EXHIBIT 10.1
CONFIDENTIAL PORTION MARKED [*************] HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated September 11, 2003, between Avatar
Holdings Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxx (the
"Employee").
W I T N E S S E T H :
WHEREAS, the Company desires to employ the Employee as its
Executive Vice President and General Counsel and the Employee desires to accept
such employment, all on the terms and conditions specified herein; and
WHEREAS, the Employee and the Company desire to set forth in
writing all of their respective duties, rights and obligations with respect to
the Employee's employment by the Company; and
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and obligations hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. EMPLOYMENT AND TERM. The Company hereby employs the
Employee, and the Employee hereby accepts employment by the Company, in the
capacity and upon the terms and conditions hereinafter set forth. The term of
employment under this Agreement shall be for the period commencing as of January
1, 2003 and ending on December 31, 2006, unless earlier terminated as herein
provided (the "Term of Employment"). The last day of the Employee's Term of
Employment shall be referred to in this Agreement as the "Date of Termination."
2. DUTIES. (a) During the Term of Employment, the Employee
shall serve as the Company's Executive Vice President and General Counsel, and
shall perform such duties, functions and responsibilities as are associated with
and incident to the positions of Executive Vice President and General Counsel,
consistent with the Employee's current duties, functions and responsibilities,
in accordance with past practice, and as the Company may, from time to time,
require of the Employee, including, but not limited to, the performance of such
functions and duties for the Company's subsidiaries and affiliates as the
Company may require, subject to the direction of the Company's Board of
Directors. The Employee shall serve the Company faithfully, conscientiously and
to the best of the Employee's ability and shall promote the interests and
reputation of the Company. Unless prevented by sickness or disability, the
Employee shall devote all of the Employee's time, attention, knowledge, energy
and skills, during normal working hours, and at such other times as the
Employee's duties may require, to the duties of the Employee's employment. The
principal place of employment of the Employee shall be the principal executive
offices of the Company and/or such other location in the state of Florida as
shall be necessary for the Employee to discharge the Employee's duties
hereunder. The Employee acknowledges that in the course of employment the
Employee may be required, from time to time, to travel on behalf of the Company.
(b) The Employee and the Company acknowledge that the Employee
has been engaged in sales of non-buildable or environmentally sensitive land and
specially designated asset sales made outside the Company's ordinary course of
business, as determined by the Company. In addition to the duties described
above, the Employee shall continue to be engaged in such sales as requested and
determined by management of the Company.
3. COMPENSATION AND BENEFITS. As full and complete
compensation for the Employee's execution and delivery of this Agreement and
performance of any services hereunder, the Company shall pay, grant or provide
the Employee, and the Employee agrees to accept, the following compensation and
benefits:
(a) BASE SALARY. The Company shall pay the Employee a base
salary at an annual rate of $350,000 payable at such times and in accordance
with the Company's customary payroll practices as they may be adopted or
modified from time to time. On an annual basis or at such other times as the
Company may determine, the Company may review the Employee's performance and
determine whether, in its sole discretion, the Company will increase (but not
decrease) the Employee's base salary.
(b) EMPLOYEE BENEFITS. The Company shall afford the Employee
the opportunity to participate during the Term of Employment in any medical,
dental, disability insurance, retirement, savings and any other employee
benefits plans, policies or arrangements which the Company maintains for its
senior executives in accordance with the written terms of such plans, policies
or arrangements. Nothing in this Agreement shall require the Company or its
affiliates to establish, maintain or continue any benefit plan, policy or
arrangement or restrict the right of the Company or any of its affiliates to
amend, modify or terminate any such benefit plan, policy or arrangement.
(c) EXPENSES. The Employee shall be entitled to reimbursement
or payment of reasonable business expenses (in accordance with the Company's
policies for its senior executives, as the same may be amended from time to time
in the Company's sole discretion), following the Employee's submission of
appropriate receipts and/or vouchers to the Company.
(d) VACATIONS, HOLIDAYS OR TEMPORARY LEAVE. The Employee shall
be entitled to take four (4) weeks of vacation per year, without loss or
diminution of compensation. Such vacation shall be taken at such time or times,
and as a whole or in increments, as the Employee shall elect, consistent with
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the reasonable needs of the Company's business. The Employee shall further be
entitled to the number of paid holidays, and leaves for illness or temporary
disability in accordance with the policies of the Company for its senior
executives (as such policies may be amended from time to time or terminated in
the Company's sole discretion).
(e) ADDITIONAL COMPENSATION. As compensation for the
additional duties set forth in Section 2(b) above, the Employee shall be
entitled to the additional compensation set forth on the Annex attached hereto.
(f) COMPANY VEHICLE. During the Term of Employment, the
Company shall provide the Employee with the use of a vehicle associated with the
Employee's employment consistent with past practice.
4. PROTECTION OF CONFIDENTIAL INFORMATION.
(a) TRADE SECRETS AND KNOW-HOW.
(i) During the Term of Employment and for all time
following the Date of Termination, the Employee shall not, directly or
indirectly, use, furnish or make accessible to any person, firm or corporation
or other business entity, whether or not he, she, or it competes with the
business of the Company, its subsidiaries and/or affiliates (each of the
foregoing entities being referred to herein, collectively and individually, as
the "Avatar Entities"), (x) any trade secret or know-how acquired by the
Employee during the Employee's employment by the Company which relates to the
business practices, methods, processes or other confidential or secret aspects
of the business of any of the Avatar Entities, (y) any information concerning
the business and affairs of the Avatar Entities and (z) any notes, analysis,
compilations, studies, summaries and other material prepared by or for the
Company continuing or based, in whole or in part, on any information included in
clause (x) or (y) above, without the prior written consent of the Company (such
information, subject to Section 4(a)(ii) below, being referred to as the
"Confidential Information").
(ii) Confidential Information shall not include any
information or documents that (A) are or become publicly available without
breach by the Employee of Section 4(a)(i) hereof, (B) the Employee receives from
any third party who, to the best of the Employee's knowledge upon reasonable
inquiry, is not in breach of an obligation of confidence with any of the Avatar
Entities, or (C) is required to be disclosed by law, statute, governmental or
judicial proceeding; PROVIDED, HOWEVER, that in the event that the Employee is
requested by any governmental or judicial authority to disclose any Confidential
Information, the Employee shall give the Company prompt notice of such request,
such that the Company may seek a protective order or other appropriate relief,
and in any such proceeding the Employee shall disclose only so much of the
Confidential Information as is required to be disclosed.
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(b) REMEDIES. The Employee acknowledges that the Employee's position
with the Company places the Employee in a position of confidence and trust with
the clients and employees of the Avatar Entities, and that in connection with
the Employee's services to the Company, the Employee will have access to
confidential information vital to the Avatar Entities' businesses. The Employee
further acknowledges that in view of the nature of the businesses in which the
Avatar Entities are engaged, the foregoing restrictive covenants in this Section
4 hereof are reasonable and necessary in order to protect the legitimate
interests of the Avatar Entities and that violation thereof would result in
irreparable injury to the Avatar Entities. Accordingly, the Employee consents
and agrees that if the Employee violates or threatens to violate any of the
provisions of this Section 4 hereof the Avatar Entities would sustain
irreparable harm and, therefore, one or more of the Avatar Entities shall be
entitled to obtain from any court of competent jurisdiction, without posting any
bond or other security, preliminary and permanent injunctive relief as well as
damages and an equitable accounting of all earnings, profits and other benefits
arising from such violation, which rights shall be cumulative and in addition to
any other rights or remedies in law or equity to which any of the Avatar
Entities may be entitled.
(c) RETURN OF CONFIDENTIAL INFORMATION. Upon termination of the
Employee's employment, the Employee shall promptly return all Confidential
Information in tangible form, and shall not make or retain any copies thereof.
5. TERMINATION OF EMPLOYMENT.
(a) The Employee's employment with the Company hereunder shall
terminate upon the occurrence of any of the following events:
(i) the termination of the Employee's employment upon and at
any time following December 31, 2006, absent the parties having entered into a
written agreement of Employment with a term of employment ending after December
31, 2006;
(ii) the death of the Employee during the Term of Employment;
(iii) the Disability (as defined below) of the Employee during
the Term of Employment;
(iv) at any time upon written notice to the Employee from the
Company of termination of the Employee's employment for Cause (as defined
below);
(v) at any time upon written notice to the Employee from the
Company of termination of the Employee's employment Without Cause (as defined
below);
(vi) the resignation or other withdrawal of employment by the
Employee for any reason during the Term of Employment.
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(b) For purposes of this Agreement, the "Disability" of the Employee
shall mean the Employee's inability, because of mental or physical illness or
incapacity, whether total or partial, to perform one or more of the material
functions of the Employee's employment under this Agreement with or without
reasonable accommodation and which entitles the Employee to receive benefits
under a disability plan, policy or arrangement that is provided to the Employee
by the Company.
(c) For purposes of this Agreement, the term "Cause" shall mean the
Employee's (i) conviction or entry of a plea of guilty or nolo contendere, with
respect to any felony; (ii) commission of any act of willful misconduct, gross
negligence, fraud or dishonesty; or (iii) violation of any material term of this
Agreement or any material written policy of the Company, PROVIDED that in the
case of clause (iii), the Company first deliver written notice thereof to the
Employee and the Employee shall not have cured such violation within thirty (30)
days after receipt of such written notice.
(d) For purposes of this Agreement, "Without Cause" shall mean any
reason other than the reasons described in Sections 5(a)(i), (ii), (iii), (iv)
and (vi) hereof. The parties expressly agree that a termination of employment
Without Cause pursuant to Section 5(a)(v) hereof may be for any reason
whatsoever, or for no reason, in the sole discretion of the Company.
6. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. If the Employee's employment hereunder is
terminated due to the Employee's death or Disability pursuant to Sections
5(a)(ii) or (iii) hereof, the Company shall pay or provide to the Employee, the
Employee's designated beneficiary or to the Employee's estate: (i) all base
salary pursuant to Section 3(a) hereof and any vacation pay pursuant to Section
3(d) hereof, in each case which has been earned but unpaid as of the Date of
Termination; (ii) any benefits to which the Employee may be entitled under any
employee benefits plan, policy or arrangement pursuant to Section 3(b) hereof in
which the Employee is a participant in accordance with the written terms of such
plan, policy or arrangement up to and including the Date of Termination; and
(iii) any additional compensation to which the Employee may be entitled as set
forth on the Annex attached hereto. Should the Company wish to purchase
insurance to cover the costs associated with the Employee's termination of
employment pursuant to Sections 5(a)(ii) or (iii), the Employee agrees to
execute any and all necessary documents required in connection with such
insurance.
(b) TERMINATION FOR CAUSE OR RESIGNATION BY THE EMPLOYEE. If the
Employee's employment hereunder is terminated by the Company for Cause pursuant
to Section 5(a)(iv) or due to the Employee's resignation or other withdrawal of
employment pursuant to Section 5(a)(vi), the Company shall pay or provide to the
Employee: (i) all base salary pursuant to Section 3(a) hereof and any vacation
pay pursuant to Section 3(d) hereof, in each case which has been earned but
unpaid as of the Date of Termination; and (ii) any benefits to which the
Employee may be entitled under any employee benefits plan, policy or arrangement
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pursuant to Section 3(b) hereof in which the Employee is a participant in
accordance with the written terms of such plan, policy or arrangement up to and
including the Date of Termination.
(c) TERMINATION WITHOUT CAUSE. If the Employee's employment hereunder
is terminated by the Company Without Cause pursuant to Section 5(a)(v), the
Company shall pay or provide to the Employee: (i) all base salary pursuant to
Section 3(a) hereof and any vacation pay pursuant to Section 3(d) hereof, in
each case which has been earned but unpaid as of the Date of Termination; (ii)
any benefits to which the Employee may be entitled under any employee benefits
plan, policy or arrangement pursuant to Section 3(b) hereof in which the
Employee is a participant in accordance with the written terms of such plan,
policy or arrangement up to and including the Date of Termination; (iii) any
additional compensation to which the Employee may be entitled as set forth on
the Annex attached hereto; and (iv) a lump sum payment of $350,000 in lieu of
any other payments or benefits. The Company's obligation to make the payment
pursuant to this Section 6(c) shall be conditioned upon the Company's prior
receipt of an executed general release of claims that the Employee may have
against the Company, its affiliates and their respective shareholders,
directors, officers, employees and agents, to the maximum extent permitted by
law. Any payments made pursuant to Section 6(c)(i), (ii) and (iv) shall be made
within ninety (90) days of the termination of Employee's employment.
(d) TERMINATION UPON EXPIRATION OF THIS AGREEMENT. If the Employee's
employment hereunder is terminated pursuant to Section 5(a)(i) and the Employee
is no longer actively employed (whether or not pursuant to an employment
agreement) by the Company, the Company shall pay to the Employee any additional
compensation to which the Employee may be entitled as set forth on the Annex
attached hereto.
(e) NO OTHER PAYMENTS. Except as provided in this Section 6, the
Employee shall not be entitled to receive any other payments or benefits from
the Company due to the termination of the Employee's employment, including but
not limited to, any employee benefits under any of the Company's employee
benefits plans or programs (other than at the Employee's expense under the
Consolidated Omnibus Budget Reconciliation Act of 1985 or pursuant to the terms
of any pension benefit plan which the Company may have in effect from time to
time) or any right to be paid severance pay. If the Employee is entitled to any
notice or payment in lieu of any notice of termination required by Federal,
State or local law, including but not limited to the Worker Adjustment and
Retraining Notification Act, the Company's obligation to make payments pursuant
to Section 6(c)(i) shall be reduced by the amount of any such payment in lieu of
notice.
7. NO CONFLICTING AGREEMENTS.
(a) The Employee hereby represents and warrants that the Employee is
not a party to any agreement, or non-competition or other covenant or
restriction contained in any agreement, commitment, arrangement or understanding
(whether oral or written), which would in any way conflict with or limit the
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Employee's ability to commence work on the first day of the Term of Employment
or would otherwise limit the Employee's ability to perform all responsibilities
in accordance with the terms and subject to the conditions of this Agreement.
(b) The Employee agrees that the compensation provided for in Section 3
hereto represents the sole compensation to be paid to the Employee in respect of
the services performed or to be performed for the Company and/or its affiliates
by such Employee. The Employee further agrees that should there be a
determination that for federal, state, local and/or other tax purposes, the
Employee's compensation for services performed for the Company and its
affiliates is greater than the amounts payable hereunder, the Employee will
indemnify and hold harmless the Company and its affiliates against any and all
liabilities, losses and expenses, including, but not limited to, any additional
taxes, penalties and interest, and attorneys' and accountants' fees arising out
of, resulting from or relating to such determination.
8. DEDUCTIONS AND WITHHOLDING. The Employee agrees that the Company
shall withhold from any and all compensation required to be paid to the Employee
pursuant to this Agreement all federal, state, local and/or other taxes which
the Company determines are required to be withheld in accordance with applicable
statutes and/or regulations from time to time in effect and all amounts required
to be deducted in respect of the Employee's coverage under applicable employee
benefit plans.
9. ENTIRE AGREEMENT. This Agreement embodies the entire agreement of
the parties with respect to the Employee's employment and supersedes any other
prior oral or written agreements between the Employee and the Company and its
affiliates. This Agreement may not be changed or terminated orally but only by
an agreement in writing signed by the parties hereto.
10. WAIVER. The waiver by the Company of a breach of any provision of
this Agreement by the Employee shall not operate or be construed as a waiver of
any subsequent breach by the Employee. The waiver by the Employee of a breach of
any provision of this Agreement by the Company shall not operate or be construed
as a waiver of any subsequent breach by the Company.
11. GOVERNING LAW. This Agreement shall be subject to, and governed by,
the laws of the State of Florida applicable to contracts made and to be
performed in the State of Florida, regardless of where the Employee is in fact
required to work.
12. JURISDICTION. Any legal suit, action or proceeding against any
party hereto arising out of or relating to this Agreement shall be instituted in
a federal or state court in the State of Florida, and each party hereto waives
any objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding and each party hereto irrevocably submits to the
jurisdiction of any such court in any suit, action or proceeding.
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13. ASSIGNABILITY. The obligations of the Employee may not be delegated
and, except as expressly provided in Section 6(a) relating to the designation of
beneficiaries, the Employee may not, without the Company's written consent
thereto, assign, transfer, convey, pledge, encumber, hypothecate or otherwise
dispose of this Agreement or any interest therein. Any such attempted delegation
or disposition shall be null and void and without effect. The Company and the
Employee agree that this Agreement and all of the Company's rights and
obligations hereunder may be assigned or transferred by the Company to and may
be assumed by and become binding upon and may inure to the benefit of any
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 the assets,
or otherwise, acquires all or a material part of the assets of the Company. Any
assignment by the Company of its rights and obligations hereunder to any
affiliate of or successor to the Company shall not be considered a termination
of employment for purposes of this Agreement.
14. SEVERABILITY. If any provision of this Agreement as applied to
either party or to any circumstances shall be adjudged by a court of competent
jurisdiction to be void or unenforceable, the same shall in no way affect any
other provision of this Agreement or the validity or enforceability of this
Agreement.
15. NOTICES. All notices to the Employee hereunder shall be in writing
and shall be delivered personally or sent by registered or certified mail,
return receipt requested, to:
Xxxxxx X. Xxxxxx
000 Xxxxxxxx Xxx Xxxxx
Xxxx 0000
Xxxxx, Xxxxxxx 00000
All notices to the Company hereunder shall be in writing and shall be delivered
personally or sent by registered or certified mail, return receipt requested,
to:
Avatar Holdings Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Avatar Holdings Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
Facsimile: (000) 000-0000
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Either party may change the address to which notices shall be sent by sending
written notice of such change of address to the other party.
16. SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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
taken together shall constitute one and the same instrument.
18. PREVAILING PARTY EXPENSES. The Employee and the Company agree that
in the event that any provision of this Agreement becomes subject to any
litigation or arbitration or any party seeks an adjudication to enforce his
rights under, or to recover damages for breach of, this Agreement, the
prevailing party in such litigation or arbitration shall be entitled to recover
all costs and expenses (including reasonable legal fees) incurred in connection
therewith from the other party.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
AVATAR HOLDINGS INC.
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
/s/ XXXXXX X. XXXXXX
-----------------------------------------
Employee
Name: Xxxxxx X. Xxxxxx
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Annex To Employment Agreement
Terms of Additional Compensation
1. The Employee will be awarded an opportunity to receive (x) a percentage
(the "Percentage") of the Net Sale Proceeds (as defined below) received
by the Company on certain asset sales of non-buildable or
environmentally sensitive land and specially designated asset sales
(the "Eligible Properties") that are made outside of the Company's
ordinary course of business, as determined by the Company, during the
Employee's Term of Employment less (y) the Deductible (as defined
below), subject to the Employee's active involvement and engagement in
procuring such sales for the benefit of the Company (the "Additional
Compensation"). Notwithstanding anything to the contrary contained
herein, the maximum aggregate Additional Compensation payable to the
Employee hereunder is $1,600,000 (the "Aggregate Cap").
2. For purposes of this Annex, capitalized terms not otherwise defined
shall have the following meanings:
"Net Sale Proceeds" shall mean the sale proceeds actually received by
the Company less any and all expenses and costs related to the sale
(including closing costs) and any expenditures made by the Company in
contemplation of, or in connection with, such sale.
"Deductible" for any calendar year shall mean an amount equal to (i)
the product of (x) $100,000 and (y) the Calendar Year Multiplier less
(ii) the sum of Deductibles in prior calendar years (to the extent that
each such Deductible did not reduce Additional Compensation for such
prior year below 0).
"Calendar Year Multiplier" shall be equal to:
----- ---------------------------------------------------------------
1 for Additional Compensation paid to the Employee in calendar
year 2003;
----- ---------------------------------------------------------------
2 for Additional Compensation paid to the Employee in calendar
year 2004;
----- ---------------------------------------------------------------
3 for Additional Compensation paid to the Employee in calendar
year 2005;
----- ---------------------------------------------------------------
4 for Additional Compensation paid to the Employee in calendar
year 2006;
----- ---------------------------------------------------------------
4 for Additional Compensation paid to the Employee in calendar
year 2007;
----- ---------------------------------------------------------------
4 for Additional Compensation paid to the Employee in calendar
year 2008;
----- ---------------------------------------------------------------
4 for Additional Compensation paid to the Employee in calendar
year 2009;
----- ---------------------------------------------------------------
4 for Additional Compensation paid to the Employee in calendar
year 2010.
----- ---------------------------------------------------------------
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3. The Employee is hereby awarded the following Percentages for asset
sales of the following Eligible Properties:
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4. In the event that the Company identifies additional Eligible Properties
for similar sale, the terms of other compensation, if any, payable to
the Employee shall be determined at such time.
5. All decisions with respect to, or in connection with, the sale of
Eligible Properties shall be made solely by authorized officers of the
Company, including all transaction terms and conditions (i.e., price,
holdbacks, timing, etc.). The Company may limit or abandon any sales or
proposed sales of Eligible Properties at any time for any reason or for
no reason in its sole discretion. The Company shall have no obligation
to take any action with respect to any sales or proposed sales of
Eligible Properties.
6. All determinations relating to Eligible Properties, the Additional
Compensation payable to the Employee and the amount of Net Sale
Proceeds will be made by and administered under the supervision of the
Company's Compensation Committee in its sole and absolute discretion,
and all determinations of the Company's Compensation Committee will be
final and binding on the Employee and the Company.
7. The maximum cash amount that may be paid to Employee as Additional
Compensation shall not exceed $200,000 per calendar year through and
including 2007 (the "Initial Annual Cap") and $266,667 per calendar
year from 2008 through and including 2010 (the "Secondary Annual Cap");
provided however, that any Additional Compensation that has been earned
but not paid as a result of the Initial Annual Cap shall be deferred
and payable within the first ninety (90) days of the following calendar
year, subject again to the Initial Annual Cap, and if necessary, to
successive calendar years, subject to the Initial Annual Cap and the
Aggregate Cap. The Company shall not pay any interest on any amounts of
Additional Compensation that are deferred or payable in future calendar
years. If there is any earned but unpaid Additional Compensation as of
December 31, 2006, such amount shall be forfeited unless the Employee
provides consulting services to the Company after the Term of
Employment, in which case, the Company shall pay any earned but unpaid
Additional Compensation subject to the Secondary Annual Cap and the
Aggregate Cap for three additional calendar years beginning in 2008,
subject to the Employee providing the required consulting services
A-2
described below, provided, however, that any Eligible Properties set
forth in paragraph 3 above that are subject to executed sale contracts
as of December 31, 2006 for which the Company receives Net Sale
Proceeds in calendar year 2007 shall be treated as if such sales
occurred in 2006, and any Additional Compensation payable to the
Employee as a result of such sales shall be payable in calendar year
2007 if and only if the Employee has not already been paid Additional
Compensation in an amount equal to the Initial Annual Cap in 2006, and
then only in an amount up to the Initial Annual Cap. To eliminate any
ambiguity, it is understood and agreed that (X) no Additional
Compensation shall be paid in 2007 unless (i) the Employee has not been
paid Additional Compensation in an amount equal to $200,000 in calendar
year 2006 and (ii) Eligible Properties set forth in paragraph 3 are
subject to executed sales contracts as of December 31, 2006 and the
Company receives Net Sales Proceeds from such sales in calendar year
2007 and (Y) the maximum aggregate amount of Additional Compensation
payable in calendar years 2006 and 2007 is $200,000. In each year, such
payments shall be made within the first ninety (90) days of the
calendar year following the Employee's completion of one year of
consulting services. If there is any earned but unpaid Additional
Compensation as of March 31, 2010, such amount shall be forfeited,
provided that any Additional Compensation resulting from sales of
Eligible Properties which provided for deferred payments to the Company
shall be payable to the Employee upon receipt of such deferred payments
by the Company, subject to the Secondary Annual Cap and the Aggregate
Cap. The Employee shall provide consulting services relating to all
Company matters in which the Employee was involved prior to the
expiration of the Term of Employment and such other matters relating to
Company activities as may be reasonably requested from time to time by
the Company. During the consulting period, the Employee shall be an
independent contractor and shall not be an employee or agent of the
Avatar Entities. The Employee shall provide consulting services in
calendar years 2007-2009 for the required amount of days and for the
consulting fee set forth on the following table in order to receive any
Additional Compensation in the calendar year following the Employee's
completion of such consulting services:
----------------------- ------------------------------------------------ ------------------------------------------
Calendar Year Required Consulting Services Consulting Fee
----------------------- ------------------------------------------------ ------------------------------------------
2007 6 days per month; 72 days per annum $83,333 per annum payable quarterly
----------------------- ------------------------------------------------ ------------------------------------------
2008 5 days per month; 60 days per annum $83,333 per annum payable quarterly
----------------------- ------------------------------------------------ ------------------------------------------
2009 4 days per month; 48 days per annum $83,333 per annum payable quarterly
----------------------- ------------------------------------------------ ------------------------------------------
If the Employee does not provide the required consulting services for the
applicable calendar year, the Company shall not be obligated to pay the Employee
any Additional Compensations or the consulting fees with respect thereto.
A-3
8. If the Employee's employment is terminated by reason of his death or
Disability, the Company shall pay to the Employee, the Employee's
designated beneficiary or to the Employee's estate the amount of earned
but unpaid Additional Compensation as of the date of the Employee's
death or Disability, as would otherwise be payable pursuant to this
Annex as though the Employee's employment had not been terminated,
within ninety (90) days of Employee's death or Disability or seven days
after such later date as an executor or administrator of the decedent's
estate shall be appointed, provided that any Additional Compensation
resulting from sales of Eligible Properties which provided for deferred
payments to the Company shall be payable to the Employee upon receipt
of such deferred payments by the Company. In addition, the Employee
shall be entitled to receive the Additional Compensation for any
Eligible Properties set forth in paragraph 3 above that are subject to
executed sale contracts at the time of termination of the Employee's
employment by reason of the Employee's death or Disability, provided
that the Employee was actively engaged in such sale at the time his
employment is terminated. Payment of the Additional Compensation for
such sales shall be made within ninety (90) days of the closing of such
sales. Notwithstanding anything to the contrary contained herein, in no
event shall the Employee be entitled to receive Additional Compensation
in excess of the amount as would otherwise be payable pursuant to this
Annex if the Employee's employment had not been terminated.
9. If Employee's employment is terminated by the Company without Cause,
the Employee shall be entitled to receive the amount of earned but
unpaid Additional Compensation through the Date of Termination as would
otherwise be payable pursuant to this Annex as though the Employee's
employment had not been terminated. In addition, Employee shall be
entitled to receive the Additional Compensation for any Eligible
Properties set forth in paragraph 3 above that are subject to executed
sale contracts at the time of termination of Employee's employment by
the Company without Cause, provided that the Employee was actively
engaged in such sale at the time of his termination. Notwithstanding
anything to the contrary contained herein, in no event shall the
Employee be entitled to receive Additional Compensation in excess of
the amount as would otherwise be payable pursuant to this Annex if the
Employee's employment had not been terminated.
10. If the Employee's employment is terminated by the Company with Cause or
by the Employee, the Employee shall forfeit any and all Additional
Compensation, including such Additional Compensation that has been
earned but not paid to the Employee, and shall cease to have any right
to any future Additional Compensation.
A-4
