Exhibit 10.2 to New Ulm Telecom, Inc. Form 8-K dated July 12, 2006







EXHIBIT 10-2 


NEW ULM TELECOM, INC.

EXECUTIVE EMPLOYMENT AGREEMENT 



        THIS EXECUTIVE AGREEMENT
(“Agreement”) is made and entered into as of the 1st day of July, 2006, by and between New Ulm Telecom, Inc.
(the “Company”), and Barbara Bornhoft (the “Executive”). 


WITNESSETH: 



        WHEREAS, the Company
desires to provide the Executive with specified benefits in the event of Executive’s termination of employment under certain
circumstances and to enter into mutual covenants in exchange for such benefits, and the Executive desires to enter into this
Agreement and to accept such benefits, subject to the terms and provisions of this Agreement; 



        NOW, THEREFORE, In
consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually a “Party” and together the
“Parties”) agree as follows: 



        1.       Definitions. 



        A.                 “Affiliate” of
a person or other entity shall mean a person or other entity that directly or indirectly controls, is controlled by, or is under
common control with the person or other entity specified. 



        B.                 “Annual
Incentive Award” shall mean the annual incentive compensation that may be paid to the Executive under the New Ulm Telecom
Management Incentive Plan, as specified in Section 3 below and in the New Ulm Telecom Management Incentive Plan document.




        C.                 “Board” shall
mean the Board of Directors of the Company.  



        D.                 “Cause” shall
mean:  



                    (1)                 gross
malfeasance of the Executive of a material nature;  



                    (2)                 the
Executive is convicted of a felony or pleads nolo contendere (i.e., no contest) or guilty to a felony under Minnesota law
or other federal, state or local law; 



                    (3)            willful
misconduct of the Executive with regard to the Company having a material adverse effect on the Company, and 



                    (4)                            refusal
to, or failure to attempt in good faith to, perform the Executive’s duties or to follow the written legal direction of the
Board. 



        E.                 “Change
of Control” shall mean the occurrence of any of the following events: 



                   (1)                 the
sale, exchange, lease or other disposition of all or substantially all of the assets of the Company to a person or group of
related persons (as such terms are defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934), 




  








                    (2)                 a
merger or consolidation as a result of which 50% or more of the voting securities of the Company are held by third parties,




                    (3)                 a
sale to a third party of more than 50% of the voting securities of the Company, 



                    (4)                 a
change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board cease for any
reason to constitute a majority of the Board; provided, however, that for purposes of this definition, any individual who becomes
a member of the Board subsequent to the Effective Date, whose election, or nomination for election, by the company’s
stockholders was approved by a vote of at least a majority of those individuals who are members of the Board and who were also
members of the Board as of the Effective Date. 



        F.                “Disability” shall
mean the definition(s) of disability under the terms of the disability insurance policy or policies that may be provided to the
Executive. 



        G.                 “Effective
Date” shall mean the date as of which this Agreement was entered into. 



        H.                 “Term
of Agreement” shall mean the period specified in Section 2 below. 



        I.                 “Termination
for Good Reason” shall mean termination by the Executive of her employment at the Executive’s initiative following the
occurrence of any of the following events without her prior written consent: 



                    (1)                 a
reduction in the Executive’s base salary or other cash compensation or in her ability to participate in or to receive
benefits from any welfare benefit and/or compensation plans without a counter-balancing increase in another element of
Executive’s welfare benefits and/or total compensation package; 



                    (2)                 a
material diminution in the Executive’s duties or the assignment to the Executive of duties which are materially inconsistent
with her duties or which materially impair the Executive’s ability to function as the Vice President of the Company;




                    (3)                 the
relocation of the Company’s principal office, or the Executive’s own office location, as assigned to the Executive by
the Company to a location more than 35 miles from New Ulm, Minnesota. 



        2.       Term of Agreement.



        The Term of Agreement shall
begin on the Effective Date, and shall extend to July 1, 2007, and then shall automatically renew for successive one (1) year
terms, unless terminated on a written notice given by either Party 90-days prior to the Effective Date of the renewal period.
Notwithstanding the foregoing, the Term of Agreement may be earlier terminated by either Party in accordance with the provisions
of Section 5 below. 



        3.       Salary
and Incentive Compensation.  



        A.                 Base
Salary.   Base salary shall be paid at a rate of $110,000 per annum. This base salary may be increased, but not
decreased, annually by the Board. The Board may consider the Executive’s performance, the financial strength of the Company,
and the competitive market in determining salary increases each year. 




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        B.                 Incentive
Compensation.  



                    (1)                 The
Executive may, at the Board’s discretion, be awarded incentive compensation under the New Ulm Telecom Management Incentive
Plan, in the form of a cash incentive (Annual Incentive Award) on an annual basis. 



                    (2)                 The
target incentive for the Executive is 15% of 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. 



                    (3)                 Annual
Incentive Awards are determined as described in the New Ulm Telecom Management Incentive Plan document, and are generally based on
net income, operating revenue and customer service performance versus goal. 



                    (4)                 The
Board will approve the Executive’s incentive plan goals for each year by the end of the first quarter of that year. After the
fiscal year has been completed and performance results have been audited and approved by the Board, the Board will assess
performance results versus goal. If available, Annual Incentive Awards are typically paid within two and one-half months following
the end of the fiscal year. 



        4.       Benefits.  



        A.                 Standard
Benefits.   The Executive shall be eligible to participate in standard employee benefit programs (including
medical, dental, life and disability insurance, which shall be effective as of and from the date of the employment hereunder) as
the Company shall maintain from time-to-time for the benefit of all employees. 



        B.                 Automobile
Reimbursement.   The Executive will be reimbursed for all automobile expenses related to business travel, including
vehicle lease or payment costs approved by the Board. All personal use of the automobile provided to the Executive will be tracked
and reported separately as W-2 income to the Executive. 



        C.                 Vacation.   The
Executive shall be entitled to five (5) weeks paid vacation and three (3) personal days per annum under the Company’s paid
time off program for executives, and with such additional paid vacation time as the Board may reasonably determine or is
consistent with the Company’s vacation policy as is exists from time-to-time. Unused vacation shall accrue on an annual basis
and will be paid on termination. The maximum amount of vacation that may be paid on termination is equal to the annual accrual
rate multiplied by 2, or 10 weeks. 



        5.       Termination
of Employment.  



        A.                 Termination
Due to Death.   In the event that the Executive’s employment is terminated due to her death, the
Executive’s estate or her beneficiaries, as the case may be, shall be entitled to the following benefits: 



                    (1)                 Base
salary through the end of the month in which death occurs;  



                    (2)                 Annual
Incentive Award for the year in which the Executive’s death occurs, equal to the target award for that fiscal year, payable
in a single installment promptly after her death. 





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        B.                 Termination
Due to Disability.   In the event that the Executive’s employment is terminated due to her Disability, he
shall be entitled to the following benefits: 



                    (1)                 Disability
benefits in accordance with the long-term disability program then in effect for the Executive; 



                    (2)                 Base
salary through the end of the month in which disability benefits commence; 



                    (3)                 Annual
Incentive Award for the year in which the Executive’s termination occurs, equal to the target award for that fiscal year,
payable in a single installment promptly after her termination. 



        C.                 Termination
by the Company for Cause.  



                    (1)                 A
termination for Cause shall not take effect unless the provisions of this paragraph (1) are complied with. The Executive shall be
given written notice by the Board of the intention to terminate him for Cause, such notice (A) to state in detail the particular
act or acts or failure or failures to act that constitute the grounds on which the proposed termination for Cause is based and (B)
to be given within six months of the Board learning of such act or acts or failure or failures to act. The Executive shall have 30
calendar days after the date that such written notice has been given to the Executive in which to cure such conduct to the extent
such cure is possible. If, at the end of the thirty day period, the Board confirms that, in its judgment, grounds for Cause on the
basis of the original notice still exist, the Executive shall thereupon be terminated for cause. 



                    (2)                 In
the event the Company terminates the Executive’s employment for Cause: 



                                (a)                 Executive
shall be entitled to base salary through the date of the termination; and 



                                (b)                 The
Executive will forfeit the Annual Incentive Award earned during the fiscal year in which she terminated. 



        D.                 Termination
without Cause or Termination for Good Reason.   In the event the Executive’s employment is terminated by the
Company without Cause, other than due to Disability or death, or in the event there is a Termination for Good Reason, the
Executive shall be entitled to the following benefits: 



                    (1)                 Base
salary through the date of termination;  



                    (2)                 Base
salary, at the annualized rate in effect on the date of termination, for a
          period of twenty-four (24) months following such termination.  



        E.                 Termination
resulting from a Change in Control.   If, within 12 months of a Change in Control, the Executive’s employment
is terminated by the Company without Cause, other than due to Disability or death, or if there is a Termination for Good Reason,
the Executive shall be entitled to receive the following benefits: 



                    (1)                 Base
salary through the date of termination;  



                    (2)                 Lump
sum award equal to twenty-four (24) months of base salary, paid following
          termination.  





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        F.                 Voluntary
Termination; Retirement.  



                    (1)                 A
termination of Employment by the Executive on her own initiative, other than a termination due to death or Disability or a
Termination for Good Reason or retirement following the end of the Term of Employment, shall have the same consequences as
provided in Section 5(C)(2) for a termination for Cause. A voluntary termination under this Section 5(F) shall be effective 30
calendar days after prior written notice is received by the Company. 



        G.                 No
Mitigation; No Offset.   In the event of any termination of employment under this Section 5, the Executive shall be
under no obligation to seek other employment and there shall be no offset against amounts due the Executive under this Agreement
on account of any remuneration attributable to any subsequent employment that he may obtain. 



        H.                 Nature
of Payments.   Any amounts due under this Section 5 are in the nature of severance payments considered to be
reasonable by the Company and are not in the nature of a penalty. 



        6.       Confidentiality. 



        A.                 The
Executive agrees that he will not, at any time during the Term of Agreement or thereafter, disclose or use any trade secret,
proprietary or confidential information of the Company or any subsidiary or Affiliate of the Company, obtain during the course of
her employment, except as required in the course of such employment or with the written permission of the company or, as
applicable, any subsidiary or Affiliate of the Company or as may be required by law, provided that, if the Executive receives
legal process with regard to disclosure of such information, he shall promptly notify the Company and cooperate with the Company
in seeking a protective order. 



        B.                 The
Executive agrees that at the time of the termination of her employment with the Company, whether at the instance of the Executive
or the Company, and regardless of the reasons therefor, she will deliver to the Company, and not keep or deliver to anyone else,
any and all notes, files, memoranda, papers and, in general, any and all physical matter containing information, including any and
all documents significant to the conduct of the business of the Company or any subsidiary or Affiliate of the Company which are in
her possession, except for any documents for which the Company or any subsidiary or Affiliate of the Company has given written
consent to removal at the time of the termination of the Executive’s employment and her personal rolodex, phone book and
similar items. 



        C.                 The
Executive agrees that the Company’s remedies at law would be inadequate in the event of a breach or threatened breach of this
Section 6; accordingly, the Company shall be entitled, in addition to its rights at law, to an injunction and other equitable
relief without the need to post a bond. 



        7.       Noncompetition
and Nonsolicitation. 



        A.                 During
the Term of Agreement, and for a period of 12 months after the date the Executive’s employment terminates, the Executive
shall not, without the prior approval of the Board, in the same or a similar capacity, engage in or invest in, or aid or assist
anyone else in the conduct of any business which directly competes with the business of the Company and its subsidiaries and
Affiliates as conducted during the term hereof. In any court of competent jurisdiction shall determine that any of the provisions
of this Section 7 shall not be enforceable because of the duration or scope thereof, the parties hereto agree that said court
shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable and this
Agreement in its reduced form shall be valid and enforceable to the extent permitted by law; and 




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        B.                 During
the Term of Agreement and for a period of 12 months after the date the Executive’s employment terminates, Executive shall not
attempt, directly or indirectly, to induce any employee of the Company, or any subsidiary or any Affiliate thereof, to be employed
or perform services elsewhere. 



        C.                 Subject
to the provisions of Sections 7(A), 7(B) and 7(D) and notwithstanding any other provisions of this Agreement, any and all payments
(except those made from Company-sponsored tax-qualified pension or welfare plans), benefits or other entitlements to which the
Executive may be eligible in accordance with the terms hereof, may be forfeited, whether or not in pay status, at the discretion
of the Company, if the Executive breaches the provisions as set forth in Section 7(A) or 7(B). The payments, benefits and other
entitlements hereunder are being made in part in consideration of the obligations of this Section 7 and in particular the
post-employment payments, benefits and other entitlements are being made in consideration of, and dependent upon, compliance with
this Section 7. 



        D.                 Anything
in Section 7(C) to the contrary notwithstanding, no forfeiture or cancellation shall take place with respect to any payments,
benefits or entitlements hereunder or under any other award agreement, plan or practice unless the Company shall have first given
the Executive written notice of its intent to so forfeit, or cancel or pay out and Executive has not, within 30 calendar days of
giving such notice, ceased such unpermitted activity, provided that the foregoing prior notice procedure shall not be required
with respect to: 



                    (1)                 An
activity which the Executive initiated after the Company had informed the Executive in writing that it believed such activity
violated Section 7(A) or 7(B); 



                    (2)                 Any
competitive activity regarding products or services which are part of a line of business which represents more than 5% of the
Company’s consolidated gross revenues for its most recent completed fiscal year at the time the competitive activity
commences. 



        E.                 Nothing
in this Section 7 shall prohibit the Executive from being a passive owner of not more than one percent of the outstanding common
stock, capital stock and equity of any firm, corporation or enterprise so long as the Executive has no active participation in the
management of business of such firm, corporation or enterprise. 



        8.       Resolution of Disputes. 



        Any disputes arising under or
in connection with this Agreement shall be resolved by third party mediation of the dispute and, failing that, by binding
arbitration, to be held in New Ulm, Minnesota, in accordance with the rules and procedures of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Each
Party shall bear her or its own costs of mediation, arbitration or litigation, except that the Company shall bear all such costs
if the Executive prevails in such mediation, arbitration or litigation on any material issue. 




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        9.       Indemnification. 



        A.                 The
Company agrees that if the Executive is made a party, or is threatened to be made a party, to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he is or was a
director, officer or employee of the Company or is or was serving at the request of the company as a director, officer, member,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether or not the basis of such Proceeding is the Executive’s alleged action in an official capacity
while serving as a director, officer, member, employee or agent, the Executive shall be indemnified and held harmless by the
Company to the fullest extent legally permitted or authorized by the Company’s certificate of incorporation or by-laws or
resolutions of the Company’s Board of Directors or, if greater, by the laws of the State of Minnesota, against all cost,
expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes or other
liabilities or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the Executive even if he has ceased to be a director, member,
employee or agent of the Company or other entity and shall inure to the benefit of the executive’s heirs, executors and
administrators. The Company shall advance to the Executive all reasonable costs and expenses incurred by him in connection with a
Proceeding within 30 calendar days after receipt by the Company of a written request for such advance. Such request shall include
an undertaking by the Executive to repay the amount of such advance if it shall ultimately be determined that he is not entitled
to be indemnified against such costs and expenses. 



        B.                 Neither
the failure of the Company (including its Board, independent legal counsel or members) to have made a determination prior to the
commencement of any proceeding concerning payment of amounts claimed by the Executive under Section 9(A) above that
indemnification of the Executive is proper because she has met the applicable standard of conduct, nor a determination by the
Company (including its Board, independent legal counsel or members) that the Executive has not met such applicable standard of
conduct, shall create a presumption that the Executive has not met the applicable standard of conduct. 



        C.                 The
Company agrees to continue and maintain a directors’ and officers’ liability insurance policy covering the Executive to
the extent the Company provides such coverage for its other executive officers. 



        10.       Assignability;
Binding Nature. 



        This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective successors, heirs (in the case of the Executive) and
assigns. Rights or obligations of the Company under this Agreement may be assigned or transferred by the Company pursuant to a
merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all
of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets
of the Company and such assignee or transferee assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Company further agrees that, in the event of a sale of assets or
liquidation as described in the preceding sentence, it shall take whatever action it reasonably can in order to cause such
assignee or transferee to expressly assume the liabilities, obligations and duties of the Company hereunder. No rights or
obligations of the Executive under this Agreement may be assigned or transferred by the Executive other than her rights to
compensation and benefits, which may be transferred only by Will or operation of law. 



        11.       Representation. 



        The Company represents and
warrants that it is fully authorized and empowered to enter into this Agreement and that the performance of its obligations under
this Agreement will not violate any agreement between it and any other person, firm or organization. The Executive represents that
the performance of her obligations under this Agreement will not violate any agreement between her and any other person, firm or
organization that would be violated by the performance of her obligations under this Agreement. 




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        12.       Entire Agreement.  



        This Agreement contains the
entire understanding and agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or oral, between the Parties with respect thereto.




        13.       Amendment or Waiver. 



        No provision in this
Agreement may be amended unless such amendment is agreed to in writing and signed by the Executive and an authorized officer of
the Company. No waiver by either Party of any breach by the other Party of any condition or provision contained in this Agreement
to be performed by such other Party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any
prior or subsequent time. Any waiver must be in writing and signed by the Executive and approved by the Board. 



        14.       Severability. 



        In the event that any
provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent
permitted by law so as to achieve the purposes of this Agreement. 



        15.       Survivorship. 



        Except as otherwise expressly
set forth in this Agreement, the respective rights and obligations of the Parties hereunder shall survive any termination of the
Executive’s employment. This Agreement itself (as distinguished from the Executive’s employment) may not be terminated
by either Party without the written consent of the other Party. 



        16.       References. 



        In the event of the
Executive’s death or a judicial determination of her incompetence, reference in this Agreement to the Executive shall be
deemed, where appropriate, to refer to her beneficiary, estate or other legal representative. 



        17.       Governing Law/Jurisdiction. 



        This Agreement shall be
governed in accordance with the laws of Minnesota without reference to principles of conflict of laws. 





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        18.       Notices. 



        All notices and other
communications required or permitted hereunder shall be in writing and shall be deemed given when (a) delivered personally, (b)
sent by certified or registered mail, postage prepaid, return receipt requested or (c) delivered by overnight courier (provided
that a written acknowledgment of receipt is obtained by the overnight courier) to the Party concerned at the address indicated
below or to such changed address as such Party may subsequently give such notice of: 



	  	If to the Company:



New Ulm Telecom, Inc.

27 North Minnesota Street

New Ulm, MN 56073



ATTENTION:

Perry Meyer

Board of Directors, Compensation Committee Chair



If to the Executive:



Barbara Bornhoft

c/o NU Telecom, Inc.

27 North Minnesota Street

New Ulm, MN 56073 






        19.       Headings. 



        The headings of the sections
contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of
any provision of this Agreement. 



        IN WITNESS WHEREOF, the
undersigned have executed this Agreement to be effective as of the date first written above. 


	 	 NEW ULM TELECOM, INC. 
	 
	Dated:   	July 12, 2006 	   	By:   	/s/   James P. Jensen 
	 	James P. Jensen, Chairman of the Board 
	 
	Dated:   	July 11, 2006 	   	By:   	/s/   Barbara Bornhoft 
	 	Barbara Bornhoft, Vice President/COO 

















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