(PHELPS DODGE CORPORATION) [p68822p6882202.gif]                One N. Central
Avenue, Phoenix, AZ 85004                (602) 366-8100

Exhibit 10.12

Award of Restricted Stock

Dear :

      Phelps Dodge Corporation (the “Company”) is pleased to confirm to you that
at a meeting held on           (“Grant Date”), the Compensation and Management
Development Committee of the Board of Directors of Phelps Dodge Corporation (the
“Committee”) awarded you          shares of Restricted Stock of the Company
pursuant to the 2003 Stock Option and Restricted Stock Plan (the “Plan”).

      This letter will confirm the following agreement between you and the
Company pursuant to the Plan. Capitalized terms used herein that are not defined
in the Award of Restricted Stock letter shall have the meanings assigned to such
terms in the Plan. This award of Restricted Stock is subject to the terms and
conditions of the Plan, as supplemented by this letter.

      1. Restriction on Transfer. Except as provided in paragraphs 3 and 4
below, the shares of Restricted Stock awarded to you hereunder may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered until the
lapse of the applicable Restricted Period for these shares as set forth in
subparagraphs 1. a., 1. b., and 1. c. below.

  a.  
The Restricted Period for 25% of the shares of Restricted Stock issued pursuant
to this award shall lapse on the third anniversary date of the Grant Date.
    b.  
The Restricted Period for an additional 25% of the shares of Restricted Stock
issued pursuant to this award shall lapse on the fourth anniversary date of the
Grant Date.
    c.  
The Restricted Period for the remaining 50% of the shares of Restricted Stock
issued pursuant to this award shall lapse on the fifth anniversary date of the
Grant Date.

 

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Notwithstanding the foregoing, if the Restricted Period for any shares of
Restricted Stock would lapse during any “blackout period” as defined in Section
306(a)(4) of the Sarbanes-Oxley Act of 2002, then, unless otherwise determined
by the Committee, the Restricted Period for such shares shall not lapse until
the first day following the expiration of such blackout period.

      2. Forfeiture of Restricted Stock. Except as provided in paragraph 3
below, if your employment with the Company and its Subsidiaries terminates prior
to the end of any applicable Restricted Period for any reason including, without
limitation, any termination by you or by the Company in its absolute discretion,
your shares of Restricted Stock, for which the applicable Restricted Period has
not lapsed, shall revert back to the Company without any payment to you and you
shall cease to have any rights with respect to such shares of Restricted Stock.
In the case of such reversion, such shares shall be retransferred to the Company
by means of the stock power referred to in paragraph 5 below.

      3. Death, Disability or Retirement. If your employment with the Company
and its Subsidiaries terminates by reason of your death, or your Disability
(except for a termination occurring within six months of the Grant Date on
account of your Disability), any Restricted Period still in effect shall lapse
upon your termination of employment. For purposes of this Award of Restricted
Stock, the Committee has determined as of the date of grant that the following
additional terms and conditions shall be applicable:

  a.  
If your employment with the Company and its Subsidiaries terminates (except for
a termination that occurs within six months of the Grant Date) by reason of your
Retirement on or after your Normal Retirement Date, as defined in the Phelps
Dodge Retirement Plan (or any successor plan thereof), any Restricted Period
still in effect shall lapse upon your termination of employment.
    b.  
If your employment with the Company and its Subsidiaries terminates (except for
a termination that occurs within six months of the Grant Date) by reason of your
Retirement on or after your Early Retirement Date, as defined in the Phelps
Dodge Retirement Plan (or any successor plan thereof), and before your Normal
Retirement Date under conditions determined by the Committee, in its sole
discretion, not to be adverse to the Company, and you sign a release of claims
in such form as is satisfactory to the Company (in its sole discretion), any
Restricted Period still in effect shall lapse upon your termination of
employment.

      4. Change of Control. Any Restricted Period still in effect shall lapse in
the event that, on or after the date six months after the Grant Date, a Change
of Control occurs.

2

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      5. Rights as a Shareholder. Subject to the provisions of paragraph 7
below, you shall have all the rights of a holder of Common Shares with respect
to your Restricted Stock, including the right to vote the shares and to receive
dividends. Notwithstanding the foregoing, your Restricted Stock shall be held by
the Company prior to the lapse of the applicable Restricted Period and you shall
deliver to the Company a stock power executed in blank in such form as the
Company shall determine.

      6. Administration. The Plan is administered by the Committee and any
interpretation or construction of the Plan or this letter by the Committee, and
any determination made by the Committee pursuant to the Plan or this letter,
shall be conclusive and binding on the Company, you and any other interested
party.

      7. Conversion and Property Distributions. In the event your Restricted
Stock is exchanged for or converted into securities other than Common Shares or
in the event that any distribution is made with respect to such Restricted Stock
either in Common Shares or in other property or by way of an extraordinary cash
dividend, the securities or other property or cash that you receive shall be
subject to the same restrictions as apply to your Restricted Stock, including
those provided by the last sentence of paragraph 5 above.

      8. Withholding. You shall be required to pay, as a condition of receiving
a share certificate without legend, any applicable federal, state or local tax
withholding requirements, which, if the Committee shall permit, may be satisfied
by the withholding of shares of Restricted Stock with respect to which the
Restricted Period has lapsed, subject to such terms and conditions as the
Committee shall impose.

      9. Governing Law. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of New York.

      Please sign one of the two copies of this letter where indicated below and
the attached Stock Power and return them to Linda Lewis, Manager, Executive
Compensation (Phelps Dodge Corporation, One North Central Avenue, Phoenix, AZ
85004) at your earliest convenience. Please retain the other copy of this letter
for your records.

                      PHELPS DODGE CORPORATION
 
           

      By:    

           

          Senior Vice President
 
           

  ACCEPTED AND AGREED TO:        

           

           

  Date:        

           

           

3

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Exhibit 10.12

[PHELPS DODGE CORPORATION LETTERHEAD]

(date)

Phelps Dodge Corporation

Award of Restricted Stock

Dear :

      Phelps Dodge Corporation (the “Company”) is pleased to confirm to you that
at a meeting held on          (“Grant Date”), the Compensation and Management
Development Committee of the Board of Directors of Phelps Dodge Corporation (the
“Committee”) awarded you          shares of Restricted Stock of the Company
pursuant to the 2003 Stock Option and Restricted Stock Plan (the “Plan”).

      This letter will confirm the following agreement between you and the
Company pursuant to the Plan. Capitalized terms used herein that are not defined
in the Award of Restricted Stock letter shall have the meanings assigned to such
terms in the Plan. This award of Restricted Stock is subject to the terms and
conditions of the Plan, as supplemented by this letter.

      1. Restriction on Transfer. Except as provided in paragraphs 3 and 4
below, the shares of Restricted Stock awarded to you hereunder may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered
until          (the “Restricted Period”).

      Notwithstanding the foregoing, if the Restricted Period for any shares of
Restricted Stock would lapse during any “blackout period” as defined in Section
306(a)(4) of the Sarbanes-Oxley Act of 2002, then, unless otherwise determined
by the Committee, the Restricted Period for such shares shall not lapse until
the first day following the expiration of such blackout period.

      2. Forfeiture of Restricted Stock. Except as provided in paragraph 3
below, if your employment with the Company and its Subsidiaries terminates prior
to the end of any applicable Restricted Period for any reason including, without
limitation, any termination by you or by the Company in its absolute discretion,
your shares of Restricted Stock, for which the applicable Restricted Period has
not lapsed, shall revert back to the Company without any payment to you and you
shall cease to have any rights with respect to such shares of Restricted Stock.
In the case of such reversion, such shares shall be retransferred to the Company
by means of the stock power referred to in paragraph 5 below.

 

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      3. Death, Disability or Retirement. If your employment with the Company
and its Subsidiaries terminates by reason of your death or your Disability
(except for a termination occurring within six months of the Grant Date on
account of your Disability), any Restricted Period still in effect shall lapse
upon your termination of employment. For purposes of this Award of Restricted
Stock, the Committee has determined as of the date of grant that the following
additional terms and conditions shall be applicable:

  a.  
If your employment with the Company and its Subsidiaries terminates (except for
a termination that occurs within six months of the Grant Date) by reason of your
Retirement on or after your Normal Retirement Date, as defined in the Phelps
Dodge Retirement Plan (or any successor plan thereof), any Restricted Period
still in effect shall lapse upon your termination of employment.
    b.  
If your employment with the Company and its Subsidiaries terminates (except for
a termination that occurs within six months of the Grant Date) by reason of your
Retirement on or after your Early Retirement Date, as defined in the Phelps
Dodge Retirement Plan (or any successor plan thereof), and before your Normal
Retirement Date under conditions determined by the Committee, in its sole
discretion, not to be adverse to the Company, and you sign a release of claims
in such form as is satisfactory to the Company (in its sole discretion), any
Restricted Period still in effect shall lapse upon your termination of
employment.

      4. Change of Control. Any Restricted Period still in effect shall lapse in
the event that, on or after the date six months after the Grant Date, a Change
of Control occurs.

      5. Rights as a Shareholder. Subject to the provisions of paragraph 7
below, you shall have all the rights of a holder of Common Shares with respect
to your Restricted Stock, including the right to vote the shares and to receive
dividends. Notwithstanding the foregoing, your Restricted Stock shall be held by
the Company prior to the lapse of the applicable Restricted Period and you shall
deliver to the Company a stock power executed in blank in such form as the
Company shall determine.

      6. Administration. The Plan is administered by the Committee and any
interpretation or construction of the Plan or this letter by the Committee, and
any determination made by the Committee pursuant to the Plan or this letter,
shall be conclusive and binding on the Company, you and any other interested
party.

2

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      7. Conversion and Property Distributions. In the event your Restricted
Stock is exchanged for or converted into securities other than Common Shares or
in the event that any distribution is made with respect to such Restricted Stock
either in Common Shares or in other property or by way of an extraordinary cash
dividend, the securities or other property or cash that you receive shall be
subject to the same restrictions as apply to your Restricted Stock, including
those provided by the last sentence of paragraph 5 above.

      8. Withholding. You shall be required to pay, as a condition of receiving
a share certificate without legend, any applicable federal, state or local tax
withholding requirements, which, if the Committee shall permit, may be satisfied
by the withholding of shares of Restricted Stock with respect to which the
Restricted Period has lapsed, subject to such terms and conditions as the
Committee shall impose.

      9. Governing Law. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of New York.

      Please sign one of the two copies of this letter where indicated below and
the attached Stock Power and return them to Linda Lewis, Manager, Executive
Compensation (Phelps Dodge Corporation, One North Central Avenue, Phoenix, AZ
85004) at your earliest convenience. Please retain the other copy of this letter
for your records.

                      PHELPS DODGE CORPORATION
 
           

      By:    

           

          Senior Vice President
 
           

  ACCEPTED AND AGREED TO:        
 
           

           

  Date:        
 
           

           

3