NORTHWESTERN CORPORATION
TRADITIONAL PENSION EQUALIZATION PLAN
Amended and Restated Effective January 1, 2000
The Northwestern Public Service Company Pension Equalization
Plan, now known as the Northwestern Corporation Traditional
Pension Equalization Plan (the 'Plan'), was adopted by
Northwestern Public Service Company, now known as Northwestern
Corporation, effective August 5, 1987. Northwestern Corporation
now amends and restates the Plan, effective January 1, 2000, as
hereinafter set forth:
ARTICLE I
DEFINITIONS
Wherever used herein the following terms shall have the
meanings hereinafter set forth:
1.1 'Affiliate' means (i) any corporation while it is a
member of the same 'controlled group' of corporations (within the
meaning of Code Section 414(b)) as the Company; (ii) any other
trade or business (whether or not incorporated) while it is under
'common control' (within the meaning of Code Section 414(c)) with
the Company; (iii) any organization during any period in which it
(along with the Company) is a member of an 'affiliated service
group' (within the meaning of Code Section 414(m)); or (iv) any
other entity during any period in which it is required to be
aggregated with the Company under Code Section 414(o).
1.2. 'Beneficiary' means a person or entity designated by a
Participant under the Qualified Plan to receive benefits
thereunder following his death.
1.3. 'Board' means the Board of Directors of the Company.
1.4 'Code' means the Internal Revenue Code of 1986, as
amended from time to time, and any regulations relating thereto.
1.5. 'Company' means Northwestern Corporation, a Delaware
corporation, or, to the extent provided in Section 7.9 below, any
successor corporation or other entity resulting from a merger or
consolidation into or with the Company or a transfer or sale of
substantially all of the assets of the Company.
1.6. 'Normal Retirement Date' means the first day of the
month coinciding with or next following a Participant's 65th
birthday.
1.7. 'Participant' means an Employee of the Company who is
designated by name on the attached Schedule A. No other Employee
shall be or become a Participant in the Plan.
1.8. 'Plan' means the Northwestern Corporation Traditional
Pension Equalization Plan.
1.9. 'Qualified Plan' means the Northwestern Pension Plan as
amended and restated effective January 1, 2000 and as further
amended from time to time.
1.10. 'Qualified Plan Death Benefit' means the aggregate
benefit payable to the Surviving Spouse or Beneficiary of a
Participant pursuant to the Qualified Plan and all annuities
purchased for the Participant under the Qualified Plan (whether
or not terminated) in the event of the death of the Participant
at any time prior to commencement of payment of his Qualified
Plan Retirement Benefit.
1.11. 'Qualified Plan Retirement Benefit' means the
aggregate benefit payable to a Participant pursuant to the
Qualified Plan and all annuities purchased for the Participant
under the Qualified Plan (whether or not terminated) by reason of
his termination of employment with the Company and all Affiliates
for any reason other than death.
1.12. 'Supplemental Death Benefit' means the benefit payable
to a Surviving Spouse or Beneficiary pursuant to the Plan.
1.13. 'Supplemental Retirement Benefit' means the
benefit payable to a Participant pursuant to the Plan by reason
of his termination of employment with the Company and all
affiliates for any reason other than death.
1.14. 'Surviving Spouse' means a person who is married
to a Participant at the date of his death and for at least one
year prior thereto.
1.15. Words in the masculine gender shall include the
feminine and the singular shall include the plural, and vice
versa, unless qualified by the context. Any headings used herein
are included for ease of reference only, and are not to be
construed so as to alter the terms hereof.
ARTICLE II
ELIGIBILITY
A Participant who is designated on Schedule A shall be
eligible to receive a Supplemental Retirement Benefit. The
Surviving Spouse or Beneficiary of a Participant designated on
Schedule A who dies prior to commencement of payment of his
Qualified Plan Retirement Benefit shall be eligible to receive a
Supplemental Death Benefit.
ARTICLE III
SUPPLEMENTAL RETIREMENT BENEFIT
3.1. Amount. The Supplemental Retirement Benefit payable to
a Participant in the form of a straight life annuity over the
lifetime of the Participant only, commencing on his Normal
Retirement Date, shall be a monthly amount equal to the
difference between (a) and (b) below:
(a) the monthly amount of the Qualified Plan
Retirement Benefit to which the Participant would have been
entitled under the Qualified Plan if such Benefit were
computed (i) without giving effect to any limitations on
benefits imposed by any provisions of the Code;
LESS
(b) the monthly amount of the Qualified Plan
Retirement Benefit actually payable to the Participant under
the Qualified Plan.
The amounts described in (a) and (b) shall be computed as of
the date of termination of employment of the Participant with the
Company and all affiliates in the form of a straight life annuity
payable over the lifetime of the Participant only commencing on
his Normal Retirement Date.
3.2. Form of Benefit. The Supplemental Retirement Benefit
payable to a Participant shall be paid in the same form under
which the Qualified Plan Retirement Benefit is payable to the
Participant. Subject to Section 3.4, the Participant's election
under the Qualified Plan of any optional form of payment of his
Qualified Plan Retirement Benefit (with the valid consent of his
Surviving Spouse where required under the Qualified Plan) shall
also be applicable to the payment of his Supplemental Retirement
Benefit. In the case of a form of payment selected by the
Participant under the Qualified Plan that provides for payments
to his Surviving Spouse or other Beneficiary following his death,
the Supplemental Retirement Benefit shall likewise be paid
following his death to the Surviving Spouse or other Beneficiary
in accordance with the terms of such form of payment selected
under the Qualified Plan.
3.3. Commencement of Benefit. Payment of the Supplemental
Retirement Benefit to a Participant shall commence on the same
date as payment of the Qualified Plan Retirement Benefit to the
Participant commences. Subject to Section 3.4, any election
under the Qualified Plan made by the Participant with respect to
the commencement of payment of his Qualified Plan Retirement
Benefit shall also be applicable with respect to the commencement
of payment of his Supplemental Retirement Benefit.
3.4. Approval of Company. Notwithstanding the provisions of
Sections 3.2 and 3.3 above, an election made by the Participant
under the Qualified Plan with respect to the form of payment of
his Qualified Plan Retirement Benefit (with the valid consent of
his Surviving Spouse where required under the Qualified Plan), or
the date for commencement of payment thereof, shall not be
effective with respect to the form of payment or date for
commencement of payment of his Supplemental Retirement Benefit
hereunder unless such election is expressly approved in writing
by the Company with respect to his Supplemental Retirement
Benefit. If the Company shall not approve such election in
writing, then the form of payment or date for commencement of
payment of the Participant's Supplemental Retirement Benefit
shall be selected by the Company in its sole discretion.
3.5. Actuarial Equivalent. A Supplemental Retirement
Benefit which is payable in any form other than a straight life
annuity over the lifetime of the Participant, or that commences
at any time prior to the Participant's Normal Retirement Date,
shall be the actuarial equivalent of the Supplemental Retirement
Benefit set forth in Section 3.1 above as determined by the same
actuarial adjustments as those specified in the Qualified Plan
with respect to determination of the amount of the Qualified Plan
Retirement Benefit on the date for commencement of payment
hereunder.
ARTICLE IV
SUPPLEMENTAL DEATH BENEFIT
4.1. Amount. If a Participant dies prior to commencement of
payment of his Qualified Plan Retirement Benefit under
circumstances in which a Qualified Plan Death Benefit is payable
to his Surviving Spouse or Beneficiary (if the Participant has
designated a Beneficiary other than his Surviving Spouse in
accordance with the terms of the Qualified Plan), a Supplemental
Death Benefit is payable to his Surviving Spouse or Beneficiary
as hereinafter provided. The monthly amount of the Supplemental
Death Benefit payable to a Surviving Spouse or Beneficiary shall
be equal to the difference between (a) and (b) below:
(a) the monthly amount of the Qualified Plan Death
Benefit to which the Surviving Spouse or Beneficiary would
have been entitled under the Qualified Plan if such Benefit
were computed without giving effect to any limitations on
benefits imposed by the Code;
LESS
(b) the monthly amount of the Qualified Plan Death
Benefit actually payable to the Surviving Spouse or
Beneficiary under the Qualified Plan.
4.2. Form and Commencement of Benefit. A Supplemental Death
Benefit shall be payable over the lifetime of the Surviving
Spouse or Beneficiary only, in monthly installments commencing on
the date for commencement of payment of the Qualified Plan Death
Benefit to the Surviving Spouse or Beneficiary and terminating on
the date of the last payment of the Qualified Plan Death Benefit
made before the Surviving Spouse's or Beneficiary's death.
ARTICLE V
ADMINISTRATION OF THE PLAN
5.1. Administration by the Company. The Company shall be
responsible for the general operation and administration of the
Plan and for carrying out the provisions thereof.
5.2. General Powers of Administration. All provisions set
forth in the Qualified Plan with respect to the administrative
powers and duties of the Company, expenses of administration, and
procedures for filing claims shall also be applicable with
respect to the Plan. The Company shall be entitled to rely
conclusively upon all tables, valuations, certificates, opinions
and reports furnished by any actuary, accountant, controller,
counsel, or other person employed or engaged by the Company with
respect to the Plan.
ARTICLE VI
AMENDMENT OR TERMINATION
6.1. Amendment or Termination. The Company intends the Plan
to be permanent but reserves the right to amend or terminate the
Plan when, in the sole opinion of the Company, such amendment or
termination is advisable. Any such amendment or termination
shall be made pursuant to a resolution of the Board and shall be
effective as of the date of such resolution.
6.2. Effect of Amendment or Termination. No amendment or
termination of the Plan shall directly or indirectly deprive any
current or former Participant, Surviving Spouse or Beneficiary of
all or any portion of any Supplemental Retirement Benefit or
Supplemental Death Benefit payment which has commenced prior to
the effective date of such amendment or termination or which
would be payable if the Participant terminated employment for any
reason, including death, on such effective date.
ARTICLE VII
GENERAL PROVISIONS
7.1. Funding. The Plan at all times shall be entirely
unfunded and no provision shall at any time be made with respect
to segregating any assets of the Company for payment of any
benefits hereunder. No Participant, Surviving Spouse,
Beneficiary, or any other person shall have any interest in any
particular assets of the Company by reason of the right to
receive a benefit under the Plan and any such Participant,
Surviving Spouse, Beneficiary, or other person shall have only
the rights of a general unsecured creditor of the Company with
respect to any rights under the Plan.
7.2. General Conditions. Except as otherwise expressly
provided herein, all terms and conditions of the Qualified Plan
applicable to a Qualified Plan Retirement Benefit or a Qualified
Plan Death Benefit shall also be applicable to a Supplemental
Retirement Benefit or a Supplemental Death Benefit payable
hereunder. Any Qualified Plan Retirement Benefit or Qualified
Plan Death Benefit, or any other benefit payable under the
Qualified Plan, shall be paid solely in accordance with the terms
and conditions of the Qualified Plan and nothing in this Plan
shall operate or be construed in any way to modify, amend or
affect the terms and provisions of the Qualified Plan.
7.3. No Guaranty of Benefits. Nothing contained in the Plan
shall constitute a guaranty by the Company or any other entity or
person that the assets of the Company will be sufficient to pay
any benefit hereunder.
7.4. No Enlargement of Employee Rights. No Participant,
Surviving Spouse or Beneficiary shall have any right to a benefit
under the Plan except in accordance with the terms of the Plan.
Establishment of the Plan shall not be construed to give any
Participant the right to be retained in the service of the
Company or any affiliate thereof.
7.5. Spendthrift Provision. No interest of any person or
entity in, or right to receive a benefit under, the Plan shall be
subject in any manner to sale, transfer, assignment, pledge,
attachment, garnishment, or other alienation or encumbrance of
any kind; nor may such interest or right to receive a benefit be
taken, either voluntarily or involuntarily, for the satisfaction
of the debts of, or other obligations or claims against, such
person or entity, including claims for alimony, support, separate
maintenance, and claims in bankruptcy proceedings.
The benefit of any Participant may be offset by an amount
set forth in a court order or requirement to pay that arises from
(1) a judgment of conviction for a crime involving the Plan, (2)
a civil judgment (or consent, order or decree) that is entered by
a court in an action brought in connection with a breach (or
alleged breach) of a fiduciary duty under the Employee Retirement
Income Security Act of 1974, as amended ('ERISA'), or (3) a
settlement agreement entered into by the Participant with either
the Secretary of Labor or the Pension Benefit Guaranty
Corporation in connection with a breach of fiduciary duty under
ERISA by a fiduciary or any other person.
7.6. Applicable Law. The Plan shall be construed and
administered under the laws of the State of South Dakota, except
to the extent preempted by applicable federal law.
7.7. Small Benefits. If the actuarial value of any
Supplemental Retirement Benefit or Supplemental Surviving Spouse
Benefit is less than $5,000, the Company may pay the actuarial
value of such Benefit to the Participant, Surviving Spouse or
Beneficiary in a single lump sum in lieu of any further benefit
payments hereunder.
7.8. Incapacity of Recipient. If any person entitled to a
benefit payment under the Plan is deemed by the Company to be
incapable of personally receiving and giving a valid receipt for
such payment, then, unless and until claim therefor shall have
been made by a duly appointed guardian or other legal
representative of such person, the Company may provide for such
payment or any part thereof to be made to any other person or
institution then contributing toward or providing for the care
and maintenance of such person. Any such payment shall be a
payment for the account of such person and a complete discharge
of any liability of the Company and the Plan therefor.
7.9. Corporate Successors. The Plan shall not be
automatically terminated by a transfer or sale of assets of the
Company or by the merger or consolidation of the Company into or
with any other corporation or other entity, but the Plan shall be
continued after such sale, merger or consolidation only if and to
the extent that the transferee, purchaser or successor entity
agrees to continue the Plan. In the event that the Plan is not
continued by the transferee, purchaser or successor entity, then
the Plan shall terminate subject to the provisions of Section
6.2.
7.10. Unclaimed Benefit. Each Participant shall keep
the Company informed of his current address and the current
address of his spouse and Beneficiaries. The Company shall not
be obligated to search for the whereabouts of any person. If the
location of a Participant is not made known to the Company within
three (3) years after the date on which payment of the
Participant's Supplemental Retirement Benefit may first be made,
payment may be made as though the Participant had died at the end
of the three-year period. If, within one additional year after
such three-year period has elapsed, or, within three years after
the actual death of a Participant, the Company is unable to
locate any Surviving Spouse or Beneficiary of the Participant,
then the Company shall have no further obligation to pay any
benefit hereunder to such Participant, Surviving Spouse,
Beneficiary, or any other person and such benefit shall be
irrevocably forfeited.
7.11. Limitations on Liability. Notwithstanding any of
the preceding provisions of the Plan, neither the Company nor any
individual acting as an employee or agent of the Company shall be
liable to any Participant, former Participant, Surviving Spouse,
Beneficiary, or any other person for any claim, loss, liability
or expense incurred in connection with the Plan.
7.12. Taxable Distribution. The Company shall determine
the manner and amount of payments to be made to the Participant,
Surviving Spouse or Beneficiary, and shall make such payments, in
accordance with the terms of the Plan. Notwithstanding anything
to the contrary contained herein or in the Qualified Plan, (a) in
the event that the Internal Revenue Service prevails in its claim
that the amount of any benefit accrued under the Plan constitutes
taxable income to a Participant, Surviving Spouse or Beneficiary
for any taxable year, prior to the taxable year in which such
benefit is distributed, or (b) in the event that legal counsel,
satisfactory to the Company and the applicable Participant,
Surviving Spouse or Beneficiary, renders an opinion that the
Internal Revenue Service would likely prevail in such a claim,
such benefits under the Plan, to the extent constituting taxable
income, shall be immediately distributed to the Participant,
Surviving Spouse or Beneficiary. For purposes of this Section,
the Internal Revenue Service shall be deemed to have prevailed in
a claim if such claim is upheld by a court of final jurisdiction,
or if the Company, based upon an opinion of legal counsel
satisfactory to the Company and the Participant, Surviving Spouse
or Beneficiary, fails to appeal a decision of the Internal
Revenue Service, or a court of applicable jurisdiction, with
respect to such claim, to an appropriate Internal Revenue Service
appeals authority or to a court of higher jurisdiction within the
appropriate time period.
IN WITNESS WHEREOF, Northwestern Corporation has caused this
amendment and restatement of the Plan to be executed in its name,
by its duly authorized officer, on this day of
, 2000, effective as of January 1, 2000.
NORTHWESTERN CORPORATION
By:
SCHEDULE A
PLAN PARTICIPANTS
1. Merle D. Lewis