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Exhibit (10)(h)

PERFORMANCE INCENTIVE STOCK PLAN

The CMS Energy Corporation Performance Incentive Stock Plan, first effective February 3, 1988, is
hereby set forth as amended and restated effective June 1, 2004, and as further amended effective
April 1, 2006 to ensure compliance with the requirements of Internal Revenue Code Section 409A.

Article I. Purpose

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

Article II. Definitions

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

	 	a.	 	“Award Period” means the period or periods of time relating to any restrictions imposed
by the Committee with respect to Common Stock awarded under Article VII. Such period of
time shall extend for a period of at least twelve months from and after the date of the
award.
	 
	 	b.	 	“Beneficiary” means the beneficiary or beneficiaries designated to receive the amount, if
any, payable under the Plan upon the death of a Participant.
	 
	 	c.	 	“Board” means the Board of Directors of the Corporation.
	 
	 	d.	 	“Change in Control” means, for individuals who have a written agreement including a
change in control provision, whatever meaning was given in such agreement. For other
individuals, the phrase shall have the meaning shown on Attachment A.
	 
	 	e.	 	“Committee” means the Compensation and Human Resources Committee of the Board, which
shall be comprised in such a manner to comply with the requirements, if any, of the New York
Stock Exchange or other applicable stock markets, Rule 16b-3 (or any successor rule) under
the Securities Exchange Act of 1934, as amended, and Section 162(m) of the Internal Revenue
Code of 1986, as amended.
	 
	 	f.	 	“Common Stock” means the Common Stock of the Corporation as authorized for issuance in
its Articles of Incorporation at the time of an award or grant under this Plan.
	 
	 	g.	 	“Corporation” means CMS Energy Corporation, its successors and assigns, and each of its
Subsidiaries, or any of them individually.
	 
	 	h.	 	“Director” means any person who is a member of the Board of Directors of the Corporation
or a Subsidiary.
	 
	 	i.	 	“Eligible Person” means a key employee, non-employee Director or advisor. A key employee
must at the end of the fiscal year be a regular full-time salaried employee of the
Corporation or a Subsidiary, or, to the extent the Committee may determine, a person whose
services to the Corporation terminated before the end of the fiscal year, who, in the
opinion of the Committee, made a significant contribution to the Corporation or a
Subsidiary.
	 
	 	j.	 	“Incentive Option” means an option to purchase Common Stock of the Corporation
which
meets the requirements set forth in the Plan and also meets the definition of an Incentive Stock Option set forth in Section 422 of the Internal Revenue Code of 1986,
as amended (the
“Code”).

 

 

	 	k.	 	“Non-Employee Director” means a member of the Board of Directors of the Corporation or a
Subsidiary who is not currently an employee of the Corporation or a Subsidiary and has not
been an employee of the Corporation or a Subsidiary within the preceding 3 years.
	 
	 	l.	 	“Nonqualified Option” means an option to purchase Common Stock of the Corporation which
meets the requirements set forth in the Plan but does not meet the definition of an
Incentive Stock Option set forth in Section 422 of the Code.
	 
	 	m.	 	“Officers Incentive Compensation Plan” means the incentive compensation plan, including
any amendments thereto, authorized and approved by the Board to provide incentive
compensation to the Officers of the Corporation or a Subsidiary.
	 
	 	n.	 	“Optionee” means any person to whom an option or right has been granted or who becomes a
holder of an option or right under Article VI of the Plan.
	 
	 	o.	 	 “Participant” means a person to whom a grant or award has been made which has not been
paid, forfeited, or otherwise terminated or satisfied under the Plan, or a person included
under the Management Stock Purchase Plan.
	 
	 	p.	 	“Performance Criteria” are the factors used by the Committee to establish goals to track
business measures such as net earnings; operating earnings or income; earnings growth; net
income (absolute or competitive growth rates comparative); cash flow (including operating
cash flow, free cash flow, discounted cash flow return on investment, and cash flow in
excess of cost of capital); earnings per share; stock price (absolute or peer-group
comparative); total shareholder return; absolute and/or relative return on common
shareholders equity; return on shareholders equity (absolute or peer-group comparative);
absolute and/or relative return on capital; absolute and/or relative return on assets;
economic value added (income in excess of cost of capital); customer satisfaction; expense
reduction; sales; or ratio of operating expenses to operating revenues.
	 
	 	q.	 	“Performance Unit” means a contractual right granted to a Participant pursuant to Article
VIII to receive a designated dollar value equal to the value established by the Committee
and subject to such terms and conditions as are set forth in this Plan and the applicable
grant.
	 
	 	r.	 	“Phantom Share” means a contractual right granted to a Participant pursuant to Article
VIII to receive an amount equal to the Appreciation Value at such time, and
subject to such
terms and conditions as are set forth in this Plan and the applicable grant.
	 
	 	s.	 	“Restricted Common Stock” means Common Stock delivered subject to the restrictions described in Article VII.
	 
	 	t.	 	“Restrictions” for purposes of Article VII includes any time based and/or performance based conditions on vesting.
	 
	 	u.	 	“Shareholders” means the shareholders of the Corporation.
	 
	 	v.	 	“Stock Appreciation Right” shall mean a right, granted in conjunction with a Stock
Option, to surrender the Stock Option and receive the appreciation in value of the optioned
shares over the option price.
	 
	 	w.	 	“Stock Option” means an option to purchase shares of Common Stock, granted pursuant to
this Plan.
	 
	 	x.	 	“Subsidiary” means a corporation, domestic or foreign, 50 percent or more of the voting
stock of which is owned directly or indirectly by the Corporation.

Article III. Effective Date, Duration, Scope and Administration of the Plan

	3.1	 	This Plan shall be effective June 1, 2004, conditioned upon approval of the shareholders of
the Corporation, and shall continue until May 31, 2009.
	 
	3.2	 	The Committee shall have full power and authority to construe, interpret and administer the
Plan. All decisions, actions or interpretations of the Committee shall be final, conclusive
and binding upon all parties. If any Participant or Optionee objects to any such
interpretation or action formally or informally, the expenses of the Committee and its agents
and counsel shall be chargeable against any amounts otherwise payable under the Plan to or on account of the
Participant or Optionee.

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

Article IV. Participation, Awards and Grants

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

	4.2	 	Each year, the Committee may award shares of Common Stock, and/or may grant Phantom Shares,
Performance Units, Stock Options which qualify as “Incentive Stock Options” within the meaning
of Section 422 of the Code or Stock Options which do not qualify as Incentive Stock Options
and/or Stock Appreciation Rights for use in connection with Stock Options to each Eligible
Person whom it has designated as an Optionee or Participant for such year. No Incentive Stock
Option will be granted to an Eligible Person who is not a full or part-time employee of the
Corporation or a subsidiary of the Corporation.

	4.3	 	Awards of Common Stock and grants of Stock Options (with or without Stock Appreciation
Rights), Phantom Shares or Performance Units may be made, without amending the Plan, to
Eligible Persons who are foreign nationals or employed outside the United States or both, on
such terms and conditions different from those specified in the Plan as may, in the judgment
of the Committee, be necessary or desirable to further the purposes of the Plan or to
accommodate differences in local law, tax policy or custom. Moreover, the Committee may
approve such supplements to or alternative versions of the Plan as it may consider necessary
or appropriate for such purposes without thereby affecting the terms of the Plan as in effect
for any other purpose; provided, however, no such supplement or alternative version shall: (a)
increase the number of available shares of Common Stock under Section 5.1; or (b) increase the
limitations contained in Section 5.3.

Article V. Shares Reserved Under the Plan

	5.1	 	There is hereby reserved for award under this Plan 6 million whole shares of Common Stock,
less the number of shares awarded, granted or purchased under the provisions of this Plan
which have not been forfeited. To the extent permitted by law or the rules and regulations of
any stock exchange on which the Common Stock is listed, shares of Common Stock with respect to
which payment or exercise is in cash as well as any shares or options which are forfeited may
thereafter again be awarded or made subject to grant under the Plan. The number of shares made
available for option and sale under Article VI of this Plan plus the number of shares awarded
under Article VII of this Plan plus the number of shares awarded or purchased under Article
VIII of this Plan will not exceed, at any time, the number of shares of Common Stock reserved
pursuant to this Article V.

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

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	 	 	in any Stock Option agreement to sell a fractional share, and the total substitution or
adjustment with respect to each Stock Option agreement shall be limited accordingly.
	 
	5.3	 	Individual Grant Limit: The combined maximum shares awarded or granted for any one Eligible
Person for any one year under this Plan, excluding any Performance Units awarded under Section
8.2, will not exceed 250,000 shares of Common Stock.

Article VI. Stock Options and Stock Appreciation Rights

	6.1	 	The Committee may from time to time provide for the option and sale of shares of Common
Stock, which may consist in whole or in part of the authorized and unissued Common Stock of
the Corporation.
	 
	6.2	 	Optionees: The Committee shall determine and designate from time to time, in its discretion,
those Eligible Persons to whom Stock Options and Stock Appreciation Rights are to be granted
and who thereby become Optionees under the Plan.
	 
	6.3	 	Allotment of Shares: The Committee shall determine and fix the number of shares of Common
Stock subject to options to be offered to each Optionee.
	 
	6.4	 	Option Price: The Committee shall establish the option price at the time any option is
granted at not less than 100% of the fair market value of the stock on the date on which such
option is granted; provided, however, that with respect to an Incentive Option granted to an
employee who at the time of the grant owns (after applying the attribution rules of Section
425(d) of the Code) more than 10% of the total combined voting stock of the Corporation or of
any parent or Subsidiary, the option price shall not be less than 110% of the fair market
value of the stock subject to the Incentive Option on the date such option is granted. In no
event shall Options previously granted under this Plan be re-priced by reducing the exercise
price thereof, nor shall Options previously granted under this Plan be cancelled and replaced
by a subsequent re-grant under this Plan of Options having an exercise price lower than the
options so cancelled.

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

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

	6.6	 	Granting and Exercise of Stock Options and Stock Appreciation Rights: The granting of Stock
Options and Stock Appreciation Rights hereunder shall be effected in accordance with
determinations made by the Committee pursuant to the provisions of the Plan, by execution of
instruments in writing in form approved by the Committee. The Committee may grant Stock
Options that provide for the grant of a subsequent restoration Stock Option if the exercise
price has been paid for by tendering shares to the Company. Any restoration Stock Option shall
be for the number of shares tendered in exercising the predecessor option. The restoration
Stock Option exercise price shall be the then-current Fair Market Value, and the term of such
restoration option may not extend beyond the remaining term of the original option.
	 
	 	 	Each Stock Option and Stock Appreciation Right granted hereunder shall be exercisable at any such
time or times or in any such installments as may be determined by the Committee at the time of
the grant, subject to the limitation that for each Incentive Option and related Stock
Appreciation Right granted, a maximum of $100,000 (based on the price at the date of grant) may
be exercised per year, plus any unused carry-over from a previous year(s).

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

	6.8	 	Nontransferability of Stock Options and Stock Appreciation Rights: No Stock Option or Stock
Appreciation Right granted under the Plan to an Optionee shall be transferable by such
Optionee otherwise than by will, pursuant to a valid Domestic Relations Order which limits the
rights of the alternate payee to those available to the Optionee, or by the laws of descent
and distribution except that the Optionee may transfer to an immediate family member or a
family trust for estate planning purposes, and such Stock Option and Stock Appreciation Right
shall be exercisable, during the lifetime of the Optionee, only by the Optionee or by a member
of such Optionee’s immediate family or by the family trust.

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

	6.10	 	Termination of Employment: If the employment of an Optionee by the Corporation shall be
terminated due to either the voluntary resignation of the employee or for cause, any
outstanding Stock Option or Stock Appreciation Right granted to such Optionee shall terminate.
If the employment of an Optionee shall be terminated due to the Optionee’s death, any Stock
Option or Stock Appreciation Right, transferred to a family trust or by will or by the laws of
descent and distribution, may be exercised for one year following the date of the Optionee’s
death. If the employment of an Optionee shall otherwise terminate such as due to dismissal, a
reorganization, retirement from active employment or service with the Corporation after age
55, or the disability of the Optionee, the Optionee may exercise any outstanding Stock Option
or Stock Appreciation Right for one year following the date of the termination of employment.
In such event, except upon the disability of the Optionee, any outstanding Incentive Option or
related Stock Appreciation Right may be exercised for only three months following an
Optionee’s termination of employment. Notwithstanding the foregoing, any Stock Option,
Incentive Stock Option or Stock Appreciation Right, the exercise of which has been extended
pursuant to this Section 6.10, shall immediately terminate upon the Optionee’s acceptance of
an offer of employment with a competitor of the Corporation as determined by the Committee in
its sole discretion. In no event, however, shall a Stock Option or Stock Appreciation Right be
exercisable subsequent to its expiration date and, furthermore, a Stock Option or Stock
Appreciation Right may only be exercised after termination of an Optionee’s employment to the
extent exercisable on the date of termination of employment.

	6.11	 	Termination of Service: If a Non-Employee Director ceases to be a member of the Board for any
reason, or if an advisor no longer provides service to the Corporation, the Non-Employee
Director or advisor may exercise any Option or related Stock Appreciation Right for one year
following such termination of service. In no event, however, shall a Stock Option or Stock
Appreciation Right be exercisable subsequent to its expiration date and, furthermore, a Stock
Option or Stock Appreciation Right may only be exercised after termination of an Optionee’s
service to the extent exercisable on the date of termination of service.

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

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

	6.14	 	Restrictions on Sale of Shares: If, at the time of exercise of any Stock Option or Stock
Appreciation Right granted hereunder, the Corporation is precluded by any legal, regulatory or
contractual restriction from selling and/or delivering shares pursuant to the terms of such
Stock Option or Stock Appreciation Right, the sale and delivery of the shares may be delayed
until the restrictions

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	 	 	are resolved and only cash may be paid upon exercise of the Stock Appreciation Right. At any time
during such delay, the Committee, in its discretion, may permit the Optionee to revoke a Stock
Option exercise, in which event any corresponding Stock Appreciation Right shall be reinstated.
	 
	6.15	 	Compliance With Rule 16b-3: Notwithstanding any other provision of the Plan to the contrary,
the administration of the Plan and the grant, exercise and terms of Stock Appreciation Rights
hereunder shall comply with Rule 16b-3, or any successor rule, under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”).

Article VII. Restricted Common Stock

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

	7.2	 	Restrictions:

	 	a.	 	Award Period. Any shares of Common Stock awarded or issued under the Plan may be made
subject to such other restrictions as the Committee deems advisable, including without
limitation provisions to comply with Federal and state securities laws. In making
determinations of legal requirements the Committee may rely on an opinion of counsel for the
Corporation. Except for any recoupment set forth in Article X.2, after shares are awarded
under the Plan, the Committee may not, at a later date, add additional restrictions or
extend the length of the Award Period. Notwithstanding the foregoing, the restrictions
shall terminate upon the death of the Participant.
	 
	 	b.	 	Stock Certificates. Whenever shares of Common Stock are awarded to a Participant, such
shares shall be outstanding, and stock certificates shall be issued in the name of the
Participant, which certificates may bear a legend stating that the shares are issued subject
to the restrictions set forth in the Plan. All certificates issued for shares of Common
Stock awarded under the Plan shall be deposited for the benefit of the Participant with the
Secretary of the Corporation as custodian until such time as the shares are vested and
transferable.
	 
	 	c.	 	Voting Rights. A Participant who is awarded shares of Common Stock under the Plan shall
have full voting rights on such shares, whether or not the shares are vested or
transferable.
	 
	 	d.	 	Dividend Rights. Shares of Common Stock awarded to a Participant under the Plan, whether
or not vested or transferable, may have full dividend rights as determined by the Committee.
However, if shares or securities are issued as a result of a merger, consolidation or
similar event, such shares shall be issued in the same manner, and subject to the same
deposit requirements, vesting provisions and transferability restrictions as the shares of
Common Stock which have been awarded.
	 
	 	e.	 	Delivery. Deliveries of Restricted Common Stock by the Corporation may consist in whole
or in part of the authorized and unissued Common Stock of the Corporation (at such time or
times and in such manner as it may determine). The Restricted Common Stock shall be paid and
delivered as soon as practicable after the Award Period in accordance with Section 7.3.
	 
	 	f.	 	Transferability. The shares may not be sold, exchanged, transferred, pledged,
hypothecated, or otherwise disposed of by the Participant until their release. However,
nothing herein shall preclude a Participant from making a gift of any shares of Restricted
Common Stock to a spouse, child, stepchild, grandchild, parent or sibling, or legal
dependent of the Participant or to a trust of which the beneficiary or beneficiaries of the
corpus and the income shall be either such a person or the Participant; provided that, the
Restricted Common Stock so given shall remain subject to the restrictions, obligations and
conditions described in this Article VII.
	 
	 	g.	 	Vesting. If a Participant has received an award pursuant to the provisions of the Plan,
is employed by the Corporation or remains a Non-Employee Director or is an advisor at the
end of the Award Period and the performance goals have been met, then the Participant shall
be fully vested, at the end of the Award Period, in the shares of Common Stock awarded to
the Participant for that Award Period.

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	 	h.	 	Termination of Employment. In the event of termination of employment of an employee
Participant or termination of service of a Non-Employee Director or advisor prior to the
last day of an Award Period for any reason other than Participant’s death, retirement of a
Participant from active employment or service with the Corporation after age 55
(“Retirement”), or disability of a Participant., all rights to any shares of Restricted
Common Stock held in a deposit account with respect to such award, including any additional shares issued with respect to such shares as described in subsection 7.2d above shall be
forfeited to the Corporation. However, the Committee may, if the Committee determines that
circumstances warrant such action, vest all or a portion of such outstanding awards and
approve the immediate distribution of all vested Common Stock that would otherwise be
forfeited. Alternatively, the Committee may, if the Committee determines that circumstances
warrant such action, instruct that such shares of Restricted Common Stock shall continue to
be held by the Corporation in a deposit account until any performance restrictions have been
satisfied or the shares are forfeited for failure to satisfy such performance restrictions.
	 
	 	i.	 	Exchange of Shares .In the event the Common Stock shall be changed into or exchanged for
a different number or kind of shares of stock or other securities of CMS Energy Corporation
or of another corporation, whether through reorganization, recapitalization, stock split-up,
combination of shares, merger or consolidation or otherwise, then there shall be substituted
for each share of stock awarded pursuant to this Article VII the number and kind of shares
of stock or other securities into which each outstanding share Common Stock shall be so
changed or for which each such share shall be exchanged. In the event the Common Stock
shall be exchanged for a cash payment, in whole or in part, whether through reorganization,
recapitalization, merger or consolidation or otherwise, then any shares awarded pursuant to
this Article VII shall also be exchanged for a similar cash and/or stock payment. At the
time of any such change or exchange, whether for stock or for cash or a combination of stock
and cash, any restrictions, other than time based vesting, shall be removed and such stock
and/or cash as substituted for the shares awarded to the Participant shall continue to be
considered an award of shares of Restricted Common Stock under this Plan. Nothing in this
provision permits or requires the Corporation to sell a fractional share. Any such exchange
for cash will be structured in such a manner as to be exempt from Section 409A or
alternatively, to comply with Section 409A.

	7.3	 	Distribution of Restricted Common Stock

	 	a.	 	Distribution After Award Period: Except as otherwise provided, distribution of vested
awards of Common Stock shall be made as soon as practicable after the last day of the
applicable Award Period in the form of full shares of Common Stock, with fractional shares,
if any, being awarded in cash.
	 
	 	b.	 	Distribution After Death of Participant: Upon the death of the Participant, either before
or after retirement, any shares of Restricted Common Stock then held shall, subject to this
Article VII, be delivered within a reasonable time under the circumstances to Participant’s
Beneficiary or, in the absence of an appropriate Beneficiary designation to the
Participant’s estate, in such one or more installments as the Committee may then determine.
	 
	 	c.	 	Distribution After Retirement or Disability: Upon termination of a Participant due to
Retirement or disability, any shares awarded not less than 12 months prior to termination
shall continue to be held by the Corporation in a deposit account until any performance
restrictions have been satisfied or the shares are forfeited for failure to satisfy such
performance restrictions. The Committee may, at its discretion and in exceptional
circumstances, waive the requirement that the shares be awarded not less than 12 months
prior to such termination. If such outstanding shares awarded to the Participant are
subject only to time based vesting and not to any additional performance criteria, then such
shares shall be delivered to the Participant as soon as practicable after such termination.
Notwithstanding the above, if an employee Participant accepts an offer of employment with a
competitor of the Corporation as determined by the Committee in its sole discretion, all
shares that have not been distributed as of that date shall terminate and be forfeited by
the Participant.

	7.4	 	Designation of Beneficiaries

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

7

 

	7.5	 	Transferability: Subject to the provision of this Article VII, shares of Common Stock awarded
to a Participant will become freely transferable by the Participant only at the end of the
Award Period established with respect to such shares.
	 
	7.6	 	Distribution to Person Other Than Employee: If the Committee shall find that any person to
whom any award is payable under this Article VII of the Plan is unable to care for such
person’s affairs because of illness or accident, or is a minor, or has died, then any payment
due Participant or Participant’s estate (unless a prior claim therefor has been made by a duly
appointed legal representative), may, if the Committee so directs the Corporation, be paid to
Participant’s spouse, a child, a relative, an institution maintaining or having custody of
such person, or any other person deemed by the Committee to be a proper recipient on behalf of
such person otherwise entitled to payment. Any such payment shall be a complete discharge of
the liability of the Committee and the Corporation therefor.
	 
	7.7	 	Restricted Common Stock for employee Participants is intended to constitute an unfunded
deferred compensation arrangement for a select group of management or highly compensated
personnel.
	 
	7.8	 	A forfeiture of shares of Common Stock pursuant to subsection 7.2h of the Plan shall effect a
complete forfeiture of voting rights, dividend rights and all other rights relating to the
award or grant as of the date of forfeiture.
	 
	7.9	 	Each distribution of Common Stock under this Article VII of the Plan shall be made subject to
such federal, state and local tax withholding requirements as apply on the distribution date.
For this purpose, the Committee may provide for the withholding of shares of Common Stock or
allow a Participant to pay to the Corporation funds sufficient to satisfy such withholding
requirements.

Article VIII. Phantom Shares and Performance Units.

	8.1	 	Phantom Shares.

	 	a.	 	Grants of Phantom Shares. The Committee may from time to time grant Phantom Shares, the
value of which is determined by reference to a share of Common Stock on terms and conditions
as the Committee, in its discretion, may from time to time determine. Each grant of Phantom
Shares shall specify the number of Phantom Shares granted, the Initial Value of such Phantom
shares which shall not be less than 100% of the Fair Market Value of the Common Stock as of
the date of grant, the Valuation Dates, the number of Phantom Shares whose appreciation
value shall be determined on each such Valuation Date, any applicable vesting schedule for
such Phantom Shares, and any applicable limitation on payment for such Phantom Shares.

	 	b.	 	Appreciation Value.

	 	(i)	 	Valuation Dates; Measurement of Appreciation Value. The Committee shall provide for
one or more Valuation Dates on which the Appreciation Value of the Phantom Shares granted
shall be measured and fixed, and shall designate the number of such Phantom Shares whose
Appreciation Value is to be calculated on each such Valuation Date.
	 
	 	(ii)	 	Payment of Appreciation Value. Except as otherwise provided in this Section 8.1, the
Appreciation Value of a Phantom Share shall be paid to a Participant in cash in a lump sum
as soon as practicable following the Valuation Date applicable to such Phantom Share. The
Committee may in its discretion, establish and set forth a maximum dollar amount payable
under the Plan for each Phantom Share granted.
	 
	 	(iii)	 	The Committee may, in its discretion, provide that Phantom Shares shall vest
(subject to such terms and conditions as the Committee may provide in the award) over such
period of time, from the date of grant, as may be specified in a vesting schedule
contained in the grant.
	 
	 	(iv)	 	Termination. In the event of termination of employment of an employee Participant or
termination of service of a non-Employee Director or advisor prior to one or more
Valuation Dates, unless the Committee in its discretion determines otherwise, the
Appreciation Value for any Phantom Share to which the Participant’s Rights are vested,
shall be the lesser of the Appreciation Value as of the termination date or the
Appreciation Value of such Phantom Share calculated as of the originally scheduled
Valuation Date applicable thereto in accordance with Section 8.1(b)(i). Except as
otherwise provided in the grant agreement, the Appreciation Value so determined for each
such vested outstanding Phantom Share shall then be payable to the Participant or the
Participant’s estate following the originally scheduled Valuation Date applicable thereto
in accordance with Section 8.1(b)(ii). Upon a termination as described in this Section
8.1(b)(iv), all rights with respect to Phantom Shares that are not vested as of such date
will be relinquished.

8

 

	8.2	 	Performance Units. The Committee may, in its discretion, grant Performance Units to Eligible
Persons. Each Performance Unit will have an initial value that is established by the Committee
at the time of grant and credited to a bookkeeping account established for the Participant,
but no Participant shall be granted Performance Units during any one fiscal year with an
initial value in excess of $2.5 million. The Committee will set performance periods and
objectives and other terms and conditions of the grant based upon Performance Criteria as
determined by the Committee that, depending upon the extent to which they are met, will
determine the value of Performance Units that will be paid out to the Participant. The
Committee may pay earned Performance Units in cash, Common Stock or a combination thereof.
	 
	 	 	Unless otherwise set forth in the grant, in the event the employment of an employee Participant
is terminated during a performance period due to death, disability or retirement under the
provisions of the Pension Plan the Participant will receive a prorated payout of Performance
Units. In the event the employment is terminated for any other reason, then all Performance Units
will be forfeited. If the service of a Non-Employee Director or advisor is terminated during a
performance period, the Participant will receive a prorated payout of Performance Units.
Notwithstanding the above, no payouts will be made to the extent that objectives other than the
duration of the performance period have not been met except to the extent that the Committee in
its discretion decides to waive any such other achievement or objectives.
	 
	8.3	 	Grant Terms. The terms of any award granted under this Article VIII shall be set forth in a
separate grant agreement. Any such award either shall be structured in such a manner as to be
exempt from the requirements of Code section 409A or shall be structured to meet the
requirements of such provision.

Article IX. Amendment, Duration and Termination of the Plan

	9.1	 	Duration of Plan. No grants or awards may be made under this Plan after May 31, 2009. Any
grant or award effective on or prior to May 31, 2009 will continue to vest and otherwise be
effective after the expiration of this Plan in accordance with the terms and conditions of
this Plan as well as any requirements set forth in the grant or award.

	9.2	 	Right To Amend, Suspend or Terminate Plan: Except as provided in Section 9.5 below, the Board
reserves the right at any time to amend, suspend or terminate the Plan in whole or in part and
for any reason and without the consent of any Optionee, Participant or Beneficiary; provided,
that no such amendment shall:

	 	a.	 	Change the Stock Option price or adversely affect any Stock Option or Stock Appreciation
Right outstanding under the Plan on the effective date of such amendment or termination, or
	 
	 	b.	 	Adversely affect any award or grant then in effect or rights to receive any amount to
which Participants or Beneficiaries have become entitled prior to such amendment, or
	 
	 	c.	 	Unless approved by the Shareholders of the Corporation, increase the aggregate number of
shares of Common Stock reserved for award or grant under the Plan, change the group of
Eligible Persons under the Plan or materially increase benefits to Eligible Persons under
the Plan.

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

	9.4	 	Amendments May Be Retroactive: Subject to Section 9.1 above, any amendment, modification,
suspension or termination of any provisions of the Plan may be made retroactively.

	9.5	 	Change in Control Under an Agreement: Notwithstanding any other provisions in the Plan, in
the event of a Change in Control as defined under any written employment contract or agreement
between the Corporation or a subsidiary and an Officer of the Corporation or a subsidiary,
awards of Common Stock granted under this Plan, as well as grants of any Performance Units and
the Appreciation Value of Phantom Shares, shall vest to the extent, if any, provided for in
the written employment agreement or contract or in such separate contractual arrangement
relating to such an award or grant as may exist from time to time. Notwithstanding any other
provisions of the Plan, the provisions of this Section 9.5 may not be amended after the date a
Change in Control occurs.

9

 

	9.6	 	Change in Control Without an Agreement: Except as otherwise may be provided by the Committee,
in the event of a change in control, a Participant not covered by a written employment
contract or agreement or agreement containing a change in control provision will have any
portion of an Award based on absolute total shareholder return vest (for purposes of the
performance-based restriction) at the target, and continue to be subject to time based
restrictions. The portion of any Award based on relative total shareholder return will vest
(for purposes of the performance-based restriction) on a pro rata basis to the change in
control date using the target number of shares as the basis for the pro ration and continue to
be subject to time based restrictions.

Article X. General Provisions

	10.1	 	Rights to Continued Employment, Award or Option: Nothing contained in the Plan or in any
grant or award under this Plan shall give any employee the right to be retained in the
employment of the Corporation or affect the right of the Corporation to terminate the
employee’s employment at any time. The adoption of the Plan shall not constitute a contract
between the Corporation and any employee. No Eligible Person who is an employee shall receive
any right to be granted an option, right or award hereunder nor shall any such option, right
or award be considered as compensation under any employee benefit plan of the Corporation.

	10.2	 	Recoupment. Any Awards or Grants under this Plan is also subject to recoupment under the CMS
Energy Recoupment Policy Relating to Financial Restatements.

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

IN WITNESS WHEREOF, execution is hereby effected.

	 	 	 	 	 
	ATTEST:

	 	CMS ENERGY CORPORATION
	 	 
	 
	 	 	 	 
	/s/
	 	By: /s/	 	 
	 
	 	 
	 	 
	Secretary

	 	       Chief Executive Officer	 	 

10

 

Attachment A

Page 1 of 2

“Change in Control” means a change in control of CMS Energy Corporation, and shall be
deemed to have occurred upon the first to occur of any of the following events:

	(a)	 	Any Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of CMS Energy Corporation (not including securities beneficially
owned by such Person any securities acquired directly from CMS Energy Corporation
or its Affiliates) representing twenty-five percent (25%) or more of the combined
voting power of CMS Energy Corporation’s then outstanding securities, excluding any
Person who becomes such a Beneficial Owner in connection with a transaction
described in clause (i) of paragraph (c) below; or

	(b)	 	The following individuals cease for any reason to constitute a
majority of directors then serving: individuals who, on the Effective Date,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of CMS Energy Corporation) whose appointment or election by
the Board or nomination for election by CMS Energy Corporation’s stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the Effective Date or whose
appointment, election or nomination for election was previously so approved or
recommended; or

	(c)	 	The consummation of a merger or consolidation of CMS Energy Corporation
or any direct or indirect subsidiary of CMS Energy Corporation with any other
corporation or other entity, other than: (i) any such merger or consolidation which
involves either CMS Energy Corporation or any such subsidiary and would result in
the voting securities of CMS Energy Corporation outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of CMS Energy Corporation or its Affiliates, at
least sixty percent (60%) of the combined voting power of the voting securities of
CMS Energy Corporation or the surviving entity or any parent thereof outstanding
immediately after such merger or consolidation and immediately following which the
individuals who comprise the Board immediately prior thereto constitute at least a
majority of the board of directors of CMS Energy Corporation, the entity surviving
such merger or consolidation or, if CMS Energy Corporation or the entity surviving
such merger is then a subsidiary, the ultimate parent thereof; or (ii) a merger or
consolidation effected to implement a recapitalization of CMS Energy Corporation
(or similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of CMS Energy Corporation (not including in
the securities beneficially owned by such Person any securities acquired directly
from CMS Energy Corporation or its Affiliates) representing twenty-five percent
(25%) or more of the combined voting power of CMS Energy Corporation’s then
outstanding securities; or

	(d)	 	Either (1) the stockholders of CMS Energy Corporation approve a plan of
complete liquidation or dissolution of CMS Energy Corporation, or (2) there is
consummated an agreement for the sale, transfer or disposition by CMS Energy
Corporation of all or substantially all of CMS Energy Corporation’s assets (or any
transaction having a similar effect). For purposes of clause (d)(2), (i) the sale,
transfer or disposition of a majority of the shares of common stock of Consumers
Energy Company shall constitute a sale, transfer or disposition of substantially
all of the assets of CMS Energy Corporation and (ii) the sale, transfer or
disposition of subsidiaries or affiliates of CMS Energy Corporation, singly or in
combinations, or their assets, only qualifies as a Change in Control if it
satisfies the substantiality test contained in that clause and the Board of CMS
Energy Corporation’s determination in that regard is final. In addition, for
purposes of clause (d)(2), the sale, transfer or disposition of assets has to be in
a transaction or series of transactions closing within six months after the closing
of the first transaction in the series, other than with an

1

 

Attachment A

Page 2 of 2

entity in which at least 60% of the combined voting power of the voting securities is
owned by stockholders of CMS Energy Corporation in substantially the same proportions as
their ownership of CMS Energy Corporation immediately prior to such transaction or
transactions and immediately following which the individuals who comprise the Board
immediately prior thereto constitute at least a majority of the board of directors of
the entity to which such assets are sold, transferred or disposed or, if such entity is
a subsidiary, the ultimate parent thereof.

Notwithstanding the foregoing clauses (a), (c) and (d), a “Change in Control” shall not
be deemed to have occurred by virtue of the consummation of any transaction or series
of integrated transactions closing within six months after the closing of the first
transaction in the series immediately following which the record holders of the common
stock of CMS Energy Corporation immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in an
entity which owns all or substantially all of the assets of CMS Energy Corporation
immediately following such transaction or series of transactions.

2exv10wxiy

 

Exhibit (10)(i)

CMS ENERGY DEFERRED SALARY SAVINGS PLAN

The purposes of the CMS Energy Deferred Salary Savings Plan (the “Plan”) are to provide key
management employees the opportunity to defer additional compensation in excess of the limitations
on contributions imposed on the Savings Plan for Employees of Consumers Energy and other CMS Energy
Companies due to the application of various laws and regulations including the limitations of Code
Section 401(a)(17), 402(g) or 415(c)(1)(A) and to provide those employees with employer matching
contributions equal to the matching contributions that would have been made by the Company on their
behalf under the Savings Plan. Further, Additional Deferrals are also permitted to assist
employees in meeting their financial goals. This plan is maintained primarily for the purpose of
providing deferred compensation to a select group of management or highly compensated employees.

This Plan was originally effective on December 1, 1989 and includes amendments through December 1,
2007.

SECTION 1. DEFINITIONS

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

	 	 	 
	Account or Account 

Balance

	 	The notional amount credited to a Participant or beneficiary in
accordance with the provisions of this Plan.
	 
	 	 
	Additional Deferral

	 	The amount deferred by a Participant in accordance with Section 3.3.
	 
	 	 
	Code

	 	The Internal Revenue Code of 1986, as amended.
	 
	 	 
	Company

	 	CMS Energy Corporation and its subsidiaries which are directly or
indirectly owned 80% or greater. 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.
	 
	 	 
	Compensation

	 	A Participant’s regular salary from an Employer, before any
adjustment for Deferrals under this Plan or any other deferred
compensation plan of the Company, the Savings Plan, Code Section
125 plans, or deductions for taxes or other withholdings, but
excluding any bonus, imputed income, incentive or other premium
pay. For purposes of determining amounts subject to a deferral
election under Section 3.1, Compensation for a Plan Year does not
include any amounts paid in the Plan Year that are attributable to
services performed by the Participant in an earlier Plan Year,
except to the extent permitted by Code Section 409A.
	 
	 	 
	Deferrals

	 	Amounts deferred by a Participant pursuant to Section 3.
	 
	 	 
	Employee

	 	Any person, employed by an Employer and on the payroll and
employment records system as an employee, excluding consultants,
advisors and independent contractors, whose Compensation, when
annualized, exceeds the Threshold Limit.

 

 

	 	 	 
	Employer

	 	The entity within the Company that employs the Participant.
	 
	 	 
	Employer Matching 

Amounts

	 	Money or property added to the Participant’s account as provided in
Section 3.2.
	 
	 	 
	Participant

	 	Any Employee who meets the eligibility requirements of the Plan,
who elects to enroll under the Plan, and for whom Deferrals are
currently being made under the Plan or for whom Deferrals were
previously made under the Plan which have not been distributed.
	 
	 	 
	Payment Event

	 	The time when the Participant may receive the benefits deferred
under the Plan as described in Section 6.2.
	 
	 	 
	Payment Term

	 	The form and duration of any payment to a participant or
beneficiary as described in Section 6.2.
	 
	 	 
	Plan Administrator

	 	The Benefit Administration Committee as selected by the Chief
Executive Officer and Chief Financial Officer of the Company to
manage the plan.
	 
	 	 
	Plan Record Keeper

	 	The person(s) or entity named as such by the Plan Administrator.
	 
	 	 
	Plan Year

	 	January 1 to December 31 of a calendar year.
	 
	 	 
	Savings Plan

	 	The Savings Plan for Employees of Consumers Energy and other CMS
Energy Companies.
	 
	 	 
	Separation from 

Service

	 	If 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.
	 
	 	 
	Threshold Limit

	 	The amount as determined by the Secretary of the Treasury above
which annual compensation is disregarded for qualified plans. As
of January 1, 2007, the Threshold Limit was $225,000.

SECTION 2. ELIGIBILITY AND ENROLLMENT

2.1 Eligibility. Each Employee is eligible to become a Participant on the date of
employment, or if later, the first of the month following when the Employee first has annualized
Compensation in excess of the Threshold Limit. A Participant will no longer be permitted to make
contributions to this Plan as of the end of any Plan Year when his or her annualized Compensation
falls below the Threshold Limit.

2.2 Enrollment. An Employee may enroll during an enrollment period prior to the start of
each Plan Year. A new Employee may enroll within 30 days of the date of employment. An Employee
may enroll within 30 days of first becoming eligible to participate in the Plan for the initial
Plan Year of his or her participation. The foregoing provisions allowing late elections by
new Employees and newly eligible Employees shall apply only to the extent permitted by Code Section
409A.

2

 

2.3 Procedure. An Employee must enroll in the Plan by completing the application for
participation. Such application may, at the election of the Company or the Plan Record Keeper, be
in an electronic format. Completion of the application by the Employee shall constitute an
acceptance of the terms and conditions of the Plan.

SECTION 3. DEFERRALS

3.1 Deferrals. Upon enrolling in the Plan, each Participant may elect to defer a portion
of his or her Compensation that is in excess of the Threshold Limit. The Deferral amount shall not
be less than 1% or greater than 6% of his or her Compensation in excess of the Threshold Limit. A
deferral election applies to one Plan Year.

Deferral elections made during the enrollment period immediately prior to the start of a Plan Year
shall apply to Compensation received during that coming Plan Year. A deferral election made during
one of the 30-day periods described at 2.1 above shall apply to Compensation paid for services to
be rendered during the portion of the Plan Year following the deferral election.

Any such deferral election shall become irrevocable as to the applicable Plan Year’s Compensation
as of the last permissible date for making such an election under Code Section 409A.

3.2 Employer Matching Amounts. Not less frequently than annually, the Company shall add an
amount to the Participant’s Deferral which is equal to 60% of the amount deferred by the
Participant under the Plan. (Prior to September 1, 2005, the Employer Matching Amount was equal to
50%). At no time will the applicable rate for the Employer Matching Amounts hereunder exceed the
then current rate of match under the Savings Plan, and no Employer Matching Amounts will be
contributed to the Participant Account for any period in which the company match under the Savings
Plan is suspended or terminated. The employee share of any applicable FICA, FUTA and other
applicable taxes for any Deferrals and Employer Matching Amounts will be deducted from the
Participant’s pay at the time of any Deferral.

3.3 Additional Deferral. A Participant may elect to defer an additional amount (in excess
of the 6% deferral under Section 3.1 above) into the Plan, up to a maximum of 50% of his or her
Compensation. The election of any additional deferral will be made in accordance with Section 3.1.
The deferral will be subject to its own Payment Election as described under Section 6 and will be
consistent with the provisions of Section 6.1. Any such Additional Deferral will not receive any
Employer Matching Amounts.

SECTION 4 INVESTMENTS

4.1 Designation of Investments. At the time of electing a Deferral under the Plan, the
Participant shall specify the proportions of the Deferral to be invested among the various options
available as investments under the Plan. A Participant who has previously deferred amounts under a nonqualified deferred compensation plan of the Company will automatically have his or her
existing investment profile apply to this Deferral also.

3

 

All determinations of the available investments by the Plan Administrator are final and binding
upon the Participants. If a Participant fails to make an investment election, then such amounts
shall be accounted for as if contributed to a lifestyle fund (as that term is defined in the
Savings Plan) with a date that is applicable to the Participant’s age 65, rounded up, or such other
investments as determined by the Plan Administrator.

4.2 Changes in Investment Elections. All investment elections may be changed at the
Participant’s election subject to any applicable restrictions imposed by the Plan Administrator,
the Plan Record Keeper or by any laws and regulations.

4.3 Determination of Investment Earnings. All gains and losses will be based upon the
performance of the investments selected by the participant from the date any Deferral or Employer
Matching Amount is first credited to the Participant’s Account. If the Company elects to fund its
obligation for its convenience as described in Section 8.5, then investment performance will be the
Account Balance as reported by the Plan Record Keeper.

SECTION 5 VESTING AND RECOUPMENT

5.1 Vesting of Employer Matching Amounts. Employer Matching Amounts and any related
earnings do not vest until such time as the Participant has been employed by the Company for not
less than five full calendar years. Notwithstanding the above, if a Participant dies or becomes
disabled, as that term is defined under Code Section 409A and any applicable regulations, the
Matching Employer Amounts and any related earnings will vest as of the date of the Participant’s
death or disability. For purposes of vesting, all periods of service with an Employer are counted
and completion of 12 months of employment, whether or not continuous, counts as one year of vesting
under this Plan.

5.2 Recoupment. Any Matching Employer Amounts are also subject to recoupment under the CMS
Energy Recoupment Policy Relating to Financial Restatements.

SECTION 6. PAYMENT ELECTIONS

6.1 Payment Elections. At the time the Employee makes a deferral election to participate
in the Plan as described in Section 3.1 and/or 3.3, such Employee must select the Payment Event and
Payment Term applicable to the Deferral and the Employer Matching Amounts for the Plan Year, as
well as any earnings or income attributable to such amounts. Such Payment Options must be in
accordance with the provisions of Section 6.2 and cannot be subsequently changed except as
permitted under Section 6.3.

6.2 Payment Options.

(a) Payment Events. Each Participant must annually select one or more Payment
Events from the following choices for each contribution including
Deferrals, Employer Matching Amounts and/or Additional Deferrals. Such election must be made at the time the
deferral election is made:

4

 

	 	(i)	 	Separation from Service for any reason other than death. Payment will
be made, or begin in January of the year following Separation from Service or, if
later, the seventh month after the month of 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 5 years
after the last day of the applicable Plan Year. However, for amounts attributable
to an Additional Deferral, payment upon attainment of a date certain that is more
than one month after the last day of the applicable Plan Year. Later installments,
if any, will be paid in January of the succeeding years.
	 
	 	(iii)	 	The earlier of (i) or (ii) above.

Any participant failing to make an election will be deemed to have elected payment upon
Separation from Service in accordance with 6.2(a)(i).

(b) Payment Term. Upon selecting a Payment Event, 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
shall be equal to a fractional amount of the Account Balance the numerator of which
is one and the denominator of which is the number of installment payments
remaining. For example, a series of five installment payments will result in a
payout of one fifth of the Account Balance for the first installment, one fourth of
the Account Balance in the second installment, one third of the Account Balance for
the third installment, one half of the Account Balance for the fourth installment
and in the fifth installment the Account Balance is paid in full. Each
installment, because of gains and losses, may not be identical to the prior
installment.

Any participant failing to elect a Payment Term will be deemed to have elected a single sum.

6.3 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 be
made when all of the following conditions are satisfied:

(a) such election may not take effect until at least 12 months after the date on which the
election is made;

5

 

(b) 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 6.2(b)(ii), 5 years from the date the first
installment was scheduled to be paid); and

(c) 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
6.2(b)(ii), 12 months before the first installment was scheduled to be paid), if the
Participant’s previous commencement date was a specified date.

6.4 Payment Upon the Death of the Participant. In the event of the death of a Participant
prior to the start of any payments under the Plan, the Participant’s named beneficiary or
beneficiaries shall receive as soon as administratively practicable but not later than 90 days
after the Participant’s death, the entire Account Balance. In the event of the death of a
Participant after commencement of benefits, the Participant’s named beneficiary or beneficiaries
shall receive in a single sum as soon as administratively practicable but not later than 90 days
after the Participant’s death, the entire Account Balance remaining under the Plan. If the
Participant fails to name a beneficiary, or the beneficiary predeceases the Participant, then the
Participant’s estate will receive, in a single sum as soon as administratively practicable but not
later than 90 days after the Participant’s death, the entire Account Balance. In no event may any
recipient designate a year of payment for an amount payable upon the death of the Participant.

6.5 Payment in the Event of an Unforeseeable Emergency. The Participant may request that
payments of any vested amounts 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 Employee or the Employee’s spouse or dependent, loss of the Employee’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Employee. 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 Employee’s assets (without causing
severe financial hardship), or by cessation of deferrals under this arrangement, the Savings Plan
or other arrangements. Distributions because of an unforeseeable emergency shall not exceed the
amount permitted under Section 409A and 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 Plan Year will cease and
the Participant will not be eligible to make any deferral elections under this Plan for the
following Plan Year. For any Participant receiving a hardship withdrawal from the Savings Plan as
permitted by the Code and the Savings Plan, all deferral elections under this Plan for the current
Plan Year will cease and the Participant will not be eligible to make any deferral elections or
receive Employer Matching Amounts under this Plan for the following Plan Year.

6

 

SECTION 7. NON-ALIENATION OF BENEFITS

7.1 Non-Alienation. Except as may be required by a domestic relations order described in
Code Section 414(p)(1)(B), in no event shall the Plan Administrator pay or assign over any part of
the interest of a Participant under the Plan, or his or her beneficiary or beneficiaries, which is
payable, distributable or credited to his or her account, to any assignee or creditor of such
Participant or his or her beneficiary or beneficiaries. Prior to the time of distribution, a
Participant, his or her beneficiary or beneficiaries or legal representative shall have no right by
way of anticipation or otherwise to assign or otherwise dispose of any interest which may be
payable, distributable or credited to the account of the Participant or his or her beneficiary or
beneficiaries under the Plan, and every attempted assignment or other disposition of such interest
in the Plan shall not be merely voidable but absolutely void.

SECTION 8. ADMINISTRATION

8.1 Plan Administrator. The Plan Administrator shall have authority to take necessary
actions to implement the Plan and 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 all aspects of the Plan. Any Participant with a claim under the Plan must make a
written request within 60 days to the Plan Administrator for a determination on the claim. If the
claim involves a benefit or issue relevant to an individual who has been appointed to serve on the
Benefits Administration Committee, the individual so affected shall not participate in the
determination. The Plan Administrator may hire such experts, accountants, or attorneys as it deems
necessary to make a decision and may rely on the opinion of such persons in making a determination.
The Plan Administrator shall notify the Participant of its determination in writing within 60 days
of the claim unless the Plan Administrator advises the Participant that it requires additional time
(not to exceed 90 days) to complete its investigation. The Participant may, within 60 days from
the date the determination was mailed to the Participant, request a redetermination of the matter,
and provide any additional information for the Plan Administrator to consider in its
redetermination. The Plan Administrator will issue its opinion within 60 days of the request for
redetermination, unless the Plan administrator advises the Participant that it requires additional
time (not to exceed 90 days) to complete its reconsideration of the matter.

8.2 Administrative Expenses. Any administrative expenses, costs, charges or fees, to the
extent not paid by the Company are to be charged to the Participant Accounts in accordance with the
Plan Record Keeper’s normal procedures.

8.3 Amendment or Termination of the Plan. The Company may amend or terminate the Plan at
any time. Upon termination, any amount accrued under the Plan and vested will remain in the Plan
and be paid out in accordance with the Payment Elections previously selected, but no further
Deferrals or Employer Matching Amounts will be made to the Plan. The Plan Administrator is
authorized to make any amendments that are deemed necessary or desirable to comply with any
applicable laws, regulations or orders or as may be advised by counsel or to clarify the terms and
operation of the Plan. Notwithstanding the above, the Company may terminate the Plan and
accelerate any benefits under the Plan, at its discretion, if it acts consistent in all manners
with the requirements of Code Section 409A and any applicable regulations, with respect to when a
terminated plan may accelerate payment to a Participant.

7

 

8.4 Naming a Beneficiary. A Participant may at any time file a beneficiary designation
with the Company or the Plan Record Keeper. Only one such beneficiary designation, the most recent
received by the Plan Record Keeper, is effective at any time. No beneficiary designation is
effective until it is received and accepted by the Company or the Plan Record Keeper. If a
Participant fails to name a beneficiary or if the beneficiary predeceases the Participant, any
benefit accrued under the Plan will be paid to the Participant’s estate. A Participant must name a
separate beneficiary for each Account Balance Plan.

8.5 Funding Status. This is an unfunded nonqualified deferred compensation plan. To the
extent the Company 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, remain the property of the Company
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 are subject to the claims of the creditors of the Company.

	 	 	 	 	 
	ATTEST:

	 	CMS ENERGY CORPORATION
	 	 
	 
	 	 	 	 
	/s/

	 	/s/	 	 
	 

	 	 	 	 
	Vice President and Secretary

	 	Chief Executive Officer	 	 
	 

	 	CMS Energy and Consumers Energy	 	 
	 
	 	 	 	 
	Date: _____________
	 	 	 	 

8

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