-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C1ScD35BVisWLF5LLsSmOplQcYnWYh3gbWNj+w2rTBYfjQsx0eM/gd4QLt5HQ2+j 7NeI+CI8KzKdxNkvK6lDVQ== 0001047469-99-025596.txt : 19990629 0001047469-99-025596.hdr.sgml : 19990629 ACCESSION NUMBER: 0001047469-99-025596 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LODGENET ENTERTAINMENT CORP CENTRAL INDEX KEY: 0000911002 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 460371161 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-22334 FILM NUMBER: 99653850 BUSINESS ADDRESS: STREET 1: 3900 W. INNOVATION STREET CITY: SIOUX FALLS STATE: SD ZIP: 57107- BUSINESS PHONE: (605)-988-1000 MAIL ADDRESS: STREET 1: 808 WEST AVE N CITY: SIOUX FALLS STATE: SD ZIP: 57104 FORMER COMPANY: FORMER CONFORMED NAME: LNET INC DATE OF NAME CHANGE: 19930820 11-K 1 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One): [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. Commission file Number: 0-22334 LODGENET ENTERTAINMENT CORPORATION 401(K) PLAN AND TRUST (Title of the Plan) LODGENET ENTERTAINMENT CORPORATION (Name of Issuer of the Securities Held Pursuant to the Plan) DELAWARE 46-0371161 (State of Incorporation) (IRS Employer Identification Number) 3900 WEST INNOVATION STREET, SIOUX FALLS, SOUTH DAKOTA 57107 (Address of Principal Executive Offices) (605) 988-1000 (Registrant's Telephone Number, including Area Code) INDEX
PAGE ---- Form 11-K cover page for the LodgeNet Entertainment Corporation 401(k) Plan and Trust............................................................ Cover Index.............................................................................. 2 Signature.......................................................................... 3 FINANCIAL STATEMENTS AND EXHIBITS The following financial statements of the LodgeNet Entertainment Corporation 401(k) Plan and Trust for the time periods specified below are submitted herewith together with the independent auditor's report thereon: Independent Auditor's Report....................................................... F-1 Statement of Net Assets Available for Plan Benefits at December 31, 1998 and 1997.................................................... F-2 Statements of Changes in Net Assets Available for Plan Benefits for the year ended December 31, 1998..................................................... F-6 Notes to Financial Statements...................................................... F-8 Supplementary Schedules. Schedule of assets held for investment purposes.................................. F-12 Schedule of reportable transactions.............................................. F-13 Consent of Independent Auditors.................................................... F-14
All other schedules are omitted since the required information is not present, or is not present in the amounts sufficient to require submission of a schedule; or because the information is included in the financial statements and notes thereto. 2 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN AND TRUST (Name of Plan) Date: June 28, 1999 /s/ Scott C. Petersen ----------------------------------- Scott C. Petersen President, Chief Executive Officer, and Plan Trustee 3 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Plan Administrator of LodgeNet Entertainment Corporation 401(k) Plan: We have audited the accompanying statements of net assets available for benefits of LodgeNet Entertainment Corporation 401(k) Plan as of December 31, 1998 and 1997, and the related statement of changes in net assets available for benefits for the year ended December 31, 1998. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of LodgeNet Entertainment Corporation 401(k) Plan as of December 31, 1998 and 1997, and the changes in net assets available for benefits for the year ended December 31, 1998, in conformity with generally accepted accounting principles. The schedules of assets held for investment purposes and reportable transactions that accompany the Plan's financial statements do not disclose the historical cost basis of one investment held and for reportable transactions of all investments purchased and sold. Disclosure of this information is required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of LodgeNet Entertainment Corporation 401(k) are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, except for the omission of the information discussed in the preceding paragraph, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP /s/ Arthur Andersen LLP Minneapolis, Minnesota, May 14, 1999 F-1 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN Statement of Net Assets Available for Benefits As of December 31, 1998
Neuberger/ Dreyfus Fidelity Berman S&P 500 Asset Limited Oppenheimer American Index Manager Bond Global Century Ultra ------------ ----------- ----------- ------------ ------------- INVESTMENTS, at market value: Growth funds $1,740,323 $ - $ - $ - $ - Balanced fund - 736,684 - - - Bond funds - - 116,172 - - International funds - - - 473,639 - Aggressive growth funds - - - - 1,807,626 Stable value funds - - - - - Stock fund - - - - - Participant loans - - - - - ------------ ----------- ----------- ------------ ------------- Total investments 1,740,323 736,684 116,172 473,639 1,807,626 CONTRIBUTIONS RECEIVABLE: Participant 10,151 4,219 1,096 2,576 11,552 Employer 11,640 5,763 1,004 4,928 10,410 ------------ ----------- ----------- ------------ ------------- Total contributions receivable 21,791 9,982 2,100 7,504 21,962 ------------ ----------- ----------- ------------ ------------- Net assets available for benefits $1,762,114 $746,666 $118,272 $481,143 $1,829,588 ------------ ----------- ----------- ------------ ------------- ------------ ----------- ----------- ------------ ------------- Nationwide Nationwide Dreyfus A Money Virtuoso II Bond Market ------------ ----------- ----------- INVESTMENTS, at market value: Growth funds $ - $ - $ - Balanced fund - - - Bond funds - 142,016 - International funds - - - Aggressive growth funds - - - Stable value funds 164,562 - 78,355 Stock fund - - - Participant loans - - - ------------ ----------- ----------- Total investments 164,562 142,016 78,355 CONTRIBUTIONS RECEIVABLE: Participant 1,208 1,182 597 Employer 1,786 1,737 1,106 ------------ ----------- ----------- Total contributions receivable 2,994 2,919 1,703 ------------ ----------- ----------- Net assets available for benefits $167,556 $144,935 $80,058 ------------ ----------- ----------- ------------ ----------- -----------
F-2 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN Statement of Net Assets Available for Benefits As of December 31, 1998 (Continued)
Warburg Fidelity American Pincus Advisor Century LodgeNet Emerging Janus Janus Growth Income & Common Loan Growth Worldwide Twenty Opportunity Growth Stock Fund Total --------- ---------- --------- ----------- -------- -------- ----- ---------- INVESTMENTS, at market value: Growth funds $ - $ - $ - $108,252 $344,204 $ - $ - $2,192,779 Balanced fund - - - - - - - 736,684 Bond funds - - - - - - - 258,188 International funds - 314,588 - - - - - 788,227 Aggressive growth funds 56,450 - 171,575 - - - - 2,035,651 Stable value funds - - - - - - - 242,917 Stock fund - - - - - 131,075 - 131,075 Participant loans - - - - - - 418,752 418,752 ------- -------- -------- -------- -------- ------- ------- ---------- Total investments 56,450 314,588 171,575 108,252 344,204 131,075 418,752 6,804,273 CONTRIBUTIONS RECEIVABLE: Participant 761 3,389 1,267 1,899 3,300 1,543 - 44,740 Employer 1,070 4,454 2,239 2,314 4,399 2,698 - 55,548 ------- -------- -------- -------- -------- ------- ------- ---------- Total contributions receivable 1,831 7,843 3,506 4,213 7,699 4,241 - 100,288 ------- -------- -------- -------- -------- ------- ------- ---------- Net assets available for benefits $58,281 $322,431 $175,081 $112,465 $351,903 $135,316 $418,752 $6,904,561 ------- -------- -------- -------- -------- ------- ------- ---------- ------- -------- -------- -------- -------- ------- ------- ----------
The accompanying notes are an integral part of this statement. F-3 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN Statement of Net Assets Available for Benefits As of December 31, 1997
Neuberger/ Dreyfus Fidelity Berman S&P 500 Asset Limited Oppenheimer American Index Manager Bond Global Century Ultra ------------ ----------- ----------- ------------ ------------- INVESTMENTS, at market value: Growth funds $1,042,517 $ - $ - $ - $ - Balanced fund - 593,533 - - - Bond funds - - 92,163 - - International funds - - - 82,590 - Aggressive growth funds - - - - 1,185,753 Stable value funds - - - - - Stock fund - - - - - Participant loans - - - - - ------------ ----------- ----------- ------------ ------------- Total investments 1,042,517 593,533 92,163 482,590 1,185,753 CONTRIBUTIONS RECEIVABLE: Participant 917 440 - - 1,183 Employer 110 65 - - 130 ------------ ----------- ----------- ------------ ------------- Total contributions receivable 1,027 505 - - 1,313 ------------ ----------- ----------- ------------ ------------- Net assets available for benefits $1,043,544 $594,038 $92,163 $482,590 $1,187,066 ------------ ----------- ----------- ------------ ------------- ------------ ----------- ----------- ------------ ------------- Nationwide Nationwide Dreyfus A Money Virtuoso II Bond Market ------------ ----------- ----------- INVESTMENTS, at market value: Growth funds $ - $ - $ - Balanced fund - - - Bond funds - 81,850 - International funds - - - Aggressive growth funds - - - Stable value funds 137,852 - 29,290 Stock fund - - - Participant loans - - - ------------ ----------- ----------- Total investments 137,852 81,850 29,290 CONTRIBUTIONS RECEIVABLE: Participant - - - Employer - - - ------------ ----------- ----------- Total contributions receivable - - - ------------ ----------- ----------- Net assets available for benefits $137,852 $81,850 $29,290 ------------ ----------- ----------- ------------ ----------- -----------
F-4 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN Statement of Net Assets Available for Benefits As of December 31, 1997 (Continued)
Warburg Fidelity American Pincus Advisor Century LodgeNet Emerging Janus Growth Income & Common Loan Growth Worldwide Opportunity Growth Stock Fund Total --------- ---------- ----------- -------- -------- -------- ---------- INVESTMENTS, at market value: Growth funds $ - $ - $27,148 $45,174 $ - $ - $1,114,839 Balanced fund - - - - - - 593,533 Bond funds - - - - - - 174,013 International funds - 84,212 - - - - 566,802 Aggressive growth funds 8,146 - - - - - 1,193,899 Stable value funds - - - - - - 167,142 Stock fund - - - - 99,045 - 99,045 Participant loans - - - - - 217,055 217,055 ------ ------- ------- ------- ------- -------- --------- Total investments 8,146 84,212 27,148 45,174 99,045 217,055 4,126,328 CONTRIBUTIONS RECEIVABLE: Participant 324 162 324 - - - 3,350 Employer 22 11 22 - - - 360 ------ ------- ------- ------- ------- -------- --------- Total contributions receivable 346 173 346 - - - 3,710 ------ ------- ------- ------- ------- -------- --------- Net assets available for benefits $8,492 $84,385 $27,494 $45,174 $99,045 $217,055 $4,130,038 ------ ------- ------- ------- ------- -------- ---------- ------ ------- ------- ------- ------- -------- ----------
The accompanying notes are an integral part of this statement. F-5 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1998
Neuberger/ Dreyfus Fidelity Berman S&P 500 Asset Limited Oppenheimer American Index Manager Bond Global Century Ultra ------------ ----------- ----------- ------------ ------------- NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1997 $1,043,544 $594,038 $ 92,163 $ 482,590 $1,187,066 ---------- -------- -------- --------- ---------- INCREASE (DECREASE) DURING THE YEAR: Contributions- Participant 317,393 150,572 30,612 116,267 367,669 Employer 122,050 60,180 12,564 45,805 136,827 Rollover 34,358 19,466 4,250 6,622 35,077 ---------- -------- -------- --------- ---------- Total contributions 473,801 230,218 47,426 168,694 539,573 Interest income - - - - - Net unrealized/realized gain (loss) 326,190 89,737 3,062 52,508 423,074 Distributions to participants (68,365) (48,793) (7,227) (32,797) (117,656) Net loan activity (81,201) (13,374) (5,520) (8,238) (55,861) Fund transfers, net 70,233 (104,289) (11,404) (180,577) (143,458) Forfeitures, net (2,088) (871) (228) (1,037) (3,150) ---------- -------- -------- --------- ---------- Net increase (decrease) during the year 718,570 152,628 26,109 (1,447) 642,522 ---------- -------- -------- --------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1998 $1,762,114 $746,666 $118,272 $481,143 $1,829,588 ---------- -------- -------- --------- ---------- ---------- -------- -------- --------- ---------- Nationwide Nationwide Dreyfus A Money Virtuoso II Bond Market ------------ ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1997 $137,852 $ 81,850 $ 29,290 -------- -------- -------- INCREASE (DECREASE) DURING THE YEAR: Contributions- Participant 44,568 35,343 22,340 Employer 18,865 14,834 10,170 Rollover 4,688 9,113 23,709 -------- -------- -------- Total contributions 68,121 59,290 56,219 Interest income 6,495 - - Net unrealized/realized gain (loss) - (127) 3,594 Distributions to participants (40,954) (3,609) (1,215) Net loan activity (2,926) (9,501) (7,435) Fund transfers, net (492) 17,264 (11,462) Forfeitures, net (540) (232) 11,067 -------- -------- -------- Net increase (decrease) during the year 29,704 63,085 50,768 -------- -------- -------- NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1998 $167,556 $144,935 $80,058 -------- -------- -------- -------- -------- --------
F-6 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1998 (Continued)
Warburg Fidelity American Pincus Advisor Century LodgeNet Emerging Janus Janus Growth Income & Common Loan Growth Worldwide Twenty Opportunity Growth Stock Fund Total --------- ---------- -------- ----------- --------- --------- ------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1997 $ 8,492 $ 84,385 $ - $ 27,494 $ 45,174 $ 99,045 $217,055 $4,130,038 ------- -------- -------- -------- -------- -------- -------- ---------- INCREASE (DECREASE) DURING THE YEAR: Contributions- Participant 22,513 98,687 3,418 44,606 76,761 57,981 - 1,388,730 Employer 8,912 38,812 2,913 18,470 30,835 22,881 - 544,118 Rollover 8,894 28,052 3,164 13,856 42,989 - - 234,238 ------- -------- -------- -------- -------- -------- -------- ---------- Total contributions 40,319 165,551 9,495 76,932 150,585 80,862 - 2,167,086 Interest income - - - - - - 23,172 29,667 Net unrealized/realized gain (loss) 2,660 35,736 19,449 15,601 48,327 (44,591) - 975,220 Distributions to participants (2,140) (50,413) - (19,866) (4,354) - - (397,389) Net loan activity 651 2,912 (197) 224 1,880 - 178,525 (61) Fund transfers, net 8,438 85,651 146,334 12,869 110,893 - - - Forfeitures, net (139) (1,391) - (789) (602) - - - ------- -------- -------- -------- -------- -------- -------- ---------- Net increase (decrease) during the year 49,789 238,046 175,081 84,971 306,729 36,271 201,697 2,774,523 ------- -------- -------- -------- -------- -------- -------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1998 $58,281 $322,431 $175,081 $112,465 $351,903 $135,316 $418,752 $6,904,561 ------- -------- -------- -------- -------- -------- -------- ---------- ------- -------- -------- -------- -------- -------- -------- ----------
The accompanying notes are an integral part of this statement. F-7 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN Notes to Financial Statements December 31, 1998 and 1997 1. DESCRIPTION OF THE PLAN: The following is not a comprehensive description of the plan and, therefore, does not include all situations and limitations covered by the plan. Participants should refer to the plan agreement for a more complete description of the plan's provisions. GENERAL The LodgeNet Entertainment Corporation 401(k) Plan (the Plan) is a defined contribution plan covering all full-time employees of LodgeNet Entertainment Corporation (the Company) who have completed 90 days of service and are age 18 or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. PLAN OPERATIONS The Company functions as the plan administrator. The plan administrator utilizes Fringe Benefits Design, Inc. and Nationwide Life Insurance Company to provide record-keeping and reporting services. Nationwide Life Insurance Company and Charles Schwab Retirement Plan Services are the asset custodians of the Plan. Administrative expenses of the Plan are paid by the Company and were $34,822 in 1998. CONTRIBUTIONS The Plan includes 401(k) basic and supplemental cash deferred arrangements. Participants in the Plan may make a basic voluntary contribution by salary deferral in amounts ranging from 1% to 15% of their compensation, as defined. The Company matches participant contributions in an amount equal to 50% of the first 6% of each participant's eligible contribution for the plan year, not to exceed 3% of their compensation, as defined. The Company may make discretionary contributions to the Plan. In a year in which the Company chooses to make discretionary contributions, the contributions will be allocated based upon a participant's proportionate share of total compensation for all participants. There were no discretionary contributions in 1998. F-8 VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company's matching contribution portion of participant accounts plus actual earnings thereon is based on years of continuous service. A participant is 100% vested after five years of credited service based on the following percentages: Less than one year of service 0% vested One year but less than two 20% vested Two years but less than three 40% vested Three years but less than four 60% vested Four years but less than five 80% vested Five years or more 100% vested
If a participant dies or becomes disabled while still employed by the Company, his or her entire plan interest becomes 100% vested. Forfeitures of the nonvested employer contributions, resulting from participants who withdraw from the Plan, are used to reduce future employer contributions. PARTICIPANT LOANS Participants may borrow funds from the Plan up to 50% of their vested balance. Loans will not be granted in amounts less than $1,000 or greater than $50,000. Loans are evidenced by a promissory note and have a repayment period of up to five years, unless the loan qualifies as a home loan. The plan administrator will determine the appropriate interest rate by obtaining at least one quote from a financial institution, as chosen by the plan administrator, that is in the business of lending money. DISTRIBUTION OF BENEFITS Upon retirement, death, disability or attainment of age 62, a participant or a participant's beneficiary, in the case of death, may receive the vested portion of the amount credited to the participant's account by a lump-sum payment or, if the invested portion exceeds $3,500, the participant may elect to receive periodic installment payments. AMENDMENTS Effective July 1, 1997, the Plan was amended to reduce the time requirement to become eligible to participate in the Plan from 6 months of service to 90 days of service following the employee's employment commencement date. Also, effective January 1, 1998, the matching contribution of the Company was increased from 25% to 50% of the first 6% of each participant's eligible contributions for the Plan year, up to a maximum match of 3% of compensation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: BASIS OF ACCOUNTING The financial statements have been prepared on the accrual basis of accounting. F-9 USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Ultimate results could differ from those estimates. INVESTMENTS Participants have the opportunity to direct all money allocated to their accounts. With the addition of the Janus Twenty fund, participants have fourteen investments from which to choose. A description of each investment is as follows: DREYFUS S&P 500 INDEX--Seeks investment results that correspond to the price and yield performance of publicly traded common stocks in the aggregate, as represented by the Standard & Poor's 500 Composite Stock Price Index. Considered to be a relatively volatile mutual fund option. FIDELITY ASSET MANAGER--Seeks capital appreciation. Considered to be a moderately volatile investment option. NEUBERGER/BERMAN LIMITED BOND--Seeks income, consistent with low risk to principal and liquidity. Considered to be a slightly volatile fund. OPPENHEIMER GLOBAL--Seeks capital appreciation; current income is not an objective. Considered to be the most volatile investment option. AMERICAN CENTURY ULTRA--Seeks capital growth. This fund is viewed as next to the most volatile mutual fund option. NATIONWIDE VIRTUOSO II--Seeks the guarantee of principal and interest through an unallocated insurance contract. A new interest rate is declared annually. Considered to be the least volatile fund. DREYFUS A BOND--Seeks current income consistent with preservation of capital and maintenance of liquidity. Considered to be a slightly volatile fund. NATIONWIDE MONEY MARKET--Seeks to provide a high level of current income while preserving capital and maintaining liquidity. Considered to be a slightly volatile fund. WARBURG PINCUS EMERGING GROWTH--Seeks maximum capital appreciation. Considered to be a volatile investment option. JANUS WORLDWIDE--Seeks long-term growth of capital. This fund is considered to be moderately volatile. JANUS TWENTY--Seeks stocks with strong current financial positions and the potential for future growth. It may invest without limit in foreign securities. This fund is nondiversified. FIDELITY ADVISOR GROWTH Opportunity--Seeks to provide capital growth. Considered to be a moderately volatile investment option. F-10 AMERICAN CENTURY INCOME & GROWTH--Seeks long-term growth of capital as well as current income. Considered to be a relatively volatile investment option. LODGENET COMMON STOCK--Invests in LodgeNet Entertainment Corporation common stock. Limited to 10% of contributions made. All of the investments described above, except for Nationwide Virtuoso II and LodgeNet common stock, are part of an unallocated insurance contract pooled separate account with Nationwide Life Insurance Company. Net unrealized gains represent the increase in the market value of an investment from the end of the prior year or from the date of purchase, if purchased during the year, to the end of the current year. 3. TAX STATUS: The Internal Revenue Service has determined and informed the Company by a letter dated February 14, 1995, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the plan administrator and the Plan's tax counsel believe that the Plan continues to operate in compliance with the applicable requirements of the IRC and remains tax-exempt. 4. PLAN TERMINATION: Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of the Plan's termination, participants will become 100% vested in their accounts. F-11 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN (EMPLOYER IDENTIFICATION NUMBER: 46-0371161) (PLAN NUMBER: 001) Item 27a--Schedule of Assets Held for Investment Purposes As of December 31, 1998
Number of Units or Market Shares Description Cost Value - ----------- ------------------------------------------------------- --------- ---------- 133,872 Nationwide Virtuoso II unallocated insurance contract** $ 147,957 $ 164,562 Nationwide Arranger pooled separate accounts**: 516,301 Dreyfus S&P 500 Index 1,081,870 1,740,323 406,582 Fidelity Asset Manager 489,028 736,684 96,243 Neuberger/Berman Limited Bond 105,861 116,172 209,591 Oppenheimer Global 306,007 473,639 551,926 American Century Ultra 1,053,552 1,807,626 118,607 Dreyfus A Bond 135,141 142,016 42,695 Nationwide Money Market 74,042 78,355 38,496 Warburg Pincus Emerging Growth 53,629 56,450 205,344 Janus Worldwide 280,472 314,588 80,895 Janus Twenty 152,126 171,575 56,398 Fidelity Advisor Growth Opportunity 91,081 108,252 188,950 American Century Income & Growth 294,124 344,204 19,066 LodgeNet common stock** * 131,075 Loans to participants, with interest ranging from 8.25% to 9.75% 418,752 418,752 ---------- ---------- Total investments $4,683,642 $6,804,273 ---------- ---------- ---------- ----------
*Information is not available from the asset custodians of the Plan. **Denotes party in interest. F-12 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN (EMPLOYER IDENTIFICATION NUMBER: 46-0371161) (PLAN NUMBER: 001) Item 27d--Schedule of Reportable Transactions For the Year Ended December 31, 1998
Total Number of Proceeds Cost of Net Number of Sales/ Total Cost of From Sales/ Investments Gain Description Purchases Maturities Purchases Maturities Sold/ Matured (Loss) - ----------- -------- ---------- ------------- ---------- ------------- ------ Dreyfus S&P 500 Index 229 165 $669,993 $298,377 * * Fidelity Asset Manager 161 180 253,171 199,757 * * Neuberger/Berman Limited Bond 150 69 163,767 142,820 * * Oppenheimer Global 150 181 175,156 236,615 * * American Century Ultra 215 198 708,365 509,565 * * Dreyfus A Bond 141 74 141,996 81,702 * * Nationwide Money Market 160 49 185,149 139,679 * * Janus Worldwide 231 66 282,339 87,699 * * American Century Income & Growth 213 67 343,167 92,463 * *
*Information is not available from the asset custodians of the Plan. F-13 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K into the Company's previously filed Registration Statement (Form S-8 No. 33-75906). ARTHUR ANDERSEN LLP /s/ Arthur Andersen LLP Minneapolis, Minnesota June 23, 1999 F-14 -----END PRIVACY-ENHANCED MESSAGE-----