Exhibit 10(a)(1)
NORTHWESTERN PUBLIC SERVICE COMPANY
SUPPLEMENTAL INCOME SECURITY PLAN
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
1.1 Definitions. When the following terms are used herein with
initial capital letters, they shall mean:
(a) Administrator. The Company or such individual or
committee as the Company shall designate from time to time. The
Administrator shall have the authority to administer the Plan and
to construe its provisions, and the decisions of the
Administrator shall be final and binding on all parties. The
Administrator shall constitute the "administrator" and "named
fiduciary" of the Plan within the meaning of the Employee
Retirement Income Security Act of 1974 ("ERISA").
(b) Company. Northwestern Public Service Company.
(c) Disability. The total and permanent disability as
determined by a doctor of medicine approved by the Company, which
event will be deemed to have occurred on the date of delivery of
such doctor's certificate to such effect to the Company. In lieu
of such certification, the Company may accept, as proof of total
and permanent disability, proof of the Participant's eligibility
for disability benefits under the Federal Social Security Act, as
amended from time to time.
(d) Earnings. The amount of salary paid by the Company to
a Participant for services rendered, excluding any commissions
and bonuses.
(e) Earnings Level. Earnings within a prescribed range as
shown on the attached Schedule A.
(f) Employee. An individual who customarily works a
regularly scheduled work week with the Company of at least twenty
(20) hours per week.
(g) Participant. An Employee who has become eligible to
participate in the Plan in accordance with Article II.
(h) Plan Anniversary. The first day of a Plan Year which
is July 1 of each year.
(i) Plan Year. The twelve (12) month period beginning on
July 1 and ending on June 30.
(j) Retirement Date. The later of the Employee's or
Director's 65th birthday or retirement from the Company.
1.2 Gender and Number. The pronouns "he", "him" and "his", referring
to an Employee, Participant or Beneficiary, shall also refer to and include
females as well as males, and the singular shall include the plural, and
the plural the singular, except when the context or otherwise requires.
ARTICLE II
ELIGIBILITY
2.1 Eligibility. Senior management employees who are selected by the
Chief Executive Officer of the Company ("Eligible Employee") and all
outside members of the Board of Directors of the Company shall be eligible
to participate in this Plan as of the date he has satisfied such
requirement. To be an Eligible Employee, one must:
(a) Be under age 65;
(b) Be credited with six months or more of service in a
qualifying position; and
(c) Be actively at work on the Plan Anniversary Date.
(d) Be in a state of health that would meet customary
requirements at reasonable standard insurance rates.
2.2 Special State of Health Rule. Participation in the Plan shall be
limited to those Eligible Employees and Directors whose state of health and
safety at the time of their entry into the Plan is determined to the
satisfaction of the Administrator to be normal for their age group, on the
basis of standards comparable to those customarily employed in the
insurance industry for setting standard premium rates; provided, however,
that the Administrator in its sole discretion may permit participation by
an Eligible Employee or Director whose state of health or safety does not
meet this requirement, on the condition that the amount of benefits
provided to him or his Beneficiary may be reduced, at the Administrator's
discretion, from that which would otherwise apply to him under the terms of
this Plan. An Eligible Employee or Director who participates in the Plan
under this section shall be advised by the Administrator in a written
notice no later than sixty (60) days after the determination of his state
of health and safety as required herein, of the dollar amount of benefits
to be provided to him (or his Beneficiary) under the Plan.
2.3 Forfeiture of Eligibility. No benefits shall apply to a
terminated Participant who, prior to the occurrence of a Change in Control
or Major Transaction, is discharged from his employment with the Company on
account of dishonesty or misconduct.
ARTICLE III
BENEFITS
3.1 Death Benefits. Upon the death of a Participant, the
Participant's Beneficiary shall be entitled to receive Death Benefits in
the form of a monthly income in the amount applicable to the Participant's
executed certificate on file (Earnings Level for Eligible Employees) as
shown on the attached Schedule A.
3.2 Retirement Benefits. Subject to the provisions of Article II, an
Eligible Employee shall upon his retirement, be eligible to receive a
Retirement Benefit on his Retirement Date. The amount of benefit shall be
based on the Participant's executed certificate on file as shown on the
attached Schedule A. An election for Retirement Benefits by an Eligible
Employee must be made within thirty (30) days of Retirement. At the time
of the election, the Eligible Employee may elect to receive all or part of
the retirement benefit in 25% increments. Once this election is made, it
cannot be changed.
3.3 Increase in Benefits. Subject to the provisions of Article II, a
Participant whose Earnings increase to the extent that he enters a higher
Earnings Level shall become entitled to the amount of benefits of such
higher Earnings Level, as of the Plan Anniversary coincident with or next
following such increase in Earnings provided, that he is actively employed
by the Company on such Plan Anniversary, that he is credited with six
months or more of service in a qualifying position (under 2.1) and provided
further that if the state of health and safety of such a Participant is not
then determined to the satisfaction of the Administrator to be normal for
his age group, on the basis of standards comparable to those customarily
employed in the insurance industry in setting standard or reasonable
premium rates, such increase in benefits shall apply only to the extent
authorized by the Administrator. The Administrator shall advise any such
Participant, in a written notice no later than sixty (60) days after the
determination of his state of health and safety as required herein, of the
dollar amount of benefits to be provided to him (or his Beneficiary) under
the Plan, which dollar amount shall in no event be less than that to which
he was entitled prior to such notice.
3.4 Payment of Benefits. Retirement benefits will be eligible for
payment on the first of the month following the Participant's Retirement
Date. Death Benefits will be paid to the participant's named beneficiary
on the first of the month following the Participant's date of death. All
Retirement and Death benefit payments shall be made in monthly installments
and shall continue for fifteen (15) years from the date of the initial
monthly payment.
ARTICLE IV
PORTABILITY AND ELIGIBILITY FOR BENEFITS
IN THE EVENT OF TERMINATION
4.1 Subject to, in the cases of clauses (a), (b) and (c) only, the
provisions of Article II, an Eligible Employee whose employment has
terminated will be eligible for benefits if:
(a) The Eligible Employee retires under the Company's
Pension Plan;
(b) The termination is due to total disability;
(c) The Eligible Employee terminates for reasons other than
4.1(a), 4.1(b) or 4.1(d) and has beenemployed by the Company for
ten (10) or more consecutive years or has five (5) years of Plan
participation; or
(d) The Eligible Employee is terminated following a Change
in Control or Major Transaction (each as defined in Section 4.2
hereof) and such employee was employed by the Company prior to
such Change in Control or Major Transaction.
4.2 Definitions of Change in Control and Major Transaction
(a) Change in Control. For purposes of the Plan, a Change
in Control of the Company shall occur upon the happening of the
earliest to occur of the following:
1. any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly,
of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its affiliates)
representing 20% or more of the combined voting power of the
Company's then outstanding securities; or
2. during any period of not more than two consecutive
years (not including any period prior to August __, 1995),
individuals who at the beginning of such period constitute
the Board and any new director (other than a director
designated by a Person who has entered into an agreement
with the Company to effect a transaction described in clause
(I) of this paragraph or clauses (I), (II) or (III) of
paragraph (b) below) whose election by the Board or
nomination for election by the Company's shareholders was
approved or recommended by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election
or nomination for election was previously so approved or
recommended, cease for any reason to constitute a majority
thereof.
(b) Major Transaction. For purposes of the Plan, a Major
Transaction shall occur upon the happening of the earliest to
occur of the following:
1. the shareholders of the Company approve a merger
or consolidation of the Company with any corporation or
business trust, other than (i) a merger or consolidation
which would result in the individuals who prior to such
merger or consolidation constitute the Board constituting at
least two-thirds (2/3) of the board of directors of the
Company or the surviving or succeeding entity immediately
after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no Person
acquires more than 20% of the combined voting power of the
Company's then outstanding securities; or
2. the shareholders of the Company approve a plan of
complete liquidation of the Company; or
3. the shareholders of the Company approve an
agreement for the sale or disposition by the Company of all
or substantially all the Company's assets, other than a sale
or disposition which would result in the individuals who
prior to such sale or disposition constitute the Board
constituting at least two-thirds (2/3) of the board of
directors of the Person purchasing such assets immediately
after such sale or disposition.
For purposes of the Plan, "Beneficial Owner" shall have the
meaning defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and "Person" shall have
the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof; however, a
Person shall not include (i) the Company, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of
the Company, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of
shares of the Company.
ARTICLE V
DESIGNATION OF BENEFICIARY
5.1 General. Beneficiary shall mean the person or persons designated
by a Participant in writing, in a form acceptable to the Administrator, to
receive benefits in the event of the Participant's death. Such a
designation may be revoked in writing by the Participant at any time, and
the last such designation executed by the Participant and filed with the
Administrator shall control. A Participant may, by completing and filing
with the Administrator a form provided by the Administrator for the
purpose, waive entirely his right to designate a Beneficiary hereunder, or
irrevocably assign such right to either the Company or the Beneficiary.
5.2 Plan Designations. If there is no designated Beneficiary to
receive any amount that becomes payable to a Beneficiary, or in the event a
designated Beneficiary has predeceased the Participant, or if the
Participant designated distribution according to the Plan ("Per Plan"),
such balance shall be paid in equal shares to the person or persons in the
first surviving class of the following classes of preference Beneficiaries:
(a) Participant's surviving spouse, with a balance of
payments that may be payable in the event that the spouse dies
before the end of the fixed payment period, to be paid in order
of preference to those designated in classes (b), (c) or (d)
hereafter, or as my spouse may validly designate during his or
her lifetime,
(b) Participant's surviving issue, (including legally
adopted issue), per stirpes and not per capita,
(c) Participant's surviving parents,
(d) Participant's estate.
5.3 Interpretations. Any ambiguity in the interpretation of the
Beneficiary designation shall be determined by the Administrator.
ARTICLE VI
CLAIMS
A Participant or Beneficiary who has become entitled to Benefits and
who wishes payment to commence shall submit a claim to the Administrator in
writing, in such form and with such supporting documents and authorizations
as the Administrator may require. If a Participant's or a Beneficiary's
claim for benefits is denied in whole or in part, he shall be entitled to a
written explanation form the Administrator setting forth the specific
reasons for the denial, and to a full and fair review by the Administrator
of the decision denying the claim.
ARTICLE VII
EXCLUSIONS AND LIMITATIONS
7.1 General. No benefits shall be payable under the Plan:
(a) on account of a Participant's death by suicide within
two (2) years of his entry into the Plan, or
(b) to a Participant (or his Beneficiary) within two (2)
years after the Participant has materially misrepresented the
state of his health or safety to the Company, or to any party
designated by the Company, on the occasion of his entry into the
Plan.
In the case of a Participant who has become eligible for an increase
in benefits under Section 3.3, no such increase shall apply:
(a) in the event of the Participant's suicide within two
(2) years after such increase becomes effective, or
(b) within two (2) years following the Participant's
material misrepresentation of the state of his health or safety
to the Company, or to any party designated by the Company, on the
occasion of his becoming eligible for an increase in benefits.
No benefits shall be payable to a Participant (or his Beneficiary) who
has materially misrepresented his age to the Company, except as the
Administrator shall authorize in its sole discretion.
7.2 Benefits as stated in Executed Certificate. No benefits shall
apply to a terminated Participant except as shall be set forth in a valid
Executed Certificate of Eligibility issued to him by the Administrator,
according to such reasonable rules and procedures as the Administrator may
establish.
7.3 Employee Cooperation. The right of any Eligible Employee to
participate in the Plan is conditioned upon and subject to his cooperation
with the efforts of the Administrator to determine the state of his health
and safety.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Obligation of the Company. Benefits under the Plan will be paid
solely from the general assets of the Company. No funds or assets will be
segregated or set aside by the Company for the payment of benefits, and no
trust or escrow of any kind will be created with respect to the Plan by the
Company.
8.2 Amendments or Termination. This Plan may be amended or
terminated at any time by affirmative vote of the Board of Directors of the
Company; provided, however, that such amendment or termination shall not
effect any Participant's right to benefits which arises prior to such
amendment or termination.
This Plan, as revised, has been executed on the behalf of the Company
on the 2nd day of January, 1997.
NORTHWESTERN PUBLIC SERVICE COMPANY
By /s/ Merle D. Lewis
_____________________________________
Merle D. Lewis, President & CEO