Document:

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                                                                   EXHIBIT 10(g)

                    SALARIED EMPLOYEES MERIT PROGRAM FOR 2003

SECTION 1. INTRODUCTION

         The objectives of the CMS Energy Salaried Employees Merit Program for
2003 ("SEM Plan" or the "Plan") are to conserve cash during the term of the Plan
and to provide an incentive for eligible employees to remain with the CMS
Companies. The effective date of the SEM Plan is January 1, 2003.

SECTION 2. DEFINITIONS

"CMS Energy Corporation" or "CMS" or the "Corporation" means CMS Energy
Corporation. The Plan also applies to all of the subsidiary companies of CMS
electing to be covered by it (the "CMS Companies").

"Change in Control of CMS Energy" means:

     1.  A Change in Control would be required to be reported in response to
         Item 1(a) of the Current Report on Form 8-K, as in effect on January 1,
         2003, pursuant to Sections 13 or 15(d) of the Exchange Act, whether or
         not the Corporation is then subject to such reporting requirement;

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

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

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

"Closing Market Price" means, with respect to any particular period, the closing
price for Common Stock, as published in The Wall Street Journal in its report of
the New York Stock Exchange Composite Transactions, for the last business day on
which the Exchange is open during such period. In the event that the Common
Stock ceases, for any reason, to be listed on the Exchange, the Corporation will
determine another reasonable method of calculating Closing Market Price or take
such other action, as it deems appropriate.

"Common Stock" means the Common Stock of CMS Energy Corporation.

"Credit Period" means a 3-month calendar quarter beginning on or after January
1, 2003 and ending the last day of March, June, September or December of 2003 or
2004. Credit Period shall also include January 31, 2005.

 "Earnings" means Earnings as defined in the Pension Plan for Employees of
Consumers Energy and other CMS Energy Corporation companies.

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"Eligible Employee" means a salaried employee who satisfies both of the
qualification requirements listed below:

     1.  The employee receives a credit in a Special Compensation Account
         effective on or after January 1, 2003, and

     2.  The employee either

         (a)   Remains an active employee of the Corporation through January 31,
               2005, or

         (b)   Terminates employment prior to January 31, 2005 due to:

               (i) Retirement with Retirement Income or Disability Payments
                   under the Pension Plan for Employees of Consumers Energy and
                   other CMS Energy Corporation Employees, or

               (ii) Layoff for lack of work, or

               (iii) Death.

In addition to any other reason by which an employee may no longer be considered
an active employee, an employee will be deemed to have ceased being an active
employee upon termination of the employee's continuous service in accordance
with (i) the practices and procedures of CMS or the CMS Company by which the
employee is employed, respectively and (ii) as specified in the Employee
Handbook (except where continuous service is terminated solely because a
full-time employee becomes a part-time employee). An employee terminated for
cause forfeits all rights and benefits under the Plan.

If a person ceases to be an active employee for any reason other than those
mentioned in subparagraphs 2(b)(i) or 2(b)(ii), above, and is subsequently
reemployed by CMS or one of the CMS Companies prior to December 31, 2003,
eligibility, if any, will be based solely upon amounts credited to the Special
Compensation Account on or after the date of rehire.

"Leave of Absence" means any unpaid leave of greater than 30 days for which an
individual received authorization from CMS or one of the Companies for any
reason other than sickness or injury. Employees on leave for sickness or injury
will be treated as if they are active employees for the purposes of this Plan.

"Salaried Employee" means any exempt or non-exempt employee (as defined by the
Fair Labor Standards Act) of CMS or one of the CMS Companies, other than those
employees in a job classification that is represented by a labor union as of the
effective date of the Plan, provided however, that if any such labor union
elects to participate in the Plan, the employees represented by the labor union
may participate under the same terms and conditions as a non-exempt salaried
employee. Salaried employee does not include any person classified by the
Company as being a leased employee, independent contractor, temporary employee,
a co-op student, or an intern employee.

"Special Compensation Account" or "Account "means a record-keeping account
established by one of the CMS Companies for an Eligible Employee pursuant to the
Plan.

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"Special Increase" means any amount that may be designated as a special increase
for a salaried employee on or after January 1, 2003 and prior to December 31,
2004.

"Special Merit Increase" means any amount that may be designated as a special
merit increase for a salaried employee on or after January 1, 2003 and prior to
December 31, 2003.

"Valuation Date" means the last day on which the New York Stock Exchange is open
during a Credit Period.

SECTION 3 SPECIAL MERIT INCREASES

The full amount of any Special Merit Increases for each pay period will be
credited to the Special Compensation Accounts for each Credit Period.

SECTION 4 OTHER SPECIAL INCREASES

Other amounts may be designated as Special Increases by CMS or one of the CMS
Companies from time to time. For example, Outstanding Contributor Awards, or any
amounts payable under the Annual Incentive Compensation Plans or other bonus or
incentive plan or agreement may be designated a Special Increase. The full
amount of any such Special Increases awarded for each pay period will be
credited to the Special Compensation Accounts for each Credit Period.

SECTION 5 DATE OF CREDIT

All amounts credited to the Special Compensation Accounts will be credited as of
the Credit Period during which a relevant paycheck is dated or, in the case of
dividends, the Credit Period in which the record date occurs. These Credit
Periods may or may not correspond with the Credit Period in which work was
performed or dividends were declared. Retroactive payments or adjustments in pay
status will be reflected as of the Credit Period during which the payment or
adjustment is made and will not be applied retroactively.

SECTION 6 SPECIAL COMPENSATION ACCOUNT

Special Compensation Accounts will accrue units based upon the Closing Market
Price of Common Stock at the end of each Credit Period and the amount of any
Special Merit Increases, Special Promotion Increases or other Special Increases
and Dividends credited to the Accounts during that Credit Period. One unit will
represent the dollar value of one share of Common Stock at the Closing Market
Price for that Credit Period. The total number of dollars credited for any
Special Merit Increase, Special Promotion Increases or other Special Increases
and Dividends credited to the Accounts during that Credit Period will be divided
by the Closing Market Price. The resulting number will be the number of units to
be accrued.

The Special Compensation Accounts will be general liabilities of CMS or the CMS
Companies. No money or stock will be set aside at the time the units are
accrued. No guarantee of the dollar value of the Special Compensation Accounts
can be made since the value of the Accounts will fluctuate with the price of
Common Stock. The Special Compensation Accounts will remain

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fully unfunded unless there is a Change of Control of CMS Energy. In the event
of a Change of Control of CMS Energy, a trust will be established within no less
than 30 days of the Change in Control of CMS Energy, and sufficient stock to
satisfy the accrued obligations under this SEM Plan will be deposited into such
account. The trust as established, will be subject only to the general creditors
of CMS Energy or any successor entity or entities, but will not be available for
any other corporate obligations. No additional participants or obligations shall
be added to the trust as established without the consent of the majority of the
then participating eligible employees. Subsequent to the Change in Control of
CMS Energy, all additional amounts due under the terms of the SEM Plan shall be
added to the trust within 10 days of the accrual of the additional amount to any
Special Compensation Account.

SECTION 7 DIVIDENDS

If any dividends are paid on Common Stock after December 31, 2002 and prior to
the Valuation Date used for distribution, an amount equivalent to any such
dividends will be credited to the Special Compensation Accounts as if dividends
were reinvested in Common Stock at the end of the Credit Period in which the
record date occurs.

SECTION 8 CONDITION PRECEDENT

All Special Compensation Accounts are intended as an incentive for employees to
remain at work. Consequently, the payout for Special Compensation Accounts for
each employee is expressly conditioned upon the employee being an Eligible
Employee.

The failure of this condition to be satisfied by an employee for any reason
whatsoever will result in the cancellation of any Special Compensation Account
for that employee and will relieve the Company of any further obligations
hereunder.

SECTION 9 EFFECT ON OTHER EMPLOYEE BENEFIT PLANS

The Pension Plan will be amended so that, to the extent allowed by law, any
amounts credited to the Special Compensation Accounts for any Credit Period as
Special Merit Increases will be treated as though they are Earnings during the
year in which such Credit Period occurs for the purposes of calculating pension
benefits for Eligible Employees. Any increase or decrease in the value of the
Special Compensation Accounts due to dividends or changes in the price of Common
Stock will not be reflected in Earnings for the purposes of calculating pension
benefits.

Other than as specified above, no amounts credited to the Special Compensation
Accounts or payments or distributions under the Plan will be considered as
salary or earnings for purposes of any employee benefit plan or practice of CMS
or the CMS Companies, including but not limited to, the Pension Plan, The
Savings Plan, the Long Term Disability Plan, Paid Personal Absence or the Group
Term Life Insurance Plan.

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SECTION 10 NATURE OF THE PLAN

The Plan is an unfunded plan of CMS or the CMS Companies and is not intended to
be a qualified employee benefit plan under the Internal Revenue Code. Any
amounts that may become due are to be satisfied from the general corporate funds
of CMS or the CMS Companies, which are subject to the claims of creditors.

SECTION 11 DISTRIBUTIONS

Eligible Employees will receive distribution of their Special Compensation
Accounts in 2005. Payment may be made in cash, shares of Common Stock, or any
combination thereof at the discretion of CMS or the CMS Companies.

Each Eligible Employee will be eligible to receive one share of Common Stock for
each unit in his or her Account, or cash or other Corporation marketable
securities having a value equal to the number of units in such account
multiplied by the Closing Market price of Common Stock as of the Valuation Date
first preceding the date on which distribution is made (except as provided in
Sections 13 and 14 below). Amounts shall be withheld for FICA tax, federal,
state and local income taxes and such other amounts as may be authorized or
required by law.

The units accrued to the Accounts will be distributed in March 2005 based upon
the Valuation Date as of January 31, 2005, or such earlier date as is the last
business day for the New York Stock Exchange in January, 2005. For an Eligible
Employee terminating employment on or before December 31, 2003 as set forth in
the definition at 2 (b)(i), (ii) or (iii), the units accrued to the Accounts
will be distributed as soon as practicable after January 1, 2004 but not later
than March 31, 2004 based upon the Valuation Date as of December 31, 2003 or
such earlier date as is the last business day for the New York Stock Exchange in
December, 2003. For an Eligible Employee who dies prior to January 1, 2005,
distribution will be made to the beneficiary as set forth at Section 14 in a
single payment in March 2005.

SECTION 12 SPECIAL RULES FOR EMPLOYEES ON LEAVE OF ABSENCE

Any individual who fails to return to active pay status at the expiration of a
leave of absence will be deemed to have ceased being an active employee
effective as of the date the leave of absence began.

Any individual who is on a leave of absence on January 1, 2003, and who is still
on leave of absence on March 1 of the year a distribution would be made in
accordance with Section 12, above, will not receive any distribution at that
time because it cannot be determined if such individual is an Eligible Employee
until the leave of absence expires or the employee returns to work, whichever
comes first. Therefore, CMS or the CMS Companies will designate an amount as a
number of shares of stock or an amount of cash or some combination thereof,
based upon the units in the individual's Account as of the Valuation Date which
would have been used had the individual not been on a leave of absence. If the
individual becomes an Eligible Employee,

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those amounts, with no addition for interest, dividends or any other reason,
will be distributed to the individual not more than two months after the
individual becomes an Eligible Employee.

SECTION 13 OVERTIME

When an employee receives overtime pay subject to a Special Merit Increase or
other Special Increase, the Special Compensation Account will be credited
appropriately.

SECTION 14 BENEFICIARIES

If the employee is deceased on the day distribution would otherwise be made,
distribution may be made to beneficiaries determined in accordance with this
section, and CMS or the CMS Companies will be relieved of all liability if
distribution is made (i) to the estate of the decedent, or (ii) to the first of
the following classes in which there exist survivors of the decedent.

               1.  Spouse of the decedent.

               2.  Children of the decedent.

               3.  Parents of the decedent.

               4.  Brothers and sisters of the decedent.

Distribution may be delayed without payment of interest or any penalty or the
accumulation of dividends for a reasonable period during which CMS or the CMS
Companies may decide to whom to make a distribution.

SECTION 15 NO ASSIGNMENT OF BENEFITS

No interest in the Plan may be assigned or alienated by voluntary or involuntary
assignment. Any attempt by an employee or beneficiary to assign or alienate any
interest under the Plan will be void.

SECTION 16 CLAIMS PROCEDURE

Distributions under the Plan will normally be made without an employee having to
file a claim for benefits. However, an employee or beneficiary who does not
receive a distribution to which he believes he is entitled may present a claim
to the Sr. Vice President, Human Resources.

Each employee or beneficiary who wishes to file a claim for benefits will do so
in writing, addressed to the Sr. Vice President, Human Resources at CMS Energy,
One Energy Plaza, Jackson, MI 49201. All such claims must be submitted within
one year after the date the employee or beneficiary claims distribution should
have been made. Claims not made within one year will be forever barred.

Within 90 days after receipt of a claim in writing, the Sr. Vice President,
Human Resources will make a determination of the claim. If a claim is denied the
claimant will be advised in writing of the reason for the denial and of any
additional action or information that may be necessary to determine the claim.

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An employee or beneficiary whose claim has been denied will have an opportunity
to request a review of the claim, and may submit a written statement regarding
issues relevant to his or her claim. Requests for review must be filed within 60
days after receipt of written notification of denial of a claim. The employee or
beneficiary will be given the opportunity for an oral hearing on the claim and a
determination will be made in writing within 30 days of the oral hearing or
within 30 days after receiving notice that the claimant does not desire an oral
hearing.

All interpretations of the Plan by the Sr. Vice President, Human Resources and
determinations of the Sr. Vice President, Human Resources concerning the Plan's
administration and application will be final and binding upon all persons.

SECTION 17 EARLY RESOLUTIONS OF POTENTIAL CLAIMS

Employees will receive periodic statements and are encouraged to review the
statements carefully for accuracy. Any questions as to the correctness of the
statements should be raised in writing with the Human Resource Department of CMS
or the CMS Companies as soon as possible after a problem is discovered. The
statement will be reviewed and any inaccuracies discovered will be corrected, or
an explanation of why the statement is correct will be provided to the employee.

There will be a rebuttable presumption that if any statement has not been
disputed within 6 months of the date delivered to the employee, such statement
is correct in all particulars. This presumption may be rebutted by clear and
convincing evidence.

SECTION 18 COMPLIANCE WITH LAW

This Plan will be construed, whenever possible, to be in conformity with the
requirements of any applicable Federal law or law of the state of Michigan. The
Plan is not, however, subject to the Employee Retirement Income Security Act
(ERISA). The Plan may be amended to the extent deemed necessary or desirable due
to Federal law or law of the State of Michigan, including but not limited to
income tax laws.

SECTION 19 TERMINATION OF PLAN

This Plan will terminate on December 31, 2005. No distribution will be made to
any person, nor will any other benefits of any kind be payable to any person
under this Plan after December 31, 2005.

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                                                                   EXHIBIT 10(i)

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

Effective January 1, 2003
Approved by Committee on May 23, 2003

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                            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 predecessor to the Plan was initially
               effective as of January 1, 1986 and that predecessor, as amended,
               is hereby terminated. The Plan as described herein, is effective
               as of January 1, 2003.

         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. Deferred merit increases from the
                    Salaried Employees Merit Program for the year 2003 shall be
                    added to Base Salary being paid in cash for the 2003 and
                    2004 Performance Years. Deferred merit increases from the
                    Salaried Employees Merit Program for the year 2004 shall be
                    added to Base Salary being paid in cash for the 2004
                    Performance Year. For purposes of the Plan, an Officer's
                    Base Salary must be subject to annual review and annual
                    approval by the Committee. For any Code Section 162(m)
                    Employee, the Base Salary upon which the Annual Award is
                    based will be the amount in effect on January 1 of the
                    Performance Year.

               (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 Organization and
                    Compensation of the Board of Directors of CMS Energy.

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

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               (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.

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

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

               (m)  "GCR Recovery" means actual/forecast incremental GCR
                    recovery during January and February of 2004 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, 2003 and any amendments thereto.

               (t)  "Plan Administrator" means the Chairman 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 are eligible for participation in the Plan.

         1.5   ADMINISTRATION OF THE PLAN.

               (a)  The Plan is administered by the Chairman 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.

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               (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 Chairman 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 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.

   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 60% is achieved. 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 2003 is set forth below.

               (a)  EPS COMPONENT. EPS performance shall constitute 40% of the
                    composite Plan Performance Factor. The 100% EPS goal for the
                    2003 performance year is $.80 per share, and the EPS
                    component shall increase or decrease by 50% for each $.10
                    per share change in performance. (Mathematical interpolation
                    shall be used for actual results not shown in the table.)
                    There will be no payout under the plan unless at least $.60
                    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 2003 performance year is $400 million, and the CFCF
                    component shall increase or decrease by 25% for each $50
                    million change in performance. (Mathematical interpolation
                    shall be used for actual results not shown in the table.)
                    There will be no payout under the plan unless at least $250
                    million is achieved (regardless of EPS performance).

                    COMPOSITE PERFORMANCE FACTORS FOR 2003 PERFORMANCE YEAR
<TABLE>
<CAPTION>
          CFCF
        Component      $250       $300      $350      $400      $450      $500      $550
       (Millions)
     ------------------------------------------------------------------------------------
<S>                   <C>       <C>        <C>       <C>       <C>      <C>       <C>
     EPS COMPONENT

     $ .60             NONE       NONE      NONE       60%       75%       90%      105%
     $ .70             NONE       NONE       65%       80%       95%      110%      125%
     $ .80             NONE        70%       85%      100%      115%      130%      145%
     $ .90              75%        90%      105%      120%      135%      150%      165%
     $1.00              95%       110%      125%      140%      155%      170%      185%
     $1.10             115%       130%      145%      160%      175%      190%      200%
     $1.20             135%       150%      165%      180%      195%      200%      200%
     $1.30             155%       170%      185%      200%      200%      200%      200%
</TABLE>

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

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

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  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>
                       Chairman & CEO                         E-9                     66%
                       President & COO/Vice Chairman          E-8                     57%
                       Executive Vice President               E-7                     53%
                       President, Subsidiary - Sr. VP         E-6                     49%
                       Senior Vice President                  E-5                     45%
                       Vice President                         E-4                     41%
                       Vice President                         E-3                     37%
</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 for
               Salary Grades E-5 and below will be paid in cash no later than
               March 30th 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 Officer is
               enrolled at the time the Committee makes the Annual Award.

         4.2   MANDATORY DEFERRED ANNUAL AWARD. All Annual Awards for the 2003
               performance year for Salary Grade E-6 and above will be credited
               to the individual officer's Salaried Employees Merit Plan special
               account and will be paid in accordance with that plan.

         4.3   VOLUNTARY DEFERRED ANNUAL AWARDS.

               (a)  The payment of all or one-half of a cash Annual Award may be
                    deferred voluntarily at the election of an individual Plan
                    participant. A separate irrevocable election must be made in
                    the calendar year prior to the beginning of the 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.

               (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

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                    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 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.

         4.4  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

               (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

                                        6

<PAGE>

               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.

   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.

         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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