New Ulm Telecom, Inc. Management Incentive Plan (as Amended 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:

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:

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.

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.

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

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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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