<PAGE>   1
                                                                EXHIBIT  (10)(d)

                             CMS ENERGY CORPORATION
                        PERFORMANCE INCENTIVE STOCK PLAN


The CMS Energy Performance Incentive Stock Plan, first effective February 3,
1988, is hereby set forth as amended and restated effective December 3, 1999
including amendments as of December 3, 1999.

ARTICLE I.  PURPOSE

The CMS Energy Corporation Performance Incentive Stock Plan (hereinafter called
the "Plan") is a Plan to provide incentive compensation to key employees of the
Corporation, including its Subsidiaries, based upon such key employees'
individual contributions to the long-term growth of and profitability of the
Corporation, and in order to encourage such key employees to identify with
shareholder concerns and their current and continuing interest in the
development and financial success of the Corporation. Because it is expected
that the efforts of the key employees selected for participation in the Plan
will have a significant impact on the results of the Corporation's operations in
future years, the Plan is intended to assist the Corporation in attracting and
retaining as key employees individuals of superior ability and in motivating
their activities on behalf of the Corporation.

ARTICLE II.  DEFINITIONS

2.1  Definitions: When used in the Plan, the following words and phrases
     shall have the following meanings:

     a.   "Beneficiary" means the beneficiary or beneficiaries designated in
          accordance with Article VII to receive the amount, if any, payable
          under the Plan upon the death of a Participant.

     b.   "Board" means the Board of Directors of the Corporation.

     c.   "Committee" means those members of the Organization and Compensation
          Committee of the Board who, at the time of any award or determination
          by the Committee hereunder, are not, and at all times within one year
          prior thereto shall not have been, eligible for selection as persons
          to whom incentive compensation may be awarded pursuant to the Plan, or
          to whom incentive or unqualified Stock Options may be granted pursuant
          to any other plan of the Corporation.

     d.   "Common Stock" means all classes of Common Stock of the Corporation as
          that term is defined in its Articles of Incorporation at the time of
          an award or grant under this Plan.

     e.   "Common Stock Outstanding" means the number of shares of Common Stock
          issued and outstanding on the first day of January of each year. In
          case of a reorganization, recapitalization, stock split, stock
          dividend, combination of shares, merger, consolidation, rights
          offering, or any other change in the capital structure of the

<PAGE>   2
                                                                               2
          Corporation, the Committee shall make such adjustment, if any, as it
          may deem appropriate in the determination of Common Stock Outstanding.

     f.   "Corporation" means CMS Energy Corporation, its successors and
          assigns, and each of its Subsidiaries, or any of them individually.

     g.   "Eligible Employee" means an officer or other key executive who at the
          end of the fiscal year is a regular full-time salaried employee of the
          Corporation or a Subsidiary, or, to the extent the Committee may
          determine, a person whose services to the Corporation terminated
          before the end of the fiscal year, who, in the opinion of the
          Committee, made a significant contribution to the successful
          management of the Corporation or a Subsidiary. A Director of the
          Corporation or a Subsidiary is not an Eligible Employee unless he is
          also a regular full-time salaried employee of the Corporation or a
          Subsidiary.

     h.   "Incentive Option" means an option to purchase Common Stock of the
          Corporation which meets the requirements set forth in the Plan and
          also meets the definition of an Incentive Stock Option set forth in
          Section 422 of the Internal Revenue Code of 1986, as amended (the
          "Code").

     i.   "Nonqualified Option" means an option to purchase Common Stock of the
          Corporation which meets the requirements set forth in the Plan but
          does not meet the definition of an Incentive Stock Option set forth in
          Section 422 of the Code.

     j.   "Optionee" means any person to whom an option or right has been
          granted or who becomes a holder of an option or right under Article VI
          of the Plan.

     k.   "Participant" means a person to whom an award of Restricted Common
          Stock has been made which has not been paid, forfeited, or otherwise
          terminated or satisfied under the Plan.

     l.   "Restricted Common Stock" means Common Stock delivered subject to the
          restrictions described in Article VII.

     m.   "Shareholders" means the shareholders of the Corporation.

     n.   "Stock Appreciation Right" shall mean a right, granted in conjunction
          with a Stock Option, to surrender the Stock Option and receive the
          appreciation in value of the optioned shares over the option price.

     o.   "Stock Option" means an option to purchase shares of Common Stock,
          granted pursuant to this Plan.

     p.   "Subsidiary" means a corporation, domestic or foreign, 80 percent or
          more of the voting stock of which is owned directly or indirectly by
          the Corporation.




<PAGE>   3

                                                                               3


ARTICLE III.  EFFECTIVE DATE, DURATION, SCOPE AND ADMINISTRATION OF
THE PLAN

3.1  This Plan shall be effective upon approval of the shareholders of the
     Corporation and shall continue until terminated by the Board as provided in
     Article VIII.

3.2  The Committee shall have full power and authority to construe, interpret
     and administer the Plan. All decisions, actions or interpretations of the
     Committee shall be final, conclusive and binding upon all parties. If any
     person objects to any such interpretation or action formally or informally,
     the expenses of the Committee and its agents and counsel shall be
     chargeable against any amounts otherwise payable under the Plan to or on
     account of the Participant or Optionee.

3.3  No member of the Committee shall be personally liable by reason of any
     contract or other instrument executed by him or on his behalf in his
     capacity as a member of the Committee nor for any mistake of judgment made
     in good faith, and the Corporation shall indemnify and hold harmless each
     member of the Committee and each other officer, employee or director of the
     Corporation to whom any duty or power relating to the administration or
     interpretation of the Plan may be allocated or delegated, against any cost
     or expense (including counsel fees) or liability (including any sum paid in
     settlement of a claim with the approval of the Board) arising out of any
     act or omission to act in connection with the Plan unless arising out of
     such person's own fraud or bad faith.

ARTICLE IV.  PARTICIPATION, STOCK AWARDS AND OPTION GRANTS

4.1  Each year the Committee shall designate as Participants and/or Optionees in
     the Plan those Eligible Employees who, in the opinion of the Committee,
     have significantly contributed to the successful management of the
     Corporation.

4.2  Each year, the Committee may award shares of Common Stock, and/or may grant
     Stock Options which qualify as "Incentive Stock Options" within the meaning
     of Section 422 of the Code or Stock Options which do not qualify as
     Incentive Stock Options and/or Stock Appreciation Rights for use in
     connection with options to each Eligible Employee whom it has designated as
     an Optionee or Participant for such year. The Committee has full discretion
     to determine the class or classes of Common Stock to which grants or awards
     apply. Upon the approval by the Board of Directors of the Corporation of
     the individual awards and/or grants, if any, made to officers and of the
     total of all awards and grants made to all other Eligible Employees, the
     determination of the Committee as to each such award and grant shall become
     final.

ARTICLE V.  SHARES RESERVED UNDER THE PLAN

5.1  There is hereby reserved for award under this Plan an aggregate number of
     whole shares of Common Stock equal as nearly as possible to, but not more
     than, 5% of the aggregate shares of each class of Common Stock Outstanding
     on the first day of January of each year, less the number of shares of each
     class of Restricted Common Stock awarded under the Plan and Common Stock
     subject to options, granted under this Plan during the immediately
     preceding four calendar year period, which have not been forfeited. Any
     shares or options which are

<PAGE>   4
                                                                               4
     forfeited may thereafter again be awarded or made subject to grant under
     the Plan. Notwithstanding the above, the number of shares of each class of
     Common Stock awarded under Article VII of this Plan will not exceed 20% of
     the aggregate number of shares reserved pursuant to this Article V. The
     number of shares made available for option and sale under Article VI of
     this Plan, plus the number of shares awarded under Article VII of this Plan
     will not exceed, at any time, the number of shares of Common Stock reserved
     pursuant to this Article V.

5.2  If a dividend shall be declared upon the Common Stock payable in shares of
     Common Stock, the number of shares of Common Stock then subject to any such
     option and the number of shares reserved for issuance pursuant to the Plan
     but not yet covered by an option shall be adjusted by adding to each such
     option or share the number of shares which would be distributable thereon
     if such share had been outstanding on the date fixed for determining the
     shareholders entitled to receive such stock dividend. In the event that the
     outstanding shares of the Common Stock shall be changed into or exchanged
     for a different number or kind of shares of stock or other securities of
     CMS Energy Corporation or of another corporation, whether through
     reorganization, recapitalization, stock split-up, combination of shares,
     merger or consolidation or otherwise, then there shall be substituted for
     each share of Common Stock subject to any such option and for each share of
     Common Stock reserved for issuance pursuant to the Plan but not yet covered
     by an option, the number and kind of shares of stock or other securities
     into which each outstanding share of Common Stock shall be so changed or
     for which each such share shall be exchanged. In the event there shall be
     any change, other than as specified above in this Section 5.2, in the
     number or kind of outstanding shares of Common Stock of the Corporation or
     of any stock or other securities into which such Common Stock shall have
     been changed or for which it shall have been exchanged, then if the
     Committee shall in its sole discretion determine that such change equitably
     requires an adjustment in the number or kind of shares theretofore reserved
     for issuance pursuant to the Plan but not yet covered by an option and of
     the shares then subject to an option or options, such adjustment shall be
     made by the Committee and shall be effective and binding for all purposes
     of the Plan and each Stock Option agreement. In the case of any such
     substitution or adjustment as provided for in this paragraph, the option
     price in each Stock Option agreement for each share covered thereby prior
     to such substitution or adjustment will be the option price for all shares
     of stock or other securities which shall have been substituted for such
     share or to which such share shall have been adjusted pursuant to this
     section. No adjustment or substitution provided for in this Section 5.2
     shall require the Corporation in any Stock Option agreement to sell a
     fractional share, and the total substitution or adjustment with respect to
     each Stock Option agreement shall be limited accordingly.

5.3  Individual Grant Limit: The maximum shares of Restricted Common Stock
     awarded under this Plan and Common Stock subject to Stock Options,
     including Stock Appreciation Rights granted in conjunction with Stock
     Options, granted under this Plan for any one Eligible Employee for any one
     year will not exceed 100,000 shares of each class of Corporation Common
     Stock.


ARTICLE VI.  STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

<PAGE>   5

                                                                              5

6.1  The Committee may from time to time provide for the option and sale of
     shares of Common Stock, which may consist in whole or in part of the
     authorized and unissued or reacquired Common Stock of the Corporation.

6.2  Optionees: The Committee shall determine and designate from time to time,
     in its discretion, those Eligible Employees of the Corporation to whom
     Stock Options and Stock Appreciation Rights are to be granted and who
     thereby become Optionees under the Plan.

6.3  Allotment of Shares: The Committee shall determine and fix the number of
     shares and classes of Common Stock subject to options to be offered to each
     Optionee.

6.4  Option Price: The Committee shall establish the option price at the time
     any option is granted at not less than 100% of the fair market value of the
     stock on the date on which such option is granted; provided, however, that
     with respect to an Incentive Option granted to an employee who at the time
     of the grant owns (after applying the attribution rules of Section 425(d)
     of the Code) more than 10% of the total combined voting stock of the
     Corporation or of any parent or Subsidiary, the option price shall not be
     less than 110% of the fair market value of the stock subject to the
     Incentive Option on the date such option is granted.

6.5  Stock Appreciation Rights: At the discretion of the Committee, any Stock
     Option granted under this Plan may, at the time of such grant, include a
     Stock Appreciation Right. A Stock Appreciation Right shall pertain to, and
     be granted only in conjunction with, a related underlying Stock Option, and
     shall be exercisable only at the time and to the extent the related
     underlying Stock Option is exercisable and only if the fair market value of
     the Common Stock of the Corporation exceeds the Stock Option price in the
     related underlying Stock Option. An Optionee who is granted a Stock
     Appreciation Right may elect to surrender the related underlying Stock
     Option with respect to all or part of the number of shares subject to the
     related underlying Stock Option and exercise in lieu thereof the Stock
     Appreciation Right with respect to the number of shares as to which the
     Stock Option is surrendered.

     The exercise of the underlying Stock Option shall terminate the related
     Stock Appreciation Right to the extent of the number of shares purchased
     upon exercise of the underlying Stock Option. The exercise of a Stock
     Appreciation Right shall terminate the related underlying Stock Option to
     the extent of the number of shares with respect to which the Stock
     Appreciation Right is exercised. Upon exercise of a Stock Appreciation
     Right, an Optionee shall be entitled to receive, without payment to the
     Company (except for applicable withholding taxes), an amount equal to the
     excess of (i) the then aggregate fair market value of the number of shares
     with respect to which the Optionee exercises the Stock Appreciation Right,
     over (ii) the aggregate Stock Option price per share for such number of
     shares. Such amount may be paid by the Corporation, at the election of the
     Optionee, in cash, Common Stock of the Corporation or any combination
     thereof; provided, however, that the Committee shall have sole discretion
     to approve or disapprove an election of an Optionee to receive cash upon
     exercise of a Stock Appreciation Right.

6.6  Granting and Exercise of Stock Options and Stock Appreciation Rights: The
     granting of Stock Options and Stock Appreciation Rights hereunder shall be
     effected in accordance with

<PAGE>   6


                                                                               6

     determinations made by the Committee pursuant to the provisions of the
     Plan, by execution of instruments in writing in form approved by the
     Committee.

     Each Stock Option and Stock Appreciation Right granted hereunder shall be
     exercisable at any such time or times or in any such installments as may be
     determined by the Committee at the time of the grant, subject to the
     limitation that for each Incentive Stock Option and related Stock
     Appreciation Right granted, a maximum of $100,000 (based on the price at
     the date of exercise) may be exercised per year, plus any unused carry-over
     from a previous year(s). Except as provided in Section 6.10, Stock Options
     and Stock Appreciation Rights may be exercised only while the Optionee is
     an employee of the Corporation.

     Successive Stock Options and Stock Appreciation Rights may be granted to
     the same Optionee, whether or not the Stock Option(s) and Stock
     Appreciation Right(s) previously granted to such Optionee remain
     unexercised. An Optionee may exercise a Nonqualified Option or related
     Stock Appreciation Right, if then exercisable, notwithstanding that Stock
     Options and Stock Appreciation Rights previously granted to such Optionee
     remain unexercised.

6.7  Payment of Stock Option Price: At the time of the exercise in whole or in
     part of any Stock Option granted hereunder, payment of the option price in
     full in cash or, with the consent of the Committee, in Common Stock of the
     Corporation, shall be made by the Optionee for all shares so purchased. No
     Optionee shall have any of the rights of a Shareholder of the Corporation
     under any such Stock Option until the actual issuance of shares to said
     Optionee, and prior to such issuance no adjustment shall be made for
     dividends, distributions or other rights in respect of such shares, except
     as provided in Section 5.2.

6.8  Nontransferability of Stock Options and Stock Appreciation Rights: No Stock
     Option or Stock Appreciation Right granted under the Plan to an Optionee
     shall be transferable by such Optionee otherwise than by will, or by the
     laws of descent and distribution, and such Stock Option and Stock
     Appreciation Right shall be exercisable, during the lifetime of the
     Optionee, only by the Optionee.

6.9  Term of Stock Options and Stock Appreciation Rights: If not sooner
     terminated, each Stock Option and Stock Appreciation Right granted
     hereunder shall expire not more than ten years (ten years and one month in
     the case of a Nonqualified Option and any related Stock Appreciation Right)
     from the date of the granting thereof; provided, that with respect to an
     Incentive Option and a related Stock Appreciation Right granted to an
     Optionee who, at the time of the grant, owns (after applying the
     attribution rules of Section 425(d) of the Code) more than 10% of the total
     combined voting stock of all classes of stock of the Corporation or of any
     parent or Subsidiary, such Stock Option and Stock Appreciation Right shall
     expire not more than five years after the date of granting thereof.

6.10 Termination of Employment: If the employment of an Optionee by the
     Corporation shall be terminated due to a reason other than the Optionee's
     death, the Committee may, in its discretion, permit the exercise of Stock
     Options and Stock Appreciation Rights granted to such Optionee for a period
     not to exceed one year following such termination of employment or three
     years following termination of employment upon retirement in accordance
     with a pension plan of the Corporation; provided, however, that no
     Incentive Option or related
<PAGE>   7
     Stock Appreciation Right may be exercised after three months following an
     Optionee's termination of employment, unless such termination of employment
     is due to the Optionee's death or disability. If the termination is due to
     the Optionee's disability, the Committee may permit the Incentive Option
     and related Stock Appreciation Right to be exercised for one year following
     the Optionee's termination of employment. If the employment of an Optionee
     by the Corporation shall be terminated due to the Optionee's death, any
     Stock Option, or related Stock Appreciation Right, transferred by will or
     the laws of descent and distribution, may be exercised for one year
     following the Optionee's death. In no event, however, shall a Stock Option
     or Stock Appreciation Right be exercisable subsequent to its expiration
     date and, furthermore, a Stock Option or Stock Appreciation Right may only
     be exercised after termination of an Optionee's employment to the extent
     exercisable on the date of termination of employment. Upon the termination
     of employment of an Optionee by the Corporation, every Stock Option and
     related Stock Appreciation Right shall terminate, except as otherwise
     specifically provided in this Plan. Further, no Stock Option or related
     Stock Appreciation Right may be exercised after such termination of
     employment, except within a time period provided in this Section 6.10.

6.11 Investment Purpose: Any shares of Common Stock subject to option under the
     Plan may be made subject to such other restrictions as the Committee deems
     advisable, including without limitation provisions to comply with Federal
     and state securities laws. In making determinations of legal requirements
     the Committee shall rely on an opinion of counsel for the Corporation.

6.12 Withholding Payments: If upon the exercise of a Nonqualified Option and/or
     a Stock Appreciation Right or as a result of a disqualifying disposition
     (within the meaning of Section 422 of the Code) of shares acquired upon
     exercise of an Incentive Option, there shall be payable by the Corporation
     any amount for income tax withholding, either the Corporation shall
     appropriately reduce the amount of stock or cash to be paid to the Optionee
     or the Optionee shall pay such amount to the Corporation to reimburse it
     for such income tax withholding.

6.13 Restrictions on Sale of Shares: If, at the time of exercise of any Stock
     Option or Stock Appreciation Right granted hereunder, the Corporation is
     precluded by any legal, regulatory or contractual restriction from selling
     and/or delivering shares pursuant to the terms of such Stock Option or
     Stock Appreciation Right, the sale and delivery of the shares may be
     delayed until the restrictions are resolved and only cash may be paid upon
     exercise of the Stock Appreciation Right. At any time during such delay,
     the Committee, in its discretion, may permit the Optionee to revoke a Stock
     Option exercise, in which event any corresponding Stock Appreciation Right
     shall be reinstated.

6.14 Compliance With Rule 16b-3: Notwithstanding any other provision of the Plan
     to the contrary, the administration of the Plan and the grant, exercise and
     terms of Stock Appreciation Rights hereunder shall comply with Rule 16b-3,
     or any successor rule, under the Securities Exchange Act of 1934, as
     amended (the "Exchange Act").




<PAGE>   8

                                                                               8


ARTICLE VII.  RESTRICTED COMMON STOCK

7.1  Awards: The Committee may from time to time award restricted shares of
     Common Stock to any Eligible Employee it has designated as a Participant
     for such year. Awards shall be made to Eligible Employees on the basis of
     their contributions to the successful management of the Corporation in
     accordance with such rules as the Committee may prescribe. The Committee
     may also award restricted shares of Common Stock conditioned on the
     attainment of a performance goal that relates to Shareholder return,
     measured by factors determined by the Committee as set forth in the award.

7.2  Restrictions:

     a.   Any shares of Corporation Common Stock awarded or issued under the
          Plan may be made subject to such other restrictions as the Committee
          deems advisable, including without limitation provisions to comply
          with Federal and state securities laws. In making determinations of
          legal requirements the Committee shall rely on an opinion of counsel
          for the Corporation. The restrictions with respect to the Common Stock
          awarded will extend for such period, or periods, of at least twelve
          months from and after the date of the award, as may be determined for
          each award by the Committee (the award period), except that
          nonperformance based awards will vest only after twenty four months
          and then in annual installments equal to 25% of the award.
          Notwithstanding the foregoing, the restrictions shall terminate upon
          the death of the Participant or, within the discretion of the
          Committee, upon Participant's retirement pursuant to a pension plan of
          the Corporation on or after Participant's 62nd birthday, except as may
          otherwise be determined to be necessary or desirable in the opinion of
          the Committee, to comply with the law or to prevent Restricted Common
          Stock from being subject to Federal income tax prior to the
          termination of restrictions.

     b.   Whenever shares of Common Stock are awarded to a Participant, such
          shares shall be outstanding, and stock certificates shall be issued in
          the name of the Participant, which certificates may bear a legend
          stating that the shares are issued subject to the restrictions set
          forth in the Plan. All certificates issued for shares of Common Stock
          awarded under the Plan shall be deposited for the benefit of the
          Participant with the Secretary of the Corporation as custodian until
          such time as the shares are vested and transferable.

     c.   A Participant who is awarded shares of Common Stock under the Plan
          shall have full voting rights on such shares, whether or not the
          shares are vested or transferable.

     d.   Shares of Common Stock awarded to a Participant under the Plan,
          whether or not vested or transferable, shall have full dividend rights
          with respect to dividends declared after the award, with such
          dividends being paid directly to the Participant, regardless of
          whether such dividends are paid in cash or in Common Stock. However,
          if shares or securities are issued as a result of a merger,
          consolidation or similar event, such shares shall be issued in the
          same manner, and subject to the same deposit requirements, vesting
          provisions and transferability restrictions as the shares of Common
          Stock which have been awarded.



<PAGE>   9

                                                                               9


     e.   Deliveries of Restricted Common Stock by the Corporation may consist
          in whole or in part of the authorized and unissued or reacquired
          Common Stock of the Corporation (at such time or times and in such
          manner as it may determine). The Restricted Common Stock shall be paid
          and delivered as soon as practicable after the award period in
          accordance with Section 7.3.

     f.   The shares may not be sold, exchanged, transferred, pledged,
          hypothecated, or otherwise disposed of by the Participant until their
          release. However, nothing herein shall preclude a Participant from
          making a gift of any shares of Restricted Common Stock to a spouse,
          child, stepchild, grandchild, parent or sibling, or legal dependent of
          the Participant or to a trust of which the beneficiary or
          beneficiaries of the corpus and the income shall be either such a
          person or the Participant; provided that, the Restricted Common Stock
          so given shall remain subject to the restrictions, obligations and
          conditions described in this Article VII.

     g.   If a Participant has received an award pursuant to the provisions of
          the Plan, is employed by the Corporation at the end of the award
          period and the performance goals have been met, then the Participant
          shall be fully vested, at the end of the award period, in the shares
          of Common Stock awarded to the Participant for that award period.

     h.   In the event of termination of employment of a Participant with the
          Corporation prior to the last day of an award period for any reason
          other than Participant's death, all rights to any shares of Restricted
          Common Stock held in a deposit account with respect to such award,
          including any additional shares delivered with respect to such shares
          as described in subsection 7.2d above shall be forfeited to the
          Corporation. However, the Committee may, if the Committee determines
          that the circumstances warrant such action, approve the distribution
          of all or any part of the Restricted Common Stock which would
          otherwise be forfeited. By way of illustration, but not limitation,
          circumstances which might warrant such action on the part of the
          Committee include retirement pursuant to a pension plan of the
          Corporation, or retirement pursuant to a pension plan of the
          Corporation by reason of disability.

7.3  Distribution of Restricted Common Stock

     a.   Distribution After Award Period: Except as otherwise provided,
          distribution of vested awards of Common Stock shall be made as soon as
          practicable after the last day of the applicable award period in the
          form of full shares of Common Stock, with fractional shares, if any,
          being awarded in cash.

     b.   Distribution After Death of Participant: Upon the death of the
          Participant, either before or after retirement, any shares of
          Restricted Common Stock then held shall, subject to this Article VII,
          be delivered within a reasonable time under the circumstances to
          Participant's Beneficiary or, in the absence of an appropriate
          Beneficiary designation to the Participant's estate, in such one or
          more installments as the Committee may then determine.



<PAGE>   10

                                                                              10
7.4  Designation of Beneficiaries

     If a Participant dies prior to the receipt in full of any award under the
     Plan to which the Participant is entitled, the award shall be distributed
     to the Participant's Beneficiary or, in the absence of a Beneficiary
     designation, to the Participant's estate. The designation of a Beneficiary
     shall be made in writing on a form prescribed by and filed with the
     Committee prior to the Participant's death. If the Committee is in doubt as
     to the right of any person to receive such amount, the Committee may retain
     such amount, without liability for any interest thereon, until the rights
     thereto are determined, or the Committee may pay such amount into any court
     of appropriate jurisdiction and such payment shall be a complete discharge
     of the liability of the Plan and the Corporation therefor.

7.5  Transferability: Subject to the provision of this Article VII, shares of
     Common Stock awarded to a Participant will become freely transferable by
     the Participant only at the end of the award period established with
     respect to such shares.

7.6  Distribution to Person Other Than Employee: If the Committee shall find
     that any person to whom any award is payable under this Article VII of the
     Plan is unable to care for such person's affairs because of illness or
     accident, or is a minor, or has died, then any payment due Participant or
     Participant's estate (unless a prior claim therefor has been made by a duly
     appointed legal representative), may, if the Committee so directs the
     Corporation, be paid to Participant's spouse, a child, a relative, an
     institution maintaining or having custody of such person, or any other
     person deemed by the Committee to be a proper recipient on behalf of such
     person otherwise entitled to payment. Any such payment shall be a complete
     discharge of the liability of the Committee and the Corporation therefor.

7.7  Restricted Common Stock is intended to constitute an unfunded deferred
     compensation arrangement for a select group of management or highly
     compensated personnel.

7.8  A forfeiture of shares of Common Stock pursuant to subsection 7.2h of the
     Plan shall effect a complete forfeiture of voting rights, dividend rights
     and all other rights relating to the award or grant as of the date of
     forfeiture.

7.9  Each distribution of Common Stock under this Article VII of the Plan shall
     be made subject to such federal, state and local tax withholding
     requirements as apply on the distribution date. For this purpose, the
     Committee may provide for the withholding of shares of Common Stock or
     allow a Participant to pay to the Corporation funds sufficient to satisfy
     such withholding requirements.

7.10 Notwithstanding any other provisions in the Plan, in the event of a Change
     in Control (as hereinafter defined), each Participant shall be fully vested
     in the number of shares of Common Stock awarded to such Participant for all
     award periods that, upon such event, have not yet ended. Distribution of
     all shares of Common Stock shall be made as soon as practicable within 7
     days after the date of the Change in Control, as if the applicable award
     period or periods had ended on such date. In addition, the Corporation
     shall reimburse a participant for legal fees and expenses incurred by such
     Participant in successfully seeking to obtain or enforce any right to
     distribution under this Section 7.10. For purposes of this

<PAGE>   11
                                                                              11

     Plan, a Change in Control shall occur upon the occurrence of one or more of
     the following events:

     (i)    A Change in Control of the Corporation would be required to be
            reported in response to Item 1(a) of the Current Report on Form 8-K,
            as in effect on the date hereof, pursuant to Sections 13 or 15(d) of
            the Exchange Act, whether or not the Corporation is then subject to
            such reporting requirement;

     (ii)   Any "person" or "group" within the meaning of Sections 13(d) and
            14(d)(2) of the Exchange Act becomes the "beneficial owner" as
            defined in Rule 13d-3 under the Exchange Act of more than 30% of the
            then outstanding voting securities of the Corporation;

     (iii)  During any period of twenty-four consecutive months (not including
            any period prior to the adoption of this Plan) Present Directors
            and/or New Directors cease for any reason to constitute a majority
            of the Board. For purposes of this subsection (iii), "Present
            Directors" shall mean individuals who at the beginning of such
            consecutive twenty-four month period were members of the Board and
            "New Directors" shall mean any director of the Corporation whose
            election by the Board or whose nomination for election by the
            Corporation's Shareholders was approved by a vote of at least
            two-thirds of the Corporation's Directors then still in office who
            were Present Directors or New Directors;

     (iv)   There is a sale by the Corporation within a three-year period of
            assets of the Corporation with either a book value or market value
            of 50% or more of the assets of the Corporation;

     (v)    A bidder as defined in Rule 14D-1(b) under the Exchange Act files a
            Tender Offer Statement with the Securities and Exchange Commission
            and the Corporation.

     Notwithstanding any other provisions of the Plan, the provisions of this
     Section 7.10 may not be amended after the date a Change in Control occurs
     without the written consent of a majority in number of participants.

ARTICLE VIII.  AMENDMENT OR TERMINATION OF THE PLAN

8.1  Right To Amend, Suspend or Terminate Plan: The Board reserves the right at
     any time to amend, suspend or terminate the Plan in whole or in part and
     for any reason and without the consent of any Optionee, Participant or
     Beneficiary; provided, that no such amendment shall:

     a.   Change the Stock Option price or adversely affect any Stock Option or
          Stock Appreciation Right outstanding under the Plan on the effective
          date of such amendment or termination, or

     b.   Adversely affect any award or grant then in effect or rights to
          receive any amount to which Participants or Beneficiaries have become
          entitled prior to such amendment, or


<PAGE>   12
                                                                              12

     c.   Unless approved by the Shareholders of the Corporation, increase the
          aggregate number of shares of Common Stock reserved for award or grant
          under the Plan, change the group of Eligible Employees under the Plan
          or materially increase benefits to Eligible Employees under the Plan.

8.2  Periodic Review of Plan: In order to assure the continued realization of
     the purposes of the Plan, the Committee shall periodically review the Plan,
     and the Committee may suggest amendments to the Board as it may deem
     appropriate.

8.3  Amendments May Be Retroactive: Subject to Section 8.1 above, any amendment,
     modification, suspension or termination of any provisions of the Plan may
     be made retroactively.

ARTICLE IX.  GENERAL PROVISIONS

9.1  Rights to Continued Employment, Award or Option: Nothing contained in the
     Plan or in any Stock Option, Stock Appreciation Right or Restricted Common
     Stock award shall give any employee the right to be retained in the
     employment of the Corporation or affect the right of the Corporation to
     terminate the employee's employment at any time. The adoption of the Plan
     shall not constitute a contract between the Corporation and any employee.
     No Eligible Employee shall receive any right to be granted an option, right
     or award hereunder nor shall any such option, right or award be considered
     as compensation under any employee benefit plan of the Corporation.

9.2  Governing Law: The provisions of this Plan and all rights thereunder shall
     be governed by and construed in accordance with the laws of the State of
     Michigan.

IN WITNESS WHEREOF, execution is hereby effected.

ATTEST:                                 CMS ENERGY CORPORATION



                                        By:
------------------------------------       -------------------------------------
               Secretary                    Chairman and Chief Executive Officer