Audit Committee Charter

The Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of NorthWestern Corporation (the “Corporation”) assists the Board in fulfilling its responsibilities for oversight of (a)(i) the Corporation’s accounting and financial reporting processes, (ii) the audits and integrity of the Corporation’s financial statements, (iii) the Corporation’s compliance with legal and regulatory requirements, (iv) the independent auditor’s qualifications and independence, and (v) the performance of the Corporation’s internal audit function and independent auditors; (b) preparation of the reports that the rules of the Securities and Exchange Commission (the “SEC”) require be included in the Corporation’s annual proxy statement; and (c) such other duties as directed by the Board.
Organization and Meetings
The membership of the Committee shall consist of not less than three non-employee members of the Board who are “independent” and are able to read and understand financial statements and are financially literate.  To be “independent,” a Committee member may not: (a) accept any consulting, advisory or other compensatory fee, directly or indirectly, from the Corporation (except for Board or Committee fees); or (b) be an affiliate of the Corporation or any of its subsidiaries (except in the capacity as a member of the Board or the Committee), as determined in accordance with the rules of the SEC.  In addition, each member shall be free of any relationship that, in the opinion of the Board, would interfere with his or her individual exercise of independent judgment, as determined in accordance with the NASDAQ Marketplace Rules.  The Committee shall have at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background that results in financial sophistication.  The Committee shall also seek to have at least one member who is an “audit committee financial expert” as determined in accordance with the SEC rules, provided that the Committee will not be in violation of its charter if it fails to have a member who is an audit committee financial expert.  In discharging this oversight role, the Committee is expected to maintain free and open communication (including private executive sessions at least annually) with the Corporation’s independent auditor (the “Accountant”), and the management of the Corporation and shall be empowered to investigate any matter brought to its attention, with full power to retain independent counsel, accountants or others to assist in the conduct of any investigation, at the Corporation’s expense. 

The Committee’s primary responsibilities are:

While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Corporation’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles.  This is the responsibility of management and the Accountant.  Nor is it the duty of the Committee to conduct investigations or to assure compliance with laws and regulations.