Document:

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                                                                    Exhibit 4.11

                         PREFERRED SECURITIES GUARANTEE

                                     BETWEEN

                            PHELPS DODGE CORPORATION

                                       AND

                           FIRST UNION NATIONAL BANK,

                              AS GUARANTEE TRUSTEE

                         DATED AS OF___________________

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                                TABLE OF CONTENTS
                                                                            Page

ARTICLE I DEFINITIONS AND INTERPRETATIONS.....................................1

   SECTION 1.1 Definitions and Interpretations................................1

ARTICLE II TRUST INDENTURE ACT................................................5

   SECTION 2.1 Trust Indenture Act: Application...............................5
   SECTION 2.2 List of Holders................................................6
   SECTION 2.3 Reports by the Guarantee Trustee...............................6
   SECTION 2.4 Periodic Reports to the Guarantee Trustee......................6
   SECTION 2.5 Evidence of Compliance with Conditions Precedent...............6
   SECTION 2.6 Events of Default; Waiver......................................7
   SECTION 2.7 Event of Default; Notice.......................................7
   SECTION 2.8 Conflicting Interests..........................................7

ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE....................7

   SECTION 3.1 Powers and Duties of the Guarantee Trustee.....................7
   SECTION 3.2 Certain Rights of the Guarantee Trustee........................9
   SECTION 3.3 Compensation..................................................10
   SECTION 3.4 Indemnity.....................................................10
   SECTION 3.5 Not Responsible for Sufficiency of Guarantee..................11
   SECTION 3.6 Exculpation...................................................11

ARTICLE IV GUARANTEE TRUSTEE.................................................12

   SECTION 4.1 Guarantee Trustee; Eligibility................................12
   SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustees....12

ARTICLE V GUARANTEE..........................................................13

   SECTION 5.1 Guarantee.....................................................13
   SECTION 5.2 Waiver of Notice and Demand...................................13
   SECTION 5.3 Obligations Not Affected......................................13
   SECTION 5.4 Rights of Holders.............................................14
   SECTION 5.5 Guarantee of Payment..........................................14
   SECTION 5.6 Subrogation...................................................15

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   SECTION 5.7 Independent Obligations.......................................15
   SECTION 5.8 Net Payments..................................................15

ARTICLE VI LIMITATION OF TRANSACTIONS; RANKING...............................16

   SECTION 6.1 Limitation of Transactions....................................16
   SECTION 6.2 Ranking.......................................................17
   SECTION 6.3 Pari Passu Guarantees.........................................17

ARTICLE VII TERMINATION......................................................17

   SECTION 7.1 Termination...................................................17

ARTICLE VIII MISCELLANEOUS...................................................18

   SECTION 8.1 Successors and Assigns........................................18
   SECTION 8.2 Amendments....................................................18
   SECTION 8.3 Notices.......................................................18
   SECTION 8.4 Benefit.......................................................19
   SECTION 8.5 Governing Law.................................................19
   SECTION 8.6 Submission to Jurisdiction....................................19
   SECTION 8.7 Counterparts..................................................20

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                         PREFERRED SECURITIES GUARANTEE

         This GUARANTEE, dated as of ________, 2000, is executed and delivered
by Phelps Dodge Corporation, a New York corporation (the "Guarantor"), having
its principal place of business at 2600 North Central Avenue, Phoenix, Arizona
85004, and First Union National Bank, as trustee (the "Guarantee Trustee"),
having a corporate trust office at 5847 San Felipe, Suite 1050, Houston, Texas
77057, for the benefit of the Holders (as defined herein) from time to time of
the Preferred Securities (as defined herein) of PD Capital Trust [I] [II], a
Delaware statutory business trust (the "Trust").

         WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of ________, 200_ (as amended from time to time, the "Trust Agreement"), among
the Trustees named therein, the Guarantor, as depositor and issuer of Debt
Securities (as defined herein) (in such capacities, respectively, the
"Depositor" and "Debt Security Issuer"), and the Holders from time to time of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
on the date hereof $________ ($________ if the Underwriters' over-allotment
option pursuant to the Underwriting Agreement is exercised in full) aggregate
liquidation preference of its __% preferred securities (liquidation preference
$1,000 per preferred security) (the "Preferred Securities"), representing
preferred undivided beneficial interests in the assets of the Trust and having
the terms set forth in the Trust Agreement;

         WHEREAS, the Preferred Securities will be issued by the Trust and the
proceeds thereof, together with the proceeds from the issuance of the Common
Securities (as defined herein), will be used to purchase the Debt Securities,
which will be deposited with the Property Trustee under the Trust Agreement, as
trust assets; and

         WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee, to pay to the Holders of the Preferred
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein;

         NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee for the
benefit of the Holders from time to time of the Preferred Securities.

                                   ARTICLE I
                         DEFINITIONS AND INTERPRETATIONS

SECTION 1.1       Definitions and Interpretations

         In this Guarantee, unless the context otherwise requires:

         (a) capitalized terms used in this Guarantee, but not defined in the
preamble hereto have the respective meanings assigned to them in this Section
1.1 or in the Trust Agreement, as the case may be;

         (b) a term defined anywhere in this Guarantee has the same meaning
throughout;

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         (c) all references to "the Guarantee" or "this Guarantee" are to this
Preferred Securities Guarantee as modified, supplemented or amended from time to
time;

         (d) all references in this Guarantee to Articles and Sections are to
Articles and Sections of this Guarantee, unless otherwise specified;

         (e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee, unless otherwise defined in this Guarantee or unless the
context otherwise requires;

         (f) a reference to the singular includes the plural and vice versa; and

         (g) the masculine, feminine, or neuter genders used herein shall
include the masculine, feminine and neuter genders.

         "Additional Amounts" has the meaning specified in Section 5.8.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that the Trust shall not
be deemed to be an Affiliate of the Guarantor. For the purpose of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

         "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Trust.

         "Covered Person" means any Holder or beneficial owner of Preferred
Securities.

         "Delaware and Administrative Indemnitees" has the meaning specified in
Section 3.6(a).

         "Debt Securities" means the series of subordinated debt securities of
the Debt Security Issuer designated the __% Junior Subordinated Debt Securities
due ____ held by the Property Trustee.

         "Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee; provided, that except with
respect to a default in payment of any Guarantee Payments, the Guarantor shall
have received notice of default from the Guarantee Trustee and shall not have
cured such default within 60 days after receipt of such notice.

         "Extension Period" means any period during which the Debt Security
Issuer may defer the payment of interest on Debt Securities as may be provided
in the Indenture.

         "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Trust: (i) any accrued and unpaid
Distributions (as defined in the Trust Agreement) that are required to be paid
on such Preferred Securities, to the extent the Trust shall have funds on hand
available therefor at such time, (ii) the Redemption Price with respect to
Preferred

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Securities called for redemption by the Trust, to the extent the Trust shall
have funds on hand available therefor at such time and (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of the Trust, unless Debt
Securities are distributed to the Holders, the Liquidation Distribution.

         "Guarantee Trustee" has the meaning specified in the preamble to this
Guarantee until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee, at which time
"Guarantee Trustee" thereafter shall mean each such Successor Guarantee Trustee.

         "Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Preferred Securities; provided, that in determining whether
the holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Depositor, the Guarantee Trustee or any Affiliate of the
Guarantor, the Depositor or the Guarantee Trustee.

         "Indebtedness" means, with respect to any Person, whether recourse is
to all or a portion of the assets of such Person and whether or not contingent
and without duplication: (i) every obligation of such Person for money borrowed;
(ii) every obligation of such Person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (iv)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable); (v) every
capital lease obligation of such Person; (vi) every obligation of such Person
pursuant to derivative products, including interest rate, foreign exchange rate
and commodity forward contracts, options and swaps and similar arrangements;
(vii) every obligation of the type referred to in clauses (i) through (vi) of
another Person and all dividends of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or liable for,
directly or indirectly, as obligor or otherwise; and (viii) any renewals,
extensions, refundings, amendments or modifications of any obligation of the
type referred to in clauses (i) through (vii).

         "Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.

         "Indenture" means the Subordinated Indenture dated as of ________,
200_, between the Debt Security Issuer and First Union National Bank, as
trustee, and any indenture supplemental thereto pursuant to which the Debt
Securities are to be issued to the Property Trustee of the Trust.

         "Liquidation Distribution" means the lesser of (i) the aggregate of the
liquidation preference of $1,000 per Preferred Security plus accumulated and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Trust shall have funds on hand available to make such payment at such
time and (ii) the amount of assets of the Trust remaining available for
distribution to Holders in liquidation of the Trust.

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         "List of Holders" has the meaning specified in Section 2.2(a).

         "Majority in liquidation preference of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by a Holder or Holders,
voting separately as a class, of more than 50% of the liquidation preference of
all then outstanding Preferred Securities issued by the Trust.

         "Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board of Directors, a Vice Chairman,
the President, any Senior Vice President, any Vice President, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of such Person, and
delivered to the Guarantee Trustee. Any Officer's Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee (other than pursuant to Section 2.4) shall include:

         (i) a statement that the officer signing the Officer's Certificate has
read the covenant or condition and the definitions relating thereto;

         (ii) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officer's Certificate;

         (iii) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

         (iv) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.

         "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.

         "Redemption Price" means the redemption price with respect to Preferred
Securities, including all accumulated and unpaid Distributions to the date of
redemption.

         "Responsible Officer," when used with respect to the Guarantee Trustee,
means the Chairman or any Vice Chairman of the Board of Directors, the Chairman
or any Vice Chairman of the Executive Committee of the Board of Directors, the
Chairman of the Trust Committee, the President, any Senior Vice President, any
Vice President, the Secretary, any Assistant Secretary, the Treasurer, any
Assistant Treasurer, the Cashier, any Senior Trust Officer, any Assistant
Cashier, any Trust Officer or Assistant Trust Officer, the Controller or any
Assistant Controller or any other officer of the Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.

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         "Rights Plan" means the Rights Agreement, dated February 5, 1998,
between the Guarantor and The Chase Manhattan Bank, as Rights Agent, or any
similar agreement into which the Guarantor may enter.

         "Senior Indebtedness" means, with respect to any Person, the principal
of, any premium and interest on (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to such
Person whether or not such claim for post-petition interest is allowed in such
proceeding) and other amounts in respect of all Indebtedness of such Person,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to this Guarantee or to other Indebtedness that is
pari passu with, or subordinated to, this Guarantee, provided, that Senior
Indebtedness shall not be deemed to include (i) Indebtedness under this
Guarantee, (ii) any Indebtedness of such Person that, when incurred and without
respect to any election under Section 1111(b) of the Bankruptcy Reform Act of
1978, was without recourse to such Person, (iii) any Indebtedness of such Person
to any of its Subsidiaries, (iv) any Indebtedness of such Person to any employee
of such Person, and (v) trade accounts payable of such Person.

         "Subsidiary" means, in respect of any Person, a corporation more than
50% of the outstanding voting stock of which is owned, directly or indirectly,
by such Person or by one or more other Subsidiaries, or by such Person and one
or more other Subsidiaries. For purposes of this definition, "voting stock"
means stock that ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.

         "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

         "Taxing Jurisdiction" means any jurisdiction in which the Guarantor is
organized or resident for tax purposes.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.

         "Underwriting Agreement" means an underwriting agreement, purchase
agreement or placement agreement executed and delivered by the Trust, the
Guarantor and the underwriters named therein.

                                   ARTICLE II
                               TRUST INDENTURE ACT

SECTION 2.1       Trust Indenture Act: Application

         (a) This Guarantee is subject to the provisions of the Trust Indenture
Act that are required to be part of this Guarantee and shall, to the extent
applicable, be governed by such provisions. If any provision of this Guarantee
modifies or excludes any provision of the Trust Indenture Act that may be so
modified or excluded, the latter provision shall be deemed to apply to this
Guarantee as so modified or to be excluded, as the case may be.

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         (b) If any provision of this Guarantee limits, qualifies or conflicts
with any duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act or by Section 318(c) thereof, such required provision shall
control.

SECTION 2.2       List of Holders

         (a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (i) 15 days after each Regular Record Date (as defined in the
Indenture), a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of the
applicable date, and (ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished, in each case to the extent such information is in
the possession or control of the Guarantor and is not identical to a previously
supplied list of Holders or has not otherwise been received by the Guarantee
Trustee in its capacity as such or in its capacity as Registrar (as defined in
the Indenture). The Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.

         (b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.

SECTION 2.3       Reports by the Guarantee Trustee

         If required by Section 313(a) of the Trust Indenture Act, the Guarantee
Trustee shall, within 60 days after each September 15 following the date of this
Guarantee deliver to the Holders a brief report dated as of such September 15,
which complies with the provisions of Section 313(a). The Guarantee Trustee
shall also comply with the other requirements of Section 313 of the Trust
Indenture Act.

SECTION 2.4       Periodic Reports to the Guarantee Trustee

         The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders, such documents, reports and
information, if any, as required by Section 314 of the Trust Indenture Act and
the compliance certificate required by Section 314 of the Trust Indenture Act,
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act, such compliance certificate to be provided within 120 days of the
end of each fiscal year of the Guarantor.

SECTION 2.5       Evidence of Compliance with Conditions Precedent

         The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officer's
Certificate.

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SECTION 2.6       Events of Default; Waiver

         The Holders of a Majority in liquidation preference of the Preferred
Securities may, by vote, on behalf of all Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee, but no such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent thereon.

SECTION 2.7       Event of Default; Notice

         (a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default known to the Guarantee Trustee, transmit by mail,
first-class postage prepaid, to the Holders, notices of all such Events of
Default, unless such defaults have been cured or waived before the giving of
such notice, provided, that except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.

         (b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer of the Guarantee Trustee charged with the
administration of the Trust Agreement shall have obtained written notice, of
such Event of Default from the Guarantor or a Holder.

SECTION 2.8       Conflicting Interests

         The Trust Agreement shall be deemed to be specifically described in
this Guarantee for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.

                                  ARTICLE III
                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

SECTION 3.1       Powers and Duties of the Guarantee Trustee

         (a) The rights, immunities, duties and responsibilities of the
Guarantee Trustee shall be as provided by the Trust Indenture Act.
Notwithstanding the foregoing, no provision of the Indenture shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Guarantee relating to the conduct or
affecting the liability of or affording protection to the Guarantee Trustee
shall be subject to the provisions of this Section.

         (b) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder

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exercising his or her rights pursuant to Section 5.4(d) or to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Successor Guarantee Trustee. The right, title and interest
of the Guarantee Trustee shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.

         (c) Without limiting the effect of the first sentence of Section
3.1(a), no provision of this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its negligent
failure to act or its own bad faith or willful misconduct, except that:

                  (i) the Guarantee Trustee shall not be liable for any error of
         judgment made in good faith by a Responsible Officer of the Guarantee
         Trustee, unless it shall be proved that the Guarantee Trustee was
         negligent in ascertaining the pertinent facts upon which such judgment
         was made;

                  (ii) the Guarantee Trustee shall not be liable with respect to
         any action taken or omitted to be taken by it in good faith in
         accordance with the direction of the Holders of not less than a
         Majority in liquidation preference of the Preferred Securities relating
         to the time, method and place of conducting any proceeding for any
         remedy available to the Guarantee Trustee, or exercising any trust or
         power conferred upon the Guarantee Trustee under this Guarantee; and

                  (iii) prior to the occurrence of any Event of Default and
         after the curing or waiving of all such Events of Default that may have
         occurred:

                           (A) the duties and obligations of the Guarantee
                  Trustee shall be determined solely by the express provisions
                  of this Guarantee, and the Guarantee Trustee shall not be
                  liable except for the performance of such duties and
                  obligations as are specifically set forth in this Guarantee,
                  and no implied covenants or obligations shall be read into
                  this Guarantee against the Guarantee Trustee; and

                           (B) in the absence of bad faith on the part of the
                  Guarantee Trustee, the Guarantee Trustee may conclusively
                  rely, as to the truth of the statements and the correctness of
                  the opinions expressed therein, upon any certificates or
                  opinions furnished to the Guarantee Trustee and conforming to
                  the requirements of this Guarantee; but in the case of any
                  such certificates or opinions that by any provision hereof are
                  specifically required to be furnished to the Guarantee
                  Trustee, the Guarantee Trustee shall be under a duty to
                  examine the same to determine whether or not they conform to
                  the requirements of this Guarantee.

         (d) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall be entitled to enforce this Guarantee for the benefit of
the Holders.

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SECTION 3.2 Certain Rights of the Guarantee Trustee

         (a) Subject to the provisions of Section 3.1:

                  (i) The Guarantee Trustee may rely upon, and shall be fully
         protected in acting or refraining from acting in good faith upon, any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document believed by
         it to be genuine and to have been signed, sent or presented by the
         proper party or parties.

                  (ii) Any direction or act of the Guarantor contemplated by
         this Guarantee shall be sufficiently evidenced by an Officer's
         Certificate of the Guarantor, unless otherwise prescribed herein.

                  (iii) Whenever, in the administration of this Guarantee, the
         Guarantee Trustee shall deem it desirable that a matter be proved or
         established before taking, suffering or omitting any action hereunder,
         the Guarantee Trustee (unless other evidence is herein specifically
         prescribed) may, in the absence of bad faith on its part, request and
         rely upon an Officer's Certificate which, upon receipt of such request,
         shall be promptly delivered by the Guarantor.

                  (iv) The Guarantee Trustee may consult with competent legal
         counsel, and the written advice or opinion of such counsel with respect
         to legal matters shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted to be
         taken by it hereunder in good faith and in accordance with such advice
         or opinion. Such counsel may be counsel to the Guarantor or any of its
         Affiliates and may include any of its employees. The Guarantee Trustee
         shall have the right at any time to seek instructions concerning the
         administration of this Guarantee from any court of competent
         jurisdiction.

                  (v) The Guarantee Trustee shall be under no obligation to
         exercise any of the rights or powers vested in it by this Guarantee at
         the request or direction of any Holder, unless such Holder shall have
         provided to the Guarantee Trustee reasonable security or indemnity
         against the costs, expenses (including attorneys' fees and expenses)
         and liabilities that might be incurred by it in complying with such
         request or direction, including such reasonable advances as may be
         requested by the Guarantee Trustee.

                  (vi) The Guarantee Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document, but the Guarantee Trustee, in
         its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit.

                  (vii) The Guarantee Trustee may execute any of the trusts or
         powers hereunder or perform any duties hereunder either directly or by
         or through agents or attorneys, and the Guarantee Trustee shall not be
         responsible for any misconduct or negligence on the part of any such
         agent or attorney appointed with due care by it hereunder.

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                  (viii) Any action taken by the Guarantee Trustee or its agents
         hereunder shall bind the Holders, and the signature of the Guarantee
         Trustee or its agents alone shall be sufficient and effective to
         perform any such action. No third party shall be required to inquire as
         to the authority of the Guarantee Trustee to so act or as to its
         compliance with any of the terms and provisions of this Guarantee, both
         of which shall be conclusively evidenced by the Guarantee Trustee's or
         its agent's taking such action.

                  (ix) Whenever in the administration of this Guarantee the
         Guarantee Trustee shall deem it desirable to receive instructions with
         respect to enforcing any remedy or right or taking any other action
         hereunder, the Guarantee Trustee (A) may request instructions from the
         Holders of a Majority in liquidation preference of the Preferred
         Securities, (B) may refrain from enforcing such remedy or right or
         taking such other action until such instructions are received, and (C)
         shall be protected in acting in accordance with such instructions.

                  (x) The Guarantee Trustee shall have no duty to see to any
         recording, filing or registration of any instrument (or any
         rerecording, refiling or registration thereof).

                  (xi) The Guarantee Trustee shall not be liable for any action
         taken, suffered, or omitted to be taken by it in good faith and
         reasonably believed by it to be authorized or within the discretion or
         rights or powers conferred upon it by this Guarantee.

         (b) No provision of this Guarantee shall be deemed to impose any duty
or obligation on the Guarantee Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

SECTION 3.3       Compensation

         The Guarantor agrees to pay the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
(including the reasonable fees and expenses of its attorneys and agents)
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee.

         The provisions of this Section 3.3 shall survive the termination of
this Guarantee or the resignation or removal of the Guarantee Trustee.

SECTION 3.4       Indemnity

         The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee, including the costs and expenses of defending

                                       10
<PAGE>   14

itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Guarantee Trustee will
not claim or exact any lien or charge on any Guarantee Payments as a result of
any amount due to it under this Guarantee.

         When the Guarantee Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(4) or Section
5.1(5) of the Indenture, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.

         The provisions of this Section 3.4 shall survive the termination of
this Guarantee or the resignation or removal of the Guarantee Trustee.

SECTION 3.5       Not Responsible for Sufficiency of Guarantee.

         The Guarantee Trustee makes no representation as to the validity or
sufficiency of this Guarantee.

SECTION 3.6       Exculpation.

         (a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Guarantee or by law, except that in
the case of all Indemnified Persons except the Delaware Trustee, the
Administrative Trustees and their officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents (the
"Delaware and Administrative Indemnitees"), such an Indemnified Person shall be
liable, responsible or accountable in damages or otherwise for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence,
gross negligence or willful misconduct, and except that in the case of the
Delaware and Administrative Indemnitees, such an Indemnified Person shall be
liable, responsible or accountable in damages or otherwise for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross negligence
or willful misconduct.

         (b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.

                                       11
<PAGE>   15

                                   ARTICLE IV
                                GUARANTEE TRUSTEE

SECTION 4.1       Guarantee Trustee; Eligibility

         (a) There shall at all times be a Guarantee Trustee which shall:

                  (i) not be an Affiliate of the Guarantor; and

                  (ii) be a Person that is eligible pursuant to the Trust
         Indenture Act to act as such and has a combined capital of at least
         $50,000,000, and shall be a corporation meeting the requirements of
         Section 310(a) of the Trust Indenture Act. If such corporation
         publishes reports of condition at least annually pursuant to law or to
         the requirements of the supervising or examining authority then, for
         the purposes of this Section 4.1(a)(ii), the combined capital and
         surplus of such corporation shall be deemed to be its combined capital
         and surplus as set forth in its most recent report of condition so
         published.

         (b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).

         (c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act, subject to the penultimate
paragraph thereof.

SECTION 4.2       Appointment, Removal and Resignation of Guarantee Trustees

         (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed with or without cause at any time by the Guarantor.

         (b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.

         (c) The Guarantee Trustee appointed to office shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

         (d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 30 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.

                                       12
<PAGE>   16

                                   ARTICLE V
                                   GUARANTEE

SECTION 5.1       Guarantee

         The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert, other then
the defense of payment. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Guarantor to
the Holders or by causing the Trust, through the Debt Security Issuer, to pay
such amounts to the Holders. The Guarantor shall give prompt written notice to
the Guarantee Trustee in the event it makes any direct payment hereunder.

SECTION 5.2       Waiver of Notice and Demand

         The Guarantor hereby waives notice of acceptance of this Guarantee and
of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
the Trust or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

SECTION 5.3       Obligations Not Affected

         The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:

         (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Trust;

         (b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debt Securities or so provided by the Indenture);

         (c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Trust granting indulgence or extension of any
kind;

         (d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization,

                                       13
<PAGE>   17

arrangement, composition or readjustment of indebtedness of, or other similar
proceedings affecting, the Trust or any of the assets of the Trust;

         (e) any invalidity of, or defect or deficiency in, the Preferred
Securities;

         (f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

         (g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

         There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.

SECTION 5.4       Rights of Holders

         The Guarantor expressly acknowledges that: (a) this Guarantee will be
deposited with the Guarantee Trustee to be held for the benefit of the Holders;
(b) the Guarantee Trustee has the right to enforce this Guarantee on behalf of
the Holders; (c) the Holders of a Majority in liquidation preference of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of this Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under this Guarantee; provided, however,
that, subject to Section 3.1, the Guarantee Trustee shall have the right to
decline to follow any such direction if the Guarantee Trustee being advised by
counsel determines that the action so directed may not lawfully be taken, or if
the Guarantee Trustee in good faith shall, by a Responsible Officer or Officers
of the Guarantee Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of the Holders not party to such direction, and provided, further, that
nothing in this Guarantee shall impair the right of the Guarantee Trustee to
take any action deemed proper by the Guarantee Trustee and which is not
inconsistent with such direction; and (d) any Holder may, to the extent
permitted by law, institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee, without first instituting a legal
proceeding against the Guarantee Trustee, the Trust, the Debt Security Issuer or
any other Person. The Guarantor waives any right or remedy to require that any
such action on this Guarantee be brought first against the Trust or any other
Person or entity before so proceeding directly against the Guarantor.

SECTION 5.5       Guarantee of Payment

         This Guarantee creates a guarantee of payment and not of collection.
This Guarantee will not be discharged except by payment of the Guarantee
Payments in full (without duplication of amounts theretofore paid by the Trust)
or upon distribution of Debt Securities to Holders as provided in the Trust
Agreement.

                                       14
<PAGE>   18

SECTION 5.6       Subrogation

         The Guarantor shall be subrogated to all rights, if any, of the Holders
against the Trust in respect of any amounts paid to such Holders by the
Guarantor under this Guarantee; provided, that the Guarantor shall not (except
to the extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.

SECTION 5.7       Independent Obligations

         The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.

SECTION 5.8       Net Payments

         All payments required to be made hereunder by the Guarantor shall be
made without withholding or deduction at source for, or on account of, any
present or future taxes, fees, duties, assessments or governmental charges of
whatever nature imposed or levied by or on behalf of any Taxing Jurisdiction or
any political subdivision or taxing authority thereof or therein, unless such
taxes, fees, duties, assessments or governmental charges are required to be
withheld or deducted by (A) the laws (or any regulations or ruling promulgated
thereunder) of a Taxing Jurisdiction or any political subdivision or taxing
authority thereof or therein or (B) an official position regarding the
application, administration, interpretation or enforcement of any such laws,
regulations or rulings (including a holding by a court of competent jurisdiction
or by a taxing authority in a Taxing Jurisdiction or any political subdivision
thereof). If any withholding or deduction at source is required, the Guarantor
shall, subject to the limitations and exceptions set forth below, pay to the
Holder of any Preferred Security such additional amounts as may be necessary so
that every net payment of principal, premium, if any, interest or any other
amount made to such Holder, after such withholding or deduction, shall not be
less than the amount provided for in this Guarantee to be then due and payable
(the "Additional Amounts"); provided, that the Guarantor shall not be required
to make payment of such Additional Amounts for or on account of:

         (a) any tax, fee, duty, assessment or governmental charge of whatever
nature which would not have been imposed but for the fact that such Holder or
the Owner of such Preferred Security: (i) was a resident, domiciliary or
national of, or engaged in business or maintained a permanent establishment or
was physically present in, the relevant Taxing Jurisdiction or any political
subdivision thereof or therein or otherwise had some connection with the
relevant Taxing Jurisdiction or any political subdivision thereof or therein
other than by reason of the mere ownership of, or receipt of payment under, such
Preferred Security or this Guarantee; (ii)

                                       15
<PAGE>   19

presented such Preferred Security for payment in the relevant Taxing
Jurisdiction or any political subdivision thereof or therein, unless such
Preferred Security could not have been presented for payment elsewhere; or (iii)
presented such Preferred Security more than thirty (30) days after the date on
which the payment in respect of such Preferred Security first became due and
payable, except to the extent that such Holder would have been entitled to such
Additional Amounts if it had presented such Preferred Security for payment on
any day within such period of thirty (30) days;

         (b) any estate, inheritance, gift, sale, transfer, personal property or
similar tax, fee, duty, assessment or other governmental charge; or

         (c) any tax, fee, duty, assessment or other governmental charge that is
imposed or withheld by reason of the failure by such Holder or such Owner to
comply, within 90 days, with any reasonable request by the Guarantor addressed
to such Holder or such Owner (i) to provide information concerning the
nationality, residence or identity of such Holder or such Owner or (ii) to make
any declaration or other similar claim or satisfy any information or reporting
requirement, which, in the case of (i) or (ii), is required or imposed by
statute, treaty, regulation or administrative practice of the relevant Taxing
Jurisdiction or any political subdivision thereof or therein as a precondition
to exemption from all or part of such tax, fee, duty, assessment or other
governmental charge;

nor shall Additional Amounts be paid with respect to any payment of the
principal of, or premium, if any, interest or any other amounts on, any such
Preferred Security to any Holder where the Owner of such Preferred Security is a
fiduciary or partnership to the extent such payment would be required by the
laws of the relevant Taxing Jurisdiction (or any political subdivision or
relevant taxing authority thereof or therein) to be included in the income for
tax purposes of a beneficiary with respect to such fiduciary or partner of such
partnership who would not have been entitled to such Additional Amounts had it
been the Holder of the Preferred Security.

         All references in this Guarantee to Guarantee Payments shall include
any Additional Amounts payable by the Guarantor in respect of such Guarantee
Payments.

                                   ARTICLE VI
                       LIMITATION OF TRANSACTIONS; RANKING

SECTION 6.1       Limitation of Transactions

         The Guarantor covenants and agrees that it shall not (a) declare or pay
any dividends or distributions on, or redeem purchase, acquire or make a
liquidation payment with respect to, any shares of the capital stock of the
Guarantor or (b) make any payment of principal of or any interest or premium on
or repay, repurchase or redeem any debt securities of the Guarantor that rank
pari passu in all respects with or junior in interest to the Debt Securities
(other than (i) repurchases, redemptions or other acquisitions of shares of
capital stock of the Guarantor in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of any one or
more employees, officers, directors or consultants, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of

                                       16
<PAGE>   20

capital stock of the Guarantor (or securities convertible into or exercisable
for such capital stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period, (ii) as a result of an exchange
or conversion of any class or series of the capital stock of the Guarantor (or
any capital stock of a Subsidiary of the Guarantor), for any class or series of
the capital stock of the Guarantor or of any class or series of the indebtedness
of the Guarantor for any class or series of the capital stock of the Guarantor,
(iii) the purchase of fractional interests in shares of the capital stock of the
Guarantor pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) any declaration of a
dividend in connection with any Rights Plan, the issuance of rights, stock or
other property under any Rights Plan or the redemption or repurchase of rights
pursuant thereto or (v) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock), if at
such time the Guarantor shall have given notice of its election to begin an
Extension Period with respect to the Debt Securities as may be provided in the
Indenture and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing.

SECTION 6.2       Ranking

         This Guarantee will constitute an unsecured obligation of the Guarantor
and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Guarantor. The obligations of the Guarantor under this
Guarantee do not constitute Senior Claims (as defined in the Indenture).

SECTION 6.3       Pari Passu Guarantees

         This Guarantee shall rank pari passu with any similar Guarantees issued
by the Guarantor on behalf of holders of preferred securities of any other
trust, partnership or other entity affiliated with the Guarantor which is a
financing vehicle of the Guarantor or any Affiliate of the Guarantor in
connection with the issuance by such entity of preferred securities or other
securities which are similar to preferred securities that are guaranteed by the
Guarantor pursuant to an instrument that ranks pari passu with or junior in
right of payment to this Guarantee.

                                   ARTICLE VII
                                   TERMINATION

SECTION 7.1       Termination

         This Guarantee shall terminate and be of no further force and effect
upon (i) full payment of the Redemption Price of all Preferred Securities, (ii)
the distribution of the Debt Securities to all Holders in exchange for the
Preferred Securities or (iii) full payment of the amounts payable in accordance
with the Trust Agreement upon liquidation of the Trust. Notwithstanding the
foregoing, this Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any Holder must restore payment of any sums
paid with respect to the Preferred Securities or under this Guarantee. The
obligations of the Guarantor under Sections 3.3 and 3.4 shall survive any such
termination.

                                       17
<PAGE>   21

                                  ARTICLE VIII
                                  MISCELLANEOUS

SECTION 8.1       Successors and Assigns

         All guarantees and agreements contained in this Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation,
amalgamation or merger or conveyance, transfer or lease involving the Guarantor
that is permitted under Article VII of the Indenture and pursuant to which the
assignee agrees in writing to perform the Guarantor's obligations hereunder, the
Guarantor shall not assign its obligations hereunder.

SECTION 8.2       Amendments

         Except with respect to any changes that do not adversely affect the
rights of Holders in any material respect (in which case no consent of Holders
will be required), this Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation preference of the Preferred
Securities. The provisions of Article VI of the Trust Agreement concerning
meetings of Holders apply to the giving of such approval.

SECTION 8.3       Notices

         Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by first class mail, as
follows:

         (a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address or facsimile number set forth below (or such other address or
facsimile number as the Guarantee Trustee may give notice of to the Guarantor
and the Holders):

                  First Union National Bank
                  Corporate Trust Group
                  5847 San Felipe, Suite 1050
                  Houston, Texas 77057

                  Attention: [__]
                  Facsimile No.: (713)278-4329

         (b) If given to the Guarantor, at the Guarantor's mailing address or
facsimile number set forth below (or such other address or facsimile number as
the Guarantor may give notice of to the Guarantee Trustee and the Holders):

                  Phelps Dodge Corporation
                  2600 North Central Avenue
                  Phoenix, Arizona 85004-3089

                                       18
<PAGE>   22

                  Attn: General Counsel
                  Facsimile No.: (602) 234-8050

         (c) If given to the Trust, at the Trust's (and the Guarantee Trustee's)
address or facsimile number set forth below or such other address or facsimile
number as the Trust or the Guarantee Trustee may give notice to the Guarantee
Trustee (if given by the Trust) and the Holders:

                  PD Capital Trust [I] [II]
                  [__]

                  Attn: [__]
                  Facsimile No.: [__]

         with a copy to:

                  First Union National Bank
                  Corporate Trust Group
                  5847 San Felipe, Suite 1050
                  Houston, Texas 77057

                  Attention: [__]
                  Facsimile No.: (713)278-4329

         (d) If given to any Holder, at the address set forth on the books and
records of the Trust.

         All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

SECTION 8.4       Benefit

         This Guarantee is solely for the benefit of the Holders and is not
separately transferable from the Preferred Securities.

SECTION 8.5       Governing Law

         THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.

SECTION 8.6       Submission to Jurisdiction

         The Guarantor agrees that any judicial proceedings instituted in
relation to any matter arising under this Guarantee may be brought in any United
States Federal or New York State court sitting in the Borough of Manhattan, The
City of New York, New York to the extent that such court has subject matter
jurisdiction over the controversy, and, by execution and delivery of

                                       19
<PAGE>   23

this Guarantee, the Guarantor hereby irrevocably accepts, generally and
unconditionally, the jurisdiction of the aforesaid courts, acknowledges their
competence and irrevocably agrees to be bound by any judgment rendered in such
proceeding. The Guarantor also irrevocably and unconditionally waives for the
benefit of the Guarantee Trustee and the Holders any immunity from jurisdiction
and any immunity from legal process (whether through service of notice,
attachment prior to judgment, attachment in the aid of execution, execution or
otherwise) in respect of this Guarantee. The Guarantor hereby irrevocably
designates and appoints for the benefit of the Guarantee Trustee and the Holders
for the term of this Guarantee CT Corporation, 111 8th Avenue, New York, New
York 10011, as its agent to receive on its behalf service of all process (with a
copy of all such service of process to be delivered to S. David Colton, Esq.,
Senior Vice President and General Counsel, Phelps Dodge Corporation, 2600 North
Central Avenue, Phoenix, Arizona 85004-3089) brought against it with respect to
any such proceeding in any such court in The City of New York, such service
being hereby acknowledged by the Guarantor to be effective and binding service
on it in every respect whether or not the Guarantor shall then be doing or shall
have at any time done business in New York. Such appointment shall be
irrevocable so long as any of the Preferred Securities or the obligations of the
Guarantor hereunder remain outstanding, or until the appointment of a successor
by the Guarantor and such successor's acceptance of such appointment. Upon such
acceptance, the Guarantor shall notify the Guarantee Trustee of the name and
address of such successor. The Guarantor further agrees for the benefit of the
Guarantee Trustee and the Holders to take any and all action, including the
execution and filing of any and all such documents and instruments, as may be
necessary to continue such designation and appointment of CT Corporation in full
force and effect so long as any of the Preferred Securities or the obligations
of the Guarantor hereunder shall be outstanding. The Guarantee Trustee shall not
be obligated and shall have no responsibility with respect to any failure by the
Guarantor to take any such action. Nothing herein shall affect the right to
serve process in any other manner permitted by any law or limit the right of the
Guarantee Trustee or any Holder to institute proceedings against the Guarantor
in the courts of any other jurisdiction or jurisdictions.

SECTION 8.7       Counterparts

         This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                       20
<PAGE>   24

         THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

                                          PHELPS DODGE CORPORATION

                                          By: __________________________________
                                          Name: ________________________________
                                          Title: _______________________________

                                          By: __________________________________
                                          Name: ________________________________
                                          Title: _______________________________

                                          FIRST UNION NATIONAL BANK,
                                            as Guarantee Trustee

                                          By: __________________________________
                                          Name: ________________________________
                                          Title: _______________________________

                                       21EXHIBIT 10.14

--------------------------------------------------------------------------------

                         GENTIVA HEALTH SERVICES, INC.,
                                  as Depositor

                            WILMINGTON TRUST COMPANY,
                    as Property Trustee and Delaware Trustee

                           THE ADMINISTRATIVE TRUSTEES

                                       AND

                               THE SEVERAL HOLDERS

                               -------------------

                                 Amendment No. 1

                            Dated as of June 30, 2000
                               -------------------

                                       To

                   Trust Agreement, Dated as of March 9, 2000,
               Among Gentiva Health Services, Inc., as Depositor,
                 Wilmington Trust Company, as Property Trustee,
                and Delaware Trustee, the Administrative Trustees
           named therein and the Several Holders (as defined therein)

--------------------------------------------------------------------------------

<PAGE>

                     AMENDMENT NO. 1 TO THE TRUST AGREEMENT

     AMENDMENT NO. 1 to the TRUST AGREEMENT (this "Amendment No. 1"), dated as
of June 30, 2000, among Gentiva Health Services, Inc., a Delaware corporation
(the "Company"), Wilmington Trust Company, a Delaware corporation, as Property
Trustee and Delaware Trustee (the "Trustee"), the Administrative Trustees named
in the Trust Agreement (as defined herein) (the "Administrative Trustees") and
the several Holders (as defined in the Trust Agreement).

                             RECITALS OF THE COMPANY

     WHEREAS, the Company, the Trustee and the Administrative Trustees
heretofore executed and delivered an Trust Agreement, dated as of March 9, 2000
(the "Trust Agreement") (capitalized terms used but not otherwise defined in
this Amendment No. 1 shall have the meanings ascribed to such terms in the Trust
Agreement); and

     WHEREAS, pursuant to the Trust Agreement, Gentiva Trust (the "Trust")
issued and the Trustee authenticated and delivered 400,000 Preferred Securities
and 12,371 Common Securities (collectively, the "Trust Securities"); and

     WHEREAS, the Company and the Trust desire to amend the Trust Agreement to
provide that on and after the date hereof, pursuant to the Trust Agreement, (i)
the Distribution Dates in respect of the Trust Securities will be January 15,
April 15, July 15 and October 15, commencing on July 15, 2000 and (ii) the
Distribution Dates may be modified from time to time in the future by action of
the Board of Directors of the Company, without the consent of the Holders; and

     WHEREAS, the Holders have consented to this Amendment No. 1 prior to the
date hereof in accordance with the Trust Agreement; and

     WHEREAS, pursuant to Section 11.3(c) of the Trust Agreement, the parties
hereto are entering into this Amendment No. 1 to provide that on and after the
date hereof (i) Distributions on the Trust Securities will only be on January
15, April 15, July 15 and October 15, commencing on July 15, 2000 and will
otherwise be in accordance with the Trust Agreement and (ii) the Distribution
Dates may be modified from time to time in the future by action of the Board of
Directors of the Company, without the consent of the Holders; and

<PAGE>
                                      -2-

     WHEREAS, this Amendment No. 1 has been duly authorized by all necessary
action on the part of the Trust and the Company.

     NOW, THEREFORE, the Company, the Trust and the Administrative Trustees
hereby covenant and agree with the Trustee for the equal and proportionate
benefit of all Holders of the Debentures, as follows:

     SECTION 1. Amendment of Certain Sections of Trust Agreement. Subject to the
other provisions hereof, the Trust Agreement and the Trust Securities are hereby
amended and supplemented in the following respects:

          (a) Section 4.1(a)(i) of the Trust Agreement is hereby amended by
     deleting the second sentence of such subparagraph and replacing it with the
     following:

          "Distributions will accrue from March 15, 2000, and, except in the
     event (and to the extent) that the Depositor exercises its right to defer
     the payment of interest on the Debentures pursuant to the Indenture, will
     be payable quarterly in arrears on January 15, April 15, July 15 and
     October 15 of each year, commencing on July 15, 2000."

          (b) Section 11.3(c) of the Trust Agreement is hereby amended by adding
     the following sentence to the end of such section:

          "Notwithstanding the foregoing, the Distribution Dates may be modified
     from time to time on and after the date hereof by action of the Board of
     Directors of the Company, without the consent of the Holders and with prior
     notice to the Trustee."

          (c) The Trust Securities shall be modified to reflect the foregoing.

     SECTION 2. Effect of Amendment No. 1. Upon the execution and delivery of
this Amendment No. 1 by the Company, the Trustee and the Administrative
Trustees, the Trust Agreement and the Trust Securities shall be amended in
accordance herewith, and this Amendment No. 1 shall amend and form a part of the
Trust Agreement and the Trust Securities for all purposes, and every Holder of
Trust Securities heretofore or hereafter authenticated and delivered under the
Trust Agreement shall be bound thereby.

<PAGE>
                                      -3-

     SECTION 3. Trust Agreement Remains in Full Force and Effect. Except as
amended hereby, all provisions in the Trust Agreement shall remain in full force
and effect.

     SECTION 4. Conflict with Trust Indenture Act. If any provision of this
Amendment No. 1 limits, qualifies or conflicts with any provision of Sections
310 through 317, inclusive, of the Trust Indenture Act, which provision imposes
duties on any Person, the applicable provisions of Sections 310 through 317,
inclusive, of the Trust Indenture Act shall control.

     SECTION 5. Separability Clause. In case any provision in this Amendment No.
1 shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

     SECTION 6. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.

     SECTION 7. Benefits of Amendment No. 1, Etc. Nothing in this Amendment No.
1, express or implied, shall give to any Person, other than the parties hereto
and thereto and their successors hereunder and the Holders of the Trust
Securities from time to time, any benefit or any legal or equitable right,
remedy or claim under this Amendment No. 1.

     SECTION 8. Successors and Assigns. All covenants and agreements in this
Amendment No. 1 by the Company shall bind its successors and assigns, whether so
expressed or not.

     SECTION 9. Trustee Not Responsible for Recitals. The recitals contained
herein shall be taken as the statements of the Company and the Administrative
Trustees, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Amendment No. 1.

     SECTION 10. Certain Duties and Responsibilities of the Trustee. In entering
into this Amendment No. 1, the Trustee shall be entitled to the benefit of every
provision of the Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustee, whether or not elsewhere
herein so provided.

     SECTION 11. Governing Law. This Amendment No. 1 shall be governed by and
construed in accordance with the laws of the State of Delaware.

<PAGE>
                                      -4-

     SECTION 12. Counterparts. This Amendment No. 1 may be executed in
counterparts, each of which, when so executed, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be duly executed and attested, all as of the date and year first above written.

                            Edward A. Blechschmidt,
                            as Administrative Trustee

                            By: /s/ Edward A. Blechschmidt
                                ------------------------------
                                 Name:

                            Patricia C. Ma,
                            as Administrative Trustee

                            By: /s/ Patricia C. Ma
                                ------------------------------
                                 Name:

<PAGE>
                                      -5-

                            John J. Collura,
                            as Administrative Trustee

                            By: /s/ John J. Collura
                                ------------------------------
                                 Name:

                            Gentiva Health Services, Inc.

                            By: /s/ Patricia C. Ma
                                ------------------------------
                                 Name:
                                 Title:

                            Wilmington Trust Company,
                            as Property Trustee and Delaware Trustee

                            By: /s/ Mary C. St. Amand
                                ------------------------------
                                 Name:   Mary C. St. Amand
                                 Title:  Assistant Vice President

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