Document:

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                                                                     EXHIBIT 10a

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

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

                                       1
<PAGE>

                            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 and after express approval of the Committee.

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

      1.3   DEFINITIONS. As used in this 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)" means the "Million Dollar Cap" that may
                  limit an employer's annual tax compensation deduction for
                  certain compensation of covered employees, unless the
                  compensation is based on specific performance goals that are
                  adopted and administered in accordance with requirements set
                  forth in Code Section 162(m) and regulations thereunder.

            (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 four
                  highest paid executive officers of the Company.

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

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

            (i)   "Company" means CMS Energy Corporation.

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

                                       2
<PAGE>

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

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

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

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

            (s)   "Plan" means the Annual Officer Incentive Compensation Plan
                  for Officers of CMS Energy Corporation and Its Subsidiaries,
                  as effective January 1, 2004 and any amendments thereto.

            (t)   "Plan Administrator" means the President and Chief Executive
                  Officer of CMS Energy, under the general direction of the
                  Outside Directors on the Committee.

            (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.

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

      1.4   ELIGIBILITY. Officers (salary grade E-3 and above) 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
                  Outside Directors who are members 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 30th of the calendar year
                  following the Performance Year, will review for approval
                  proposed Annual Awards for all Officer participants, as
                  recommended by the President and CEO of the Company. All
                  proposed Annual Awards are subject to approval of the
                  Committee. Before the payment of any Annual Awards, the
                  Committee will certify in writing that the performance goals
                  were in fact satisfied in accordance with Code Section 162(m).

                                       3
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            (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 discretionary decisions of the Committee
                  are final.

            (e)   Only Committee members who are Outside Directors shall
                  participate in the Committee actions with respect to Code
                  Section 162(m) Employees

II.   CORPORATE PERFORMANCE GOALS

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

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

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

             COMPOSITE PERFORMANCE FACTORS FOR 2005 PERFORMANCE YEAR

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

EPS

COMPONENT

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

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

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

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

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

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

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

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

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

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

                                       4
<PAGE>

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 as in effect on January 1 of 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.

            <TABLE>
            <CAPTION>
                                                                 SALARY               STANDARD AWARD AS A % OF
                        POSITION                                 GRADE                       BASE  SALARY
                        --------                                 ------               ------------------------
            <S>                                                  <C>                  <C>
            President & CEO                                       E-9                            65%
            Vice Chairman                                         E-8                            60%
            President, Subsidiary - Ex Vice Pres                  E-7                            55%
            President, Subsidiary                                 E-6                            50%
            Senior Vice President                                 E-5                            45%
            Vice President                                        E-4                            40%
            Vice President                                        E-3                            35%
            </TABLE>

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

                      INDIVIDUAL AWARD = BASE SALARY TIMES
                   STANDARD AWARD % TIMES PERFORMANCE FACTOR %

IV.   PAYMENT OF ANNUAL AWARDS

      4.1   CASH ANNUAL AWARD. All Annual Awards for a Performance Year will be
            paid in cash no later than March 31st of the calendar year following
            the Performance Year provided that they first have been reviewed and
            approved by the Committee, and provided further 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   VOLUNTARY 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. A separate
                  irrevocable election must be made no later than six months
                  prior to the end of Performance Year. Any Annual Award made by
                  the Committee after termination of employment of an Officer or
                  retirement of an Officer is not eligible for a voluntary
                  deferral and will be paid in full in cash in the year in which
                  the Annual Award is made.

                                       5
<PAGE>
            (b)   A Voluntary Deferred Annual Award may be paid out in a lump
                  sum or in five or ten annual installments beginning in the
                  first January of the calendar year following retirement or
                  termination of employment. If an Annual Award is paid in
                  annual installments, each year the payment will be a fraction
                  of the balance equal to one over the number of annual
                  installments remaining. In the event of the participant's
                  death, all deferred amounts will be paid in total in January
                  of the calendar year following the year of death.

            (c)   At the time of electing to voluntarily defer payment, the
                  participant must elect whether the sum deferred will be
                  treated by the Company or Subsidiary, as applicable, in
                  accordance with Paragraph I or Paragraph II below.

                  i.    A Voluntary Deferred Annual Award will be credited with
                        sums in lieu of interest from the first day of the month
                        following the month in which the Annual Award is
                        determined to the date of payment. The interest accrual
                        rate will be equivalent to the U.S. prime rate of
                        interest as reported in The Wall Street Journal,
                        compounded quarterly as of the first business day of
                        January, April, July and October of each year during the
                        deferral period. The prime rate in effect on the first
                        business day of January, April, July and October will be
                        the prime rate (described above) in effect for that
                        quarterly period.

                  ii.   A Voluntary Deferred Annual Award will be treated as if
                        it were invested as an optional cash payment under the
                        CMS Energy Stock Purchase Plan including the
                        accumulation of any dividends. The value of the deferred
                        sum at the time of payment will be equal to the number
                        of dollars such an investment would have been worth as
                        measured by the purchase price of shares of Common Stock
                        using the average closing price, as reported in The Wall
                        Street Journal (NYSE - composite transactions) for the
                        first five trading days in the December previous to a
                        January payout.

            The amount of any Voluntary Deferred Annual Award is to be satisfied
            from the general corporate funds of the company on whose payroll the
            Officer was enrolled prior to the payout beginning and are subject
            to the claims of general creditors of that company.

      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, and the
                  beneficiary shall receive payment in the event that the
                  Participant dies prior to receipt of either a cash Annual
                  Award, a Mandatory Deferred Annual Award or a Voluntary
                  Deferred Annual Award. If a beneficiary is not named, the
                  payment will be made to the first surviving class as follows:

                        1. Widow or Widower

                        2. Children, per capita

                        3. Parents, per capita

                        4. Brothers and Sisters, per capita

                        5. Estate of the Deceased

                                       6
<PAGE>
            (b)   A participant may change beneficiaries at any time, and the
                  change will be effective as of the date the participant
                  completes and signs the beneficiary form, whether or not the
                  participant is living at the time the request is received by
                  the Company. However, the Company or the applicable Subsidiary
                  will not be liable for any payments made before receipt of a
                  written request.

V.    CHANGE OF STATUS

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

      5.1   PRO-RATA ANNUAL AWARDS. A new 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 an Annual Award.

      5.3   RESIGNATION. An Officer who resigns during or after a Performance
            Year will not be eligible for an Annual Award. If the resignation is
            due to reasons such as a downsizing or reorganization, or the ill
            health of the 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 Officers who retires, is on
            disability or leave of absence during the performance year and who
            becomes employed by a competitor of CMS Energy or Consumers Energy
            prior to one year after the award payout will forfeit all rights to
            an Award, unless prior approval has been granted by the Committee.

VI.   MISCELLANEOUS

      6.1   IMPACT ON BENEFIT PLANS. Payments made under the Plan will be
            considered as earnings for the Supplemental Executive Retirement
            Plan (Salary Grades E-3 through E-9) but not for purposes of the
            Employees' Savings Plan, Pension Plan, or other employee benefit
            programs.

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

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

                                       7
<PAGE>

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

      6.5   DISPUTE RESOLUTION. Any disputes related to the Plan should first be
            brought to the Plan Administrator. If that does not result in a
            mutually agreeable resolution, then the dispute shall be subject to
            final and binding arbitration before a single arbitrator selected by
            the parties to be conducted in Jackson, Michigan. The arbitration
            will be conducted and finished within 90 days of the selection of
            the arbitrator. The parties shall share equally the cost of the
            arbitrator and of conducting the arbitration proceeding, but each
            party shall bear the cost of its own legal counsel and experts and
            other out-of-pocket expenditures.

                                       8<PAGE>

                                                                     EXHIBIT 10b

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

Effective January 1, 2004
Approved by Committee on March 23, 2005

                                       1
<PAGE>

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

I.    GENERAL PROVISIONS

      1.1 PURPOSE. The purpose of the Annual Management Incentive Compensation
      Plan ("MIC 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 certain highly competent Management and
            Professional Employees.

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

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

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

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

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

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

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

            (e)   "Company" means CMS Energy Corporation.

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

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

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

            (i)   "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.

            (j)   "Leave of Absence" for purposes of this MIC Plan means a leave
                  of absence that has been approved by the Plan Administrator.

                                       2
<PAGE>

            (k)   "Management and Professional Employee" means an employee of
                  the Company or a Subsidiary in the salary grades specified in
                  the table contained in Article III of the MIC Plan.

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

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

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

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

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

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

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

      1.4   ELIGIBILITY. Certain Management and Professional Employees are
            eligible for participation in the MIC Plan.

      1.5   ADMINISTRATION OF THE PLAN.

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

            (b)   The Committee, no later than March 30th of the Performance
                  Year, will approve performance goals for the Performance Year.

            (c)   The Committee, no later than March 30th of the calendar year
                  following the Performance Year, will review for approval
                  proposed Annual Awards for the total of all MIC Plan
                  participants, as recommended by the President and CEO of the
                  Company. All proposed Annual Awards are subject to approval of
                  the Committee. Before the payment of any Annual Awards, the
                  Committee will certify in writing that the performance goals
                  were in fact satisfied in accordance with Code Section 162(m).

            (d)   The Committee reserves the right to modify the performance
                  goals with respect to unforeseeable circumstances or otherwise
                  exercise discretion with respect to proposed Annual Awards as
                  it deems necessary to maintain the spirit and intent of the
                  MIC Plan. The Committee also reserves the right in its
                  discretion to not pay Annual Awards for a Performance Year.
                  All discretionary decisions of the Committee are final.

                                       3
<PAGE>

II.   CORPORATE PERFORMANCE GOALS

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

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

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

             COMPOSITE PERFORMANCE FACTORS FOR 2005 PERFORMANCE YEAR

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

EPS

COMPONENT

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

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

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

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

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

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

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

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

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

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

III.  ANNUAL AWARD FORMULA

      3.1   ANNUAL AWARDS. Annual Awards for each eligible MIC Plan participant
            will be based upon a standard award as set forth in the table below.
            The total amount of an MIC

                                       4
<PAGE>

            participant Annual Award shall be computed according to the annual
            award formula set forth in Section 3.2.

                            <TABLE>
                            <CAPTION>
                            SALARY
                            GRADE         STANDARD AWARD AMOUNT
                            -----         ---------------------
                            <S>           <C>
                              25                 $37,000
                              24                 $36,500
                              23                 $22,500
                              22                 $22,000
                              21                 $13,500
                              20                 $13,000
                              19                 $12,500
                            </TABLE>

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

       INDIVIDUAL AWARD = STANDARD AWARD AMOUNT TIMES PERFORMANCE FACTOR %

IV.   PAYMENT OF ANNUAL AWARDS

      4.1   CASH ANNUAL AWARD. All Annual Awards for a Performance Year will be
            paid in cash no later than March 31st of the calendar year following
            the Performance Year provided that they first have been reviewed and
            approved by the Committee, and provided further that the Annual
            Award for a particular Performance Year has not been deferred
            voluntarily pursuant to Section 4.3. The amounts required by law to
            be withheld for income and employment taxes will be deducted from
            the Annual Award payments. All Annual Awards become the obligation
            of the company on whose payroll the Employee is enrolled at the time
            the Committee makes the Annual Award.

      4.2   VOLUNTARY DEFERRED ANNUAL AWARD

            (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 MIC Plan participant. A separate
                  irrevocable election must be made no later than six months
                  prior to the end of Performance Year. Any Annual Award made by
                  the Committee after termination of employment of a participant
                  or retirement of a participant is not eligible for a voluntary
                  deferral and will be paid in full in cash in the year in which
                  the Annual Award is made.

            (b)   A Voluntary Deferred Annual Award may be paid out in a lump
                  sum or in five or ten annual installments beginning in the
                  first January of the calendar year following retirement or
                  termination of employment. If an Annual Award is paid in
                  annual installments, each year the payment will be a fraction
                  of the balance equal to one over the number of annual
                  installments remaining. In the event of the participant's
                  death, all deferred amounts will be paid in total in January
                  of the calendar year following the year of death.

            (c)   At the time of electing to voluntarily defer payment, the
                  participant must elect whether the sum deferred will be
                  treated by the Company or Subsidiary, as applicable, in
                  accordance with Paragraph I or Paragraph II below.

                  i.    A Voluntary Deferred Annual Award will be credited with
                        sums in lieu of interest from the first day of the month
                        following the month in which the Annual Award is
                        determined to the date of payment. The interest accrual
                        rate will be equivalent to the prime rate of interest as
                        reported in The Wall Street Journal, compounded
                        quarterly as of the first business day of January,
                        April, July and October of each

                                       5
<PAGE>

                        year during the deferral period. The prime rate in
                        effect on the first business day of January, April, July
                        and October will be the prime rate (described above) in
                        effect for that quarterly period.

                  ii.   A Voluntary Deferred Annual Award will be treated as if
                        it were invested as an optional cash payment under the
                        CMS Energy Stock Purchase Plan including the
                        accumulation of any dividends. The value of the deferred
                        sum at the time of payment will be equal to the number
                        of dollars such an investment would have been worth as
                        measured by the purchase price of shares of Common Stock
                        using the average closing price, as reported in The Wall
                        Street Journal (NYSE - composite transactions) for the
                        first five trading days in the December previous to a
                        January payout.

                  The amount of any Voluntary Deferred Annual Award is to be
                  satisfied from the general corporate funds of the company on
                  whose payroll the MIC Plan participant was enrolled prior to
                  the payout beginning and are subject to the claims of general
                  creditors of that company.

      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, and the
                  beneficiary shall receive payment in the event that the
                  Participant dies prior to receipt of either a cash Annual
                  Award, or a Voluntary Deferred Annual Award. If a beneficiary
                  is not named, the payment will be made to the first surviving
                  class as follows:

                        1. Widow or Widower

                        2. Children, per capita

                        3. Parents, per capita

                        4. Brothers and Sisters, per capita

                        5. Estate of the Deceased

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

V.    CHANGE OF STATUS

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

      5.1   PRO-RATA ANNUAL AWARDS. A new MIC participant, whether hired or
            promoted to the position, or an MIC employee 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 MIC
            participant 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. Awards will also be prorated for any change in full time or
            part time work status.

                                       6
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      5.2   TERMINATION. An MIC participant whose employment is terminated
            pursuant to a violation of the Company code of conduct or other
            corporate policies will not be considered for an Annual Award.

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

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

VI.   MISCELLANEOUS

      6.1   IMPACT ON BENEFIT PLANS. Payments made under the Plan will be
            considered as earnings for the Supplemental Executive Retirement
            Plan (Salary Grades E-1, E-2 and F) but not for purposes of the
            Employees' Savings Plan, Pension Plan, or other employee benefit
            programs.

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

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

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

      6.5   DISPUTE RESOLUTION. Any disputes related to the Plan should first be
            brought to the Plan Administrator. If that does not result in a
            mutually agreeable resolution, then the dispute shall be subject to
            final and binding arbitration before a single arbitrator selected by
            the parties to be conducted in Jackson, Michigan. The arbitration
            will be conducted and finished within 90 days of the selection of
            the arbitrator. The parties shall share equally the cost of the
            arbitrator and of conducting the arbitration proceeding, but each
            party shall bear the cost of its own legal counsel and experts and
            other out-of-pocket expenditures.

                                       7

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