Exhibit 10.1(d)


 


NORTHWESTERN
CORPORATION


 


Incentive Compensation and
Severance Plan

and

Summary Plan Description


 


It is of utmost importance to NorthWestern Corporation
and its affiliates (collectively, “NorthWestern”) to motivate and to retain
employees who support its continued, successful operation of and who will lead
NorthWestern through a successful Chapter 11 reorganization (the “Chapter 11
Case”).  Accordingly, NorthWestern has
adopted this Incentive Compensation and Severance Plan (the “Plan”) to determine
both –


 


•                  the incentive compensation that
participating employees will receive pursuant to Section 3 of the Plan for
calendar years 2003 and 2004 (“Incentive Payments”); and


 


•                  the severance benefits that
participating employees will receive pursuant to Section 4 of the Plan in
the event their employment with the Company terminates for any reason.


 


Throughout this Plan, the term “Company” is used when
NorthWestern is acting, through its employees and Directors, in its corporate
interest as employer, as Plan sponsor, or as settlor with respect to the Plan
and any successor-in-interest to NorthWestern in such capacity.  The Plan uses the term “Plan
Administrator” whenever the Company is acting in the limited
capacity of making determinations, decisions, and interpretations associated
with administering the Plan.


 


This Plan modifies and supersedes any and all prior
incentive compensation and severance policies, plans and programs with respect
to the Company’s employees.  To the
extent any of such incentive compensation and severance policies, plans and
programs conflict or differ in any way with this Plan, the provisions of this
Plan governs except with respect to the severance provisions of the UPA.  The Plan is an “employee welfare benefit plan”
as defined in Section 3(1) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), is
not intended to be a “pension plan” as defined in Section 3(2)(A) of
ERISA, and shall be administered so as not to be an ERISA pension plan.


 


1.                                       Plan Eligibility


 


You will be eligible to collect incentive
compensation and severance benefits pursuant to Sections 3 and 4 of the Plan
only if (i) the Company makes the discretionary decision in writing to
include you in the Plan, and (ii) if required by the Company, you enroll
in the Plan through execution of an agreement (the “Enrollment Agreement”)
substantially in the form attached and made a part of this Plan.


 





















 


2.                                      Ineligibility
for Plan Benefits


 


(a)                               Incentive
Compensation.  You will become
ineligible to receive incentive compensation pursuant to Section 3 of the
Plan immediately upon terminating your employment with the Company for any
reason.  This means that to qualify to
collect Incentive Payments, you must remain an employee of the Company through
the respective performance dates provided in the Plan.


 


(b)                               Severance
Benefits.  You will be ineligible to
receive severance benefits pursuant to Section 4 of the Plan if at the
time your employment terminates, you are either ineligible pursuant to subsection (c) of
this Section or classified by the Company as being in one or more of the
following ineligible categories:


 


i.                  Foreign Employees, i.e., persons who are not on a
U.S. payroll of the Company.


ii.               Leased Employees, i.e., persons who are the Company’s
leased employees, within the meaning of Internal Revenue Code Section 414(n).


iii.            Persons
Waiving Participation, i.e., persons to whom the Company did
not extend the opportunity of participating in this Plan.


iv.           Persons on
Indefinite Unpaid Leaves of Absence, i.e., persons who are
absent from work on indefinite unpaid leaves of absence expected to exceed
thirty days, except leaves during which regular pay continues or to the extent
eligibility is required by applicable law.


v.              Employees
with Individual Agreements, i.e., persons who have a right to
collect severance benefits pursuant to a separate written agreement entered
into with the Company after the date on which NorthWestern adopts this Plan,
unless such an agreement provides expressly to the contrary.


vi.           Employees
who Resign, etc., i.e., persons whose employment terminates
voluntarily, or due to Cause, retirement, death, or disability.


vii.        Persons
Discharged for Cause, i.e., persons whose employment is terminated
for Cause, as determined by the Plan Administrator
in its sole discretion based on the following types of misconduct:


1.                                                               willful
failure to comply with written policies or lawful directives on material
business matters;


 


2.                                                               willful
statements or conduct adversely affecting the Company or causing (or being
reasonably likely to cause) injury to the reputation, business or business
relationships of the Company; or


 


3.                                                              illegal
conduct, gross misconduct or, dishonesty, in each case which is willful and
results (or is reasonably likely to result) in material damage to the Company.


 


viii.     Changed
Decisions, i.e., persons for whom NorthWestern cancels a pending
termination of employment at any time before employment actually terminates.


 


(c)                                Successor
Employment, and Comparable Employment.  You
will not be entitled to severance benefits under this Plan, if the Plan
Administrator determines that a Successor Employer has offered you an
Equivalent or Better Position to commence promptly


 





















 


following your termination of employment with NorthWestern, whether you
accept the position or not.  A “Successor Employer” is:


i.                  any entity that
assumes operations or functions formerly carried out by the Company (such as
the buyer of a facility or any entity to which a Company operation or function
has been outsourced);


ii.               any affiliate of
the Company; or


iii.            any entity making the
job offer at the request of the Company (such as a joint venture of which the
Company or an affiliate is a member).


“Equivalent or Better
Position” means employment that does not involve either a
material reduction in compensation or benefits, a material reduction in
responsibilities, duties or support, or relocation to a primary place of
employment of greater than fifty (50) miles from the current primary place of
employment.


 


3.                                      Eligible
Employees Incentive Payments


 


In general, Incentive Payments will be approximately
60% of normal, total targeted cumulative incentives for all participants for
each of Plan Years 2003 and 2004.


 


(a)                               Officers


 


An Incentive Payment will be provided to each Officer
equal to a fixed multiple of the Officer’s targeted, annual incentive.  The following amounts are payable upon the
Company’s determination that the associated performance-based milestones have
been achieved while the Officer is an active employee of the Company:


 


i.                  One-third of the
total amount listed in the Plan with respect to the Officer shall be paid as
soon as practicable following the entry of any order by the Court approving a
disclosure statement.


 


ii.               The second
one-third of the total amount listed in the Plan with respect to the Officer
shall be paid as soon as practicable following the effective date of the Debtor’s
confirmed reorganization plan.


 


iii.            The final one-third of
the total amount listed in the Plan with respect to the Officer shall be paid
as of January 31, 2005.


 


If an Officer voluntarily resigns from employment with
the Company before the effective date of the Company’s reorganization plan, the
Officer will both forfeit any future right to collect benefits pursuant to the
Plan, and will promptly return to the Company the full amount of any benefits
previously paid to the Officer pursuant to the Plan.


 


(b)                               Group
1 Employees


 


An Incentive Payment will be provided to each employee
eligible for Group 1 Incentive Payments as described in the Plan.  Incentive Payments will vest on June 1,
2004 and will be paid on or after September 30, 2004 with respect to 2003
incentives.  Incentive Payments with
respect to 2004 incentives will vest on January 1, 2005 and will be paid
not later than January 31, 2005.


 





















 


(c)                                Group
2 Employees – All Other Employees


 


An Incentive Payment will be provided for all
employees (other than Officers and Group 1 Employees), for calendar years 2003
and 2004, and will be funded at 40% of the cumulative, targeted annual
incentive level for all such participants for each year.  Individual Incentive Payments will be based
on individual performance and will be made not later than June 30, 2004
with respect to 2003 incentives and not later than January 31, 2005 with respect
to 2004 incentives.(1)


 


4.                                      Severance
Benefits


 


If the Company terminates the employment of an
eligible employee without Cause (as defined in Section 2) directly in
connection with NorthWestern’s post-petition corporate restructuring process,
the Company, upon a properly executed release of claims, shall –


 


•                  make a lump sum cash severance
payment to the employee in an amount determined pursuant to the guidelines set
forth in the remainder of this Section; and


 


•                  provide the employee with healthcare and
similar Company-provided group insurance, at no cost to the employee, for the
number of months that serves as the multiple for calculating the employee’s
cash severance payment.


 


Unless otherwise set forth in the release of claims,
any cash payment due under this Section will be made within seven (7) business
days from the date of an employee’s termination of employment.


 


(a)                               Officers


 


If an employee is an officer and qualifies for
severance benefits under this Section, the Company will provide the employee
with severance benefits.  The Company,
without the mutual, written consent of the qualified officer, may not reduce
the right to and amount of such severance benefits.


 


(b)                               Group
1 Employees


 


If an employee qualifies for severance benefits under
this Section, the Company will provide the employee with severance benefits
determined under the Plan.  The Company,
without the mutual, written consent of the qualified employee, may not reduce
the right to and amount of such severance benefits.


 










(1) The right to
these Incentive Payments shall be in addition to any pre-petition contractual
rights that a Group 2 Employee may have to collect cash-based payments (which
the Company shall pay in the ordinary course of business during the
post-petition corporate restructuring process).


 





















 


(c)                                Group
2 (All other employee)


 


If an employee qualifies for severance benefits under
this Section due to a termination of employment without Cause, the Company
will provide such employees with severance benefits equal to the greater of –


 


i.                  1-week of
salary for every full year of service with the Company, with a minimum of 4
weeks and a maximum of 26 weeks, or


 


ii.               if applicable, the
severance benefits that such employee would be entitled to receive pursuant to
the terms of UPA.(2)


 


5.                                      Reemployment


 


If you are re-employed by NorthWestern or a Successor
Employer while severance benefits are still payable under the Plan, all such
benefits will cease, except as otherwise specified by NorthWestern or the
Successor Employer, as the case may be. 
If you receive severance benefits after your eligibility ceases under
the Plan due to reemployment, you must promptly repay any such severance
benefits.


 


6.                                      Taxes


 


Taxes will be withheld from benefits under the Plan to
the extent required by law.


 


7.                                      Relation
to Other Plans


 


Any prior incentive compensation, severance, or
similar plan of the Company that might apply to you is hereby modified as to
you while you are eligible for Plan benefits. 
Severance benefits under this Plan will not be counted as “compensation”
for purposes of determining benefits under any other benefit plan, pension
plan, or similar arrangement.  All such
plans or similar arrangements, to the extent inconsistent with this Plan, are
hereby so amended except the severance provisions of the UPA.


 


8.                                      Amendment
or Termination


 


Acting through its Board of Directors, NorthWestern
Corporation or any successor-in-interest to NorthWestern Corporation has the
right, in its nonfiduciary settlor capacity, to amend the Plan or to terminate
it at any time, prospectively, for any reason, without notice, including to
discontinue or eliminate benefits; provided, however, any vested
right to Incentive Payments under this Plan may not be eliminated.  No person has any right to Incentive Payments
under this Plan until those Incentive Payments vest in accordance with the
terms of the Plan.  Unless expressly
provided otherwise herein, the Company may amend the Plan to provide greater or
lesser benefits to particular employees by sending affected employees a letter
or other notice setting forth the applicable benefit modification.


 


9.                                      Claims
Procedures


 


(a)                               Claims
Normally Not Required


 


Normally, you do not need to present a formal claim to
receive benefits payable under this Plan.


 










(2) The severance
benefits portion of the Unit Purchase Agreement between Touch America Holdings, Inc.,
Montana Power Company and NorthWestern dated September 29, 2000 as amended
(“UPA”) applies until it expires on February 15, 2004, at which time those
employees covered by the UPA will be eligible for severance benefits only under
the Plan.


 





















 


(b)                               Disputes


 


If any person (Claimant) believes that benefits are
being denied improperly, that the Plan is not being operated properly, that
fiduciaries of the Plan have breached their duties, or that the Claimant’s
legal rights are being violated with respect to the Plan, the Claimant must
file a formal claim with the Plan Administrator.  This requirement applies to all claims that
any Claimant has with respect to the Plan, including claims against fiduciaries
and former fiduciaries, except to the extent the Plan Administrator determines,
in its sole discretion, that it does not have the power to grant all relief
reasonably being sought by the Claimant.


 


(c)                                Time
for Filing Claims


 


A formal claim must be filed within 90 days after the
date the Claimant first knew or should have known of the facts on which the
claim is based, unless the Plan Administrator in writing consents otherwise.


 


(d)                               Procedures


 


The Plan Administrator has adopted the procedures for
considering claims, which it may amend from time to time, as it sees fit.  These procedures shall comply with all
applicable legal requirements.  The right
to receive benefits under this Plan is contingent on a Claimant using the prescribed
claims procedures to resolve any claim. 
Therefore, if a Claimant (or his or her successor or assign) seeks to
resolve any claim by any means other than the prescribed claims provisions, he
or she must repay all benefits received under this Plan and shall not be
entitled to any further Plan benefits.


 


10.                               Plan
Administration


 


(a)                               Discretion


 


The Plan Administrator is responsible for the general
administration and management of the Plan and shall have all powers and duties
necessary to fulfill its responsibilities, including, but not limited to, the
discretion to interpret and apply the Plan and to determine all questions
relating to eligibility for benefits. 
The Plan shall be interpreted in accordance with its terms and their
intended meanings.  However, the Plan
Administrator and all Plan fiduciaries shall have the discretion to interpret
or construe ambiguous, unclear, or implied (but omitted) terms in any fashion
they deem to be appropriate in their sole discretion, and to make any findings
of fact needed in the administration of the Plan.  The validity of any such interpretation,
construction, decision, or finding of fact shall not be given de novo review if
challenged in court, by arbitration, or in any other forum, and shall be upheld
unless clearly arbitrary or capricious.


 


(b)                               Finality
of Determinations


 


All actions taken and all determinations made in good
faith by the Plan Administrator or by Plan fiduciaries will be final and
binding on all persons claiming any interest in or under the Plan.  To the extent the Plan Administrator or any
Plan fiduciary has been granted discretionary authority under the Plan, the
Plan Administrator’s or Plan fiduciary’s prior exercise of such authority shall
not obligate it to exercise its authority in a like fashion thereafter.


 


(c)                                Drafting
Errors


 


If, due to errors in drafting, any Plan provision does
not accurately reflect its intended meaning, as demonstrated by consistent
interpretations or other evidence of intent,


 





















 


or as determined by the
Plan Administrator in its sole discretion, the provision shall be considered
ambiguous and shall be interpreted by the Plan Administrator and all Plan
fiduciaries in a fashion consistent with its intent, as determined in the sole
discretion of the Plan Administrator.  The Plan Administrator shall amend the Plan
retroactively to cure any such ambiguity.


 


(d)                               Fiduciary
Disclosure Authority


 


No Plan fiduciary shall have the authority to
answer questions about any pending or final business decision of the Company or
any affiliate that has not been officially announced, to make disclosures about
such matters, or even to discuss them, and no person shall rely on any
unauthorized, unofficial disclosure.  Thus, before a decision is officially
announced, no fiduciary is authorized to tell any person, for example, that he
or she will or will not be terminated or that the Company will or will not
offer severance benefits in the future.  Nothing in this subsection shall preclude
any fiduciary from fully participating in the consideration, making, or
official announcement of any business decision.


 


(e)                                Scope


 


This Section may not be invoked by any
person to require the Plan to be interpreted in a manner inconsistent with its
interpretation by the Plan Administrator or other Plan fiduciaries.


 


11.                               Costs
and Indemnification


 


All costs of administering the Plan and providing Plan
benefits will be paid by the Company, with one exception: Any expenses (other
than arbitrator fees) incurred in resolving disputes with multiple Claimants
concerning their entitlement to the same benefit may be charged against the
benefit, which will be reduced accordingly, to the extent permitted by
law.  To the extent permitted by
applicable law and in addition to any other indemnities or insurance provided
by the Company, the Company shall indemnify and hold harmless its (and its
affiliates’) current and former officers, Directors, and employees against all
expenses, liabilities, and claims (including legal fees incurred to defend
against such liabilities and claims) arising out of their discharge in good
faith of their administrative and fiduciary responsibilities with respect to
the Plan.  Expenses and liabilities
arising out of willful misconduct will not be covered under this indemnity.


 


12.                               Limitation
on Employee Rights


 


This Plan shall not give any employee the right to be
retained in the service of the Company or interfere with or restrict the right
of the Company to discharge or retire the employee.


 


13.                               Governing
Law


 


This Plan is a welfare plan subject to ERISA, and it
shall be interpreted, administered, and enforced in accordance with that
law.  To the extent that state law is
applicable, the statutes and common law of the State of South Dakota (excluding
any that mandate the use of another jurisdiction’s laws) shall apply.


 


14.                               Miscellaneous


 


Where the context so indicates, the singular will
include the plural and vice versa. 
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan.  Unless the context clearly indicates to the


 





















 


contrary, a reference to
a statute or document shall be construed as referring to any subsequently
enacted, adopted, or executed counterpart.


 


15.                               Statement
of ERISA Rights


 


The following information required by ERISA is
furnished by the Plan Administrator.


 


(a)                               General
Plan Information


 


	
  Name of Plan:

  	
   

  	
  NorthWestern Corporation Incentive

  Compensation and Severance Plan

  
	
  Plan Administrator’s Name:

  	
   

  	
  NorthWestern Corporation

  
	
   Address and Phone Number:

  	
   

  	
  125 South Dakota Avenue

  Sioux Falls, South Dakota 57104

  Telephone: 605-978-2835

  
	
  Employer Identification

  Number assigned by IRS:

  	
   

  	
  46-0172280

  
	
  Plan Number of the Plan:

  	
   

  	
  <ASSIGN PLAN NUMBER>

  
	
  Type of Plan:

  	
   

  	
  Incentive Compensation and Severance Pay
  Plan

  
	
  Type of Administration:

  	
   

  	
  Employer Administration

  
	
  Name and Address of Registered Agent for
  Service of Legal Process

  	
   

  	
  Plan Administrator

  
	
  Source of Contribution to the Plan:

  	
   

  	
  General assets of NorthWestern Corporation

  
	
  Funding Medium:

  	
   

  	
  General assets of NorthWestern Corporation

  
	
  Plan Fiscal Year Ends On:

  	
   

  	
  December 31st

  



 


(b)                               Plan
Modification, Amendment, And Termination


 


The Plan Administrator
has the right to amend or terminate the Plan at any time in accordance with Section 8
above, with or without notice.  The
consent of any employee is not required to terminate, modify, amend, or change
the plan.


 


(c)                                Your
Rights under ERISA


 


As a participant in the plan, you are entitled to
certain rights and protections under ERISA. 
Your rights include the following:


 


1.                                       Right
to Examine Plan Documents:


 


You have the right to examine all plan documents,
including the annual reports and plan descriptions filed with the U.S.
Department of Labor.  The Plan
Administrator will tell you where the plan documents are available for
examination.  There will be no charge for
examining plan documents.


 





















 


2.                                       Right
to Obtain Copies of Plan Documents:


 


You have the right to obtain copies of all plan documents.  You should make your request in writing to
the Plan Administrator.  There may be a
reasonable charge for the copies.


 


3.                                       Right
to Written Explanation of Denial:


 


If your claim for benefits under the plan is denied in whole or in
part, you must be given a written explanation of the reason for denial.


 


4.                                       Right
to Review:


 


You have the right to request a review and
reconsideration of any denial of your claim for plan benefits.


 


5.                                       Other
ERISA Rights:


 


You can protect your rights under ERISA.  For example, ERISA gives you the right to
file suit in a state or federal court if your claim for benefits under the plan
is denied or ignored.  You can also file
suit in a federal court if you request plan documents and do not receive them
within 30 days.  In such a case, the court
will require the Plan Administrator to give you the plan documents you requested.  In some cases, the court could also require
the Plan Administrator to pay you up to $110 a day until you receive the
requested materials.


 


ERISA gives you rights and protections.  ERISA also imposes special obligations on the
people (called “fiduciaries”) who operate this employee benefit plan.  The fiduciaries have a duty to protect the
plan’s money and the interests of plan participants.  The named fiduciary is NorthWestern
Corporation.  ERISA prohibits anyone from
discriminating against you in any way to prevent you from receiving a plan
benefit or from exercising your rights under ERISA.


 


If you believe that the fiduciaries have misused the
plan’s money, or that you have been discriminated against for asserting your
rights, you can ask for help from the U.S. Department of Labor.  You can also file suit in a federal
court.  If you file a suit, the court
will decide who must pay the court costs and legal fees.  If your suit is successful, the court may
require the fiduciary to pay those costs and fees.


 


If you have any questions about your plan, you should
contact the Plan Administrator.


 


If you have any questions about this statement of your
rights under ERISA, you should contact the nearest office of the Employee
Benefits Security Administration, U.S. Department of Labor, listed in your
telephone directory or the Division of Technical Assistance and Inquiries,
Employee Benefits Security Administration, U.S. Department of Labor, 200
Constitution Avenue N.W., Washington, D.C. 20210.  You may also obtain certain publications
about your rights and responsibilities under ERISA by calling the publications
hotline of the Employee Benefits Security Administration.


 





















 


Adopted and Approved


 


 


	
  NORTHWESTERN CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
  Date

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
  Chairman and Chief Executive Officer