NOTE 14-STOCKHOLDERS’ EQUITY

Treasury Stock:

Activity in treasury stock in the years 2015 and 2014 was as follows (in millions):

	2015			2014
Southern Copper common shares
Balance as of January 1,	$	1,693.5		$	1,011.0
Purchase of shares	1,004.4			682.7
Used for corporate purposes	(0.3		)	(0.2		)

Balance as of December 31,	2,697.6			1,693.5


Parent Company (Grupo Mexico) common shares
Balance as of January 1,	207.1			205.5
Other activity, including dividend, interest and foreign currency transaction effect	4.2			1.6

Balance as of December 31,	211.3			207.1


Treasury stock balance as of December 31,	$	2,908.9		$	1,900.6

SCC shares of common stock in treasury:

At December 31, 2015 and 2014, treasury stock holds 108,653,816 shares and 71,977,964 shares of SCC’s common stock with a cost of $2,697.6 million and $1,693.5 million, respectively. The shares of SCC’s common stock held in treasury are used for Director’s stock award plans and available for general corporate purposes.

SCC share repurchase program:

In 2008, the Company’s Board of Directors (“BOD”) authorized a $500 million share repurchase program that has since been increased by the BOD and is currently authorized to $3 billion. Pursuant to this program, the Company purchased common stock as shown in the table below. These shares are available for general corporate purposes. The Company may purchase additional shares of its common stock from time to time, based on market conditions and other factors. This repurchase program has no expiration date and may be modified or discontinued at any time.

						Maximum
						Number of Shares
					Total Number of	that May Yet Be
		Total Number	Average		Shares Purchased	Purchased Under	Total Cost
Period		of Shares	Price Paid		as Part of Publicly	the Plan	($ in
From	To	Purchased	per Share		Announced Plan	@ $26.12(1)	millions)
2008	2012	46,914,486	$	18.72	46,914,486		878.1
2013:		10,245,000	27.47		57,159,486		281.4
2014:		22,711,428	30.06		79,870,914		682.8
2015:
01/01/15	01/31/15	5,927,154	27.12		85,798,068		160.7
02/01/15	02/28/15	2,590,076	29.45		88,388,144		76.3
03/01/15	03/31/15	4,563,649	29.16		92,951,793		133.1

Total first quarter		13,080,879	29.29				370.1


04/01/15	04/30/15	1,511,200	29.42		94,462,993		44.5

Total second quarter		1,511,200	29.42				44.5


07/01/15	07/31/15	1,603,800	27.84		96,066,793		44.7
08/01/15	08/31/15	6,160,000	26.90		102,226,793		165.7
09/01/15	09/30/15	3,724,273	26.69		105,951,066		99.4

Total third quarter		11,488,073	26.97				309.8


10/01/15	10/31/15	1,525,000	28.08		107,476,066		42.8
11/01/15	11/30/15	4,635,000	26.59		112,111,066		123.2
12/01/15	12/31/15	4,448,900	25.61		116,559,966		114.0

Total fourth quarter		10,608,900	26.39				280.0


Total 2015		36,689,052	27.38		116,559,966		1,004.4

Total purchased		116,559,966	$	24.42		5,871,706	2,846.6

(1)

NYSE closing price of SCC common shares at December 31, 2015.

As a result of the repurchase of shares of SCC’s common stock, Grupo Mexico’s direct and indirect ownership was 88.6% as of December 31, 2015 and 84.6% at December 31, 2014.

Directors’ Stock Award Plan:

The Company established a stock award compensation plan for certain directors who are not compensated as employees of the Company. Under this plan, participants will receive 1,200 shares of common stock upon election and 1,200 additional shares following each annual meeting of stockholders thereafter. 600,000 shares of Southern Copper common stock have been reserved for this plan. The fair value of the award is measured each year at the date of the grant. In 2015 and 2014 the stock based compensation expense under this plan equaled $ 0.4 million and $0.3 million, respectively.

The activity of this plan for the years ended December 31, 2015 and 2014 was as follows:

	2015		2014
Total SCC shares reserved for the plan	600,000		600,000


Total shares granted at January 1,	(309,600	)	(297,600	)
Granted in the period	(13,200	)	(12,000	)

Total shares granted at December 31,	(322,800	)	(309,600	)


Remaining shares reserved	277,200		290,400

Parent Company common shares:

At December 31, 2015 and 2014, there were in treasury 110,472,170 and 89,950,310 of Grupo Mexico’s common shares, respectively.

Employee Stock Purchase Plan:

2007 Plan: In January 2007, the Company offered to eligible employees a stock purchase plan (the “Employee Stock Purchase Plan”) through a trust that acquires shares of Grupo Mexico stock for sale to its employees, employees of subsidiaries, and certain affiliated companies. The purchase price was established at the approximate fair market value on the grant date. Every two years employees were able to acquire title to 50% of the shares paid in the previous two years. The employees paid for shares purchased through monthly payroll deductions over the eight year period of the plan. At the end of the eight year period, the Company granted the participant a bonus of one share for every ten shares purchased by the employee.

The participants were entitled to receive dividends in cash for dividends paid by Grupo Mexico for all shares that were fully purchased and paid by the employee as of the date that the dividend is paid. If the participant had only partially paid for shares, the entitled dividends were used to reduce the remaining liability owed for purchased shares.

In the case of voluntary or involuntary resignation/termination of the employee, the Company paid to the employee the fair market sales price at the date of resignation/termination of the fully paid shares, net of costs and taxes. When the fair market sales value of the shares was higher than the purchase price, the Company applied a deduction over the amount to be paid to the employee based on a decreasing schedule specified in the plan.

In case of retirement or death of the employee, the Company rendered the buyer or his legal beneficiary, the fair market sales value as of the date of retirement or death of the shares effectively paid, net of costs and taxes.

The stock based compensation expense for the years ended December 31, 2014 and 2013 and the unrecognized compensation expense under the Employee Stock Purchase Plan, were as follows:

	2014		2013
Stock based compensation expense	$	2.1	$	2.1
Unrecognized compensation expense	—		$	2.1

This plan ended in January 2015.

The following table presents the stock award activity of the Employee Stock Purchase Plan at the close of the plan and for the years ended December 31, 2015 and 2014:

	Shares		Unit Weighted Average Grant Date Fair Value
Outstanding shares at January 1, 2015	4,298,612		$	1.16
Granted	—		—
Exercised	(4,189,371	)	1.16
Forfeited	—		—

Outstanding shares at December 31, 2015	109,241		$	1.16

Outstanding shares at January 1, 2014	4,449,599		$	1.16
Granted	—		—
Exercised	(150,987	)	1.16
Forfeited	—		—

Outstanding shares at December 31, 2014	4,298,612		$	1.16

2010 Plan: During 2010, the Company offered to eligible employees a stock purchase plan through a trust that acquires series B shares of Grupo Mexico stock for sale to its employees, employees of subsidiaries, and certain affiliated companies. The purchase price was established at 26.51 Mexican pesos (approximately $1.54) for the initial subscription. The terms of this plan are similar to the terms of the prior Employee Stock Purchase Plan.

The stock based compensation expense for the years ended December 31, 2015, 2014 and 2013 and the remaining balance of the unrecognized compensation expense under the New Employee Stock Purchase Plan, were as follows:

	2015		2014		2013
Stock based compensation expense	$	0.6	$	0.6	$	0.6
Unrecognized compensation expense	$	1.4	$	2.0	$	2.6

The unrecognized compensation expense under this plan is expected to be recognized over the remaining three year period.

The following table presents the stock award activity of the 2010 Employee Stock Purchase Plan for the years ended December 31, 2015 and 2014:

	Shares		Unit Weighted Average Grant Date Fair Value
Outstanding shares at January 1, 2015	2,287,891		$	2.05
Granted	—		—
Exercised	(60,309	)	2.05
Forfeited	—		—

Outstanding shares at December 31, 2015	2,227,582		2.05

Outstanding shares at January 1, 2014	3,012,464		$	2.05
Granted	—		—
Exercised	(724,573	)	2.05
Forfeited	—		—

Outstanding shares at December 31, 2014	2,287,891		$	2.05

2015 Plan: In January 2015, the Company offered to eligible employees a new stock purchase plan (the “New Employee Stock Purchase Plan”) through a trust that acquires series B of shares of Grupo Mexico stock for sale to its employees, and employees of subsidiaries, and certain affiliated companies. The purchase price was established at 38.44 Mexican pesos (approximately $2.23) for the initial subscription, which expires on January 2023. Every two years employees will be able to acquire title to 50% of the shares paid in the previous two years. The employees will pay for shares purchased through monthly payroll deductions over the eight year period of the plan. At the end of the eight year period, the Company will grant the participant a bonus of 1 share for every 10 shares purchased by the employee. Any future subscription will be at the average market price at the date of acquisition or the grant date.

If Grupo Mexico pays dividends on shares during the eight year period, the participants will be entitled to receive the dividend in cash for all shares that have been fully purchased and paid as of the date that the dividend is paid. If the participant has only partially paid for shares, the entitled dividends will be used to reduce the remaining liability owed for purchased shares.

In the case of voluntary or involuntary resignation/termination of the employee, the Company will pay to the employee the fair market sales price at the date of resignation of the fully paid shares, net of costs and taxes. When the fair market sales value of the shares is higher than the purchase price, the Company will apply a deduction over the amount to be paid to the employee based on a decreasing schedule specified in the plan.

In case of retirement or death of the employee, the Company will render the buyer or his legal beneficiary, the fair market sales value as of the date of retirement or death of the shares effectively paid, net of costs and taxes.

The stock based compensation expense for the year ended December 31, 2015 and the unrecognized compensation expense under this plan were as follows (in millions):

	2015
Stock based compensation expense	$	0.4
Unrecognized compensation expense	$	4.4

The following table presents the stock award activity of this plan for the year ended December 31, 2015:

	Shares	Unit Weighted Average Grant Date Fair Value

Outstanding shares at January 1, 2015	—	—
Granted	2,652,386	$	2.63
Exercised	—	—
Forfeited	—	—

Outstanding shares at December 31, 2015	2,652,386	$	2.63

Executive Stock Purchase Plan:

Grupo Mexico also offers a stock purchase plan for certain members of its executive management and the executive management of its subsidiaries and certain affiliated companies. Under this plan, participants will receive incentive cash bonuses which are used to purchase shares of Grupo Mexico which are deposited in a trust.

Non-controlling interest:

For all the years presented, in the consolidated statement of earnings the income attributable to non-controlling interest is based on the earnings of the Company’s Peruvian Branch.

The non-controlling interest of the Company’s Peruvian Branch is for investment shares. These shares were generated by legislation in place in Peru from the 1970s through 1991; such legislation provided for the participation of mining workers in the profits of the enterprises for which they worked. This participation was divided between equity and cash. The investment shares included in the non-controlling interest on the consolidated balance sheets are the still outstanding equity distributions made to the Peruvian Branch’s employees.

In prior years, the Company acquired some Peruvian investment shares in exchange for newly issued common shares of the Company and through purchases at market value. These acquisitions were accounted for as purchases of non-controlling interests. The excess paid over the carrying value was assigned to intangible assets and is being amortized based on production. As a result of these acquisitions, the remaining investment shareholders hold a 0.71% interest in the Peruvian Branch and are entitled to a pro rata participation in the cash distributions made by the Peruvian Branch. The shares are recorded as a non-controlling interest in the Company’s financial statements.