Document:

exv10wxjy

 

Exhibit (10)(j)

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, 2007.
	 
	 	1.3	 	Definitions. As used in this Plan, the following terms have the
meaning described below:

	 	(a)	 	“Adjusted Net Income” means generally accepted accounting practices
income excluding asset sale cost, accounting changes, large restructuring and
severance, legal and settlement cost for round-trip trading and gas price
reporting, regulatory recovery for prior year changes, mark to mark greater than
+/- $.05 of budget, and early debt retirement option premiums.
	 
	 	(b)	 	“Annual Award” means an annual incentive award granted under the
Plan.
	 
	 	(c)	 	“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.
	 
	 	(d)	 	“CMS Energy” means CMS Energy Corporation.
	 
	 	(e)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(f)	 	“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).

1

 

	 	(g)	 	“Committee” means the Committee on Compensation and Human Resources
of the Board of Directors of CMS Energy Corporation.
	 
	 	(h)	 	“Company” means CMS Energy Corporation.
	 
	 	(i)	 	“Corporate Free Cash Flow” (CFCF) means CMS Consolidated Cash Flow
from operating activities, excluding restricted cash flow, common dividends,
financing and adjusted for GCR Recovery.
	 
	 	(j)	 	“Deferred Annual Award” means the amount deferred by an Officer
pursuant to Section 4.2
	 
	 	(k)	 	“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.
	 
	 	(l)	 	“Earnings Per Share” (EPS) means the amount of adjusted net income
per outstanding CMS Energy Share.
	 
	 	(m)	 	“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.
	 
	 	(n)	 	“Leave of Absence” for purposes of this Plan means a leave of absence
that has been approved by the Plan Administrator.
	 
	 	(o)	 	“Officer” means an employee of the Company or a Subsidiary in Salary
Grade “E-3” or higher.
	 
	 	(p)	 	“Payment Event” means the date a Deferred Annual Award may be paid
pursuant to Section 4.2.
	 
	 	(q)	 	“Payment Term” means the length of time for payment of a Deferred
Annual Award under Section 4.2.
	 
	 	(r)	 	“Pension Plan” means the Pension Plan for Employees of Consumers
Energy and Other CMS Energy Companies.
	 
	 	(s)	 	“Performance Year” means the calendar year prior to the year in which
an Annual Award is made by the Committee.
	 
	 	(t)	 	“Plan Administrator” means 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.

2

 

	 	(u)	 	“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.
	 
	 	(v)	 	“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.
	 
	 	(w)	 	“Subsidiary” means any direct or indirect subsidiary of the Company.

	 	1.4	 	Eligibility. Officers are eligible for participation in the Plan.
	 
	 	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, no later than March 30th of the Performance
Year, will approve performance goals for 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 

3

 

	 	 	 	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%. A table containing the composite Plan Performance Factors shall
be created by the Committee for each Performance Year. The table for Performance Year
2007 is set forth below.

	 	(a)	 	EPS Component. EPS performance shall constitute 50% of the
composite Plan Performance Factor. The 100% EPS goal for the 2007 performance
year is $.85 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 $.80 per share is achieved.
	 
	 	(b)	 	CFCF Component. CFCF performance shall constitute 50% of
composite Plan Performance Factor. The 100% CFCF goal for the 2007 performance
year is $1,250 million, and the CFCF component shall decrease by 1% for each $2
million change in performance. The CFCF component shall increase by 1% for each $2
million increase in performance from $1,250 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 $1,150 million is achieved.

 Composite Performance Factors for 2007 Performance Year

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CFCF	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Component	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(Millions)	 	<$1150	 	$1150	 	$1200	 	$1250	 	$1300	 	$1350	 	$1400	 	$1450
	EPS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Component
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$.79
	 	No Payout	 	 	25	%	 	 	38	%	 	 	50	%	 	 	63	%	 	 	75	%	 	 	88	%	 	 	100	%
	$.80
	 	 	38	%	 	 	63	%	 	 	75	%	 	 	88	%	 	 	100	%	 	 	113	%	 	 	125	%	 	 	138	%
	$.85
	 	 	50	%	 	 	75	%	 	 	88	%	 	 	100	%	 	 	113	%	 	 	125	%	 	 	138	%	 	 	150	%
	$.90
	 	 	63	%	 	 	88	%	 	 	100	%	 	 	113	%	 	 	125	%	 	 	138	%	 	 	150	%	 	 	163	%
	$.95
	 	 	75	%	 	 	100	%	 	 	113	%	 	 	125	%	 	 	138	%	 	 	150	%	 	 	163	%	 	 	175	%
	$1.00
	 	 	88	%	 	 	113	%	 	 	125	%	 	 	138	%	 	 	150	%	 	 	163	%	 	 	175	%	 	 	188	%
	$1.05
	 	 	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%

	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

4

 

	 	 	 	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.

	 	 	 	 	 	 	 	 	 
	 	 	Salary	 	Std Award as a
	Position	 	Grade	 	% of Base Salary
	 
	 	 	 	 	 	 	 	 
	President & CEO
	 	 	E-9	 	 	 	65	%1
	President, Subsidiary — Ex Vice Pres
	 	 	E-7	 	 	 	55	%2
	President, Subsidiary — Ex 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:

	 	 	 	Individual Award = Base Salary times

Standard Award % times 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 whatever 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 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

 

			
	1	 	100% effective January 1, 2008
	 
	2	 	60% effective January 1, 2008

5

 

	 	 	 	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.
	 
	 	(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

6

 

	 	 	 	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.

	 	(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.

7

 

	 	(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
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

8

 

	 	 	 	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 either a cash Annual Award or 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 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 who retires, is on disability or leave of absence and who becomes employed by a
competitor of CMS Energy or Consumers 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”

9

 

	 	 	 	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.

	 	5.5	 	Recoupment of Annual Awards. Annual Awards under the Plan are also
subject to recoupment pursuant to the CMS Energy Recoupment Policy Relating to
Financial Restatements.

	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

10

 

	 	 	 	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.

	 	 	 	 	 	 	 
	ATTEST:

	 	 
	 	CMS ENERGY CORPORATION
	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Vice President and Secretary

	 	 	 	Chief Executive Officer

CMS Energy and Consumers Energy	 	 

Date: __________________

11exv10wxky

 

Exhibit (10)(k)

SUPPLEMENTAL EXECUTIVE RETIREMENT

PLAN FOR EMPLOYEES OF

CMS ENERGY / CONSUMERS ENERGY COMPANY

INTRODUCTION

The objective of the Supplemental Executive Retirement Plan is to retain and motivate top level
executives by providing additional retirement income to supplement that provided by the Pension
Plan.

The Supplemental Executive Retirement Plan became effective on January 1, 1982 and is applicable to
all employees of the Company who are eligible in accordance with the provisions of this
Supplemental Plan. This document includes all amendments through December 1, 2007.

This instrument describes the Supplemental Plan for employees who retire, die or whose services are
terminated on or after January 1, 2005. The rights of employees who, prior to January 1, 2005,
retired, died or whose services were terminated are governed by the provisions of the instrument in
effect at such time. This Supplemental Plan is an unfunded, unsecured promise to pay benefits at a
later date. Subject to the provisions of this Supplemental Plan, Participants have no greater
rights than the general creditors of the Company.

SECTION I. DEFINITIONS

Whenever used in this Supplemental Plan, the following terms shall have the respective meanings set
forth below, unless the context clearly indicates otherwise.

	 	 	 
	“Accrued
Supplemental
Executive
Retirement
Income”

	 	Means the Supplemental Executive Retirement Income beginning at
the first of the month following attainment of age 65, which
would be payable to a Participant at the rates provided in
subsection 1 of Section V, on the basis of his Accredited Service
and Preference Service rendered to the date of computation.
	 
	 	 
	“Accredited Service”

	 	The period of service subsequent to inclusion in the Pension Plan.
	 
	 	 
	“Code”

	 	The Internal Revenue Code of 1986, as amended.
	 
	 	 
	“Company”

	 	Means CMS Energy Corporation and Consumers Energy Company and any
subsidiary owned 80% and whose employees participate in the
Pension Plan. For purposes of determining a Separation from
Service from the Company, the Company shall include the CMS
Energy Corporation and all persons or entities that would be
considered a single employer under Code Section 414(b) or Section
414(c), using for such purposes a “50 percent” standard, instead
of an “80 percent” standard, under such provisions.
	 
	 	 
	“Disability Service”

	 	Means the Accredited Service and Preference Service granted a
Participant as provided in subsection 5 of Section V.

1

 

	 	 	 
	 
	 	 
	“Disability Service
Pension
Supplement”

	 	Means the pension supplement,
provision for which is made in
subsection 5 of Section V of this
Supplemental Plan.
	 
	 	 
	“Earnings”

	 	Means the regular salary paid to the
Participant during the Fiscal Year
January 1 — December 31.
	 
	 	 
	“Employment Agreement”

	 	Means a Severance or Change in
Control Agreement (Tier I, Tier II
or Tier III) authorized by the
Compensation and Human Resources
Committee of the Board of Directors
of CMS Energy Corporation and
entered into between a Participant
and CMS Energy Corporation or a
subsidiary.
	 
	 	 
	“Final Executive
Pay”

	 	Means 1/12th of the average of the
Earnings (without regard to any
limitations imposed on the Pension
Plan by the Internal Revenue Code or
Regulations thereunder) plus
Incentive Compensation (if any) of a
Participant, including any such
amounts deferred, for his five years
of highest totals of Earnings plus
Incentive Compensation (if any)
during the period of his Accredited
Service.
	 
	 	 
	 

	 	For purposes of determining Final
Executive Pay, Accredited Service
shall include only the service
provided while the Participant holds
a position that qualifies for
inclusion under this Supplemental
Plan.
	 
	 	 
	“Incentive
Compensation”

	 	Means the applicable amount awarded
to the Participant under an Annual
Incentive Compensation Plan of the
Company during a Plan Year.
	 
	 	 
	“Participant”

	 	Means an employee of the Company
included in the Supplemental Plan
pursuant to Section II.
	 
	 	 
	“Payment Options”

	 	Means the form of benefit payments
elected by a Participant under
Section VI.
	 
	 	 
	“Pension Plan”

	 	Means the Pension Plan for Employees
of Consumers Energy Company, as
amended.
	 
	 	 
	“Plan Administrator”

	 	Means the Benefit Administration
Committee as selected by the Chief
Executive Officer and Chief
Financial Officer of the Company to
manage this Supplemental Plan.
	 
	 	 
	“Preference Service”

	 	Means the period of service credited
to a Participant pursuant to Section
III.
	 
	 	 
	“Provisional Payee”

	 	Means the individual named by the
Participant pursuant to Section
VI(1)(C) to receive a benefit upon
his death.
	 
	 	 
	“Retirement Income”

	 	Means the income which would be
payable to the Participant from

1

 

	 	 	 
	 

	 	the
Pension Plan if the Participant were
to elect to start a monthly benefit
as of the applicable date.
	 
	 	 
	“Separation from
Service”

	 	Means the 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.
	 
	 	 
	“Supplemental
Executive
Retirement
Income”

	 	Means the monthly retirement income
provided for by this Supplemental
Plan.
	 
	 	 
	“Supplemental
Plan or Plan”

	 	Means the Supplemental Executive
Retirement Plan as it is described
in this instrument.

The masculine pronoun wherever used herein shall mean or include the feminine pronoun.

SECTION II. ELIGIBILITY

1. Employees included on January 1, 1982. Each officer or other executive of the Company in
Salary Grades E-1 and above on January 1, 1982, who is eligible for inclusion in the Pension Plan
on that date, will be included in the Supplemental Plan as of January 1, 1982.

2. Employees included after January 1, 1982. Each officer or other executive of the
Company who is eligible for inclusion in the Pension Plan and is appointed to a position at Salary
Grade E-1 or above after January 1, 1982, will be included in the Supplemental Plan on the first
day of the month after he assumes such a position. Effective May 1, 1995, an officer or executive
of Consumers Energy who is eligible for inclusion in the Pension Plan and is appointed to a
position at Salary Grade F or above will be included in the Supplemental Plan on the first day of
the month after he assumes such position. Any employee hired or promoted to a Salary Grade F or
above (E-1 or above for CMS employees) on or after July 1, 2003 and who is not eligible for
inclusion in the final average pay provisions of the Pension Plan will not be included in this
Plan. Effective as of January 1, 2004, the Salary structure for non-officer employees of CMS
Energy Corporation and its subsidiaries was modified and as of that date, executives promoted to or
hired at a Salary Grade 24 or above and who are covered under the final average pay provisions of
the Pension Plan are eligible for this Supplemental Plan.

3. Exclusion of additional participants. Effective as of April 1, 2006 no additional employees
will be included in this Supplemental Plan. Employees first hired at or promoted to a Salary Grade
24 or above on or after April 1, 2006 will not be eligible for benefits under this Supplemental
Plan. Employees previously covered under this Supplemental Plan who were not accruing benefits
under this Supplemental Plan as of March 31, 2006, and who are reemployed or promoted to a Salary
Grade 24 or above on or after April 1, 2006 will not resume participation in this Supplemental
Plan.

2

 

SECTION III. DETERMINATION OF PREFERENCE SERVICE

Preference Service. Each Participant at a Salary Grade E-3 or above shall be credited with
one month of Preference Service for each month of Accredited Service credited to him under the
Pension Plan until the sum of Accredited Service and Preference Service equals 20 years.
Preference Service will be reduced by the amount (if any) by which the total period of Preference
Service when added to the total period of Accredited Service exceeds 35 years.

SECTION IV. RETIREMENT

Retirement dates for the purposes of this Supplemental Plan shall be the later of Separation from
Service or age 55; provided, however, that a Participant must have five years of actual service at
an applicable salary grade to be eligible for Supplemental Executive Retirement Income.

SECTION V. SUPPLEMENTAL EXECUTIVE RETIREMENT INCOME

1. Normal or Deferred Supplemental Executive Retirement Income. The monthly Supplemental
Executive Retirement Income payable to a Participant who, incurs a Separation from Service on or
after September 1, 2005, will be an amount equal to the product of the Participant’s Final
Executive Pay times the sum of the percentages determined below, plus, for each employee who
retires with 35 years of Accredited Service under the Pension Plan, an amount equal to $20.00 for
each additional full year of vested service that would otherwise have been credited as Accredited
Service but for the application of the minimum age requirements in the Pension Plan or the 35-year
Accredited Service maximum, minus (i) .5% multiplied by 1/12th of the Participant’s “Final Average
Compensation” up to “Covered Compensation” (as those terms are used in Section 401(l) of the
Internal Revenue Code) for each year of Accredited Service and Preference Service and (ii) the
Retirement Income provided or credited to the Participant under the Pension Plan:

2.1% for each of the first 20 years of Accredited Service and Preference Service.

1.7% for each of the next 15 years of Accredited Service and Preference Service (1.5% for
Participant’s Separating from Service after January 1, 2005 but prior to August 1, 2005).

2. Early Supplemental Executive Retirement Income. The monthly Supplemental Executive Retirement
Income payable to a Participant who, incurs a Separation from Service on or after age 55 but prior
to age 65, will be the amount of his Accrued Supplemental Executive Retirement Income on the date
his retirement commences, reduced by 5/12th of 1% for each month by which his Early Retirement Date
precedes his age 62.

The monthly Supplemental Executive Retirement Income payable to a Participant who separates from
service prior to age 55 with a vested benefit that is not otherwise forfeited, will be the
actuarial equivalent (currently established by the Plan actuary as 38.3%), payable at age 55, of
the accrued Supplemental Executive Retirement Income.

3. Payments Under this Supplemental Plan. The payments provided for in this Supplemental
Plan shall be made by the Company at such times as required under this Supplemental Plan; provided,
however, that, while the Company hopes and expects to make the payments provided for

3

 

under this Supplemental Plan, such payment is not guaranteed. Payments under this Supplemental Plan may be
accelerated or delayed only to the extent permitted by Code Section 409A.

4. Establishment of Fund. The Company may establish a fund, as part of the general assets of the
Company, and subject to the claims of the general creditors of the Company, to provide for the
payments required under this Supplemental Plan.

5. Disability Service Pension Supplement. If a Participant is totally disabled (unable to perform
the Participant’s regular job because of disease or injury) and, as a result, fails to accumulate
Accredited Service under the Pension Plan for some period of time, a Disability Service Pension
Supplement will be calculated and paid as if Accredited Service and applicable Preference Service
were credited during such period subject to the following:

	A.	 	The period of Disability Service begins when the Participant stops
accumulating Accredited Service under the Pension Plan as a result of
the Participant’s total disability, provided that the Participant has
not undertaken other employment.
	 
	B.	 	The period of Disability Service ends when the Participant first:

	 	(i)	 	Begins again to accumulate Accredited Service under the Pension Plan,
	 
	 	(ii)	 	Undertakes other employment,
	 
	 	(iii)	 	Attains age 55.

	C.	 	The “Final Executive Pay” of the Participant, for purposes of
determining the Disability Pension Supplement only, will be calculated
as if the Participant were earning during the period of Disability
Service the sum of (1) the Participant’s last monthly rate of basic
earnings prior to the period of Disability Service, and (2) 1/12th of
the average of the Incentive Compensation (if any) for the five years
of Accredited Service while in an eligible salary grade immediately
preceding the period of Disability Service (or the monthly average of
Incentive Compensation earned over the Participant’s Accredited
Service if the Participant has fewer than five years of Accredited
Service while in an eligible salary grade), increased or decreased
each July 1, following the beginning of the Participant’s period of
Disability Service, according to the change in the Bureau of Labor
Statistics Consumer Price Index (CPI-W) for the preceding 12-month
period of Disability Service (or lesser period of Disability Service,
if applicable). However, no July 1 increase or decrease will exceed
an amount which could result in an increase greater than a 5%
compounded annual increase since the beginning of the Participant’s
period of Disability Service, or in a reduction in the Participant’s
Final Executive Pay to an amount less than the Participant’s Final
Executive Pay prior to the period of Disability Service. For purposes
of this provision, the Consumer Price Index for the second month
previous to any measurement date will be deemed to be in effect on
such date.
	 
	D.	 	The amount of the Disability Service Pension Supplement is the
Supplemental Executive Retirement Income, calculated using Final
Executive Pay as determined in Section V, subsection 5.C above, and
giving credit for Accredited Service and applicable Preference Service
for any period of Disability Service, less:

	 	(i)	 	The Supplemental Executive Retirement Income calculated without regard to the
Disability Service Pension Supplement,

4

 

	 	(ii)	 	The Retirement Income that is or would be provided by the Pension Plan if the
Participant elected to retire, and
	 
	 	(iii)	 	Any amount paid to a retired Participant for lost benefits under the Pension Plan, for
the period of Disability Service, under a disability insurance policy, the premiums for
which were paid in whole or in part by CMS Energy Corporation or any subsidiaries which are
at least 80% owned, directly or indirectly, by CMS Energy Corporation.

	E.	 	Payments will begin as of the later of i) the first of the month following the Participant’s
attainment of age 55, or ii) the seventh month following the Participant’s separation from
service due to disability.

SECTION VI. PAYMENT OPTIONS AND

PRE-RETIREMENT SURVIVOR BENEFIT

1. Payment Options. Prior to December 31, 2007, a Participant must elect to receive his benefit
in either a Single Sum Option or a Monthly Annuity Option. This Payment Option elected by a
Participant may not be changed after December 31, 2007. Any Participant failing to make a Payment
Election prior to December 31, 2007 will be presumed to have elected to continue to receive the
Monthly Annuity Option. Under either Payment Option benefit payments will commence on: i) the
first day of the seventh month following Separation from Service if a Participant incurs a
Separation from Service on or after age 55; or, ii) if a Participant incurs a Separation from
Service prior to age 55, the later of age 55 or the first day of the seventh month following
Separation from Service. For persons incurring a Separation from Service in 2007, the benefit
option will be that elected on or before December 31, 2006.

	A.	 	The Single Sum Payment will be determined by:

	 	(i)	 	The present value of the Participant’s Supplemental Executive Retirement Income
determined on the basis of the benefit the Participant would have been entitled to on the
first day of the month following the later of his sixty-fifth birthday or his Retirement
Date. The benefit will be the present value of the deferred annuity if the Supplemental
Executive Retirement Income commences prior to age 65 and will not include any early
retirement subsidies in Section V(2) of this Supplemental Agreement;
	 
	 	(ii)	 	Payment will be based upon the mortality tables used by the Pension Plan for computing
single sums. The interest rate will be based on the earnings assumption used to comply
with Financial Accounting Standard 87 under the Pension Plan (which is based on the assumed
rate of return on assets) or such other reasonable mortality table or interest assumptions
as the Plan Administrator may adopt from time to time;
	 
	 	(iii)	 	Payment will not include any amounts otherwise forfeited under this Supplemental Plan;
and
	 
	 	(iv)	 	If a Participant dies after Separation from Service after age 55, but prior to payment
of the Single Sum, his or her estate will receive the present value of the Single Sum on
the first day of the seventh month following the Separation from Service.

	B 	 	Payment of the Monthly Annuity Option will be made to the Participant as follows:

5

 

	 	(i)	 	If the Monthly Annuity is scheduled to commence upon the seventh month following
Separation from Service, the initial payment will include the payments for the six months
prior to the payment date, less any applicable taxes and other withholdings. No interest
or lost value of money will be paid on the benefits. If a Participant dies prior to
receipt of the initial payment, any payments for months prior to his death will be made to his
Provisional Payee, if any survives him, or to his estate on the first day of the seventh
month following his Separation from Service.
	 
	 	(ii)	 	If the Monthly Annuity is scheduled to start at age 55, the benefit will commence the
later of the first of the month following the Participant’s 55th birthday or the seventh
month following Separation from Service. If the Participant dies after age 55 but prior to
receipt of the initial payment, any payments for months prior to his death will be made to
his Provisional Payee, if any survives him, or to his estate on the date the payment would
have been made to the Participant had he survived.

	C.	 	A Participant electing a Monthly Annuity Option may, at any time prior to commencement of
benefits, elect an actuarially equivalent joint and survivor annuity benefit. For this
purpose, actuarial equivalence shall be determined by the Plan’s actuary (as selected by the
Plan Administrator) applying reasonable actuarial methods and assumptions, and in accordance
with the other applicable rules under Code Section 409A and applicable regulations including
1.409A-2(b)(2)(ii). A joint and survivor annuity provides a benefit to the Participant for
his life and upon his death, provides a lifetime benefit to a Provisional Payee. A
Participant may name a Provisional Payee or change his Provisional Payee at any time that is
administratively reasonable, but not less than 8 days prior to (i) Separation from Service on
or after age 55; or (ii) 30 days prior to age 55 for a Participant Separating from Service
prior to age 55. A Participant may elect from the following Monthly Annuity Options:

	 	(i)	 	a 100% Annuity payable to him for his life with no Provisional Payee (the standard
benefit if no other election is made);
	 
	 	(ii)	 	an actuarially reduced equivalent benefit to provide a monthly annuity for his life
with a 50% survivor annuity to his named Provisional Payee;
	 
	 	(iii)	 	an actuarially reduced equivalent benefit to provide a monthly annuity for his life
with a 75% survivor annuity to his named Provisional Payee;
	 
	 	(iv)	 	an actuarially reduced equivalent benefit to provide a monthly annuity for his life
with a 100% survivor annuity to his named Provisional Payee; or
	 
	 	(v)	 	an actuarially reduced equivalent benefit to provide a monthly annuity for his life,
provided that if he dies less than 10 years following payment commencement date, his
Provisional Payee or the estate of the last surviving of the Participant or the Provisional
Payee will receive the same monthly payment until a date that is 10 years from the month
the Executive Retirement Income was first allocated as part of an initial payment.

If the Participant elects a 50%, 75% or 100% survivor annuity and the Provisional Payee dies while
the Participant is in pay status, the unreduced amount will be restored effective the first of the
month following the death of the Provisional Payee.

6

 

2. Pre-Retirement Survivor Benefit.

	A.	 	Participants Actively on Payroll. A Participant may select one beneficiary to receive a
benefit in the event of the Participant’s death subsequent to attaining five years as a
Participant in this Supplemental Plan and prior to Separation from Service. A married
Participant is presumed to have selected his spouse to receive the benefit unless the spouse
provides notarized consent
allowing the Participant to name a different beneficiary. An unmarried Participant who has
elected a beneficiary under the Pension Plan will have the same beneficiary under this
Supplemental Plan unless he elects to file a separate beneficiary form with the Company or the
Plan Record Keeper. Payments to the beneficiary will commence the first of the month following
the Participant’s death and will be equal to 50% of the Accrued Supplemental Executive
Retirement Income which would be payable if the Participant had elected to Separate from
Service the first of the month following his date of death adjusted for Early Retirement in
accordance with Section V (2). Notwithstanding the above, if a Participant is younger than age
55 at the time of his death, the benefit payable to the beneficiary will be 32.5% of the
Accrued Supplemental Early Retirement Income without any further adjustments.
	 
	B.	 	Participants Separating from Service Prior to Age 55. A Participant incurring a
Separation from Service prior to age 55 will have a pre-retirement survivor benefit for his
spouse for the period of time he is married after Separation from Service. Payments to the
spouse will commence the first of the month following the Participant’s death and will be
equal to 20% of the Supplemental Executive Retirement. The Supplemental Executive Retirement
Income of a Participant will be reduced for any year or portion of a year that this option is
elected. The reduction will be .1% for any year or portion of a year the election is in
effect from the date the benefit is elected through age 44, plus .3% for any year or portion
of a year the benefit is in effect from age 45 through age 54, plus .5% if the benefit is in
effect the year the employee attains age 55. With the spouse’s notarized consent the
Participant may waive this coverage.

SECTION VII. TERMINATION OF SERVICE

If a Participant included in the Supplemental Plan voluntarily terminates his services prior to age
55 other than in accordance with the terms of an Employment Agreement effective following a Change
in Control as defined in the Employment Agreement, the Participant will forfeit all Supplemental
Executive Retirement Income except for any amount attributable to Earnings not permitted to be used
for benefit calculation under the Pension Plan by the Internal Revenue Code or Regulations
thereunder. Any such amount shall be calculated without Preference Service or Incentive Income. A
Participant whose services are terminated for any reason prior to attaining five years of actual or
disability service following inclusion in this Supplemental Plan shall not be eligible for
Supplemental Executive Retirement Income except as provided for in any Employment Agreement which
provides for additional Years of Service, Earnings and Incentive Compensation to be used in the
calculation of Retirement Income in the event of a Change in Control.

SECTION VIII. FORFEITURE

A Participant who is discharged by the Company for cause, or an employee who is subsequently
convicted of any felony committed while in the course of his employment with the Company, which
felony involved theft, malicious destruction or misuse of the property of the Company or the
embezzlement or misapplication of the funds of the Company, or who makes an admission in writing of
the commission of such felony, shall be ineligible for and forfeit all Supplemental Executive
Retirement Income.

7

 

SECTION IX. NON-ALIENATION OF BENEFITS

No benefit under the Supplemental Plan shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, renunciation, or reduction and any attempt
so to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, renounce, or reduce
the same shall be void, nor shall any such benefit be in any manner liable for or subject to the
debts, contracts, liabilities, engagements or torts of the person entitled to such benefit.

If any Participant or retired Participant or any Provisional Payee under the Supplemental Plan is
adjudicated bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge, renounce, or reduce any benefit under the Supplemental Plan, except as specifically
provided in the Supplemental Plan, then such benefit shall cease and terminate and in that event,
subject to the requirements of Code Section 409A, the Plan Administrator shall hold or apply the
same or any part thereof to or for the benefit of such Participant or retired Participant or
Provisional Payee in such manner as the Plan Administrator may think proper, provided the Plan
Administrator shall not act in any manner as would perpetuate the alienations prohibited by this
Section. Nothing in this provision provides the Plan Administrator any power to accelerate any
payments under this Supplemental Plan or to defer any payments under this Supplemental Plan other
than in compliance with Code Section 409A and applicable regulations.

SECTION X. LIMITATION OF RIGHTS

Neither the establishment of this Supplemental Plan, nor any modification thereto, nor the payment
of any benefits, shall be construed as giving to any Participant, other employee, or other person
any legal or equitable rights against the Company, or any officer or employee thereof, or the Plan
Administrator, except as herein provided. Under no circumstances shall the terms of employment of
any employee be modified or in any way affected hereby. Inclusion under the Supplemental Plan will
not give any Participant or any Provisional Payee any right to claim a Supplemental Executive
Retirement Income except to the extent such right is specifically fixed under the terms of the
Supplemental Plan. Subject to the provisions of this Supplemental Plan and the Supplemental
Executive Retirement Trust the Participant shall have no rights greater than those of a general,
unsecured creditor of the Company.

SECTION XI. ADMINISTRATION OF SUPPLEMENTAL PLAN

The general administration of this Supplemental Plan shall be placed in the Plan Administrator
provided for in this Supplemental Plan. The determination of the Plan Administrator as to any
question or matter arising under this Supplemental Plan shall be conclusive and binding.

The Participant shall file any claim for benefits with the Plan Administrator (EP1-449), One Energy
Plaza, Jackson, Michigan 49201. Written notice of any determination will generally be provided
within 60 days after the claim is filed. A denial will include an explanation including how to
perfect the claim when appropriate. A Participant, or his authorized representative, may appeal
such denial of his original claim within 90 days on the notice of denial and may submit additional
information and appear before the Plan Administrator for a hearing. A hearing will generally be
held within 60 days and a determination 60 days after the hearing. The final determination of the
Plan Administrator is required before pursuing other possible remedies. The findings of fact and
interpretation of the Plan by the Plan Administrator is final, conclusive and binding on the
parties.

8

 

SECTION XII. RECOUPMENT

Any benefit under this Plan is also subject to recoupment under the CMS Energy Recoupment Policy
Relating to Financial Restatements.

SECTION XIII. AMENDMENT, MODIFICATION OR

TERMINATION OF THE SUPPLEMENTAL PLAN

This Supplemental Plan may be amended, modified or terminated at any time by action of the
Board of Directors of the Company. Notwithstanding any other provisions of this Supplemental Plan,
in the event of a Change in Control (as defined in an Employment Agreement between the Participant
and CMS Energy Corporation), each such Participant covered under an Employment Agreement shall
receive such additional vesting and benefits consistent with the terms of the Employment Agreement.
While the Company hopes and expects to continue the Supplemental Plan indefinitely, it reserves
the right to terminate or modify it at any time. The Plan Administrator may amend this
Supplemental Plan, consistent with the terms of its charter, to comply with any applicable laws,
rules or regulations, including Section 409A, to clarify its terms or to provide for administrative
requirements. Any amendment or termination will be consistent with Code Section 409A and any
applicable amendments or regulations.

IN WITNESS WHEREOF, execution is hereby effected this 1st day of December, 2007.

	 	 	 	 	 	 	 
	ATTEST:

	 	 	 	CMS ENERGY CORPORATION
	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/

	 	 	 	/s/	 	 
	 	 	 	 	 	 	 
	Vice President and Secretary

	 	 	 	Chief Executive Officer, CMS Energy and

Consumers Energy	 	 

Date: _____________________

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]