Exhibit 10.4
Terms and Conditions of Stock Option Agreement
Ford Motor Company Long-Term Incentive Plan
Effective for Options and/or Stock Appreciation Rights granted under the Ford
Motor Company Long-Term Incentive Plan.
Please refer to Appendix A for Additional Country-Specific Information
1.    The Option may not be exercised prior to the date one year from the date
of the Stock Option Agreement of which these terms and conditions are a part
(the Agreement). Thereafter, the Option may be exercised in installments as
follows:
•(a) Beginning on the date one year from the date of the Agreement, the Option
may be exercised to the extent of 33% of the shares originally covered thereby;
•(b) Beginning on the date two years from the date of the Agreement, the Option
may be exercised to the extent of an additional 33% of the shares originally
covered thereby;
•(c) Beginning on the date three years from the date of the Agreement, the
Option may be exercised to the extent of an additional 34% of the shares
originally covered thereby; and
•(d) To the extent not exercised, installments shall be cumulative and may be
exercised in whole or in part;
all subject to the Agreement and these terms and conditions and any rules and
regulations established by the Committee pursuant to the Plan.

Notwithstanding the foregoing, if your stock option grant included an incentive
stock option (ISO), the ISO portion of the grant would be maximized within
permissible regulatory limits. This could result in a different number of
options vesting on the first three anniversary dates of the grant under the
nonqualified option (NQO) and/or the ISO portion of the grant than the number
indicated by the schedule above. In any event, the total number of NQOs and ISOs
in the grant, will, as a whole, vest according to the schedule above. Your grant
information (available online via Morgan Stanley’s Benefit Access website -
www.benefitaccess.com or through a Morgan Stanley phone representative) will
reflect the specific number of ISOs and NQOs vesting on the specific dates.

2.    The Stock Appreciation Right, if any, granted by the Company to the
Optionee under the Agreement shall entitle the Optionee to receive, without
payment to the Company and as the Optionee may elect, either (a) that number of
shares of Stock determined by dividing (i) the total number of shares of Stock
subject to the Option (or the portion or portions thereof which the Optionee
from time to time elects to use for purposes of this clause (a)), multiplied by
the amount by which the fair market value of a share of Stock on the day
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this right is exercised exceeds the option price set forth in the Agreement
(such amount being hereinafter referred to as the Spread), by (ii) the fair
market value of a share of Stock on the exercise date; or (b) cash in an amount
determined by multiplying (i) the total number of shares of Stock subject to the
Option (or the portion or portions thereof which the Optionee from time to time
elects to use for purposes of this clause (b)), by (ii) the amount of the
Spread; or (c) a combination of shares of Stock and cash, in amounts determined
as set forth in clauses (a) and (b) above; all subject to the terms and
conditions set forth herein and any rules and regulations established by the
Committee pursuant to the Plan.

The right of the Optionee to exercise any Stock Appreciation Right shall be
cancelled if and to the extent that the Option is exercised. The right of the
Optionee to exercise the Option shall be cancelled if and to the extent that
shares covered by the Option are used to calculate shares or cash received upon
exercise of any Stock Appreciation Right.

Fair market value shall mean the closing price at which Stock shall have been
reported on the New York Stock Exchange on the date as of which such computation
is to be made or, if no such closing price shall have been reported on such day,
on the next preceding day on which such closing price of Stock shall have been
reported on such Exchange.

If any fractional share of Stock would otherwise be deliverable to the Optionee
upon exercise of any Stock Appreciation Right, the Optionee shall be paid a cash
amount equal to the same fraction of the fair market value of the Stock on the
date of exercise.

Any Stock Appreciation Right shall become and remain exercisable by the Optionee
only to the extent that the Option becomes and remains exercisable.

3.    Except as provided in the immediately following two paragraphs, if, prior
to the date one year from the date of the Agreement, the Optionee's employment
with the Company shall be terminated by the Company, with or without cause, or
by the act, death, incapacity or retirement of the Optionee, the Optionee's
right to exercise the Option and any Stock Appreciation Right shall terminate on
the date of such termination of employment and all rights hereunder and under
the Agreement shall cease.

Notwithstanding the provisions of the next preceding paragraph, if the
Optionee's employment with the Company shall be terminated by reason of
retirement, release because of disability or death, and the Optionee had
remained in the employ of the Company for at least six months following the date
of the Agreement, and subject to the provisions of Article 4 hereof, all the
Optionee's rights hereunder and under the Agreement shall continue in effect or
continue to accrue until the date ten years after the date of the Agreement,
subject, in the event of the Optionee's death during such ten-year period, to
the provisions of the sixth paragraph of this Article and subject to any other
limitation contained herein or in the Agreement on the exercise of the Option or
any Stock Appreciation Right in effect at the date of exercise.
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Notwithstanding anything to the contrary set forth herein or in the Agreement,
if the Optionee's employment with the Company shall be terminated at any time by
reason of a sale or other disposition (including, without limitation, a transfer
to a Joint Venture (as hereinafter defined)) of the division, operation or
subsidiary in which the Optionee was employed or to which the Optionee was
assigned, all the Optionee's rights under the Option and any Stock Appreciation
Right granted to him or her shall become immediately exercisable and continue in
effect until the date five years after the date of such termination (but not
later than the date ten years from the date of grant of the Option), provided
the Optionee shall satisfy both of the following conditions:
(a) the Optionee, at the date of such termination, had remained in the employ of
the Company for at least three months following the grant of the Option and any
Stock Appreciation Right, and (b) the Optionee continues to be or becomes
employed in such division, operation or subsidiary following such sale or other
disposition and remains in such employ until the date of exercise of the Option
or any Stock Appreciation Right (unless the Committee, or any committee
appointed by it for the purpose, shall waive this condition (b)).

Upon termination of the Optionee's employment with such (former) division,
operation or subsidiary following such sale or other disposition, any then
existing right of the Optionee to exercise the Option or any Stock Appreciation
Right shall be subject to the following limitations: (i) if the Optionee's
employment is terminated by reason of disability, death or retirement with the
approval of his or her employer, the Optionee's rights shall continue as
provided in the preceding sentence with the same effect as if his or her
employment had not terminated; (ii) if the Optionee's employment is terminated
by reason of discharge or voluntary quit, the Optionee's rights shall terminate
on the date of such termination of employment and all rights under the Option
and any Stock Appreciation Right shall cease; and (iii) if the Optionee's
employment is terminated for any reason other than a reason set forth in the
preceding clauses (i) and (ii), the Optionee shall have the right, within three
months after such termination, to exercise the Option or any Stock Appreciation
Right to the extent that it or any installment thereof shall have accrued at the
date of such termination and shall not have been exercised, subject in the case
of any such termination to the provisions of Article 4 hereof and any other
limitation on the exercise of the Option and any Stock Appreciation Right in
effect at the date of exercise. For purposes of this paragraph, the term Joint
Venture shall mean any joint venture corporation or partnership, or comparable
entity, in which the Company has a substantial equity interest.

If, on or after the date one year from the date of the Agreement, the Optionee's
employment with the Company shall be terminated for any reason except
retirement, release because of disability, death, release because of a sale or
other disposition of the division, operation or subsidiary in which the Optionee
was employed or to which the Optionee was assigned, discharge, release in the
best interest of the Company or voluntary quit, the Optionee shall have the
right, within three months after such termination, to exercise the Option or any
Stock Appreciation Right to the extent that it or
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any installment thereof shall have accrued at the date of such termination of
employment and shall not have been exercised, subject to the provisions of
Article 4 hereof and any other limitation contained herein or in the Agreement
on the exercise of the Option or any Stock Appreciation Right in effect at the
date of exercise.

If the Optionee's employment with the Company shall be terminated at any time by
reason of discharge, release in the best interest of the Company or voluntary
quit, the Optionee's right to exercise the Option or any Stock Appreciation
Right shall terminate on the date of such termination of employment and all
rights hereunder and under the Agreement shall cease.

If the Optionee shall die within the applicable period specified in the second,
third, or fourth paragraph of this Article, the beneficiary designated pursuant
to Article 7 hereof or, if no such designation is in effect, the executor or
administrator of the estate of the decedent or the person or persons to whom the
Option or any Stock Appreciation Right shall have been validly transferred by
the executor or the administrator pursuant to will or the laws of descent and
distribution shall have the right, within the same period of time as the period
during which the Optionee would have been entitled to exercise the Option or any
Stock Appreciation Right if the Optionee had not died, to exercise the Option or
any Stock Appreciation Right (except that, if the fourth paragraph of this
Article shall apply to the Optionee, the Option or any Stock Appreciation Right
may be exercised only to the extent that it or any installment thereof shall
have accrued at the date of death and shall not have been exercised, and except
that the period of time within which the Option or any Stock Appreciation Right
shall be exercisable following the date of the Optionee's death shall not be
less than one year (unless the Option by its terms expires earlier)), subject to
the provision that neither the Option nor any Stock Appreciation Right shall be
exercised under any circumstances beyond ten years from the date of the
Agreement and to any other limitation on the exercise of the Option or any Stock
Appreciation Right in effect at the date of exercise.

Notwithstanding anything to the contrary set forth in the Agreement or in these
terms and conditions, neither the Option nor any Stock Appreciation Right shall
be exercised on or after the date ten years from the date of the Agreement.

4.    Anything contained herein or in the Agreement to the contrary
notwithstanding, the right of the Optionee to exercise the Option or any Stock
Appreciation Right following termination of the Optionee's employment with the
Company shall remain effective only if, during the entire period from the date
of the Optionee's termination to the date of such exercise, the Optionee shall
have earned out such right by (i) making himself or herself available, upon
request, at reasonable times and upon a reasonable basis, to consult with,
supply information to and otherwise cooperate with the Company or any subsidiary
thereof with respect to any matter that shall have been handled by him or her or
under his or her supervision while he or she was in the employ of the Company or
of any subsidiary thereof, and (ii) refraining from engaging in any activity
that is directly or indirectly in competition with any activity of the Company
or any subsidiary thereof.
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In the event of the Optionee's nonfulfillment of the condition set forth in the
immediately preceding paragraph, the Optionee's right to exercise the Option or
any Stock Appreciation Right shall cease; provided, however, that the
nonfulfillment of such condition may at any time (whether before, at the time of
or subsequent to termination of his or her employment) be waived in the
following manner:
•(1) if the Optionee at any time shall have been subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended
(the Exchange Act) or the liability provisions of Section 16(b) of the Exchange
Act (any such Optionee being hereinafter called a Section 16 Person), such
waiver may be granted by the Committee upon its determination that in its sole
judgment there shall not have been and will not be any substantial adverse
effect upon the Company or any subsidiary thereof by reason of the
nonfulfillment of such condition; and
•(2) if the Optionee shall not at any time have been a Section 16 Person, such
waiver may be granted by the Committee (or any committee appointed by it for the
purpose) upon its determination that in its sole judgment there shall not have
been and will not be any such substantial adverse effect.
Anything contained herein or in the Agreement to the contrary notwithstanding,
the right of the Optionee to exercise the Option or any Stock Appreciation Right
following termination of the Optionee's employment with the Company shall cease
on and as of the date on which it has been determined by the Committee that the
Optionee at any time (whether before or subsequent to termination of the
Optionee's employment) acted in a manner inimical to the best interests of the
Company. Conduct which constitutes engaging in an activity that is directly or
indirectly in competition with any activity of the Company or any subsidiary
thereof shall be governed by the four immediately preceding paragraphs of this
Article and shall not be subject to any determination under this paragraph.

5.    Payment for any shares of Stock purchased upon exercise of the Option
shall be made in full at the time of exercise. Such payment may be made in cash,
by wire, by delivery of shares of Stock beneficially owned by the Optionee or by
a combination of cash and Stock, at the election of the Optionee; provided,
however, that any shares of Stock so delivered shall have been beneficially
owned by the Optionee for a period of not less than six months (or 12 months if
the stock being surrendered was acquired through the exercise of an ISO) prior
to the date of such exercise. Any shares of Stock so delivered shall be valued
at their fair market value (determined as provided in Article 2 hereof) on the
date of such exercise.

The Optionee, from time to time during the period when the Option and any Stock
Appreciation Right may by their terms be exercised (a) may exercise the Option
in whole or in part by delivering to the Company or its designee (i) a written
notice signed by the Optionee stating the number of shares that the Optionee has
elected to purchase at that
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time from the Company, and (ii) a check in an amount, or (in accordance with the
preceding paragraph) shares of Stock having a value, equal to the purchase price
of the shares then to be purchased, or a combination of shares of Stock and
cash, or (b) may exercise any Stock Appreciation Right in whole or in part by
delivering to the Company a written notice signed by the Optionee stating (i)
the number of shares covered by the Option he or she has elected to use to
compute the number of shares, and/or (ii) the number of shares covered by the
Option he or she has elected to use to compute the amount of cash, to be
received from the Company pursuant to exercise of any Stock Appreciation Right.
The Committee, if it shall deem it necessary or desirable for any reason
connected with any law or regulation of any governmental authority relating to
the regulation of securities, may require the Optionee to execute and file with
it such evidence as it may deem necessary that the Optionee is acquiring any
shares of Stock for investment and not with a view to their distribution and, by
way of the adoption of rules and regulations or otherwise, impose conditions as
to the time and manner of exercise of any Stock Appreciation Right by any person
or class of persons.

As soon as practicable after receipt by the Company or its designee of such
notice, check and/or shares of Stock (if the Option is exercised in whole or in
part) and such evidence of intent to acquire for investment as may be required
by the Committee, the Company shall issue the appropriate number of shares in
the name of the Optionee and deliver the certificate therefor to the Optionee
and/or deliver a check payable to the order of the Optionee for the appropriate
amount of cash. The number of shares shall be adjusted appropriately, or other
appropriate arrangements shall be made, for any taxes required to be withheld by
federal, state or local law.

6.    As a condition of the granting of the Option and any Stock Appreciation
Right, the Optionee and the Optionee's successors and assigns agree that any
dispute or disagreement which shall arise under or as a result of the Agreement
or these terms and conditions shall be determined by the Committee in its sole
discretion and judgment and that any such determination and any interpretation
by the Committee of the Agreement or of these terms and conditions shall be
final and shall be binding and conclusive for all purposes.

7.    Unless the Committee determines otherwise, neither the Option nor any
Stock Appreciation Right is transferable by the Optionee otherwise than by will
or the laws of descent and distribution, and, during the Optionee's lifetime,
each is exercisable only by the Optionee or the Optionee's guardian or legal
representative. Once transferred by will or by the laws of descent and
distribution, neither the Option nor any Stock Appreciation Right shall be
further transferable. Any transferee of the Option and any Stock Appreciation
Right shall take the same subject to the terms and conditions set forth herein.
No such transfer of the Option and any Stock Appreciation Right shall be
effective to bind the Company unless the Company shall have been furnished with
written notice thereof and a copy of the will and/or such other evidence as the
Committee may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions set
forth herein. No assignment or
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transfer of the Option and any Stock Appreciation Right, or of the rights
represented thereby, other than as provided in this Article, shall vest in the
purported assignee or transferee any interest or right therein whatsoever.

Notwithstanding anything to the contrary set forth herein, the Optionee may file
with the Company or its designee a written designation of beneficiary or
beneficiaries (subject to such limitations as to the classes and number of
beneficiaries and contingent beneficiaries and such other limitations as the
Committee from time to time may prescribe) to exercise, in the event of the
Optionee's death, the Option or any Stock Appreciation Right subject to the
terms and conditions set forth herein and to receipt by the Company of such
evidence as the Committee may deem necessary to establish the acceptance by the
beneficiary or beneficiaries of the terms and conditions set forth herein. The
Optionee may from time to time revoke or change any such designation of
beneficiary and any designation of beneficiary by the Optionee shall be
controlling over any other disposition, testamentary or otherwise; provided,
however, that if the Committee shall be in doubt as to the entitlement of any
such beneficiary to exercise the Option or any Stock Appreciation Right, the
Committee may determine to recognize only an exercise by the legal
representative of the Optionee, in which case the Company, the Committee and the
members thereof shall not be under any further liability to anyone. If the
Optionee has not designated a beneficiary or beneficiaries, the executor or
administrator of the estate of the decedent or the person or persons to whom the
Option or any Stock Appreciation Right shall have been validly transferred by
the executor or administrator pursuant to will or the laws of descent and
distribution shall have the rights of a beneficiary with respect to the exercise
of such Option or Stock Appreciation Right.

8.    The Optionee, a beneficiary designated pursuant to Article 7 hereof or a
transferee of the Option and any Stock Appreciation Right shall have no rights
as a stockholder with respect to any share covered by the Option or any Stock
Appreciation Right until such person shall have become the holder of record of
such share, and, except as provided in Article 10 hereof, no adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash or securities or
other property) or distributions or other rights in respect of such share for
which the record date is prior to the date upon which such person shall become
the holder of record thereof.

9.    The existence of the Option or any Stock Appreciation Right shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize any adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Stock or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceedings
whether of a similar character or otherwise.

10.    The shares covered by the Option and any Stock Appreciation Right are
shares of Stock as presently constituted, but if, and whenever, prior to the
delivery by the Company of all
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of the shares of Stock and/or cash deliverable upon exercise of the Option or
any Stock Appreciation Right, the Company shall effect the payment of a stock
dividend on Stock payable in shares of Stock, a subdivision or combination of
the shares of Stock, or a reclassification of Stock, the number and price of
shares remaining under the Option and any Stock Appreciation Right shall be
appropriately adjusted. Such adjustment shall be made by the Committee, whose
determination as to what adjustment shall be made, and the extent thereof, shall
be final and shall be binding and conclusive for all purposes. Any such
adjustment may provide for the elimination of any fractional share which might
otherwise become subject to the Option.

11.    Except as hereinbefore expressly provided, (a) the issue by the Company
of shares of Stock of any class, or securities convertible into shares of Stock
of any class, for cash or property or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe therefore, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, or (b) the payment of a stock dividend on any other class
of the Company's stock, or (c) any subdivision or combination of the shares of
any other class of the Company's stock, or (d) any reclassification of any other
class of the Company's stock, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Stock
subject to the Option or any Stock Appreciation Right.

12.    After any merger of one or more corporations into the Company, or after
any consolidation of the Company and one or more corporations in which the
Company shall be the surviving corporation, the Optionee shall, at no additional
cost, be entitled upon any exercise of the Option or any exercise of any Stock
Appreciation Right for Stock, to receive (subject to any required action by
stockholders), in lieu of the number of shares as to which the Option or any
Stock Appreciation Right shall then be so exercised, the number and class of
shares of stock or other securities to which the Optionee would have been
entitled pursuant to the terms of the agreement of merger or consolidation if at
the time of such merger or consolidation the Optionee had been a holder of
record of a number of shares of Stock equal to the number of shares as to which
such Option or Stock Appreciation Right shall then be so exercised. Comparable
rights shall accrue to the Optionee in the event of successive mergers or
consolidations of the character described above or in the event of any exercise
of any Stock Appreciation Right for cash following any such merger or
consolidation. Anything contained herein or in the Agreement to the contrary
notwithstanding, upon the dissolution or liquidation of the Company, or upon any
merger or consolidation in which the Company is not the surviving corporation,
the Option and any Stock Appreciation Right shall terminate; but if a period of
one year from the date of the Agreement shall have expired, the Optionee shall
have the right, immediately prior to such dissolution, liquidation, merger or
consolidation, to exercise the Option or any Stock Appreciation Right in whole
or in part to the extent it shall not have been exercised, without regard to the
installment provisions of Article 1 hereof but subject to any other limitation
contained herein or in the Agreement on the exercise of the Option and any Stock
Appreciation Right in effect on the date of exercise. In the event of any other
event affecting Stock, an appropriate
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adjustment shall be made in the number and price of shares remaining under, and
other terms and provisions of, the Option and any Stock Appreciation Right. The
foregoing adjustments and the manner of application of the foregoing provisions
shall be determined by the Committee in its sole discretion, and such
determination shall be final and shall be binding and conclusive for all
purposes. Any such adjustment may provide for the elimination of any fractional
share which might otherwise become subject to the Option.

13.    Optionee acknowledges and agrees that, in order for the Company to
perform its requirements under the Plan, the Company may process, for an
indefinite period of time, personal data about Optionee. Such data includes, but
is not limited to, the information provided in the Option grant materials and
any changes thereto, and other appropriate personal data about Optionee,
including information about Optionee's participation in the Plan and options
exercised under the Plan from time to time. Optionee also hereby gives for an
indefinite period of time Optionee's explicit consent to the Company to collect,
use, store and transfer any such personal data for use in the United States of
America or any other required location. The legal persons for whom the personal
data is intended include Ford and any of its subsidiaries, the outside plan
administrator as selected by the Company from time to time and any other person
that the Company may deem appropriate in its administration of the Plan.
Optionee has been informed of Optionee's right to access and correct Optionee's
personal data by contacting Optionee's local Human Resources Representative.
Optionee has been informed of Optionee's right to withdraw at any time
Optionee's consent to the processing of personal data. Optionee has been
informed that the provision of personal data is voluntary. Optionee understands
that the transfer of the information outlined here is important to the
administration of the Plan. Optionee's consent is given freely and is valid as
long as it is needed for administration of the Plan or to comply with applicable
legal requirements. Optionee's failure to consent to the Company's collection,
use, storage and transfer of such personal data may limit Optionee's right to
participate in the Plan. For purposes of this paragraph, the term "Company"
shall be deemed to include Ford Motor Company, Optionee's employer, and any
other affiliate of Ford Motor Company involved in the administration of the
Plan.

14.    Optionee acknowledges that the Company is entitled to terminate the Plan
unilaterally, and Optionee hereby waives any right to receive Plan benefits in
the event that the Plan is terminated or Optionee's right to exercise the Option
otherwise terminates under the terms of the Agreement. Optionee further
acknowledges that the Company's grant of the option to Optionee is not an
element of the Optionee's compensation and that the option is awarded in the
Company's discretion. Optionee further acknowledges that receipt of the Option
does not entitle Optionee to any further grants of an Option in the future, and
that the Company does not guarantee that benefits under the Plan will have a
particular value or be granted to Optionee in the future.

15.    Notwithstanding any of the other provisions of the Agreement or these
terms and conditions, the Optionee agrees not to exercise the Option or any
Stock Appreciation
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Right, and that the Company will not be obligated to issue any shares or deliver
any cash pursuant to the Agreement, if the exercise of the Option or any Stock
Appreciation Right or the issuance of such shares or delivery of such cash would
constitute a violation by the Optionee or by the Company of any provisions of
any law or regulation of any governmental authority. Any determination of the
Committee in this connection shall be final and shall be binding and conclusive
for all purposes. The Company shall in no event be obligated to take any
affirmative action in order to cause the exercise of the Option or any Stock
Appreciation Right or the issuance of shares or delivery of cash pursuant
thereto to comply with any law or any regulation of any governmental authority.

16.    Every notice relating to the Agreement shall be in writing and shall be
given by registered mail with return receipt requested. All notices to the
Company shall be addressed to:
•Morgan Stanley
•Ford Service Center
•1001 Page Mill Road
•Bldg. 4, Suite 101
•Palo Alto, CA 94304, USA

•Phone No.:
•877-664-FORD (3673) (U.S.)
•212-615-7009 (Non-U.S.)
•Fax No.:650-494-2561

All notices by the Company to the Optionee shall be addressed to the current
address of the Optionee as shown on the records of the Company. Either party by
notice to the other may designate a different address to which notices shall be
addressed. Any notice given by the Company to the Optionee at his or her last
designated address shall be effective to bind any other person who shall acquire
rights under the Agreement.

17.    Whenever the term Optionee is used in any provision of the Agreement or
these terms and conditions under circumstances such that the provision should
logically apply to any other person or persons designated as a beneficiary
pursuant to the provisions of Article 7 hereof, or to whom the Option and any
Stock Appreciation Right, in accordance with the provisions of Article 7 hereof,
may be transferred, the term Optionee shall be deemed to include such person or
persons.

18.    The Agreement has been made in and it and these terms and conditions
shall be construed in accordance with the laws of the State of Michigan.
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