1999 HOVNANIAN ENTERPRISES, INC
STOCK INCENTIVE PLAN

(As amended and restated March 8th, 2002)

1. Purpose of the Plan
The purpose of the Plan is to aid the Company and its
Affiliates in recruiting and retaining key employees, directors or
consultants of outstanding ability and to motivate such employees,
directors or consultants to exert their best efforts on behalf of the
Company and its Affiliates by providing incentives through the
granting of Awards. The Company expects that it will benefit from the
added interest which such key employees, directors or consultants
will have in the welfare of the Company as a result of their
proprietary interest in the Company's success.
2. Definitions
The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or
any successor thereto.
(b) Affiliate: With respect to the Company, any entity
directly or indirectly controlling, controlled by, or
under common control with, the Company or any other
entity designated by the Board in which the Company or an
Affiliate has an interest.
(c) Award: An Option, Stock Appreciation Right or Other
Stock-Based Award granted pursuant to the Plan.
(d) Beneficial Owner: A "beneficial owner", as such term is
defined in Rule 13d-3 under the Act (or any successor
rule thereto).
(e) Board: The Board of Directors of the Company.
(f) Change in Control:
The occurrence of any of the following
events:
(i)  any Person (other than a Person holding securities
representing 10% or more of the combined voting power of
the Company's outstanding securities as of the Effective
Date, or any Family Member of such a Person, the Company,
any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or any company
owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their
ownership of stock of the Company), becomes the
Beneficial Owner, directly or indirectly, of securities
of the Company, representing 50% or more of the combined
voting power of the Company's then-outstanding
securities;
(ii)  during any period of twenty-four consecutive
months (not including any period prior to the Effective
Date), individuals who at the beginning of such period
constitute the Board, and any new director (other than
(A) a director nominated by a Person who has entered into
an agreement with the Company to effect a transaction
described in Sections 2(f) (i) , (iii) or (iv) of the
Plan or (B) a director nominated by any Person (including
the Company) who publicly announces an intention to take
or to consider taking actions (including, but not limited
to, an actual or threatened proxy contest) which if
consummated would constitute a Change in Control) whose
election by the Board or nomination for election by the
Company's shareholders was approved in advance by a vote
of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of
the period or whose election or nomination for election
was previously so approved, cease for any reason to
constitute at least a majority thereof;
(iii) the consummation of any transaction or series of
transactions under which the Company is merged or
consolidated with any other company, other than a merger
or consolidation which would result in the shareholders
of the Company immediately prior thereto continuing to
own (either by remaining outstanding or by being
converted into voting securities of the surviving entity)
more than 65% of the combined voting power of the voting
securities of the Company or such surviving entity
outstanding immediately after such merger or
consolidation; or
(iv) the Company undergoes a complete liquidation of the
Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's
assets, other than a liquidation of the Company into a
wholly-owned subsidiary.
(g) Code: The Internal Revenue Code of 1986, as amended, or
any successor thereto.
(h) Committee: The Compensation Committee of the Board.
(i) Company: Hovnanian Enterprises, Inc., a Delaware
corporation.
(j) Disability: Inability of a Participant to perform in all
material respects his duties and responsibilities to the
Company, or any Subsidiary of the Company, by reason of a
physical or mental disability or infirmity which
inability is reasonably expected to be permanent and has
continued (i) for a period of six consecutive months or
(ii) such shorter period as the Board may reasonably
determine in good faith. The Disability determination
shall be in the sole discretion of the Board and a
Participant (or his representative) shall furnish the
Board with medical evidence documenting the Participant's
disability or infirmity which is satisfactory to the
Board.
(k) Effective Date: March 5,1999
(l) Fair Market Value: On a given date, the arithmetic mean
of the high and low prices of the Shares as reported on
such date on the Composite Tape of the principal national
securities exchange on which such Shares are listed or
admitted to trading, or, if no Composite Tape exists for
such national securities exchange on such date, then on
the principal national securities exchange on which such
Shares are listed or admitted to trading, or, if the
Shares are not listed or admitted on a national
securities exchange, the arithmetic mean of the per Share
closing bid price and per Share closing asked price on
such date as quoted on the National Association of
Securities Dealers Automated Quotation System (or such
market in which such prices are regularly quoted), or, if
there is no market on which the Shares are regularly
quoted, the Fair Market Value shall be the value
established by the Committee in good faith. If no sale of
Shares shall have been reported on such Composite Tape or
such national securities exchange on such date or quoted
on the National Association of Securities Dealer
Automated Quotation System on such date, then the
immediately preceding date on which sales of the Shares
have been so reported or quoted shall be used.
(m) Family Member:
(i) any Person holding securities representing 10% or
more of the combined voting power of the Company's
outstanding securities as of the Effective Date;
(ii) any spouse of such a person;
(iii) any descendant of such a person;
(iv) any spouse of any descendant of such a person; or
(v) any trust for the benefit of any of the
aforementioned persons.
(n) ISO: An Option that is also an incentive stock option
granted pursuant to Section 6(d) of the Plan.
(o) LSAR: A limited stock appreciation right granted pursuant
to Section 7(d) of the Plan.
(p) Other Stock-Based Awards: Awards granted pursuant to
Section 8 of the Plan.
(q) Option: A stock option granted pursuant to Section 6 of
the Plan.
(r) Option Price: The purchase price per Share of an Option,
as determined pursuant to Section 6(a) of the Plan.
(s) Participant: An employee, director or consultant who is
selected by the Committee to participate in the Plan.
(t) Performance-Based Awards: Certain Other Stock-Based
Awards granted pursuant to Section 8(b) of the Plan.
(u) Person: A "person", as such term is used for purposes of
Section 13 (d) or 14(d) of the Act (or any successor
section thereto).
(v) Plan: The 1999 Hovnanian Enterprises, Inc. Stock
Incentive Plan.
(w) Shares: Shares of common stock of the Company.
(x) Stock Appreciation Right: A stock appreciation right
granted pursuant to Section 7 of the Plan.
(y) Subsidiary: A subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section
thereto)
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan
is 1,500,000. The maximum number of Shares for which Options or Stock
Appreciation Rights may be granted during a calendar year to any
Participant shall be 300,000. The Shares may consist, in whole or in
part, of unissued Shares or treasury Shares. The issuance of Shares
or the payment of cash upon the exercise of an Award shall reduce the
total number of Shares available under the Plan, as applicable.
Shares which are subject to Awards which terminate or lapse may be
granted again under the Plan.
4. Administration
The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any
subcommittee thereof consisting solely of at least two individuals
who are each "non-employee directors" within the meaning of Rule 16b-
3 under the Act (or any successor rule thereto) and "outside
directors" within the meaning of Section 162(m) of the Code (or any
successor section thereto); provided, however, that any action
permitted to be taken by the Committee may be taken by the Board, in
its discretion. The Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to
the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan. The
Committee may correct any defect or omission or reconcile any
inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the Committee
in the interpretation and administrations of the Plan, as described
herein, shall lie within its sole and absolute discretion and shall
be final, conclusive and binding on all parties concerned (including,
but not limited to Participants and their beneficiaries or
successors. Determinations made by the Committee under the Plan need
not be uniform and may be made selectively among Participants,
whether or not such Participants are similarly situated. The
Committee shall require payment of any amount it may determine to be
necessary to withhold for federal, state, local or other, taxes as a
result of the exercise of an Award. Unless the Committee specifies
otherwise, the Participant may elect to pay a portion or all of such
withholding taxes by (a) delivery in Shares or (b) having Shares
withheld by the Company from any Shares that would have otherwise
been received by the Participant. The number of Shares so delivered
or withheld shall have an aggregate Fair Market Value sufficient to
satisfy the applicable withholding taxes. If the chief executive
officer of the Company is a member of the Board, the Board by
specific resolution may constitute such chief executive officer as a
committee of one which shall have the authority to grant Awards of up
to an aggregate of 300,000 Shares in each calendar year to
Participants who are (i) not subject to the rules promulgated under
Section 16 of the Act (or any successor section thereto) or (ii)
covered employees (or anticipated to become covered employees) as
such term is defined in Section 162(m) of the Code; provided,
however, that such chief executive officer shall notify the Committee
of any such grants made pursuant to this Section 4.
5. Limitations
No Award may be granted under the Plan after the tenth
anniversary of the Effective Date, but Awards theretofore granted may
extend beyond that date.
6. Terms and Conditions of Options
Options granted under the Plan shall be, as determined by the
Committee, non-qualified or incentive stock options for federal
income tax purposes, as evidenced by the related Award agreements,
and shall be subject to the foregoing and the following terms and
conditions and to such other terms and conditions, not inconsistent
therewith, as the Committee shall determine:
(a)  Option Price. The Option Price per Share shall be
determined by the Committee, but shall not be less than 100% of the
Fair Market Value of the Shares on the date an Option is granted.
(b)  Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be
determined by the Committee, but in no event shall an Option be
exercisable more than ten years after the date it is granted.  The
Committee may, in its discretion, accelerate the date after which
Options may be exercised in whole or in part.  If the chief executive
officer of the Company is a member of the Board, the Board by
specific resolution may constitute such chief executive officer as a
committee of one which shall have the authority to accelerate the
date after which Options may be exercised in whole or in part.
(c) Exercise of Options. Except as otherwise provided in the
Plan or in an Award agreement, an Option may be exercised for all, or
from time to time any part, of the Shares for which it is then
exercisable. For purposes of Section 6 of the plan, the exercise date
of an Option shall be the later of the date a notice of exercise is
received by the Company and, if applicable, the date payment is
received by the Company pursuant to clauses (i), (ii), (iii) or (iv)
in the following sentence. The purchase price ~or the Shares as to
which an Option is exercised shall be paid to the Company in full at
the time of exercise at the election of the Participant (i) in cash,
(ii) in Shares having a Fair Market Value equal to the aggregate
Option Price for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee; provided, that such
Shares have been held by the Participant for no less than six months,
(iii) partly in cash and partly in such Shares or (iv) through the
delivery of irrevocable instruments to a broker to deliver promptly
to the Company an amount equal to the aggregate option price for the
shares being purchased. No Participant shall have any rights to
dividends or other rights of a stockholder with respect to Shares
subject to an Option until the Participant has given written notice
of exercise of the Option, paid in full for such Shares and, if
applicable, has satisfied any other conditions imposed by the
Committee pursuant to the Plan.
(d) ISOs. The Committee may grant Options under the Plan that
are intended to be ISOs. Such ISOs shall comply with the requirements
of Section 422 of the Code (or any successor section thereto) . No
ISO may be granted to any Participant who at the time of such grant,
owns more than ten percent of the total combined voting power of all
classes of stock of the Company or of any Subsidiary, unless (i) the
Option Price for such ISO is at least 110% of the Fair Market Value
of a Share on the date the ISO is granted and (ii) the date on which
such ISO terminates is a date not later than the day preceding the
fifth anniversary of the date on which the ISO is granted. Any
Participant who disposes of Shares acquired upon the exercise of an
ISO either (i) within two years after the date of grant of such ISO
or (ii) within one year after the transfer of such Shares to the
Participant, shall notify the Company of such disposition and of the
amount realized upon such disposition.
7. Terms and Conditions of Stock Appreciation Rights
(a)  Grants. The Committee also may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a Stock
Appreciation Right in connection with an Option, or a portion
thereof. A Stock Appreciation Right granted pursuant to clause (ii)
of the preceding sentence (A) may be granted at the time the related
Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same Shares
covered by an Option (or such lesser number of Shares as the
Committee may determine) and (C) shall be subject to the same terms
and conditions as such Option except for such additional limitations
as are contemplated by this Section 8 (or such additional limitations
as may be included in an Award agreement).
(b) Terms. The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee but
in no event shall such amount be less than the greater of (i) the
Fair Market Value of a Share on the date the Stock Appreciation Right
is granted or, in the case of a Stock Appreciation Right granted in
conjunction with an Option, or a portion thereof, the Option Price of
the related Option and (ii) an amount permitted by applicable laws,
rules, by-laws or policies of regulatory authorities or stock
exchanges. Each Stock Appreciation Right granted independent of an
Option shall entitle a Participant upon exercise to an amount equal
to (i) the excess of (A) the Fair Market Value on the exercise date
of one Share over (B) the exercise price per Share, times (ii) the
number of Shares covered by the Stock Appreciation Right. Each Stock
Appreciation Right granted in conjunction with an Option, or a
portion thereof, shall entitle a Participant to surrender to the
Company the unexercised Option, or any portion thereof, and to
receive from the Company in exchange therefor an amount equal to (i)
the excess of (A) the Fair Market Value on the exercise date of one
Share over (B) the Option Price per Share, times (ii) the number of
Shares covered by the Option, or portion thereof, which is
surrendered. The date a notice of exercise is received by the Company
shall be the exercise date. Payment shall be made in Shares or in
cash, or partly in Shares and partly in cash (any such Shares valued
at such Fair Market Value), all as shall be determined by the
Committee. Stock Appreciation Rights may be exercised from time to
time upon actual receipt by the Company of written notice of exercise
stating the number of Shares with respect to which the Stock
Appreciation Right is being exercised. No fractional Shares will be
issued in payment for Stock Appreciation Rights, but instead cash
will be paid for a fraction or, if the Committee should so determine,
the number of Shares will be rounded downward to the next whole
Share.
(c) Limitations. The Committee may impose, in its discretion,
such conditions upon the exercisability or transferability of Stock
Appreciation Rights as it may deem fit.
(d) Limited Stock Appreciation Rights. The Committee may
grant LSARs that are exercisable upon the occurrence of specified
contingent events. Such LSARs may provide for a different method of
determining appreciation, may specify that payment will be made only
in cash and may provide that any related Awards are not exercisable
while such LSARS are exercisable. Unless the context otherwise
requires, whenever the term "Stock Appreciation Right" is used in the
Plan, such term shall include LSARs.
8. Other Stock-Based Awards
(a)  Generally. The Committee, in its sole discretion, may
grant Awards of Shares, Awards of restricted Shares and Awards that
are valued in whole or in part by reference to, or are otherwise
based on the Fair Market Value of, Shares ("Other Stock-Based
Awards"). Such Other Stock-Based Awards shall be in such form, and
dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive one or more
Shares (or the equivalent cash value of such Shares) upon the
completion of a specified period of service, the occurrence of an
event and/or the attainment of performance objectives. Other Stock-
Based Awards may be granted alone or in addition to any other Awards
granted under the Plan. Subject to the provisions of the Plan, the
Committee shall determine to whom and when Other Stock-Based Awards
will be made, the number of Shares to be awarded under (or otherwise
related to) such Other Stock-Based Awards; whether such Other Stock-
Based Awards shall be settled in cash, Shares or a combination of
cash and Shares; and all other terms and conditions of such Awards
(including, without limitation, the vesting provisions thereof and
provisions ensuring that all Shares so awarded and issued shall be
fully paid and non-assessable).
(b) Performance-Based Awards. Notwithstanding anything to the
contrary herein, certain Other Stock-Based Awards granted under this
Section 8 may be granted in a manner which is deductible by the
Company under Section 162(m) of the Code (or any successor section
thereto) ("Performance-Based Awards"). A Participant's Performance-
Based Award shall be determined based on the attainment of written
performance goals approved by the Committee for a performance period
established by the Committee (i) while the outcome for that
performance period is substantially uncertain and (ii) no more than
90 days after the commencement of the performance period to which the
performance goal relates or, if less, the number of days which is
equal to 25 percent of the relevant performance period. The
performance goals, which must be objective, shall be based upon one
or more of the following criteria: (i) consolidated earnings before
or after taxes (including earnings before interest, taxes,
depreciation and amortization); (ii) net income; (iii) operating
income; (iv) earnings per Share; (v) book value per Share; (vi)
return on shareholders' equity; (vii) expense management; (viii)
return on investment; (ix) improvements in capital structure; (x)
profitability of an identifiable business unit or product; (xi)
maintenance or improvement of profit margins; (xii) stock price;
(xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash
flow; (xvii) working capital and (xviii) return on assets. The
foregoing criteria may relate to the Company, one or more of its
Subsidiaries or one or more of its divisions or units, or any
combination of the foregoing, and may be applied on an absolute basis
and/or be relative to one or more peer group companies or indices, or
any combination thereof, all as the Committee shall determine. In
addition, to the degree consistent with Section 162(m) of the Code
(or any successor section thereto), the performance goals may be
calculated without regard to extraordinary items. The maximum amount
of a Performance-Based Award during a calendar year to any
Participant shall be $2,000,000. The Committee shall determine
whether, with respect to a performance period, the applicable
performance goals have been met with respect to a given Participant
and, if they have, to so certify and ascertain the amount of the
applicable Performance-Based Award. No Performance-Based Awards will
be paid for such performance period until such certification is made
by the Committee. The amount of the Performance-Based Award actually
paid to a given Participant may be less than the amount determined by
the applicable performance goal formula, at the discretion of the
Committee. The amount of the Performance-Based Award determined by
the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole
discretion after the end of such performance period; provided,
however, that a Participant may, if and to the extent permitted by
the Committee and consistent with the provisions of Section 162(m) of
the Code, elect to defer payment of a Performance-Based Award.
9. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the
contrary, the following provisions shall apply to all Awards granted
under the Plan:
(a) Generally. In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share dividend or
split, reorganization, recapitalization, merger, consolidation, spin-
off, combination or exchange of Shares or other corporate exchange,
any distribution to shareholders of Shares other than regular cash
dividends or any similar event, the Committee in its sole discretion
and without liability to any person may make such substitution or
adjustment, if any, as it deems to be equitable, as to (i) the number
or kind of Shares or other securities issued or reserved for issuance
pursuant to the Plan or pursuant to outstanding Awards, (ii) the
Option Price and/or (iii) any other affected terms of such Awards.
(b) Change in Control. Except as otherwise provided in an
Award agreement, in the event of a Change in Control, the Committee
in its sole discretion and without~ liability to any person may take
such actions, if any, as it deems necessary or desirable with respect
to any Award (including, without limitation, (i) the acceleration of
an Award, (ii) the payment of a cash amount in exchange for the
cancellation of an Award and/or (iii) the requiring of the issuance
of substitute Awards that will substantially preserve the value,
rights and benefits of any affected Awards previously granted
hereunder) as of the date of the consummation of the Change in
Control.
10. No Right to Employment
The granting of an Award under the Plan shall impose no
obligation on the Company or any Subsidiary to continue the
employment of a Participant and shall not lessen or affect the
Company's or Subsidiary's right to terminate the employment of such
Participant.
11. Successors and Assigns
The Plan shall be binding on all successors and assigns of the
Company and a Participant; including without limitation, the estate
of such Participant and the executor, administrator or trustee of
such estate, or any receiver or trustee in bankruptcy or
representative of the Participant's creditors.
12. Nontransferability of Awards
Unless otherwise determined by the Committee, an Award shall
not be transferable or assignable by the Participant otherwise than
by will or by the laws of descent and distribution.  Notwithstanding
the foregoing, a Participant may transfer an option (other than an
ISO) in whole or in party by gift or domestic relations order to a
family member of the Participant (a "Permitted Transferee") and,
following any such transfer such option or portion thereof shall be
exercisable only by the Permitted Transferee, provided that no such
option or portion thereof is transferred for value, and provided
further that, following any such transfer, neither such option or any
portion thereof nor any right hereunder shall be transferable other
than to the Participant or otherwise than by will or the laws of
descent and distribution or be subject to attachment, execution or
other similar process.  For purposes of this Section 12, "family
member" includes any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships,
any person sharing the Participant's household (other than a tenant
or employee), trust in which these persons have more than fifty
percent of the beneficial interest, a foundation in which these
persons (or the Participant) control the management of assets and any
other entity in which these persons (or the Participant) own more
than fifty percent of the voting interests.  An Award exercisable
after the death of a Participant may be exercised by the legatees,
personal representatives or distributees of the Participant.
13. Amendments or Termination
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which, (a)
without the approval of the shareholders of the Company, would
(except as is provided in Section 10 of the Plan), increase the total
number of Shares reserved for the purposes of the Plan or change the
maximum number of Shares for which Awards may be granted to any
Participant or (b) without the consent of a Participant, would impair
any of the rights or obligations under any Award theretofore granted
to such Participant under the Plan; provided, however, that the
Committee may amend the Plan in such manner as it deems necessary to
permit the granting of Awards meeting the requirements of the Code or
other applicable laws. Notwithstanding anything to the contrary
herein, the Board may not amend, alter or discontinue the provisions
relating to Section 9(b) of the Plan after the occurrence of a Change
in Control.
14. International Participants
With respect to Participants who reside or work outside the
United States of America and who are not (and who are not expected to
be) `covered employees' within the meaning of Section 162(m) of the
Code, the Committee may, in its sole discretion, amend the terms of
the Plan or Awards with respect to such Participants in order to
conform such terms with the requirements of local law.
15. Choice of Law
The Plan shall be governed by and construed in accordance with
the laws of the State of Delaware.
16. Effectiveness of the Plan
The Plan shall be effective as of the Effective Date. If the
Plan is not approved by the shareholders of the Company prior to the
first anniversary of the Effective Date, no Awards may be granted
thereafter.
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045050-0001-08714-NY03.2155838.2		01/15/03 10:57 AM