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EXHIBIT (10)(d)
CMS ENERGY CORPORATION
PERFORMANCE INCENTIVE STOCK PLAN
The CMS Energy Performance Incentive Stock Plan, first effective February 3,
1988, is hereby set forth as amended and restated effective December 3, 1999
including amendments as of December 3, 1999.
ARTICLE I. PURPOSE
The CMS Energy Corporation Performance Incentive Stock Plan (hereinafter called
the "Plan") is a Plan to provide incentive compensation to key employees of the
Corporation, including its Subsidiaries, based upon such key employees'
individual contributions to the long-term growth of and profitability of the
Corporation, and in order to encourage such key employees 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 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 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 in
accordance with Article VII 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 those members of the Organization and Compensation
Committee of the Board who, at the time of any award or determination
by the Committee hereunder, are not, and at all times within one year
prior thereto shall not have been, eligible for selection as persons
to whom incentive compensation may be awarded pursuant to the Plan, or
to whom incentive or unqualified Stock Options may be granted pursuant
to any other plan of the Corporation.
d. "Common Stock" means all classes of Common Stock of the Corporation as
that term is defined in its Articles of Incorporation at the time of
an award or grant under this Plan.
e. "Common Stock Outstanding" means the number of shares of Common Stock
issued and outstanding on the first day of January of each year. In
case of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights
offering, or any other change in the capital structure of the
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Corporation, the Committee shall make such adjustment, if any, as it
may deem appropriate in the determination of Common Stock Outstanding.
f. "Corporation" means CMS Energy Corporation, its successors and
assigns, and each of its Subsidiaries, or any of them individually.
g. "Eligible Employee" means an officer or other key executive who at the
end of the fiscal year is 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 successful
management of the Corporation or a Subsidiary. A Director of the
Corporation or a Subsidiary is not an Eligible Employee unless he is
also a regular full-time salaried employee of 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. "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.
j. "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.
k. "Participant" means a person to whom an award of Restricted Common
Stock has been made which has not been paid, forfeited, or otherwise
terminated or satisfied under the Plan.
l. "Restricted Common Stock" means Common Stock delivered subject to the
restrictions described in Article VII.
m. "Shareholders" means the shareholders of the Corporation.
n. "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.
o. "Stock Option" means an option to purchase shares of Common Stock,
granted pursuant to this Plan.
p. "Subsidiary" means a corporation, domestic or foreign, 80 percent or
more of the voting stock of which is owned directly or indirectly by
the Corporation.
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ARTICLE III. EFFECTIVE DATE, DURATION, SCOPE AND ADMINISTRATION OF
THE PLAN
3.1 This Plan shall be effective upon approval of the shareholders of the
Corporation and shall continue until terminated by the Board as provided in
Article VIII.
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 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, STOCK AWARDS AND OPTION GRANTS
4.1 Each year the Committee shall designate as Participants and/or Optionees in
the Plan those Eligible Employees who, in the opinion of the Committee,
have significantly contributed to the successful management of the
Corporation.
4.2 Each year, the Committee may award shares of Common Stock, and/or may grant
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 options to each Eligible Employee whom it has designated as
an Optionee or Participant for such year. The Committee has full discretion
to determine the class or classes of Common Stock to which grants or awards
apply. Upon the approval by the Board of Directors of the Corporation of
the individual awards and/or grants, if any, made to officers and of the
total of all awards and grants made to all other Eligible Employees, the
determination of the Committee as to each such award and grant shall become
final.
ARTICLE V. SHARES RESERVED UNDER THE PLAN
5.1 There is hereby reserved for award under this Plan an aggregate number of
whole shares of Common Stock equal as nearly as possible to, but not more
than, 5% of the aggregate shares of each class of Common Stock Outstanding
on the first day of January of each year, less the number of shares of each
class of Restricted Common Stock awarded under the Plan and Common Stock
subject to options, granted under this Plan during the immediately
preceding four calendar year period, which have not been forfeited. Any
shares or options which are
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forfeited may thereafter again be awarded or made subject to grant under
the Plan. Notwithstanding the above, the number of shares of each class of
Common Stock awarded under Article VII of this Plan will not exceed 20% of
the aggregate number of shares reserved pursuant to this Article V. 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
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 case 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.
5.3 Individual Grant Limit: The maximum shares of Restricted Common Stock
awarded under this Plan and Common Stock subject to Stock Options,
including Stock Appreciation Rights granted in conjunction with Stock
Options, granted under this Plan for any one Eligible Employee for any one
year will not exceed 100,000 shares of each class of Corporation Common
Stock.
ARTICLE VI. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
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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 or reacquired Common Stock of the Corporation.
6.2 Optionees: The Committee shall determine and designate from time to time,
in its discretion, those Eligible Employees of the Corporation 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 and classes 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.
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
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determinations made by the Committee pursuant to the provisions of the
Plan, by execution of instruments in writing in form approved by the
Committee.
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 Stock Option and related Stock
Appreciation Right granted, a maximum of $100,000 (based on the price at
the date of exercise) may be exercised per year, plus any unused carry-over
from a previous year(s). Except as provided in Section 6.10, Stock Options
and Stock Appreciation Rights may be exercised only while the Optionee is
an employee of the Corporation.
Successive Stock Options and Stock Appreciation Rights may be granted to
the same Optionee, whether or not the Stock Option(s) and Stock
Appreciation Right(s) previously granted to such Optionee remain
unexercised. An Optionee may exercise a Nonqualified Option or related
Stock Appreciation Right, if then exercisable, notwithstanding that Stock
Options and Stock Appreciation Rights previously granted to such Optionee
remain unexercised.
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, with the consent of the Committee, 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, or by the
laws of descent and distribution, and such Stock Option and Stock
Appreciation Right shall be exercisable, during the lifetime of the
Optionee, only by the Optionee.
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 (ten years and one month in
the case of a Nonqualified Option and any related Stock Appreciation Right)
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 Stock 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 a reason other than the Optionee's
death, the Committee may, in its discretion, permit the exercise of Stock
Options and Stock Appreciation Rights granted to such Optionee for a period
not to exceed one year following such termination of employment or three
years following termination of employment upon retirement in accordance
with a pension plan of the Corporation; provided, however, that no
Incentive Option or related
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Stock Appreciation Right may be exercised after three months following an
Optionee's termination of employment, unless such termination of employment
is due to the Optionee's death or disability. If the termination is due to
the Optionee's disability, the Committee may permit the Incentive Option
and related Stock Appreciation Right to be exercised for one year following
the Optionee's termination of employment. If the employment of an Optionee
by the Corporation shall be terminated due to the Optionee's death, any
Stock Option, or related Stock Appreciation Right, transferred by will or
the laws of descent and distribution, may be exercised for one year
following the Optionee's death. 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. Upon the termination
of employment of an Optionee by the Corporation, every Stock Option and
related Stock Appreciation Right shall terminate, except as otherwise
specifically provided in this Plan. Further, no Stock Option or related
Stock Appreciation Right may be exercised after such termination of
employment, except within a time period provided in this Section 6.10.
6.11 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.
6.12 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.
6.13 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.
6.14 Compliance With Rule 16b-3: Notwithstanding any other provision of the Plan
to the contrary, the administration of the Plan and the grant, exercise and
terms of Stock Appreciation Rights hereunder shall comply with Rule 16b-3,
or any successor rule, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
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ARTICLE VII. RESTRICTED COMMON STOCK
7.1 Awards: The Committee may from time to time award restricted shares of
Common Stock to any Eligible Employee it has designated as a Participant
for such year. Awards shall be made to Eligible Employees on the basis of
their contributions to the successful management of the Corporation in
accordance with such rules as the Committee may prescribe. The Committee
may also award restricted shares of Common Stock conditioned on the
attainment of a performance goal that relates to Shareholder return,
measured by factors determined by the Committee as set forth in the award.
7.2 Restrictions:
a. Any shares of Corporation 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 shall rely on an opinion of counsel
for the Corporation. The restrictions with respect to the Common Stock
awarded will extend for such period, or periods, of at least twelve
months from and after the date of the award, as may be determined for
each award by the Committee (the award period), except that
nonperformance based awards will vest only after twenty four months
and then in annual installments equal to 25% of the award.
Notwithstanding the foregoing, the restrictions shall terminate upon
the death of the Participant or, within the discretion of the
Committee, upon Participant's retirement pursuant to a pension plan of
the Corporation on or after Participant's 62nd birthday, except as may
otherwise be determined to be necessary or desirable in the opinion of
the Committee, to comply with the law or to prevent Restricted Common
Stock from being subject to Federal income tax prior to the
termination of restrictions.
b. 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. 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. Shares of Common Stock awarded to a Participant under the Plan,
whether or not vested or transferable, shall have full dividend rights
with respect to dividends declared after the award, with such
dividends being paid directly to the Participant, regardless of
whether such dividends are paid in cash or in Common Stock. 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.
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e. Deliveries of Restricted Common Stock by the Corporation may consist
in whole or in part of the authorized and unissued or reacquired
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.
f. 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. If a Participant has received an award pursuant to the provisions of
the Plan, is employed by the Corporation at the end of the award
period and 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. In the event of termination of employment of a Participant with the
Corporation prior to the last day of an award period for any reason
other than Participant's death, all rights to any shares of Restricted
Common Stock held in a deposit account with respect to such award,
including any additional shares delivered 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 the circumstances warrant such action, approve the distribution
of all or any part of the Restricted Common Stock which would
otherwise be forfeited. By way of illustration, but not limitation,
circumstances which might warrant such action on the part of the
Committee include retirement pursuant to a pension plan of the
Corporation, or retirement pursuant to a pension plan of the
Corporation by reason of disability.
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.
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7.4 Designation of Beneficiaries
If a Participant dies prior to the receipt in full of any award under the
Plan to which the Participant is entitled, the award shall be distributed
to the Participant's Beneficiary or, in the absence of a Beneficiary
designation, to the Participant's estate. 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.
7.5 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.
7.6 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.
7.7 Restricted Common Stock is intended to constitute an unfunded deferred
compensation arrangement for a select group of management or highly
compensated personnel.
7.8 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.
7.9 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.
7.10 Notwithstanding any other provisions in the Plan, in the event of a Change
in Control (as hereinafter defined), each Participant shall be fully vested
in the number of shares of Common Stock awarded to such Participant for all
award periods that, upon such event, have not yet ended. Distribution of
all shares of Common Stock shall be made as soon as practicable within 7
days after the date of the Change in Control, as if the applicable award
period or periods had ended on such date. In addition, the Corporation
shall reimburse a participant for legal fees and expenses incurred by such
Participant in successfully seeking to obtain or enforce any right to
distribution under this Section 7.10. For purposes of this
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Plan, a Change in Control shall occur upon the occurrence of one or more of
the following events:
(i) A Change in Control of the Corporation would be required to be
reported in response to Item 1(a) of the Current Report on Form 8-K,
as in effect on the date hereof, pursuant to Sections 13 or 15(d) of
the Exchange Act, whether or not the Corporation is then subject to
such reporting requirement;
(ii) Any "person" or "group" within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act becomes the "beneficial owner" as
defined in Rule 13d-3 under the Exchange Act of more than 30% of the
then outstanding voting securities of the Corporation;
(iii) During any period of twenty-four consecutive months (not including
any period prior to the adoption of this Plan) Present Directors
and/or New Directors cease for any reason to constitute a majority
of the Board. For purposes of this subsection (iii), "Present
Directors" shall mean individuals who at the beginning of such
consecutive twenty-four month period were members of the Board and
"New Directors" shall mean any director of the Corporation whose
election by the Board or whose nomination for election by the
Corporation's Shareholders was approved by a vote of at least
two-thirds of the Corporation's Directors then still in office who
were Present Directors or New Directors;
(iv) There is a sale by the Corporation within a three-year period of
assets of the Corporation with either a book value or market value
of 50% or more of the assets of the Corporation;
(v) A bidder as defined in Rule 14D-1(b) under the Exchange Act files a
Tender Offer Statement with the Securities and Exchange Commission
and the Corporation.
Notwithstanding any other provisions of the Plan, the provisions of this
Section 7.10 may not be amended after the date a Change in Control occurs
without the written consent of a majority in number of participants.
ARTICLE VIII. AMENDMENT OR TERMINATION OF THE PLAN
8.1 Right To Amend, Suspend or Terminate Plan: 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 become
entitled prior to such amendment, or
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c. Unless approved by the Shareholders of the Corporation, increase the
aggregate number of shares of Common Stock reserved for award or grant
under the Plan, change the group of Eligible Employees under the Plan
or materially increase benefits to Eligible Employees under the Plan.
8.2 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.
8.3 Amendments May Be Retroactive: Subject to Section 8.1 above, any amendment,
modification, suspension or termination of any provisions of the Plan may
be made retroactively.
ARTICLE IX. GENERAL PROVISIONS
9.1 Rights to Continued Employment, Award or Option: Nothing contained in the
Plan or in any Stock Option, Stock Appreciation Right or Restricted Common
Stock award 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 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.
9.2 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
By:
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Secretary Chairman and Chief Executive Officer