Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Short-Term Incentive Compensation Plan
On December 14, 2021, the Board of Directors (the "Board") of NorthWestern
Corporation d/b/a NorthWestern Energy (Nasdaq: NWE) (the "Company"), based on
the recommendation of the Human Resources Committee (the "Committee") of the
Board, established the Company's 2022 Annual Incentive Plan for officers and
other eligible employees of the Company (the "2022 AI Plan").
The 2022 AI Plan provides for a payment of incentive compensation to officers
and other eligible employees for the performance period of January 1, 2022,
through December 31, 2022. To be eligible to receive a payout under the 2022 AI
Plan, employees must be employed on December 31, 2022, and have been employed
actively for at least one full quarter of the plan year.
A target incentive level for each participating employee is set by position and
is expressed as a percentage of base salary. The short-term incentive target
opportunities under the 2022 AI Plan for the Company's principal executive
officer, principal financial officer and the other remaining named executive
officers in the Company's proxy statement filed for its 2021 annual meeting of
shareholders (the "2021 Proxy Statement") are as follows:

Short-Term Incentive Target


                                                                              Opportunity (as a percentage of
Name                           Title                                                    base salary)
Robert C. Rowe (1)             Chief Executive Officer                                      100%
Brian B. Bird                  President and Chief Operating Officer                        75%
Crystal D. Lail                Vice President and Chief Financial Officer                   50%
Heather H. Grahame             General Counsel and Vice President -                         55%
                               Regulatory and Federal Government Affairs
Curtis T. Pohl                 Vice President - Retail Operations                           40%
Bobbi L. Schroeppel            Vice President - Customer Care,                              40%
                               Communications and Human Resources

(1) Mr. Rowe, a member of the Board, abstains from voting on all Board matters concerning executive compensation.




  The performance measures for the 2022 AI Plan are substantially the same as
under the Company's prior plan.
Payouts of awards to plan participants from the performance pool (as discussed
below) will be determined based on a combination of:
(i)individual performance ratings that evaluate achievement against established
goals and objectives as well as overall job performance; and
(ii)company performance based on the achievement of the following specified
performance metrics during 2021:
1.Financial Performance, weighted at 55%, based on achieving targeted net
income;
2.Safety, weighted at 15%, using three equally weighted measurements, two based
on OSHA definitions - lost time incident rate and total recordable incident rate
-

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and the third based on completion of safety and security training by active
employees;
3.Reliability, weighted at 15%, consisting of two electric system reliability
indices (each weighted at 5%), which measure the total duration of interruption
for the average customer on our system during a predefined period of time, and
two natural gas system reliability indices (each weighted at 2.5%), which
measure damage per 1,000 locates and leaks per 100 miles on our system during a
predefined period of time; and
4.Customer Satisfaction, weighted at 15%, consisting of performance as
determined by an independent survey conducted by J.D. Power & Associates (5%)
and, operational performance (5%) and reputational perception (5%) pursuant to a
separate independent survey conducted by Flynn Wright.

No awards will be paid out under the 2022 AI Plan unless at least 90% of the net
income target is met. In the event that a work-related fatality occurs during
the year, the lost time incident rate portion of the safety performance metric
will be forfeited for all employees unless it is determined by the Committee
that no actions on the part of the employee or the Company contributed to the
incident. In calculating performance against target, the Board may make
adjustments either positively or negatively for one-time events and
extraordinary non-budgeted items.
A performance pool will be created and funded based on the level of achievement
of the four company performance factors described above. The performance pool
then will be allocated to each executive using total target incentive dollars at
the end of the performance period for eligible employees in each functional
unit, division or department, as adjusted based on the performance funding level
achieved.
Allocations of the performance pool will be based on the recommendation of an
employee's supervisor. In no case will the total payouts in a given performance
pool exceed the total dollars available for that performance pool.

Awards will be paid out to employees as soon as practicable after year-end
results are known, but no later than March 31, 2023. The actual incentive
amounts paid under the 2022 AI Plan will be based on the Company's actual
results during 2022 in relation to the established performance objectives, and
these payments may be greater or less than the target amounts that have been
established.
The annual incentive awards are governed by the terms of the 2022 AI Plan. For
further information regarding the 2022 AI Plan, see the copy of the plan that is
filed as Exhibit 99.1 hereto and incorporated herein by reference.
(e) Executive Retirement/Retention Program
On December 14, 2021, the Board, based on the recommendation of the Committee,
also approved grants of performance-based restricted share units to each of the
Company's eight executive officers under the Company's Executive
Retirement/Retention Program (the "Program"). These grants are made on an annual
basis under the NorthWestern Corporation Amended and Restated Equity
Compensation Plan (the "Equity Compensation Plan").

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The purpose of the Program is to reward the Company's executives when they
retire for their years of service with the Company and to provide the Company's
executives an incentive to continue their employment with, and to advance the
interests of, the Company. The Company does not provide its executives with a
traditional supplemental executive retirement plan, or SERP. As described in
more detail below, executives receive these awards only if the Company satisfies
a financial performance measure and they remain employed with the Company
through the vesting period.
Summary of Program Provisions
Under the terms of the grants, each participant received an award of restricted
share units ("RSUs") based upon a percentage of the participant's base salary
divided by the fair market value of the Company's common stock as of the grant
date. Each of the Company's executive officers received awards under the
Program. The awards for the Company's principal executive officer, principal
financial officer and the other named executive officers in the 2021 Proxy
Statement are set forth in the table below.
                                                         Program Target Opportunity (as                 Number of
Name                                                      a percentage of base salary)              RSUs Awarded (1)
Robert C. Rowe (2)                                                    60%                                 9,380
Chief Executive Officer
Brian B. Bird                                                         30%                                 3,465
President and Chief Operating Officer
Crystal D. Lail                                                       25%                                 2,166
Vice President and Chief Financial Officer
Heather H. Grahame
General Counsel and Vice President - Regulatory                       25%                                 2,550
and Federal Government Affairs
Curtis T. Pohl                                                        20%                                 1,470
Vice President - Distribution
Bobbi L. Schroeppel
Vice President - Customer Care, Communications                        20%                                 1,395
and Human Resources
(1) Based on a grant date fair value of $43.29, which was calculated using the closing stock price of $55.30 on December
14, 2021, less the present value of expected dividends, calculated using a 1.23% five-year Treasury rate and assuming
quarterly dividends of $0.62 for the five-year vesting period.
(2) Mr. Rowe, a member of the Board, abstains from voting on all Board matters concerning executive compensation.



Vesting of the RSUs to each participant is conditioned on the Company achieving
net income that exceeds the Company's net income for 2021 for three of the five
calendar years 2022 through 2026. For purposes of the award, "net income" means
net income, as reflected in the Company's audited consolidated financial
statements. In determining whether the performance measure has been satisfied,
the Board may make discretionary adjustments either positively or negatively for
one-time events and extraordinary non-budgeted items.

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Vesting of the RSUs also generally is contingent upon the participant remaining
in the continuous employ of the Company through the end of the performance
period; however, as discussed below, vesting also would occur earlier upon the
death or disability of the participant, or upon a change of control of the
Company. Upon vesting, RSUs will be credited to an account for the participant.
The participant's account will be credited for the payment of cash or stock
dividends related to the vested RSUs for dividends declared after the date that
the RSUs become vested and until the RSUs are paid. Cash dividend equivalents
will be credited as additional vested RSUs.
If the participant retires before vesting, a pro rata portion of the RSUs (based
on the number of months of service during the performance period) will vest and
will be paid as described in the following paragraph. If the participant dies or
becomes disabled prior to vesting, the RSUs will become vested and will be paid
as soon as practicable after such death or disability. Upon a change of control,
the performance measure will be deemed satisfied and awards will be deemed
vested, but will not be paid until the participant's departure from the Company
as described in the following paragraph.
Following the participant's departure from the Company, except as described
above in the event of death or disability, payout of the earned and vested RSUs
will be made in equal annual installments over a five-year period. Payout will
be made in shares of common stock of the Company, with one RSU vested and earned
equal to one share of the Company's common stock. Awards under the Program may
be canceled by the Board at any time.
The terms of the awards are governed by the Form of NorthWestern Corporation
Executive Retirement/Retention Program Restricted Share Unit Award Agreement
(the "Award Agreement") and the Equity Compensation Plan. For further
information regarding the Award Agreement, see the copy of the Award Agreement
that is filed as Exhibit 99.2 hereto and incorporated herein by reference. For
further information regarding the Equity Compensation Plan, see the Appendix to
the Company's 2021 Proxy Statement, dated March 5, 2021 (Commission File No.
1-10499), which is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.



EXHIBIT NO.             DESCRIPTION OF DOCUMENT
  99.1  *               2022 Annual Incentive Plan
  99.2  *               Form of NorthWestern Corporation Executive

Retirement/Retention Program


                        Restricted Share Unit Award Agreement

* filed herewith

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