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Exhibit 10(b)
RESTRICTED STOCK UNIT AGREEMENT
THIS RESTRICTED STOCK UNIT AGREEMENT, dated December 7, 1998 (the
"Agreement"), is made between Avatar Holdings Inc. a Delaware corporation (the
"Company") and Xxxxxx X. Xxxxxx (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 the Plan by the Company's stockholders at the 1999
Annual Meeting), 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) The Participant shall be granted, automatically and without
further authorization on the part of the Committee, 100,000 Units upon
satisfaction of all of the following conditions (the first date on which all
such conditions are satisfied being hereinafter referred to as the "Grant
Date"): (i) the Plan shall have been approved by the stockholders of the
Company at the 1999 Annual Meeting (the "Stockholder Approval"), and (ii) 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 during the period beginning on the date immediately following the
Stockholder Approval and ending on February 12, 2002; provided, however, that
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 condition in clause (ii)
is satisfied.
(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
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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 February 13, 2002, 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 February 13, 2002.
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.
(iii) if the Participant dies or in the event of the
Participant's employment with the Company is
terminated by the Company for reason of the
Participant's "permanently disability" (as defined
below), the number of Units granted to the
Participant pursuant to Section 2(a) hereof, if any,
which equals the product of (x) a fraction the
numerator of which is the number of completed whole
months elapsed after the Grant Date 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 Grant Date
until February 13, 2002 and (y) 100,000, shall vest,
be converted into shares of Common Stock and be
immediately distributed to the Participant (or the
executor or administrator of the deceased
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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 February 13, 1997, as
amended 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"), unless such
securities are originally issued to such Significant Owner by the
Company; 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
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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
required 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
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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., 000 Xxxxxxxx Xxxxxx,
Xxxxx Xxxxxx, Xxxxxxx 00000 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. 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.
16. 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.
17. 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/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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