SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549
                              FORM 10-K/A
(Mark One)

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
           For the fiscal year ended November 30, 1996
                               or
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                  Commission file no. 1-8846

                          CALTON, INC.                    
     (Exact name of registrant as specified in its charter)

           New Jersey                              22-2433361     

(State or other jurisdiction of                 (I.R.S. Employer
 incorporation or organization)              Identification Number)

        500 Craig Road
     Manalapan, New Jersey                        07726-8790    
    (Addresses of principal                        Zip Code
       executive offices)

                  Registrant's telephone number, 
               including area code: (908) 780-1800

   Securities registered pursuant to Section 12(b) of the Act:

                         Title of Class

                                     Name of each exchange
          Title of each class        on which registered  
          Common Stock, $.01
          par value per share        American Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No   

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K X.

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.  Yes X  No   

The aggregate market value (based upon the last sales price reported by the
American Stock Exchange) of voting shares held by non-affiliates of the
registrant as of March 31, 1997 was $8,489,000.

As of March 31, 1997, 26,538,000 shares of Common Stock were outstanding.

Certain items in Parts I and II incorporate information by reference from the
1996 Annual Report to Shareholders. Except for portions which are expressly
incorporated by reference herein, the Annual Report is not deemed filed a part
hereof.


Disclosure Concerning Forward-Looking Statements
All statements, other than statements of historical fact, included in this Form
10-K, including without limitation the statements incorporated by reference in
Part II, Item 7: "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the statements under "Business," are, or may be
deemed to be, "Forward-Looking Statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such
forward-looking statements, including the statements pertaining to the
Company's ability to comply with the covenants contained in its revolving
credit facility which are incorporated by reference in Part II - Items 7 and 8,
involve assumptions, known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements contained in this Form
10-K. Such potential risks and uncertainties, include without limitation,
matters related to national and local economic conditions, the effect of
governmental regulation on the Company, the competitive environment in which
the Company operates, changes in interest rates, home prices, availability and
cost of land for future growth, the timing of land acquisition and product
development, availability of working capital and the availability and cost of
labor and materials, and other risk factors detailed herein and in other of the
Company's Securities and Exchange Commission filings. The forward-looking
statements are made as of the date of this Form 10-K and the Company assumes no
obligation to update the forward-looking statements or to update the reasons
actual results could differ from those projected in such forward-looking
statements.


                                PART I

Item 1.  BUSINESS

(a)       General Development of Business

General

Calton, Inc. (the "Company" or "Calton") and its subsidiaries design, construct
and sell single family detached homes primarily in central New Jersey and
central Florida. The Company markets primarily to first and second time move-up
buyers with the 549 homes delivered in fiscal 1996 having an average sales
price of approximately $201,000.

The Company's current homebuilding activities are conducted primarily through
two divisions: the Northeast and the Florida division.

Calton was incorporated in 1981 for the purpose of acquiring all of the issued
and outstanding capital stock of Kaufman and Broad of New Jersey, Inc., a New
Jersey corporation, from Kaufman and Broad, Inc., a Maryland corporation. After
the acquisition, the name of Kaufman and Broad of New Jersey, Inc. was changed
to Calton Homes, Inc. ("Calton Homes") which continues as a wholly owned
subsidiary of Calton. Calton maintains its executive offices at 500 Craig Road,
Manalapan, New Jersey 07726 and its telephone number is (908) 780-1800.

On March 9, 1993, Calton and certain of its subsidiaries filed petitions under
Chapter 11 of the United States Bankruptcy Code. The United States Bankruptcy
Court confirmed the Plan of Reorganization (the "Reorganization") on May 6,
1993 and the Reorganization was consummated on May 28, 1993. The Reorganization
resulted in the discharge of approximately $61.5 million of indebtedness and
$22.8 million of interest payments owed to certain creditors. In exchange for
the discharge of these obligations, these creditors were issued a combination
of cash, equity securities and short-term debt instruments which were retired
in September 1993. The equity securities issued to the creditors represented
approximately 93.5% of the voting power of the Company's capital stock.

On November 21, 1995, the Company had a significant shift in stock ownership
and voting rights. In addition, changes occurred on the Board of Directors and
in the Company's management.

Since 1969, the Company and its predecessor have constructed and sold
approximately 17,200 units in 143 residential developments in New Jersey,
Florida, Pennsylvania, California and Illinois. At November 30, 1996, the
Company had 20 communities open for sales. The Company builds single-family

                              -1-

detached homes ranging in base price from $96,000 to $199,000 in the Florida
division and $180,000 to $515,000 in the Northeast division. The average base
selling price of homes to be built on unsold lots, as of November 30, 1996, was
approximately $148,000 and $285,000 for the Florida and Northeast divisions,
respectively. Because of the timing of home deliveries, the average base
selling price of homes under development may not be indicative of the average
revenue per home sold in any fiscal year. See Item 1(c), "Residential
Development."

In 1996, the Company began its entry into the active adult housing market in
Ocean County, New Jersey. Through this community, marketed under the name
Renaissance, the Company will offer nine different single-family detached home
types. The Company has the contractual right to purchase up to 2,000 finished
lots on a rolling-option basis with the land seller funding the construction of
the amenities. This community is anticipated to be a major part of the
Northeast division's future deliveries and results. The Renaissance community
will offer a wide array of amenities, including a 24-hour attended gatehouse, a
25,000 square foot clubhouse and an eighteen-hole golf course.

(b)       Financial Information About Industry Segments

Substantially all revenues and equity in earnings, operating profits and assets
of the Company and its subsidiaries are attributable to one line of business,
the development and sale of residential housing and the acquisition and sale of
real property.

(c)       Description of Business

General

The Company designs, constructs and sells single family detached homes,
primarily in central New Jersey and central Florida. The Company markets
primarily to first and second time move-up buyers with the 549 homes delivered
in fiscal 1996 having an average sales price of approximately $201,000.

Corporate Operations

The Company operates through separate divisions, which are located within or
near the markets in which they operate. Each division is managed by an
executive with substantial experience in the markets served. In addition, each
division is staffed with personnel equipped with the skills to complete the
functions of land acquisition, entitlement processing, land development,
construction, marketing, sales and product service.

The Company's corporate staff is responsible for: (i) evaluating the
suitability of and selecting geographic markets; (ii) allocating capital
resources among divisions; (iii) maintaining the Company's relations with its
lenders to regulate the flow of financial resources; and (iv) monitoring the
divisional operations. Capital commitments are determined through consultation
among senior management and division managers. Centralized financial controls
are also maintained through the standardization of accounting and financial
policies and procedures, which are applied uniformly throughout the Company.

The Company's operating strategy generally consists of: (i) targeting primarily
the second and third time move-up buyer and, beginning in 1997, the active
adult community buyer in New Jersey; (ii) conducting homebuilding activities in
markets that, based on economic and demographic trends, demonstrate strong

                             -2-

growth potential; (iii) designing each residential community to meet the needs
of the particular market based on local conditions and demographic factors;
(iv) minimizing land risks by purchasing entitled tracts of well-located
property through options or contingent purchase contracts and limiting land
holdings to those which can be developed within two years from the date of
purchase or where available purchasing finished lots on a rolling option basis;
(v) developing residential communities in phases which enables the Company to
reduce financial exposure, control construction and operating expenses and
adapt quickly to changes in customer demands and other market conditions; (vi)
utilizing subcontractors to perform land development and home construction on a
fixed price basis; and (vii) emphasizing the quality, features and value of its
homes.

Geographic Markets

The Company's current business operations are principally located in central
New Jersey and the greater Orlando, Florida area. Generally, the Company has
organized divisions that are located in markets that demonstrate a strong
growth profile. The Company selects locations within these markets for its
residential housing communities that have ready access to metropolitan areas by
public transportation and major arterial highways and which have experienced
increased housing demand.

In March 1995, the Company consolidated its New Jersey-North and New Jersey-
South divisions into the Northeast division. The Northeast division conducts
homebuilding activities in Burlington, Hunterdon, Monmouth, Middlesex, Ocean
and Mercer counties in New Jersey. The Company's Florida division conducts
homebuilding activities in the Orange and Seminole County areas, concentrating
in the suburban Orlando area.

The Company does not anticipate that it will expand into any new geographic
areas in fiscal 1997 and, therefore, plans to focus its operating locations and
available capital in the Northeast and Florida divisions.

Products

The Company offers a variety of homestyles tailored to meet the specific needs
of the particular geographic and demographic markets served, including the
second and third time move-up buyer and, to a lesser extent, the first time and
first time move-up buyer. Homestyles, prices and sizes are tailored to each
community based upon the Company's assessment of specific market conditions and
the restrictions imposed by local jurisdictions. In certain projects,
recreational amenities such as tennis courts and playground areas are
constructed by the Company. The Company believes that its current product
strategy which primarily focuses on the second and third time move up and
active adult buyer  enables it to mitigate some of the risks inherent in the
homebuilding industry by providing it with a product mix that supplies
particular markets that are not as susceptible to changing market conditions
including interest rate changes.

The Company generally standardizes its product line within geographic markets
it serves. This standardization improves the quality of construction and
permits efficient production techniques and bulk purchasing of materials and
components, thus reducing construction costs and the time required to build a
home. See "Sales and Marketing."

                             -3-

Land Acquisition, Planning and Development

Substantially all of the land acquired by the Company is purchased only after
necessary entitlements have been obtained so that the Company has certain
rights to begin development or construction as market conditions dictate. The
term "entitlements" refers to developmental approvals, tentative maps or
recorded plats, depending on the jurisdiction within which the land is located.
Entitlements generally give a developer the right to obtain building permits
upon compliance with certain conditions that are usually within the developer's
control. Although entitlements are ordinarily obtained prior to the Company's
purchase of the land, the Company is still required to obtain a variety of
other governmental approvals and permits during the development process. The
Company primarily buys finished lots that are ready for construction in the
Florida market. Although finished lots are generally not available in the
Northeast markets, the Company has entered into a contract to purchase up to
2,000 finished lots on a rolling option basis in Ocean County, New Jersey, in
its active adult community marketed under the name Renaissance.

The Company's general policy has been to control land for future development or
sale through the use of purchase options or contingent purchase contracts
whenever practicable and where market conditions permit. The Company endeavors
to acquire property for development either (i) on an installment method, with
closings on a portion of a project on a periodic basis or (ii) through the use
of purchase money mortgages. In certain cases, when available, the Company
acquires finished lots on a rolling option basis. These policies enable the
Company to limit its financial commitments, including cash expenditures and
interest and other carrying costs, and avoid large land inventories which
exceed the Company's near term development needs. At the same time, the Company
retains any appreciation in the value of the parcel prior to exercising the
option or closing the contingent purchase contract. During the option or
contingency period, the Company performs feasibility studies, technical,
engineering and environmental surveys and obtains the entitlements.

In making land acquisitions, the Company considers such factors as: (i) current
market conditions; (ii) internal and external demographic and marketing
studies; (iii) environmental conditions; (iv) proximity to developed and
recreational areas; (v) availability of mass transportation and major arterial
highways and ready access to metropolitan areas and other employment centers;
(vi) industrial and commercial growth patterns; (vii) financial review as to
the feasibility of the proposed community, including projected profit margins,
returns on capital employed and payback periods; (viii) the ability to secure
governmental approvals and entitlements; (ix) customer preferences; (x) access
to materials and subcontractors; and (xi) management's judgement as to the real
estate market, economic trends and the Company's experience in a particular
market. The Company's development activities include land planning and securing
entitlements. These activities are performed by the Company's employees,
together with independent engineers, architects and other consultants. The
Company's employees also develop long-term planning of future communities.

Construction

The Company employs production managers who are responsible for coordinating
all functions pertaining to the construction process. All construction work for
the Company is performed by subcontractors on a fixed price basis, with the
Company acting as general contractor. In order to maintain control over costs,

                             -4-

quality and work schedules, the Company employs an on-site superintendent who
is responsible for supervising subcontractor work at each project.

The Company's housing is constructed according to standardized design plans
that are then customized to each individual contract preference. Generally, the
Company seeks to develop communities having a number of lots to absorb
deliveries over a minimum one year period in order to reduce the per unit cost
of the housing products which it sells. Advantages achieved by volume building
include lower unit prices paid to subcontractors and reduced material costs per
unit.

Generally, the Company's policy is to commence construction of a detached
housing unit beyond the foundation after a sales contract for that unit has
been signed. The Company does, however, ordinarily attempt to maintain a
predetermined inventory of homes in-process in order to match the construction
times of homes with the mortgage application process and to accommodate
customers who require immediate occupancy, such as relocation buyers. In
addition, in order to permit construction and delivery of housing units on a
year round basis, the Company, in anticipation of winter in the Northeast, will
start construction of foundations prior to having signed sales contracts.

Materials and Subcontractors

The Company attempts to maintain efficient operations by utilizing standardized
material available from a variety of sources. Prices for materials may
fluctuate due to various factors, including demand levels or supply shortages.
During 1996, major building material prices for lumber, asphalt and appliances
remained relatively flat while prices for concrete increased modestly. The
price of gypsum remained flat overall, increasing during the first half of the
year with a corresponding decrease during the second half.

The Company enters into contracts with numerous subcontractors representing all
building trades in connection with the construction of its homes, and has
established long-term relationships with a number of subcontractors. These
subcontractors bid competitively for each phase of the work at each project and
are selected based on quality, price and reliability. Subcontractor bids are
solicited after an internal job cost budget estimate has been prepared based on
estimated material quantities. These internal estimates serve as the formal
baseline budget against which the cost of each trade is measured. Each division
is responsible for contracting all trades in each of its communities.
Production costs are monitored monthly to assess actual versus contracted
amounts. The Company closely monitors subcontractor performance and
expenditures on each community to assess project profitability. Additionally,
the Company is generally able to obtain reduced prices from many of its
subcontractors due to the volume of work it provides to its subcontractors.
Agreements with subcontractors generally are for three to twelve months, and
provide a fixed price for labor and materials.

The Company has, from time to time, experienced minor temporary construction
delays due to shortages of materials or availability of subcontractors. Such
construction delays may extend the period of time between the signing of a
purchase contract and the receipt of revenues by the Company at the time of
delivery of the home to the buyer. To date, the Company has experienced no
material adverse financial effects as a result of construction delays.
Currently, sufficient materials and subcontractors are available to meet the

                             -5-

Company's demands; however, the Company cannot predict the extent to which
shortages in necessary materials or labor may occur in the future.

Sales and Marketing

Each division establishes marketing objectives, determines retail pricing,
formulates sales strategies and develops advertising programs, which in each
case, are subject to periodic market analyses conducted by the division. The
Company typically constructs, furnishes and landscapes model homes for each
community and maintains an on-site sales office staffed with its own sales
personnel. The Company makes use of newspaper, billboard and direct mail
advertising, special promotional events and illustrated brochures in a
comprehensive marketing program. The Company has established a web site on the
Internet (http://www.caltonhomes.com) to provide its customers with additional
information on the Company's communities and homes. In marketing its products,
the Company emphasizes quality, features and value and provides a 15 year
limited warranty on its homes. In addition, the Company offers a customization
program in order to make the products the Company builds more attractive to
homebuyers by tailoring them to individual customer needs.

The Company's sales personnel participate in an intensive sales training
program to develop their skills and knowledge. The Company consults with these
personnel in the product development process to obtain and consider feedback
from customers and information with respect to the Company's competitors.

Sales of the Company's homes are made pursuant to standard sales contracts that
are customary in the markets served by the Company. Such contracts require a
customer deposit (generally up to 5% of the base selling price unless limited
by local law) at time of contract signing and provide the customer with a
mortgage contingency, if necessary. The contingency period typically is sixty
(60) days following execution of the contract. In certain instances, contracts
are contingent on the sale of a purchaser's existing home. In such cases, the
Company retains the right to sell the home to a different buyer during the
period in which the "house-to-sell" condition is not satisfied. The
cancellation rate for new contracts signed was approximately 22% for fiscal
1996. Cancellation rates may vary from year to year. The Company attempts to
limit cancellations by training its sales force to determine at the sales
office the qualifications of potential homebuyers and by obtaining financial
information about the prospective purchaser.                                   

        

At March 31, 1997, the Company employed 50 full-time and part-time sales
personnel who are paid on a salary and/or sales commission basis. The Company
also utilizes the services of independent real estate brokers through a
cooperative broker referral plan.

Customer Financing

The Company sells its homes to customers who generally finance their purchase
through conventional and government insured mortgages. The Company provides its
customers with information on a wide selection of conventional mortgage
products and various mortgage lenders to assist the homebuyer through the
mortgage process. Mortgages arranged by mortgage providers in recent years have
been mortgage loans underwritten and made directly by a lending institution to
the customer. The Company is not liable for repayment of any mortgage loans.

                              -6-

Backlog

At November 30, 1996, the Company had a backlog of signed contracts for 165
homes with an aggregate sales price of $40.2 million as compared to a backlog
of signed contracts for 166 homes with an aggregate sales price of
$36.0 million at November 30, 1995. All of the November 30, 1996 backlog is
expected to be completed and delivered by November 30, 1997. Backlog includes
contracts containing financing and certain other contingencies, including, in
certain instances, contracts which are contingent on the buyer selling their
homes. Due to changes in product offerings, the uncertainty of future market
conditions and the general economic environment, the sales backlog achieved in
the current period may not be indicative of those to be realized in succeeding
periods.

Residential Development

The Company markets and sells varying types of residential homes ranging in
base selling prices from $96,000 to $199,000 in the Florida division and
$180,000 to $515,000 in the Northeast division. Current average base selling
prices for the Company's homes are approximately $262,000 in New Jersey and
$154,000 in Florida. Average base selling prices of homes sold in any period or
unsold at any point in time will vary depending on the specific projects and
style of homes under development. The Company continually monitors prevailing
market conditions, including interest rates and the level of resale activity in
the markets in which it operates. The Company may, from time to time, sell all
or a portion of a residential project prior to its development by the Company.

                               -7-

As of November 30, 1996, the Company had 20 residential communities open for
sales which include an aggregate of 1,150 single family detached homes to be
delivered. The following sets forth certain information as of November 30, 1996
with respect to communities being developed by each of the Company's operating
divisions:

                                           Homes
                                           Deliv- Homes
                                     Homes ered   Un-
                      Year           Deliv- Yr.   der
                       of     Lots   ered  Ended  Con-
                      First   Ap-    Incep-Nov.  tract   Un-
                      Deliv-  proved tion   30,  (Back- sold
                       ery     (a)  To Date1996  log)   Lots     Price Range
Northeast             ------  ----- -----  ----  ----   ----  -----------------
Belmont at
 Steeplechase
 (Burlington)           1995    291    55    31     8    228  $179,990-$231,990
Bey Brook
 Estates (Dover)        1997     31     0     0     4     27  $396,990-$424,990
Crown Pointe
 (West Windsor)         1996     94     3     3    13     78  $384,990-$475,990
Jockey Club at
 Steeplechase
 (Burlington)           1995    177    88    41    15     74  $137,990-$171,990
Manalapan Chase
 (Manalapan)            1996     52    19    19    22     11  $328,990-$406,990
Monmouth Ridings
 (Howell)               1994    144   125    38     9     10  $184,990-$223,990
Regency Oaks
 (Marlboro)             1995     39    26     9     8      5  $338,990-$429,990
Stanton Ridge
 (Readington)           1997     14     0     0     2     12  $415,990-$514,990
Other (commun-
 ities with fewer
 than 5 homes
 unsold)                        754   752   119     1      1
                              ----- -----  ----  ----   ----                   
     Total                    1,596 1,068   260    82    446
                                                 

Orlando, Florida
Beechwoods
 (Altamonte
 Springs)               1995     57    38    27     3     16  $133,900-$174,990
Brookhaven Oaks
 (Ocoee)                1996     42     5     5    23     14  $145,990-$179,990
Cambridge Com-
 mons (Apopka)          1995     87    52    29     9     26  $ 99,990-$121,990
Cheshire Woods
 (Ocoee)                1996    100    20    20     7     73  $108,990-$127,990
Conway Harbor
 (Orlando)              1997     63     0     0     1     62  $119,990-$139,990
Crescent Park
 (Orlando)              1995    108    33    21     5     70  $156,990-$185,990
Cypress Lakes
 (Orlando)              1996     79    24    24     6     49  $ 95,990-$114,990
Heather Glen at
 Eastwood
 (Orlando)              1997     28     0     0     1     27  $139,990-$171,990
Longwood Club
 (Longwood)             1997     52     0     0     2     50  $159,990-$198,990
The Meadows
 (Oviedo)               1995     49    22    13     8     19  $140,990-$176,990
Saddlebrook
 (Gotha)                1995     52    45    27     1      6  $130,990-$173,990
Sand Lake Cove
 (Dr. Phillips)         1996     97    26    26     9     62  $164,990-$198,990
Other (com-
 munities with fewer
 than 5 homes
 unsold)                        295   282    66     8      5
                              ----- -----  ----  ----   ----                   
     Total                    1,109   547   258    83    479
                                                 

Chicago, Illinois       1995     78    74    31     0      4
                              ----- -----  ----  ----   ----
     TOTAL                    2,783 1,689   549   165    929
                              ===== =====  ====  ====   ====

(a) Includes dwelling units completed and delivered, units under construction
    and units designated on subdivision or site plans where preliminary and
    final subdivision or site plan approvals, which in certain instances may be
    subject to the fulfillment of certain conditions imposed thereby, have been
    received. Also includes approximately 252 planned homes under rolling
    options in 6 communities in New Jersey and Florida currently being
    developed and marketed by the Company, which will require cash payments of
    $4.8 million in 1997, $3.6 million in 1998 and $390,000 in 1999.

                              -8-


Land Inventory

The Company acquires options or contingent purchase contracts on land where
practicable and where market conditions and lending availability permit. In
other instances, the Company has endeavored to acquire property either subject
to purchase money mortgages, or on an installment method, with closings on a
portion of a project on a periodic basis. In order to ensure the availability
of land for future development, the Company believes it is necessary to control
land in New Jersey at an earlier point in time than in other markets. As of
November 30, 1996, if all of the options held by the Company were exercised and
all of the contingent purchase contracts to which the Company is a party were
closed, the Company would have sufficient land to maintain its anticipated
level of deliveries for the next five years in the Northeast market. The
Company believes that additional acquisitions of new communities will be
required for anticipated deliveries in 1999 and beyond in the Florida market.
The Company's revolving credit facility (the "Facility") contains provisions
limiting the amount of land which the Company may acquire in any one year
(other than land acquisitions utilizing proceeds of purchase money mortgages)
to $22.0 million in 1997.

The following table sets forth certain information, as of November 30, 1996,
with respect to options held by the Company and contingent purchase contracts
to which the Company is a party:

                                Number of
                                Proposed
                                Residential    Planned
                                Communities   Homes (1)
                                -----------   ---------
Northeast                                10       3,459
Orlando, Florida                          2         152
                                -----------   ---------
     Total                               12       3,611
                                ===========   =========

(1)  Final development approvals have not been obtained with respect to certain
     properties included in the above table. Accordingly, the number of units
     approved for development, if any, may differ from the number of planned
     units reflected in the table. In addition, prior to exercising an option
     or closing a contingent purchase contract, the Company conducts
     feasibility studies and other analyses with respect to a proposed
     community. In certain instances, a determination may be made by the
     Company not to proceed with certain communities. Accordingly, no assurance
     can be given that the Company will ultimately pursue the development of
     every community reflected in the table above.

As of November 30, 1996, the Company held options or was a party to contingent
contracts to purchase 12 parcels of land in New Jersey and Florida for which it
has paid options fees and earnest money aggregating $2.1 million (which
includes $900,000 applied to the purchase price of a property acquired in
December, 1996). A total of 3,611 homes, of which 3,297 homes are single family
and 314 are townhomes, are planned for these parcels. Through November 30,
1996, the Company has spent an additional $3.7 million in predevelopment costs
on such land, $2.6 million of which costs would not be recoverable in the event
these options were not exercised or the contracts were not closed, as the case
may be. Assuming that in each year the Company makes payments with respect to
either options or contingent contracts, exercises options, or closes such
contracts with respect to the minimum amount of land necessary to retain its
rights to acquire the remainder of the subject properties, the aggregate amount
required to retain or exercise such options or close or extend such contingent
contracts in periods subsequent to November 30, 1996 is approximately

                             -9-

$11.7 million in 1997, $13.3 million in 1998, $9.7 million in 1999,
$11.9 million in 2000, $8.3 million in 2001 and $59.8 million thereafter.
Assuming the Company exercises such options and contingent contracts, the
Company will be in a position to acquire title to approximately 313, 469, 425,
618, and 293 lots during fiscal years 1997 through 2001, respectively, and
1,493 lots thereafter. The Renaissance community represents the majority of the
capital requirements and lots which are currently planned for development
subsequent to the year 2001.

Commercial Land and Buildings

Pursuant to management's continued focus on its core homebuilding business, the
Company sold four of its commercial properties in 1996 for approximately
$3.2 million. The sales resulted in an aggregate pre-tax gain of approximately
$1.1 million and provided approximately $1.8 million of additional cash for
operations.

The Company owns certain undeveloped properties in New Jersey, Florida,
California and Pennsylvania. These properties include 60 acres of commercial
property in Manalapan, New Jersey; 14 acres consisting of two parcels in Orange
County, Florida; and three other properties, two in Pennsylvania and one in
California. Each of these properties are currently available for sale except
for one of the Pennsylvania properties, which has certain acreage under
contract for sale.

Joint Ventures

The Company has participated in joint ventures in the past that were engaged in
land and residential housing development. During 1996, the Company received
$460,000 of a fully reserved note receivable from a previous joint venture and
received $725,000 from the liquidation of a joint venture in which it
previously participated. However, as of November 30, 1996, the Company had no
involvement in any active joint ventures.

Competition

The Company's business is highly competitive. Homebuilders compete for
desirable properties, financing, raw materials and skilled labor among other
things. The Company competes in each of the geographic areas in which it
operates with numerous real estate developers, ranging from small local to
larger regional and national builders and developers, some of which have
greater sales and financial resources than the Company. Resales of housing
provide additional competition. The Company competes primarily on the basis of
quality, features, value, reputation, price, location, design and amenities.

Regulation and Environmental Matters

The Company is subject to various local state and federal statutes, ordinances,
rules and regulations concerning zoning, building design, construction and
similar matters, including local regulation which imposes restrictive zoning
and density requirements in order to limit the number of homes that can
eventually be built within the boundaries of a particular locality. In
addition, the Company is subject to registration and filing requirements in
connection with the construction, advertisement and sale of its communities in
certain states and localities in which it operates even if any or all necessary
government approvals have been obtained. Generally, the Company must obtain
numerous government approvals, licenses, permits, and agreements before it can
commence development and construction. Certain governmental authorities impose

                             -10-

fees as a means of defraying the cost of providing certain governmental
services to developing areas, or have required developers to donate land to the
municipality or make certain off-site land improvements. The Company may also
be subject to periodic delays or may be precluded entirely from developing
communities due to building moratoriums that could be implemented in the future
in the states in which it operates. Generally, such moratoriums relate to
insufficient water or sewage facilities.

The Company is also subject to a variety of local, state and federal statutes,
ordinances, rules and regulations concerning protection of health and the
environment ("environmental laws"). The particular environmental laws which
apply to any given community vary greatly according to the community site, the
site's environmental conditions and the present and former uses of the site.
These environmental laws may result in delays, may cause the Company to incur
substantial compliance and other costs, and can prohibit or severely restrict
development in certain environmentally sensitive regions or areas. For example,
in July 1987, New Jersey adopted the Fresh Water Wetlands Protection Act which
restricts building in or near certain protected geographic areas designated as
fresh water wetlands. The preservation of wetlands located within a project may
lessen the number of units that may be built in a particular project. The
Company has planned all of its projects containing wetlands to comply with the
regulations adopted under the Fresh Water Wetlands Protection Act and does not
believe that this legislation will adversely affect its present development
activities in New Jersey.

The State of Florida has adopted a wide variety of other environmental
protection laws. The laws regulate developments of substantial size and
developments in or near certain specified geographic areas within the State of
Florida, including the Big Cypress, Green Swamp and Florida Keys areas,
imposing requirements for development approvals which are more stringent than
those which the Company would have to meet in Florida for development outside
of these geographic areas. Further, the State of Florida regulates certain
types of developments located in or near certain types of geographic areas,
plant life or animal life. The Company does not believe that any land owned by
it that is planned for development is the site of any protected plant or animal
life. Although the Company owns land in or near certain protected types of
geographic areas, the Company designs its various communities to avoid
disturbing such areas so that certain regulations with respect to these areas
are not applicable. When the Company undertakes development activity in or near
or which may have an impact on any protected areas, it is required to satisfy
more stringent requirements for developmental approval than would otherwise be
applicable. In addition, the laws of the State of Florida require the use of
construction materials which reduce the energy consumption required for heating
and cooling.

The Florida Growth Management Act of 1985 requires that an infrastructure,
including roads, sewer and water lines, must be in existence or funded
concurrently with the construction of the development. If such infrastructure
will not be concurrently available or funded, then the project cannot be
developed. This will have an effect on limiting the amount of land available
for development and may delay construction and completion of some developments.

In July 1985, New Jersey adopted the Fair Housing Act which established an
administrative agency to adopt criteria by which municipalities will determine
and provide for their fair share of low and moderate income housing ("Mt.
Laurel" housing). This agency promulgated regulations with respect to such
criteria effective August 1986. 

                             -11-

The Company may be required to set aside Mt. Laurel housing in certain
municipalities in which it owns or has the right to acquire land. In order to
comply with such requirements, the Company may be required to (i) sell some
homes at prices which would result in no gain or loss and an operating margin
less than would have resulted otherwise, or (ii) contribute to public funding
of affordable housing, which contribution will increase the costs of homes to
be developed in a community. The Company attempts to recover some of these
potential losses or reduced margins through increased density, certain cost
saving construction and land development measures and reduced land prices for
the sellers of property.

Despite the Company's past ability to obtain necessary permits and development
approvals for its communities, it can be anticipated that increasingly
stringent requirements will be imposed on developers and homebuilders in the
future. Although the Company cannot predict the effect of these requirements,
they could result in time consuming and expensive compliance programs and
substantial expenditures for pollution and water quality control, which could
materially adversely affect the Company. In addition, the continued
effectiveness of permits already granted or development approvals already
obtained is dependent upon many factors, some of which are beyond the Company's
control, such as changes in policies, rules and regulations and their
interpretation and application.

The foregoing does not purport to be a full description of all of the
legislation and regulations impacting the business of the Company. The Company
may be subject to numerous other governmental rules and regulations regarding
building standards, labor practices, environmental matters and other aspects of
real estate development in each jurisdiction in which it does business.

Employees

As of March 31, 1997, the Company employed approximately 116 full-time
personnel, including 15 corporate employees, 63 employees in the Northeast
division and 38 employees in the Florida division. The Company also employs
approximately 20 part-time employees in various locations. The Company believes
its employee relations are satisfactory.

Item 2.  COMPANY FACILITIES

The Company leases approximately 19,413 square feet of office space (of which
3,629 square feet are sublet to tenants) and 6,200 square feet of storage space
in a two-story office building in Manalapan, New Jersey, which houses the
Company's corporate headquarters and its Northeast division. In addition, the
Company leases 5,280 square feet of office space in Florida. Management
believes that these arrangements provide adequate space for the Company to
conduct its operations.

The Company also has remote sales offices when not utilizing a model home and
construction offices on each of its project sites, some of which include mobile
units which are leased for terms varying from one month to one year. From time
to time the Company also leases model homes in some of its communities which
the Company has previously sold to third parties under a lease-back
arrangement. The current leases on model homes have terms up to two years.

                             -12-

Item 3.  LEGAL PROCEEDINGS

In July 1994, an action was filed against Calton Homes, Inc., the Township of
Plainsboro, New Jersey and its planning board, certain real estate brokers and
certain unnamed officers of Calton Homes, Inc., by approximately 60 purchasers
in the Company's Princeton Manor development seeking compensatory and punitive
damages arising out of an alleged failure to disclose that a portion of the
property adjacent to the community could be developed by Plainsboro Township as
a public works site. The Company is vigorously contesting this matter and,
although there can be no assurances, does not believe that the case will have
any material effect on the financial position, results of operations or cash
flows of the Company. In addition, the Company believes that it is
contractually entitled to indemnification from Plainsboro Township in the event
that any liability should arise.

In June 1996, the Federal Deposit Insurance Corporation (the "FDIC"), in its
capacity as Liquidating Agent/Receiver of Eliot Savings Bank, instituted an
action in the United States District Court, District of Massachusetts, seeking
recovery of amounts owed under a $5.7 million promissory note (the "Note")
issued to Eliot Savings Bank by the Residences at the Surf joint venture (the
"Joint Venture"), an entity in which a Talcon, L.P. ("Talcon") subsidiary had
an interest. This action relates to a loan on property owned by the Joint
Venture. The loan was placed on the property before Talcon was formed.
Accordingly, in connection with the creation of Talcon, the interest in the
Joint Venture was transferred upstream to Calton, Inc. and then transferred
downstream into Talcon, and eventually into the Talcon subsidiary. In its suit,
the FDIC alleges, among other things, that Calton, by virtue of the assignment
of the interest in the Joint Venture to Calton in 1987, has liability as a
general partner in the Joint Venture and is seeking to collect approximately
$8.7 million in principal and interest from Calton and other parties. While no
discovery has occurred to date, based upon a preliminary analysis of this
matter, Calton believes that the FDIC's position is contrary to applicable law
and that Calton does not have any obligations under the Note by virtue of the
assignment of the interest in the Joint Venture to Calton or otherwise. The
Company will vigorously contest this matter but there can be no assurances that
the case will not have a material adverse effect on the Company's financial
position, results of operations or cash flows.

Calton and its subsidiaries are involved from time to time in routine
litigation. Management does not believes that any of this litigation is
material to the financial position, results of operations or cash flows of the
Company.

Calton's by-laws contain provisions which provide indemnification rights to
officers, directors and employees under certain circumstances with respect to
liabilities and damages incurred in connection with any proceedings brought
against such persons by reason of their being officers, directors or employees
of Calton.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of 1996, no matter was submitted to a vote of
security holders through the solicitation of proxies or otherwise.

                             -13-


                                  PART II


Item 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
         MATTERS

Information pertaining to the market for the Registrant's Common Stock, high
and low sales prices of the Common Stock in 1996 and 1995 and the number of
holders of Common Stock is presented on page 24 of the 1996 Annual Report to
Shareholders, which information is incorporated herein by reference.

The Company has not paid dividends on its capital stock in the past. In
addition, the terms of the Facility prohibit the payment of dividends.

Item 6.  SELECTED FINANCIAL DATA

The financial highlights data is presented on page one of the 1996 Annual
Report to Shareholders, which information is incorporated herein by reference.

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

The information required by this item is presented on pages 5 through 11 of the
1996 Annual Report to Shareholders, which information is incorporated herein by
reference.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements, including the Report of Independent
Accountants thereon and the unaudited Quarterly Financial Results, are
presented on pages 12 through 24 of the 1996 Annual Report to Shareholders,
which information is incorporated herein by reference.

Item 9.  CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.


                              -14-

                                     PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The directors and executive officers of the Company as of March 31, 1997 are
listed below and brief summaries of their business experience and certain other
information with respect to them is set forth in the following table and in the
information which follows the table.

Name                                   Age            Position

Anthony J. Caldarone                    59            Chairman, President and
                                                      Chief Executive Officer

Robert A. Fourniadis                    39            Senior Vice President-
                                                      Legal and Secretary

Bradley A. Little                       46            Senior Vice President-
                                                      Finance, Treasurer and
                                                      Chief Financial Officer

J. Ernest Brophy                        72            Director

Mark N. Fessel                          40            Director

Frank Cavell Smith, Jr.                 51            Director


Mr. Caldarone was reappointed as Chairman, President and Chief Executive
Officer of Calton in November 1995, having previously served in such capacities
from the inception of the Company in 1981 through May 1993 when the Company
consummated the Reorganization. From June 1993 through October 1995, Mr.
Caldarone served as a Director of the Company.

Mr. Fourniadis was named Senior Vice President, Secretary and Corporate Counsel
of Calton in June 1993 following the consummation of the Reorganization. Prior
thereto, Mr. Fourniadis served as Vice President and Corporate Counsel of
Calton Homes from 1988 to 1993.

Mr. Little was named Senior Vice President, Treasurer and Chief Financial
Officer of Calton in June 1993 following the consummation of the
Reorganization. Prior thereto, Mr. Little had served as Vice President of
Accounting of Calton from 1989 to June 1993.

Mr. Brophy, a self-employed attorney and certified public accountant
specializing in tax consultation to clients engaged in the construction
business, was reappointed as a Director of Calton in November 1995, having
served in such capacity from March 1983 through November 1985 and from April
1986 until through May 1993 when the Company consummated the Reorganization.

                             -15-

Since 1992, Mr. Brophy has served as Chief Financial Officer and a director of
Hurdy-Gurdy International, Inc., a company that markets sorbet products.

Mr. Fessel was designated as a Director of Calton by the holders of a majority
in outstanding principal amount of the Company's 12-5/8% Subordinated Notes
(the "Subordinated Notes") pursuant to the Reorganization in May 1993. Since
1985, Mr. Fessel has owned and operated a real estate company and has acted as
principal in numerous commercial and residential real estate developments
throughout the northeast. In 1984, Mr. Fessel served as the Vice President of
Acquisitions of the Meredith Organization, a nationally recognized real estate
developer.

Mr. Smith was designated as a Director of Calton by the holders of a majority
in outstanding principal amount of Subordinated Notes pursuant to the
Reorganization in May 1993. Since 1990, Mr. Smith has been associated with the
MEG Companies as a Senior Consultant responsible for corporate real estate
consulting activities. From 1977 to 1990, Mr. Smith served as a Real Estate
Consultant and Real Estate Development Manager for The Spaulding Co., Inc. Mr.
Smith also is an adjunct faculty member at Boston University and a member of
the Board of Trustees of Shelter, Inc.


Item 11.  EXECUTIVE COMPENSATION

The following table sets forth information concerning the annual and long-term
compensation for services in all capacities to the Company and its subsidiaries
for the fiscal years ended November 30, 1996, 1995 and 1994, of the Chief
Executive Officer of the Company in fiscal 1996 and the other executive
officers of the Company who earned salary and bonuses in fiscal 1996 in excess
of $100,000 (collectively, the "Named Officers"):

                               SUMMARY COMPENSATION TABLE

                                                      Long
                                                      Term
                                                     Compen-
                                                     sation
                                                     Awards
                                                     Securities   All Other
                                                       Under-      Compen-
Name and                         Salary    Bonus       lying       sation
Principal Position (1)   Year    ($)(2)   ($)(2)    Options (#)   ($)(4)(5)
----------------------   ----   -------- ---------  -----------   ----------
Anthony J. Caldarone     1996   $250,000 $  20,000           --      $13,007(6)
 Chairman, Chief         1995      7,692        --      500,000(7)       240
 Executive Officer &     1994         --        --           --           --
 President(8)

Bradley A. Little        1996    140,000    15,000       25,000        7,586
 Sen. Vice President-    1995    137,917        --      185,000(9)    14,004
 Finance & Treasurer     1994    126,250   100,000       60,000       11,922

Robert A. Fourniadis     1996    122,500    10,000       10,000        7,014
  Sen. Vice President-   1995    120,417        --      185,000(9)    13,812
  Legal & Secretary      1994    108,333    90,000       60,000       11,470
___________________

(1)  Each of the individuals named in the above table served as an officer of
     the Company's wholly owned subsidiary, Calton Homes, Inc. ("Calton
     Homes"), during all or a portion of the three years ended November 30,
     1996. All cash compensation included in the above table was paid or
     accrued by Calton Homes.

                             -16-

(2)  Represents amounts accrued in fiscal 1994 and fiscal 1996 and payable in
     the subsequent fiscal year to the Named Officers pursuant to the Company's
     Incentive Compensation Plan (the "Incentive Plan"). No Incentive Plan
     Awards were made with respect to fiscal 1995. The Incentive Plan provides
     for an incentive compensation pool equal to ten percent (10%) of the
     Company's annual pre-tax income, subject to certain adjustments to pre-tax
     income that may be made by the Compensation Committee to remove the effect
     of events or transactions not in the ordinary course of the Company's
     operations. No such adjustments were made for the fiscal years 1994 or
     1996, and the incentive compensation pools for such years were $656,000 in
     fiscal 1994 (of which $620,000 was awarded) and $120,000 in fiscal 1996
     (of which $119,000 was awarded). Officers and key operations and senior
     corporate management employees (the "Eligible Employees") of the Company
     and its subsidiaries are eligible for participation in the Incentive Plan.
     In addition, up to 10% of the incentive compensation pool established
     under the Incentive Plan may be used for bonuses to full time employees
     who do not otherwise have an opportunity for commissions or bonuses. The
     Eligible Employees are determined each fiscal year by the Compensation
     Committee based on the recommendations of the President and Chief
     Executive Officer of the Company. An Eligible Employee may not receive a
     distribution from the incentive compensation pool for any fiscal year that
     exceeds the lesser of twenty percent (20%) of the available incentive
     compensation pool or one hundred percent (100%) of the Eligible Employee's
     base salary for such fiscal year, unless otherwise provided in the
     Eligible Employee's employment agreement with the Company. The
     Compensation Committee ultimately determines the percentage, if any, of
     the incentive compensation pool for a fiscal year to be awarded to an
     Eligible Employee.

(3)  Includes amounts contributed by the Company under its 401(k) Plan (the
     "401(k) Plan"). All full-time employees who have completed more than one
     year of service with the Company are eligible to participate in the 401(k)
     Plan which allows eligible employees to save up to 18% of their pre-tax
     compensation (subject to a maximum amount per year established annually
     pursuant to the Internal Revenue Code of 1986, as amended) through a pay-
     roll deduction. Subject to the discretion of its Board of Directors, the
     Company may make matching contributions to the 401(k) Plan in the form of
     cash or Common Stock. The Company's matching contribution for fiscal 1996
     was made primarily in Common Stock and the Company anticipates that its
     matching contribution for the next fiscal year will be made in the form of
     Common Stock. Amounts contributed by the Company to the accounts of the
     Named Officers for fiscal 1996 (including the dollar value of contri-
     butions made in the form of Common Stock) were as follows:  Mr. Caldarone
     - $475; Mr. Little - $475; and Mr. Fourniadis - $273.

(4)  Includes the reimbursement by the Company of automobile expenses in fiscal
     1996 as follows:  Mr. Caldarone - $8,040; Mr. Little - $6,000; and Mr.
     Fourniadis - $6,000.

(5)  Includes cost of premiums paid by the Company under a program which
     provides officers of the Company with additional life insurance
     (supplementing the coverage available under the Company's group life
     insurance plan) as follows:  Mr. Caldarone - $3,450; Mr. Little - $1,111;
     and Mr. Fourniadis - $741.

(6)  Includes $1,042 paid to Mr. Caldarone in connection with his election not
     to participate in the Company's group health insurance plan.

(7)  Represents options to purchase Common Stock which were granted to Mr.
     Caldarone effective January 31, 1996 pursuant to his employment agreement
     with the Company. 

(8)  Mr. Caldarone was reappointed Chairman, President and Chief Executive
     Officer of the Company on November 21, 1995 having previously served in
     such capacities from the Company's inception until June 1993.

                             -17-

(9)  Represents 25,000 shares underlying options granted in January 1996 for
     services rendered in fiscal 1995 and 160,000 shares underlying options
     granted in respect of prior fiscal years which were repriced in 1995.

Directors' Compensation

Members of the Board of Directors who are not full time employees of Calton
were each entitled in fiscal 1996 to annual compensation of $20,000 for service
as a director. Calton paid or accrued a total of $69,000 in director fees to
members of the  Board of Directors during fiscal year 1996. Directors are 
reimbursed for travel expenses incurred in connection with attendance at Board
and committee meetings. Directors who are not full time employees are paid a
participation fee of $1,000 for each committee meeting attended. In addition,
under the terms of the Company's 1996 Equity Incentive Plan (the "1996 Option
Plan") each non-employee director who has attended 75% or more of the Board
meetings and meetings of the committees on which he serves is awarded options
to purchase 10,000 shares of the Company's Common Stock each time such director
is re-elected to the Board of Directors. Options to purchase an aggregate of
30,000 shares of Common Stock at an exercise price of $.53125 per share (the
fair market value of the Common Stock on the date of grant) were granted to
non-employee directors pursuant to the 1996 Option Plan in fiscal 1996. The
exercise price of these options was adjusted to $.41 per share (the fair market
value of the Common Stock on the date of the adjustment) in January 1997.

Employment Agreement with Chief Executive Officer

Effective November 21, 1995, the Company entered into an Employment Agreement
(the "Employment Agreement") with Anthony J. Caldarone, Chairman, President and
Chief Executive Officer of the Company. The term of the Employment Agreement
will end on November 30, 1998; provided, that such term will be automatically
extended annually for periods of one (1) year unless a notice of non-extension
is issued by the Company or Mr. Caldarone. Pursuant to the Employment
Agreement, Mr. Caldarone will receive a minimum annual salary of $250,000
("Base Compensation") which may be increased by the Board or a committee
thereof. Mr. Caldarone is entitled to participate in any bonus compensation or
benefit plan or arrangement provided by the Company to its employees or senior
level executives, including the Company's Incentive Plan. Under the Employment
Agreement, Mr. Caldarone may be awarded up to thirty percent (30%) of the
Incentive Plan's designated incentive compensation for any fiscal year and,
subject to such limitation, is entitled to not less than one-half of the
average percentage that all awards to other Eligible Participants are of the
respective Eligible Participants' base salary for the relevant fiscal year. Mr.
Caldarone is entitled to be reimbursed by the Company for certain automobile
expenses and was granted options to purchase 500,000 shares of Common Stock
under the 1996 Option Plan pursuant to the Employment Agreement.

If the Employment Agreement is terminated by reason of Mr. Caldarone's death,
the Company is obliged to reimburse Mr. Caldarone's designated beneficiaries
the cost of COBRA benefits, other than long-term disability coverage, for a
period of 18 months following the date of death. If the Employment Agreement is

                             -18-

terminated by reason of Mr. Caldarone's disability, Mr. Caldarone will be
entitled to receive a lump sum cash payment equal to one years' Base
Compensation (the "Severance Compensation") from the Company as well as the
cost of COBRA benefits, other than long-term disability, for him and his family
for a period of 18 months following the date of termination, and  continue to
participate in any group life insurance or supplemental life insurance program
of the Company then in effect for a period of 18 months following the date of
termination (collectively, the "Severance Benefits"). The Company may terminate
the Employment Agreement for just cause in the event Mr. Caldarone is convicted
of a felony in connection with his duties as an officer of the Company, if the
commission of such felony resulted in a personal financial benefit to Mr.
Caldarone. Upon termination for just cause by the Company, Mr. Caldarone is not
entitled to receive any Severance Compensation or Severance Benefits. If the
Company terminates the Employment Agreement without just cause, Mr. Caldarone
is entitled to the Severance Compensation and Severance Benefits. If the
Company terminates the Employment Agreement by issuing a notice of
non-extension, Mr. Caldarone is entitled to receive a lump sum cash payment
equal to one years' Base Compensation as well as the Severance Benefits. Mr.
Caldarone may terminate the Employment Agreement for just cause and receive
Severance Compensation and Severance Benefits, if (i) the Board fails to
re-elect him as each of Chairman, President and Chief Executive Officer of the
Company, (ii) the Board significantly reduces the nature and scope of his
authorities, powers, duties and functions, (iii) the Company breaches any
material covenant of the Employment Agreement, or (iv) the Company consents to
Mr. Caldarone's retirement. If Mr. Caldarone terminates the Employment
Agreement without just cause or by issuing a notice of non-extension, he is not
entitled to the Severance Compensation or Severance Benefits. After the date of
termination of Mr. Caldarone' employment for any of the reasons specified
herein and in the Employment Agreement, Mr. Caldarone will not receive any
further salary payments under the Employment Agreement.

For the term of the Employment Agreement and for a period of twelve (12) months
following termination of Mr. Caldarone' employment, other than for just cause
by the Company or without just cause by Mr. Caldarone, Mr. Caldarone is
restricted from competing with the Company in certain regions in which the
Company is actively engaged in business.

Severance Policy Arrangements For Senior Executives

The Company has established a severance compensation policy for senior level
executives who have been employed by the Company for more than one year (the
"Severance Policy"). To become eligible to participate in the Severance Policy,
a senior level executive must be selected by the Company's Compensation
Committee and approved by the Board of Directors ("Eligible  Participants").
Under the Severance Policy, an Eligible Participant whose employment is
terminated is entitled to receive one month's base salary for each year
employed by the Company, pro rated for any partial year, but in no event less
than six month's base salary; provided, however, that the Eligible Participants
who were designated to participate in the Severance Policy in August 1993 (Mr.
Little and Mr. Fourniadis) are entitled to receive twelve month's base salary.
In addition, the Company will pay all amounts required to be paid by the

                             -19-

Eligible Participants to continue insurance coverage under COBRA for a period
of time equal to the number of months on which the severance compensation is
based. The severance compensation for Eligible Participants who are parties to
employment agreements will be governed by the terms of such agreements.
Eligible Participants who resign voluntarily or who are terminated for cause
(as defined in the Severance Policy) will not be eligible for severance
compensation.

Option Grants

Shown below is further information with respect to grants during fiscal 1996 of
stock options to the Named Officers by the Company which are reflected in the
Summary Compensation Table set forth under the caption "Executive
Compensation."

                      Individual Grants
                      ------------------


                                %   of
                                Total                          Potential
                                Options                        Realizable
                                Granted                     Value at Assumed
                                  to    Exer-                 Annual Rates
                     No. of     Employ- cise                 of Stock Price
                     Securities   ees     or                 Appreciation for
                     Underlying   in     Base                  Option Term
                     Options     Fiscal Price   Expiration  -----------------
Name                 Granted (#) Year   ($/Sh)  Date (1)    5% ($)    10% ($)
-------------------- ----------  -----  ------- ----------  --------  --------
Bradley A. Little     25,000(1)   3.2% $.53125(2) 4/24/2006   $8,353   $21,166
Robert A. Fourniadis  10,000(2)   1.3%  .53125(2) 4/24/2006    3,341     8,467

(1)  Represents shares of Common Stock underlying options granted in April
     1996. The options are exercisable cumulatively in five equal annual
     installments commencing on the first anniversary of the date of grant.

(2)  The exercise price of these options was adjusted to $.41 per share in
     January 1997. The potential realizable value of the adjusted options held
     by the individuals identified in the above table is as follows: Mr. Little
     - $5,849 (assuming a 5% annual appreciation rate) and $14,523 (assuming a
     10% annual appreciation rate); and Mr. Fourniadis - $2,340 (assuming a 5%
     annual appreciation rate) and $5,809 (assuming a 10% appreciation rate).

Option Exercises and Fiscal Year-End Values

Shown below is information with respect to unexercised options to purchase the
Company's Common Stock held by the Named Officers at November 30, 1996. On such
date, the exercise price of each of such options equaled or exceeded the
closing price of the Company's Common Stock on the American Stock Exchange
($.3125 per share) on November 29, 1996 (the last day of fiscal 1996 on which
the Common Stock was traded on the American Stock Exchange). No options were
exercised in fiscal 1996.

                                        Number of Securities
                                       Underlying Unexercised
                                    Options Held at FY-End (#)(1)
                                    -----------------------------
                                     Exercisable   Unexercisable
                                     -----------   -------------
Anthony J. Caldarone                     500,000             ---
Bradley A. Little                        120,000          90,000
Robert A. Fourniadis                     120,000          75,000

                             -20-


Compensation Committee Interlocks and Insider Participation

The Compensation Committee currently consists of Mark N. Fessel and Frank
Cavell Smith, Jr. No such person was an officer or employee of the Company
during fiscal 1996 or was formerly an officer of the Company.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

The following table sets forth information concerning beneficial ownership of
the Company's Common Stock as of March 31, 1997 by (i) each person known by the
Company to be the beneficial owner (as defined in Rule 13d-3 ("Rule 13d-3") of
the Securities Exchange Act of 1934) of more than five percent (5%) of the
Company's Common Stock and (ii) each of the Named Officers who was employed by
the Company at March 31, 1997. Except as set forth in the footnotes to the
table, the shareholders have sole voting and investment power over such shares:

                                     Amount and Nature of          Percent
Name of Beneficial Owner             Beneficial Ownership         of Class
------------------------             --------------------         --------
Anthony J. Caldarone                            7,433,618(1)         27.5%
Joyce P. Caldarone                              4,775,618(2)         17.7%
Apollo Homes Partners, L.P.(3)                  2,658,000(4)         10.0%
Frederick J. Jaindl(5)                          2,195,350             8.3%
Goldman Sachs & Co.(6)                          1,344,600             5.1%
Robert A. Fourniadis                              168,919(7)           (8)
Bradley A. Little                                 166,276(9)           (8)
J. Ernest Brophy                                   23,770(10)          (8)
Mark N. Fessel                                     14,390(10)          (8)
Frank Cavell Smith, Jr.                            10,000(10)          (8)
All Directors and Executive
 Officers as a Group
 (6 persons)(1)(7)(9)(10)                       7,816,973            28.7%
____________________

(1)  Includes an aggregate of 1,395,209 shares held by Joyce P. Caldarone, Mr.
     Caldarone's wife, as to which shares he disclaims any beneficial interest,
     500,000 shares subject to currently exercisable options granted under the
     Company's 1996 Equity Incentive Plan (the "1996 Option Plan"), 8,837
     shares held through the Company's 401(k) Plan and 2,658,000 shares held by
     Apollo Homes Partners, L.P. ("Apollo Homes"), which Mr. Caldarone has the
     right to vote in the election of directors pursuant to a proxy granted to
     him by Apollo Homes. In addition, under the terms of a stock purchase
     agreement between Mr. Caldarone and Apollo Homes, Mr. Caldarone was
     granted certain rights of first offer with respect to the shares of Calton
     Common Stock owned by Apollo. The agreement also grants Apollo certain
     "tag-along rights" to sell shares of Calton Common Stock in the event of,
     and along with, certain transfers of Common Stock made by Mr. and/or Mrs.
     Caldarone, and contains provisions requiring (a) Apollo, under certain
     circumstances, to sell the Common Stock owned by it in the event that Mr.
     and Mrs. Caldarone sell all of the securities of the Company that they own
     and (b) Mr. and Mrs. Caldarone to offer to Apollo, under certain
     circumstances, the opportunity to purchase a pro rata portion of
     additional securities acquired by Mr. and/or Mrs. Caldarone from the
     Company.

                              -21-

(2)  Includes an aggregate of 3,380,409 shares beneficially owned by Anthony J.
     Caldarone, Mrs. Caldarone's husband, as to which shares she disclaims any
     beneficial interest.

(3)  The sole general partner of Apollo Homes is AIF II, L.P., a Delaware
     limited partnership. The managing general partner of AIF II, L.P. is
     Apollo Advisors, whose principal offices are located at Two Manhattanville
     Road, Purchase, New York 10577. Apollo Capital Management, Inc. ("ACM") is
     the general partner of Apollo Advisors. Shareholdings information is based
     upon Apollo Homes' Schedule 13D, as amended to November 21, 1995.

(4)  See note 1 above for a description of certain rights granted by Apollo
     Homes to Anthony J. Caldarone with respect to these shares.

(5)  Such holder maintains an address at c/o Jaindl Farms, 3150 Coffeetown
     Road, Orefield, Pennsylvania 12609. Shareholdings information is based
     upon the Schedule 13D of such holder, as amended to January 14, 1997.

(6)  The principal offices of such shareholder are located at 85 Broad Street,
     New York, New York 10004. Shareholdings information is based upon the
     Schedule 13D, as amended to May 5, 1995, of Goldman Sachs & Co., the
     direct owner, and The Goldman Sachs Group, L.P., which indicates that each
     of such entities is a beneficial owner of such shares.

(7)  Includes 148,333 shares subject to currently exercisable options granted
     under the Company's Amended and Restated 1993 Non-Qualified Stock Option
     Plan (the "1993 Option Plan" and 20,586 shares held through the Company's
     401(k) Plan.

(8)  Shares beneficially owned do not exceed 1% of the Company's outstanding
     Common Stock.

(9)  Includes 148,333 shares subject to currently exercisable options granted
     under the 1993 Option Plan and 17,943 shares held through the Company's
     401(k) Plan.

(10) Includes 10,000 shares subject to currently exercisable options granted
     under the 1996 Option Plan.


Item 13.  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Goldman, Sachs & Co. is the beneficial owner of more than 5% of the Company's
Common Stock and is affiliated with one of the lenders under the Facility. This
affiliate held a 22.5% interest in amounts outstanding under the Facility,
which totaled $39.5 million, at November 30, 1996.

                              -22-


                                  PART IV

Item 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
           FORM 8-K

                                                                               

                                                                      Page 

    (a)  1. and 2.   Financial statements and financial
                     statement schedules

                     Reference is made to the Index of Financial
                     Statements and Financial Statement Schedules
                     hereinafter contained                            F-1

         3.          Exhibits

                     Reference is made to the Index of
                     Exhibits hereinafter contained                   F-5 
                                                                      and       
                                                                      F-6

    (b)              Reports on Form 8-K

                     None

                             -23-

                                                                        
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                   CALTON, INC.
                                   (Registrant)

                               By: /s/ Bradley A. Little
                                   BRADLEY A. LITTLE,
                                   Senior Vice President-Finance

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.

      Signature                       Title                           Date

/s/ Anthony J. Caldarone      Chairman, Chief Executive          April 11, 1997
(Anthony J. Caldarone)        Officer and President
                              (Principal Executive Officer)

/s/ Bradley A. Little         Senior Vice President-Finance      April 11, 1997
(Bradley A. Little)           & Treasurer (Principal Financial
                              & Accounting Officer)

/s/ J. Ernest Brophy          Director                           April 11, 1997
(J. Ernest Brophy)


/s/ Mark N. Fessel            Director                           April 11, 1997
(Mark N. Fessel)


/s/ Frank Cavell Smith, Jr.   Director                           April 11, 1997
(Frank Cavell Smith, Jr.)           

                              -24-

                             CALTON, INC. AND SUBSIDIARIES
                            INDEX TO FINANCIAL STATEMENTS AND
                              FINANCIAL STATEMENT SCHEDULES


                                                                      Page
                                                                    Number

Consolidated Balance Sheet at November 30, 1996 and 1995. . . . . . . .*

Consolidated Statement of Operations for the years ended
  November 30, 1996, 1995 and 1994. . . . . . . . . . . . . . . . . . .*

Consolidated Statement of Cash Flows for the years
  ended November 30, 1996, 1995 and 1994. . . . . . . . . . . . . . . .*

Consolidated Statement of Shareholders' Equity for
  the years ended November 30, 1996, 1995 and 1994. . . . . . . . . . .*

Notes to Consolidated Financial Statements. . . . . . . . . . . . . . .*

Report of Independent Accountants . . . . . . . . . . . . . . . . .  *,F-2

Consent of Independent Accountants. . . . . . . . . . . . . . . . . . .F-3

Schedules**

II-Valuation and Qualifying Accounts. . . . . . . . . . . . . . . . . .F-4


                                                                          

*   The financial statements and notes thereto together with the Report of
    Independent Accountants on pages 12 through 24 of the 1996 Annual Report to
    Shareholders are incorporated herein by reference.

**  Schedules other than the schedule listed above have been omitted because of
    the absence of the conditions under which they are required or because the
    required information is presented in the financial statements or the notes
    thereto.

                             F-1

                        REPORT OF INDEPENDENT ACCOUNTANTS




Our report on the consolidated financial statements of Calton, Inc. and
Subsidiaries, dated January 10, 1997, except for Notes 1 and 5, as to which the
date is April 11, 1997, has been incorporated by reference in this Form 10-K
from page 24 of the 1996 Annual Report to Shareholders of Calton, Inc. In
connection with our audits of such financial statements, we have also audited
the related financial statement schedule listed in the Index on page F-1 of
this Form 10-K.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.



/s/ Coopers & Lybrand L.L.P.

Princeton, New Jersey
January 10, 1997

                             F-2

                       CONSENT OF INDEPENDENT ACCOUNTANTS






We consent to the incorporation by reference in the Registration Statements of
Calton, Inc. and Subsidiaries on Form S-8 (Nos. 33-35176 and 33-75184) of our
report, dated January 10, 1997, except for Notes 1 and 5, as to which the date
is April 11, 1997, on our audits of the consolidated financial statements and
financial statement schedule of Calton, Inc. and Subsidiaries as of November
30, 1996, and 1995 and for the years ended November 30, 1996, 1995 and 1994,
which report has been incorporated by reference in this Annual Report on Form
10-K.


/s/ Coopers & Lybrand L.L.P.

Princeton, New Jersey
April 11, 1997

                             F-3 

                                  SCHEDULE II

                         CALTON, INC. AND SUBSIDIARIES
                       VALUATION AND QUALIFYING ACCOUNTS
                            (Amounts in Thousands)

                                         Additions
                                    ----------------------
                          Balance    Charged                            Balance
                         at Begin-  to Costs    Charged to                at
                          ning of     and       to Other                End of
Description                Year     Expenses    Accounts    Deductions   Year
--------------------     --------   --------   -----------  ----------  ------
Year ended 
 November 30, 1994:
Net realizable
 value reserves
 for inventory           $    --    $   400    $        --  $       --  $   400
                         ========   ========   ===========  ==========  =======
Valuation allowance
 for net deferred
 tax asset               $ 39,365   $     --   $        --  $    2,473  $36,892
                         ========   ========   ===========  ==========  =======

Year ended
 November 30, 1995:
Net realizable
 value reserves
 for inventory           $    400   $  1,593   $        --  $       --  $ 1,993
                         ========   ========   ===========  ==========  =======
Valuation allowance
 for net deferred
 tax asset               $ 36,892   $     --   $        --  $ 18,245(A) $18,647
                         ========   ========   ===========  ==========  =======

Year ended
 November 30, 1996:
Net realizable
 value reserves
 for inventory           $  1,993   $     --   $        --  $      880  $ 1,113
                         ========   ========   ===========  ==========  =======
Valuation allowance
 for net deferred
 tax asset               $ 18,647   $     --   $       981  $       --  $19,628
                         ========   ========   ===========  ==========  =======



(A)  Represents the impact of the recalculation of the Section 382
     limitation and the utilization against taxable income attributable to
     Talcon, L.P.
                             F-4

                                INDEX TO EXHIBITS

2.                Plan of Reorganization of the Registrant and Subsidiaries
                  incorporated by reference to Exhibit 2 to Amendment No. 1 to
                  Form S-1 Registration Statement under the Securities act of
                  1933, Registration No. 33-60022.
3.1               Amended and Restated Certificate of Incorporation of the
                  Registrant filed with the Secretary of State, State of New
                  Jersey on May 28, 1993, incorporated by reference to Exhibit
                  3.2 to Amendment No. 1 to Form S-1 Registration Statement
                  under the Securities Act of 1933, Registration No. 33-60022
                  and Certificate Amendment to Amended and Restated
                  Certificate of Incorporation of Registrant filed with the
                  Secretary of State, State of New Jersey on April 27, 1994,
                  incorporated by reference to Exhibit 3(b) to Form S-1
                  Registration Statement under the Securities Act of 1933,
                  Registration No. 33-76312.
3.2               By Laws of Registrant, as amended, incorporated by reference
                  to Exhibit 3.1 of Form 10-K of Registrant for the fiscal
                  year ended November 30, 1990.
4.                Second Amended and Restated Loan and Security Agreement
                  dated as of April 10, 1997, among the Registrant, Calton
                  Funding, Inc. and a group of financial institutions. Upon
                  request of the Securities and Exchange Commission, the
                  Registrant agrees to furnish a copy of the exhibits and
                  schedules identified in such agreement.
(*)10.1           1996 Equity Incentive Plan.
(*)10.3           Registrant's Amended and Restated 1993 Non-Qualified Stock
                  Option Plan, incorporated by reference to Exhibit 10.3 to 
                  Form 10-K of Registrant for the fiscal year ended November 
                  30, 1995.
(*)10.4           Incentive Compensation Plan of Registrant.
(*)10.6           Severance Policy for Senior Executives of Registrant
                  incorporated by reference to Exhibit 10.6 of Form 10-K of
                  Registrant for the fiscal year ended November 30, 1994.
(**)10.7          Executive Employment Agreement dated as of November 21, 1995
                  between Registrant and Anthony J. Caldarone, incorporated by
                  reference to Exhibit 10.7 to Form 10-K of Registrant for the
                  fiscal year ended November 30, 1995.
(**)10.8          Supplemental Executive Compensation Agreement dated as of
                  May 12, 1995 between the Registrant and Douglas T. Noakes,
                  incorporated by reference to Exhibit 10.8 to Form 10-K of
                  Registrant for the fiscal year ended November 30, 1995.
(**)10.9          Supplemental Executive Compensation Agreement dated as of
                  May 12, 1995 between the Registrant and Bradley A. Little,
                  incorporated by reference to Exhibit 10.9 to Form 10-K of
                  Registrant for the fiscal year ended November 30, 1995. An
                  agreement substantially identical in term and content and
                  executed by the Registrant and Robert A. Fourniadis has not
                  been reproduced herein.
13.               Certain pages of Registrant's 1996 Annual Report to
                  Shareholders which, except for those portions expressly
                  incorporated herein by reference, are not deemed filed a
                  part hereof.
21.               Subsidiaries of the Registrant.
27.               Financial Data Schedule.

(*)               Constitutes a compensatory plan required to be filed as an
                  exhibit pursuant to Item 14(c) of Form 10-K.
(**)              Constitutes a management contract required to be filed
                  pursuant to Item 14(c) of Form 10-K.<PAGE>

                              F-5