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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

SCHEDULE 14A

(Rule 14a-101)

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. _____ )

Filed by the RegistrantxFiled by a Party other than the Registranto

Check the appropriate box:

 

 

o

Preliminary Proxy Statement

 

 

o

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

 

x

Definitive Proxy Statement

 

 

o

Definitive Additional Materials

 

 

o

Soliciting Material Pursuant to §240.14a-12


 

NEW ULM TELECOM, INC.

(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.

 

 

o

Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.


 

 

 

 

(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 0-11 (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:

 

 

 


 

 

o

Fee paid previously with preliminary materials.

 

 

o

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(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 Statement No.:

 

 

 

 

(3)

Filing Party:

 

 

 

 

(4)

Date Filed:


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NEW ULM TELECOM, INC
27 North Minnesota Street
New Ulm, Minnesota 56073
(507) 354-4111

NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD ON
THURSDAY, MAY 30, 2013

To Be Held May 27, 2010

          NOTICE IS HEREBY GIVEN that theThe Annual Meeting of the Shareholders of New Ulm Telecom, Inc. (the Company), a Minnesota corporation, will be held atTurner Hall,located at 102 South State Street in New Ulm, Minnesota, on Thursday, May 27, 201030, 2013 at 10:00 a.m., Central Daylight Time, for the following purposes:

 

 

 

 

(1)

To elect two Directors named in the attached proxy statement to serve for a term of three years, each to hold office until the Annual Meeting of Shareholders to be held in 2013, or until his or her successor is elected;ensuing three-year terms;

 

 

 

 

(2)

Ratification ofTo ratify the appointment of Olsen Thielen & Co., Ltd. as the Company’s independent registered public accounting firm for the fiscal year endingended December 31, 2010; and2013;

 

 

 

 

(3)

To approve a proposal to amend and restate the Company’s Articles of Incorporation (Articles);

(4)

To approve the Company’s executive compensation;

(5)

To cast an advisory vote regarding the frequency of future advisory votes on executive compensation; and

(6)

To transact such other business asthat may properly comebe brought before the Annual Meeting or any adjournment or postponement thereof.meeting.

The Board of Directors (Board) has fixed the close of business on March 30, 2010April 5, 2013 as the record date for the determination of shareholders entitled to notice of, and to vote at, the Annual Meeting.Meeting and any adjournment thereof.

 

 

 

By Order of the Board of DirectorsBY THE ORDER OF THE BOARD OF

 

 

DIRECTORS NEW ULM TELECOM, INC.

 

/s/ Barbara A.J. Bornhoft

 

 

 

Barbara A.J. Bornhoft

 

Barbara A.J. Bornhoft -Corporate Secretary

New Ulm, Minnesota
April 12, 201015, 2013


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INFORMATION CONCERNING SOLICITATION AND VOTING – YOUR VOTE IS IMPORTANT. Regardless of whetherWhether or not you expect to attend the Annual Meetingmeeting, please sign and date the proxy and return it promptly in person, you are urgedthe enclosed envelope, or take advantage of the option to vote your shares by promptly marking, signing, dating and returning your Proxy CardInternet or telephone. If you choose to return the proxy card by mail, we have enclosed an envelope, for which no postage is required if mailed in the alternative, by votingUnited States. You may also vote your shares electronically either over the Internet atwww.proxyvote.com or by touch tone telephone at 1-800-690-6903.


 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 27, 2010.

30, 2013.

This Proxy Statement, along with the New Ulm Telecom, Inc. 2009Company’s 2012 Annual Report and Annual Report on
Form 10-K are available free of charge on the following website:
www.proxyvote.com



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TABLE OF CONTENTS

 

 

 

 

Page

INFORMATION CONCERNING SOLICITATION AND VOTING

 

1

2

QUESTIONS AND ANSWERS

 

3

4

PROPOSAL NO. 1:1 – ELECTION OF DIRECTORS

 

6

7

CORPORATE GOVERNANCE

 

14

15

THE BOARD OF DIRECTORS AND COMMITTEES

 

17

NON-EMPLOYEE DIRECTOR COMPENSATION

 

19

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

20

21

EXECUTIVE COMPENSATION

 

21

22

COMPENSATION POLICY

 

23

24

REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

 

26

27

AUDIT COMMITTEE DISCLOSURE

 

2728

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

29

REPORT OF AUDIT COMMITTEE

 

30

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

30

PROPOSAL NO. 2:2 – RATIFICATION OF OLSEN THIELEN & CO., LTD. AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

31

PROPSAL 3 – AMENDING AND RESTATING THE COMPANY’S ARTICLES OF INCORPORATION

 

33

PROPOSAL 4 – ADVISORY VOTE APPROVING EXECUTIVE COMPENSATION

34

PROPOSAL 5 – ADVISORY VOTE ON FREQUENCY OF FUTURE EXECUTIVE COMPENSATION ADVISORY VOTES

35

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

33

35

ANNUAL REPORT ON FORM 10-K

 

33

36

SHAREHOLDER PROPOSALS FOR 20112014 ANNUAL MEETING

 

33

36

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING

 

33

36

OTHER MATTERS

 

3336

APPENDIX A

37


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NEW ULM TELECOM, INC
27 North Minnesota Street
New Ulm, Minnesota 56073
(507) 354-4111

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 27, 2010TO BE HELD ON THURSDAY, MAY 30, 2013

QUESTIONS &AND ANSWERS

What is the purpose of this Proxy StatementStatement?

This proxy statement is being made available to shareholders beginning on or about April 12, 2010 in connection with the Board of Directors (Board) of the Company,15, 2013 for the solicitation of proxies for the Annual Meeting of Shareholders and any adjournment thereof, to be held commencing at 10:00 a.m., Thursday, May 27, 201030, 2013 at Turner Hall, located at 102 South State Street, New Ulm, Minnesota.

Who can vote?

Record holders of the Company’s common stock at the close of business on March 30, 2010April 5, 2013 are entitled to vote at this Annual Meeting. Shareholders are entitled to one vote for each share held on the March 30, 2010April 5, 2013 record date. On that date, there were 5,115,4355,103,918 shares outstanding. In addition, shareholders have the right to cumulate votes in the election of Directors, as described on page 6.7.

How do I vote?

Registered ShareholdersShareholders.. If your shares are registered in your name, you may vote in person or by proxy. If you decide to vote by proxy, you may do so inONEof the following three ways:

 

 

 

 

•

By Internet – After reading the proxy materials, youYou may vote using the Internet at the websitewww.proxyvote.comwww.proxyvote.com.. You can transmit the voting instructions via electronic delivery of the information up until 10:59 p.m., Central Daylight Time, the day before the Annual Meeting, or May 26, 2010.29, 2013. Use the proxy card when accessing the web site and follow the instructions to obtain the records and to create an electronic voting instruction form.

 

 

 

 

•

By telephone – After reading the proxy materials, youYou may vote by using the toll-free telephone number,1-800-690-6903.Using a touch-tone telephone, you can transmit the voting instructions up until 10:59 p.m., Central Daylight Time, the day before the Annual Meeting, or May 26, 2010.29, 2013. Use the proxy card when you call and follow the instructions provided.

 

 

 

 

•

By mailing – After reading the proxy materials, youYou may vote your shares by marking, signing, dating and returning your Proxy Card in the postage paid envelope provided, addressed to New Ulm Telecom, Inc.,Vote Processing, c/o Broadridge.Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Proxy cards must be received by Broadridge on or before May 26, 2010.29, 2012.

The Internet and telephone voting procedures have been set up for your convenience and have been designed to authenticate your identity, allow you to give voting instructions and confirm that those instructions have been recorded properly.


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Whether you choose to vote over the Internet, by telephone or by mail, you can specify whether your shares should be voted for both, oneall, any, or neithernone of the nominees for Director. You can also specify whether you want to vote for or against, or abstain from voting for, the ratification of the appointment of the independent registered public accounting firm. You can also specify whether you want to vote for or against, or abstain from voting for, the proposal amending and restating the Company’s Articles. You can also specify whether you want to vote for or against, or abstain from voting for the proposal on the non-binding vote on executive compensation. You can also specify whether you want to vote for one year, two years or three years, or abstain from voting for the non-binding advisory vote on the frequency of future executive compensation. If you make these specifications, your shares will be voted in accordance therewith. If you sign, date and return your Proxy Card, but do not specify how you want to vote, your shares will be votedFORthe election of all Director Nominees andnominees,FORthe ratification of the appointment of the independent auditors.registered public accounting firm,FORthe proposal amending and restating the Company’s Articles,FOR the proposal on the non-binding vote on executive compensation andFOR three years for the non-binding advisory vote on the frequency of future executive compensation.

Beneficial Owners/Nominee Shares. If your shares are held by a bank, broker, trustee or some other nominee that entity will give you separate voting instructions. If you do not provide voting instructions to your nominee, your shares will not be voted in the election of Directors.

Registered shareholders and beneficial owners of shares held in street name may also vote in person at the Annual Meeting. If you are a registered shareholder and attend the Annual Meeting, you may deliver your completed proxy card in person. Additionally, written ballots will be available for any shareholder that wishes to vote in person at the Annual Meeting. Beneficial owners of shares held in registered name who wish to vote at the Annual Meeting will need to obtain a legal proxy from the institution that holds their shares.

The persons named as proxies were selected by theare Board members and are Directors who are not currently standing for election. If any other matters are properly presented for action at the Annual Meeting, including a question of adjourning or postponing the Annual Meeting from time to time, the persons named in the proxies and acting in that capacity, will have discretion to vote on these matters in accordance with their best judgment.

The notice of the Annual Meeting, this proxy statement and related proxy card are being mailed to shareholders on or about April 12, 2010.15, 2013.

May I change my vote?

Your proxy may be revoked at any time before it is voted. You may change your vote after you submit your proxy card by:

 

 

•

Sending a written notice addressed to the Chief Executive Officer (CEO) of the Company, which must be received prior to the Annual Meeting, stating that you want to revoke your proxy;

 

 

•

Submitting a new completed proxy card to the CEO of the Company, which must be received prior to the Annual Meeting and contain a later date than the previously submitted proxy;

 

 

•

Entering later-dated telephone or Internet voting instructions, which will automatically revoke the earlier proxy; or

 

 

•

Attending the Annual Meeting and voting in person and informing the Secretary of the Company that you are revoking your proxy. Attendance of a shareholder at the Annual Meeting will not automatically revoke any proxy previously submitted.


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Who is soliciting proxies?

The enclosed proxy is being solicited by the Board and the Company will pay the cost of the solicitation, including preparing, assembling and mailing the proxies and solicitation materials. The Company is soliciting proxies principally by mail. In addition, the Directors, Officers and regular employees of the Company may solicit proxies personally or by telephone, for which they will receive no financial consideration other than their regular compensation. The Company will also request brokerage houses, nominees, custodians and fiduciaries to forward soliciting material to the beneficial owners of the shares of the Company common stock held as of the record date and will reimburse these persons for their reasonable expenses so incurred.

When are shareholder proposals due for the next Annual Meeting?

Shareholders who want to have their proposals considered for inclusion in the Company’s proxy materials for the 20112014 Annual Meeting of Shareholders must submit their proposals to the Company no later than December 16, 2010.15, 2013.

ShareholdersShareholder suggestions for Directors

The Company’s Corporate Governance and Nominating Committee will consider shareholder suggestions for nominees for election to the Company’s Board if these suggestions are in writing and include biographical data and a description of the nominee’s qualifications. These suggestions must also be accompanied by the written consent of each nominee and can be mailed to the Corporate Governance and Nominating Committee, New Ulm Telecom, Inc., Attention: Corporate Secretary, 27 North Minnesota Street, New Ulm, Minnesota 56073. These suggestions must be received by the Corporate Secretary no later than December 31, 2010.15, 2013.

Quorum, Abstentions, and Broker Non-Votes

The presence, in person or by proxy, of the shareholders of thirty-five percent of the shares of common stock outstanding and entitled to vote is necessary to constitute a quorum for the transaction of Company business at the Annual Meeting. Proxies containing abstentions and non-votes are counted as present for the purposes of determining whether a quorum is present at the Annual Meeting. All votes will be tabulated by the inspector of election for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.

If a properly executed proxy is returned and the shareholder has abstained from voting on any matter, the shares represented by that proxy will be considered present at the Annual Meeting for purposes of determining a quorum and for purposes of calculating the vote, but will not be considered to have been voted in favor of that matter.

If a properly executed proxy that is returned by a broker holding shares in street name indicates that the broker does not have discretionary authority as to certain shares to vote on one or more matters, these shares will be considered present at the Annual Meeting for purposes of determining a quorum, but will not be considered to be represented at the Annual Meeting for purposes of calculating the vote with respect to those matters.


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PROPOSAL 1 – ELECTION OF DIRECTORS

There are currently seven Directors serving on the Board and each Director serves a three-year term. Two Directors will be elected at this Annual Meeting. The Board has nominated and recommends for election, James P. Jensen and Perry L. Meyer. EachMr. Jensen currently serves as a Director and Chair of the nomineesBoard of the Company and has agreed to stand for re-election. Mr. Meyer currently serves as a Director and has agreed to stand for re-election. Biographical information on each of the nominees is set forth below.on the following pages.

          The intent isWe recommend that each proxy will be votedvote in favor of these nominees. The Board believes that each named nominee will be able to serve, but if anyeither of the nominees areis unable to stand for election, the Board may designate a substitute. Shares represented by proxies may be voted for the substitute, but will not be voted for more than the two nominees. The two nominees receiving the greatest number of votes will be elected.

Directors are elected by a plurality of the votes cast, (i.e.i.e. the nominees receiving the greatest number of votes will be elected).elected. For each share held, shareholders may cast one vote for each of the two DirectorshipsDirector positions to be filled at this Annual Meeting. Each shareholder entitled to vote also has the right to vote shares on a cumulative basis in the election of Directors by giving written notice of intent to do so to any Officer of the Company before the Annual Meeting;Meeting, or to the presiding Officer at the Annual Meeting at any time before the election. If notice of this intent is given, the presiding Officer at the Annual Meeting will announce before the election of Directors that shareholders will vote their shares on a cumulative basis by multiplying the number of shares held by the shareholder by the number of Directors to be elected. Each shareholder then may cast that shareholder’s votes for one candidate or may distribute the votes among any number oftwo candidates.

If no shareholder provides a notice of such intent, the nominees who receive the affirmative vote of the holders of a plurality of the voting power of the shares present and entitled to vote at the Annual Meeting will be elected to serve on the Board. If any shareholder determines to vote on a cumulative basis and an individual other than the above-stated nominees has been nominated to serve as a Director, then the two nominees receiving the largest number of votes, taking into account cumulative voting, will be elected to serve on the Board.

Votes cast for a nominee will be counted in favor of election. Withheld votes and broker non-votes will not count either in favor of or against election of a nominee. The persons appointed as proxies in the accompanying proxy card unless authorization to do so is withheld, will vote for the election of the Board’s nominees.nominees, unless authorization to do so is withheld.

 

Your Board recommends a vote FOR these nominees. Shares represented by proxy will be voted FOR the nominees…..unlessnominees, unless you specify otherwise in your voting instructions


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BOARD OF DIRECTORS

Set forth on the following pages is biographical information on the two nominees for election and the other continuing Directors with unexpired terms of office. All information is given as of March 30, 2010,31, 2013, unless otherwise indicated. The following table sets forth information, including business experience and memberships on other Boards during the past five years, pertaining to the nomineesnominee standing for election, as well as for other continuing Directors. Information concerning beneficial ownership of the Company’s common stock as of March 30, 201031, 2013 can be found on page 20.21. We are not aware of any arrangement or understanding pursuant to which any individual is to be selected as a Director or nominee. There are no familial relationships between any Director and Executive Officer.


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NOMINEES FOR ELECTION
To Serve a Three-Year Term Expiring In 20132016


 

 

James P. Jensen


 

 

 

Term:

Expires in 2010.2013. Independent Director since 1982.

 

 

Recent Business
Experience:

Mr. Jensen currently serves on the Board of New Ulm Telecom, Inc.the Company. Since 2003, Mr. Jensen has been the President of Jensen Consulting,Business, Inc., which offers business consulting services, primarily in the areas of sales, and customer service and advertising support. Mr. Jensen is also a published author and a motivational speaker to bankingbusinesses and retail businesses. In addition, fromother groups. From January 2008 until January 2010, Mr. Jensen was a business partner in J Longs Clothing, where he was responsible for supervising all aspects of marketing and advertising, as well as being responsible for the motivation and training of sales staff, merchandise purchasing, public relations contacts and sales. Mr. Jensen was also the President of Jensen Clothing, Inc. from 1970 until 2003,2001, overseeing all business operations, including employee management, sales, marketing, advertising, promotions, and purchasing. Mr. Jensen has served as Chair of the Board of New Ulm Telecom, Inc.Company since 1999.

 

 

New Ulm Telecom,Company
Inc. Committees:

Chair of the Executive Committee, Chair of the Corporate Governance and Nominating Committee and Chair of the Board. Also serves as an ad-hocEx- officio member of the Audit Committee, the Compensation Committee, and the CompensationCorporate Governance and Nominating Committee.

 

 

Other Directorships:

Alliance Bank,Banks, New Ulm, Minnesota (1989 – Present)(1989–present); Riverbend Center for Entrepreneurial Facilitation, Mankato, Minnesota (2006 – (2006–2008); Leuthold Company, Inc., Albert Lea, Minnesota (1970 – (1970–1994) and Oak Hills Foundation Board, New Ulm, Minnesota (2004 – Present)(2004–present).

 

 

Selection Criteria:

The Board selectedbelieves that Mr. Jensen as a nominee duebrings to Mr. Jensen’sthe Board his business experience in retail, and sales and marketing, as well as his experience as a business owner, which allows him to provide the Company with insight that can be used in its business-decision making. In addition to Mr. Jensen’s business experience, he is or has been active in various community organizations, including a member of the New Ulm Retail Development Committee, past Chair of the New Ulm Chamber of Commerce, past President of the New Ulm Retail Association, past member of the Board of Directors of the Brown County Agriculture Society, past member of the Lions Club of New Ulm and a charter member of the Big Brothers of New Ulm. Mr. Jensen contributes to the Board and the Committees on which he serves through the skills and expertise he has developed in his retail endeavors and his consulting business, his knowledge and experience on other Boards, his perspective as an active community member and his prior New Ulm Telecom, Inc. Board experience.

 

 

Age:

6568


 

 


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Perry L. Meyer

 

 

 

Term:

Expires in 2010.2013. Independent Director since 1995.

 

 

Recent Business
Experience:

Mr. Meyer currently serves on the Board of New Ulm Telecom, Inc.the Company. Mr. Meyer oversees all operations of a 2,300-acre diversified grain and livestock farm. Mr. Meyer serves as President of Steamboat Pork, a 1,400 head/sow farm started in 1998 by eight Nicollet and Sibley county farmers to produce isowean pigs.

 

 

New Ulm Telecom,Company
Inc. Committees:

Chair of the Compensation Committee Memberand member of the Executive Committee.

 

 

Other Directorships:

President, St. John’s Lutheran Church (2010–present); Planning and Zoning Commission, City of New Ulm (2009–present); Chair of the Board for Heartland Corn Products – also serving as Secretary (1992 – (1992–2005), Winthrop, Minnesota (1992 – Present)(1992–present); Treasurer for Lafayette Township, Nicollet County, Minnesota (1987 – (1987–2005); New Ulm Rural Fire Association, New Ulm, Minnesota (1987 – (1987–2005); Chair of the Minnesota Valley Lutheran High School Foundation (2010–present); Minnesota Valley Lutheran High School Board Member, New Ulm, Minnesota (1996 – (1996–2002); New Ulm Area Foundation, New Ulm, Minnesota (1997 – (1997–2003); Director/Board Secretary for Cenex Harvest States Soybean Processing, Mankato, Minnesota (1997 – (1997–2001); Secretary/Treasurer of the Nicollet County Township Officer Association, Nicollet County, Minnesota (1993 – (1993–1996) and Nicollet County Corn Growers, Nicollet County, Minnesota (1988 – (1988–1994).

 

 

Selection Criteria:

The Board selectedbelieves Mr. Meyer as a nominee duebrings to Mr. Meyer’sthe Board his previous experience both on the Board of New Ulm Telecom, Inc.Company and his experience on other Boards, in particular his experience on the Heartland Corn Products Board. In addition to his Board experiences, Mr. Meyer is also an active member of the community, including his membership on the Planning and Zoning Commission for the City of New Ulm, Minnesota and as a Directorthe Chair of the Minnesota Valley Lutheran High School Foundation. As an independent business operator and an active member of community organizations and business organizations, the Board believes that Mr. Meyer contributes to the Board and the Committees on which he serves, through the skill and expertise he has developed in his operation of a diverse grain and livestock farm, his knowledge and experience on other Boards, his perspective as an active community member and his prior New Ulm Telecom, Inc.Company Board experience.

 

 

Age:

5558


 


 

THE BOARD RECOMMENDS A VOTE “FOR” EACH NOMINEE FOR DIRECTOR


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CONTINUING DIRECTORS


Paul W. Erick

Term:

Expires in 2014. Independent Director since 2005.

Recent Business
Experience:

Mr. Erick currently serves on the Board of the Company. Prior to his retirement in September 2000, Mr. Erick was an Officer and Shareholder of Olsen Thielen & Co., Ltd., a public accounting firm. Mr. Erick was a licensed Certified Public Accountant in Minnesota, South Dakota, Wisconsin and Iowa.

At Olsen Thielen & Co., Ltd., Mr. Erick served as the Firm’s Corporate Secretary, Co-Trustee its of retirement plan, Quality Review Committee Chair and Continuing Professional Education Committee Chair.

Mr. Erick has performed many Security and Exchange Commission (SEC) Practice Section and Private Companies Practice Section peer reviews as a team captain or team member. He was an instructor at the South Dakota Society of Certified Public Accountants peer review conference. He drafted the Olsen Thielen & Co., Ltd’s quality control policies and procedures and made annual revisions. He acted as a liaison with the firm’s peer reviewers and was in charge of annual internal inspections.

Mr. Erick researched or supervised the research of issues related to accounting, auditing and financial reporting, including SEC issues. He performed concurring reviews of SEC engagements. He has consulted on acquisitions and sales of businesses.

Mr. Erick served many years on Minnesota Society of Certified Public Accountants Committees, including Auditing Procedures, Accounting Policies, Continuing Professional Education, Cooperation with the Bar, Government and Not For Profit Committees. He also served as Chair of the Financial Statement Review and Quality Review Committees for which he received Outstanding Committee Awards.

Company
Committees:

Mr. Erick serves as the Chair of the Audit Committee.

Selection Criteria:

Mr. Erick brings 34 years of public accounting experience to the Board along with his background and experience in SEC accounting and reporting. The Board has determined that Mr. Erick satisfies the criteria adopted by the SEC to serve as an “Audit Committee Financial Expert.” The Board believes that Mr. Erick contributes to the Board and the Audit Committee with his expertise from his extensive public accounting knowledge and experience, and his prior Company Board experience.

Age:

69


 

 


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CONTINUING DIRECTORS

 


Duane D. Lambrecht

 

 

 

Term:

Expires in 2011.2014. Independent Director since 1999.

 

 

Recent Business
Experience:

Mr. Lambrecht currently serves on the Board of New Ulm Telecom, Inc.the Company. Mr. Lambrecht is the founder of Shelter Products, Inc., a regional wholesale building materials distributor serving the five-state area encompassing Minnesota. Mr. Lambrecht has served as Chair, President and CEO since the founding of Shelter Products in 1981. In this capacity, he has been responsible for product and market development, distribution systems, personnel recruitment and training, as well as all aspects of financial controls and relationships. From 1972 – 1972–1981, Mr. Lambrecht worked for a material distributor as a Division Manager.

 

 

New Ulm Telecom,Company
Inc. Committees:

Mr. Lambrecht serves as a memberChair of the ExecutiveCorporate Governance and Nominating Committee and a member of the Audit Committee.

 

Other Directorships:

Past Board member of North American Building Material Distribution Association - also served as President (2008 – (2008–2009), and currently serves on its Executive Committee (1999 – Present); Board member of the New Ulm EconomicsEconomic Development Corporation – also served as President (2004 – (2004–2007), New Ulm, Minnesota (2003 – Present)(2003–2011); Board Member of New Ulm Medical Foundation, New Ulm, Minnesota (2003–Present)2011); Board member of New Ulm Area Foundation, New Ulm, Minnesota (2006–Present)2011); Member of Undergraduate Advisory Board – University of Minnesota, Carlson School of Management, Minneapolis, Minnesota (1996 - (1996–2008); Board member, New Ulm United Way – also served as President (1984 – (1984–1985), New Ulm, Minnesota (1983 – (1983–1989); Director for Sioux Valley Hospital – also served as Board Chair (1991 – (1991–1993), New Ulm, Minnesota (1984 – (1984–1994); President of New Ulm Rotary Club, New Ulm, Minnesota (1984 – (1984–1985); Board member of Minnesota Manufactured Housing Association, St. Paul, Minnesota (1990 – (1990–1995).

 

 

Selection Criteria:

Mr. Lambrecht brings to the Board his experience on the Board of New Ulm Telecom, Inc.,the Company, his experience on other Boards and his experience as a business entrepreneur. In addition to his Board experiences, Mr. Lambrecht is also an active member of the community, including his membership on the New Ulm Medical Foundation; New Ulm Area Foundation and the New Ulm Rotary Club (past President). Mr. Lambrecht is a Life Member Disabled American Veteran; Life Member Purple Heart Association and a Vietnam Combat Veteran. As an independent business operator and an active member of community organizations and business organizations, the Board believes that Mr. Lambrecht contributes to the Board and the Committees on which he serves through the skills and expertise he has developed in his founding of businesses, 29 years30 years’ operating as a regional wholesale building materials distributor, his knowledge and experience on other Boards, his perspective as an active community member and his prior New Ulm Telecom, Inc.Company Board experience.

 

 

Age:

6366

 

 

 


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Paul W. Erick


 

Dennis E. Miller

 

 

Term:

Expires in 2011.2015. Independent Director since 2005.2009.

 

 

Recent Business
Experience:

Mr. Erick currently serves on the Board of New Ulm Telecom, Inc. Mr. Erick, prior to his retirement in September 2000, was an Officer and Shareholder of Olsen, Thielen & Co., Ltd., a public accounting firm. Mr. Erick was a licensed CPA in Minnesota, South Dakota, Wisconsin and Iowa.

At Olsen, Thielen & Co., Ltd., Mr. Erick served as the Firm’s Corporate Secretary, Co-Trustee of retirement plan, Quality Review Committee Chair and Continuing Professional Education Committee Chair.

Mr. Erick has performed many Securities and Exchange Commission (SEC) Practice Section and Public Company Practice Section peer reviews as a team captain or team member. He was an instructor at the South Dakota Society of Certified Public Accountants peer review conference. He drafted the Olsen, Thielen & Co., Ltd’s quality control policies and procedures and made annual revisions. He acted as a liaison with the firm’s peer reviewers and was in charge of annual internal inspections.

Mr. Erick researched or supervised the research of issues related to accounting, auditing and financial reporting, including SEC issues. He performed concurring reviews of SEC engagements. He has consulted on acquisition and sale of businesses.

Mr. Erick served many years on Minnesota Society of Certified Public Accountants Committees, including Auditing Procedures, Accounting Policies, Continuing Professional Education, Cooperation with the Bar, Government and Not For Profit Committees. He also served as Chair of the Financial Statement Review and Quality Review Committees for which he received Outstanding Committee Awards.

New Ulm Telecom,
Inc. Committees:

Mr. Erick serves as the Chair of the Audit Committee.

Selection Criteria:

Mr. Erick brings 34 years of public accounting experience to the Board along with his background and experience in SEC accounting and reporting. The Board has determined that Mr. Erick satisfies the criteria adopted by the SEC to serve as “Audit Committee Financial Expert” and is an independent Director, pursuant to the standards set forth in the Company’s Corporate Governance Guidelines and the requirements under the Securities Exchange Act of 1934. The Board believes that Mr. Erick contributes to the Board and the Audit Committee with his expertise from his extensive public accounting knowledge and experience, and his prior New Ulm Telecom, Inc. Board experience.

Age:

66


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Rosemary J. Dittrich


Term:

Expires in 2012. Independent Director since 1997.

Recent Business
Experience:

Ms. Dittrich currently serves on the Board of New Ulm Telecom, Inc. Ms. Dittrich is a co-owner and the Executive Secretary of D & A Trucklines, Inc., a family-owned trucking company of 50 years. Ms. Dittrich has been active in all aspects of a growing company, including decisions regarding consolidating partnerships, developing business policies, succession planning and serving as the Director of Human Resources.

New Ulm Telecom,
Inc. Committees:

Member of the Compensation Committee.

Selection Criteria:

Ms. Dittrich brings to the Board her hands-on business experience as the owner of a business. In addition, Ms. Dittrich has been active in the community, including her involvement with the United Way of Brown County; Midwest Safety Group (a Trucking Association); and her previous memberships in the New Ulm Chamber of Commerce Board and the Sister Cities Commission. She and her husband have received the Service to Mankind Award in recognition of their outstanding volunteer service to the community. As a business owner and an active member of the community, the Board believes that Ms. Dittrich contributes to the Board and the Committee on which she serves through the hands-on experience and expertise garnered from her roles in running a family-owned trucking business and her prior experience on the New Ulm Telecom, Inc. Board.

Age:

68


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Mary Ellen Domeier

Term:

Expires in 2012. Independent Director since 1999.

Recent Business
Experience:

Ms. Domeier currently serves on the Board of New Ulm Telecom, Inc. In addition, from 1972 until her retirement in 2003, Ms. Domeier served in various positions at Frandsen Bank & Trust Company, New Ulm, Minnesota, including as CEO from 1988 - 2003 and Chair from 1997 – 2003. At Frandsen Bank & Trust Company, Ms. Domeier oversaw all areas of administration, operations, policies and business lines. She currently continues to be active in banking, serving as the Chair of Bank Midwest, Spirit Lake, Iowa. From 2004 to 2006, Ms. Domeier served as the part-time Executive Officer of New Ulm Area Catholic Schools, providing administrative direction, coordinating a capital campaign and re-established its foundation.

New Ulm Telecom,
Inc. Committees:

Ms. Domeier currently serves as a Member of the Audit Committee, and a Member of the Corporate Governance and Nominating Committee.

Other Directorships:

Board Member of Bank Midwest (also serving on the Audit Committee, Trust Committee, Governance and Nominating Committee and Executive Committee), and a member of Bank Midwest – New Ulm, Community Advisory Board, Spirit Lake, Iowa (2007 – Present); Chair and Board member, Minnesota Bankers Association (1997 – 2003); Member, Federal Reserve Bank Consumer Advisory Council, Washington, DC (1999 – 2003); Member and Board Vice-Chair, American Artstone Company (also serving as Chair, Audit Committee; Strategic Planning Committee, Chair; Governance Committee), New Ulm, Minnesota (2003 – 2009); Member of the Governor’s Judiciary Commission on Judicial Selection, State of Minnesota (1999 – 2006).

Selection Criteria:

Ms. Domeier brings to the Board her experience on the Board of New Ulm Telecom, Inc., her experience on other Boards and her diverse banking experience, another highly regulated and complex industry. In addition to her board and banking experiences, Ms. Domeier brings her leadership skills from service with many community organizations, including serving as the Chair of the New Ulm Retail Development Corporation (Chair – Executive Committee, Chair – Recruitment Committee); and her past associations, including Oak Hills Living Center Foundation (past Chair), New Ulm Area Foundation (past Chair and founder), Chamber of Commerce (past Chair), United Way of New Ulm (past Chair), Rotary Club of New Ulm (past Chair), Brown County Historical Society (past Treasurer) and Minnesota State University – Mankato Business Advisory Council. With Ms. Domeier’s banking experience, participation on various Boards, her extensive community involvement and her prior New Ulm Telecom, Inc. Board experience, the Board believes that Ms. Domeier contributes to the Board and the Committees on which she serves through the skills and expertise she has developed.

Age:

68


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Dennis E. Miller


Term:

Expires in 2012. Independent Director since 2009.

Recent Business
Experience:

Mr. Miller currently serves on the Board of New Ulm Telecom, Inc.the Company. Mr. Miller serves as the President and CEO of Mavericks Wireless, LLC, providing consulting services to telecommunications companies (2007 – (2007–present). Mr. Miller served as the President and CEO (1995 – (1995–2007) of Midwest Wireless Holdings in Mankato, Minnesota, where he was responsible for strategic development, including consolidating partnerships; identifying, financing, acquiring and integrating new markets; integrating multiple network technologies; and innovating product development and deployment. Mr. Miller led Midwest Wireless from a start-up Company, culminating in successfully completing its sale to Alltel Wireless for $1.075 billion in 2006. From 1990 – 1990–1995, Mr. Miller served as Vice President of Minnesota Operations for Pacific Telecom Cellular, Appleton, Wisconsin, where he served as the senior state executive in Minnesota and was responsible for the development of 10 rural service areas for wireless services and developing business polices, practices and operations for businesses. Mr. Miller also has prior business experience in sales, including leading sales teams and developing sales and distribution programs and processes.

 

 

New Ulm Telecom,Company
Inc. Committees:

Member of the Compensation Committee and Member of the Corporate Governance and Nominating Committee and member of Executive Committee.

 

Other Directorships:

Coughlan Companies (Governance Committee Chair and member of the Audit Committee)Chair), a publishing firm, Mankato, Minnesota (2007 – (2007–present); Jordan Sands LLC, a Minnesota based mining firm and affiliate of Coughlin Companies; Member, CTIA – The Wireless Association Board of Directors (also serving on the Executive Committee (1999 – (1999–2007), Treasurer (2006) and Chair of Small Operators Caucus (1999 – (1999–2007), (1996 – (1996–2007); Member, Rural Cellular Association (President 2003), (1995 – (1995–2007); Member, Immanuel St. Joseph’s – Mayo Health System Board of Directors (including Vice Chair of regional Mayo owned and operated health system of clinics and hospitals, Compensation Committee Chair and Finance Committee), (1999 – (1999–present); Chair, Technology Plus, Mankato, Minnesota (1997 – (1997–2004); Member, Minnesota Telecom Alliance (Wireless Committee Chair) (1998 – (1998–2002).

 

 

Selection Criteria:

Mr. Miller brings to the Board his experience on the Board of New Ulm Telecom, Inc.,the Company, his experience on other Boards and his wireless telecommunications experience. In addition, Mr. Miller is also active as a member of the Minnesota State University Foundation (2006 – present); the Minnesota State University College of Business Advisory Council (2000 – Present)(2000–present); Chair of the Southern Minnesota Initiative Foundation Leader’s Circle (2003 – (2003–present) and as a member of the University of St. Thomas College of Business Advisory Board (2002 – present). Due to Mr. Miller’s extensive experience in the wireless telecommunications industry, his experience in regulatory and legislative affairs, at both the state and federal level, and his participation on business and industry Boards, the Board believes that Mr. Miller contributes to the Board and the Committees on which he serves.

 

 

Age:

5053

 

 

 


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Wesley E. Schultz

Term:

Will expire in 2015. Independent Director since 2012.

Recent Business
Experience:

Mr. Schultz currently serves on the Board of the Company. Mr. Schultz served as the Chief Financial Officer (CFO) (1996–2008) of Rural Cellular Corporation (RCC), headquartered in Alexandria, Minnesota. RCC, a wireless communications company, was listed among the 50 largest publicly traded companies in Minnesota prior to its sale to Verizon Wireless in 2008. Mr. Schultz was responsible for all accounting and financing activities, (SEC) filings and reporting, financial planning and analysis, treasury, budgeting, audit, tax, accounting, human resources, purchasing, insurance and the oversight of company-owned and leased office facilities nationwide.

Mr. Schultz was a senior management team member involved in major business decisions; developing and implementing strategic plans for growth and integrating its financial strategy. In addition to being the CFO, he was Executive Vice President and a member of the Board of Directors.

Prior to working at RCC, Mr. Schultz was the CFO for two companies where he led their initial public offerings; Spanlink, Inc. (1996) and Serving Software, Inc. (1991–1994).

Company
Committees:

Member of the Audit Committee and member of the Compensation Committee.

Other Directorships:

OrthoCor Medical, Inc., an innovator of devices utilizing pulsed electromagnetic frequency and thermal technologies to alleviate joint pain and minimize swelling, Minneapolis, Minnesota (2011–present); Geneva Capital, LLC, an equipment leasing company, Alexandria, Minnesota (2005–present); RCC, a wireless communications company, Alexandria, Minnesota (1999–2008) and Professional Support Solutions, Inc., an IVR and CTI Support Solutions and Integration Company, Dublin, California (2009–2011).

Selection Criteria:

Mr. Schultz brings to the Board his experience on the Board of the Company, 18 years of CFO experience, including 13 years of public company experience in the telecommunications industry, along with his background and experience in accounting and reporting. The Board has determined that Mr. Schultz satisfies the criteria adopted by the SEC to serve as an “Audit Committee Financial Expert.” The Board believes that Mr. Schultz contributes to the Board and the Committees on which he serves.

Age:

56



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Suzanne M. Spellacy

Term:

Will expire in 2015. Independent Director since 2012.

Recent Business
Experience:

Ms. Spellacy currently serves on the Board of the Company. Ms. Spellacy is Vice President and General Counsel of Taylor Corporation, which operates more than 80 subsidiaries, devoted to print services and marketing solutions and is one of the largest privately-held corporations in the country. Ms. Spellacy is responsible for the legal affairs of Taylor Corporation and its subsidiaries, which collectively have over 9,000 employees globally. Ms. Spellacy joined Taylor Corporation in 2000 and previously served as Vice President, Human Resources (2001–2005) and Assistant General Counsel (2005–2011). Prior to joining Taylor Corporation, Ms. Spellacy was a shareholder in the Twin Cities law firm of Winthrop and Weinstine, P.A. and received her law degree from the University of Minnesota in 1992.

Company
Committees:

Member of the Compensation Committee and member of the Corporate Governance and Nominating Committee.

Other Directorships:

Minnesota Job Skills Partnership Board (Board Member (2004–2011)); Greater Mankato Early Learning Initiative (Board Member (2011–present)), President (2008–2011); Greater Mankato YMCA (Board Member and Finance Committee Member (2006–2009)); Loyola Catholic School Board of Trustees (2009–2011); Loyola Catholic School Board (Board Member (2004–2005), Chair (2005–2009)); Southern Minnesota Advocates (Board Member (2009–present)).

Selection Criteria:

Ms. Spellacy brings to the Board her experience on the Board of the Company, 20 years of legal and business experience, including experience with business transactions, mergers and acquisitions, executive compensation, employee benefits, employment law and other legal matters. Ms. Spellacy gained experience in state policy and legislative affairs by serving as the Governor’s business representative on the Minnesota Job Skills Partnership Board. She has been an active member of the community and brings her leadership skills from service with many community organizations, including her role as a founding board member and first board chair for the Greater Mankato Early Learning Initiative, a collaborative effort between business, education and non-profits. The Board believes that Ms. Spellacy contributes to the Board and the Committees on which she serves.

Age:

47



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CORPORATE GOVERNANCE

Director Independence

All of the Company’s Directors have met the criteria for independence under the rules of the SEC and Rule 5605(a)(2) of NASDAQ.

Director Qualifications

 

 

 

 

Criteria for Membership

 

 

 

 

 

The Company’s Corporate Governance and Nominating Committee areis responsible for annually reviewing the composition of the Board for desired skills and characteristics of Directors, as well as the composition of the Board as a whole.

 

 

 

 

Terms, Limitations and Retirement

 

 

 

 

All Directors are elected to three-year terms. The Board does not believe it should establish a limit on the number of times that a Director may stand for election. To ensure that the Board of the Company is not be made up of individuals who are not active in the business, agriculture, professional or working life of the community, the Board decidedour By-Laws state that it wasis in the best interest of the Company that an age limit belimits are set for members of the Board. No individual is eligible to be appointed or elected as a Director after attaining the age of 69.

 

 

 

 

Ownership of Company Stock

 

 

 

 

All Directors are required to own common stock of the Company.

Selecting Nominees for Election to the Board

The Corporate Governance and Nominating Committee is the standing committee responsible for recommending to the full Board the nominees for election as directors at our annual shareholder meetings. The Company’s Bylaws call for the Board to then select nominees to stand for election. In making its recommendations, the Committee reviews the composition of the full Board to determine the qualifications and areas of expertise needed to further enhance the composition of the Board, and works with management in attracting candidates with those qualifications. Although the Committee does not have a formal policy regarding diversity, the Committee seeks to provide the Board prospective nominees that reflect diversity in background, education, gender, business experience, skills, business relationships and associations, and other factors that would contribute to the Board’s governance of the Company.

Other Board Information

 

 

Other Board Information

 

 

Frequency of Meetings

 

 

 

 

The Board typically holds twelve regularly scheduled meetings per year. If necessary, special meetings of the Board are held as determined by the Board.

 

 

 

 

Annual Evaluations

 

 

 

 

The Corporate Governance and Nominating Committee conducts, or causes to be conducted, annual evaluations to assess the Board’s performance and composition.


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Executive Sessions of Independent Directors

 

 

 

 

 

The Company’s independent Directors (all members of the Board are independent Directors) meet in executive sessions (without members of management present) regularly.

Committees

Currently, the Board has four standing Committees: (i) Executive,Audit; (ii) Audit,Compensation; (iii) Compensation and (iv) Corporate Governance and Nominating.Nominating; and (iv) Executive.


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CEO and Management Succession

The Corporate Governance and Nominating Committee conductconducts periodic reviews to assess the succession planning for the Company’s Executive Officers. In the event of the loss of the CEO or any other Executive Officer, a meeting of the Corporate Governance and Nominating CommitteeBoard would be held to discuss the implementation of the existing succession plan and, in the case of the CEO, provide recommendations to the Board fordetermine interim management of the Company.

Review and Access to Guidelines

The Corporate Governance and Nominating Committee reviews the Company’s Corporate Governance Policy annually, and if deems appropriate, recommends amendments to the Board.

Communication with the Board

The Board has implemented a process by which Company shareholders may send written communications to the Board’s attention. Any shareholder desiring to communicate with the Board, or one or more of its Directors, may send a letter addressed to:

 

 

 

New Ulm Telecom, Inc.

 

Attention: Corporate Secretary (Board Matters)

27 North Minnesota Street

 

New Ulm, Minnesota 56073

Attention: Corporate Secretary (Board Matters)

The Board has instructed the Corporate Secretary to promptly forward all communications received to the full Board or the individual Board members specifically addressed in the communication, without first screening those communications.

The Company encourages all of its Directors and Officers to attend the Annual Meeting of Shareholders. All seven of the Company’s sevencurrent Directors attended the 2009Company’s 2012 Annual Meeting of Shareholders.

Code of Business Conduct

The Company-adopted Code of Business Conduct for Directors, Executive Officers and all employees is available on the Company’sCompany website atwww.nutelecom.net. The Code of Business Conduct includes the following principles related to the Company’sCompany Directors, Officers and employees:

 

 

 

 

•

Act with honesty and integrity;

 

•

Promote full, fair, accurate, timely and understandable disclosures in reports and documents filed with the SEC and other public communications;

 

•

Comply with laws, rules and regulations of governments and their agencies;

 

•

Respect the confidentiality of information acquired in the course of performing work for the Company, except when authorized or otherwise legally obligated to disclose the information; and


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•

Do not use confidential information of the Company for personal advantage or for the benefit of acquaintances, friends or relatives.


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Risk Oversight

The Board and each of its Committees are involved in overseeing risk associated with the Company and its operations. The Board and Audit Committee monitor the Company’s credit risk, liquidity risk and regulatory risk through regular reviews with management, external auditors and other advisors. In its periodic meetings with management and the Company’s independent registered public accounting firm, the Audit Committee discusses the scope and plan for the audits and includes management in its review of accounting and financial controls, assessment of business risks, and legal and ethical compliance programs. The Board and the Corporate Governance and Nominating Committee monitor the Company’s governance and succession risk through regular reviews with management and outside advisors. The Board and the Compensation Committee monitor the Company’s compensation and benefit policies and related risks through regular reviews with management and the Committee’s outside advisors. The Board and its Executive Committee monitor operational risk and enterprise risk by monitoring the Company’s overall strategic goals and objectives with management and the Board, and reviewsreview and considersconsider merger, acquisition and growth opportunities for recommendation to the Board. The Board as a whole monitors any potential for reputation risk.

Board Leadership

The Board does not have a formal policy regarding the separation of the roles of CEO and Chair of the Board, but believes it is in the best interestsinterest of the Company to make that determination based on the position and direction of the Company and the membership of the Board. TheHowever, at this time, the Board has determined however, that it is in the best interest of the Company’s shareholders at this time for the roles of Chair and CEO to be separated. The current CEO Bill Otis is not a member of the Board, but serves on the Executive Committee.Board. This structure ensures a greater role for the Chair, together with the active participation of the independent Directors, in setting agendas and establishing Board priorities and procedures. Further, this structure permits the CEO to focus on the management of the Company’s day-to-day operations.


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THE BOARD OF DIRECTORS AND COMMITTEES

Board of Director Committees

The Board consists of seven members with staggered terms of three years. The Board typically holds regular monthly meetings and several special meetings, andmeetings. It has established the following Committees: (i) Audit Committee; (ii) Compensation Committee; (iii) Corporate Governance and Nominating Committee; (ii) Audit Committee; (iii) Compensation Committee and (iv) Executive Committee. The former Steering Committee has been replaced by the Executive Committee and the responsibilities of the former Strategic Planning Committee have been assigned to the Executive Committee. Committee Charters can be viewed on the Company’s website atwww.nutelecom.net. The Chair of the Board is an ex-officio member of all Committees. The Board held 1213 meetings in 2009.2012. All Committees meet as required and each Director attended 75% or more of the Board meetings and applicable Committee meetings.


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Corporate Governance and Nominating Committee

          This Committee was established on January 21, 2010. Members of the Corporate Governance and Nominating Committee are James P. JensenDuane D. Lambrecht (Chair), Mary Ellen Domeier and Dennis E. Miller.Miller and Suzanne M. Spellacy. In addition, the Company’s CEO is also a member of the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee is responsible for reviewing, addressing and making recommendations to the Board on matters pertinentpertaining to appropriate governance standards (including the Board’s nominating process and succession planning). Committee responsibilities include:

 

 

 

 

•

Develop and recommend governance principles applicable to the Company and to the Board;

 

 

 

 

•

Oversee the evaluation of the Board and its Committees;

 

 

 

 

•

Make recommendations to the Chair and the Board as to composition of all Board Committees;

 

 

 

 

•

Maintain shareholder relations efforts;

 

 

 

 

•

Develop, maintain and implement a board-approved nomination process for seats on the Company’s Board, although the ultimate decision for nominations rests with the entire Board; and

 

 

 

 

•

Ensure appropriate succession planning is in place for both senior management and members of the Board.Board;

•

Ensure Board and Committee assessments are completed; and

•

Board educational opportunities are identified and recommended from the completed assessments.

Board policy requires consideration of candidates for Director positions,Positions as recommended by shareholders, if they are qualified to serve on the Board. The Board may elect not to consider an unsolicited recommendation if no vacancy exists on the Board and the Board does not perceive a need to increase its size. In order for a Director candidate to be considered for nomination at the Annual Meeting of Shareholders, the recommendation must be received by the Company as provided under “Shareholder Proposals for 20112014 Annual Meeting,”Meeting” on page 33.36.

The Corporate Governance and Nominating Committee held three meetings in 2012.

Audit Committee

Members of the Audit Committee are Paul W. Erick (Chair), Mary Ellen Domeier and Duane D. Lambrecht.Lambrecht and Wesley E. Schultz. All members of the Audit Committee are independent, as defined in Rule 5605(a)(2) of the NASDAQ’s listing standards. Each member of the Audit Committee is financially literate and at least one membertwo members of the Committee hashave accounting or related financial management expertise. The Board has determined that Mr. Paul E. Erick (Chair of the Audit Committee), satisfies and Mr. Wesley E. Schultz, satisfy the criteria adopted by the SEC to serve as an “Audit Committee Financial Expert.Experts.”


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The Audit Committee is responsible for overseeing the Company’s accounting procedures, financial reporting processes and internal controls and audit, andaudit. It consults with management and the independent registered public accounting firm on, among other items, matters related to the annual audit, the published financial statements and the accounting principles applied. As part of its duties, the Audit Committee appoints, evaluates and retains the Company’s independent registered public accounting firm and evaluates that firm’s qualifications, performance and independence. The Audit Committee has established policies and procedures for the pre-approval of all services provided by the independent registered public accounting firm.

The Audit Committee had 15held six meetings in 2009.2012. The Audit Committee’s Report is included on page 30 of this proxy statement.


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Compensation Committee

Members of the Compensation Committee are Perry L. Meyer (Chair), Rosemary J. DittrichWesley E. Schultz and Dennis E. Miller.Suzanne M. Spellacy. The Compensation Committee’s duties include evaluating employee compensation and benefit plans as well as staffing. The Compensation Committee also makes recommendations pertaining to the compensation of Directors. This

The Compensation Committee had 6held six meetings in 2009.2012. The Compensation Committee’s Report is included on page 27 of this proxy statement.

Executive Committee

          The Executive Committee was established on January 21, 2010. Members of the Executive Committee are James P. Jensen (Chair), Duane D. Lambrecht and Perry L. Meyer.Meyer and Dennis E. Miller. In addition, the Company’s CEO, Chief Operating Officer (COO) and Chief Financial Officer (CFO)CFO are also members of the Executive Committee. This Committee is responsible for carrying out the Board’s overall responsibility with respect to: (i) exercising the Board’s authority when the Board is not in session; (ii) discussing Board agenda topics beyond those on the Consent Agenda; (iii) strategic planning; (iv) consideration of the Company’s merger, acquisition and growth opportunities andopportunities; (v) monitoring the status of any litigation and making recommendations to the Board.Board and (vi) implementation of Board member education based on input given by the Corporate Governance and Nominating Committee and other committees.

SteeringThe Executive Committee

          Members of the Steering Committee consisted of James P. Jensen (Chair), Duane D. Lambrecht and Perry L. Meyer. This Committee was responsible for the study and analysis of the Company’s financial needs and requirements and the evaluation of future operations and Company direction. The Steering Committee had 6 held three meetings in 2009. As of January 21, 2010, this Committee’s responsibilities have been assumed by the Company’s Executive Committee.2012.

Strategic Planning Committee

          Members of the Strategic Planning Committee consisted of Mary Ellen Domeier (Chair), Rosemary J. Dittrich and Dennis E. Miller. This Committee existed to ensure that Company management and the Board engaged in ongoing strategic thinking and planning, reviewed mission and value objectives, and, from time to time, that previously determined strategic action plans were being implemented. This Committee met as deemed necessary, but no less than quarterly. This Committee had 4 meetings in 2009. As of January 21, 2010, this Committee’s responsibilities have been assumed by the Company’s Executive Committee.


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NON-EMPLOYEE DIRECTOR COMPENSATION

On February 28, 2012, our Board adopted the New Ulm Telecom, Inc. Director Stock Plan (the “Plan”). The Plan was subsequently approved by the Company shareholders on May 31, 2012 and became effective on that date. Under the plan, the Board (or a Committee) has the power to designate that portion of the Director’s retainer that will be paid in Company common stock. Each Director has the ability to designate an additional percentage of their retainer to be paid in Company common stock. For the director terms that began after the 2013 Annual Meeting of Shareholders, the Board determined that 50% of each Director’s retainer would be paid in Company common stock, and each director had the ability to designate an additional percentage of their retainer, up to a maximum of 100% of the retainer, to be paid in Company common stock. In 2009, the Directors were2012, each Director was paid an annual retainer of $16,800. In addition, Directors received $735$1,000 for each Board and Committee meeting they attended from January 2009 through August 2009, and $588 for each Board and Committee meeting they attended from September 2009 through December 2009.attended. The Chair of the Board, who is not an employee of the Company, receives an additional annual retainer of $12,000. Also, theThe Audit Committee Chair, who is not an employee of the Company, receives an additional annual retainer of $7,500. The Compensation Committee Chair, who is not an employee of the Company, receives an additional annual retainer of $5,000.

Under Board policy for non-employee Director Compensation established May 26, 2009, a Director who serves at least three full terms (nine years) is entitled to receive as compensation three times the Board annual retainer in effect at the time of separation from the Board. A Director who serves full terms beyond the initial three terms is entitled to receive additional compensation of one-half times the annual Board retainer in effect at the time of separation for each additional full term served, not to exceed three additional terms. Separation includes retirement, resignation, death, disability or change of corporate ownership. This compensation to Directors will generally be paid within sixty days of the Director’s separation from the Board, and otherwise in accordance with Section 409A of the Internal Revenue Code. The Company’s future obligations under this policy as of December 31, 20092012 were $294,000.$201,600. The Company developed this policy with the assistance of Organizational Concepts International (OCI), an outside compensation consultant, in an effort to remain competitive in attracting and retaining quality outside Directors. The decision to engage OCI was made by the Compensation Committee.


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The following table shows the compensation paid or accrued to each of the Company’s Directors in 2009:2012:

20092012 DIRECTOR COMPENSATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

Fees Earned
or Paid in
Cash ($)

 

All Other
Compensation
($) (1)

 

Total ($)

 

 

Fees Earned
or Paid in
Cash ($)

 

Fees Earned
or Paid in
Stock ($)

 

All Other
Compensation
($) (1)

 

Total ($)

 

 

 

 

 

 

 

 

James P. Jensen

 

$

59,964

 

$

0

 

$

59,964

 

 

$

51,000

 

$

16,800

 

$

—

 

$

67,800

 

Perry L. Meyer

 

34,734

 

0

 

34,734

 

 

35,000

 

16,800

 

—

 

51,800

 

Duane D. Lambrecht

 

39,585

 

0

 

39,585

 

 

29,400

 

8,400

 

—

 

37,800

 

Paul W. Erick

 

42,821

 

0

 

42,821

 

 

34,500

 

16,800

 

—

 

51,300

 

Rosemary J. Dittrich

 

32,676

 

8,400

 

41,076

 

Mary Ellen Domeier

 

39,879

 

42,400

 

82,279

 

Dennis E. Miller (2)

 

19,138

 

0

 

19,138

 

Gary Nelson (3)

 

20,230

 

0

 

20,230

 

Dennis Miller

 

29,000

 

16,800

 

—

 

45,800

 

Wesley E. Schultz (2)

 

15,000

 

16,800

 

—

 

31,800

 

Suzanne M. Spellacy (3)

 

15,400

 

8,400

 

—

 

23,800

 

Mary Ellen Domeier (4)

 

18,000

 

—

 

—

 

18,000

 

Rosemary J. Dittrich (5)

 

15,000

 

—

 

8,400

 

23,400

 



 

 

 

(1)

The amount listed in the All Other Compensation column represents the change in the non-employee Director Compensation policy value accruing to each Director for future payment under the Company’s Director Separation policy dated May 30, 2010.

(2)

Mr. Dennis E. Miller was elected to the Board on May 28,26, 2009.

 

 

(2)

Mr. Wesley E. Schultz was elected to the Board on May 31, 2012.

(3)

Mr. Gary NelsonMs. Suzanne M. Spellacy was elected to the Board on May 31, 2012.

(4)

Ms. Mary Ellen Domeier retired from the Board on May 28, 2009.31, 2012.

(5)

Ms. Rosemary J. Dittrich retired from the Board on May 31, 2012.


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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table includes information regarding beneficial ownership of the Company’s common stock as of March 30, 201031, 2013 by (a) each person who beneficially owns five percent or more of our common stock,stock; (b) each Director and nominee for Director,Director; (c) each Named Executive Officer and (d) all Directors and Executive Officers as a group. Unless otherwise noted, each person identified below possesses sole voting and investment power with respect to such shares. Except as noted below, we know of no agreements among our shareholders that relate to voting or investment power with respect to our common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name and Address of Beneficial Owner

 

Amount and
Nature of
Beneficial
Ownership (1)

 

Percent of
Class (2)

 

 

Amount and
Nature of
Beneficial
Ownership (1)

 

Percent of
Class (2)

 

 

 

 

Ruth B. Wines, Trustee of the Ralph K. Wines &
Ruth B. Wines Family Trust
216 Apolena, Newport Beach, California

 

274,320

 

5.4

%

 

 

274,320

 

5.4

%

Bill D. Otis (3)

 

206,477

 

4.0

 

James P. Jensen (4)

 

16,743

 

 

*

 

Bill D. Otis

 

206,477

 

4.0

 

James P. Jensen (3)

 

21,300

 

*

 

Perry L. Meyer

 

12,000

 

 

*

 

 

20,988

 

*

 

Rosemary J. Dittrich (5)

 

14,470

 

 

*

 

Dennis E. Miller

 

3,200

 

 

*

 

 

7,417

 

*

 

Barbara A. J. Bornhoft

 

2,100

 

 

*

 

Mary Ellen Domeier (6)

 

2,220

 

 

*

 

Wesley E. Schultz

 

3,647

 

*

 

Paul W. Erick

 

2,947

 

*

 

Duane D. Lambrecht (7)(4)

 

1,150

 

 

*

 

 

2,574

 

*

 

Paul W. Erick

 

100

 

 

*

 

Barbara A.J. Bornhoft

 

2,300

 

*

 

Suzanne M. Spellacy

 

1,624

 

*

 

Curtis O. Kawlewski

 

0

 

 

*

 

 

0

 

*

 

All nominees, Directors and Officers as a group (10
persons) (8)

 

258,460

 

5.1

%

 

All nominees, Directors and Executive Officers as a
group (10 persons) (5)

 

269,274

 

5.3

%

*

Represents less than 1.0%

 

 

 

*

Represents less than 1.0%

(1)

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to securities. Securities “beneficially owned” by a person may include,include: securities owned by or for, among others; the spouse, children or certain other relatives of such person, as well as other securities, as to which the person has, or shares voting, or investment power, or has the option to acquire within 60 days. Unless otherwise indicated, the address of each shareholder is: c/o New Ulm Telecom, Inc., 27 North Minnesota Street, New Ulm, Minnesota 56073.

(2)

Percentage of beneficial ownership is based on 5,115,4355,103,918 shares outstanding as of March 30, 2010.31, 2013.

(3)

155,247 of Mr. Otis’s shares are pledged to a financial institution for Mr. Otis’s indebtedness.

(4)

(3)

Includes 3,654 shares owned by Mr. Jensen’s spouse.

(5)

Includes 4,970 shares owned by Ms. Dittrich’s spouse.

(6)

Includes 370 shares owned by Ms. Domeier’s spouse.

(7)(4)

Includes 250 shares owned by Mr. Lambrecht’s spouse.

(8)

(5)

Includes 13,4833,904 shares owned by the spouses of Directors and Executive Officers.


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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows compensation paid to or earned by the CEO, COO and CFO (the Named“Named Executive Officers)Officers” during 2009.2012. For more information regarding the Company’s salary policies and executive compensation plans, please review the information under the caption “Report of Compensation Committee on Executive Compensation,” on page 26.27.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name and Principal
Position

 

Year

 

Salary
($)

 

Bonus
($)

 

Non-Equity Incentive Plan Compensation
($)

 

All Other
Compensation
($)(a)

 

Total
($)

 

 

Year

 

Salary ($)

 

Non-Equity
Incentive Plan
Compensation ($)

 

All Other
Compensation
(a) ($)

 

Total ($)

 

Bill D. Otis

 

2009

 

259,730

 

0

 

0

 

8,996

 

268,726

 

 

2012

 

260,000

 

52,000

 

31,644

 

343,644

 

President and CEO

 

2008

 

233,907

 

0

 

46,744

 

15,929

 

294,580

 

 

2011

 

260,000

 

84,825

 

29,843

 

374,668

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barbara A. J. Bornhoft

 

2009

 

152,421

 

0

 

0

 

5,092

 

157,513

 

Barbara A.J. Bornhoft

 

2012

 

165,000

 

24,750

 

19,699

 

209,449

 

Vice President/COO

 

2008

 

136,548

 

5,000

 

20,549

 

11,577

 

173,674

 

 

2011

 

155,000

 

37,929

 

18,781

 

211,710

 

and Corporate Secretary

 

 

 

 

 

 

 

 

 

 

Curtis O. Kawlewski

 

2009

 

12,019

 

0

 

0

 

0

 

12,019

 

 

2012

 

145,000

 

21,750

 

10,167

 

176,917

 

CFO (beginning 11/16/09)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nancy L. Blankenhagen

 

2009

 

102,038

 

0

 

0

 

3,474

 

105,512

 

CFO (2004 – 11/16/09)

 

2008

 

91,884

 

0

 

14,021

 

7,641

 

113,546

 

CFO

 

2011

 

130,000

 

31,811

 

9,877

 

171,688

 


 

 

 

(a)

Represents taxable fringe benefits and contributions made by the Company under its 401(k) plan.

Grants of Plan-Based Awards in 20092012

The following table sets forth information relating to potential plan-based awards in 2012 for Named Executive Officers under the 2006 Management Incentive Plan, as amended:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Future Payouts Under Non-
Equity Incentive Plan Awards (1)

 

 

Potential Payouts Under Non-Equity
Incentive Plan Awards (1)

 

Name

 

Threshold
($)

 

Target
($)

 

Maximum
($)

 

 

Threshold
($)

 

Target
($)

 

Maximum
($)

 

Bill D. Otis

 

25,000

 

50,000

 

100,000

 

 

26,000

 

52,000

 

104,000

 

 

 

 

 

 

 

 

 

Barbara A. J. Bornhoft

 

11,025

 

22,050

 

44,100

 

 

12,375

 

24,750

 

49,500

 

 

 

 

 

 

 

 

 

Nancy L. Blankenhagen

 

6,750

 

13,500

 

27,000

 

Curtis O. Kawlewski

 

10,875

 

21,750

 

43,500

 

 


 

 

(1)

Represents awards that may have been earned during 2012 by the Named Executive Officers under the Company’s 2006 Management Incentive Plan as amended. No actual award amounts were earned or paid under this plan in 2009. For actual award amounts earned and paid under all Company plans, please see the Summary Compensation Table column entitled “Non-Equity Incentive Plan Compensation.”Compensation” on page 22 of this proxy statement. For explanation of this plan, refer to the description on pages 23 -page 25 of this proxy statement under the heading “Compensation Policy - Cash-Based Incentive Compensation.”


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Options and Warrants

The Company did not issue any options or warrants during 20092012 and had no options or warrants outstanding as of December 31, 2009.2012.

Employment Agreements

CEO Bill D. Otis. Mr. Otis and the Company entered into an employment agreement in July 2006 that provided for an annual base salary of no less than $170,000 and that Mr. Otis would be eligible for incentive compensation under the New Ulm Telecom Management Incentive Plan in the form of a cash incentive (Annual Incentive Award) on an annual basis. The base salary for Mr. Otis will remainwas set at $250,000$268,000 for 2010.2013. The target incentive payout for Mr. Otis is set at 20% of his base salary. The maximum incentive award payable under the plan is 40% of base salary (2 times the target). The minimum incentive award payable under the plan is $0. Upon

Under the employment agreement, amended in March, 2012, upon termination of Mr. Otis’ employment by the Company without cause or by Mr. Otis for good reason, Mr. Otis willwould receive 24 months2.99 years of base salary at the annualized rate of pay at termination. Upon a change-in-control transaction, and if the employment of Mr. Otis is terminated by the Company without cause or by Mr. Otis for good reason within 12 months of the change-in-control transaction, Mr. Otis willwould receive a lump sum payment equal to 24 months2.99 years of base salary at the annualized rate of pay at termination. This amount would have been $500,000equal to $780,000 at December 31, 2009.2012, based on the employment agreement that was in effect at that time.

COO Barbara A.J. Bornhoft. Ms. Bornhoft and the Company entered into an employment agreement in July 2006 that provided for an annual base salary of no less than $110,000 and that Ms. Bornhoft would be eligible for incentive compensation under the New Ulm Telecom Management Incentive Plan in the form of an Annual Incentive Award. The base salary for Ms. Bornhoft will remainwas set at $147,000$170,000 for 2010.2013. The target incentive for Ms. Bornhoft is 15% of her base salary. The maximum incentive award payable under the plan is 30% of base salary (2 times the target). The minimum incentive award payable under the plan is $0. Upon

Under the employment agreement, amended in March, 2012, upon termination of Ms. Bornhoft’s employment by the Company, without cause or by Ms. Bornhoft for good reason,reason; Ms. Bornhoft willwould receive 1224 months of base salary at the annualized rate of pay at termination. Upon a change-in-control transaction, and if Ms. Bornhoft is terminated by the Company without cause or by Ms. Bornhoft for good reason within 12 months of the change-in-control transaction, Ms. Bornhoft willwould receive a lump sum payment equal to 24 months of base salary at the annualized rate of pay at termination. This amount would have been equal to $330,000 at December 31, 2012, based on the employment agreement that was in effect at that time.

CFO Curtis O. Kawlewski. Mr. Kawlewski and the Company entered into an employment agreement in March 2012 that provided for an annual base salary of no less than $145,000 and that Mr. Kawlewski would be eligible for incentive compensation under the New Ulm Telecom Management Incentive Plan in the form of an Annual Incentive Award. The base salary for Mr. Kawlewski was set at $149,350 for 2013. The target incentive for Mr. Kawlewski is 15% of his base salary. The maximum incentive award payable under the plan is 30% of base salary (2 times the target). The minimum incentive award payable under the plan is $0.

Upon termination of Mr. Kawlewski’s employment by the Company without cause or by Mr. Kawlewski for good reason, Mr. Kawlewski would receive 12 months of base salary at the annualized rate of pay at termination. Upon a change-in-control transaction, if Mr. Kawlewski is terminated by the Company, without cause or by Mr. Kawlewski for good reason within 12 months of the change-in-control transaction, Mr. Kawlewski would receive a lump sum payment equal to 12 months of base salary at the annualized rate of pay at termination, whichtermination. This amount would have been equal to $147,000$145,000 at December 31, 2009.2012, based on the employment agreement that was in effect at that time.


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COMPENSATION POLICY

The Compensation Committee, which is comprised solely of Independent Directors, is responsible for evaluating and monitoring the Company’s general compensation policies and compensation plans, as well as the specific compensation levels for Executive Officers, including our CEO. The Compensation Committee reviews and recommends annual base salary levels and annual cash award opportunity levels for each Named Executive Officer to the Board.

General Compensation Philosophy

Under the supervision of the Board, the compensation philosophy is designed to:

 

 

 

 

•

Attract and retain well-qualified executive talent;

 

 

 

 

•

Tie annual cash incentives to achievement of measurable corporate performance objectives; and

 

 

 

 

•

Align executive incentives with shareholder value creation.

To achieve these objectives, the Compensation Committee implemented and maintains a compensation plan that ties a significant portion of an executive’s overall compensation to the Company’s financial performance. Overall, the total compensation opportunity is intended to create an executive compensation program that is set competitively compared to similar-sized companies, particularly telecommunication companies.

Each Executive Officer’s compensation package is generally comprised of three elements:

 

 

 

 

•

Base salary and fringe benefits, which reflects an individual’s qualifications, scope of responsibilities, experience level, expertise, performance and contribution to the Company’s financial results;

 

 

 

 

•

Cash-based incentive compensation tied to measurable targets of the Company’s overall success; and

 

 

 

 

•

The Company’s qualified 401(k) plan, in which the executives participate along with all other Company employees.participate.

The Executive Officers were not present during, and did not participate in, deliberations or decisions involving their own compensation during 2009.2012. While Executive Officers do not play a role in setting their own compensation, the Company’s CEO does make recommendations to the Compensation Committee concerning individual performance of other Executive Officers.

Base Salary

The level of base salary is established primarily on the basis of an executive’s qualifications and relevant experience; the scope of his or her responsibilities; the strategic goals that he or she manages; the compensation levels of Executive Officers at similar-sized companies, particularly telecommunications companies; the relationship between the executive’s performance and the Company’s results; and market rates of compensation required to retain qualified management. The Company believes that executive base salaries should be competitive with salaries at similar-sized companies. The Compensation Committee reviews the base salary of each executive annually and makes recommendations to the Board pertaining to any adjustments in base salary that (i) take into account the individual’s performance and any changes in the individualsindividual’s responsibility and (ii) are necessary or appropriate to maintain a competitive salary structure.


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Cash-Based Incentive Compensation

The Company engaged an outside consultant in 2005 to advise the Company on its development of Employee Incentive Plans for (i) employees other than Executive Officers and (ii) Executive Officers. Both plans were implemented in 2006. Payments on each plan were based on achievement of objectives of measurable corporate performance, with financial and customer-related targets. The financial targets included achievement of specified certain operating revenue and net income criteria based on the Company’s budget, while the customer service targets were based on several factors;factors, including (i) “uptime” (the amount of time that the Company’s phone, cable and Internet services were available to customers) and restoration time (the ability of the Company to restore service when an interruption occurs),; (ii) customer retention and (iii) customer service (derived from customer service data).

The Executive Officer potential awards under the 2006 Management Incentive Plan, as amended, and in effect in 2009,2012, were as follows:

 

 

 

 

 

Position

 

Target Award

 

Maximum Award

CEO

 

20% of base salary

 

40% of base salary

COO

 

15% of base salary

 

30% of base salary

CFO

 

15% of base salary

 

30% of base salary

The award formula was weighted according to each of the percentages listed below.

 

 

 

 

 

Net Income

 

 

6060%

%

Operating Revenue

 

 

2525%

%

Customer Service

 

 

1515%

%

Total

 

 

100100%

%

On March 30, 2010 the Compensation Committee recommended, andFebruary 26, 2013, the Board gave its approval, that no plan-based award payments would be paid out for 2009. The Company did not meetamended the minimum requirements for net income financial targets.

The Company will continue the2006 Management Incentive Plan to more closely align potential payouts to operating results. The net income component was changed to operating income before interest, taxes, depreciation and amortization (OIBITDA). The amended award formula is now weighted according to each of the percentages listed below. The Board reserves the right to modify the calculations in 2010 based upon similar factorsthe plan at its discretion. Reasons for modifications may include (but are not limited to) acquisitions or sales of businesses, below target financial performance and the same performance ratios. external economic factors. The amendment takes effect for years starting after December 31, 2012.

OIBITDA

60%

Operating Revenue

25%

Customer Service

15%

Total

100%


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Potential payouts under the Plan are set forth below.


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Grants of Plan-Based Awards in 20102013

The following table sets forth certain information concerning plan-based potential awards to be granted to the Named Executive Officers below during the fiscal year ending December 31, 2010.2013. This information is based on criteria contained in the 2006 Management Incentive Plan, as amended, and described above.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated Future Payouts Under Non-Equity
Incentive Plan Awards

 

 

Estimated Future Payouts Under Non-
Equity Incentive Plan Awards

 

Name

 

Threshold
($)

 

Target
($)

 

Maximum
($)

 

 

Threshold
($)

 

Target
($)

 

Maximum
($)

 

 

 

 

 

 

 

 

Bill D. Otis

 

25,000

 

50,000

 

100,000

 

 

26,800

 

53,600

 

107,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barbara A.J. Bornhoft

 

11,025

 

22,050

 

44,100

 

 

12,750

 

25,500

 

51,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Curtis O. Kawlewski

 

9,375

 

18,750

 

37,500

 

 

11,202

 

22,403

 

44,806

 

 

Other Compensation Programs

The Company has a qualified 401(k) Retirement Savings Plan (Retirement Plan). The Named Executive Officers, along with other employees who made contributions to the Retirement Plan, receive matching contributions of 50% of every dollar, up to 6% of all eligible employee contributions. The Company matches a portion of employee contributions to the Retirement Plan in order to encourage employees to participate in their own retirement savings and to provide another competitive recruiting tool to attract and retain employees.

In addition, on December 18, 2012, the Board authorized the Company to make a discretionary corporate contribution of 3% of eligible compensation for all eligible employees to their respective 401(k) plan accounts for the fiscal year 2012 under the Company’s Retirement Plan.

Elements of Post-Termination Compensation

As noted above under “Employment Agreements,” our Employment Agreements with Mr. Otis, and Ms. Bornhoft and Mr. Kawlewski contain change-in-control provisions. The Compensation Committee believes that severance and change-in-control arrangements for these Named Executive Officers aids in the recruitment and retention of Executive Officers and provideprovides incentives for Executive Officers to grow our business and maintain focus on creating value for our shareholders. The Compensation Committee believes that providing protection to Executive Officers whose employment may be terminated in connection with a change-in-control transaction strikes an appropriate balance between the interests of our Executive Officers and the interests of others if a change-in-control transaction occurs.

The Company does not grant stock awards and does not have any pension plans or any nonqualified deferred compensation plans for its Executive Officers or employees.


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REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The compensation program for the CEO and the Board is the responsibility of the Compensation Committee of the Board. The Compensation Committee is comprised entirely of independent members of the Board. The Compensation Committee oversees the Company’s compensation practices and establishes the principles and strategies that guide the design of compensation plans and benefit programs for all employees of the Company, and makes recommendations to the Board. From January 2009 to May 2009, theThe Compensation Committee wasis comprised of three Directors: Mr.Perry L. Meyer (Chair), Mr. LambrechtWesley E. Schultz and Ms. Dittrich. In May 2009, Mr. Lambrecht replaced Mr. Nelson on the Audit Committee and Mr. Miller became a member of the Compensation Committee.Suzanne M. Spellacy.

The following discussion describes the Company’s approach pertaining to executive compensation. The Compensation Committee retains the right to consider factors other than those set forth below in setting executive compensation levels for individual officers.

The 20092012 salary program consisted of two elements: (i) an annual base salary and (ii) a cash award under a Management Incentive Plan. The purpose of the Plan was to reward key executives for the long-term success of the Company and to assist in the recruitment and retention of key executives. The Plan was also used to link total executive compensation to the Company’s financial performance. Overall, the philosophy for the executive compensation program is to pay executives competitively compared to similar-sized companies, particularly telecommunications companies.

The Compensation Committee considers Company performance and compensation levels of comparable companies when making its recommendations pertaining to annual base salaries and making awards under the incentive plan. The Compensation Committee’s goal is to remain reasonably competitive with comparable companies.

The Compensation Committee worked with a consultant to develop the Management Incentive Plan. This plan was effective beginning in the year 2006. This Management Incentive Plan enables the Company to motivate its Executive Officers to achieve key financial and strategic objectives.

The Compensation Committee of the Board has reviewed and discussed with management the Executive Compensation discussion and analysis. Based on the review and discussions, the Compensation Committee recommended that the Board include the Executive Compensation discussion and analysis in the proxy statement.

In reviewing the CEO’s 20092012 performance, the Compensation Committee determined that Mr. Otis’ total compensation package was in alignment with the Company’s overall performance in 2009.2012. The Compensation Committee also reviewed the compensation levels of executives in comparable companies, and determined that Mr. Otis’ compensation was competitive within the industry. In addition, the Compensation Committee believes that the Company’s compensation practices and compensation philosophy align executive interests with those of its shareholders by linking total executive compensation to the Company’s overall financial performance.

 

Submitted by the Compensation Committee of the Board of Directors

Perry L. Meyer, Chair

Rosemary J. DittrichWesley E. Schultz

Dennis E. Miller      Suzanne M. Spellacy


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AUDIT COMMITTEE DISCLOSURE

Who serves on the Audit Committee?

The members of the Audit Committee asis comprised of December 31, 2009 included Mr.three Directors: Paul W. Erick (Chair), Ms. Mary Ellen Domeier and Mr. Duane D. Lambrecht.Lambrecht and Wesley E. Schultz. Each member of the Audit Committee has been determined by the Board to be independent under the rules of the SEC. The Board has determined that Mr. Paul W. Erick is ourand Mr. Wesley E. Schultz are qualified to be “Audit Committee Financial Expert,Experts,” as defined in Item 407(c)(5) of Regulation S-K promulgated under the Exchange Act of 1934.

What document governs the activities of the Audit Committee?

The Audit Committee acts under a written charter that sets forth its responsibilities and duties as well as requirements for the Audit Committee’s composition and meetings. The Audit Committee Charter is available on the Company’s website atwww.nutelecom.net and is also available in print, free of charge, upon request. Requests for a printed copy of the Audit Committee Charter should be submitted to the Corporate Secretary, New Ulm Telecom, Inc., at 27 North Minnesota Street, New Ulm, Minnesota 56073.

How does the Audit Committee conduct its meetings?

During the year ended December 31, 2009,2012, the Audit Committee met with the Company’s management at each of its regularly scheduled quarterly meetings. The Audit Committee also met with a representative from Olsen Thielen & Co., Ltd., the Company’s independent registered public accounting firm, at several of its meetings. Agendas for the Audit Committee’s meetings are established by the Chair of the Audit Committee in consultation with the CFO. At those meetings, the Audit Committee reviewed and discussed various financial and regulatory issues, accounting and financial management issues, developments in the accounting profession as well as a summary of anonymous reports received via the Company’s anonymous reporting process (there were no anonymous reports received in 2009).process. The Audit Committee also had separate executive sessions from time to time.

Does the The Audit Committee review the periodicprovides reports and other public financial disclosures of the Company?its activities at each regularly scheduled Board meeting.

The Audit Committee reviews each of the Company’s quarterly and annual reports, including Management’s Discussion and Analysis of Financial Condition and Results of Operations. As part of this review, the Audit Committee discusses these reports with the Company’s management and the Company’s independent registered public accounting firm and considersprior to the audit and review reports prepared byfiling of each report with the independent registered public accounting firm about the Company’s quarterly and annual reports.SEC. In addition, the Audit Committee also reviews related matters, such as the quality of the Company’s accounting practices, alternative methods of accounting under generally accepted accounting principles in the United States and the preferences of the independent registered public accounting firm in this regard. The Company’s critical accounting policies and the clarity and completeness of the Company’s financial and other disclosures are also discussed.


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What is the role of the Audit Committee in connection with the financial statements of the Company?

Management of the Company has the primary responsibility for the Company’s financial statements. The independent registered public accounting firm has responsibility for the integrated audit of the Company’s financial statements. The responsibility of the Audit Committee is to oversee financial matters, among other responsibilities fulfilled by the Audit Committee under its charter. The Audit Committee meets periodically with representatives of Olsen Thielen & Co., Ltd. without the presence of management, to ensure candid and constructive discussions about the Company’s compliance with accounting standards and best practices among public companies comparable in size and scope to the Company.

What matters have members of the Audit Committee discussed with the independent registered public accounting firm?

          In its meetings with representatives of Olsen, Thielen & Co., Ltd., the Audit Committee asked the representatives to address and discuss their responses to several questions that they believed were relevant to its oversight. These questions included:

•

Are the accounting principles or financial reporting practices used by the Company fully acceptable? If not, what alternative principles or financial reporting would you recommend?

•

Are there any accounting principles or financial reporting practices used by the Company that are acceptable only because their effect is not considered material to the financial statements? Will their effect be material in the future?

•

Were there any significant systems implemented or modified that could affect the processing of transactions?

•

Are there any concerns about the Company’s timely recognition of potential financial reporting issues or recognition of revenue?

The Audit Committee has also discussed with Olsen Thielen & Co., Ltd. that their firm is retained by the Audit Committee and that they must raise any concerns about the Company’s financial reporting and procedures directly with the Audit Committee. Based on these discussions and its discussions with management, the Audit Committee believes it has a basis for its oversight judgments and for recommending that the Company’s audited financial statements are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.


What has the Audit Committee done with regard to the Company’s audited financial statements for the year ended December 31, 2009?Table of Contents

The Audit Committee has:

 

 

•

Reviewed and discussed the audited financial statements with the Company’s management; and

•

Discussed with Olsen Thielen & Co., Ltd., the matters required to be discussed under Statement on Auditing Standards No. 114, The Auditors Communication with Those Charged with Governance, as amended and as adopted by the Public Company Accounting Oversight Board.Board (PCAOB).


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Has the Audit Committee considered the independence of the Company’s independent registered public accounting firm?

The Audit Committee has received written disclosures and a letter, required by PCAOB Rule 3526, Communications with Audit Committees Concerning Independence, from Olsen, Thielen & Co., Ltd.Independence. The Audit Committee has also discussed with Olsen Thielen & Co., Ltd., its independence as it relates to the Company. The Audit Committee has concluded that Olsen Thielen & Co., Ltd. is independent fromwith respect to the Company and its management.

Has the Audit Committee made any recommendations regarding the audited financial statements for the year ended December 31, 2009?

          Based upon its review and the discussions with management and the Company’s independent registered public accounting firm, the Audit Committee recommended to the Board that the audited consolidated financial statements for the Company, should be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

Does the Audit Committee provide a periodic report of its activities to the Board?

          The Audit Committee provides reports of its activities at each regularly scheduled Board meeting.

Has the Audit Committee reviewed the fees paid to the Company’s independent registered public accounting firm during the year ended December 31, 2009?

The Audit Committee has reviewed and discussed the fees paid to Olsen Thielen & Co., Ltd. during the year ended December 31, 2009.2012. The fees paid were for services related to the audit and other services and are included belowon page 31 under “Fees Paid to Independent Registered Public Accounting Firm.”

What is the Company’s policy regarding the retention of the Company’s independent registered public accounting firm?

The Audit Committee has adopted a policy regarding the retention of independent registered public accounting firms that requires pre-approval of all services of Olsen Thielen & Co., Ltd. by the Audit Committee or the Chair of the Audit Committee. When services are pre-approved by the Chair of the Audit Committee, notice of this approval is given to the other members of the Audit Committee and presented to the full Audit Committee at its next scheduled meeting.


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REPORT OF AUDIT COMMITTEE

          The Audit Committee assists the Board in its oversight of the Company’s financial reporting process. The Audit Committee operates under a written charter adopted by the Board.

          In addition to its other duties described in the Committee’s Charter, the Audit Committee has:

•

Reviewed and discussed with the Company’s management and the independent registered public accounting firm, the audited financial statements as of December 31, 2009 and for the year then ended;

•

Discussed with the independent registered public accounting firm, the matters required to be discussed by Statement on Auditing Standards No. 114,The Auditor’s Communication with Those Charged with Governance;and

•

Received from the independent registered public accounting firm, the written disclosures and letter required by PCAOB Rule 3526,Communications with Audit Committees Concerning Independence,and discussed their independence with them.

          Based upon the review and discussions summarized above, together with the Committee’s other deliberations, the Audit Committee recommended to the Board that the audited financial statements of the Company, as of December 31, 2009 and for the year then ended, be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 to be filed with the SEC.

          Management is responsible for the Company’s internal controls and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States and for expressing an opinion thereon. The Audit Committee’s responsibility is generally to monitor and oversee these processes, as described in the Audit Committee Charter.

Submitted by the Audit Committee of the Board

Paul W. Erick, Chair

Mary Ellen Domeier

Duane D. Lambrecht

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

It is the Company’s policy that all proposed transactions by the Company with Directors, Officers, five percent shareholders and their affiliates, be entered into only if these transactions are on terms no less favorable to the Company than could be obtained from unaffiliated parties, are reasonably expected to benefit the Company and are approved by a majority of the disinterested, independent members of its Board.


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REPORT OF AUDIT COMMITTEE

The Audit Committee assists the Board in its oversight of the Company’s financial reporting process. The Audit Committee operates under a written charter adopted by the Board.

In addition to its other duties described in the Committee’s Charter, the Audit Committee has:

•

Reviewed and discussed with the Company’s management and the independent registered public accounting firm, the audited financial statements as of December 31, 2012 and for the year then ended;

•

Discussed with the independent registered public accounting firm, the matters required to be discussed by Statement on Auditing Standards No. 114,The Auditor’s Communication with Those Charged with Governance;and

•

Received from the independent registered public accounting firm, the written disclosures and letter required by PCAOB Rule 3526,Communications with Audit Committees Concerning Independence,and discussed their independence with them.

Based upon the review and discussions summarized above, together with the Committee’s other deliberations, the Audit Committee recommended to the Board that the audited financial statements of the Company, as of December 31, 2012 and for the year then ended, be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 to be filed with the SEC.

Management is responsible for the Company’s internal controls and financial reporting processes. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States and for expressing an opinion thereon. The Audit Committee’s responsibility is generally to monitor and oversee these processes, as described in the Audit Committee Charter.

Submitted by the Audit Committee of the Board of Directors
Paul W. Erick, Chair
Duane D. Lambrecht
Wesley E. Schultz


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PROPOSAL 2 – RATIFICATION OF OLSEN, THIELEN & CO., LTD. AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Services of Independent Registered Public Accounting Firm for 20102013

Olsen Thielen & Co., Ltd. served as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2009.2012. The Audit Committee of the Board appointed Olsen Thielen & Co., Ltd. as the independent registered public accounting firm for the Company forbeginning with the fiscal year ended December 31, 2008. On June 24, 2008, the Company announced that it was replacing its prior auditor, Kiesling Associates, LLP with Olsen, Thielen & Co., Ltd. A full discussion is contained in the Company’s Form 8-K filed on June 27, 2008 and in the Company’s Form 10-K for the year ended December 31, 2008.

Fees Billed and Paid to Independent Registered Public Accounting Firm

The following is a summary of fees billed by Olsen Thielen & Co., Ltd. for professional services rendered for the fiscal years ended December 31, 20092012 and 2008,2011, respectively. In addition, a summary of fees billed by Kiesling Associates, LLP for professional services rendered for the year ended December 31, 2008 is also shown below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee Category

 

Olsen, Thielen
2009 Fees

 

Olsen, Thielen
2008 Fees

 

Kiesling
2008 Fees

 

 

2012 Fees

 

2011 Fees

 

Audit Fees

 

$

117,103

 

$

150,160

 

$

14,100

 

 

$

141,782

 

$

130,564

 

Audit - Related Fees

 

—

 

—

 

—

 

 

5,850

 

5,812

 

Tax Fees

 

5,636

 

24,861

 

—

 

 

2,510

 

1,160

 

All Other Fees

 

 

20,975

 

 

35,868

 

 

—

 

 

 

44,537

 

 

26,396

 

Total Fees

 

$

143,714

 

$

210,889

 

$

14,100

 

 

$

194,679

 

$

163,932

 

Audit Fees

Audit fees consist of feesare those billed for professional services rendered for the audit of the Company’s annual consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports.

Audit-Related Fees

Audit-related fee consists of fees those billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” There were noThe audit-related fees billed for 2009 or 2008.2012 and 2011 related to the audits of the Company’s employee benefit plan.

Tax Fees

Tax fees consist of feesare those billed for professional services for tax compliance and tax advice. The tax fees for 2008 included the completion of the Hutchinson Telephone Company tax return for 2007 that was completed after the acquisition of Hutchinson Telephone Company by the Company on January 4, 2008.

All Other Fees

All other fees consist of feesare those for products and services other than the services reported above. The fees billed for all other services paid in 2009,2012 and 2011, respectively, were for general regulatory assistance. The fees billed for all other services paid in 2008 consisted primarily of charges related to services rendered for 2007, activities for Hutchinson Telephone Company prior to the acquisition and general regulatory assistance. The Company typically does not engage its current independent registered public accounting firm directly for other fees or services.


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Independence

The Audit Committee of the Board has determined that the provision of the services described above is compatible with maintaining the independence of the independent registered public accounting firm’s independence.


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Audit Committee Pre-Approval Policy for Services of Independent Registered Public Accounting Firm

The Audit Committee annually approves the scope and fees payable for the year-end audit to be performed by the independent registered public accounting firm for the next fiscal year. The Audit Committee is required to pre-approve audit and non-audit services performed by the independent registered public accounting firm in order to assure that the provision of such services does not impair the independent registered public accounting firm’s independence. The Audit Committee does not delegate to management, its responsibilities to pre-approve services performed by the independent registered public accounting firm. The Audit Committee pre-approved all services the Company received from Olsen Thielen & Co., Ltd. during the year ended December 31, 2009.2012.

Appointment of Independent Registered Public Accounting Firm for 20102013

Subject to ratification by the shareholders at the May 27, 201030, 2013 Annual Meeting, the Audit Committee of the Board has appointed Olsen Thielen & Co., Ltd. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010.2013. In the event the shareholders fail to ratify the appointment, the Audit Committee will reconsider this appointment. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the Company’s and its shareholders’ best interests.

Ratification of the appointment of Olsen Thielen & Co., Ltd. as the Company’s independent registered public accounting firm requires that a majority of the votes cast, whether in person or by proxy, be cast in favor of the proposal. Broker non-votes are counted in determining the votes present at a meeting for purposes of establishing a quorum; but are not considered votes cast and will not count either in favor or against the proposal. Abstentions are counted as present and entitled to vote for the purposes of determining a quorum, but are not counted for the purposes of determining whether shareholders have approved the matter. Therefore, if you abstain from voting on Proposal 2: Ratification of Olsen Thielen & Co., Ltd. as the Company’s Independent Registered Public Accounting Firm, it has the same effect as a vote against the proposal.

Representatives of Olsen Thielen & Co., Ltd. are expected to be present at the annual meeting and will have an opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions from shareholders in attendance.

 

THE BOARD AND THE AUDIT COMMITTEE RECOMMEND A VOTE “FOR” THE RATIFICATION OF APPOINTMENT OF OLSEN THIELEN & CO., LTD. AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. SHARES REPRESENTED BY PROXY WILL BE VOTED “FOR” THIS PROPOSAL, UNLESS YOU SPECIFY A DIFFERENT CHOICE ON THE ACCOMPANYING PROXY CARD.


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PROPOSAL 3 – AMENDING AND RESTATING THE COMPANY’S ARTICLES OF INCORPORATION

We are asking our shareholders to consider and approve an amendment and restatement of the Company’s Articles.

Background and Reasons for the Amendment and Restatement of the Company’s Articles

Our Board recently undertook a review of the Company’s Articles to determine whether changes were appropriate. We are proposing the following changes to clarify the language in the Articles and make them conform to applicable Minnesota law.

•

To add a title to each of Articles I through VI to add clarity;

•

To amend Article III to correct references to applicable provisions of Minnesota Statutes Chapter 302A, the Minnesota Business Corporations Act;

•

To capitalize certain terms, including “Annual Meeting of Shareholders” and “Resolution”; and

•

To amend Article VI, “Director Liability” to remove specific provisions and refer generally to Chapter 302A.

A copy of the current Company Articles is included in Appendix A on page 37, with the proposed changes to be voted on. If the shareholders approve the change, the Company will file its restated articles with the change with the Minnesota Secretary of State.

THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF AMENDING AND RESTATING THE COMPANY’S ARTICLES OF INCORPORATION. SHARES REPRESENTED BY PROXY WILL BE VOTED “FOR” THIS PROPOSAL, UNLESS YOU SPECIFY A DIFFERENT CHOICE ON THE ACCOMPANYING PROXY CARD.


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PROPOSAL 4 – ADVISORY VOTE APPROVING EXECUTIVE COMPENSATION

As required by Section 14A of the Securities Exchange Act of 1934, we are asking shareholders to cast an advisory vote on named executive officer compensation.

As described in detail in the section entitled “Executive Compensation,” which can be found on pages 22-23, we have designed our executive compensation program to implement core compensation principles, including pay for performance and alignment of our management’s interests with those of our shareholders. Under these programs, in 2012 we paid our Named Executive Officers their base salaries and non-equity incentive plan compensation as the Company achieved the specific financial performance goals that the Board had set. We encourage shareholders to read the “Executive Compensation” section of this proxy statement for a more detailed discussion of our executive compensation program, including information about 2012 compensation of our Named Executive Officers.

We are asking our shareholders to indicate their support for our Named Executive Officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our Named Executive Officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named Executive Officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask our shareholder to vote“FOR” the following resolution at the Annual Meeting.

RESOLVED, that the shareholders of New Ulm Telecom, Inc. approve, on an advisory basis, the compensation of the Named Executive Officers as disclosed in New Ulm Telecom, Inc.’s proxy statement for the 2013 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.

Vote Required

Approval of this Proposal 4 requires the affirmative vote of the holders of the majority of the shares present, in person or by proxy, and entitled to vote on this Proposal 4. While this vote is advisory, and not binding on the Compensation Committee or the Board, it will provide valuable information that the Compensation Committee will be able to consider when determining executive compensation philosophy, policies and practices for the remainder of 2013 and future years.

THE BOARD RECOMMENDS A VOTE “FOR” THE ADVISORY VOTE ON EXECTUIVE COMPENSATION.


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PROPOSAL 5 – ADVISORY VOTE ON FREQUENCY OF FUTURE EXECUTIVE COMPENSATION ADVISORY VOTES

As required by Section 14A of the Securities Exchange Act of 1934, we are also asking shareholders to cast an advisory vote on the frequency of future advisory votes on our Named Executive Officer compensation. By voting on this Proposal 5, shareholders may indicate whether they would prefer an advisory vote on Named Executive Officer compensation every year, every two years, or every three years.

After careful consideration, our Board has determined that an advisory vote on executive compensation that occurs every three years (triennially) is the most appropriate alternative for New Ulm Telecom, Inc. and therefore our Board recommends that your vote “FOR” “Every Three Years” as the frequency for future advisory votes on executive compensation.

In formulating its recommendation, our Board believes that a triennial vote would provide us the time to thoughtfully consider the voting results, engage with shareholders to further understand the voting results, and respond to the vote and to shareholders’ feedback as described in detail in the section entitled “Executive Compensation,” which can be found on pages 22-23. Additionally, we intend to engage with our shareholders regarding executive compensation during the period between shareholder advisory votes. We believe that our openness to input from our shareholders regarding executive compensation and the ability of shareholders to contact us at any time regarding these matters will reduce the need for and value of a more frequent advisory vote on executive compensation.

We are not asking shareholders to approve or disapprove of the Board’s recommendation, but rather to indicate their own choice as among the frequency options. Shareholders may cast a vote on their preferred voting frequency by choosing the option of every year, every two years, every three years, or abstain from voting on Proposal 5.

Vote Required

The option of every year, every two years or every three years that receives a plurality of the votes cast at the Annual Meeting by shareholders voting on Proposal 5 will be the option for the advisory vote on executive compensation that has been selected by shareholders and recommended to the Board. While this vote is advisory, and not binding on the Board, the Board will take into account the outcome of the vote in making its determination concerning the frequency of future advisory votes on executive compensation.

THE BOARD RECOMMENDS A VOTE OF “EVERY THREE YEARS” ON PROPOSAL 5: ADVISORY VOTE ON THE FREQUENCY OF FUTURE COMPENSATION ADVISORY VOTES.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company’s Officers, Directors and beneficial owners of more than ten percent of the Company’s common stock are required to file reports of their beneficial ownership with the SEC. Based on the Company’s review of copies of such reports received by it, or written representations from reporting persons, the Company believes that during the fiscal year ended December 31, 2009,2012, Executive Officers and Directors of the Company filed all reports with the SEC required under Section 16(a) to report their beneficial ownership on a timely basis.


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ANNUAL REPORT ON FORM 10-K

Upon written request to New Ulm Telecom, Inc., 27 North Minnesota Street, New Ulm, Minnesota 56073, Attention: President, the Company will send, without charge, a copy of its Annual Report on Form 10-K for the fiscal year ended December 31, 2009,2012, including the financial statements and the financial statement schedules as filed with the SEC, to any person whose proxy is being solicited. The Annual Report on Form 10-K can also be found on the Company’s website atwww.nutelecom.net.

SHAREHOLDER PROPOSALS FOR 20112014 ANNUAL MEETING

If any shareholder intends to present a proposal to be considered for inclusion in the Company’s proxy materials in connection with the Company’s 20112014 Annual Meeting of Shareholders, the proposal must be in proper form (per SEC Regulation 14A, Rule 14a-8 – Shareholder Proposals) and be received at the principal Executive Offices of the Company at 27 North Minnesota Street, New Ulm, Minnesota 56073, Attention: Bill Otis, no later than December 14, 2010.15, 2013. In addition, if the Company is not notified by March 6, 2011,1, 2014, of a proposal to be brought before the 20112014 Annual Meeting of Shareholders by a shareholder, the proxies held by management may provide the discretion to vote against the proposal even though it is not discussed in the proxy statement for the meeting.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING

The Proxy Statement, Proxy Form and Annual Report on Form 10-K, are available at the Company’s website, located atwww.proxyvote.comwww.proxyvote.com..

OTHER MATTERS

The Company did not receive notice by December 12, 200918, 2012 of any shareholder proposals that are to be presented for a vote at the meeting. Therefore, no shareholder proposals are included in this proxy statement and if any other matter requiring a vote properly comes before the meeting, the persons named on the accompanying proxy card will vote your shares on that matter in their discretion.

YOUR VOTE IS IMPORTANT. Regardless of whetherWhether or not you expect to attend the meeting, please sign and date the proxy and return it promptly in person, you are urgedthe enclosed envelope, or take advantage of the option to vote your shares by promptly marking, signing, dating and returning yourInternet or telephone. If you choose to return the proxy card or,by mail, we have enclosed an envelope, for which no postage is required if mailed in the alternative, by votingUnited States. You may also vote your shares electronically either over the Internet (www.proxyvote.com) atwww.proxyvote.comor by touchtonetouch tone telephone (1-800-690-6903).at 1-800-690-6903.

 

 

 

By Order of the Board of Directors

 

/s/ Barbara A.J. Bornhoft

 

Barbara A.J. Bornhoft

 

Corporate Secretary

New Ulm, Minnesota
April 15, 2013


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APPENDIX A

NEW ULM TELECOM, INC.

ARTICLES OF INCORPORATION

Article I
(NAME)

The name of this corporation shall be NEW ULM TELECOM, INC.

Article II
(REGISTERED OFFICE)

The principal place of business and registered address of this corporation is 27 North Minnesota
Street, City of New Ulm, Brown County, Minnesota.

Article III
(SHARES)

Section 1. The total authorized shares of all classes which the corporation shall have authority to issue is 100,000,000, consisting of: 10,000,000 shares of preferred stock of the par value of One Dollar and Sixty-Six Cents ($1.66) per share (hereinafter the “preferred shares”); and 90,000,000 shares of common stock of the par value of One Dollar and Sixty-Six Cents ($1.66) per share (hereinafter the “common shares”).

 

 

New Ulm, Minnesota

(a)

The Board of Directors of the corporation (hereinafter referred to as the “Board of Directors” or “Board”) may, from time to time, establish by resolution, different classes or series of preferred shares and may fix the rights and preferences of said shares in any class or series. Specifically, preferred shares of the corporation may be issued from time to time in one or more series, each of which series shall have such designation or title and such number of shares as shall be fixed by resolution of the Board of Directors prior to the issuance thereof. Each such series of preferred shares shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights, and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions providing for the issuance of such series of preferred shares as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof pursuant to the authority hereby expressly vested in the Board.

 

April 12, 2010

(b)

Except as provided or required by law, or as provided in the resolution or resolutions of the Board of Directors creating any series of preferred shares, the common shares shall have the exclusive right to vote for the election and removal of directors and for all other purposes. Unless otherwise provided by resolution or resolutions of the Board of Directors, each holder of common shares shall be entitled to one vote for each share held.


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(c)

The Board of Directors shall have the authority to issue shares of a class or series, shares of which may then be outstanding, to holders of shares or another class or series to effectuate share dividends, splits, or conversion of its outstanding shares.

Section 2. Except as provided in this section, no person shall beneficially own more than seven percent (7%) of the outstanding capital stock of the corporation. This restriction as to ownership shall not apply to any stock acquired by the corporation.

(a)

For the purposes of this Section 2, the term “person” includes a natural person and an organization, as defined in Minnesota Business Corporation Act Section 302A.011, Subd. 19. The terms “ownership,” or “own” in this Section 2 shall mean and include “beneficial ownership” as defined in Minnesota Business Corporation Act Section 302A.011, Subd. 41. The term “Excess Shares” shall mean shares beneficially owned or acquired by a person that are in excess of seven percent (7%) of the outstanding capital stock of the corporation. For purposes of this Section 2, the term “capital stock” refers to common shares of the corporation.

(b)

A determination as to whether a person’s ownership of capital stock of the corporation includes or constitutes Excess Shares shall be made with reference to the number of shares of common stock outstanding as reported by the corporation in its most recent report filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which sets forth the number of shares of common stock of the corporation outstanding as of a specified date, or, if the corporation ceases to file reports pursuant to the Exchange Act, the number of shares of outstanding common stock set forth in any report, communication or financial statement sent by the corporation to the holders of record of its capital stock.

(c)

No person who owns Excess Shares shall have voting rights with respect to Excess Shares. Excess Shares may be counted when determining whether a quorum exists for the transaction of business at a meeting of shareholders. Excess Shares may be voted following their transfer to another person who is not the beneficial owner of seven percent (7%) or more the corporation’s capital stock.


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(d)

The corporation shall have the right, but not the obligation, upon written notice to a person owning Excess Shares, to redeem Excess Shares at a redemption price equal to the market value of the Excess Shares, as determined in accordance with Minnesota Business Corporation Act Section 302A.011, Subd. 50, on the date the corporation mails such notice of redemption to the beneficial owner of the Excess Shares. Such right of redemption shall be exercised by the corporation by giving notice in writing to the beneficial owner at the address of the beneficial owner as the same appears in the records of the corporation or its transfer agent not later than the sixtieth (60th) day following the corporation’s receipt of notice of a person’s ownership of Excess Shares. If the corporation shall give notice to a person of its intention to redeem Excess Shares, the beneficial owner of the Excess Shares shall tender such shares to the corporation, or its transfer agent, duly endorsed for transfer, not later than twenty (20) days following the date of such notice. Unless the corporation is required by MBCA Section 302A.553, Subd. 3, to obtain shareholder approval for such redemption, the corporation shall pay such redemption price of the Excess Shares to such shareholder, without interest, within twenty (20) days after receipt of the tender of such shares. If the corporation is required, pursuant to MBCA Section 302A.553, Subd. 3 to obtain approval from its shareholders for such redemption, the corporation shall notify the beneficial owner of the Excess Shares and, as a condition of such redemption, must obtain approval of the shareholders by the affirmative vote of the holders of a majority of the voting power of all shares entitled to vote at the corporation’s next regular meeting or at any special meeting of shareholders, in which event such beneficial owner of Excess Shares shall not be obligated to tender the Excess Shares until such person has been notified by the corporation that the redemption has been approved by the shareholders. Promptly upon receipt of notice of approval of redemption of the Excess Shares, the beneficial owner of the Excess Shares shall tender such shares to the corporation, duly endorsed for transfer and, not later than twenty (20) days thereafter, the corporation shall pay the redemption price to such tendering owner, without interest.

(e)

“Excess Shares” shall not include any capital stock authorized by the Board of Directors issued by the corporation to persons in a transaction without shareholder approval (“Board-approved Transaction”), or any capital stock issued by the corporation to persons in a transaction approved by the holders of a majority of the voting power of all classes of shares entitled to vote at a shareholders’ meeting (“Shareholder-approved Transaction”); provided, however, that such shares may constitute Excess Shares subject to this Section 2 when transferred by the beneficial owners thereof following a Board-approved Transaction or a Shareholder-approved Transaction, to persons who, as a result of such transfers, would own more than seven percent (7%) of the corporation’s capital stock.

Section 3. It shall require a two-thirds (2/3rds) majority vote of the outstanding capital stock of the corporation to amend Section 2 of this Article III.

Section 4. No transfer of stock shall be permitted if the result of such sale is ownership of less than thirty (30) shares of stock by the transferee or transferor except that any stockholder presently owning less than t thirty (30) shares shall be permitted to transfer the same in total. No transfer of stock shall be permitted which results in the ownership of fractional shares.


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Article IV I
(PREEMPTIVE RIGHTS DENIED)

The holders of shares of the corporation shall have no pre-emptive right to purchase, subscribe or otherwise acquire any new or additional securities of the corporation, or any options or warrants to purchase, subscribe or otherwise acquire any such new or additional securities before the corporation may offer them to other persons.

Article I V
(DIRECTORS)

(Section 1.) The government of said corporation for the management of its affairs shall be vested in a Board of Directors, who shall be stockholders. The number of directors shall be no fewer than seven (7) but no more than nine (9), based on need as determined by the Board. The directors shall be elected to office at the a (A)nnual m (M)eeting of the s (S)hareholders of the corporation to be held in New Ulm, Minnesota, or at such other place as designated by a r Resolution of the Board of Directors during the month of May in each year.

(Section 2.) Each director shall be elected to office for a term of three (3) years and shall continue to serve until the director’s successor has been duly elected and qualified. Any vacancy that may occur shall be filled by appointment by the Board until the next Annual Meeting at which time a director will be elected by the stockholders to fill the un-expired term.

(Section 3). Any action required or permitted to be taken at a meeting of the Board of Directors, other than an action requiring shareholder approval, may be taken by written action signed, or consented to by authenticated electronic communication, by the number of directors that would be required to take the same action at a meeting of the Board at which all directors were present.

Article V(I)
(DIRECTOR LIABILITY)

No Director shall be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty by such Directors as a director; provided, however, that this Article shall not eliminate or limit the liability of a Director to the extent provided by applicable law:

(a)For any breach of the Director’s duty of loyalty to the corporation or its shareholders;
(b)For act or omissions not in good faith or which involve intentional misconduct or a knowing violation of law:
(c)Under Section 302A.559, 80A.76 or 80A.77 of the Minnesota Statutes;

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(d)For any transaction from which the Director derived an improper personal benefit; or
(e)For any act or omission occurring prior to the effective date of this Article.

(To the fullest extent permitted by Chapter 302A, Minnesota Statutes, as the same exists or may hereafter by amended, a director of this corporation shall not be personally liable to the corporation of its shareholders for monetary damages for breach of fiduciary duty as a director.) No amendment to or repeal of this Article shall apply to or have any effect on the liability or alleged liability of any d (D)irector for or with respect to any acts or omissions of such d (D)irector occurring prior to such amendment or repeal.


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NEW ULM TELECOM, INC.
27 NORTH MINNESOTA STREET
NEW ULM, MN 56073

VOTE BY INTERNET -www.proxyvote.com

Use the Internet to transmit theyour voting instructions and for electronic delivery of information up until 10:59 P.M. Central Time (thethe day before the annualcut-off date or meeting date).date. Have theyour proxy card in hand when accessingyou access the web site and follow the instructions to obtain theyour records and to create an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS

PROXY MATERIALS
If you would like to reduce the costs incurred by New Ulm Telecom, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communicationsproxy materials electronically in future years.

VOTE BY PHONE - 1-800-690-6903


Use any touch-tone telephone to transmit theyour voting instructions up until 10:59 P..M.P.M. Central Time the day before the cut-off date or meeting date. Have theyour proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL


Mark, sign and date theyour proxy card and return it in the postage-paid envelope we have provided or return it to New Ulm Telecom, Inc.,Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.










 

 

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

 

M11277

M58159-P37806

KEEP THIS PORTION FOR YOUR RECORDS

 

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEW ULM TELECOM, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Board of Directors recommends you vote FOR the following directors:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.

 

Election of Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

For

 

Withhold

   

 

 

 

 

 

 

Nominees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1a. James P. Jensen

 

(GRAPHIC)

 

(GRAPHIC)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1b. Perry L. Meyer

 

(GRAPHIC)

 

(GRAPHIC)

 

The Board of Directors recommends you vote 3 YEARS on the following proposal:

 

1 Year  

2 Years  

3 Years  

Abstain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.

To cast an advisory vote regarding the frequency of future non-binding advisory votes on executive compensation.

 

(GRAPHIC)

(GRAPHIC)

(GRAPHIC)

(GRAPHIC)

 

 

 

The Board of Directors recommends you vote FOR proposals 2, 3 and 4.

 

For

  Against

Abstain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

To ratify the selection of Olsen Thielen & Co., Ltd. as the Company’s independent public accounting firm.

 

(GRAPHIC)

(GRAPHIC)

(GRAPHIC)

 

6.

To transact other business that may properly be brought before the meeting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.

To approve a proposal to amend and restate the Company’s Articles of Incorporation (Articles).

 

(GRAPHIC)

(GRAPHIC)

(GRAPHIC)

 

NOTE: The nominees for Board of Directors, if elected, will each hold office until the Annual Meeting of Shareholders to be held in 2016 or until his/her successor is elected and qualified.

 

 

 

4.

To approve the Company’s executive compensation.

 

(GRAPHIC)

(GRAPHIC)

(GRAPHIC)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For address change/comments, mark here.

 

 

 

(GRAPHIC)

 

 

 

 

 

(see reverse for instructions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please indicate if you plan to attend this meeting

 

(GRAPHIC)

(GRAPHIC)

 

 

 

 

 

 

 

 

 

 

Yes

No

 

 

 

 

 

 

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature [PLEASE SIGN WITHIN BOX]

  Date

 

 

 

 

 

Signature (Joint Owners)

Date

 

 


Table of Contents








Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report, Telephone/Internet insert (BR supplied) and Form 10-K
are available at www.proxyvote.com.








 

NEW ULM TELECOM, INC.

For

Withhold

For All

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

M58160-P37806   


 

All

All

Except

 

 

 

 

 

 

 

The Board of Directors recommends that you vote FOR the following:

NEW ULM TELECOM, INC.

27 North Minnesota street

New Ulm, MN 56073

(507) 354-4111

 

 

The undersigned hereby appoints Paul Erick, Duane Lambrecht, Dennis Miller, Wesley Schultz and Suzanne Spellacy or any of them, with power of substitution, as proxies to vote the shares of common stock of the undersigned in New Ulm Telecom, Inc. at the Annual Meeting of Shareholders to be held on May 30, 2013 at 10:00 a.m. at Turner Hall, located at 102 South State Street, New Ulm, Minnesota and at any adjournment thereof, upon all business that may properly come before the meeting, including the business identified (and in the manner directed) on this proxy and described in the proxy statement furnished herewith.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WHICH RECOMMENDS VOTING FOR THE ITEMS ON THE REVERSE SIDE. THIS PROXY WILL BE VOTED AS SPECIFIED. IF NOT SPECIFIED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ITEMS ON THE REVERSE SIDE. ABSTENTIONS WILL BE COUNTED TOWARDS THE EXISTENCE OF A QUORUM.

 

 

 

 

 

 

 

 

 

 

 

Address change/commets: 

 

 

 

 

Proposal 1 -

Election of Directors

O

O

O

Nominees:

01)

James Jensen

02)

Perry Meyer

The Board of Directors recommends that you vote FOR the following proposal(s):

For

Against

Abstain

Proposal 2 - To ratify the selection of Olsen Thielen & Co., Ltd. as the Company’s independent public accounting firm.

O

O

O

NOTE: The nominees for Board of Directors, if elected, will each hold office until the Annual Meeting of Shareholders to be held in 2013 or until his/her successor is elected and qualified.

For address changes or comments, please check this box and write them on the back where indicated.

O

Please indicate if you plan to attend this meeting.

O

O

Yes

No

Please mark, sign and date and return promptly in the enclosed, pre-addressed envelope.

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)

 


Table of Contents











Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement, AR/10K wrap is/are available at www.proxyvote.com










M11278         




NEW ULM TELECOM, INC.
27 North Minnesota Street
New Ulm, MN 56073 (507)
354-4111

The undersigned hereby appoints Paul Erick, Mary Ellen Domeier, Rosemary Dittrich, Duane Lambrecht, and Dennis Miller, or any of them, with power of substitution, as proxies to vote the shares of common stock of the undersigned in New Ulm Telecom, Inc. at the Annual Meeting of Shareholders to be held on May 27, 2010 at 10:00 a.m. at Turner Hall, located at 102 South State Street, New Ulm, Minnesota and at any adjournment thereof, upon all business that may properly come before the meeting, including the business identified (and in the manner indicated) on this proxy and described in the proxy statement furnished herewith.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WHICH RECOMMENDS VOTING FOR THE ITEMS ON THE REVERSE SIDE. THIS PROXY WILL BE VOTED AS SPECIFIED. IF NOT SPECIFIED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ITEMS ON THE REVERSE SIDE. ABSTENTIONS WILL BE COUNTED TOWARDS THE EXISTENCE OF A QUORUM.


 

 

 

 

Address Changes/Comments: Continued and to be signed on reverse side

 

 

 

 

 

 

 


(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)

Continued and to be signed on reverse side