EXHIBIT 4.6

                               MARGO CARIBE, INC.
                           2003 RESTRICTED STOCK PLAN


SECTION 1.  ESTABLISHMENT; PURPOSE; DEFINITIONS.

          (a) Margo Caribe,  Inc., a Puerto Rico  corporation  (the  "Company"),
     hereby establishes an incentive compensation plan for key employees,  to be
     known as "The Margo Caribe,  Inc. 2003 Restricted Stock Plan" (the "Plan"),
     as set forth in this  document.  The Plan  permits the grant of  Restricted
     Stock to key employees of the Company and its Subsidiaries and Affiliates.

          (b) The  purpose  of the Plan is to enable  the  Company  to  attract,
     retain and reward key  employees  of the Company and its  Subsidiaries  and
     Affiliates  and  strengthen  the  mutuality of  interests  between such key
     employees  and the  Company's  shareholders  by offering such key employees
     equity incentives.

          (c) For  purposes  of the Plan,  the  following  terms  shall have the
     meanings set forth below:

               "Affiliate"  means any entity  (other  than the  Company  and its
          Subsidiaries)  that is  designated  by the  Board  as a  participating
          employer under the Plan.

               "Award" means any award of Restricted Stock under the Plan.

               "Award  Agreement" means an agreement setting forth the terms and
          conditions  applicable to an Award granted to a Participant  under the
          Plan.

               "Board" means the Board of Directors of the Company.

               "Book Value"  means,  as of any given date,  on a per share basis
          (1)  the  shareholders'  equity  in the  Company  as of the end of the
          immediately  preceding  fiscal  year  as  reflected  in the  Company's
          audited  consolidated  balance sheet as of such year-end date, subject
          to such  adjustments as the Committee shall specify at or after grant,
          divided  by (2) the number of  outstanding  shares of Stock as of such
          year-end  date,  subject to such  adjustments  as the Committee  shall
          specify for events subsequent to such year-end date.

               "Change in  Control"  has the  meaning  assigned to it in Section
          6(b).



<PAGE>


               "Change  in  Control  Price" has the  meaning  assigned  to it in
          Section 6(c).

               "Committee" means the Compensation Committee of the Board.

               "Company" means Margo Caribe, Inc., a Puerto Rico corporation, or
          any successor corporation.

               "Disability"  means a mental or physical  condition which, in the
          opinion of the Committee,  renders a Participant unable or incompetent
          to carry out the job responsibilities  held by such Participant or the
          duties  assigned to such  Participant at the time such condition arose
          or was  incurred,  and which is  expected  to be  permanent  or for an
          indefinite duration.

               "Eligible Persons" has the meaning assigned to it in Section 4.

               "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
          amended.

               "Expiration  Date"  means  the date upon  which an Award,  or any
          portion thereof,  is scheduled to expire or terminate if not exercised
          or vested prior thereto, as determined by the Committee.

               "Fair Market Value" means, as of any given date, the mean between
          the highest and lowest quoted  selling price of the Stock on such date
          on the Nasdaq  SmallCap Market or, if no such sale of the Stock occurs
          on the Nasdaq  SmallCap  Market on such date,  then such mean price on
          the next preceding day on which the Stock was traded.  If the Stock is
          no longer traded on the Nasdaq SmallCap  Market,  then the Fair Market
          Value of the Stock shall be determined by the Committee in good faith.

               "Family   Member"  means  a   Participant's   child,   stepchild,
          grandchild, parent, stepparent,  grandparent,  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,  a
          trust in which any of these  persons  (and/or the  Participant)  holds
          more than 50% of the beneficial interest, a foundation in which any of
          these  persons  (and/or the  Participant)  controls the  management of
          assets and any other entity in which any of these persons  (and/or the
          Participant) owns more than 50% of the voting interests.

                                       -2-

<PAGE>



               "Non-Employee  Director" shall have the meaning set forth in Rule
          16b-3(b)(3)(i)  promulgated by the Securities and Exchange  Commission
          under the Exchange  Act, or any  successor  definition  adopted by the
          Commission.

               "Participant"  means an Eligible  Person who holds an outstanding
          Award granted under the Plan.

               "Performance-Based Restricted Stock" means an Award of Restricted
          Stock,  which  will vest upon the  achievement  of  Performance  Goals
          established  by or under the  direction of the Committee and set forth
          in the related Award Agreement.

               "Performance  Goals" means the performance  goals  established by
          the Committee  with respect to any Award,  which shall be based on one
          or more of the following measures: operating income, net income and/or
          operating  ratios.  Performance  goals may be measured on a corporate,
          subsidiary  or  business  unit  basis,  or  any  combination  thereof.
          Performance  goals  may  reflect  absolute  entity  performance  or  a
          relative comparison of entity performance to the performance of a peer
          group of entities or other external measure.

               "Plan" means The Margo Caribe,  Inc. 2003 Restricted  Stock Plan,
          as amended from time to time.

               "Restricted Stock" means an Award of shares of Stock that is made
          pursuant to Section 5 and is subject to restrictions.

               "Restriction  Period" and "Minimum Restriction Period" shall have
          the meanings assigned to them in Section 5(b)(6).

               "Section 16 Participant"  means a Participant  under the Plan who
          is then subject to Section 16 of the Exchange Act.

               "Stock" means the Common Shares,  $0.001 par value per share,  of
          the Company.

               "Subsidiary" means any corporation (other than the Company) in an
          unbroken chain of  corporations  beginning with the Company if each of
          the  corporations  (other than the last  corporation  in the  unbroken
          chain) owns stock  possessing 50% or more of the total combined voting
          power of all classes of stock in one of the other corporations in such
          chain.


                                       -3-

<PAGE>



               "Time-based  Restricted Stock" means an Award of Restricted Stock
          that will vest upon the lapse of a time period  determined by or under
          the  direction of the  Committee  and  specified in the related  Award
          Agreement.

SECTION 2.  ADMINISTRATION.

     The Plan  shall be  administered  by the  Committee.  The  Committee  shall
consist of not less than three  directors of the  Company,  all of whom shall be
Non-Employee  Directors.  Committee  members shall be appointed by the Board and
shall serve on the Committee at the pleasure of the Board.  The functions of the
Committee  specified  in the Plan shall be  exercised by the Board if and to the
extent that no Committee  exists which has the  authority to so  administer  the
Plan.

     The Committee  shall have full power to interpret and  administer  the Plan
and full authority to select the  individuals to whom Awards will be granted and
to  determine  the type and amount of Awards to be granted to each  Participant,
the  consideration,  if any,  to be paid for such  Awards,  the  timing  of such
Awards,  the terms and conditions of Awards granted under the Plan and the terms
and conditions of the related Award  Agreements  which will be entered into with
Participants. As to the selection of and grant of Awards to Participants who are
not Section 16 Participants,  the Committee may delegate its responsibilities to
members of the Company's management consistent with applicable law.

     The Committee shall have the authority to adopt,  alter,  change and repeal
such rules, regulations,  guidelines and practices governing the Plan, from time
to time, as it shall deem  advisable;  to interpret the terms and  provisions of
the Plan and any Award issued under the Plan (and any Award  Agreement  relating
thereto);  to direct  employees of the Company or other advisors to prepare such
materials  or  perform  such  analyses  as  the  Committee  deems  necessary  or
appropriate; and otherwise to supervise the administration of the Plan.

     Any interpretation and administration of the Plan by the Committee, and all
actions  and  determinations  of the  Committee,  shall be  final,  binding  and
conclusive  on the Company,  its  shareholders,  Subsidiaries,  Affiliates,  all
Participants in the Plan, their respective legal representatives, successors and
assigns and all persons  claiming under or through any of them. No member of the
Board or of the  Committee  shall incur any  liability  for any action  taken or
omitted, or any determination made, in good faith in connection with the Plan.


                                       -4-

<PAGE>

SECTION 3.  STOCK SUBJECT TO THE PLAN.

          (a)  Aggregate  Stock  Subject to the Plan.  Subject to  adjustment as
     provided  in  Section  3(c)  below,  the  total  number  of shares of Stock
     reserved  and  available  for Awards  under the Plan is 200,000.  Any Stock
     issued  hereunder  may  consist,  in whole or in part,  of  authorized  and
     unissued shares or treasury shares.

          (b) Forfeiture or Termination of Awards or Stock. If any Stock subject
     to  any  Award  granted  hereunder  is  forfeited  or  an  Award  otherwise
     terminates  or expires  without the  issuance  of Stock,  the Stock that is
     subject  to such  Award  shall  again  be  available  for  distribution  in
     connection  with future Awards under the Plan as set forth in Section 3(a),
     unless the  Participant  who had been awarded such  forfeited  Stock or the
     expired or  terminated  Award has  theretofor  received  dividends or other
     benefits of ownership with respect to such Stock.  For purposes  hereof,  a
     Participant  shall not be deemed to have  received a benefit  of  ownership
     with  respect  to such  Stock  by the  exercise  of  voting  rights  or the
     accumulation  of dividends  which are not realized due to the forfeiture of
     such Stock or the  expiration or  termination  of the related Award without
     issuance of such Stock.

          (c)   Adjustment.   In  the  event  of  any  merger,   reorganization,
     consolidation, recapitalization, share dividend, share split, reverse share
     split,  combination  of shares or other change in the  corporate or capital
     structure  of  the  Company  affecting  the  Stock,  such  substitution  or
     adjustment  shall  be made in the  aggregate  number  of  shares  of  Stock
     reserved for issuance  under the Plan, in the maximum number of shares that
     may be subject to Awards  granted to any  Participant  during any  calendar
     year or other  period  and in the number of shares  subject  to  Restricted
     Stock Awards granted under the Plan as may be approved by the Committee, in
     its sole discretion, to prevent dilution or enlargement of rights; provided
     that the  number of shares  subject  to any Award  shall  always be a whole
     number. Any fractional shares shall be eliminated.


SECTION 4.  ELIGIBILITY.

     Officers and other key  employees of the Company and its  Subsidiaries  and
Affiliates  (but  excluding  members of the  Committee  and any other person who
serves  only  as a  director)  who  are  responsible  for or  contribute  to the
management, growth or



                                       -5-

<PAGE>


profitability  of the business of the Company or its  Subsidiaries or Affiliates
("Eligible Persons") are eligible to be granted Awards under the Plan.

SECTION 5.  RESTRICTED STOCK.

          (a) Grant. Subject to the terms and conditions of the Plan, Restricted
     Stock may be awarded to Eligible  Persons at any time and from time to time
     as shall be determined by the Committee.  The Committee shall determine the
     individuals to whom,  and the time or times at which,  grants of Restricted
     Stock will be made; the number of shares of Restricted  Stock to be awarded
     to each  Participant;  the  price  (if  any) to be paid by the  Participant
     (subject  to  Section   5(b));   whether   the  Awards   will   consist  of
     Performance-Based  Restricted  Stock or  Time-Based  Restricted  Stock or a
     combination  thereof; the date or dates or conditions upon which Restricted
     Stock Awards will vest, whether through lapse of time or the achievement of
     specified  Performance  Goals;  the Performance Goal or Goals, if any, that
     must be  satisfied as a condition  to the vesting of any  Restricted  Stock
     Award;  the period or periods within which such Restricted Stock Awards may
     be subject to forfeiture; and the other terms and conditions of such Awards
     in addition to those set forth in Section 5(b).

          The Committee  may condition the grant or vesting of Restricted  Stock
     upon the lapse of time or the attainment of specified  Performance Goals or
     such other factors as the Committee may determine in its sole discretion.

          (b) Terms and  Conditions.  Restricted  Stock  awarded  under the Plan
     shall be subject to the following  terms and  conditions  and shall contain
     such additional terms and conditions,  not inconsistent with the provisions
     of the Plan,  as the Committee  shall deem  desirable.  A  Participant  who
     receives a Restricted Stock Award shall not have any rights with respect to
     such  Award,  unless  and until  such  Participant  has  executed  an Award
     Agreement  evidencing  the Award in the form  approved from time to time by
     the  Committee  and has  delivered  a fully  executed  copy  thereof to the
     Company,   and  has  otherwise  complied  with  the  applicable  terms  and
     conditions of such Award.

          (1)  The  purchase  price for  shares  of  Restricted  Stock  shall be
               determined by the Committee at the time of grant and may be equal
               to their par value or zero.


                                       -6-

<PAGE>



          (2)  Awards of  Restricted  Stock must be  accepted by  executing  the
               related Restricted Stock Award Agreement,  delivering an executed
               copy of such Restricted  Stock Award Agreement to the Company and
               paying whatever price (if any) is required under Section 5(b)(1).

          (3)  Subject  to  Section  5(b)(5),   each  Participant   receiving  a
               Restricted  Stock  Award shall be issued a stock  certificate  in
               respect of such  shares of  Restricted  Stock.  Such  certificate
               shall be  registered in the name of such  Participant,  and shall
               bear an appropriate legend referring to the terms, conditions and
               restrictions applicable to such Award.

          (4)  Subject to Section  5(b)(5),  the stock  certificates  evidencing
               such shares of Restricted Stock shall be delivered to and held in
               custody by the Company,  or its designee,  until the restrictions
               thereon  shall have  lapsed or any  conditions  to the vesting of
               such Award have been satisfied.  As a condition of any Restricted
               Stock Award, the Participant shall deliver to the Company a stock
               power,  endorsed in blank,  relating to the Stock covered by such
               Award.

          (5)  In the discretion of the Company,  any shares of Restricted Stock
               awarded to any  Participant  may be issued and held in book entry
               form. In such event, no stock certificates evidencing such shares
               will be issued and the applicable  restrictions  will be noted in
               the records of the Company's transfer agent and in the book entry
               system.

          (6)  A Participant  may be granted an Award of  Time-Based  Restricted
               Stock or Performance-  Based  Restricted  Stock, or a combination
               thereof.  Time-Based  Restricted  Stock  Awards will vest and all
               restrictions thereon will terminate upon the lapse of a period of
               time specified by the Committee, provided all other conditions to
               vesting have been met. Performance-Based  Restricted Stock Awards
               will vest and all  restrictions  thereon will  terminate upon the
               certification by the

                                       -7-

<PAGE>



               Committee of the achievement of the specified  Performance Goals,
               provided all other conditions to vesting have been met.

          (7)  Subject to the provisions of this Plan and the related Restricted
               Stock  Award  Agreement,  during the period set by the  Committee
               commencing  with  the  date  of a  Restricted  Stock  Award  (the
               "Restriction  Period"),  the  Participant  who has received  such
               Award shall not be permitted to sell, transfer, pledge, assign or
               otherwise  encumber  the  shares of  Restricted  Stock  which are
               subject to such Award.  The Restriction  Period shall not be less
               than six months  and one day in  duration  ("Minimum  Restriction
               Period")  and may be a  function  of time or the  achievement  of
               Performance Goals, or both, as determined by the Committee at the
               time of  grant.  Subject  to these  limitations  and the  Minimum
               Restriction  Period  requirement,  the  Committee,  in  its  sole
               discretion,  may  provide for the lapse of such  restrictions  in
               installments  and may accelerate or waive such  restrictions,  in
               whole or in part,  based on  service,  performance  or such other
               factors and criteria as the Committee may determine,  in its sole
               discretion.

          (8)  Except as provided in this Section  5(b)(8),  Section  5(b)(7) or
               Section 5(b)(9),  the Participant shall have, with respect to the
               shares  of  Restricted  Stock  awarded,  all of the  rights  of a
               shareholder of the Company, including the right to vote the Stock
               and the right to receive any  dividends.  The  Committee,  in its
               sole  discretion,  as determined at the time of award, may permit
               or require the payment of cash  dividends to be deferred  and, if
               the Committee so determines, reinvested, subject to Section 9(f),
               in additional Restricted Stock to the extent shares are available
               under Section 3, or otherwise reinvested.  Stock dividends issued
               with respect to  Restricted  Stock shall be treated as additional
               shares  of  Restricted   Stock  that  are  subject  to  the  same
               restrictions  and other  terms and  conditions  that apply to the
               shares

                                       -8-

<PAGE>



               with respect to which such dividends are issued.

          (9)  No  Restricted  Stock shall be  transferable  by any  Participant
               other  than by will or by the laws of descent  and  distribution,
               except that,  if determined by the Committee at the time of grant
               and so provided in the applicable Award Agreement,  a Participant
               may transfer  Restricted  Stock during his or her lifetime to one
               or  more  of  his  or  her  Family  Members,   provided  that  no
               consideration  is paid for the  transfer  and  that the  transfer
               would not result in the loss of any exemption under Rule 16b-3 of
               the  Exchange  Act with  respect  to any  Restricted  Stock.  The
               transferee   of   Restricted   Stock   will  be  subject  to  all
               restrictions,  terms and conditions  applicable to the Restricted
               Stock prior to its  transfer,  except that the  Restricted  Stock
               will not be further  transferable by the transferee other than by
               will or by the laws of descent and distribution.

          (10) If a Participant's employment by the Company or any Subsidiary or
               Affiliate  terminates by reason of death,  any  Restricted  Stock
               held by such  Participant  at the time of death shall  thereafter
               vest or any  restrictions  lapse,  to the extent such  Restricted
               Stock  would  have  become   vested  or  no  longer   subject  to
               restriction  within  one year  from  the  time of  death  had the
               Participant  continued  to fulfill all of the  conditions  of the
               Restricted Stock Award during such period;  provided that, if the
               vesting  of  such  Award  is  conditioned  on or  subject  to the
               achievement  of specified  Performance  Goals,  such  Performance
               Goals are achieved prior to the earlier of the expiration of such
               one year period or the Expiration  Date of the Award,  subject in
               all cases to the  Minimum  Restriction  Period  requirement.  The
               balance of the Restricted Stock shall be forfeited.

          (11) If a Participant's employment by the Company or any Subsidiary or
               Affiliate  terminates  by reason of  Disability,  any  Restricted
               Stock

                                                        -9-

<PAGE>


               then  held  by  such  Participant  shall  thereafter  vest or any
               restriction lapse, to the extent such Restricted Stock would have
               become  vested or no longer  subject to  restrictions  within one
               year  from  the  time of  such  termination  had the  Participant
               continued  to fulfill  all of the  conditions  of the  Restricted
               Stock Award during such period;  provided that, if the vesting of
               such Award is  conditioned  on or subject to the  achievement  of
               specified  Performance Goals, such Performance Goals are achieved
               prior to the earlier of the expiration of such one year period or
               the  Expiration  Date of the  Award,  subject in all cases to the
               Minimum  Restriction  Period  requirement.  The  balance  of  the
               Restricted Stock shall be forfeited.

          (12) Unless otherwise determined by the Committee at or after the time
               of granting any Restricted Stock Award, and except as provided in
               Section  5(b)(13)  hereof,  if a Participant's  employment by the
               Company or any Subsidiary or Affiliate  terminates for any reason
               other than death or Disability, all Restricted Stock held by such
               Participant  which is unvested or subject to  restriction  at the
               time of such termination shall thereupon be forfeited.

          (13) If a  Participant's  employment  with the  Company (or any of its
               Subsidiaries  or  Affiliates)   terminates  due  to  a  Qualified
               Retirement (as defined  below),  the following  provisions  shall
               apply (subject in all cases to Section 5(b)(13)(C) hereof):

               (A)  If and to the extent that any Award  Installment (as defined
                    below)  is vested as of the  Qualified  Retirement  Date (as
                    defined below),  all shares of Restricted  Stock held by the
                    Participant in connection with such Award  Installment shall
                    be free of  applicable  restrictions  and  delivered  to the
                    Participant (subject to Section 5(b)(5));

               (B)  (i) With respect to all Time-Based  Restricted  Stock Awards
                    held by the



                                      -10-

<PAGE>



                    Participant on his or her Qualified  Retirement Date, if and
                    to the extent that any Award Installment is not vested as of
                    such Qualified  Retirement Date, such Award  Installment (a)
                    shall remain in effect with respect to fifty  percent  (50%)
                    of the  shares  of Stock  covered  thereby  and,  as to such
                    shares,   shall   immediately  vest  on  the   Participant's
                    Qualified  Retirement  Date, and shall thereafter be free of
                    applicable  restrictions  and  delivered to the  Participant
                    (subject  to  Section  5(b)(5));  and (b)  shall  terminate,
                    effective as of the Qualified  Retirement Date, with respect
                    to the remaining  fifty percent (50%) of the shares  covered
                    by such Award Installment.

                    (ii) with respect to all Performance- Based Restricted Stock
                    Awards  held  by the  Participant  on  his or her  Qualified
                    Retirement  Date,  if and  to  the  extent  that  any  Award
                    Installment  is not  vested as of the  Qualified  Retirement
                    Date, such Award Installment (a) shall remain in effect with
                    respect  to  fifty  percent  (50%)  of the  shares  of Stock
                    covered thereby and, as to such shares,  shall vest upon the
                    achievement  of the related  Performance  Goals (unless such
                    Performance  Goals are not achieved  prior to the Expiration
                    Date  applicable to such Award  Installment,  in which event
                    the Award  Installment  will  terminate,  and all  shares of
                    Restricted  Stock covered by such Award  Installment will be
                    forfeited,  as of  such  Expiration  Date),  and  (b)  shall
                    terminate,  effective as of the Qualified  Retirement  Date,
                    with respect to the  remaining  fifty  percent  (50%) of the
                    shares  covered by such Award  Installment;  provided  that,
                    with  respect  to  any  member  of  the   Company's   Senior
                    Management  Group  (as  defined  below)  who has  given  the
                    Company at least one (1) full year's prior written notice of
                    his or her retirement, upon any Qualified


                                      -11-

<PAGE>


                    Retirement   of  such   individual,   no   portion   of  any
                    Performance-Based  Restricted  Stock  Awards  held  by  such
                    Participant  on his or her  Qualified  Retirement  Date will
                    terminate  on such  date,  but such  Awards  will  remain in
                    effect and one hundred  percent (100%) of the shares subject
                    to each such  Award held by such  Participant  on his or her
                    Qualified Retirement Date shall vest as of the date on which
                    the applicable  Performance Goals have been achieved (unless
                    such  Performance  Goals  are  not  achieved  prior  to  the
                    Expiration Date applicable to such Award, in which event the
                    Award will  terminate,  and all shares of  Restricted  Stock
                    covered  by  such  Award  will  be  forfeited,  as  of  such
                    Expiration Date).

               (C)  If the Committee  determines  that the Participant is or has
                    engaged in any  Disqualifying  Activity (as defined  below),
                    then (1) to the extent that any Restricted  Stock Award held
                    by such  Participant  has vested as of the  Disqualification
                    Date (as  defined  below),  the  Participant  shall have the
                    right to receive  all shares of  Restricted  Stock which are
                    vested as of such date (subject to Section  5(b)(5)) and (2)
                    to the extent that any  Restricted  Stock Award held by such
                    Participant has not vested as of the Disqualification  Date,
                    the Award shall  terminate,  and all related shares shall be
                    forfeited,  as  of  such  date.  Any  determination  by  the
                    Committee,  which  may act  upon the  recommendation  of the
                    Chief  Executive  Officer  or other  senior  officer  of the
                    Company,  that  the  Participant  is or has  engaged  in any
                    Disqualifying Activity, and as to the Disqualification Date,
                    shall be final and conclusive.

               (D)  For purposes of Section  5(b)(13),  the following  terms are
                    defined as follows:

                    (i)   Qualified   Retirement   -   any   termination   of  a
                    Participant's employment


                                      -12-

<PAGE>


                    with the Company or its  Subsidiaries  or Affiliates for any
                    reason  (other  than  death,  Disability  or an  involuntary
                    termination  for Cause) if, at or  immediately  prior to the
                    date of such termination,  the Participant satisfies both of
                    the following conditions:

                           (a)      the  Participant is 55 year of age or older;
                                    and

                           (b)      the  sum  of  the   Participant's   age  and
                                    completed years of service as an employee of
                                    the   Company   or   its   Subsidiaries   or
                                    Affiliates  (disregarding  fractions in both
                                    cases) shall total 70 or more.

                    (ii)  Qualified  Retirement  Date - the date as of which the
                    Participant's   employment   with   the   Company   or   its
                    Subsidiaries  or Affiliates  shall  terminate  pursuant to a
                    Qualified Retirement.

                    (iii)Disqualifying  Activity  - means  any of the  following
                    acts or activities:

                           (a)      directly   or   indirectly   serving   as  a
                                    principal,  shareholder,  partner, director,
                                    officer,  employee  or  agent  of,  or  as a
                                    consultant, advisor or in any other capacity
                                    to, any  business or entity  which  competes
                                    with  the  Company  or its  Subsidiaries  or
                                    Affiliates  in any business or activity then
                                    conducted  by  the  Company  or  any  of its
                                    Subsidiaries  or  Affiliates  to  an  extent
                                    deemed material by the Committee; or


                                      -13-

<PAGE>



                           (b)      any  disclosure by the  Participant,  or any
                                    use by the  Participant  for  his or her own
                                    benefit  or for  the  benefit  of any  other
                                    person or entity  (other than the Company or
                                    its  Subsidiaries  or  Affiliates),  of  any
                                    confidential  information or trade secret of
                                    the  Company or any of its  Subsidiaries  or
                                    Affiliates   without   the  consent  of  the
                                    Company; or

                           (c)      any   material   violation  of  any  of  the
                                    provisions of the Company's  Employee's Code
                                    of  Ethics   ("Code  of   Conduct")  or  any
                                    agreement  between the  Participant  and the
                                    Company;

                           (d)      making  any other  disclosure  or taking any
                                    other  action  which  is  determined  by the
                                    Committee to be  materially  detrimental  to
                                    the business, prospects or reputation of the
                                    Company  or  any  of  its   Subsidiaries  or
                                    Affiliates; or

                           (e)      the  Participant   fails,  in  any  material
                                    respect,  to  perform  his or  her  assigned
                                    responsibilities   as  an  employee  of  the
                                    Company  or  any  of  its   Subsidiaries  or
                                    Affiliates,  as determined by the Committee,
                                    in its sole judgment,  after consulting with
                                    the Chief Executive Officer.

                    The  ownership  of less  than 2% of the  outstanding  voting
                    securities of a publicly traded  corporation  which competes
                    with the Company or any of its

                                      -14-

<PAGE>


                    Subsidiaries   or   Affiliates   shall  not   constitute   a
                    Disqualifying Activity.

                    (iv) Cause - means a felony  conviction of a Participant  or
                    the failure of a Participant  to contest  prosecution  for a
                    felony, or a Participant's willful misconduct or dishonesty,
                    any of which,  in the judgment of the Committee,  is harmful
                    to  the  business  or  reputation  of  the  Company  or  any
                    Subsidiary  or Affiliate;  or any material  violation of the
                    Code of Conduct or any agreement between the Participant and
                    the Company.

                    (v)  Disqualification  Date - the earliest  date as of which
                    the Participant  engaged in any Disqualifying  Activity,  as
                    determined by the Committee.

                    (vi)  Award  Installment  - if the  Restricted  Stock  Award
                    consists of multiple  Awards,  each with a separate  Vesting
                    Date and/or separate Expiration Date, any one of such Awards
                    or,  if the  Restricted  Stock  Award  consists  of a single
                    Award,  with a single  Vesting Date and a single  Expiration
                    Date, then the entire Award.

                    (vii)Vesting  Date - the date on which any restrictions on a
                    Restricted  Stock  Award  terminate  and such  Award  vests,
                    whether  by  reason  of lapse of time,  the  achievement  of
                    specified Performance Goals or both.

                    (viii) Senior  Management  Group - means the Chief Executive
                    Officer and other members of the executive  management  team
                    (i.e., the Chief Executive Officer's Direct Reporting Group)
                    determined,  with respect to any Participant, on the date of
                    his or her retirement from the Company.


                                      -15-

<PAGE>



SECTION 6.  CHANGE IN CONTROL PROVISION.

          (a) Impact of Event. In the event of and upon a "Change in Control" as
     defined  in  Section  6(b),  the  following   acceleration   and  valuation
     provisions shall apply:

          (1)  All  restrictions,  limitations  and  Performance  Goals, if any,
               applicable to any Restricted Stock shall terminate and such Stock
               shall be deemed fully vested; and

          (2)  The value of all outstanding  Awards,  in each case to the extent
               vested,  shall,  unless otherwise  determined by the Committee in
               its sole  discretion at or after grant but prior to any Change in
               Control,  be cashed  out on the basis of the  "Change  in Control
               Price", as defined in Section 6(c), as of the date such Change in
               Control is determined to have occurred.

          (b)  Definition of Change in Control.  For purposes of Section 6(a), a
     "Change in Control" means the happening of any of the following:

          (1)  When any  "person" as defined in Section  3(a)(9) of the Exchange
               Act and as used in Sections 13(d) and 14(d) thereof,  including a
               "group"  as defined in Section  13(d) of the  Exchange  Act,  but
               excluding the Company and any Subsidiary and any employee benefit
               plan  sponsored or  maintained  by the Company or any  Subsidiary
               (including any trustee of such plan acting as trustee),  directly
               or indirectly, becomes the "beneficial owner" (as defined in Rule
               13d-3 under the Exchange  Act, as amended from time to time),  of
               securities of the Company  representing 20 percent or more of the
               combined   voting  power  of  the  Company's   then   outstanding
               securities;  provided,  however,  that  the  terms  "person"  and
               "group" shall not include any "Excluded  Director",  and the term
               "Excluded Director" means any director who, on the effective date
               of the  Plan,  is the  beneficial  owner  of or has the  right to
               acquire an amount of Stock equal to or greater  than five percent
               of the number of shares of



                                      -16-

<PAGE>



               Stock  outstanding on such effective  date; and further  provided
               that,  unless otherwise  determined by the Board or any committee
               thereof,  the terms  "person"  and "group"  shall not include any
               entity  or group of  entities  which  has  acquired  Stock of the
               Company  in  the  ordinary  course  of  business  for  investment
               purposes  only and not with the  purpose or effect of changing or
               influencing the control of the Company,  or in connection with or
               as a participant in any transaction having such purpose or effect
               ("Investment  Intent"),  as  demonstrated  by the  filing by such
               entity  or  group  of a  statement  on  Schedule  13G  (including
               amendments thereto) pursuant to Regulation 13D under the Exchange
               Act, as long as such entity or group continues to hold such Stock
               with an Investment Intent;

          (2)  When,  during  any  period of 24  consecutive  months  during the
               existence of the Plan, the  individuals  who, at the beginning of
               such period,  constitute  the Board (the  "Incumbent  Directors")
               cease for any reason  other than death to  constitute  at least a
               majority thereof; provided,  however, that a director who was not
               a director at the  beginning  of such  24-month  period  shall be
               deemed to have  satisfied  such 24-month  requirement  (and be an
               Incumbent  Director)  if such  director was elected by, or on the
               recommendation of or with the approval of, at least two-thirds of
               the directors who then  qualified as Incumbent  Directors  either
               actually  (because  they were  directors at the beginning of such
               24-month  period) or by prior operation of this Section  6(b)(2);
               or

          (3)  The occurrence of a transaction  requiring  shareholder  approval
               for  the  acquisition  of  the  Company,  or any  portion  of the
               outstanding equity securities or voting power of the Company,  by
               an entity other than the Company or a Subsidiary through purchase
               of Stock or assets, by merger or otherwise;

     provided,  however,  a change in control shall not be deemed to be a Change
     in Control for purposes of the Plan if the Board



                                      -17-

<PAGE>



     approves  such change  prior to either (i) the  commencement  of any of the
     events described in Section  6(b)(1),  (2), or (3) or (ii) the commencement
     by any person other than the Company of a tender offer for Stock.

          (c) Change in Control  Price.  For purposes of this Section 6, "Change
     in Control Price" means the highest price per share paid in any transaction
     reported on the Nasdaq SmallCap Market, or paid or offered in any bona fide
     transaction  related  to a Change in Control  of the  Company,  at any time
     during the 60-day period immediately preceding the occurrence of the Change
     in Control, in each case as determined by the Committee.

SECTION 7.  AMENDMENTS AND TERMINATION.

     The Board may at any time, in its sole discretion, amend, supplement, alter
or discontinue  the Plan, but no such amendment,  alteration or  discontinuation
shall be made which  would  impair the  rights of a  Participant  under an Award
theretofore granted, without the Participant's consent. The Company shall submit
to the shareholders of the Company for their approval any amendments to the Plan
which  are  required  to be  approved  by  shareholder  by law or the  rules and
regulations  of any  governmental  authority or any stock exchange or upon which
the Stock is then traded.

     Subject to changes in law or other  legal  requirements  that would  permit
otherwise, the Plan may not be amended without the approval of the shareholders,
to (a) increase the total number of shares of Stock that may be issued under the
Plan or to any  Participant  during any calendar  year  (except for  adjustments
pursuant to Section 3(c)), (b) modify the Plan's  eligibility  requirements,  or
(c) change the Performance Goals specified in Section 1(c).

     The Committee may at any time, in its sole  discretion,  amend the terms of
any  outstanding  Award,  but no such amendment shall be made which would impair
the rights of a  Participant  under an Award  theretofore  granted,  without the
Participant's  consent;  nor shall any such amendment  reduce the purchase price
(if any) of the Stock which is subject to an  outstanding  Award;  nor shall any
such  amendment be made which would make the applicable  exemptions  provided by
Rule 16b-3 under the  Exchange  Act  unavailable  to any Section 16  Participant
holding an Award without the Participant's consent.

     Subject  to the  above  provisions,  the  Board  shall  have all  necessary
authority to amend the Plan to take into account changes



                                      -18-

<PAGE>



in applicable  securities  and tax laws and accounting  rules,  as well as other
developments.

SECTION 8.  UNFUNDED STATUS OF PLAN.

     The Plan is  intended  to  constitute  an  "unfunded"  plan  for  incentive
compensation.  With respect to any payments not yet made to a Participant by the
Company,  nothing  contained  herein shall give any such  Participant any rights
that are greater than those of a general creditor of the Company.

SECTION 9.  GENERAL PROVISIONS.

          (a)  The  Committee  may  require  each  Participant  acquiring  Stock
     pursuant  to an Award  under the Plan to  represent  to and agree  with the
     Company in writing that the  Participant  is acquiring  the Stock without a
     view to distribution  thereof. Any certificates for such shares may include
     any  legend  which  the  Committee   deems   appropriate   to  reflect  any
     restrictions on transfer.

          All shares of Stock or other securities issued under the Plan shall be
     subject  to  such  stop-transfer  orders  and  other  restrictions  as  the
     Committee  may deem  advisable  under  the  rules,  regulations  and  other
     requirements of the Securities and Exchange Commission,  any stock exchange
     upon which the Stock is then listed,  and any  applicable  federal or state
     securities  laws,  and the  Committee  may cause a legend or  legends to be
     placed on any certificates for such shares to make appropriate reference to
     such  restrictions or to cause such restrictions to be noted in the records
     of the Company's stock transfer agent and any applicable book-entry system.

          (b)  Nothing  contained  in this Plan  shall  prevent  the Board  from
     adopting  other  or  additional  compensation   arrangements,   subject  to
     shareholder  approval if such approval is required;  and such  arrangements
     may be either generally applicable or applicable only in specific cases.

          (c)  Neither  the  adoption of the Plan,  nor its  operation,  nor any
     document  describing,  implementing  or referring to the Plan,  or any part
     thereof,  shall  confer  upon any  Participant  under the Plan any right to
     continue in the employ, or as a director,  of the Company or any Subsidiary
     or Affiliate, or shall in any way affect the right and power of the Company
     or any Subsidiary or Affiliate to terminate the employment, or service as a
     director,  or  change  the  job  title,  duties,  authority,   position  or
     compensation of any Participant in the


                                      -19-

<PAGE>



     Plan at any time with or without  assigning a reason therefor,  to the same
     extent as the Company or any Subsidiary or Affiliate might have done if the
     Plan had not been adopted.

          (d) For purposes of this Plan, a transfer of a Participant between the
     Company  and  any  of its  Subsidiaries  or  Affiliates,  or  between  such
     Subsidiaries or Affiliates, shall not be deemed a termination of employment
     or  adversely  affect or enlarge the rights of any  Participant  under this
     Plan or with respect to any Award.

          (e) No  later  than  the date as of  which  an  amount  first  becomes
     includable  in the gross income of the  Participant  for federal,  state or
     Puerto Rico income tax  purposes  with respect to any Award under the Plan,
     the Participant shall pay to the Company, or make arrangements satisfactory
     to the Committee regarding the payment of, any federal,  state, Puerto Rico
     or local  taxes or other  items of any kind  required by law to be withheld
     with  respect to such amount.  Subject to the  following  sentence,  unless
     otherwise  determined  by the  Committee,  withholding  obligations  may be
     settled with Stock,  including  unrestricted  Stock previously owned by the
     Participant  or Stock  that is part of the  Award  that  gives  rise to the
     withholding  requirement.  Notwithstanding the foregoing, any election by a
     Section 16 Participant to settle such tax withholding obligation with Stock
     that is previously  owned by the Participant or part of such Award shall be
     subject to prior approval by the  Committee,  in its sole  discretion.  The
     obligations  of the  Company  under the Plan shall be  conditional  on such
     payment or arrangements and the Company and its Subsidiaries and Affiliates
     to the  extent  permitted  by law shall  have the right to deduct  any such
     taxes from any payment of any kind otherwise due to the Participant.

          (f) The actual or deemed reinvestment of dividends in additional Stock
     or  Restricted  Stock at the time of any  dividend  payment  shall  only be
     permissible if sufficient shares of Stock are available under Section 3 for
     such reinvestment  (taking into account the then outstanding and previously
     granted Restricted Stock).

          (g) The Plan, all Awards made and all actions taken thereunder and any
     agreements  relating  thereto,  shall  be  governed  by  and  construed  in
     accordance with the laws of the Commonwealth of Puerto Rico.

          (h) In the event any Award is  transferred  or assigned  pursuant to a
     court order, such transfer or assignment shall



                                      -20-

<PAGE>


     be without liability to the Company and the Company shall have the right to
     offset against such Award any expenses (including attorneys' fees) incurred
     by the Company in connection with such transfer or assignment.

          (i) All Award Agreements  entered into with  Participants  pursuant to
     the Plan shall be subject to the Plan. A Participant  who receives an Award
     under the Plan shall not have any rights  with the  respect to such  Award,
     unless  and  until  such   Participant  has  executed  an  Award  Agreement
     evidencing the Award, in the form approved by the Committee;  has delivered
     a  fully-executed  copy of such Award  Agreement  to the  Company;  and has
     otherwise complied with the applicable terms and conditions of such Award.

          (j) The provisions of Awards need not be the same with respect to each
     Participant.

SECTION 10.  SHAREHOLDER APPROVAL; EFFECTIVE DATE OF PLAN.

     The Plan was adopted by the Board on May 2, 2003 and is subject to approval
by the holders of the Company's outstanding Stock, in accordance with applicable
law. The Plan will become effective on the date of such approval.

SECTION 11.  TERM OF PLAN.

     No Award shall be granted pursuant to the Plan on or after May 2, 2013, but
Awards granted prior to such date may extend beyond that date.









                                      -21-