EX-10.(M)





Exhibit (10)(m)


ANNUAL OFFICER INCENTIVE

COMPENSATION PLAN FOR CMS ENERGY CORPORATION
AND ITS SUBSIDIARIES


 








 








ANNUAL OFFICER INCENTIVE

COMPENSATION PLAN FOR OFFICERS OF CMS ENERGY CORPORATION

AND ITS SUBSIDIARIES





	I.	 	GENERAL PROVISIONS






	 	1.1	 	Purpose. The purpose of the Annual Officer Incentive Compensation Plan (“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 highly competent Officers.
	 
	 	(b)	 	No payments to Officers in the form of incentive compensation shall be made
unless pursuant to a plan approved by the Committee on Compensation and Human
Resources of the Board of Directors of CMS Energy (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 as of January 1, 2008.
	 
	 	1.3	 	Definitions. As used in this Plan, the following terms have the meaning described
below:






	 	(a)	 	“Annual Award” means an annual incentive award granted under the Plan.
	 
	 	(b)	 	“Base Salary” means the base salary on January 1 of a Performance Year,
except as impacted by a Change in Status as defined in Article V. For purposes of the
Plan, an Officer’s Base Salary must be subject to annual review and annual approval
by the Committee.
	 
	 	(c)	 	“CMS Energy” means CMS Energy Corporation.
	 
	 	(d)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(e)	 	“Code Section 162(m) Employee” means an employee whose compensation is
subject to the “Million Dollar Cap” under Code Section 162(m). Generally, this is the
CEO and the three highest paid executive officers of the Company (other than the CEO
and the CFO).
	 
	 	(f)	 	“Committee” means the Committee on Compensation and Human Resources of the
Board of Directors of CMS Energy Corporation.
	 
	 	(g)	 	“Company” means CMS Energy Corporation.
	 
	 	(h)	 	“Deferred Annual Award” means the amount deferred by an Officer pursuant to
Section 4.2




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	 	(i)	 	“Disability” means that a participant has terminated employment with the
Company or a Subsidiary and is disabled, as that term is defined under Code Section
409A and any applicable regulations.(k) “Leave of Absence” for purposes of this Plan
means a leave of absence that has been approved by the Plan Administrator.
	 
	 	(l)	 	“Officer” means an employee of the Company or a Subsidiary in Salary Grade
“E-3” or higher.
	 
	 	(m)	 	“Payment Event” means the time at which a Deferred Annual Award may be paid
pursuant to Section 4.2.
	 
	 	(n)	 	“Payment Term” means the length of time for payment of a Deferred Annual
Award under Section 4.2.
	 
	 	(o)	 	“Pension Plan” means the Pension Plan for Employees of Consumers Energy and
Other CMS Energy Companies.
	 
	 	(p)	 	“Performance Year” means the calendar year prior to the year in which an
Annual Award is made by the Committee.
	 
	 	(q)	 	“Plan Administrator” means the President and Chief Executive Officer of CMS
Energy, under the general direction of the Committee. For purposes of administering
Deferred Amounts under Section 4.2, the Plan Administrator is the Benefits
Administration Committee appointed by the Chief Executive Officer and the Chief
Financial Officer as authorized by the Board of Directors.
	 
	 	(r)	 	“Retirement” means that a 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. For a participant ineligible for coverage under the
Pension Plan and covered instead under the Defined Company Contribution Plan,
retirement occurs when there is a Separation from Service on or after age 55 with 5
or more years of service.
	 
	 	(s)	 	“Separation from Service” means an Employee retires or otherwise has a
separation from service from the Company as defined under Code Section 409A and any
applicable regulations. The Plan Administrator will determine, consistent with the
requirements of Code Section 409A and any applicable regulations, to what extent a
person on a leave of absence, including on paid sick leave pursuant to Company
policy, has incurred a Separation from Service.
	 
	 	(t)	 	“Subsidiary” means any direct or indirect subsidiary of the Company.






	 	1.4	 	Eligibility. Officers are eligible for participation in the Plan.





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	 	1.5	 	Administration of the Plan.






	 	(a)	 	The Plan is administered by the President and Chief Executive Officer of
CMS Energy under the general direction of the Committee.
	 
	 	(b)	 	The Committee, will normally approve performance goals in January of the
Performance Year, but no later than March 30th of the Performance Year.
	 
	 	(c)	 	The Committee, no later than March 1st of the calendar year following the
Performance Year, will review for approval proposed Annual Awards for all Officer
participants, taking into account the recommendations of the Chief Executive Officer
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 Annual Awards as it deems necessary to maintain the spirit and intent of
the Plan, provided that such discretion will be to decrease or eliminate, not
increase, Annual Awards in the case of any Code Section 162(m) Employees. The
Committee also reserves the right in its discretion to not pay Annual Awards for a
Performance Year. All 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 adjusted net income per outstanding CMS Energy share
(BPS); and (2) the Corporate Free Cash Flow of CMS Energy (CFCF). 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 corporate performance goals and their use in determination of
the composite Plan Performance Factor shall be created by the Committee for each
Performance Year.






	III.	 	ANNUAL AWARD FORMULA






	 	3.1	 	Officers’ Annual Awards. Annual Awards for each eligible Officer will be based
upon a standard award percentage of the Officer’s Base Salary for the Performance Year. The
standard award percentages are set forth in the table below. The maximum amount that can be
awarded under this Plan for any Code Section 162(m) Employee will not exceed $2.5 Million
in any one Performance Year. The total amount of an Officer’s Annual Award shall be computed
according to the annual award formula set forth in Section 3.2.





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	 	 	 	 	 	 	Std Award
	 	 	Salary	 	Percentage
	Position	 	Grade	 	of Base Salary
	President & CEO
	 	 	E-9	 	 	 	100	%
	President, Consumers Energy
	 	 	E-8	 	 	 	60	%
	Ex Vice Pres
	 	 	E-7	 	 	 	55	%
	President, Subsidiary — Sr. Vice Pres
	 	 	E-6	 	 	 	50	%
	Senior Vice President
	 	 	E-5	 	 	 	45	%
	Vice President
	 	 	E-4	 	 	 	40	%
	Vice President
	 	 	E-3	 	 	 	35	%







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





Annual
Award = Base Salary times
Standard Award Percentage times Plan Performance Factor



	 	 	 	In addition, each Annual Award for Officers of Consumers Energy Company will be modified
based on the results achieved for the Consumers Energy Annual Employee Incentive
Compensation Plan. If the Consumers Energy Annual Employee Incentive Compensation Plan
pays out an award for the same Performance Year, then there is no modification of awards
under this plan. If however, there is no award under the Consumers Energy Annual Employee
Incentive Compensation Plan, then the Annual Award, if any, earned under this plan will be
reduced by 25%.





IV. PAYMENT OF ANNUAL AWARDS



	 	4.1	 	Cash Annual Award. All Annual Awards for a Performance Year will be paid in
cash after certification by the outside auditors of the Company and the Committee that the
performance goals have been satisfied, but not later than March 15th of the
calendar year following the Performance Year provided that the Annual Award for a
particular Performance Year has not been deferred voluntarily pursuant to Section 4.2. 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 Officer is enrolled at the time the Committee makes the Annual Award.






	 	4.2	 	Deferred Annual Awards.






	 	(a)	 	The payment of all or any portion (rounded to an even multiple of 10%) of a
cash Annual Award may be deferred voluntarily at the election of an individual Plan
participant. Any such deferral will be net of any applicable FICA or FUTA taxes. A
separate irrevocable election must be made prior to the
Performance Year. Any Annual Award made by the Committee after termination of
employment of a participant or retirement of a participant will be paid in
accordance with any deferral election made within the enrollment period.





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	 	(b)	 	At the time the participant makes a deferral election he or she must select
the payment options (including the Payment Event as set forth at (c) below and the
Payment Term as set forth at (d) below) applicable to the Deferred Annual Award for
the Performance Year, as well as any earnings or income attributable to such amounts.
The payment options elected will apply only to that year’s Deferred Annual Award and
will not apply to any previous Deferred Annual Award or to any subsequent Deferred
Annual Award. Any participant who elects to defer all or a portion of an Annual Award
and who fails to select a Payment Event or a Payment Term will be presumed to have
elected a Payment Event of Separation from Service in accordance with paragraph
(c)(i) below and/or a Payment Term of a single sum.
	 
	 	(c)	 	The Payment Event elected can be either:






	 	(i)	 	Separation from Service for any reason other than death. Payment will
be made, or begin, in the later of: (1) January of the year following the year of
the Separation from Service; or (2) the seventh month after the month of the
Separation from Service. Later installments, if any, will be paid in January of
the succeeding years;
	 
	 	(ii)	 	Payment upon attainment of a date certain that is more than 1 year
after the last day of the applicable Performance Year. Later installments, if any,
will be paid in January of the succeeding years; or
	 
	 	(iii)	 	The earlier of (i) or (ii) above.






	 	(d)	 	Payment Term. At the time of electing to defer an Annual Award, the
participant must also elect how he or she wishes to receive any such payment from
among the following options (the participant may elect a separate Payment Term for
each Payment Event elected):






	 	(i)	 	Payment in a single sum upon occurrence of the Payment Event.
	 
	 	(ii)	 	Payment of a series of annual installment payments over a period from
two (2) years to fifteen (15) years following the Payment Event. Each installment
payment shall be equal to a fractional amount of the balance in the account the
numerator of which is one and the denominator of which is the number of
installment payments remaining. Although initially such installment payments will
be identical, actual payments may vary based upon investment performance. For
example, a series of 5 installment payments will result in a payout of 1/5 of the
account balance in the first installment, 1/4 of the account balance (including
investment gains or losses since the first installment date) in the second
installment, etc.





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	 	(e)	 	Changes to Payment Options. Once a payment option has been elected,
subsequent changes which would accelerate the receipt of benefits from the Plan are
not permitted, except that the Plan Administrator may at its discretion accelerate
payments to the extent permitted by Code Section 409A and applicable regulations. A
subsequent election to change the payment options related to a Payment Event, in
order to delay a payment or to change the form of a payment, can only be made when
all of the following conditions are satisfied:






	 	(i)	 	such election may not take effect until at least 12 months after the
date on which the election is made;
	 
	 	(ii)	 	the payment(s) with respect to which such election is made is
deferred for a period of not less than 5 years from the date such payment would
otherwise have been made (or, in the case of installment payments under Section
4.2(d)(ii), 5 years from the date the first installment was scheduled to be paid);
and
	 
	 	(iii)	 	such election must be made not less than 12 months before the date
the payment was previously scheduled to be made (or, in the case of installment
payments under Section 4.2(d)(ii), 12 months before the first installment was
scheduled to be paid), if the participant’s previous commencement date was a
specified date.






	 	(f)	 	Investments. At the time of electing to voluntarily defer payment, the
participant must elect how the Deferred Annual Award will be treated by the Company
or Subsidiary. To the extent that any amounts deferred are placed in a rabbi trust
with an independent record keeper, a participant who has previously deferred amounts
under this Plan will automatically have his or her existing investment profile apply
to this deferral also. All determinations of the available investment options by the
Plan Administrator are final and binding upon participants. A participant may change
the investment elections at anytime prior to the payment of the benefit, subject to
any restrictions imposed by the Plan Administrator, the Benefit Administration
Committee, the plan record keeper or by any applicable laws and regulations. A
participant not making an election will have amounts deferred treated as if in a
Lifestyle Fund applicable to the participant’s age 65, rounded up, or such other
investment as determined by the Benefit Administration Committee. All gains and
losses will be based upon the performance of the investments selected by the
participant from the date the deferral is first credited to the nominal account. If
the Company elects to fund its obligation as discussed below, then investment
performance will be based on the balance as determined by the record keeper.
	 
	 	(g)	 	The amount of any Deferred Annual Award is to be satisfied from the general
corporate funds of the company on whose payroll the Plan participant was enrolled
prior to the payout beginning and are subject to the claims of general creditors.
This is an unfunded nonqualified deferred compensation plan. To the




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	 	 	 	extent the Committee elects to place funds with a trustee to pay its future obligations
under this Plan, such amounts are placed for the convenience of the Company or
Subsidiary, remain the property of the Company or Subsidiary and the participant shall
have no right to such funds until properly paid in accordance with the provisions of
this Plan. For administrative ease and convenience, such amounts may be referred to as
participant accounts, but as such are a notional account only and are not the property
of the participant. Such amounts remain subject to the claims of the creditors of the
Company or Subsidiary.
	 
	 	(h)	 	Payment in the Event of an Unforeseeable Emergency. The participant may
request that payments commence immediately upon the occurrence of an unforeseeable
emergency as that term is defined in Code Section 409A and any applicable
regulations. Generally, an unforeseeable emergency is a severe financial hardship
resulting from an illness or accident of the participant or the participant’s spouse
or dependent, loss of the participant’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events beyond
the control of the participant. A distribution on account of unforeseeable emergency
may not be made to the extent that such emergency is or may be relieved through
reimbursement or compensation from insurance or otherwise, by liquidation of the
participant’s assets (without causing severe financial hardship), or by cessation of
deferrals under this arrangement, the Savings Plan for Employees of Consumers Energy
and other CMS Energy Companies (the “Savings Plan”) or other arrangements.
Distributions because of an unforeseeable emergency shall not exceed the amount
permitted under Section 409A and accordingly are limited to the amount reasonably
necessary to satisfy the emergency need (after use of insurance proceeds, liquidation
of assets, etc.) plus an amount to pay taxes reasonably anticipated as a result of
the distribution. In the event any payment is made due to an unforeseeable emergency,
all deferral elections for the current Performance Year will cease and the
participant will not be eligible to make any deferral elections under this Plan for
the following Performance Year. For any participant receiving a hardship withdrawal
under the Savings Plan, all deferral elections under this Plan for the current
Performance Year will cease and the participant will not be eligible to make any
deferral elections under this Plan for the following Performance Year.






	 	4.3	 	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 or record keeper, and the beneficiary shall
receive, within 90 days of the participant’s death, in a single sum, all payments
credited to the participant in the event that the participant dies prior to receipt
of Deferred Annual Awards. If a beneficiary is not named or does not survive the
participant, the payment will be made to the participant’s estate. In no event





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	 	 	 	may any recipient designate a year of payment for an amount payable upon the
death of the participant.
	 
	 	(b)	 	A participant may change beneficiaries at any time, and the change will be
effective as of the date the plan record keeper or Company accepts the form as
complete. Neither the Company nor the applicable Subsidiary will be liable for any
payments made before receipt and acceptance of a written beneficiary request.






	V.	 	CHANGE OF STATUS






	 	 	Payments in the event of a change in status will not be made if no Annual Awards are made for
the Performance Year.






	 	5.1	 	Pro-Rata Annual Awards. A new Officer, whether hired or promoted to the
position, or an Officer promoted to a higher salary grade during the Performance Year will
receive a pro rata Annual Award based on the percentage of the Performance Year in which
the employee is in a particular salary grade. An Officer whose salary grade has been
lowered, but whose employment is not terminated, during the Performance Year will receive a
pro rata Annual Award based on the percentage of the Performance Year in which the employee
is in a particular salary grade.
	 
	 	5.2	 	Termination. An Officer whose employment is terminated pursuant to a violation
of the Company code of conduct or other corporate policies will not be considered for or
receive an Annual Award.
	 
	 	5.3	 	Resignation. An Officer who resigns prior to payment (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 Officer or ill
health in the immediate family, the Officer 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 Officer 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. An Officer whose
employment is terminated following the Performance Year but prior to payment due to death,
Disability or Retirement will continue to be eligible for an Annual Award for the
Performance Year. Any such payment or Annual Award payable due to the death of the Officer
will be made to the named beneficiary, or if no beneficiary is named or if the beneficiary
doesn’t survive the Officer, then to the Officer’s estate
no later than March15 following
the applicable Performance Year. Notwithstanding the above, an Officer who retires, is on
disability or leave of absence and who becomes employed by a competitor of CMS Energy or
Consumers





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	 	 	 	Energy or their subsidiaries or affiliates prior to award payout will forfeit all
rights to an Annual Award, unless prior approval of such employment has been granted by
the Committee. A “competitor” shall mean an entity engaged in the business of (1)
selling (a) electric power or natural gas at retail or wholesale within the State of
Michigan or (b) electric power at wholesale within the market area in which an electric
generating plant owned by a subsidiary or affiliate of CMS Enterprises is located or (2)
developing an electric generating plant within the State of Michigan or a market area in
which an electric generating plant owned by a subsidiary or affiliate of CMS Enterprises
is located.






	VI.	 	MISCELLANEOUS






	 	6.1	 	Impact on Benefit Plans. Payments made under the Plan will be considered as
earnings for the Supplemental Executive Retirement Plans (Salary Grades E-3 through E-9)
but not for purposes of the 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 Board of Directors of the CMS Energy
Corporation may amend or terminate the Plan at any time. Upon termination, any amount
accrued under the Plan will remain in the Plan and be paid out in accordance with the
payment options previously selected. Notwithstanding the foregoing, the Board of Directors
of CMS Energy Corporation may terminate the Plan and accelerate payment of any deferred
benefits under the Plan if it acts consistent in all respects with the requirements of Code
Section 409A and any applicable regulations with respect to when a terminated plan may
accelerate payment to a participant.
	 
	 	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 must be brought to the
Plan Administrator. The Plan Administrator is granted full discretionary authority to apply
the terms of the Plan, make administrative rulings, interpret the Plan and make any other
determinations with respect to the Plan. If the Plan Administrator makes a determination
and the participant disagrees with or wishes to appeal the determination, the participant
must appeal the decision to the Plan Administrator, in writing and not later than 60 days
from when the determination was mailed to the participant. If the participant does not
timely appeal the original determination, the participant has no further rights under the
Plan with respect to the matter presented in the claim. If the participant appeals the
original determination and that appeal does not result in a mutually agreeable resolution,
then the dispute shall be subject to




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	 	 	 	final and binding arbitration before a single arbitrator selected by the parties
to be conducted in Jackson, Michigan, provided the participant makes such request for
arbitration in writing within 30 days of the final decision by the Plan Administrator.
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. The arbitrator must use
an arbitrary and capricious standard of review when considering any determinations and
findings by the Plan Administrator.






	VII.	 	AMENDMENT TO REFLECT CODE SECTION 409A






	 	7.1	 	Code Section 409A. This Plan has been amended, effective as of January 1, 2005,
to comply with the requirements of Section 409A of the Code. To the extent counsel
determines additional amendments may be reasonable or desirable in order to comply with
Code Section 409A, and any other applicable rules, laws and regulations, such changes shall
be authorized with the approval of the Plan Administrator.




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CORPORATE
PERFORMANCE GOALS -2008


The composite Plan Performance Factor (as used in Section II of the Incentive Compensation
Plan) will depend on corporate performance in two areas: (1) the adjusted net income per
outstanding CMS Energy share (EPS); and (2) the Corporate Free Cash Flow of CMS Energy (CFCF). Each
Component as well as the composite Plan Performance Factor to be used for payouts will be capped at
a maximum of 200%. The table for Performance Year 2008 is set forth below.



(a) EPS Component. EPS performance shall constitute 50% of the composite Plan Performance
Factor. The 100% EPS goal for the 2008 performance year is $1.20 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 EPS Component unless at least $1.10 per share is achieved.



(b) CFCF Component. CFCF performance shall constitute 50% of composite Plan Performance
Factor. The 100% CFCF goal for the 2008 performance year is negative $525 million, and the CFCF
component shall increase or decrease by 1% for each $2 million change in performance from $50
million. (Mathematical extrapolation shall be used for actual results not shown in the table.)
There will be no payout under the CFCF component unless at least negative $625 million is achieved.




Plan
Performance Factor for 2008 Performance Year



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CFCF	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Component	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(Millions)	 	<$(625)	 	$(625)	 	$(575)	 	$(525)	 	$(475)	 	$(425)	 	$(375)	 	$(325)
	EPS
Component
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$1.09
	 	No Payout	 	 	25	%	 	 	38	%	 	 	50	%	 	 	63	%	 	 	75	%	 	 	88	%	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$1.10
	 	 	25	%	 	 	50	%	 	 	63	%	 	 	75	%	 	 	88	%	 	 	100	%	 	 	113	%	 	 	125	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$1.15
	 	 	38	%	 	 	63	%	 	 	75	%	 	 	88	%	 	 	100	%	 	 	113	%	 	 	125	%	 	 	138	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$1.20
	 	 	50	%	 	 	75	%	 	 	88	%	 	 	100	%	 	 	113	%	 	 	125	%	 	 	138	%	 	 	150	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$1.25
	 	 	63	%	 	 	88	%	 	 	100	%	 	 	113	%	 	 	125	%	 	 	138	%	 	 	150	%	 	 	163	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$1.30

	 	 	75	%	 	 	100	%	 	 	113	%	 	 	125	%	 	 	138	%	 	 	150	%	 	 	163	%	 	 	175	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$1.35

	 	 	88	%	 	 	113	%	 	 	125	%	 	 	138	%	 	 	150	%	 	 	163	%	 	 	175	%	 	 	188	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$1.40

	 	 	100	%	 	 	125	%	 	 	138	%	 	 	150	%	 	 	163	%	 	 	175	%	 	 	188	%	 	 	200	%






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%




 








 




“Adjusted Net Income” means generally accepted accounting practices income excluding asset
sales, changes to accounting principles from those used in the budget, large restructuring and
severance, legal and settlement cost or gains related to previously
sold assets, and regulatory
recovery for prior year changes.



“Corporate Free Cash Flow” (CFCF) means CMS Consolidated Cash Flow from operating activities,
excluding restricted cash flow, common dividends, financing, major post budget transactions like
mergers and acquisitions in excess of $25 million and recovery for gas price changes (favorable or
unfavorable) related to GCR recovery in January/February of the following performance year.



“Earnings Per Share” (EPS) means the amount of adjusted net income per outstanding CMS Energy
Share.



“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.