-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PTmvi9Hzo6GSyrZseDV5Lf0/RQ0uo6vuB1uABxO+nuXDlg9UyfScnkrvczdgsmgy o+ZKaGWViwCr1BpfZYpj1g== 0000897101-07-000818.txt : 20070417 0000897101-07-000818.hdr.sgml : 20070417 20070417171451 ACCESSION NUMBER: 0000897101-07-000818 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070531 FILED AS OF DATE: 20070417 DATE AS OF CHANGE: 20070417 EFFECTIVENESS DATE: 20070417 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ULM TELECOM INC CENTRAL INDEX KEY: 0000071557 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 410440990 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-03024 FILM NUMBER: 07771594 BUSINESS ADDRESS: STREET 1: 400 2ND ST N CITY: NEW ULM STATE: MN ZIP: 56073 BUSINESS PHONE: 5073544111 MAIL ADDRESS: STREET 1: P O BOX 697 CITY: NEW ULM STATE: MN ZIP: 56073 FORMER COMPANY: FORMER CONFORMED NAME: NEW ULM RURAL TELEPHONE CO DATE OF NAME CHANGE: 19840816 DEF 14A 1 newulm071671_def14a.htm DEFINITIVE PROXY STATEMENT DATED MAY 31, 2007 New Ulm Telecom, Inc. Definitive Proxy Statement dated May 31, 2007

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

Filed by the Registrant x         Filed by a Party other than the Registrant o

 

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 May 31, 2007

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of New Ulm Telecom, Inc. (the “Company”), a Minnesota corporation, will be held at Turner Hall, located at 102 South State Street, New Ulm, Minnesota, on Thursday, May 31, 2007 at 10:00 a.m. for the following purposes:

 

(1)

To elect two directors for a term of three years, each to hold office until the Annual Meeting of Shareholders to be held in 2010, or until his or her successor is elected;

 

(2)

To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

The Board of Directors has fixed the close of business on April 9, 2007, as the record date for the determination of shareholders entitled to notice of, and to vote at, the meeting.

 

By Order of the Board of Directors

 

/s/   Barbara A.J. Bornhoft

 

Barbara A.J. Bornhoft

Corporate Secretary

 

New Ulm, Minnesota

April 16, 2007

 

TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON IF THEY SO DESIRE.

 

 




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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 31, 2007

 

INFORMATION CONCERNING SOLICITATION AND VOTING

 

General

This proxy statement and the enclosed proxy are furnished in connection with the solicitation of proxies by the Board of Directors of New Ulm Telecom, Inc. (the “Company”) for use at the Annual Meeting of Shareholders and any adjournment thereof to be held commencing at 10:00 a.m., local time, on Thursday, May 31, 2007, at Turner Hall, located at 102 South State Street, New Ulm, Minnesota.

You may cast your vote by proxy as follows:

 

 

By Internet—Stockholders of record may vote using the Internet by voting at the website listed on the enclosed proxy card. Beneficial owners may vote by accessing the website specified on the voting instruction form provided by their brokers, trustees or nominees. Please check the voting instruction form for Internet voting availability.

 

 

By telephone—Stockholders of record may vote by using the toll-free telephone number listed on the enclosed proxy card. Beneficial owners may vote by telephone by calling the number specified on the voting instruction forms provided by their brokers, trustees or nominees.

 

 

By mailing the proxy card—Stockholders of record may vote by completing, signing, dating and mailing the enclosed proxy card in the accompanying pre-addressed postage paid envelope. Beneficial owners may vote by completing, signing and dating the voting instruction forms provided by their brokers, trustees or nominees and mailing them in the enclosed pre-addressed envelope.

 

All shares of common stock represented by properly executed and returned proxies, unless such proxies have previously been revoked, will be voted at the meeting and, where the manner of voting is specified on the proxy, will be voted in accordance with such specifications. Shares represented by properly executed and returned proxies on which no specification has been made will be voted in favor of each proposal.

The persons named as proxies were selected by the Board of Directors of the Company and are directors or officers of the Company. If any other matters are properly presented at the meeting for action, including a question of adjourning or postponing the meeting from time to time, the persons named in the proxies and acting thereunder will have discretion to vote on these matters in accordance with their best judgment.

The notice of annual meeting, this proxy statement and related proxy card are being mailed to shareholders on or about April 23, 2007.

 

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Record Date and Outstanding Common Stock

The Board of Directors has fixed the close of business on April 9, 2007, as the record date for determining the holders of outstanding common stock entitled to notice of, and to vote at, the meeting. Only shareholders of record at the close of business on April 9, 2007 will be entitled to vote at the meeting. On that date, there were 5,115,435 shares of common stock issued, outstanding and entitled to vote.

Revocability of Proxies

Any shareholder who executes and returns a proxy may revoke it at any time before it is voted. Any shareholder who wishes to revoke a proxy can do so by (a) executing a later-dated proxy relating to the same shares and delivering it to the Chief Executive Officer (CEO) before the vote at the meeting, (b) filing with the CEO before the vote at the meeting a written notice of revocation bearing a later date than the proxy, or (c) appearing in person at the meeting, filing a written notice of revocation and voting in person the shares to which the proxy relates. Any written notice or subsequent proxy should be delivered to New Ulm Telecom, Inc., 27 North Minnesota Street, New Ulm, Minnesota 56073, Attention: Bill Otis, or hand-delivered to Mr. Bill Otis before the vote at the meeting.

Voting and Solicitation

Each shareholder is entitled to one vote, exercisable in person or by proxy, for each share of common stock held of record on the record date. However, shareholders have the right to cumulate votes in the election of directors, as described on page 4.

The Company will pay the cost of this 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 may solicit proxies personally, by telephone, by facsimile or by e-mail, for which they will receive no 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 shares of common stock held as of the record date and will reimburse these persons for their reasonable expenses so incurred.

Quorum; Abstentions; Broker Non-Votes

The presence in person or by proxy of the holders of 35% of the shares of common stock outstanding and entitled to vote is necessary to constitute a quorum for the transaction of business at the meeting. All votes will be tabulated by the inspector of election for the 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 the proxy will be considered present at the 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 the matter.

If a properly executed proxy is returned by a broker holding shares in street name which 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 meeting for purposes of determining a quorum, but will not be considered to be represented at the meeting for purposes of calculating the vote with respect to the matter.

 

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS

There are currently seven directors on the Board of Directors. Each director is elected to a three-year term. Two directors will be elected at the annual meeting. The Board of Directors has nominated and recommends for election the two persons named herein. It is intended that proxies will be voted for such nominees. The Board of Directors believes that each nominee named herein will be able to serve, but should a nominee be unable to serve as a director, the persons named in the proxies have advised the Company that they will vote for the election of such substitute nominee as the Board of Directors may propose.

The following table sets forth information, including business experience during the past five years, as to the nominees for election and as to the other directors. Information concerning beneficial ownership of the Company’s common stock as of April 9, 2007 can be found beginning on page 6. 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 or executive officer, except that the Chair of the Board, Mr. James P. Jensen, is the brother-in-law of Mr. Gary Nelson, one of the Company’s other directors.

 



 

TERMS ENDING IN 2007 AND

NOMINEES FOR TERMS ENDING IN 2010

 

JAMES JENSEN has served as a director since 1982 and as Chair of the Board since 1999. Mr. Jensen, age 62, has been the President of Jensen Consulting, Inc. since 2003. Prior to that, Mr. Jensen served as a Marketing Consultant and Sales Representative for Kohls-Weelborg Dealerships from March 2003 until January 2004, and as the President of Jensen Clothing, Inc. until 2003. Mr. Jensen currently serves on the Board of Directors of Alliance Bank.

 

PERRY MEYER has served as a director since 1995. Mr. Meyer, age 52, is a farmer who raises corn, soybeans and hogs. Since 2003, Mr. Meyer has served on the Board Chairman of Heartland Corn Products, which owns and operates an Ethanol plant in Winthrop, Minnesota. Mr. Meyer has previously served as the Lafayette Township Treasurer.

 



 

TERMS ENDING IN 2008

 

DUANE LAMBRECHT has served as a director since 1999. Mr. Lambrecht, age 60, has been the owner and CEO of Shelter Products, Inc. for more than five years. Mr. Lambrecht also serves on the Board of Directors of the North American Building Material Distributors Association.

 

PAUL ERICK, CPA has served as a director since 2005. Mr. Erick, age 63, was an officer and stockholder of Olsen, Thielen & Co., Ltd. (a public accounting firm) until his retirement in August 2000.

 



 

TERMS ENDING IN 2009

 

ROSEMARY DITTRICH has served as a director since 1997. Ms. Dittrich, age 65, is a co-owner and Corporate Secretary of D & A Truck Line.

 

MARY ELLEN DOMEIER has served as a director since 1999. Ms. Domeier, age 65, currently serves on the Board of Directors of American Artstone Company and Bank Midwest Association. Previously, Ms. Domeier served as the Executive Officer of New Ulm Area Catholic Schools from 2004 until her

 

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retirement in 2006. Prior to that, Ms. Domeier served as the CEO and Chair of Frandsen Bank & Trust until her retirement in 2003.

 

GARY NELSON has served as a director since 1982. Mr. Nelson, age 69, is retired and served as the President and CEO of The Insurance Group until his retirement in 2000.

 



Cumulative Voting for Directors – Vote Required

For each share held, shareholders may cast one vote for each of the two directorships to be filled at this meeting. Each shareholder entitled to vote has the right to vote the shareholder’s 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 meeting, or to the presiding officer at the meeting at any time before the election. If notice of such intent is given, the presiding officer at the meeting will announce, before the election of directors, that shareholders may 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 votes for one candidate or may distribute the votes among any number of candidates. If no shareholder provides notice of the intent, the nominees who receive the affirmative vote of the holders of a majority of the voting power of the shares present and entitled to vote at the meeting will be elected to serve on the Board of Directors. 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 who receive the largest number of votes, taking into account cumulative voting, will be elected to serve on the Board of Directors.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH NOMINEE FOR DIRECTOR SET FORTH IN PROPOSAL NO. 1.



THE BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors consists of seven members with staggered terms of three years. The Board holds regular monthly meetings and some special meetings. The Board has established an Audit Committee, Steering Committee, Compensation Committee, and Strategic Planning Committee performing the functions described below. The Chair of the Board is an ex-officio member of all committees. The Board held 17 meetings in 2006. All committees meet as required. Each director attended 75% or more of the Board meetings and applicable committee meetings.

 

Audit Committee consists of Paul Erick (Chair), Mary Ellen Domeier and Gary Nelson. All members of the Audit Committee are independent as defined in Rule 4200(a)(15) of the Nasdaq’s listing standards. Each member of the Audit Committee is financially literate and at least one member of the Committee has accounting or related financial management expertise. The Board of Directors has determined that Mr. Paul Erick, the Chair of the Audit Committee, satisfies the criteria adopted by the Securities and Exchange Commission 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 Audit Committee oversees the Company’s accounting, financial reporting process, internal controls and audit, and consults with management and the independent auditors 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 auditors and evaluates the independent auditors’ qualifications, performance and independence. The Audit Committee has established policies and procedures for the pre-approval of all services provided by the independent auditors. The Audit Committee’s Report is included on page 14 of this proxy statement. The Audit Committee had 8 meetings in 2006.

 

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Steering Committee consists of James Jensen (Chair), Duane Lambrecht, and Perry Meyer. This committee is responsible for the study and analysis of the Company’s financial requirements and the evaluation of the operations of the Company. The Steering Committee had 6 meetings in 2006.

 

Compensation Committee consists of Perry Meyer (Chair), Rosemary Dittrich and Duane Lambrecht. Its duties are to evaluate employee compensation and staffing. The Compensation Committee also makes appropriate recommendations concerning executive and director compensation. This committee had 6 meetings in 2006.

 

Strategic Planning Committee consists of Mary Ellen Domeier (Chair), Rosemary Dittrich and Gary Nelson. This committee is designed to serve as a catalyst in ensuring Company management and the Board of Directors engage in ongoing strategic thinking. This committee had 2 meetings in 2006.

 

Nominations

 

The Company does not have a formal Nominating Committee or Nominating Committee Charter. The Company’s Board of Directors, which is comprised completely of independent directors as defined in Rule 4200(a)(15) of the Nasdaq’s listing standards, functions as the Company’s Nominating Committee. To date, the Company feels that the full Board best represents the interests of the shareholders regarding nominations. However, the Company may appoint a Nominating Committee in the future if it deems it is appropriate.

 

The Board has generally identified nominees based upon suggestions by current directors, management or shareholders. The Company’s Board member selection criteria include: integrity, education, corporate governance experience, business experience, and understanding of the Company’s industry. The Board has used these criteria to evaluate potential nominees. The Board to date, does not evaluate proposed nominees differently depending upon who has made the recommendation. The Board has not paid any third party fee to assist in this process.

 

It is the Board’s policy to consider director candidates recommended by shareholders who appear to be qualified to serve on the Board of Directors. The Board may choose not to consider an unsolicited recommendation if no vacancy exists on the Board and the Board does not perceive a need to increase the size of the Board. 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 2008 Annual Meeting,” on page 17.

 

Shareholder Communications with Board

The Board of Directors 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.
27 North Minnesota Street
New Ulm, Minnesota 56073
Attention: Corporate Secretary (Board Matters)


The Corporate Secretary has been instructed by the Board to promptly forward all communications so 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 of the Company’s seven directors attended the 2006 Annual Meeting of Shareholders.

 

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NON-EMPLOYEE DIRECTOR COMPENSATION

In 2006, the directors were paid an annual retainer of $13,600. In addition, directors received $600 for each Board and Committee meeting they attended. In 2007, the directors will be paid a $16,000 annual retainer and $700 for each Board and Committee meeting they attend. In 2006, the Chair of the Board, who is not an employee of the Company, received an additional annual retainer of $12,000. This annual retainer will be $12,000 in 2007. Also, in 2007, the Audit Committee Chair will receive a $3,000 annual retainer. The Company has a director retirement policy pursuant to which directors who leave the Board will receive $1,000 for each year of service to the Board with a maximum of $20,000 paid to any one director.

The following table shows the compensation paid to or earned by each of New Ulm Telecom, Inc.’s directors in 2006:

2006 DIRECTOR COMPENSATION

 

Name

 

 

Fees Earned or
Paid in Cash ($)

 

 

Change in Pension Value and Nonqualified
Deferred Compensation Earnings ($)

 

 

Total ($)

 

James Jensen

 

$

 

48,999

 

$

 

0

 

$

 

48,999

 

Perry Meyer

 

 

 

30,999

 

 

 

1,000

 

 

 

31,999

 

Duane Lambrecht

 

 

 

30,399

 

 

 

1,000

 

 

 

31,399

 

Paul Erick

 

 

 

29,199

 

 

 

1,000

 

 

 

30,199

 

Rosemary Dittrich

 

 

 

28,599

 

 

 

1,000

 

 

 

29,599

 

Mary Ellen Domeier

 

 

 

29,799

 

 

 

1,000

 

 

 

30,799

 

Gary Nelson

 

 

 

30,399

 

 

 

0

 

 

 

30,399

 

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding beneficial ownership of the Company’s common stock as of April 9, 2007, by (a) each person known by the Company to own beneficially 5% or more of the Company’s common stock, (b) each director and nominee for director, (c) the executive officers, and (d) 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, the Company knows of no agreements among our shareholders which relate to voting or investment power with respect to our common stock.

 

 

 

 

 

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Name and Address of Beneficial Owner

 

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 92662

 

274,320

 

5.4

%

Bill Otis

 

206,477

 

4.1

 

Gary Nelson (3)

 

34,509

 

*

 

James Jensen (4)

 

16,743

 

*

 

Perry Meyer

 

12,000

 

*

 

Rosemary Dittrich (5)

 

14,200

 

*

 

Barbara Bornhoft

 

2,100

 

*

 

Mary Ellen Domeier (6)

 

2,220

 

*

 

Duane Lambrecht (7)

 

1,150

 

*

 

Patricia Matthews

 

300

 

*

 

Paul Erick

 

100

 

*

 

Nancy Blankenhagen

 

90

 

*

 

All directors and officers as a group (11 persons) (8)

 

289,889

 

5.7

%

 

___________________

* Represents less than 1.0%

 

(1)

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to securities. Securities “beneficially owned” by a person may 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 5,115,435 shares outstanding as of April 9, 2007.

 

(3)

Includes 4,509 shares owned by Mr. Nelson’s spouse.

 

(4)

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

 

(5)

Includes 4,700 shares owned by Ms. Dittrich’s spouse.

 

(6)

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

 

(7)

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

 

(8)

Includes 13,113 shares owned by the spouses of directors and officers.

 









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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows compensation paid to or earned by the Chief Executive Officer, Vice President/Chief Operating Officer and Corporate Secretary, and the Chief Financial Officer (the “Named Executive Officers”) during 2006. 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 13.

 

 

Name and Principal Position

 

Year

 

Salary ($)

 

Non-Equity Incentive Plan Compensation
($)

 

All Other
Compensation
($)(1)

 

Total ($)

 

Bill Otis

President and Chief
Executive Officer

 

2006

 

176,820

 

41,200

 

15,049

 

233,069

 

 

 

 

 

 

 

 

 

 

 

 

 

Barbara Bornhoft

Vice President/Chief Operating
Officer and Corporate Secretary

 

2006

 

114,748

 

20,002

 

8,619

 

143,369

 

 

 

 

 

 

 

 

 

 

 

 

 

Nancy Blankenhagen
Chief Financial Officer

 

2006

 

75,174

 

8,930

 

5,791

 

89,895

 

 

___________________

 

(1)

Represents contributions made by the Company under its 401(k) plan.

Grants of Plan-Based Awards in 2006

 

The following table sets forth certain information concerning the plan-based awards granted to the Named Executive Officers during the fiscal year ended December 31, 2006 under the 2006 Management Incentive Plan:

 

 

 

 

 

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

 

Name

 

Grant Date

 

Threshold
($)

 

Target
($)

 

Maximum
($)

 

Bill Otis

 

3/28/2006

 

17,000

 

34,000

 

68,000

 

Barbara Bornhoft

 

3/28/2006

 

8,250

 

16,500

 

33,000

 

Nancy Blankenhagen

 

3/28/2006

 

3,685

 

7,370

 

14,740

 

 

___________________

 

(1)

Represents bonuses that may have been earned by the Named Executive Officers under the Company’s 2006 Management Incentive Plan. For the actual bonus amounts earned and paid under these plans, please see the Summary Compensation Table column entitled “Non-Equity Incentive Plan Compensation.” For explanation of this plan, refer to the description on pages 9, 10 and 11 of this proxy statement under the heading “Compensation Discussion and Analysis – Cash-Based Incentive Compensation.”

 

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Options and Warrants

 

The Company did not issue any options or warrants during 2006, and at December 31, 2006, had no options or warrants outstanding.

 

Employment Agreements

 

Mr. Otis and the Company entered into an employment agreement, effective July 1, 2006, providing that Mr. Otis would receive an annual base salary of no less than $170,000 and would be awarded incentive compensation under the New Ulm Telecom Management Incentive Plan, in the form of a cash incentive on an annual basis. On December 19, 2006, the Board set the 2007 base salary levels for Mr. Otis as $195,000. Mr. Otis’ contract automatically renews for a 1-year period unless terminated by either party on 90 days notice prior to the renewal date.

 

Ms. Bornhoft and the Company entered into an employment agreement, effective July 1, 2006, providing that Ms. Bornhoft would receive an annual base salary of no less than $110,000 and will be awarded incentive compensation under the New Ulm Telecom Management Incentive Plan, in the form of a cash incentive on an annual basis. On December 19, 2006, the Board set the 2007 base salary levels for Ms. Bornhoft at $120,000. Ms. Bornhoft’s contract renews for a 1-year period unless terminated by either party on 90 days notice prior to the renewal date.

 

COMPENSATION DISCUSSION AND ANYALYSIS

 

The Compensation Committee, which is comprised solely of Independent Directors, is responsible for establishing and monitoring the Company’s general compensation policies and compensation plans, as well as the specific compensation levels for executive officers, including our Chief Executive Officer. The Compensation Committee reviews and establishes annual base salary levels and annual cash bonus opportunity levels for each Named Executive Officer.

 

General Compensation Philosophy

 

Under the supervision of the Board of Directors, the compensation philosophy is designed to attract and retain well-qualified executive talent, to tie annual cash incentives to achievement of measurable corporate performance objectives and to align executives’ incentives with stockholder 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 telecommunications companies.

 

Each executive officer’s compensation package is generally comprised of three elements:

 

 

Base salary, which reflects an individual’s qualifications, scope of responsibilities, experience level, expertise, performance, and impact on 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 which the executives participate in along with all of the Company’s employees.

 

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The executive officers were not present during, and did not participate in, deliberations or decisions involving their own compensation during 2006. While an executive officer does not play a role in setting compensation of his or her own compensation, the Company’s Chief Executive Officer does make recommendations concerning individual performance of other executive officers to the Compensation Committee.

 

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 may adjust base salary to take into account the individual’s performance, any changes in responsibility, and to maintain a competitive salary structure.

 

Cash-Based Incentive Compensation

 

The Company engaged an outside consultant to advise the Company in its development of an Employee Incentive Plan for employees other than executive officers and a Management Incentive Plan for its 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 were achievement of specified certain operating revenue and net income based upon the Company’s 2006 budget, while the customer service targets were based upon several factors, including (i) “uptime” (the amount of time that the Company’s phone, cable and internet services were available to customers), restoration time (the ability of the Company to restore service when an interruption occurs) customer retention and customer service (derived from customer service data).

 

The executive officers bonus potential under the 2006 Management Incentive Plan were as follows:.

 

 

Position

 

Target Award

 

Maximum Award

Chief Executive Officer

 

20% of base salary

 

40% of base salary

Vice President

 

15% of base salary

 

30% of base salary

Chief Financial Officer

 

10% of base salary

 

20% of base salary

 

 

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

 

Net Income

 

60

%

Operating Revenue

 

25

%

Customer Service

 

15

%

Total

 

100

%

 

Performance results must be at least 80% of goal in order to produce any award. In addition, no awards would be paid if net income performance is less than 80% of target amount. Maximum awards are paid for goal achievement of 120% and above.

 

For 2006, the Company paid an award under the plan of $41,200 to Mr. Otis, $20,002 to Ms. Bornhoft and $8,930 to Ms. Blankenhagen for achievement of 103.9% of net income, 101.4% of operating revenue and 110.3% customer service.

 

The Company will continue the Management Incentive Plan in 2007 based upon similar factors and the same performance ratios. Although the Company has not yet set the net income and operating revenue goals from its budgeting process, potential payouts under the Plan are set forth below.

 

Grants of Plan-Based Awards in 2007

 

The following table sets forth certain information concerning plan-based awards granted to the Named Executive Officers during the fiscal year ended December 31, 2007.

 

 

 

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

 

Name

 

Threshold
($)

 

Target
($)

 

Maximum
($)

 

Bill Otis

 

19,500

 

39,000

 

78,000

 

Barbara Bornhoft

 

9,000

 

18,000

 

36,000

 

Nancy Blankenhagen

 

3,905

 

7,810

 

15,620

 

 

Other Compensation Programs

 

New Ulm Telecom, Inc. has a qualified 401(k) Retirement Savings Plan (“Retirement Plan”). All of the Named Executive Officers, along with other employees who made contributions into the Retirement Plan, received matching contributions of 50% of every dollar up to 6% of all eligible employee contributions. In addition, the Company made a discretionary, profit sharing contribution of 4% for 2006 to all Retirement Plan participants’ accounts in the first quarter of 2007. The purpose of the Company’s matching contributions into the Retirement Plan is to encourage employees to participate in their own retirement savings and to provide another competitive recruiting tool to attract and retain employees.

 

Termination and Change in Control Payments

Upon termination of Mr. Otis’s employment by the Company without cause or by Mr. Otis for good reason, Mr. Otis will receive 24 months of base salary at the annualized rate of pay at termination. Upon

 

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a change in control transaction and if Mr. Otis is terminated without cause or Mr. Otis resigns for good reason within 12 months of the change in control transaction, Mr. Otis will receive a lump sum payment equal to 24 months of base salary at the annualized rate of pay at termination, which would be a total of $390,000 in 2007.

 

Upon termination of Ms. Bornhoft’s employment by the Company without cause or by Ms. Bornhoft for good reason, Ms. Bornhoft will receive 12 months of base salary at the annualized rate of pay at termination. Upon a change in control transaction and if Ms. Bornhoft is terminated without cause or Ms. Bornhoft resigns for good reason within 12 months of the change in control transaction, Ms. Bornhoft will receive a lump sum payment equal to 12 months of base salary at the annualized rate of pay at termination, which would be a total of $120,000 in 2007.

 

New Ulm Telecom, Inc. does not grant stock awards and does not have any pension plans or any nonqualified deferred compensation plans.

 














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REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

 

The compensation program for the Chief Executive Officer and the Board of Directors is the responsibility of the Compensation Committee of the Board of Directors (the “Committee”). The Committee is composed entirely of independent members of the Board. The Committee oversees New Ulm Telecom, Inc.’s compensation and establishes the principles and strategies that guide the design of compensation plans and benefit programs for all employees within New Ulm Telecom, Inc. In 2006, the Committee was comprised of three directors: Messrs. Meyer and Lambrecht and Ms. Dittrich. Mr. Meyer is the Chair of the Committee.

 

The following discussion describes New Ulm Telecom, Inc.’s approach to executive compensation. The Committee retains the right to consider factors other than those set forth below in setting executive compensation levels for individual officers.

 

The 2006 salary program consisted of two elements: an annual base salary and a cash bonus 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 New Ulm Telecom, Inc.’s financial performance. Overall, the philosophy for the executive compensation program is to pay competitively compared to similar-sized companies, particularly telecommunications companies.

 

When setting annual base salaries and making awards under the bonus plan, the Compensation Committee considers Company performance and compensation levels of comparable companies with a goal of remaining reasonably competitive with comparable companies.

 

The Committee worked with a consultant to develop the Management Incentive Plan. This plan was effective beginning in the year 2006. The purpose of the Management Incentive Plan is to enable New Ulm Telecom, Inc. to motivate its executive officers to achieve key financial and strategic objectives.

 

In reviewing the Chief Executive Officer’s 2006 performance, the Committee determined that Mr. Otis’ total compensation package was in alignment with the Company’s performance in 2006. The 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 Committee believes that New Ulm Telecom, Inc.’s compensation practices and compensation philosophy align executive interests with those of its shareholders by linking total executive compensation to New Ulm Telecom, Inc.’s financial performance.

 

Submitted by the Compensation Committee of the Board of Directors

Perry Meyer, Chair

Rosemary Dittrich

Duane Lambrecht

 

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Table of Contents

REPORT OF AUDIT COMMITTEE

 

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

 

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 auditors, the audited financial statements as of December 31, 2006 and for the year then ended;

 

Discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 Communication with Audit Committees;

 

Received from the independent auditors the written disclosures and the letter required by Independence Standards Board Standard No. 1 Independence Discussions with Audit Committees and discussed with them their independence.

 

Based upon the review and discussions summarized above, together with the Committee’s other deliberations, the Committee recommended to the Board of Directors that the audited financial statements of the Company, as of December 31, 2006 and for the year then ended, be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 to be filed with the Securities and Exchange Commission.

 

Management is responsible for the Company’s internal controls and the financial reporting process. The independent auditors are 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 (see Appendix A).

 

Submitted by the Audit Committee of the Board of Directors

Paul Erick, Chair

Mary Ellen Domeier

Gary Nelson

 

 










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Table of Contents

SHAREHOLDER RETURN PERFORMANCE GRAPH

Set forth below is a graph that compares the cumulative total shareholder return on our common stock to the Russell 2000 Index and to the NASDAQ Telecommunications Index. The comparison covers the period from December 31, 2001 to December 31, 2006. Shareholder return assumes reinvestment of all dividends.

 


 

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 of Directors.

 








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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

General

The Audit Committee of the Board of Directors has appointed Kiesling Associates LLP as independent registered public accounting firm for the Company for the fiscal year ending December 31, 2006 and for the first three quarters of 2007.

Representatives of Kiesling Associates LLP are expected to be present at the annual meeting, will have an opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions from shareholders in attendance.

The following is a summary of fees billed by Kiesling Associates LLP for professional services rendered for the years ended December 31, 2006 and December 31, 2005.

 

Fee Category

 

 

 

2006 Fees

 

 

 

2005 Fees

 

Audit Fees

 

 

 

$

75,529

 

 

 

$

71,334

 

Audit - Related Fees

 

 

 

 

 

 

 

 

 

Tax Fees

 

 

 

 

12,500

 

 

 

 

11,400

 

All Other Fees

 

 

 

 

 

 

 

 

 

Total Fees

 

 

 

$

87,029

 

 

 

$

82,734

 

 

Audit Fees

Consists of fees 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

Consists of fees 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 no audit-related fees billed for 2006 or 2005.

Tax Fees

Consists of fees billed for professional services for tax compliance.

All Other Fees

Consists of fees for services other than the services reported above. There were no other fees billed for 2006 or 2005.

Independence

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

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

As part of its duties, the Audit Committee is required to pre-approve audit and non-audit services performed by the independent registered public accounting firm in order to ensure that the provision of these services does not impair the independent registered public accounting firm’s independence. On an annual basis, the Audit Committee reviews and provides pre-approval for certain types of services that may be provided by the independent registered public accounting firm without obtaining specific pre-approval at the time of engagement from the Audit Committee. If a type of service to be provided has not received pre-approval during this annual process, it will require specific pre-approval by the Audit Committee. The Audit Committee does not delegate to management its responsibilities to pre-approve services. The Audit Committee pre-approved all of the services the Company received from Kiesling Associates LLP during the year ended December 31, 2006.

 

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company’s officers, directors and beneficial owners of more than 10% of the Company’s common stock are required to file reports of their beneficial ownership with the Securities and Exchange Commission. 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, 2006, all reports required under Section 16(a) were filed with the Securities and Exchange Commission on a timely basis.

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, 2006, including the financial statements and the financial statement schedules, as filed with the Securities and Exchange Commission, to any person whose proxy is being solicited.

SHAREHOLDER PROPOSALS FOR 2008 ANNUAL MEETING

If a shareholder wishes to present a proposal for consideration for inclusion in the proxy materials for the 2008 Annual Meeting of Shareholders, the proposal must be sent by certified mail, return receipt requested, and must 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 16, 2007. All proposals must conform to the rules and regulations of the Securities and Exchange Commission. Under Securities and Exchange Commission rules, if a shareholder notifies the Company of his or her intent to present a proposal for consideration at the 2008 Annual Meeting of Shareholders after February 28, 2008, the Company, acting through the persons named as proxies in the proxy materials for such meeting, may exercise discretionary authority with respect to such proposal without including information regarding such proposal in our proxy materials.

OTHER MATTERS

The management of the Company is unaware of any other matters that are to be presented for action at the annual meeting. Should any other matter properly come before the meeting, however, the persons named in the enclosed proxy will have discretionary authority to vote all proxies with respect to such matter in accordance with their judgment.

By Order of the Board of Directors

/s/ Barbara A.J. Bornhoft

Barbara A.J. Bornhoft

Corporate Secretary

New Ulm, Minnesota

April 16, 2007

 

 








17

 




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APPENDIX A

 

NEW ULM TELECOM, INC.

AUDIT COMMITTEE CHARTER

Organization

There shall be a committee of the Board of Directors of New Ulm Telecom, Inc. (the “Company”) to be known as the Audit Committee. The Audit Committee shall be composed of three or more non-employee directors, appointed annually at the annual organizational meeting of the Board of Directors. Each member of the Audit Committee shall be an independent director and shall have a basic understanding of finance and accounting and be able to read and understand fundamental financial statements at the time of their appointment to the Audit Committee, and, at any time when required by the Rules of the Securities Exchange Act of 1934, as amended, the Securities and Exchange Commission, a stock exchange or the Nasdaq stock market which are applicable to the Company, at least one member of the Committee shall have accounting or related financial management expertise and qualify as a “financial expert” in accordance with the requirements of the rules and regulations of the Securities and Exchange Commission and the Marketplace Rules of The Nasdaq Stock Market or such other listing organization or system on which the Company’s securities are listed or reported (as may be modified or supplemented).

Statement of Policy

The Audit Committee shall, through regular or special meetings with management and the Company’s independent auditors, provide assistance to the Board of Directors in fulfilling their responsibility to the shareholders, potential shareholders, and investment community and provide oversight on matters relating to (a) internal controls regarding finance, accounting, auditing, and regulatory compliance activities, (b) public disclosure, accounting, and financial reporting practices, (c) the quality and integrity of the Company’s financial reports, and (d) management’s identification and control of key business and financial risks. In so doing, the Audit Committee shall maintain free and open means of communication among the directors, the independent auditors and Company management.

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles, which is the responsibility of management and the independent auditors. It is also the responsibility of management to assure compliance with laws and regulations and the Company’s corporate policies with oversight by the Audit Committee in the areas covered by this Charter.

Responsibilities

In carrying out its responsibilities, the Audit Committee’s policies and procedures will remain flexible, in order to best react to changing conditions and to ensure the integrity of the Company’s financial accounting and public disclosure practices.

In carrying out these responsibilities, the Audit Committee shall:

(a)           Review and reassess the adequacy of this Charter at least annually and submit the Charter to the Board of Directors for approval and cause the Charter to be approved at least once every three years in accordance with the rules and regulations of the Securities and Exchange Commission and the Marketplace Rules of The Nasdaq Stock Market or such other listing organization or system on which the Company’s securities are listed or reported (as may be modified or supplemented).

 

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(b)           Assess the quality of the Company’s financial reporting and the soundness of business risk controls.

(c)           Review periodically any code of ethics adopted by the Company, determine whether the conduct of the Company’s management is consistent with such code of ethics, and review any code of ethics with all Company directors and senior management on an annual basis.

(d)           Emphasize the adequacy of internal controls to identify any payments, transactions, or procedures that might be deemed illegal or otherwise improper.

(e)           Consider and review with the independent auditors:

 

The adequacy of the Company’s internal controls including computerized information system controls and security.


 

Any significant findings and recommendations of the independent auditors together with management’s responses thereto.


(f)           Annually review and discuss with the independent auditors all significant relationships they have with the Company that could impair the auditors’ independence. Such review should include receipt and review of a report from the independent auditors regarding their independence consistent with Independence Standards Board Standard I (as it may be modified or supplemented). All engagements for non-audit services by the independent auditors must be approved by the Audit Committee prior to the commencement of services. The Audit Committee may designate a member of the Audit Committee to represent the entire Audit Committee for purposes of approval of non-audit services, subject to review by the full Committee at the next regularly scheduled meeting. The Company’s independent auditors may not be engaged to perform activities prohibited under the rules of the Public Company Accounting Oversight Board, the Sarbanes-Oxley Act of 2002, the rules and regulations of the Securities and Exchange Commission, or the Marketplace Rules of The Nasdaq Stock Market or such other listing organization or system on which the Company’s securities are listed or reported.

(g)           Annually review and approve any conflicts of interest and related-party transactions (unless the Board of Directors has established a separate committee of independent directors to perform such functions).

(h)           Establish procedures for:

 

The receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters.


 

The confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.


(i)            Perform any other activities consistent with this Charter, the Company’s by-laws and governing law, as the Audit Committee or the Board of Directors deems necessary or appropriate.

 

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Independent Auditor Oversight

The Audit Committee has the ultimate responsibility for the oversight of the services provided by the independent auditors. The Company’s independent auditors are directly accountable to the Audit Committee and the Board of Directors. The Audit Committee shall review the independence and performance of the independent auditors, annually appoint the independent auditors and approve any discharge of auditors when circumstances warrant.

Auditor Qualifications

The Audit Committee shall appoint a public accounting firm to audit the books of the Company. The audit firm shall meet the independence and registration requirements of the Sarbanes-Oxley Act of 2002, the rules and regulations of the Securities and Exchange Commission and the Marketplace Rules of The Nasdaq Stock Market.

The Audit Committee shall periodically obtain from the independent auditor a formal written statement delineating all relationships between the auditor and the Company. The Audit Committee shall actively engage in dialogue with the independent auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the auditor and to take or recommend that the full Board of Directors take appropriate action to ensure the independence of the independent auditor.

Annual Audit Planning and Supervision

The Audit Committee shall:

 

Review the background and expertise of the independent auditor’s proposed executive partner and auditing personnel background and expertise.


 

Determine whether the independent auditor is registered with the Public Company Accounting Oversight Board, when required, and the AICPA’s SEC practice section and participates in voluntary peer review professional practice program.


 

Review the independent auditor’s litigation history and professional liability insurance.


 

Review the independent auditor’s engagement letter, which shall define the nature and scope of the audit engagement and constitute a contract for that firm’s professional services.


The Audit Committee also shall obtain and review at least annually a written report from the independent auditors describing:

 

 

All critical accounting policies and practices to be used by the Company;


 

All alternative treatments of financial information within generally accepted accounting principles that have been discussed with the Company’s management;


 

Ramifications of the use of such alternative disclosures and treatments, and the treatments preferred by the independent auditors; and


 

Other material written communications between the independent auditors and management, such as any management letter or schedule of unadjusted differences.


 

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Table of Contents

Annual Audit Review

The Audit Committee shall approve:

 

The fees and other significant compensation to be paid to the independent auditors.


 

The independent auditors’ annual audit plan, including scope, staffing, locations and reliance upon management and internal audit department.


In connection with the annual audit, the Audit Committee shall:

 

Ascertain any disagreements about audit personnel or between audit personnel and company management.


 

Review the Company’s annual audited financial statements prior to filing or release. Such review shall include discussions with management and the independent auditors of significant issues regarding critical accounting estimates, accounting principles, practices and judgments, including, without limitation, a review with the independent auditors of any auditor report to the Committee required under the rules of the Securities and Exchange Commission (as may be modified or supplemented). Review should also include review of the independence of the independent auditors and a discussion with the independent auditors of the conduct of their audit. Based on such review, the Audit Committee shall determine whether to recommend to the Board of Directors that the annual audited financial statements be included in the Company’s Annual Report filed under the rules of the Securities and Exchange Commission.


Quarterly Review

The Audit Committee shall review quarterly financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operation and ensure that the independent auditor reviews quarterly financial statements based on SAS 100, “Interim Financial Information”.

The Audit Committee shall obtain from the independent auditor (prior to the filing of the Form 10-Q and prior to the public announcement of the Company’s quarterly results) a written confirmation that the auditor determines all matters are consistent with standards described in SAS 61, Communication with Audit Committees, including significant adjustments and significant new accounting policies. If concerns exist, the Audit Committee, or at least its Chair, will discuss with the independent auditor and a representative of financial management, in person or by telephone conference call, the matters of concern prior to the filing of the Form 10-Q and prior to the public announcement of the Company’s quarterly results.

Annual Review

The Audit Committee shall review and discuss with management and the independent auditors the Company’s annual financial statements and any other significant reports or financial information prior to submission to any governmental body, or the public, including without limitation:

 

Any certification, report, opinion or review rendered by the independent accountants, and


 

The Annual Report on Form 10-K, with particular attention to Management’s Discussion and Analysis of Financial Condition and Results of Operation contained therein.


 

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The Audit Committee shall confirm that the annual report discusses changes in corporate reporting or accounting practices (for example, departures from GAAP, exceptions to the consistent application of accounting principles, etc.).

The Audit Committee shall review with Company’s management, legal counsel, and the independent auditors any use of the statutory “safe harbor” for forward-looking information that relates to or derives from the Company’s financial statements.

The Audit Committee shall prepare an annual report for inclusion in the Company’s annual proxy statement as required by rules and regulations of the Securities and Exchange Commission and submit such report to the Board of Directors for approval.

Additional Matters for Review

The Audit Committee shall also:

 

Receive a copy of outside counsel’s letter to the auditor regarding litigation, claims and assessments and review the accounting treatment concerning contingency losses and any effect on financial statements.


 

Be informed via correspondence by the independent auditor or counsel of the status of the Company’s compliance with applicable securities, tax, antitrust, labor and industry laws and regulations.


 

Ascertain the existence of and review any material non-arm’s length transactions.


 

Review the Company’s annual proxy statement for omissions of critical information.


 

Discuss the independent auditor’s analysis of the Company’s internal controls.


Outside Advisers

The Audit Committee shall have the authority to engage independent counsel and other advisers, as it determines necessary to carry out its responsibilities. The Company shall provide for appropriate funding, as determined by the Audit Committee, in its capacity as a committee of the Board of Directors, for payment of compensation to:

 

 

The independent auditors employed by the Company for the purpose of rendering or issuing an audit report.


 

Any advisers employed by the Audit Committee pursuant to this Charter.


Definitions of Certain Terms

The terms “independent director,” “registered” (when referring to a public accounting firm) and “non-audit services” shall have the meanings set forth in the Sarbanes-Oxley Act of 2002, the rules and regulations of the Securities and Exchange Commission, and the Marketplace Rules of The Nasdaq Stock Market or such other listing organization or system on which the Company’s securities are listed or reported. The term “independent auditor” shall mean the registered public accounting firm selected by the Audit Committee to audit the books of the Company pursuant to the terms of this Charter.

 

 

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




AUTO DATA PROCESSING
INVESTOR COMM SERVICES
ATTENTION:
TEST PRINT
51 MERCEDES WAY
EDGEWOOD, NY 11717

VOTE BY INTERNET - www.proxyvote.com  

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

VOTE BY PHONE -1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

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

MEETING ATTENDANCE

If it is your intention to attend the meeting in person, you can vote using an above option or you can bring the card with you to the meeting.

ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS

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 communications electronically in future years.

g

0000 0000 0000

 

 

NAME

 

NEW ULM TELECOM INC

123,456,789,012.12345

NEW ULM TELECOM INC

123,456,789,012.12345

NEW ULM TELECOM INC

123,456,789,012.12345

NEW ULM TELECOM INC

123,456,789,012.12345

NEW ULM TELECOM INC

123,456,789,012.12345

NEW ULM TELECOM INC

123,456,789,012.12345

NEW ULM TELECOM INC

123,456,789,012.12345

NEW ULM TELECOM INC

123,456,789,012.12345

 

 

PAGE                     1 OF                     2

x

 

 

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

NEWUL1

KEEP THIS PORTION FOR YOUR RECORDS

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

DETACH AND RETURN THIS PORTION ONLY

 

NEW ULM TELECOM, INC.

 

 

 

 

 

 

 

02

0000000000

214748609210

 

 

 

The Board recommends voting FOR the item

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Item

For
All

Withhold
All

For all
Except

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.

 

 

 

 

 

 

1.

To elect two directors for a term of three years, each to hold office until the Annual Meeting of Shareholders to be held in 2010, or until his or her successor is elected.

o

o

o

 

 

 

 

 

 

 

 

 

 

 

 

Nominees: 01) James Jensen

02) Perry Meyer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

In their discretion, the proxies are authorized to vote upon any other business as may properly come before the meeting or any adjournment or postponement thereof.

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Please sign exactly as name(s) appear(s) on the mailing label. If a joint account, each owner should sign. If signing for a corporation or as an agent, attorney or fiduciary, indicate the capacity in which you are signing.

 

 

 

 

 

 

 

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

o

AUTO DATA PROCESSING
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ATTENTION:
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51 MERCEDES WAY
EDGEWOOD, NY
11717

 

 

 

 

 

 

 

 

 

Please indicate if you plan to attend this meeting.

o

o

 

 

 

 

Yes

No

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P41838

 

 

123,456,789,012
649060100
63

Signature [PLEASE SIGN WITHIN BOX]

Date

 

Signature (Joint Owners)

Date

 



Table of Contents

 

 

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

 

PROXY

 

The undersigned hereby appoints Rosemary Dittrich, Mary Ellen Domeier, Paul Erick, Duane Lambrecht and Gary Nelson 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 31, 2007 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 ITEM 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 ITEM ON THE REVERSE SIDE. ABSTENTIONS WILL BE COUNTED TOWARDS THE EXISTENCE OF A QUORUM.

 

 

 

 

 

 

 

 

 

Address Changes/Comments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 





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