Document:

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                                                                    EXHIBIT 10.7

                         EXECUTIVE EMPLOYMENT AGREEMENT
                         ------------------------------

        This Employment Agreement (the "Agreement") is entered into effective as
of the 1st day of January, 2006 by and between Calton, Inc. (the "Employer" or
the "Company"), a New Jersey corporation which maintains its principal executive
offices at 2050 40th Avenue, Suite One, Vero Beach, Florida 32960, and Anthony
J. Caldarone (the "Executive"), an individual residing at 162 Anchor Drive, Vero
Beach, Florida 32963.

                              W I T N E S S E T H:

        WHEREAS, the Company is engaged in the acquisition, design, development,
construction and marketing of residential real estate including, without
limitation, residential housing units; and

        WHEREAS, the Executive has had extensive experience in the field of
residential and commercial real estate development and other related areas in a
management capacity and has served as Chairman, President and Chief Executive
Officer of the Company since 2003; and

        WHEREAS, the Employer desires to provide for the continued employment of
the Executive as the President and Chief Executive Officer of the Company and
for the Executive to serve as the Chairman of the Board of Directors of the
Company (the "Board") pursuant to the terms and conditions of this Agreement
since the Employer believes that the Executive's business and technical
experience, skill, acumen, and expertise will enhance the business and improve
the profitability of the Company.

        NOW, THEREFORE, in consideration of the representations, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:

        1.      EMPLOYMENT.

                1.1.    TERM. The term of this Agreement shall commence on
January 1, 2006 and end on December 31, 2006 (the "Term"), unless further
extended or sooner terminated as hereinafter provided.

                1.2.    POWERS, DUTIES AND RESPONSIBILITIES. For the Term of
this Agreement, the Employer hereby employs the Executive, and the Executive
hereby accepts employment with the Employer, to render service as President,
Chief Executive Officer and Chairman of the Board of the Company, with such
powers, duties and responsibilities consistent with the position of President,
Chief Executive Officer and Chairman of the Board as provided for in the
Employer's By-laws and as otherwise may from time to time be determined by the
Board and subject to the rights of the shareholders of the Company. The
Executive agrees to devote the necessary working time to the Employer as shall
be reasonably required to accomplish the Company's

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goals and to diligently perform all duties and fulfill all responsibilities
incident to his employment in a businesslike and efficient manner. The Executive
shall be responsible for each facet of the Employer's business operations, and
the Executive will report directly to the Employer's Board.

                1.3.    The Executive agrees that he will not become involved in
any activity outside of the business of the Company that would materially
interfere with the performance of his duties hereunder or any activity that
would be inimical to or contrary to the best interests of the Employer.

        2.      COMPENSATION AND BENEFITS.

                2.1.    SALARY. During the period of the Executive's employment
hereunder, the Executive shall receive a salary of One Hundred Thousand Dollars
($100,000) per annum paid in accordance with the Employer's normal payroll
practices (the "Base Compensation"). The payment of such Base Compensation to
the Executive shall not prevent the Executive from participating in any other
compensation or benefit plan provided by the Employer, unless excluded by the
terms of any such plan. No other compensation, benefit, or payment made by the
Employer hereunder shall in any way limit or reduce the obligation of the
Employer to pay the Executive's Base Compensation hereunder. Base Compensation
as defined and used herein shall include any increase thereto pursuant to an
action of the Board or the Compensation Committee of the Board (the
"Compensation Committee").

                2.2.    BONUS COMPENSATION. The Executive shall be eligible to
receive bonus compensation pursuant to the Executive's participation in the
Calton, Inc. Incentive Compensation Plan ("Incentive Plan"). The Executive shall
be eligible to participate in any other bonus compensation plan or arrangement
otherwise provided by the Employer to senior level executives of the Company.

                2.3.    BENEFIT PLANS. The Executive will be entitled to
participate in all Employer benefit plans available, or hereafter made
available, to senior level executives of the Employer, including the Company's
severance policy for senior executives as such policy may be in effect from time
to time. The Executive will be eligible to participate in any existing stock
option plan or any stock option plan or arrangement hereafter adopted by the
Employer. Except as provided herein or required by the terms of an Employer
sponsored benefit plan, nothing paid to the Executive under any such plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the Base Compensation payable to the Executive pursuant to
Section 2.1 of this Agreement.

                2.4.    PERQUISITES. The Executive shall be entitled to receive
any perquisites available, or hereafter made available, to senior level
executives of the Company.

                2.5.    VACATION. The Executive shall be entitled to fifteen
(15) days paid vacation per annum.

        3.      EMPLOYMENT PERIOD. The Executive's employment with the Employer
shall at all times be "at-will" and may continue until either Employer or
Executive have notified the other of

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the termination of employment with Employer, which termination may be for any
lawful reason or no reason at all, at any time, with or without notice.

        4.      COVENANTS OF THE EXECUTIVE.

                4.1.    COVENANTS AGAINST COMPETITION. The Executive
        acknowledges that (i) the principal business of the Employer is the
        acquisition, design, development, construction and marketing of
        residential real estate including residential housing units; (ii) the
        Employer's business is conducted in the State of Florida; (iii) the
        Executive's work for the Employer will bring him and will continue to
        bring him into close contact with many trade secrets of and confidential
        information concerning the Employer, its subsidiaries and its affiliates
        which are not readily available to the public; and (iv) the covenants in
        this Section 4 are essential to protect the business and goodwill of the
        Employer. In order to induce the Employer to enter into this Agreement,
        the Executive covenants and agrees that:

                        4.1.1.  NON-COMPETE. For the Term of this Agreement, and
        for a period of twelve (12) months following termination of the
        Executive's employment (the "Restricted Period") the Executive shall
        not, in the State of Florida: (i) compete with the Employer by engaging
        in the Employer's business of acquiring, designing, developing,
        constructing and marketing residential real estate, including, without
        limitation, residential housing units; or (ii) become interested in or
        engaged in the Employer's business of acquiring, designing, developing,
        constructing and marketing residential real estate, directly or
        indirectly, as an individual, partner, shareholder, officer, director,
        principal, agent, senior level management employee, trustee, consultant
        or in any other relationship or capacity.

                        4.1.2.  CORPORATE OPPORTUNITIES. During the Restricted
        Period, the Executive shall not acquire any ownership, beneficial or
        pecuniary interest in, or become a director, officer or significant
        equity holder of, any entity that acquires any ownership, beneficial or
        pecuniary interest in, any residential real estate development project
        of the Employer or any of its subsidiaries or other affiliated entities.

                        4.1.3.  CONFIDENTIAL INFORMATION. During and after the
        Restricted Period, the Executive shall keep secret and retain in
        strictest confidence, and shall not use for the benefit of himself or
        others, except in the course of performing his duties for the Employer,
        all proprietary and/or confidential matters of the Employer, its
        subsidiaries and its affiliates, including, without limitation, details
        of contracts, pricing policies, operational methods, marketing plans and
        strategies, real estate acquisition, development and design techniques,
        projects and plans, business acquisition plans, new personnel
        acquisition plans, and other business affairs of the Employer and its
        subsidiaries and other affiliated entities learned by the Executive
        heretofore or hereafter; provided, however, the Executive shall not be
        restricted with respect to use of confidential information that (i) was
        rightfully known to Executive prior to disclosure by Employer; (ii) is
        or becomes public knowledge through no action or default on the part of
        the Executive; (iii) is disclosed to the Executive by a third party,
        provided that the third party has the lawful right to make such
        disclosure; (iv) is approved by the Board in writing for

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        disclosure to specified third parties; or (v) is required to be
        disclosed by Executive pursuant to a court order.

                        4.1.4.  NONSOLICITATION OF EMPLOYEES. During the
        Restricted Period, the Executive shall not, directly or indirectly,
        hire, solicit or encourage any employee to leave the employment of the
        Employer or any of its subsidiaries or other affiliated entities.

                        4.1.5.  PROPERTY OF THE EMPLOYER. All memoranda, notes,
        lists, records and other documents and all copies thereof, including,
        but not limited to, such items stored in computer memories, on microfilm
        or by any other means, made or compiled by or on behalf of the
        Executive, or made available to the Executive, concerning the business
        of the Employer or any of its subsidiaries or other affiliated entities
        are and shall be the Employer's property and shall be delivered to the
        Employer promptly upon the termination of the Executive's employment
        with the Employer or at any other time on request. The Executive shall
        be entitled to copies of any of the materials referenced herein, at no
        cost and expense to the Executive, to the extent necessary to (i) defend
        any lawsuit; (ii) respond to any inquiry from any court or governmental
        agency related to such materials; (iii) respond to any tax audits; or
        (iv) to respond to any other inquiries which require Executive to have
        access to such materials.

                4.2.    RIGHTS AND REMEDIES UPON BREACH. If the Executive
breaches, or threatens to commit a breach, of any of the provisions of Section
4.1, the Employer shall have the rights and remedies set forth in this Section
4.2 of this Agreement, each of which shall be independent of the other and
severally enforceable, and all of which rights and remedies shall be in addition
to, and not in lieu of, any other rights and remedies available to the Employer
in law or in equity.

                        4.2.1.  SPECIFIC PERFORMANCE. The Employer shall have
        the right and remedy to have the covenants of this Section 4
        specifically enforced by any court having equity jurisdiction, it being
        acknowledged and agreed that any such breach or threatened breach will
        cause irreparable injury to the Employer and that money damages will not
        provide adequate remedy to the Employer.

                        4.2.2.  ACCOUNTING. The Employer shall have the right
        and remedy to require the Executive to account for and pay over to the
        Employer all compensation, profits, monies, accruals, increments or
        other benefits (collectively, the "Benefits") derived or received by the
        Executive as the result of any transactions constituting a breach of any
        of the covenants of Section 4, and the Executive shall account for and
        pay over such Benefits to the Employer.

                4.3.    SEVERABILITY OF COVENANTS. If any court determines that
any of the covenants of Section 4, or any part thereof, is invalid or
unenforceable, the remainder of the covenants shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.

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                4.4.    BLUE-PENCILING. If any court determines that any of the
covenants of Section 4, or any part thereof, is unenforceable because of the
duration or geographic scope of such provision, such court shall have the power
to reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall then be enforceable and shall be
enforced.

        5.      BINDING EFFECT. The respective obligations of the Employer and
the Executive under this Agreement shall inure to the benefit of and be binding
upon the Employer and the Executive and the respective successors and assigns of
the Employer. This Agreement shall be assignable by the Employer but not by the
Executive. As used herein, the term "successors and assigns" shall include any
entity which acquires all or substantially all of the assets and businesses of
Employer whether by purchase, merger, consolidation or otherwise.

        6.      APPLICABLE LAW. The Agreement shall be interpreted and construed
in accordance with the laws of the State of New Jersey.

        7.      INDEMNIFICATION. The Employer will defend and indemnify the
Executive as provided for in the Employer's By-laws, regardless of any
subsequent amendment, which may restrict or limit the Executive's right to
indemnification as set forth in the By-laws, or repeal of the relevant By-law
provisions. Further, the Executive shall be covered by any directors' and
officers' insurance policy (the "D&O Policy") provided by the Employer for its
officers and directors to the fullest extent that coverage pursuant to any such
D&O Policy is provided for the Employer's other officers and directors.
Following the termination of the Executive's employment with the Employer, the
Executive shall be covered by any then existing or subsequently obtained D&O
Policy to the same extent that any such D&O Policy provides coverage officers or
directors of the Employer. Following termination of his employment with the
Employer, the Executive will be entitled to request and obtain an endorsement or
other customary form of confirmation from the carrier of any such D&O Policy
that the Executive is covered as a former officer or director of the Employer.

        8.      REPRESENTATIONS AND WARRANTIES OF THE EMPLOYER. The Employer
represents and warrants that the execution of this Agreement by the Employer has
been duly authorized by all required resolutions of its Board and/or Board
committees.

        9.      NOTICES. For the purposes of this Agreement, notices, demands
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly issued when hand delivered, or when
dispatched to any overnight delivery service, or when deposited for mailing in a
United States mailbox or at a United States Post Office if sent postage prepaid
and return receipt requested by United States Certified or Registered Mail.

                If to the Executive:

                        Anthony J. Caldarone
                        162 Anchor Drive
                        Vero Beach, Florida  32963

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                If the Employer:

                        Calton, Inc.
                        2050 40th Avenue, Suite One
                        Vero Beach, Florida  32960

or to such other address as any party may have furnished to the other in writing
in accordance herewith.

        10.     ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding between the Employer and Executive with respect to the employment
of the Executive by the Employer, and it supersedes all prior and
contemporaneous, written, oral, express and implied communications, agreements
and understandings between the Executive and the Employer, its subsidiaries and
its other affiliated entities. In the event that any term, or condition or
provisions of this Agreement varies from, or is in any way dissimilar to or a
conflict with, any term, condition or provision of any of the Employer's benefit
plans or any other agreement between the Employer and the Executive, the terms,
conditions and provisions of this Agreement will control.

        11.     AMENDMENT. No provision of this Agreement may be amended,
modified, waived or discharged unless such waiver, amendment, modification or
discharge is approved by the Board, or a committee of the Board having
appropriate authority, and agreed to in writing signed by both the Executive and
the Employer.

        12.     SEVERABILITY. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which shall remain in
full force and effect.

        13.     COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which together constitute
one and the same Agreement.

        14.     EFFECTIVE DATE. The parties hereto agree that this Agreement is
effective and legally binding as of January 1, 2006.

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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
this 9th day of January 2006.

WITNESS:

_________________________        _______________________________________________
                                 Anthony J. Caldarone

WITNESS:                         CALTON, INC.

_________________________     By:_______________________________________________
                                 Laura A. Camisa
                                 Chief Financial Officer & Senior Vice President

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                                                                    EXHIBIT 10.9

                                  CALTON, INC.
                           2000 EQUITY INCENTIVE PLAN

1.      PURPOSE.

        The purpose of this Calton, Inc. 2000 Equity Incentive Plan (the "Plan")
        is to advance the interests of Calton, Inc. (the "Company") and its
        subsidiaries by enhancing the ability of the Company to (i) attract and
        retain employees and other persons or entities who are in a position to
        make significant contributions to the success of the Company and its
        subsidiaries; (ii) reward such persons for such contributions; and (iii)
        encourage such persons or entities to take into account the long-term
        interest of the Company through ownership of shares of the Company's
        common stock, $.05 par value per share (the "Common Stock").

        The Plan is intended to accomplish these objectives by enabling the
        Company to grant awards ("Awards") in the form of incentive stock
        options ("ISOs"), nonqualified stock options ("Nonqualified Options")
        (ISOs and Nonqualified Options shall be collectively referred to herein
        as "Options"), stock appreciation rights ("SARs"), restricted stock
        ("Restricted Stock"), deferred stock ("Deferred Stock"), or other stock
        based awards ("Other Stock Based Awards"), all as more fully described
        below.

2.      ADMINISTRATION.

        The Plan will be administered by the Compensation Committee (the
        "Committee") of the Board of Directors of the Company (the "Board"). The
        Committee may be constituted to permit the Plan to comply with the
        "outside director" requirement of Section 162(m)(4)(c)(i) of the
        Internal Revenue Code of 1986, as amended (the "Code"), and the
        regulations promulgated thereunder, or any successor rules. The
        Committee will determine the recipients of Awards, the times at which
        Awards will be made, the size and type or types of Awards to be made to
        each recipient, and will set forth in each such Award the terms,
        conditions and limitations applicable to the Award granted. Awards may
        be made singly, in combination or in tandem. The Committee will have
        full and exclusive power to interpret the Plan, to adopt rules,
        regulations and guidelines relating to the Plan, to grant waivers of
        Plan restrictions and to make all of the determinations necessary for
        its administration. Such determinations and actions of the Committee,
        and all other determinations and actions of the Committee made or taken
        under authority granted by any provision of the Plan, will be conclusive
        and binding on all parties.

3.      EFFECTIVE DATE AND TERM OF PLAN.

        The Plan will become effective on January 27, 2000, but shall be subject
        to approval by the requisite vote of the Company's shareholders. Any
        Awards granted under the Plan prior to such shareholder approval shall
        be conditioned upon such shareholder approval and shall be null and void
        if such approval is not obtained.

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        The Plan will terminate on January 27, 2010, subject to earlier
        termination of the Plan by the Board pursuant to Section 18 herein. No
        Award may be granted under the Plan after the termination date of the
        Plan, but Awards previously granted may extend beyond that date pursuant
        to the terms of such Awards.

4.      SHARES SUBJECT TO THE PLAN.

        Subject to adjustment as provided in Section 16 herein, the aggregate
        number of shares of Common Stock reserved for issuance pursuant to
        Awards granted under the Plan shall be one million three hundred
        thousand (1,300,000) shares. The maximum number of shares of Common
        Stock which may be issued to the Chief Executive Officer ("CEO") of the
        Company pursuant to all Awards granted the CEO under the Plan shall not
        exceed thirty-five percent (35%) of the number of shares of the
        Company's Common Stock reserved for issuance hereunder. The maximum
        number of shares of the Company's Common Stock awarded to any other
        "Participant" (as defined in Section 5 below) pursuant to all Awards
        granted to such Participant under the Plan shall not exceed twenty
        percent (20%) of the number of shares of the Company's Common Stock
        reserved for issuance hereunder.

        The shares of Common Stock delivered under the Plan may be either
        authorized but unissued shares of Common Stock or shares of the
        Company's Common Stock held by the Company as treasury shares, including
        shares of Common Stock acquired by the Company in open market and
        private transactions. No fractional shares of Common Stock will be
        delivered pursuant to Awards granted under the Plan and the Committee
        shall determine the manner in which fractional share value will be
        treated.

        If any Award requiring exercise by a Participant for delivery of shares
        of Common Stock is cancelled or terminates without having been exercised
        in full, or if any Award payable in shares of Common Stock or cash is
        satisfied in cash rather than Common Stock, the number of shares of
        Common Stock as to which such Award was not exercised or for which cash
        was substituted will be available for future Awards of Common Stock;
        provided, however, that Common Stock subject to an Option cancelled upon
        the exercise of an SAR shall not again be available for Awards under the
        Plan unless, and to the extent that, the SAR is settled in cash. Shares
        of Restricted Stock and Deferred Stock forfeited to the Company in
        accordance with the Plan and the terms of the particular Award shall be
        available again for Awards under the Plan unless the Committee
        determines otherwise.

5.      ELIGIBILITY AND PARTICIPATION.

        Those eligible to receive Awards under the Plan (each, a "Participant"
        and collectively, the "Participants") will be persons in the employ of
        the Company or any of its subsidiaries designated by the Committee
        ("Employees") and other persons or entities who, in the opinion of the
        Committee, are in a position to make a significant contribution to the
        success of the Company or its subsidiaries, including, without
        limitation, consultants and agents of the Company or any subsidiary. A
        "subsidiary" for purposes of the Plan will be a present or future
        corporation of which the Company owns or controls, or will own or
        control, more than 50% of the total combined voting power of all classes
        of stock or other equity interests.

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6.      OPTIONS.

        (a)     NATURE OF OPTIONS. An Option is an Award entitling the
                Participant to purchase a specified number of shares of Common
                Stock at a specified exercise price. Both ISOs, as defined in
                Section 422 of the Code, and Nonqualified Options may be granted
                under the Plan; provided however, that ISOs may be awarded only
                to Employees.

        (b)     EXERCISE PRICE. The exercise price of each Option shall be equal
                to the "Fair Market Value" (as defined below) of the Common
                Stock on the date the Award is granted to the Participant;
                provided, however, that (i) in the Committee's discretion, the
                exercise price of a Nonqualified Option may be less than the
                Fair Market Value of the Common Stock on the date of grant; (ii)
                with respect to a Participant who owns more than ten percent
                (10%) of the total combined voting power of all classes of stock
                of the Company, the option price of an ISO granted to such
                Participant shall not be less than one hundred and ten percent
                (110%) of the Fair Market Value of the Common Stock on the date
                the Award is granted; and (iii) with respect to any Option
                repriced by the Committee, the exercise price shall be equal to
                the Fair Market Value of the Common Stock on the date such
                Option is repriced unless otherwise determined by the Committee.
                For purposes of this Plan, Fair Market Value shall mean the
                closing price of the Common Stock as reported on the American
                Stock Exchange, or if not reported on the American Stock
                Exchange, on the principal securities exchange on which the
                Common Stock is listed, or if not so listed, the high and low
                sales prices (or the average of the high asked and low bid
                prices of the Common Stock if sales price information is not
                reported) of the Common Stock as reported by the Nasdaq Stock
                Market or, if not reported on the Nasdaq Stock Market, by the
                NASD OTC Bulletin Board or similar quotation service. If the
                Common Stock is not publicly traded, Fair Market Value shall be
                determined in good faith by the Board of Directors.

        (c)     DURATION OF OPTIONS. The term of each Option granted to a
                Participant pursuant to an Award shall be determined by the
                Committee; provided, however, that in no case shall an Option be
                exercisable more than ten (10) years (five (5) years in the case
                of an ISO granted to a ten-percent stockholder as defined in (b)
                above) from the date of the Award.

        (d)     EXERCISE OF OPTIONS AND CONDITIONS. Except as otherwise provided
                in Sections 16 and 17 herein, and except as otherwise provided
                below with respect to ISOs, Options granted pursuant to an Award
                will become exercisable at such time or times, and on and
                subject to such conditions, as the Committee may specify at the
                time of the Award. The Options may be subject to such
                restrictions, conditions and forfeiture provisions as the
                Committee may determine, including, but not limited to,
                restrictions on transfer, continuous service with the Company or
                any of its subsidiaries, achievement of business objectives, and
                individual, division and

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                Company performance. To the extent exercisable, an Option may be
                exercised either in whole at any time or in part from time to
                time. With respect to an ISO granted to a Participant, the Fair
                Market Value of the shares of Common Stock on the date of grant
                which are exercisable for the first time by a Participant during
                any calendar year shall not exceed $100,000.

        (e)     PAYMENT FOR AND DELIVERY OF STOCK. Full payment for shares of
                Common Stock purchased will be made at the time of the exercise
                of the Option, in whole or in part. Payment of the purchase
                price will be made in cash or in such other form as the
                Committee may permit, including, without limitation, delivery of
                shares of Common Stock.

7.      STOCK APPRECIATION RIGHTS.

        (a)     NATURE OF STOCK APPRECIATION RIGHTS. A SAR is an Award entitling
                the recipient to receive payment, in cash and/or shares of
                Common Stock, determined in whole or in part by reference to
                appreciation in the value of a share of Common Stock. A SAR
                entitles the recipient to receive in cash and/or shares of
                Common Stock, with respect to each SAR exercised, the excess of
                the Fair Market Value of a share of Common Stock on the date of
                exercise over the Fair Market Value of a share of Common Stock
                on the date the SAR was granted.

        (b)     GRANT OF SARS. SARs may be subject to Awards in tandem with, or
                independently of, Options granted under the Plan. A SAR granted
                in tandem with an Option which is not an ISO may be granted
                either at or after the time the Option is granted. A SAR granted
                in tandem with an ISO may be granted only at the time the ISO is
                granted and may expire no later than the expiration of the
                underlying ISO.

        (c)     EXERCISE OF SARS. A SAR not granted in tandem with an Option
                will become exercisable at such time or times, and on such
                conditions, as the Committee may specify. A SAR granted in
                tandem with an Option will be exercisable only at such times,
                and to the extent, that the related option is exercisable. A SAR
                granted in tandem with an ISO may be exercised only when the
                market price of the shares of Common Stock subject to the ISO
                exceeds the exercise price of the ISO, and the SAR may be for no
                more than one hundred percent (100%) of the difference between
                the exercise price of the underlying ISO and the Fair Market
                Value of the Common Stock subject to the underlying ISO at the
                time the SAR is exercised. At the option of the Committee, upon
                exercise, an SAR may be settled in cash, Common Stock or a
                combination of both.

8.      RESTRICTED STOCK.

        A Restricted Stock Award entitles the recipient to acquire shares of
        Common Stock, subject to certain restrictions or conditions, for no cash
        consideration, if permitted by applicable law, or for such other
        consideration as may be determined by the Committee. The Award may be
        subject to such restrictions, conditions and forfeiture provisions as
        the

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        Committee may determine, including, but not limited to, restrictions on
        transfer, continuous service with the Company or any of its
        subsidiaries, achievement of business objectives, and individual,
        division and Company performance. Subject to such restrictions,
        conditions and forfeiture provisions as may be established by the
        Committee, any Participant receiving an Award of Restricted Stock will
        have all the rights of a stockholder of the Company with respect to the
        shares of Restricted Stock, including the right to vote the shares and
        the right to receive any dividends thereon.

9.      DEFERRED STOCK.

        A Deferred Stock Award entitles the recipient to receive shares of
        Common Stock to be delivered in the future. Delivery of the shares of
        Common Stock will take place at such time or times, and on such
        conditions, as the Committee may specify. At the time any Deferred Stock
        Award is granted, the Committee may provide that the Participant will
        receive an instrument evidencing the Participant's right to future
        delivery of Deferred Stock.

10.     DIRECTOR'S FEES.

        Subject to the limitation contained in Section 4 of this Plan on the
        number of shares of Common Stock which may be issued pursuant to this
        Plan, any member of the Board who provides written notice to the Company
        shall be entitled to receive all or a portion of the member's annual
        board retainer fee, Board meeting fees, and Board committee fees in the
        form of shares of the Company's Common Stock. Any member of the Board
        who desires to receive all or any part of such Board fees in shares of
        Common Stock must provide the Chief Financial Officer of the Company
        with written notice of the member's election (an "Election") to receive
        payment of Board fees in this form no later than five (5) business days
        prior to the date of payment of such fees. Shares of Common Stock with
        an aggregate Fair Market Value, on the date preceding the date of
        payment of Board fees, equal to the aggregate amount of such Board fees
        shall be issued to the Board member no later than fifteen (15) business
        days following the date of payment of such Board fees by the Company.

11.      FORMULA AWARDS.

         On each date that (i) an individual who is not an employee of the
         Company or any subsidiary is elected or reelected as a director by the
         shareholders of the Company and (ii) that an annual meeting of
         shareholders of the Company is held during the term of office of such
         director (but excluding any annual meeting at which such director's
         term of office expires and such director is not reelected) such
         director shall receive, on such date, a grant of Nonqualified Stock
         options to acquire ten thousand (10,000) shares of Common Stock and
         each such Option shall have a per share exercise price equal to the
         Fair Market Value of the Common Stock on such date of grant. Each
         Nonqualified Stock Option granted to a non-employee Director pursuant
         to this Section 11 shall have a term of five (5) years from the date of
         grant and shall vest and become fully exercisable on the first
         anniversary of such date of grant. In order for a non-employee Director
         to be granted such Nonqualified Stock options, the Director must have
         attended seventy-five

                                        5
<PAGE>

        (75%) of all Board meetings and seventy-five percent (75%) of all Board
        committee meetings, of which the Director is a member, called and held
        during the previous twelve (12) months while such Director was a member
        of the Board and committees). Notwithstanding anything to the contrary
        set forth above, no awards of Nonqualified Stock Options shall be made
        pursuant to this Section 11 to a Director who is receiving a comparable
        award under the Company's 1996 Equity Incentive Plan. The provisions of
        this Section 11 of the Plan shall not be amended more than once every
        six (6) months, other than to comport with changes in the Internal
        Revenue Code of 1986, as amended, the Employee Retirement Income
        Security Act of 1974, or the rules thereunder.

12.     OTHER STOCK BASED AWARDS.

        The Committee shall have the right to grant Other Stock Based Awards
        under the Plan to Employees which may include, without limitation, the
        grant of shares of Common Stock as bonus compensation and the issuance
        of shares of Common Stock in lieu of an Employee's cash compensation.

13.     AWARD AGREEMENTS.

        The grant of any Award under the Plan may be evidenced by an agreement
        which shall describe the specific Award granted and the terms and
        conditions of the Award. Any Award shall be subject to the terms and
        conditions of any such agreement required by the Committee.

14.     TRANSFERS.

        No Award (other than an outright Award in the form of Common Stock
        without any restrictions) may be assigned, pledged or transferred other
        than by will or by the laws of descent and distribution and, during a
        Participant's lifetime, will be exercisable only by the Participant or,
        in the event of a Participant's incapacity, by the Participant's
        guardian or legal representative.

15.     RIGHTS OF A STOCKHOLDER.

        Except as specifically provided by the Plan, the receipt of an Award
        will not give a Participant rights as a stockholder of the Company. The
        Participant will obtain such rights, subject to any limitations imposed
        by the Plan, or the instrument evidencing the Award, upon actual receipt
        of shares of Common Stock.

16.     CONDITIONS ON DELIVERY OF STOCK.

        The Company will not be obligated to deliver any shares of Common Stock
        pursuant to the Plan or to remove any restrictions or legends from
        shares of Common Stock previously delivered under the Plan until, (a) in
        the opinion of the Company's counsel, all applicable federal and state
        laws and regulations have been complied with, (b) until the shares of
        Common Stock to be delivered have been listed or authorized to be listed
        on the American Stock Exchange (or such other exchange or quotation
        system on which shares of Common Stock may be listed or quoted), and (c)
        until all other legal matters in

                                        6
<PAGE>

        connection with the issuance and delivery of such shares of Common Stock
        have been approved by the Company's counsel. If the sale of shares of
        Common Stock has not been registered under the Securities Act of 1933,
        as amended (the "Act"), and qualified under the appropriate "blue sky"
        laws, the Company may require, as a condition to exercise of the Award,
        such representations and agreements as counsel for the Company may
        consider appropriate to avoid violation of such Act and laws and may
        require that the certificates evidencing such shares of Common Stock
        bear an appropriate legend restricting transfer.

        If an Award is exercised by a Participant's legal representative, the
        Company will be under no obligation to deliver shares of Common Stock
        pursuant to such exercise until the Company is satisfied as to the
        authority of such representative.

17.     TAX WITHHOLDING.

        The Company will have the right to deduct from any cash payment under
        the Plan taxes that are required to be withheld and to condition the
        obligation to deliver or vest shares of Common Stock under this Plan
        upon the Participant's paying the Company such amount as the Company may
        request to satisfy any liability for applicable withholding taxes. The
        Committee may in its discretion permit Participants to satisfy all or
        part of their withholding liability either by delivery of shares of
        Common Stock held by the Participant or by withholding shares of Common
        Stock to be delivered to a Participant upon the grant or exercise of an
        Award.

18.     ADJUSTMENT OF AWARD.

        (a)     In the event that a dividend shall be declared upon the Common
                Stock payable in shares of Common Stock, the number of shares of
                the Common Stock then subject to any Award and the number of
                shares of the Common Stock which may be issued under the Plan
                but not yet covered by an Award shall be adjusted by adding to
                each share the number of shares which would be distributable
                thereon if such shares had been outstanding on the date fixed
                for determining the stockholders entitled to receive such stock
                dividend. In the event that the outstanding shares of the Common
                Stock shall be changed into or exchanged for a different number
                or kind of shares of Common Stock or other securities of the
                Company or of another corporation or for cash, whether through
                reorganization, recapitalization, stock split, combination of
                shares, sale of assets, merger or consolidation in which the
                Company is the surviving corporation, then, there shall be
                substituted for each share of the Common Stock then subject to
                any Award, the number and kind of shares of stock or other
                securities or the amount of cash into which each outstanding
                share of the Common Stock shall be so changed or for which each
                such share shall be exchanged.

        (b)     In the event of a proposal, which is approved by the Board, of
                any merger or consolidation involving the Company where the
                Company is not the surviving entity, any sale of substantially
                all of the Company's assets or any other transaction or series
                of related transactions as a result of which a single person or

                                        7
<PAGE>

                several persons acting in concert own a majority of the
                Company's then outstanding Common Stock (such merger,
                consolidation, sale of assets, or other transaction being
                hereinafter referred to as a "Transaction"), all outstanding
                options and SARs shall become exercisable immediately before or
                contemporaneously with the consummation of such Transaction and
                each outstanding share of Restricted Stock and each outstanding
                Deferred Stock Award shall immediately become free of all
                restrictions and conditions upon consummation of such
                Transaction. Immediately following the consummation of the
                Transaction, all outstanding Options and SARs shall terminate
                and cease to be exercisable.

                In lieu of the foregoing, if the Company will not be the
                surviving corporation or entity, the Committee may arrange to
                have such acquiring or surviving corporation or entity, or an
                "Affiliate,, (as defined below) thereof, grant replacement
                Awards which shall be immediately exercisable to Participants
                holding outstanding Awards.

                The term "Affiliate," with respect to any Person, shall mean any
                other Person who is, or would be deemed to be an "affiliate" or
                an "associate" of such Person within the respective meanings
                ascribed to such terms in Rule 12b-2 of the General Rules and
                Regulations under the Securities Exchange Act of 1934. The term
                "Person" shall mean a corporation, association, partnership,
                joint venture, trust, organization, business, individual or
                government or any governmental agency or political subdivision
                thereof.

        (c)     In the event of the dissolution or liquidation of the Company
                (except a dissolution or liquidation relating to a sale of
                assets or other reorganization of the Company referred to in the
                preceding sections), the outstanding options and SARs shall
                terminate as of a date fixed by the Committee; provided,
                however, that not less than thirty (30) days written notice of
                the date so fixed shall be given to each Participant who shall
                have the right during such period to exercise the Participant's
                Options or SARs as to all or any part of the shares of Common
                Stock covered thereby. Further, in the event of the dissolution
                or liquidation of the Company, each outstanding share of
                Restricted Stock and each outstanding Deferred Stock Award shall
                immediately become free of all restrictions and conditions.

19.     TERMINATION OF SERVICE.

        Upon a Participant's termination of service with the Company or a
        subsidiary (if an employee only of a subsidiary), any outstanding Award
        shall be subject to the terms and conditions set forth below, unless
        otherwise determined by the Committee:

        (a)     In the event a Participant leaves the employ or service of the
                Company or a subsidiary of the Company, prior to the
                Participant's 65th birthday, whether voluntarily or otherwise
                but other than by reason of the Participant's death or
                "disability" (as such term is defined in Section 22(e)(3) of the
                Code), each Option

                                        8
<PAGE>

                and SAR granted to the Participant shall terminate upon the
                earlier to occur of (i) the expiration of the period three (3)
                months after the date of such termination and (ii) the date
                specified in the Option or SAR; provided, that, prior to the
                termination of such Option or SAR, the Participant shall be able
                to exercise any part of the Option or SAR which is exercisable
                as of the date of termination. Further, each outstanding share
                of Restricted Stock and each outstanding Deferred Stock Award
                which remains subject to any restrictions or conditions of the
                Award shall be forfeited to the Company upon such date of
                termination.

        (b)     In the event a Participant's employment with or service to the
                Company or its subsidiaries terminates by reason of the
                Participant's death or "disability" (as such term is defined in
                Section 22(e)(3) of the Code), each Option and SAR granted to
                the Participant shall become immediately exercisable in full and
                shall terminate upon the earlier to occur of (i) the expiration
                of the period six (6) months after the date of such termination
                and (ii) the date specified in the option or SAR. Further, each
                outstanding share of Restricted Stock and each outstanding
                Deferred Stock Award shall immediately become free of all
                restrictions and conditions upon the date of such termination.

        (c)     In the event a Participant voluntarily or involuntarily leaves
                the employ or service of the Company or a subsidiary of the
                Company, after the Participant's 65th birthday, each Option and
                SAR granted to the Participant shall become immediately
                exercisable in full and shall terminate upon the earlier to
                occur of (i) the expiration of three (3) months after the date
                of such termination and (ii) the date specified in the Option or
                SAR. Further, each outstanding share of Restricted Stock and
                each outstanding Deferred Stock Award shall immediately become
                free of all restrictions and conditions upon the date of such
                termination.

20.     AMENDMENTS AND TERMINATION.

        The Committee will have the authority to make such amendments to any
        terms and conditions applicable to outstanding Awards as are consistent
        with this Plan; provided, that, except for adjustments under Section 16
        hereof, no such action will modify such Award in a manner adverse to the
        Participant without the Participant's consent except as such
        modification is provided for or contemplated in the terms of the Award.

        The Board may amend, suspend or terminate the Plan, subject to
        shareholder approval if so required by any applicable federal or state
        securities laws, tax laws or corporate statute, except that no action
        may, without the consent of a Participant, adversely affect any Award
        previously granted to the Participant under the Plan.

21.     SUCCESSORS AND ASSIGNS.

        The provisions of this Plan shall be binding upon all successors and
        assigns of any such Participant including, without limitation, the
        estate of any such Participant and the executors, administrators, or
        trustees of such estate, and any receiver, trustee in bankruptcy or
        representative of the creditors of any such Participant.

                                        9
<PAGE>

22.     MISCELLANEOUS.

        (a)     This Plan shall be governed by and construed in accordance with
                the laws of the State of New Jersey.

        (b)     Any and all funds received by the Company under the Plan may be
                used for any corporate purpose.

        (c)     Nothing contained in the Plan or any Award granted under the
                Plan shall confer upon a Participant any right to be continued
                in the employment of the Company or any subsidiary, or interfere
                in any way with the right of the Company, or its subsidiaries,
                to terminate the employment relationship at any time.

                Reflects amendments through February 8, 2006 and effects of
                reverse/forward stock split effected as of May 31, 2000.

                                       10

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