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Exhibit 10 (i) - Incentive Compensation Agreement, Dennis J. Getman
AVATAR HOLDINGS INC.
255 Alhambra Circle
Coral Gables, Florida 33134
As of January 18, 1993
Mr. Dennis J. Getman
c/o Avatar Holdings Inc.
255 Alhambra Circle
Coral Gables, Florida 33134
Dear Mr. Getman:
We are writing with respect to the following incentive
compensation hereby granted to you as an employee of Avatar
Holdings Inc. (the "Company"):
1. Incentive Compensation. (a) Within 10 days
following the fifth anniversary hereof or, if earlier, the Date
of Termination (as hereinafter defined), the Company shall pay
you, as incentive compensation ("Incentive Compensation"), a cash
amount equal to the product of (x) the number of shares of the
Company's common stock, par value $1.00 per share ("Common
Stock"), in which you are vested (as the same may be adjusted
pursuant to paragraph 3(x) below), times (y) the excess, if any,
of the Final Value per share of Common Stock over $33.75 (the
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"Strike Price") (as the same may be adjusted pursuant to
paragraph 3(y) below), payable on the fifth anniversary of the
date hereof or, if earlier, on the Date of Termination (in either
case, the "Determination Date"). "Final Value" shall mean, as of
any Determination Date, the average Market Value (as defined in
paragraph 2 below) per share of Common Stock during the twenty
(20) business days immediately preceding such Determination Date.
(b) For the purposes of this paragraph 1, you
will vest in 3,000 shares of Common Stock on each of the first
through fifth anniversaries hereof provided that you are still
employed by the Company on such anniversary. In the event that
there is a Date of Termination prior to the fifth anniversary
hereof as a result of (i) your death, (ii) your "permanent
disability," (iii) the Company's termination of your employment
without "cause" or (iv) your termination of your employment with
the Company for "good reason" (each as defined in paragraph 2
below), you shall immediately vest on the Date of Termination in
50% of the remaining unvested shares and you shall forfeit any
unvested shares. In the event that there is a Date of
Termination prior to the fifth anniversary hereof as a result of
the Company's termination of your employment for "cause," you
shall forfeit the remaining unvested shares.
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2. Certain Definitions. (a) For the purposes
hereof, "permanent disability" shall be defined as any physical
or mental disability or incapacity which renders you incapable of
fully performing the services required of you in your employment
with the Company for a period of 120 consecutive days or for
shorter periods aggregating 120 days during any period of twelve
(12) consecutive months.
(b) For the purposes hereof, termination for
"cause" shall mean termination after:
(i) your commission of a material act
of fraud against the Company or its affiliates;
(ii) your conviction of (or
pleading by you of nolo contendere to) any crime which
constitutes a felony in the jurisdiction involved; or
(iii) the willful, repeated and
demonstrable failure by you substantially to perform your
duties over a period of not less than 30 days, other than
any such failure resulting from your incapacity due to
physical or mental illness, or material breach of any of
your obligations under this Agreement, and your failure to
cure such failure or breach within 30 days after receipt of
written notice from the Chairman of the Executive Committee
of the Board of Directors of the Company.
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(c) For the purposes hereof, "Date of
Termination" shall mean (i) if your employment is terminated by
your death, the date of your death, and (ii) if your employment
is terminated for any other reason, the date on which a notice
thereof is given.
(d) For the purposes hereof, "good reason" shall
mean the substantial reduction by the Company of any material
duties currently performed by you as Executive Vice President and
General Counsel of the Company without cause, provided that you
first deliver written notice thereof to the Chairman of the
Executive Committee of the Board of Directors of the Company and
the Company shall have failed to restore such duties within
thirty (30) days after receipt of such written notice.
(e) For the purposes hereof, "Market Value" as of
any date shall mean the closing price (or, if there is no closing
price on such date, then the mean between the closing bid and
asked prices) per share of Common Stock on such date as reported
in the trading reports of the principal securities exchange in
the United States on which such stock is listed, or, if such
stock is not listed on a securities exchange in the United
States, as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or NASDAQ's
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successor, or if not reported on NASDAQ, the fair market value
per share of such stock as determined by the Board of Directors
in good faith.
3. Adjustments. In the event the Company shall at
any time after the date hereof (A) declare or pay any dividend on
the Common Stock payable in shares of Common Stock, (B) subdivide
or split the outstanding shares of Common Stock into a greater
number of shares or (C) combine or consolidate the outstanding
shares of Common Stock into a smaller number of shares or effect
a reverse split of the outstanding shares of Common Stock, then
and in each such event (x) the number of shares of Common Stock
on the basis of which the Incentive Compensation is to be
calculated shall be adjusted by multiplying (a) such number of
shares as determined immediately prior to such event by (b) a
fraction (the "Adjustment Fraction"), the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock outstanding immediately prior to such
event and (y) the Strike Price shall be adjusted by multiplying
(a) the Strike Price as determined immediately prior to such
event by (b) the reciprocal of the Adjustment Fraction.
In addition, in the event the Company shall at any time
after the date hereof make any distribution on the shares of
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Common Stock, whether by way of a dividend or a reclassification
of stock, a recapitalization, a spin-off of interests in an
affiliated entity, a reorganization of the Company or otherwise,
in cash or any debt security, debt instrument, real or personal
property or any other property (other than any shares of Common
Stock or other capital stock of the Company), then for the
purpose of calculating the Incentive Compensation to be paid to
you, the Final Value of the Common Stock of the Company on the
Determination Date shall be increased in accordance with the
remaining provisions of this paragraph 3. In the case of a cash
dividend, the Final Value per share of the Common Stock on the
Determination Date shall be increased by an amount equal to the
per share cash amount of such dividend. In all other cases, the
Final Value per share of the Common Stock on the Determination
Date shall be increased by an amount equal to the excess of (A)
the average Market Value per share of the Common Stock for the
five (5) business days immediately preceding the ex-dividend date
for a dividend or distribution on such stock or the five (5)
business days immediately preceding the effective date of a
reclassification, recapitalization or other transaction involving
such stock over (B) the average Market Value per share of the
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Common Stock of the Company for the five (5) business days next
succeeding such ex-dividend date or effective date, as the case
may be; provided, however, that if the Company's Board of
Directors, in good faith, believes that the adjustment, as
determined by the preceding formula, is insufficient to reflect
the per share reduction in value of the Company as a result of
such transaction, in addition to the adjustment determined by
such formula the Board of Directors may increase the Final Value
per share of the Common Stock on the Determination Date by such
amount as the Board of Directors determines, in good faith, to be
appropriate to reflect such per share reduction in value of the
Company. In addition to the adjustments specifically provided
for in this paragraph 3, the manner of determining the Incentive
Compensation due to you shall be further modified or amended as
mutually determined by you and the Board of Directors of the
Company (acting in its good faith judgment) to equitably account
for any extraordinary transaction or occurrence not specifically
described in this paragraph 3 and which would by itself adversely
affect the value of the Common Stock or the computation of the
Incentive Compensation due and owing to you.
4. No Obligation as to Employment. Nothing contained
herein shall be deemed to obligate the Company to continue your
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employment or to obligate you to remain within the Company's
employment for any period of time hereafter.
5. Deductions and Withholdings. The Company shall be
entitled to withhold any amounts payable under this Agreement on
account of payroll taxes and similar matters as are required by
applicable law, rule or regulation of appropriate governmental
authorities.
6. Successors; Binding Agreement. (a) The Company
will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company,
by agreement in form and substance reasonably satisfactory to
you, to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to Incentive Compensation from
the Company in the same amount and on the same terms as you would
be entitled to hereunder if your employment was terminated other
than for cause or as the result of a permanent disability, except
that for purposes of implementing the foregoing, the date on
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which any such succession becomes effective shall be deemed the
Date of Termination. As used in this Agreement, "Company" shall
include any successor to the Company's business and/or assets as
aforesaid which executes and delivers the agreement provided for
in this paragraph 6 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
(b) This Agreement and all your rights hereunder shall
inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. Your obligations
hereunder may not be delegated and except as otherwise provided
herein relating to the designation of a devisee, legatee or other
designee, you may not assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of this Agreement or any of your
rights hereunder, and any such attempted delegation or
disposition shall be null and void and without effect.
7. Notice. For the purposes of this Agreement,
notices and all other communications provided for shall be in
writing and shall be deemed to have been duly given when
delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as
follows:
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If to you:
Mr. Dennis J. Getman
c/o Avatar Holdings Inc.
255 Alhambra Circle
Coral Gables, Florida 33134
If to the Company:
Avatar Holdings Inc.
255 Alhambra Circle
Coral Gables, Florida 33134
Attention: Chairman of the Executive Committee
or to such other address as any party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement
may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by you
and by the Company. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with,
any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior
or subsequent time. This Agreement constitutes the complete
understanding between the parties with respect to your employment
and no agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been
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made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of Florida.
9. Validity. The invalidity or unenforceability of
any provision or provisions of this Agreement shall not affect
the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
If the foregoing is satisfactory, would you please so
indicate by signing and returning to the Company the enclosed
copy of this letter whereupon this will constitute our agreement
on the subject.
AVATAR HOLDINGS INC.
By:/s/ Edwin Jacobson
Edwin Jacobson
Chairman of the Executive
Committee
ACCEPTED AND AGREED TO:
/s/ Dennis J. Getman
Dennis J. Getman
February 22, 1993
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