<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
AVATAR HOLDINGS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
AVATAR HOLDINGS INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
AVATAR
HOLDINGS INC.
255 Alhambra Circle
Coral Gables, Florida 33134
(305) 442-7000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 26, 1994
To the Stockholders of Avatar Holdings Inc.:
The Annual Meeting of Stockholders of Avatar Holdings Inc. will be held at
the Hyatt Regency Coral Gables, 50 Alhambra Plaza, Coral Gables, Florida on May
26, 1994, at 10:00 a.m. local time, for the following purposes:
1. To elect eight directors.
2. To approve the appointment of Ernst & Young, independent accountants, to
act as auditors for Avatar for the year ending December 31, 1994.
3. To transact such other business as properly may come before the meeting,
or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 31, 1994 as
the record date for the determination of stockholders entitled to receive notice
of, and to vote at, the Annual Meeting or any adjournment or adjournments
thereof.
YOUR ATTENTION IS DIRECTED TO THE PROXY STATEMENT ATTACHED TO THIS NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS FOR INFORMATION WITH RESPECT TO THOSE PERSONS
WHO WILL BE ENTITLED TO VOTE AT THE MEETING AND OTHER RELEVANT MATTERS.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
POSTAGE-PREPAID ENVELOPE PROVIDED FOR YOUR CONVENIENCE. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON IF YOU WISH.
By Order of the Board of Directors,
Juanita I. Kerrigan
Vice President and Secretary
Dated: April 26, 1994.
<PAGE> 3
AVATAR HOLDINGS INC., 255 ALHAMBRA CIRCLE, CORAL GABLES, FLORIDA 33134
(305) 442-7000
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 26, 1994
This Proxy Statement and the enclosed form of proxy are furnished to the
stockholders of Avatar Holdings Inc., a Delaware corporation ("Avatar"), in
connection with the solicitation of proxies by and on behalf of the Board of
Directors of Avatar for use at the Annual Meeting of Stockholders to be held at
the place and time and for the purposes set forth in the annexed Notice of
Annual Meeting of Stockholders.
VOTING RIGHTS AND PROXY INFORMATION
Record Date; Voting Rights
Pursuant to the By-Laws of Avatar, the Board of Directors has fixed the
close of business on March 31, 1994 as the record date for the determination of
stockholders entitled to notice of and to vote at the meeting, or any
adjournment or adjournments thereof.
At the close of business on March 31, 1994, 9,095,102 shares of Common
Stock, $1.00 par value, of Avatar ("Common Stock"), which constitutes the only
class of voting securities of Avatar, were issued, outstanding and entitled to
vote. For each share of Common Stock held of record as of the close of business
on March 31, 1994, stockholders are entitled to one vote, except in regard to
the election of directors, for which there will be cumulative voting as
described under the heading "Election of Directors." In accordance with Avatar's
By-Laws, the holders of a majority of the outstanding shares of Common Stock,
present in person or represented by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting.
Proxies
When a proxy is received, properly executed, in time for the Annual
Meeting, the shares represented thereby will be voted at the meeting as
directed. If no such direction is specified, the proxy will be voted FOR the
election as directors of Avatar of the eight nominees named therein and FOR
approval of the appointment of Ernst & Young, independent accountants, as
auditors of Avatar for the year ending December 31, 1994. Any stockholder who
executes a proxy may revoke it at any time prior to its exercise by giving
written notice of such revocation to the Secretary of Avatar. In addition, a
stockholder who attends the meeting may vote in person, thereby cancelling any
proxy previously given by such stockholder.
This proxy statement and the form of proxy enclosed herewith, and the
accompanying Annual Report of Avatar for the fiscal year ended December 31,
1993, including financial statements, were first mailed to stockholders of
record as of the close of business on March 31, on or about April 26, 1994.
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<PAGE> 4
PRINCIPAL STOCKHOLDERS AND SECURITY
OWNERSHIP OF MANAGEMENT
Principal Stockholders
The following table sets forth, as of March 31, 1994, information with
respect to each person or entity known by the Board of Directors to be the
beneficial owner of more than 5% of the outstanding Common Stock. Except as
otherwise indicated, all shares are owned directly.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
Odyssey Partners, 31 West 52nd Street 2,107,763 23.17%
L.P.(1)(2) New York, NY 10019
Spears, Benzak, 45 Rockefeller Plaza 1,718,632 18.90%
Salomon & New York, NY 10111
Farrell(3)
- --------------------------------------------------------------------------------------
</TABLE>
(1) Does not include shares owned by Leon Levy, who is Chairman of the
Board and a member of the Executive Committee of Avatar and is a general partner
of Odyssey Partners, L.P., a Delaware limited partnership ("Odyssey"). Mr. Levy,
Jack Nash, Stephen Berger and Joshua Nash, by virtue of being general partners
of Odyssey, share voting and dispositive power with respect to the Common Stock
owned by Odyssey and, accordingly, may each be deemed to own beneficially the
Common Stock owned by Odyssey. Each of the aforesaid persons has expressly
disclaimed any such beneficial ownership (within the meaning of Exchange Act
Rule 13d-3 (d)(1)) which exceeds the proportionate interest in the Common Stock
which he may be deemed to own as a general partner of Odyssey. The Company has
been advised that no other person exercises (or may be deemed to exercise) any
voting or investment control over the Common Stock owned by Odyssey. Odyssey is
a private investment firm with substantial equity capital invested in marketable
securities and closely held businesses. Mr. Levy's ownership of Common Stock is
indicated in the table included in "Security Ownership of Management."
(2) By virtue of its present Common Stock ownership, Odyssey may be deemed
to be a "control" person of Avatar within the meaning of that term as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended.
(3) Based upon information set forth in the Schedule 13G, dated February
15, 1994, filed by Spears, Benzak, Salomon & Farrell (a registered investment
adviser), such shares are held for the benefit of various of its clients; it has
revocable shared dispositive power with such clients; and it has no power to
vote or direct the vote of such shares.
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<PAGE> 5
Security Ownership of Management
The following table sets forth, as of March 31, 1994, information with
respect to the outstanding shares of Common Stock beneficially owned by each
present director, nominee as a director of Avatar, the Chairman of the Executive
Committee, President and Chief Executive Officer(who is also a director), and
the four most highly compensated executive officers in addition to the Chairman
of the Executive Committee, President and Chief Executive Officer and by all
persons presently serving as directors and officers of Avatar as a group. Except
as otherwise indicated, all shares are owned directly.
<TABLE>
<CAPTION>
PERCENT
AMOUNT AND NATURE OF OF
NAME OR GROUP BENEFICIAL OWNERSHIP(1) CLASS
<S> <C> <C>
- ------------------------------------------------------------------------------------------
Leon Levy 2,356,258(2) 25.91%
Geoffrey C. Hazard, Jr. 6,043 .07%
J. Edward Houston None
Edwin Jacobson None
Leon T. Kendall 200(3) .002%
Martin Meyerson 2,347(4) .03%
William M. Porter 2,347 .03%
Fred Stanton Smith None
Henry King Stanford None
Lawrence Wilkov 5 --(5)
Dennis J. Getman None
Charles L. McNairy None
G. Patrick Settles None
All directors and officers as a group
(consisting of 15 persons of which 6 hold
shares of Common Stock) 2,367,200(2)(3)(4) 26.03%
- ------------------------------------------------------------------------------------------
</TABLE>
(1) The information as to securities owned by directors, officers and
nominees was furnished to Avatar by such directors, officers and nominees.
(2) Includes 2,107,763 shares owned by Odyssey. Mr. Levy is a general
partner of Odyssey and therefore may be deemed to beneficially own the shares of
Common Stock owned by Odyssey and to share such "control" of the Company as
Odyssey may have. See Notes (1) and (2) to the preceding table included in
"Principal Stockholders."
(3) Does not include an aggregate of 400 shares owned by Mr. Kendall's wife
for her own account and as custodian for their son, as to which shares Mr.
Kendall disclaims beneficial ownership.
(4) Does not include 847 shares owned by Mr. Meyerson's wife, as to which
shares Mr. Meyerson disclaims beneficial ownership.
(5) Represents less than .001%.
ELECTION OF DIRECTORS
Eight directors are to be elected for the ensuing year and until their
respective successors are duly elected and qualified. Stockholders have
cumulative voting rights with respect to election
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<PAGE> 6
of directors. Under cumulative voting, each stockholder is entitled to the same
number of votes per share as the number of directors to be elected (or, for
purposes of this election, eight votes per share). A stockholder may cast all
such votes for a single nominee or distribute them among the nominees, as he
wishes, either by so marking his ballot at the meeting or by specific voting
instructions sent to Avatar with a signed proxy. In connection with the
solicitation of proxies, discretionary authority to cumulate votes is being
solicited. Nominees for director will be elected by a plurality of the votes
cast at the Annual Meeting by the holders of Common Stock present in person or
by proxy and entitled to notice of, and to vote at, the Annual Meeting.
Consequently, only shares that are voted in favor of a particular nominee will
be counted toward such nominee's achievement of a plurality. Shares present at
the meeting that are not voted for a particular nominee or shares present by
proxy where the stockholder properly withheld authority to vote for such nominee
(including broker non-votes) will not be counted toward such nominee's
achievement of a plurality. Unless authority to vote for the nominees for
director is withheld, it is the intention of the persons named in the
accompanying proxy to vote the proxies in such manner as will elect as directors
the nominees named below.
All of the nominees were elected at the June 3, 1993 Annual Meeting of
Avatar's Stockholders. The Board of Directors met eight times during 1993,
including the annual meeting of directors held immediately following the 1993
Annual Meeting of Stockholders.
The Board of Directors does not contemplate that any of the persons named
below will be unable, or will decline, to serve. However, if any of such persons
is unable or declines to serve, the persons named in the accompanying proxy may
vote for another person or persons in their discretion.
The following table sets forth certain information with respect to each
nominee for director. Except as otherwise indicated, each nominee has held his
present occupation or occupations for more than the past five years and has not
been principally employed by any subsidiary or affiliate of Avatar. There are no
family relationships between any nominee, director or executive officer of
Avatar.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME AGE OCCUPATIONS AND DIRECTORSHIPS
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Leon Levy 68 Chairman of the Board of Avatar since January 22, 1981;
Director since General Partner, Odyssey Partners, L.P., a private
September 1980 partnership engaged in investment, trading and related
activities; Chairman of the Board of Oppenheimer Funds;
former Chairman of the Board (1974-1985) of Oppenheimer
Management Corp.; Director of: Electra Investment Trust
PLC, Mercury Assets Management, Ltd., and S. G. Warburg
& Co., Ltd. (Jersey Funds).
- --------------------------------------------------------------------------------------------
J. Edward Houston 60 President and Chief Executive Officer, Savoy Group,
Director since Inc., operator of an ocean terminal and shipping
September 1980 company, since February 1992; also, attorney, law firm
of Houston and Shahady, P.A. since November 1988;
formerly Chairman of the Board and President, South
Florida Savings Bank, from January 1984 to April 1986.
</TABLE>
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<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME AGE OCCUPATIONS AND DIRECTORSHIPS
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Edwin Jacobson 64 President and Chief Executive Officer of Avatar since
Director since February 27, 1994, and Chairman of the Executive
June 1992 Committee of Avatar since June 15, 1992; also,
President and Chief Executive Officer, Chicago
Milwaukee Corporation, an investment company, since
June 1985, President and Chief Executive Officer, CMC
Heartland Partners, an operating general partnership of
a public limited partnership engaged in the real estate
business, since September 1990, and President and Chief
Executive Officer, since June 1985, of Milwaukee Land
Company, a non-diversified, closed-end management
investment company, publicly trading since July 1993.
- --------------------------------------------------------------------------------------------
Leon T. Kendall 65 Professor of Finance and Real Estate, Kellogg School of
Director since Management, Northwestern University, since September
May 1983 1988; formerly Chairman of the Board, Mortgage Guaranty
Insurance Corporation, and Vice Chairman of the Board,
MGIC Investment Corporation, from December 1981 to
December 1989; Director of: Universal Foods
Corporation; Asset Management Funds; Region 3,
Resolution Trust Corporation; and Chicago
Board -- Options Exchange.
- --------------------------------------------------------------------------------------------
Martin Meyerson 71 Chairman, University of Pennsylvania Foundation and
Director since President Emeritus, University of Pennsylvania, since
May 1981 February 1981, and President thereof from 1970 to 1981;
Director of: Scott Paper Company; First Fidelity
Bancorporation; Saint Gobain Corporation (U.S./France)
and two of its operating companies, CertainTeed
Corporation and Norton Company; Universal Health
Services, Inc.; Trustee, Penn Mutual Life Insurance
Company.
- --------------------------------------------------------------------------------------------
William M. Porter 80 Retired; formerly Vice Chairman of the Board, Context
Director since Industries, Inc., a real estate, development and
September 1980 building supplies company, from March to June 1981;
formerly President and Chief Executive Officer of
Context Industries, Inc. from July 1976 to February
1981.
- --------------------------------------------------------------------------------------------
Fred Stanton Smith 66 Vice Chairman of the Board, The Keyes Company, a real
Director since estate brokerage, financing, management, insurance and
September 1980 development firm, since January 28, 1992; formerly
President, The Keyes Company; Director, Eagle National
Bank.
- --------------------------------------------------------------------------------------------
Henry King Stanford 78 President Emeritus, The University of Miami since July
Director since 1981, and President Emeritus, University of Georgia
September 1980 since July 1987; formerly President, The University of
Miami, from July 1962 to June 1981; also formerly
Interim President, University of Georgia, from July
1986 to June 1987.
</TABLE>
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<PAGE> 8
INFORMATION REGARDING THE BOARD OF DIRECTORS
Certain Committees of the Board
To assist it in carrying out its duties, the Board of Directors has
established an Executive Committee, an Audit Committee and a Community Affairs
Committee, the current members of which are as follows:
<TABLE>
<S> <C> <C>
EXECUTIVE COMMITTEE AUDIT COMMITTEE COMMUNITY AFFAIRS COMMITTEE
- --------------------------------------------------------------------------------------------------
Edwin Jacobson(1)(2) J. Edward Houston(1) Henry King Stanford(1)
J. Edward Houston Geoffrey C. Hazard, Jr.(3) Martin Meyerson
Leon Levy(2) Leon T. Kendall William M. Porter
Fred Stanton Smith Martin Meyerson Fred Stanton Smith
William M. Porter
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Chairman
(2) Officer of Avatar
(3) As a result of his decision not to stand for re-election to Avatar's
Board of Directors due to expanded professional commitments, Mr. Hazard will not
be a member of this Committee following Avatar's 1994 Annual Meeting of
Stockholders.
The Board of Directors has not established a Nominating Committee and, as
more fully described below and under "EXECUTIVE COMPENSATION AND OTHER
INFORMATION -- Executive Committee Report on Executive Compensation," the
Executive Committee performs the functions of a compensation committee.
Executive Committee
The Executive Committee of the Board of Directors has authority to exercise
most powers of the full Board of Directors in connection with matters which
arise during the intervals between meetings of the Board of Directors. In
addition to such other functions as are assigned to it from time to time by the
Board of Directors, the Executive Committee also reviews and approves or
recommends to the Board the compensation and terms of employment of all officers
and employees of Avatar and its subsidiaries whose base salaries exceed $70,000
per annum. The Executive Committee met four times during the fiscal year ended
December 31, 1993.
Audit Committee
The Audit Committee of the Board of Directors recommends to the Board of
Directors the appointment of the independent auditors, subject to approval by
the stockholders of Avatar; reviews the independent auditors' report and
management letters and reports to the Board of Directors with respect thereto;
reviews with the internal auditors Avatar's accounting policies and procedures,
including its internal accounting controls and internal auditing procedures;
determines whether there are any conflicts of interest in financial or business
matters between Avatar and any of its officers or employees; and reviews the
recommendations of the independent auditors. The Audit Committee also performs
such other tasks as are assigned to it from time to time by the Board of
Directors. The Audit Committee met five times during the fiscal year ended
December 31, 1993.
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<PAGE> 9
Community Affairs Committee
The Community Affairs Committee of the Board of Directors monitors the
reputation and standing in the community of Avatar and its various subsidiaries
and divisions, and oversees the interaction of Avatar with the community. The
Community Affairs Committee also performs such other tasks as are assigned to it
from time to time by the Board of Directors. The Community Affairs Committee met
once during the fiscal year ended December 31, 1993.
Directors' Compensation
Pursuant to resolutions of the Board of Directors, compensation for
directors who are not salaried employees of Avatar is $17,500 per annum. Members
of the Executive Committee who are not salaried employees of Avatar receive a
fee of $500 for attendance at each meeting. Members and the Chairman of the
Audit Committee receive additional compensation of $12,000 and $14,000 per
annum, respectively. Members and the Chairman of the Community Affairs Committee
receive additional compensation of $2,000 per annum plus a fee of $500 for
attendance at each meeting.
On September 1, 1986, Mr. Porter entered into an agreement with the Avatar
Audit Committee pursuant to which he is paid $1,000 per month for consulting and
administrative services performed for the Audit Committee and on behalf of
Avatar, which services include acting as Secretary of the Audit Committee and as
liaison with Avatar's Internal Audit Department and such other services as may
be requested by the Audit Committee or by management.
Directors' Attendance
In fiscal year 1993 all of the incumbent directors attended 75% or more of
the aggregate of their respective Board and Committee meetings, except for Mr.
Hazard who attended 54%.
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<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary Compensation Table
The following information is furnished with respect to compensation paid by
Avatar during the three fiscal years ended December 31, 1993, to each of the
Chief Executive Officer and four other highest paid executive officers of Avatar
(these five executive officers being hereinafter referred to as the "Named
Executive Officers") whose total salary and bonus exceeded $100,000 for the year
ended December 31, 1993.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
------------------------ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(2)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Lawrence Wilkov(3) 1993 $300,000 -- $2,249
President, Chief Executive 1992 $300,000 -- $2,182
Officer & Chief Operating 1991 $300,000 -- $6,356
Officer
- ---------------------------------------------------------------------------------------------
Edwin Jacobson(4) 1993 $250,000(5) --(5) --
Chairman of the Executive 1992 $134,615(6) -- --
Committee
- ---------------------------------------------------------------------------------------------
Dennis J. Getman 1993 $208,000 $12,500(5) $2,249
Executive Vice President & 1992 $208,000 -- $2,182
General Counsel 1991 $208,000 -- $6,240
- ---------------------------------------------------------------------------------------------
Charles L. McNairy 1993 $135,096 $10,000(5) $2,177
Executive Vice President, 1992 $116,696 -- $1,751
Treasurer & Chief Financial 1991 $113,550 -- $3,407
Officer
- ---------------------------------------------------------------------------------------------
G. Patrick Settles 1993 $107,234 -- $1,609
Vice President & Assistant 1992 $103,503 -- $1,552
General Counsel 1991 $101,850 -- $3,055
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) Of the Named Executive Officers, Messrs. Wilkov, Getman and McNairy also
received automobile allowances and/or the use of company-leased
automobiles. Avatar also provides group life, health, hospitalization and
medical reimbursement plans which do not discriminate in scope, terms or
operation in favor of officers and directors and are available to all
full-time employees. The aggregate value of these and any additional
perquisite and other personal benefits cannot be specifically or precisely
ascertained but do not, in any event, exceed 10 percent of the total annual
salary and bonus reported for each of the Named Executive Officers.
(2) Reflects for each Named Executive Officer Avatar's contribution to the
401(k) Plan.
(3) On February 25, 1994, Mr. Wilkov commenced a lawsuit against Avatar, Mr.
Jacobson and Odyssey, in the Circuit Court of the Eleventh Judicial Circuit
in and for Dade County, Florida, claiming damages arising out of Mr.
Wilkov's termination of his employment purportedly for "Good Reason" (as
defined in his employment agreement). Mr. Wilkov also seeks to
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<PAGE> 11
recover damages from Avatar for libel and slander and from Odyssey and Mr.
Jacobson based on their alleged malicious interference with his employment
agreement. Avatar denies that Mr. Wilkov had Good Reason to terminate his
employment agreement. Avatar, Odyssey and Mr. Jacobson do not believe there
is any valid basis for Mr. Wilkov's claims, and various affirmative
defenses have been asserted. Avatar also has asserted counterclaims against
Mr. Wilkov for breach of contract, promissory estoppel and improper
inducement in connection with amendments to Mr. Wilkov's employment
agreement. (For a description of Mr. Wilkov's employment agreement, see
"Employment and Other Agreements" below.)
(4) In addition to his position as Chairman of the Executive Committee, Mr.
Jacobson was elected as President and Chief Executive Officer effective as
of February 27, 1994 and his employment agreement was amended as of March
1, 1994. See "Employment and Other Agreements" below.
(5) For discussion of Avatar's employment agreement with Mr. Jacobson and its
incentive compensation agreements with Messrs. Getman and McNairy, see
"Stock-Based Long-Term Incentive Plans" and "Employment and Other
Agreements" below.
(6) Mr. Jacobson's employment at a salary of $250,000 per annum commenced as of
June 15, 1992.
Stock-Based Long-Term Incentive Plans -- Awards in Last Fiscal Year
Of the Named Executive Officers, stock-based long-term incentive awards
were granted during 1993 only to Messrs. Getman and McNairy. The material terms
of such awards are described under "Employment Agreements."
<TABLE>
<CAPTION>
PERFORMANCE OR
NUMBER OF SHARES, OTHER PERIOD
UNITS OR UNTIL MATURATION
NAME OTHER RIGHTS OR PAYOUT(1)
<S> <C> <C>
- -----------------------------------------------------------------------------------------
Dennis J. Getman 15,000 January 18, 1998
Charles L. McNairy 15,000 September 9, 1998
- -----------------------------------------------------------------------------------------
</TABLE>
(1) Assumes continuation of employment through such date.
Employment and Other Agreements
Avatar entered into an employment agreement with Mr. Jacobson, dated June
15, 1992, as amended as of March 1, 1994, pursuant to which Mr. Jacobson is
employed as Chairman of the Executive Committee and President and Chief
Executive Officer until June 15, 1997, unless sooner terminated in accordance
with the terms of the agreement. In addition to base salary of $325,000 per
annum (as increased as of March 1, 1994), Mr. Jacobson was granted a stock-based
long-term incentive award ("Award") based upon an aggregate of 150,000 shares of
Avatar's Common Stock which will vest with respect to 30,000 shares on each of
the first five
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<PAGE> 12
anniversary dates of the agreement. Such Award provides for Mr. Jacobson to
receive, within ten days following June 15, 1997 (or the termination date, if
earlier), a cash payment equal to the excess of a formula amount based upon the
closing prices of Avatar's Common Stock during a specified period prior to June
15, 1997 (or the termination date, if earlier) over the closing price of
Avatar's Common Stock on the date of grant ($25.25), multiplied by the number of
shares which will have become vested.
In the event of Mr. Jacobson's death, disability or his resignation for
Good Reason, as defined in his agreement, prior to the fifth anniversary of such
agreement, Mr. Jacobson or his estate would receive cash compensation at a rate
equal to full base salary through the date of death or termination and would
vest in 50 percent of the remaining unvested shares in addition to shares
already vested.
As of January 18, 1993 and as of September 9, 1993, respectively, Avatar
entered into Incentive Compensation Agreements with Mr. Getman and Mr. McNairy,
whereby each of Mr. Getman and Mr. McNairy was granted an Award based upon an
aggregate of 15,000 shares of Avatar Common Stock, which will vest with respect
to 3,000 shares per year on each of the first five anniversary dates of each
agreement. Such Awards provide for each of Mr. Getman and Mr. McNairy to receive
within ten days following the respective fifth anniversary date (or the
respective termination date, if earlier) of their agreements, a cash payment
equal to the excess of a formula amount based upon the closing prices of Avatar
Common Stock during a specified period prior to the respective fifth anniversary
date (or the respective termination date, if earlier) over the closing price of
the Avatar Common Stock on the respective date of grant ($33.75 per share and
$36.00 per share, respectively), multiplied by the number of shares which will
have become vested.
Pursuant to Mr. Jacobson's employment agreement and the incentive
compensation agreements with Messrs. Getman and McNairy, the number of shares on
which such Awards are based and related market values are subject to adjustment
as the result of various occurrences, such as declaration or payment of stock
dividends, stock splits, subdivisions, combinations, consolidations, reverse
splits, distributions, reclassifications or recapitalizations. Mr. Jacobson also
is entitled to various employee benefits which are subject to continuation or
termination in various circumstances.
As of June 15, 1992, Avatar and Mr. Wilkov entered into an amended and
restated employment agreement, pursuant to which Mr. Wilkov was to be employed
as President, Chief Executive Officer and Chief Operating Officer until December
31, 1997, unless sooner terminated in accordance with the terms of the
agreement. In addition to base salary of $300,000 per annum, Mr. Wilkov was
granted an Award based upon an aggregate of 150,000 shares of Avatar's Common
Stock which was to vest with respect to 30,000 shares on each of the first five
anniversary dates of the agreement. Such Award provided for Mr. Wilkov to
receive, within ten days following June 15, 1997 (or the termination date, if
earlier), a cash payment equal to the excess of a formula amount based upon the
closing prices of Avatar's Common Stock during a specified period prior June 15,
1997 (or the termination date, if earlier) over the closing price of
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<PAGE> 13
Avatar's Common Stock on the date of grant ($25.25 per share), multiplied by the
number of shares which were to have become vested.
The base salary rate and vesting of the Award were subject to reduction if
Mr. Wilkov or Avatar changed his status to that of a part-time employee or
consultant (which compensation was to be further reduced if he elected to
terminate his employment and not remain a part-time employee or consultant), Mr.
Wilkov became disabled, was terminated for cause or resigned for a reason other
than for Good Reason (as defined in his employment agreement). In addition, upon
Mr. Wilkov's resignation for Good Reason or termination by Avatar for a reason
other than for cause, he would have been entitled to receive his full base
salary for the remainder of the employment term and he would have vested in 50
percent of the unvested shares under the Award. Upon his death during the
employment term, his estate would have vested in 50 percent of the unvested
shares under the Award. (With respect to pending litigation between Avatar and
Mr. Wilkov, see Note (3) to the Summary Compensation Table in the discussion
under the heading "EXECUTIVE COMPENSATION AND OTHER INFORMATION" above.)
11
<PAGE> 14
Notwithstanding any statement incorporating future filings in whole or in
part, including this Proxy Statement, in any of Avatar's previous filings under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, the following report and the Performance Graph below shall not be
incorporated by reference into any such filing.
Executive Committee Report on Executive Compensation
The Executive Committee of Avatar's Board of Directors traditionally
performs the functions of a compensation committee, including the review and
approval of compensation and terms of employment for all officers and those
employees of Avatar and its subsidiaries whose base salaries exceed $70,000 per
annum. However, the compensation arrangements regarding any executive officer
who is also a member of the Executive Committee has been acted on and approved
by the full Board of Directors (with such member not participating).
Avatar's executive compensation is intended to reward, retain and motivate
management. The primary component of compensation has been base salary. However,
for certain of the most senior executives, compensation packages now include
stock-based long-term incentive awards (the "Awards"). The grant of these Awards
are intended to align the interests of Avatar's most senior executives with
those of the stockholders over the term of the Awards, and to motivate these
executives to improve Avatar's long-term business position and performance.
These Awards are described in the discussion under the heading "EXECUTIVE
COMPENSATION AND OTHER INFORMATION -- Stock-Based Long-Term Incentive Plans and
Employment and Other Agreements" above. The Executive Committee believes that
Avatar's executive compensation arrangements are reasonable in light of the
needs of Avatar, competitive compensation levels and the goals of retention and
motivation of management.
In determining salary levels for the Chief Executive Officer and the other
executive officers, primary consideration is given to each executive's level of
responsibility and individual performance, as well as compensation generally
received by executives in the real estate business.
On January 22, 1994, Mr. Wilkov purported to terminate his employment
agreement with Avatar. As a result, Mr. Jacobson was elected as Avatar's
President and Chief Executive Officer effective as of February 27, 1994. See
Note (3) to the Summary Compensation Table and the discussion under the heading
"-- Employment and Other Agreements" above.
EXECUTIVE COMMITTEE
Edward Jacobson, Chairman
J. Edward Houston
Leon Levy
Fred Stanton Smith
Compensation Committee Interlocks and Insider Participation
The members of the Executive Committee are Messrs. Jacobson, Houston, Levy
and Smith. Mr. Jacobson serves as Chairman of the Executive Committee and
President and Chief Executive
12
<PAGE> 15
Officer. Mr. Jacobson did not participate in the Board of Directors' decision to
approve the amendment to his employment agreement.
Performance Graph
The following graph provides a comparison of the cumulative total returns
based on an investment of $100 after the close of the market on December 31,
1988 in Avatar's Common Stock, the NASDAQ Market Index and a composite peer
group index (the "Peer Index") for the periods indicated, in each case assuming
reinvestment of any dividends. The cumulative total returns for the NASDAQ
Market Index were prepared by Media General Financial Services, Inc. ("Media
General"). The "Peer Index" is a combination of the Real Estate Subdividers and
Developers Index and the Water Utilities Index, each of which is published by
Media General. The cumulative total returns for each index were prepared by
Media General and were combined by Avatar to form the Peer Index based on the
relative percentage of Avatar's assets applicable to each of Avatar's lines of
business (i.e., real estate and water utilities) at the end of each year
depicted in the graph.
<TABLE>
<CAPTION>
Measurement Period Avatar Hold-
(Fiscal Year Covered) ings Inc. NASDAQ Peer Index
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 100.52 112.89 102.43
1990 51.81 91.57 78.28
1991 92.23 117.56 110.24
1992 144.04 118.71 122.87
1993 139.38 142.40 129.49
</TABLE>
13
<PAGE> 16
APPOINTMENT OF AUDITORS
Ernst & Young, independent accountants, audited the financial statements of
Avatar for the fiscal year ended December 31, 1993. Such audit services
consisted of the firm's examination of and report on the annual financial
statements and assistance and consultation in connection with filings with the
Securities and Exchange Commission and other matters.
Representatives of Ernst & Young are expected to attend the Annual Meeting,
will have the opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions.
Based upon the recommendation of the Audit Committee, and subject to
approval by the stockholders, the Board of Directors has appointed Ernst &
Young, independent accountants, as auditors of Avatar for the fiscal year ending
December 31, 1994. Approval by the stockholders will require the affirmative
vote of a majority of the votes present at the meeting in person or by proxy and
entitled to be cast. The Board of Directors recommends that the accompanying
proxy be voted FOR such approval and it is intended that the proxies not
otherwise limited will be voted in such manner.
1995 STOCKHOLDERS' PROPOSALS
Proposals of stockholders intended to be presented at the Annual Meeting in
1995 must be received by the office of the Secretary, Avatar Holdings Inc., P.O.
Box 523000, Miami, Florida 33152, no later than December 27, 1994.
ADDITIONAL INFORMATION
All of the expenses involved in preparing, assembling and mailing this
Proxy Statement and the accompanying material will be paid by Avatar. In
addition to the solicitation of proxies by mail, Avatar will request brokers and
securities dealers to obtain proxies from and send proxy material to their
principals. Expenses incurred in this connection will be reimbursed by Avatar.
Proxies may be solicited personally, by telephone or telegraph, by the directors
and officers of Avatar without additional compensation. The Board of Directors
knows of no business to come before the meeting other than as stated in the
Notice of Annual Meeting of Stockholders. Should any business other than that
set forth in such Notice properly come before the meeting, or any adjournment or
adjournments thereof, it is the intention of the persons named in the
accompanying proxy to vote such proxy in accordance with their judgment on such
matters.
By Order of the Board of Directors,
Juanita I. Kerrigan
Vice President and Secretary
Dated: April 26, 1994.
14
<PAGE> 17
Notice of 1994
Annual Meeting
and Proxy
Statement
- --------------------------------------------------------------------------------
AVATAR
HOLDINGS INC.
<PAGE> 18
<TABLE>
<S> <C>
AVATAR HOLDINGS INC. This Proxy is Solicited on Behalf of the Board of
255 ALHAMBRA CIRCLE Directors
CORAL GABLES, FLORIDA 33134 The undersigned hereby appoints Edwin Jacobson and
PROXY Juanita I. Kerrigan, as Proxies, each with the
power to appoint his or her substitute; and hereby
authorizes them to represent and vote, as
designated below, all the shares of Common Stock
of Avatar Holdings Inc. held of record by the
undersigned at the close of business on March 31,
1994, at the Annual Meeting of Stockholders to be
held on May 26, 1994, or any adjournment or
adjournments thereof.
1. ELECTION OF EIGHT DIRECTORS
/ /FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees listed below
below)
</TABLE>
L. Levy, J. E. Houston, E. Jacobson, L. T. Kendall, M. Meyerson,
W. M. Porter, F. S. Smith, H. K. Stanford.
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG, INDEPENDENT ACCOUNTANTS, AS
AUDITORS OF AVATAR HOLDINGS INC. FOR 1994.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ITEMS 1 AND 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized
officer. If a partnership,
please sign in partnership
name by authorized person.
Dated: , 1994
---------------
<TABLE>
<S> <C>
- ---------------------------------------------------- ---------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS Signature
PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
- ---------------------------------------------------- ---------------------------
Signature if held jointly
</TABLE>
