Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e) As part of its ongoing program to reduce expenses, effective April 13, 2009, Avatar has reduced the compensation of most of its employees whose annual compensation exceeds $30,000. Reductions range from 4% to 10%, depending upon the level of compensation, and include those employees with written employment agreements who have agreed to such reductions. The annual base salaries of Named Executive Officers, Gerald D. Kelfer, Avatar's President and Chief Executive Officer; Jonathan Fels, President of Avatar's wholly-owned subsidiary, Avatar Properties Inc.; and Michael Levy, Executive Vice President and Chief Operating Officer of Avatar Properties Inc. have been reduced from $500,000 to $450,000. In addition, their annual bonuses, payable in December 2009, of $500,000, $400,000 and $400,000, respectively, will be reduced by 10% on the amounts to be accrued from April 13 through December 31, 2009; and amounts to be paid will be $465,400, $372,320 and $372,320, respectively.

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