Exhibit 10.11


                            PHELPS DODGE CORPORATION
                            DIRECTORS STOCK UNIT PLAN

                                TABLE OF CONTENTS
                                                             

Section 1.  Purpose                                          

Section 2.  Definitions                                      

Section 3.  Units                                            

Section 4.  Vesting and Forfeitures                          

Section 5.  Participation Agreement                          

Section 6.  Payment of Benefits                              

Section 7.  Administration                                   

Section 8.  Amendment and Termination                        

Section 9.  Effective Date of the Plan                       

Section 10. Governing Law                                    

Section 11. General Provisions                               


                            Phelps Dodge Corporation
                            Directors Stock Unit Plan

Section 1.  Purpose

         The  Phelps  Dodge  Corporation  1997  Directors  Stock  Unit Plan (the
"Plan") was initially  adopted  effective  January 1, 1997, in order to attract,
retain and motivate the best qualified directors for the benefit of Phelps Dodge
Corporation  (the  "Corporation")  and  its  shareholders  and to  provide  such
directors an economic interest in the Corporation, thereby enhancing a long-term
mutuality of interest between such directors and shareholders.

         In order to increase the  mutuality of interest  between  directors and
shareholders, the Retirement Plan for Directors of Phelps Dodge Corporation (the
"Retirement  Plan")  is  being  terminated  and  benefits  accrued  by  Eligible
Directors under the Retirement Plan are being canceled in exchange for the award
of Units under this Plan. Additionally, as described herein, benefits under this
Plan are being enhanced in order to replace the benefits that Eligible Directors
would have accrued under the Retirement Plan.

         By the  adoption  of this  document,  the  Plan is  being  amended  and
restated  in order to reflect  the  replacement  of the  Retirement  Plan by the
provisions  of this Plan.  By the  adoption of this  amended and  restated  Plan
document, the name of the Plan is being changed to the "Phelps Dodge Corporation
Directors Stock Unit Plan."

Section 2.  Definitions

                  When used in this Plan,  the  following  terms  shall have the
meanings  set  forth  in this  Section  unless  the  context  clearly  indicates
otherwise:

                  "Account"  shall mean the accounts  which may be maintained by
the Committee to reflect the number of Units  awarded to each Eligible  Director
under the Plan.

                  "Board" shall mean the Board of Directors of the Corporation.

                  "Change in Control"  shall mean the  occurrence  of any of the
following:

                  (a) any "person" or "group" of persons (as such terms are used
in Section 13 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, becoming 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)  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) the individuals who, at the beginning of any period of two
years or less,  constituted the Board ceasing,  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.

                  "Committee"  shall  mean the  Committee  on  Directors  of the
Board.

                  "Common  Shares"  shall mean the shares of common stock of the
Corporation.

                  "Corporation" shall mean Phelps Dodge Corporation.

                  "Director"  shall mean any member of the Board  regardless  of
whether an Eligible Director.

                  "Disability"  shall mean the inability of an Eligible Director
to perform  his or her duties for a period of at least 180 days due to mental or
physical infirmity, as determined by the Corporation's policies.

                  "Eligible  Director"  shall  mean  a  Director  who  is not an
employee of the Corporation or any Subsidiary.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

                  "Fair  Market  Value"  shall mean the  average of high and low
prices  of a  Common  Share  on the  New  York  Stock  Exchange  on the  date of
determination  or, if no sale of Common Shares is recorded on such date, then on
the next preceding day on which there was such a sale.

                  "Grant" shall mean an award of Units under Section 3.

                  "Gross Cause" shall  include  fraud,  misappropriation  of, or
other  intentional  misconduct  damaging  to, the  property  or  business of the
Corporation or any of its  subsidiaries  or  affiliates,  or the commission of a
crime.

                  "Retirement Plan" shall mean the Retirement Plan for Directors
of Phelps Dodge Corporation.

                  "Subsidiary"  shall mean any  entity of which the  Corporation
possesses  directly  or  indirectly  fifty  percent  (50%) or more of the  total
combined voting power of all classes of stock of such entity.

                  "Termination" shall mean any termination (whether voluntary or
involuntary) of an Eligible  Director's service as a Director,  other than (1) a
termination  caused by the Eligible  Director's  death or (2) a termination that
the Committee determines to have resulted from Gross Cause.

                  "Unit" shall mean a contractual  obligation of the Corporation
to deliver a Common Share or pay cash based on the Fair Market Value of a Common
Share to an Eligible  Director  or the  beneficiary  or estate of such  Eligible
Director as provided herein. 

Section 3. Units

                  (a) Unit Awards.  Subject to the requirements of Section 5(a),
on each January 1 during the term of the Plan, each Eligible Director serving as
a  Director  on such date who has been a Director  continuously  since the prior
November 15 shall be awarded 450 Units.

                  (b)  Special  Award of  Converted  Retirement  Plan  Benefits.
Subject to the  requirements of Section 5(a), the present value of each Eligible
Director's  accrued  benefit  under the  Retirement  Plan,  as determined by the
Corporation  (the  "Accrued  Benefit"),  shall be  converted to Units under this
Plan.  The number of Units  awarded to each Eligible  Director  pursuant to this
Section shall be determined by dividing the Eligible  Director's Accrued Benefit
by the Fair Market Value on December 31, 1997. The number of Units so determined
shall be credited to the Eligible  Director's Account effective January 1, 1998.
After the conversion,  Eligible  Directors shall not be entitled to any benefits
under the Retirement Plan.

                  (c)  Dividend  Equivalents.  Whenever a dividend  other than a
dividend payable in the form of the Corporation's Common Shares is declared with
respect to the Corporation's  Common Shares,  the number of Units credited to an
Eligible  Director  shall be  increased  by the  number of Units  determined  by
dividing  (i) the  product  of (A) the total  number of Units  standing  to such
Eligible  Director's  credit on the  related  dividend  record  date and (B) the
amount of any cash dividend  declared by the  Corporation on a Common Share (or,
in the case of any dividend  distributable in property other than Common Shares,
the per share value of such  dividend,  as  determined  by the  Corporation  for
purposes of income tax  reporting)  by (ii) the Fair Market Value on the related
dividend payment date. In the case of any dividend declared on the Corporation's
Common Shares which is payable in Common Shares, each Eligible Director shall be
credited  with an  additional  number of Units  equal to the  product of (i) the
total number of Units standing to such Eligible Director's credit on the related
dividend  record  date and (ii) the  number  of  Common  Shares  (including  any
fraction thereof) distributable as a dividend on a Common Share.

                  (d) Adjustment for Corporate  Transactions.  In the event that
any recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination,  exchange of shares, warrants or rights offering to purchase Common
Shares at a price  substantially below Fair Market Value, or other similar event
affects the Common Shares such that an adjustment is required to preserve, or to
prevent  enlargement of, the benefits or potential benefits made available under
the Plan,  then the Board  shall  adjust  the  number  and kind of shares  which
thereafter  may be awarded  under the Plan and the number of Units to be granted
annually to each Eligible Director under the Plan.

Section 4. Vesting and Forfeitures

                  (a) Vesting.  All of the Units  awarded each year  pursuant to
Section 3(a) (450 Units) shall be vested as of the date of Grant.  Units awarded
pursuant to Section 3(b) shall be vested as January 1, 1998.

                  (b) Forfeitures. Notwithstanding Section 4(a) to the contrary,
if the Committee  determines that an Eligible Director's  termination of service
as a  Director  is due to  Gross  Cause,  all  Units  credited  to the  Eligible
Director's  Account  shall be forfeited,  and the Eligible  Director will not be
entitled to receive any benefits under this Plan.

Section 5. Participation Agreement

                  (a) Participation  Agreement.  Effective January 1, 1998, each
Eligible  Director,  as a  condition  of  receiving  a Grant,  must enter into a
Participation  Agreement  in such form and at such time as the  Committee  shall
require.  The  Participation  Agreement  shall  indicate  the  manner  in  which
distributions  are to be made to the  Eligible  Director,  and, if the  Eligible
Director elects installment  payments,  the period over which, and the frequency
with which, such installments should be made. In the Participation Agreement the
Eligible  Director  may elect to postpone  the  payments  to which the  Eligible
Director  is  entitled  until  the  later of a  specified  date or the  Eligible
Director's Termination.  Despite any such election, the payment must be made (or
commence if installments  are elected) by the fifth  anniversary of the Eligible
Director's  Termination.  The  Participation  Agreement  also may set forth such
other  information  as the  Committee  may  require.  In the  case  of  Eligible
Directors  who are  participating  in this Plan on the date of  adoption of this
amended and restated Plan document, the Participation Agreement must be executed
and  delivered to the  Committee on or before  December 31, 1997. In the case of
any other Eligible  Director,  the Participation  Agreement must be executed and
delivered  to the  Committee  before  the first  date as of which  the  Eligible
Director is scheduled to receive a Grant pursuant to Sections 3(a).

                  (b) Revised Participation Agreements. A Participant may file a
new Participation  Agreement in order to change an election made in a previously
filed Participation  Agreement.  If the new Participation  Agreement changes the
method of payment  from  installments  to lump sum or vice versa,  or if the new
Participation Agreement changes the time of distribution,  the new election will
only be honored if at least one (1) full calendar  year elapses  between (a) the
date as of which such new  Participation  Agreement is filed and (b) the date as
of which such  distribution  will commence  under such  election.  The foregoing
timing restrictions do not apply to a Participant's  election to receive cash or
Common Shares. 

Section 6. Payment of Benefits

                  (a) Payment Upon  Termination.  Except as provided in Sections
6(b) or 6(c) below, upon  Termination,  each Eligible Director shall be entitled
to a  distribution  of the vested  Units  credited  to the  Eligible  Director's
Account in the manner specified in the Eligible Director's initial Participation
Agreement or in any revised Participation  Agreement that has been in effect for
the  requisite  period of time  specified in Section  5(b).  Distribution  of an
Eligible  Director's  Accounts  pursuant to this Section may be made by means of
any one of the following methods:

                           (1)  Lump Sum Cash  Payment.  A single  lump sum cash
         payment in an amount equal to (i) the sum of the number of vested Units
         credited to the Eligible  Director's  Account on the effective  date of
         the distribution multiplied by (ii) the Fair Market Value on such date.
         Such  lump sum cash  payment  shall  be made to the  Eligible  Director
         within a reasonable  period of time following the effective date of the
         distribution.

                           (2) Lump  Sum  Payment  of  Common  Shares.  A single
         delivery  of a number of Common  Shares  equal to the  number of vested
         Units credited to the Eligible Director's Account at the effective date
         of the  distribution.  Any fractional  Common Shares will be settled in
         cash  based  on the Fair  Market  Value  on the  effective  date of the
         distribution.  Such Common  Shares (and any cash in lieu of  fractional
         Common  Shares)  shall be delivered to the Eligible  Director  within a
         reasonable   period  of  time  following  the  effective  date  of  the
         distribution.

                           (3) Cash  Installment  Payments.  By  distribution in
         substantially  equal  monthly,  quarterly,  semiannual  or annual  cash
         installments  over a fixed period selected by the Eligible Director but
         not in excess of ten (10) years. The amount of each  installment  shall
         equal  (i)  the  number  of  vested  Units  credited  to  the  Eligible
         Director's Account as of the effective date of the installment  payment
         multiplied  by (ii) the Fair  Market  Value on such date and divided by
         (iii)  the  remaining   number  of  payments  to  be  made.  The  first
         installment  payment  shall  be  made as soon  as  possible  after  the
         effective   date  of  the   installment   payment  and  all  subsequent
         installment  payments shall be made at the regular  interval elected by
         the  Eligible  Director  in  the  Eligible   Director's   Participation
         Agreement.

                           (4)   Common   Shares   Installment    Payments.   By
         distribution in substantially equal monthly,  quarterly,  semiannual or
         annual  installments  of Common Shares over a fixed period  selected by
         the Eligible  Director but not in excess of ten (10) years.  The number
         of Common Shares to be distributed at each installment  shall equal (i)
         the number of vested Units credited to the Eligible  Director's Account
         as of the effective date of the installment payment divided by (ii) the
         remaining number of payments to be made.  Fractional Common Shares will
         be rounded up to the nearest whole Common Share.  However, if the final
         installment requires the distribution of a fractional Common Share, the
         fractional  Common  Share  will be  settled  in cash  based on the Fair
         Market   Value  on  the  date   immediately   preceding   the  date  of
         distribution.  The first  installment  payment shall be made as soon as
         possible  after the effective date of the  installment  payment and all
         subsequent  installment  payments shall be made at the regular interval
         elected  by  the   Eligible   Director  in  the   Eligible   Director's
         Participation Agreement.

The effective  date of any lump sum payment and the effective  date of any first
installment  payment shall be the Eligible Director's date of Termination unless
the  Eligible  Director  has elected in the  Eligible  Director's  Participation
Agreement to defer the  distribution in accordance with Section 5(a).  Unless an
Eligible  Director has  affirmatively  elected to receive payments in any of the
forms  permitted by paragraphs (2) through (4), above,  the Eligible  Director's
Accounts shall be  distributed in a lump sum cash payment  pursuant to paragraph
(1).

                  (b)  Payment  Upon  Death.  In the  event  of the  death of an
Eligible Director prior to full  distribution of the Eligible  Director's vested
Account,  the  Corporation,  regardless  of the  elections  made in the Eligible
Director's  most recent  Participation  Agreement,  shall pay to the beneficiary
designated by the Eligible  Director on a form provided by the Corporation,  or,
in the absence of such designation,  to the Eligible  Director's estate, cash in
an aggregate  amount equal to the product of (i) the number of Units credited to
such Eligible  Director's  Account on the date of the Eligible  Director's death
multiplied by (ii) the Fair Market Value on the date of the Eligible  Director's
death.

                  (c) Change in Control. Notwithstanding the foregoing, upon the
occurrence of a Change in Control,  and  regardless of the elections made in the
Eligible Director's most recent Participation  Agreement,  the Corporation shall
pay an Eligible  Director (or, in the event of the death of an Eligible Director
following a Change in Control,  the beneficiary or estate determined pursuant to
(b) above),  not later than 30 days after the Change in Control occurs,  cash in
an aggregate  amount equal to the product of (i) the number of Units credited to
such Eligible Director's Account at the time of the Change in Control multiplied
by (ii) the Fair Market Value on the date of the Change in Control.

                  (d)  Satisfaction  of  Corporation's   Obligation.   Upon  the
delivery of a Common  Share (or the  payment of cash with  respect to a whole or
fractional  Common  Share)  pursuant  to the Plan,  the  corresponding  Unit (or
fraction  thereof) shall be canceled and be of no further force or effect.  Each
Eligible  Director's  Account  will be  adjusted,  as  payments  are made to the
Eligible   Director,   to  reflect  the   cancellation  of  Units.   

Section 7. Administration

                  The Plan shall be  administered  by the Committee.  Subject to
the  provisions  of the Plan,  the  Committee  shall have  plenary  authority to
interpret  the Plan,  to  prescribe,  amend and  rescind  rules and  regulations
relating to it, and to  determine  the terms and  provisions  of the awards made
pursuant to the Plan and to make all other determinations necessary or advisable
for the administration of the Plan;  provided,  however,  that the Plan shall be
administered such that the transactions  contemplated hereunder will continue to
qualify for the exemptive relief available under Rule 16b-3 of the Exchange Act.

Section 8. Amendment and Termination

                  The Board may suspend,  revise,  amend or discontinue the Plan
at any time; provided, however, that no such action may materially and adversely
affect any rights of an Eligible  Director  under any Grant made pursuant to the
Plan  without  such  Eligible  Director's  consent.  Unless the Board  otherwise
specifies at the time of such  termination,  a termination  of the Plan will not
result in a distribution  with respect to the Units then credited to an Eligible
Director under the Plan.

Section 9. Effective Date of the Plan

                  The Plan,  as amended and  restated,  shall be effective as of
January 1, 1998 and shall  terminate as of December 31, 2006 unless  extended by
the Board or terminated at an earlier date pursuant to Section 8 of the Plan.

Section 10. Governing Law

                  The Plan shall be construed in all respects  under the laws of
the State of New York.

Section 11.  General Provisions

                  (a) Nontransferable Grants. Grants made under the Plan may not
be assigned or transferred, in whole or in part, either directly or by operation
of law  (except  in the  event  of an  Eligible  Director's  death  by  will  or
applicable  laws of  descent  and  distribution),  including,  but not by way of
limitation, by execution, levy, garnishment,  attachment,  pledge, bankruptcy or
in any other manner,  and no such right or interest of any Eligible  Director in
the Plan  shall be subject  to any  obligation  or  liability  of such  Eligible
Director.

                  (b) No Right to Serve as a Director. The Plan shall not impose
any obligation on the Corporation to retain any Eligible  Director as a Director
nor shall it impose  any  obligation  on the part of any  Eligible  Director  to
remain as a Director of the Corporation.

                  (c) No Right to Particular  Assets.  Nothing  contained in the
Plan and no action  taken  pursuant to the Plan shall  create or be construed to
create a trust of any kind or any fiduciary relationship between the Corporation
and any  Eligible  Director,  the  executor,  administrator  or  other  personal
representative or designated beneficiary of such Eligible Director, or any other
persons.  Any reserves that may be established by the  Corporation in connection
with Units granted under the Plan shall  continue to be treated as the assets of
the Corporation for Federal income tax purposes and remain subject to the claims
of the Corporation's  creditors. To the extent that any Eligible Director or the
executor,  administrator,  or other  personal  representative  of such  Eligible
Director  acquires a right to receive any payment from the Corporation  pursuant
to the Plan,  such  right  shall be no  greater  than the right of an  unsecured
general creditor of the Corporation.

                  (d) No Rights as Shareholder.  An Eligible Director shall have
no rights as a shareholder of the Corporation  with respect to any Units granted
pursuant to the Plan unless and until Common  Shares are  delivered  pursuant to
Section 6 above.

                  (e) Limitations on Liability. Neither the establishment of the
Plan nor any  modifications  thereof nor the  creation of any account  under the
Plan nor the  payment  of any  benefits  shall be  construed  as  giving  to any
participant or other person any legal or equitable right against the Corporation
(or any  person  connected  therewith)  except  as  provided  by law or any Plan
provision.  In no event shall the Corporation or any person connected  therewith
be liable to any person for the failure of any participant or other person to be
entitled to any  particular  tax  consequences  with  respect to the Plan or any
contribution thereto or any distributions therefrom.

                  (f)  Non-Exclusivity.  The  adoption  of the Plan by the Board
shall not be construed as creating any  limitations on the power of the Board to
adopt such other compensatory arrangements as it may deem desirable.

                  (g) No Limit on Corporate  Action.  The  existence of the Plan
and the Units granted  hereunder  shall not affect in any way the right or power
of the Board or the  shareholders  of the  Corporation  to make or authorize any
adjustment,   recapitalization,   reorganization   or   other   change   in  the
Corporation's capital structure or its business,  any merger or consolidation of
the Corporation,  any issue of bonds, debentures,  preferred or prior preference
stocks ahead of or affecting  Common Shares,  the  dissolution or liquidation of
the  Corporation  or any  sale  or  transfer  of all or part  of its  assets  or
business, or any other corporate act or proceeding.

                  (h) Listing of Common  Shares and Related  Matters.  If at any
time the Board shall determine in its discretion that the listing,  registration
or  qualification  of the Common  Shares  covered by the Plan upon any  national
securities  exchange  or under any  state or  federal  law,  or the  consent  or
approval of any  governmental  regulatory  body,  is necessary or desirable as a
condition  of, or in  connection  with,  the delivery of Common Shares under the
Plan,  no  Common  Shares  will be  delivered  unless  and until  such  listing,
registration,  qualification,  consent or approval  shall have been  effected or
obtained,  or otherwise  provided for, free of any  conditions not acceptable to
the Board.

                  (i)  Severability of Provisions.  If any provision of the Plan
shall be held invalid or  unenforceable,  such  invalidity  or  unenforceability
shall not affect any other  provisions  hereof,  and the Plan shall be construed
and enforced as if such provision had not been included.

                  (j) Incapacity. Any benefit payable to or for the benefit of a
minor, an incompetent  person or other person  incapable of receipting  therefor
shall be  deemed  paid  when  paid to such  person's  guardian  or to the  party
providing or  reasonably  appearing to provide for the care of such person,  and
such payment shall fully discharge any liability or obligation of the Board, the
Corporation and all other parties with respect thereto.

                  (k) Headings and  Captions.  The headings and captions  herein
are provided for reference and convenience only, shall not be considered part of
the Plan, and shall not be employed in the construction of the Plan.