Exhibit 10.4




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, 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 any of its 80% or greater owned subsidiaries by providing such individuals
the opportunity to earn meaningful additional compensation based on the
operating results of the Company. This Plan is consistent with the Plan that has
been in effect and renewed since 1995.




2.    EFFECTIVE
DATE AND TERM OF THE PLAN

 

      
The Plan shall be effective as of December 1, 2004, subject to the approval of
the Company’s Board of Directors (the “Board”), and it shall terminate on
November 30, 2006 (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 any of its 80% or greater owned subsidiaries 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 any of its 80% or greater owned 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 Eligible Employee participating in the Plan; provided, however,
that the 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 (i) such twenty percent (20%) limit shall not apply with respect
to a fiscal year if the total amount of the Incentive Pool for such fiscal year
is less than $200,000 and (ii) 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 80% or greater owned 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 an 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 the 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.




10.         
GOVERNING
LAW AND JURISDICTION OF NEW JERSEY COURTS

 

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

 

 

 

 

BOD APPROVED:
11/02/2004