Exhibit 10.6


                                January 13, 1999


                           Change of Control Agreement

         Phelps Dodge Corporation (the "Corporation") considers the maintenance
of a sound and vital management to be essential to protecting and enhancing the
best interests of the Corporation and its shareholders. The Corporation
recognizes that, as is the case with many publicly held corporations, the
continuing possibility of an unsolicited tender offer or other takeover bid for
the Corporation is unsettling to you and other senior executives of the
Corporation and its principal subsidiaries and may result in the departure or
distraction of management personnel to the detriment of the Corporation and its
shareholders. The Board of Directors of the Corporation and the Compensation and
Management Development Committee (the "Committee") of the Board have previously
determined that it is in the best interests of the Corporation and its
shareholders for the Corporation to minimize these concerns by entering into an
agreement (your "Change of Control Agreement") which would provide you with
severance benefits in the event your employment with the Corporation terminates
under certain limited circumstances.

         These arrangements are being made to help assure a continuing
dedication by you to your duties to the Corporation notwithstanding the
occurrence of a tender offer or other takeover bid. In particular, the Board and
the Committee believe it important, should the Corporation receive proposals
from third parties with respect to its future, to enable you, without being
influenced by the uncertainties of your own situation, to assess and advise the
Board whether such proposals would be in the best interests of the Corporation
and its shareholders and to take such other action regarding such proposals as
the Board might determine to be appropriate. The Board and the Committee also
wish to demonstrate to executives of the Corporation and its subsidiaries that
the Corporation is concerned with the welfare of its executives and intends to
see that loyal executives are treated fairly.

         In view of the foregoing, in order to induce you to remain in the
employ of the Corporation or one of its principal subsidiaries and in further
consideration of your continued employment with the Corporation, the Corporation
and you agree to a Change of Control Agreement as follows:

         1.       Termination Benefits.

         In the event your employment with the Corporation or any subsidiary of
the Corporation terminates by reason of a "Qualifying Termination" (as
"Qualifying Termination" is defined below) within two years after a "Change of
Control" of the Corporation (as "Change of Control" is defined below), subject
to the "Cap" described in Section 6, you shall receive the following benefits:

                  (a) Termination Payments. The Corporation will pay you as
termination compensation within ten days after your employment with the
Corporation terminates a lump sum amount equal to the sum of: (i) three times
the highest annual base salary (not including any bonuses under the
Corporation's Annual Incentive Compensation Plan or Long-Term Performance Plan)
paid or payable by the Corporation or any subsidiary of the Corporation to you
for the three calendar years ending with the year your employment with the
Corporation terminates; plus (ii) three times the sum of the bonuses or
incentive compensation actually paid or payable to you under the Corporation's
Annual Incentive Compensation Plan for services performed during the two
calendar years preceding the calendar year in which the Change of Control occurs
divided by two; less (iii) any severance, termination, or other cash
compensation payable to you under your Severance Agreement with the Corporation
or pursuant to any severance policy, plan, or program sponsored by the
Corporation or any subsidiary of the Corporation.

         For purposes of calculating your incentive compensation payment under
clause (ii) of the preceding paragraph, any bonus or incentive compensation will
be allocated to the calendar year for which it is earned rather than the
calendar year in which it is paid. In addition, the total bonuses or incentive
compensation paid or payable to you for services performed during the two
calendar years preceding the calendar year of the Change of Control will be
divided by two even if you were not employed by the Corporation or any
subsidiary of the Corporation, or were not eligible to participate in the Annual
Incentive Compensation Plan, during one of those years.

         If the Annual Incentive Compensation Plan is replaced by another
incentive compensation or bonus program, the amounts actually paid or payable to
you under the replacement program will be used for purposes of the first
sentence of this paragraph (a).

                  (b) Benefits Continuation. You will continue to receive life,
disability, accident and group health and dental insurance benefits
substantially similar to those which you were receiving immediately prior to
your termination of employment until the earlier of (i) the end of the period of
36 months following your termination of employment or (ii) the day on which you
become eligible to receive any health care benefits under any plan or program of
any other employer. The 36 month period referred to in the preceding sentence
shall be reduced by the number of months, if any, for which you are entitled to
receive continued benefits under your Severance Agreement with the Corporation
or pursuant to any severance policy, plan, or program sponsored by the
Corporation or any subsidiary of the Corporation. The benefits provided pursuant
to this Section shall be provided on substantially the same terms and conditions
as they were provided prior to the Change of Control, except that the full cost
of such benefits shall be paid by the Corporation. If you later retire and
become entitled to retiree coverage, the retiree coverage in effect prior to the
Change of Control will replace the active employee coverage in effect prior to
the Change of Control, but the Corporation will bear the full cost of the
retiree coverage during the period mentioned above. Your right to receive
continued coverage under the Corporation's group health plans pursuant to
Section 601 et seq. of the Employee Retirement Income Security Act of 1974, as
it may be amended or replaced from time to time, shall commence following the
expiration of your right to receive continued benefits under this Agreement. As
noted above, your right to receive all forms of benefits under this Section is
terminated as soon as you become eligible to receive any health care benefits
from any other employer.

         2.       Other Benefits; Loans.

                  (a) Incentive Compensation Plan. Generally, your participation
in the Corporation's Annual Incentive Compensation Plan, and any right you may
have to receive a bonus thereunder for the year in which your employment with
the Corporation or any subsidiary of the Corporation terminates or any prior
year (in addition to any amount you receive based on your prior bonuses or
incentive compensation pursuant to Section 1(a)) shall be governed by the terms
of that Plan. If you were a participant in the Corporation's Annual Incentive
Compensation Plan at any time during the calendar year in which a Change of
Control occurs, however, you will receive at least a pro rated incentive
compensation payment for the year in which the Change of Control occurs. Your
pro rated incentive compensation payment will be calculated in two steps. The
first step will be to calculate the incentive compensation to which you would be
entitled under the Annual Incentive Compensation Plan, calculated on the basis
of the following assumptions: (i) the annual performance period ends on the date
of the Change of Control; (ii) the financial performance of the Corporation or
any of its subsidiaries for the relevant performance period will be equal to the
financial performance measured as of the date of the Change of Control,
annualized; and (iii) you satisfy all individual subjective performance goals or
measures set for you under the Annual Incentive Compensation Plan at the
"target" performance level. The second step will be to multiply the amount
determined pursuant to the first step by a fraction, the numerator of which is
the number of days that have elapsed in the calendar year prior to the day of
the Change of Control and the denominator of which is 365.

                  (b) Retirement and Savings Plans. Any participation by you in,
and any terminating distributions and vested rights under, the Phelps Dodge
Retirement Plan, the Phelps Dodge Savings and Deferred Profit Sharing Plan for
Salaried Employees, or any other retirement or savings plan sponsored by the
Corporation, regardless of whether such plan qualifies for favorable tax
treatment, shall be governed by the terms of those respective plans.

                  (c) Loans. Any indebtedness owed by you to the Corporation or
any subsidiary of the Corporation on account of advances or loans shall become
due and payable and may be deducted from the payment referred to in Section 1.

         3.       Confidentiality.

         In the event your employment with the Corporation or any subsidiary of
the Corporation terminates under the circumstances specified in Section 1, you
shall retain in confidence any confidential information known to you concerning
the Corporation and its subsidiaries and their businesses so long as such
information is not publicly disclosed.

         4.       Change of Control Defined.

                  For purposes of this Agreement, a "Change of Control" shall be
deemed to have taken place at the time:

                  (a) when any "person" or "group" of persons (as such terms are
used in Section 13 and 14 of the Securities Exchange Act of 1934, as amended
from time to time (the "Exchange Act")), other than the Corporation or any
employee benefit plan sponsored by the Corporation, becomes the "beneficial
owner" (as such term is used in Section 13 of the Exchange Act) of 25% or more
of the total number of the Corporation's common shares at the time outstanding;
or

                  (b) of the approval by the vote of the Corporation's
stockholders holding at least 50% (or such greater percentage as may be required
by the Certificate of Incorporation or By-Laws of the Corporation or by law) of
the voting stock of the Corporation of any merger, consolidation, sale of
assets, liquidation or reorganization in which the Corporation will not survive
as a publicly owned corporation; or

                  (c) when the individuals who, at the beginning of any period
of two years or less, constituted the Board of Directors of the Corporation
cease, for any reason, to constitute at least a majority thereof, unless the
election or nomination for election of each new director was approved by the
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period.

         5.       Qualifying Termination Defined.

                  (a) Qualifying Termination. For purposes of this Agreement,
the term "Qualifying Termination" means a termination of your employment with
the Corporation or any subsidiary of the Corporation (under circumstances where
you are no longer employed by the Corporation or any such subsidiary) for any
reason other than:

                      (i)   death;

                      (ii)  Disability;

                      (iii) Cause;

                      (iv)  retirement at or after your Normal Retirement Date;
                            or

                      (v) by you without Good Reason.

                  (b) Cause. "Cause" means willful misconduct in the performance
of your duties as an employee which results in a material detriment to the
Corporation, and its subsidiaries, taken as a whole.

                  (c) Disability. For purposes of this Agreement, the term
"Disability" shall have the meaning given to that term in the Phelps Dodge
Retirement Plan.

                  (d) Good Reason. For purposes of this Agreement, the term
"Good Reason" means that you have terminated your employment with the
Corporation and all subsidiaries of the Corporation under any of the following
circumstances:

                      (i) such termination occurs more than 180 days following
                      the time when a Change of Control takes place and such
                      Change of Control has not been approved by a resolution
                      adopted by the Board of Directors of the Corporation as
                      constituted immediately prior to such Change of Control;
                      or

                      (ii) you terminate your employment on account of one or
                      more of the following events (and you have not agreed to
                      such event in writing):

                           (A) the assignment to you of any duties inconsistent,
                           in a way materially adverse to you, with your
                           positions, duties, responsibilities and status with
                           the Corporation and its subsidiaries immediately
                           prior to a Change of Control, or a material reduction
                           in the duties and responsibilities you held
                           immediately prior to such Change of Control; or a
                           change in your reporting responsibilities, titles or
                           offices as in effect immediately prior to such Change
                           of Control; or any removal of you from or any failure
                           to re-elect you to any position with the Corporation
                           or any subsidiary that you held immediately prior to
                           such Change of Control except in connection with your
                           promotion or the termination of your employment due
                           to death, Disability, retirement on or after your
                           Normal Retirement Date, or Cause; or

                           (B) a reduction by the Corporation or any subsidiary
                           of the Corporation in your base salary as in effect
                           immediately prior to such Change of Control; the
                           failure by the Corporation or any such subsidiary to
                           continue in effect any employee benefit plan or
                           compensation plan in which you are participating
                           immediately prior to such Change of Control unless
                           you are permitted to participate in other plans
                           providing you with substantially comparable benefits;
                           or the taking of any action by the Corporation or any
                           such subsidiary which would adversely affect your
                           participation in or materially reduce your benefits
                           under such plan; or

                           (C) the Corporation's or any subsidiary's requiring
                           you to be based anywhere other than a location within
                           50 miles of your location immediately prior to such
                           Change of Control; or the Corporation's or any
                           subsidiary's requiring you to travel on the
                           Corporation's or any subsidiary's business to an
                           extent substantially more burdensome than your travel
                           obligations immediately prior to such Change of
                           Control.

                  (e) Normal Retirement Date. For purposes of this Agreement,
the term "Normal Retirement Date" means the date on which you satisfy the
requirements for normal retirement benefits under the Phelps Dodge Retirement
Plan.

                  (f) Employment by Successors. For purposes of this Agreement,
employment by a successor of the Corporation, or a successor of any subsidiary
of the Corporation, that has assumed this Agreement pursuant to Section 10 shall
be considered to be employment by the Corporation or one of its subsidiaries. As
a result, if you are employed by such a successor following a Change of Control,
you will not be entitled to receive the benefits provided by Section 1 unless
your employment with the successor is subsequently terminated in a Qualifying
Termination. Solely for purposes of applying the provisions of Section 1 and the
definitions set forth in Section 5, the successor shall be deemed to be a
subsidiary of the Corporation.

         6.       Cap on Payments.

                  (a) General Rules. The Internal Revenue Code (the "Code")
places significant tax burdens on you and the Corporation if the total payments
made to you due to a Change of Control exceed prescribed limits. For example, if
your "Base Period Income" (as defined below) is $100,000, your limit or "Cap" is
$299,999. If your "Total Payments" exceed the Cap by even $1.00, you are subject
to an excise tax under Section 4999 of the Code of 20% of all amounts paid to
you in excess of $100,000. In other words, if your Cap is $299,999, you will not
be subject to an excise tax if you receive exactly $299,999. If you receive
$300,000, you will be subject to an excise tax of $40,000 (20% of $200,000). In
order to avoid this excise tax and the related adverse tax consequences for the
Corporation, by signing this Agreement, you will be agreeing that, subject to
the exception noted below, the present value of your Total Payments will not
exceed an amount equal to your Cap.

                  (b) Special Definitions. For purposes of this Section, the
following specialized terms will have the following meanings:

                      (i) "Base  Period  Income".  "Base  Period  Income"  is an
amount equal to your "annualized includable compensation" for the "base period"
as defined in Sections 280G(d)(1) and (2) of the Code and the regulations
adopted thereunder. Generally, your "annualized includable compensation" is the
average of your annual taxable income from the Corporation for the "base
period", which is the five calendar years prior to the year in which the Change
of Control occurs. These concepts are complicated and technical and all of the
rules set forth in the applicable regulations apply for purposes of this
Agreement.

                      (ii) "Cap" or "280G Cap". "Cap" or "280G Cap" shall mean
an amount equal to 2.99 times your "Base Period Income". This is the maximum
amount which you may receive without becoming subject to the excise tax imposed
by Section 4999 of the Code or which the Corporation may pay without loss of
deduction under Section 280G of the Code.

                      (iii) "Total  Payments".  The "Total Payments" include any
"payments in the nature of compensation" (as defined in Section 280G of the Code
and the regulations adopted thereunder), made pursuant to this Agreement or
otherwise, to or for your benefit, the receipt of which is contingent on a
Change of Control and to which Section 280G of the Code applies.

                  (c) Calculating the Cap. If the Corporation believes that
these rules will result in a reduction of the payments to which you are entitled
under this Agreement, it will so notify you as soon as possible. The Corporation
will then, at its expense, retain a "Consultant" (which shall be a law firm, a
certified public accounting firm, and/or a firm of recognized executive
compensation consultants) to provide an opinion or opinions concerning whether
your Total Payments exceed the limit discussed above. The Corporation will
select the Consultant.

                  At a minimum, the opinions required by this Section must set
forth the amount of your Base Period Income, the present value of the Total
Payments and the amount and present value of any excess parachute payments.

                  If the opinions state that there would be an excess parachute
payment, your payments under this Agreement will be reduced to the extent
necessary to eliminate the excess. You will be allowed to choose the payment
that should be reduced or eliminated, but the payment you choose to reduce or
eliminate must be a payment determined by such Consultant to be includable in
Total Payments. You will make your decision in writing and deliver it to the
Corporation within 30 days of your receipt of such opinions. If you fail to so
notify the Corporation, it will decide which payments to reduce or eliminate.

                  If the Consultant selected to provide the opinions referred to
above so requests in connection with the opinion required by this Section, a
firm of recognized executive compensation consultants selected by the
Corporation shall provide an opinion, upon which such Consultant may rely, as to
the reasonableness of any item of compensation as reasonable compensation for
services rendered before or after the Change of Control.

                  If the Corporation believes that your Total Payments will
exceed the limitations of this Section, it will nonetheless make payments to
you, at the times stated above, in the maximum amount that it believes may be
paid without exceeding such limitations. The balance, if any, will then be paid
after the opinions called for above have been received.

                  If the amount paid to you by the Corporation is ultimately
determined, pursuant to the opinion referred to above or by the Internal Revenue
Service, to have exceeded the limitation of this Section, the excess will be
treated as a loan to you by the Corporation and shall be repayable on the 90th
day following demand by the Corporation, together with interest at the lowest
"applicable federal rate" provided in Section 1274(d) of the Code. If it is
ultimately determined, pursuant to the opinion referred to above or by the
Internal Revenue Service, that a greater payment should have been made to you,
the Corporation shall pay you the amount of the deficiency, together with
interest thereon from the date such amount should have been paid to the date of
such payment, at the rate set forth above, so that you will have received or be
entitled to receive the maximum amount to which you are entitled under this
Agreement.

                  (d) Effect of Repeal. In the event that the provisions of
Sections 280G and 4999 of the Code are repealed without succession, this Section
shall be of no further force or effect.

                  (e) Exception. The Consultant selected pursuant to Section
6(c) will calculate your "Uncapped Benefit" and your "Capped Benefit". The
limitations of Section 6(a) will not apply to you if your Uncapped Benefit is at
least 120% of your Capped Benefit. For this purpose, your "Uncapped Benefit" is
the amount to which you will be entitled pursuant to Sections 1(a) and 1(b), as
applicable, without regard to the limitations of Section 6(a). Your "Capped
Benefit" is the amount to which you will be entitled pursuant to Sections 1(a)
and 1(b), as applicable, after the application of the limitations of Section
6(a).

7.       Tax Gross-Up.

                  (a) Gross-Up Payment. If the Cap imposed by Section 6(a) does
not apply to you because of the exception provided by Section 6(e), the
Corporation will provide you with a "Gross-Up Payment" if an excise tax is
imposed on you pursuant to Section 4999 of the Code. Except as otherwise noted
below, this Gross-Up Payment will consist of a single lump sum payment in an
amount such that after payment by you of the "total presumed federal and state
taxes" and the excise taxes imposed by Section 4999 of the Code on the Gross-Up
Payment (and any interest or penalties actually imposed), you retain an amount
of the Gross-Up Payment equal to the remaining excise taxes imposed by Section
4999 of the Code on your Total Payments (calculated before the Gross-Up
Payment). For purposes of calculating your Gross-Up Payment, your actual federal
and state income taxes will not be used. Instead, we will use your "total
presumed federal and state taxes." For purposes of this Agreement, your "total
presumed federal and state taxes" shall be conclusively calculated using a
combined tax rate equal to the sum of the maximum marginal federal and
applicable state income tax rates and the hospital insurance (or "HI") portion
of F.I.C.A. Based on the rates in effect for 1996 for an Arizona resident, the
"total presumed federal and state tax rate" is 46.65% (39.6% federal income tax
rate plus 5.6% Arizona state income tax rate plus 1.45% HI tax rate). The state
tax rate for your principal place of residence will be used and no adjustments
will be made for the deduction of state taxes on the federal return, any
deduction of federal taxes on a state return, the loss of itemized deductions or
exemptions, or for any other purpose.

                  (b) Calculations. All determinations concerning whether a
Gross-Up Payment is required pursuant to paragraph (a) and the amount of any
Gross-Up Payment (as well as any assumptions to be used in making such
determinations) shall be made by the Consultant selected pursuant to Section
6(c). The Consultant shall provide you and the Corporation with a written notice
of the amount of the excise taxes that you are required to pay and the amount of
the Gross-Up Payment. The notice from the Consultant shall include any necessary
calculations in support of its conclusions. All fees and expenses of the
Consultant shall be borne by the Corporation. Any Gross-Up Payment shall be made
by the Corporation within 15 days after the mailing of such notice.

         As a general rule, the Consultant's determination shall be binding on
you and the Corporation. The application of the excise tax rules of Section
4999, however, is complex and uncertain and, as a result, the Internal Revenue
Service may disagree with the Consultant concerning the amount, if any, of the
excise taxes that are due. If the Internal Revenue Service determines that
excise taxes are due, or that the amount of the excise taxes that are due is
greater than the amount determined by the Consultant, the Gross-Up Payment will
be recalculated by the Consultant to reflect the actual excise taxes that you
are required to pay (and any related interest and penalties). Any deficiency
will then be paid to you by the Corporation within 15 days of the receipt of the
revised calculations from the Consultant. If the Internal Revenue Service
determines that the amount of excise taxes that you paid exceeds the amount due,
you shall return the excess to the Corporation (along with any interest paid to
you on the overpayment) immediately upon receipt from the Internal Revenue
Service or other taxing authority.

         The Corporation has the right to challenge any excise tax
determinations made by the Internal Revenue Service. If the Corporation agrees
to indemnify you from any taxes, interest and penalties that may be imposed upon
you (including any taxes, interest and penalties on the amounts paid pursuant to
the Corporation's indemnification agreement), you must cooperate fully with the
Corporation in connection with any such challenge. The Corporation shall bear
all costs associated with the challenge of any determination made by the
Internal Revenue Service and the Corporation shall control all such challenges.
The additional Gross-Up Payments called for by the preceding paragraph shall not
be made until the Corporation has either exhausted its (or your) rights to
challenge the determination or indicated that it intends to concede or settle
the excise tax determination.

         You must notify the Corporation in writing of any claim or
determination by the Internal Revenue Service that, if upheld, would result in
the payment of excise taxes in amounts different from the amount initially
specified by the Consultant. Such notice shall be given as soon as possible but
in no event later than 15 days following your receipt of notice of the Internal
Revenue Service's position.

                  (c) Discretionary Gross-Ups. The Corporation also may provide
you with a tax gross-up covering income and/or excise taxes in other situations,
but the Corporation is not obligated to do so and may only do so pursuant to a
resolution duly adopted by the Board of Directors or the Committee. The payment
of a tax gross-up to any other executive or employee of the Corporation shall
not entitle you to receive a tax gross-up. Similarly, the payment of a tax
gross-up to you in certain circumstances or with respect to certain payments or
benefits shall not entitle you to a tax gross-up in other circumstances or with
respect to other payments or benefits.

         8.       Term of Agreement.

         This Agreement is effective immediately and will continue in effect
until the later of (a) December 31, 2002 or (b) two years following a Change of
Control that occurs prior to December 31, 2002.

         9.       Termination Notice and Procedure.

         Any termination of your employment by the Corporation or you shall be
communicated by written notice of termination, all in accordance with the
following procedures:

                  (a) The notice of termination shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances alleged to provide a basis for
termination.

                  (b) If the Corporation notifies you of your termination for
Cause and you in good faith notify the Corporation that a dispute exists
concerning such termination within the 15 day period following your receipt of
such notice, you may elect to continue your employment during such dispute. If
it is thereafter determined that Cause did exist, your termination date shall be
the earlier of (i) the date on which the dispute is finally determined, either
by mutual written agreement of the parties or pursuant to the arbitration
provisions set out below, or (ii) the date of your death. If it is determined
that Cause did not exist, your employment shall continue as if the Corporation
had not delivered its notice of termination.

                  (c) If the Corporation notifies you of your termination by
reason of Disability and you in good faith notify the Corporation that a dispute
exists concerning such termination within the 15-day period following your
receipt of such notice, you also may elect to continue your employment during
such dispute. The dispute relating to the existence of a Disability shall be
resolved by the opinion of the licensed physician selected by the Corporation;
provided, however, that if you do not accept the opinion of the licensed
physician selected by the Corporation, the dispute shall be resolved by the
opinion of a licensed physician who shall be selected by you; provided further,
however, that if the Corporation does not accept the opinion of the licensed
physician selected by you, the dispute shall be finally resolved by the opinion
of a licensed physician selected by the licensed physicians selected by the
Corporation and you, respectively. If it is thereafter determined that a
Disability did exist, your termination date shall be the earlier of (i) the date
on which the dispute is resolved or (ii) the date of your death. If it is
determined that a Disability did not exist, your employment shall continue as if
the Corporation had not delivered its notice of termination.

                  (d) If you in good faith notify the Corporation of your
termination for Good Reason and the Corporation notifies you that a dispute
exists concerning the termination within the 15 day period following the
Corporation's receipt of such notice, you may elect to continue your employment
during such dispute. If it is thereafter determined that Good Reason did exist,
your termination date shall be the earlier of (i) the date on which the dispute
is finally determined, either by mutual written agreement of the parties or
pursuant to the arbitration provisions set out below, (ii) the date of your
death, or (iii) one day prior to the second anniversary of a Change of Control,
and your payments hereunder shall reflect events occurring after you delivered
notice of termination. If it is determined that Good Reason did not exist, your
employment shall continue after such determination as if you had not delivered
the notice of termination asserting Good Reason.

                  (e) If you do not elect to continue employment pending
resolution of a dispute regarding a notice of termination, and it is finally
determined that the reason for termination set forth in such notice of
termination did not exist, if such notice was delivered by you, you shall be
deemed to have voluntarily terminated your employment other than for Good Reason
and if delivered by the Corporation, the Corporation will be deemed to have
terminated you other than by reason of your death, Disability, retirement on or
after your Normal Retirement Date or Cause.

                  (f) For purposes of this Agreement, a transfer from the
Corporation to one of its subsidiaries or a transfer from a subsidiary to the
Corporation or another subsidiary shall not be treated as a termination of
employment.

                  (g) If you elect to continue your employment pending the
resolution of a dispute pursuant to Sections 9 (b) (c), or (d), the Corporation,
in its discretion, may place you on a paid administrative leave until the
dispute is resolved.

         10.      Assumption by Successors.

         The Corporation will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Corporation or any of its subsidiaries to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Corporation or any subsidiary would be required to
perform it if no such succession had taken place. Failure of the Corporation to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle you to
compensation in the same amount and on the same terms to which you would be
entitled hereunder if you terminate your employment for Good Reason following a
Change of Control, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed your
termination date.

         11.      Miscellaneous.

                  (a) Arbitration; Related Expenses. Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration held in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. The Corporation shall pay on a current basis all
legal expenses (including attorney's fees) incurred by you in connection with
such arbitration and the entering of such award if you prevail, or substantially
prevail, in such proceeding.

                  (b) Replacement of Other Agreements. This Agreement replaces
and supersedes any agreement previously entered into between you and the
Corporation regarding the payment of compensation or benefits following a Change
of Control. This Agreement does not replace or supersede your Severance
Agreement with the Corporation or any provision in any stock option or
restricted stock plan or agreement or any plan or program to provide retirement
or savings benefits.

                  (c) Employment at Will. This Agreement shall neither obligate
the Corporation or any subsidiary of the Corporation to continue you in its
employ (or to employ you in any particular office or to perform any specified
responsibility) nor obligate you to continue in the employ of the Corporation or
any subsidiary of the Corporation.

                  (d) Successors. This Agreement shall be binding upon and inure
to the benefit of you, your estate and the Corporation and any successor of the
Corporation, but neither this Agreement nor any rights arising hereunder may be
assigned or pledged by you.

                  (e) Governing Law. This agreement shall be governed by the
laws of the State of New York.

                  (f) Severability. If any provision of this Agreement as
applied to either party or to any circumstances shall be adjudged by a court of
competent jurisdiction to be void or unenforceable, the same shall in no way
affect any other provision of this Agreement or the validity or enforceability
of this Agreement.

                  (g) Amendment or Waiver. Except as otherwise provided in
Section 11(j) of this Agreement, no provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in a writing signed by you and such officer as may be designated by the Board of
Directors of the Corporation or a duly authorized Committee thereof. No waiver
by either party hereto at any time of any breach by the other party hereto of
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of any other condition or provision at any time.

                  (h) No Duty to Mitigate. For purposes of receiving payments
under this Agreement, you are not under any duty to mitigate the damages
resulting from your termination of employment. As a result, you will receive the
payments and other benefits provided by this Agreement regardless of whether you
search for or obtain other work. As provided in Section 1b), however, your right
to receive continued life, disability, accident and group health and dental
insurance benefits will terminate if you become eligible to receive any health
care benefits under any other plan or program of any subsequent employer.

                  (i) Funding. The Corporation shall establish a trust to
provide for the funding of the Corporation's obligations under this and similar
agreements with other executives. The trustee of the trust shall be chosen by
the Corporation or any individual or committee to whom the Corporation delegates
that responsibility, but the trustee must be a national or state bank or trust
company. Prior to the day on which a Change of Control occurs, the Corporation
shall transfer to the trustee of the trust an amount equal to the Corporation's
total potential liability to you pursuant to Sections 1(a), 2(a) and 7. Such
amount shall be determined by the Corporation acting in good faith. If it is
discovered at any time that the amount initially transferred is less than the
total amount called for by the preceding sentence, the shortfall shall be
transferred to the trustee immediately upon the discovery of such error. Under
the terms of the trust, the trustee shall be obligated to pay to you the amount
to which you are entitled pursuant to Sections 1(a), 2(a), 7 and 11(a) unless
such amounts are paid in a timely manner by the Corporation or its successors.
The other terms and provisions of the trust agreement shall be determined by the
Corporation and the trustee.

                  (j) Effect of Change of Law. If at any time during the term of
this Agreement any federal or state law or regulation is adopted or modified in
any way that will increase the cost of this Agreement to the Corporation, the
Corporation reserves the right to unilaterally modify any provision of the
Agreement in any manner which it deems appropriate to eliminate the cost
increase to the Corporation, including but not limited to eliminating the
offending provision or provisions in their entirety.

         If you are in agreement with the foregoing, please so indicate by
signing and returning to the Corporation the enclosed copy of this letter,
whereupon this letter shall constitute a binding agreement between you and the
Corporation.

                                Very truly yours,

                            PHELPS DODGE CORPORATION


                                                     By
                                                              Vice President


Agreed:

                                                     Date