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                                 Exhibit 10.12

                                  AMENDMENT TO
                         PHELPS DODGE 1998 STOCK OPTION
                           AND RESTRICTED STOCK PLAN

         WHEREAS, Phelps Dodge Corporation (the "Corporation") adopted the
Phelps Dodge 1998 Stock Option and Restricted Plan (the "Plan"); and

         WHEREAS, pursuant to Section 7 of the Plan, the Board of Directors
retained the right to amend the Plan;

         NOW, THEREFORE, the Plan is amended as follows:

1. The fourth sentence of Section 5.4 of the Plan is deleted in its entirety and
a new fourth sentence is inserted in lieu thereof, to read as follows:

         Without limiting the generality of the foregoing, the Committee may
         approve, pursuant to the foregoing sentence, provisions making
         installments exercisable (1) upon a Participant's Retirement (provided
         that, in the event that the Participant is retiring prior to his normal
         retirement date and such retirement is not determined by the Committee
         to be adverse to the Corporation, such acceleration shall be
         conditioned upon the execution by the Participant of a release in favor
         of the Corporation and its affiliates in a form acceptable to the
         Corporation), (ii) six months (or such greater or lesser period as the
         Committee shall in its discretion determine) from the date on which an
         Option is granted if such Option is granted in conjunction with the
         Participant's exercise of another Option (whether such Option is issued
         under this Plan or a Predecessor Plan) with Common Shares already owned
         by the Participant, (iii) not later than the date the Participant
         ceases to be employed by the Corporation if he ceases to be so employed
         within two years following a Change of Control of the Corporation, and
         (iv) at such time and for such period as the Committee deems
         appropriate, in the event of a Change of Control.

2. Section 6.4 of the Plan is amended to add a new sentence at the end thereof,
to read as follows:

         Notwithstanding the foregoing, if a Participant incurs a tax liability
         in respect of an award of Restricted Stock prior to the time the
         Restricted Period would otherwise lapse hereunder (other than by reason
         of the election by the Participant under the Code to be taxed at the
         time of grant), the Restricted Period shall lapse on the date such tax
         liability arises with respect to the number of whole Common Shares
         having a Fair Market Value at such time no greater than the amount
         required to satisfy all tax withholding requirements applicable thereto
         (as determined in accordance with Section 9.3 hereof). Unless the
         Committee shall instruct otherwise, the Corporation shall withhold such
         released Common Shares to satisfy such withholding obligations.
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3. The second sentence of Section 9.3 of the Plan is deleted in its entirety and
a new second sentence is inserted in lieu thereof, to read as follows:

         Subject to any required withholding of Common Shares pursuant to
         Section 6.4, the Committee may, in its discretion, permit a Participant
         to elect, subject to such conditions as the Committee shall impose, (i)
         to have Common Shares otherwise issuable or deliverable under the Plan
         withheld by the Corporation or (ii) to deliver to the Corporation
         previously acquired shares of Stock, in each case, having a Fair Market
         Value sufficient to satisfy all or part of the minimum amount of the
         Participant's total Federal, state and local tax withholding obligation
         associated with the transaction.

                  IN WITNESS WHEREOF, the Corporation has caused this Amendment
to be executed by its duly authorized officer as of the 4th day of May, 2000.

                                   PHELPS DODGE CORPORATION

                                   By:  /s/ DAVID PULATIE

                                   Title: SVP, Human Resources