Document:

exv10w1

Exhibit 10.1

	 	 	 

	Date:

	 	April 25, 2011
	 
	 	 
	To:

	 	Nigel Lee
	 
	 	 
	Re:

	 	MUTUALLY AGREED RESIGNATION

By Hand Delivery

Dear Nigel,

This is to acknowledge and confirm that MoneyGram International Pte. Ltd. and MoneyGram
International, Inc. (collectively, the “Company”) and you mutually agree that, effective
immediately, you are resigning from your employment at the Company and also resigning as a member
of the Board of Directors of any Company affiliate. Because you are resigning your employment with
the Company, the payment of your salary and all your benefits and entitlements shall cease
immediately, and you are not entitled to any severance payment or other benefit, as agreed in
Section 15.4 of your Letter of Appointment dated March 26, 2010.

Please also be advised that the Company considers your resignation to be a resignation without Good
Reason under the MoneyGram International, Inc. 2005 Omnibus Incentive Plan, Non-Qualified Stock
Option Agreement for Employees in Singapore dated April 22, 2010
(“Stock Option Agreement”).
Accordingly, pursuant to Section 5(c) of that Stock Option Agreement, any portion of the Option
that has not vested is immediately forfeited.

This letter also is to remind you of the obligations you agreed to undertake in the Employee Trade
Secret, Confidential Information and Post-Employment Restriction Agreement (“Confidentiality
Agreement”) you executed on February 5, 2010, including your obligation not to accept employment
or otherwise render services for specified competitors of the Company for the next 12 months
(Section 4.2), your obligation not to interfere with existing employment or similar relationships
between the Company and its employees or contractors for the next 12 months (Section 4.3), and
your obligation not to interfere in any way with the Company’s customer relationships for the next
12 months (Section 4.3). Of course, we also expect that you will honor your obligation not to ever
use or disclose the Company’s Confidential Information and trade secrets (Section 3) or make any
disparaging statements about the Company and/or its officers and employees (Section 6).

Please also note that pursuant to Section 7 of your Confidentiality Agreement, you are required to
immediately return to the Company upon termination all Company property and information within
your possession, including Company credit cards, Company-owned and issued computers, cellular
telephones, computer software, Personal Digital Assistants (PDAs), building passes, Company files,
manuals, entry cards, keys, etc. Please immediately provide all such property and other
information that is in your possession at this time, and make arrangements for the immediate
return of all such property and information (including but not limited to electronically-stored
information) that is at your office, residence, or some other location.

 

 

For your reference and convenience, we are providing you with copies of your Letter of Appointment,
Stock Option Agreement, and Confidentiality Agreement. Please note that your resignation will be
without prejudice to the rights and remedies of the Company and to your continuing obligations
under your Letter of Appointment, Stock Option Agreement, and Confidentiality Agreement. All of the
Company’s rights against you are hereby reserved.

Yours faithfully

For and on behalf of

MoneyGram International Pte. Ltd.

and MoneyGram International, Inc.

	 	 	 

	/s/ Steve Piano

	 	April 26th, 2011
	 

	 	 
	Steve Piano

	 	Date
	Executive Vice President- Human
	 	 
	Resources and Corporate Services
	 	 

I, Nigel Lee, hereby acknowledge and agree that, effective immediately, I am resigning from
employment as an employee and/or officer of MoneyGram International Pte. Ltd., MoneyGram
International, Inc., or any related corporate affiliate on the above terms.

I also hereby resign from any and all directorships held by me with respect to any corporate
affiliate of MoneyGram International, Inc.

	 	 	 

	/s/
Nigel L. Lee

	 	April 26th 2011
	 

	 	 
	Nigel
L. Lee

	 	Dateexv10w2

Exhibit 10.2

	 	 	 

	Date:

	 	April 26, 2011
	 
	 	 
	To:

	 	Nigel Lee
	 
	 	 
	Re:

	 	TERMINATION OF STOCK OPTION

By Hand Delivery

Dear Nigel,

As we discussed last evening, and pursuant to Section 6(d) of the MoneyGram International, Inc.
2005 Omnibus Incentive Plan, Non-Qualified Stock Option Agreement for Employees in Singapore dated
April 22, 2010, this is to confirm that effective today, the Company has terminated all options
held by you to purchase Company stock, whether vested or unvested.

Yours faithfully

For and on behalf of

MoneyGram International Pte. Ltd.

and MoneyGram International, Inc.

	 	 	 

	/s/ Steve Piano

	 	April 26th, 2011
	 

	 	 
	Steve Piano

	 	Dateexv10w4

Exhibit 10.4

CMS INCENTIVE COMPENSATION PLAN

FOR CMS ENERGY

AND ITS SUBSIDIARIES

 

CMS INCENTIVE COMPENSATION PLAN FOR CMS ENERGY

AND ITS SUBSIDIARIES

	I.	 	GENERAL PROVISIONS

	 	1.1	 	Purpose. The purpose of the CMS Incentive Compensation Plan (“CMSICP
Plan” or “Plan”) is to:

	 	(a)	 	Provide an equitable and competitive level of compensation that
will permit CMS Energy (“Company”) and its subsidiaries to attract, retain and
motivate officers and employees.

	 	(b)	 	No payments to Officers or Employees in the form of incentive
compensation shall be made unless pursuant to a plan approved by the Committee
on Compensation and Human Resources of the Board of Directors of CMS Energy and
after express approval of the Committee. This plan shall be administered by
the President and CEO of CMS Energy and the Benefit Administration
Committee.

	 	1.2	 	Effective Date. The initial effective date of the Plan is January 1, 2004.
The Plan, as described herein, is amended and restated effective as of January 1,
2011.

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

	 	(a)	 	“Annual Award” means an annual incentive award granted under
the CMSICP Plan.

	 	(b)	 	“Base Salary” means the base salary on January 1 of a
Performance Year, except as impacted by a Change in Status as defined in
Article V. For purposes of the Plan, an Officer’s Base Salary must be subject
to annual review and annual approval by the Committee.

	 	(c)	 	“CMS Energy” means CMS Energy Corporation.

	 	(d)	 	“Code” means the Internal Revenue Code of 1986, as amended.

	 	(e)	 	“Code Section 162(m) Employee” means an employee whose
compensation is subject to the “Million Dollar Cap” under Code Section 162(m).
Generally, this is the CEO and the three highest paid executive officers of the
Company (other than the CEO and the CFO).

	 	(f)	 	“Committee” means the Committee on Compensation and Human
Resources of the Board of Directors of CMS Energy Corporation.

	 	(g)	 	“Company” means CMS Energy.

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	 	(h)	 	“Deferred Annual Award” means the amount deferred pursuant to
Section 4.2.

	 	(i)	 	“Disability” means that a participant has terminated employment
with the Company or a Subsidiary and is disabled, as that term is defined under
Code Section 409A and any applicable regulations.

	 	(j)	 	“Leave of Absence” for purposes of this CMSICP Plan means a
leave of absence that has been approved by the Company.

	 	(k)	 	“Officer” means an employee of the Company or a Subsidiary in
Salary Grade “E-3” or higher.

	 	(l)	 	“Payment Event” means the time at which a Deferred Annual Award
may be paid pursuant to Section 4.2.

	 	(m)	 	“Payment Term” means the length of time for payment of a
Deferred Annual Award under Section 4.2.

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

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

	 	(p)	 	“Plan Administrator” for Officer participants means the
President and Chief Executive Officer of CMS Energy, under the general
direction of the Committee. For all other participants and for purposes of
administering Deferred Amounts under Section 4.2, the Plan Administrator is the
Benefits Administration Committee appointed by the Chief Executive Officer and
the Chief Financial Officer as authorized by the Board of Directors.

	 	(q)	 	“Retirement” means that a Plan participant is no longer an
active employee and qualifies for a retirement benefit other than a deferred
vested retirement benefit under the Pension Plan. For a participant ineligible
for coverage under the Pension Plan and covered instead under the Defined
Company Contribution Plan, retirement occurs when there is a Separation from
Service on or after age 55 with 5 or more years of service.

	 	(r)	 	“Separation from Service” means an Employee retires or
otherwise has a separation from service from the Company as defined under Code
Section 409A and any applicable regulations. The Plan Administrator will
determine, consistent with the requirements of Code Section 409A and any
applicable regulations, to what extent a person on a leave of absence,

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	 	 	 	including on paid sick leave pursuant to Company policy, has incurred a
Separation from Service. Notwithstanding the above, a Separation from
Service will occur consistent with the Regulation 1.409A-1(h) when it is
reasonably anticipated that the level of service provided by the Employee
will be no more than 45% of the average level of bona fide service performed
by the Employee over the immediately preceding 36 month period.

	 	(s)	 	“Subsidiary” means any direct or indirect subsidiary of the
Company.

	 	1.4	 	Eligibility. Officers of CMS Energy and/or Consumers Energy and U.S.
Employees who do not participate in a broad based incentive plan contingent upon
objectives and performance unique to the employees’ subsidiary, affiliate, site and/or
business unit, are eligible for participation in the CMSICP Plan (“Employee”). An
individual listed on the Company payroll records as a contract employee is not eligible
for this Plan.

	 	1.5	 	Administration of the Plan.

	 	(a)	 	The Plan is administered by the President and Chief Executive
Officer of CMS Energy under the general direction of the Committee.

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

	 	(c)	 	The Committee, no later than March 1st of the
calendar year following the Performance Year, will review for approval proposed
Annual Awards for the total of all CMSICP Officer participants, as recommended
by the President and CEO of CMS Energy. All proposed Annual Awards are subject
to approval of the Committee. Before the payment of any Annual Awards, the
Company’s outside auditors and the Committee will certify in writing that the
performance goals were in fact satisfied in accordance with Code Section
162(m).

	 	(d)	 	The Committee reserves the right to modify the performance
goals with respect to unforeseeable circumstances or otherwise exercise
discretion with respect to proposed Annual Awards as it deems necessary to
maintain the spirit and intent of the CMSICP Plan, provided that such
discretion will be to decrease or eliminate, not increase, Annual Awards in the
case of any Code Section 162(m) Employees. The Committee also reserves the
right in its discretion to not pay Annual Awards for a Performance Year. All
decisions of the Committee are final.

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	II.	 	CORPORATE PERFORMANCE GOALS

	 	2.1	 	In General. Corporate performance goals are established in two areas:
(1) the adjusted net income per outstanding CMS Energy share (EPS); and (2) the Cash
Flow of CMS Energy (CF).

	 	2.2	 	Plan Performance Factor. The plan performance factor used to calculate
an Annual Award is based on the results of the corporate performance goals and is
capped at two times the standard award amount. The Plan Performance Factor is
established in a table relating specific performance results in the areas of EPS and CF
to specific performance goals. This table shall be created by the Committee for each
Performance Year.

	III.	 	ANNUAL AWARD FORMULA

	 	3.1	 	Officers’ Annual Awards. Annual Awards for each eligible Officer will
be based upon a percentage of the Officer’s Base Salary for the Performance Year times
the Plan performance factor for the year as determined under 2.2 above. The standard
award percentages are set forth in the table below. The maximum amount that can be
awarded under this Plan for any Code Section 162(m) Employee will not exceed $2.5
Million in any one Performance Year. The total amount of an CMSICP participant
Officer’s Annual Award shall be computed according to the annual award formula set
forth in Section 3.2.

	 	 	 	 	 
	 	 	Salary	 	Percentage
	Position	 	Grade	 	of Base Salary
	President & CEO
	 	E-9	 	100%
	President, Consumers Energy
	 	E-8	 	65%
	Executive Vice President
	 	E-7	 	60%
	Senior Vice President
	 	E-6	 	60%
	Senior Vice President
	 	E-5	 	55%
	Vice President
	 	E-4	 	45%
	Vice President
	 	E-3	 	40%

	 	3.2	 	Calculation of Award. Annual Awards for Officer, CMSICP participants
will be calculated and made as follows:

Annual Award = Base Salary times

Standard Award Percentage times Plan Performance Factor

	 	 	 	In addition, each Annual Award for Officers of Consumers Energy Company may be
modified based on the results achieved for the Consumers Energy Annual Employee
Incentive Compensation Plan. If the Consumers Energy Annual Employee Incentive
Compensation Plan does not pay out an award for the same Performance Year, then the
Annual Award, if any, earned under this Plan will be

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	 	 	 	reduced by 10%. If the Consumers Energy Annual Employee Incentive Compensation Plan
pays out an award for the same Performance Year based on achievement of some, but
not all, of the established objectives, then there is no modification of awards
under this Plan. If however, the Consumers Energy Annual Employee Incentive
Compensation Plan pays out an award for the same Performance Year based on
achievement of 100% of the established objectives, then the Annual Award, if any,
earned under this Plan will be increased by up to 10%, provided, however, that no
such increase will cause the Annual Award to exceed the maximum of two times the
standard award amount.

	 	3.3	 	Employees’ Annual Awards. Annual Awards for eligible Employee, CMSICP
participants will be based upon a standard award as set forth in the table below. The
total amount of an Employee Annual Award shall be computed according to the annual
award formula set forth in Section 3.4.

	 	 	 	 	 
	Salary	 	Standard Award Amount
	Grade	 	Full time	 	Part time
	25
	 	$37,000	 	 
	24
	 	$36,500	 	 
	23
	 	$22,500	 	 
	22
	 	$22,000	 	 
	21
	 	$13,500	 	 
	20
	 	$13,000	 	 
	19
	 	$12,500	 	 
	18
	 	$  2,000	 	$1,000
	17
	 	$  1,750	 	$   875
	16
	 	$  1,500	 	$   750
	15
	 	$  1,350	 	$   675
	14
	 	$  1,200	 	$   600
	13
	 	$  1,150	 	$   575
	12
	 	$  1,100	 	$   550
	11
	 	$  1,050	 	$   525
	10
	 	$  1,000	 	$   500
	9
	 	$     950	 	$   475
	8
	 	$     900	 	$   450
	7
	 	$     850	 	$   425
	6
	 	$     800	 	$   400
	5
	 	$     750	 	$   375
	4
	 	$     700	 	$   350
	3
	 	$     650	 	$   325
	2
	 	$     600	 	$   300
	1
	 	$     550	 	$   275

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	 	3.4	 	Calculation of Award. Annual Awards for CMSICP participants will be
calculated and made as follows:

Annual Award = Standard Award Amount times Plan Performance Factor

	IV.	 	PAYMENT OF ANNUAL AWARDS

	 	4.1	 	Cash Annual Award. All Annual Awards for a Performance Year will be
paid in cash after certification by the outside auditors of the Company and the
Committee that the performance goals have been satisfied, but not later than March
15th of the calendar year following the Performance Year provided that the
Annual Award for a particular Performance Year has not been deferred voluntarily
pursuant to Section 4.2. The amounts required by law to be withheld for income and
employment taxes will be deducted from the Annual Award payments. All Annual Awards
become the obligation of the company on whose payroll the Officer/Employee is enrolled
at the time the Committee makes the Annual Award.

	 	4.2	 	Deferred Annual Awards.

	 	(a)	 	The payment of all or any portion (rounded to an even multiple
of 10%) of a cash Annual Award may be deferred voluntarily at the election of
an individual Plan participant in salary grades 19-25 and E-3 — E-9. Any such
deferral will be net of any applicable FICA or FUTA taxes. A separate
irrevocable election must be made prior to the Performance Year. Any Annual
Award made by the Committee after termination of employment of a participant or
retirement of a participant will be paid in accordance with any deferral
election made within the enrollment period.

	 	(b)	 	At the time the participant makes a deferral election he or she
must select the payment options (including the Payment Event as set forth at
(c) below and the Payment Term as set forth at (d) below) applicable to the
Deferred Annual Award for the Performance Year, as well as any earnings or
income attributable to such amounts. The payment options elected will apply
only to that year’s Deferred Annual Award and will not apply to any previous
Deferred Annual Award or to any subsequent Deferred Annual Award. Any
participant who elects to defer all or a portion of an Annual Award and who
fails to select a Payment Event or a Payment Term will be presumed to have
elected a Payment Event of Separation from Service in accordance with paragraph
(c)(i) below and/or a Payment Term of a single sum.

	 	(c)	 	The Payment Event elected can be either:

	 	(i)	 	Separation from Service for any reason other
than death. Payment will be made, or begin, in the later of: (1)
January of the year

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	 	 	 	following the year of the Separation from Service; or (2) the seventh
month after the month of the Separation from Service. Later
installments, if any, will be paid in January of the succeeding
years;

	 	(ii)	 	Payment upon attainment of a date certain that
is more than 1 year after the last day of the applicable Performance
Year. Later installments, if any, will be paid in January of the
succeeding years; or

	 	(iii)	 	The earlier of (i) or (ii) above.

	 	(d)	 	Payment Term. At the time of electing to defer an Annual
Award, the participant must also elect how he or she wishes to receive any such
payment from among the following options (the participant may elect a separate
Payment Term for each Payment Event elected):

	 	(i)	 	Payment in a single sum upon occurrence of the
Payment Event.

	 	(ii)	 	Payment of a series of annual installment
payments over a period from two (2) years to fifteen (15) years
following the Payment Event. Each installment payment shall be equal
to a fractional amount of the balance in the account the numerator of
which is one and the denominator of which is the number of installment
payments remaining. Although initially such installment payments will
be identical, actual payments may vary based upon investment
performance. For example, a series of 5 installment payments will
result in a payout of 1/5 of the account balance in the first
installment, 1/4 of the account balance (including investment gains or
losses since the first installment date) in the second installment,
etc.

	 	(e)	 	Changes to Payment Options. Once a payment option has been
elected, subsequent changes which would accelerate the receipt of benefits from
the Plan are not permitted, except that the Plan Administrator may at its
discretion accelerate payments to the extent permitted by Code Section 409A and
applicable regulations. A subsequent election to change the payment options
related to a Payment Event, in order to delay a payment or to change the form
of a payment, can only be made when all of the following conditions are
satisfied:

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

	 	(ii)	 	the payment(s) with respect to which such
election is made is deferred for a period of not less than 5 years from
the date such

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	 	 	 	payment would otherwise have been made (or, in the case of
installment payments under Section 4.2(d)(ii), 5 years from the date
the first installment was scheduled to be paid); and

	 	(iii)	 	such election must be made not less than 12
months before the date the payment was previously scheduled to be made
(or, in the case of installment payments under Section 4.2(d)(ii), 12
months before the first installment was scheduled to be paid), if the
participant’s previous commencement date was a specified date.

	 	(f)	 	Investments. At the time of electing to voluntarily defer
payment, the participant must elect how the Deferred Annual Award will be
treated by the Company or Subsidiary. To the extent that any amounts deferred
are placed in a rabbi trust with an independent record keeper, a participant
who has previously deferred amounts under this Plan will automatically have his
or her existing investment profile apply to this deferral also. All
determinations of the available investment options by the Plan Administrator
are final and binding upon participants. A participant may change the
investment elections at anytime prior to the payment of the benefit, subject to
any restrictions imposed by the Plan Administrator, the plan record keeper or
by any applicable laws and regulations. A participant not making an election
will have amounts deferred treated as if in a Lifestyle Fund under the Savings
Plan for Employees of Consumers Energy and other CMS Energy Companies (the
“Savings Plan”) applicable to the participant’s age 65, rounded up, or such
other investment as determined by the Benefit Administration Committee. All
gains and losses will be based upon the performance of the investments selected
by the participant from the date the deferral is first credited to the nominal
account. If the Company elects to fund its obligation as discussed below, then
investment performance will be based on the balance as determined by the record
keeper.

	 	(g)	 	The amount of any Deferred Annual Award is to be satisfied from
the general corporate funds of the company on whose payroll the Plan
participant was enrolled prior to the payout beginning and are subject to the
claims of general creditors. This is an unfunded nonqualified deferred
compensation plan. To the extent the Company or Subsidiary, as applicable,
elects to place funds with a trustee to pay its future obligations under this
Plan, such amounts are placed for the convenience of the Company or Subsidiary,
remain the property of the Company or Subsidiary and the participant shall have
no right to such funds until properly paid in accordance with the provisions of
this Plan. For administrative ease and convenience, such amounts may be
referred to as participant accounts, but as such are a notional account only
and are not the property of the participant. Such amounts remain subject to
the claims of the creditors of the Company or Subsidiary.

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	 	(h)	 	Payment in the Event of an Unforeseeable Emergency. The
participant may request that payments commence immediately upon the occurrence
of an unforeseeable emergency as that term is defined in Code Section 409A and
any applicable regulations. Generally, an unforeseeable emergency is a severe
financial hardship resulting from an illness or accident of the participant or
the participant’s spouse or dependent, loss of the participant’s property due
to casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the participant. A
distribution on account of unforeseeable emergency may not be made to the
extent that such emergency is or may be relieved through reimbursement or
compensation from insurance or otherwise, by liquidation of the participant’s
assets (without causing severe financial hardship), or by cessation of
deferrals under this arrangement, the Savings Plan or other arrangements.
Distributions because of an unforeseeable emergency shall not exceed the amount
permitted under Section 409A and accordingly are limited to the amount
reasonably necessary to satisfy the emergency need (after use of insurance
proceeds, liquidation of assets, etc.) plus an amount to pay taxes reasonably
anticipated as a result of the distribution. In the event any payment is made
due to an unforeseeable emergency, all deferral elections for the current
Performance Year will cease and the participant will not be eligible to make
any deferral elections under this Plan for the following Performance Year. For
any participant receiving a hardship withdrawal under the Savings Plan, all
deferral elections under this Plan for the current Performance Year will cease
and the participant will not be eligible to make any deferral elections under
this Plan for the following Performance Year.

	 	4.3	 	Payment in the Event of Death.

	 	(a)	 	A participant may name the beneficiary of his or her choice on
a beneficiary form provided by the Company or record keeper, and the
beneficiary shall receive, within 90 days of the participant’s death, in a
single sum, all payments credited to the participant in the event that the
participant dies prior to receipt of Deferred Annual Awards. If a beneficiary
is not named or does not survive the participant, the payment will be made to
the participant’s estate. In no event may any recipient designate a year of
payment for an amount payable upon the death of the participant.

	 	(b)	 	A participant may change beneficiaries at any time, and the
change will be effective as of the date the plan record keeper or Company
accepts the form as complete. Neither the Company nor the applicable
Subsidiary will be liable for any payments made before receipt and acceptance
of a written beneficiary request.

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	V.	 	CHANGE OF STATUS

	 	 	Payments in the event of a change in status will not be made if no Annual Awards are made
for the Performance Year.

	 	5.1	 	Pro-Rata Annual Awards. A new Officer/Employee participant, whether
hired or promoted to the position, or an Officer/employee promoted to a higher salary
grade during the Performance Year will receive a pro rata Annual Award based on the
percentage of the Performance Year in which the employee is in a particular salary
grade. An Officer/Employee participant whose salary grade has been lowered, but whose
employment is not terminated during the Performance Year will receive a pro rata Annual
Award based on the percentage of the Performance Year in which the employee is in a
particular salary grade.

	 	5.2	 	Termination. An Officer/Employee participant whose employment is
terminated pursuant to a violation of the Company code of conduct or other corporate
policies will not be considered for or receive an Annual Award.

	 	5.3	 	Resignation. An Officer/Employee participant who resigns prior to
payment (during or after a Performance Year) will not be eligible for an Annual Award.
If the resignation is due to reasons such as a downsizing or reorganization, or the ill
health of the employee or ill health in the immediate family, the employee may petition
the Plan Administrator and may be considered, in the discretion of the Plan
Administrator, for a pro rata Annual Award. The Plan Administrator’s decision to
approve or deny the request for a pro rata Annual Award shall be final.

	 	5.4	 	Death, Disability, Retirement, Leave of Absence. An Officer/Employee
participant whose status as an active employee is changed during the Performance Year
due to death, Disability, Retirement, or Leave of Absence will receive a pro rata
Annual Award. An Officer/Employee participant whose employment is terminated following
the Performance Year but prior to payment due to death, Disability or Retirement will
continue to be eligible for an Annual Award for the Performance Year. Any such payment
or Annual Award payable due to the death of the Officer/Employee participant will be
made to the named beneficiary, or if no beneficiary is named or if the beneficiary
doesn’t survive the Officer/Employee participant, then to the Officer/Employee
participant’s estate no later than March 15 following the applicable Performance Year.
Notwithstanding the above, an Officer/Employee participant who retires, is on
disability or Leave of Absence and who becomes employed by a competitor of CMS Energy
or Consumers Energy or their subsidiaries or affiliates prior to award payout will
forfeit all rights to an Annual Award, unless prior approval of such employment has
been granted by the Committee. A “competitor” shall mean an entity engaged in the
business of (1) selling (a) electric power or natural gas at retail or wholesale within
the State of Michigan or (b) electric power at wholesale within the market area in
which an electric generating plant owned by a subsidiary or affiliate of

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	 	 	 	CMS Energy is located or (2) developing an electric generating plant within the
State of Michigan or a market area in which an electric generating plant owned by a
subsidiary or affiliate of CMS Energy is located.

	 	5.5	 	Clawback.

	 	(a)	 	If, due to a restatement of CMS Energy’s or an Affiliate’s
publicly disclosed financial statements or otherwise, an Officer or Employee is
subject to an obligation to make a repayment or return of benefits to CMS
Energy or an Affiliate pursuant to a clawback provision contained in this Plan,
a supplemental executive retirement plan, the Performance Incentive Stock Plan,
or any other benefit plan (a “benefit plan clawback provision”) of the Company,
it shall be a precondition to the payment of any award under this Plan, that
the Officer or Employee fully repay or return to the Company 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 Officer or
Employee to forfeit or return any benefits provided hereunder, in the event of
a restatement of the Company’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 Company lists its traded shares.

	 	(b)	 	To the degree any benefits hereunder are not otherwise
forfeitable pursuant to the preceding sentences of this Section 5.5, the Board
or a Committee delegated authority by the Board (“delegated Committee”), may
require the Officer or Employee to return to the Company or forfeit any amounts
granted under this Plan, if:

	 	1.	 	the grant of such compensation was predicated
upon achieving certain financial results which were subsequently the
subject of a substantial accounting restatement of the Company’s
financial statements filed under the securities laws (a “financial
restatement”),

	 	2.	 	a lower payout or Annual Award (“reduced
financial results”), would have occurred based upon the financial
restatement, and

	 	3.	 	in the reasonable opinion of the Board or the
delegated Committee, the circumstances of the financial restatement
justify such a modification of the Annual Award. 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

11

 

	 	 	 	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 paid Plan benefits shall not apply unless a claim is made
therefore by the Company within three years of the payment of such benefits.

	 	(c)	 	The Board or delegated 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 Company 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.

	VI.	 	MISCELLANEOUS

	 	6.1	 	Impact on Benefit Plans. Payments made under the Plan will be
considered as earnings for the Supplemental Executive Retirement Plans but not for
purposes of the Employees’ Savings Plan, Pension Plan, or other employee benefit
programs.

	 	6.2	 	Impact on Employment. Neither the adoption of the Plan nor the
granting of any Annual Award under the Plan will be deemed to create any right in any
individual to be retained or continued in the employment of the Company or any
corporation within the Company’s control group.

	 	6.3	 	Termination or Amendment of the Plan. The Board of Directors of the
CMS Energy Corporation may amend or terminate the Plan at any time. Upon termination,
any Deferred Annual Award accrued under the Plan will remain in the Plan and be paid
out in accordance with the payment options previously selected. The Plan Administrator
is authorized to make any amendments that are deemed necessary or desirable to comply
with any applicable laws, regulations or orders or as may be advised by counsel or to
clarify the terms and operation of the Plan. The Company may terminate the Plan and
accelerate payment of any deferred benefits under the Plan if it acts consistent in all
respects with the requirements of Code Section 409A and any applicable regulations with
respect to when a terminated plan may accelerate payment to a participant.

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

	 	6.5	 	Dispute Resolution. Any disputes related to the Plan must be brought
to the Plan Administrator. The Plan Administrator is granted full discretionary
authority to apply the terms of the Plan, make administrative rulings, interpret the
Plan and make any other determinations with respect to the Plan. If the Plan
Administrator

12

 

	 	 	 	makes an adverse determination and the participant disagrees with or wishes to
appeal the determination, the participant must appeal the decision to the Plan
Administrator, in writing and not later than 60 days from when the determination was
mailed to the participant. If the participant does not timely appeal the original
determination, the participant has no further rights under the Plan with respect to
the matter presented in the claim. If the participant appeals the original
determination and that appeal does not result in a mutually agreeable resolution,
then the dispute shall be subject to final and binding arbitration before a single
arbitrator selected by the parties to be conducted in Jackson, Michigan, provided
the participant makes such request for arbitration in writing within 30 days of the
final decision by the Plan Administrator. The arbitration will be conducted and
finished within 90 days of the selection of the arbitrator. The parties shall share
equally the cost of the arbitrator and of conducting the arbitration proceeding, but
each party shall bear the cost of its own legal counsel and experts and other
out-of-pocket expenditures. The arbitrator must use an arbitrary and capricious
standard of review when considering any determinations and findings by the Plan
Administrator.

	VII.	 	AMENDMENT TO REFLECT CODE SECTION 409A

	 	7.1	 	Code Section 409A. This Plan has been amended, effective as of January
1, 2005, to comply with the requirements of Section 409A of the Code. To the extent
counsel determines additional amendments may be reasonable or desirable in order to
comply with Code Section 409A, and any other applicable rules, laws and regulations,
such changes shall be authorized with the approval of the Plan Administrator.

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