Document:

Exhibit 10.01

Exhibit 10.01

FLEXTRONICS INTERNATIONAL LTD.

2010 EQUITY INCENTIVE PLAN

ARTICLE 1. PURPOSES OF THE PLAN.

The purposes of the Flextronics International Ltd. 2010 Equity Incentive Plan (the
“Plan”) are to attract and retain the best available personnel, to provide additional
incentives to Employees and Directors of the Company and its Affiliates and to promote the success
of the Company’s business by linking the personal interests of Employees and Directors of the
Company and its Affiliates to those of the Company’s shareholders and by providing such individuals
with an incentive for outstanding performance to generate superior returns to the Company’s
shareholders.

ARTICLE 2. DEFINITIONS.

Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronouns shall include the
plural where the context so indicates.

2.1 “Affiliate” means any corporation or other entity (including but not limited to
partnerships and joint ventures) which is, directly or indirectly through one or more intermediary
entities controlled by, or under common control with, the Company.

2.2 “Award” means an award of an Option, SAR, Performance Share, Performance Share
Unit, Restricted Share Unit, or any other right or benefit, including any other Share-Based Award
under Article 8, granted to a Participant pursuant to the Plan.

2.3 “Award Agreement” means any written agreement, contract, or other instrument or
document evidencing the terms and conditions of an Award, including through electronic medium.

2.4 “Board” means the Board of Directors of the Company.

2.5 “Change of Control” shall mean the occurrence of any of the following events:

(a) A transaction or series of transactions (other than an offering of the Shares to the
general public through a registration statement filed with the Securities and Exchange Commission
(“SEC”)) whereby any “person” or related “group” of “persons” (as such terms are used in Sections
13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an
employee benefit plan maintained by the Company or any of its Subsidiaries or a “person” that,
prior to such transaction, directly or indirectly controls, is controlled by, or is under common
control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning
of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the
total combined voting power of the Company’s securities outstanding immediately after such
acquisition; or

 

 

 

(b) During any one-year period, individuals who, at the beginning of such period, constitute
the Board together with any new Director(s) (other than any one or more Directors designated by any
person who shall have entered into an agreement with the Company in connection with any transaction
described in Section 2.5(a) or Section 2.5(c) hereof) whose election or appointment by the Board or
nomination for election by the Company’s shareholders was approved by a vote of at least a majority
of the Directors then still in office who either were Directors at the beginning of the one-year
period (other than vacant seats) or whose election or appointment or nomination for election was
previously so approved, cease for any reason to constitute a majority of the Board pursuant to a
transaction or other mechanism outside of the normal election process of Directors under the
Companies Act and/or the Company’s Amended and Restated Articles of Association; or

(c) The consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets in any single transaction or series of related transactions or (z) the
acquisition of assets or shares of another entity, in each case other than a transaction:

(i) Which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted into
voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of
the Company’s assets or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of the
combined voting power of the Successor Entity’s outstanding voting securities immediately after the
transaction, and

(ii) After which no person or group, beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however, that no person or
group shall be treated for purposes of this Section 2.5(c)(ii) as beneficially owning 50% or more
of combined voting power of the Successor Entity solely as a result of the voting power held in the
Company prior to the consummation of the transaction; or

(d) The Company’s shareholders approve a liquidation or dissolution of the Company.

A transaction will not constitute a Change of Control or other consolidating event if effected for
the purpose of changing the place of incorporation or form of organization of the ultimate parent
entity (including where the Company is succeeded by an issuer incorporated under the laws of
another state, country or foreign government for such purpose and whether or not the Company
remains in existence following such transaction) where all or substantially all of the persons or
group that beneficially own all or substantially all of the combined voting power of the Company’s
voting securities immediately prior to the transaction beneficially own all or substantially all of
the combined voting power of the Company in substantially the same proportions of their ownership
after the transaction. The Committee shall have full and final authority, which shall be exercised
in its discretion, to determine conclusively whether a Change of Control of the Company has
occurred pursuant to the above definition, and the date of the occurrence of such Change of Control
and any incidental matters relating thereto.

2.6 “Code” means the U.S. Internal Revenue Code of 1986, as amended.

2.7 “Committee” means the Compensation Committee of the Board, or such other
committee appointed by the Board to administer the Plan.

 

2

 

2.8 “Companies Act” means the Companies Act (Cap 50, 2006 Rev. Ed.) of Singapore.

2.9 “Company” means Flextronics International Ltd, a Singapore company, or any
successor corporation.

2.10 “Covered Employee” means an Employee who is, or could be, a “covered employee”
within the meaning of Section 162(m) of the Code.

2.11 “Director” means a member of the Board, or as applicable, a member of the board
of directors of a Subsidiary or Affiliate qualified under Section 146 of the Companies Act.

2.12 “Disability” means that a Participant is unable to carry out the
responsibilities and functions of the position held by the Participant by reason of any medically
determined physical or mental impairment for a period of not less than ninety (90) consecutive
days. A Participant shall not be considered to have incurred a Disability unless he or she
furnishes proof of such impairment, such as a treating physician’s written certification,
sufficient to satisfy the Committee in its discretion. Notwithstanding the foregoing, for purposes
of Incentive Stock Options granted under this Plan, “Disability” means that the Participant is
disabled within the meaning of Section 22(e)(3) of the Code.

2.13 “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

2.14 “Effective Date” shall have the meaning set forth in Section 13.1 hereof.

2.15 “Eligible Individual” means any person who is an Employee or a Director, as
determined by the Committee.

2.16 “Employee” means a full time or part time Employee of the Company or any
Parent, Subsidiary or Affiliate, including an officer or Director, who is treated as an Employee in
the personnel records of the Company or any Parent, Subsidiary or Affiliate for the relevant
period, but shall exclude individuals who are classified by the Company or any Parent, Subsidiary
or Affiliate as (a) leased from or otherwise employed by a third party, (b) independent contractors
or (c) intermittent or temporary, even if any such classification is changed retroactively as a
result of an audit, litigation or otherwise. A Participant shall not cease to be an Employee in
the case of (i) any vacation or sick time or otherwise approved paid time off in accordance with
the Company or a Parent, Subsidiary or Affiliate’s policy or (ii) transfers between locations of
the Company or between the Company and/or any Parent, Subsidiary or Affiliate. Neither services as
a Director nor payment of a director’s fee by the Company or Parent, Subsidiary or Affiliate shall
be sufficient to constitute “employment” by the Company or any Parent, Subsidiary or Affiliate.

2.17 “Fair Market Value” means, as of any given date, (a) if Shares are traded on
any established stock exchange, the closing price of a Share as quoted on the principal exchange on
which the Shares are listed, as reported in the Wall Street Journal (or such other source as the
Committee may deem reliable for such purposes) for such date, or if no sale occurred on such date,
the first trading date immediately prior to such date during which a sale occurred; or (b) if
Shares are not traded on an exchange but are regularly quoted on a national market or other
quotation system, the closing sales price on such date as quoted on such market or system, or if no
sales occurred on such date, then on the date immediately prior to such date on which sales prices
are reported; or (c) in the absence of an established market for the Shares of the type described
in (a) or (b) of this Section 2.17, the fair market value established by the Committee acting in
good faith. For purposes of a “net exercise” procedure for Options, the Committee may apply a
different method for calculating Fair Market Value.

 

3

 

2.18 “Full-Value Award” means any Award other than an Option, SAR or other Award for
which the Participant pays a minimum of the Fair Market Value of the Shares, as determined as of
the date of grant.

2.19 “Incentive Stock Option” means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor provision thereto.

2.20 “Insider” means an officer or Director of the Company or any other person whose
transactions in the Company’s Shares are subject to Section 16 of the Exchange Act.

2.21 “Non-Qualified Stock Option” means an Option that is not intended to be an
Incentive Stock Option.

2.22 “Option” means a right granted to a Participant pursuant to Article 5 to
purchase a specified number of Shares at a specified price during specified time periods. An
Option may either be an Incentive Stock Option or a Non-Qualified Stock Option.

2.23 “Ordinary Shares” means ordinary shares or “Shares” of no par value
each in the capital of the Company for issuance under this Plan, and any successor security.

2.24 “Outside Director” means a member of the Board who is not an Employee of the
Company or any Parent, Subsidiary or Affiliate of the Company.

2.25 “Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the Company owns
Shares possessing more than 50% of the total combined voting power of all classes of Shares in one
of the other corporations in such chain or a “parent corporation” within the meaning of Section
424(e) of the Code.

2.26 “Participant” means any Eligible Individual who, as a Director or Employee, has
been granted an Award pursuant to the Plan.

2.27 “Performance-Based Award” means an Award granted pursuant to Article 9.

2.28 “Performance Criteria” means such factors as may be selected by the Committee,
in its sole discretion, including, but not limited to, the following measures to determine whether
the performance goals established by the Committee and applicable to Awards have been satisfied:

(a) Net revenue and/or net revenue growth;

(b) Earnings before income taxes and amortization and/or earnings before income taxes and
amortization growth;

(c) Operating income and/or operating income growth;

(d) Net income and/or net income growth;

(e) Earnings per share and/or earnings per share growth;

(f) Total shareholder return and/or total shareholder return growth;

(g) Return on equity;

 

4

 

(h) Operating cash flow;

(i) Free cash flow (operating cash flow minus net capital expenditures);

(j) SG&A expense;

(k) Inventory turns or other similar working capital measures;

(l) Economic value added; and

(m) Return on invested capital.

Performance Criteria may be computed on an absolute basis or relative to an index (such as the
S&P 500 Index) or to a specified peer group of companies as determined by the Committee at the time
Awards are granted. In addition, to the extent consistent with Section 162(m) of the Code,
Performance Criteria may be computed under generally accepted accounting principles (GAAP),
International Financial Reporting Standards (IFRS), or on an adjusted basis to exclude any one or
more of the following: stock-based compensation expense, restructuring charges, non-cash
convertible interest expense, distressed customer charges, intangible amortization, impairment
charges and other charges as may be determined by the Committee at the time Awards are granted.

2.29 “Performance Goals” means, for a Performance Period, the goals established in
writing by the Committee for the Performance Period based upon the Performance Criteria. Depending
on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be
expressed in terms of overall Company performance, the performance of a Parent, Subsidiary or
Affiliate, the performance of a division or a business unit of the Company or a Parent, Subsidiary
or Affiliate, or the performance of an Eligible Individual. The Committee, in its discretion, may,
to the extent consistent with, and within the time prescribed by, Section 162(m) of the Code,
appropriately adjust or modify the calculation of Performance Goals for such Performance Period in
order to prevent the dilution or enlargement of the rights of Participants (a) in the event of, or
in anticipation of, any unusual or extraordinary corporate item, transaction, event, or
development, or (b) in recognition of, or in anticipation of, any other unusual or nonrecurring
events affecting the Company, or the financial statements of the Company, or in response to, or in
anticipation of, changes in applicable laws, regulations, accounting principles, or business
conditions.

2.30 “Performance Period” means the one or more periods of time, which may be of
varying and overlapping durations, as the Committee may select but not less than one (1) year in
duration, over which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participant’s right to, and the payment of, a Performance-Based Award.

2.31 “Performance Share” means a right granted to a Participant pursuant to Section
8.2 hereof, to receive Shares, the payment of which is contingent upon achieving certain
Performance Goals or other performance-based targets established by the Committee, and shall be
evidenced by a bookkeeping entry representing the equivalent of one Share.

2.32 “Performance Share Unit” means a right granted to a Participant pursuant to
Section 8.3 hereof, to receive Shares, the payment of which is contingent upon achieving certain
Performance Goals or other performance-based targets established by the Committee, and shall be
evidenced by a bookkeeping entry representing the equivalent of one Share.

 

5

 

2.33 “Plan” means this Flextronics International Ltd. 2010 Equity Incentive Plan, as
it may be amended from time to time.

2.34 “Qualified Performance-Based Compensation” means any compensation that is
intended to qualify as “qualified performance-based compensation” as described in Section
162(m)(4)(C) of the Code.

2.35 “Restricted Share Unit” means an Award granted pursuant to Section 8.4 hereof
and shall be evidenced by a bookkeeping entry representing the equivalent of one Share.

2.36 “Securities Act” shall mean the U.S. Securities Act of 1933, as amended.

2.37 “Share-Based Award” means any Full-Value Award settled in Shares granted under
Article 8 of this Plan.

2.38 “Stock Appreciation Right” or “SAR” means a right granted pursuant to
Article 7 to receive a payment equal to the excess of the Fair Market Value of a specified number
of Shares on the date the SAR is exercised over the grant price on the date the SAR was granted as
set forth in the applicable Award Agreement.

2.39 “Subsidiary” means any “subsidiary corporation” as defined in Section 424(f) of
the Code and any applicable regulations promulgated thereunder, any other entity of which a
majority of the outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company. For purposes of granting Options or any other “stock rights” within the
meaning of Section 409A of the Code, an entity shall not be considered a Subsidiary if granting
such stock right would result in the stock right becoming subject to Section 409A of the Code.

2.40 “Termination of Service” means, for purposes of this Plan with respect to a
Participant, that the Participant has for any reason ceased to provide services as an Employee,
officer or Director to the Company or a Parent, Subsidiary or Affiliate of the Company. An
Employee will not be deemed to have ceased to provide services in the case of (i) sick leave, (ii)
vacation leave (iii) military leave, (iv) transfers of employment between the Company and any
Parent, Subsidiary or Affiliate; or (iv) any other leave of absence approved by the Committee,
provided, that such leave is for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute or unless provided otherwise pursuant
to formal policy adopted from time to time by the Company and issued and promulgated to Employees
in writing. In the case of any Employee on an approved leave of absence, the Committee may make
such provisions respecting suspension of vesting of the Award while on leave from the employ of the
Company or a Parent, Subsidiary or Affiliate as it may deem appropriate, except that in no event
may an Option be exercised after the expiration of the term set forth in the applicable Award
Agreement. The Committee will have sole discretion to determine whether a Participant has ceased
to provide services and the effective date on which the Participant ceased to provide services (the
“Termination Date”).

ARTICLE 3. SHARES SUBJECT TO THE PLAN.

3.1 Number of Shares Available.

 

6

 

(a) Subject to Section 3.3 and Article 11, the total number of Shares reserved and available
for grant and issuance pursuant to this Plan (including upon the exercise of an Incentive Stock
Option) will be 10,000,000 Shares. In addition, any authorized shares not issued or subject to
outstanding grants under the Company’s 2001 Equity Incentive Plan, the Company’s 2002
Interim Incentive Plan, the Solectron Corporation 2002 Stock Plan and/or the Company’s 2004 Award
Plan for New Employees (each a “Prior Plan” and collectively, the “Prior Plans”)
and including any award that terminates, is forfeited, is canceled, expires, or lapses for any
reason under the Prior Plans, will no longer be available for grant and issuance under the Prior
Plans, but will be available for grant and issuance under this Plan. The authorized Shares under
this Plan up to 68,000,000 Shares may be used to grant Incentive Stock Options (“ISOs”)
during the term of this Plan. Any Shares that are subject to Awards of Options or SARs shall be
counted against this limit as one (1) Share for every one (1) Share granted or subject to grant for
any such Award. Any Shares that are subject to a Full-Value Award (other than Options or SARs)
shall be counted against this limit as one and seventy-one hundredths (1.71) Shares for every one
(1) Share granted or subject to grant for any such Award.

(b) To the extent that an Award, including any previous outstanding grants made under any
Prior Plan, terminates, is forfeited, is canceled, expires, lapses for any reason, or is settled in
cash, any Shares subject to the Award shall again be available for the grant of an Award pursuant
to the Plan. Any Shares that become available for the grant of Awards pursuant to this Section
3.1(b) shall be added back as one (1) Share if such Shares were subject to Options or SARs and as
one and seventy-one hundredths (1.71) shares if such shares were subject to Full-Value Awards. Any
Shares withheld (if and to the extent permitted by applicable law) to satisfy the grant or Exercise
Price or tax withholding obligation pursuant to any Award shall be treated as issued under this
Plan and shall be deducted from the aggregate number of shares which may be issued under Section
3.1(a). Further, any Shares tendered (if and to the extent permitted by applicable law) to satisfy
the grant or Exercise Price or tax withholding obligations pursuant to any Award shall not be added
to the aggregate number of Shares which may be issued under Section 3.1(a). To the extent
permitted by applicable law or any exchange rule, Shares issued in assumption of, or in
substitution for, any outstanding awards of any entity acquired in any form of combination by the
Company or any Subsidiary or Affiliate shall not be counted against Shares available for grant
pursuant to this Plan.

3.2 Shares Distributed. Any Shares distributed pursuant to an Award may consist in
whole or in part, of authorized and unissued Shares, or treasury Shares.

3.3 Limitation on Number of Shares Subject to Awards. Notwithstanding any provision
in the Plan to the contrary, and subject to Article 11, where it is intended to comply with Section
162(m) of the Code, the maximum number of Shares that are subject to or covered or measured by one
or more Awards that may be granted to any one Participant during any calendar year shall be
6,000,000 Shares. Further, where it is intended to comply with Section 16(m) of the Code, the
maximum amount that may be paid in cash during any calendar year with respect to any Award shall be
an amount equal to the preceding share limitation multiplied by the average daily trading price of
the Shares during the preceding calendar year. To the extent required by Section 162(m) of the
Code, in applying the foregoing limitation with respect to a Participant, if any Award is canceled,
the canceled Award shall continue to count against the maximum number of Shares with respect to
which an Award may be granted to a given Participant.

ARTICLE 4. ELIGIBILITY AND PARTICIPATION.

4.1 Eligibility. Awards may be granted to Eligible Individuals; however, ISOs shall
only be awarded to Employees of the Company, or a Parent or Subsidiary within the meaning of
Section 422 of the Code. A person may be granted more than one Award under this Plan.

4.2 Participation. Subject to the provisions of the Plan, the Committee may, from
time to time, select from among all Eligible Individuals, those to whom Awards shall be granted and
shall determine the nature and amount of each Award. No Eligible Individual shall have any right
by virtue of this Plan to receive an Award pursuant to this Plan.

 

7

 

ARTICLE 5. OPTIONS.

5.1 General. The Committee is authorized to grant Options to Eligible Individuals
on the following terms and conditions:

(a) Exercise Price. The exercise price per Share (“Exercise Price”) subject
to an Option shall be determined by the Committee and set forth in the Award Agreement; provided
that: (i) the Exercise Price shall not be less than 100% of the Fair Market Value of a Share on the
date of grant and (ii) the Exercise Price of any ISO granted to a Ten Percent Shareholder (as set
forth in Section 5.2(c) below) will not be less than 110% of the Fair Market Value of the Shares on
the date of grant.

(b) Time and Conditions of Exercise. The Committee shall determine the time or
times at which an Option may be exercised in whole or in part; provided that the term of any Option
granted under the Plan shall not exceed seven (7) years. The Committee shall also determine the
performance goals or other conditions, if any, that must be satisfied before all or part of an
Option may be exercised.

(c) Payment. The Committee shall determine the methods by which the Exercise Price
of an Option may be paid, the form of payment, including, without limitation: (i) cash or check,
(ii) through a “same day sale” commitment from the Participant and a broker-dealer that is a member
of the Financial Industry Regulatory Authority (a “FINRA” dealer) whereby the Participant
irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay
the Exercise Price, and whereby the FINRA dealer irrevocably commits upon receipt of such Shares,
to remit such amounts to the Company, (iii) other property acceptable to the Committee (including
through the delivery of a notice that the Participant has placed a market sell order with a broker
with respect to Shares then issuable upon exercise of the Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction
of the Exercise Price; provided that payment of such proceeds is then made to the Company upon
settlement of such sale, or (iv) any combination of the foregoing methods of payment. The
Committee shall also determine the methods by which Shares shall be delivered or deemed to be
delivered to Participants. Notwithstanding any other provision of the Plan to the contrary, no
Participant who is a Director of the Company (as defined under the Companies Act from time to time)
or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act
shall be permitted to pay the Exercise Price of an Option, or continue any extension of credit with
respect to the Exercise Price of an Option with a loan from the Company or a loan arranged by the
Company in violation of Section 13(k) of the Exchange Act and/or Section 162 of the Companies Act.

(d) Evidence of Grant. All Options shall be evidenced by an Award Agreement between
the Company and the Participant. The Award Agreement shall include such additional provisions as
may be specified by the Committee.

5.2 Incentive Stock Options. ISOs shall be granted only to Employees of the Company
or any Subsidiary, and the terms of any ISOs granted pursuant to the Plan, in addition to the
requirements of Section 5.1 hereof, must comply with the provisions of this Section 5.2.

(a) Expiration. Subject to Section 5.2(c) hereof, an ISO shall expire and may not
be exercised to any extent by anyone after the first to occur of the following events:

 

8

 

(i) Seven years from the date it is granted, unless an earlier time is set in the Award
Agreement;

(ii) Three months after the Participant’s Termination of Service; and

(iii) One year after the date of the Participant’s Termination of Service on account of
Disability or death. Upon the Participant’s Disability or death, any ISOs exercisable at the
Participant’s Disability or death may be exercised by the Participant’s legal representative or
representatives, by the person or persons entitled to do so pursuant to the Participant’s last will
and testament, or, if the Participant fails to make testamentary disposition of such ISO or dies
intestate, by the person or persons entitled to receive the ISO pursuant to the applicable laws of
descent and distribution.

(b) Dollar Limitation. The aggregate Fair Market Value (determined as of the time
the Option is granted) of all Shares with respect to which ISOs are first exercisable by a
Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by
Section 422(d) of the Code, or any successor provision. To the extent that ISOs are first
exercisable by a Participant in excess of such limitation, the excess shall be considered
Non-Qualified Stock Options.

(c) Ten Percent Shareholder. An ISO shall be granted to any individual who, at the
date of grant, owns stock possessing more than ten percent of the total combined voting power of
all classes of Shares of the Company (a “Ten Percent Shareholder”) only if such Option is
granted at a price that is not less than 110% of Fair Market Value on the date of grant and the
Option is exercisable for no more than five years from the date of grant.

(d) Notice of Disposition. The Participant shall give the Company prompt notice of
any disposition of Shares acquired by exercise of an ISO within (i) two years from the date of
grant of such Incentive Stock Option or (ii) one year after the transfer of such Shares to the
Participant.

(e) Right to Exercise. During a Participant’s lifetime, an ISO may be exercised
only by the Participant.

(f) Failure to Meet Requirements. Any Option (or portion thereof) purported to be
an ISO, which, for any reason, fails to meet the requirements of Section 422 of the Code shall be
considered a Non-Qualified Stock Option.

5.3 Exemption from Section 409A. It is intended that all Options granted under this
Plan will be exempt from Section 409A of the Code.

5.4 Substitution of SARs. The Committee may provide in the Award Agreement
evidencing the grant of an Option that the Committee, in its sole discretion, shall have to right
to substitute a SAR for such Option at any time prior to or upon exercise of such Option; provided,
that such SAR shall be exercisable with respect to the same number of Shares for which such
substituted Option would have been exercisable.

ARTICLE 6. GRANTS TO OUTSIDE DIRECTORS.

6.1 Types of Options and Shares. Options granted under this Plan and subject to
this Article 6 shall be Non-Qualified Stock Options.

 

9

 

6.2 Eligibility. Options subject to this Article 6 shall be granted only to Outside
Directors. In no event, however, may any Outside Director be granted any Options under this
Article 6 if such grant is (a) prohibited, or (b) restricted (either absolutely or subject to
various securities requirements, whether legal or administrative, being complied with), in the
jurisdiction in which such Outside Director is resident under the relevant securities laws of that
jurisdiction.

6.3 Vesting and Exercisability. The date an Outside Director is granted an Option
is referred to in this Plan as the “Start Date” for such Option. Each Option will vest and
become exercisable according to the terms set forth by the Committee in the applicable Award
Agreement as long as the Outside Director continuously remains a Director or a consultant to the
Company on each applicable vesting date. Notwithstanding anything to the contrary in Article 5, no
Options granted to an Outside Director will be exercisable after the expiration of five (5) years
from the date the Option is granted to such Outside Director. If the Outside Director is
Terminated, the Outside Director may exercise his or her Options only to the extent that such
Options would have been exercisable upon the Termination Date for such period as set forth in the
Award Agreement. Notwithstanding any provision to the contrary, in the event of a Change of
Control, the Committee may accelerate the vesting of all Options granted to Outside Directors in
its discretion and such Options will become exercisable in full prior to the consummation of such
Change of Control at such times and on such conditions as the Committee determines, and must be
exercised, if at all, within three (3) months of the consummation of said Change of Control event.

6.4 Exercise Price. The Exercise Price of an Option granted under this Article 6
shall be not less than 100% of the Fair Market Value of a Share on the Start Date.

ARTICLE 7. STOCK APPRECIATION RIGHTS.

7.1 Grant of SARs.

(a) A SAR shall be subject to such terms and conditions not inconsistent with the Plan as
the Committee shall impose and shall be evidenced by an Award Agreement, provided that the term of
any SAR shall not exceed seven years.

(b) A SAR shall entitle the Participant (or other person entitled to exercise the SAR
pursuant to the Plan) to exercise all or a specified portion of the SAR (to the extent then
exercisable pursuant to its terms) and to receive from the Company an amount equal to the product
of (i) the excess of (A) the Fair Market Value of the Shares on the date the SAR is exercised over
(B) the grant price of the SAR and (ii) the number of Shares with respect to which the SAR is
exercised, subject to any limitations the Committee may impose.

7.2 Grant Price. The grant price per Share subject to a SAR shall be determined by
the Committee and set forth in the Award Agreement; provided that the per Share grant price for any
SAR shall not be less than 100% of the Fair Market Value of a Share on the date of grant.

7.3 Payment and Limitations on Exercise.

(a) Subject to Section 7.3(b) hereof, payment of the amounts determined under Section 7.1(b)
hereof shall be in cash, in Shares (based on its Fair Market Value as of the date the SAR is
exercised) or a combination of both, as determined by the Committee.

(b) To the extent any payment under Section 7.1(b) hereof is effected in Shares, it shall be
made subject to satisfaction of all provisions of Article 5 pertaining to Options.

 

10

 

ARTICLE 8. OTHER TYPES OF SHARE-BASED AWARDS.

8.1 General Restrictions on Share-Based Awards.

(a) Share-Based Awards granted under this Article 8 may be based on a completion of a
specified number of years of service with the Company or a Parent, Subsidiary, or Affiliate of the
Company or upon the completion of Performance Goals as set by the Committee. Any Share-Based
Awards granted under this Article 8 based on Performance Factors shall have a minimum Performance
Period of one (1) year and any Share-Based Award with vesting based on the passage of time and
continuous service to the Company or a Parent, Subsidiary or Affiliate shall have a minimum total
vesting period of three (3) years (which may be pro-rata) (collectively referred to as the
“Minimum Restriction Period”).

(b) Share-Based Awards granted not in accordance with the Minimum Restriction Period may not
exceed five percent (5%) of the total Shares reserved and available for grant and issuance pursuant
to this Plan, including (i) Shares that are subject to issuance upon exercise or vesting of an
Award but cease to be subject to such Award for any reason other than the exercise or vesting of
such Award; (ii) any authorized Shares not issued or subject to outstanding grants under the Prior
Plans; and (iii) any Shares subject to outstanding grants that are forfeited and/or that are
issuable upon exercise of Options granted pursuant to the Prior Plans that expire or become
unexercisable for any reason without having been settled or exercised in full.

8.2 Performance Share Awards. Performance Share Awards shall be denominated in a
number of Shares and may be linked to any one or more of the Performance Criteria or other specific
performance criteria determined appropriate by the Committee, in each case on a specified date or
dates or over any Performance Period or Periods determined by the Committee.

8.3 Performance Share Units. Performance Share Unit awards shall be denominated in
unit equivalents of Shares and/or units of value including the dollar value of Shares and which may
be linked to any one or more of the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, in each case on a specified date or dates or over any
Performance Period or Periods determined by the Committee. On the vesting date, the Company shall,
subject to Section 10.6, transfer to the Participant one unrestricted, fully transferable Share for
each Performance Share Unit scheduled to be paid out on such date and not previously forfeited.
Alternatively, settlement of a Performance Share Unit may be made in cash (in an amount reflecting
the Fair Market Value of Shares that would have been issued) or any combination of cash and Shares,
as determined by the Committee in its sole discretion.

8.4 Restricted Share Units. Restricted Share Units represent an unfunded and
unsecured obligation of the Company, subject to the terms and conditions of the applicable Award
Agreement evidencing the grant of the Restricted Share Units. Restricted Share Unit Awards shall
be denominated in unit equivalents of Shares and/or units of value including dollar value of Shares
in such amounts and subject to such terms and conditions as determined by the Committee. At the
time of grant, the Committee shall specify the date or dates on which the Restricted Share Units
shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it
deems appropriate. At the time of grant, the Committee shall specify the settlement date
applicable to each grant of Restricted Share Units which shall be no earlier than the vesting date
or dates of the Award and may be determined at the election of the grantee. On the maturity date,
the Company shall, subject to Section 10.6, transfer to the Participant one unrestricted, fully
transferable Share for each Restricted Share Unit scheduled to be paid out on such date and not
previously forfeited. Alternatively, settlement of a Restricted Share Units may
be made in cash or any combination of cash and Shares, as determined by the Committee, in its sole
discretion, at the time of grant of the Restricted Share Units.

 

11

 

8.5 Other Share-Based Awards. The Committee is authorized under the Plan to make
any other Award to an Eligible Individual that is not inconsistent with the provisions of the Plan
and that by its terms involves or might involve the issuance of (i) Shares, (ii) a right with an
exercise or conversion privilege related to the passage of time, the occurrence of one or more
events, or the satisfaction of Performance Criteria or other conditions, or (iii) any other
security with the value derived from the value of the Shares. The Committee may establish one or
more separate programs under the Plan for the purpose of issuing particular forms of Awards to one
or more classes of Participants on such terms and conditions as determined by the Committee from
time to time.

8.6 Term. Except as otherwise provided herein, the term of any Award of Performance
Shares, Performance Share Units, Restricted Share Units and any other Share-Based Award granted
pursuant to this Article 8 shall be set by the Committee in its discretion.

8.7 Form of Payment. Payments with respect to any Awards granted under this Article
8 shall be made in cash, in Shares or a combination of both, as determined by the Committee.

8.8 Timing of Settlement. At the time of grant, the Committee shall specify the
settlement date applicable to an Award of Performance Shares, Performance Share Units, Restricted
Share Units or any other Share-Based Award granted pursuant to this Article 8, which shall be no
earlier than the expiration of the Minimum Restriction Period or other subsequent vesting date(s)
applicable to the relevant Award and may be later than the vesting date(s) to the extent and under
the terms determined by the Committee.

ARTICLE 9. PERFORMANCE-BASED AWARDS.

9.1 Purpose. The purpose of this Article 9 is to provide the Committee the ability
to qualify Awards, other than Options and SARs, and that are granted pursuant to Article 8 as
Qualified Performance-Based Compensation. If the Committee, in its discretion, decides to grant a
Performance-Based Award to a Covered Employee, the provisions of this Article 9 shall control over
any contrary provision contained in Article 8; provided, however, that the Committee may in its
discretion grant Awards to Covered Employees that are based on Performance Criteria or Performance
Goals but that do not satisfy the requirements of this Article 9.

9.2 Applicability. This Article 9 shall apply only to those Covered Employees
selected by the Committee to receive Performance-Based Awards that are intended to qualify as
Qualified Performance-Based Compensation. The designation of a Covered Employee as a Participant
for a Performance Period shall not in any manner entitle the Participant to receive an Award for
the period. Moreover, designation of a Covered Employee as a Participant for a particular
Performance Period shall not require designation of such Covered Employee as a Participant in any
subsequent Performance Period and designation of one Covered Employee as a Participant shall not
require designation of any other Covered Employees as a Participant in such period or in any other
period.

9.3 Procedures with Respect to Performance-Based Awards. To the extent necessary to
comply with the Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C) of
the Code, with respect to any Award granted under Article 8 which may be granted to one or more
Covered Employees, no later than ninety (90) days following the commencement of any fiscal year in
question or any other designated fiscal period or period of

 

12

 

service (or such other time as may be required or permitted by Section 162(m) of the Code), the
Committee shall, in writing, (a) designate one or more Covered Employees, (b) select the
Performance Criteria applicable to the Performance Period, (c) establish the Performance Goals, and
amounts of such Awards, as applicable, which may be earned for such Performance Period, and (d)
specify the relationship between Performance Criteria and the Performance Goals and the amounts of
such Awards, as applicable, to be earned by each Covered Employee for such Performance Period.
Following the completion of each Performance Period, the Committee shall certify in writing whether
the applicable Performance Goals have been achieved for such Performance Period. In determining
the amount earned by a Covered Employee, the Committee shall have the right to reduce or eliminate
(but not to increase) the amount payable at a given level of performance to take into account
additional factors that the Committee may deem relevant to the assessment of individual or
corporate performance for the Performance Period.

9.4 Payment of Performance-Based Awards. Unless otherwise provided in the
applicable Award Agreement, a Participant must be employed by the Company, or a Parent, Subsidiary
or Affiliate on the day a Performance-Based Award for the appropriate Performance Period is paid to
the Participant. Furthermore, a Participant shall be eligible to receive payment pursuant to a
Performance-Based Award for a Performance Period only if the Performance Goals for such period are
achieved. In determining the amount earned under a Performance-Based Award, the Committee may
reduce or eliminate the amount of the Performance-Based Award earned for the Performance Period, if
in its sole and absolute discretion, such reduction or elimination is appropriate.

9.5 Additional Limitations. Notwithstanding any other provision of the Plan, any
Award which is granted to a Covered Employee and is intended to constitute Qualified
Performance-Based Compensation shall be subject to any additional limitations set forth in Section
162(m) of the Code (including any amendment to Section 162(m) of the Code) or any regulations or
rulings issued thereunder that are requirements for qualification as qualified performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended
to the extent necessary to conform to such requirements.

ARTICLE 10. PROVISIONS APPLICABLE TO AWARDS.

10.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the
discretion of the Committee, be granted either alone, in addition to, or in tandem with, any other
Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards
may be granted either at the same time as or at a different time from the grant of such other
Awards.

10.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements
that set forth the terms, conditions and limitations for each Award which may include the term of
an Award, the provisions applicable in the event of a Participant’s Termination of Service, and the
Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an
Award.

10.3 Limits on Transfer. No right or interest of a Participant in any Award may be
pledged, encumbered, or hypothecated to or in favor of any party, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the Company or a Parent,
Subsidiary or Affiliate in accordance with the provisions of the Companies Act. Except as
otherwise provided by the Committee, no Award shall be assigned, transferred, or otherwise disposed
of by a Participant other than by will or the laws of descent and distribution or pursuant

 

13

 

to beneficiary designation procedures approved from time to time by the Committee (or the Board in
the case of Awards granted to Outside Directors). The Committee by express provision in the Award
Agreement or an amendment thereto may, subject to applicable laws, permit an Award (other than an
ISO) to be transferred to, exercised by and paid to certain persons or entities related to the
Participant, including, but not limited to, members of the Participant’s family, charitable
institutions, or trusts or other entities whose beneficiaries or beneficial owners are members of
the Participant’s family and/or charitable institutions, or to such other persons or entities as
may be expressly approved by the Committee, pursuant to such conditions and procedures as the
Committee may establish. Any permitted transfer shall be subject to the condition that the
Committee receive evidence satisfactory to it that the transfer is being made for estate and/or tax
planning purposes (or to a “blind trust” in connection with the Participant’s Termination of
Service or employment with the Company or a Parent, Subsidiary or Affiliate to assume a position
with a governmental, charitable, educational or similar non-profit institution) and on a basis
consistent with the Company’s lawful issue of securities.

10.4 Termination of Service. Any Award granted under this Plan shall only be
exercisable or payable while the Participant is an Employee or Director, as applicable; provided,
however, that the Committee in its sole and absolute discretion may provide that any Award may be
exercised or paid subsequent to a Termination of Service, as applicable, or following a Change of
Control, or because of the Participant’s retirement, death or disability, or otherwise; provided,
however, that any such provision with respect to Performance Shares or Performance Share Units
shall be subject to the requirements of Section 162(m) of the Code that apply to Qualified
Performance-Based Compensation.

10.5 Beneficiaries. Notwithstanding Section 10.3 hereof, a Participant may, if
permitted by the Committee and any applicable local laws, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any Award upon the
Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming
any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award
Agreement applicable to the Participant, except to the extent the Plan and Award Agreement
otherwise provide, and to any additional restrictions deemed necessary or appropriate by the
Committee. If the Participant is married and resides in a community property state, a designation
of a person other than the Participant’s spouse as his or her beneficiary with respect to more than
50% of the Participant’s interest in the Award shall not be effective without the prior written
consent of the Participant’s spouse. If no beneficiary has been designated or survives the
Participant, payment shall be made to either the person’s estate or legal representative or the
person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution
(or equivalent laws outside the U.S.). Subject to the foregoing, a beneficiary designation may be
changed or revoked by a Participant at any time provided the change or revocation is filed with the
Committee.

10.6 Share Certificates. Notwithstanding anything herein to the contrary, the
Company shall not be required to issue or deliver any certificates evidencing Shares pursuant to
the exercise or vesting of any Award, unless and until the Committee has determined, with advice of
counsel, that the issuance and delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authorities and, if applicable, the requirements of any exchange
on which the Shares are listed or traded. All certificates evidencing Shares delivered pursuant to
the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems
necessary or advisable to comply with federal, state local, securities or other laws, including
laws of jurisdictions outside of Singapore and the United States, rules and regulations and the
rules of any national securities exchange or automated quotation system on which the Shares are
listed, quoted, or traded. The Committee may place legends on any certificate evidencing Shares to

 

14

 

reference restrictions applicable to the Shares. In addition to the terms and conditions provided
herein, the Committee may require that a Participant make such reasonable covenants, agreements,
and representations as the Committee, in its discretion, deems advisable in order to comply with
any such laws, regulations, or requirements. The Committee shall have the right to require any
Participant to comply with any timing or other restrictions with respect to the settlement or
exercise of any Award, including a window-period limitation, as may be imposed in the discretion of
the Committee.

10.7 Accelerated Vesting and Deferral Limitations. The Committee shall not have the
discretionary authority to accelerate or delay issuance of Shares under an Award that constitutes a
deferral of compensation within the meaning of Section 409A of the Code, except to the extent that
such acceleration or delay may, in the discretion of the Committee, be effected in a manner that
will not cause any person to incur taxes, interest or penalties under Section 409A of the Code.

ARTICLE 11. CHANGES IN CAPITAL STRUCTURE.

11.1 Adjustments. Should any change be made to the Shares issuable under the Plan
by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares, spin-off or other change affecting the outstanding Shares as a class without the Company’s
receipt of consideration, then appropriate adjustments shall be made to (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the maximum number and/or class of
securities for which any Participant may be granted Awards under the terms of the Plan or that may
be granted generally under the terms of the Plan, and (iii) the number and/or class of securities
and price per Share in effect under each Award outstanding under Articles 5 through 8. Such
adjustments to the outstanding Awards are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such Awards, provided, however, that fractions
of a Share will not be issued but will be replaced by a cash payment equal to the Fair Market Value
of such fraction of a Share, as determined by the Committee. Notwithstanding anything herein to
the contrary, an adjustment to an Award under this Section 11.1 may not be made in a manner that
would result in the grant of a new Option or SAR under Code Section 409A. The adjustments
determined by the Committee shall be final, binding and conclusive.

11.2 Change of Control.

(a) Notwithstanding Section 11.1 hereof, and except as may otherwise be provided in any
applicable Award Agreement or other written agreement entered into between the Company and a
Participant, if a Change of Control occurs and a Participant’s Full-Value Awards are not converted,
assumed, or replaced by a comparable award by a successor or survivor corporation, or a parent or
subsidiary thereof, such Full-Value Awards shall automatically vest and become fully exercisable
and all forfeiture restrictions on such Awards shall lapse immediately prior to the Change of
Control and following the consummation of such Change in Control, the Award shall terminate and
cease to be outstanding. Further, if a Change of Control occurs and a Participant’s Options or
SARs are not converted, assumed or replaced by a comparable award by a successor or survivor
corporation, or a parent or subsidiary therefore, such Options or SARs outstanding at the time of
the Change of Control, shall automatically vest and become fully exercisable immediately prior to
the Change of Control and thereafter shall automatically terminate. In the event that the terms of
any agreement (other than the Award Agreement) between the Company or any Subsidiary or Affiliate
and a Participant contains provisions that conflict with and are more restrictive than the
provisions of this Section 11.2(a), this Section
11.2(a) shall prevail and control and the more restrictive terms of such agreement (and only such
terms) shall be of no force or effect. The determination of comparability in this Section 11.2(a)
shall be made by the Committee, and its determination shall be final, binding and conclusive.

 

15

 

(b) Where Awards are assumed or continued after a Change of Control, the Committee may
provide that one or more Awards will automatically accelerate upon an involuntary Termination of
Service within a designated period (not to exceed eighteen (18) months) following the effective
date of such Change of Control. If the Committee so determines, any such Award shall accordingly,
immediately prior to the effective date of such Change of Control or upon an involuntary
Termination of Service following a Change of Control (at the Committee’s discretion), become fully
exercisable and all forfeiture restrictions on such Awards shall lapse.

(c) The portion of any Incentive Stock Option accelerated in connection with a Change in
Control shall remain exercisable as an Incentive Stock Option only to the extent the applicable One
Hundred Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar
limitation is exceeded, the accelerated portion of such Option shall be exercisable as a
Non-Statutory Option under the U.S. federal tax laws.

11.3 No Other Rights. Except as expressly provided in the Plan, no Participant
shall have any rights by reason of any subdivision or consolidation of Shares of any class, the
payment of any dividend, any increase or decrease in the number of Shares of any class or any
dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except
as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no
issuance by the Company of Shares of any class, or securities convertible into Shares of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to, the number of
Shares subject to an Award or the grant or the Exercise Price of any Award.

ARTICLE 12. ADMINISTRATION.

12.1 Authority of Committee. This Plan will be administered by the Committee or by
the Board acting as the Committee. Subject to the general purposes, terms and conditions of this
Plan, and to the direction of the Board, the Committee will have full power to implement and carry
out this Plan. The Committee will have the authority to:

(a) construe and interpret this Plan, any Award Agreement and any other agreement or
document executed pursuant to this Plan;

(b) prescribe, amend and rescind rules and regulations relating to this Plan or any Award;

(c) designate Eligible Individuals to receive Awards;

(d) determine the form and terms of Awards;

(e) determine the number of Awards to be granted and the number of Shares or other
consideration subject to Awards;

(f) determine whether Awards will be granted singly, in combination with, in tandem with, in
replacement of, or as alternatives to, other Awards under this Plan or any other incentive or
compensation plan of the Company or any Parent, Subsidiary or Affiliate of the Company;

 

16

 

(g) grant waivers of Plan or Award conditions;

(h) determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the Exercise Price or Grant Price, any restrictions or limitations on the
Award, any schedule for the lapse of forfeiture restrictions or restrictions on the exercisability
of an Award, vesting, and accelerations or waivers thereof, any provisions related to
non-competition and recapture of gain on an Award, based in each case on such considerations as the
Committee in its sole discretion determines; provided, however, that the Committee shall not have
the authority to accelerate the vesting or waive the forfeiture of any Performance-Based Awards
intended to qualify as Qualified Performance Based-Compensation, except as permitted under Section
162(m) of the Code;

(i) correct any defect, supply any omission or reconcile any inconsistency in this Plan, any
Award or any Award Agreement;

(j) determine whether the Performance Goals under any Performance-Based Award have been met;

(k) determine whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the Exercise Price or Grant Price of an Award may be paid in, cash, Shares, other
Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

(l) establish, adopt, or revise any rules and regulations including adopting sub-plans to
the Plan as the Committee may deem necessary or advisable under local law;

(m) suspend or terminate the Plan at any time provided that such suspension or termination
does not impair the rights and obligations under any outstanding Award without written consent of
the affected Participant;

(n) determine the Fair Market Value of the Shares for any purpose; and

(o) make all other decisions and determinations that may be required pursuant to the Plan or
as the Committee deems necessary or advisable to administer the Plan.

12.2 Committee Discretion. Any determination made by the Committee with respect to
any Award will be made in its sole discretion at the time of grant of the Award or, unless in
contravention of any express term of this Plan or Award, at any later time, and such determination
will be final and binding on the Company and on all persons having an interest in any Award under
this Plan.

12.3 Delegation of Authority. To the extent permitted by applicable law, the
Committee may from time to time delegate to a committee of one or more members of the Board or one
or more officers of the Company the authority to grant or amend Awards to Participants other than
Insiders to whom authority to grant or amend Awards has been delegated hereunder. For the
avoidance of doubt, provided it meets the limitation in the preceding sentence, this delegation
shall include the right to modify Awards as necessary to accommodate changes in the laws or
regulations, including in jurisdictions outside the United States. Any delegation hereunder shall
be subject to the restrictions and limits that the Committee specifies at the time of such
delegation, and the Committee may at any time rescind the authority so delegated or appoint a new
delegatee. At all times, the delegatee appointed under this Section 12.3 shall serve in such
capacity at the pleasure of the Committee.

 

17

 

ARTICLE 13. EFFECTIVE AND EXPIRATION DATE.

13.1 Effective Date. The Plan is effective as of the date the Plan is adopted by
the Board (the “Effective Date”). This Plan shall be approved by the Company’s
shareholders within twelve months (12) months after the date the Plan is adopted by the Board. The
Plan will be deemed to be approved by the shareholders if it is approved by a majority of the votes
cast at a duly held shareholders’ meeting at which a quorum representing a majority of outstanding
voting stock is, either in person or by proxy, present and voting on the Plan.

13.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant
to the Plan after the tenth anniversary of the Effective Date, except that no Incentive Stock
Options may be granted under the Plan after the earlier of the tenth anniversary of (a) the date
the Plan is approved by the Board or (b) the Effective Date. Any Awards that are outstanding on
the tenth anniversary of the Effective Date shall remain in force according to the terms of the
Plan and the applicable Award Agreement.

ARTICLE 14. AMENDMENT, MODIFICATION, AND TERMINATION.

14.1 Amendment, Modification, and Termination. The Committee has complete and
exclusive power and authority to amend or modify the Plan (or any component thereof) in any or all
respects whatsoever. However, (i) no such amendment or modification shall materially and adversely
affect rights and obligations with respect to Awards at the time outstanding under the Plan, unless
the Participant consents to such amendment, and (ii) the grants to Outside Directors pursuant to
Article 6 may not be amended at intervals more frequently than once every six (6) months, other
than to the extent necessary to comply with applicable U.S. income tax laws and regulations. In
addition, the Committee may not, without the approval of the Company’s shareholders, amend the Plan
to (i) materially increase the maximum number of Shares issuable under the Plan or the maximum
number of Shares for which any one individual participating in the Plan may be granted Awards, (ii)
materially modify the eligibility requirements for Plan participation or (iii) materially increase
the benefits accruing to Participants. Further, the repricing, replacement or regranting of any
previously granted Award, through cancellation or by lowering the Exercise Price of such Award,
shall be prohibited unless the shareholders of the Company first approve such repricing,
replacement or regranting. No underwater Option or SAR may be cancelled in exchange for, or in
connection with the payment of a cash amount without shareholder approval. The Committee may at
any time terminate or amend this Plan in any respect, including without limitation amendment of any
form of Award Agreement or instrument to be executed pursuant to this Plan; provided, however, that
the Committee will not, without the approval of the shareholders of the Company, amend this Plan in
any manner that requires such shareholder approval under Nasdaq or other stock exchange listing
requirements then applicable to the Company.

14.2 Awards Previously Granted. Except with respect to amendments made pursuant to
Section 15.14 hereof, no termination, amendment, or modification of the Plan shall adversely affect
in any material way any Award previously granted pursuant to the Plan without the prior written
consent of the Participant; provided, however, that an amendment or modification that may cause an
Incentive Stock Option to become a Non-Qualified Stock Option shall not be treated as adversely
affecting the rights of the Participant.

 

18

 

ARTICLE 15. GENERAL PROVISIONS.

15.1 No Rights to Awards. No Eligible Individual or other person shall have any
claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is
obligated to treat Eligible Individuals, Participants or any other persons uniformly.

15.2 No Shareholders Rights. Except as otherwise provided herein, a Participant
shall have none of the rights of a shareholder with respect to Shares covered by any Award,
including the right to vote or receive dividends, until the Participant becomes the owner of such
Shares, notwithstanding the exercise or vesting of an Option or other Award.

15.3 Withholding. The Company or any Subsidiary or Affiliate, as appropriate, shall
have the authority and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy U.S. federal, state, or local taxes and any taxes imposed
by jurisdictions outside of the United States (including income tax, social insurance
contributions, payment on account and any other taxes that may be due) required by law to be
withheld with respect to any taxable event concerning a Participant arising as a result of this
Plan or to take such other action as may be necessary in the opinion of the Company or a Parent,
Subsidiary or Affiliate, as appropriate, to satisfy withholding obligations for the payment of
taxes by any means authorized by the Committee. No Shares shall be delivered hereunder to any
Participant or other person until the Participant or such other person has made arrangements
acceptable to the Committee for the satisfaction of these tax obligations with respect to any
taxable event concerning the Participant or such other person arising as a result of Awards made
under this Plan.

15.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any Parent, Subsidiary or
Affiliate to terminate any Participant’s employment or services at any time, nor confer upon any
Participant any right to continue in the employ or service of the Company or any Parent, Subsidiary
or Affiliate.

15.6. Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Participant pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights
that are greater than those of a general creditor of the Company or any Subsidiary or Affiliate.

15.7 Relationship to other Benefits. No payment pursuant to the Plan shall be taken
into account in determining any benefits pursuant to any pension, retirement, savings, profit
sharing, group insurance, termination programs and/or indemnities or severance payments, welfare or
other benefit plan of the Company or any Parent, Subsidiary or Affiliate except to the extent
otherwise expressly provided in writing in such other plan or an agreement thereunder, or as
expressly provided by applicable law.

15.8 Expenses. The expenses of administering the Plan shall be borne by the Company
and/or its Subsidiaries and/or Affiliates.

15.9 Titles and Headings. The titles and headings of the Sections in the Plan are
for convenience of reference only and, in the event of any conflict, the text of the Plan, rather
than such titles or headings, shall control.

 

19

 

15.10 Fractional Shares. No fractional Shares shall be issued and the Committee
shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or
whether such fractional shares shall be eliminated by rounding down as appropriate.

15.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth
in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 under the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

15.12 Government and Other Regulations. The obligation of the Company to make
payment of awards in Shares or otherwise shall be subject to all applicable laws, rules, and
regulations of Singapore and the United States and jurisdictions outside of Singapore and United
States, and to such approvals by government agencies, including government agencies in
jurisdictions outside of Singapore and the United States, in each case as may be required or as the
Company deems necessary or advisable. Without limiting the foregoing, the Company shall have no
obligation to issue or deliver evidence of title for Shares subject to Awards granted hereunder
prior to: (i) obtaining any approvals from governmental agencies that the Company determines are
necessary or advisable, and (ii) completion of any registration or other qualification with respect
to the Shares under any applicable law in Singapore or the United States or in a jurisdiction
outside of Singapore or the United States or ruling of any governmental body that the Company
determines to be necessary or advisable or at a time when any such registration or qualification is
not current, has been suspended or otherwise has ceased to be effective. The inability or
impracticability of the Company to obtain or maintain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority shall not have been
obtained. The Company shall be under no obligation to register Shares issued or paid pursuant to
the Plan under the Securities Act. If the Shares paid pursuant to the Plan may in certain
circumstances be exempt from registration pursuant to the Securities Act the Company may restrict
the transfer of such Shares in such manner as it deems advisable to ensure the availability of any
such exemption.

15.13 Governing Law. The Plan and all Award Agreements, and all controversies
thereunder or related thereto, shall be construed in accordance with and governed by the laws of
the State of California, without regard to principles of conflict of laws.

15.14 Section 409A. Except as provided in Section 15.15 hereof, to the extent that
the Committee determines that any Award granted under the Plan is subject to Section 409A of the
Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required
by Section 409A of the Code. To the extent applicable, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A of the Code and U.S. Department of Treasury regulations
and other interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the Effective Date. Notwithstanding any
provision of the Plan to the contrary, in the event that following the Effective Date the Committee
determines that any Award may be subject to Section 409A of the Code and related U.S. Department of
Treasury guidance (including such U.S. Department of Treasury guidance as may be issued after the
Effective Date), the Committee may adopt such

 

20

 

amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take any other actions,
that the Committee determines are necessary or appropriate to (a) exempt the Award from Section
409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect
to the Award, or (b) comply with the requirements of Section 409A of the Code and related U.S.
Department of Treasury guidance and thereby avoid the application of any penalty taxes under such
Section.

15.15 No Representations or Covenants with respect to Tax Qualification. Although
the Company may endeavor to (1) qualify an Award for favorable tax treatment under the laws of the
United States or jurisdictions outside of the United States (e.g., Incentive Stock Options) or (2)
avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no
representation to that effect and expressly disavows any covenant to maintain favorable or avoid
unfavorable tax treatment, anything to the contrary in this Plan, including Section 15.14 hereof,
notwithstanding. The Company shall be unconstrained in its corporate activities without regard to
the potential negative tax impact on holders of Awards under the Plan.

 

21exv10w1

Exhibit 10.1

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 August 1, 2010.

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 or Directors 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 or
Directors 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.	 	“Affiliate” has the meaning set forth in Rule 12b-2 under the United Sates Securities
Exchange Act of 1934, as amended.
	 
	 	b.	 	“Appreciation Value” means the increase in the value of a Phantom Share awarded to a
Participant and as described in Section 8.1.
	 
	 	c.	 	“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, provided however, that for shares subject only to time based vesting such period of
time shall extend for a period of at least thirty-six months from and after the date of the
award.
	 
	 	d.	 	“Beneficiary” means the beneficiary or beneficiaries designated to receive the amount, if
any, payable under the Plan upon the death of a Participant. A beneficiary designation
shall not be applicable to grants under Article VI.
	 
	 	e.	 	“Board” means the Board of Directors of the Corporation.
	 
	 	f.	 	“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.
	 
	 	g.	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	h.	 	“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 Code.
	 
	 	i.	 	“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.
	 
	 	j.	 	“Corporation” means CMS Energy Corporation, its successors and assigns, and each of its
Subsidiaries, or any of them individually.
	 
	 	k.	 	“Director” means any person who is a member of the Board of Directors of the Corporation
or a Subsidiary.
	 
	 	l.	 	“Eligible Person” means an officer, a key employee or Non-Employee Director. A key
employee must at the end of the fiscal year be a regular full-time salaried employee of the
Corporation or a Subsidiary.

 

 

	 	m.	 	“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 Code.
	 
	 	n.	 	“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.
	 
	 	o.	 	“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.
	 
	 	p.	 	“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.
	 
	 	q.	 	“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.
	 
	 	r.	 	“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.
	 
	 	s.	 	“Performance Criteria” are the factors used by the Committee (on an absolute or
comparative basis) to establish goals to track business measures such as net earnings;
operating earnings or income; earnings growth; net income; 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; total shareholder return;
absolute and/or relative return on common shareholders equity; return on shareholders
equity; return on capital; 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.
	 
	 	t.	 	“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.
	 
	 	u.	 	“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.
	 
	 	v.	 	“Restricted Common Stock” means Common Stock delivered subject to the restrictions described in Article VII.
	 
	 	w.	 	“Restrictions” for purposes of Article VII includes any time based and/or performance based conditions on vesting.
	 
	 	x.	 	“Shareholders” means the shareholders of the Corporation.
	 
	 	y.	 	“Stock Appreciation Right” shall mean a right to receive the appreciation in value of the
optioned shares over the option price.
	 
	 	z.	 	“Stock Option” means an option to purchase shares of Common Stock at a specified price,
granted pursuant to Article VI of this Plan.
	 
	 	aa.	 	“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.
	 
	 	bb.	 	“Valuation Date” means the date or dates established by the Committee at the time of
grant of Phantom Stock, when the Appreciation Value is determined.

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

	3.1	 	Effective Date: This Plan shall be effective June 1, 2009, conditioned upon approval of the
shareholders of the Corporation, and shall continue until May 31, 2014.
	 
	3.2	 	Administration: 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

2

 

	 	 	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.
	 
	3.3	 	Indemnification: 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	 	Participation: 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	 	Awards and Grants: Each year, the Committee may award shares of Common Stock, and/or may
grant Phantom Shares, Performance Units, Incentive Options, Stock Options and/or Stock
Appreciation Rights to each Eligible Person whom it has designated as an Optionee or
Participant for such year. No Incentive 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 and Grants to Foreign Nationals: 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	 	Shares Reserved: 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	 	Exchange of Shares: 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 reserved for issuance pursuant to the Plan but not yet covered by an option or grant,
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 or grant, such adjustment
shall be made by the Committee and shall be effective and binding for all purposes of the
Plan. No adjustment or substitution provided for in this Section 5.2 shall require the
Corporation 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.

3

 

	5.3	 	Grant Limits: 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 500,000 shares of Common Stock. Not more than 10% of the total shares reserved for
award under this Plan shall be granted to Non-Employee Directors.

Article VI. Stock Options and Stock Appreciation Rights

	6.1	 	Options: The Committee may from time to time authorize a grant of Stock Options on 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. In the event of any exchange of
shares as described in Section 5.2, any outstanding shares subject to Option and/or Stock
Appreciation Rights hereunder shall be also subject to the same substitution or adjustment as
provided for in Section 5.2.
	 
	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. Notwithstanding the above, in the event of any exchange of shares as
described in Section 5.2, the value of the award shall be preserved in that the option price
in each Stock Option agreement for each share covered thereby prior to 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. If such
reorganization, recapitalization, merger or consolidation involves a cash payment or a
combination of a cash payment and shares, the Committee shall take such action as in its
judgment will effectively preserve the current value, if any, of the Stock Option agreement on
the date of the reorganization, recapitalization, merger or consolidation. Any such
adjustment with respect to each Stock Option or Stock Appreciation Right shall be consistent
with the requirements applicable to exempt stock rights under Section 409A of the Code and
applicable regulations. Any adjustment with respect to Incentive Options shall also conform
to the requirements of Section 422 of the Code.
	 
	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, in cash, Common
Stock of the Corporation or any combination thereof.
	 
	 	 	Notwithstanding the above, the Committee may grant Stock Appreciation Rights that are not in
conjunction with a related underlying Stock Option. The basis used in determining any increase
in the value of the Common Stock under such Stock Appreciation Right shall be not less than 100%
of the fair market value of the Common Stock on the date of grant. To the extent, if any, that
the Committee elects to grant such Stock Appreciation Rights, then the grant shall in all
respects conform in writing with

4

 

	 	 	all requirements of 409A, including, without limitation, a definite valuation/vesting date for
determining the value of the 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. Any grants of Stock Options and
Stock Appreciation Rights shall be made in accordance with any applicable legal requirements
of any Federal or state securities laws and in making determinations of legal requirements the
Committee may relay on an opinion of counsel for the Corporation.
	 
	 	 	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).
	 
	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, the Non-Employee Director 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.

5

 

	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 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.

Article VII. Restricted Common Stock

	7.1	 	Awards: The Committee may from time to time award Restricted 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 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, and 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.
	 
	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 Section 10.2, 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.

6

 

	 	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 at the end of the Award
Period and, for shares with performance based restrictions, 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.
	 
	 	h.	 	Termination of Employment or Service: If the employment of an employee Participant or the
service of a Non-Employee Director terminates prior to the last day of an Award Period for
any reason other than the 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 some or all restrictions have been satisfied or the
shares are forfeited for failure to satisfy such 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 as set forth
in Section 5.2 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.
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.
	 
	 	c.	 	Distribution After Retirement or Disability: Upon termination of an employee Participant
due to Retirement or disability, all outstanding shares shall be forfeited by the
Participant except for the pro rata portion of any such outstanding grant equal to a
fraction, the numerator of which is the number of full and partial months of service from
the date of the grant to the termination date and the denominator of which is the time
duration of the award until vesting as of the grant date, expressed in months. Any shares
that are not forfeited at termination which are subject to Performance Criteria 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

7

 

	 	 	 	satisfy such performance restrictions. Any shares that are not forfeited at termination
which are subject only to time based vesting and not to any additional Performance Criteria
shall be delivered to the Participant as soon as practicable after 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 shall be forfeited by the Participant. However, the Committee may, at its discretion
and in exceptional circumstances, 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 some or all restrictions have been satisfied or the
shares are forfeited for failure to satisfy such restrictions.

	7.4	 	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.
	 
	7.5	 	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.
	 
	7.6	 	Deferred Compensation: 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.
	 
	7.7	 	Forfeiture of Voting Rights: 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.
	 
	7.8	 	Taxes: 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. In
the event of any exchange of shares as described in Section 5.2, any outstanding Phantom
Shares shall be also subject to the same substitution or adjustment as provided for in
Section 5.2.
	 
	 	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.

8

 

	 	(iii)	 	Vesting: 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 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 Beneficiary or 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.

	8.2	 	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 after age 55 the Participant or the Participant’s beneficiary 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 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 Term: 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. Any such grants shall be made in accordance with any
applicable legal requirements of any Federal or state securities laws and in making
determinations of legal requirements the Committee may relay on an opinion of counsel for the
Corporation.
	 
	8.4	 	Taxes: Each payment under this Article VIII 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, if a payout is made under Section 8.2 in Common Stock, 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 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, 2014. Any
grant or award effective on or prior to May 31, 2014 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

9

 

	 	 	 	become entitled prior to such amendment, or
	 
	 	c.	 	Unless approved by the Shareholders of CMS Energy 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 and 9.2 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.
	 
	9.6	 	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	 	Clawback:

	 	a.	 	If, due to a restatement of CMS Energy Corporation’s or an Affiliate’s publicly
disclosed financial statements or otherwise, an Eligible Person is subject to an obligation
to make a repayment or return of benefits to CMS Energy Corporation or an Affiliate
pursuant to a clawback provision contained in this Plan, a supplemental executive
retirement plan, a bonus plan, or any other benefit plan (a “benefit plan clawback
provision”) of the Corporation, it shall be a precondition to the vesting of any unvested
award under this Plan, that the Eligible Person fully repay or return to the Corporation
any amounts owing under such benefit plan clawback provision. Any and all awards under
this Plan are further subject to any provision of law which may require the Eligible
Person to forfeit or return any benefits provided hereunder, in the event of a restatement
of the Corporation’s publicly disclosed accounting statements or other illegal act,
whether required by Section 304 of the Sarbanes-Oxley Act of 2002, federal securities law
(including any rule or regulation promulgated by the Securities and Exchange Commission),
any state law, or any rule or regulation promulgated by the applicable listing exchange or
system on which the Corporation lists its traded shares.
	 
	 	b.	 	To the degree any benefits hereunder are not otherwise forfeitable pursuant to the
preceding sentences of this Section 10.2, the Board or Committee may require the Eligible
Person to return to the Corporation any amounts granted, awarded or paid under this Plan,
or may determine that all or any portion of a grant shall not vest, if:

	 	(1)	 	the grant of such compensation or the vesting of such compensation, or
profit realized on the exercise or sale of securities obtained pursuant to the
Plan, was predicated upon achieving certain financial results which were

10

 

	 	 	 	subsequently the subject of a substantial accounting restatement of the
Corporation’s financial statements filed under the securities laws (a “financial
restatement”),
	 
	 	(2)	 	a lower grant, a lower vesting result, or a lower profit on the exercise
or sale of securities obtained pursuant to the Plan (“reduced financial results”),
would have occurred based upon the financial restatement, and
	 
	 	(3)	 	in the reasonable opinion of the Board or the Committee, the
circumstances of the financial restatement justify such a modification of the award
or its vesting. Such circumstances may include, but are not limited to, whether the
financial restatement was caused by misconduct, whether the financial restatement
affected more than one period and the reduced financial results in one period were
offset by increased financial results in another period, the timing of the
financial restatement or any required repayment, and other relevant factors.

	 	 	 	Unless otherwise required by law, the provisions of this Subsection b. relating to the return
of previously vested Plan benefits shall not apply unless a claim is made therefore by the
Corporation within three years of the vesting of such benefits.
	 
	 	c.	 	The Committee shall also have the discretion to require a clawback in the event of a
mistake or accounting error in the calculation of a benefit or an award that results in a
benefit to an eligible individual to which he/she was not otherwise entitled. The rights
set forth in this Plan concerning the right of the Corporation to a clawback are in
addition to any other rights to recovery or damages available at law or equity and are not
a limitation of such rights.

	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/ Catherine M. Reynolds

 

Secretary
	 	By: 
	 	/s/ John Russell

 

Chief Executive Officer
	 	 

11

 

Attachment A

	 	 	“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 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

12

 

Attachment A

	 	 	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.

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}]]