EXHIBIT 10.4

                    CALTON, INC. INCENTIVE COMPENSATION PLAN

1. PURPOSE

     Pursuant to Calton's ("Calton" or the "Company") philosophy of providing
compensation to its employees which is competitive with the compensation offered
by similar companies operating in the same regions and emphasizing incentive
compensation as a result of the cyclical nature of the Company's business, the
Company has established the Calton, Inc. Incentive Compensation Plan (the
"Plan") to promote the interests of Calton and its shareholders by enhancing the
Company's ability to attract, retain and motivate highly qualified individuals
to serve the Company and its subsidiaries by providing such individuals the
opportunity to earn meaningful additional compensation based on the operating
results of the Company.

2. EFFECTIVE DATE AND TERM OF THE PLAN

     The Plan shall be effective as of June 1, 1993, subject to the approval of
the Company's Board of Directors (the "Board"), and it shall terminate on
November 30, 2000 (the "Term"). The Board, in its sole discretion, may renew,
for up to two (2) fiscal years upon each such renewal, the Term of the Plan and
the provisions hereunder.

3. PARTICIPATION

     All officers of the Company and its subsidiaries and all managers that
participate in the Company's Management Objective Bonus Program are eligible for
participation in the Plan. In addition, up to 10% of the Incentive Pool (as
defined below) may be used for bonuses to other full time employees of the
Company and its subsidiaries who are not otherwise eligible for commissions or
bonuses. The employees that are eligible to participate in the Plan (the
"Eligible Employees") shall be determined each fiscal year by the Compensation
Committee of the Board (the "Committee") based on the recommendations of the
President and Chief Executive Officer of the Company. The determination of
Eligible Employees entitled to participate in the Plan shall be made by the
Committee no later than the end of the first quarter of any fiscal year;
provided, however, that an Eligible Employee hired after the end of the first
quarter of any fiscal year may be considered by the Committee for participation
in the Plan. Participation in the Plan during any one fiscal year does not imply
or guarantee participation in any other fiscal year during the Term of the Plan.

4. INCENTIVE COMPENSATION

     The available pool of incentive compensation (the "Incentive Pool") under
this Plan during any particular fiscal year shall be equal to ten percent (10%)
of the Company's pre-tax income as reported in the Company's Form 10-K for a
particular fiscal year, subject to certain non-operating adjustments (the
"Adjustments") that may be made to the Incentive Pool at the discretion of the
Committee to remove the effect of events or transactions not in the ordinary
course of the Company's operations.

5. DISTRIBUTION OF INCENTIVE COMPENSATION

     The President and Chief Executive Officer of the Company shall recommend
the dollar amount of an award from the Incentive Pool (the "Incentive Award") to
be granted to each

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Eligible Employee participating in the Plan; provided, however, that an Eligible
Employee participating in the Plan may not receive an Incentive Award during any
particular fiscal year that exceeds the lesser of twenty percent (20%) of the
Incentive Pool or one hundred percent (100%) of the Eligible Employee's base
salary compensation for the same fiscal year; provided, however, that the
Committee reserves the right to make special, supplemental grants that exceed
one hundred percent (100%) of an Eligible Employee's base salary for the same
fiscal year. The Committee shall then review and approve, with the power to
alter, modify or disapprove in whole or in part, the proposed Incentive Award
for each Eligible Employee participating in the Plan no later than February 15
of the succeeding fiscal year, or the fifteenth day of the last month of the
first quarter of the succeeding fiscal year if the end of such preceding fiscal
year is other than November 30. An Eligible Employee selected for participation
in the Plan who was hired by the Company or one of its subsidiaries subsequent
to the commencement of the relevant fiscal year shall only be entitled to a
pro-rata portion of any Incentive Award. An Eligible Employee participating in
the Plan shall not be entitled to receive any Incentive Award until the grant of
any such Incentive Award has been approved by the Committee. Any Incentive Award
shall be distributed and paid to and Eligible Employee in accordance with the
Company's ordinary payroll policies and procedures during the last pay period of
February of each fiscal year, or during the last pay period of the last month of
the first quarter of the fiscal year if the end of such preceding fiscal year is
other than November 30. All approved and paid Incentive Awards shall be subject
to all tax withholding and reporting requirements.

6. TERMINATION

     Upon the termination of employment of an Eligible Employee selected to
participate in the plan for a particular fiscal year for any reason the
Committee shall not grant, and the Eligible Employee shall not be entitled to,
an Incentive Award for the fiscal year in which termination occurred, unless
otherwise determined by the Board of Directors.

7. AMENDMENT OR DISCONTINUANCE

     At any time during the Term of the Plan, the Committee may alter, amend,
suspend or discontinue the Plan.

8. OTHER AGREEMENTS

     In the event that any term or condition of this Plan varies from, or is in
any way dissimilar to or in contrast with, any term, condition or provision of
any other agreement between the Company and an Eligible Employee, such as an
employment agreement, the relevant terms, conditions and/or provisions of such
other agreement will control.

9. SUCCESSORS

     The provisions of the Plan shall be binding upon all successors of any
Eligible Employee granted an Incentive Award under the Plan, including, without
limitation, the estate of any such Eligible Employee and the executors,
administrators or trustees of such estate, and any receiver, trustee in
bankruptcy or representative of the creditors of any such Eligible Employee. Any
obligations with respect to Incentive Awards granted pursuant to the Plan shall
be expressly assumed by any successor in interest to the Company.

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10. GOVERNING LAW AND JURISDICTION OF NEW JERSEY COURTS

     This Plan and any agreement entered into in connection therewith shall be
construed and its provisions enforced and administered in accordance with the
laws of the State of New Jersey.

         [The foregoing reflects amendments made through July 14, 1999.]