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                                                                                                Exhibit
10.4

McMoRan EXPLORATION CO.

NOTICE OF GRANT OF
NONQUALIFIED STOCK OPTIONS AND
RESTRICTED STOCK UNITS
UNDER THE
2008 STOCK INCENTIVE PLAN
[Form for Non-Management and Advisory Director Grants]

Pursuant to the terms of the McMoRan Exploration Co. 2008 Stock Incentive (the
“Plan”), __________________________ (the “Director”), [a director/an advisory
director] of McMoRan Exploration Co. (the “Company”), was granted effective June
1, 20__ (the “Grant Date”), an option to purchase shares of the common stock of
the Company (the “Common Stock”) and restricted stock units as hereinafter set
forth.  Defined terms not otherwise defined herein shall have the meanings set
forth in Section 2 of the Plan.
 
1. Subject to all the terms and conditions of the Plan, the Director, as a
matter of separate inducement and agreement in connection with [his/her]
services as a director or advisory director of the Company, and not in lieu of
any salary or other compensation for the Director’s services, is granted, on the
terms and conditions set forth in the Plan, the option to purchase from the
Company all or any part of _____ shares of Common Stock (the “Option”) at an
exercise price of $_____________ per share and _____ restricted stock units
(“RSUs”).
 
2. Unless the exercisability of the Option or vesting of the RSUs is accelerated
pursuant to the terms of the Plan or this Notice, and subject to any other terms
of the Plan, the Option granted hereunder shall become exercisable and the RSUs
shall vest in installments as follows:
 
 
 
Date
Number of Shares
Subject to the Option to
Become Exercisable
 
Number of RSUs
To Vest
 
June 1, 20__
 
___
 
___
June 1, 20__
___
___
June 1, 20__
___
___
June 1, 20__
___
___

The Option granted hereunder shall terminate on June 1, 20__ unless terminated
earlier as provided in the Plan or this Notice, and any portion of the Option
not exercised on or before such date or such earlier termination, whichever
shall first occur, may not thereafter be exercised.
 
3. Additional Terms and Conditions of Options.
 
3.1 In order to exercise the Option, the holder of the Option shall give notice
to the Company or its designee in the manner determined by the Company,
specifying the number of shares to be purchased and accompanied by payment in
full of the aggregate exercise price thereof, as provided in the Plan.
 

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3.2 Any provision of this Plan or this Notice to the contrary notwithstanding,
the Nominating and Corporate Governance Committee (the “Committee”) may cause
any Option granted hereunder to be canceled in consideration of a cash payment
or alternative Option made to the holder of such canceled Option equal in value
to such canceled Option.  Notwithstanding the foregoing, except for adjustments
permitted under the Plan, no action by the Committee shall cause a reduction in
the exercise price of Options granted under the Plan without the approval of the
stockholders of the Company.  The determinations of value under this
subparagraph shall be made by the Committee in its sole discretion.
 
3.3           (a) For purposes of this Section 3.3, if the Director continues to
provide services to the Company or a subsidiary of the Company pursuant to a
consulting or other arrangement, the Director will not “cease to be an Eligible
Individual” until such time as the Director no longer provides such services.
 
(b) If the Director ceases to be an Eligible Individual for any reason other
than death, disability or retirement from the Board, the Options granted
hereunder shall terminate except that any Options, to the extent then
exercisable, may be exercised by the holder thereof within three months after
the Director ceases to be an Eligible Individual, but not later than the
termination date of the Option.
 
(c) If the Director ceases to be an Eligible Individual by reason of the
Director’s disability or retirement from the Board, the Options granted
hereunder shall terminate except that any Options, to the extent then
exercisable or exercisable within one year thereafter, may be exercised by the
holder thereof within three years after the Director ceases to be an Eligible
Individual, but not later than the termination date of the Option.
 
(d) If the Director dies while serving as an Eligible Individual, the Options
granted hereunder shall terminate, except that any Options, to the extent
exercisable by the holder thereof at the time of such death or exercisable
within one year thereafter, may be exercised until the third anniversary of the
date of such death, but not later than the termination date of the Option, by
the holder thereof, the Director’s estate, or the person designated in the
Director’s last will and testament, as appropriate.
 
(e) If the Director dies after ceasing to be an Eligible Individual, the Options
granted hereunder shall terminate, except that any Options, to the extent still
outstanding and exercisable by the holder thereof at the time of such death, may
be exercised until the third anniversary of the date the Director ceased to be
an Eligible Individual, but not later than the termination date of the Option,
by the holder thereof, the Director’s estate, or the person designated in the
Director’s last will and testament, as appropriate.
 
4. Additional Terms and Conditions of Restricted Stock Units.
 
4.1 Subject to the terms, conditions, and restrictions set forth herein, each
RSU represents the right to automatically receive from the Company, on the
respective scheduled vesting date for such RSU, one share (a “Share”) of Common
Stock, free of any restrictions and all cash, securities and property credited
to or deposited in the Director’s Dividend Equivalent Account (as defined in
Section 4.3) with respect to such RSU.
 
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4.2 Except as provided in Section 4.3, an RSU shall not entitle the Director to
any incidents of ownership (including, without limitation, dividend and voting
rights) (a) in any Share until the RSU shall vest and the Director shall be
issued a Share to which such RSU relates nor (b) in any cash, securities or
property credited to or deposited in a Dividend Equivalent Account related to
such RSU until such RSU vests.
 
4.3 From and after the Grant Date of an RSU until the issuance of the Share
payable in respect of such RSU, the Director shall be credited, as of the
payment date therefor, with (a) the amount of any cash dividends and (b) the
amount equal to the Fair Market Value of any Shares, securities, or other
property distributed or distributable in respect of one share of Common Stock to
which the Director would have been entitled had the Director been a record
holder of one share of Common Stock at all times from the Grant Date to such
issuance date (a “Property Distribution”).  All such credits shall be made
notionally to a dividend equivalent account (a “Dividend Equivalent Account”)
established for the Director with respect to all RSUs granted with the same
vesting date.  All credits to a Dividend Equivalent Account for the Director
shall be notionally increased by the Account Rate (as hereinafter defined),
compounded quarterly, from and after the applicable date of credit until paid in
accordance with the terms of the Plan and this Notice.  The “Account Rate” shall
be the prime commercial lending rate announced from time to time by JPMorgan
Chase Bank or by another major national bank headquartered in New York, New York
designated by the Committee.  The Committee may, in its discretion, deposit in
the Participant’s Dividend Equivalent Account the securities or property
comprising any Property Distribution in lieu of crediting such Dividend
Equivalent Account with the Fair Market Value thereof.  For purposes of this
Notice, “Fair Market Value” of a share of Common Stock or any other security
shall be the closing per share or security sale price on the Composite Tape for
New York Stock Exchange-Listed Stocks on the date in question or, if there are
no reported sales on such date, on the last preceding date on which any reported
sale occurred.  If on the date in question the shares of Common Stock or other
securities in question are not listed on such Composite Tape, the fair market
value shall be the closing sale price on the New York Stock Exchange on such
date or, if no sales occurred on such date, on the last previous day on which a
sale on the New York Stock Exchange is reported.
 
4.4          (a) Except as otherwise set forth in Section 4.4(b), all unvested
RSUs, all amounts credited to the Director’s Dividend Equivalent Account with
respect to such RSUs, and all securities and property comprising Property
Distributions deposited in such Dividend Equivalent Account with respect to such
RSUs shall immediately be forfeited on the date the Director ceases to be an
Eligible Individual, unless the Director continues providing services to the
Company pursuant to a consulting or other arrangement.
 
(b) If the Director ceases to be an Eligible Individual by reason of the
Director’s death, retirement or disability (as defined in Section 4.4(d)), all
unvested RSUs and all amounts credited to or property deposited in the
Director’s Dividend Equivalent Account with respect to such RSUs shall vest as
of the date the Director ceases to be an Eligible Individual.
 
(c) For purposes of this Section 4.4, if the Director continues to provide
services to the Company or a subsidiary of the Company pursuant to a consulting
or other arrangement, the Director will not “cease to be an Eligible Individual”
until such time as the Director no longer provides such services.
 
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(d) For purposes of this Section 4.4, a “disability” shall have occurred if the
Director is (i) unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than 3 months under an
accident and health plan covering employees of the Director’s employer.
 
5. Change of Control.
 
5.1 For purposes of this Notice, “Change of Control” means the earliest of the
following events:  (i) any person or any two or more persons acting as a group,
and all affiliates of such person or persons, shall acquire beneficial ownership
of more than 25% of all classes and series of the Company’s outstanding stock
(exclusive of stock held in the Company’s treasury or by the Company’s
Subsidiaries), taken as a whole, that has voting rights with respect to the
election of directors of the Company (not including any series of preferred
stock of the Company that has the right to elect directors only upon the failure
of the Company to pay dividends) pursuant to a tender offer, exchange offer,
purchase or other acquisition or series of purchases or other acquisitions, or
any combination of those transactions (a “25% Stock Acquisition”); provided,
however, that any 25% Stock Acquisition shall not constitute a Change in Control
if all of the acquiring persons enter into a standstill agreement with the
Company in a form approved by the Board and a majority of the members of the
Board at the time of such approval were also members of the Board immediately
prior to the 25% Stock Acquisition, or (ii) there shall be a change in the
composition of the Board at any time within two years after any tender offer,
exchange offer, merger, consolidation, sale of assets or contested election, or
any combination of those transactions (a “Transaction”), such that (A) the
persons who were directors of the Company immediately before the first such
Transaction cease to constitute a majority of the board of directors of the
corporation that shall thereafter be in control of the companies that were
parties to or otherwise involved in such Transaction or (B) the number of
persons who shall thereafter be directors of such corporation shall be fewer
than two-thirds of the number of directors of the Company immediately prior to
such first Transaction.
 
5.2 Upon a Change of Control, or immediately prior to the closing of a
transaction that will result in a Change of Control if consummated, all
outstanding Options granted pursuant to this Plan shall automatically become
fully vested and exercisable.  If a Change of Control also qualifies as a change
in the ownership of the Company, a change in the effective control of the
Company or a change in the ownership of a substantial portion of the assets of
the Company under Section 409A of the Internal Revenue Code and any related
implementing regulations or guidance, then all outstanding RSUs shall become
fully vested.
 
5.3 No later than 30 days after a Change of Control, the Committee, acting in
its sole discretion without the consent or approval of any Participant (and
notwithstanding any removal or attempted removal of some or all of the members
thereof as directors or Committee members), may act to effect one or more of the
alternatives listed below, which may vary among individual Participants and
which may vary among Options and RSUs held by any individual Participant:
 
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(a) require that all outstanding Options be exercised on or before a specified
date (before or after such Change of Control) fixed by the Committee, after
which specified date all unexercised Options and all rights of the Director
thereunder shall terminate,
 
(b) make such equitable adjustments to Awards then outstanding as the Committee
deems appropriate to reflect such Change of Control (provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary),
 
(c) provide for mandatory conversion or exchange of some or all of the
outstanding Options held by the Director as of a date, before or after such
Change of Control, specified by the Committee, in which event such Options shall
be deemed automatically cancelled and the Company shall pay, or cause to be
paid, to the Director an amount of cash per share equal to the excess, if any,
of the Change of Control Value of the shares subject to such Option, as defined
and calculated below, over the per share exercise price of such Options or, in
lieu of such cash payment, the issuance of Common Stock or securities of an
acquiring entity having a Fair Market Value equal to such excess, or
 
(d) provide that thereafter, upon any exercise of an Option that entitles the
holder to receive Common Stock, the holder shall be entitled to purchase or
receive under such Option, in lieu of the number of shares of Common Stock then
covered by such Option, the number and class of shares of stock or other
securities or property (including, without limitation, cash) to which the holder
would have been entitled pursuant to the terms of the agreement providing for
the reorganization, share exchange, merger, consolidation or asset sale, if,
immediately prior to such Change of Control, the holder had been the record
owner of the number of shares of Common Stock then covered by such Option.
 
5.4 For the purposes of any conversions or exchanges under paragraph (c) of
Section 5.3, the “Change of Control Value” shall equal the amount determined by
whichever of the following items is applicable:
 
(a) the per share price to be paid to holders of Common Stock in any such
merger, consolidation or other reorganization,
 
(b) the price per share offered to holders of Common Stock in any tender offer
or exchange offer whereby a Change of Control takes place, or
 
(c) in all other events, the Fair Market Value of a share of Common Stock, as
determined by the Committee as of the date determined by the Committee to be the
date of conversion or exchange.
 
5.5 In the event that the consideration offered to stockholders of the Company
in any transaction described in this Section 5 consists of anything other than
cash, the Committee shall determine the fair cash equivalent of the portion of
the consideration offered that is other than cash.
 
6. The Option and the RSUs granted hereunder are not transferable by the
Director otherwise than by will or by the laws of descent and distribution.
 
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7. All notices hereunder shall be in writing, and if to the Company, shall be
delivered personally to the Secretary of the Company or mailed to its principal
office, 1615 Poydras Street, New Orleans, Louisiana 70112, addressed to the
attention of the Secretary; and if to the Director, shall be delivered
personally or mailed to the Director at the address on file with the
Company.  Such addresses may be changed at any time by notice from one party to
the other.
 
8. The terms of this Notice shall bind and inure to the benefit of the Director,
the Company and the successors and assigns of the Company and, to the extent
provided in the Plan and in this Notice, the legal representatives of the
Director.
 
9. This Notice is subject to the provisions of the Plan.  The Plan may at any
time be amended by the board of directors of the Company (the “Board”), and this
Notice may at any time be amended by the Committee provided that no amendment to
this Notice that materially impairs the benefits provided to the Director
hereunder may be made without the Director’s consent.  Subject to any applicable
provisions of the Company’s by-laws or of the Plan, any applicable
determinations, orders, resolutions or other actions of the Committee shall be
final, conclusive and binding on the Company and the holder of the Option and
the RSUs granted hereunder.
 
McMoRan EXPLORATION CO.

By:  _______________________                                                                    

 
 
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