UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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 Registrant x   Filed by a Party other than the Registrant ¨

Check the appropriate box:

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):

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

Whether you choose to vote over the Internet, by telephone or by mail, you can specify whether your shares should be voted for all, any one or two, or none of the three nominees for Director. You can 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 approval of the New Ulm Telecom, Inc. 2015 Employee Stock Plan. If you make these specifications, your shares will be voted as you direct. If you sign, date and return your Proxy Card, but do not specify how you want to vote, your shares will be voted FOR the election of all Director Nominees, FOR the ratification of the appointment of the independent registered public accounting firm and FOR  the approval of the New Ulm Telecom, Inc. 2015 Employee Stock Plan.   

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 or the other proposals.

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 entity that holds their shares.

The persons named as proxies are Board members 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 17, 2015.

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 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.

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.

NOMINEES FOR ELECTION

To Serve a Three-Year Term Expiring In 2018

CONTINUING DIRECTORS

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 Committee is 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 made up of individuals who are active in the business, agriculture, professional or working life of the community, our By-Laws state that it is in the best interest of the Company that age limits 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 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

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

            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

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

CEO and Management Succession

The Corporate Governance Committee conducts 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 Board would be held to discuss the implementation of the existing succession plan and, in the case of the CEO, determine interim management of the Company.

Review and Access to Guidelines

The Corporate Governance 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

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 current Directors attended the Company’s 2014 Annual Meeting of Shareholders.

Code of Business Conduct

We have adopted a Code of Business Conduct and Ethics that applies to all Directors, Executive Officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or persons performing similar functions. The Code of Business Conduct and Ethics includes the following principles related to the Company Directors, Executive 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
·	Do not use confidential information of the Company for personal advantage or for the benefit of acquaintances, friends or relatives.

The Code of Business Conduct and Ethics is publically available by clicking on the “Investors” link on the Company’s website at www.nutelecom.net. We intend to disclose (i) any amendments to, or (ii) waivers from, the Code of Business Conduct and Ethics applicable to our principal executive officer, principal financial officer and principal accounting officer or persons performing similar functions or with respect to the required elements of the Code of Business Conduct and Ethics, by disclosing the amendment or waiver on this website.

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 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 review and consider 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 interest of the Company to make that determination based on the position and direction of the Company and the membership of the Board. However, at this time, the Board has determined that it is in the best interest of the Company’s shareholders for the roles of Chair and CEO to be separated. The current CEO Bill Otis is not a member of the 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.

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. It has established the following Committees: (i) Audit Committee; (ii) Compensation Committee; (iii) Corporate Governance Committee; and (iv) Executive Committee. Committee Charters can be viewed on the Company’s website at www.nutelecom.net. The Chair of the Board is an ex-officio member of all Committees. The Board held 13 meetings in 2014. All Committees meet as required and each Director attended 75% or more of the Board meetings and applicable Committee meetings .  

Corporate Governance Committee

Members of the Corporate Governance Committee are Duane D. Lambrecht (Chair), Colleen R. Skillings, and Suzanne M. Spellacy. The Corporate Governance Committee is responsible for reviewing, addressing and making recommendations to the Board on matters pertaining 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;
●	Ensure appropriate succession planning is in place for both senior management and members of the 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 as recommended by shareholders, if the persons recommended 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 2016 Annual Meeting” on page 34.

The Corporate Governance Committee held three meetings in 2014.

Audit Committee

Members of the Audit Committee are Wesley E. Schultz (Chair), Duane D. Lambrecht and Colleen R. Skillings. 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 two members of the Committee have accounting or related financial management expertise. The Board has determined that Mr. Wesley E. Schultz (Chair of the Audit Committee) and Colleen R. Skillings, satisfy the criteria adopted by the SEC to serve as “Audit Committee Financial Experts.” 

The Audit Committee is responsible for overseeing the Company’s accounting procedures, financial reporting processes and internal controls and audit. 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 held six meetings in 2014. The Report of Audit Committee is included on page 29 of this proxy statement. 

Compensation Committee

Members of the Compensation Committee are Perry L. Meyer (Chair), Dennis E. Miller and 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.

The Compensation Committee held three meetings in 2014. The Report of Compensation Committee on Executive Compensation is included on page 26 of this proxy statement.  

Executive Committee

Members of the Executive Committee are James P. Jensen (Chair), Perry L. Meyer and Dennis E. Miller. In addition, the Company’s CEO, Chief Operating Officer (COO) and 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; (v) monitoring the status of any litigation and making recommendations to the Board and (vi) implementation of Board member education based on input given by the Corporate Governance Committee and other committees.   

The Executive Committee held two meetings in 2014.

On February 24, 2015, the Company’s Board made changes to its Director’s compensation. These changes were recommended by the Company’s Compensation Committee after consultation with an independent third party consultant. The changes were recommended to better align Director compensation with Company peers. Effective June 1, 2015, the Director’s annual retainer will be increased from $16,800 to $20,000. No other changes were made to existing Director compensation.

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, 2014 were $218,400. 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 outside Directors. The decision to engage OCI was made by the Compensation Committee.

The following table shows the compensation paid or accrued to each of the Company’s Directors in 2014:

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 31, 2015 by (a) each person who beneficially owns five percent or more of our common stock; (b) each Director and nominee for 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.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows compensation paid to or earned by the CEO, COO and CFO “Named Executive Officers” during 2014. 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.

Grants of Plan-Based Awards in 2014

The following table sets forth information relating to potential plan-based awards in 2014 for Named Executive Officers under the 2006 Management Incentive Plan, as amended:

Options and Warrants

The Company did not issue any options or stock awards to named executives during 2014 and had no options or stock awards outstanding as of December 31, 2014.  

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 was set at $284,000 for 2015. 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.

Under the employment agreement, as amended in March 2012, upon termination of Mr. Otis’ employment by the Company without cause or by Mr. Otis for good reason, Mr. Otis would receive 2.99 years of base salary at the annualized rate of pay at termination. Upon a change-in-control transaction, 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 would receive a lump sum payment equal to 2.99 years of base salary at the annualized rate of pay at termination. This amount would have been equal to $825,240 at December 31, 2014, 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 was set at $180,400 for 2015. 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.

Under the employment agreement, as amended in March 2012, upon termination of Ms. Bornhoft’s employment by the Company, without cause or by Ms. Bornhoft for good reason; Ms. Bornhoft would receive 24 months of base salary at the annualized rate of pay at termination. Upon a change-in-control transaction, 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 would 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 $350,200 at December 31, 2014, based on the employment agreement that was in effect at that time.

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. This amount would have been equal to $157,400 at December 31, 2014, based on the employment agreement that was in effect at that time.

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.

The Executive Officers were not present during, and did not participate in, deliberations or decisions involving their own compensation during 2014. 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.

As required by Section 14A of the Securities Exchange Act of 1934, the Company proposed an advisory vote to the shareholders approving executive compensation at the May 30, 2013 New Ulm Telecom, Inc. annual meeting. This proposal, commonly known as a “say-on-pay” proposal, gave the Company shareholders the opportunity to express their views on the Company’s Named Executive Officers’ compensation. The Company shareholders approved the proposal with 2,220,076 votes for, 296,247 votes against, 312,917 abstentions and 500,419 broker non-votes. While this vote was advisory, and was not binding on the Compensation Committee or the Board, it did provide valuable information to the Compensation Committee and the Board in setting the Company’s general compensation policies and compensation plans for the Company’s Named Executive Officers.

As required by Section 14A of the Securities Exchange Act of 1934, the Company also proposed an advisory vote to the shareholders at the May 30, 2013 New Ulm Telecom, Inc. annual meeting on the frequency of future advisory votes on the Company’s Named Executive Officers’ compensation. The Company asked the shareholders whether they would prefer an advisory vote on Named Executive Officers’ compensation every year, every two years, or every three years. The Company shareholders approved the vote for every three years with 1,828,357 for the three year selection compared to 610,642 votes for every one year, 36,247 votes for every two years, 353,994 abstentions and 500,419 broker non-votes. The Board adopted the recommendation of the shareholders and intends to have another advisory vote to approve executive compensation at the 2016 Annual Meeting of Shareholders.

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 individual’s responsibility and (ii) are necessary or appropriate to  maintain a competitive salary structure.

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, 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 2014, were as follows:

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

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.

Submitted by the Compensation Committee of the Board of Directors

Perry L. Meyer, Chair

Dennis E. Miller

Suzanne M. Spellacy

AUDIT COMMITTEE DISCLOSURE

The Audit Committee is comprised of three Directors: Wesley E. Schultz (Chair), Duane D. Lambrecht and Colleen R. Skillings. 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. Wesley E. Schultz and Colleen R. Skillings are qualified to be “Audit Committee Financial Experts,” as defined in Item 407(d)(5) of Regulation S-K promulgated under the Exchange Act of 1934.

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 at www.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.

During the year ended December 31, 2014, the Audit Committee met with the Company’s management at each of its regularly scheduled 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. The Audit Committee also had separate executive sessions from time to time. The Audit Committee provides reports of 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 prior to the filing of each report with the 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.

Management of the Company has the primary responsibility for the Company’s financial statements. The independent registered public accounting firm has responsibility for the 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. 

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.

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 (PCAOB).

The Audit Committee has received written disclosures and a letter, required by PCAOB Rule 3526, Communications with Audit Committees Concerning 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 with respect to the Company and its management.

The Audit Committee has reviewed and discussed the fees paid to Olsen Thielen & Co., Ltd. during the year ended December 31, 2014. The fees paid were for services related to the audit and other services and are included on page 30 under "Fees Billed and Paid to Independent Registered Public Accounting Firm."

The Audit Committee has adopted a policy 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.

Independence

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

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, 2014.

Appointment of Independent Registered Public Accounting Firm for 2015

Subject to ratification by the shareholders at the May 28, 2015 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, 2015. 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.

On February 24, 2015, our Board adopted the New Ulm Telecom, Inc. 2015 Employee Stock Plan (the “2015 Plan”), subject to shareholder approval. A copy of the 2015 Plan is attached to this proxy statement as Appendix A.

Purpose of the 2015 Plan

The purpose of the 2015 Plan is to enable New Ulm Telecom, Inc. (the “Company”) and its Subsidiaries to attract and retain employees by allowing these employees to acquire Company common stock, thereby aligning the financial interests of the employees with the other shareholders of the Company. The 2015 Plan provides for the issuance of Company common stock upon the attainment of objectives under the Company’s 2006 Employee Incentive Plans, as amended (“2006 Incentive Plan”).   

The Company currently operates Employee Incentive Plans for (i) employees other than Executive Officers and (ii) Executive Officers. Both plans were implemented in 2006, operate on an annual basis and make cash payments to employees on achievement of objective measurable corporate performance, with financial and customer-related targets. See “Compensation Policy – Cash-Based Incentive Compensation” on page 24 for a description of these plans. These Employee Incentive Plans are collectively referred to in this section as the “2006 Incentive Plan.” Each year the Company's Board of Directors determines the goals for payments under the 2006 Incentive Plan.

Although the Company maintain operates a Director Stock Plan under which each non-employee director is paid a portion of director fees in common stock, the Company has no plan or program under which employees may be issued Common Stock.

The Board of Directors wishes to increase the ownership of common stock by Company employees. Therefore, after approval of the 2015 Plan by the Company shareholders, each participant in the 2006 Incentive Plan will be able to elect to receive a portion of his or her payment under the 2006 Incentive Plan in the form of Company common stock, with the first payout made in 2016. The 2015 Plan will not increase the amounts payable under the 2006 Incentive Plan, but will simply give Company employees the ability to receive a portion of the payout in Company common stock.

Who is Eligible for Stock

Only Employees participating in the 2006 Incentive Plan, or any successor plan or similar plan, are eligible to receive Common Stock under the 2015 Plan.

Types of Stock Incentives to be Awarded

Only Common Stock may be issued under the 2015 Plan.

Administration

The Board, or the Compensation Committee if one is in operation, will administer the 2015 Plan. The Committee will have the power and authority to designate by resolution to determine:

•	The terms under which common stock may be issued under the 2006 Incentive Plan, or any successor plan, including the ability of Employees to elect to receive common stock;
•	The maximum percentage, if any, of the annual payout that an Employee may elect to receive in common stock; and
•	The date or dates on which Employees must elect whether to receive a payout under the 2006 Incentive Plan in common stock, which date or dates may be different for Employees that are executive officers of the Company or otherwise Reporting Persons subject to Section 16(a) of the Securities Exchange of 1934.

 The Committee also has the authority to:

•	Adopt, alter and repeal administrative rules, guidelines and practices governing the 2015 Plan as it, from time to time, deems advisable;
•	Interpret the terms and provisions of the 2015 Plan; and
•	Otherwise supervise the administration of the 2015 Plan.

Tax Consequences of stock payments to Participants and the Company

Common Stock issued under the 2015 Plan will be subject to ordinary income tax on issuance. The Company is entitled to a corresponding deduction at the time the participant recognizes taxable income on the Common Stock.

Additional Matter

The Board believes the 2015 Stock Plan will enable employees to participate in the long-term success and growth of the Company by enabling them to obtain Company common stock, which otherwise may be difficult for them to obtain given (i) the limited depth and liquidity in the Company common stock and (ii) the strict insider trading laws that the Company operates under . 

Registration with the SEC

If the 2015 Plan is approved by our shareholders, we intend to file a registration statement with the SEC pursuant to the Securities Act of 1933, as amended, covering the 200,000 share issuable under the Plan.

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, 2014, 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.

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 at www.proxyvote.com.

OTHER MATTERS

The Company did not receive notice by December 15, 2014 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. Whether or not you expect to attend the meeting, please sign and date the proxy and return it promptly in the enclosed envelope, or take advantage of the option to vote by Internet 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 United States. You may also vote your shares electronically either over the Internet at www.proxyvote.com or by touch tone telephone 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, 2015

APPENDIX A

NEW ULM TELECOM, INC.

2015 EMPLOYEE STOCK PLAN

1.             General Purpose of Plan; Definitions . 

(a)         The name of this Plan is the New Ulm Telecom, Inc. 2015 Employee Stock Plan (the “Plan”). The purpose of the Plan is to enable New Ulm Telecom, Inc. (the “Company”) and its Subsidiaries to attract and retain employees by aligning the financial interests of these individuals with the other shareholders of the Company. The Plan provides for the issuance of Company Common Stock upon the attainment of objectives under the Company’s 2006 Employee Incentive Plans, as amended (“2006 Incentive Plan”).

(b)         For purposes of the Plan, the following terms are defined:

(i)            “Board” means the Board of Directors of the Company.

(ii)            “ Committee ” means the Committee referred to in Section 2 of the Plan. If at any time there is no Committee, then the functions of the Committee specified in the Plan will be exercised by the Board, unless the Plan specifically states otherwise.

(iii)        “ Common Stock ” means the Common Stock, $1.66 par value per share, of the Company.

(iv)        “ Company ” means New Ulm Telecom, Inc., a corporation organized under the laws of the State of Minnesota, and any successor corporation.

(v)          “ Employee ” means an employee of New Ulm Telecom, Inc. or any subsidiary of New Ulm Telecom, Inc.

(vi)        “ Fair Market Value ” means the value of the Share of Common Stock on a given date as determined by the Committee in good faith using reasonable valuation methods.

2.             Administration . 

(a)         The Board has the power to delegate, by resolution, all or any portion of its authority under this Plan to any committee of the Board. Until such time as the Board delegates its authority under this Section 2, the Plan will be administered by the Board of Directors of the Company acting as a committee of the Whole.

(b)    The Committee will have the power and authority to designate by resolution to determine:

(i)            The terms under which Common Stock may be issued under the 2006 Incentive Plan, or any successor plan, including the ability of Employees to elect to receive Common Stock.

(ii)          The maximum percentage, if any, of the payout that an Employee can elect to receive in common stock.

(iii)        The date or dates on which any Employee must elect whether to receive a payout under the 2006 Incentive Plan in Common Stock, which date or dates may be different for Employees that are executive officers of the Company or otherwise Reporting Persons subject to Section 16(a) of the Securities Exchange of 1934.

(c)         The Committee also has the authority to:

(i)            Adopt, alter and repeal administrative rules, guidelines and practices governing the Plan as it, from time to time, deems advisable;

(ii)          Interpret the terms and provisions of the Plan; and

(iii)        Otherwise supervise the administration of the Plan.

(d)        All shares of Common Stock issued under the Plan are to be issued at Fair Market Value.

3.             Stock Subject to Plan . 

(a)         The total number of shares of Common Stock reserved and available for issue under the Plan will be 200,000.

(b)           Shares may be issued under the Plan only for achievement of objectives under the 2006 Incentive Plan, or any successor plan or similar plan, as operated by the Company on an annual basis.

(c)         In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, other change in corporate structure affecting the Common Stock, or spin-off or other distribution of assets to shareholders, the Board will have the power to make such substitution or adjustment in the aggregate number of shares reserved for issuance under the Plan, and in the number of outstanding unvested shares granted under the Plan, as may be determined to be appropriate by the Board, in its sole discretion.

4.             Eligibility .   

(a)           Only Employees participating in the 2006 Incentive Plan, or any successor plan or similar plan, are eligible to receive Common Stock under the Plan.

5.             Amendments and Termination . 

(a)           This Plan may be amended by the Board from time to time to the extent that the Committee deems necessary or appropriate. No amendment that would increase the number of shares reserved under Section 3(a) may be made without the approval  of the shareholders of the Company.

(b)        No shares may be issued under the Plan for any purpose other than for issuance under the 2006 Incentive Plan or any successor plan or similar plan under which payments are based upon achievement of Company-defined objectives.

6.             General Provisions . 

(a)         Common Stock delivered under the Plan will be subject to such restrictions, if any, as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any applicable federal or state securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to these restrictions.

(b)         All shares received under this Plan will be subject to the Company’s Insider Trading Policy, as in effect from time to time.

(c)          Nothing contained in the Plan will prevent the Board of Directors from adopting other or additional employee compensation arrangements, subject to shareholder approval if required.

7.             Effective Date of the Plan; Termination Date of the Plan . 

(a)         The Plan will become effective on the date it is approved by a vote of the shareholders of the Company in accordance with Minnesota law.

(b)        This Plan will operate for a period of ten years and will expire on May 31, 2025.