8-KLeadership ChangesMaterial AgreementsExhibits & Filings

CMS ENERGY CORP 8-K Report, Material Agreement (Aug 21, 2009)

Filed August 21, 2009For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS), through its principal subsidiary Consumers Energy Company, reported on August 21, 2009, an amendment and restatement of its $150 million secured revolving credit facility. This facility, set to expire in September 2009, has been extended with substantially similar terms and will continue to be secured by first mortgage bonds. The amendment ensures continued access to short-term funding for general corporate purposes, providing operational stability during a period of economic uncertainty. Additionally, the company disclosed the adoption of a new Change in Control Agreement (CIC Agreement) for certain officers, including Senior Vice President John Butler. This agreement, designed to retain key talent, outlines severance packages involving a multiple of salary and bonus, accelerated vesting of restricted stock (with specific provisions for performance-based shares), and preservation of existing retirement benefits in the event of a change in control of CMS Energy. This move is intended to align executive interests with those of shareholders during potentially transitional periods.

Key Highlights

  • 1Consumers Energy Company amended and restated its $150 million secured revolving credit facility.
  • 2The credit facility was set to expire in September 2009 and has been extended with similar terms.
  • 3The facility remains secured by first mortgage bonds of Consumers Energy.
  • 4Funds drawn under the credit facility are intended for general corporate purposes.
  • 5CMS Energy adopted a standardized Change in Control Agreement for certain officers.
  • 6The CIC Agreement provides a separation payment, accelerated equity vesting, and preservation of benefits upon a change in control.
  • 7The CIC Agreement aims to retain key executives by providing financial security and incentives.

Frequently Asked Questions

The primary purpose of the amended and restated revolving credit facility is to ensure Consumers Energy Company has continued access to short-term funding for its general corporate purposes. This facility replaces an existing one set to expire soon, providing operational continuity and financial flexibility.

The CIC Agreement provides for a separation payment equal to a multiple (3x for Mr. Butler) of the officer's base salary and target bonus, immediate vesting of restricted stock (with specific conditions for performance-based shares), and preservation of accrued retirement benefits in the event of a 'Change in Control' of CMS Energy. The officer must also release claims against the company.

CMS Energy is implementing these CIC Agreements to help retain key executives by providing them with financial security and incentives. This ensures that leadership remains focused on long-term company strategy and shareholder value, even amidst potential corporate transitions or acquisitions.

The credit facility is secured by first mortgage bonds of Consumers Energy, which were created under the original facility and its associated Supplemental Indenture. This collateralization provides security for the lenders.