Document:

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                                                                Exhibit 10 (ab)

                              AMENDED AND RESTATED
                        RESTRICTED STOCK UNIT AGREEMENT

         This AMENDED AND RESTATED RESTRICTED STOCK UNIT AGREEMENT
("AGREEMENT") is made as of October 20, 2000, between Avatar Holdings Inc., a
Delaware corporation (the "COMPANY") and Gerald D. Kelfer (the "PARTICIPANT")
and amends and restates in its entirety, the restricted stock unit agreement
dated December 7, 1998 between the Company and the Participant (the "ORIGINAL
AGREEMENT").

                              W I T N E S S E T H

         WHEREAS, the Participant is currently employed as President and Chief
Executive Officer of the Company;

         WHEREAS, the Participant was awarded an opportunity to receive 100,000
Performance Conditioned Restricted Stock Units pursuant to the Original
Agreement; and

         WHEREAS, the Company and the Participant wish to amend and restate the
terms of the Original Agreement, all upon the terms hereinafter set forth;

         NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree that the Original
Agreement is amended and restated in its entirety to read as follows:

         1. AWARD. Pursuant to the provisions of the Amended and Restated 1997
Incentive and Capital Accumulation Plan, as the same may be amended, modified
and supplemented (the "PLAN"), the Incentive Plan Committee (the "COMMITTEE")
of the Board of Directors of the Company (the "BOARD") awards to the
Participant, as of December 7, 1998, subject to the terms and conditions of the
Plan and subject further to the terms and conditions herein set forth (and
subject to the approval of an amendment to the Plan (the "PLAN AMENDMENT") by
the Company's stockholders at the 2001 Annual Meeting or at a special meeting
of stockholders on or before December 31, 2001 (the STOCKHOLDER APPROVAL"), an
opportunity to receive 100,000 Performance Conditioned Restricted Stock Units
("UNITS"). Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Plan. This award is intended to constitute a
Performance-Based Award within the meaning of the Plan.

         2. TERMS AND CONDITIONS. It is understood and agreed that the award
evidenced by this Agreement is subject to the following terms and conditions:

         (a) Subject to obtaining the Stockholder Approval, the Participant
shall be granted, automatically and without further authorization on the part
of the Committee, 100,000 Units upon satisfaction of the following condition

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(the date on which such condition is satisfied being hereinafter referred to as
the "GRANT DATE"): the closing stock price of the Common Stock on its principal
trading market shall have been at least $25 per share for 20 trading days out
of 30 consecutive trading days or the Company consummates a transaction which
results in the stockholders of the Company receiving cash, securities, or other
property (or any combination thereof) having a "VALUE" as determined by the
Committee of at least $25 per share in either case, during the period beginning
on the date immediately following the date hereof and ending on December 31,
2005 (the "HURDLE PRICE CONDITION"); PROVIDED, HOWEVER, that subject to Section
4 hereof, no Units shall be granted if the Participant's employment with the
Company has terminated for any reason on or prior to the time the Hurdle Price
Condition is satisfied. For purposes of this Section 2(a), "VALUE" shall mean
the amount received by the stockholders of the Company taking into account the
net present value of any debt, securities, future payments, contingent rights
or other non-cash consideration to be paid to such stockholders.

         (b) The Participant shall not possess any incidents of ownership
(including, without limitation, dividend and voting rights) in shares of Common
Stock in respect of the Units until such Units have vested and been distributed
to the Participant in the form of shares of Common Stock in accordance with
Sections 3 and 4 hereof.

         (c) Except as provided in this Section 2(c), the Units and any
interest of the Participant therein may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units
in contravention of this Section 2(c) is void AB INITIO. Units shall not be
subject to execution, attachment or other process. Notwithstanding the
foregoing, with the written consent of the Committee the Participant shall be
permitted to transfer such Units to members of his immediate family (I.E.,
children, grandchildren or spouse), trusts for the benefit of such family
members, and partnerships whose only partners are such family members;
PROVIDED, HOWEVER, that no consideration can be paid for the transfer of the
Units and the transferee of the Units shall be subject to all conditions
applicable to the Units (including all of the terms and conditions of this
Agreement) prior to transfer.

         3. VESTING AND CONVERSION OF UNITS. On December 31, 2005, the Units
granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest
in full and such vested Units shall be converted into an equivalent number of
shares of Common Stock that will be immediately distributed to the Participant;
PROVIDED, HOWEVER, that subject to the provisions of Section 4 hereof, no Units
shall vest or be converted and distributed to the Participant unless the
Participant is an employee of the Company on December 31, 2005.

         Upon the distribution of the shares of Common Stock in respect of the
Units, the Company shall issue to the Participant or the Participant's personal
representative a stock certificate representing such shares of Common Stock,
free of any restrictions, subject to Section 8 hereof.

         4. TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL.

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         (a) Notwithstanding any other provision contained herein:

                  (i) if the Participant's employment with the Company is
terminated by the Company for "cause" (as defined below) or by the Participant
for other than "good reason" (as defined below), the Participant shall forfeit
all Units granted to the Participant pursuant to Section 2(a) hereof, if any,
as of the date of termination of employment.

                  (ii) if the Participant's employment with the Company is
terminated by the Company other than for "cause", or is terminated by the
Participant for "good reason", all Units granted to the Participant pursuant to
Section 2(a) hereof, if any, shall vest, be converted into shares of Common
Stock and be immediately distributed to the Participant.

                  (iii) if the Participant dies or in the event the
Participant's employment with the Company is terminated by the Company for
reason of the Participant's "permanent disability" (as defined below), the
number of Units granted to the Participant pursuant to Section 2(a) hereof, if
any, which equals the greater of (i) the product of (x) a fraction the
numerator of which is the number of completed whole months elapsed from
December 7, 1998 to the date of death or permanent disability, as the case may
be (whichever is sooner), and the denominator of which is the number of whole
months from December 7, 1998 to December 31, 2005 and (y) 100,000 or (ii)
50,000 Units, shall vest, be converted into shares of Common Stock and be
immediately distributed to the Participant (or the executor or administrator of
the deceased Participant's estate or the person or persons to whom the deceased
Participant's rights shall pass by will or the laws of descent or distribution,
as applicable), and any portion of the Units then remaining unvested shall be
forfeited. If the Participant's employment with the Company is terminated by
Participant's death or "permanent disability" prior to the Grant Date and
Stockholder Approval has been obtained on or before December 31, 2001, and the
Hurdle Price Condition is satisfied on or before the one year anniversary of
Participant's termination for death or "permanent disability", 50,000 units
shall be granted and shall vest, be converted into shares of Common Stock and
be immediately distributed to the Participant (or the executor or administrator
of the deceased Participant's estate or the person or persons to whom the
deceased Participant's rights shall pass by will or the laws of descent or
distribution, as applicable), and any portion of the Units then remaining
unvested shall be forfeited.

                  For purposes of this Section 4(a), the terms "CAUSE", "GOOD
REASON" and "PERMANENT DISABILITY", shall have the meanings ascribed to such
terms in the Participant's employment agreement with the Company, dated as of
November 30, 2000, as amended or restated from time to time.

         (b) In the event of a Change of Control (as defined below), all Units
granted to the Participant pursuant to Section 2(a) hereof shall vest, be
converted into shares of Common Stock and be immediately distributed to the
Participant. For purposes of this Section 4(b), the term "CHANGE OF CONTROL"
shall mean any of the following events:

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

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

         5. DEFERRAL. The Participant may elect to defer the receipt of Common
Stock upon the vesting of the Units granted to the Participant pursuant to
Section 2(a) hereof and for the Company to continue to maintain such Units on
its books of account if the Participant delivers to the Company a written
notice of such election at least six months prior to such vesting and enters
into a deferral agreement with the Company on terms satisfactory to the
Committee.

         6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common
Stock of the Company, through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, reverse stock split, split up,
spinoff, combination of shares, exchange of shares, dividend in kind or other
like change in capital structure or distribution (other than normal cash
dividends) to stockholders of the Company, in order to prevent dilution or
enlargement of the Participant's rights under this Agreement and the Plan, the
Committee may, in an equitable manner, adjust the number and kind of shares
that may be issued under this Agreement and make any other appropriate
adjustments in the terms of the Units and this Agreement to reflect such
changes or distributions. In addition, the Committee may make adjustments to
the terms and conditions of the Units and this Agreement in recognition of
unusual or nonrecurring events affecting the Company or the financial
statements of the Company, or in response to changes in applicable laws,
regulations, or accounting principles.

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

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withhold shares of Common Stock having a Fair Market Value (as defined in the
Plan) equal to the amount of tax to be withheld, such tax calculated at rates
prescribed by statute or regulation.

         8. REGULATORY COMPLIANCE AND LISTING. The issuance or delivery of any
stock certificates representing shares of Common Stock issuable pursuant to
this Agreement may be postponed by the Committee for such period as may be
required to comply with any applicable requirements under the federal or state
securities laws, any applicable listing requirements of any national securities
exchange or the NASDAQ National Market System, and any applicable requirements
under any other law, rule or regulation applicable to the issuance or delivery
of such shares, and the Company shall not be obligated to deliver any such
shares of Common Stock to the Participant if either delivery thereof would
constitute a violation of any provision of any law or of any regulation of any
governmental authority, any national securities exchange or the NASDAQ National
Market System, or the Participant shall not yet have complied fully with the
provisions of Section 7 hereof.

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

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

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

         12. NOTICES. Any notice required or permitted under this Agreement
shall be deemed given when delivered personally, or when deposited in a United
States Post Office, postage prepaid, addressed, as appropriate, (i) to the

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Participant at the last address specified in Participant's employment records,
or such other address as the Participant may designate in writing to the
Company, or (ii) to the Company, Avatar Holdings Inc., 201 Alhambra Circle,
12th Floor, Coral Gables, Florida 33134 Attention: Chairman of the Board, or
such other address as the Company may designate in writing to the Participant.

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

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

         15. STOCKHOLDER APPROVAL OF THE PLAN AMENDMENT. The Company hereby
undertakes to submit an amendment to the Plan for approval by stockholders at
the Company's next annual meeting or at a special meeting on or before December
31, 2001. If the stockholders fail to approve the Plan Amendment at such annual
meeting or special meeting (or any adjournment thereof) on or before December
31, 2001, this Agreement will be terminated effective immediately following
such annual meeting or special meeting (or any adjournment thereof) at which
stockholders failed to approve the Plan Amendment. If this Agreement is so
terminated, the Participant and the Company shall be discharged and released of
and from any further obligations under this Agreement, and the Original
Agreement shall continue to be in full force and effect.

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

         17. 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.

         18. 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.

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

                                           AVATAR HOLDINGS INC.

                                           By:     /s/ LEON LEVY
                                              ---------------------------------
                                                Name: Leon Levy
                                                Title: Chairman of the Board

                                                  /s/ GERALD D. KELFER
                                                -------------------------------
                                                     Gerald D. Kelfer

                                       7<PAGE>   1
                                                                Exhibit 10 (ac)

                        RESTRICTED STOCK UNIT AGREEMENT

         This RESTRICTED STOCK UNIT AGREEMENT ("AGREEMENT"), dated October 20,
2000, between Avatar Holdings Inc., a Delaware corporation (the "COMPANY") and
Gerald D. Kelfer (the "PARTICIPANT").

         1. AWARD. Pursuant to the provisions of the Amended and Restated 1997
Incentive and Capital Accumulation Plan, as the same may be amended, modified
and supplemented (the "PLAN"), the Incentive Plan Committee (the "COMMITTEE")
of the Board of Directors of the Company (the "BOARD") hereby awards to the
Participant, on the date hereof, subject to the terms and conditions of the
Plan and subject further to the terms and conditions herein set forth (and
subject to the approval of an amendment to the Plan (the "PLAN AMENDMENT") by
the Company's stockholders at the 2001 Annual Meeting or at a special meeting
of stockholders on or before December 31, 2001 (the "STOCKHOLDER APPROVAL")),
an opportunity to receive 50,000 Performance Conditioned Restricted Stock Units
("UNITS"). Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Plan. This award is intended to constitute a
Performance-Based Award within the meaning of the Plan.

         2. TERMS AND CONDITIONS. It is understood and agreed that the award
evidenced by this Agreement is subject to the following terms and conditions:

         (a) Subject to obtaining the Stockholder Approval, the Participant
shall be granted, automatically and without further authorization on the part
of the Committee, 50,000 Units upon satisfaction of the following condition
(the date on which such condition is satisfied being hereinafter referred to as
the "GRANT DATE"): (i) the closing stock price of the Common Stock on its
principal trading market shall have been at least $25 per share for 20 trading
days out of 30 consecutive trading days or the Company consummates a
transaction which results in the stockholders of the Company receiving cash,
securities, or other property (or any combination thereof) having a "value" as
determined by the Committee of at least $25 per share in either case, during
the period beginning on the date immediately following the date hereof and
ending on December 31, 2005 (the "HURDLE PRICE CONDITION"); PROVIDED, HOWEVER,
that subject to Section 4 hereof, no Units shall be granted if the
Participant's employment with the Company has terminated for any reason on or
prior to the time the Hurdle Price Condition is satisfied. For purposes of this
Section 2(a), "VALUE" shall mean the amount received by the stockholders of the
Company taking into account the net present value of any debt, securities,
future payments, contingent rights or other non-cash consideration to be paid
to such stockholders.

         (b) The Participant shall not possess any incidents of ownership
(including, without limitation, dividend and voting rights) in shares of Common
Stock in respect of the Units until such Units have vested and been distributed

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to the Participant in the form of shares of Common Stock in accordance with
Sections 3 and 4 hereof.

         (c) Except as provided in this Section 2(c), the Units and any
interest of the Participant therein may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of. Any attempt to transfer Units
in contravention of this Section 2(c) is void AB INITIO. Units shall not be
subject to execution, attachment or other process. Notwithstanding the
foregoing, with the written consent of the Committee the Participant shall be
permitted to transfer such Units to members of his immediate family (I.E.,
children, grandchildren or spouse), trusts for the benefit of such family
members, and partnerships whose only partners are such family members;
PROVIDED, HOWEVER, that no consideration can be paid for the transfer of the
Units and the transferee of the Units shall be subject to all conditions
applicable to the Units (including all of the terms and conditions of this
Agreement) prior to transfer.

         3. VESTING AND CONVERSION OF UNITS. On December 31, 2005, the Units
granted to the Participant pursuant to Section 2(a) hereof, if any, shall vest
in full and such vested Units shall be converted into an equivalent number of
shares of Common Stock that will be immediately distributed to the Participant;
PROVIDED, HOWEVER, that subject to the provisions of Section 4 hereof, no Units
shall vest or be converted and distributed to the Participant unless the
Participant is an employee of the Company on December 31, 2005.

         Upon the distribution of the shares of Common Stock in respect of the
Units, the Company shall issue to the Participant or the Participant's personal
representative a stock certificate representing such shares of Common Stock,
free of any restrictions, subject to Section 8 hereof.

         4. TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL.

         (a) Notwithstanding any other provision contained herein:

                  (i)      if the Participant's employment with the Company is
                           terminated by the Company for "cause" (as defined
                           below) or by the Participant for other than "good
                           reason" (as defined below), the Participant shall
                           forfeit all Units granted to the Participant
                           pursuant to Section 2(a) hereof, if any, as of the
                           date of termination of employment.

                  (ii)     if the Participant's employment with the Company is
                           terminated by the Company other than for "cause", or
                           is terminated by the Participant for "good reason",
                           all Units granted to the Participant pursuant to
                           Section 2(a) hereof, if any, shall vest, be
                           converted into shares of Common Stock and be
                           immediately distributed to the Participant.

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                  (iii)    if the Participant dies or in the event the
                           Participant's employment with the Company is
                           terminated by the Company for reason of the
                           Participant's "permanent disability" (as defined
                           below), the number of Units granted to the
                           Participant pursuant to Section 2(a) hereof, if any,
                           which equals the greater of (i) the product of (x) a
                           fraction the numerator of which is the number of
                           completed whole months elapsed from the date hereof
                           to the date of death or permanent disability, as the
                           case may be (whichever is sooner), and the
                           denominator of which is the number of whole months
                           from the date hereof to December 31, 2005 and (y)
                           50,000 or (ii) 25,000 Units, shall vest, be
                           converted into shares of Common Stock and be
                           immediately distributed to the Participant (or the
                           executor or administrator of the deceased
                           Participant's estate or the person or persons to
                           whom the deceased Participant's rights shall pass by
                           will or the laws of descent or distribution, as
                           applicable), and any portion of the Units then
                           remaining unvested shall be forfeited. If the
                           Participant's employment with the Company is
                           terminated by Participant's death or permanent
                           disability prior to the Grant Date and Stockholder
                           Approval has been obtained on or before December 31,
                           2001, and the Hurdle Price Condition is satisfied on
                           or before the one year anniversary of Participant's
                           termination for death or "permanent disability",
                           25,000 Units shall be granted and shall vest, be
                           converted into shares of Common Stock and be
                           immediately distributed to the Participant (or the
                           executor or administrator of the deceased
                           Participant's estate or the person or persons to
                           whom the deceased Participant's rights shall pass by
                           will or the laws of descent or distribution, as
                           applicable), and any portion of the Units then
                           remaining unvested shall be forfeited.

                  For purposes of this Section 4(a), the terms "CAUSE", "GOOD
REASON" and "PERMANENT DISABILITY", shall have the meanings ascribed to such
terms in the Participant's employment agreement with the Company, dated as of
November 30, 2000, as amended or restated from time to time.

         (b) In the event of a Change of Control (as defined below), all Units
granted to the Participant pursuant to Section 2(a) hereof shall vest, be
converted into shares of Common Stock and be immediately distributed to the
Participant. For purposes of this Section 4(b), the term "CHANGE OF CONTROL"
shall mean any of the following events:

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

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

         5. DEFERRAL. The Participant may elect to defer the receipt of Common
Stock upon the vesting of the Units granted to the Participant pursuant to
Section 2(a) hereof and for the Company to continue to maintain such Units on
its books of account if the Participant delivers to the Company a written
notice of such election at least six months prior to such vesting and enters
into a deferral agreement with the Company on terms satisfactory to the
Committee.

         6. EQUITABLE ADJUSTMENT. If there shall be any change in the Common
Stock of the Company, through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, reverse stock split, split up,
spinoff, combination of shares, exchange of shares, dividend in kind or other
like change in capital structure or distribution (other than normal cash
dividends) to stockholders of the Company, in order to prevent dilution or
enlargement of the Participant's rights under this Agreement and the Plan, the
Committee may, in an equitable manner, adjust the number and kind of shares
that may be issued under this Agreement and make any other appropriate
adjustments in the terms of the Units and this Agreement to reflect such
changes or distributions. In addition, the Committee may make adjustments to
the terms and conditions of the Units and this Agreement in recognition of
unusual or nonrecurring events affecting the Company or the financial
statements of the Company, or in response to changes in applicable laws,
regulations, or accounting principles.

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

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

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exchange or the NASDAQ National Market System, and any applicable requirements
under any other law, rule or regulation applicable to the issuance or delivery
of such shares, and the Company shall not be obligated to deliver any such
shares of Common Stock to the Participant if either delivery thereof would
constitute a violation of any provision of any law or of any regulation of any
governmental authority, any national securities exchange or the NASDAQ National
Market System, or the Participant shall not yet have complied fully with the
provisions of Section 7 hereof.

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

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

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

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

                                       5
<PAGE>   6

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

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

         15. STOCKHOLDER APPROVAL OF THE PLAN AMENDMENT. The Company hereby
undertakes to submit an amendment to the Plan for approval by stockholders at
the Company's next annual meeting or at a special meeting on or before December
31, 2001. If the stockholders fail to approve the Plan Amendment at such annual
meeting or special meeting (or any adjournment thereof) on or before December
31, 2001, this Agreement will be terminated effective immediately following
such annual meeting or special meeting (or any adjournment thereof) at which
stockholders failed to approve the Plan Amendment. If this Agreement is so
terminated, the Participant and the Company shall be discharged and released of
and from any further obligations under this Agreement.

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

         17. 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.

         18. 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.

                                       6
<PAGE>   7

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

                                          AVATAR HOLDINGS INC.

                                          By:   /s/ LEON LEVY
                                             ----------------------------------
                                               Name: Leon Levy
                                               Title: Chairman of the Board

                                                /s/ GERALD D. KELFER
                                               --------------------------------
                                                   Gerald D. Kelfer

                                       7

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