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EXHIBIT 10c
ANNUAL EMPLOYEE INCENTIVE
COMPENSATION PLAN FOR CMS ENERGY CORPORATION AND
ITS SUBSIDIARIES
Effective January 1, 2005
Approved by Committee on March 23, 2005
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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, 2005.
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 Compensation and Human
Resources 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 and Administrative Services 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 the total of all EIC Plan
participants, as recommended by the President 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
discretio
