Document:

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                                                                    Exhibit 10.1

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

                  This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement")
is made as of March 27, 2003, between Avatar Holdings Inc., a Delaware
corporation (the "Company") and Gerald D. Kelfer (the "Employee").

                               W I T N E S S E T H

                  WHEREAS, the Employee is currently employed as President and
Chief Executive Officer of the Company pursuant to the employment agreement
dated November 30, 2000 between the Company and the Employee (the "Original
Agreement"); and

                  WHEREAS, the Company and the Employee wish to provide for
certain modifications to the Original Agreement, all upon the terms hereinafter
set forth; and

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

                  1. Employment. The Company agrees to employ Employee and
Employee agrees to be employed by the Company commencing as of the date hereof
and ending on December 31, 2008 (unless sooner terminated as hereinafter
provided), on the terms and subject to the conditions set forth in this
Agreement.

                  2. Duties. (a) Employee shall continue to be nominated as a
director of the Company and, subject to Employee's election thereto by the Board
of Directors or the stockholders of the Company, Employee shall be employed as
the President and Chief Executive Officer of the Company. In such capacities,
Employee shall serve as the senior executive officer of the Company and shall
have the duties and responsibilities prescribed for such positions by the
By-Laws of the Company, and shall have such other duties and responsibilities as
may from time to time be prescribed by the Board of Directors of the Company or
the Executive Committee of the Board of Directors, provided that such duties and
responsibilities are consistent with Employee's position as the senior executive
officer. In the event that during the term of Employee's employment hereunder
Employee's duties and responsibilities are expanded or Employee's title is
changed (without reduction in status), then in either or both events the rights
and obligations under this Agreement shall not be affected. In the performance
of Employee's duties, Employee shall be subject to the supervision and direction
of the Board of Directors of the Company and the Executive Committee of the
Board of Directors.

                  (b) Subject to the term of Employee's employment hereunder,
Employee shall devote Employee's full working time and effort to the proper
performance of Employee's duties and responsibilities as President and Chief
Executive Officer. Employee hereby represents and warrants to the Company that
Employee has no obligations under any existing employment or service agreement
other than the Original Agreement and that Employee's performance of the
services required of Employee hereunder will not conflict with any other
existing obligations or

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commitments. Nothing in this Agreement shall preclude Employee from engaging,
consistent with Employee's duties and responsibilities hereunder, in charitable
and community affairs.

                  (c) Employee shall perform the services contemplated hereunder
at the principal executive office of the Company and at such other locations as
may be reasonably necessary to the performance of such services.

                  3. Compensation.

                  (a) Base Salary. During the term of Employee's employment
hereunder, the Company shall pay Employee, and Employee shall accept from the
Company for Employee's services, a salary at the rate of $500,000 per year
("Base Salary"). Such Base Salary shall be payable in accordance with the
Company's policy with respect to the compensation of executives.

                  (b) Annual Bonus. During the term of Employee's employment
hereunder, the Company shall pay Employee, and Employee shall accept from the
Company for Employee's services, in addition to Employee's Base Salary, a
calendar year annual cash bonus of $500,000 ("Annual Bonus"). Such Annual Bonus
shall be payable in accordance with the Company's policy with respect to the
compensation of executives, but no later than 30 days after the end of each
calendar year in respect of which the bonus is earned.

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

                  (d) Expenses. During Employee's employment, Employee will be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Employee in performing Employee's services hereunder, provided that Employee
properly accounts therefor in accordance with Company policy.

                  4. Intentionally Omitted.

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

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Employee shall also be entitled to all paid holidays given by the Company to its
senior executives.

                  6. Participation in Benefit Plans. Employee shall be entitled
to participate in and to receive benefits under all the Company's employee
benefit plans and arrangements (other than plans relating to stock options,
restricted stock, stock appreciation rights, "phantom stock" or similar plans)
in effect on the date hereof, and Employee shall also be entitled to participate
in or receive benefits under any pension or retirement plan, savings plan, or
health-and-accident plan made available by the Company in the future to its
senior executives and other key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements and provided that Employee meets the eligibility requirements
thereof.

                  7. Other Offices. Employee further agrees to serve without
additional compensation, if elected or appointed thereto, as an officer or
director of any of the Company's subsidiaries or affiliates or as any other
officer of the Company.

                  8. Termination.

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

                  (b) Disability. In the event of Employee's permanent
disability (as hereinafter defined) during the term of Employee's employment
hereunder, the Company shall have the right, upon written notice to Employee, to
terminate Employee's employment hereunder, effective upon the giving of such
notice. For the purposes hereof, "permanent disability" shall be defined as any
physical or mental disability or incapacity which renders Employee incapable of
fully performing the services required of Employee in accordance with Employee's
obligations hereunder for a period of 120 consecutive days or for shorter
periods aggregating 120 days during any period of twelve (12) consecutive
months.

                  (c) Cause. The Company may terminate Employee's employment
hereunder for "Cause". For the purposes hereof, termination for "Cause" shall
mean termination after:

                           (i)      Employee's commission of a material act of
                  fraud against the Company or its affiliates;

                           (ii)     Employee's conviction of (or pleading by
                  Employee of nolo contendere to) any crime which constitutes a
                  felony in the jurisdiction involved; or

                           (iii)    the willful, repeated and demonstrable
                  failure by Employee substantially to perform Employee's duties
                  over a period of not less than 30 days, other than any such
                  failure resulting from Employee's incapacity due to physical
                  or mental illness, or material breach of any of Employee's
                  obligations under this Agreement, and Employee's failure to
                  cure such failure or breach within 30 days after receipt of
                  written notice from the Chairman of the Board of Directors of
                  the Company.

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                  (d) Termination by Employee for Good Reason. Employee may
terminate Employee's employment hereunder for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean (A) the failure of the Board of Directors to
continue to recommend or elect, or the stockholders of the Company to continue
to elect, Employee as a director of the Company throughout the term of
Employee's employment hereunder, or the failure of the Board of Directors to
elect Employee or continue to elect Employee to the Executive Committee of the
Board, provided that if Employee is not so continued, the Company shall be
entitled to cure such failure within thirty (30) days after Employee ceases to
serve as a director or a member of the Executive Committee, as the case may be,
(B) any assignment to Employee of any material duties other than those
contemplated by, or any limitation of Employee's powers or in any respect not
contemplated by, paragraph 2 hereof, provided that Employee first deliver
written notice thereof to the Chairman of the Board of Directors of the Company
and the Company shall have failed to cure such non-permitted assignment or
limitation within thirty (30) days after receipt of such written notice, (C) a
reduction in Employee's rate of compensation, or a material reduction in
Employee's fringe benefits or any other material failure by the Company to
perform any of its material obligations hereunder, provided that Employee first
deliver written notice thereof to the Chairman of the Board of the Company and
the Company shall not have cured such reduction or failure within thirty (30)
days after receipt of such written notice, or (D) the Company relocates its
principal place of business to a place whose distance is further than a (i)
75-mile radius from Coral Gables, Florida or (ii) 75-mile radius from New York,
New York.

                  (e) Termination by Employee Following a Change in Control.
Employee may terminate Employee's employment hereunder, within twelve (12)
months following a Change in Control. For purposes of this Agreement, a "Change
of Control" shall mean any of the following events:

                  (1) a person or entity or group of persons or entities, acting
         in concert, become the direct or indirect beneficial owner (within the
         meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
         amended) of securities of the Company representing ninety percent (90%)
         or more of the combined voting power of the issued and outstanding
         Common Stock (a "Significant Owner"); or

                  (2) the Board approves any merger, consolidation or like
         business combination or reorganization of Avatar, the consummation of
         which would result in the occurrence of the event described in clause
         (1) above, and such transaction shall have been consummated.

                  (f) Any termination by the Company pursuant to paragraphs (b)
or (c) above or by Employee pursuant to paragraph (d) or (e) above shall be
communicated by written Notice of Termination to the other party hereto. For the
purposes hereof, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Employee's employment under the provision so
indicated.

                  (g) "Date of Termination" shall mean (i) if Employee's
employment is terminated by Employee's death, the date of Employee's death, (ii)
if Employee's employment is terminated for any other reason, the date on which a
Notice of Termination is given.

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                  9. Compensation Upon Termination or During Disability.

                  (a) If Employee's employment shall be terminated by reason of
Employee's death, the Company shall pay, to such person as Employee shall
designate in a notice filed with the Company, or, if no such person shall be
designated, to Employee's estate as a lump sum death benefit, an amount equal to
any accrued but unpaid Base Salary and a prorated Annual Bonus at the time of
Employee's death. This amount shall be exclusive of and in addition to any
payments Employee's widow, beneficiaries or estate may be entitled to receive
pursuant to any pension or employee benefit plan maintained by the Company.
Employee's designated beneficiary or the executor of Employee's estate, as the
case may be, shall accept the payment provided for in this paragraph 9 in full
discharge and release of the Company of and from any further obligations under
this Agreement, subject to payments, if any, provided for in paragraph 9(f)
below.

                  (b) During any period that Employee fails to perform
Employee's duties hereunder as a result of incapacity due to physical or mental
illness, Employee shall continue to receive Employee's full Base Salary and a
prorated Annual Bonus until, if applicable, Employee's employment is terminated
pursuant to paragraph 8(b) hereof. If Employee's employment is terminated by the
Company pursuant to paragraph 8(b), the Company shall be discharged and released
of and from any further obligations under this Agreement, subject to payments,
if any, provided for in paragraph 9(f) below. During any such period and
thereafter Employee shall continue to bear the obligations provided for in
paragraph 10 below in accordance with the terms of such paragraph 10.

                  (c) If Employee's employment shall be terminated for Cause or
Employee shall terminate Employee's employment other than for Good Reason, the
Company shall pay Employee Employee's full Base Salary and a prorated Annual
Bonus through the Date of Termination or the date on which Employee terminates
Employee's employment at the rate in effect at the time Notice of Termination is
given or the date on which Employee terminates Employee's employment. The
Company shall be discharged and released of and from any further obligations
under this Agreement. Thereafter, Employee shall continue to have the
obligations provided for in paragraphs 9 and 10 below. Nothing contained herein
shall be deemed to be a waiver by the Company of any rights that it may have
against Employee in respect of Employee's actions which gave rise to the
termination of Employee's employment for Cause.

                  (d) If the Company shall terminate Employee's employment other
than pursuant to paragraphs 8(b) or 8(c) hereof or if Employee shall terminate
Employee's employment for Good Reason, then

                           (i)      The Company shall continue to pay Employee
                  Employee's full Base Salary in accordance with normal payroll
                  practices and without interest through December 31, 2008 at
                  the rate in effect at the time Notice of Termination is given
                  in accordance with paragraph 8(f) hereof;

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                           (ii)     The Company shall continue to pay Employee
                  Employee's Annual Bonus in accordance with normal payroll
                  practices and without interest through December 31, 2008;

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

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

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

                  (f) Severance Payment. If the Employee's employment terminates
on December 31, 2008 pursuant to paragraph 1 of this Agreement, the Employee
terminates his employment for Good Reason or Employee is terminated by the
Company without Cause, the Company shall pay or provide to the Employee
beginning in the calendar year following the Date of Termination an annual
payment of $250,000 for four (4) years, payable within thirty (30) days
following the beginning of each such calendar year. If Employee's employment
with the Company is terminated by Employee's death or Permanent Disability prior
to December 31, 2008 or Employee terminates his employment pursuant to paragraph
8(e) hereof, the Employee (or the executor or administrator of the deceased
Employee's estate or the person or persons to whom the deceased Employee's
rights shall pass by will or the laws of descent or distribution, as applicable)
shall be entitled to receive, beginning in the calendar year following the Date
of Termination, an annual payment for four (4) years, payable within thirty (30)
days following the beginning of each such calendar year, equal to the product of
(x) a fraction the numerator of which is the number of completed whole months
elapsed from November 30, 2000 to the date of death, Permanent Disability or
termination of employment, as the case may be (whichever is sooner), and the
denominator of which is ninety-seven (97) and (y) $250,000.

                  (g) If the Company shall terminate Employee's employment
hereunder other than pursuant to paragraphs 8(b) or 8(c) hereof, or if Employee
shall terminate Employee's employment pursuant to paragraph 8(d) hereof,
Employee agrees, during the entire period of time that Employee is entitled to
receive any benefits pursuant to paragraph 9(d) above, to make known Employee's
availability for employment involving services of a nature substantially similar
and of a comparable

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stature to those performed by Employee on behalf of the Company in a manner
customary for executives holding positions substantially similar and of a
comparable stature to Employee's position with the Company. Employee agrees to
keep the Chairman of the Board of the Company (or his designee) apprised of
Employee's employment status during such period and, if requested, Employee will
provide appropriate supporting documentation with respect to the salary, bonuses
or other compensation earned by and benefits made available to Employee in
respect of such employment. In the event Employee secures employment as
described in this paragraph (e), the Company shall be entitled to (i) deduct
from the amounts payable to Employee pursuant to paragraphs 9(d)(i) and 9(d)(ii)
above (excluding any accrued but unpaid Annual Bonus through the date of
termination) any salary, bonuses or other compensation paid to Employee in
connection with such employment and (ii) terminate Employee's participation in
(and shall not be required to pay Employee any sums in respect of) any employee
benefit plans and programs described in paragraph 9(d)(iii) that are
substantially similar to any employee benefit plans and programs in which
Employee participates in connection with such new or existing employment.
Employee agrees promptly to repay to the Company any amounts paid to Employee by
the Company pursuant to paragraphs 9(d)(i) and 9(d)(ii) which the Company was
entitled to deduct from such amounts pursuant to this paragraph (e).

                  10. Non-Competition and Protection of Confidential
Information.

                  (a) Restrictive Covenants. Employee agrees, as a condition to
the performance by the Company of its obligations hereunder, particularly its
obligations under paragraph 3 hereof, that during the term of Employee's
employment hereunder and during the further period of one (1) year after the
termination of such employment, Employee shall not, without the prior written
approval of the Board of Directors of the Company, directly or indirectly
through any other person, firm or corporation:

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

                           (ii)     Solicit, raid, entice or induce any person,
                  firm or corporation that presently is or at any time during
                  the term of Employee's employment hereunder a customer of the
                  Company, or any of its subsidiary companies, to become a
                  customer of any other person, firm or corporation, and
                  Employee shall not approach any such person, firm or
                  corporation for such purpose or authorize or knowingly approve
                  the taking of such actions by any other person; or

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                           (iii)    Solicit, raid, entice or induce any person
                  that presently is or at any time during the term of Employee's
                  employment hereunder an employee of the Company, or any of its
                  subsidiary companies, to become employed by any person, firm
                  or corporation, and Employee shall not approach any such
                  employee for such purpose or authorize or knowingly approve
                  the taking of such actions by any other person.

                  (b) Confidential Information. Recognizing that the knowledge,
information and relationship with customers, suppliers, and agents, and the
knowledge of the Company's and its subsidiary companies' business methods,
systems, plans and policies which Employee shall hereafter establish, receive or
obtain as an employee of the Company or its subsidiary companies, are valuable
and unique assets of the respective businesses of the Company and its subsidiary
companies, Employee agrees that, during and after the term of Employee's
employment hereunder, Employee shall not (otherwise than pursuant to Employee's
duties hereunder) disclose, without the prior written approval of the Board of
Directors of the Company, any such knowledge or information pertaining to the
Company or any of its subsidiary companies, their business, personnel or
policies, to any person, firm, corporation or other entity, for any reason or
purpose whatsoever. The provisions of this paragraph 10 shall not apply to
information which is or shall become generally known to the public or the trade
(except by reason of Employee's breach of Employee's obligations hereunder),
information which is or shall become available in trade or other publications,
information known to Employee prior to entering the employ of the Company, and
information which Employee is required to disclose by order of a court of
competent jurisdiction (provided that prior to Employee's disclosure of any such
information Employee shall provide the Company with reasonable notice and a
reasonable opportunity to seek a protective order to prevent such disclosure).

                  (c) Geographic Scope. The provisions of this paragraph 10
(other than paragraphs 10(a)(iii) and (b), which shall be in full force and
effect without regard to the geographic limitations set forth in this paragraph
10(d)) shall be in full force and effect within a 100-mile radius of a site for
which the Company or any Avatar Entity has commenced development or has a
binding commitment therefor. The Employee and the Company expressly agree that
the prohibitions set forth in paragraphs 10(a)(i) and (ii) shall be in full
force and effect with respect to any services or business activity which
competes in the above mentioned geographic area with the business operations or
activities of the Company, its subsidiaries and/or affiliates (each of the
foregoing entities being referred to herein, collectively and individually, as
the "Avatar Entities"), regardless of the geographic location of the Employee in
rendering such services or engaging in such business activity.

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

                  (e) Remedies. The Employee acknowledges that his services are
of a special, unique and extraordinary character and, his position with the
Avatar Entities places him in a substantial relationship and a position of
confidence and trust with specific prospective or existing customers, suppliers
and employees of the Avatar Entities, and that in connection with his services
to the Company, the Employee will have access to confidential business or
professional information vital to the Avatar Entities' businesses. The Employee
further

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acknowledges that in view of the nature of the business in which the Avatar
Entities are engaged, the foregoing restrictive covenants in this paragraph 10
hereof are reasonable and necessary in order to protect the legitimate business
interests of the Avatar Entities and that violation thereof would result in
irreparable injury to the Avatar Entities. Accordingly, the Employee consents
and agrees that if the Employee violates or threatens to violate any of the
provisions of this paragraph 10 hereof the Avatar Entities would sustain
irreparable harm and, therefore, the Avatar Entities shall be entitled to obtain
from any court of competent jurisdiction, temporary, preliminary and/or
permanent injunctive relief as well as damages, attorneys fees and costs, and an
equitable accounting of all earnings, profits and other benefits arising from
such violation, which rights shall be cumulative and in addition to any other
rights or remedies in law or equity to which the Avatar Entities may be
entitled.

                  11. Deductions and Withholdings. The Company shall be entitled
to withhold any amounts payable under this Agreement on account of payroll taxes
and similar matters as are required by applicable law, rule or regulation of
appropriate governmental authorities.

                  12. Successors; Binding Agreement.

                  (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance reasonably satisfactory to Employee, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Employee to compensation from the Company in the same amount and
on the same terms as Employee would be entitled to hereunder if Employee
terminated Employee's employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
"Company" shall include any successor to the Company's business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
paragraph 12 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. Except as set forth above, the Company may
not assign this Agreement or any of its rights or obligations hereunder, without
Employee's prior written consent.

                  (b) This Agreement and all Employee's rights hereunder shall
inure to the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Employee should die while any amounts would still be
payable to Employee hereunder if Employee had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Employee's devisee, legatee, or other designee or, if
there be no such designee, to Employee's estate. Employee's obligations
hereunder may not be delegated and except as otherwise provided herein relating
to the designation of a devisee, legatee or other designee, Employee may not
assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this
Agreement or any of Employee's rights hereunder, and any such attempted
delegation or disposition shall be null and void and without effect.

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                  (c) This Agreement has been duly authorized by the Company,
and constitutes the legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms. Employee agrees that this
Agreement constitutes Employee's legal, valid and binding obligation and is
enforceable against Employee in accordance with its terms.

                  13. Notice. For the purposes of this Agreement, notices and
all other communications provided for shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

                  If to Employee:

                           Mr. Gerald D. Kelfer
                           7426 S.W. 49th Place
                           Miami, Florida 33143

                  If to the Company:

                           Avatar Holdings Inc.
                           201 Alhambra Circle, 12th Floor
                           Coral Gables, Florida  33134
                           Attention: Chairman of the Board

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

                  14. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by Employee and by the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.

                  15. Other Agreements between Employee and the Company.
Employee and the Company hereby acknowledge that upon execution of this
Agreement, the Original Agreement shall be terminated and the provisions thereof
shall be given no force or effect. This Agreement constitutes the complete
understanding between the parties with respect to Employee's employment and no
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Florida.

                  16. Validity. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.

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                  17. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.

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

                                           AVATAR HOLDINGS INC.

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

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

                                       11<PAGE>

                                                                    Exhibit 10.2

                        AMENDMENT TO AMENDED AND RESTATED
                         RESTRICTED STOCK UNIT AGREEMENT

                  THIS AMENDMENT dated as of March 27, 2003 (the "Amendment") to
the Amended and Restated Restricted Stock Agreement (the "Agreement") dated as
of October 20, 2000, between Avatar Holdings Inc., a Delaware corporation (the
"Company"), and Gerald D. Kelfer (the "Participant"). All capitalized terms not
otherwise defined herein shall have the meanings given to such terms in the
Agreement.

                  WHEREAS, the Company and the Participant wish to modify
certain provisions in the Agreement; and

                  WHEREAS, the Hurdle Price Condition has been met and the Units
have been granted to the Participant.

                  NOW, THEREFORE, in consideration of the foregoing premises and
the mutual promises and obligations contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                  1.       Section 4(a)(iii) of the Agreement is hereby deleted
in its entirety and replaced with the following:

                           "(iii) if the Participant dies or in the event the
Participant's employment with the Company is terminated by the Company for the
reason of Participant's "permanent disability" (as defined below), all Units
granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest,
be converted into shares of Common Stock and be immediately distributed to the
Participant (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).

                  For purposes of this Section 4(a), the terms "cause", "good
reason" and "permanent disability", shall have the meanings ascribed to such
terms in the Participant's amended and restated employment agreement with the
Company, dated as of March 27, 2003, as amended or restated from time to time."

                  2.       This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

                  3.       Except as specifically amended hereby, the Agreement
is in all respects confirmed, ratified and approved.

<PAGE>

                  4.       This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflict of laws of the
State of Delaware.

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

                                           AVATAR HOLDINGS INC.

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

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

                                       2

<PAGE>

                                                                    Exhibit 10.3

                     EARNINGS PARTICIPATION AWARD AGREEMENT

         THIS EARNINGS PARTICIPATION AWARD AGREEMENT, dated March 27, 2003 (the
"Agreement"), is made between Avatar Holdings Inc., a Delaware corporation (the
"Company") and Gerald D. Kelfer (the "Participant").

1. AWARD. Pursuant to the provisions of the (i) Avatar Holdings Inc. Executive
Incentive Compensation Plan, as the same may be amended, modified and
supplemented from time to time (the "Executive Plan") the Committee (with
respect to the Cash Award (as defined below) such term shall have the meaning
set forth 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 other provisions herein set forth, the Cash Award and (ii)
Amended and Restated Avatar Holdings Inc. 1997 Incentive and Capital
Accumulation Plan, as the same may be amended, modified and supplemented from
time to time (the "1997 Plan" and together with the Executive Plan, collectively
the Plans) the Committee (with respect to the Stock Award (as defined below)
such term shall have the meaning set forth in the 1997 Plan) hereby awards to
the Participant, on the date hereof, subject to the terms and conditions of the
1997 Plan and subject further to the terms and conditions and other provisions
herein set forth, the Stock Award if, as of an applicable Performance Goal Test
Date (as defined below), the Performance Goal (as defined below) applicable to a
Cash Award or the Stock Award, as the case may be, 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:

                  "Actual Gross Profit Amount" shall mean the Company's
         cumulative Gross Profit during the Performance Period.

                  "Business Plan" shall mean the Company's business plan for the
         period commencing on January 1, 2003 and ending on December 31, 2007,
         in such form that the Compensation Committee approved on or prior to
         the date hereof.

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

                  "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, the excess, if any, of (x) two and one-half
         percent (2.5%) of the Gross

<PAGE>

         Profit earned by the Company for such fiscal year, over (y) the Minimum
         Gross Profit Level for such fiscal year.

                  "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.

                  "Fair Market Value" shall mean the average of the closing
         prices of the Common Stock for the fifteen trading days ending with and
         including the measuring date if the Common Stock is readily tradeable
         on a national securities exchange, the National Association of
         Securities Dealers Automated Quotation System or other national market
         system, provided, however, if such exchange or system is not open for
         business on any day during such period or the Common Stock was not
         traded on any day during such period, the Fair Market Value shall be
         determined as of the most recent fifteen trading days ending with and
         including the measuring date on which such exchange or system shall
         have been open for business and the Common Stock was traded, and if the
         Common Stock is not readily tradable as set forth above, Fair Market
         Value shall mean the amount determined in good faith by the Committee
         as the fair market value of the Common Stock of the Company.

                  "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, 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 (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
         (benefit)" plus (iv) 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 (v) 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, over (y) the Excluded Amounts for such fiscal year.

                  "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."

                                       2

<PAGE>

                  "Minimum Cumulative Gross Profit Level" shall mean that as of
         the Last Day of the Performance Period (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:

<TABLE>
<CAPTION>
 FISCAL YEAR END                           GROSS PROFIT
 ---------------                           ------------
<S>                                        <C>
December 31, 2003                          $10,000,000
December 31, 2004                          $12,000,000
December 31, 2005                          $14,400,000
December 31, 2006                          $17,280,000
December 31, 2007                          $20,736,000
</TABLE>

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

                  "Performance Goal" shall mean (i) in the case of the 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 Stock 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
         Cash Award, December 31 of each year within the Performance Period and
         with respect to the Stock Award, the Last Day of the Performance
         Period.

                  "Performance Period" shall mean the period commencing January
         1, 2003 and ending on December 31, 2007 (December 31, 2007, 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".

                  "Stock Award" shall mean a grant of a number of shares of
         Common Stock having a Fair Market Value on the Payment Date equal to
         two and one-half percent (2.5%) of the excess, if any, of (x) the
         Actual Gross Profit Amount over (y) the Target Gross Profit Amount.

                  "Target Gross Profit Amount" shall mean $186,956,000.

3. TERMS AND CONDITIONS. The Cash Award and the Stock Award (together the
"Awards") evidenced by this Agreement are subject to the following terms and
conditions:

                                       3

<PAGE>

         (a) The payment of performance based compensation described herein is
contingent upon the achievement of the Performance Goal applicable to a Cash
Award or the Stock Award, as the case may be.

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

         (c) The applicable 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,
or Common Stock to be issued, if any, to the Participant and (ii) if it has not,
shall so certify in writing with a brief explanation as to why the Committee has
determined that such Performance Goal has not been met. Payments of cash, if
any, or the issuance of Common Stock, if any, pursuant to the Awards shall be
made to the Participant, in each case within 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 the year ended as of the applicable
Performance Goal Test Date (each such date being a "Payment Date").

         (d) Notwithstanding anything to the contrary contained in this
Agreement, in the event of a Change in Control (as defined in the 1997 Plan) of
the Company, this Agreement shall terminate and be of no further force and
effect and the Participant shall no longer be entitled to receive (i) any cash
payments pursuant to the Cash Award for any period after the end of the previous
Performance Period or (ii) an issuance of shares of Common Stock pursuant to the
Stock Award, provided, however, that with respect to the fiscal year in which
such Change in Control occurs, the Committee shall have the discretion to award
in an equitable manner, based on the financial results of the Company to the
date of the consummation of the Change in Control (as determined by the
Committee in its sole discretion in consultation with the Company's advisors), a
pro rata portion of the Cash Award for the fiscal year in which the Change in
Control is consummated. The determination of the Committee as to any partial
award shall be final and binding on all parties, including the Participant and
the Company.

4. CAP ON COMPENSATION. Notwithstanding anything to the contrary herein, the
maximum payment of cash pursuant to the Cash Award or the issuance of Common
Stock pursuant to the Stock Award to the Participant hereunder shall be subject
to the limitations in the Plans and the Participant's employment agreement with
the Company or a subsidiary thereof, each as may be amended from time to time.

5. TERMINATION OF EMPLOYMENT.

         (a) Subject to Section 3 hereof:

                                       4

<PAGE>

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

                  (ii)     if the Participant's employment with the Company is
terminated by the Company other than for "cause" or by the Participant for "good
reason," the Participant shall be entitled to continue to receive such cash
payments or Common Stock issuances as would otherwise be made pursuant to this
Agreement as though the Participant's employment had not been terminated; and

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

                           (A) the Participant shall be entitled to receive only
that portion of any cash payments or Common Stock issuances otherwise payable
pursuant to Section 3(c) hereof following such termination, equal to the product
of (x) a fraction (which in no event shall exceed one (1)) the numerator of
which is the number of completed whole months elapsed after the first day of the
Performance Period to the date of death or 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 or Common Stock issuances that would have been
payable pursuant to Section 3(c) hereof if the Participant remained an employee
of the Company through and including the Last Day of the Performance Period;
provided, however, that with respect to cash payments pursuant to the 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

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

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

         (b) For purposes of Section 5(a) hereof, the terms "cause", "good
reason" and "permanent disability", shall have the meanings ascribed to such
terms in the Participant's employment agreement with the Company or a subsidiary
thereof, as the case may be, as amended from time to time; provided, however, if
the Participant is no

                                       5

<PAGE>

longer employed pursuant to an employment agreement but is continuing in employ,
such terms shall have the meanings ascribed to such terms in the employment
agreement last in effect.

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 or other agreement with the Company or
any of its subsidiaries (after the expiration of any notice and cure period),
then in addition to any other rights or remedies arising from or relating to
such breach the Participant shall forfeit any right to any cash payments or
Common Stock issuances pursuant to this Agreement from and after the date of
such breach.

7. TAXES. Any cash payment pursuant to a Cash Award or Common Stock issuance
pursuant to the Stock 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.

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

9. NO OBLIGATION TO PURSUE PROJECT. 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.

10. 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.

                                       6

<PAGE>

11. ASSIGNMENT; SUCCESSORS.

         (a) The Cash Award, Stock Award 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 Awards in contravention
of this Section 11(a) is void ab initio. The 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 the Company or any of its
subsidiaries, any other corporation or other business entity which, by merger,
consolidation, purchase of assets, or otherwise, acquires all or a material part
of the assets of the Company.

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

12. 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.

13. 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.

14. 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.

15. 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.

16. INCORPORATION OF PLANS. Each of the Plans is hereby incorporated by
reference and made a part of this Agreement, and this Agreement shall be subject
to the terms of the Plans, as the Plans may be amended from time to time.

                                       7

<PAGE>

17. STOCKHOLDER APPROVAL OF 1997 PLAN. In the event that the requisite number of
shares of Common Stock reserved for issuance under the 1997 Plan to issue the
Common Stock pursuant to the Stock Award to the Participant are not available,
the Company may submit an amendment to the 1997 Plan (the "1997 Plan
Amendment"), which increases the number of shares available for issuance
thereunder to satisfy the Company's obligations pursuant to the Stock Award for
approval by stockholders at an annual meeting or meetings (or at a special
meeting or special meetings) after it is determined that additional shares of
Common Stock are needed for issuance pursuant to the Stock Award. The
Participant agrees that the failure of the Company to submit the 1997 Plan
Amendment to the Company's stockholders or, if submitted, the failure of the
Company's stockholders to approve the 1997 Plan Amendment (and any adverse
financial consequences to Participant resulting therefrom) shall not constitute
a "good reason" under the Participant's employment with Company or any
subsidiary of the Company.

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

19. MISCELLANEOUS. This Agreement cannot be changed or terminated orally. This
Agreement and the Plan contain the entire agreement between the parties relating
to the subject matter hereof. The section headings herein are intended for
reference only and shall not affect the interpretation hereof.

                                       8

<PAGE>

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

                                           AVATAR HOLDINGS INC.

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

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

                                       9

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