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Exhibit 10(h) Nonqualified Stock option Agreement between
Avatar Holdings Inc. and Xxxxxx X. Xxxxxx
NONQUALIFIED STOCK OPTION AGREEMENT
GRANTED TO: Xxxxxx X. Xxxxxx
DATE OF GRANT: February 13, 1997
GRANTED PURSUANT TO: Avatar Holdings Inc. 1997 Incentive
and Capital Accumulation Plan
NUMBER OF UNDERLYING: 225,000 shares
SHARES OF COMMON
STOCK:
EXERCISE PRICE: $34 per share
VESTING SCHEDULE: 20% each year
1. This Nonqualified Stock Option Agreement (the
"Agreement") is made and entered into as of February 13, 1997,
between Avatar Holdings Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxx ("Employee"). It is the intent
of the Company and Employee that the Option (as defined in
Paragraph 2 below) will not qualify as an "incentive stock
option" under Section 422 of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
2. Employee is granted an option by the Incentive Plan
Committee of the Company's Board of Directors (the "Committee")
to purchase 225,000 shares of Common Stock (the "Option")
pursuant to the Company's 1997 Incentive and Capital Accumulation
Plan (the "Plan") (subject to shareholder approval of the Plan).
Capitalized terms not defined herein shall have the meanings
ascribed thereto in the Plan.
3. The Option's exercise price is $34 per share, such
exercise price being in the judgment of the Committee not less
than one hundred percent (100%) of the Fair Market Value of the
Common Stock on the date of grant.
4. Subject to Paragraphs 5 and 6 below, the Option shall
be exercisable, on a cumulative basis, according to the vesting
schedule set forth below:
45,000 shares shall become exercisable and remain exercisable on
February 13, 1998.
45,000 shares shall become exercisable and remain exercisable on
February 13, 1999.
45,000 shares shall become exercisable and remain exercisable on
February 13, 2000.
45,000 shares shall become exercisable and remain exercisable on
February 13, 2001.
45,000 shares shall become exercisable and remain exercisable on
February 13, 2002.
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Exhibit 10(h) Nonqualified Stock option Agreement between
Avatar Holdings Inc. and Xxxxxx X. Xxxxxx
-- continued
5. Subject to Paragraph 6 below, the unexercised portion
of the Option, unless sooner terminated, shall expire on February
13, 2007 (the "Expiration Date") and, notwithstanding anything
contained herein to the contrary, no portion of the Option may be
exercised after such date.
6. If prior to the Expiration Date, Employee's employment
with the Company or any subsidiary corporation terminates, the
Option will terminate on the applicable date as described below,
provided, however, that none of the events described below shall
extend the period of exercisability beyond the Expiration Date:
(a) If the employment of Employee is terminated by
reason of Employee's death either while in the employ of the
Company or any subsidiary corporation, or during the one (1) year
period specified in clause (b) below, the Option to the extent
not theretofore exercised shall remain exercisable only to the
extent that it would have been exercisable immediately prior to
Employee's death for one (1) year after Employee's death and
shall be exercisable by the executor or administrator of the
estate of the deceased Employee or the person or persons to whom
the deceased Employee's rights under the Option shall pass by
will or the laws of descent or distribution;
(b) If the employment of Employee is terminated by the
Company for reason of Employee's "permanent disability" (as
defined below), the Option to the extent not theretofore
exercised shall remain exercisable only to the extent that it
would have been exercisable immediately prior to Employee's
termination of employment for one (1) year after the date of
termination of employment;
(c) If the employment of Employee is terminated by the
Company on or prior to the second anniversary of the Commencement
Date (as defined in the Employment Agreement (as defined below))
pursuant to Paragraph 7(d) of the Employment Agreement, the
Option to the extent not theretofore exercised shall remain
exercisable until August 13, 1999, only to the extent that it
would have been exercisable on or prior to February 13, 1999
(i.e., for 90,000 shares of Common Stock to the extent not
theretofore exercised).
(d) If the employment of Employee is terminated by the
Company other than "for cause" (as defined below) following the
second anniversary of the Commencement Date pursuant to the
Employment Agreement, or is terminated by the Employee "for good
reason" (as defined below), the Option to the extent not
theretofore exercised shall remain exercisable in accordance with
the terms of this Agreement, including without limitation, the
provisions of Sections 4 and 5 hereof.
(e) If the employment of Employee is terminated (i) by
the Company for cause or (ii) by the Employee for other than good
reason, the Option shall, to the extent not theretofore
exercised, immediately become null and void.
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Exhibit 10(h) Nonqualified Stock option Agreement between
Avatar Holdings Inc. and Xxxxxx X. Xxxxxx
-- continued
For purposes of this Agreement, the terms "permanent
disability", "for cause" and "for good reason" shall have the
meanings ascribed to such terms in the Employee's employment
agreement with the Company, dated February 13, 1997, as amended
from time to time (the "Employment Agreement").
7. Employee may exercise the Option regardless of whether
any other option that Employee has been granted by the Company
remains unexercised. In no event may Employee exercise the
Option for a fraction of a share or for less than 100 shares
unless the number purchased is the remaining balance for which
the Option is then exercisable.
8. The Option's exercise price shall be paid by Employee
on the date the option is exercised, in full in cash; provided,
however, that in lieu of cash, Employee may to the extent
permitted by applicable law, exercise the Option in part, by
delivering to the Company an executed non-recourse promissory
note, which shall bear interest at then applicable Federal rate
per annum (as determined pursuant to S1274 of the Code) payable
semi-annually and which shall be secured by the shares of Common
Stock then being purchased pursuant to the exercise of the
Option; provided, further however, that the principal amount of
such note shall not exceed 66-2/3% (or such lesser percentage as
would be permitted by applicable margin regulations) of the
aggregate exercise price of the shares of Common Stock then being
purchased pursuant to the exercise of the Option. Such
promissory note shall be payable, with accrued interest, upon the
earliest to occur of (i) the termination of Employee's employment
by the Company for cause or by the Employee other than for good
reason, (ii) the sale, transfer or disposition by the Employee of
any or all of the shares of Common Stock securing the promissory
note and (iii) the fifth anniversary of the date of exercise of
the Option; provided, however, in the case of clause (ii), if
Employee prepays the unpaid principal of, and accrued interest
on, such promissory note in the same proportion as the number of
shares of Common Stock that are sold bears to the number of
shares of Common Stock initially secured by such promissory note,
then such promissory note shall not then become due and payable.
9. The Company may withhold from sums due or to become due
to Employee from the Company an amount necessary to satisfy its
obligation to withhold taxes incurred by reason of the issuance
or disposition of shares pursuant to the Option, or may require
Employee to reimburse the Company in such amount.
10. Employee shall not have any of the rights of a
shareholder with respect to the shares of Common Stock underlying
the Option while the Option is unexercised.
11. Any exercise of this Option shall be in writing
addressed to the Corporate Secretary of the Company at the
principal place of business of the Company, specifying the Option
being exercised and the number of shares to be purchased,
accompanied by payment therefor.
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Exhibit 10(h) Nonqualified Stock option Agreement between
Avatar Holdings Inc. and Xxxxxx X. Xxxxxx
-- continued
12. This Option shall not be transferable otherwise than by
will or the laws of descent and distribution, and shall be
exercisable, during Employee's lifetime, only by Employee.
Notwithstanding the foregoing, this Option may be transferred by
Employee solely to Employee's spouse, siblings, parents, children
and grandchildren or trusts for the benefit of such persons or
partnerships, corporations, limited liability companies or other
entities owned solely by such persons, including trusts for such
persons, subject to any restriction included in this Agreement.
13. If the Company, in its sole discretion, shall determine
that it is necessary, to comply with applicable securities laws,
the certificate or certificates representing the shares purchased
pursuant to the exercise of the Option shall bear an appropriate
legend in form and substance, as determined by the Company,
giving notice of applicable restrictions on transfer under or in
respect of such laws.
14. The Company agrees that at the time of exercise of the
Option it will use reasonable efforts in good faith to have an
effective Registration Statement on Form S-8 under the Securities
Act of 1933, as amended (the "Act"), which includes a prospectus
that is current with respect to the shares subject to the Option.
Employee covenants and agrees with the Company that if, at the
time of exercise of the Option, there does not exist a
Registration Statement on an appropriate form under the Act,
which Registration Statement shall have become effective and
shall include a prospectus that is current with respect to the
shares subject to the Option, (i) that he or she is purchasing
the shares for his or her own account and not with a view to the
resale or distribution thereof, (ii) that any subsequent offer
for sale or sale of any such shares shall be made either pursuant
to (x) a Registration Statement on an appropriate form under the
Act, which Registration Statement shall have become effective and
shall be current with respect to the shares being offered and
sold, or (y) a specific exemption from the registration
requirements of the Act, but in claiming such exemption, Employee
shall, prior to any offer for sale or sale of such shares, obtain
a favorable written opinion from counsel for or approved by the
Company as to the applicability of such exemption and (iii) that
Employee agrees that the certificates evidencing such shares
shall bear a legend to the effect of the foregoing.
15. This Agreement is subject to all terms, conditions,
limitations and restrictions contained in the Plan, which shall
be controlling in the event of any conflicting or inconsistent
provisions.
16. This Agreement is not a contract of employment and the
terms of Employee's employment shall not be affected hereby or by
any agreement referred to herein except to the extent
specifically so provided herein or therein. Nothing herein shall
be construed to impose any obligation on the Company to continue
Employee's employment, and it shall not impose any obligation on
Employee's part to remain in the employ of the Company.
17. Employee acknowledges and agrees that neither the
Company, its shareholders nor its directors and officers, has any
duty or obligation to disclose to the Employee
any material information regarding the business of
the Company or affecting the value of the Common Stock
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Exhibit 10(h) Nonqualified Stock option Agreement between
Avatar Holdings Inc. and Xxxxxx X. Xxxxxx
-- continued
before or at the time of a termination of the employment
of Employee by the Company, including, without limitation,
any information concerning plans for the Company to make a public
offering of its securities or to be acquired by or merged with or
into another firm or entity.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
AVATAR HOLDINGS INC.
By: /s/ Xxxx Xxxx
---------------------
Xxxx Xxxx
Chairman of the Board
ACCEPTED:
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
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