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                                                                     EXHIBIT 10c

                            ANNUAL EMPLOYEE INCENTIVE
                COMPENSATION PLAN FOR CMS ENERGY CORPORATION AND
                                ITS SUBSIDIARIES

Effective January 1, 2005
Approved by Committee on March 23, 2005

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                            ANNUAL EMPLOYEE INCENTIVE
              COMPENSATION PLAN FOR CMS ENERGY CORPORATION AND ITS
                                  SUBSIDIARIES

I.    GENERAL PROVISIONS

      1.1 PURPOSE. The purpose of the Annual Employee Incentive Compensation
      Plan ("EIC Plan") is to:

            (a)   Provide an equitable and competitive level of compensation
                  that will permit CMS Energy Corporation ("Company") and its
                  subsidiaries to attract, retain and motivate their Employees.

            (b)   No payments to Employees in the form of incentive compensation
                  shall be made unless pursuant to a plan approved by the
                  Committee and after express approval of the Committee.

      1.2   EFFECTIVE DATE. The initial effective date of the Plan is January 1,
            2004. The Plan as described herein, is amended and restated
            effective January 1, 2005.

      1.3   DEFINITIONS. As used in this EIC Plan, the following terms have the
            meaning described below:

            (a)   "Annual Award" means an annual incentive award granted under
                   the EIC Plan.

            (b)   "CMS Energy" means CMS Energy Corporation.

            (c)   "Committee" means the Committee on Compensation and Human
                   Resources of the Board of Directors of CMS Energy.

            (d)   "Common Stock" means the common stock of CMS Energy.

            (e)   "Company" means CMS Energy Corporation.

            (f)   "Corporate Free Cash Flow" (CFCF) means CMS Consolidated Cash
                   Flow from operating activities, excluding pension
                   contributions and adjusted for GCR Recovery, plus Cash Flow
                   from Investing Activities.

            (g)   "Disability" means that a participant has terminated
                   employment with the Company or a Subsidiary and is entitled
                   to disability payments under the Pension Plan.

            (h)   "Earnings Per Share" (EPS) means the amount of ongoing net
                   income per outstanding CMS Energy Share.

            (i)   "EIC Plan" means the Annual Employee Incentive Compensation
                   Plan for CMS Energy Corporation and Its Subsidiaries, as
                   effective January 1, 2004 and any amendments thereto.

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            (j)   "Employee" means a regular fulltime or part time employee of
                  the Company or a Subsidiary in the salary grades specified in
                  the table contained in Article III of the EIC Plan.

            (k)   "GCR Recovery" means actual/forecast incremental GCR recovery
                  during January and February, calculated as actual/forecast GCR
                  cycle billed sales times above budget GCR factor.

            (l)   "Leave of Absence" for purposes of this EIC Plan means a leave
                  of absence that has been approved by the Company or a
                  Subsidiary.

            (m)   "Outside Directors" means directors of CMS Energy who are not
                  employed by CMS Energy or a Subsidiary and satisfy the
                  requirements of an "Outside Director" under Code Section
                  162(m).

            (n)   "Pension Plan" means the Pension Plan for Employees of
                  Consumers Energy and Other CMS Energy Companies.

            (o)   "Performance Year" means the calendar year prior to the year
                  in which an Annual Award is made by the Committee.

            (p)   "Plan Administrator" means the Sr. Vice President - Human
                  Resources of CMS Energy, under the general direction of the
                  Outside Directors on the Committee.

            (q)   "Retirement" means that an EIC Plan participant is no longer
                  an active employee and qualifies for a retirement benefit
                  other than a deferred vested retirement benefit under the
                  Pension Plan.

            (r)   "Subsidiary" means any direct or indirect subsidiary of the
                  Company.

      1.4   ELIGIBILITY. Regular non-union U.S. employees who do not participate
            in a broad based incentive plan contingent upon objectives and
            performance unique to the employees' subsidiary, affiliate, site
            and/or business unit, are eligible for participation in the EIC
            Plan.

      1.5   ADMINISTRATION OF THE PLAN.

            (a)   The EIC Plan is administered by the Sr. Vice President - Human
                  Resources and Administrative Services of CMS Energy under the
                  general direction of the Outside Directors who are members of
                  the Committee.

            (b)   The Committee, no later than March 31st of the Performance
                  Year, will approve performance goals for the Performance Year.

            (c)   The Committee, no later than March 31st of the calendar year
                  following the Performance Year, will review for approval
                  proposed Annual Awards for the total of all EIC Plan
                  participants, as recommended by the President and CEO of the
                  Company. All proposed Annual Awards are subject to approval of
                  the Committee. Before the payment of any Annual Awards, the
                  Committee will certify in writing that the performance goals
                  were in fact satisfied in accordance with Code Section 162(m).

            (d)   The Committee reserves the right to modify the performance
                  goals with respect to unforeseeable circumstances or otherwise
                  exercise discretion with respect to proposed

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            Annual Awards as it deems necessary to maintain the spirit and
            intent of the EIC Plan. The Committee also reserves the right in its
            discretion to not pay Annual Awards for a Performance Year. All
            discretionary decisions of the Committee are final.

II.   CORPORATE PERFORMANCE GOALS

      2.1   IN GENERAL. The composite Plan Performance Factor will depend on
            corporate performance in two areas: (1) the ongoing net income per
            outstanding CMS Energy share (EPS); and (2) the Corporate Free Cash
            Flow of CMS Energy (CFCF). There will be no payout under the Plan
            unless a composite Plan Performance Factor of at least 75% is
            achieved. Each Component as well as the composite Plan Performance
            Factor to be used for payouts will be capped at a maximum of 200%. A
            table containing the composite Plan Performance Factors shall be
            created by the Committee for each Performance Year. The table for
            Performance Year 2005 is set forth below.

            (a)   EPS COMPONENT. EPS performance shall constitute 40% of the
                  composite Plan Performance Factor. The 100% EPS goal for the
                  2005 performance year is $.90 per share, and the EPS component
                  shall increase or decrease by 25% for each $.05 per share
                  change in performance. (Mathematical extrapolation shall be
                  used for actual results not shown in the table.) There will be
                  no payout under the plan unless at least $.80 per share is
                  achieved (regardless of CFCF performance).

            (b)   CFCF COMPONENT. CFCF performance shall constitute 60% of
                  composite Plan Performance Factor. The 100% CFCF goal for the
                  2005 performance year is $(150) million, and the CFCF
                  component shall increase or decrease by 25% for each $50
                  million change in performance. (Mathematical extrapolation
                  shall be used for actual results not shown in the table.)

             COMPOSITE PERFORMANCE FACTORS FOR 2005 PERFORMANCE YEAR

<TABLE>
<S>                               <C>              <C>            <C>            <C>          <C>         <C>
        CFCF
        COMPONENT                 $    (250)       $    (200)     $(166.67)      $ (150)      $ (100)     $  (50)      $ 0     $50
        (MILLIONS)

EPS

COMPONENT

  $.80                            No Payout        No Payout            75%          80%          95%        110%      125%    140%

  $.85                            No Payout               75%           85%          90%         105%        120%      135%    150%

  $.90                            No Payout               85%           95%         100%         115%        130%      145%    160%

  $.925                                  75%              90%          100%         105%         120%        135%      150%    165%

  $.95                                   80%              95%          105%         110%         125%        140%      155%    170%

  $1.00                                  90%             105%          115%         120%         135%        150%      165%    180%

  $1.05                                 100%             115%          125%         130%         145%        160%      175%    190%

  $1.10                                 110%             125%          135%         140%         155%        170%      185%    200%
</TABLE>

Notes: Mathematical extrapolation shall be used for actual results not shown in
the table.

Target Award is Bolded 100% and Maximum Award is Bolded 200%

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III.  ANNUAL AWARD FORMULA


      3.1   ANNUAL AWARDS. Annual Awards for each eligible EIC Plan participant
            will be based upon a standard award as set forth in the table below.
            The total amount of an EIC participant Annual Award shall be
            computed according to the annual award formula set forth in Section
            3.2.

                      <TABLE>
                      <CAPTION>
                       YEAR           FULLTIME         PART TIME
                       END            STANDARD          STANDARD
                      SALARY           AWARD             AWARD
                      GRADE            AMOUNT            AMOUNT
                      -----           --------         ---------
                      <S>             <C>              <C>

                       18             $2,000            $1,000
                       17             $1,750            $  875
                       16             $1,500            $  750
                       15             $1,350            $  675
                       14             $1,200            $  600
                       13             $1,150            $  575
                       12             $1,100            $  550
                       11             $1,050            $  525
                       10             $1,000            $  500
                        9             $  950            $  475
                        8             $  900            $  450
                        7             $  850            $  425
                        6             $  800            $  400
                        5             $  750            $  375
                        4             $  700            $  350
                        3             $  650            $  325
                        2             $  600            $  300
                        1             $  550            $  275
</TABLE>

      3.2   Annual Awards for EIC participants will be calculated and made as
            follows:

       INDIVIDUAL AWARD = STANDARD AWARD AMOUNT TIMES PERFORMANCE FACTOR %

IV.   PAYMENT OF ANNUAL AWARDS

      4.1   CASH ANNUAL AWARD. All Annual Awards for a Performance Year will be
            paid in cash no later than March 31st of the calendar year following
            the Performance Year provided that they first have been reviewed and
            approved by the Committee. The amounts required by law to be
            withheld for income and employment taxes will be deducted from the
            Annual Award payments. All Annual Awards become the obligation of
            the company on whose payroll the Employee is enrolled at the time
            the Committee makes the Annual Award.

      4.2   PAYMENT IN THE EVENT OF DEATH.

            (a)   A participant may name the beneficiary of his or her choice on
                  a beneficiary form provided by the Company, and the
                  beneficiary shall receive payment in the event that the
                  Participant dies prior to receipt of a cash Annual Award. If a
                  beneficiary is not named, the payment will be made to the
                  first surviving class as follows:

                        1. Widow or Widower

                        2. Children, per capita

                        3. Parents, per capita

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                        4. Brothers and Sisters, per capita

                        5. Estate of the Deceased

            (b)   A participant may change beneficiaries at any time, and the
                  change will be effective as of the date the participant
                  completes and signs the beneficiary form, whether or not the
                  participant is living at the time the request is received by
                  the Company. However, the Company or the applicable Subsidiary
                  will not be liable for any payments made before receipt of a
                  written request.

V.    CHANGE OF STATUS

            Payments in the event of a change in status will not apply if no
            awards are made for the performance year.

      5.1   PRO-RATA ANNUAL AWARDS. A new EIC participant, hired during the
            Performance Year will receive a pro rata Annual Award based on the
            percentage of the Performance Year in which the employee is
            employed.

      5.2   TERMINATION. An EIC participant whose employment is terminated
            pursuant to a violation of the Company code of conduct or other
            corporate policies will not be considered for an Annual Award.

      5.3   RESIGNATION. An EIC participant who resigns during or after a
            Performance Year will not be eligible for an Annual Award. If the
            resignation is due to reasons such as a downsizing or
            reorganization, or the ill health of the employee or ill health in
            the immediate family, the employee may petition the Committee and
            may be considered, in the discretion of the Committee, for a pro
            rata Annual Award. The Committee's decision to approve or deny the
            request for a pro rata Annual Award shall be final.

      5.4   DEATH, DISABILITY, RETIREMENT, LEAVE OF ABSENCE. An EIC participant
            whose status as an active employee is changed during the Performance
            Year due to death, Disability, Retirement, or Leave of Absence will
            receive a pro rata Annual Award.

VI.   MISCELLANEOUS

      6.1   IMPACT ON BENEFIT PLANS. Payments made under the Plan will be not be
            considered as earnings for purposes of the Employees' Savings Plan,
            Pension Plan, or other employee benefit programs.

      6.2   IMPACT ON EMPLOYMENT. Neither the adoption of the Plan nor the
            granting of any Annual Award under the Plan will be deemed to create
            any right in any individual to be retained or continued in the
            employment of the Company or any corporation within the Company's
            control group.

      6.3   TERMINATION OR AMENDMENT OF THE PLAN. The Company at any time may,
            in writing, terminate or amend the Plan.

      6.4   GOVERNING LAW. The Plan will be governed and construed in accordance
            with the laws of the State of Michigan.

      6.5   DISPUTE RESOLUTION. Any disputes related to the Plan should first be
            brought to the Plan Administrator. If that does not result in a
            mutually agreeable resolution, then the dispute shall

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            be subject to final and binding arbitration before a single
            arbitrator selected by the parties to be conducted in Jackson,
            Michigan. The arbitration will be conducted and finished within 90
            days of the selection of the arbitrator. The parties shall share
            equally the cost of the arbitrator and of conducting the arbitration
            proceeding, but each party shall bear the cost of its own legal
            counsel and experts and other out-of-pocket expenditures.

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