EXHIBIT 10(a)
GENERAL WAIVER AND RELEASE AGREEMENT
This GENERAL WAIVER AND RELEASE AGREEMENT ("Agreement"), made as of the 27th day
of May, 2004, pursuant to Michigan law, among XXXXXXX X. XXXXXX (the
"Executive"), an individual, and CONSUMERS ENERGY COMPANY, a Michigan
corporation (the "Company") and CMS ENERGY CORPORATION, a Michigan corporation,
is a general waiver and release of all claims against the Company, CMS Energy
Corporation and all of their subsidiaries and affiliates (collectively the "CMS
Companies").
WHEREAS, upon termination of his employment, Executive is eligible for the
payment of certain severance benefits under Paragraph 6 of an Employment
Agreement, dated as of December 10, 1999 between Executive and CMS Energy
Corporation, provided that "any payment under this provision shall be contingent
upon the Executive's execution of a waiver and release of all liability by the
Company and its agents at the time of termination;"
WHEREAS, the parties have recognized that the facts and circumstances
surrounding Executive's cessation of employment with the Company are unusual and
not exactly contemplated by the terms of some of the applicable benefit plans
and programs, thus requiring interpretation and application of language and
producing different possible outcomes unless the parties agree to a mutually
satisfactory resolution of any open issues;
WHEREAS, the parties hereto have agreed upon the level of severance benefits due
under said Paragraph 6, as previously interpreted by CMS Energy Corporation, and
under the Executive Incentive Separation Plan which also requires a release by
Executive, with the result that the parties have resolved all potential issues
about the interpretation and application of language in applicable benefit plans
and programs; and
WHEREAS, this General Waiver and Release Agreement satisfies the aforementioned
conditions for payment of severance benefits:
NOW THEREFORE, in consideration of the covenants undertaken and the releases
contained in this Agreement, the Executive and Consumers Energy Company and CMS
Energy Corporation, on their own behalf and on behalf of their respective
successors and assigns, agree as follows:
1. CESSATION OF EMPLOYMENT
Executive agrees that his employment as an employee and officer of all CMS
Companies was fully and completely terminated effective as of March 17, 2004.
Further, Executive waives any right to object to such termination. The parties
agree this was not a termination for cause.
2. MONETARY AND OTHER CONSIDERATION
In consideration for the releases and the other covenants in this Agreement,
Executive agrees and reaffirms that the only monetary and other consideration to
which he is entitled due to the termination of employment is that provided to
Executive pursuant to this Agreement.
(A) The parties hereto agree that ninety-five percent of the total amount
of severance benefits received by Executive pursuant to this Agreement
shall be consideration for the General Release and Discharge by
Executive (see Section 5), and five percent of the total amount shall
be consideration for the Release of Age Discrimination Claims by
Executive (see Section 6).
(B) Plans and Programs With Vested Rights
Following is a list of significant plans and programs where the
parties in the spirit of compromise are agreeing upon the scope of
Executive's vested rights and are agreeing upon the interpretation of
the plans and programs for purposes of this Agreement. Further, the
parties to this Agreement stipulate that no other section of this
Agreement seeks to otherwise change any of the terms of any of those
plans and programs as they would apply to Executive.
(1) CMS Energy Corporation Annual Executive Incentive Compensation
Plan, initially effective January 1, 1987, as amended and
restated effective January 1, 2002 ("Old Incentive Compensation
Plan"): The parties agree that Executive has no more money coming
to him as a result of awards to Executive under the Old Incentive
Compensation Plan except to the extent, if any, Executive has
deferred prior awards. The parties agree that whatever Executive
may have been entitled to receive under the Old Incentive
Compensation Plan has already been paid to him or has been
deferred as he has directed. Executive's directions shall
continue to be carried out.
(2) Pension Plan for Employees of Consumers Energy Company, effective
as of September 1, 2000 ("Pension Plan"): The parties agree that
Executive's rights under the Pension Plan are governed by the
provisions contained in Section VII of the Pension Plan and that
Executive can begin to receive his pension on a monthly basis
when he reaches age 55. Basically, the amount of Executive's
pension will be determined in accordance with the actuarial table
contained in Appendix A to the Pension Plan, and further reduced
for any survivor options provided to or selected by Executive for
which he is eligible. Executive is not eligible to receive his
pension as a single sum determined on a present value basis.
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(3) Supplemental Executive Retirement Plan for Employees of CMS
Energy/Consumers Energy Company, effective as of January 1, 2001
("SERP"): The parties agree that Executive's rights under SERP
are governed by the provisions contained in the last sentence of
Section VII of SERP and Executive can begin to receive his SERP
on a monthly basis when he reaches age 55. Basically, the amount
of Executive's SERP will be reduced by the same percentage from
the actuarial table contained in Appendix A to the Pension Plan
and used to determine his pension, and further reduced for any
survivor options provided to or selected by Executive for which
he is eligible under SERP. As would be the case if he retired
under SERP, Executive cannot receive his SERP as a single sum
determined on a present value basis.
(4) Annual Officer Incentive Compensation Plan for CMS Energy
Corporation and Its Subsidiaries, effective as of January 1, 2003
("AOIC Plan"): Pursuant to the AOIC Plan, for performance year
2003, the Board had already considered and approved awards under
the AOIC Plan prior to March 17, 2004, but no individual award of
incentive compensation had yet been paid to any officer,
including Executive, as of March 17, 2004, but would have been
paid before the end of March. Moreover, Executive's award would
be credited to his Salaried Employees Merit Program for 2003
("SEM Plan") special account for later payment. The Company
agrees to take no steps to prevent payment and crediting from
taking place for Executive's incentive compensation related to
performance year 2003 and further agrees it will allow payment in
cash of such credited amount (subject only to state, federal,
FICA and other applicable withholding taxes and authorized
deductions) to be made from the SEM Plan within 30 days after the
signing of this Agreement. Executive agrees he is not entitled to
any award under the Plan for all or any portion of the 2004
performance year.
(5) CMS Deferred Salary Savings Plan, initially effective as of
December 1, 1989, as amended through January 1, 1994 and the
Employees' Savings and Incentive Plan of Consumers Energy
Company/Employee Stock Ownership Plan of Consumers Energy
Company, effective as of January 1, 2001: Executive was 100%
vested in the account values in each of the aforementioned plans
as of March 17, 2004. All amounts in the accounts will be treated
as required in the plan documents, including distribution to
Executive in accordance with the payment options selected by him.
(6) Under the Stock Plan referenced below in paragraph C(1), certain
options were granted to Executive on July 31, 2002 and on August
22, 2003. For only those options, the exercise date is being
extended pursuant to Section 6.10 of the Stock Plan so that
Executive may exercise those options if he so chooses. The period
during which those options may be exercised is a window period
that begins at
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8:00 AM on the 30th day after the signing of this Agreement by
both parties and expires at 5:00 PM on the 60th day after the
signing of this Agreement by both parties. Aside from allowing
the exercise during the window period, all other terms of the
options remain as stated in their original awards. Nothing in
this Agreement extends any option beyond its original expiration
date.
(7) Salaried Employees Merit Program for 2003 ("SEM Plan"): Executive
had an account balance in the SEM Plan as of March 17, 2004.
Distributions under the SEM Plan will be made in March 2005 based
on the price of CMS Energy Corporation common stock on January
31, 2005. The Company agrees not to challenge Executive's
eligibility to have the aforementioned distribution from his SEM
Plan account take place in March 2005.
(8) Unused Vacation: The parties agree that Executive shall be paid
for 25 days, or 200 hours, of unused vacation at an hourly wage
rate based upon Executive's 2004 base pay, 2080 hours per year
and eight hours a day. The amount of this payment will be made to
Executive within 10 days after signing this Agreement subject to
reduction for state, federal, FICA and other applicable
withholding taxes and authorized deductions.
(9) Health Care, Life Insurance, Long Term Disability: The parties
agree that all rights, if any, Executive shall have to continue
coverage and receipt of any Health Care, Life Insurance and Long
Term Disability benefits will be determined in accordance with
the terms and conditions of the Group Health Care Plan for
Employees of Consumers Energy, the Term Life Insurance Plan for
Salaried Employees of Consumers Energy, any applicable individual
long term disability contract and any applicable laws.
(C) Plans and Programs Where There Are Forfeitures
(1) CMS Energy Corporation Performance Incentive Stock Plan,
effective as of December 3, 1999 ("Stock Plan"): As of March 17,
2004, Executive had certain CMS Energy Corporation stock options
governed by the Stock Plan which are being forfeited pursuant to
the Stock Plan and this Agreement. The total number of options
being forfeited is for 83,000 shares of stock. The number of
shares subject to forfeiture and their grant date are: 7,000
shares (July 28, 1994), 7,000 shares (July 27, 1995), 9,000
shares (July 25, 1996), 10,000 shares (July 24, 1997), 9,000
shares (July 23, 1998), 14,000 shares (July 22, 1999), 14,000
shares (February 24, 2000), 18,000 shares (February 22, 2001) and
18,000 shares (February 22, 2002). Executive agrees not to
contest such forfeiture in exchange for the consideration
represented by this Section 2.
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(2) As of March 17, 2004, Executive also had 27,000 shares of CMS
Energy Corporation restricted stock governed by the Stock Plan.
In accordance with the provisions of the Stock Plan and this
Agreement, all of said shares of restricted stock are being
forfeited. Executive agrees not to contest such forfeiture in
exchange for the consideration represented by this Section 2.
(3) Unless he is an active employee on the payroll of a CMS Company
at the time he reaches the age of 55, Executive will not be
eligible for retiree health care. Nothing in this Agreement is
intended to change that outcome.
(D) Severance Benefits
(1) Pursuant to the terms of the Executive Incentive Separation Plan,
the parties agree that Executive shall receive a monthly payment
equal to $5,978.68, which shall be paid to Executive every month
in which he also receives a payment under the Pension Plan. If
Executive predeceases his spouse after he reaches the age of 55,
Executive's spouse shall receive a monthly payment equal to 50%
of the payment that Executive is receiving, or $2,989.34. This
payment to Executive's spouse shall be made until the month of
the death of Executive's spouse. If Executive predeceases his
spouse before he reaches the age of 55, the monthly payment to
Executive's spouse at the 50% level shall begin with the first
month following the month in which Executive would have reached
the age of 55 and continue monthly until the month of her death.
If Executive's spouse predeceases him, Executive's monthly
payment does not "pop up," above the $5,978.68 per month level.
Each monthly payment called for by this subparagraph shall be
reduced for state, federal, FICA and other applicable withholding
taxes and authorized deductions at the time of payment.
(2) To resolve the amount of severance benefits due Executive
pursuant to Paragraph 6 of the aforementioned Employment
Agreement, the parties agree that Executive shall receive a total
of $699,984.00. The severance benefits payable pursuant to this
subparagraph shall be paid in three installments as follows:
$174,996.00 on or about July 1, 2004, $349,992.00 on or about
January 5, 2005 (but not before January 1, 2005), and $174,996.00
on or about January 5, 2006 (but not before January 1, 2006).
Each payment shall be reduced for state, federal, FICA and other
applicable withholding taxes and authorized deductions at the
time of payment. If Executive dies before receiving the three
installment payments, the payment(s) remaining shall be made to
his surviving spouse according to the schedule set forth above.
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3. RETURN OF COMPANY PROPERTY
By signing this Agreement, Executive represents and warrants that he has
returned to the Company all of its property and all the property of any of the
CMS Companies which Executive had in his possession, provided however that
Executive can keep the personal computer assigned for his use once it is cleaned
by the Company of all documents belonging to any of the CMS Companies and
contains only a basic operating system and Executive's personal attorney files
on the hard drive. Prior to cleaning, the Company will retain copies of
documents which need to be retained pursuant to Company document retention
policies. Specifically, Executive expressly agrees to return, within 10 days
after signing this Agreement, all originals and copies of documents which he may
have in his possession in connection with the business and affairs of any CMS
Company. Notwithstanding the foregoing, property or documents of CMS Companies,
if any, in Executive's possession due to arrangements made in connection with
ongoing or pending litigation or investigations are not covered by this
paragraph. Executive shall provide a written certification of compliance with
this section of the Agreement on or about the 30th day after signing this
Agreement.
4. PROPRIETARY MATERIALS AND INFORMATION
(A) Executive acknowledges that by reason of his position with the CMS
Companies he has been given access to "Proprietary Materials and
Information" respecting the Company's business affairs and the
business affairs of the CMS Companies. Executive represents that he
has held all such information confidential and will continue to do so,
and that Executive will not use such information for any business
(which term herein includes a partnership, firm, corporation or any
other entity) without the prior written consent of the Company.
Because of the temporal nature of such materials and information, the
requirements of this paragraph shall expire on May 27, 2005.
(B) For purposes of this Agreement, "Proprietary Materials and
Information" includes, by way of example and not limitation, notes,
letters, internal company memoranda, records, reports, recordings,
records of conversations and other information concerning the
Company's business affairs and the business affairs of the CMS
Companies which Executive obtained by virtue of the Executive's
position and which was not disseminated to the public during the term
of the Executive's employment. It also includes the contents of
Executive's personal computer and the non-original copies of documents
contained in Executive's office files.
(C) Executive further agrees not to testify or act in any capacity as a
paid or unpaid expert witness, advisor or consultant on behalf of any
person, individual, partnership, firm, corporation or any other person
or entity that has or may have any claim, demand, action, suit, cause
of action, or judgment against the Company or any of the CMS
Companies. The intent of this paragraph is to preclude Executive from
voluntarily
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participating in commercial litigation against any of the CMS
companies. Notwithstanding the foregoing, this paragraph does not
prevent Executive from offering sworn testimony after being served a
valid subpoena.
5. GENERAL RELEASE AND DISCHARGE BY EXECUTIVE
In consideration of the payments and commitments made by the Company to the
Executive (described in Section 2 above), the Executive on his own behalf, and
his descendants, ancestors, dependents, heirs, executors, administrators,
assigns, and successors, and each of them, hereby covenants not to xxx and fully
releases and discharges the Company, CMS Energy Corporation, and all of their
subsidiaries and affiliates, past and present, and each of them as well as its
and their trustees, directors, officers, agents, attorneys, insurers, employees,
stockholders, representatives, assigns, and successors, past and present, and
each of them, hereinafter together and collectively referred to as "Releasees,"
with respect to and from any and all claims, wages, demands, rights, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
debts, costs, expenses, attorneys' fees, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise, whether now
known or unknown, suspected or unsuspected, and whether or not concealed or
hidden, which the Executive now owns or holds or has at any time heretofore
owned or held as against said Releasees, arising out of or in any way connected
with the Executive's employment relationship with the Company or the Releasees,
or the Executive's termination of employment or any other transactions,
occurrences, acts or omissions or any loss, damage or injury whatever, known or
unknown, suspected or unsuspected, resulting from any act or omission by or on
the part of said Releasees, or any of them, committed or omitted prior to the
date of this Agreement, including but not limited to, claims based on any
express or implied contract of employment which may have been alleged to exist
between the Company, the Releasees and the Executive, Title VII of the Civil
Rights Act of 1964, 42 U.S.C. Section 2000e, et seq, as amended, the Civil
Rights Act of 1991, P. L. 102-1 66, the Xxxxxxx-Xxxxxx Civil Rights Act, MCLA
Section 37.2101, et seq, the Rehabilitation Act of 1973, 29 U.S.C. Section 701,
et seq, as amended, the Americans with Disabilities Act of 1990, 42 U.S.C.
Section 12206, et seq, as amended, (or the Persons with Disabilities Civil
Rights Act, MCLA Section 37.1101, et seq, as amended, or any other federal,
state or local law, rule, regulation or ordinance, and claims for severance pay,
sick leave, vacation pay and holiday pay, except as provided in the sentences
that follow. Nothing in this Agreement is intended to, nor do the Executive, the
Company and CMS Energy Corporation, waive the right to enforce this Agreement
pursuant to Section 14 below. Further, this release does not relate to claims
Executive may have accrued through March 17, 2004 under benefit programs
available to all employees under the general benefit plan descriptions, under
descriptions contained in particular plans or contracts applicable to members of
Executive's paygrade and under the Pension Plan and SERP, provided, however,
that determinations made with respect to the particular plans described in
Section 2 of this Agreement are final and shall not be changed. Finally, this
release does not relate to Executive's rights and claims for indemnification.
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6. RELEASE OF AGE DISCRIMINATION CLAIMS BY EXECUTIVE
In consideration for the consideration described in Section 2 above, the Company
and the Executive further agree that this Agreement releases and discharges the
Company and the Releasees from each, every and all liability to the Executive
for any damage to person or property whatsoever, whether now known or unknown,
apparent or not yet discovered, foreseen or unforeseen, developed or
undeveloped, resulting or to result from claims of age discrimination occurring
prior to the date of this Agreement under the Age Discrimination in Employment
Act of 1967 ("ADEA"), 29 U.S.C. Section 621, et seq, as amended by the Older
Workers Benefit Protection Act of 1990. The Executive specifically acknowledges
for purposes of this provision that: (1) the Executive has been advised by the
Company to consult with an attorney prior to signing this release under the Age
Discrimination in Employment Act, as amended; (2) the Executive has been given
21 days to consider the release; and (3) the Executive may revoke this Agreement
within 7 days of signing this Agreement. In the event of such a revocation, the
Executive will repay to the Company all funds already received pursuant to
Section 2 hereof and waive his rights to receive any additional funds under this
Agreement. Such a revocation, to be effective, must be in writing and either (i)
postmarked within 7 days of execution of this Agreement and addressed to the
attention of Xxxx X. Xxxxx, CMS Energy Corporation, at Xxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, or (ii) hand delivered to Xxxx X. Xxxxx within 7 days
of execution of this Agreement. Executive understands that if revocation is made
by mail, mailing by certified mail, return receipt requested, is recommended to
show proof of mailing. IF EXECUTIVE SIGNS THIS AGREEMENT PRIOR TO THE END OF THE
21 DAY PERIOD, EXECUTIVE CERTIFIES THAT THE EXECUTIVE KNOWINGLY AND VOLUNTARILY
DECIDED TO SIGN THE AGREEMENT AFTER CONSIDERING IT LESS THAN 21 DAYS AND HIS
DECISION TO DO SO WAS NOT INDUCED BY ANY OF THE CMS COMPANIES THROUGH FRAUD,
MISREPRESENTATION OR A THREAT TO WITHDRAW OR ALTER THE OFFER OF THE SEVERANCE
BENEFITS PAYABLE UNDER THIS AGREEMENT PRIOR TO THE EXPIRATION OF THE 21 DAY TIME
PERIOD. The release provided for in this Section 6 shall not be effective or
enforceable until after the revocation period has passed.
7. NO ADMISSION OF LIABILITY
The consideration advanced herein by the Company and all other CMS Companies is
in full settlement of all claims by the Executive with respect to his employment
relationship and does not constitute an admission of liability by the Company,
CMS Energy Corporation, and all of their subsidiaries and affiliates. The
consideration has been advanced as a compromise to avoid expense and any
potential controversy with Executive. The covenants undertaken by the Executive
do not constitute an admission of liability to any CMS Company by the Executive.
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8. CONFIDENTIALITY
(A) Executive agrees that the terms and conditions of this Agreement shall
remain confidential as between the parties and that the Executive
shall not disclose them to any other person except Executive's legal
counsel, financial and/or tax advisors, future employer(s), and
members of his immediate family. Executive shall also be allowed to
disclose the terms and conditions to other persons after he has
requested and received the express consent of the Company for such
disclosure.
(B) Without limiting the generality of the foregoing, neither the Company,
CMS Energy Corporation nor the Executive will respond to or in any way
participate in or contribute to any public discussion, notice or other
publicity concerning or in any way relating to the terms and
conditions of this Agreement or the circumstances surrounding
Executive's termination of employment. Notwithstanding the foregoing
sentence, the Company and all of the CMS Companies and the Executive
shall be allowed to make such filings regarding the terms and
conditions of this Agreement with the appropriate regulatory bodies,
as may be required or advisable in the their sole discretion,
including the submission of this Agreement as an exhibit to such
filings.
(C) Without limiting the generality of the foregoing, the Executive
specifically agrees that he and the persons to whom he is allowed to
make disclosure pursuant to paragraph (A) above shall not disclose
detailed information regarding the contents of this Agreement to any
current or former employee of any CMS Company. Executive and the CMS
Companies may acknowledge, however, than an agreement has been reached
by the parties.
9. GOVERNING LAW AND SEVERABILITY OF INVALID PROVISIONS
This Agreement will be governed by and construed in accordance with the laws of
the State of Michigan, without regard to its conflicts of law principles.
Further, if any provision of this Agreement is held invalid, the invalidity
shall not affect other provisions or applications of the Agreement, which can be
given effect without the invalid provisions or applications, and to this end the
provisions of this Agreement are declared to be severable.
10. FULL UNDERSTANDING AND VOLUNTARY ACCEPTANCE
In entering this Agreement, the Company, CMS Energy Corporation and the
Executive represent that they have had the opportunity to consult with attorneys
of their own choice, that the Company, CMS Energy Corporation and the Executive
have read the terms of this Agreement and that those terms are fully understood
and voluntarily accepted by them. The parties further
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represent that this Agreement contains the entire Agreement between the parties
and that neither party has made any promise, inducement or agreement not herein
expressed.
11. COOPERATION WITH COMPANY ON INVESTIGATIONS AND LAWSUITS
When requested, Executive agrees to fully and unconditionally cooperate with the
Company, CMS Energy Corporation and all other CMS Companies, by making himself
available at reasonable times and for reasonable periods of time, in any pending
or future civil or criminal investigations, claims or lawsuits by any
governmental, regulatory or legislative body or by any other person, where it is
determined by the Company that Executive has information that may be useful in
the matter at issue. Any reasonable out-of-pocket expenses incurred in complying
with this Section shall be reimbursed to Executive. Further, Executive shall be
reimbursed for all reasonable business expenses of the kind that are customarily
reimbursed by the Company to its Executives, when incurred by him in connection
with the cooperation to be provided under this section of this Agreement.
Nothing in this section and in this Agreement provides to the Company the right
to direct or determine the defense(s) which the Executive might assert in
response to any complaint or charges brought against the Executive as an
individual.
12. DISCLOSURE TO STATE OR FEDERAL AGENCIES OR COURTS
Nothing in this Agreement is to be construed as prohibiting either the Executive
or any of the CMS Companies from freely providing any truthful information to a
state or federal agency or court when requested or required to do so by such
agency or court or when otherwise permitted by law to provide such information
to them.
13. LITIGATION
In the event of litigation or other proceeding ("Litigation") by Executive
against the Company or any of the Releasees about matters that have been
released under this Agreement, Executive agrees to repay to the Company and CMS
Energy Corporation the consideration advanced under Section 2 above, prior to
the commencement of Litigation and to pay to the Company and the Releasees all
costs and expenses of defending against the Litigation incurred by the Company
and Releasees, and those associated with them, including reasonable attorneys
fees. Notwithstanding the foregoing, this section is not intended to preclude
the offset of the portion of the consideration received under Section 2 related
to the release of an ADEA claim, in lieu of the repayment of said ADEA
consideration by Executive, if Executive commences litigation pursuant to ADEA.
Moreover, a dispute and arbitration covered by Section 14 of this Agreement,
including the enforcement by Executive of any arbitration award is not
litigation within the scope of this Section 13.
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14. ARBITRATION
The parties agree that any disputes between them relating to the formation,
breach, interpretation and application of this Agreement and not settled by the
parties shall be submitted to final and binding arbitration.
(A) Arbitration proceedings shall be conducted in Jackson, Michigan on at
least ten (10) business days' written notice to the parties. Such
proceedings shall be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (except as
may be specified otherwise herein).
(B) There shall be only one arbitrator, having knowledge and experience
with employment law. If the parties cannot agree upon the arbitrator,
each party shall select a representative qualified to be the
arbitrator, and the two representatives shall select the arbitrator.
If either party fails to select a representative, the other party may
seek to have the Federal District Judge having the highest authority
in the Federal District in which Jackson, Michigan is situated to
appoint a person meeting the qualification requirements specified
herein to serve as the arbitrator. If the judge with the highest
seniority does not immediately appoint someone, the party may make
such request of the next senior judge(s) (in descending order of
authority) until a qualified arbitrator is appointed.
(C) Each party shall be entitled to reasonable discovery through requests
for admission, requests for production of documents and by depositions
of not more than 10 individuals, and by no other means; and discovery
procedures shall be utilized only for the discovery of relevant
admissible evidence or information reasonably calculated to lead to
the discovery of relevant admissible evidence, and shall not place an
undue burden on the party from whom discovery is sought.
(D) All discovery shall be completed, and the arbitration hearing shall
commence within 90 days after appointment of the arbitrator; and
absent a finding by the arbitrator of exceptional circumstances, the
hearing shall be completed and an award setting forth the findings and
reasoning for the arbitrator's decision, shall be rendered within 60
days after the conclusion of the hearing.
(E) The arbitrator shall not have authority to fashion a remedy that
includes consequential, exemplary or punitive damages of any type
whatsoever, and the arbitrator is hereby prohibited from awarding
injunctive relief of any kind, whether mandatory or prohibitory.
(F) The award shall be final and binding on all parties and shall not be
subject to court review. However, it may be enforced in any court of
competent jurisdiction.
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(G) The costs of the arbitration proceeding, which shall include the
arbitrator's xxxx for services in connection with the arbitration
proceeding, will be apportioned equally between the parties and each
party shall pay its own attorney fees, experts' fees and any other
expenses incurred in connection with the preparation for or conduct of
the proceeding.
15. CANCELLATION OF PRIOR AGREEMENTS
This Agreement sets forth the entire agreement of the parties hereto with
respect to the subject matters contained herein and supersedes, cancels, voids
and renders of no further force and effect any and all employment agreements,
change of control agreements and other similar agreements, representations,
promises, covenants, communications and arrangements, whether oral or written,
between the Company and the Executive, CMS Energy Corporation and the Executive,
and any one of the CMS Companies and the Executive that may have been executed
or made prior to the date of this Agreement and which also may address the
subject matters contained herein, including but not by way of limitation, the
Employment Agreement, dated December 10, 1999, between the Executive and CMS
Energy Corporation including Paragraph 8 thereof. However, see Subsection 17(A)
of this Agreement with respect to said Paragraph 8.
16. MODIFICATION
This Agreement shall not be varied, altered, modified, canceled, changed, or in
any way amended except by mutual agreement of the parties in a written
instrument executed by the parties hereto or their legal representatives.
17. INDEMNIFICATION AND INSURANCE
(A) Paragraph 8 of the Employment Agreement, dated December 10, 1999,
between the Executive and CMS Energy Corporation reads as follows:
"8. Indemnification. The Company [CMS Energy Corporation]
shall cause the Executive to be insured under its Directors
and Officers Liability Insurance policy, if any, during his
Employment Period and for a period of not less than five
years after the termination of the Executive's employment
for any reason whatsoever. In addition to insurance and
any other indemnification available to the Executive as an
Officer, the Company [CMS Energy Corporation] shall indemnify,
to the extent permitted by applicable law, the Executive for
settlements, judgments and reasonable expenses in connection
with activities arising from services rendered by Executive
as a Director or Officer of the Company [CMS Energy Corporation]
or any affiliated
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company and shall, to the extent permitted by law, advance to
the Executive all reasonable costs and expenses in defense of
any claim or cause of action arising out of or pertaining to
the Executive's employment with CMS [CMS Energy Corporation]
or the Company [CMS Energy Corporation]."
Executive and CMS Energy Corporation restate Paragraph 8 as part of
this Agreement with the understanding that (i) the restated paragraph
represents an agreement between Executive and CMS Energy Corporation
only and does not bind Consumers Energy Company and any other CMS
Company to do anything; (ii) Executive is acknowledging when he signs
this Agreement that he has been placed on notice of the difficulty CMS
Energy Corporation may have in arranging coverage during the
referenced five year period in future commercial insurance markets;
and (iii) CMS Energy Corporation will be required to use its best
efforts to arrange such coverage.
(B) With respect to Consumers Energy Company and the CMS Companies other
than CMS Energy Corporation, nothing in this Agreement shall be
construed to alter, modify or limit Executive's rights (i) pursuant to
applicable statutes, articles of incorporation, by-laws, common law
and resolutions of the Boards of Consumers Energy Company or any of
the CMS Companies to seek or obtain indemnification from said company
respecting defense costs, judgments and other liabilities and (ii) to
assert a claim for reimbursement under any potentially applicable
directors and officers liability insurance policy which covers his
service with said companies. Further, if Executive suffers actual
monetary damage as a result of a lack of directors and officers
liability insurance coverage with respect to his service with said
companies, that will be a proper subject for arbitration under Section
14 of this Agreement, provided Executive has also been unsuccessful in
asserting his rights and having his actual monetary damage reimbursed
pursuant to clause (i) of this Subsection and provided further that
Section 14 of this Agreement shall not be used, unless mutually agreed
to at the time by the parties in writing, as a vehicle for resolving
in connection with litigation and investigations pending at the time
his employment was terminated on March 17, 2004 (x) Executive's claims
for final discharge of any obligation to repay to CMS Energy
Corporation moneys being advanced to him and (y) Executive's claims
for indemnification by CMS Energy Corporation. Executive will not be
allowed pursuant to Section 14 to recover more than the actual
monetary damage he suffers after receipt of reimbursement from other
sources.
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18. COUNTERPARTS
This Agreement may be executed in one (1) or more counterparts, each of which
shall be deemed to be an original, but all of which together will constitute one
and the same Agreement. Signatures transmitted via facsimile shall be regarded
by the parties as original signatures.
Signed as of this 27th day of May, 2004.
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Executive: Xxxxxxx X. Xxxxxx
CONSUMERS ENERGY COMPANY
By: /s/ Xxxx X. Xxxxx
-------------------------------------
CMS ENERGY CORPORATION
By: /s/ S. Xxxxxx Xxxxx, Xx.
------------------------------------
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