**Exhibit 10.4**

 

DIRECTORS’ STOCK AWARD PLAN

(Approved by the Stockholderson May 16, 2005)

 

The Company has astockholder approved plan, the Directors’ Stock Award Plan (“Plan”) whichprovides that directors who are not compensated as employees of the Companywill be automatically awarded 200 shares of common stock upon election and 200additional shares following each annual meeting of stockholdersthereafter.  Under the Plan, 100,000 shares have been reserved forawards.  At December 31, 2005, 31,200 shares have been awarded underthe Plan, leaving 68,800 shares available for use after that date.

 

The following is adescription of the Plan.

 

**1.  Purpose**

 

The purposes of theDirectors’ Stock Award Plan are (a) to attract and retain highly qualifiedindividuals to serve as members of the Board of Directors (the “Board”) ofSouthern Copper Corporation (the “Company”), (b) to increase the stockownership in the Company of members of the Board who are not compensated asemployees and (c) to relate the compensation of members of the Board whoare not compensated as employees more closely to the Company’s performance andits 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 beadministered by the Board.  Subject to the provisions of the Plan, theBoard shall be authorized to interpret the Plan, to establish, amend, andrescind any rules and regulations relating to the Plan and to make allother determinations necessary or advisable for the administration of the Plan;provided, however, that the Board shall have no discretion with respect to theselection of directors to receive awards of Shares or the number of Shares tobe awarded.  The determinations of the Board in the administration of thePlan, as described herein, shall be final and conclusive.  The Secretaryof the Company shall be authorized to implement the Plan in accordance with itsterms and to take such actions of a ministerial nature as shall be necessary toeffectuate the intent and purposes thereof.  The validity, constructionand effect of the Plan and any rules and regulations relating to the Planshall be determined in accordance with the laws of the State of Delaware.

 

**3.  Eligibility**

 

The class of individualseligible to receive awards of Shares under the Plan shall be directors of theCompany who are not compensated as employees of the Company (“EligibleDirectors”).  Any recipient of an awardgranted hereunder shall hereinafter be referred to as a “Participant”.

 

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

 

**4.  Shares Subject to the Plan**

 

Subject to adjustment asprovided in Section 6, an aggregate of 100,000 shares shall be availablefor awards under the Plan.  The sharesmay be made available from authorized but unissued shares or treasuryshares.  If any stock awards under thePlan shall be 

 

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foregone or returned to theCompany for any reason, the shares subject to such award shall again beavailable for awards.

 

**5.  Grant, Stock Awards**

 

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

 

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

 

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

 

**6.  Adjustment of and Changes in Shares**

 

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

 

**7.  Withholding of Taxes and Other Laws**

 

The Company shall beauthorized to withhold from any payment due under this Plan the amount ofwithholding taxes, if any, due in respect of an award hereunder, unless otherprovisions satisfactory to the Company shall have been made for the payment ofsuch taxes.

 

The Board may refuse toissue or transfer any Shares if, acting in its sole discretion, it determinesthat the issuance or transfer of such Shares might violate any applicable lawor regulation or entitle the Company to recover the same under Section 16(b) ofthe Securities Exchange Act of 1934, as amended.  Without limiting thegenerality of the foregoing, no award granted hereunder shall be construed asan offer to sell securities of the Company, and no such offer shall beoutstanding, unless and until the Board in its sole discretion has determinedthat any such offer, if made, would be in compliance with all applicablerequirements of the U.S. federal securities laws.

 

**8.  Effective Date and Duration of Plan**

 

The Plan became effective onJanuary 1, 1996 on the effective date of the exchange of the Company’sshares 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 extendedor terminated at an earlier date by Shareholders or is terminated by exhaustionof the shares available for issuance hereunder.

 

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