Exhibit (10)(m)
EMPLOYMENT AGREEMENT
AGREEMENT between CMS Gas Transmission and Storage Company, a
Michigan corporation (the "Company"), and Xxxxxxx X. Xxxxxx (the "Execu-
tive") dated this 2nd day of April, 1996.
Whereas the Company considers the maintenance of a vital
management essential to protecting and enhancing the best interests of the
Company and its shareholders. Whereas the Company has determined to
encourage the continuing attention and dedication of the key members of
its management without the distraction arising from the possibility of a
change in control.
Therefore, the parties hereto agree as follows:
1. Operation of Agreement. The "Effective Date" shall be the
date on which a Change of Control (as defined in Section 2) shall occur.
2. Change of Control. As used in this Agreement, "Change of
Control" shall be deemed to have taken place if a person, including a
"group" as defined in Section 13(d)(3) of the Securities Exchange Act of
1934 becomes the beneficial owner of shares having 35% or more of the
total number of votes that may be cast in the election of Directors of
CMS Energy Corporation.
3. Employment. The Company hereby agrees to continue to
employ and engage the services of the Executive as its President and Chief
Executive Officer for the period beginning on the Effective Date and
ending on the earlier of the fifth anniversary of such date or the Normal
Retirement Date of the Executive under the Consumers Power Company's
Pension Plan (hereinafter "Employment Period"). The Executive agrees to
serve the Company in such position, unless an event shall occur which is
described in Section 6.
4. Duties. The Executive agrees during the Employment Period
to devote his full business time to the business and affairs of the
Company (except for (i) services on corporate, civic or charitable boards
or committees, (ii) such reasonable time as shall be required for the
investment of the Executive's assets, which do not significantly interfere
with the performance of his responsibilities hereunder and (iii) periods
of vacation and sick leave to which he is entitled) and to use his best
efforts to promote the interests of the Company and to perform faithfully
and efficiently the responsibilities of its President and Chief Executive
Officer.
5. Compensation and Other Terms of Employment.
(a) Base Salary. The Executive shall receive an annual
base salary ("Base Salary") of not less than his annual salary immediately
prior to the Effective Date (payable in equal semi-monthly installments)
from the Company.
The Base Salary shall be reviewed and may be increased at any
time and from time to time in accordance with the Company's regular
practices, and shall be reviewed at least annually by the Organization and
Compensation Committee of its Board of Directors.
(b) Incentive Compensation. As further compensation, the
Executive will be eligible for awards ("Incentive Compensation") under the
Company's Executive Incentive Compensation Plan in which he was
participating immediately prior to the Effective Date.
(c) Retirement, Savings and Stock Option Plans. In
addition to the Base Salary and Incentive Compensation payable as
hereinabove provided, the Executive shall be entitled to participate in
savings, stock options and other incentive plans and programs available to
executives of the Company or to opportunities provided under any such
plans in which he was participating immediately preceding the Effective
Date, whichever is greater.
(d) Vacation and Employee Benefits.
(i) The Executive shall be entitled to paid vacation
and other employee benefits and perquisites, in accordance with the
policies of the Company in effect for executive officers, or the vacation
employee benefits and perquisites to which he was entitled immediately
prior to the Effective Date, whichever is greater.
6. Termination.
(a) Death. This Agreement shall terminate automatically
upon the Executive's death. In the event of such termination, the Company
shall pay to the Executive's estate all benefits and compensation accrued
hereunder to the date of death, including a pro rata portion of incentive
compensation.
(b) Disability. In the event the Executive becomes unable
by reason of physical or mental disability to render the services required
hereunder and such disability continues for a continuous period of 6
months, the employment of the Executive hereunder shall terminate, unless
the employment is extended by agreement of the Company and the Executive.
Commencing at the date of termination of employment for disability, the
Executive shall receive annually a sum equal to 50% of his Base Salary at
the time of termination of employment, in monthly installments until his
62nd birthday, or his death if earlier. Disability payments hereunder
shall be reduced by the amount of other Company-sponsored disability
benefits paid to the Executive through insurance or otherwise.
(c) Termination with Cause. The Company may terminate the
Executive's employment for Cause. For purposes of this Agreement, "Cause"
shall mean an act or acts of dishonesty, fraud, misappropriation or
intentional material damage to the property or business of the Company or
commission of a felony on the Executive's part. If the Executive's
employment is terminated for Cause, the Company shall pay the Executive
his full accrued Base Salary through the date of such termination at the
rate in effect at the time of such termination, and the Company shall have
no further obligations to the Executive under this Agreement.
(d) Other Termination or Resignation of Executive.
(i) The Company may terminate the Executive's
employment without Cause.
(ii) In the event that the Executive determines in
his sole judgment that his position, authority, or responsibilities have
been diminished as a result of the "Change of Control," the Executive may
terminate his employment with the Company upon written notice given within
12 months after the Effective Date.
(iii) In the event of a termination of employment
under this subsection (d), the Executive shall receive a severance payment
equal to twice his Base Salary at the time of termination of employment
plus either twice his incentive compensation payable with respect to the
last full calendar year prior to the termination of employment or, if no
incentive compensation was awarded to the Executive with respect to the
last full calendar year prior to the termination of employment, twice the
standard incentive award, as defined in the Company's Executive Incentive
Compensation Plan for the salary grade of the Executive for such year.
The severance payment shall be paid in a lump sum payment, in cash, or as
otherwise directed by the Executive.
7. No Obligation to Mitigate Damages. The Executive shall not
be obligated to seek other employment in mitigation of amounts payable or
arrangements made under the provisions of this Agreement and the obtaining
of any such other employment shall in no event effect any reduction of the
Company's obligations to make the payments and arrangements required to be
made under this Agreement.
8. Indemnification. The Company shall include the Executive
in its Director and Officer 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 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 the Executive as a Director or Officer of the Company or any
affiliated company.
9. Notices. Any notices, requests, demands and other
communications provided for by this Agreement shall be sufficient if in
writing and if sent by registered or certified mail to the Executive at
the last address he has filed in writing with the Company or, in the case
of the Company, Attn: Secretary, at its principal executive offices.
10. Non-Alienation. The Executive shall not have any right to
pledge, hypothecate, anticipate or in any way create a lien or security
interest upon any amounts provided under this Agreement; and no benefits
payable hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts, or by operation of law, except by will or
the laws of descent and distribution.
11. Governing Law. The provisions of this Agreement shall be
construed in accordance with the laws of the State of Michigan.
12. Amendment. This Agreement may be amended or cancelled only
by mutual agreement of the parties in writing without the consent of any
other person and, so long as the Executive lives, no person, other than
the parties hereto, shall have any rights under or interest in this
Agreement or the subject matter hereof.
13. Successor to the Company. Except as may be otherwise
provided herein, this Agreement shall be binding upon and inure to the
benefit of the Company and any successor of the Company.
14. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
IN WITNESS WHEREOF, the Company and the Executive have executed
this Agreement as of the date first above written.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
CMS GAS TRANSMISSION AND STORAGE COMPANY
By: /s/ Xxxxxxx X. XxXxxxxxx, Xx.
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Xxxxxxx X. XxXxxxxxx, Xx.
Chairman of the Board
