<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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
AVATAR HOLDINGS INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / 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 25, 1995
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
25, 1995, at 10:00 a.m. local time, for the following purposes:
1. To elect eight directors.
2. To approve the appointment of Ernst & Young LLP, independent
accountants, to act as auditors for Avatar for the year ending December
31, 1995.
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, 1995 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 25, 1995.
<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 25, 1995
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, 1995 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, 1995, 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 outstanding and entitled to vote. For
each share of Common Stock held of record as of the close of business on March
31, 1995, 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 LLP, independent accountants, as
auditors of Avatar for the year ending December 31, 1995. 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,
1994, including financial statements, were first mailed to stockholders of
record as of the close of business on March 31, on or about April 25, 1995.
1
<PAGE> 4
PRINCIPAL STOCKHOLDERS AND SECURITY
OWNERSHIP OF MANAGEMENT
Principal Stockholders
The following table sets forth, as of March 31, 1995, 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 23.2%
L.P.(1)(2) New York, NY 10019
Spears, Benzak, 45 Rockefeller Plaza 2,108,635 23.2%
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, Joshua Nash and Jeffrey Gendell, 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.
Avatar 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 partnership engaged in investment, trading and
related activities. 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 6,
1995, 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.
2
<PAGE> 5
Security Ownership of Management
The following table sets forth, as of March 31, 1995, information with
respect to the outstanding shares of Common Stock beneficially owned by each
present director, nominee for director, by each of the Named Executive Officers
identified herein under the caption "Summary Compensation Table" other than Mr.
Wilkov (whose stock ownership, if any, is not known), and by all present
directors and executive 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 2,385,758(2) 26.2%
J. Edward Houston None
Edwin Jacobson None
Leon T. Kendall 200(3) *
Martin Meyerson 2,347(4) *
William M. Porter 2,347 *
Kenneth T. Rosen 1,000 *
Fred Stanton Smith None
Henry King Stanford None
Dennis J. Getman None
Charles L. McNairy None
G. Patrick Settles None
All directors and executive officers as a group
(consisting of 14 persons of whom 5 benefi-
cially own shares of Common Stock) 2,391,652(2)(3)(4) 26.3%
- - ------------------------------------------------------------------------------------------
</TABLE>
* Represents less than one percent.
(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 own beneficially the shares of
Common Stock owned by Odyssey. 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.
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 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
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<PAGE> 6
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 May 26, 1994 Annual Meeting of
Avatar's Stockholders, except Kenneth T. Rosen who was elected by the Board of
Directors at its meeting held September 29, 1994. The Board of Directors met
seven times during 1994, including the annual meeting of directors held
immediately following the 1994 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 69 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, and S. G. Warburg & Co., Ltd. (Jersey Funds).
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME AGE OCCUPATIONS AND DIRECTORSHIPS
- - --------------------------------------------------------------------------------------------
<S> <C> <C>
Edwin Jacobson 65 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 66 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 72 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: 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 81 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.
- - --------------------------------------------------------------------------------------------
Kenneth T. Rosen 46 Professor of Business Administration, since 1979, and
Director since Chairman of the Center for Real Estate and Urban
September 1994 Economics, since 1981, University of California,
Berkeley; also President, Rosen Consulting Group, a
real estate consulting business, since 1990; Director,
Golden West Financial Corporation.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME AGE OCCUPATIONS AND DIRECTORSHIPS
- - --------------------------------------------------------------------------------------------
<S> <C> <C>
Fred Stanton Smith 67 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 79 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>
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>
<CAPTION>
EXECUTIVE COMMITTEE AUDIT COMMITTEE COMMUNITY AFFAIRS COMMITTEE
- - --------------------------------------------------------------------------------------------------
<S> <C> <C>
Edwin Jacobson(1)(2) J. Edward Houston(1) Henry King Stanford(1)
J. Edward Houston Leon T. Kendall Martin Meyerson
Leon Levy(2) Martin Meyerson William M. Porter
Fred Stanton Smith William M. Porter Fred Stanton Smith
- - --------------------------------------------------------------------------------------------------
</TABLE>
(1) Chairman
(2) Officer of Avatar
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 six times during the fiscal year ended
December 31, 1994.
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;
6
<PAGE> 9
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, 1994.
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, 1994.
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 1994 all of the incumbent directors attended 75% or more of
the aggregate of their respective Board and Committee meetings.
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<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary Compensation Table
The following table sets forth information with respect to compensation of
the Chief Executive Officer, the former Chief Executive Officer and the three
other highest paid executive officers of Avatar whose total salary and bonus was
$100,000 or more for the year ended December 31, 1994 (these five executive
officers being hereinafter referred to as the "Named Executive Officers").
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
------------------------ ALL OTHER
NAME AND PRINCIPAL POSITION(S) YEAR SALARY BONUS COMPENSATION(2)
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Edwin Jacobson(3) 1994 $311,731(4) --(4) --
President, Chief Executive 1993 250,000 -- --
Officer and Chairman of the 1992 134,615(5) -- --
Executive Committee
- - ---------------------------------------------------------------------------------------------
Dennis J. Getman 1994 208,000 $17,500(4) $ 2,249
Executive Vice President and 1993 208,000 12,500 2,249
General Counsel 1992 208,000 -- 2,182
- - ---------------------------------------------------------------------------------------------
Charles L. McNairy 1994 156,065 --(4) 2,249
Executive Vice President, 1993 135,096 10,000 2,177
Treasurer and 1992 116,696 -- 1,751
Chief Financial Officer
- - ---------------------------------------------------------------------------------------------
G. Patrick Settles 1994 110,452 -- 1,657
Vice President and Assistant 1993 107,234 -- 1,609
General Counsel 1992 103,503 -- 1,552
- - ---------------------------------------------------------------------------------------------
Lawrence Wilkov(7) 1994 53,423(6) -- 779(7)
Former President, 1993 300,000 -- 2,249
Chief Executive Officer and 1992 300,000 -- 2,182
Chief Operating Officer
- - ---------------------------------------------------------------------------------------------
</TABLE>
(1) Of the Named Executive Officers, Messrs. Getman, McNairy and Wilkov (until
April 1994) 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 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% 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) 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.
8
<PAGE> 11
(4) For discussion of Avatar's employment agreement with Mr. Jacobson and its
incentive compensation agreements with Messrs. Getman and McNairy, see
"Employment and Other Agreements" below.
(5) Mr. Jacobson's employment at a salary of $250,000 per annum commenced as of
June 15, 1992.
(6) Reflects salary paid through February 27, 1994.
(7) Mr. Wilkov's employment with Avatar terminated on January 22, 1994. See
"Employment and Other Agreements" below.
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 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 fifty 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's Common Stock, which vests 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's 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 Avatar's 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.
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<PAGE> 12
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. Mr. Wilkov purported to terminate his employment agreement with Avatar
on January 22, 1994, and subsequently commenced a lawsuit against Avatar, Mr.
Jacobson and Odyssey claiming, among other things, damages arising out of his
termination of employment. On July 22, 1994, a settlement was reached with Mr.
Wilkov, which was approved by the full Board of Directors. Pursuant to the
settlement agreement, among other things, the litigation was dismissed with
prejudice, Avatar paid Mr. Wilkov $1,000,000 (less required tax withholding),
and Mr. Wilkov's employment relationship with Avatar ended.
10
<PAGE> 13
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
is 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. No
awards were made to the Chief Executive Officer and the other executive officers
of Avatar in 1994. 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
the discussion under the heading "-- Employment and Other Agreements.")
EXECUTIVE COMMITTEE
Edwin 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 Officer. Mr. Jacobson did not participate in the
Board of Directors' decision to approve the amendment to his employment
agreement. See "Employment and Other Agreements." Mr. Levy serves as Chairman of
the Board of Directors.
11
<PAGE> 14
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,
1989 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>
1989 100.00 100.00 100.00
1990 51.55 81.12 75.34
1991 91.75 104.14 105.81
1992 143.30 105.16 117.65
1993 138.66 126.14 126.11
1994 156.70 132.44 119.71
</TABLE>
12
<PAGE> 15
APPOINTMENT OF AUDITORS
Ernst & Young LLP, independent accountants, audited the financial
statements of Avatar for the fiscal year ended December 31, 1994. 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 LLP 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
LLP, independent accountants, as auditors of Avatar for the fiscal year ending
December 31, 1995. 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.
1996 STOCKHOLDERS' PROPOSALS
Proposals of stockholders intended to be presented at the Annual Meeting in
1996 must be received by the office of the Secretary, Avatar Holdings Inc., P.O.
Box 523000, Miami, Florida 33152, no later than December 26, 1995.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires Avatar's
officers and directors, and any persons who own more than ten percent of
Avatar's Common Stock to file reports of initial ownership of Avatar's Common
Stock and subsequent changes in that ownership with the Securities and Exchange
Commission. Officers, directors and greater than ten-percent beneficial owners
are also required to furnish Avatar with copies of all Section 16(a) forms they
file. Based solely upon a review of the copies of the forms furnished to Avatar,
or written representations from certain reporting persons that no Forms 5 were
required, Avatar believes that during the 1994 fiscal year all Section 16(a)
filing requirements were complied with except that one report on Form 3 was not
timely filed by Jeffrey A. Sopshin after becoming an executive officer of
Avatar.
13
<PAGE> 16
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 25, 1995.
14
<PAGE> 17
Notice of 1995
Annual Meeting
and Proxy
Statement
- - --------------------------------------------------------------------------------
AVATAR
HOLDINGS INC.
<PAGE> 18
APPENDIX A
PROXY
AVATAR HOLDINGS INC.
255 ALHAMBRA CIRCLE
CORAL GABLES, FLORIDA 33134
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Edwin Jacobson and 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, 1995 at the Annual Meeting of Stockholders to
be held on May 25, 1995, or any adjournment or adjournments thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE> 19
<TABLE>
<S> <C>
Please mark
/X/ your votes
as this
---------------
COMMON
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.
FOR all nominees listed at left (except WITHHOLD AUTHORITY
as marked to the contrary below). to vote for all nominees listed.
Item 1 - ELECTION OF EIGHT DIRECTORS
Nominees: L. Levy, E. Jacobson, L.T. Kendall / / / /
M. Meyerson, W.M. Porter, K.T. Rosen,
F.S. Smith, H.K. Stanford.
(INSTRUCTION: To withhold authority to vote for any individual nominee write that nominees's name in the space provided below.)
- - ------------------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
Item 2 - APPROVAL OF THE
APPOINTMENT OF
ERNST & YOUNG,
INDEPENDENT / / / / / /
ACCOUNTANTS,
AS AUDITORS OF
AVATAR HOLDINGS
INC. FOR 1995.
ITEM 3 - IN THEIR DISCRE-
TION. THE PROXIES
ARE AUTHORIZED
TO VOTE UPON
SUCH OTHER BUSI- / / / / / /
NESS AS MAY
PROPERLY COME
BEFORE THE
MEETING.
Dated: , 1995.
---------------------------------------------------------------
- - ----------------------------------------------------------------------------
Signature
- - ----------------------------------------------------------------------------
Signature if held jointly
Please sign exactly as name appears above. 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.
</TABLE>
