<PAGE>
EXHIBIT 10 (f)
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 June 1,
2004, and as further amended effective April 1, 2006 to ensure
compliance with
the requirements of Internal Revenue Code Section 409A.
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,
Directors or
advisors 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,
Directors or advisors 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.
"Beneficiary" means the beneficiary or beneficiaries designated
to
receive the amount, if any, payable under the Plan upon the death
of
a Participant.
b.
"Board"
means the Board of Directors of the Corporation.
c.
"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 Internal Revenue Code of 1986, as amended.
d.
"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.
e.
"Corporation" means CMS Energy Corporation, its successors and
assigns, and each of its Subsidiaries, or any of them
individually.
f.
"Director"
means any person who is a member of the Board of
Directors of the Corporation or a Subsidiary.
g.
"Eligible
Person" means a key employee, non-employee Director or
advisor. A key employee must at the end of the fiscal year be a
regular full-time salaried employee of the Corporation or a
Subsidiary, or, to the extent the Committee may determine, a
person
whose services to the Corporation terminated before the end of
the
fiscal year, who, in the opinion of the Committee, made a
significant contribution to the Corporation or a Subsidiary.
h.
"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 Internal Revenue Code of 1986, as amended
(the
"Code").
i.
"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.
j.
"Nonqualified Option" means an option to purchase Common Stock
of
the Corporation which meets the requirements set forth
<PAGE>
in the Plan but does not meet the definition of an Incentive
Stock
Option set forth in Section 422 of the Code.
k.
"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.
l.
"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.
m.
"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, or a person included under the
Management
Stock Purchase Plan.
n.
"Performance Criteria" are the factors used by the Committee to
establish goals to track business measures such as net
earnings;
operating earnings or income; earnings growth; net income
(absolute
or competitive growth rates comparative); 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 (absolute or peer-group comparative);
total
shareholder return; absolute and/or relative return on common
shareholders equity; return on shareholders equity (absolute or
peer-group comparative); absolute and/or relative return on
capital;
absolute and/or relative 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.
o.
"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.
p.
"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.
q.
"Restricted Common Stock" means Common Stock delivered subject
to
the restrictions described in Article VII.
r.
"Restricted Stock Unit" means a bookkeeping account established
pursuant to a matching grant to a Participant, as described in
Article VIII, that is (a) credited with amounts equal to Shares
or
some other unit of measurement specified in the award, (b)
subject
to restrictions and (c) payable in cash or shares.
s.
"Shareholders" means the shareholders of the Corporation.
t.
"Stock
Appreciation Right" shall mean a right, granted in
conjunction with a Stock Option, to surrender the Stock Option
and
receive the appreciation in value of the optioned shares over
the
option price.
u.
"Stock
Option" means an option to purchase shares of Common Stock,
granted pursuant to this Plan.
v.
"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.
Article III.
Effective Date. Duration, Scope and Administration of the Plan
3.1 This Plan
shall be effective June 1, 2004, conditioned upon approval of
the
shareholders of the Corporation, and shall continue until May
31,
2009.
3.2 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
person
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 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
2
<PAGE>
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 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 Each year,
the Committee may award shares of Common Stock, Restricted
Stock
Units, and/or may grant Phantom Shares, Performance Units,
Stock
Options
which qualify as "Incentive Stock Options" within the meaning
of
Section
422 of the Code or Stock Options which do not qualify as
Incentive
Stock
Options and/or Stock Appreciation Rights for use in connection
with
Stock
Options to each Eligible Person whom it has designated as an
Optionee
or Participant for such year. No Incentive Stock 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 of
Common Stock or Restricted Stock Units 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 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 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 subject to any such
option and
for each share of Common Stock reserved for issuance pursuant
to the Plan but
not yet covered by an option, 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 and of the shares then subject to an
option or
options, such adjustment shall be made by the Committee and
shall be
effective and binding for all purposes of the Plan and each
Stock
Option
agreement. In the ease of any such substitution or adjustment
as
provided
for in this paragraph, the option price in each Stock Option
agreement
for each share covered thereby prior to such 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 pursuant to this section. 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
<PAGE>
5.3 Individual
Grant Limit: The combined maximum shares awarded or granted for
any one
Eligible Person for any one year under this Plan, excluding (a)
any shares
or Restricted Share Units purchased or awarded under the
Management
Stock Purchase Plan in Section 8.3 and (b) any Performance
Units
awarded under Section 8.2, will not exceed 250,000 shares of
Common
Stock.
Article VI. Stock Options and Stock Appreciation Rights
6.1 The
Committee may from time to time provide for the option and sale
of
shares of
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.
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.
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, at the election of
the
Optionee,
in cash, Common Stock of the Corporation or any combination
thereof;
provided, however, that the Committee shall have sole
discretion
to approve
or disapprove an election of an Optionee to receive cash upon
exercise
of a 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. The Committee may grant Stock Options
that
provide
for the grant of a subsequent restoration Stock Option if the
exercise
price has been paid for by tendering shares to the Company. Any
restoration Stock Option shall be for the number of shares tendered
in
exercising
the predecessor option. The restoration Stock Option exercise
price
shall be the then-current Fair Market Value, and the term of
such
restoration option may not extend beyond the remaining term of
the
original
option.
Each Stock
Option and Stock Appreciation Right granted hereunder shall be
exercisable
