**Exhibit10.4**

 

DIRECTORS’ STOCKAWARD PLAN

(Approved by theStockholders on May 16, 2005)

 

The Company has a stockholderapproved plan, the Directors’ Stock Award Plan (“Plan”) which provides thatdirectors who are not compensated as employees of the Company will beautomatically 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, 32,200 shares have been awarded under thePlan, leaving 68,800 shares available for use after that date.

 

The following is a descriptionof the Plan.

 

**1.****             ****Purpose**

 

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

 

**2.****             ****Administration**

 

The Plan shall be administeredby the Board.  Subject to the provisions of the Plan, the Board shall beauthorized to interpret the Plan, to establish, amend, and rescind any rulesand regulations relating to the Plan and to make all other determinationsnecessary or advisable for the administration of the Plan; provided, however,that the Board shall have no discretion with respect to the selection ofdirectors to receive awards of Shares or the number of Shares to beawarded.  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 Plan shallbe 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 the2005 annual 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.****             ****SharesSubject to the Plan**

 

Subject to adjustment asprovided in Section 6, an aggregate of 100,000 shares shall be available forawards under the Plan.  The shares may bemade 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 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 afterSeptember 1, 1995, each newly elected Eligible Director will be granted 200Shares.

 

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

 

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

 

**6.****             ****Adjustmentof and Changes in Shares**

 

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

 

**7.****             ****Withholdingof 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 to issueor transfer any Shares if, acting in its sole discretion, it determines thatthe issuance or transfer of such Shares might violate any applicable law orregulation 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.****             ****EffectiveDate and Duration of Plan**

 

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

 

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