Exhibit 10.4 to New Ulm Telecom, Inc. Form 10-K for fiscal year ended December 31, 2007





EXHIBIT 10.4


New Ulm Telecom, Inc.

Management Incentive Plan

(as Amended December 31, 2007)


Plan Summary


SECTION I. PURPOSE 


The purpose of
the Management Incentive Plan (the “Plan”) is to enable New Ulm Telecom, Inc.
(the “Company”) to motivate its executive officers to achieve key financial and
strategic objectives. This Plan is effective beginning with the 2006 fiscal
year and will continue until the Company amends, revises or terminates the
Plan.


SECTION II. ELIGIBILITY CRITERIA 


Plan
participants are selected by the Compensation Committee of the Board of
Directors (the “Committee”). Eligible participants include the following:


	
 

	
 

	
 


	
 

	
•

	
Chief
  Executive Officer


	
 

	
 

	
 


	
 

	
•

	
Vice
  President


	
 

	
 

	
 


	
 

	
•

	
Chief
  Financial Officer





Participants
in the Management Incentive Plan are not eligible for participation in the
Employee Incentive Plan. 


SECTION III. AWARD LEVELS 


Participants
have the opportunity to earn cash payments under the Plan based on the
achievement of pre-established financial and non-financial objectives for the
fiscal year. Awards are determined as described in Section IV, and award
targets are expressed as a percentage of the participant’s base salary. 


The minimum
individual award for any fiscal year is 0%. The target and maximum individual
awards are 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

	
 

	
15% of base
  salary

	
 

	
30% of base
  salary





As listed in
the above table, the maximum individual awards are equal to two times [2x] the
target award. 



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SECTION IV. AWARD
CALCULATION & DETERMINATION 


Awards are
calculated and determined based on the following three Company objectives1.
The award formula is weighted according to each of the percentages listed
below. 


	
 

	
 

	
 

	
 

	
 


	 	
1.

	
Net Income

	
 

	
60% weight


	 	
2.

	
Operating
  Revenue

	
 

	
25% weight


	 	
3.

	
Customer
  Service (up-time, customer survey results, customer retention)

	
 

	
15% weight


	 	
 

	
 

	
 

	 


	 	
 

	
   Total Weighting 

	
 

	
100%





Performance Minimums and Maximums


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


Performance & Award Multiple Table


As indicated
in the following table, the percent of goal achievement determines the award
percentage for each of the identified objectives. This table assumes an individual incentive target equal to
15% of base
pay.


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
% of Goal

  Achievement

	
 

	
Net Income

  Award

	
+

	
Operating

  Rev Award

	
+

	
Customer 

  Svs Award

	
=

	
Total Award 

  Multiple


	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 


	
   120%+

	
 

	
18.0%

	
 

	
  7.5%

	
 

	
  4.5%

	
 

	
 30.0%


	
110%

	
 

	
13.5%

	
 

	
5.63%

	
 

	
3.38%

	
 

	
22.51%


	
100%

	
 

	
  9.0%

	
 

	
3.75%

	
 

	
2.25%

	
 

	
  15.0%


	
   90%

	
 

	
6.75%

	
 

	
2.79%

	
 

	
1.71%

	
 

	
11.25%


	
  80%

	
 

	
  4.5%

	
 

	
1.88%

	
 

	
1.13%

	
 

	
   7.51%


	
<80%

	
 

	
     0%

	
 

	
    0%

	
 

	
     0%

	
 

	
      0%





Awards are prorated between levels of
performance.


Award Examples


Annual Base Pay: $70,000

Incentive Target: 15% or $10,500


Net Income: 90% of goal

Operating Revenue: 110% of goal

Customer Service: 100% of goal


(90% * 0.60) + (110%
* 0.25) + ( 100% * 0.15) = (6.75%) + (5.63%) + (2.25%) = 14.63%


14.63% × $70,000 = $10,241.00


	
 


	



	
1
  Financial measures generally refer to figures reported in the Company’s
  audited income statement; however, all measures for the Plan are subject to
  the definition and interpretation of the Board of Directors.





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SECTION V. PLAN ADMINISTRATION 


The Plan is
administered by the Compensation Committee of the Board of Directors. 


Awards are
generally determined as described in Section IV, however, the Committee
reserves the right to modify the calculations at its discretion. Reasons for
modification may include (but are not limited to) acquisitions or sales of
businesses, below target financial performance and/or external economic
factors.


If available,
awards will typically be paid two and one-half months following the end of the
fiscal year. Participants need to be employed through the last day of the
fiscal year in order to receive any award for that year (unless otherwise specified
in the Executive’s employment agreement).


SECTION VI. PROGRESS REPORTS
& INSIDER INFORMATION 


Quarterly
progress reports will be given to all employees upon filing of the Company’s
10Q with the Securities and Exchange Commission. This will take place no more
than 45 days after any given quarter except year-end (see Plan Administration). Any
information given out prior to a public report (such as a 10Q) is considered
inside information. 


All employees
must be aware that forecast information is proprietary in nature and must not
be disclosed. If this information is disclosed, not only could it be a
competitive disadvantage for the Company, but the employee disclosing such
information could be liable for passing insider information.


SECTION VII. PARTICIPANT RIGHTS 


This Plan is
not intended to be a contract of employment. Both the Participant and the
Company have the right to end their employment relationship with or without
cause or notice.


SECTION VIII. AMENDMENT & TERMINATION 


Except as
otherwise stated in this plan, the Company reserves the power to amend or
wholly revise the Plan, prospectively, at any time with or without prior
notice.


The Company
may terminate the Plan at any time and reserves the right to interpret all
provisions of the Plan. The terms of this document shall supersede all terms
and provisions of any and all such prior plan documents.


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