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                                                                    Exhibit 10.4

                           SPANISH BROADCASTING SYSTEM
                             1999 STOCK OPTION PLAN
                            FOR NONEMPLOYEE DIRECTORS



     1. PURPOSE.

         The purpose of the Plan is to promote the interests of Spanish
Broadcasting System, Inc. (the "Company") and its shareholders by increasing the
proprietary and personal interest of nonemployee members of the Board in the
growth and continued success of the Company by granting them Options to purchase
shares of the Company's stock.

     2. DEFINITIONS.

         Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.

         "Board" shall mean the Board of Directors of the Company.

         "Change in Control" shall mean the occurrence of any of the following:

         (a) any "person" as such term is defined in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company or any Subsidiary or any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any Subsidiary), becomes the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting power of
the Company's then outstanding securities;

         (b) during any two consecutive years, individuals who at the beginning
of such period constitute the Board, and any new director (whose election by the
Board or nomination for election by the Company's shareholders was approved 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 of the Board;

         (c) the stockholders of the Company approve a merger or consolidation
of the Company with any other company other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than eighty percent (80%) of the combined voting power of the
voting securities of the Company (or such surviving entity) outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires more
than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities; or




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         (d) the stockholders of the Company adopt a plan of 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.

         "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

         "Company" shall mean Spanish Broadcasting System, Inc., a Delaware
corporation, and any successor corporation.

         "Disability" shall mean the inability, by reason of bodily injury or
physical or mental disease, or any combination thereof, of the Optionee to
perform his duties as a member of the Board for a period of one hundred eighty
(180) days (whether or not consecutive) in any period of three hundred and
sixty-five (365) consecutive days.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         "Fair Market Value" per Share as of a particular date shall mean,
unless otherwise determined by the Board:

         (i) the closing sales price per Share on a national securities exchange
on the most recent date on which there was a sale of Shares on such exchange;

         (ii) if clause (i) does not apply and the Shares are quoted on the
National Association of Securities Dealers Automated Quotation system
("NASDAQ"), either (a) the closing price per Share as reported on NASDAQ for the
date of grant, provided, a sale was reported on such day or (b) if the date of
grant is a holiday, Saturday or Sunday, the closing price per share as reported
on NASDAQ on the preceding day to the date of grant on which a sale was
reported;

         (iii) if clause (i) or (ii) does not apply and the Shares are then
traded on an over-the-counter market, the closing price for the Shares in such
over-the-counter market for the business day preceding the exercise date; or

         (iv) if the Shares are not then listed on a national securities
exchange or traded in an over-the-counter market, such value as the Board in its
discretion may determine.

         "Nonemployee Director" shall mean a member of the Board who is not an
employee of the Company.

         "Option" shall mean an option to purchase Shares granted pursuant to
the Plan. Options granted under the Plan are not"incentive stock options" within
the meaning of Section 422 of the Code.





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         "Option Agreement" shall mean an Option Agreement, substantially in the
form attached hereto as Exhibit A, to be entered into between the Company and an
Optionee, which shall set forth the terms and conditions of the Options granted
to such Optionee.

         "Participant" shall mean a Nonemployee Director who is granted an
Option under the Plan.

         "Plan" shall mean this Spanish Broadcasting System 1999 Stock Option
Plan for Nonemployee Directors, as hereinafter amended from time to time.

         "Share" shall mean a share of the Company's common stock, $.0001 par
value.

      3. SHARES SUBJECT TO THE PLAN.

         (a) Shares Subject to the Plan. Subject to adjustment as set forth in
Section 3(b), the maximum number of Shares that may be issued or transferred
pursuant to Options under this Plan shall be 300,000 which may be authorized but
unissued Shares or Shares held in the Company's treasury, or a combination
thereof. Any Shares subject to an Option that cease to be subject thereto may
again be the subject of Options hereunder.

         (b) Changes in Company's Shares. In the event the Board determines that
any stock dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, exchange
of shares, warrants or rights offering to purchase Shares, or other similar
corporate event, affects the value of the Shares such that an adjustment is
required in order to preserve the benefits or potential benefits intended to be
made available under this Plan, the Board shall have the right, in its sole
discretion, and in such manner as it may deem equitable, to adjust any or all of
(a) the number and kind of Shares subject to outstanding Options, and (b) the
exercise price with respect to any Option or (c) make provision for a cash
payment to an Optionee or a person who has an outstanding Option (in an amount
equal to the then difference between the exercise price and the Fair Market
Value of a Share).

      4. PARTICIPATION.

         Each Nonemployee Director shall be eligible to participate in the Plan,
provided that the Board shall have the discretion to determine which, if any,
Nonemployee Director shall receive a grant of Options hereunder.

      5. TERMS OF OPTIONS AND SHARES.

         (a) Terms. The Options granted hereunder shall have the following terms
and conditions:




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                  (i) Exercise Price. The exercise price of any Option shall be
one hundred percent (100%) of the Fair Market Value of a Share as of the date
the Option is granted, provided, however, that the Board, in its discretion may
grant Options above or below Fair Market Value.

                  (ii) Term. Subject to the discretion of the Board, the term of
an Option shall be ten years from the date it is granted.

                  (iii) Vesting. Options shall be exercisable in such
installments (which need not be equal) and at such times as the Board may
designate, as embodied in the Option Agreement covering such Option, provided,
however, that any Options granted hereunder as of the Effective Date shall vest
and become exercisable at a rate of twenty percent (20%) immediately and an
additional twenty percent (20%) each year, beginning on the first anniversary of
the date of grant, and each anniversary thereof, provided that the Optionee is
still a member of the Board on each such vesting date. In addition, any Option
granted an individual who is elected to the Board as a Nonemployee Director
during calendar year 2000 or thereafter shall vest and become exercisable at a
rate of twenty percent (20%) per year, beginning on the date of grant and an
additional twenty percent (20%) on the first anniversary of the date of grant
and each anniversary thereafter, provided that the Optionee is still a member of
the Board on each such date. Notwithstanding the foregoing, any Options that are
not exercisable prior to a Change in Control shall become exercisable on the
date of such Change in Control and shall remain exercisable for the remainder of
their Term.

                  (iv) Number. The Board shall have the discretion to determine
the number of options to be granted any Nonemployee Director, and to determine
the terms and conditions of any such grant, all as embodied in the Option
Agreement covering such Option.

         (b) Termination of Service. An Optionee who ceases to be a member of
the Board for any reason other than death, retirement on or after age 65, or
Disability shall have thirty (30) days from the date of such cessation to
exercise any then exercisable Options, after which all such Options shall
terminate and be of no further force or effect. If an Optionee ceases to be a
member of the Board due to death, retirement on or after age 65, or Disability,
all outstanding Options held by such Optionee that are exercisable on such date
shall remain exercisable for their Term, and shall thereafter terminate and be
of no further force or effect.

         (c) Option Agreement. Options shall be granted only pursuant to a
written Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Board shall determine, consistent with the Plan.

         (d) Non-Transferability. No Option granted hereunder the Plan shall be
transferable by the Optionee to whom granted otherwise than by will or the laws
of descent and distribution, and an Option may be exercised during the lifetime
of such Optionee only by the Optionee or his guardian or legal representative.
The terms of such Option shall be binding upon the beneficiaries, executors,
administrators, heirs and successors of the Optionee.





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         (e) Method of Exercise. The exercise of an Option shall be made only by
delivery of a written notice (in person or by first class mail to the Secretary
of the Company at the Company's principal executive office) specifying the
number of Shares to be purchased and accompanied by full payment therefor and
otherwise in accordance with the Option Agreement pursuant to which the Option
was granted. The exercise price for any Shares purchased pursuant to the
exercise of an Option shall be paid in full upon such exercise in cash, by check
or, at the discretion of the Board and upon such terms and conditions as the
Board shall approve, by transferring previously owned Shares to the Company,
having Shares withheld, or pursuant to a "cashless exercise" procedure, or any
combination thereof. Any Shares transferred to the Company as payment of the
exercise price shall be valued at their Fair Market Value on the day preceding
the date of exercise of such Option. If requested by the Board, the Optionee
shall deliver the Option Agreement evidencing the Option to the Secretary of the
Company who shall endorse thereon a notation of such exercise and return such
Option Agreement to the Optionee. Not less than one hundred (100) Shares may be
purchased at any time upon the exercise of an Option unless the number of Shares
so purchased constitutes the total number of Shares then purchasable under the
Option or the Board determines otherwise in its sole discretion.

         (f) Rights as Stockholder. No Optionee shall be deemed for any purpose
to be or to have the rights and privileges of the owner of any Shares subject to
any Option unless and until (a) the Option shall have been exercised pursuant to
the terms thereof, and (b) the Company shall have issued the Shares to the
Optionee.

      6. ADMINISTRATION.

         The Plan shall be administered by the Board. Subject to the provisions
of the Plan, the Board shall be authorized to interpret and construe the Plan
and the Option Agreements, 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 and to carry out its purpose.
The determinations of the Board in the administration of the Plan, as described
herein, shall be final and conclusive. The Secretary 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 Board may, in its sole and absolute discretion, delegate to any
proper officer of the Company, or more than one of them, any or all of its
administrative duties under this Plan.

      7. OTHER PROVISIONS.

         (a) Effective Date. The Plan has been approved by the Board and by the
Company's stockholders, and shall become effective as of the date the Board
approved such Plan, (the "Effective Date"). The Plan shall continue in effect
until ten years after the date it was approved by the Company's stockholders.

         (b) Amendment, Suspension or Termination of the Plan. The Plan may be
wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to





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time by the Board; provided, however, that, except as provided in Section 3(b),
no amendment, suspension nor termination shall, without the consent of the
Optionee, alter or impair any rights or obligations under any Option theretofore
granted.

         (c) Governing Law. The Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of New York without giving effect to the choice of law principles thereof.

         (d) Regulations and Other Approvals. (i) The obligation of the Company
to sell or deliver Shares with respect to Options granted under the Plan shall
be subject to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by
the Board.

                  (ii) The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority.

                  (iii) Each Option is subject to the requirement that, if at
any time the Board determines, in its sole discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
the issuance of Shares, no Options shall be granted or payment made or Shares
issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions as
acceptable to the Board.

                  (iv) In the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act, and is not otherwise exempt from such registration,
such Shares shall be restricted against transfer to the extent required by the
Securities Act or regulations thereunder, and the Board may require any
individual receiving Shares pursuant to the Plan, as a condition precedent to
receipt of such Shares, to represent to the Company in writing that the Shares
acquired by such individual are acquired for investment only and not with a view
to distribution. The certificate for such shall include any legend that the
Board deems appropriate to reflect any restrictions on transfer.

         (e) Withholding of Taxes. As a condition to the exercise of an Option
and to the extent required by law, no later than the date as of which an amount
first becomes includible in the gross income of an Optionee for federal income
tax purposes with respect to Options granted under this Agreement, the Optionee
shall pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any federal, estate, or local taxes of any kind
required by law to be withheld with respect to such amount. The obligations of
the Company under this Agreement shall be conditioned on such payment or
arrangements, and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
employee. In its discretion, the Board may permit an Optionee to satisfy
withholding obligations by delivering previously owned Shares or by having
Shares withheld.





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         (f) Titles; Construction. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan. The masculine pronoun shall include the feminine and neuter and the
singular shall include the plural, when the context so indicates.





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                                   EXHIBIT A

                            FORM OF OPTION AGREEMENT

[SBS LOGO]



Date:
     -------------------


(Optionee's Name)
------------------------
(Address)
------------------------
(Address)
------------------------


Dear (Optionee's Name) :
     -------------------



Pursuant to the terms and conditions of the Spanish Broadcasting System, Inc.
1999 Stock Option Plan for NonEmployee Directors (the "Plan"), you have been
granted a Nonqualified Stock Option to purchase ________ shares (the "Option")
of Class A common stock as outlined below.

<TABLE>
<S>                            <C>
            Granted To:        ________________________

            Grant Date:        ________________________

       Options Granted:        ________________________

Option Price per Share:        ________________________  Total Cost to Exercise: $________

       Expiration Date:        _________ _________ _______, unless terminated earlier.

      Vesting Schedule:        ___% immediately, ___ % each year as follows:

                               ____________________________________________

                               ____________________________________________

       Transferability:        Not transferable except in accordance with the Plan.



                                       Spanish Broadcasting System, Inc.



                                       By:_________________________________
</TABLE>


By my signature below, I hereby acknowledge receipt of this Option granted on
the date shown above, which has been issued to me under the terms and conditions
of the Plan. I further acknowledge receipt of a copy of the Plan and agree to
conform to all of the terms and conditions of the Option and the Plan.


Signature:_____________________________________     Date:_______________________
                  (Name of Optionee)



                                     EX-A-1