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EXHIBIT 10(X)
ANNUAL EMPLOYEE INCENTIVE
COMPENSATION PLAN FOR CMS ENERGY CORPORATION
AND ITS SUBSIDIARIES
Effective January 1, 2004
Approved by Committee on February 27,
2004
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ANNUAL EMPLOYEE INCENTIVE
COMPENSATION PLAN FOR CMS ENERGY CORPORATION AND ITS
SUBSIDIARIES
I.
GENERAL PROVISIONS
1.1 PURPOSE.
The purpose of the Annual Employee Incentive
Compensation Plan ("EIC Plan") is to:
(a) Provide an
equitable and competitive level of
compensation that will permit CMS Energy Corporation
("Company") and its subsidiaries to attract, retain
and motivate their Employees.
(b) No
payments to Employees in the form of incentive
compensation shall be made unless pursuant to a plan
approved by the Committee and after express approval
of the Committee.
1.2 EFFECTIVE
DATE. The initial effective date of the Plan is
January 1, 2004. The Plan as described herein, is amended and
restated effective January 1, 2004.
1.3
DEFINITIONS. As used in this EIC Plan, the following terms
have the meaning described below:
(a) "Annual
Award" means an annual incentive award
granted under the EIC Plan.
(b) "CMS
Energy" means CMS Energy Corporation.
(c)
"Committee" means the Committee on Organization and
Compensation of the Board of Directors of CMS Energy.
(d) "Common
Stock" means the common stock of CMS Energy.
(e) "Company"
means CMS Energy Corporation.
(f) "Corporate
Free Cash Flow" (CFCF) means CMS
Consolidated Cash Flow from operating activities,
excluding pension contributions and adjusted for GCR
Recovery, plus Cash Flow from Investing Activities.
(g)
"Disability" means that a participant has terminated
employment with the Company or a Subsidiary and is
entitled to disability payments under the Pension
Plan.
(h) "Earnings
Per Share" (EPS) means the amount of
ongoing
net income per outstanding CMS Energy Share.
(i) "EIC Plan"
means the Annual Employee Incentive
Compensation Plan for CMS Energy Corporation and Its
Subsidiaries, as effective January 1, 2004 and any
amendments thereto.
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(j) "Employee"
means a regular fulltime or part time
employee of the Company or a Subsidiary in the salary
grades specified in the table contained in Article
III of the EIC Plan.
(k) "GCR
Recovery" means actual/forecast incremental GCR
recovery during January and February, calculated as
actual/forecast GCR cycle billed sales times above
budget GCR factor.
(l) "Leave of
Absence" for purposes of this EIC Plan
means a leave of absence that has been approved by
the Company or a Subsidiary.
(m) "Outside
Directors" means directors of CMS Energy who
are not employed by CMS Energy or a Subsidiary and
satisfy the requirements of an "Outside Director"
under Code Section 162(m).
(n) "Pension
Plan" means the Pension Plan for Employees
of Consumers Energy and Other CMS Energy Companies.
(o)
"Performance Year" means the calendar year prior to
the year in which an Annual Award is made by the
Committee.
(p) "Plan
Administrator" means the Sr. Vice President -
Human Resources of CMS Energy, under the general
direction of the Outside Directors on the Committee.
(q)
"Retirement" means that an EIC Plan participant is no
longer an active employee and qualifies for a
retirement benefit other than a deferred vested
retirement benefit under the Pension Plan.
(r)
"Subsidiary" means any direct or indirect subsidiary
of the Company.
1.4
ELIGIBILITY. Regular non-union 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 EIC Plan.
1.5
ADMINISTRATION OF THE PLAN.
(a) The EIC
Plan is administered by the Sr. Vice
President - Human Resources of CMS Energy under the
general direction of the Outside Directors who are
members of the Committee.
(b) The
Committee, no later than March 31st of the
Performance Year, will approve performance goals for
the Performance Year.
(c) The
Committee, no later than March 31st of the
calendar year following the Performance Year, will
review for approval proposed Annual Awards for all
EIC Plan participants, as recommended by the Chairman
and CEO of the Company. All proposed Annual Awards
are subject to approval of the Committee. Before the
payment of any Annual Awards, the Committee will
certify in writing that the performance goals were in
fact satisfied in accordance with Code Section
162(m).
(d) The
Committee reserves the right to modify the
performance goals with respect to unforeseeable
circumstances or otherwise exercise discretion with
respect to proposed
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Annual Awards as it deems necessary to maintain the
spirit and intent of the EIC Plan. The Committee also
reserves
the right in its discretion to not
