Phelps Dodge Corp – ‘DEF 14A’ for 5/5/99

As of:  Wednesday, 3/31/99   ·   For:  5/5/99   ·   Accession #:  950147-99-286   ·   File #:  1-00082

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Definitive Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive N&Ps of Phelps Dodge Corporation           33    107K 

DEF 14A
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT 
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.   )

Filed by the Registrant [X]                                                     
Filed by a Party other than the Registrant [ ]                                  

Check the appropriate box:                                                      
[ ]  Preliminary Proxy Statement             [ ]  Confidential, For Use of the  
[X]  Definitive Proxy Statement                   Commission Only (as permitted 
[ ]  Definitive Additional Materials              by Rule 14a-6(e)(2))          
[ ]  Soliciting Material Pursuant to                                            
Rule 14a-11(c) or Rule 14a-12                                         

PHELPS DODGE CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              
[X]  No fee required.                                                           
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.   

--------------------------------------------------------------------------------
1)   Title of each class of securities to which transaction applies:            

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2)   Aggregate number of securities to which transaction applies:               

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3)   Per unit price or other underlying value of transaction  computed  pursuant
     to Exchange  Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):                          

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4)   Proposed maximum aggregate value of transaction:                           

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5)  Total fee paid:                                                             
[  ] Fee paid previously with preliminary materials:                    
   [  ] Check box if any part of the fee is offset as provided by Exchange Act
        Rule  0-11(a)(2)  and identify the filing for which the offsetting fee
        was paid  previously.  Identify  the previous  filing by  registration
       statement number, or the form or schedule and the date of its filing.

1)   Amount previously paid:                                  
                                    ------------------------------------------
2)   Form, Schedule or Registration Statement No.:            
                                                          --------------------
3)   Filing Party:                                            
                          ----------------------------------------------------
4)   Date Filed:                                              
                        ------------------------------------------------------

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NOTICE OF                                                                       

ANNUAL MEETING                                                                  

OF SHAREHOLDERS                                                                 

AND PROXY STATEMENT                                                             

May 5, 1999                                                                     

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PHELPS                                                                          
DODGE CORPORATION                                                               

                          2600 North Central Avenue, Phoenix, Arizona 85004-3014
--------------------------------------------------------------------------------

Douglas C. Yearley                                                              
Chairman of the Board                                                           
and Chief Executive Officer                                                     

                                                                   April 1, 1999

Dear Shareholder:                                                               

     You are cordially  invited to attend our annual meeting of  shareholders to
be held at 11:30 a.m. (MST) on Wednesday,  May 5, 1999, at the Arizona  Biltmore
Hotel,  24th Street and Missouri Avenue,  Phoenix,  Arizona.  Enclosed with this
proxy statement are your proxy card and the 1998 annual report.                 

     Your vote is  important.  Whether you plan to attend or not,  please  sign,
date,  and return the enclosed proxy card in the envelope  provided,  or you may
access the automated  telephone  voting feature which is described on your proxy
card. If you plan to attend the meeting you may vote in person.                 

     Registration  and seating will begin at 10:30 a.m. Each shareholder will be
asked to sign an  admittance  card and may be asked to  present a valid  picture
identification.  Shareholders holding stock in brokerage accounts ("street name"
holders)  will need to bring a copy of a brokerage  statement  reflecting  stock
ownership as of the March 17 record date.  Cameras,  recording devices and other
electronic devices will not be permitted at the meeting.                        

     Last year, 83% of our outstanding  shares were  represented in person or by
proxy, and we hope to increase our shareholder participation this year.         

  Sincerely,

      /s/ D C Yearly

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS      

TO THE SHAREHOLDERS OF PHELPS DODGE CORPORATION:                                

     The annual meeting of shareholders of Phelps Dodge Corporation will be held
at the  Arizona  Biltmore  Hotel,  24th  Street and  Missouri  Avenue,  Phoenix,
Arizona,  on Wednesday,  May 5, 1999, at 11:30 a.m., to consider and take action
on the following:                                                               

1.   Elect four directors;                                  

          2.   Ratify  the   appointment   of   PricewaterhouseCoopers   LLP  as
               independent  accountants  for the  Corporation for the year 1999;
and                                               

          3.   Transact any other  business that may properly be brought  before
the annual meeting.                               

     Only holders of record of the  Corporation's  common shares at the close of
business  on March 17,  1999,  will be entitled to vote at the meeting or at any
adjournments of our annual meeting.  On March 17, 1999 we had 57,932,634  common
shares outstanding.                                                             

     If  you  participate  in  the  ChaseMellon  Shareholder  Services  Investor
Services  Program  for  Phelps  Dodge  Shareholders,  administered  by The Chase
Manhattan  Bank, all common shares held for your account under that service will
be voted in accordance with your proxy.                                         

     Proxies are solicited by the Board of Directors.  You may revoke your proxy
before it is voted at the  annual  meeting  by  delivering  a signed  revocation
letter or new proxy,  dated later than your first proxy, to Robert C. Swan, Vice
President and Secretary.                                                        

     Shareholders who do not expect to attend the meeting in person are asked to
access the automated  telephone  voting  feature  described on the proxy card or
date,  sign and complete the enclosed  proxy and return it without  delay in the
enclosed  envelope,  which  requires  no  postage  stamp if mailed in the United
States.  If you are  attending in person and if you have mailed your proxy card,
you may revoke your proxy and vote in person at the meeting.                    

     This proxy  statement  and  accompanying  materials are being first sent to
shareholders on April 1, 1999.                                                  

                           By order of the Board of Directors,
                        Robert C. Swan
                          Vice President and Secretary

Phoenix, Arizona                                                                
April 1, 1999                                                                   

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1. ELECTION OF DIRECTORS  
BOARD STRUCTURE                                                                 

The Corporation currently has twelve directors. Eleven directors are divided    
into three classes: four in Class I, four in Class II, and three in Class III.  
Mr. Dunham's election to the Board became effective on November 4, 1998 and he  
is a nominee for Class II. The terms of office of the Class II directors expire 
at the 1999 annual meeting of shareholders. Mr. Paul W. Douglas, a Class II     
director, will retire on May 5, 1999 in accordance with the Corporation's policy
on retirement of directors.                                                     

ELECTION OF DIRECTORS                                                           

The four nominees for election as Class II directors are listed below. If       
elected, the nominees will serve for a term of three years and until their      
successors are elected and qualify. Unless you direct us on the proxy card to   
vote differently, we will vote signed, returned proxies FOR the election of such
nominees. If for any reason any nominee cannot or will not serve as a director, 
we may vote such proxies for the election of a substitute nominee designated by 
the Board of Directors.                                                         

NOMINEES                                                                        

A nominee must receive a plurality of the votes cast at the annual meeting to be
elected. Abstentions and broker non-votes therefore have no effect on the       
election of directors.                                                          

  AGE, PRINCIPAL OCCUPATION,
                                BUSINESS EXPERIENCE                     DIRECTOR
    NOMINEE               AND OTHER DIRECTORSHIPS HELD                   SINCE
    -------               ----------------------------                   -----
Archie W. Dunham      Mr. Dunham has been President and Chief              1998 
(Class II)            Executive Officer of Conoco, Inc. (integrated             
      energy company) since January 1996. He was
         an Executive Vice President of E.I. duPont de
       Nemours and Company (chemical materials and
          energy company), Conoco's parent, from 1995 to
        October 1998. He was a Senior Vice President
       -- DuPont Polymers and DuPont Chemicals and
        Pigments from 1987 to 1992, and an Executive
       Vice President -- Exploration Production of
     Conoco from 1992 to 1995. Mr. Dunham is a
  director of E.I. duPont de Nemours and
       Company, Conoco, Inc. and Louisiana Pacific
Corporation. Age 60.                

William A. Franke     Mr. Franke has been Chairman and Chief Executive     1980 
(Class II)            Officer of America West Holdings Corporation              
            since February 1997 and Chairman of the Board of
            its principal subsidiary, America West Airlines,
         Inc. (airline carrier) since 1992. He was the
     subsidiary's Chief Executive Officer from
      December 1993 until February 1997, and its
           President from May 1996 until February 1997. He
         has been President of Franke & Company, Inc.,
       Phoenix, Arizona, an investment firm, since
           1987. He is a director of America West Holdings
     Corporation, America West Airlines, Inc.,
            Central Newspapers, Inc., Beringer Wine Estates,
          Mtel Latin America, Inc., AerFi Group Plc, and
             the Air Transport Association of America. Age 62.

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  AGE, PRINCIPAL OCCUPATION,
                               BUSINESS EXPERIENCE                      DIRECTOR
    NOMINEE               AND OTHER DIRECTORSHIPS HELD                   SINCE
    -------               ----------------------------                   -----
Southwood J.          Mr. Morcott has been Chairman of the Board of        1991 
Morcott               Dana Corporation (manufacturer and distributor            
(Class II)            of automotive and vehicular parts) since 1990.            
       From 1987 to 1995, he served as Chairman of
          Hayes-Dana Inc. He was Chief Executive Officer
        of Dana Corporation from 1989 until February
       1999, and Chief Operating Officer from 1986
        until January 1997. He was President of Dana
           Corporation from 1986 to 1995. Mr. Morcott is a
         director of Dana Corporation, CSX Corporation
and Johnson Controls, Inc. Age 61.  

J. Steven Whisler     Mr. Whisler has been President and Chief             1995 
(Class II)            Operating Officer of the Corporation since                
        December 1997, and President of Phelps Dodge
          Mining Company, a division of the Corporation,
           from 1991 to October 1998. He was a Senior Vice
     President of the Corporation from 1988 to
   December 1997 and Vice President of the
            Corporation from 1987 until 1988. He was General
            Counsel of the Corporation from 1987 until 1991.
            He is a director of Burlington Northern Santa Fe
Corporation and Southern Peru Copper
Corporation. Age 44.                

CONTINUING DIRECTORS                                                            

The seven directors whose terms will continue after the annual meeting and will 
expire at the 2000 annual meeting (Class III) or the 2001 annual meeting (Class 
I) are listed below.                                                            

  AGE, PRINCIPAL OCCUPATION,
                                BUSINESS EXPERIENCE                     DIRECTOR
 NOMINEE                 AND OTHER DIRECTORSHIPS HELD                  SINCE
 -------                 ----------------------------                  -----
Robert N. Burt     Mr. Burt has been Chairman of the Board and            1993  
(Class III)        Chief Executive Officer of FMC Corporation                   
(chemicals and machinery for industry,    
    agriculture and government) since 1991. He was
    President from 1990 to 1993 and Executive Vice
    President from 1988 to 1990. From 1989 to 1991
    he was Chairman and Chief Executive Officer of
FMC Gold Company. He is a director of FMC 
     Corporation and Warner-Lambert Company. Age 61.

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      AGE, PRINCIPAL OCCUPATION,
                                 BUSINESS EXPERIENCE                    DIRECTOR
    NOMINEE                 AND OTHER DIRECTORSHIPS HELD                 SINCE
    -------                 ----------------------------                 -----

Robert D. Krebs        Mr. Krebs has been Chairman, President and          1987 
(Class III)            Chief Executive Officer of Burlington Northern           
               Santa Fe Corporation (transportation) since April
        1997. From September 1995 to April 1997 he
          was President and Chief Executive Officer of
            Burlington Northern Santa Fe Corporation. From
         June 1988 to January 1998, he was Chairman,
   President and CEO of Santa Fe Pacific
         Corporation. He is a director of Burlington
    Northern Santa Fe Corporation. Age 56.

Douglas C. Yearley     Mr. Yearley has been Chairman of the Board and      1986 
(Class III)            Chief Executive Officer of the Corporation since         
                 1989 and was President of the Corporation from 1991
             until December 1997. He was President of Phelps
              Dodge Industries, a division of the Corporation,
            from 1988 until 1990, Executive Vice President
         of the Corporation from 1987 until 1989 and
           Senior Vice President of the Corporation from
          1982 through 1986. He is a director of J. P.
          Morgan & Co., Incorporated and its principal
       banking subsidiary, Morgan Guaranty Trust
  Company of New York, Lockheed Martin
            Corporation, USX Corporation and Southern Peru
Copper Corporation. Age 63.       

Paul Hazen             Mr. Hazen has been Chairman of Wells Fargo &        1988 
(Class I)              Co. since November 1998. He was Chairman                 
          and Chief Executive Officer of Wells Fargo &
           Co., San Francisco (bank holding company) and
         of Wells Fargo Bank, N.A. (national banking
           association) from January 1995 until November
         1998. He was President of Wells Fargo & Co.
        and of Wells Fargo Bank, N.A. from 1984 to
          1994. He is a director of Wells Fargo & Co.,
        AirTouch Communications, Inc. and Safeway,
Inc. Age 57.                      

Manuel J. Iraola       Mr. Iraola has been President of Phelps Dodge       1997 
(Class I)              Industries, a division of the Corporation, since         
      1995, and a Senior Vice President of the
             Corporation since 1995. From 1992 until 1995 he
         was President of Phelps Dodge International
           Corporation, and he was Senior Vice President
      and Chief Financial Officer of Columbian
    Chemicals Company, a subsidiary of the
        Corporation, from 1986 until 1992. Age 51.

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AGE, PRINCIPAL OCCUPATION,
                               BUSINESS EXPERIENCE                      DIRECTOR
   NOMINEE               AND OTHER DIRECTORSHIPS HELD                    SINCE
   -------               ----------------------------                    -----
Marie L. Knowles     Mrs. Knowles has been Executive Vice President        1994 
(Class I)            and Chief Financial Officer of Atlantic                    
        Richfield Company (diversified energy company)
         since 1996. From 1993 until 1996 she was Senior
       Vice President of Atlantic Richfield Company,
         and President of ARCO Transportation Company, a
          former subsidiary of Atlantic Richfield Company.
      From 1990 to 1993 she was Vice President and
        Controller of Atlantic Richfield Company. Mrs.
         Knowles is a director of Vastar Resources, Inc.
Age 52.                               

Gordon R. Parker     Mr. Parker was Chairman of Newmont Mining             1995 
(Class I)            Corporation from 1986 until his retirement in              
        1994. He was Chief Executive Officer from 1985
 until 1993. Mr. Parker is a director of
         Caterpillar, Inc., Gold Fields of South Africa,
         Gold Fields Limited and The Williams Companies,
Inc. Age 63.                          

BOARD MEETINGS                                                                  

The Board of Directors met nine times during 1998. Various committees of the    
Board also met during the year. Average attendance at all Board and committee   
meetings was 91%.                                                               

BOARD COMMITTEES                                                                

THE AUDIT COMMITTEE is comprised of Messrs. Douglas, Dunham (appointed February 
3, 1999), Franke, Hazen (Chairman), (Mrs.) Knowles, and Krebs. The Committee,   
which met four times during 1998, generally performs the following functions:   

*    Recommends the appointment of the Corporation's independent      
         accountants and reviews the scope and timing of their audit plans and
the appropriateness of their fees;                          

*    Reviews the scope and results of internal audit activity;        

*    Reviews internal audit policies and procedures and financial and 
accounting controls;                                        

  *    Reviews reports, recommendations, and opinions prepared or given by
      the independent accountants concerning the Corporation's financial
          statements, financial and accounting personnel, and internal controls,
and implements such recommendations as appropriate; and     

*    Reviews the Corporation's code of business ethics and policies.  

THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE, comprised of Messrs.     
Burt, Douglas, Dunham (appointed February 3, 1999), Hazen and Morcott           
(Chairman), met five times during 1998. The Committee performs the following    
functions:                                                                      

 *    Reviews and approves the compensation for the Corporation's senior
officers;                                                   

*    Reviews management recommendations concerning the compensation of
other officers and key personnel;                           

*    Reviews the Corporation's program for management development; and

*    Reviews and approves incentive compensation awards, stock option 
grants and awards of restricted stock.                      

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THE COMMITTEE ON DIRECTORS is comprised of Messrs. Franke, Krebs (Chairman),    
Morcott, and Parker. The Committee, which met twice during 1998, performs the   
following functions:                                                            

    *    Makes recommendations concerning the composition of the Board and its
committees, and reviews director compensation; and          

*    Reviews the qualifications of potential director candidates and  
recommends to the Board nominees for election as directors. 

The Committee on Directors will consider potential nominees recommended by      
shareholders. Recommendations should be sent to the Secretary of the Corporation
and should include the address and a brief description of the qualifications of 
the individual recommended.                                                     

THE ENVIRONMENTAL, HEALTH AND SAFETY COMMITTEE, comprised of Messrs. Burt       
(Chairman), Douglas, (Mrs.) Knowles and Morcott, met three times in 1998. The   
Committee generally performs the following functions:                           

    *    Reviews the Corporation's environmental, health, and safety policies;

*    Reviews management's implementation of these policies; and       

    *    Makes reports and recommendations to the Board concerning the results
of its reviews.                                             

THE FINANCE COMMITTEE is comprised of Messrs. Franke, (Chairman), Hazen, Parker 
and Yearley. The Committee, which met four times during 1998, is responsible    
for:                                                                            

*    Reviewing the financial affairs of the Corporation and its       
subsidiaries;                                               

*    Recommending to the Board financial policies and actions to      
      accommodate the Corporation's goals and operating strategies while
maintaining a sound financial condition; and                

   *    Reviewing the funding and management of assets for retirement income
plans of the Corporation and its subsidiaries.              

DIRECTORS STOCK OWNERSHIP POLICY                                                

The Board of Directors has adopted a policy that each director, within three    
years of his or her election, shall own a total of not less than 2,000 common   
shares of the Corporation. Stock units granted to a director under the          
Corporation's Directors Stock Unit Plan or the Deferred Compensation Plan apply 
toward attainment of the requirement.                                           

BOARD COMPENSATION                                                              

RETAINER AND FEES                                                               

Directors who are not salaried employees of the Corporation ("non-employee      
directors") receive the following annual compensation for their Board service:  

ANNUAL RETAINER:   $25,000                                    

ATTENDANCE FEES:   $1,000 for each Board meeting              
               $1,000 for each Board Committee meeting
      Expenses related to attendance

ANNUAL COMMITTEE                                              
CHAIR STIPEND:     $3,000                                     

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SHARES OF STOCK:                                                                

The foregoing retainer and fees, at the election of the director, may be        
received in common shares in lieu of cash.                                      

STOCK UNITS:       450 units                                

DIRECTORS STOCK UNIT PLAN                                                       

In order to encourage increased stock ownership, the Board of Directors adopted 
the Directors Stock Unit Plan. Pursuant to that Plan each non-employee director 
receives an annual grant of 450 stock units having a value equal to 450 of the  
Corporation's common shares. While stock units do not confer on a director the  
right to vote, each stock unit is credited on each dividend payment date with   
stock units equal to the applicable dividend payable on the Corporation's common
shares. Upon termination of service as a director, the director is entitled to  
payment of his or her accumulated stock units in an equivalent number of the    
Corporation's common shares or in cash.                                         

DIRECTORS DEFERRED COMPENSATION PLAN                                            

Directors may defer payment of retainer and/or meeting fees to future years and 
may elect to have such deferred compensation                                    

*    receive interest at prevailing market rates                      

*    invested in the Corporation's common shares, or                  

   *    invested in one of several mutual funds designated for that purpose.

EXPENSES AND BENEFITS                                                           

All directors are reimbursed for travel and other related expenses incurred in  
attending shareholder, Board and committee meetings. The Corporation also       
provides non-employee directors with life insurance benefits and allows them to 
participate in its Matching Gifts Program by matching gifts from directors to   
qualified organizations up to a total of $10,000 per year.                      

DIRECTORS AND OFFICERS LIABILITY INSURANCE                                      

On June 1, 1997, the Corporation extended its directors' and officers' liability
insurance policies and its pension trust liability policies (placed on three    
year terms) issued by National Union Fire Insurance Company of Pittsburgh, Pa., 
Executive Risk Indemnity Inc., Continental Casualty Company, Federal Insurance  
Company and XL Insurance Company, each for an additional annual term ending June
1, 2000, at additional premiums of $619,000, $132,000, $115,000, $49,000 and    
$66,000, respectively. The policies insure (i) directors, officers, division    
presidents and vice presidents of the Corporation and its subsidiaries, and     
employees who are fiduciaries of employee benefit plans of the Corporation and  
its subsidiaries, against certain liabilities they may incur in the performance 
of their duties and (ii) the Corporation against any obligation to indemnify    
such persons against such liabilities, and (iii) the Corporation for allegations
related to securities claims. On November 1, 1998, the Corporation extended     
those policies to expire on June 1, 2001 at additional premiums of $456,666,    
$132,000, $115,000, $49,000 and $66,000, respectively.                          

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

The following directors served on the Compensation and Management Development   
Committee during all of 1998: Messrs. Burt, Douglas, Hazen and Morcott          
(Chairman). None of these directors is or has been an officer or employee of the
Corporation or any of its subsidiaries or has had any other relationship with   
the Corporation or any of its subsidiaries requiring disclosure under the       
applicable rules of the Securities and Exchange Commission.                     

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SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS                             

The following table lists the common share ownership as of February 1, 1999 for 
our directors and the five named executive officers. "Beneficial Ownership"     
includes shares a director or officer has the power to vote or transfer, and    
stock options that were exercisable on February 1, 1999 or within 60 days       
thereafter. On February 1, 1999, the directors and the five named executive     
officers of the Corporation owned, in the aggregate, 1,259,453 shares of the    
Corporation's common stock (approximately 2.2 percent of the shares             
outstanding). The Corporation's directors also have interests in stock-based    
units under Corporation plans. While these units may not be voted or            
transferred, they are listed in the table below because they represent a        
component of the total economic interest of our directors in the Corporation's  
stock.                                                                          

                     OPTIONS
         SHARES      EXERCISABLE
NAME OF                  BENEFICIALLY     WITHIN      STOCK           
BENEFICIAL OWNER                 OWNED        60 DAYS     UNITS(1)      TOTAL   
----------------                 -----        -------     --------      -----   
Robert N. Burt                   2,218          3,061      1,674         6,953  
Archie W. Dunham                 1,000              0        450         1,450  
William A. Franke                2,000          8,801      2,330        13,131  
Paul Hazen                       3,000          8,801      5,071(2)     16,872  
Manuel J. Iraola                44,801(3)     114,580          0       159,381  
Marie L. Knowles                 1,000          1,913      1,445         4,358  
Robert D. Krebs                  1,962          7,653      1,974        11,589  
Southwood J. Morcott             1,866          5,357      4,640(2)     11,863  
Gordon R. Parker                 1,000          1,913      1,572         4,485  
Thomas M. St. Clair             20,606        122,051          0       142,657  
Timothy R. Snider                8,107         32,047          0        40,154  
J. Steven Whisler               83,994(3)     199,325          0       283,319  
Douglas C. Yearley             113,078        450,163          0       563,241  
Directors and named executive                                                   
officers as a group           284,632        955,665     19,156     1,259,453 

----------                                                                      

(1)  Represents stock units awarded under the Directors Stock Unit Plan.        

(2)  Includes stock units awarded under the Directors Deferred Compensation     
Plan.                                                                 

(3)  Includes the following shares of restricted stock awarded under the 1993   
    Stock Option and Restricted Stock Plan: Mr. Iraola, 25,000 shares, and Mr.
Whisler, 25,000 shares.                                               

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 

Based on a review of reports filed by our directors, executive officers and     
beneficial holders of 10% or more of our outstanding shares, and upon           
representations from those persons, all reports required to be filed by our     
reporting persons during 1998 were filed on time.                               

To the knowledge of the Corporation, the following entities beneficially owned  
in excess of five percent of the Corporation's common shares as of December 31, 
1998:                                                                           

                                                      NUMBER OF     PERCENT OF
       NAME AND ADDRESS                                 SHARES       OUTSTANDING
       ----------------                                 ------       -----------

Capital Research and Management Company(a)             5,966,300       10.3 %   
333 South Hope Street                                                           
Los Angeles, CA 90071                                                           

Wellington Management Company, LLP(b) and              4,004,000        6.91%   
Vanguard Wellington Fund, Inc.                                                  
75 State Street                                                                 
Boston, MA 02109                                                                

AMVESCAP PLC; AVZ, Inc.; AIM Management Group, Inc.;   5,225,278        8.91%   
AMVESCAP Group Services, Inc.; INVESCO, Inc.;                                   
INVESCO North American Holdings, Inc.; and                                      
INVESCO Capital Management, Inc.(c)                                             
11 Devonshire Square                                                            
London, EC2M 4YR England                                                        

----------                                                                      
(a)  A report on Schedule 13G, dated December 9, 1998, disclosed that this      
     entity, as a registered investment advisor, had sole dispositive power over
   5,966,300 shares which represented 10.3% of the outstanding common shares
at December 31, 1998.                                                 

(b)  Wellington Management Company LLP filed a report on Schedule 13G, dated    
     December 31, 1998, which disclosed that, as a registered investment advisor
     and a parent holding company, it had shared voting power over 84,800 shares
     and shared dispositive power over 4,004,000 shares (including the 3,804,900
    shares held by Vanguard Wellington Fund described below) which represented
    6.91% of the outstanding common shares at December 31, 1998. On a separate
Schedule 13G, dated February 10, 1999, the Vanguard Wellington Fund   
   disclosed that it had sole voting power and shared dispositive power over
   3,804,900 shares which represented 6.57% of the outstanding common shares
   at December 31, 1998. Wellington Management is the investment advisor for
   the Vanguard Wellington Fund and shares dispositive power over the shares
held by the Fund. The address of the Vanguard Wellington Fund is 100  
Vanguard Boulevard, Malvern, PA 19355.                                

(c)  A report on Schedule 13G, dated February 10, 1999, disclosed that these    
  entities, filing jointly as parent holding companies and as a registered
  investment advisor (INVESCO Capital Management, Inc.), had shared voting
 power over 5,225,278 shares and shared dispositive power over 5,225,278
     shares which represented 8.91% of the outstanding common shares at December
31, 1998.                                                             

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

The following table summarizes the compensation we paid our Chairman and Chief  
Executive Officer and each of the four other most highly compensated executive  
officers in 1998, 1997 and 1996.                                                

Summary Compensation Table  

                                                        [Enlarge/Download Table]

                                                                  Long-Term                   
                                   Annual Compensation           Compensation                 
                               --------------------------   ---------------------             
                                                    Other                              All    
         Name                                      Annual   Restricted                Other   
         and                    Base               Compen-     Stock     Options     Compen-  
      Principal                Salary     Bonus    sation     Awards     Granted     sation(4)
       Position          Year    ($)     ($)(1)    ($)(2)       ($)        (#)         ($)    
     ----------          ----  -------   -------   -------  ----------  ---------    -------  
                                                                                              
Douglas C. Yearley       1998  800,000   440,000   136,262      -0-      100,000      151,246 
Chairman of the Board,   1997  750,000   860,300   152,248      -0-      242,660(3)   125,765 
Chief Executive          1996  675,000   675,000    56,172      -0-      103,601(3)   109,465 
Officer and Director                                                                          

J. Steven Whisler        1998  480,000   240,000    13,240      -0-       80,000       50,110 
President and Chief      1997  400,000   309,900    18,349      -0-      121,960(3)    43,602 
Operating Officer;       1996  355,000   300,000    14,793      -0-       44,499(3)    38,489 
and Director                                                                                  

Manuel J. Iraola         1998  390,000   340,000    64,057      -0-       52,414(3)    48,031 
Senior Vice President;   1997  360,000   247,800    22,064      -0-       36,933(3)    41,604 
President, PDI           1996  320,000   280,000    17,216      -0-       30,000       36,650 
and Director                                                                                  

Thomas M. St. Clair      1998  310,000   118,000     7,475      -0-          -0-       68,163 
Senior Vice              1997  300,000   239,400     7,993      -0-       39,516(3)    53,968 
President and            1996  290,000   188,900    12,589      -0-       53,572(3)    50,915 
Chief Financial Officer                                                                       

Timothy R. Snider(5)     1998  285,000   100,000     7,138      -0-       55,000       28,888 
Senior Vice President;                                                                        
President, PDMC                                                                               

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(1)  Amounts shown under "Bonus" were paid under the Annual Incentive           
  Compensation Plan. Amounts shown under "Base Salary" and "Bonus" include
any salary or bonus deferred by the executive under the Phelps Dodge  
     Employee Savings Plan (the "Savings Plan") and the Phelps Dodge Corporation
Supplemental Savings Plan (the "Supplemental Savings Plan").          

(2)  Amounts shown under "Other Annual Compensation" include tax payment        
    reimbursements for all reported executives, and spousal travel expenses of
$24,543 for one executive officer and $55,324 for another executive   
officer.                                                              

(3)  The option grants denoted by "(3)" include reload options, as well as      
normal compensatory options. See Stock Options below.                 

(4)  Amounts shown include the following contributions and accruals by the      
Corporation for 1998 to the Savings Plan and 1998 accruals under the  
Supplemental Savings Plan, and for premium payments for life insurance
    policies issued through the Executive Life Insurance Plan for the reported
executives:                                                           

                                               Executive
              Employee     Supplemental       Life
                  Savings       Savings        Insurance
Name               Plan           Plan           Plan   
----               ----           ----           ----   
Douglas C. Yearley       20,500         59,000         71,746         
J. Steven Whisler        20,500         24,000          5,402         
Manuel J. Iraola         20,500         20,000          7,531         
Thomas M. St. Clair      20,500         14,000         33,628         
Timothy R. Snider        19,333          4,910          4,645         

     Amounts listed for Messrs. Whisler and St. Clair also include $208 and $35,
respectively, which is imputed income to each such officer on life    
    insurance policies for which the Corporation has the sole right to receive
any amounts payable with respect to the cash surrender value.         

(5)  Effective October 1, 1998, Mr. Snider was elected a Senior Vice President  
of the Corporation, and President of Phelps Dodge Mining Company.     

STOCK OPTIONS                                                                   

Each of the executives listed in the Summary Compensation Table was eligible to 
receive two types of option grants during 1998: normal option grants and reload 
option grants. The first type of grant is a compensatory award normally made on 
an annual basis which is intended to reward each named executive based on the   
Corporation's future performance. Normal option grants customarily include the  
right to receive reload options.                                                

A reload option is granted to an employee who exercises an option with          
already-owned shares. It replaces the opportunity for future appreciation that  
the employee would otherwise lose by exercising the original option, while      
encouraging the employee to increase his share ownership. Reload options provide
only limited incremental value to the employee as compared to the options they  
replace. Reload option grants customarily include the right to receive          
additional reload options.                                                      

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The following table contains information with respect to the normal compensatory
option grants and reload option grants made to each named executive during 1998 
and the hypothetical value at the time of grant based on a variation of the     
Black-Scholes model (see footnote (3) on page 12). The Corporation is not aware 
of any option pricing model which can provide a true assessment of the value of 
the options. Over their lives, the options could have a greater or a lesser     
value than that shown in the table, and under some circumstances they could have
zero value.                                                                     

Option Grants in 1998 

                                                        [Enlarge/Download Table]

                               Normal       % of Total                                            
                             and Reload   Options Granted                                         
                               Options      to Employees    Exercise  Expiration    Grant Date    
      Name                    Granted(1)     In 1998(2)      Price       Date     Present Value(3)
      ----                    ----------     ----------      -----       ----     ----------------
                                                                                                  
Douglas C. Yearley   Normal   100,000          9.30        $55.2500     12/2/08     $1,096,000    

J. Steven Whisler    Normal    80,000          7.43         55.2500     12/2/08        876,800    

Manuel J. Iraola     Reload     4,204                       66.5000     12/2/02         27,536    
                     Reload     3,210                       66.5000     12/1/03         21,026    
                     Normal    45,000          4.87         55.2500     12/2/08        493,200    

Thomas M. St. Clair               -0-           -0-(4)                                            

Timothy R. Snider    Normal    15,000                       46.5313      9/2/08        128,250    
                     Normal    40,000          5.11         55.2500     12/2/08        438,400    

----------                                                                      
(1)  Normal options expire no later than the tenth anniversary of the date of   
    grant, plus one day. If an employee retires on his normal retirement date,
 or retires early under any pension or retirement plan maintained by the
   Corporation or any subsidiary, or dies, his exercisable options terminate
no later than the fifth anniversary of his retirement or death. If an 
  optionee's employment terminates for any reason other than retirement or
  death, his exercisable options terminate no later than 30 days following
the termination of his employment.                                    

    Normal options generally become exercisable in three or four substantially
     equal annual installments beginning on the first anniversary of the date of
grant or earlier as the Committee in its discretion may determine. The
   Committee may also approve provisions making installments exercisable (a)
   upon the employee's retirement, (b) six months from the date an option is
granted if it is the result of a previous exercise in which pre-owned 
     shares were used in payment of the exercise, and (c) as the Committee deems
  appropriate in a change of control of the Corporation but not later than
two years after the employee ceases employment.                       

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Options include the right to receive reload options in the event the  
optionee exercises an option with already-owned shares. Reload options
contain the same expiration dates and other terms as the options they 
     replace except that they have an exercise price per share equal to the fair
     market value of a common share on the date the reload option is granted and
become exercisable in full six months after they are granted. Reload  
     options customarily include the right to receive additional reload options.

(2)  Illustrates the total number of normal and reload options granted as a     
   percent of the aggregate number of 1998 normal options (1,053,800 shares)
and 1998 reload options (21,984 shares) granted to all employees.     

(3)  The hypothetical present value of the options at the date of grant was     
     determined using a variation of the Black-Scholes option pricing model. The
   Black-Scholes model is a complicated mathematical formula which is widely
 used to value options traded on the stock exchanges. However, executive
    stock options differ from exchange-traded options in several key respects.
  Executive options are long-term, non-transferable and subject to vesting
 restrictions, whereas exchange-traded options are short-term and can be
  exercised or sold immediately in a liquid market. The model used here is
    adapted to estimate the present value of an executive option and considers
a number of factors, including the grant price of the option, the     
    volatility of the Corporation's common shares, the dividend rate, the term
of the option, the time it is expected to be outstanding and interest 
rates. The Black-Scholes values were derived using as assumptions the 
 following financial factors which existed at or about the time that the
 options were granted: volatility of .2894, dividend yield of 2.98%, and
    interest rates of 4.368% for normal options and 5.420% for reload options.
    In view of the Corporation's historic exercise experience and the inherent
   motivation to exercise options early in their terms because of the reload
 option feature, normal options were assumed to be outstanding for three
years at time of exercise and reload options for one year. No downward
    adjustments were made to the resulting grant-date option values to account
     for potential forfeiture or non-transferability of the options in question.
     Because the Black-Scholes model was not developed for executive options and
    requires the use of assumptions primarily based on conditions in effect at
     the time of grant (and not over the term of the option), it provides only a
theoretical estimate of the value of these options.                   

(4)  Mr. St. Clair has announced his retirement effective June 1, 1999.         

Reload option grants are part of the Corporation's overall program to increase  
the number of common shares owned by its executive officers and other key       
employees. Traditional option programs generally do not encourage optionees to  
exercise options prior to the end of their term or to hold the shares received  
upon such exercise. The Compensation and Management Development Committee       
adopted the reload option program, with shareholder approval, to encourage      
option exercises and stock retention by permitting an optionee to exercise an   
option with already-owned common shares and to be restored to the same economic 
opportunity available immediately prior to such exercise.                       

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Under the reload program, an employee who exercises an option (the "Original    
Option") with already-owned shares prior to the end of the option term will     
receive an additional option (the "Reload Option") covering a number of shares  
equal to the number used to exercise the Original Option. The Reload Option will
be exercisable, beginning six months after grant and continuing for the         
remaining term of the Original Option, at a price equal to the fair market value
of the shares on the date the Original Option is exercised. As a result of the  
exercise of the Original Option with already-owned shares, the net number of    
common shares held by the employee will increase by the number of shares that   
has an aggregate market value equal to the "spread" on the option (the "spread" 
equals the aggregate market price of the option shares on the day of exercise   
less the aggregate exercise price). Thus, the number of shares covered by the   
Reload Option plus the number of additional shares received on the exercise of  
the Original Option will equal the number of shares covered by the Original     
Option. The program thereby serves to replace the opportunity for future        
appreciation that an optionee would otherwise lose by exercising an option using
already-owned shares. In addition, by inducing option exercises and stock       
retention, the reload feature offers optionees the opportunity to receive       
dividends on a greater number of shares than would be the case without such a   
feature.                                                                        

An employee will also benefit from the use of the reload feature if the market  
price of the underlying shares declines between the date he exercises the       
Original Option and the expiration date of that option. By encouraging an       
employee to exercise options with shares, the reload feature enables an employee
to protect against a decline in the market price of the common shares without   
losing the potential benefit of a price increase.                               

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AGGREGATED OPTION EXERCISES IN 1998 AND DECEMBER 31, 1998 OPTION VALUES         

The following table provides information concerning options exercised in 1998 by
the named executives and the options held by them at the end of 1998:           

                                                              Value of
                                             Number of         Unexercised
                                            Unexercised       In-the-Money
                   Shares                  Options at         Options at
                 Acquired                  12/31/98           12/31/98
                       on        $ Value    (Exercisable/      (Exercisable/
       Name          Exercise(1)  Realized    Unexercisable)   Unexercisable)(2)
       ----          -----------  --------    --------------   -----------------
Douglas C. Yearley         0            0     450,163/176,668   $     0/     0  
J. Steven Whisler          0            0     199,325/127,001         0/     0  
Manuel J. Iraola      10,764      222,744     114,580/ 76,334    23,600/     0  
Thomas M. St. Clair        0            0     122,051/ 20,667         0/     0  
Timothy R. Snider          0            0      32,047/ 66,468         0/62,813  

----------                                                                      
(1)  Options for 10,764 were exercised by Mr. Iraola using shares already owned 
   to pay the exercise price of the options exercised in 1998. The number of
     shares acquired upon exercise of these options in excess of the shares used
to pay the exercise price and associated taxes was 1,842. He acquired 
reload options to purchase 7,414 shares.                              

(2)  Value is based on the mean of the high and low prices of the common shares 
on the Consolidated Trading Tape on December 31, 1998 ($50.7188).     

 PENSION AND OTHER RETIREMENT BENEFITS

RETIREMENT PLANS                                                                

The following pension table shows the estimated aggregate annual benefits       
payable in the form of a straight life annuity commencing at age 65 under the   
Phelps Dodge Retirement Plan for Salaried Employees (the "Retirement Plan") as  
supplemented by the Phelps Dodge Corporation Supplemental Retirement Plan (the  
"Supplemental Retirement Plan") that make up amounts limited by the Internal    
Revenue Code (the "Code").                                                      

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PENSION PLAN TABLE  

                                                        [Enlarge/Download Table]


FINAL AVERAGE                  ESTIMATED ANNUAL BENEFITS FOR YEARS OF SERVICE INDICATED(c)              
COMPENSATION   -----------------------------------------------------------------------------------------
   (a)(b)         10         15         20         25         30         35          40           45    
------------   --------   --------   --------   --------   --------   --------   ----------   ----------
                                                                                                        
  $  200,000   $ 29,965   $ 44,947   $ 59,929   $ 74,911   $ 89,894   $104,876   $  119,858   $  134,840
  $  300,000   $ 45,965   $ 68,947   $ 91,929   $114,911   $137,894   $160,876   $  183,858   $  206,840
  $  400,000   $ 61,965   $ 92,947   $123,929   $154,911   $185,894   $216,876   $  247,895   $  278,840
  $  500,000   $ 77,965   $116,947   $155,929   $194,911   $233,894   $272,876   $  311,858   $  350,840
  $  600,000   $ 93,965   $140,947   $187,929   $234,911   $281,894   $328,876   $  375,858   $  422,840
  $  700,000   $109,965   $164,947   $219,929   $274,911   $329,894   $384,876   $  439,858   $  494,840
  $  800,000   $125,965   $188,947   $251,929   $314,911   $377,894   $440,876   $  503,858   $  566,840
  $  900,000   $141,965   $212,947   $283,929   $354,911   $425,894   $496,876   $  567,858   $  638,840
  $1,000,000   $157,965   $236,947   $315,929   $394,911   $473,894   $552,876   $  631,858   $  710,840
  $1,100,000   $173,965   $260,947   $347,929   $434,911   $521,894   $608,876   $  695,858   $  782,840
  $1,200,000   $189,965   $284,947   $379,929   $474,911   $569,894   $664,876   $  759,858   $  854,840
  $1,300,000   $205,965   $308,947   $411,929   $514,911   $617,894   $720,876   $  823,858   $  926,840
  $1,400,000   $221,965   $332,947   $443,929   $554,911   $665,894   $776,876   $  887,858   $  998,840
  $1,500,000   $237,965   $356,947   $475,929   $594,911   $713,894   $832,876   $  951,858   $1,070,840
  $1,600,000   $253,965   $380,947   $507,929   $634,911   $761,894   $888,876   $1,015,858   $1,142,840
  $1,700,000   $269,965   $404,947   $539,929   $674,911   $809,894   $944,876   $1,079,858   $1,214,840

----------                                                                      
(a)  The Retirement Plan provides a member upon retirement at age 65 with a     
  pension for life in a defined amount based upon final average salary and
    length of benefit service. Under the Retirement Plan, final average salary
    ("Final Average Salary") is the highest average annual base salary for any
consecutive 36-month period plus the highest average annual incentive 
     compensation for any consecutive 60-month period during a member's last 120
  months of employment. Benefit service includes all periods of employment
    with the Corporation or its participating subsidiaries. Benefits under the
   Retirement Plan are subject to certain limitations under the Code, and to
the extent the result of such limitations would be a benefit less than
   would otherwise be paid under such Plan, the difference is provided under
the supplementary retirement provisions of the Supplemental Retirement
 Plan. The formula for determining benefits payable under the Retirement
 Plan takes into account estimated social security benefits payable. The
amounts set forth in the table assume maximum social security benefits
payable in 1998.                                                      

(b)  Amounts of annual incentive compensation have been estimated based on the  
  five-year average annual incentive compensation awarded to participating
employees for 1994 through 1998. The actual amount of incentive       
   compensation for an individual at any level of Final Average Salary could
vary.                                                                 

(c)  The expected credited years of benefit service at normal retirement for the
     Corporation's five current named executive officers as of December 31, 1998
   are as follows: Mr. Yearley, 41 years; Mr. Whisler, 43 years; Mr. Iraola,
   30 years; Mr. St. Clair, 11 years; and Mr. Snider, 45 years. The years of
     service are based on normal retirement for all executive officers under the
Retirement Plan and the applicable provisions of the Supplemental     
Retirement Plan.                                                      

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SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS

SEVERANCE AGREEMENTS WITH OUR EXECUTIVES                                        

The Corporation has severance agreements with each of its five named executive  
officers under which the executive would receive a lump sum payment equal to his
annual base salary in the event the Corporation terminates his employment, other
than for cause or mandatory retirement, or the executive voluntarily terminates 
his employment because of material reductions in his salary or his position,    
duties and responsibilities. The terminated executive would also receive (i)    
outplacement services at a cost up to 15% of his base salary and (ii) the cost  
of continued coverage for a limited period under the Corporation's group health,
life insurance and disability plans.                                            

CHANGE OF CONTROL AGREEMENTS WITH OUR EXECUTIVES                                

The Corporation also has agreements with such executives under which each       
executive would receive, in the event he ceases to be employed by the           
Corporation within two years following a change of control of the Corporation   
(for a reason other than death, disability, willful misconduct, normal          
retirement or under certain circumstances a voluntary termination of employment 
by the executive), a lump sum equal to (i) three times the executive's highest  
base salary during that year and the prior two years plus (ii) three times the  
executive's average bonus paid under the Annual Incentive Compensation Plan for 
the two calendar years preceding the year in which the change of control occurs,
less (iii) any severance payable under his Severance Agreement. The amount of   
such payments, when combined with any other payments that are contingent upon a 
change of control, may be capped at the maximum amount that can be paid without 
triggering an excise tax under the Internal Revenue Code. This "Cap" on payments
does not apply if the amount of such payments, calculated without the Cap, is at
least 20% more than the amount of such payments calculated with the Cap. If the 
payments are not subject to the Cap, the Corporation will provide the executive 
with a tax gross-up payment to reimburse the executive for any excise taxes as  
well as the presumed income taxes on the gross-up. The terminated executive     
would also receive the cost of continued coverage for a limited period under the
Corporation's group health, life insurance and disability plans. Except under   
certain circumstances, these change of control agreements expire on December 31,
2002.                                                                           

OTHER CHANGE OF CONTROL PROVISIONS                                              

Although normal compensatory options granted by the Corporation generally become
exercisable in three or four substantially equal annual installments beginning  
on the first anniversary of the date of grant, they also become exercisable in  
certain change of control situations. Specifically, such options are exercisable
(but not earlier than six months from the date of grant) for a period of 30 days
beginning on the date the Corporation's common shares are purchased pursuant to 
a third party tender offer or the Corporation's shareholders approve a merger or
similar transaction which the Corporation will not survive as a publicly held   
corporation or, in the case of the five named executive officers and certain    
other employees, the date the employee ceases to be employed if he/she ceases to
be employed within two years following a change of control.                     

The Supplemental Retirement Plan provides for the payment of unreduced benefits 
to employees who meet liberalized age and length of service requirements and    
whose employment is terminated by the Corporation or any of its subsidiaries    
within two years following a change of control of the Corporation. The          
Supplemental Retirement Plan also provides an additional 36 months of service   
credit to an executive who, due to his termination of employment within two     
years following a change of control of the Corporation, becomes entitled to     
receive payments under                                                          

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his change of control agreement with the Corporation. The Supplemental Savings  
Plan obligates the Corporation to transfer an amount equal to the deficiency in 
the assets of the Plan's trust fund, if any, prior to the day on which a change 
of control occurs.                                                              

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 COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
REPORT ON EXECUTIVE COMPENSATION

THE COMMITTEE                                                                   

The Committee is composed solely of directors who are not employees of the      
Corporation. It has periodically retained respected independent compensation    
consultants to advise and assist it in connection with various compensation     
matters.                                                                        

CORPORATE GOALS                                                                 

The Corporation's goal is to be the leader in each of the domestic and          
international mining and manufacturing activities in which it competes. It also 
seeks to achieve and sustain progressive increases in value for its             
shareholders, while balancing appropriately the short and long-term             
opportunities for the Corporation.                                              

To meet these goals, the Corporation employs high caliber, dedicated senior     
managers who are well trained and results oriented. The Board of Directors      
established the Compensation and Management Development Committee to oversee the
Corporation's compensation and management development programs and to ensure    
that these programs maximize the Corporation's ability to attract, retain and   
motivate employees to meet these stated objectives.                             

The Committee believes it can motivate senior managers participating in these   
programs by:                                                                    

    *    Emphasizing the relationship between pay and performance by rewarding
          managers who bring about solid achievement with regard to key business
        strategies and specific operational objectives and by increasing the
          relative amount of compensation at risk as management responsibilities
increase.                                                   

*    Assuring that the elements of variable compensation are linked as
          directly as practicable to measurable financial, operational and other
forms of performance.                                       

*    Encouraging stock ownership by executives.                       

*    Tying pay for performance as closely as possible to success in   
       maximizing the value of the Corporation's stock over the long term.

ELEMENTS OF EXECUTIVE COMPENSATION                                              

The executive officers are compensated by salaries, annual incentive awards and 
long-term incentive compensation, with the greatest emphasis on long term       
incentives in the form of stock options. Each element focuses on performance in 
a different but complementary way. Salaries focus on individual performance,    
competence and the Corporation's performance during the officer's tenure. Annual
incentives relate to corporate, division and, where appropriate, unit and       
individual performance. Long-term incentive awards, which are paid in the form  
of stock options, and, from time to time, in restricted stock, create a         
long-term identity of interest with the shareholders based on the Corporation's 
performance and related growth of shareholder value.                            

The Committee believes that the Corporation competes for its executive talent   
primarily with similarly sized industrial companies located in the United       
States. Accordingly, where possible, the Committee compares the compensation for
the top five executives, at least annually, to the compensation paid to         
executives holding similar positions at sixteen publicly held industrial        
corporations of an average size,                                                

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measured by revenues and market capital, similar to that of the Corporation     
(referred to below as the "comparison group"). For other executives, comparisons
to similar positions are based on a much larger group of companies of similar   
size to the Corporation measured by revenues. The Committee believes that the   
competitive data used is generally representative of the competitive level of   
compensation paid to executive officers in companies the size of Phelps Dodge.  
Thus, the companies used for comparison purposes in connection with the         
compensation paid to the Corporation's executive officers are different from the
companies included in the peer group used in the performance graphs on pages 22 
and 23 to compare shareholder returns.                                          

EXECUTIVE SALARIES                                                              

Individual salaries for executive officers are established by the Committee to  
reflect the officer's performance and competence, existing general economic and 
industry conditions and the Corporation's performance during the executive      
officer's tenure. Generally, salary adjustments are targeted to move salaries to
median levels over time for sustained and expected performance and competence.  
The salaries of executive officers who have performed exceptionally well over   
sustained periods of time may be adjusted to exceed median levels. Based on     
available information, the Committee believes salaries in 1998 for the executive
officers were at or near the median when compared to employees in similar       
positions in the comparison group. The Committee determined that, although over 
the last decade Phelps Dodge stock has significantly outperformed the S&P Metals
Mining index and the individual executives named in the Summary Compensation    
Table have sustained excellent individual performance, due to our current and   
projected low copper price environment, salaries for three of these executives  
should not be adjusted in 1999. However, salaries for the other two executives  
will be adjusted upward in 1999 to bring their salaries closer to the median.   

ANNUAL INCENTIVES                                                               

The Annual Incentive Compensation Plan provides the executive officers and      
certain other officers and managers with compensation based on success in       
achieving annual corporate, division and, where appropriate, unit and individual
goals. For each executive officer, a target award is determined approximating   
the 60th percentile of the annual incentive compensation paid by the comparison 
group to individuals holding comparable positions. Lower threshold awards and   
higher maximum awards are also established. Corporate goals are set using return
on equity and net operating cash flow return on invested capital, both of which 
are fundamental indicators of the Corporation's performance. The goals are      
equally weighted and determine 70% of the CEO's and COO's total annual incentive
compensation, and 60% and 15% of the corporate executives' and operation        
executives' awards, respectively. In 1998, the Corporation's performance with   
respect to return on equity was below the threshold goal. The Corporation's 1998
performance with respect to net operating cash flow return on invested capital  
was approximately midway between threshold and target goals. Based on these     
results and the Committee's evaluation of performance relative to individual    
and, where appropriate, division and unit goals, the Committee approved Annual  
Incentive Compensation awards for 1998 below the targeted amounts for four of   
the listed executives, and above the targeted amount for one of the listed      
executives, due to the above target performance of the PDI division.            

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LONG-TERM INCENTIVE COMPENSATION                                                

The Committee uses stock options as the principal method of providing long-term 
incentive compensation primarily because employees benefit from options, if at  
all, only to the extent of increases in the value of the Corporation's common   
shares. To further the identity of interest with the shareholders, the executive
officers are expected to acquire and own significant numbers of the             
Corporation's shares.                                                           

The Committee has determined that to focus the executives' attention to an      
appropriate extent on the long-term growth of shareholder value, the targeted   
compensation levels with respect to the present value of stock options should be
approximately midway between the fiftieth and seventy-fifth percentiles of the  
long-term incentive awards made to executives holding similar positions in the  
comparison group. Adjustments are made from these levels based on the           
performance, career potential, critical skills and prior grant history of the   
executive officer. Of the stock options granted to executive officers in 1998,  
three approximated targeted levels and one was below the targeted level. All of 
the option grants for 1998 were approved by the Committee.                      

GRANTS OF RESTRICTED STOCK                                                      

The Committee also made grants of restricted stock to a limited number of other 
employees under the Corporation's Stock Option and Restricted Stock Plan. No    
grants were made to the executives named in the Summary Compensation Table. The 
principal purpose of these grants was to retain the services of key executive   
and skilled personnel through a means that also provides a meaningful economic  
incentive to increase the value of the Corporation's common shares. The size of 
each award was determined based on the Committee's subjective determination of  
the recipient's expected contribution to the Corporation over the stated vesting
period, the significance of the recipient's position with the Corporation and   
the importance of maintaining continuity of management and critical skills in   
the recipient's function.                                                       

STOCK OWNERSHIP GUIDELINES                                                      

To underscore the connection between the interests of management and            
stockholders, the Corporation, several years ago, established informal stock    
ownership guidelines for its executive officers. In 1996, the Corporation       
formalized this program and established stock ownership targets for officers of 
the Corporation who hold the position of Vice President and above and certain   
senior executives within the Phelps Dodge Mining Company and Phelps Dodge       
Industries divisions. The targets are expressed in terms of the value of the    
Corporation's common shares held by the executive as a multiple of salary grade 
midpoint. The targets range from one and one-half times salary midpoint up to   
five times salary midpoint for the CEO. Many Vice Presidents and other          
executives already hold a substantial amount of common shares, but those who do 
not hold sufficient shares have five years from the date they became subject to 
the ownership requirements to reach their personal ownership targets.           

TAX CODE ISSUES                                                                 

Section 162(m) of the Internal Revenue Code generally places a one million      
dollar per person limit on the deduction a publicly-held corporation may take   
for compensation paid to its chief executive officer and its four other highest 
compensated "covered employees," excluding for this purpose deferred            
compensation and, in general, compensation constituting "performance-based"     
compensation. In 1998, the Corporation obtained shareholder approval for the    
1998 Stock Option and Restricted Stock Plan which continues to exclude          
compensation from stock options from the $1 million deductibility limit. Other  
elements of the compensation payable to executive officers, such as salary,     
annual incentive compensation and restricted stock, are not excludable from such
limit. Mr. Yearley deferred $240,000 of his salary in 1998.                     

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However, as a result of the Corporation's strong performance in 1997 and the    
related above target incentive compensation award received by Mr. Yearley in    
1998, his compensation subject to Section 162(m) exceeded one million dollars.  
This resulted in the loss of a Federal income tax deduction with respect to     
approximately $624,845 of his compensation. In 1998, Mr. Iraola became vested in
5,000 shares of restricted stock awarded to him in 1993, which resulted in an   
additional $283,437 in taxable income. Therefore, his compensation subject to   
Section 162(m) also exceeded one million dollars. This resulted in the loss of a
Federal income tax deduction with respect to approximately $41,132 of his       
compensation.                                                                   

CEO COMPENSATION                                                                

Douglas C. Yearley, the Chief Executive Officer of the Corporation, received a  
base salary of $800,000 in 1998, an Annual Incentive Compensation Plan award of 
$440,000 for 1998 performance compared to stated corporate and individual       
performance goals, and a compensatory option grant in 1998 to purchase 100,000  
common shares.                                                                  

The first 70% of Mr. Yearley's Annual Incentive Compensation Plan award was     
equally determined on the basis of the Corporation's actual return on equity and
net operating cash flow return on invested capital as compared to goals set at  
the beginning of the year. The Corporation's performance was below threshold    
goal for return on equity and approximately midway between threshold and target 
for net operating cash flow return on invested capital. The remaining 30% of Mr.
Yearley's award was based on the Committee's subjective evaluation of his       
performance with regard to individual goals pertaining to managing through the  
downturn in the copper market, strategic initiatives, and completing the next   
steps in the organization transition. Based on its judgment as to Mr. Yearley's 
performance in these respects, the Committee made an above target award to him  
as to this part of his incentive compensation. Mr. Yearley's compensatory stock 
option grant, which was below the targeted level but larger than his 1997 grant,
was based on the policy discussed above.                                        

The Committee believes that Mr. Yearley's 1998 salary was at or near the 1998   
median paid by comparable companies to their CEOs.                              

CONCLUSION                                                                      

The Committee will continue to evaluate the Corporation's compensation programs 
to best enable the Corporation to employ and motivate high caliber, dedicated   
people. Such employees, properly motivated, are believed to be key to           
achievement of the Corporation's goal to be the international leader in the     
mining and manufacturing activities in which it competes and the related        
enhancement of shareholder value over the long term.                            

       THE COMPENSATION AND MANAGEMENT
DEVELOPMENT COMMITTEE   

      Southwood J. Morcott, Chairman

Robert N. Burt          

Paul W. Douglas         

Paul Hazen              

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COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
 AMONG PHELPS DODGE CORPORATION, THE S & P 500 INDEX
 AND THE S & P METALS MINING INDEX

                   Cumulative Total Return
                    ----------------------------------------------------------
                    12/31/93  12/31/94  12/31/95  12/31/96  12/31/97  12/31/98
Phelps Dodge Corp.     100        131      136       151        143       121   
S & P 500              100        101      139       171        229       294   
S & P METALS MINING    100        117      129       132         89        64   

*    The chart above reflects $100 invested at 12/31/93 in Phelps Dodge common  
stock, the S&P 500, and in a peer group represented by the S&P Metals 
   Mining index, comprised of Phelps Dodge, ASARCO Incorporated, Cyprus Amax
Minerals Co., Freeport-McMoRan Copper & Gold Inc., and Inco Ltd.      

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 COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN*
 AMONG PHELPS DODGE CORPORATION, THE S & P 500 INDEX
 AND THE S & P METALS MINING INDEX

             Cumulative Total Return
          ------------------------------------------------
          12/31/88  12/31/89  12/31/90  12/31/91  12/31/92

Phelps Dodge Corp.     100       136       137       170       255              
S & P 500              100       132       128       166       179              
S & P METALS MINING    100       115       109       123       132              

                    ----------------------------------------------------------
                    12/31/93  12/31/94  12/31/95  12/31/96  12/31/97  12/31/98

Phelps Dodge Corp.     265       347       360       402       381      322     
S & P 500              197       200       275       338       451      580     
S & P METALS MINING    147       172       190       194       131       94     

*    The chart above reflects $100 invested at 12/31/88 in Phelps Dodge common  
stock, the S&P 500, and in a peer group represented by the S&P Metals 
   Mining index, comprised of Phelps Dodge, ASARCO Incorporated, Cyprus Amax
Minerals Co., Freeport-McMoRan Copper & Gold Inc., and Inco Ltd. This 
 10-year graph illustrates the relative stock performances over a period
     that more closely represents the longer business cycle generally associated
   with the industry of the Corporation and is especially meaningful because
   the business focus and growth strategies of the Corporation have been and
continue to be long term.                                             

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2. RATIFICATION OF APPOINTMENT OF ACCOUNTANTS                                   

On the recommendation of the Audit Committee, the Board of Directors has        
appointed PricewaterhouseCoopers LLP as independent accountants for the         
Corporation for the year 1999.                                                  

PricewaterhouseCoopers LLP or a predecessor firm has been the independent       
accountants for the Corporation since 1915. A representative of                 
PricewaterhouseCoopers LLP will be present at the annual meeting with the       
opportunity to make a statement if he so desires and to respond to appropriate  
questions.                                                                      

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF 
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS.                          

OTHER BUSINESS

The Board of Directors is not aware of any other matters to be presented at the 
annual meeting. If any other matter proper for action at the meeting should be  
presented, the holders of the accompanying proxy will vote the shares           
represented by the proxy on such matter in accordance with their best judgment. 
If any matter not proper for action at the meeting should be presented, the     
holders of the proxy will vote against consideration of the matter or the       
proposed action.                                                                

 VOTING PROCEDURES

All shares represented by the accompanying proxy, if the proxy is duly executed 
and received by the Corporation at or prior to the annual meeting, will be voted
at the meeting in accordance with any instructions specified on such proxy.     
Where no instruction is specified, the shares may be voted according to the     
printed instructions on the proxy.                                              

It is the policy of the Corporation that, except under limited circumstances,   
each shareholder proxy card, ballot and voting tabulation that identifies any   
shareholder will be kept confidential and that the receipt and tabulation of    
such votes will be conducted by independent third parties, including the        
Corporation's transfer agent and its proxy solicitation firm, and not by        
employees of the Corporation.                                                   

The cost of soliciting proxies for the meeting will be borne by the Corporation.
The Corporation has retained Morrow & Co., Inc., 445 Park Avenue, New York, NY  
10022 to assist in soliciting proxies for a fee estimated at $12,500 plus       
reasonable expenses. Morrow & Co., Inc. and some officers and other employees of
the Corporation may solicit proxies in person and by telephone or otherwise. The
Corporation may also reimburse brokers and others who are record holders of the 
Corporation's shares for their reasonable expenses incurred in obtaining voting 
instructions from beneficial owners of such shares.                             

PROPOSALS FOR 2000

The Corporation will review for inclusion in next year's proxy statement        
shareholder proposals received by December 3, 1999. Proposals should be sent to 
the Secretary of the Corporation, 2600 North Central Avenue, Phoenix, Arizona   
85004-3014.                                                                     

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Shareholder proposals not included in next year's proxy statement may be brought
before the May 3, 2000 annual meeting of shareholders by a shareholder of the   
Corporation who is entitled to vote at the meeting, who has given a written     
notice to the Secretary of the Corporation containing certain information       
specified in the by-laws and who was a shareholder of record at the time such   
notice was given. Such notice must be delivered or mailed and received at the   
address in the preceding paragraph no earlier than February 3, 2000 and no later
than March 3, 2000.                                                             

If a shareholder notifies the Corporation after February 15, 2000 of an         
intention to present a proposal at the Corporation's May 3, 2000 annual meeting 
(and for any reason the proposal is voted on at such meeting), the Corporation's
proxy holders will have the right to exercise discretionary voting authority    
with respect to such proposal.                                                  

ANNUAL REPORT FOR 1998

The annual report of the Corporation for the year 1998, including financial     
statements, is being furnished concurrently with this proxy statement to persons
who were shareholders of record as of March 17, 1999, the record date for the   
annual meeting. The annual report does not form part of the material for the    
solicitation of proxies.                                                        

                   By order of the Board of Directors,
                  Robert C. Swan
                  Vice President and Secretary

Phoenix, Arizona                                                                
April 1, 1999                                                                   

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PROXY 

PHELPS DODGE CORPORATION

 SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PHELPS DODGE CORPORATION

     The  undersigned  shareholder of PHELPS DODGE  CORPORATION  hereby appoints
MANUEL J.  IRAOLA,  MARIE L.  KNOWLES  and DOUGLAS C.  YEARLEY,  or any of them,
proxies  of the  undersigned,  each with  power of  substitution,  at the annual
meeting of shareholders  of the  Corporation to be held at the Arizona  Biltmore
Hotel, 24th Street and Missouri Avenue, Phoenix,  Arizona, on Wednesday,  May 5,
1999 at 11:30 a.m., and at any adjournments  thereof,  to vote all Common Shares
of the Corporation held or owned by the undersigned,  including any which may be
held for the  undersigned's  account under the Phelps Dodge  Corporation  Common
Stock Investor Services Program administered by The Chase Manhattan Bank.       
     For those  participants  who hold accounts  with Common Shares  through the
Phelps  Dodge  Employee  Savings  Plan  and/or  The  Phelps  Dodge   Corporation
Supplemental  Savings Plan:  The  undersigned  instructs  the UMB Bank,  N.A. as
Trustee for the Plans, to vote all shares or fractions of shares credited to the
undersigned's  account as of the latest  available  processing date on or before
May 5, 1999,  as directed on the reverse  side of this proxy.  Those  shares for
which no  directions  are  received  will be voted  by the  Trustee  in its sole
discretion.                                                                     
THIS PROXY IS CONTINUED ON THE REVERSE SIDE 
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY 
--------------------------------------------------------------------------------

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                                                        [Enlarge/Download Table]
                                                                                                             
                                                                                      Please mark            
                                                                                      your votes as [X]      
                                                                                      indicated in           
                                                                                      this example           
                         FOR  WITHHELD                                                                       
                         ALL  FOR ALL                            FOR  AGAINST ABSTAIN                        
PROPOSAL 1: Election of  [ ]    [ ]    PROPOSAL 3: Ratification  [ ]    [ ]     [ ]   The Board of Directors 
Directors for the term                 of Independent Public                          recommends you vote    
specified in the proxy                 Accountants                                    FOR MANAGEMENT         
Statement:                                                                            PROPOSALS 1 AND 2      

01 A. Dunham                                                                          The proxies are        
02 W. Franke                                                                          instructed to vote as  
03 S. Morcott                                                                         directed above, and in 
04 J. Whisler                                                                         their discretion on all
                                                                                      other matters. Where no
WITHHELD FOR: (Write                                                                  direction is specified,
name(s) of nominee(s)                                                                 this proxy will be     
below).                                                                               voted FOR Management   
 ________________________                                                             Proposals 1 and 2      
 ________________________                                                             as recommended by the  
                                                                                      Board of Directors     

Signature(s)______________________________________________________ Date_________________________             
NOTE: Please sign name exactly as it appears hereon. Joint owners should each sign. When signing             
as attorney, executor, administrator, trustee or guardian, please give full title as such.                   

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -   
^ FOLD AND DETACH HERE ^
PLEASE FOLD AND DETACH HERE AND READ THE REVERSE SIDE 

HELP US SAVE MONEY - VOTE BY TELEPHONE
IF YOU WISH TO VOTE BY TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW

Have your proxy in hand. Decide how you wish to vote.                           

*   On a Touch Tone Telephone call Toll Free 1-800-840-1208 24 hours per day - 7
days a week.                                                            
*   You will be asked to enter a Personal Identification number                 

OPTION #1 To vote as the Board of Directors recommends on ALL proposals: Press 1
      now. If you wish to vote on each proposal separately, press 0 now.

When you Press 1, your vote will be confirmed and cast as you  directed.  END OF
CALL                                                                            

OPTION #2 If you  selected to vote on each  proposal  separately,  you will hear
these instructions                                          

Proposal 1: To vote FOR ALL  nominees,  press 1; to WITHHOLD  FOR ALL  nominees,
press 9; To  WITHHOLD  FOR AN  INDIVIDUAL  nominee,  press 0.  Please  make your
selection now.                                                                  

To withhold  for  individual  nominees  please  enter the two digit  number that
appears next to the nominee you DO NOT wish to vote for. Once you have completed
voting for Directors, press 0.                                                  

Proposal 2: You may make your  selection any time: To vote for, press 1; Against
press 9; Abstain press 0.                                                       

Your vote selection will be repeated and you will have an                       
opportunity to confirm it.                                                      

Please do not return the above proxy card if you voted by phone.                
Thank you for voting.                                                           

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PHELPS DODGE CORPORATION

SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PHELPS DODGE CORPORATION 

     The  undersigned  shareholder of PHELPS DODGE  CORPORATION  hereby appoints
MANUEL J.  IRAOLA,  MARIE L.  KNOWLES  and DOUGLAS C.  YEARLEY,  or any of them,
proxies  of the  undersigned,  each with  power of  substitution,  at the annual
meeting of shareholders  of the  Corporation to be held at the Arizona  Biltmore
Hotel, 24th Street and Missouri Avenue, Phoenix,  Arizona, on Wednesday,  May 5,
1999 at 11:30 a.m., and at any adjournments  thereof,  to vote all Common Shares
of the Corporation held or owned by the undersigned,  including any which may be
held for the undersigned's  account under the Chase Mellon Shareholder  Services
Investor  Services  Program for Phelps Dodge Common Shares  administered  by The
Chase Manhattan Bank.                                                           
THE PROXIES ARE INSTRUCTED TO VOTE AS DIRECTED BELOW, AND IN THEIR DISCRETION ON
ALL OTHER MATTERS. WHERE NO DIRECTION IS SPECIFIED, THIS PROXY WILL BE VOTED FOR
MANAGEMENT PROPOSALS 1 AND 2 AS RECOMMENDED BY THE BOARD OF DIRECTORS.          
MANAGEMENT PROPOSALS:                                                           
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR MANAGEMENT PROPOSALS 1 AND 2     

Proposal 1:  Election of Directors  for the  respective  terms  specified in the
Proxy Statement; Messrs. Dunham, Franke, Morcott and Whisler.                   

FOR all          WITHHELD           WITHHELD for the following only             
nominees     for all nominees     (write name(s) of nominee(s) below)           
[ ]               [ ]            ___________________________________          

 PLEASE SIGN ON REVERSE SIDE
 AND RETURN PROMPTLY

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 PROXY

Proposal 2: Ratification of Independent Public Accountants                      
                                                 FOR [ ] AGAINST [ ] ABSTAIN [ ]

                                          Dated: _______________________________
                                          Signature ____________________________
                                          Signature ____________________________

Please  sign  exactly  as name  appears  above.  When  shares  are held by joint
tenants,  both should sign. When signing as attorney,  executor,  administrator,
trustee or guardian,  please give full title as such. If a  corporation,  please
sign in full  corporate  name by President  or other  authorized  officer.  If a
partnership, please sign in partnership name by authorized person.              

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEF 14A’ Filing		Date		First		Last			Other Filings
		12/31/02		20					10-K,  10-K/A,  11-K,  NT 10-K
		6/1/01		10
		6/1/00		10
		5/3/00		29					DEF 14A
		3/3/00		29
		2/15/00		29
		2/3/00		29
		12/3/99		28
		6/1/99		16
For Period End:		5/5/99		2		32
		4/1/99		3		29
Filed on:		3/31/99							10-Q
		3/17/99		4		29
		2/10/99		12					SC 13G/A
		2/3/99		8
		2/1/99		11
		12/31/98		12		19			10-K405,  11-K
		12/9/98		12					SC 13G
		11/4/98		5
		11/1/98		10
		10/1/98		14
		6/1/97		10
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