Stock Award Agreement, dated as of June 15, 2011, between Avatar Holdings Inc. and Allen J. Anderson

 

This STOCK AWARD AGREEMENT (“Agreement”), dated June 15, 2011 (the “Effective Date”), by and between Avatar Holdings Inc., a Delaware corporation (the “Company”) and Allen Anderson (the “Participant”).

 

 

 

 

(b)           Stock Dividends and Stock Splits.  In the event the Participant receives a stock dividend on the Restricted Stock or the Restricted Stock is split or the Participant receives any other shares, securities, moneys or property representing a dividend on the Restricted Stock (other than regular cash dividends on and after the date of this Agreement) or representing a distribution or return of capital upon or in respect of the Restricted Stock or any part thereof, or resulting from a split-up, reclassification or other like changes of the Restricted Stock, or otherwise received in exchange therefore, and any warrants, rights or options issued to the Participant in respect of the Restricted Stock (collectively “RS Property”), the Participant will also immediately deposit with and deliver to the Company any of such RS Property, including any certificates representing shares duly endorsed in blank or accompanied by stock powers duly executed in blank, and such RS Property shall be subject to the same restrictions, including those of this Section 2, as the shares of Restricted Stock with regard to which they are issued and shall herein be encompassed within the term “Restricted Stock” and the term “Shares.”

 

(c)           Rights with Respect to Restricted Stock.  Upon issuance in the Participant’s name pursuant to Section 2(a) above, the Restricted Stock will constitute issued and outstanding shares of Common Stock for all corporate purposes.  From and after the date of issuance, the Participant will have the right to vote the Restricted Stock, to receive and retain all regular cash dividends payable to holders of Common Stock of record on and after the issuance of the Restricted Stock (although such dividends shall be treated, to the extent required by law, as additional compensation for tax purposes if paid on Restricted Stock) and to exercise all other rights, powers and privileges of a holder of Common Stock with respect to the Restricted Stock, with the exceptions that (i) the Participant will not be entitled to delivery of the stock certificate or certificates representing the Restricted Stock until all the vesting requirements with respect thereto shall have been fulfilled, (ii) the Company (or its designated agent) will retain custody of the stock certificate or certificates, if any, representing the Restricted Stock and the other RS Property until all the vesting requirements with respect thereto shall have been fulfilled, (iii) no RS Property shall bear interest or be segregated in separate accounts during the applicable restriction period, and (iv) except as set forth in the Plan or this Agreement, the Participant may not sell, assign, transfer, pledge, exchange, encumber or otherwise dispose of the Restricted Stock (other than by will or the laws of descent and distribution) until all the vesting requirements with respect thereto shall have been fulfilled.

 

 

(d)           Each reference contained in this Agreement to:

 

“Change in Control” shall mean any of the following events:

 

(A)  A person or entity or group of persons or entities, acting in concert, shall become the direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Exchange Act) of securities of the Company representing fifty-one percent (51%) or more of the combined voting power of the issued and outstanding common stock of the Company (a “Significant Owner”), unless such shares are originally issued to such Significant Owner by the Company; or

 

(B)  The majority of the Board is no longer comprised of the incumbent directors who constitute the Board on the Effective Date1 (as defined in Section 22(a) of the Plan) and any other individual(s) who becomes a director subsequent to the Effective Date of the Plan whose initial election or nomination for election as a director, as the case may be, was approved by at least a majority of the directors who comprised the incumbent directors as of the date of such election or nomination; or

 

(C)  A sale of all or substantially all of the assets of the Company; or

 

(D)  The Board shall approve any merger, consolidation, or like business combination or reorganization of the Company, the consummation of which would result in the occurrence of any event described in clause (C) above, and such transaction shall have been consummated.

 

“Performance Goals” shall mean: (A) the identification of, and submission to the Board of a plan for the disposition of, material non-core assets of the Company; (B) the commencement of a plan for a material reduction in general administrative and overhead costs; (C) the submission to the Board of a strategic plan for the Company to achieve positive cash flows and earnings; and (D) the commencement of the relocation of the Company’s corporate offices (including the leasing of new space and a plan for the disposition of the premises in Coral Gables).

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

 

“Employment Agreement” shall mean the Participant’s employment agreement with the Company, dated June 15, 2011, as amended or restated from time to time.

 

“Material Capital Transaction” shall mean any sale, disposition, merger, acquisition, reorganization, consolidation, split-up, spin-off, combination, exchange of shares, or other similar corporate transaction involving the Company (each, a “Transaction”), where the value of the Transaction is equal to or exceeds one-third of the sum of (A) the total equity value of the Company based on fully diluted shares of Common Stock outstanding including any shares of Common Stock to be issued in such transaction and (B) total outstanding debt.

 

 

(a)           General.  Subject to Section 4 hereof, shares of Restricted Stock shall vest and cease to be Restricted Stock upon the satisfaction of the performance based vesting requirements of Section 3(b).

 

(b)           Performance Based Vesting.  The Restricted Stock shall vest, as set forth in this Section 3(b), on the earlier of (i) January 1, 2012, or (ii) the date the Participant's employment with the Company terminates.  The Restricted Stock shall only vest to the extent (expressed as a percentage) the Performance Goals have been met on such applicable date, as determined in good faith by the Committee.  Except as provided in Section 4(b), the Committee shall make such determination no later than January 15, 2012.

 

 

(a)           Except as otherwise provided in this Section 4, upon any termination of employment with the Company, the Participant shall forfeit to the Company, without compensation, all the shares of Restricted Stock which have not vested on the date of such termination of employment with the Company.

 

(b)           In the event of a termination of employment prior to December 31, 2011, the Restricted Stock shall vest only to the extent (expressed as a percentage) the Performance Goals have been met on of before the date the Participant's employment with the Company terminates.  The Committee shall make such determination no later than 15 days following the Participant's termination of employment. Any remaining unvested Restricted Stock shall be forfeited to the Company, without compensation.

 

(c)           In the event Change in Control occurs during the “Term” (as defined in the Employment Agreement), the Restricted Stock shall fully vest at the time of the Change in Control.

 

 

(d)           In the event a Material Capital Transaction occurs during the “Term” (as defined in the Employment Agreement), in connection with which the Company terminates the Participant’s employment, provided that the Participant is willing to remain employed through the date on which a replacement Chief Executive Officer commences employment with the Company, the Restricted Stock shall vest in full as of the date of such termination.

 

(e)           Notwithstanding anything to the contrary herein, the Participant shall forfeit to the Company, without compensation, all the shares of Restricted Stock which have not vested on or before June 30, 2014.

 

 

(a)           Generally.  The Participant agrees that, subject to Section 5(b) below, (i) no later than the date on which any Restricted Stock shall have become taxable to the Participant as compensation, the Participant will pay to the Company, or make arrangements satisfactory to the Company regarding payment of, any federal, state or local, domestic or foreign taxes of any kind required by law to be withheld with respect to any Restricted Stock which shall have become so taxable, and (ii) the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Participant any federal, state or local taxes of any kind required by law to be withheld with respect to any Restricted Stock which shall have become so taxable.

 

(b)           Section 83(b) Election.  If the Participant properly elects within thirty (30) days after the award of the Restricted Stock in accordance with Code Section 83(b) to include in gross income for federal income tax purposes in the year of issuance the fair market value of such Restricted Stock, the Participant shall pay to the Company or make arrangements satisfactory to the Company to pay to the Company upon such election, any federal, state or local taxes required to be withheld with respect to such Restricted Stock.  If the Participant shall fail to make such payment, the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Participant any federal, state or local taxes of any kind required by law to be withheld with respect to such Restricted Stock.  The Participant acknowledges that it is the Participant’s sole responsibility, and not the Company’s, to file timely and properly the election under Section 83(b) of the Code and any corresponding provisions of state tax laws if the Participant elects to utilize such election.

 

 

“The shares of common stock represented hereby are subject to terms and conditions (including forfeiture and restrictions on transfer) set forth in the employment agreement, as the same may be amended, restated modified or supplemented, between Avatar Holdings Inc. and the registered owner of the shares represented hereby (or such owner’s predecessor in interest) which agreement is binding upon any and all owners of any interests in such shares. The shares of common stock represented hereby may be transferred only upon specific instructions from Avatar Holdings Inc.”

 

 

 

 

 

 

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