus which has been earned but has not been paid as of the Date of Termination, payable in
a lump sum payment in accordance with Section 3(b), and (iii) any benefits to which the Employee
may be entitled under any employee benefits plan or program pursuant to Section 3(c) hereof in
which he is a participant in accordance with the terms of such plan or program up to and including
the Date of Termination.

(b) Death or Disability.

(i) Subject to Section 6(b)(ii) below, if the Employee’s employment hereunder is terminated
due to the Employee’s death or Disability pursuant to Sections 5(a)(ii) or (iii) hereof and a
Change in Control Date shall not have occurred prior to such termination, the Company shall pay or
provide to the Employee, his designated beneficiary or to his estate (i) in a lump sum payment
within thirty (30) days following the Date of Termination, all Base Salary pursuant to Section 3(a)
hereof and any vacation pay pursuant to Section 3(e) hereof, in each case which has been earned but
has not been paid as of the Date of Termination, (ii) a prorated Annual Bonus as of the Date of
Termination payable in a lump sum payment in accordance with Section 3(b) and (iii) any benefits to
which the Employee may be entitled under any employee benefits plan or program pursuant to Section
3(c) hereof in which he is a participant in accordance with the terms of such plan or program up to
and including the Date of Termination. Should the Company wish to purchase insurance to cover the
costs associated with the Employee’s termination of employment pursuant to Sections 5(a)(ii) or
(iii), the Employee agrees to execute any and all necessary documents necessary to effectuate such
insurance.

(ii) If the Employee’s employment hereunder is terminated due to the Employee’s death or
Disability pursuant to Sections 5(a)(ii) or (iii) hereof and a Change in Control Date shall have
occurred prior to such termination, (A) the Administrator shall disburse within thirty (30) days
following the Date of Termination in a lump sum payment to the Employee, his designated beneficiary
or to his estate a pro rata portion of the Retention Amount as of the Date of Termination equal to
the Retention Amount multiplied by a fraction (x) the numerator of which is the number of days
elapsed in the Retention Period as of the Date of Termination and (y) the denominator of which is
the total number of days in the Retention Period and (B) the remaining balance of the Retention
Amount shall be disbursed by the Administrator as a donation to one or more charitable,
not-for-profit organizations designated by the Board of Directors of Avatar, in its sole
discretion, in each case subject to and in accordance with the Retention Account Procedures.

(c) Termination for Cause or Resignation Without Good Reason. If the Employee’s
employment hereunder is terminated pursuant to Section 5(a)(iv) or Section 5(a)(vii), the Company
shall pay or provide to the Employee (i) in a lump sum payment within thirty (30) days following
the Date of Termination, all Base Salary pursuant to Section 3(a) hereof and any vacation pay
pursuant to Section 3(e) hereof, in each case which has been earned but has not been paid as of the
Date of Termination and (ii) any benefits to which the Employee may be entitled under any employee
benefits plan or program pursuant to Section 3(c) hereof in which he is a participant in accordance
with the terms of such plan or program up to and including the Date of Termination, in each case
subject to set-off, counterclaim, recoupment, defense or any other claim, right or cause of action
which the Company may have against the Employee or others. Notwithstanding the foregoing, if a
Change in Control Date has occurred and the Employee’s employment hereunder is terminated pursuant
to Section 5(a)(iv) or Section 5(a)(vii) during the Retention Period, Employee shall not be
entitled to receive any portion of the Retention Amount and the entire balance of the Retention
Amount shall be disbursed by the Administrator as a donation to one or more charitable,
not-for-profit organizations designated by the Board of Directors of Avatar, in its sole
discretion, subject to and in accordance with the Retention Account Procedures.

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

(i) The Company shall continue to pay the Employee his full Base Salary and Annual Bonus in
accordance with normal payroll practices and without interest through the earlier of (A) December
31, 2010 and (B) the second Anniversary of the Date of Termination, at the rate in effect at the
time notice of the termination of the Employee’s employment is given in accordance with Section
5(a)(v) or Section 5(a)(vi) hereof, as the case may be, with each payment due during such period
hereby designated a “separate payment” for purposes of Section 409A; provided,
however, that if a Change of Control Date shall have occurred prior to Employee’s
termination Without Cause or resignation for Good Reason, the Administrator shall disburse the
Retention Amount (as defined in Section 6(f) hereof) to the Employee in a lump sum payment within
thirty (30) days following the Date of Termination, subject to and in accordance with the Retention
Account Procedures; and

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

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

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

(i) The Company shall pay or provide to the Employee (i) in a lump sum payment within thirty
(30) days following the Date of Termination, all Base Salary pursuant to Section 3(a) hereof and
any vacation pay pursuant to Section 3(e) hereof, in each case which has been earned but has not
been paid as of the Date of Termination, (ii) any prorated Annual Bonus which has been earned but
has not been paid as of the Date of Termination, payable in a lump sum payment in accordance with
Section 3(b), and (iii) any benefits to which the Employee may be entitled under any employee
benefits plan or program pursuant to Section 3(c) hereof in which he is a participant in accordance
with the terms of such plan or program up to and including the Change in Control Date.

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

(iii) If the Employee becomes entitled to any payment, benefit or distribution (or combination
thereof) by the Company or any other Avatar Entity, whether paid or payable pursuant to this
Agreement or any other plan, arrangement, or agreement with the Company or any other Avatar Entity
(the “Payments”), which are or become subject to the excise tax imposed by Section 4999 of
the Code, or any interest or penalties are incurred by the Employee with respect to such excise tax
(such excise tax, together with any such interest and penalties, hereinafter collectively referred
to as the “Excise Tax”), the Payments shall be reduced by an amount not to exceed $250,000
until no portion of such Payments would be subject to Excise Tax. The reduction of the Payments, if
applicable, shall be made by reducing the cash portion of the Payments under the following sections
in the following order: (A) Section 6(f)(ii), and (B) Section 6(d). Notwithstanding the foregoing,
if the reduction in the Payments required so that no portion of the Payments are subject to the
Excise Tax would be greater than $250,000, then the Employee in his sole discretion may elect
whether or not to reduce the Payments to avoid the Excise Tax. In such case, if the Employee
elects not to reduce the Payments then the Employee shall be responsible for the payment of the
Excise Tax.

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

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

7. Employment after the Employment Term. No later than January 2, 2009, the Company
shall enter into negotiations, in good faith, with the Employee regarding the continued employment
of the Employee with the Company after the Term of Employment; provided that if the Employee and
the Company shall fail to enter into a new agreement prior to the expiration of the Term of
Employment, the Employee’s employment shall terminate in accordance with Section 5(a)(i) hereof.

8. No Conflicting Agreements; Indemnification.

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

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

9. Section 409A of the Code.

(a) If any payment, compensation or other benefit provided to the Employee in connection with
his employment termination is determined, in whole or in part, to constitute “nonqualified deferred
compensation” within the meaning of Section 409A and the Employee is a specified employee as
defined in Section 409A(a)(2)(B)(i), no part of such payments shall be paid before the day that is
six (6) months plus one (1) day after the date of termination or earlier death (the “New
Payment Date”). The aggregate of any payments that otherwise would have been paid to the
Employee during the period between the date of termination and the New Payment Date shall be paid
to the Employee in a lump sum on such New Payment Date. Thereafter, any payments that remain
outstanding as of the day immediately following the New Payment Date shall be paid without delay
over the time period originally scheduled, in accordance with the terms of this Agreement.
Notwithstanding the foregoing, to the extent that the foregoing applies to the provision of any
ongoing welfare benefits to the Employee that would not be required to be delayed if the premiums
therefor were paid by the Employee, the Employee shall pay the full cost of premiums for such
welfare benefits during the six-month period and the Company shall pay the Employee an amount equal
to the amount of such premiums paid by the Employee during such six-month period promptly after its
conclusion. A termination of employment shall not be deemed to have occurred for purposes of any
provision of this Agreement providing for the payment of any amounts or benefits subject to Section
409A upon or following a termination of employment unless such termination is also a “separation
from service” within the meaning of Section 409A, and for purposes of any such provision of this
Agreement, references to a “resignation,” “termination,” “terminate,” “termination of employment”
or like terms shall mean separation from service.

(b) All reimbursements for costs and expenses under this Agreement shall be paid in no event
later than the end of the calendar year following the calendar year in which the Employee incurs
such expense. With regard to any provision herein that provides for reimbursement of costs and
expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement
or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and
(ii) the amount of expenses eligible for reimbursements or in-kind benefits provided during any
taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be
provided in any other taxable year, provided, however, that the foregoing clause (ii) shall not be
violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the
Code solely because such expenses are subject to a limit related to the period the arrangement is
in effect.

(c) The parties acknowledge and agree that the interpretation of Section 409A and its
application to the terms of this Agreement is uncertain and may be subject to change as additional
guidance and interpretations become available. Anything to the contrary herein notwithstanding,
all benefits or payments provided by the Company to the Employee that would be deemed to constitute
“nonqualified deferred compensation” within the meaning of Section 409A are intended to comply with
Section 409A. If, however, any such benefit or payment is deemed to not comply with Section 409A,
the Company and the Employee agree to renegotiate in good faith any such benefit or payment
(including, without limitation, as to the timing of any severance payments payable hereof) so that
either (i) Section 409A will not apply or (ii) compliance with Section 409A will be achieved;
provided, however, that any resulting renegotiated terms shall provide to the
Employee the after-tax economic equivalent of what otherwise has been provided to the Employee
pursuant to the terms of this Agreement, and provided further, that any deferral of
payments or other benefits shall be only for such time period as may be required to comply with
Section 409A.

10. 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.

11. Entire Agreement. This Agreement, the letter agreement dated as of May 20, 2005,
among the Company, Avatar and the Employee, and for purposes of the definition of “Retention
Amount,” the 2008-2010 Earnings Participation Award Agreement, dated as of April 15, 2005, between
Avatar and the Employee, embody the entire agreement of the parties with respect to the Employee’s
employment and supersedes any other prior oral or written agreements between the Employee and any
Avatar Entity (including the Original Agreement). This Agreement may not be modified or terminated
orally but only by an agreement in writing signed by the parties hereto.

12. 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.

13. 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.

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

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

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

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 F. Levy

c/o Avatar Properties Inc.

12th Floor

201 Alhambra Circle

Coral Gables, Florida 33134

with a copy to:

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

201 South Biscayne Blvd.

Suite 1700

Miami, FL 33131

Attention: Eliot Abbott, Esq.

Facsimile: (305) 379-3428

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

Avatar Properties Inc.

12th Floor

201 Alhambra Circle

Coral Gables, Florida 33134

Attention: Chairman of the Board

Facsimile: (305) 441-7876

with a copy to:

Avatar Properties Inc.

201 Alhambra Circle

12th Floor

Coral Gables, Florida 33134

Attention: General Counsel

Facsimile: (305) 441-9927

with a copy to:

Avatar Holdings Inc.

201 Alhambra Circle

12th Floor

Coral Gables, Florida 33134

Attention: Chairman of the Board

Facsimile: (305) 448-7876

and with a copy to:

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention: R. Todd Lang, Esq.

Facsimile: (212) 310-8007

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

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

19. 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.

20. 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.

21. 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.

22. 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)

1

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

AVATAR PROPERTIES INC.

By:_/s/ Gerald D. Kelfer     

Name: Gerald D. Kelfer

Title: Chief Executive Officer

/s/ Michael F. Levy

	 	 	Michael F. Levy

2

ANNEX

Retention Account Procedures

Capitalized terms used but not otherwise defined in this Annex shall have the meanings ascribed to
such terms in the Amended and Restated Employment Agreement between Avatar Properties Inc. and
Michael F. Levy, dated as of December 22, 2008 (the “Agreement”).

In the event of a Change in Control, the Retention Amount to which the Employee may be entitled
pursuant to (i) the Agreement and (ii) the Amended and Restated 2008-2010 Earnings Participation
Award Agreement between the Employee and Avatar, dated as of December 22, 2008 (collectively, the
“Applicable Agreements”), are subject to the Retention Account Procedures as further
described in this Annex.

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

2. Retention Account.

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

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

(c) If (i) the Employee is continuously employed by any of the Avatar Entities through the
Retention Period until the Retention Date, then within thirty (30) days following the Retention
Date, the Administrator shall distribute in a lump sum payment the Retention Amount to the
Employee, or (ii) the Employee’s employment is terminated for any reason prior to the Retention
Date, subject to paragraph (d) below, Avatar (or its successor) and the Employee shall notify the
Administrator, in a writing signed by the Employee and Chairman of the Board of Avatar (or its
successor) (the “Joint Notice”), of the agreement between Avatar and the Employee directing
the Administrator to disburse the Retention Amount pursuant to the Applicable Agreements.

(d) The Administrator shall have no right to make an independent determination as to the
circumstances in which the Employee’s employment was terminated or as to its duty to disburse
monies or other property from the Retention Account. If, at any time, there shall exist any
dispute between Avatar (or its successor) and the Employee as to the employment status of the
Employee, the circumstances in which such employment was terminated or the holding or disposition
of monies and/or property from the Retention Account, the Administrator may (i) refrain from
disbursing any monies and/or property from the Retention Account until (x) the rights of Avatar
(and any successor) and the Employee (or Employee’s heirs, executors or administrators) with
respect to such monies and/or property shall have been fully and finally adjudicated by a
non-appealable final order, decree or judgment of a court of competent jurisdiction or (y) all such
disputes shall have been resolved and the Administrator shall have received a Joint Notice to that
effect or (ii) deposit the monies and/or property held in the Retention Account in the registry of
a court of competent jurisdiction pending full and final adjudication pursuant to the rules of
procedure governing practice in such court.

3. Administration of the Retention Account by the Administrator.

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

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

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

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

3

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)

4EX-10.10

EXHIBIT 10.10

AMENDED AND RESTATED 2008-2010 EARNINGS PARTICIPATION AWARD AGREEMENT

This AMENDED AND RESTATED 2008-2010 EARNINGS PARTICIPATION AWARD AGREEMENT, dated December 22,
2008 (the “Agreement”), is made by and between Avatar Holdings Inc., a Delaware corporation
(the “Company”) and Michael F. Levy (the “Participant”) and amends and restates in
its entirety the 2008-2010 Earnings Participation Award Agreement, by and between the Company and
the Participant, dated April 15, 2005 (the “Original Agreement”).

The Company and the Participant wish to provide for certain modifications to the Original
Agreement to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and wish to amend, restate and supersede the Original Agreement, all upon the terms
and conditions set forth herein.

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

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

2. CERTAIN DEFINITIONS.

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

(b) Each reference contained in this Agreement to:

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

“Actual Gross Profit Amount” shall mean the Company’s cumulative Gross Profit
during the Performance Period.

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

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

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

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

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

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

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

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

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

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

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

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

	 	 	 
	Fiscal Year End	 	Gross Profit
	December 31, 2008

December 31, 2009

December 31, 2010

	 	$40,000,000

$50,000,000

$60,000,000

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

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

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

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

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

“Target Gross Profit Amount” shall mean $390,000,000.

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

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

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

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

(c) The Committee shall determine whether a Performance Goal has been met as of the applicable
Performance Goal Test Date and, (i) if it has, shall so certify in writing and ascertain the amount
of cash to be paid, if any, to the Participant and (ii) if it has not, shall so certify in writing
with a brief explanation as to the methodology and calculation of the Committee in determining that
such Performance Goal has not been met. Payments of cash in a lump sum, if any, pursuant to the
Cash Awards shall be made to the Participant, in each case in the fiscal year following the year
during which the applicable Performance Goal Test Date occurs, within thirty (30) days following
the filing with the Securities and Exchange Commission of an annual report on Form 10-K (which
contains audited financial statements) for such fiscal year but in no event later than April 1st of
the fiscal year following the year during which the applicable Performance Goal Test Date occurs
(each such date being a “Payment Date”).

(d) Notwithstanding anything to the contrary contained in this Agreement, in the event a
Change in Control Date occurs during the Performance Period, (i) on the Change in Control Date, the
Company shall deposit into the Retention Account any cash payment pursuant to the Cumulative Cash
Award (and such amount shall be added to the Retention Amount) and, if the Participant’s employment
has not been otherwise terminated by Avatar Properties for Cause or by Participant Without Good
Reason and the Participant is continuously employed by Avatar Properties through the Retention
Period such that the Participant’s employment terminates upon the Retention Date, the Administrator
shall distribute the Retention Amount to the Participant in a lump sum payment within thirty (30)
days following the Retention Date, subject to and in accordance with the Retention Account
Procedures; provided, however, that if the Participant’s employment with Avatar
Properties is terminated due to the Participant’s death or Disability during the Retention Period,
(A) the Administrator shall disburse to the Participant, his designated beneficiary or to his
estate, in a lump sum payment, a pro rata portion of the Retention Amount as of the Date of
Termination equal to the Retention Amount multiplied by a fraction (x) the numerator of which is
the number of days elapsed in the Retention Period as of the Date of Termination and (y) the
denominator of which is the total number of days in the Retention Period and (B) the remaining
balance of the Retention Amount shall be disbursed by the Administrator as a donation to one or
more charitable, not-for-profit organizations designated by the Board of Directors of Avatar, in
its sole discretion, in each case subject to and in accordance with the Retention Account
Procedures, and (ii) the Participant shall be entitled to receive a pro rata portion of the Annual
Cash Award (as of the Change in Control Date) for the fiscal year in which such Change in Control
Date occurs. The Committee shall determine the basis, methodology and calculation for, and any
estimates used in, determining the prorated Actual Gross Profit Amount and prorated Minimum Gross
Profit Level for the portion of the fiscal year preceding the Change in Control Date. The
determination of the Committee as to any such partial award shall be final and binding on all
parties, including the Participant and the Company. Such prorated Annual Cash Award shall be paid
in a lump sum cash payment within thirty (30) days following the Change in Control Date.

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

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

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

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

5. TERMINATION OF EMPLOYMENT.

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

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

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

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

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

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

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

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

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

(b) In the event that the Company’s financial statements with respect to any fiscal year (or
portion thereof) within the Performance Period are restated within eighteen (18) months following
the payment to the Participant of cash pursuant to a Cash Award such that Gross Profit is greater
than previously reported, the Company shall pay in a lump sum cash payment to the Participant
within thirty (30) days following the filing of such restated financial statements with the
Securities and Exchange Commission, an amount equal to the difference between (x) the amount that
the cash payment pursuant to the Cash Award would have been if the Company had used the restated
financial statements to determine the amount of the Company’s Gross Profit for the Performance Goal
Test Date less (y) the amount of the cash payment pursuant to the Cash Award paid to the
Participant.

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

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

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

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

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

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

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

12. ASSIGNMENT; SUCCESSORS.

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

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

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

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

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

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

16. SECTION 409A OF THE CODE. If any payment or entitlement provided to the Participant hereunder
in connection with the Participant’s termination of employment, is determined, in whole or in part,
to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code
(“Section 409A”) and the Participant is a specified employee as defined in Section
409A(a)(2)(B)(i), no part of such payments shall be paid before the day that is six (6) months plus
one (1) day after the date of termination or earlier death (the “New Payment Date”). The
aggregate of any payments that otherwise would have been paid to the Participant during the period
between the date of termination and the New Payment Date shall be paid to the Participant in a lump
sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day
immediately following the New Payment Date shall be paid without delay over the time period
originally scheduled, in accordance with the terms of this Agreement. A termination of employment
shall not be deemed to have occurred for purposes of any provision of this Agreement providing for
the payment of any amounts or benefits subject to Section 409A upon or following a termination of
employment unless such termination is also a “separation from service” within the meaning of
Section 409A, and for purposes of any such provision of this Agreement, references to a
“resignation,” “termination,” “terminate,” “termination of employment” or like terms shall mean
separation from service. The parties acknowledge and agree that the interpretation of Section 409A
and its application to the terms of this Agreement is uncertain and may be subject to change as
additional guidance and interpretations become available. Anything to the contrary herein
notwithstanding, all benefits or payments provided by the Company to the Participant that would be
deemed to constitute “nonqualified deferred compensation” within the meaning of Section 409A are
intended to comply with Section 409A. If, however, any such benefit or payment is deemed to not
comply with Section 409A, the Company and the Participant agree to renegotiate in good faith any
such benefit or payment (including, without limitation, as to the timing of any severance payments
payable hereof) so that either (i) Section 409A will not apply or (ii) compliance with Section 409A
will be achieved; provided, however, that any resulting renegotiated terms shall provide to the
Participant the after-tax economic equivalent of what otherwise has been provided to the
Participant pursuant to the terms of this Agreement, and provided further, that any deferral of
payments or other benefits shall be only for such time period as may be required to comply with
Section 409A.

17. 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.

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

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

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

21. MISCELLANEOUS. This Agreement cannot be modified or terminated orally. This Agreement, the
Executive Plan, and the letter agreement dated as of May 20, 2005 among the Company, Avatar
Properties and the Participant, contain the entire agreement between the parties relating to the
subject matter hereof. This Agreement supersedes the Original Agreement. The section headings
herein are intended for reference only and shall not affect the interpretation hereof.

(signature page follows)

1

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

	 	 	 
	AVATAR HOLDINGS INC.

	By:

	 	/s/ Gerald D. Kelfer
	
 
	 	 

	 	 	Name: Gerald D. Kelfer

Title: Chief Executive Officer

	 	 	 	/s/ Michael F. Levy

	 	 	Michael F. Levy

2

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