SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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
[ ] 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 transactions 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:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
NEW ULM TELECOM, INC.
400 Second Street North
New Ulm, Minnesota
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1997
Notice is hereby given that the Annual Meeting of Shareholders of New
Ulm Telecom, Inc. will be held at Turner Hall, State & 1st South Street, New
Ulm, Minnesota, on Thursday, May 15, 1997 at 10:00 a.m. for the following
purposes:
1. To elect three directors for a term of three years each to
hold office until the Annual Meeting of Shareholders to be
held in May of the year 2000 or until their successors are
elected.
2. To consider and vote on a Resolution amending Article III of
the Articles of Incorporation, which amendment would require a
vote of two-thirds (2/3rds) of the outstanding capital stock
of the company to amend Article III, Section 2 of the
Company's Articles of Incorporation. Article III, Section 2
limits the percentage of the Company's outstanding capital
stock an individual, partnership or fiduciary may own.
3. To ratify the appointment of Olsen, Thielen & Co., Ltd. as
auditors of the Company for 1997.
4. To transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 22,
1997 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
Gary L. Nelson,
Secretary
New Ulm, Minnesota
April 25, 1997.
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT
TO ATTEND IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE
THEIR PROXIES AND VOTE IN PERSON IF THEY SO DESIRE.
NEW ULM TELECOM, INC.
400 2nd Street North
New Ulm, Minnesota 56073
507-354-4111
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1997
Introduction
This Proxy Statement and the enclosed Proxy, mailed on or about April
25, 1997, is made by the Board of Directors of New Ulm Telecom, Inc. (the
"Company") for use at the Annual meeting and any adjournment thereof to be held
on May 15, 1997. Only shareholders of record at the close of business on March
22, 1997 will be entitled to vote at the meeting. You are urged to sign and
return the enclosed Proxy whether or not you plan to attend the meeting. When
proxies are returned properly signed and dated, the shares represented thereby
will be voted according to your direction. You should specify your choices by
marking the appropriate boxes on the Proxy. If your Proxy does not specify a
choice, it will be voted FOR all items.
Any Proxy may be revoked at any time before it is voted by receipt of a
Proxy properly signed and dated subsequent to an earlier Proxy, or by revocation
of a written Proxy by request in person at the Annual Meeting. The persons named
as proxies were selected by the Board of Directors of the Company and are
directors or officers of the Company. The cost of this solicitation, including
preparing, assembling and mailing the Proxies and solicitation material, will be
paid by the Company.
OUTSTANDING SHARES AND VOTING RIGHTS
The total number of shares outstanding as of March 22, 1997 and
entitled to vote at the meeting consisted of 1,732,455 shares of common stock.
For each share held, shareholders may cast one vote for each of the three
directorships to be filled at this meeting. Each shareholder entitled to vote
has the right to cumulative vote their shares in the election of directors by
giving written notice of intent to cumulative vote to any officer of the
corporation before the meeting, or to the presiding officer at the meeting at
any time before the election. If notice of intent to cumulative vote occurs, the
presiding officer at the meeting shall announce, before the election of
directors, that shareholders shall cumulative vote their shares by multiplying
the number of shares held by the shareholder by the number of directors to be
elected. Each shareholder then may cast their votes for one candidate or may
distribute the votes among any number of candidates.
The presence in person or by proxy of the holders of thirty-five
percent (35%) of the shares entitled to vote at the Annual Meeting of
Shareholders constitutes a quorum for the transaction of business.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth as of March 22, 1997, the number of
shares of the Company's common stock by each person known by the Company to own
of record or beneficially five percent (5%) or more of the Company's common
stock, and all officers and directors of the Company as a group.
Name & Address of Amount & Nature of Percent of
Beneficial Ownership Beneficial Ownership Ownership
- -------------------- -------------------- ---------
Ruth F. Wines 91,440 5.3%
1418 Janeen Way
Anaheim, California
All Directors & Officers
as a Group (10 persons) 157,487 9.1%(1)
- ---------------------
(1) Includes 27,114 shares owned by the spouses of directors and
officers.
ELECTION OF DIRECTORS (PROPOSAL #1)
The Board of Directors has nominated and recommends for election as
Directors of the Company the three 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 that they
will vote for the election of such substitute nominee as the Board of Directors
may propose.
Information regarding the nominees and other directors filling
unexpired terms including information regarding their principal occupations, is
set forth below. Ownership by such nominees of common stock of the Company is
given as of March 22, 1997. To the best of the Company's knowledge, unless
otherwise indicated, the persons indicated possess sole voting and investment
power with respect to their stock ownership.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
NOMINEES PROPOSED FOR ELECTION FOR THE TERM EXPIRING IN 2000
(Including business experience in the paat five years)
- ------------------------------------------------------------
Principal Director Year Term Stock
Name and Age Occupation Since Expires Ownership Percent
- ------------ ---------- ----- ------- --------- -------
<S> <C> <C> <C> <C> <C>
ROSEMARY DITTRICH Corporate Secretary,
(55) D & A Trucking, Inc. -- -- 180 .01%
LINUS GRATHWOHL Semi-Retired Farmer 1982 1997 1,500(1) .1%
(69)
GARY NELSON President of 1982 1997 7,500(2) .4%
(58) Minnesota Valley-Nelson Insurance
- ------------------------------------------------------------
DIRECTORS SERVING UNEXPIRED TERMS
(Including business experience during the past five years)
- ------------------------------------------------------------
LAVERN BIEBL Retired 1983 1998 14,184 .8%
(69) Salesman
JAMES JENSEN President, 1982 1998 4,389(3) .3%
(52) Jensen Clothing, Inc.
PERRY MEYER Farmer 1995 1998 3,000 .2%
(42)
ROBERT RANWEILER Principal of Biebl, 1989 1999 21,450(4) 1.2%
(49) Ranweiler & Company Chartered,
a Professional Accounting Corporation
MARK RETZLAFF President of 1958 1999 7,284 .4%
(68) Retzlaff Hardware
RICHARD RODENBERG Apple Grower/ 1980 1999 21,500(5) 1.2%
(76) Retired Attorney
(1) Includes 630 shares owned by Mr. Grathwohl's wife.
(2) Includes 3,069 shares owned by Mr. Nelson's wife.
(3) Includes 1,035 shares owned by Mr. Jensen's wife.
(4) Includes 20,550 shares owned by Mr. Ranweiler's wife.
(5) Includes 1,200 shares owned by Mr. Rodenberg's wife.
</TABLE>
The Board of Directors consists of nine members with staggered terms of
three years for each Director. The Board holds regular monthly meetings and some
special meetings. The Board held 13 meetings in 1996. All Directors attended 75%
or more of the Board meetings and applicable Committee meetings.
COMMITTEES OF THE BOARD
The Audit Committee, which consists of Lavern Biebl, Robert Ranweiler
and Perry Meyer, meets as required. The Audit Committee reviews the activities
and reports of the independent accountants. This committee had 3 meetings in
1996.
The Executive Committee and Finance Committee consist of the President,
Vice-President, Secretary and Treasurer of the Company. This Committee is
responsible for the study and analysis of the Company's financial needs and
requirements and the evaluation of the future operations and needs of the
Company. The Executive Committee meets as required.
The Personnel Committee consists of Gary Nelson, Linus Grathwohl,
Robert Ranweiler and Richard T. Rodenberg. Its duties are to evaluate employee
compensation and staffing. The Personnel Committee also makes appropriate
recommendations concerning officers' and directors' compensation. This Committee
had 3 meetings in 1996.
The Company also has a Marketing Committee, a Planning Committee, a
Physical Properties Committee and a Charitable Contributions and Community
Involvement Committee. These committees meet as required.
The Board of Directors as a whole is the Nominating Committee.
In addition, the President of the Board is an ex officio member of all
Committees.
COMPENSATION OF DIRECTORS
In 1996, each Director was paid an annual retainer at the rate of
$9,666.80 per year from New Ulm Telecom, Inc.; $2,197 per year from Western
Telephone Company; $811.20 per year from Peoples Telephone Company; and $325 per
year split evenly between the other five subsidiaries of New Ulm Telecom, Inc.
This retainer covers all Committee and Board meetings.
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS
NAME AND AGE POSITION TERM OF OFFICE
------------ -------- --------------
<S> <C> <C>
RICHARD T. RODENBERG Chairman of the 1-Year Term Expiring in May,
(76) Board 1997. President from 1981-1993.
Chairman since 1993.
JAMES P. JENSEN President 1-Year Term Expiring in May,
(52) 1997. Secretary from 1989-1993.
President since 1993.
MARK W. RETZLAFF Vice-President 1-Year Term expiring in May,
(68) 1997. Vice-President since 1971.
LAVERN J. BIEBL Treasurer 1-Year Term expiring in May,
(69) 1997. Treasurer since 1989.
GARY L. NELSON Secretary 1-Year Term expiring in May,
(59) 1997. Secretary since 1993.
BILL D. OTIS Executive Vice President/ 1-Year Term expiring in May, 1997
(39) Chief Operating Officer General Manager since 1985.
Executive Vice President since 1993.
</TABLE>
There neither are nor have there been any agreements between the above-named
officers and any other persons relative to the selection of any officers.
The Company's officers and directors are required to file reports of their
beneficial ownership with the Securities and Exchange Commission. According to
the Company's records, during the period from January 1, 1996 to December 31,
1996, officers and directors of the Company filed all reports with the
Securities and Exchange Commission required under Section 16(a) to report their
beneficial ownership.
EXECUTIVE COMPENSATION
The Company maintains a consistent compensation philosophy for all employees.
This philosophy rewards the coordinated efforts of the employees in meeting
corporate objectives, as well as meeting the expectations of its customers and
shareholders. The compensation program for executives is the responsibility of
the Board of Directors. The philosophy for the executive salary program is to
pay competitively compared to similar sized companies, particularly technology
companies.
The following table sets forth the cash and non-cash compensation for each of
the last three fiscal years ending December 31, 1996 for the chief operating
officer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------
All Other
Name and Principal Position Year Salary Bonus Compensation($)(1)
- --------------------------- ---- ------ ----- ------------------
<S> <C> <C> <C> <C>
Bill Otis, 1996 $102,756 $ 16,600 $ 8,164
Chief Operating Officer 1995 $ 97,737 $ 6,600 $ 6,964
1994 $ 95,610 $ 3,000 $ 6,712
(1) Contributions from the Company to the 401(k) plan.
</TABLE>
Note: Certain columns have not been included in this table because the
information called for therein is not applicable to the Company or the
individual named above for the periods indicated.
EMPLOYEE 401(k) SAVINGS PLAN
The Company has a 401(k) Employee Savings Plan in effect for employees
who meet certain age and service requirements. The Company makes matching
contributions of 50% of the employee's contribution, up to 6% of compensation.
In 1996, the Company also contributed an additional 4% of the covered employee's
compensation, over and above the normal matching amount.
AMENDMENT TO THE ARTICLES OF INCORPORATION
OF NEW ULM TELECOM, INC. (PROPOSAL #2)
"RESOLVED, that Article III of the Articles of Incorporation, shall be amended
to read as follows:"
ARTICLE III.
Section 1. The amount of total authorized capital stock of the
corporation is 6,400,000 shares of $5.00 par value each.
Section 2. No individual shareholder, partnership, corporation
or fiduciary shall own either in their, her or his own right
or jointly with another party more than seven percent (7%) of
the outstanding capital stock of the corporation. This
restriction as to ownership shall not apply to any stock
acquired by the Company.
Section 3. It shall require a two-thirds (2/3rds) majority
vote of the outstanding capital stock of the corporation to
amend Section 2 of this Article III.
Section 4. No transfer of stock shall be permitted if the
result of such sale is ownership of less than thirty (30)
shares of stock by the transferee or transferor except that
any stockholder presently owning less than thirty (30) shares
shall be permitted to transfer the same in total. No transfer
of stock shall be permitted which results in the ownership of
fractional shares."
OPERATION OF AMENDMENT. The proposed amendment to Article III
requires a supermajority of shares to vote in favor of an amendment to Section
2. In the absence of the proposed amendment, Minnesota law presently applicable
to the Company requires the affirmative vote of a majority of shares entitled to
vote for an amendment to the Company's Articles of Incorporation. After the
proposed amendment is adopted, it will, by its terms, require the affirmative
vote of at least 66-2/3% of the outstanding voting shares of the Company to
modify or rescind Article III, Section 2.
EFFECTS; POSSIBLE ADVANTAGES AND DISADVANTAGES. If the
amendment to Article III is adopted, it will have the effect of making a
takeover of the Company more difficult. A party seeking to amend the limitation
of ownership provision described below would be required to gather the
affirmative vote of a supermajority of the outstanding shares of the Company to
make such an amendment.
If the proposed amendment is adopted, the Company is more
likely to remain a local exchange operator. In light of the changes occurring in
the telecommunications industry, the Board believes it is in the best interest
of the Company and its shareholders to position the Company to take advantage of
opportunities that may arise for operators of local exchanges.
If the proposed amendment is adopted, it may give holders of a
minority of shares veto power over amendments to Section 2 regardless of whether
the amendment is desired by or beneficial to a majority of the shareholders, and
it may assist management in retaining their present positions. The Company's
directors and officers as a group beneficially own approximately 9.1% of the
Company's outstanding stock. See "Security Ownership of Certain Beneficial
Owners and Management."
OTHER ANTI-TAKEOVER PROVISIONS. The Company's Articles of
Incorporation also require staggered terms for the Board of Directors of the
Company. Staggered terms may have the effect of making a takeover of the Company
more time consuming insofar as a person or entity seeking to elect directors
favorable to its position would be unable to elect a majority of such directors
in a single year. Furthermore, the staggered terms for the Board may delay
shareholders who are not in agreement with the policies of the Board from
removing a majority of the Board for two years unless they show cause for such
removal. In light of the environment of change in the Telecommunications
Industry, the Board believes it is in the interests of the Company and the
Shareholders generally to provide assurance of continuity of the Board
composition which results from staggered terms.
The Company's Articles of Incorporation limit the percentage
of the Company's outstanding stock which an individual shareholder, partnership,
corporation or fiduciary may own to no more than seven percent (7%) of the
outstanding capital stock of the Company. This provision inhibits a party
seeking to acquire control of the Company from acquiring sufficient shares of
stock to achieve voting control over the Company's affairs. If Proposal #2 is
adopted, a party seeking to acquire control of the Company would be required to
convince the holders of at least two-thirds of the shares of the outstanding
common stock of the Company to vote to amend this limitation on ownership
provision.
FUTURE PLANS. Management has no current knowledge of any plans
or proposals of third parties to acquire control of the Company at this time.
Management has, however, determined that based on changes in the
telecommunications industry following the passage of the Telecommunications Act
of 1996, it is in the best interest of the Company and its shareholders to adopt
measures to ensure that the Company is able to maximize any competitive
opportunities arising from the continuing changes within the telecommunications
industry. Management has no present intent to propose anti-takeover measures in
future proxy solicitations.
VOTE REQUIRED. The affirmative vote of at least a majority of
the Company's outstanding shares of common stock is needed to adopt the proposed
amendment set forth above. THE BOARD RECOMMENDS SHAREHOLDERS VOTE "FOR" THIS
PROPOSAL #2.
THE COMPANY'S AUDITORS (PROPOSAL #3)
Olsen, Thielen & Co., Ltd. has been the auditors for the Company for
many years. The Board of Directors proposes and recommends the re-election of
the firm of Olsen, Thielen & Co., Ltd. to perform an audit for the current
fiscal year ending December 31, 1997.
A representative of Olsen, Thielen & Co., Ltd. is expected to be
present at the Annual Meeting of Shareholders and will have an opportunity to
make a statement and will be available to respond to appropriate questions. The
Board of Directors has been advised by Olsen, Thielen & Co., Ltd. that no member
of that firm has any financial interest, either direct or indirect, in the
Company, and that during the past three years, has had no connection with the
Company in any capacity other than that of independent certified public
accountants.
YOUR DIRECTORS RECOMMEND A VOTE FOR Olsen, Thielen & Co., Ltd.
SHAREHOLDERS' PROPOSALS
The Company welcomes any suggestions from its shareholders, and all
suggestions will be given careful consideration. Proposals intended to be
included in next year's Proxy Statement should be submitted to Bill Otis,
Manager, 400 Second North, New Ulm, MN 56073, no later than January 1, 1998.
OTHER MATTERS
Management knows of no other matters that will be presented at the
meeting. If any other matters arise at the meeting, it is intended that the
shares represented by the proxies in the accompanying form will be voted in
accordance with the judgment of the persons named in the Proxy.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to shareholders for the fiscal
year ended December 31, 1996, accompanies this notice of meeting and Proxy
Statement. No part of the Annual report is incorporated in this Proxy Statement
and no part is to be considered Proxy solicitation material.
SHAREHOLDERS MAY RECEIVE, WITHOUT CHARGE, A COPY OF THE COMPANY'S 1996
FORM 10-K REPORT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY WRITING
TO BILL OTIS, MANAGER, NEW ULM TELECOM, INC., 400 2ND STREET NORTH, P.O. BOX
697, NEW ULM, MN 56073.
By Order of the Board of Directors
Gary L. Nelson
Secretary
NEW ULM TELECOM, INC. PROXY
The undersigned hereby appoints LAVERN BIEBL, JAMES JENSEN, PERRY
MEYER, ROBERT RANWEILER, MARK RETZLAFF, AND RICHARD T. RODENBERG, 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 May 15, 1997 at 10:00 a.m. at Turner Hall, State & 1st
South 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.
Indicate your vote by an (X). The Board of Directors recommends voting
FOR all items.
ITEM
1. Election of Directors: ____ FOR - ALL Nominees ___ WITHHELD - ALL Nominees
(Except as marked to the contrary below)
Nominees: ROSEMARY DITTRICH, LINUS GRATHWOHL, GARY NELSON
INSTRUCTION: To withhold authority to vote for any nominee, mark
through that nominee's name.
2. Shall the resolution amending Article III of the Articles of
Incorporation be adopted?
_____ FOR _____ AGAINST _____ ABSTAIN
3. Appointment of Auditors: _____ FOR _____ AGAINST _____ ABSTAIN
Nominee: OLSEN, THIELEN & CO., LTD., Certified Public Accountants
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WHICH RECOMMENDS
VOTING FOR ALL ITEMS. IT WILL BE VOTED AS SPECIFIED. IF NOT SPECIFIED, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR ALL ITEMS.
PLEASE SIGN AND RETURN PROMPTLY IN THE ENCLOSED, PRE-ADDRESSED
ENVELOPE.
SIGNATURE(s)________________________________________________DATE________________
Please sign exactly as name(s) appear on the mailing label. If joint account,
each joint owner should sign. If signing for a corporation or as agent, attorney
or fiduciary, indicate the capacity in which you are signing.
