-----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, J3TP3q6eLZg/P0EzKObWxm0eC8FQMaAPlDvlNYN35HoSmvJP6OvDjO1Ezu6HRcc5 rucRqF9pzmRFiz+AjhI7yw== 0000912057-97-024121.txt : 19970715 0000912057-97-024121.hdr.sgml : 19970715 ACCESSION NUMBER: 0000912057-97-024121 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970714 SROS: NASD 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: 1934 Act SEC FILE NUMBER: 000-22334 FILM NUMBER: 97640031 BUSINESS ADDRESS: STREET 1: 808 WEST AVE N CITY: SIOUX FALLS STATE: SD ZIP: 57104 BUSINESS PHONE: 6053301330 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 FORM 11-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 14, 1997 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, 1996 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) 808 WEST AVENUE NORTH, SIOUX FALLS, SOUTH DAKOTA 57104 ------------------------------------------------------- (Address of Principal Executive Offices) (605) 330-1330 ------------- (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 Benefits as of December 31, 1996 and 1995 ....................................... F-3 Statements of Changes in Net Assets Available for Benefits for the year ended December 31, 1996............................................ F-5 Notes to Financial Statements ............................................ F-6 Supplementary Schedules: Schedule of assets held for investment purposes ........................ F-10 Schedule of reportable transactions .................................... F-11 Consent of Independent Public Accountants................................. F-12 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 required is included in the financial statements and notes thereto. 2 SIGNATURES - ---------- THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. LODGENET ENTERTAINMENT CORPORATION 401(K) PLAN AND TRUST -------------------------------------------------------- (Name of Plan) Date: July 14, 1997 /s/ Tim C. Flynn ------------------------------------------------- Tim C. Flynn 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, 1996 and 1995, and the related statement of changes in net assets available for benefits for the year ended December 31, 1996. 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. Except as explained in the following paragraph, 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. As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, investment assets held by Nationwide Life Insurance Company and Harris Trust and Savings Bank, the custodians of the Plan, and transactions in those assets were excluded from the scope of our audit of the Plan's 1995 financial statements, except for comparing the information provided by the custodians, which is summarized in Note 3, with the related information included in the financial statements. Because of the significance of the information that we did not audit, we are unable to, and do not, express an opinion on the Plan's financial statements as of December 31, 1995. The form and content of the information included in the 1995 financial statements, other than that derived from the information certified by the custodians, have been audited by us and, in our opinion, are presented in compliance with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the financial statements, referred to above, of LodgeNet Entertainment Corporation 401(k) Plan as of and for the year ended December 31, 1996, present fairly, in all material respects, the financial status of LodgeNet Entertainment Corporation 401(k) Plan as of December 31, 1996, and the changes in its financial status for the year then ended in conformity with generally accepted accounting principles. Our audit of the Plan's financial statements as of and for the year ended December 31, 1996, was made for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions, as of and for the year ended December 31, 1996, are presented for the purposes of additional analysis and are not a required part of the basic financial statements, but are supplementary F-1 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 as of and for the year ended December 31, 1996, and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The schedule of assets held for investment purposes that accompanies the Plan's financial statements does not disclose the historical cost of certain plan assets held by the Plan's custodians. The schedule of reportable transactions does not disclose the number of purchases and sales of certain plan assets, the historical cost of certain investments sold, and the net gain or loss of certain investments 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. ARTHUR ANDERSON LLP Minneapolis, Minnesota, June 10, 1997 F-2 LODGENET ENTERTAINMENT CORPORATION 401(K) PLAN Statement of Net Assets Available for Benefits As of December 31, 1996
Dreyfus Fidelity Neuberger/ Peoples Asset Berman Oppenheimer 20th Century Nation-wide Index Manager Ltd. Bond Global Ultra Virtuoso II ----------- --------- ----------- ----------- ------------ ----------- INVESTMENTS, at market value: Growth fund $529,697 $ - $ - $ - $ - $ - Balanced fund - 420,748 - - - - Bond funds - - 62,807 - - - International fund - - - 275,507 - - Aggressive growth fund - - - - 733,166 - Stable value fund - - - - - 66,228 Money market fund - - - - - - Stock fund - - - - - - Participant loans - - - - - - ---------- ---------- ---------- ----------- ---------- --------- Total investments 529,697 420,748 62,807 275,507 733,166 66,228 CONTRIBUTIONS RECEIVABLE: Participants 3,574 2,446 424 1,661 4,933 260 Employer 501 351 72 225 552 59 ---------- ---------- ---------- ----------- ---------- --------- Net assets available for benefits $533,772 $423,545 $63,303 $277,393 $738,751 $66,547 ---------- ---------- ---------- ----------- ---------- --------- ---------- ---------- ---------- ----------- ---------- --------- Dreyfus Nation-wide LodgeNet A Bond Money Common Fund Market Fund Stock Loan Fund Total --------- -------------- ---------- --------- ----------- INVESTMENTS, at market value: Growth fund $ - $ - $ - $ - $ 529,697 Balanced fund - - - - 420,748 Bond funds 43,807 - - - 106,614 International fund - - - - 275,507 Aggressive growth fund - - - - 733,166 Stable value fund - - - - 66,228 Money market fund - 8,889 - - 8,889 Stock fund - - 97,934 - 97,934 Participant loans - - - 88,204 88,204 -------- --------- --------- --------- ----------- Total investments 43,807 8,889 97,934 88,204 2,326,987 CONTRIBUTIONS RECEIVABLE: Participants 211 63 - - 13,572 Employer 26 4 - - 1,890 -------- --------- --------- --------- ----------- Net assets available for benefits $44,044 $8,956 $97,934 $88,204 $2,342,449 -------- --------- --------- --------- ----------- -------- --------- --------- --------- -----------
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, 1995 Dreyfus Fidelity Neuberger/ 20th Peoples Asset Berman Ltd. Oppenheimer Century Index Manager Bond Global Ultra ---------- ---------- ---------- ---------- ---------- INVESTMENTS, at market value: Growth fund $270,186 $ - $ - $ - $ - Balanced fund - 240,758 - - - Bond funds - - 36,494 - - International fund - - - 141,647 - Aggressive growth fund - - - - 396,456 Stable value fund - - - - - Stock fund - - - - - Participant loans - - - - - -------- -------- -------- -------- -------- Total investments 270,186 240,758 36,494 141,647 396,456 CONTRIBUTIONS RECEIVABLE: Participants 8,764 8,082 1,280 4,190 11,252 Employer 1,153 1,079 235 595 1,408 -------- -------- -------- -------- -------- Net assets available for benefits $280,103 $249,919 $38,009 $146,432 $409,116 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Nation- Dreyfus LodgeNet wide A Bond Common Loan Virtuoso II Fund Stock Fund Total ----------- ---------- ---------- ---------- ---------- INVESTMENTS, at market value: Growth fund $ - $ - $ - $ - $270,186 Balanced fund - - - - 240,758 Bond funds - 9,426 - - 45,920 International fund - - - - 141,647 Aggressive growth fund - - - - 396,456 Stable value fund 54,625 - - - 54,625 Stock fund - - 36,259 - 36,259 Participant loans - - - 50,341 50,341 -------- -------- -------- -------- -------- Total investments 54,625 9,426 36,259 50,341 1,236,192 CONTRIBUTIONS RECEIVABLE: Participants 2,557 1,283 - - 37,408 Employer 219 120 - - 4,809 -------- -------- -------- -------- -------- Net assets available for benefits $57,401 $10,829 $36,259 $50,341 $1,278,409 -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
The accompanying notes are an integral part of this statement. F-4 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1996
Dreyfus Fidelity Neuberger/ 20th Peoples Asset Berman Ltd. Oppenheimer Century Index Manager Bond Global Ultra -------- -------- ----------- ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1995 $280,103 $249,919 $38,009 $146,432 $409,116 --------- --------- -------- --------- --------- INCREASE (DECREASE) DURING THE YEAR: Contributions- Employee 164,965 141,698 23,232 94,415 257,132 Employer 22,123 17,356 3,879 12,346 30,850 --------- --------- -------- --------- --------- Total contributions 187,088 159,054 27,111 106,761 287,982 Interest income - - - - - Net unrealized gains/realized gains 74,904 35,917 1,380 30,253 62,448 Distributions to participants (8,262) (14,457) (446) (3,271) (44,029) Net loan activity (12,433) (5,247) (675) (1,263) (14,580) Fund transfers, net 12,372 (1,641) (2,076) (1,519) 37,814 --------- --------- -------- --------- --------- Net increase during the year 253,669 173,626 25,294 130,961 329,635 --------- --------- -------- --------- --------- NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1996 $533,772 $423,545 $63,303 $277,393 $738,751 --------- --------- -------- --------- --------- --------- --------- -------- --------- --------- Nation- Nation- wide LodgeNet wide Dreyfus Money Common Loan Virtuoso II A Bond Market Stock Fund Total ----------- --------- --------- ---------- -------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, December 31, 1995 $57,401 $10,829 $ - $ 36,259 $50,341 $1,278,409 -------- -------- -------- --------- -------- ----------- INCREASE (DECREASE) DURING THE YEAR: Contributions- Employee 43,840 29,372 10,339 30,060 - 795,053 Employer 5,976 3,066 664 3,945 - 100,205 -------- -------- -------- --------- -------- ----------- Total contributions 49,816 32,438 11,003 34,005 - 895,258 Interest income 3,148 - - - 4,489 7,637 Net unrealized gains - 1,012 185 27,826 - 233,925 Distributions to participants (581) (215) (283) (156) (1,080) (72,780) Net loan activity (6) (250) - - 34,454 - Fund transfers, net (43,231) 230 (1,949) - - - -------- -------- -------- --------- -------- ----------- Net increase during the year 9,146 33,215 8,956 61,675 37,863 1,064,040 -------- -------- -------- --------- -------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, $66,547 $44,044 $ 8,956 $ 97,934 $88,204 $2,342,449 December 31, 1996 -------- -------- -------- --------- -------- ----------- -------- -------- -------- --------- -------- -----------
The accompanying notes are an integral part of this statement. F-5 LODGENET ENTERTAINMENT CORPORATION 401(k) PLAN Notes to Financial Statements December 31, 1996 and 1995 1. DESCRIPTION OF PLAN: The following description of the LodgeNet Entertainment Corporation 401(k) Plan (the Plan) provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan covering all full-time employees of LodgeNet Entertainment Corporation (the Company) who have six months of service and are age 18 or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). 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 25% of each participant's basic voluntary contribution, not to exceed 1% of their compensation, as defined. Total rollover contributions brought into the Plan in 1996 were $100,403. VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company's matching contribution portion of their 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 employer, 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. F-6 ADMINISTRATION The Corporation 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 Harris Bank and Trust are the asset custodians of the Plan. Administrative expenses of the Plan are paid by the Company and were $17,643 in 1996. PARTICIPANT LOANS Participants may borrow funds from the Plan up to 50% of their vested interest. 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 no longer than 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 vested portion exceeds $3,500, the participant may elect to receive periodic installment payments. AMENDMENT Effective January 1, 1996, the Plan was amended to eliminate the 1,000-hour requirement and change the time requirement from one year of service to six months of service following the employee's employment commencement date. 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. 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. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: BASIS OF ACCOUNTING The financial statements have been prepared on the accrual basis of accounting. F-7 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. Participants have nine investments from which to choose. A description of each investment is as follows: DREYFUS PEOPLES 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. 20TH 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 FUND--Seeks current income consistent with preservation of capital and maintenance of liquidity. Considered to be a slightly volatile fund. NATIONWIDE MONEY MARKET FUND--Seeks to provide a high level of current income while preserving capital and maintaining liquidity. Considered to be a slightly volatile fund. 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. F-8 3. INFORMATION CERTIFIED BY ASSET CUSTODIANS: The asset custodians of the Plan have certified that the following information included in the accompanying financial statements and supplemental schedules is complete and accurate: a. Net assets available for benefits as of December 31, 1996 and 1995. b. Changes in net assets available for benefits for the year ended December 31, 1996. c. Assets held for investment purposes as of December 31, 1996. d. Reportable transactions for the year ended December 31, 1996. F-9 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, 1996 Market Description of Investment Cost Value - -------------------------------------------------- --------- ---------- Nationwide Virtuoso II unallocated insurance contract** $ 66,228 $ 66,228 Pooled separate accounts: Nationwide Arranger unallocated insurance contract pooled separate account 1,682,932 2,074,621 LodgeNet Entertainment Corporation common stock** * 97,934 Loans to participants, with interest ranging from 8.0% to 9.85% 88,204 ---------- Total investments $2,326,987 ---------- ---------- *Information is not available from the asset custodians of the Plan. **Denotes party in interest. F-10 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, 1996
Cost of Net Number of Number Total Value of Total Sales Investments Gain Description Purchases of Sales Purchases Proceeds Sold (Loss) - --------------------------------------------------------- --------- -------- -------------- ----------- ----------- ------ Nationwide Virtuoso II unallocated insurance contract** * * $ 52,274 $ 43,821 $43,821 - Nationwide Arranger unallocated insurance contract pooled separate account** * * 920,930 147,372 * *
*Information is not available from the asset custodians of the Plan. **Denotes party in interest. F-11 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 ANDERSON LLP Minneapolis, Minnesota, July 11, 1997 F-12 -----END PRIVACY-ENHANCED MESSAGE-----