<SUBMISSION>
<ACCESSION-NUMBER>0000950144-04-004271
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20040525
<FILING-DATE>20040423
<EFFECTIVENESS-DATE>20040423
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AVATAR HOLDINGS INC
<CIK>0000039677
<ASSIGNED-SIC>1531
<IRS-NUMBER>231739078
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>001-07395
<FILM-NUMBER>04749556
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>201 ALHAMBRA CIRCLE
<CITY>CORAL GABLES
<STATE>FL
<ZIP>33134
<PHONE>3054427000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>201 ALHAMBRA CIRCLE
<CITY>CORAL GABLES
<STATE>FL
<ZIP>33134
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>GAC CORP /DE/
<DATE-CHANGED>19801023
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>GENERAL ACCEPTANCE CORP
<DATE-CHANGED>19710208
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>g86963def14a.htm
<DESCRIPTION>AVATAR HOLDINGS INC.
<TEXT>
<HTML>
<HEAD>
<TITLE>Avatar Holdings Inc.</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
 <B>SCHEDULE 14A</B>
</DIV>

<DIV align="center">
<B>(Rule 14a-101)</B>
</DIV>

<P align="center">
<B>INFORMATION REQUIRED IN PROXY STATEMENT</B>

<P align="center">
<B>SCHEDULE 14A INFORMATION</B>

<DIV align="center">
<B>Proxy Statement Pursuant to Section 14(a) of the
Securities</B>
</DIV>

<DIV align="center">
<B>Exchange Act of 1934 (Amendment No. &nbsp;&nbsp;)</B>
</DIV>

<P align="left">
Filed by the Registrant&nbsp;<FONT face="wingdings">&#120;
</FONT>

<P align="left">
Filed by a Party other than the
Registrant&nbsp;<FONT face="wingdings">&#111;
</FONT>

<P align="left">
Check the appropriate box:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Preliminary
    Proxy Statement
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Confidential,
    for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
    </FONT></DIV>
    </TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT size="2"><FONT face="wingdings">&#120;</FONT>&nbsp;&nbsp;Definitive
    Proxy Statement
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Definitive
    Additional Materials
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Soliciting
    Material Pursuant to Rule 14a-11(c) or Rule 14a-12
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
AVATAR HOLDINGS INC.

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<FONT size="2">(Name of Registrant as Specified In Its Charter)
</FONT>
</DIV>

<P align="center">


<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<FONT size="2">(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
</FONT>
</DIV>

<P align="left">
Payment of Filing Fee (Check the appropriate box):
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT face="wingdings">&#120;</FONT></TD>
    <TD align="left">
    No fee required.</TD>
</TR>

</TABLE>

<P align="left">
<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;Fee computed on
table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</TD>
    <TD align="left">
    Title of each class of securities to which transaction applies:</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</TD>
    <TD align="left">
    Aggregate number of securities to which transaction applies:</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</TD>
    <TD align="left">
    Per unit price or other underlying value of transaction computed
    pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on
    which the filing fee is calculated and state how it was
    determined):</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</TD>
    <TD align="left">
    Proposed maximum aggregate value of transaction:</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)</TD>
    <TD align="left">
    Total fee paid:</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT face="wingdings">&#111;</FONT></TD>
    <TD align="left">
    Fee paid previously with preliminary materials:</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT face="wingdings">&#111;</FONT></TD>
    <TD align="left">
    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.</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</TD>
    <TD align="left">
    Amount Previously Paid:</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)</TD>
    <TD align="left">
    Form, Schedule or Registration Statement No.:</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</TD>
    <TD align="left">
    Filing Party:</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)</TD>
    <TD align="left">
    Date Filed:</TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left"></TD>
    <TD align="center"></TD>
    <TD align="right"></TD>
</TR>

</TABLE>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="38%"></TD>
    <TD width="62%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
     <FONT size="5">AVATAR
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="5">HOLDINGS INC.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">201 Alhambra Circle
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Coral Gables, Florida 33134
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(305) 442-7000
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<FONT size="4">NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
</FONT>

<DIV align="center">
<FONT size="4">To Be Held On May&nbsp;25, 2004
</FONT>
</DIV>

<P align="left">
To the Stockholders of Avatar Holdings Inc.:

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&nbsp;25, 2004, at 10:00&nbsp;a.m.
local time, for the following purposes:

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;To elect ten directors.
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>2.&nbsp;</TD>
    <TD align="left">
    To approve the appointment of Ernst &#38; Young LLP, independent
    accountants, to act as auditors for Avatar for the year ending
    December&nbsp;31, 2004.</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>3.&nbsp;</TD>
    <TD align="left">
    To transact such other business as properly may come before the
    meeting, or any adjournment or adjournments thereof.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors has fixed the close of business on
April&nbsp;2, 2004 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.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Please mark your proxy if you wish to attend the Annual Meeting
in order that adequate preparations may be made. A meeting
attendance card will be mailed promptly to you to facilitate
your attendance.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING,
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE <BR>
 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.
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="38%"></TD>
    <TD width="62%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    By Order of the Board of Directors,</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Juanita I. Kerrigan</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Vice President and Secretary
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
Dated: April&nbsp;23, 2004.

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<FONT size="2">AVATAR&nbsp;HOLDINGS&nbsp;INC.,&nbsp;201&nbsp;ALHAMBRA&nbsp;CIRCLE,&nbsp;CORAL&nbsp;GABLES,&nbsp;FLORIDA&nbsp;33134&nbsp;(305)&nbsp;442-7000
</FONT>

<P align="center">
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

<DIV align="center">
To Be Held On May&nbsp;25, 2004
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This Proxy Statement and the enclosed form of proxy are
furnished to the stockholders of Avatar Holdings Inc., a
Delaware corporation (&#147;Avatar&#148;), 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.

<P align="center">
VOTING RIGHTS AND PROXY INFORMATION

<P align="left">
Record Date; Voting Rights

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the By-Laws of Avatar, the Board of Directors has
fixed the close of business on April&nbsp;2, 2004 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.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the close of business on April&nbsp;2, 2004, 8,251,386 shares
of Common Stock, $1.00 par value, of Avatar (&#147;Common
Stock&#148;), 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 April&nbsp;2, 2004, 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
&#147;Election of Directors.&#148; In accordance with
Avatar&#146;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.

<P align="left">
Proxies

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, such
shares will be voted: (1)&nbsp;FOR the election as directors of
Avatar the ten nominees named therein; (2)&nbsp;FOR approval of
the appointment of Ernst &#38; Young LLP, independent
accountants, as auditors of Avatar for the year ending
December&nbsp;31, 2004; and (3)&nbsp;in connection with the
transaction of such other business as properly may come before
the meeting in accordance with the judgment of the person or
persons voting the proxy. 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.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&#146;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 withheld authority
to vote for such nominee(s) (including broker non-votes) will
not be counted toward such nominee&#146;s achievement of a
plurality.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The affirmative vote of a majority of the shares of Common Stock
present in person or by proxy and entitled to notice of, and to
vote at, the Annual Meeting is necessary to ratify the
appointment of Ernst &#38; Young LLP as auditors for the year
ending December&nbsp;31, 2004. Abstentions will have the same
effect as votes against such proposals because the shares are
considered present at the meeting but are not affirmative votes,
and broker non-votes will not be counted in respect of the
proposal.

<P align="right">1

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This proxy statement and the form of proxy enclosed herewith,
and the accompanying Annual Report of Avatar for the fiscal year
ended December&nbsp;31, 2003, including financial statements,
were first mailed to stockholders of record as of the close of
business on April&nbsp;2, on or about April&nbsp;23, 2004.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you plan to attend the meeting, please mark the box provided
on your proxy card so that we may send you an attendance card.
Stockholders who have beneficial ownership of Common Stock that
is held by a bank or broker should bring account statements or
letters from their banks or brokers indicating that they owned
Avatar Common Stock as of April&nbsp;2, 2004. Stockholders also
may obtain an attendance card by submitting a written request to
the Secretary of Avatar.

<P align="center">
PRINCIPAL STOCKHOLDERS AND SECURITY

<DIV align="center">
OWNERSHIP OF MANAGEMENT
</DIV>

<P align="left">
Principal Stockholders

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth, as of April&nbsp;2, 2004,
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.

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Amount and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Nature of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Beneficial</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Percent of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="2">Name of Beneficial Owner</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="2">Address&nbsp;of&nbsp;Beneficial&nbsp;Owner</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Ownership</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Class</FONT></B></TD>
</TR>

<TR>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ODAV LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">280 Park Ave.<BR>
    New York, NY 10017
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,107,763</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="2">(1)(2)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">25.54</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="11"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Private Capital<BR>
    Management, L.P.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">8889 Pelican Bay Blvd. #500<BR>
    Naples, FL 34108
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,501,243</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="2">(3)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">18.19</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="11"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sterling Capital<BR>
    Management LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Two Morrocroft Centre<BR>
    4064 Colony Road, Suite 300<BR>
    Charlotte, NC 28211
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">694,885</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="2">(4)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8.42</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="11"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">The Estate of Leon Levy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">280 Park Ave.<BR>
    New York, NY 10017
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">706,426</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="2">(5)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8.56</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="11"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third Avenue Management LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">767 Third Avenue<BR>
    New York, NY 10017
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">864,915</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="2">(6)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.48</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="11" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(1)&nbsp;Does not include shares owned by Jack
Nash, who is Chairman of the Board and a member of the Executive
Committee of Avatar and is sole member of Jack Nash LLC, a
managing member of ODAV LLC, a Delaware limited liability
company (&#147;Odav&#148;), formed in September 2003 to hold the
Avatar Common Stock owned by Odyssey Partners, L.P. Jack Nash,
the sole member of Jack Nash LLC, has the sole power to vote,
direct the voting of, dispose of and direct the disposition of
the shares of Common Stock beneficially owned by Odav and,
accordingly, may be deemed to own beneficially the Common Stock
owned by Odav. Each of Jack Nash and Joshua Nash, sole member of
Joshua Nash&nbsp;II LLC, a managing member of Odav, 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 member of Odav. 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
Odav. Jack Nash&#146;s ownership of Common Stock is indicated in
the table included in &#147;Security Ownership of
Management.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(2)&nbsp;By virtue of its present Common Stock
ownership, Odav may be deemed to be a &#147;control&#148; person
of Avatar within the meaning of that term as defined in Rule
12b-2 under the Securities Exchange Act of 1934, as amended.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(3)&nbsp;Based upon information set forth in
Amendment No.&nbsp;3 to Schedule&nbsp;13G, dated
February&nbsp;13, 2004, filed by Private Capital Management,
L.P. (&#147;Private Capital&#148;) (a registered investment
adviser), the aggregate amount beneficially owned is 1,501,243
shares, of which 1,497,243 shares are held for the benefit of
various clients; the CEO and the President of Private Capital
share voting and dispositive power with respect to shares
managed by Private Capital; and beneficial ownership of such
shares is disclaimed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(4)&nbsp;Does not include shares owned by Eduardo
A. Brea, who is a Director of Avatar and is a Partner and
Managing Director of Sterling Capital Management LLC
(&#147;Sterling Capital&#148;). Mr.&nbsp;Brea&#146;s ownership
is indicated in the table included in &#147;Security Ownership
of Management.&#148; The information as to shares of Common
Stock was furnished to Avatar by Sterling Capital (a registered
investment adviser), which disclaims beneficial ownership of
such shares. Based upon information set forth in Amendment
No.&nbsp;4 to Schedule&nbsp;13G, filed on January&nbsp;9, 2004,
by Sterling Capital, its managing member, Sterling MGT,
</FONT>

<P align="left">2
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">Inc., and its five individual controlling
shareholders, such shares are held for the benefit of various
clients; and Sterling Capital shares voting and dispositive
power with its managing member and controlling shareholders.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(5)&nbsp;Information as to shares beneficially
owned is based upon Amendment No.&nbsp;1 to Schedule&nbsp;13G,
dated February&nbsp;3, 2004, filed by The Estate of Leon Levy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(6)&nbsp;Based upon information set forth in
Amendment No.&nbsp;3 to Schedule&nbsp;13G, dated January&nbsp;9,
2004, Third Avenue Management LLC (&#147;TAM&#148;) (a
registered investment adviser) is deemed to beneficially own
864,915 shares on behalf of investment advisory clients. TAM has
sole voting power with respect to 768,115 shares and sole
dispositive power with respect to 864,915 shares.
</FONT>

<P align="left">
Security Ownership of Management

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth, as of April&nbsp;2, 2004,
information with respect to the outstanding shares of Common
Stock owned beneficially by each present director, nominee for
director, each of the Named Executive Officers identified herein
under the caption &#147;Summary Compensation Table,&#148; and
all present directors and executive officers of Avatar as a
group. Except as otherwise indicated, all shares are owned
directly.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Amount and Nature of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Percent of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="2">Name or Group</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Beneficial&nbsp;Ownership<SUP>(1)(2)</SUP></FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Class<SUP>(2)</SUP></FONT></B></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Eduardo A. Brea
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,257</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(3)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Milton Dresner
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gerald D. Kelfer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Martin Meyerson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,347</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(4)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jack Nash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,108,205</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(5)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.55</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kenneth T. Rosen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Joel M. Simon
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">None</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fred Stanton Smith
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,949</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">William G. Spears
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,498</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(6)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Beth A. Stewart
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jonathan Fels
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,672</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(7)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael Levy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,515</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(8)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dennis J. Getman
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(9)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Charles L. McNairy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">None</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">All directors and executive officers as a group
    (consisting of 14&nbsp;persons of whom 12&nbsp;beneficially own
    shares of Common Stock)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,286,200</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(3)(4)(5)(6)(7)(8)(9)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27.34</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">*&nbsp;Represents less than one percent.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(1)&nbsp;The information as to securities owned
by directors, officers and nominees was furnished to Avatar by
such directors, officers and nominees.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(2)&nbsp;Calculated pursuant to
Rule&nbsp;13d-3(d) of the Exchange Act. Under
Rule&nbsp;13d-3(d), shares not outstanding which are subject to
options, warrants, rights or conversion privileges exercisable
within 60&nbsp;days are deemed outstanding for the purpose of
calculating the number and percentage of shares owned by such
person, but are not deemed outstanding for the purpose of
calculating the percentage owned by each other person listed. As
of April&nbsp;2, 2004, there were 8,251,386 shares of Common
Stock outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(3)&nbsp;Does not include 694,885 shares
beneficially owned by Sterling Capital Management LLC, of which
Mr.&nbsp;Brea is a Partner and Managing Director. See
Note&nbsp;(4) to the preceding table included in &#147;Principal
Stockholders.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(4)&nbsp;Does not include 847 shares owned by Mr.
Meyerson&#146;s wife, as to which shares Mr.&nbsp;Meyerson
disclaims beneficial ownership.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(5)&nbsp;Includes 2,107,763 shares owned by Odav.
Mr. Nash is the sole member of Jack Nash LLC, a managing member
of Odav and therefore may be deemed to own beneficially the
shares of Common Stock owned by Odav. See Notes (1)&nbsp;and
(2)&nbsp;to the preceding table included in &#147;Principal
Stockholders.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(6)&nbsp;Does not include 1,000&nbsp;shares owned
by the Estate of Mr.&nbsp;Spears&#146; deceased wife, as to
which shares Mr.&nbsp;Spears disclaimed beneficial ownership.
Includes 19,898&nbsp;shares held by an individual profit sharing
plan, a charitable remainder trust and a family foundation, over
which shares Mr.&nbsp;Spears has either sole or shared voting
and investment power. Does not include 29,904&nbsp;shares held
by Spears Grisanti &#38; Brown LLC, a registered investment
adviser, of which Mr. Spears is Managing Partner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(7)&nbsp;Includes 50,000 shares issuable upon
exercise of options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(8)&nbsp;Includes 50,000 shares issuable upon
exercise of options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(9)&nbsp;Represents 10,000 shares issuable upon
exercise of options.
</FONT>

<P align="right">3
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
CORPORATE GOVERNANCE AND CODES

<DIV align="center">
OF BUSINESS CONDUCT AND ETHICS
</DIV>

<P align="left">
Corporate Governance Guidelines and Principles

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Avatar&#146;s Board of Directors has adopted Corporate
Governance Guidelines and Principles as a component of the
flexible governance framework within which the Board, assisted
by its committees, directs Avatar&#146;s affairs. The Corporate
Governance Guidelines and Principles, which define the role of
the Board of Directors, is available on Avatar&#146;s website at
www.avatarholdings.com.

<P align="left">
Director Independence

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors has determined that all nominees for
election or reelection meet the independence criteria under the
rules and regulations of the Securities and Exchange Commission
(&#147;SEC&#148;) and of The Nasdaq Stock Market, Inc.
(&#147;Nasdaq&#148;) except for Jack Nash, Chairman of the
Board, and Gerald D. Kelfer, Vice Chairman of the Board,
President, Chief Executive Officer and Chairman of the Executive
Committee. The Board has further determined that current members
of the Audit Committee meet the more stringent independence
requirements of the SEC and Nasdaq for Audit Committee
membership.

<P align="left">
Code of Business Conduct and Ethics

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors has adopted a Code of Business Conduct
and Ethics applicable to all directors, officers and employees
of Avatar and a Supplemental Code of Ethics for the CEO, CFO and
other Senior Financial Officers. These Codes of Business Conduct
and Ethics are available on Avatar&#146;s website at
www.avatarholdings.com.

<P align="left">4

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
1.&nbsp;&nbsp;&nbsp;ELECTION OF DIRECTORS

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Ten 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,
ten 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. 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.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of the nominees were elected at the June&nbsp;11, 2003
Annual Meeting of Stockholders except Joel M. Simon. The Board
of Directors met six times during 2003, including the annual
meeting of directors held immediately following the 2003 Annual
Meeting of Stockholders.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="2">Principal Occupation or</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="2">Name</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="2">Age</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="2">Occupations and Directorships</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Eduardo A. Brea<BR>
     Director since<BR>
    May 2002
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">37
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Partner and Managing Director of Sterling Capital
    Management LLC since 2000; formerly Senior Vice President from
    1995 to 2000; formerly Senior Analyst, Wachovia Investment
    Management, from 1990 to 1995.
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Milton Dresner<BR>
     Director since<BR>
    July 1995
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">78
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Founding Partner, The Highland Companies, since
    1960, a diversified real estate development and management
    organization; Director: BioTime, Inc., New Media Lottery
    Services, Inc.
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Gerald D. Kelfer<BR>
     Director since<BR>
    October 1996
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">58
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice Chairman of the Board of Avatar since
    December 1996, Chief Executive Officer since July&nbsp;31, 1997,
    President since February&nbsp;13, 1997 and Chairman of the
    Executive Committee since May&nbsp;27, 1999; formerly a
    principal in Odyssey Partners, L.P., from July 1994 to February
    1997; and Executive Vice President, Senior General Counsel and
    Director of Olympia&nbsp;&#38; York Companies, from 1985 to 1994.
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Martin Meyerson<BR>
     Director since<BR>
    May 1981
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">81
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">President Emeritus and Professor of Policy and
    Planning, University of Pennsylvania, since February 1981, and
    President thereof from 1970 to 1981; President, FISCIT
    (Switzerland/U.S.); also, Chairman, University of Pennsylvania
    Foundation; Chairman, Marconi International Foundation;
    Director, Panasonic Foundation.
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Jack Nash<BR>
     Director since<BR>
    June 2003
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">75
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chairman of the Board of Avatar since June 2003;
    sole member of Jack Nash, LLC, a managing member of ODAV LLC, a
    private investment limited liability company, since its
    formation in September 2003; General Partner, Odyssey Partners,
    L.P., a private investment partnership, since its formation in
    1982.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="right">5

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="2">Principal Occupation or</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="2">Name</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="2">Age</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="2">Occupations and Directorships</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Kenneth T. Rosen<BR>
     Director since<BR>
    September 1994
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">55
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Professor of Business Administration, since 1979,
    and Chairman of the Fisher Center for Real Estate and Urban
    Economics, since 1981, University of California, Berkeley; also
    Chairman (formerly, President from 1990 to 2002), Rosen
    Consulting Group, a real estate consulting business and Chairman
    (formerly Chief Executive Officer from 1995 to 2002) of Lend
    Lease Rosen Real Estate Securities, a registered investment
    adviser; Director: Golden West Financial Corporation, The PMI
    Group, Inc.
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Joel M. Simon
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">58
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Partner and Principal, Crossroads, LLC, a
    national financial advisory and consulting firm, since July
    2000; formerly Chief Executive Officer and President, Starrett
    Corporation, from March 1998 to December 1998; Executive Vice
    President, Chief Operating Officer and Director, Olympia &#38;
    York Companies (U.S.A.), from 1985 to 1996; Senior Partner,
    Margolin, Winer &#38; Evens, LLP, from 1976 to 1984; Director,
    Movie Star, Inc.
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Fred Stanton Smith<BR>
     Director since<BR>
    September 1980
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">75
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice Chairman of the Board, The Keyes Company, a
    real estate brokerage, financing, management, insurance and
    development firm, since January 1992; formerly President, The
    Keyes Company; Director, Eagle National Bank.
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">William G. Spears<BR>
     Director since<BR>
    May 1999
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">65
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Principal, Spears, Grisanti &#38; Brown LLC, a
    registered investment adviser, since July 1999; formerly
    Chairman of the Board, from 1972 to June 1999, Spears, Benzak,
    Salomon &#38; Farrell, Inc., a registered investment adviser,
    which in April 1995 became a wholly-owned subsidiary of KeyCorp;
    also, Chairman of the Board, Key Asset Management (a subsidiary
    of KeyCorp), a registered investment adviser, from 1996 to 2000;
    Director: United HealthGroup Incorporated, Alcide Corporation.
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Beth A. Stewart<BR>
     Director since<BR>
    May 2001
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">47
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chief Executive Officer since August 2001 and
    Co-Chairman since October 1999, Storetrax.com, a real estate
    internet company; President, Stewart Real Estate Capital,
    L.L.C., a real estate investment and consulting firm, since
    January 1993; Adjunct Professor, Columbia University Graduate
    School of Business, from 1994 to 1996; Director: General Growth
    Properties Inc., Imperial Parking Corporation, CarMax, Inc.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">6

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
INFORMATION REGARDING THE BOARD OF DIRECTORS

<DIV align="center">
AND ITS COMMITTEES
</DIV>

<P align="left">
Certain Committees of the Board

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To assist it in carrying out its duties, the Board of Directors
has established various committees. Current committees and
current members thereof are as follows:

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Nominating and Corporate</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Executive Committee</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Audit Committee</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Governance Committee</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Compensation Committee</FONT></B></TD>
</TR>

<TR>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top"><FONT size="2">Gerald D. Kelfer <SUP>(1)(2)<BR></SUP>Fred Stanton Smith<BR>Jack Nash<SUP>(2)</SUP></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top"><FONT size="2">Kenneth T. Rosen <SUP>(1)<BR></SUP>Eduardo A. Brea<BR>Milton Dresner<BR>Beth A. Stewart</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top"><FONT size="2">Martin Meyerson<SUP>(1)<BR></SUP>Kenneth T. Rosen<BR>William G. Spears</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top"><FONT size="2">William G. Spears<SUP>(1)<BR></SUP>Milton Dresner<BR>Martin Meyerson<BR>Kenneth T. Rosen</FONT></TD>
</TR>

<TR>
    <TD colspan="15" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(1)&nbsp;Chairman
</FONT>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(2)&nbsp;Officer of Avatar
</FONT>
</DIV>

<P align="left">
Executive Committee

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. The Executive Committee did
not meet during the fiscal year ended December&nbsp;31, 2003.

<P align="left">
Audit Committee

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Audit Committee assists the Board of Directors in fulfilling
its responsibility to oversee management regarding: (i)&nbsp;the
conduct and integrity of Avatar&#146;s financial reporting;
(ii)&nbsp;Avatar&#146;s systems of internal accounting and
financial and disclosure controls; (iii)&nbsp;the
qualifications, engagement, compensation, independence and
performance of the independent auditors, their conduct of the
annual audit and their engagement for any other services;
(iv)&nbsp;Avatar&#146;s legal and regulatory compliance;
(v)&nbsp;codes of ethics as established by management and the
Board; and (vi)&nbsp;the preparation of the audit committee
report for inclusion in the annual proxy statement. The Audit
Committee may also perform such other tasks as are assigned to
it from time to time by the Board of Directors. The Audit
Committee has the authority to obtain advice and assistance
from, and receive adequate resources and funding from Avatar
for, outside counsel, independent auditors or other advisors.
The Audit Committee met six times during the fiscal year ended
December&nbsp;31, 2003. The Audit Committee has been governed by
a written charter approved by the Board of Directors. The Board
recently adopted a revised charter to comply with recently
enacted rules and regulations of the SEC and Nasdaq. The charter
is available on Avatar&#146;s website at www.avatarholdings.com
and is included herein as Annex&nbsp;A.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All members of the Audit Committee have been determined to be
independent (see &#147;Director Independence&#148;). The Board
of Directors has determined that all members of the Audit
Committee are financially literate but do not possess sufficient
accounting or related financial management expertise to be
considered financial experts under the applicable rules of the
SEC. Management&#146;s nominee for election to the Board, Joel
M. Simon, possesses accounting and financial expertise; and,
assuming his election, it is the Board&#146;s intent that
Mr.&nbsp;Simon be appointed a member of the Audit Committee and
be designated as the Committee&#146;s financial expert.

<P align="right">7
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee Report</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is the report of Avatar&#146;s Audit Committee
with respect to Avatar&#146;s audited financial statements for
the fiscal year ended December&nbsp;31, 2003:

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee has reviewed and discussed Avatar&#146;s audited
financial statements with management.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee has discussed with Ernst &#38; Young LLP,
Avatar&#146;s independent auditors, the matters required to be
discussed by SAS&nbsp;61 (Communication with Audit Committees),
as amended, regarding the auditors&#146; judgments about the
quality of Avatar&#146;s accounting principles as applied in its
financial reporting.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee has also received written disclosures within the
letter from Ernst &#38; Young required by Independence Standards
Board Standard No.&nbsp;1 (Independence Discussions with Audit
Committees) and has discussed with Ernst &#38; Young their
independence.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the review and discussions referred to above, the
Committee recommended to Avatar&#146;s Board of Directors that
its audited financial statements be included in Avatar&#146;s
Annual Report on Form&nbsp;10-K for the fiscal year ended
December&nbsp;31, 2003 for filing with the Securities and
Exchange Commission.

<P align="left">
March&nbsp;4, 2004

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="38%"></TD>
    <TD width="62%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    AUDIT COMMITTEE</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Kenneth T. Rosen, Chairman</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Eduardo A. Brea</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Milton Dresner</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Beth A. Stewart</TD>
</TR>

</TABLE>

<P align="left">
Nominating and Corporate Governance Committee

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Nominating and Corporate Governance Committee assists the
Board of Directors in: (i)&nbsp;identifying, screening and
reviewing individuals to serve as directors and recommending
candidates for nomination for election at the annual meeting of
stockholders or to fill Board vacancies; (ii)&nbsp;overseeing
Avatar&#146;s policies and procedures for receipt of stockholder
suggestions regarding composition of the Board and
recommendations of candidates for nomination;
(iii)&nbsp;overseeing implementation of Avatar&#146;s Corporate
Governance Guidelines and Principles; and (iv)&nbsp;reviewing
Avatar&#146;s overall corporate governance and recommending
changes when necessary or desirable. The Committee may also
perform such additional tasks as assigned to it by the Board of
Directors. The Committee has the authority to obtain advice and
assistance from, and receive adequate resources and funding from
Avatar for, outside counsel, consultants and other advisors. The
Committee met twice during the fiscal year ended
December&nbsp;31, 2003.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All members of the Committee have been determined to be
independent (see &#147;Director Independence&#148;). The
Committee is governed by a written charter approved by the Board
of Directors. The charter is available on Avatar&#146;s website
at www.avatarholdings.com.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Nominating and Corporate Governance Committee assesses the
appropriate size of the board, evaluates the membership and
determines whether any vacancies are anticipated. The Committee
considers candidates for Board membership based upon various
criteria, including their business and professional skills and
experience, personal integrity and judgment, commitment to
representing the long-term interests of stockholders and
availability to participate in Board activities. The Committee
will consider candidates suggested by its members, other Board
members, management and stockholders, and may, if necessary or
appropriate, utilize the services of a professional search firm.
In order to be considered, a recommendation from a stockholder
must

<P align="left">8

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
include the stockholder&#146;s name and contact information, the
candidate&#146;s name and contact information, a brief
description of the candidate&#146;s background and
qualifications and a statement by the candidate that he or she
is willing and able to serve on the Board. The Committee may
also require candidates to provide such other information as it
may request.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Avatar&#146;s By-Laws establish advance notice procedures with
respect to nominations for election for an annual meeting (see
&#147;Stockholders&#146; Proposals and Nominations of Board
Members&#148;).

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Joel M. Simon, a nominee for election at the 2004 Annual Meeting
of Stockholders, was recommended by Avatar&#146;s Chief
Executive Officer.

<P align="left">
Compensation Committee

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Compensation Committee assists the Board of Directors in
overseeing management compensation policies and practices,
including (i)&nbsp;determination and approval of the
compensation of the Chief Executive Officer; (ii)&nbsp;review
and approval of compensation levels for Avatar&#146;s other
executive officers; (iii)&nbsp;review and approval of management
incentive compensation policies and programs; (iv)&nbsp;review
and approval of equity compensation programs for employees and
the exercise of discretion in the administration of such
programs; and (v)&nbsp;preparation of an annual report on
executive compensation for inclusion in the proxy statement. The
Compensation Committee may perform such other tasks as assigned
to it by the Board of Directors. The Compensation Committee has
the authority to obtain advice and assistance from, and receive
adequate resources and funding from Avatar for, outside counsel,
compensation consultants and other advisors. The Compensation
Committee met eight times during the fiscal year ended
December&nbsp;31, 2003.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Compensation Committee is governed by a written charter
approved by the Board of Directors. The charter is available on
Avatar&#146;s website at www.avatarholdings.com.

<P align="left">
Directors&#146; Compensation

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Compensation of directors who are not salaried employees of
Avatar is $32,500 per annum. A member of the Executive Committee
who is not a salaried employee of Avatar receives a retainer of
$2,000 per annum. 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
Nominating and Corporate Governance Committee receive additional
compensation of $4,000 and $7,000 per annum, respectively.
Members and the Chairman of the Compensation Committee receive
additional compensation of $4,000 and $5,000 per annum,
respectively.

<P align="left">
Directors&#146; Attendance

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In fiscal year 2003 all of the incumbent directors attended 75%
or more of the aggregate of their respective Board and Committee
meetings, except Jack Nash whose absences were attributable to
illness.

<P align="left">
Directors&#146; Attendance at Annual Meetings of Stockholders

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board encourages each member of the Board to attend each
annual meeting of stockholders, but recognizes that unavoidable
circumstances may prevent attendance. All members of the Board
who were standing for election or reelection attended the 2003
Annual Meeting of Stockholders.

<P align="left">
Communication with the Board of Directors

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A stockholder who wishes to communicate with the Board, or
specific individual directors, may direct written communication
addressed to the Board or such director or directors in care of
the Corporate Secretary, Avatar Holdings Inc., 201 Alhambra
Circle, Coral Gables, Florida 33134.

<P align="right">9

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
EXECUTIVE COMPENSATION AND OTHER INFORMATION

<P align="left">
Summary Compensation Table

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth information with respect to
compensation of the Chief Executive Officer and the four other
highest paid executive officers of Avatar whose total salary and
accrued bonus was $100,000 or more for the year ended
December&nbsp;31, 2003, hereinafter referred to as the
&#147;Named Executive Officers&#148;.

<TABLE width="80%" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other<SUP>(1)</SUP></FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Annual</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Name and Principal Position(s)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Salary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
</TR>

<TR>
    <TD colspan="18"></TD>
</TR>

<TR>
    <TD colspan="18" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Gerald D. Kelfer<SUP>(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2003</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">500,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">500,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Chairman of the
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2002</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">500,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">500,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">Executive Committee,
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2001</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">500,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">500,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">Chief Executive Officer and President
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="18" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Jonathan Fels<SUP>(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2003</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">500,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">250,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">President, Avatar
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2002</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">400,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">250,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Properties Inc.
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2001</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">400,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">150,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="18" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Michael Levy<SUP>(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2003</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">500,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">250,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Executive Vice
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2002</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">400,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">250,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">President and
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2001</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">400,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">150,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">Chief Operating Officer, Avatar Properties Inc.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="18" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Dennis J. Getman<SUP>(2)(6)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2003</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">350,000</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">76,021</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(2)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Executive Vice
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2002</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">250,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">217,368</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">President and
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2001</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">250,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">105,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">General Counsel
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="18" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Charles L. McNairy
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2003</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">225,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">25,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Executive Vice
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2002</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">225,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">5,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">President,
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2001</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">225,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">5,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">Treasurer and Chief Financial Officer
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="18" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>

<P align="right">[Additional columns below]

<P>[Continued from above table, first column(s) repeated]

<TABLE width="90%" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="28%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Long-Term Compensation Awards</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Restricted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">LTIP</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Payouts</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">All Other</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Name and Principal Position(s)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Awards($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options(#)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">($)<SUP>(5)</SUP></FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation<SUP>(7)</SUP></FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Gerald D. Kelfer<SUP>(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">3,162,500</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(3)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">1,412,651</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">3,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Chairman of the
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">Executive Committee,
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">Chief Executive Officer and President
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="15" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Jonathan Fels<SUP>(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">632,500</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(4)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">60,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">1,059,488</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">3,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">President, Avatar
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Properties Inc.
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2,550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="15" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Michael Levy<SUP>(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">632,500</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(4)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">60,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">1,059,488</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">3,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Executive Vice
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">President and
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2,550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">Chief Operating Officer, Avatar Properties Inc.
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="15" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Dennis J. Getman<SUP>(2)(6)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">500,004</FONT></TD>
    <TD align="left" valign="top" nowrap><SUP><FONT size="1">(4)</FONT></SUP></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">3,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Executive Vice
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">President and
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2,550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">General Counsel
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="15" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Charles L. McNairy
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">3,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Executive Vice
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">President,
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="1">2,550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">Treasurer and Chief Financial Officer
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="15" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Named Executive Officers 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.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For discussion of Avatar&#146;s employment
    agreements with Messrs.&nbsp;Kelfer, Fels, Levy and Getman, see
    &#147;Employment and Other Agreements.&#148; Also see
    &#147;Long-Term Incentive Plans&nbsp;&#151; Awards in Last
    Fiscal Year&#148; for a summary of the earnings participation
    awards granted in 2003.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">On March&nbsp;27, 2003, fully vested options
    previously granted to Mr.&nbsp;Kelfer were cancelled, and he was
    granted an opportunity to receive an aggregate of 75,000
    performance conditioned restricted stock units. Also on
    March&nbsp;27, 2003, Mr.&nbsp;Kelfer was granted an opportunity
    to receive an additional 50,000 performance conditioned
    restricted stock units. See &#147;Employment and Other
    Agreements&#148; below. The dollar amount reported in the table
    has been calculated by multiplying the closing price of Avatar
    Common Stock on the date of the awards by 125,000.
    Mr.&nbsp;Kelfer is not entitled to receive dividends on the
    units.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The dollar amounts reported in the table were
    calculated by multiplying the respective closing price of Avatar
    common stock on the respective dates of the awards by 25,000 for
    each of Mr.&nbsp;Fels and Mr.&nbsp;Levy and by 15,504 for
    Mr.&nbsp;Getman. Messrs. Fels, Levy and Getman are not entitled
    to receive dividends on the units.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes $1,032,239, $774,179 and $774,179 paid
    for the second and third quarters of 2003 and $380,412, $285,309
    and $285,309 accrued for the fourth quarter of 2003 to
    Mr.&nbsp;Kelfer, Mr.&nbsp;Fels and Mr.&nbsp;Levy, respectively,
    under Cash Bonus Award Agreements entered into on
    October&nbsp;20, 2000. See &#147;Employment and Other
    Agreements&#148; below.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For additional information regarding
    Mr.&nbsp;Getman see &#147;Certain Relationships and Related
    Transactions.&#148;
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Reflects Avatar&#146;s contribution to the 401(k)
    Plan. Avatar did not have a matching contribution in effect for
    the year ended December&nbsp;31, 2002.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">10
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
Option/SAR Grants in 2003

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows all grants of options to the Named
Executive Officers in 2003. No SARs were granted to any Named
Executive Officers during 2003.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="2">Individual Grants<SUP>(1)</SUP></FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Percent of Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Options/SARs</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Underlying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Granted to</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Grant Date</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Options/SARs</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Employees in</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Expiration</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Present</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="2">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Granted(#)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Price($/Sh)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Date</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Value<SUP>(2)(3)</SUP></FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gerald D, Kelfer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jonathan Fels
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3/13/13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">699,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael Levy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3/13/13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">699,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dennis J. Getman
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Charles L. McNairy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="21" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="3%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For discussion of terms of options granted, see
    &#147;Employment and Other Agreements&#148; below.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Present value on the grant date was determined by
    using the Black-Scholes option pricing model. The model assumed
    (i)&nbsp;a risk-free rate of return of 3.73%, which was the
    implied rate on 10-year U.S. Treasury bonds on the grant date;
    (ii)&nbsp;a stock price volatility of 28.8% and (iii)&nbsp;the
    exercise of all options on the final day of their 10-year terms.
    No discount from the theoretical value was taken to reflect the
    waiting period prior to vesting, the limited transferability of
    the options, and the likelihood of the options being exercised
    in advance of the final day of their terms.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">There is no assurance that the values actually
    realized upon the exercise of these options will be at or near
    the present value shown in the table as of the date of grant.
    The Black-Scholes option pricing model is a widely used
    mathematical formula for estimating option values that
    incorporates various assumptions that may not hold true over the
    10-year life of these options. For example, assumptions are
    required about the risk-free rate of return as well as about the
    dividend yield of Common Stock and the volatility of the Common
    Stock over the 10-year period. Also, the Black-Scholes model
    assumes that an option holder can sell the option at any time at
    a fair price that includes a premium for the remaining time
    value of the option. However, an optionee can realize an
    option&#146;s value before maturity only by exercising and
    thereby sacrificing the option&#146;s remaining time value.
    Although the negative impact of this and other restrictions on
    the value of this type of option is well recognized, there is no
    accepted method for adjusting the theoretical option value for
    them. The values set forth in the table should not be viewed in
    any way as a forecast of the performance of Avatar&#146;s Common
    Stock, which will be influenced by future events and unknown
    factors.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
Aggregated Option Exercises in 2003 and Option Values at
December 31, 2003

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2003, no options were exercised by any Named Executive
Officer. Options held by Named Executive Officers were
in-the-money at December&nbsp;31, 2003.

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="2">Number of Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="2">Underlying Unexercised</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="2">Value of Unexercised In-the-Money</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="2">Options at</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="2">Options at December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="2">December 31, 2003(#)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="2">2003($)<SUP>(1)</SUP></FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="2">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Exercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Unexercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Exercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Unexercisable</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gerald D. Kelfer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jonathan Fels
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">596,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">715,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael Levy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">596,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">715,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dennis J. Getman
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Charles L. McNairy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="17" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="3%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents the difference between the $36.93
    closing price of Avatar Common Stock on December&nbsp;31, 2003
    and the exercise price of the options.
    </FONT></TD>
</TR>

</TABLE>

<P align="right">11
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
Long-Term Incentive Plans <SUP>(1)</SUP>&nbsp;&#151; Awards in
Last Fiscal Year

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="2">Estimated Future</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="2">Estimated Future Payout</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Performance or</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="2">Payment in Cash</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="2">in Shares of Common Stock</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Other Period Until</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="2">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Maturation or Payment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Threshold</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Target</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Maximum</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Threshold</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Target</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Maximum</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gerald D. Kelfer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/1/03&nbsp;&#151;&nbsp;12/31/07</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(2)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(1)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(3)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,500,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(4)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(1)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(5)(6)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jonathan Fels
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/1/03&nbsp;&#151;&nbsp;12/31/07</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(2)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(1)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(3)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,275,400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(4)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(1)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(5)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="29"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michael Levy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1/1/03&nbsp;&#151;&nbsp;12/31/07</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(2)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(1)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(3)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,275,400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(4)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(1)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(5)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="29"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dennis J. Getman
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="29"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Charles L. McNairy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="29" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For a description of the terms of the earnings
    participation award agreements with Messrs.&nbsp;Kelfer, Fels
    and Levy, see &#147;Employment and Other Agreements&nbsp;&#151;
    Agreements with Gerald Kelfer&nbsp;&#151; Earnings Participation
    Award Agreement&#148; and &#147;&#151;&nbsp;Agreements with
    Jonathan Fels and Michael Levy&nbsp;&#151; Earnings
    Participation Award Agreements.&#148;
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The performance period commenced as of
    January&nbsp;1, 2003. However, gross profit for the 2003 fiscal
    year did not exceed the minimum gross profit level and no Awards
    were earned for 2003. Based on the business plan at the time the
    Awards were granted, it is anticipated Awards will be earned for
    the 2004 fiscal year.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Target amounts are based on the business plan at
    the time the Awards were granted.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The maximum aggregate amount payable for all
    awards granted under the Executive Compensation Plan to any
    individual is $5,000,000. Cash awards under the cash bonus award
    agreements related to the Harbor Islands Project in the
    respective aggregate amounts of $1,412,651, $1,059,488 and
    $1,059,488 have been paid or accrued to Mr.&nbsp;Kelfer,
    Mr.&nbsp;Fels and Mr.&nbsp;Levy; future payments are estimated
    to approximate $1,087,349 to Mr.&nbsp;Kelfer, who has waived the
    right to receive cash payments in excess of $2,500,000 under the
    cash bonus award agreement, and $1,591,994 to each of
    Mr.&nbsp;Fels and Mr.&nbsp;Levy. Assuming payments at the
    estimated amounts, Mr.&nbsp;Kelfer would be limited to maximum
    aggregate payments under the earnings participation award
    agreement of $2,500,000.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The number of shares of Common Stock which may
    become issuable to each of Mr.&nbsp;Kelfer, Mr.&nbsp;Fels and
    Mr.&nbsp;Levy are presently not determinable, as such Awards are
    dependent upon Avatar&#146;s achievement of actual gross profit
    from January&nbsp;1, 2003 through December&nbsp;31, 2007 in
    excess of the target gross profit at the time the Awards were
    granted. (See footnote (1)&nbsp;above.)
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Under the Incentive Plan, Mr.&nbsp;Kelfer has
    been granted opportunities to receive an aggregate of 275,000
    performance-conditioned restricted stock units and options to
    purchase 225,000 shares of Avatar Common Stock, which options
    were cancelled as of March&nbsp;27, 2003 (see &#147;Employment
    and Other Agreements -Agreements with Gerald Kelfer&#148;).
    Although the options have been cancelled, under the provisions
    of the Incentive Plan, the number of options granted are counted
    for purposes of determining the aggregate number of shares
    granted to an individual. Under the Incentive Plan, the
    aggregate number of shares that may be granted to any one
    individual is 500,000. Mr.&nbsp;Kelfer would not be entitled to
    receive any shares of Common Stock pursuant to the earnings
    participation award unless the Incentive Plan is amended with
    stockholder approval to increase the individual limit.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
Equity Compensation Plan Information

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes information about the options,
warrants and rights and other equity compensation under
Avatar&#146;s equity plans as of December&nbsp;31, 2003.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Number of securities to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Number of securities remaining</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">be issued upon</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Weighted-average exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">available for future issuance</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">price of outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">under equity compensation</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">of outstanding options,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">options, warrants and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">plans (excluding securities</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">warrants and rights</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">rights</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">reflected in column (a))</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="2">Plan Category</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">(a)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">(b)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">(c)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity compensation plans approved by security
    holders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640,498</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(1)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(2)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity compensation plans not approved by
    security holders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">none</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">none</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">640,498</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(1)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><SUP><FONT size="2">(2)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="14" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="3%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes 340,504 performance conditioned
    restricted stock units, the actual grant of which is conditioned
    on certain criteria but which are not subject to payment of an
    exercise price.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Excludes above-referenced restricted stock units.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">12

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
Employment and Other Agreements

<P align="left">
<I>Agreements with Gerald Kelfer</I>

<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Employment</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of March&nbsp;27, 2003, Avatar entered into an amended and
restated employment agreement with Mr.&nbsp;Kelfer, President,
Chief Executive Officer, Chairman of the Executive Committee and
Vice Chairman of the Board, which expires on December&nbsp;31,
2008. Pursuant to the agreement, Mr.&nbsp;Kelfer continues to
receive an annual base salary of $500,000 and an annual bonus of
$500,000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Mr.&nbsp;Kelfer resigns for good reason or is terminated
without cause, he is entitled to receive his base annual salary
and annual bonus through December&nbsp;31, 2008, subject to
certain mitigation provisions. If Mr.&nbsp;Kelfer&#146;s
employment terminates on December&nbsp;31, 2008 or prior thereto
he is terminated without cause or resigns for good reason, he
will be entitled to annual payments of $250,000 for four years.
If his employment is terminated due to his death or permanent
disability or he terminates his employment as a result of a
change of control (as defined in the employment agreement),
Mr.&nbsp;Kelfer or his estate shall be entitled to receive an
annual payment for four years equal to the amount derived by
multiplying $250,000 by a fraction, the numerator of which is
the number of completed whole months of employment from
November&nbsp;30, 2000 and the denominator of which is 97 (the
number of whole months until December&nbsp;31, 2008). If
Mr.&nbsp;Kelfer resigns without good reason or is terminated for
cause, he is entitled to receive his base salary and prorated
bonus through the date of termination.

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash Bonus Award Agreement</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On October&nbsp;20, 2000, Avatar entered into a cash bonus award
agreement with Mr.&nbsp;Kelfer pursuant to which Mr.&nbsp;Kelfer
was granted an award relating to parcels 1, 8, 9 of
Avatar&#146;s Harbor Islands community development project (the
&#147;Harbor Islands Project&#148;). The award entitles
Mr.&nbsp;Kelfer to receive quarterly cash bonus payments equal
to 8% of the cash flow of the Harbor Islands Project. In
determining &#147;cash flow&#148;, there is a deduction for a
cost of capital that Avatar would charge to the project to the
extent the project is funded by Avatar, such charge to be not
less than 10% per annum. Prior to the payment of any bonus,
Avatar must first receive cumulative cash flow equal to $17
million (the approximate value of the land that Avatar has
contributed to the project), plus a 10% return thereon
compounded monthly (the &#147;Minimum Return&#148;).
Mr.&nbsp;Kelfer has waived the right to receive cash payments in
excess of $2,500,000 under the award.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The award also provides for repayment to Avatar by
Mr.&nbsp;Kelfer at the end of the project, on an after-tax
basis, of any excess payment, plus interest, should the
Compensation Committee determine that the aggregate amount of
bonus payments exceeds the aggregate amount that would have been
paid if the bonus payment had been made at the end of the
project.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Mr.&nbsp;Kelfer&#146;s employment is terminated for cause or
he resigns for other than good reason prior to December&nbsp;31,
2005, rights to future bonus payments after the date of
termination are forfeited. If Mr.&nbsp;Kelfer&#146;s employment
is terminated other than for cause or he resigns for good
reason, he will continue to receive future bonus payments. If
Mr.&nbsp;Kelfer&#146;s termination is due to his permanent
disability or death, Mr.&nbsp;Kelfer or his estate would
continue to receive prorated bonus payments based upon the
number of months actually employed.

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings Participation Award
Agreement</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of March&nbsp;27, 2003, Avatar entered into an earnings
participation award agreement with Mr.&nbsp;Kelfer, pursuant to
which he was granted a cash award and a stock award relating to
achievement of performance goals. The cash award entitles
Mr.&nbsp;Kelfer to a cash payment with respect to each fiscal
year beginning 2003 and ending 2007 equal to two and one-half
per cent of

<P align="right">13

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
Avatar&#146;s gross profit (as defined) over pre-established
levels as determined by the Compensation Committee. Under the
provisions of the Executive Incentive Compensation Plan, total
awards are limited to a maximum of $5,000,000 per individual.
Therefore, Mr.&nbsp;Kelfer may receive a maximum aggregate
amount of $5,000,000 under the cash bonus award relating to the
Harbor Islands Project and the earnings participation award
agreement.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The stock award entitles Mr.&nbsp;Kelfer to receive a number of
shares of Avatar Common Stock having a fair market value (as
defined) equal to two and one-half per cent of the excess of
actual gross profit (as defined) from January&nbsp;1, 2003
through December&nbsp;31, 2007 over the established target gross
profit of approximately $187,000,000. Under the provisions of
the Amended and Restated 1997 Incentive and Capital Accumulation
Plan as amended (the &#147;Incentive Plan&#148;), the total
aggregate number of shares that may be granted to any one
individual is 500,000. Mr.&nbsp;Kelfer would not be eligible to
receive any shares of Common Stock pursuant to the earnings
participation award unless the Incentive Plan is amended with
stockholder approval to increase the individual limit.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Mr.&nbsp;Kelfer&#146;s employment is terminated for cause or
upon resignation for other than good reason, rights to future
cash payments or Common Stock issuances after the date of
termination are forfeited. If Mr.&nbsp;Kelfer&#146;s employment
is terminated other than for cause or upon resignation for good
reason, he will continue to receive future cash payments and
Common Stock issuances. If his termination is due to his
permanent disability or death, he or his estate would receive a
prorated cash payment for the fiscal year in which his
employment was terminated and prorated Common Stock issuances
based upon the number of months actually employed during the
performance period. Upon the occurrence of a change in control
(as defined), Mr.&nbsp;Kelfer would receive a prorated cash
payment for the fiscal year in which the change in control
occurs and future cash awards and stock awards would be
cancelled.

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted Stock Unit
Agreements</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As more fully described below, Mr. Kelfer has been awarded over
time the opportunity to receive a total of 275,000 performance
conditioned restricted stock units, consisting of 100,000 units
granted on December&nbsp;7, 1998, 50,000 units granted on
October 20, 2000 and an aggregate of 125,000 units granted on
March&nbsp;27, 2003. Since being awarded, the performance
conditions for 223,700 of the units have been met, and such
units have been granted to Mr. Kelfer. The units granted to Mr.
Kelfer will vest on December 31, 2005 with respect to 150,000
units and on December&nbsp;31, 2008 with respect to the
remaining units, or upon the occurrence of a change of control
of Avatar, provided that, in each case, Mr. Kelfer is then
employed by Avatar.

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hurdle Price Restricted Stock
Units</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of March&nbsp;27, 2003, Mr.&nbsp;Kelfer&#146;s nonqualified
stock options to purchase 225,000 shares of Avatar Common Stock
were cancelled and Mr.&nbsp;Kelfer was granted performance
conditioned restricted stock units (&#147;Hurdle Price
Restricted Stock Units&#148;). As of March&nbsp;27, 2003, Avatar
entered into four restricted stock unit agreements with
Mr.&nbsp;Kelfer pursuant to which he has been awarded under the
Incentive Plan the opportunity to receive performance
conditioned restricted stock units conditioned upon (i)&nbsp;the
closing price of Avatar Common Stock being at least equal to a
specified hurdle price for 20 trading days out of 30 consecutive
trading days during the period beginning March&nbsp;27, 2003 and
ending December&nbsp;31, 2008 and (ii)&nbsp;the continued
employment of Mr. Kelfer at the time the foregoing condition is
satisfied.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At such time as the closing price of Avatar Common Stock is at
least $38.00 for 20 trading days out of 30 consecutive trading
days, Mr.&nbsp;Kelfer will be granted 23,700 restricted stock
units; at least $42.00 for 20 trading days out of 30 consecutive
trading days, Mr.&nbsp;Kelfer will be granted an additional
20,000 restricted stock units; at least $46.00 for 20 trading
days out of 30 consecutive trading days, Mr.&nbsp;Kelfer will be
granted an additional 15,000 restricted stock units; and at least

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<DIV align="left">
$50.00 for 20 trading days out of 30 consecutive trading days,
Mr.&nbsp;Kelfer will be granted an additional 16,300 restricted
stock units.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Mr.&nbsp;Kelfer&#146;s employment is terminated due to his
disability or death after a hurdle price condition is met,
Mr.&nbsp;Kelfer will receive the greater of a pro rata portion
based on the number of whole months which have elapsed from
January&nbsp;1, 2003 to the date of Mr.&nbsp;Kelfer&#146;s
disability or death or one-half of the units. If Mr.&nbsp;Kelfer
resigns without good reason or is terminated for cause, all of
the units will be forfeited. Otherwise, the units granted to him
immediately vest in full upon termination of
Mr.&nbsp;Kelfer&#146;s employment.

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amended and Restated Restricted
Stock Units</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;7, 1998, Avatar entered into a restricted stock
unit agreement with Mr.&nbsp;Kelfer, which was amended and
restated as of October&nbsp;20, 2000 and further amended on
March&nbsp;27, 2003. Under the restricted stock unit agreement
as amended, Mr.&nbsp;Kelfer was awarded under the Incentive Plan
an opportunity to receive 100,000 performance conditioned
restricted stock units representing 100,000 shares of Avatar
Common Stock. The actual grant of the units was conditioned upon
(i)&nbsp;the closing price of Avatar Common Stock being at least
$25.00 per share for 20 trading days out of 30 consecutive
trading days during the period beginning October&nbsp;21, 2000
and ending December&nbsp;31, 2005, and (ii)&nbsp;the continued
employment of Mr.&nbsp;Kelfer at the time the foregoing
condition is satisfied. If Mr.&nbsp;Kelfer&#146;s employment is
terminated due to his disability or death, the units will vest
in full. If Mr.&nbsp;Kelfer resigns without good reason or is
terminated for cause, all of the units will be forfeited.

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted Stock Units</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On October 20, 2000, Avatar entered into a restricted stock unit
agreement with Mr.&nbsp;Kelfer on terms similar to the
restricted stock unit agreement described above, pursuant to
which Mr.&nbsp;Kelfer was awarded an opportunity to receive
50,000 additional performance conditioned restricted stock units
representing 50,000 shares of Avatar Common Stock. If
Mr.&nbsp;Kelfer&#146;s employment is terminated due to his
disability or death, the units granted to him will vest pro rata
based on the number of whole months which have elapsed from
October&nbsp;20, 2000 to the date of Mr.&nbsp;Kelfer&#146;s
disability or death. If Mr.&nbsp;Kelfer resigns without good
reason or is terminated for cause, all of the units will be
forfeited.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of March&nbsp;27, 2003, Avatar entered into a restricted
stock unit agreement with Mr.&nbsp;Kelfer pursuant to which
Mr.&nbsp;Kelfer was awarded an opportunity to receive 50,000
performance conditioned restricted stock units representing
50,000 shares of Avatar Common Stock. The actual grant of the
units is conditioned upon (i)&nbsp;the closing price of Avatar
Common Stock being at least $34.00 per share for 20 trading days
out of 30 consecutive trading days during the period beginning
March&nbsp;27, 2003 and ending December&nbsp;31, 2008, and
(ii)&nbsp;the continued employment of Mr.&nbsp;Kelfer at the
time the foregoing condition is satisfied.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Mr.&nbsp;Kelfer&#146;s employment is terminated due to his
disability or death, Mr.&nbsp;Kelfer will receive the greater of
a pro rata portion of the 50,000 units based on the number of
whole months which have elapsed from January&nbsp;1, 2003 to the
date of Mr.&nbsp;Kelfer&#146;s disability or death or 25,000
units. If Mr.&nbsp;Kelfer resigns without good reason or is
terminated for cause, all of the units will be forfeited.
Otherwise, the units granted to him immediately vest in full
upon termination of Mr.&nbsp;Kelfer&#146;s employment.

<P align="left">
<I>Agreements with Jonathan Fels and Michael Levy</I>

<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Employment</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2003, Avatar entered into amended and
restated employment agreements with Jonathan Fels, as President
of Avatar Properties Inc. (&#147;Properties&#148;), and Michael
Levy, as

<P align="right">15

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<DIV align="left">
Executive Vice President and Chief Operating Officer of
Properties, pursuant to which their respective terms of
employment have been extended to December&nbsp;31, 2007. Each of
Mr.&nbsp;Fels and Mr.&nbsp;Levy receive an annual base salary of
$500,000, subject to review and increase by the Board, and a
calendar year annual cash bonus of $250,000.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the employment of Mr.&nbsp;Fels or Mr.&nbsp;Levy, as the case
may be, is terminated due to disability, death or resignation
without good reason or terminated by Avatar for cause, then he
or his estate (in the event of his death) will receive his
accrued but unpaid base salary through the date of termination.
In the event of termination due to death or disability,
Mr.&nbsp;Fels or Mr.&nbsp;Levy, or his respective estate, will
also receive his annual bonus prorated to the date of
termination. If Mr.&nbsp;Fels or Mr.&nbsp;Levy resigns for good
reason or is terminated without cause, he is entitled to receive
his base salary and annual bonus through December&nbsp;31, 2007,
subject to certain mitigation provisions.

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash Bonus Award Agreements</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On October&nbsp;20, 2000, Avatar entered into cash bonus award
agreements with Mr.&nbsp;Fels and Mr.&nbsp;Levy, pursuant to
which each was granted an award relating to the Harbor Islands
Project. The awards entitle each of Mr.&nbsp;Fels and
Mr.&nbsp;Levy to receive quarterly cash bonus payments equal to
6% of the cash flow of the Harbor Islands Project. In
determining &#147;cash flow&#148;, there is a deduction for a
cost of capital that Avatar would charge to the project to the
extent the project is funded by Avatar, such charge to be not
less than 10% per annum. Prior to the payment of any bonus,
Avatar must first receive the Minimum Return.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The awards also provide for repayment at the end of the project,
on an after-tax basis, of any excess payment, plus interest,
should the Compensation Committee determine that the aggregate
amount of bonus payments exceeds the aggregate amount that would
have been paid if the bonus payments had been made at the end of
the project.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If either Mr.&nbsp;Fels&#146; or Mr.&nbsp;Levy&#146;s employment
is terminated for cause or upon resignation for other than good
reason prior to December&nbsp;31, 2004, rights to future bonus
payments after the date of termination are forfeited. If either
Mr.&nbsp;Fels&#146; or Mr.&nbsp;Levy&#146;s employment is
terminated other than for cause or upon resignation for good
reason, he will continue to receive future bonus payments. If
either Mr.&nbsp;Fels&#146; or Mr.&nbsp;Levy&#146;s termination
is due to his permanent disability or death, he or his estate
would continue to receive prorated bonus payments based upon the
number of months actually employed.

<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Earnings Participation Award
Agreements</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March 6, 2003, Avatar entered into earnings participation
award agreements with Mr.&nbsp;Fels and Mr.&nbsp;Levy, pursuant
to which each was granted a cash award and a stock award
relating to achievement of performance goals under Avatar&#146;s
business plan. The cash awards entitle each of Mr.&nbsp;Fels and
Mr. Levy to a cash payment with respect to each fiscal year
beginning 2003 and ending 2007 equal to two percent of
Avatar&#146;s gross profit (as defined) over pre-established
levels as determined by the Compensation Committee. Under the
provisions of the Executive Incentive Compensation Plan, total
cash awards are limited to a maximum of $5,000,000 per
individual. Therefore, each of Mr.&nbsp;Fels and Mr.&nbsp;Levy
may receive a maximum of $5,000,000 under the cash bonus award
relating to the Harbor Islands Project and the earnings
participation award agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The stock awards entitle each of Mr.&nbsp;Fels and Mr.&nbsp;Levy
to receive a number of shares of Avatar Common Stock having a
fair market value (as defined) equal to two per cent of the
excess of actual gross profit (as defined) from January&nbsp;1,
2003 through December&nbsp;31, 2007 over the established target
gross profit of approximately $187,000,000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If either Mr.&nbsp;Fels&#146; or Mr. Levy&#146;s employment is
terminated for cause or upon resignation for other than good
reason, rights to future cash payments or Common Stock issuances
after the date of termination are forfeited. If either
Mr.&nbsp;Fels&#146; or Mr.&nbsp;Levy&#146;s employment is
terminated other than for

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<DIV align="left">
cause or upon resignation for good reason, he will continue to
receive future cash payments and Common Stock issuances. If
either Mr.&nbsp;Fels&#146; or Mr.&nbsp;Levy&#146;s termination
is due to his permanent disability or death, he or his estate
would receive a prorated cash payment for the fiscal year in
which his employment was terminated and prorated Common Stock
issuances based upon the number of months actually employed
during the performance period. Upon the occurrence of a change
in control (as defined), Mr.&nbsp;Fels and Mr.&nbsp;Levy would
receive prorated cash payments for the fiscal year in which the
change in control occurs and future cash awards and stock awards
would be cancelled.
</DIV>

<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nonqualified Stock Option
Agreements</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;19, 1999, Messrs.&nbsp;Fels and Levy were each
granted options to purchase 50,000 shares of Avatar Common Stock
under the Incentive Plan, at an exercise price of $25.00 per
share. The options granted to each of Messrs.&nbsp;Fels and Levy
were fully vested as of February&nbsp;19, 2002.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the employment of Mr.&nbsp;Fels or Mr.&nbsp;Levy, as the case
may be, is terminated due to his disability or death, the
options will remain exercisable for one year following the date
of termination. If either Mr.&nbsp;Fels or Mr.&nbsp;Levy, as the
case may be, resigns without good reason or is terminated for
cause, any unexercised options become null and void upon such
termination. Otherwise, the options will remain exercisable
until February&nbsp;19, 2009.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;13, 2003, Messrs. Fels and Levy were each granted
additional options to purchase 60,000 shares of Avatar Common
Stock under the Incentive Plan, at an exercise price of $25.00
per share. The options vest and become exercisable on
December&nbsp;31, 2007.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the employment of Mr. Fels or Mr. Levy, as the case may be,
is terminated due to his disability or death, the options will
vest pro rata based on the amount of time elapsed between
January&nbsp;1, 2003 and December&nbsp;31, 2007, and such
options will become immediately exercisable and expire one year
following the date of termination. If either Mr.&nbsp;Fels or
Mr.&nbsp;Levy, as the case may be, resigns without good reason
or is terminated for cause, any unexercised options become null
and void upon such termination. Otherwise, the options will
remain exercisable until March&nbsp;13, 2013.

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted Stock Units</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of March&nbsp;27, 2003, Avatar entered into restricted stock
unit agreements with Mr.&nbsp;Fels and Mr.&nbsp;Levy, pursuant
to which each has been awarded an opportunity to receive 25,000
performance conditioned restricted stock units representing
25,000 shares of Avatar Common Stock. The actual grant of the
units is conditioned upon (i)&nbsp;the closing price of Avatar
Common Stock being at least $34.00 per share for 20 trading days
out of 30 consecutive trading days during the period beginning
March&nbsp;27, 2003 and ending December&nbsp;31, 2007, and
(ii)&nbsp;the continued employment of Mr.&nbsp;Fels or
Mr.&nbsp;Levy, as the case may be, at the time the foregoing
condition is satisfied. As of December&nbsp;29, 2003, the
closing price of Avatar Common Stock was at least $34.00 for 20
trading days out of 30 consecutive trading days and 25,000
restricted stock units were granted to each of Mr.&nbsp;Fels and
Mr.&nbsp;Levy. Any units granted to Mr.&nbsp;Fels and
Mr.&nbsp;Levy vest in full on December&nbsp;31, 2007 or upon the
occurrence of a change of control of Avatar, provided that, in
either case, Mr.&nbsp;Fels or Mr.&nbsp;Levy is then employed by
Avatar.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Mr.&nbsp;Fels&#146; or Mr.&nbsp;Levy&#146;s employment is
terminated due to his disability or death, Mr.&nbsp;Fels or
Mr.&nbsp;Levy will receive the greater of a pro rata portion of
the 25,000 units based on the number of whole months which have
elapsed from January&nbsp;1, 2003 to the date of
Mr.&nbsp;Fels&#146; or Mr.&nbsp;Levy&#146;s disability or death
or 12,500 units. If either Mr. Fels or Mr.&nbsp;Levy resigns
without good reason or is terminated for cause, all of the units
will be forfeited. Otherwise, the units granted to either
Mr.&nbsp;Fels or Mr.&nbsp;Levy immediately vest in full upon
termination of Mr.&nbsp;Fels&#146; or Mr. Levy&#146;s employment.

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<P align="left">
<I>Agreements with Dennis J. Getman</I>

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employment
Agreement</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On September&nbsp;11, 2003, Avatar entered into an Employment
Agreement with Dennis J. Getman, Executive Vice President and
General Counsel, effective as of January&nbsp;1, 2003, for a
term of four years at an annual base salary of $350,000, subject
to review and increase by the Board, and additional compensation
of specified percentages of net sale proceeds on certain
designated asset sales. Over the term of the Agreement, maximum
aggregate additional compensation payable to Mr.&nbsp;Getman is
$1,600,000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Mr.&nbsp;Getman&#146;s employment is terminated due to his
disability or death, Mr.&nbsp;Getman or his estate will receive
his accrued but unpaid base salary and any additional
compensation to which he may be entitled. If Mr.&nbsp;Getman is
terminated without cause, he is entitled to receive his accrued
but unpaid base salary, any additional compensation to which he
may be entitled and a lump sum payment of $350,000 in lieu of
any other payments or benefits. If Mr.&nbsp;Getman is terminated
for cause or resigns, he is entitled to receive his accrued but
unpaid base salary.

<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nonqualified Stock Option
Agreement</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;19, 1999, Mr.&nbsp;Getman was granted options
to purchase 10,000 shares of Avatar Common Stock under the
Incentive Plan, at an exercise price of $25.00 per share. The
options granted to Mr.&nbsp;Getman were fully vested as of
February&nbsp;19, 2002.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Mr.&nbsp;Getman&#146;s employment is terminated due to his
disability or death, the options will remain exercisable for one
year following the date of termination. If Mr.&nbsp;Getman
resigns without good reason or is terminated for cause, any
unexercised options become null and void upon such termination.
Otherwise, the options will remain exercisable until
February&nbsp;19, 2009.

<P align="left">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted
Stock Units</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of September&nbsp;11, 2003, Avatar entered into a restricted
stock unit agreement with Mr.&nbsp;Getman, pursuant to which he
has been awarded an opportunity to receive 15,504 performance
conditioned restricted stock units representing 15,504 shares of
Avatar Common Stock. The units vest in full on January&nbsp;2,
2007, provided that Mr.&nbsp;Getman is employed by Avatar on
December&nbsp;31, 2006.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Mr.&nbsp;Getman&#146;s employment is terminated due to his
disability or death, Mr.&nbsp;Getman or his estate will be
entitled to receive 7,752 units. If his employment is terminated
for cause, all units will be forfeited. If he is terminated
without cause, Mr.&nbsp;Getman will be entitled to receive all
units granted to him.

<P align="left">
<I>Agreement with Charles L. McNairy</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon his termination of employment, Mr.&nbsp;McNairy is entitled
to receive his base salary for a period of one year from the
date of termination.

<P align="left">
Compensation Committee Report on Executive Compensation

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The duties and responsibilities of the Compensation Committee of
the Board of Directors include determining the compensation of
Avatar&#146;s CEO and certain other executive officers and
administrating Avatar&#146;s incentive compensation plans.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Avatar&#146;s executive compensation is intended to reward,
retain and motivate management and to align the interests of
Avatar&#146;s stockholders and management. In determining salary
levels and bonuses for the executive officers, primary
consideration is given to each executive&#146;s level of
responsibility and individual performance, as well as
compensation generally received by executives of companies
engaged in similar type activities. In 2003, certain executives
(other than Avatar&#146;s

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<DIV align="left">
CEO) received discretionary bonuses based on subjective factors.
In awarding these bonuses, the Compensation Committee considered
the successful efforts of certain executives in guiding the
development and implementation of Avatar&#146;s long term
business strategy, including, but not limited to, the
development of active adult communities.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2003, the Compensation Committee approved an amended and
restated employment agreement, a stock option agreement and a
restricted stock unit agreement with each of Jonathan Fels and
Michael Levy, and approved an employment agreement and
restricted stock unit agreement with Dennis Getman. The
employment agreements with Messrs.&nbsp;Fels and Levy increased
their base salary, set annual bonus payments and extended their
terms of employment to December&nbsp;31, 2007. The Compensation
Committee considered a number of factors in authorizing these
agreements, including the fact that Avatar did not have an
employment agreement with Mr.&nbsp;Getman, the contributions of
Messrs.&nbsp;Fels, Levy and Getman to, and responsibility for,
Avatar&#146;s active adult and home building businesses and
Avatar&#146;s overall performance, and Avatar&#146;s reliance on
Messrs. Fels, Levy and Getman.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The restricted stock units granted to Messrs.&nbsp;Fels and Levy
provide that, unless Avatar&#146;s common stock attains a market
price of $34.00 per share (the hurdle price) for 20 trading days
out of 30 consecutive trading days, Messrs. Fels and Levy will
not be entitled to receive the units and even if the hurdle
price is obtained, Messrs.&nbsp;Fels and Levy would not receive
the units until the expiration of their employment contracts on
December&nbsp;31, 2007, provided that they were still employed
by Avatar on that date (except under certain limited
circumstances). Avatar&#146;s stock price was in the range of
$23.00-$26.00 per share at the time that the restricted stock
unit agreements were being considered. The restricted stock unit
agreement with Mr.&nbsp;Getman provides that Mr.&nbsp;Getman
would not receive the units unless he remains employed under his
employment agreement with Avatar through December&nbsp;31, 2006
(except under certain limited circumstances).

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2003, in order to further motivate Avatar&#146;s executives,
the Compensation Committee considered additional methods of
rewarding Avatar&#146;s executive officers. Avatar&#146;s legal
and accounting advisors, working directly with the Compensation
Committee, reviewed comparisons to other public companies in the
real estate and active adult community businesses, the
recommendations of Avatar&#146;s CEO and relevant accounting and
federal tax considerations. Following the review, it was
determined that additional cash and stock incentives based upon
the achievement of specific performance based criteria were
appropriate. As a result, the Compensation Committee granted
earnings participation awards under the Amended and Restated
1997 Incentive and Capital Accumulation Plan and the Executive
Incentive Compensation Plan to Messrs. Fels and Levy.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the earnings participation awards, Messrs.&nbsp;Fels and
Levy would be entitled to earn periodic cash payments for fiscal
years 2003 through 2007 and a potential stock payment in fiscal
year 2008 upon the attainment of certain levels of corporate
gross profit in excess of a specified minimum amount, such
minimum amount being $10 million for fiscal year 2003 and
increasing 20% for each of fiscal years 2004 through 2007 for
the cash award. Also, no stock bonus would be paid to
Messrs.&nbsp;Fels and Levy unless cumulative corporate gross
profit from 2003 through 2007 exceeded approximately $187
million and would not be payable under any circumstances until
fiscal year 2008, although the award would accrue in 2007. See
&#147;Agreements with Jonathan Fels and Michael Levy &#150; Cash
Bonus Award Agreements.&#148; The minimum condition was not
achieved for 2003 and although it is contemplated that cash
bonus payments pursuant to the award would be accrued in 2004,
such awards would not be paid out until fiscal year 2005. The
bonus awards were intended to align the compensation of these
executives with the overall performance of the Company in that
no payments would be made unless the Company achieved a minimum
gross profit level. In addition, the maximum aggregate cash
payments to each of Messrs.&nbsp;Fels and Levy under both the
Harbor Islands cash bonus award (which was granted in 2000) and
the new cash bonus award is $5,000,000.

<P align="right">19

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<P align="left">
CEO Compensation

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2003, Gerald D. Kelfer, Avatar&#146;s CEO, was paid salary
and bonus in accordance with his employment agreement and the
Harbor Islands cash bonus award, which had been authorized by
the Compensation Committee and ratified by the Board of
Directors. The amounts paid in 2003 under the employment
agreement were not discretionary or otherwise related to the
financial performance of Avatar. The amounts paid in 2003 under
the Harbor Islands cash bonus award were not discretionary but
were related to the performance of the Harbor Islands project.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2003, the Compensation Committee authorized an amended
and restated employment agreement with Mr.&nbsp;Kelfer,
extending the term of Mr. Kelfer&#146;s employment contract with
no increase in annual salary or bonus. In 2003, the Compensation
Committee also approved a new restricted stock unit agreement
and an earnings participation award with Mr.&nbsp;Kelfer. In
addition, agreements for an aggregate of 75,000 restricted stock
units with hurdle prices ranging from $38.00 to $50.00 and the
cancellation of Mr.&nbsp;Kelfer&#146;s 225,000 stock options
were also approved. The Compensation Committee considered a
number of factors in authorizing these agreements with
Mr.&nbsp;Kelfer, including the significance of Mr. Kelfer to the
development and implementation of Avatar&#146;s long term
business strategy and Mr.&nbsp;Kelfer&#146;s proven success in
running Avatar.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In awarding the restricted stock units, the Compensation
Committee considered, among other things, that the vesting of
the restricted stock units would be subject to
Mr.&nbsp;Kelfer&#146;s continued employment throughout the term
of the employment agreement (December&nbsp;31, 2008) except
under limited circumstances. The restricted stock unit
agreements also provide that, unless Avatar&#146;s common stock
attains a series of market prices ranging from $34.00 to a high
of $50.00 per share (the hurdle prices) for 20 trading days out
of 30 consecutive trading days, Mr.&nbsp;Kelfer will not be
entitled to receive the units for which the applicable hurdle
price had not been obtained. Avatar&#146;s stock price was in
the range of $23.00-$26.00 per share at the time that the new
restricted stock unit agreements were being considered. In
awarding the earnings participation award, the Compensation
Committee considered, among other things, that no cash bonuses
under the earnings participation award would be payable in a
specified fiscal year unless a minimum corporate gross profit
for such year exceeded a specified minimum amount, such amount
being $10 million for fiscal year 2003, and increasing 20% for
each of fiscal years 2004 through 2007. Also, no stock bonus
under the earnings participation award would be paid to
Mr.&nbsp;Kelfer unless cumulative corporate gross profit from
2003 through 2007 exceeded approximately $187 million and would
not be payable under any circumstances until fiscal year 2008.
Finally, the Compensation Committee considered the fact that the
cash payments to Mr.&nbsp;Kelfer for awards made under the
Executive Incentive Compensation Plan would not exceed
$5,000,000 without additional shareholder approval.

<CENTER>
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<TR>
    <TD align="left" valign="top">
    <FONT size="2">April&nbsp;7, 2004
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">COMPENSATION COMMITTEE
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">William G. Spears, Chairman<BR>
    Milton Dresner<BR>
    Martin Meyerson<BR>
    Kenneth T. Rosen
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">20

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
Report on Repricing of Options/SARs

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under current interpretations issued by the SEC, the
cancellation of out of the money stock options and the exchange
of restricted stock therefor is required to be disclosed as a
repricing. Therefore, Avatar presents the following information
in the tabular format required by the SEC&#146;s rules, which
discloses the out of the money stock options cancelled by
Avatar&#146;s executive officers and the shares of restricted
stock exchanged therefor. For financial reporting purposes, the
exchange was not accounted for as a repricing.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Market</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Length Of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Number Of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Of Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Original</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Securities</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">At</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Price At</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Option Term</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Underlying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Time Of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Time Of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Remaining At</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Options/SARs</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Repricing</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Repricing</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">New</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Date</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Repriced Or</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Or</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Or</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Of Repricing Or</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="2">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Date</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Amended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Amendment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Amendment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">Amendment</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gerald Kelfer, President and CEO
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3/27/03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><SUP><FONT size="2">(1)</FONT></SUP></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">47 months</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="25" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In exchange for the cancellation of the 225,000
    options previously granted to Mr.&nbsp;Kelfer, as of
    March&nbsp;27, 2003, Avatar entered into four restricted stock
    unit agreements with Mr.&nbsp;Kelfer pursuant to which he was
    awarded the opportunity to receive performance conditioned
    restricted stock units conditioned upon (i)&nbsp;the closing
    price of Avatar Common Stock being at least equal to a specified
    hurdle price for 20 trading days out of 30 consecutive trading
    days during the period beginning March&nbsp;27, 2003 and ending
    December&nbsp;31, 2008 and (ii)&nbsp;the continued employment of
    Mr.&nbsp;Kelfer at the time the foregoing condition is
    satisfied. At such time as the closing price of Avatar Common
    Stock is at least $38.00 for 20 trading days out of 30
    consecutive trading days, Mr.&nbsp;Kelfer will be granted 23,700
    restricted stock units; at least $42.00 for 20 trading days out
    of 30 consecutive trading days, Mr.&nbsp;Kelfer will be granted
    an additional 20,000 restricted stock units; at least $46.00 for
    20 trading days out of 30 consecutive trading days,
    Mr.&nbsp;Kelfer will be granted an additional 15,000 restricted
    stock units; and at least $50.00 for 20 trading days out of 30
    consecutive trading days, Mr.&nbsp;Kelfer will be granted an
    additional 16,300 restricted stock units. As of February&nbsp;4,
    2004, the closing price of Avatar Common Stock was at least
    $38.00 for 20 trading days out of 30 consecutive trading days,
    and 23,700 restricted stock units were granted.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;27, 2003, the Compensation Committee approved the
grant of restricted stock units to Mr.&nbsp;Kelfer in exchange
for the cancellation of Mr.&nbsp;Kelfer&#146;s existing stock
options. The Compensation Committee considered the fact that the
restricted stock unit agreements were performance conditioned,
required the price of Avatar&#146;s common stock to achieve
certain levels before any award would be granted and that the
lowest hurdle price was $38.00, which exceeded the $34.00 strike
price of the cancelled options. In addition, even if the
performance condition was met, Mr.&nbsp;Kelfer would have to
remain employed with Avatar through December&nbsp;31, 2008,
except under certain limited circumstances to receive the award.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">April&nbsp;7, 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">COMPENSATION COMMITTEE
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">William G. Spears, Chairman<BR>
    Milton Dresner<BR>
    Martin Meyerson<BR>
    Kenneth T. Rosen
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
Compensation Committee Interlocks and Insider Participation

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The members of the Compensation Committee are Messrs. Dresner,
Meyerson, Rosen and Spears, none of whom are executive officers
of Avatar.

<P align="right">21

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
Performance Graph

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&nbsp;31, 1998 in Avatar&#146;s Common
Stock, The Nasdaq Market Index and the Real Estate Development
and Residential Construction Indexes published by CoreData for
the periods indicated, in each case assuming reinvestment of any
dividends. The cumulative total returns for The Nasdaq Market
Index were prepared by CoreData.

<P align="center">
<IMG src="g86963g8696301.gif" alt="(PERFORMANCE GRAPH)">

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="25"></TD>
</TR>

<TR>
    <TD colspan="25" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">1998</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="25"></TD>
</TR>

<TR>
    <TD colspan="25" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;Avatar Holdings Inc.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">143.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">230.81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;Nasdaq
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">176.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;Real Estate Development Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97.82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76.94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;Residential Construction Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">122.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">170.43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">164.45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">290.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
Certain Relationships and Related Transactions

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the underwritten public offering in 1998 of
Avatar&#146;s 7% Notes, Avatar entered into a registration
rights agreement with Leon Levy, Avatar&#146;s Chairman of the
Board from January 1981 to his death on April&nbsp;6, 2003. The
Estate of Leon Levy is the successor to Leon Levy under the
registration rights agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Jack Nash receives $100,000 per annum for serving as
Avatar&#146;s Chairman of the Board.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lynn Getman, wife of Named Executive Officer Dennis J. Getman,
is employed as a senior officer of a subsidiary of Avatar.
Ms.&nbsp;Getman was paid an aggregate salary and bonus of
$108,958 during 2003.

<P align="center">
2.&nbsp;APPOINTMENT OF AUDITORS

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Ernst &#38; Young LLP, independent accountants, audited the
financial statements of Avatar for the fiscal year ended
December&nbsp;31, 2003. Such audit services consisted of the
firm&#146;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.

<P align="left">22

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Representatives of Ernst &#38; 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.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to approval by the stockholders, the Audit Committee has
appointed Ernst &#38; Young LLP, independent accountants, as
auditors of Avatar for the fiscal year ending December&nbsp;31,
2004. 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 will be voted in
such manner unless otherwise directed.

<P align="left">
Audit Fees

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the approximate amount of fees
paid, or estimated to be paid, to Ernst &#38; Young LLP for
professional services during the fiscal years ended
December&nbsp;31, 2003 and 2002:

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="2">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Audit services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">400,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">370,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Audit-related services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tax services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">All other services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">478,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">478,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Audit services generally include the audit of the annual
financial statements for Avatar and its consolidated
subsidiaries, review of quarterly financial statements and
assistance in applying financial accounting and reporting
standards.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Audit-related services generally include audits of employee
benefit plans, review of cash awards under incentive
compensation plans and assistance with implementation of certain
procedures to comply with the Sarbanes-Oxley Act of 2002. Tax
services, which are estimated, generally relate to review of the
consolidated tax return. Other services represent internal audit
services during a portion of the 2002 fiscal year.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Audit Committee adopted a policy requiring pre-approval of
audit and non-audit services provided by the principal
independent accountants. The Audit Committee approved all audit
and non-audit services provided by Ernst &#38; Young LLP during
the 2003 fiscal year.

<P align="right">23

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<P align="center">
STOCKHOLDERS&#146; PROPOSALS AND NOMINATIONS OF BOARD MEMBERS

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a stockholder intends to present a proposal for action at the
2005 Annual Meeting and wishes to have such proposal considered
for inclusion in Avatar&#146;s proxy materials in reliance on
Rule&nbsp;14a-8 under the Securities Exchange Act of 1934, the
proposal must be submitted in writing and received by the
Secretary of Avatar by December&nbsp;24, 2004. Such proposal
must also meet the other requirements of the rules of the
Securities and Exchange Commission relating to
stockholders&#146; proposals.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Avatar&#146;s By-Laws establish an advance notice procedure with
regard to certain matters, including stockholder proposals and
nominations of individuals for election to the Board of
Directors. In general, notice of a stockholder proposal or a
director nomination for an annual meeting must be received by
Avatar not less than 60 days nor more than 90 days prior to the
anniversary date of the preceding annual meeting of stockholders
and must contain specified information and conform to certain
requirements, as set forth in the By-Laws. If the chairman at
any stockholders&#146; meeting determines that a stockholder
proposal or director nomination was not made in accordance with
the By-Laws, Avatar may disregard such proposal or nomination.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, if a stockholder submits a proposal outside of
Rule&nbsp;14a-8 for the 2005 Annual Meeting, and the proposal
fails to comply with the advance notice procedure prescribed by
the By-Laws, then Avatar&#146;s proxy may confer discretionary
authority on the persons being appointed as proxies on behalf of
the Board of Directors to vote on the proposal. Proposals and
nominations should be addressed to the Secretary of Avatar,
Juanita I. Kerrigan, Avatar Holdings Inc., 201&nbsp;Alhambra
Circle, Coral Gables, Florida 33134.

<P align="center">
SECTION 16(a)

<DIV align="center">
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Section 16(a) of the Securities Exchange Act of 1934 requires
Avatar&#146;s officers and directors, and any persons who own
more than ten percent of Avatar&#146;s Common Stock to file
reports of initial ownership of Avatar&#146;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&nbsp;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&nbsp;5 were required, Avatar believes that
all Section&nbsp;16(a) filing requirements were complied with,
except that one amended report on Form&nbsp;4 reporting one
transaction was not timely filed by Fred Stanton Smith following
conversion of previously outstanding 7% Notes called for
redemption in 2003.

<P align="left">24

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<P align="center">
ADDITIONAL INFORMATION

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="38%"></TD>
    <TD width="62%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    By Order of the Board of Directors,</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Juanita I. Kerrigan</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Vice President and Secretary
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
Dated: April&nbsp;23, 2004.
</DIV>

<P align="right">25

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<P align="right">
<B>Annex A</B>

<P align="center">
<B>AVATAR HOLDINGS INC</B>

<P align="center">
<B>AUDIT COMMITTEE CHARTER</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>This Audit Committee Charter, adopted by the Board of
Directors (the &#147;Board&#148;) of Avatar Holdings Inc. (the
&#147;Company&#148;) on April&nbsp;13, 2004, is intended as a
component of the flexible governance framework within which the
Board, assisted by its committees, directs the affairs of the
Company.</B>

<P align="left">
<B>I.&nbsp;PURPOSES</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Audit Committee (the &#147;Committee&#148;) shall assist the
Board of Directors (the &#147;Board&#148;) in fulfilling its
responsibility to oversee management regarding: (i) the conduct
and integrity of the Company&#146;s financial reporting to any
governmental or regulatory body, the public or other users
thereof; (ii)&nbsp;the Company&#146;s systems of internal
accounting and financial and disclosure controls; (iii)&nbsp;the
qualifications, engagement, compensation, independence and
performance of the Company&#146;s independent auditors, their
conduct of the annual audit, and their engagement for any other
services; (iv)&nbsp;the Company&#146;s legal and regulatory
compliance; (v)&nbsp;the Company&#146;s codes of ethics as
established by management and the Board; and (vi)&nbsp;the
preparation of the audit committee report required by the
Securities and Exchange Commission (&#147;SEC&#148;) rules to be
included in the Company&#146;s annual proxy statement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In discharging its role, the Committee is empowered to inquire
into any matter it considers appropriate to carry out its
responsibilities, with access to all books, records, facilities
and personnel of the Company. The Committee has the power to
retain outside counsel, independent auditors or other advisors
to assist it in carrying out its activities. The Company shall
provide adequate resources to support the Committee&#146;s
activities, including compensation of the Committee&#146;s
counsel, independent auditors and other advisors. The Committee
shall have the sole authority to retain, compensate, direct,
oversee and terminate counsel, independent auditors, and other
advisors hired to assist the Committee, who shall be accountable
ultimately to the Committee.

<P align="left">
<B>II.&nbsp;COMMITTEE MEMBERSHIP</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee shall consist of three or more members of the
Board, each of whom the Board has selected and determined to be
&#147;independent&#148; in accordance with applicable rules of
the SEC and The Nasdaq Stock Market or other primary exchange or
market on which the Company&#146;s shares of common stock are
listed. All members of the Committee shall meet the financial
literacy requirements of The Nasdaq Stock Market or other
primary exchange or market on which the Company&#146;s shares of
common stock are listed. At least one member shall be an
&#147;audit committee financial expert&#148; as such term is
defined under applicable SEC rules, as and when required by The
Nasdaq Stock Market or other primary exchange or market on which
the Company&#146;s shares of common stock are listed.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Committee members shall continue to be members until their
successors are elected and qualified or until their earlier
resignation or removal. Any member may be removed by the Board,
with or without cause, at any time. The Chairman of the
Committee shall be appointed from among the Committee members
by, and serve at the pleasure of, the Board to convene and chair
meetings of the Committee, set agendas for meetings, and
determine the Committee&#146;s information needs. In the absence
of the Chairman at a duly convened meeting, the Committee shall
select from among its members an acting chairman for purposes of
the meeting.

<P align="center">A-1

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<P align="left">
<B>III.&nbsp;COMMITTEE MEETINGS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee shall meet at least four times per year. The
Committee shall meet at least annually with the internal auditor
and the independent auditor in separate executive sessions to
provide the opportunity for full and frank discussion without
members of senior management present.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee shall establish its own schedule and rules of
procedure. Meetings of the Committee may be held telephonically.
A majority of the members of the Committee shall constitute a
quorum sufficient for the taking of any action by the Committee.
The Committee may also take action by unanimous written consent.

<P align="left">
<B>IV.&nbsp;KEY RESPONSIBILITIES</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee&#146;s role is one of oversight. The
Company&#146;s management is responsible for preparing the
Company&#146;s financial statements and the independent auditors
are responsible for auditing those financial statements. The
Committee recognizes that Company management, the internal audit
staff and the independent auditors have more time, knowledge and
detailed information about the Company than do Committee
members. Consequently, in carrying out its oversight
responsibilities, the Committee is not providing any expert or
special assurance as to the Company&#146;s financial statements
or any professional certification as to the independent
auditor&#146;s work.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following responsibilities are set forth as a guide for
fulfilling the Committee&#146;s purposes, with the understanding
that the Committee&#146;s activities may diverge as appropriate
given the circumstances. The Committee is authorized to carry
out these activities and other actions reasonably related to the
Committee&#146;s purposes or assigned by the Board from time to
time.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Committee may form, and delegate any of its responsibilities
to, a subcommittee so long as such subcommittee is solely
comprised of one or more members of the Committee.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To fulfill its purposes, the Committee shall:

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A.&nbsp;Supervise the Independent Audit
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="4%"></TD>
    <TD width="86%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp; 1.&nbsp;</TD>
    <TD align="left">
    appoint, evaluate, compensate, oversee the work of, and if
    appropriate terminate, the independent auditor, who shall report
    directly to the Committee;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp; 2.&nbsp;</TD>
    <TD align="left">
    review and approve the terms of the independent auditor&#146;s
    retention, engagement and scope of the annual audit, and
    pre-approve any audit-related and permitted non-audit services
    (including the fees and terms thereof) to be provided by the
    independent auditor (with pre-approvals disclosed as appropriate
    in the Company&#146;s periodic public filings);</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp; 3.&nbsp;</TD>
    <TD align="left">
    on an annual basis, review a formal written statement from the
    independent auditor delineating all relationships between the
    independent auditor and the Company, consistent with
    Independence Standards Board Standard No.&nbsp;1 (as modified or
    supplemented), actively engage in a dialogue with the
    independent auditor with respect to any disclosed relationships
    or services that may impact the objectivity and independence of
    the independent auditor and take appropriate action in response
    to the independent auditor&#146;s report to satisfy itself of
    the auditor&#146;s independence;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp; 4.&nbsp;</TD>
    <TD align="left">
    review and resolve any disagreements between management and the
    independent auditor concerning financial reporting, or relating
    to any audit report or other audit, review or attest services
    provided by the independent auditor.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
B.&nbsp;Oversee Internal Audit, Internal Controls and Risk
Management

<P align="center">A-2

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="4%"></TD>
    <TD width="86%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp; 5.&nbsp;</TD>
    <TD align="left">
    review and discuss with management and the independent auditor:
    (i)&nbsp;the adequacy of the Company&#146;s internal and
    disclosure controls and procedures, (including computerized
    information system disclosure controls and security), including
    whether such controls and procedures are designed to provide
    reasonable assurance that transactions entered into by the
    Company are properly authorized, assets are safeguarded from
    unauthorized or improper use, and transactions by the Company
    are properly recorded and reported; (ii)&nbsp;any significant
    deficiencies in the design or operation of the Company&#146;s
    internal controls which could adversely affect the
    Company&#146;s ability to record, process, summarize and report
    financial data; (iii)&nbsp;any fraud, whether or not material,
    that involves management or other employees who have a
    significant role in the Company&#146;s internal controls; and
    (iv)&nbsp;related findings and recommendations of management
    together with the independent auditor&#146;s attestation report;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp; 6.&nbsp;</TD>
    <TD align="left">
    review and discuss with management and the independent auditor
    any significant risks or exposures and assess the steps
    management has taken to minimize such risks; and discuss with
    management and the independent auditor, and oversee the
    Company&#146;s underlying policies with respect to, risk
    assessment and risk management;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp; 7.&nbsp;</TD>
    <TD align="left">
    establish and oversee procedures for the receipt, retention and
    treatment of complaints regarding accounting, internal
    accounting controls or auditing matters, and the confidential,
    anonymous submission by employees of concerns regarding
    questionable accounting or auditing matters;</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
C.&nbsp;Oversee Financial Reporting
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="4%"></TD>
    <TD width="86%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp; 8.&nbsp;</TD>
    <TD align="left">
    review and discuss with management and the independent auditor:
    (i)&nbsp;all critical accounting policies and practices used by
    the Company; (ii)&nbsp;any significant changes in Company
    accounting policies; (iii)&nbsp;any material alternative
    accounting treatments within GAAP that have been discussed with
    management, including the ramifications of the use of the
    alternative treatments and the treatment preferred by the
    accounting firm; and (iv)&nbsp;any accounting and financial
    reporting proposals that may have a significant impact on the
    Company&#146;s financial reports;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&nbsp; 9.&nbsp;</TD>
    <TD align="left">
    inquire as to the independent auditor&#146;s view of the
    accounting treatment related to significant new transactions or
    other significant matters or events not in the ordinary course
    of business;</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="4%"></TD>
    <TD width="86%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>10.&nbsp;</TD>
    <TD align="left">
    review and discuss with the independent auditor the matters
    required to be discussed with the independent auditor by:
    (i)&nbsp;Statement of Auditing Standards No.&nbsp;61, including
    the auditor&#146;s responsibility under generally accepted
    auditing standards, the significant accounting policies used by
    the Company, accounting estimates used by the Company and the
    process used by management in formulating them, any consultation
    with other accountants and any major issues discussed with
    management prior to its retention; (ii) Statement of Auditing
    Standards No.&nbsp;90, including whether Company accounting
    principles as applied are conservative, moderate, or aggressive
    from the perspective of income, asset, and liability
    recognition, and whether or not those principles reflect common
    or minority practices; and (iii)&nbsp;Statement of Auditing
    Standards No.&nbsp;100, including the review of the interim
    financial information of the Company and any material
    modifications that need to be made to the interim financial
    information for it to conform with GAAP;</TD>
</TR>

</TABLE>

<P align="center">A-3

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="4%"></TD>
    <TD width="86%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>11.&nbsp;</TD>
    <TD align="left">
    review and discuss with management and the independent auditor
    any material financial or non-financial arrangements that do not
    appear on the financial statements of the Company;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>12.&nbsp;</TD>
    <TD align="left">
    review and discuss with the independent auditor: (i)&nbsp;any
    significant accounting adjustments that were noted or proposed
    by the auditors but were &#147;passed&#148;; (ii)&nbsp;any
    communications between the audit team and the audit firm&#146;s
    national office respecting auditing or accounting issues
    presented by the engagement; and (iii)&nbsp;any
    &#147;management&#148; or &#147;internal control&#148; letter
    issued, or proposed to be issued, by the independent auditors to
    the Company or any other material written communications between
    the accounting firm and management, such as any management
    letter or schedule of &#147;unadjusted differences;&#148;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>13.&nbsp;</TD>
    <TD align="left">
    review the Company&#146;s financial statements, including:
    (i)&nbsp;prior to public release, review and discuss with
    management and the independent auditor the Company&#146;s annual
    and quarterly financial statements to be filed with the SEC
    (including the Company&#146;s disclosures under
    &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations&#148; and any certifications
    regarding the financial statements or the Company&#146;s
    internal accounting and financial controls and procedures and
    disclosure controls or procedures filed with the SEC by the
    Company&#146;s senior executive and financial officers); and
    (ii)&nbsp;with respect to the independent auditor&#146;s annual
    audit report and certification, before release of the annual
    audited financial statements, meet with the independent auditor
    without any management member present to discuss the adequacy of
    the Company&#146;s system of internal accounting and financial
    controls, the appropriateness of the accounting principles used
    to and judgments made in the preparation of the Company&#146;s
    audited financial statements, and the quality of the
    Company&#146;s financial reports; (iii)&nbsp;meeting separately
    and periodically, with management, internal auditors (or other
    personnel responsible for the internal audit function) and the
    independent auditor; and (iv) recommend to the Board whether to
    include the audited annual financial statements in the
    Company&#146;s Annual Report on Form 10-K to be filed with the
    SEC;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>14.&nbsp;</TD>
    <TD align="left">
    at least annually, review a report by the independent auditor
    describing any material issues raised by the most recent
    internal quality-control review of the firm, or by any review,
    inquiry or investigation by governmental or professional
    authorities (including the Public Company Accounting Oversight
    Board), within the preceding five years, regarding one or more
    independent audits carried out by the firm, and any steps taken
    to deal with any such issues;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>15.&nbsp;</TD>
    <TD align="left">
    discuss with management and the independent auditor, as
    appropriate, financial information and earnings guidance
    (including non-GAAP financial measures) provided to analysts and
    to rating agencies;</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
D.&nbsp;Oversee Legal and Ethical Compliance
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="4%"></TD>
    <TD width="86%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>16.&nbsp;</TD>
    <TD align="left">
    review periodically: (i)&nbsp;with the General Counsel or
    outside legal counsel, as appropriate, legal and regulatory
    matters that may have a material impact on the Company&#146;s
    financial statement; and (ii)&nbsp;with the Disclosure
    Committee, the scope and effectiveness of compliance policies
    and programs;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>17.&nbsp;</TD>
    <TD align="left">
    review at least annually with management, compliance with, the
    adequacy of and any requests for waivers under the
    Company&#146;s code(s) of business conduct and ethics (including
    codes that apply to all employees as well as those applicable to
    directors, senior officers and financial officers and the
    Company&#146;s policies and procedures concerning trading in
    Company securities and use in trading of</TD>
</TR>

</TABLE>

<P align="center">A-4

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="4%"></TD>
    <TD width="86%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    proprietary or confidential information); any waiver to any
    executive officer or director granted by the Committee shall be
    reported by the Committee to the Board;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>18.&nbsp;</TD>
    <TD align="left">
    review and address conflicts of interest of directors and
    executive officers;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>19.&nbsp;</TD>
    <TD align="left">
    review, discuss with management and the independent auditor, and
    approve any transactions or courses of dealing with related
    parties (e.g., including significant shareholders of the
    Company, directors, corporate officers or other members of
    senior management or their family members) that are significant
    in size or involve terms or other aspects that differ from those
    that would likely be negotiated with independent parties;</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
E.&nbsp;Report
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="4%"></TD>
    <TD width="86%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>20.&nbsp;</TD>
    <TD align="left">
    oversee the preparation and approve all reports required by the
    Committee, including the report for inclusion in the
    Company&#146;s annual proxy statement, stating whether the
    Committee: (i)&nbsp;has reviewed and discussed the audited
    financial statements with management; (ii)&nbsp;has discussed
    with the independent auditors the matters required to be
    discussed by SAS No. 61, as amended; (iii)&nbsp;has received the
    written disclosure and letter from the independent auditors
    (describing their relationships with the Company) and has
    discussed with them their independence; and (iv)&nbsp;based on
    the review and discussions referred to above, the members of the
    Committee recommended to the Board that the audited financials
    be included in the Company&#146;s Annual Report on
    Form&nbsp;10-K for filing with the SEC;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>21.&nbsp;</TD>
    <TD align="left">
    review and reassess the adequacy of this Charter, and recommend
    to the Board amendments as the Committee deems appropriate; and</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>22.&nbsp;</TD>
    <TD align="left">
    report regularly to the Board on Committee findings and
    recommendations (including on any issues that arise with respect
    to the quality or integrity of the Company&#146;s financial
    statements, the Company&#146;s compliance with legal or
    regulatory requirements, the performance and independence of the
    independent auditors or the performance of the internal audit
    function) and any other matters the Committee deems appropriate
    or the Board requests, and maintain minutes or other records of
    Committee meetings and activities.</TD>
</TR>

</TABLE>

<P align="center">A-5

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="40%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="6">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="6">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="6">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="6">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="6">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="6">&nbsp;</FONT></TD>
    <TD><FONT size="6">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="bottom"><FONT size="6">Notice of 2004<BR>Annual Meeting<BR>and Proxy<BR>Statement</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<CENTER>
<TABLE width="40%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="6">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="6">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="6">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="6">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="6">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="6">&nbsp;</FONT></TD>
    <TD><FONT size="6">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="bottom"><FONT size="6">AVATAR<BR>HOLDINGS INC.</FONT></TD>
</TR>

</TABLE>
</CENTER>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B>PROXY</B>
</DIV>

<P align="center">
<B><FONT size="2">AVATAR HOLDINGS INC.</FONT></B>

<DIV align="center">
<B><FONT size="2">201 Alhambra Circle</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Coral Gables, Florida 33134</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">This Proxy is Solicited on Behalf of the Board
of Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned hereby appoints Gerald D. Kelfer
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 on the reverse side, all the
shares of Common Stock of Avatar Holdings Inc. held of record by
the undersigned at the close of business on April&nbsp;2, 2004
at the Annual Meeting of Stockholders to be held on May&nbsp;25,
2004, or any adjournment or adjournments thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If any other business may properly come before
the meeting, or if cumulative voting is required, the proxies
are authorized to vote in their discretion, provided that they
will not vote in the election of directors for any nominee(s)
for whom authority to vote has been withheld.
</FONT>

<P align="center">
<FONT size="2">THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
</FONT>

<DIV align="center">
<FONT size="2">PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
</FONT>
</DIV>

<P align="center">
<I><FONT size="2">(continued on next page)</FONT></I>

<P align="center">
<B><FONT size="2">&#916;&nbsp;&nbsp;&nbsp;FOLD AND DETACH
HERE&nbsp;&nbsp;&nbsp;&#916;</FONT></B>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD align="left" valign="top">
        <FONT size="2">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&nbsp;1 and
        2.
        </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top">
        <FONT size="2">Please mark<BR>
        your votes as<BR>
        indicated<BR>
        in this example
        </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="bottom">
        <FONT size="4"><FONT face="wingdings">&#120;</FONT>
        </FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="18%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <FONT size="2">Item 1&nbsp;&#150;&nbsp;ELECTION OF TEN
        DIRECTORS<BR>
        Nominees: E.A.&nbsp;Brea, M.&nbsp;Dresner,
        G.D.&nbsp;Kelfer, M.&nbsp;Meyerson, J.&nbsp;Nash,
        K.T.&nbsp;Rosen, J.M.&nbsp;Simon, F.S.&nbsp;Smith, W.G.&nbsp;Spears,
        B.A.&nbsp;Stewart
        </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top">
        <FONT size="2">FOR all nominees<BR>
        listed at left (except<BR>
        as marked to the<BR>
        contrary below).
        </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top">
        <FONT size="2">WITHHOLD<BR>
        AUTHORITY<BR>
        to vote for all<BR>
        nominees listed.
        </FONT></TD>
</TR>

<TR>
        <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top">
        <FONT size="4"><FONT face="wingdings">&#111;</FONT>
        </FONT></TD>
        <TD><FONT size="4">&nbsp;</FONT></TD>
        <TD align="center" valign="top">
        <FONT size="4"><FONT face="wingdings">&#111;</FONT>
        </FONT></TD>
</TR>

<TR>
        <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="7" align="left" valign="top">
        <FONT size="2">(Instruction: To withhold authority to vote for
        any individual nominee write that nominee&#146;s name in the
        space provided below.)<BR>
        &nbsp;<BR>

        &nbsp;<BR>
        <HR size="1" noshade>(Instruction: To cumulate votes as to a
        particular nominee(s) as explained in the Proxy Statement,
        indicate the name(s) and the number of votes to be given to such
        nominee(s) in the space provided below.)<BR>
        &nbsp;<BR>
        &nbsp;<BR>
        </FONT></TD>
</TR>

<TR>
        <TD colspan="7" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD align="left" valign="top">
        <FONT size="2">Item 2&nbsp;&#150;&nbsp;APPROVAL OF THE
        APPOINTMENT OF ERNST &#38; YOUNG LLP, INDEPENDENT ACCOUNTANTS,
        AS AUDITORS OF AVATAR HOLDINGS INC. FOR 2004.
        </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top">
        <FONT size="2">FOR</FONT><BR>
        <FONT size="4"><FONT face="wingdings">&#111;</FONT>
        </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top">
        <FONT size="2">AGAINST</FONT><BR>
        <FONT size="4"><FONT face="wingdings">&#111;</FONT>
        </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top">
        <FONT size="2">ABSTAIN</FONT><BR>
        <FONT size="4"><FONT face="wingdings">&#111;</FONT>
        </FONT></TD>
</TR>

<TR>
        <TD colspan="7" align="left" valign="top">
        <FONT size="2">Item 3&nbsp;&#150;&nbsp;In their discretion the
        proxies are authorized to vote upon such other business as may
        properly come before the meeting.
        </FONT></TD>
</TR>

<TR>
        <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
        <TD colspan="3" align="left" valign="top">
        <FONT size="2">PLEASE CHECK IF YOU PLAN TO ATTEND THE ANNUAL
        STOCKHOLDERS MEETING
        </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" valign="top">
        <FONT size="4"><FONT face="wingdings">&#111;</FONT>
        </FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Signature&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
&nbsp;Signature&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
&nbsp;Date&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</FONT></B>

<P align="left">
<FONT size="2">Please sign exactly as name appears. 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.
</FONT>

<P align="center">
<B><FONT size="2">&#916;&nbsp;&nbsp;&nbsp;FOLD AND DETACH
HERE&nbsp;&nbsp;&nbsp;&#916;</FONT></B>
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