Exhibit
10.4


 


DIRECTORS’ STOCK
AWARD PLAN


(Approved by the
Stockholders on May 16, 2005)


 


The Company has a stockholder
approved plan, the Directors’ Stock Award Plan (“Plan”) which provides that
directors who are not compensated as employees of the Company will be
automatically awarded 200 shares of common stock upon election and 200
additional shares following each annual meeting of stockholders
thereafter.  Under the Plan, 100,000 shares have been reserved for
awards.  At December 31, 2005, 31,200 shares have been awarded under the
Plan, leaving 68,800 shares available for use after that date.


 


The following is a description
of the Plan.


 


1.              Purpose


 


The purposes of the Directors’
Stock Award Plan are (a) to attract and retain highly qualified individuals to
serve as members of the Board of Directors (the “Board”) of Southern Copper
Corporation (the “Company”), (b) to increase the stock ownership in the Company
of members of the Board who are not compensated as employees and (c) to relate
the compensation of members of the Board who are not compensated as employees
more closely to the Company’s performance and its shareholders’ interest by
granting such directors shares of common stock, par value $0.01 per share, of
the Company (the “Shares”).


 


2.              Administration


 


The Plan shall be administered
by the Board.  Subject to the provisions of the Plan, the Board shall be
authorized to interpret the Plan, to establish, amend, and rescind any rules
and regulations relating to the Plan and to make all other determinations
necessary or advisable for the administration of the Plan; provided, however,
that the Board shall have no discretion with respect to the selection of
directors to receive awards of Shares or the number of Shares to be
awarded.  The determinations of the Board in the administration of the
Plan, as described herein, shall be final and conclusive.  The Secretary
of the Company shall be authorized to implement the Plan in accordance with its
terms and to take such actions of a ministerial nature as shall be necessary to
effectuate the intent and purposes thereof.  The validity, construction
and effect of the Plan and any rules and regulations relating to the Plan shall
be determined in accordance with the laws of the State of Delaware.


 


3.              Eligibility


 


The class of individuals
eligible to receive awards of Shares under the Plan shall be directors of the
Company who are not compensated as employees of the Company (“Eligible
Directors”).  Any recipient of an award
granted hereunder shall hereinafter be referred to as a “Participant”.


 


Once elected at the
2005 annual meeting of stockholders, Messrs. Emilio Carrillo Gamboa, Jaime
Fernando Collazo Gonzalez, Xavier Garcia de Quevedo Topete, J. Eduardo Gonzalez
Felix, Harold S. Handelsman, German Larrea Mota-Velasco, Genaro Larrea
Mota-Velasco, Armando Ortega Gomez, Luis Miguel Palomino Bonilla, Gilberto
Perezalonso Cifuentes, Juan Rebolledo Gout, and Carlos Ruiz Sacristan will be
Eligible Directors.


 


4.              Shares
Subject to the Plan


 


Subject to adjustment as
provided in Section 6, an aggregate of 100,000 shares shall be available for
awards under the Plan.  The shares may be
made available from authorized but unissued shares or treasury shares.  If any stock awards under the Plan shall be


 


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foregone or returned to the
Company for any reason, the shares subject to such award shall again be
available for awards.


 


5.              Grant,
Stock Awards


 


(a)  Upon first election to the Board after
September 1, 1995, each newly elected Eligible Director will be granted 200
Shares.


 


(b)  Immediately following each Annual
Shareholders Meeting, each Eligible Director will be granted 200 Shares as of
the date of such meeting.


 


(c)  An Eligible Director may forego any grant of
Shares by giving irrevocable written notice to such effect to the Secretary of
the Company six months in advance of such grant.


 


6.              Adjustment
of and Changes in Shares


 


In the event of a stock split,
stock dividend, extraordinary dividend, subdivision or combination of the Shares
or other change in corporate structure affecting the Shares, the number of
Shares authorized by the Plan and the number of Shares to be granted under
Section 5 shall be appropriately and equitably adjusted.


 


7.              Withholding
of Taxes and Other Laws


 


The Company shall be
authorized to withhold from any payment due under this Plan the amount of
withholding taxes, if any, due in respect of an award hereunder, unless other
provisions satisfactory to the Company shall have been made for the payment of
such taxes.


 


The Board may refuse to issue
or transfer any Shares if, acting in its sole discretion, it determines that
the issuance or transfer of such Shares might violate any applicable law or
regulation or entitle the Company to recover the same under Section 16(b) of
the Securities Exchange Act of 1934, as amended.  Without limiting the
generality of the foregoing, no award granted hereunder shall be construed as
an offer to sell securities of the Company, and no such offer shall be
outstanding, unless and until the Board in its sole discretion has determined
that any such offer, if made, would be in compliance with all applicable
requirements of the U.S. federal securities laws.


 


8.              Effective
Date and Duration of Plan


 


The Plan became effective on
January 1, 1996 on the effective date of the exchange of the Company’s shares
for certain labor shares of the Peruvian Branch of Southern Peru Limited (the “Exchange
Offer”), subject to the completion of such Exchange Offer.  The Plan shall
terminate on January 31, 2016, unless the Plan is extended or terminated at an
earlier date by Shareholders or is terminated by exhaustion of the shares
available for issuance hereunder.


 


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