<PAGE>
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
Filed by the Registrant ( X )
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
NORTHWESTERN CORPORATION
-----------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and O-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule O-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration State No.:
3) Filing Party:
4) Date Filed:
NORTHWESTERN CORPORATION
Corporate Office
125 S. Dakota Ave.
Sioux Falls, South Dakota 57104
</PAGE>
<PAGE>
Annual Meeting
of Shareholders
May 3, 2000
March 10, 2000
Dear Shareholder:
We are pleased to invite you to attend the Annual Meeting of Shareholders
of NorthWestern Corporation, which will be held in the Great Hall of the
Washington Pavilion, 301 S. Main Ave., Sioux Falls, South Dakota, on
Wednesday, May 3, 2000, at 10:00 a.m. (Central Time Zone).
We discuss the matters to be acted upon at the meeting in more detail in
the attached Notice of Annual Meeting and Proxy Statement. You are being
asked to elect three Directors in Class III to the Board of Directors of
the Corporation. Your Board of Directors recommends that you vote 'FOR'
the three individuals nominated.
You can vote in any one of three ways this year. You can vote online at
our Web site, by calling a toll-free telephone number, or by signing and
returning the enclosed proxy card in the postage prepaid envelope provided.
Instructions for voting by each of these methods are set forth on the proxy
card.
We hope that you can attend the Annual Meeting. Whether or not you plan to
attend, you can be sure that your shares are represented at the meeting by
promptly voting by one of the three methods provided. Your vote is
important, whether you own a few shares or many.
Thank you for your continued support of NorthWestern Corporation.
Very truly yours,
Merle D. Lewis
Chairman and
Chief Executive Officer
</PAGE>
<PAGE>
NORTHWESTERN CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Corporate Office
125 S. Dakota Ave.
Sioux Falls, South Dakota 57104
March 10, 2000
To the Holders of Common Stock of
NORTHWESTERN CORPORATION:
The Annual Meeting of Shareholders of NorthWestern Corporation
('NorthWestern') will be held in the Great Hall of the Washington Pavilion,
301 S. Main Ave., Sioux Falls, South Dakota, on Wednesday, May 3, 2000, at
10:00 a.m. (Central Time Zone) for the following purposes:
(1) To elect three members of Class III of the Board of Directors of
NorthWestern to hold office until the Annual Meeting of
Shareholders in 2003, and until their successors are duly elected
and qualified; and
(2) To transact such other business as may properly come before the
meeting and any adjournment or postponement thereof.
Shareholders of record at the close of business on March 4, 2000, will be
entitled to vote at the meeting and any adjournments.
Your Board of Directors recommends that you vote 'FOR' the three nominees
for the Board.
You are encouraged to vote in any one of the three ways available: online
at NorthWestern's Web site, by calling the toll-free telephone number, or
by signing, dating and returning your proxy card in the enclosed envelope.
Instructions for voting by each of these methods are set forth on the proxy
card. If you are able to attend the Annual Meeting and wish to vote in
person, you may do so whether or not you have returned your proxy.
BY ORDER OF THE BOARD OF DIRECTORS
ALAN D. DIETRICH
Corporate Secretary
YOUR VOTE IS IMPORTANT, WHETHER YOU OWN A FEW SHARES OR MANY
</PAGE>
<PAGE>
NORTHWESTERN CORPORATION
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
To be held May 3, 2000
TABLE OF CONTENTS
Page
General Information . . . . . . . . . . . . . . . . . 1
Date of Meeting & Solicitation of Proxies . . . . . . . . 1
Outstanding Shares & Voting Rights . . . . . . . . . . 1
Election of Directors . . . . . . . . . . . . . . . . 1
Nominees . . . . . . . . . . . . . . . . . . . 2
Continuing Directors . . . . . . . . . . . . . . . 3
Meetings of the Board of Directors & Committees . . . . . . . . 4
Audit Committee . . . . . . . . . . . . . . . . . 4
Nominating & Compensation Committee . . . . . . . . . . 4
Corporate Governance Committee . . . . . . . . . . . . 4
Security Ownership by Certain Beneficial Owners & Management. . . . 5
Compensation of Executive Officers & Directors . . . . . . . . 6
Report on Executive Compensation . . . . . . . . . . . 6
Summary Compensation Table . . . . . . . . . . . . . 9
Information on Options . . . . . . . . . . . . . . 10
Employment Contracts . . . . . . . . . . . . . . . 11
Retirement Plan . . . . . . . . . . . . . . . . . 11
Other Benefits . . . . . . . . . . . . . . . . . 12
Director Compensation . . . . . . . . . . . . . . . 12
Salary Continuation Plan . . . . . . . . . . . . . . 13
Nominating & Compensation Committee Interlocks & Insider Participation 13
Section 16(a) Beneficial Ownership Reporting Compliance . . . . . 13
Performance Graph . . . . . . . . . . . . . . . . . . 14
Annual Report . . . . . . . . . . . . . . . . . . . 14
Independent Public Accountants . . . . . . . . . . . . . 15
Submission of Shareholder Proposals . . . . . . . . . . . . 15
Other Matters . . . . . . . . . . . . . . . . . . . 15
</PAGE>
GENERAL INFORMATION
Date of Meeting and Solicitation of Proxies
This proxy statement is being mailed to shareholders on or about March
10, 2000, and is furnished in connection with the solicitation by the Board
of Directors of NorthWestern (the 'Board') of proxies to be voted at the
Annual Meeting of Shareholders to be held on Wednesday, May 3, 2000 (the
'Meeting'). NorthWestern will bear all costs of the solicitation. In
addition to solicitation by mail, officers and team members of NorthWestern
may solicit proxies by telephone, facsimile, or in person. NorthWestern
has retained Georgeson Shareholder Communications Inc., to assist in the
solicitation of proxies at an estimated cost to NorthWestern of $5,500,
plus reasonable out-of-pocket expenses. Also, NorthWestern will, upon
request, reimburse brokers or other persons holding stock in their names or
in the names of their nominees for reasonable expenses in forwarding
proxies and proxy material to the beneficial owners of stock.
Outstanding Shares and Voting Rights
Holders of Common Stock of record at the close of business on March 4,
2000 (the 'Record Date'), will be entitled to one vote for each share of
Common Stock held by them on all matters to be voted upon at the Meeting.
As of the Record Date, there were outstanding 23,108,893 shares of Common
Stock.
Shareholders who execute proxies may revoke them at any time before
they are voted at the Meeting by giving written notice of such revocation
to NorthWestern's Corporate Secretary, by filing another proxy with him, or
by voting in person at the Meeting. Valid proxies will be voted in
accordance with the instructions given. In the absence of any instruction,
proxies will be voted 'FOR' election of the nominees. The form of proxy
confers discretionary authority with respect to any other business which
properly may be brought before the Meeting.
Directors will be elected by a plurality of the votes cast at the
Meeting, meaning that the three nominees receiving the most votes will be
elected directors. Abstentions will be counted as present for quorum
purposes, will not be counted as votes cast and will have no effect on the
result of the vote. If a broker which is the record holder of certain
shares indicates on a proxy that it does not have discretionary authority
to vote on a particular matter as to such shares, or if shares are not
voted in other circumstances in which proxy authority is defective, those
non-voted shares will be counted for quorum purposes but will have no
effect on the result of the election of directors and will not be deemed to
be present for purposes of determining whether shareholder approval of any
other matter has been obtained.
ELECTION OF DIRECTORS
In accordance with NorthWestern's Restated Certificate of
Incorporation and By-Laws, NorthWestern's directors are elected to
staggered terms on a classified Board of Directors. At the Meeting, three
directors will be elected to Class III of the Board, to hold office for a
term of three years, until the Annual Meeting of Shareholders in 2003, and
until their successors are duly elected and qualified.
In the event a nominee is unable to serve as a director at the time of
the Meeting, the shares represented by the proxies may (in the discretion
of the proxy holders) be voted for other nominees not named herein. Each
of the nominees has consented to be named and to serve if elected.
Management is not aware that any of the nominees will be unable to serve.
All of the nominees as directors in Class III are presently serving as
directors.
Nominees
The following information is furnished with respect to the nominees to
Class III of the Board for three-year terms expiring in 2003:
Age on
Principal Occupation Director March 1,
Nominee or Employment Since 2000
- ------------------ ------------------------- ----------- -----
John C. Charters Chief Executive Officer Feb. 2000 37
of LLC Qwest Cyber.Solutions
(a joint venture of Qwest
Communications and KPMG, LLP),
an application service provider
of information systems to
businesses, since June 1999;
formerly Vice President,
Business Development for Qwest
Communications (1998-99);
Vice President - Internet
Services & Applications
Development (1997-98) and
Executive Director INTERACT
Services (1996-97) for US West
Interprise.
Merle D. Lewis Chairman of NorthWestern 1993 52
since May 1998; Chief
Executive Officer since
February 1994; formerly
President (1994-1998);
Chairman of NorthWestern
Growth Corporation since
1994.
Marilyn R. Seymann President and Chief Executive Feb. 2000 57
Officer of M ONE, Inc., a
management and information
systems consulting firm
specializing in the financial
services industry, since 1991;
Member of the Boards of Directors
of Beverly Enterprises, Inc.,
True North Communications, Inc.
and Community First Bankshares.
Two other directors are currently serving in Class III: Aelred J.
Kurtenbach, Chairman and Chief Executive Officer of Daktronics, Inc.
(director since 1994) and Gary Olson, retired President & Chief Executive
Officer of Norwest Bank South Dakota, N.A. (director since 1998). Each has
indicated to the Board that, consistent with the Board's policies regarding
continued membership on the Board, they will be leaving the Board at the
end of their current term on April 30, 2000.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE 'FOR'
THE ELECTION OF THESE THREE NOMINEES.
Continuing Directors
The following information is furnished with respect to directors in
Class I whose terms expire in 2001:
Age on
Principal Occupation Director March 1,
Director or Employment Since 2000
- ------------------ ------------------------- ----------- --------
Randy G. Darcy Senior Vice President, 1999 49
Operations of General
Mills, Inc. (NYSE: 'GIS')
a consumer foods company,
since 1987.
Gary G. Drook President and Chief 1999 55
Executive Officer and
Director of AFFINA, The
Customer Relationship
Company (formerly Ruppman
Marketing Technologies,
Inc.), a provider of
customer services programs,
since 1997; formerly President
of Network Services (1994-1995)
for Ameritech Corporation
(NYSE: 'AIT').
Bruce I. Smith Attorney and partner in 1989 58
the law firm of Luebs,
Leininger, Smith, Busick
& Johnson since 1978.
The following information is furnished with respect to directors in
Class II whose terms expire in 2002:
Age on
Principal Occupation Director March 1,
Director or Employment Since 2000
- ------------------ ------------------------- ----------- --------
Richard R. Hylland President and Chief Operating 1995 39
Officer of NorthWestern since
May 1998; Vice Chairman
of NorthWestern Growth
Corporation since January
1999; formerly Executive
Vice President of
NorthWestern (1995-1998);
Formerly Chief Executive
Officer (Jan.-May 1999) and
President & Chief Operating
Officer (1994-1999)of NGC.
Jerry W. Johnson Dean of the School of 1994 59
Business, University of
South Dakota, since 1990;
Member of the Boards of
Directors of Citibank (S.D.),
N.A. and Citibank FSB.
Larry F. Ness Chairman and Chief 1991 54
Executive Officer of
First Dakota Financial
Corp., a bank holding
company, and Chairman
and Chief Executive Officer
of First Dakota National
Bank since 1996; formerly
Vice Chairman and Chief
Executive Officer of that
bank (1993-1995).
MEETINGS OF THE BOARD OF DIRECTORS AND COMMMITTEES
The Board held four regular meetings and two special meetings during
1999. Each director attended more than 75 percent of the aggregate of the
meetings of the Board and of each committee on which he served. Committee
members are appointed annually at the Board's regularly scheduled May
meeting.
Audit Committee
Our Audit Committee is composed of not less than three non-employee
directors. The present members of the Audit Committee are Chairman Gary
Olson, Randy G. Darcy, Aelred J. Kurtenbach, and Bruce I. Smith. The Audit
Committee held two meetings during 1999. During 1999, the Board approved an
Audit Committee Charter. The principal functions of the Audit Committee
are to recommend to the Board the appointment of independent public
accountants to conduct the annual audit of NorthWestern's financial
statements, to review the scope of the annual audit, to approve services
performed by the independent public accountants (considering the possible
effect thereof on their independence), to review the report of the
independent public accountants relating to the annual audit, and to review
NorthWestern's annual financial statements, and to monitor NorthWestern's
processes for identification of key business, financial, and regulatory
risks.
Nominating and Compensation Committee
The Nominating and Compensation Committee is composed of not less than
three non-employee directors. The present members of the Nominating and
Compensation Committee are Chairman Jerry W. Johnson, Gary G. Drook, Larry
F. Ness, and Randy G. Darcy. The Nominating and Compensation Committee
held seven meetings during 1999. The functions of the Nominating and
Compensation Committee are to recommend nominees for election to
NorthWestern's Board, to recommend the persons to be elected by the Board
as officers, to review and recommend the compensation of directors and
officers of NorthWestern, and to determine awards, if any, to the executive
officers of NorthWestern under incentive compensation and long-term equity
plans.
The Nominating and Compensation Committee will consider nominees for
directors properly recommended by shareholders. A shareholder who wishes to
submit a candidate for consideration at the Annual Meeting of Shareholders
to be held in 2001 must notify the NorthWestern Corporate Secretary in
writing not less than 90 days nor more than 120 days prior to the meeting.
The shareholder's written notice must include information about each
proposed nominee, including name, age, business address, principal
occupation, shares beneficially owned and other information required in
proxy solicitations. The nomination notice must also include the
nominating shareholder's name and address, the number of shares of the
Common Stock beneficially owned by the shareholder, and any arrangements or
understandings between the nominee and the shareholder. The shareholder
must also furnish a statement from the nominee indicating that the nominee
wishes and is able to serve as a director.
Corporate Governance Committee
The Corporate Governance Committee is composed of NorthWestern's Chief
Executive Officer and not less than three non-employee directors. The
present members of the Corporate Governance Committee are Chairman Aelred
J. Kurtenbach, Larry F. Ness, Gary Olson, and Merle D. Lewis. The
Corporate Governance Committee held two meetings in 1999. The functions of
the Corporate Governance Committee are to make recommendations to the Board
concerning Board policies, the performance appraisal procedure for the
chief executive officer, director qualifications, and Board evaluation and
to review and recommend corporate governance best practices.
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of February 1, 2000,
with respect to shares of the Common Stock owned by the directors, nominees
for director, certain executive officers of NorthWestern, by all directors
and executive officers of NorthWestern as a group, and by persons known to
NorthWestern to own more than 5% of the outstanding shares of Common Stock:
Amount & Nature
of Beneficial Ownership (1)
---------------------------
Name of Shares of Common Stock Percent
of
Beneficial Owner Beneficially Owned Common Stock
- ---------------------- ------------------------ ----------
- --
Randy G. Darcy 3,108 *
Gary G. Drook 3,010 *
Richard R. Hylland (2) 37,362(3) *
Jerry W. Johnson 6,608 *
Aelred J. Kurtenbach 7,090 *
Merle D. Lewis (2) 97,414 *
Larry F. Ness 7,702 *
Gary Olson (2) 8,083 *
Bruce I. Smith 10,148 *
John C. Charters -(4) *
Marilyn R. Se -(4) *
Walter A. Bradley, III (2) 5,958 *
Michael J. Hanson 3,876 *
Daniel K. Newell (2) 20,243(5) *
All directors &
executive officers 241,073(3)(5) 1%
Franklin Fund 1,790,500 7.8%
777 Mariners Island Blvd.
San Mateo, California 94404
NorthWestern Employee Stock 1,424,020 6.2%
Ownership Plan and Trust (6)
________________________
*Less than 1%.
(1) Shares shown represent both record and beneficial ownership, including
shares held in the team member's (employee's) account with the Trustees
of NorthWestern's Employee Stock Ownership Plan ('ESOP') and in various
plans (NorthWestern's Variable Investment Plan, Supplemental Variable
Investment Plan, and Team Member Stock Purchase Plan, collectively the
'Team Member Savings Plans'). None of the directors, nominees or
executive officers of NorthWestern beneficially owns any of
NorthWestern's Cumulative Preferred Stock ($100 par value). Unless
otherwise indicated, each person listed has sole voting and sole
investment power with respect to the shares shown in the table, and the
address of each person is 125 S. Dakota Ave., Sioux Falls, SD 57104.
(2) Messrs. Hylland, Lewis, Olson, Bradley, and Newell own, respectively,
2,068, 7,588, 5,000, 1,000, and 3,866 common units, for a total of
19,522 common units, representing limited partner interests in
Cornerstone Propane Partners, L.P., a NorthWestern partner entity; and
Messrs. Hylland, Lewis and Newell own, respectively, 20,702, 27,602,
and 14,185 Cornerstone restricted common units, for a total of 62,489
Cornerstone restricted units held by directors and executive officers
of NorthWestern. None of the foregoing amounts exceeds 1% of the
outstanding common units.
(3) Included are 756 shares that Mr. Hylland holds as custodian for his
children and 5,824 shares held by his wife.
(4) Directors/Nominees Charters and Seymann were newly elected to the
Board, effective February 2, 2000; therefore, they had no relationship
with NorthWestern and no NorthWestern securities holdings as of
February 1, 2000.
(5) Included are 1,313 shares that Mr. Newell holds jointly with or as
custodian for his children.
(6) The Common Stock owned by the ESOP is held in trust for the benefit of
participants in the ESOP, and the Trustees have sole investment power
over the Common Stock held in trust. Team member participants are
entitled to instruct the Trustees on how to vote all NorthWestern
Common Stock allocated to their accounts and will receive a separate
Proxy for voting such shares. All shares allocated to the participants
for which no voting instructions are received and all unallocated
shares held by the ESOP will be voted by the Trustees in the same
proportion that the allocated shares have been voted by participants,
unless inconsistent with the Trustee's fiduciary responsibilities.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Report on Executive Compensation
The Nominating and Compensation Committee (the 'Committee') of the
Board has furnished the following report on executive compensation to the
shareholders of NorthWestern.
Procedures and Policies
- ------------------------
The Committee, which is comprised entirely of non-employee directors,
has overall responsibility to nominate persons to serve as executive
officers of NorthWestern and to review and to recommend compensation for
the members of the Board and for the executive officers. The Committee
also reviews and recommends to the full Board any benefit plans for
officers and team members and approves any executive officer or director
awards made under NorthWestern's incentive compensation and long-term
private equity plans.
In 1999 as in prior years, the Committee engaged William M. Mercer,
Incorporated, a compensation and benefits consulting firm, to assess the
current executive compensation and private equity programs for NorthWestern
and to offer recommendations that would support NorthWestern's short- and
long-term business strategy. Mercer representatives have interviewed the
members of the Board, compared the compensation of NorthWestern's executive
officers and directors to comparable companies, and presented their
findings to the Committee. The Board has implemented various
recommendations from the Mercer studies which are designed to create and
sustain an entepreneurial mindset throughout the organization; to reward
executives for NorthWestern, business segment, and individual performance;
to focus on long-term performance and the creation of shareholder value;
and to attract and retain key executives and managers.
Section 162(m) of the Internal Revenue code of 1986 generally
disallows a tax deduction to public companies for compensation over
$1,000,000 paid to their chief executive officer and the four other most
highly compensated executive officers unless certain tests are met. The
Committee's general objective is to design and administer NorthWestern's
compensation programs in a manner that will preserve the deductibility of
compensation payments to executive officers but also will consider such
programs in light of the importance of achieving NorthWestern's
compensation objectives discussed above.
Base Salary
- -----------
The Mercer study recommended, and the Board approved, a compensation
program which positions total direct executive compensation at the median
for comparable industry markets when performance is consistent with that
comparative group; manages base salary through a range established around
the median for the comparative group with adjustments primarily as the
market median moves; utilizes annual incentives and equity-related long-
term plans; and includes stock ownership guidelines. The comparative group
is a broader group of service companies and includes some of the utilities
in the peer group used in the performance graph.
In determining Mr. Lewis' salary for 1999 as Chairman and Chief
Executive Officer, the Committee considered the recommendations of the
Mercer study, Mr. Lewis' individual performance as leader of NorthWestern,
and his contributions to the long-term success of the organization. The
Committee also utilized, throughout 1999, a formal chief executive officer
evaluation process first initiated in 1997. In particular, the Committee
considered Mr. Lewis' success in greatly expanding the three business lines
added to NorthWestern's gas and electric utility business (propane;
heating, ventilation and air conditioning; and telecommunications
services); in increasing earnings during the year; in expanding the senior
management team; and in building a common culture emphasizing initiative
and customer service. Mr. Lewis' base annual salary was established at the
median for the comparative group. Similar factors were used to determine
the base annual salary of the other named executive officers whose base
salaries were established at or near the median for the comparative group.
Annual Incentive Compensation
- -----------------------------
The philosophy for all NorthWestern incentive compensation plans is to
provide rewards when financial objectives are achieved, and to provide
reduced or no benefits when the objectives are not achieved. These
objectives are designed to further NorthWestern goals and to increase
shareholder value.
The NorthWestern Board adopted an annual incentive plan, now known at
the NorthSTAR Plan ('NorthSTAR'), which has been broadened to include team
members at many levels of NorthWestern. The purpose of NorthSTAR is to
motivate and reward outstanding performance by NorthWestern team members in
meeting short-term goals which support long-term objectives important to
NorthWestern's success. Awards under NorthSTAR are based upon several
factors measuring annual performance: For team members of NorthWestern
Corporation, NorthSTAR measures (1) NorthWestern's achievement of its
budgeted earnings per share, (2) NorthWestern's achievement of pre-
established customer satisfaction goals, and (3) an individual team
member's achievement of management-established individual, team, or
department goals. For the NorthWestern Public Service division of
NorthWestern, the above three goals are used, and in addition, NorthSTAR
measures NorthWestern Public Service's achievement of its capital
expenditure and operating income savings targets. At the end of the year, a
percentage is computed and totaled for each eligible team member for each
of the factors. If the eligible team member's composite level equals or
exceeds specified targets, a cash incentive award will be paid to the team
member, unless employment with NorthWestern has been terminated for any
reason other than death, disability or retirement. Awards to executive
officers are determined by the Committee.
The Board has adopted business segment annual incentive plans for team
members of NorthWestern Public Service ('NPS'), NorthWestern Services
Corporation ('NSC'), NorthWestern Energy Corporation ('NEC'), and NorCom
Advanced Technologies, Inc. ('NorCom'). A portion of the annual incentive
compensation of Mr. Lewis and Mr. Hylland is determined by the success of
the NPS plan, while other executive officers and other key managers are
involved in those business segment annual incentive plans which relate to
their activities. Awards under such plans for 1999 performance were made
in February 2000.
Long Term Incentive Compensation
- --------------------------------
As a complement to NorthWestern's annual incentive plans, the Board
has determined that long-term incentive programs which tie executive
compensation to increases in shareholder value are important. The Mercer
study recommended, and the Board and the shareholders of NorthWestern in
1998 adopted, and in 1999 amended, the NorthWestern Stock Option and
Incentive Plan (the 'Plan') to assist in accomplishing this goal by
strengthening the link between compensation and the market value of
NorthWestern's stock. The Plan is intended to recognize the contributions
made to NorthWestern by its team members, to provide such persons with
additional incentive to devote themselves to the future success of
NorthWestern, and to improve the ability of NorthWestern to attract, retain
and motivate individuals upon whom NorthWestern's future growth and
financial success depend, by providing such persons with an opportunity to
acquire or increase their proprietary interest in NorthWestern through
receipt of options to acquire NorthWestern's Common Stock. Similarly, the
Plan is intended as an additional incentive to directors who are not team
members of NorthWestern to serve on the Board and to devote themselves to
the future success of NorthWestern. Options granted under the Plan to team
members may be 'incentive stock options' ('ISOs') within the meaning of
Section 422(b) of the Internal Revenue Code, may be options not intended to
be ISOs ('nonqualified stock options'), or may be other types of long-term
incentives (collectively, 'Options'). Options granted to directors who are
not team members of NorthWestern are nonqualified stock options.
If benchmark performance goals established by the Board are met or
exceeded, certain key NSC, NEC, NorCom, and NPS executives have
opportunities, through long-term incentive programs for those entities, to
receive equity ownership incentives or payments in connection with improved
operations. In addition, certain key executive officers and other team
members of NGC, which initiates and manages unregulated strategic
investments for NorthWestern, were eligible during the first six months of
1999 to share in an acquisition fee equal to an aggregate of 3% of the
value of certain acquisition and investment transactions completed in 1998
if the investments met performance criteria established for each
transaction for periods following the transactions.
During 1999, NorthWestern formed a private equity investment company
in which certain executives and key team members were provided the
opportunity to make personal investments. The private equity investment
company is structured as a limited liability company, is controlled and
substantially owned by NorthWestern, and enables the investors to
participate in long-term value creation in selected growth initiatives,
including increases in the value of NorthWestern's interests in
Cornerstone, Blue Dot, and Expanets above benchmark rates of return
approved by the Committee. NorthWestern has the right to acquire the
limited liability company interests of the investors under specified
circumstances.
Mr. Lewis' long-term incentive compensation for 1999 was determined in
accordance with the terms of the long-term incentive and private equity
programs discussed above.
The Board has established stock ownership guidelines for all executive
officers which require each officer to purchase and obtain a significant
equity ownership interest in NorthWestern within specified periods. The
guidelines require equity purchase and ownership levels of 100,000 shares
for the Chief Executive Officer, 50,000 shares for the President, 25,000
shares for the Chief Financial Officer, and other levels for specified
executive officers.
This report is submitted on behalf of the Committee:
Jerry W. Johnson, Chairman
Gary G. Drook
Larry F. Ness
Randy G. Darcy
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned during the
fiscal years indicated for services in all capacities by the chief
executive officer and by the four other most highly compensated
NorthWestern executive officers in 1999:
Long Term Compensation All
Annual Compensation ---------------------- Other
---------------------- Awards Payouts (2) Comp.
Name and Salary Bonus(1) (Securities ($)
Position Year ($) ($) Underlying ($)
- --------------- ---- --------- ---------- Options) ----------- ------
-----------
Merle D. Lewis 1999 627,167 783,733 133,908 85,137 40,220
Chairman & Chief 1998 532,667 705,241 104,200 51,475 34,909
Executive Officer 1997 365,971 629,245 ------ 24,897 25,085
Richard R. Hylland 1999 416,542 666,211 68,103 32,838 21,200
President & 1998 354,542 371,395 37,900 25,738 17,499
Chief Operating 1997 246,417 486,233 ----- 24,897 10,480
Officer
Daniel K. Newell 1999 278,917 561,532 33,879 ----- 16,524
Sr. VP - Finance 1998 236,583 235,135 12,000 ----- 17,703
& Chief Financial 1997 168,333 332,039 ----- ----- 9,920
Officer; Managing
Director & CEO of
NorthWestern
Growth Corporation
Walter A. Bradley, 1999 249,875 120,396 19,638 ----- 16,127
III, Vice President1998 163,333 116,043 8,400 ----- 1,225
& Chief 1997 ----- ----- ----- ----- ----
Information Officer(4)
Michael J. Hanson 1999 245,583 293,117 5,800 ----- 11,107
President & CEO 1998 108,333 72,430 5,817 ----- -----
of NorthWestern 1997 ----- ----- ----- ----- -----
Public Service
Division (4)
______________________
(1) The amounts in the bonus column are cash awards pursuant to
NorthWestern's annual incentive plans, which are described under the
'Report on Executive Compensation' which were earned in the year shown
and paid in the following year.
(2) The amounts in this column represent the cash payouts from
NorthWestern's former phantom stock long-term incentive compensation
plan at the end of the five-year periods following the dates of the
awards.
(3) The amounts in this column include NorthWestern's contributions on
behalf of the named executive officers to the Team Member Savings
Plans and to the ESOP as well as the amounts paid by NorthWestern with
respect to term life insurance for the benefit of the executives. For
the executives named in this table, for 1999 such amounts under the
Team Member Savings Plans, ESOP, and life insurance, respectively,
were as follows: Mr. Lewis: $18,871, $9,749, and $11,600; Mr.
Hylland: $12,735, $4,765, and $3,700; Mr. Newell: $8,424, $4,560,
and $3,540; Mr. Bradley: $7,875, $4,452, and $3,800; and Mr. Hanson:
$6,080, $4,452, and $575. These amounts exclude loans, issued with
full recourse, advanced by NorthWestern to Mr. Lewis, $113,000, Mr.
Hylland, $103,000, and Mr. Newell, $103,000, in 1999 to finance the
purchase of membership interests in the NGC private equity investment
company described above.
(4) Mr. Bradley and Mr. Hanson began their employment with NorthWestern on
April 16, 1998, and June 1, 1998, respectively.
INFORMATION ON OPTIONS
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value
Individual Grants At Assumed Annual Rates of
Percent Stock Price Appreciation
No. of of Total for Option Term (3)
Securities Options
Underlying Granted to Exercise At 5% At 10%
Options Team Members or Base ($42.58 ($67.66
Granted (#)in Fiscal Price Expir. At 0% stock stock
Name (1) Year ($/Sh)(2)Date Growth price) price)
- ----- ------ ------ --------- ----- ------ ----- ------
M. D. Lewis 133,908 31 26.125 4/22/09 0 $2,203,456 $5,561,869
R. R. Hylland 68,103 16 26.125 4/22/09 0 1,120,635 2,828,658
D. K. Newell 33,879 8 26.125 4/22/09 0 557,479 1,407,164
W. A Bradley, III 19,638 5 26.125 4/22/09 0 323,143 815,664
M. J. Hanson 5,800 1 26.125 4/22/09 0 95,439 240,903
_____________________________
(1) All options granted in 1999 become exercisable in annual cumulative
installments of 33 1/3%, commencing three years from date of grant, with
full vesting occurring on the fifth anniversary date of the grant. Vesting
is accelerated in the event of a change in control of NorthWestern.
(2) All options were granted at market value (the closing price of the
Common Stock on the New York Stock Exchange as reported in the Midwest
Edition of The Wall Street Journal) on the date of grant.
(3) The hypothetical potential gains (reported net of exercise price) are
based entirely on assumed annual growth rates of 5% and 10% in the value of
NorthWestern's stock price over the ten-year life of the options (which
would equal a total increase in stock price of 63% and 159%, respectively).
These assumed rates of growth are mandated by rules of the Securities and
Exchange Commission for illustration purposes only and are not intended to
predict future stock price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Securities Value of
Underlying Unexercised Unexercised
Shares Value Options at Fiscal Year-End In-the-Money Options
Acquired on Realized (#) At Fiscal Year-End($)(1)
Name Exercise (#)($) Exercisable Unexercisable Exercisable Unexercisable
Merle D. Lewis 0 0 0 238,108 0 0
Richard R. Hylland 0 0 0 106,003 0 0
Daniel K. Newell 0 0 0 45,879 0 0
Walter A. Bradley, III
0 0 0 28,038 0 0
Michael J. Hanson 0 0 0 11,617 0 0
_______________________
(1) Represents the difference between $22.00 (the closing price of the
Common Stock on the New York Stock Exchange as reported in the Midwest
Edition of The Wall Street Journal for the close on December 31, 1999) and
the option exercise price.
Employment Contracts
The Board has adopted a program of comprehensive employment agreements
with Mr. Lewis, Mr. Hylland, Mr. Newell, Mr. Bradley, and Mr. Hanson, which
agreements have specific terms of from three to five years and contain non-
compete, confidentiality, and change of control provisions. The agreements
also include base salary amounts for the current year and annual incentive
plan and long-term incentive plan provisions tied to the success of the
team members' business segments. The agreements generally provide
termination benefits if employment by NorthWestern terminates for any
reason (other than death, disability, retirement at age 65 or such earlier
age that the Board approves, or discharge for gross misconduct in the
performance of employment duties that materially injures NorthWestern)
within 36 months after a 'change in control' or 'major transaction' event.
A change in control event generally occurs if a person acquires 20% or more
of the voting power of NorthWestern's securities. A major transaction
event occurs if the shareholders of NorthWestern approve a merger or
consolidation in which less that two-thirds of the Board of NorthWestern
continue to serve, a plan of liquidation of NorthWestern, or a sale or
disposition of all or substantially all of NorthWestern's assets. As part
of the termination benefits, NorthWestern must pay the executive officer a
lump sum payment equal to three times base salary and average annual
incentive compensation plan payment. NorthWestern must also provide the
officer with health, disability and life insurance coverages in amounts
substantially equal to those he or she was receiving at the time of the
termination for a specified period. Also, on the officer's normal
retirement date, NorthWestern must pay the officer, or his or her estate in
the event of death, a lump sum amount equal to the actuarial equivalent of
the additional retirement benefits that would have been due under
NorthWestern's retirement plan, if employment had continued for the period
for which the benefits referred to in the preceding sentence are payable.
To the extent that such benefits are subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1954, as amended, with respect
to excess 'parachute payments' under Section 180G of such Code,
NorthWestern will be responsible for such tax. The termination benefits
under these agreements are to be provided regardless of whether a team
member is able to obtain other employment.
Retirement Plan
Effective January 1, 2000, NorthWestern offered its team members two
alternatives with regard to its retirement plan. A team member could
convert his or her existing accrued benefit from the existing plan into an
opening balance in a hypothetical account under a new cash balance formula,
or that team member could continue under the existing defined benefit
formula. All team members hired after January 1, 2000 will participate in
the cash balance formula. The beginning balance in the cash balance
account for a converting team member was determined based on the team
member's accrued benefit; age and service as of January 1, 2000; 1999
eligible pay; and a conversion interest rate of 6%. Under the cash balance
formula a participant's account grows based upon (1) contributions by
NorthWestern made once per year, and (2) by annual interest credits based
on the average Federal 30-year treasury bill rate for November of the
preceding year (6.15% for 2000). Contribution rates were determined on
January 1, 2000, based on the participant's age and years of service on
that date. They range from 3%-7.5% (3% for all new team members) for
compensation below the taxable wage base and are doubled for compensation
above the taxable wage base. Upon termination of employment with
NorthWestern, a team member, or if deceased, his or her beneficiary,
receives the cash balance in the account paid in a lump sum or in other
permitted annuity forms of payment.
To be eligible for the retirement plan, a team member must be 21 years
of age and have worked at least one year for NorthWestern, working at least
1,000 hours in that year. Directors who are not team members are not
eligible to participate. Benefits for team members who chose not to convert
to the cash balance formula will continue to be part of the defined benefit
formula, which provides an annual pension benefit upon normal retirement at
age 65 or earlier (subject to benefit reduction). Under this formula the
amount of the annual pension is based upon average annual earnings for the
sixty consecutive highest paid months during the 10 years immediately
preceding retirement. Upon retirement on the normal retirement date, the
annual pension to which an eligible team member becomes entitled under the
formula amounts to 1.34% of average annual earnings up to the Covered
Compensation base plus 1.75% of such earnings in excess of the Covered
Compensation base, multiplied by all years of credited service.
The named executives also participate in a supplemental excess
retirement plan related to both of the pension formulas, which provides
benefits based on those formulas but with respect to compensation which
exceeds the limits under the Code. In 1998, NorthWestern agreed to assure
Mr. Hanson a pension benefit equivalent to that which would be provided by
the Retirement Plan if he were given credit for his 17 years of prior
service with another utility company in addition to his years of service
with NorthWestern. As a result, he was credited with those additional
years of service under the supplemental excess retirement plan.
Assuming the named executives reach the normal retirement age of 65,
the projected annual 10-year certain and continuous annuity benefit for Mr.
Lewis would be $404,551, and the projected annual life annuity benefits for
the other named executives would be: Mr. Hylland, $241,881; Mr. Newell,
$91,125; Mr. Bradley, $69,912; and Mr. Hanson, $172,159. The annual pay
credit rates are as follows for the participating named executives: Mr.
Hylland 4%, Mr. Newell 3.7%, Mr. Bradley 3%, and Mr. Hanson 3% (4.9% in the
supplemental plan).
Other Benefits
NorthWestern currently maintains a variety of benefit plans and
programs, which are generally available to all NorthWestern team members,
including executive officers, such as the Variable Investment Plan (401(k)
plan) under which a team member may contribute up to 13% of his or her
salary (with NorthWestern matching with up to 3% with the first 6%
contributed by the team member), a Supplemental Variable Investment Plan (a
non-qualified Supplemental 401(k) plan available to the extent
participation in the VIP is limited by the Internal Revenue Code), a Team
Member Stock Purchase Plan (Section 423 Plan) approved by shareholders and
instituted in 1999, in which a team member may contribute up to $3,000 per
year for the purchase of NorthWestern Common Stock (at a discount of 15% of
market value), term life and supplemental life (Family Protector Plan)
insurance coverage, the NorthWestern Employee Stock Ownership Plan (ESOP),
long-term disability plan, and other general employee benefits such as
emergency personal leave and educational assistance.
Director Compensation
Directors who are not officers of NorthWestern annually receive 1,000
shares of Common Stock of NorthWestern, are paid $2,500 each quarter for
serving on the Board, and receive an attendance fee of $4,000 for
attendance at each regular or special meeting of the Board. Directors are
also paid $1,700 for each meeting of a committee on which such director
serves and $500 for each quarter during which they serve as chairman of a
committee of the Board. Directors receive one-half of the meeting fee for
telephonic conference board or committee meetings. In addition, non-team
member directors received stock options for 3,600 shares of Common Stock in
1999. Directors who are also officers are not separately compensated for
services as a director on NorthWestern's Board.
Directors may elect to defer receipt of their cash compensation as
directors until they cease to be directors. The deferred compensation may
be invested in (1) an account which earns interest at the same rate as
accounts in the team member savings plan or (2) a deferred compensation
unit account in which the deferred compensation is converted into deferred
compensation units on the basis that each unit is at the time of investment
equal in value to the fair market value of one share of NorthWestern's
Common Stock, sometimes referred to as 'phantom stock units.' Additional
units based on the dividends paid on NorthWestern's Common Stock are added
to the director's deferred compensation unit account. Following the
director's retirement, the value of the deferred compensation units is paid
in cash in an amount determined by multiplying the accumulated deferred
compensation units by the average of the closing prices of NorthWestern's
Common Stock for the 10 days preceding such event.
Mr. Lewis, Mr. Hylland, and Mr. Newell were paid $33,500, $14,500, and
$13,500, respectively, in cash and $43,457, $20,590, and $16,234 in
restricted common units of CornerStone Propane, L.P., as director fees for
service on the board of CornerStone Propane GP, Inc., a NorthWestern
partner entity.
Salary Continuation Plan
NorthWestern has a non-qualified salary continuation plan for
directors and selected management team members. In 1999, a total of 51
active team members and non-employee directors participated in this plan.
The plan provides for certain amounts of salary continuation in the event
of death before or after retirement or, in the alternative, certain supple
mental retirement benefits in lieu of any death benefits after age 65.
Generally, death benefits will vary from 45% to 75% of salary for up to 15
years, and supplemental retirement benefits from 25% to 40% of current
salary. Life insurance is carried on each plan participant in favor of
NorthWestern to indirectly fund future benefit payments. Part of the cost
of the life insurance carried by NorthWestern is paid by team member
participants in the plan. The program is designed so that if assumptions
made as to mortality experience, policy dividends or credits, and other
actuarial factors are realized, NorthWestern will more than recover its
cost of this program. Consequently, the cost of any one individual
participant cannot be properly allocated or determined because of the
overall actuarial plan assumptions and the cost recovery feature of the
plan. Therefore, no amount attributable to this plan has been included in
the summary compensation table above.
NOMINATING AND COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
None of the current members of the Nominating and Compensation
Committee of the Board are team members or former team members of
NorthWestern.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Reports on Forms 3, 4 and 5 and any
amendments thereto furnished to NorthWestern pursuant to Section 16 of the
Securities Exchange Act of 1934, as amended, and written representations
from the executive officers and directors that no other Reports were
required, NorthWestern believes that all of such Reports were filed on a
timely basis by executive officers and directors during 1999, with the
exception of the sale of 800 shares of NorthWestern Common Stock by Thomas
A. Gulbranson, former President and Chief Executive Officer of NorthWestern
Services Corporation, a subsidiary of NorthWestern, on September 28, 1999,
that was not reported in Mr. Gulbranson's report for the month of September
filed in October 1999, but was reported in an amended Form 4 filed on
November 30, 1999.
PERFORMANCE GRAPH
The following Stock Price Performance Graph compares the cumulative
total return* on NorthWestern's Common Stock ('NOR'); an Edison Electric
Institute peer group index of 83 utility companies** (which has replaced
the EEI peer group of 46 combination gas and electric utilities used by
NorthWestern in previous years, because the former peer group data is no
longer calculated by EEI); the S&P Small Cap 600 Stock Index (in which
group NorthWestern was included in the prior year); and the S&P 500 Stock
Index for a five-year period:
(GRAPH)
NOR EEI Peer S&P Small S&P 500
Cap 600
---- ------- -------- --------
Base 12/31/94 $100 $100 $100 $100
1995 111.57 131.02 129.96 137.58
1996 144.64 132.59 157.67 169.17
1997 203.53 168.88 198.01 225.61
1998 243.59 192.34 203.41 290.09
1999 211.67 156.57 228.64 351.13
*Cumulative total return assumes quarterly reinvestment of dividends.
**Allegheny Energy; Alliant Energy; Ameren; American Electric Power;
Avista; Bangor Hydro-Electric Co.; Black Hills Corp.; Carolina Power &
Light; Central Hudson Gas & Electric; Central & South West Corp.;
Central Vermont Public Service; Cinergy, Inc.; Cleco Corp.; CMP Group;
CMS Energy Corp.; Connectiv; Consolidated Edison of NY; Constellation
Energy; Dominion Resources, Inc.; DPL Inc.; DQE Inc.; DTE Energy; Duke
Energy; Eastern Utilities Assoc.; Edison International; El Paso Electric
Co.; Empire District Electric Co.; Energy East Corp.; Entergy Corp.;
First Energy; Florida Progress Corp.; FPL Group Inc.; Green Mountain
Power Corp.; GPU Inc.; Hawaii Electric Industry; IDA Corp.; Illinova;
Ipalco Enterprises Inc.; Kansas City Power & Light; Keyspan Energy; LG&E
Energy Group; Madison Gas & Electric Co.; Maine Public Service; MDU
Resources Group; Minnesota Power & Light; Montana Power Co.; New Century
Energies; New England Electric System; Niagara Mohawk Power; Nisource;
Northeast Utilities; Northern States Power; NStar; NorthWestern Corp.;
OGE Energy; Otter Tail Power Co.; Peco Energy; PG&E Corp.; Pinnacle West
Capital; Potomac Electric Power; PPL Resources; Public Service Co. of
New Mexico; Public Service Enterprises; Pugent Sound Energy; Reliant
Energy; RGS Energy Group Inc.; St. Joseph Light & Power; Sempra Energy;
Sierra Pacific Resources; Sigcorp; Southern Co.; Teco Energy Inc.; TNP
Enterprises Inc.; TXU; Unicom; Unisource; United Illuminating Co.;
Unitil Corp.; Utilicorp United Inc.; Western Resources; Wisconsin Energy
Corp.; WPS Resources Corp.
ANNUAL REPORT
A copy of NorthWestern's Annual Report for the year ended December 31,
1999, is being sent to all shareholders of record as of the Record Date.
Your attention is directed to the financial statements and Management's
Discussion and Analysis in such Annual Report which provide additional
important information concerning NorthWestern.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has served as NorthWestern's independent public
accountants continuously since 1932. Upon the recommendation of the Audit
Committee, the Board has selected Arthur Andersen LLP to serve as
NorthWestern's independent public accountants during the current year. One
or more representatives of Arthur Andersen LLP will attend the Meeting,
will have the opportunity to make a statement and will be available to
respond to questions from shareholders.
During 1999, NorthWestern also engaged Arthur Andersen LLP to render
certain non-audit professional services. The Audit Committee of the Board
approved the audit and non-audit services and considered the possible
effect of the non-audit services on the independence of the accountants
prior to the time the services were rendered.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders who wish to present proposals for consideration at the
2001 Annual Meeting of Shareholders should submit their proposals, together
with any supporting statements, to the Corporate Secretary of NorthWestern
in order to be eligible for inclusion in the NorthWestern proxy materials
for that meeting. To be considered, a shareholder must meet certain
eligibility qualifications, and for the proposal to be timely submitted, it
must be received by the Corporate Secretary by November 12, 2000. A
shareholder presenting a proposal must appear in person or through a
qualified representative at the 2001 Annual Meeting to present the
proposal.
Other proposals that are not included in the proxy material will be
considered timely and may be eligible for presentation at the 2001 Annual
Meeting if they are received by the Corporate Secretary not later than
January 23, 2001.
OTHER MATTERS
The management does not know of any matter to be brought before the
Meeting, other than the matters described in the Notice of Annual Meeting
accompanying this Proxy Statement. The persons named in the form of proxy
solicited by the Board will vote all proxies which have been properly
executed, and if any matters not set forth in the Notice of Annual Meeting
are properly brought before the meeting, such persons will vote thereon in
accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
ALAN D. DIETRICH
Corporate Secretary
NorthWestern Corporation
March 10, 2000
PLEASE USE ONE OF THE THREE METHODS TO VOTE YOUR SHARES SO THAT
YOUR STOCK MAY BE REPRESENTED AND VOTED AT THE ANNUAL MEETING.
MANAGEMENT WILL PROVIDE TO EACH SHAREHOLDER WHOSE PROXY IS SOLICITED FOR
THE 2000 ANNUAL MEETING, UPON WRITTEN REQUEST AND WITHOUT CHARGE, A COPY OF
NORTHWESTERN'S 1999 ANNUAL REPORT (FORM 10-K) TO THE SECURITIES AND
EXCHANGE COMMISSION. REQUESTS SHOULD BE DIRECTED TO JANE RAMSELL, DIRECTOR
- - SHAREHOLDER SERVICES, NORTHWESTERN CORPORATION, 600 MARKET STREET WEST,
HURON, SOUTH DAKOTA 57350-1500.
IMPORTANT:
VOTE YOUR SHARES OVER THE INTERNET,
BY PHONE, OR BY SIGNING AND
RETURNING THE ENCLOSED CARD PROMPTLY
NORTHWESTERN CORPORATION
Annual Meeting of Shareholders
May 3, 2000
10:00 a.m., Central time zone
Washington Pavilion
301 S. Main Avenue
Sioux Falls, South Dakota 57104
NorthWestern Corporation
125 S. Dakota Avenue
Sioux Falls, South Dakota 57104 Proxy
______________________________________________________
This Proxy is solicited by the Board of Directors for use at the Annual
Meeting on May 3, 2000.
The shares of Common Stock you hold in your account or in a dividend
reinvestment account as of record on March 4, 2000, will be voted as you
specify.
If no choice is specified, the Proxy will be voted 'FOR' item 1.
By signing the Proxy, you revoke all prior Proxies and appoint Merle D.
Lewis and Richard R. Hylland, and each of them, with full power of
substitution, to vote your shares on the matters shown on the reverse side
and any other matters which may come before the Annual Meeting and all
adjournments.
SEE REVERSE SIDE FOR VOTING INSTRUCTIONS
Company Number: 250
There are three ways to vote you Proxy. Control Number: 1234567
Account Number: 1
VOTE BY INTERNET
http://www.northwestern.com/proxyvote
Go to the Web site address listed above to vote your Proxy 24 hours a day,
7 days a week. You will be prompted to enter the control number, company
number and account number, which are located in the upper right-hand corner
of this card. Then follow the simple online instructions.
VOTE BY PHONE
1-800-240-6326
Use any touch-tone telephone to vote your Proxy 24 hours a day, 7 days a
week. Have your Proxy Card in hand when you call. You will be prompted to
enter the company number and control number, which are located in the upper
right-hand corner of this card. Do not enter the three leading zeros of
the control number. Then follow the simple instructions given over the
phone.
Note: If voting by Internet or phone
Your Internet or phone vote authorizes the Named Proxies to vote your
shares in the same manner as if you marked, signed and returned your Proxy
Card. The Internet and phone voting facilities will close at 12:00 p.m.,
Central time zone, on May 2, 2000.
VOTE BY MAIL
Postage-paid envelope provided
Mark, sign and date your Proxy Card and return it in the postage-paid
envelope provided. If you vote by Internet or phone, do not return your
Proxy Card in the mail.
If you vote by Internet or Phone, please do not mail your Proxy Card.
PLEASE DETACH PROXY CARD HERE
(Mark only one box below)
1. Election of Class III Directors Control Number 1234567
01 John C. Charters __ FOR all nominees (except as marked)
02 Merle D. Lewis
03 Marilyn R. Seymann __ WITHHOLD AUTHORITY to vote for all nominees
(Instruction: To withhold authority to vote
for any individual nominee, print the
number(s) of the nominee(s) on the line
provided to the right.) ______________________________
2. Upon such other matters as may come before said meeting or any
adjournments thereof, in the discretion of the Proxyholders.
This Proxy, when properly executed, will be
voted in the manner directed by the
undersigned shareholder(s). If no direction
is made, this Proxy will be voted 'FOR' all
nominees named in item 1.
Date: _________________________________
_______________________________________
Signature
________________________________________
Signature
Please sign exactly as name(s) appear on this
Proxy. Joint owners should each sign
personally. Corporation Proxies should be
signed by authorized officer. When signing
as executors, administrators, trustees, etc.,
give full title.
Address Change? Mark box and indicate changes above. __
