LODGENET ENTERTAINMENT CORPORATION 2006 NON-EMPLOYEE DIRECTORS FEE PLAN Effective June 1, 2006

 

Exhibit 10.1
LODGENET ENTERTAINMENT CORPORATION
2006 NON-EMPLOYEE DIRECTORS FEE PLAN
 
Effective June 1, 2006
 

 


 

TABLE OF CONTENTS
         
    Page  
ARTICLE 1 DEFINITIONS
    1  
1.5 “Account”
    1  
1.6 “Administrator”
    1  
1.7 “Board”
    1  
1.8 “Change in Control”
    1  
1.9 “Code”
    2  
1.10 “Company”
    2  
1.11 “RSUs”
    2  
1.12 “Disability”
    2  
1.13 “Eligible Person”
    2  
1.14 “Enrollment Documents”
    2  
1.15 “Exchange Act”
    2  
1.16 “Hardship”
    2  
1.17 “Participant”
    3  
1.18 “Plan”
    3  
1.19 “Plan Year”
    3  
1.20 “Qualified Compensation”
    3  
1.21 “Separation from Service”
    3  
ARTICLE 2 ELIGIBILITY
    3  
2.1 Requirements for Participation
    3  
2.2 Enrollment Procedure
    3  
ARTICLE 3 PARTICIPANT DEFERRALS
    3  
3.1 Deferral of Qualified Compensation
    3  
3.2 Modification of Deferral Elections
    3  
ARTICLE 4 DEFERRED COMPENSATION ACCOUNTS
    4  
4.1 Deferred Compensation Accounts
    4  
4.2 Account Elections
    4  
4.3 Crediting of Deferred Compensation
    4  
4.4 Vesting of Deferred Compensation Accounts
    4  
4.5 Assignments, Etc. Prohibited
    4  

 


 

TABLE OF CONTENTS
(continued)
         
    Page  
ARTICLE 5 DISTRIBUTION OF ACCOUNTS
    4  
5.1 Distributions upon a Participant’s Separation from Service
    4  
5.2 Distributions upon a Participant’s Death
    5  
5.3 Election of Manner and Time of Distribution
    5  
5.4 Applicable Taxes
    6  
5.5 Nature and Sources of Benefit Payments
    6  
5.6 Source of Shares
    6  
5.7 Hardship Distributions from Accounts
    6  
5.8 Applicable Taxes
    6  
ARTICLE 6 ADMINISTRATIVE PROVISIONS
    6  
6.1 Administrator’s Duties and Powers
    6  
6.2 Limitations Upon Powers
    7  
6.3 Final Effect of Administrator Action
    7  
6.4 Indemnification by the Company; Liability Insurance
    7  
6.5 Recordkeeping
    7  
6.6 Statement to Participants
    7  
6.7 Inspection of Records
    8  
6.8 Claims Procedure
    8  
6.9 Conflicting Claims
    9  
6.10 Service of Process
    9  
6.11 Fees
    9  
ARTICLE 7 MISCELLANEOUS PROVISIONS
    9  
7.1 Termination of the Plan
    9  
7.2 Limitation on Rights of Participants
    9  
7.3 Consolidation or Merger; Adoption of Plan by Other Companies
    9  
7.4 Errors and Misstatements
    10  
7.5 Payment on Behalf of Minor, Etc
    10  
7.6 Amendment of Plan
    10  
7.7 Governing Law
    10  
7.8 Pronouns and Plurality
    10  
7.9 Titles
    10  
7.10 References
    10  

 


 

TABLE OF CONTENTS
(continued)
         
    Page  
Exhibit A            Deferral Election Form
       
Exhibit B            Distribution Election Form
       

 


 

LODGENET ENTERTAINMENT CORPORATION
2006 NON-EMPLOYEE DIRECTORS FEE PLAN
Effective June 1, 2006
PREAMBLE
LodgeNet Entertainment Corporation (the “Company”), a Delaware corporation, by resolution of itsBoard of Directors dated June 27, 2006, has adopted this LodgeNet Entertainment CorporationNon-Employee Directors Fee Plan (the “Plan”), effective as of June 1, 2006, for the benefit ofnon-employee members of its Board of Directors.
The Plan is a nonqualified deferred compensation plan which is unfunded and is maintained primarilyfor the purpose of providing deferred compensation for non-employee directors of the Company. Thepurpose of the Plan is to attract and retain non-employee directors by providing a plan fordeferral of directors equity compensation earned for such service on the Board. The Plan issubject to Section 409A of the Internal Revenue Code and the Exchange Act and applicable federalregulations.
ARTICLE 1
Definitions
Whenever the following terms are used in the Plan with the first letter capitalized, they shallhave the meaning specified below unless the context clearly indicates to the contrary.
1.5 “Account” of a Participant shall mean the Participant’s individual accountestablished for his or her benefit pursuant to Section 4.1 hereof that is credited with amountsequal to the portion of the Participant’s Qualified Compensation that he or she elects to deferpursuant to Section 3.1.
1.6 “Administrator” shall mean the Compensation Committee of the Board of LodgeNetEntertainment Corporation.
1.7 “Board” shall mean the Board of Directors of LodgeNet Entertainment Corporation.
1.8 “Change in Control” shall mean any of the following:
     (a) the acquisition by any person, entity or group of persons, within the meaning of Treas.Reg. § 1.280G-1, Q/A 27(b), of beneficial ownership (within the meaning of Rule 13d-3 promulgatedunder the Exchange Act) of stock of the Company that, together with Company stock held by suchperson, entity or group, constitutes at least fifty percent (50%) of either the total fair marketvalue or total voting power of the Company’s then outstanding stock, or
     (b) the acquisition (or series of acquisitions over the twelve (12)-month period ending on thedate of the most recent acquisition) by any person, entity or group of persons, within the meaningof Treas. Reg. § 1.280G-1, Q/A 27(b), of beneficial ownership (within the meaning of Rule 13d-3promulgated under the Exchange Act) of stock of the Company that that constitutes thirty-fivepercent (35%) or more of the total voting power of the stock of the Company, or

 


 

     (c) the replacement during any twelve (12)-month period of a majority of the members of theBoard by directors whose appointment or election is not endorsed by a majority of the Board priorto their appointment or election, or
     (d) the acquisition (or series of acquisitions over the twelve (12)-month period ending on thedate of the most recent acquisition) by any person, entity or group of persons, within the meaningof Treas. Reg. § 1.280G-1, Q/A 27(b), of ownership of forty percent (40%) or more of the totalgross fair market value of the Company’s assets immediately prior to such acquisition or series ofacquisitions.
1.9 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time,together with regulations there under.
1.10 “Company” shall mean LodgeNet Entertainment Corporation, any controlled affiliate,and any entity which is a successor in interest to the Company.
1.11 “RSUs” shall mean book entry, restricted stock units representing the equivalent ofshares of common stock of the Company.
1.12 “Disability” shall mean a Participant’s condition such that he or she is (a) unableto engage in any substantial gainful activity by reason of any medically determinable physical ormental impairment which can be expected to result in death or can be expected to last for acontinuous period of not less than twelve (12) months, or (b) is, by reason of any medicallydeterminable physical or mental impairment which can be expected to last for a continuous period ofnot less than twelve (12) months, receiving income replacement benefits for a period of not lessthan three (3) months under an accident or health plan covering employees of the Participant’semployer.
1.13 “Eligible Person” shall mean all non-employee members of the Board.
1.14 “Enrollment Documents” shall mean the Deferral Election Form and the DistributionElection Form in the form attached hereto as Exhibits A and B, respectively. The Administratorshall have the discretion to change the terms and conditions of any Enrollment Document at any timeprior to the date on which it becomes a legally binding agreement pursuant to the terms of Section3.1 below.
1.15 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
1.16 “Hardship” of a Participant, shall mean an unforeseeable emergency that is caused byan event beyond the control of the Participant that would result in severe financial hardshipresulting from any one or more of the following:
     (a) a sudden and unexpected illness or accident of the Participant, the Participant’s spouse,or a dependent (as defined in Code Section 152(a)) of the Participant;
     (b) a loss of the Participant’s property due to casualty; or
     (c) other such extraordinary and unforeseeable circumstances arising as a result of eventsbeyond the Participant’s control.
Whether a Participant has incurred a Hardship shall be determined by the Administrator in itsdiscretion in accordance with regulations issued under IRC Section 409A and on the basis of allrelevant facts and circumstances and in accordance with nondiscriminatory and objective standards,uniformly interpreted and consistently applied.

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1.17 “Participant” shall mean each Eligible Person who elects to participate in the Planas provided in Article 2 and who defers Qualified Compensation pursuant to Article 3 of the Plan.Each of such persons shall continue to be a “Participant” until they have received all benefits dueunder the Plan.
1.18 “Plan” shall mean the LodgeNet Entertainment Corporation 2006 Non-Employee DirectorsFee Plan.
1.19 “Plan Year” shall mean the 12-month period beginning on January 1st and ending onDecember 31st except for the initial Plan Year which shall commence June 1, 2006 and end December31, 2006.
1.20 “Qualified Compensation” shall mean any Board compensation in the form of cash or agrant of a stock award under the LodgeNet Entertainment Corporation 2003 Stock Option and IncentivePlan or other equity incentive plan adopted by the Board, which may be payable to a Participant.
1.21 “Separation from Service” shall mean a Participant’s termination of service as amember of the Board of the Company for any reason, including the Participant’s involuntarytermination, voluntary resignation, death, Disability, or retirement.
ARTICLE 2
Eligibility
2.1 Requirements for Participation. Any Eligible Person who executes the EnrollmentDocuments shall become a Participant on the date on which the Administrator receives and acceptssuch documents.
2.2 Enrollment Procedure. The Company will be deemed to have accepted an EligiblePerson’s Enrollment Documents as of the date of their delivery to the Company’s Corporate Secretaryor Delegate, unless the Administrator sends the Eligible Person a written notice of rejectionwithin ten (10) business days after receiving the Enrollment Documents.
ARTICLE 3
Participant Deferrals
3.1 Deferral of Qualified Compensation. To the extent allowed by the Administrator, eachEligible Person may elect to defer into his or her Account up to 100% of any Qualified Compensationthat would otherwise be payable to him or her for any Plan Year, subject to any conditions orlimitations that the Administrator may implement for a Plan Year through a written notice deliveredto Eligible Persons at least thirty (30) days before the Plan Year begins.
An Eligible Person shall make any election pursuant to this Section 3.1 by completing anddelivering his or her Enrollment Documents to the Administrator no later than the December 15thpreceding the Plan Year to which they relate. Notwithstanding the foregoing, with respect to thePlan Year beginning in 2006 or to individuals who first become eligible for the Plan during thecourse of an ongoing Plan year, Eligible Persons may complete and deliver to the Administrator hisor her Enrollment Documents within thirty (30) days of the date they become eligible for Planparticipation, in which event the Enrollment Documents shall apply only to Qualified Compensationthat would otherwise be payable for services performed after such deferral election is made.
3.2 Modification of Deferral Elections. A Participant’s election to defer QualifiedCompensation is irrevocable for the Plan Year to which it relates, subject to the right of theParticipant to terminate deferrals for any future Plan Year by written notice to the Administratorprior to January 1 of the year effective.

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ARTICLE 4
Deferred Compensation Accounts
4.1 Deferred Compensation Accounts. The Administrator shall establish and maintain foreach Participant an Account to which shall be credited pursuant to Section 4.3 hereof, and fromwhich shall be debited the Participant’s distributions and withdrawals under Articles 5 and 6.Such Account will be recorded as a liability/ payable in the Company’s financial records. To theextent that a Participant elects to defer shares of Company stock otherwise receivable asQualified Compensation, the Company will maintain separate subaccounts for cash, RSUs that arevested and another for RSUs subject to vesting requirements.
4.2 Account Elections. To the extent a Participant defers Qualified Compensation thatwould otherwise be paid in shares of the Company’s common stock, those shares (and any earningsthereon) shall be credited to the Participant’s Account as RSUs and distributions from that part ofthe Account shall be settled in shares of common stock of the Company. Cash deferrals shall berecorded as dollar and cents deferred.
4.3 Crediting of Deferred Compensation. As of the first day of each calendar month thatbegins after the Plan takes effect, each Participant’s Account shall be credited with an amountthat is equal to the amount of the Participant’s Qualified Compensation which such Participant haselected to defer under Article 3 and which would otherwise have been paid as cash compensationand/or transferred as shares of stock (restricted or unrestricted) to the Participant during thepreceding month. At the end of each month, the cash deferral subaccount shall be credited withinterest at an annualized interest rate equal to the one-month LIBOR rate published in the WallStreet Journal on the last business day of each month.
4.4 Vesting of Deferred Compensation Accounts. Each Participant’s interest in his or herAccount shall be 100% vested and non-forfeitable at all times, except with respect to RSUs thatremain subject to a risk of forfeiture in the event Participant fails to complete the vestingrequirements of the grant.
4.5 Assignments, Etc. Prohibited. The plan is an unfunded and unsecured promise to paycompensation for services performed currently, at a future date. No corporate assets are set asidefor amounts credited to the Participants’ Accounts under this Plan. No part of any Participant’sAccount shall be assignable to anyone other than the Company for the debts, contracts orengagements of the Participant, or the Participant’s beneficiaries or successors in interest, or betaken in execution by levy, attachment or garnishment or by any other legal or equitableproceeding, nor shall any such person have any rights to alienate, anticipate, commute, pledge,encumber or assign any benefits or payments hereunder in any manner whatsoever except to designatea beneficiary as provided in Section 5.2.
ARTICLE 5
Distribution of Accounts
5.1 Distributions upon a Participant’s Separation from Service. The vested Account of aParticipant who incurs a Separation from Service other than on account of death shall be paid tothe Participant as elected in accordance with Section 5.3. Non-vested portions of the Account willbe forfeited to the Company. The Participant may choose from among the following forms ofdistribution:
     (a) A single distribution of cash and shares within 30 days after the date specified in (c)below.
     (b) Approximately equal annual installments over any designated number of years (not to exceedten (10) commencing within 30 days after the date specified in (c) below.

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     (c) The distribution date:
          (i) date of the Participant’s Separation from Service;
          (ii) on the January 1st that next follows the date that is a selected number of years aftersuch Separation from Service;
          (iii) A date specified by the Participant on the Enrollment Documents (must be at least twoyears from the date payable);
          (iv) On the first of the month following attainment of a specified age of the Participant; or
          (v) on a Change in Control of the Company, in accordance with Section 409A of the Code and itsassociated regulations.
A Participant may elect a distribution pursuant to this Section 5.1 in such other forms, or payableupon such other commencement dates, as are specified by the Administrator in the EnrollmentDocuments; provided, however, that no such election shall provide for payments to be made more thanten (10) years after such Participant’s Separation from Service.
5.2 Distributions upon a Participant’s Death. Notwithstanding anything to the contraryin the Plan, the remaining balance of the Account of a Participant who dies (i) shall be paid tothe persons and entities designated by the Participant as his or her beneficiaries for such purposeand (ii) shall be paid in the manner set forth in this Section 5.2. Upon a Participant’s death,such balance shall be paid as specified by the Participant in an election made pursuant to Section5.3. Such election shall specify whether payment shall be made –
     (a) in a single distribution of shares within thirty (30) days following the Participant’sdeath, which shall be the default form of distribution absent a clear election; or
     (b) in accordance with the distribution election made pursuant to Section 5.1 hereof (in whichcase such Participant’s death shall be considered the date of such Participant’s Separation fromService for purposes of determining the date of commencement of distribution under such election).
If the Participant fails to make a beneficiary election pursuant to Section 5.3, his or her spouseat the date of death shall be deemed to be the beneficiary of his or her Account, provided that ifthe Participant does not have a spouse at the time of his or her death, the Participant’s estateshall be deemed to be the beneficiary of his or her Account.
5.3 Election of Manner and Time of Distribution. At the time a Participant elects todefer Qualified Compensation under Article 3, he or she shall make distribution elections on theEnrollment Documents and deliver such forms to the Administrator. Such elections shall apply tothe portion of the Participant’s Account that is attributable to Qualified Compensation deferredunder the applicable Enrollment Documents while such Enrollment Documents are in effect. To theextent permitted by Code Section 409A and related regulations, a Participant may change suchelections through one or more subsequent elections that in each case (i) do not take effect untilat least twelve (12) months after the date on which such election is made, (ii) are delivered tothe Administrator at least one (1) year before the date on which distributions are otherwisescheduled to commence pursuant to the Participant’s election from the choices set forth in Section5.1(b) hereof, and (iii) defer the commencement of distributions by at least five (5) years fromthe originally scheduled commencement date (except for distributions that commence because of theParticipant’s death, Disability, or Hardship).

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5.4 Applicable Taxes. All distributions under the Plan shall be subject to income taxreporting and withholding for all amounts that the Company is required to withhold under federal,state or local tax law, if any.
5.5 Nature and Sources of Benefit Payments. The Company shall make distributions of fromthe RSU subaccount in shares of common stock of the Company and from the cash subaccount in theform of cash.
5.6 Source of Shares. Shares issued in settlement of RSUs will be issued under theLodgeNet Entertainment Corporation 2003 Stock Option and Incentive Plan or other equity planinitially awarding shares as Qualified Compensation.
5.7 Hardship Distributions from Accounts.
     (a) In the event a Participant suffers a Hardship, the Participant may apply to theAdministrator for an immediate distribution of all or a portion of the Participant’s Account. Theamount of any distribution hereunder shall be limited to the amount necessary to relieve theParticipant’s Hardship, plus amounts necessary to pay taxes reasonably anticipated as a result ofthe distribution, after taking into account the extent to which the Hardship is or may be relievedthrough reimbursement or compensation by insurance or otherwise, by liquidation of theParticipant’s assets (to the extent the liquidation of such assets would not itself cause severefinancial hardship), or by cessation of the Participant’s deferrals under the Plan. TheAdministrator shall determine whether a Participant has a qualifying Hardship and the amount whichqualifies for distribution, if any. The Administrator may require evidence of the purpose andamount of the need, and may establish such application or other procedures as it deems appropriate.
     (b) Payment of Withdrawals. All withdrawals under this Article 5 shall be made within thirty(30) days after a valid election to withdraw is delivered to the Administrator. The Administratorshall give prompt notice to the Participant if an election is invalid and is therefore rejected,identifying the reason(s) for the invalidity. Hardship withdrawals will be taken from theParticipant’s cash subaccount before conversion of any RSUs. If the Administrator has not made thedistribution but has not affirmatively rejected an election within the thirty (30) day deadline,then the election shall be deemed rejected on the thirtieth (30th) day. If a withdrawalelection is rejected, the Participant may bring a claim for benefits under Section 6.8.
     (c) Effect of Withdrawals. If a Participant receives a withdrawal under this Article 5 afterdistributions have commenced under Section 5.1, the remaining payments shall be recalculated, byre-amortizing the remaining payments over the remaining term and applying the method used to creditearnings under Section 4.3.
5.8 Applicable Taxes. All withdrawals under the Plan shall be subject to income taxreporting and withholding for all amounts which the Company is required to withhold under federal,state or local tax law, if any.
ARTICLE 6
Administrative Provisions
6.1 Administrator’s Duties and Powers. The Administrator shall conduct the generaladministration of the Plan in accordance with the Plan and shall have all the necessary power,authority and discretion to carry out that function. Among its necessary powers and duties are thefollowing:

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     (a) To delegate all or part of its function as Administrator to others and to revoke any suchdelegation.
     (b) To determine questions of eligibility of Participants and their entitlement to benefits,subject to the provisions of Section 6.8.
     (c) To select and engage attorneys, accountants, actuaries, trustees, appraisers, brokers,consultants, administrators, physicians, or other persons to render service or advice with regardto any responsibility the Administrator or the Board has under the Plan, or otherwise, to designatesuch persons to carry out fiduciary responsibilities under the Plan, and (together with theAdministrator, the Company, the Board and the officers and Employees of the Company) to rely uponthe advice, opinions or valuations of any such persons, to the extent permitted by law, being fullyprotected in acting or relying thereon in good faith.
     (d) To interpret the Plan and any relevant facts for purpose of the administration andapplication of the Plan, in a manner not inconsistent with the Plan or applicable law and to amendor revoke any such interpretation.
     (e) To conduct claims procedures as provided in Section 6.8.
6.2 Limitations Upon Powers. The Plan shall be uniformly and consistently administered,interpreted and applied with regard to all Participants in similar circumstances. The Plan shallbe administered, interpreted and applied fairly and equitably and in accordance with the specifiedpurposes of the Plan. Notwithstanding the foregoing, the distribution forms and commencement datesspecified in Section 5.1 shall apply to such Participants, and in such manner, as the Administratordetermines in its sole discretion.
6.3 Final Effect of Administrator Action. Except as provided in Section 6.9, all actionstaken and all determinations made by the Administrator shall, unless arbitrary and capricious, befinal and binding upon all Participants, the Company, and any person interested in the Plan.
6.4 Indemnification by the Company; Liability Insurance. The Company shall pay orreimburse any of the Company’s officers, directors, Administrator, sub-committee members,Delegates, or Employees who are fiduciaries with respect to the Plan for all expenses incurred bysuch persons with respect to, and shall indemnify and hold them harmless from, all claims,liability and costs (including reasonable attorneys’ fees) arising out of the performance of theirduties under the Plan, provided that such persons do not act negligently in the performance of suchduties. The Company may obtain and provide for any such person, at the Company’s expense, liabilityinsurance against liabilities imposed on such person by law.
6.5 Recordkeeping.
     (a) The Administrator shall maintain suitable records of each Participant’s Account which,among other things, shall show separately deferrals and the earnings and/or dividends creditedthereon, as well as distributions and withdrawals therefrom and records of its deliberations anddecisions.
     (b) The Administrator shall not be required to maintain any records or accounts whichduplicate any records or accounts maintained by the Company.
6.6 Statement to Participants. By March 15 of each year, the Administrator shall furnishto each Participant a statement setting forth the value of the Participant’s Account as of thepreceding December 31 and such other information as the Administrator shall deem advisable tofurnish.

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6.7 Inspection of Records. Copies of the Plan and records of a Participant’s Accountshall be open to inspection by the Participant or the Participant’s duly authorized representativeat the office of the Administrator at any reasonable business hour.
6.8 Claims Procedure.
     (a) Any Participant or beneficiary has the right to make a written claim for benefits underthe Plan. If such a written claim is made, and the Administrator wholly or partially denies theclaim, the Administrator shall provide the claimant with written notice of such denial, settingforth, in a manner calculated to be understood by the claimant:
          (i) the specific reason or reasons for such denial;
          (ii) specific reference to pertinent Plan provisions on which the denial is based;
          (iii) a description of any additional material or information necessary for the claimant toperfect the claim and an explanation of why such material or information is necessary; and
          (iv) an explanation of the Plan’s claims review procedure and time limits applicable to thoseprocedures.
     (b) The written notice of any claim denial pursuant to Section 6.8(a) shall be given not laterthan ninety (90) days after receipt of the claim by the Administrator, unless the Administratordetermines that special circumstances require an extension of time for processing the claim, inwhich event:
          (i) written notice of the extension shall be given by the Administrator to the claimant priorto ninety (90) days after receipt of the claim;
          (ii) the extension shall not exceed a period of ninety (90) days from the end of the initialninety (90) day period for giving notice of a claim denial; and
          (iii) the extension notice shall indicate (A) the special circumstances requiring an extensionof time and (B) the date by which the Administrator expects to render the benefit determination.
     (c) The decision of the Administrator shall be final and conclusive unless the Participant orBeneficiary files a written request for review by the full Board, excepting the affected Boardmember if the petitioner is a current Board member.
     (d) After receiving the written appeal, if the Board, or its delegate, shall issue a writtendecision notifying the claimant of its decision on review, not later than sixty (60) days afterreceipt of the written appeal, unless the Board or its delegate determines that specialcircumstances require an extension of time for reviewing the appeal, in which event:
          (i) written notice of the extension shall be given by the Board or its delegate prior to sixty(60) days after receipt of the written appeal;
          (ii) the extension shall not exceed a period of sixty (60) days from the end of the initialsixty (60) day review period; and
          (iii) the extension notice shall indicate (A) the special circumstances requiring an extensionof time and (B) the date by which the Board or its delegate expects to render the appeal decision.

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6.9 Conflicting Claims. If the Administrator is confronted with conflicting claimsconcerning a Participant’s Account, the Administrator may interplead the claimants in an action atlaw, or in an arbitration conducted in accordance with the rules of the American ArbitrationAssociation, as the Administrator shall elect in its sole discretion, and in either case, theattorneys’ fees, expenses and costs reasonably incurred by the Administrator in such proceedingshall be paid from the Participant’s Account.
6.10 Service of Process. The Corporate Secretary of LodgeNet Entertainment Corporationis hereby designated as agent of the Plan for the service of legal process.
6.11 Fees. Any fees associated with ongoing plan administration shall be paid by theCompany.
ARTICLE 7
Miscellaneous Provisions
7.1 Termination of the Plan.
     (a) While the Plan is intended as a permanent program, the Board shall have the right at anytime to declare the Plan terminated completely as to the Company or as to any group, division orother operational unit thereof or as to any affiliate thereof.
     (b) The Separation from Service of any Eligible Person without such a declaration shall notresult in a termination of the Plan.
     (c) In the event of any termination, the Board, in its sole and absolute discretion may elect:
          (i) to maintain Participants’ Accounts, payment of which shall be made in accordance withArticles 5 and 6; or
          (ii) to the extent the Administrator determines that such action would not violate Section409A of the Code, liquidate the portion of the Plan attributable to each Participant as to whom thePlan is terminated and distribute each such Participant’s Account in a lump sum or pursuant to anymethod which is at least as rapid as the distribution method elected by the Participant underSection 5.1.
7.2 Limitation on Rights of Participants. The Plan is strictly a voluntary undertakingon the part of the Company and shall not constitute a contract between the Company and any EligiblePerson. Inclusion under the Plan will not give any Eligible Person to maintain his or her statusas a director for the Company.
7.3 Consolidation or Merger; Adoption of Plan by Other Companies.
     (a) In the event of the consolidation or merger of the Company with or into any other entity,or the sale by the Company of substantially all of its assets, the resulting successor may continuethe Plan by adopting it in a resolution of its Board of Directors. If within ninety (90) days fromthe effective date of such consolidation, merger or sale of assets, such successor corporation doesnot adopt the Plan, the Plan shall be terminated in accordance with Section 7.1.
     (b) There shall be no merger or consolidation with, or transfer of the liabilities of the Planto, any other plan unless each Participant in the Plan would have, if the combined or successorplans were terminated immediately after the merger, consolidation, or transfer, an account which isequal to or greater than his or her corresponding Account under the Plan had the Plan beenterminated immediately before the merger, consolidation or transfer.

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7.4 Errors and Misstatements. In the event of any misstatement or omission of fact by aParticipant to the Administrator or any clerical error resulting in payment of benefits in anincorrect amount, the Administrator shall promptly cause the amount of future payments to becorrected upon discovery of the facts and shall cause the Company to pay the Participant or anyother person entitled to payment under the Plan any underpayment in cash or Company stock(whichever shall be applicable to the situation) in a lump sum, or to recoup any overpayment fromfuture payments to the Participant or any other person entitled to payment under the Plan in suchamounts as the Administrator shall direct, or to proceed against the Participant or any otherperson entitled to payment under the Plan for recovery of any such overpayment.
7.5 Payment on Behalf of Minor, Etc. In the event any amount becomes payable under thePlan to a minor or a person who, in the sole judgment of the Administrator, is considered by reasonof physical or mental condition to be unable to give a valid receipt therefore, the Administratormay direct that such payment be made to any person found by the Administrator in its sole judgment,to have assumed the care of such minor or other person. Any payment made pursuant to suchdetermination shall constitute a full release and discharge of the Company, the Board, theAdministrator, the Administrator and their officers, directors and employees.
7.6 Amendment of Plan. The Plan may be wholly or partially amended by the Board fromtime to time, in its sole and absolute discretion, including prospective amendments which apply toamounts held in a Participant’s Account as of the effective date of such amendment and includingretroactive amendments necessary to conform the Plan to the provisions and requirements of theCode; provided, however, that no amendment shall decrease the amount of any Participant’s Accountas of the effective date of such amendment. Notwithstanding the foregoing, this Section 7.6 shallnot be amended in any respect on or after a Change in Control and no amendment to this Plan shallreduce, limit or eliminate any rights of a Participant to withdrawals pursuant to Article 6 fordeferrals for which elections under Section 3.1 occurred prior to the effective date of theamendment, without the Participant’s prior written consent, except for amendments necessary toconform to the provisions and requirements of the Code.
7.7 Governing Law. All disputes relating to or arising from the Plan shall be governedby the laws of the State of Delaware, to the extent not preempted by United States federal law. Ifany provision of this Plan is held by a court of competent jurisdiction to be invalid andunenforceable, the remaining provisions shall continue to be fully effective.
7.8 Pronouns and Plurality. The masculine pronoun shall include the feminine pronoun,and the singular the plural where the context so indicates.
7.9 Titles. Titles are provided herein for convenience only and are not to serve as abasis for interpretation or construction of the Plan.
7.10 References. Unless the context clearly indicates to the contrary, a reference to astatute, regulation or document shall be construed as referring to any subsequently enacted,adopted or executed statute, regulation or document.

10


 

EXHIBIT A
LODGENET ENTERTAINMENT CORPORATION
2006 NON-EMPLOYEE DIRECTOR FEE PLAN
 
Deferral Election Form
 
AGREEMENT, made this ___ day of ___ 20___, by and between me, as a participant in the LodgeNetEntertainment Corporation 2006 Non-Employee Director Fee Plan (the “Plan”), and LodgeNetEntertainment Corporation (the “Company”).
1. By the execution hereof, I agree to participate in the Plan upon the terms and conditions setforth therein, and, in accordance therewith, make the elections set forth herein effective:
___ on the January 1st that follows the Administrator’s acceptance of my Enrollment Documents.
___ on the first day of the next calendar month, but only if this election occurs within the 30-dayperiod after I first become eligible for Plan participation. (NOTE: applicable only to electionsmade with respect to the 2006 Plan Year or in subsequent Plan Years by newly elected directors).
2. For the duration of this election (as determined under paragraph 4 below), I hereby elect todefer the receipt of the following percentage(s) of Qualified Compensation that the Company willwithhold and credit to my Deferral Account pursuant to the Plan:
___%          of my annual July 1 stock retainer* (up to 100%).
___%          of any Director Fees payable in cash.
 
*Note that any deferred stock-based Qualified Compensation will be recorded as Restricted StockUnits (RSUs) and will be settled in common stock of the Company.
3. I recognize and agree that this election will remain in effect indefinitely, until the earliestof (a) the date on which my service as a member of the Board terminates, (b) the date on which theAdministrator receives a written notice in which I terminate this election, and (c) the effectivedate of a superseding election made using Enrollment Documents acceptable to the Administrator.
4. By the execution hereof, I further recognize and agree to participate in the Plan upon the termsand conditions set forth therein, including but not limited to the following terms:
     (a) This election is irrevocable with respect to any Qualified Compensation that is deferredduring the term of this election.

 


 

     (b) I may change this election effective on the next following January 1st by filing asuperseding election using Enrollment Documents accepted by the Administrator.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and year firstabove-written.
         
Witnessed by:   PARTICIPANT
 
       
 
   
 
       
Witnessed by:   LODGENET ENTERTAINMENT CORPORATION
 
       
 
  By    
 
       

2


 

EXHIBIT B
LODGENET ENTERTAINMENT CORPORATION
NON-EMPLOYEE DIRECTOR FEE PLAN
 
Distribution Election Form
 
AGREEMENT, made this ___ day of ___ 20___, by and between me, a participant in theLodgeNet Entertainment Corporation 2006 Non-Employee Director Fee Plan (the “Plan”), and LodgeNetEntertainment Corporation (the “Company”). The parties agree that any term that begins herein withinitial capital letters shall have the special meaning defined in the Plan, unless the contextclearly requires otherwise.
NOW THEREFORE, it is mutually agreed as follows:
1. Form of Payment Generally. By the execution hereof, I agree to participate in the Plan,upon the terms and conditions set forth therein, and, in accordance therewith, elect to have myAccount distributed in cash as follows:
o in a single distribution of shares within thirty (30) days from the date elected in 2below.
o in substantially equal annual distributions of shares over a period of ___ years (not toexceed 5 years) starting with the date elected in 2 below.
2. Timing of Payment. I direct that my Account begin to be distributed to me as follows:
o My Separation from Service with the Company.
o on the January 1st that next follows the date that is ___ years (not more than 5 years)after my Separation from Service on the Board.
o on the first date of the month next following my ___ birthday.
o on the following date ___ (must be at least 2 years from the deferral date).
3. Payment Upon a Change in Control.
___ By initialing in the preceding space, I direct that upon a Change in Control of theCompany my entire Account be distributed to me in one single distribution payable as soon aspracticable following the Change in Control disregarding any other election made on this form.
4. Form of Payment to Beneficiary. In the event of my death, my Account shall bedistributed —
o in one single distribution of shares within thirty (30) days following my death.

 


 

o in accordance with the payment schedule selected in paragraphs 1, 2, and 3 hereof (withdistributions made as though I survived to collect all benefits, and as though I terminated serviceon the date of my death, if payments had not already begun).
5. Designation of Beneficiary. In the event of my death before I have collected all of thebenefits payable under the Plan, I hereby direct that any remaining benefits payable under the Planbe distributed to the beneficiary or beneficiaries designated under subparagraphs a and b of thisparagraph 4 in the manner elected pursuant to paragraph 4 above:
     (a) Primary Beneficiary. I hereby designate the person(s) named below to be myprimary beneficiary and to receive the balance of any unpaid benefits under the Plan.
                         
    Social Security             Percentage of  
Name of Primary Beneficiary   Number     Mailing Address     Death Benefit  
 
                    %  
 
                    %  
     (b) Contingent Beneficiary. In the event that the primary beneficiary orbeneficiaries named above are not living at the time of my death, I hereby designate the followingperson(s) to be my contingent beneficiary for purposes of the Plan:
                         
    Social Security             Percentage of  
Name of Contingent Beneficiary   Number     Mailing Address     Death Benefit  
 
                    %  
 
                    %  
6. Effect of Election. The elections made in paragraphs 1 and 2 hereof shall apply –
o to any deferred compensation that is deferred pursuant to the deferral election to whichthis Distribution Election Form relates.
o to the entire value of my Account, provided that these elections may only be changed atleast one year in advance of the earliest date on which payments would otherwise commence pursuantto paragraphs 1 or 2 hereof, and may only be changed pursuant to an election that conforms with therequirements set forth in Section 5.3 of the Plan.
With respect to the elections in paragraphs 4 and 5 hereof, I may, by submitting aneffective superseding Distribution Election Form at any time and from time to time,prospectively change the beneficiary designation and the manner of payment to aBeneficiary. Such elections shall, however, become irrevocable upon my death.

 


 

7. Mutual Commitments. The Company agrees to make payment of all amounts due to me inaccordance with the terms of the Plan and the elections I make herein. I agree to be bound by theterms of the Plan, as in effect on the date hereof or properly amended hereafter.
8. Tax Consequences to Participant. I acknowledge that I am solely responsible for thesatisfaction of any taxes that may arise under the Plan (including any taxes arising under Sections409A or 4999 of the Code). I understand that neither the Company nor the Administrator shall haveany obligation whatsoever to pay such taxes or to prevent me from incurring them.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and year firstabove-written.
         
Witnessed by:   PARTICIPANT
 
       
 
   
 
       
Witnessed by:   LODGENET ENTERTAINMENT CORPORATION
 
       
 
  By