CALTON, INC.
                                   FORM 10-K
                    FOR FISCAL YEAR ENDED NOVEMBER 30, 1996

                                 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, 1998 (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 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 (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 a particular 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 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

     (a)  Upon termination of employment without just cause of an Eligible
Employee selected to participate in the Plan, the Eligible Employee, in the
sole discretion of the Committee, shall  be entitled to receive an Incentive
Award for the year of such termination in an amount not to exceed fifty percent
(50%) of the average Incentive Award made to Eligible Employees for the
particular fiscal year in which such termination occurred; provided, however,
that if any Incentive Award is granted, such Incentive Award shall be prorated
for the actual number of days the Eligible Employee was employed by the Company
during the particular fiscal year.  For purposes of the Plan, termination of an
Eligible Employee "without just cause" shall include, without limitation,
retirement with consent of the Company, death, permanent disability, and
termination by the Company for any reason other than for just cause as defined
in (b) hereinbelow.

     (b)  Upon the termination of employment of an Eligible Employee selected
to participate in the plan for a particular fiscal year for just cause by the
Company, 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.  For purposes of the Plan, the term "just cause" includes: (i) an
Eligible Employee's conviction for a felony or for fraud; (ii) an Eligible
Employee engaging in any conduct, by way of act or omission, which in the
opinion of the Company's Board has the potential to cause, or does cause, a
material adverse effect on the Company's business; (iii) an Eligible Employee
failing to return from authorized leave from the Company; (iv) an Eligible
Employee being found to be under the influence of, or to have distributed, any
illegal narcotic substance while on the Company's premises, including any
project site of the Company; (v) an Eligible Employee acting dishonestly or
committing theft of Company property; or (vi) the work performance of an
Eligible Employee failing to meet established Company standards; provided,
however, that the definition of "just cause" in any employment agreement
between an Eligible Employee and the Company, if any, shall supersede and take
the place of the preceding definition.


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.


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 January 30, 1996.