SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

LODGENET ENTERTAINMENT CORPORATION
- ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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[LOGO]

3900 WEST INNOVATION STREET
SIOUX FALLS, SOUTH DAKOTA 57107

------------------------

April 16, 2001

Dear Fellow Stockholder:

You are cordially invited to attend the 2001 Annual Meeting of Stockholders
of LodgeNet Entertainment Corporation. The meeting will be held on Wednesday,
May 9, 2001, at 9:00 a.m., Central Daylight Time, at LodgeNet's Headquarters and
Distribution Center, 3900 West Innovation Street, Sioux Falls, South Dakota
57107. I encourage you to read carefully the enclosed Notice of Annual Meeting
and Proxy Statement.

I hope you will be able to attend the Annual Meeting. Whether or not you
plan to attend, I urge you to complete, sign, date and promptly return the
enclosed proxy card in the enclosed envelope in order to make certain that your
shares will be represented at the Annual Meeting. Your vote is important,
whether you own a few shares or many.

Sincerely,

/s/ Scott C. Petersen

Scott C. Petersen
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER

LODGENET ENTERTAINMENT CORPORATION

----------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

---------------------

TO THE STOCKHOLDERS:

NOTICE IS HEREBY GIVEN that, pursuant to its Bylaws and the call of its
Board of Directors, the Annual Meeting of Stockholders (the "Meeting") of
LodgeNet Entertainment Corporation (the "Company") will be held at LodgeNet's
Headquarters and Distribution Center, 3900 West Innovation Street, Sioux Falls,
South Dakota 57107 on Wednesday, May 9, 2001, at 9:00 a.m., Central Daylight
Time, for the purpose of considering and voting upon the following matters:

TO RECEIVE AND CONSIDER:

The report of Management on the business of the Company and the Company's
audited financial statements for the fiscal year ended December 31, 2000,
together with the report thereon of Arthur Andersen LLP, the Company's
independent public accountants.

TO ACT ON:

1. ELECTION OF DIRECTORS. To elect two persons to the Board of Directors
of the Company to serve for a three-year term expiring in 2004 and until
such persons' successors are elected and qualified. The Board of
Directors' nominees are:

Lawrence Flinn, Jr.
Scott C. Petersen

2. AMENDMENT OF STOCK OPTION PLAN. To ratify and approve an amendment of
the Company's 1993 Stock Option Plan, as amended (the "Plan"), to
authorize up to an additional 500,000 shares available for issuance upon
the exercise of stock options granted pursuant to the Plan.

3. AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION. To ratify and
approve an amendment of the Company's Restated Certificate of
Incorporation to increase the authorized common stock from 20,000,000
shares to 50,000,000 shares with no change to the 5,000,000 authorized
shares of preferred stock.

4. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS. To
ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending December 31,
2001.

5. OTHER BUSINESS. To transact such other business as may properly come
before the Meeting and at any and all adjournments thereof.

Only those stockholders of record on March 23, 2001 shall be entitled to
notice of and to vote in person or by proxy at the Meeting.

The Proxy Statement which accompanies this notice contains additional
information regarding the proposals to be considered at the Meeting and
stockholders are encouraged to read it in its entirety.

As set forth in the enclosed Proxy Statement, the proxy is solicited by and
on behalf of the Board of Directors of the Company. It is expected that these
materials will be first mailed to stockholders on or about April 16, 2001.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE TO BE SURE
THAT YOUR STOCK IS VOTED. YOUR VOTE IS IMPORTANT, WHETHER YOU OWN A FEW SHARES
OR MANY.

By Order of the Board of Directors,

/s/ Daniel P. Johnson

Daniel P. Johnson
SECRETARY

Dated: April 16, 2001

LODGENET ENTERTAINMENT CORPORATION
3900 WEST INNOVATION STREET
SIOUX FALLS, SOUTH DAKOTA 57107
(605) 988-1000

------------------------

PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 9, 2001

---------------------

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of LodgeNet Entertainment Corporation (the
"Company") for use at the Annual Meeting of Stockholders (the "Meeting") of the
Company to be held on Wednesday, May 9, 2001, at LodgeNet's Headquarters and
Distribution Center, 3900 West Innovation Street, Sioux Falls, South Dakota
57107 at 9:00 a.m., Central Daylight Time, and at any and all adjournments
thereof. Scott C. Petersen and John M. O'Haugherty, the designated proxyholders
(the "Proxyholders"), are members of the Company's management. This Proxy
Statement and the enclosed proxy card (the "Proxy") and other enclosures will be
first mailed to stockholders on or about April 16, 2001. Only stockholders of
record on March 23, 2001 (the "Record Date") are entitled to vote in person or
by proxy at the Meeting.

MATTERS TO BE CONSIDERED

The matters to be considered and voted upon at the Meeting will be:

Lawrence Flinn, Jr.
Scott C. Petersen

5. OTHER BUSINESS. To transact such other business as may properly come
before the Meeting and at any and all adjournments thereof.

VOTING AND REVOCABILITY OF PROXIES

A Proxy for use at the Meeting is enclosed. The Proxy must be signed and
dated by you or your authorized representative or agent. You may revoke a Proxy
at any time before it is exercised at the Meeting by submitting to the Secretary
of the Company a written revocation of such proxy or a duly executed proxy
bearing a later date or by voting in person at the Meeting.

Unless revoked, the shares of common stock represented by Proxies will be
voted in accordance with the instructions given thereon. In the absence of any
instruction in the Proxy, your shares of common stock will be voted: (i) "FOR"
the election of the nominees for director set forth herein; (ii) "FOR" approval
of the Plan Amendment; (iii) "FOR" approval of the Amendment to the Restated
Certificate of Incorporation and (iv) "FOR" the ratification of the appointment
of Arthur Andersen LLP as the Company's independent public accountants for the
fiscal year ending December 31, 2001.

The enclosed Proxy confers discretionary authority with respect to any
amendments or modifications of the proposals or other business which properly
may be brought before the Meeting. As of the date hereof, management is not
aware of any such amendments or modifications or other matters to be presented
for action at the Meeting. However, if any other matters properly come before
the Meeting, the Proxies solicited hereby will be voted by the Proxyholders in
accordance with the recommendation and in the discretion of the Board of
Directors.

COSTS OF SOLICITATION OF PROXIES

This Proxy is made on behalf of the Board of Directors of the Company and
the Company will bear the costs of solicitation. The expense of preparing,
assembling, printing and mailing this Proxy Statement and the materials used in
this solicitation of Proxies also will be borne by the Company. It is
contemplated that Proxies will be solicited principally through the mail, but
directors, officers and regular employees of the Company may solicit Proxies
personally or by telephone. Although there is no formal agreement to do so, the
Company may reimburse banks, brokerage houses and other custodians, nominees and
fiduciaries for their reasonable expenses in forwarding these proxy materials to
their principals. The Company does not intend to utilize the services of other
individuals or entities not employed by or affiliated with the Company in
connection with the solicitation of Proxies.

OUTSTANDING SECURITIES AND VOTING RIGHTS

The authorized capital of the Company consists of 20,000,000 shares of
common stock, par value $.01 per share, of which 12,212,439 shares were issued
and outstanding on the Record Date, and 5,000,000 shares of preferred stock, par
value $0.01 per share, of which there are no shares outstanding. The Board of
Directors has recommended that the Stockholders approve an amendment to the
Company's Restated Certificate of Incorporation increasing the authorized common
stock from 20,000,000 authorized shares, par value $0.01 per share, to
50,000,000 authorized shares, par value $0.01 per share, with no change to the
5,000,000 authorized shares of preferred stock.

A majority of the outstanding shares of common stock constitutes a quorum
for the conduct of business at the Meeting. Each stockholder is entitled to one
vote, in person or by proxy, for each share of common stock standing in his or
her name on the books of the Company as of the Record Date on any matter
submitted to the stockholders. The Company's Certificate of Incorporation does
not authorize cumulative voting. In the election of directors, the persons
receiving the highest number of votes will be elected. The approval of the Plan
Amendment and the ratification of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending December 31, 2001
require the affirmative vote of a majority of the common stock represented and
entitled to vote at the Meeting. The approval of the Amendment to the Restated
Certificate of Incorporation requires the affirmative vote of a majority of the
outstanding shares of common stock. Shares represented by a proxy card marked as
abstaining on any proposal will be counted as a vote against that matter. If a
broker which is the record holder of certain shares indicates on a proxy that it
does not have discretionary authority to vote on a particular matter as to such
shares, or if shares are not voted in other circumstances in which proxy
authority is defective or has been withheld with respect to a particular matter,
these non-voted shares will be counted for quorum purposes but are not deemed to
be voted for purposes of determining whether stockholder approval of that matter
has been obtained.

Brokers and nominees holding common stock in "street name" which are members
of a stock exchange are required by the rules of the exchange to transmit this
Proxy Statement to the beneficial owner of the common stock and to solicit
voting instructions with respect to the matters submitted to the stockholders.
In the event any such broker or nominee has not received instructions from the
beneficial owner by the date specified in the statement accompanying such
material, the broker or nominee may give or authorize the giving of a Proxy to
vote such common stock on the matters to be considered at the Meeting; PROVIDED,
HOWEVER, that the broker or nominee may not give or authorize the giving of a
Proxy for any matter if it has notice of any contest with respect to any matter,
and, PROVIDED, FURTHER, that the broker or nominee may not vote the common stock
"FOR" any matter which substantially affects the rights or privileges of the
common stock without specific instructions from the beneficial owner. If you
hold your common stock in "street name" and you fail to instruct your broker or
nominee as to how to vote your common stock, your broker or nominee may, in its
discretion, vote your common stock only "FOR" the election of the Board of
Directors' nominees and "FOR" the proposal to ratify the appointment of Arthur
Andersen LLP as the Company's independent public accountants for the fiscal year
ending December 31, 2001.

BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

The following table sets forth the beneficial ownership of common stock as
of the Record Date by each person known to the Company to be the record or
beneficial owner of more than five percent of the outstanding shares of common
stock (other than depositories holding shares of common stock in "street name"),
by each director and nominee for director, each executive officer named in the
Summary Compensation Table, and by all directors and executive officers, as a
group:

NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER(1)(2) BENEFICIAL OWNERSHIP(3) OF CLASS(3)
- ---------------------- ----------------------- -----------

Scott C. Petersen, Chairman of the Board,
President and Chief Executive Officer
(4)(14)..................................... 527,225 4.2%
Tim C. Flynn, Chairman Emeritus (4) (14)...... 655,422 5.3%
David M. Bankers, Senior Vice President, Chief
Technology Officer (4)...................... 89,406 *
John M. O'Haugherty, Senior Vice President,
Chief Operating Officer (4)................. 130,117 1.1%
Jeffrey T. Weisner, Senior Vice President,
Chief Financial Officer (4)(15)............. 135,911 1.1%
R. Douglas Bradbury, Director (5)............. 18,406 *
Lawrence Flinn, Jr., Director (6)............. 144,965 1.2%
Richard R. Hylland, Director (7).............. 49,965 *
R. F. Leyendecker, Director (8)............... 54,965 *
Alex Brown Investment Management (9).......... 953,600 7.8%
Hilton Hotels Corporation (10)................ 1,500,000 10.9%
PAR Investment Partners, L.P. (11)............ 1,105,500 9.1%
RS Investment Management Co. LLC (12)......... 984,350 8.1%
Wellington Management Company LLP (13)........ 1,253,889 10.2%
Directors and Executive Officers
(4)(5)(6)(7)(8)
(A group of 9 persons)...................... 1,806,382 13.8%

- ------------------------

* Less than 1%.

(1) Unless otherwise indicated, the address of such person is 3900 West
Innovation Street, Sioux Falls, South Dakota 57107.

(2) Each named person has sole voting and investment power with respect to the
shares listed, except as noted below.

(3) Shares which the person (or group) has the right to acquire within 60 days
after the Record Date are deemed to be outstanding in calculating the
percentage ownership of the person (or group) but are not deemed to be
outstanding as to any other person (or group).

(4) Includes shares issuable upon the exercise of options to purchase Common
Stock which the person (or group) has the right to acquire within 60 days
after the Record Date as follows: Mr. Petersen, 352,843 shares; Mr. Flynn,
182,222 shares; Mr. O'Haugherty, 125,117 shares; Mr. Bankers, 89,506
shares; and Mr. Weisner, 43,625 shares; and all directors and executive
officers as a group, 943,688 shares. For Mr. Flynn, includes 1,200 shares
owned by Mr. Flynn's minor children, and for Mr. Petersen includes 3,150
shares owned by Mr. Petersen's minor children.

(5) Includes 18,000 shares of Common Stock which Mr. Bradbury has the right to
acquire by the exercise of vested stock options.

(6) Includes 41,000 shares of Common Stock which Mr. Flinn has the right to
acquire by the exercise of vested stock options.

(7) Includes 46,000 shares of Common Stock which Mr. Hylland has the right to
acquire by the exercise of vested stock options.

(8) Includes 51,000 shares of Common Stock which Mr. Leyendecker has the right
to acquire by the exercise of vested stock options.

(9) The address for Alex Brown Investment Management is 217 E. Redwood Street,
Suite 1400, Baltimore, Maryland, 21202; address and share ownership
information based on Schedule 13G filed for the year ended December 31,
2000.

(10) Hilton Hotels Corporation holds a warrant for 1,500,000 shares. The
warrant is dated October 9, 2000 and carries an exercise price of $20.437
per share. The warrant expires on October 9, 2007.

(11) The address of PAR Investment Partners, L.P. is One Financial Center Suite
1600, Boston, MA 02111; address and share ownership information based on
Schedule 13G filed for the year ended December 31, 2000.

(12) The address for RS Investment Management Company LLC is 388 Market Street,
Suite 200, San Francisco, CA 94111; address and share ownership
information based on Schedule 13G filed for the year ended December 31,
2000.

(13) The address of Wellington Management Company LLP is 75 State Street,
Boston, Massachusetts 02109; address and share ownership information based
on Schedule 13G filed for the year ended December 31, 2000.

(14) On October 26, 2000, Mr. Flynn retired from the Board of Directors and
Mr. Petersen succeeded him as Chairman of the Board.

(15) On March 1, 2001, Mr. Weisner retired as Senior Vice President, Chief
Financial Officer and Gary H. Ritondaro succeeded him in that position.
Mr. Weisner advised the Company in August 2000 of his plans to retire.

ELECTION OF DIRECTORS

BOARD OF DIRECTORS AND NOMINEES

The Company's Certificate of Incorporation and Bylaws provide that the
number of directors shall be determined from time to time by the Board of
Directors but may not be less than three nor more than nine. The Board of
Directors is currently composed of five members. The Bylaws further provide for
the division of the directors into three classes of approximately equal size,
with directors in each class elected for a three-year term and approximately
one-third of the directors elected each year.

The directors nominated for reelection are Lawrence Flinn, Jr. and Scott C.
Petersen. Mr. Flinn and Mr. Petersen are each completing the terms to which they
were elected by the stockholders in 1998. Each nominee has indicated his
willingness to serve and, unless otherwise instructed, Proxies will be voted in
favor of such nominees. In the event that either Mr. Flinn or Mr. Petersen
should be unable to serve as a director, it is intended that the Proxies will be
voted for the election of such substitute nominee(s), if any, as shall be
designated by the Board of Directors. Management has no reason to believe that
the nominees will be unavailable to serve.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF THE NOMINEES TO THE BOARD OF DIRECTORS.

The following table sets forth certain information, as of the Record Date,
with respect to the nominees for director and the continuing directors of the
Company. The number of shares of common stock beneficially owned by the nominees
for director and the continuing directors is set forth above under "Beneficial
Ownership of Principal Stockholders and Management."

YEAR FIRST
BECAME
DIRECTOR (1)/
NAME AGE PRINCIPAL OCCUPATION OR EMPLOYMENT FOR THE PAST FIVE YEARS TERM EXPIRES
- ---- -------- ---------------------------------------------------------- --------------

NOMINEES FOR DIRECTOR:

Lawrence Flinn, Jr..... 65 Private Investor; Formerly Chairman, Chief Executive 1994/2001
Officer and Director of United Video Satellite Group,
Inc.

Scott C. Petersen...... 45 Chairman of the Board, President and Chief Executive 1993/2001
Officer of the Company. Mr. Petersen joined the Company
in 1987 as Senior Vice President for Corporate and Legal
Affairs, was appointed Executive Vice President and
Chief Operating Officer in 1991, was appointed President
and Chief Executive Officer in July 1998 and became
Chairman of the Board in October 2000.

OTHER DIRECTORS:

R. Douglas Bradbury.... 50 Executive Vice President of Level 3 Communications, Inc. 1999/2003
("LVLT")* from August 1997-present; and Vice Chairman of
the Board from February 2000-present; Chief Financial
Officer, 1997-2000; and Director since 1998. Mr.
Bradbury was Chief Financial Officer of MFS
Communications Company, Inc., 1992-1996; Senior Vice
President 1992-1995 and Executive Vice President from
1995-1996.

Richard R. Hylland..... 40 President, Chief Operating Officer of NorthWestern 1990/2003
Corporation ("NOR")* from 1998-present; Vice Chairman of
NorthWestern Growth Corporation; Cornerstone Propane GP,
Inc., Blue Dot Services, Inc., Expanets, Inc.; Chairman
of Franklin Industries.

R. F. Leyendecker...... 55 Vice President of Regulatory Affairs for NorthWestern 1986/2002
Services Group, Inc. (a wholly owned subsidiary of NOR*)
1998-present; Vice President--Market Development,
Northwestern Corporation, 1996-1997; Vice
President--Energy Services, NPSC 1994-1996.

- ------------------------

* Denotes public company.

(1) For purposes of this table, the year in which an individual first became a
director of the Company shall be the year in which such individual was
appointed to the Board of Directors of the Company or its South Dakota
predecessor.

PROCEDURES FOR NOMINATING DIRECTORS

The procedures for nominating directors, other than by the Board of
Directors, are set forth in the Bylaws. Nominations for the election of
directors, other than by the Board of Directors, must be made by a stockholder
entitled to vote for the election of directors by giving timely written notice
to the Secretary of the Company at the Company's principal office. Such notice
must be received at least 90 days prior to the date on which, in the immediately
preceding calendar year, the Company's Annual Meeting of Stockholders for such
year was held; PROVIDED, HOWEVER, that in the event the date of the Annual
Meeting is changed by more than 30 days from such anniversary date, such
stockholder's notice must be received by the Secretary of the Company no later
than 10 days after notice or prior public disclosure of the meeting is first
given or made to stockholders. The stockholder's notice must be in writing and
must set forth as to each proposed nominee all information relating to such
person that is required to be disclosed in solicitations of proxies pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including, but not limited to, such person's written consent to
being named in the proxy statement as a nominee and to serving as a director, if
elected. The stockholder notice must also set forth the name and address of the
nominating stockholder. If the stockholder fails to comply with the above
provisions, then the Chairman of the meeting may declare that the nomination was
not made in accordance with the procedures prescribed by the Bylaws and the
defective nomination may be disregarded.

COMMITTEES OF THE BOARD OF DIRECTORS

The Audit Committee of the Board of Directors is composed of not less than
three non-employee directors who are financially literate in financial and
auditing matters and are independent as defined by the National Association of
Securities Dealers. The members of the Audit Committee are Messrs. Hylland
(Chair), Bradbury, Flinn and Leyendecker.. The Audit Committee provides
assistance to the Board in satisfying its responsibilities relating to
accounting, auditing, operating and reporting practices of the Company. The
Audit Committee also recommends to the Board the appointment of independent
public accountants to conduct the annual audit of the Company's financial
statements and confers with the independent public accountants prior to the
release of quarterly earnings. The Audit Committee met seven times during 2000.

The Compensation Committee of the Board of Directors is composed of
Messrs. Leyendecker (Chair), Bradbury, Flinn and Hylland, each of whom is
independent as defined by the National Association of Securities Dealers. The
Compensation Committee is responsible for establishing compensation policies,
for setting compensation levels for the Company's executive officers and serves
as disinterested administrators of the Plan. The Compensation Committee met four
times during 2000. For a description of the functions of the Compensation
Committee, see "ELECTION OF DIRECTORS--Executive Compensation--REPORT OF THE
COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION."

The Board of Directors met eight times during 2000. All of the persons who
were directors of the Company during 2000 attended at least 75% of the total
number of meetings of the Board of Directors and the committees of the Board of
Directors on which he served.

DIRECTOR COMPENSATION

The compensation to be paid to each non-employee director is set at $20,000
per year plus $500 for each committee meeting attended in person and $300 for
each committee meeting attended by teleconference. The non-employee directors
also receive reimbursement for travel and related expenses for attendance at
Board and Committee meetings. The non-employee directors receive half of their
annual retainer in the form of cash and the other half in shares of the
Company's Common Stock. Non-employee directors receive upon their initial
election or appointment to the Board a nonqualified stock option to purchase
12,000 shares of Common Stock under the Plan plus an additional 12,000 options
to be granted on each anniversary of such election during the term of service.

COMPLIANCE WITH REPORTING REQUIREMENTS OF SECTION 16 OF THE EXCHANGE ACT

Under Section 16(a) of the Exchange Act, the Company's directors, executive
officers and any persons holding ten percent or more of the common stock are
required to report their ownership of common stock and any changes in that
ownership to the Securities and Exchange Commission (the "SEC") and to furnish
the Company with copies of such reports. Specific due dates for these reports
have been established and the Company is required to report in this Proxy
Statement any failure to file on a timely basis by such persons. To the
Company's knowledge, based solely upon a review of copies of such reports
received by the Company which were filed with the SEC from January 1, 2000
through the Record Date, and upon written representations from such persons that
no other reports were required, the Company has been advised that all reports
required to be filed under Section 16(a) have been timely filed with the SEC.

EXECUTIVE COMPENSATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chairman and Chief Executive Officer ("CEO") and the Company's executive
officers other than the CEO (determined as of the end of the last fiscal year)
(the "Named Executives") whose total annual salary and bonus exceeded $100,000
for the fiscal year ended December 31, 2000. Along with Mr. Petersen, the
Company's other executive officers in 2000 were the Company's three Senior Vice
Presidents (Mr. Bankers, Mr. O'Haugherty and Mr. Weisner).

SUMMARY COMPENSATION TABLE

LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------------------- ------------
NUMBER OF
STOCK
OTHER ANNUAL OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) GRANTED(2)
- --------------------------- -------- --------- -------- ------------------ ------------

Scott C. Petersen (3)................. 2000 330,000 127,723 39,627 110,000
Chairman of the Board, President, 1999 320,000 193,280 26,735 --
Chief Executive Officer 1998 284,663 181,171 23,781 100,000

John M. O'Haugherty................... 2000 190,000 48,352 17,127 54,000
Senior Vice President, 1999 170,000 74,779 15,510 --
Chief Operating Officer 1998 164,800 60,114 14,875 40,000

David M. Bankers...................... 2000 185,000 48,352 16,752 54,000
Senior Vice President, 1999 160,000 71,430 15,595 --
Chief Technology Officer 1998 150,000 53,078 13,765 40,000

Jeffrey T. Weisner (4)................ 2000 135,384 30,590 13,277 24,000
Senior Vice President, 1999 150,000 62,044 19,355 --
Chief Financial Officer 1998 140,000 46,179 13,015 32,500

- ------------------------

(1) Reflects compensation paid to the Named Executives by the Company in order
for them to purchase individual supplemental insurance coverage and other
benefits.

(2) Includes options granted in December 2000 as part of the 2001 compensation
package as follows: Mr. Petersen, 60,000 options; Mr. O'Haugherty, 30,000
options; and Mr. Bankers 30,000 options.

(3) On October 26, 2000, Mr. Flynn retired from the Board of Directors and
Mr. Petersen succeeded him as Chairman of the Board.

(4) On March 1, 2001, Mr. Weisner retired as Senior Vice President, Chief
Financial Officer and Gary H. Ritondaro succeeded him in that position.
Mr. Weisner advised the Company in August 2000 of his plans to retire.

EMPLOYMENT AGREEMENTS

In connection with the Company's initial public offering in October 1993,
the Company entered into an employment agreement with Mr. Petersen, dated
August 16, 1993. In July 1998, Mr. Petersen became Chief Executive Officer and
President of the Company and at that time the Board amended and extended the
term of Mr. Petersen's agreement until June 30, 2000. Mr. Petersen's agreement
contains an automatic renewal provision which, absent notice from either the
Company or Mr. Petersen on or before each November 1, beginning in 1999, the
agreement is extended for an additional year. Accordingly, Mr. Petersen's
agreement is currently extended until June 30, 2002. The Board set
Mr. Petersen's base salary for 2000 at $330,000. In addition, Mr. Petersen is
entitled to participate in various Company employment benefits plans

Mr. Petersen's employment may be terminated prior to the expiration of the
term of the agreement (i) automatically upon Mr. Petersen's death or disability;
or (ii) by the Company at any time, with or without cause, by action of its
Board of Directors. In the event of any such termination of employment, the
following termination benefits apply: (x) for any termination, other than for
cause (including a termination due to death or disability), the Company will pay
a pro rata portion of the maximum bonus for the then current year under any
bonus program in which Mr. Petersen may be participating at the time, unless
such payment is not permitted by the terms of the plan; and (y) for any

termination by the Board of Directors without cause including an election by the
Company not to allow the agreement to automatically extend, the Company will pay
Mr. Petersen a severance payment for a period of twenty four months at a monthly
rate equal to Mr. Petersen's monthly base salary increased by twenty percent. In
the event of a termination after a change in control involving the Company, the
terms of Mr. Petersen's agreement will be governed by the terms and conditions
of the Severance Agreements described below. The employment agreement contains a
covenant by Mr. Petersen not to compete with the Company, or to work for a
competing business, for the term of his employment. Should Mr. Petersen compete
with the Company following his termination, the Company's obligation to make
severance or other payments shall immediately cease.

On May 11, 1999, the Company entered into employment agreements with David
M. Bankers, the Company's Senior Vice President and Chief Technology Officer,
John M. O'Haugherty, the Company's Senior Vice President and Chief Operating
Officer, and Jeffrey T. Weisner, the Company's Senior Vice President and Chief
Financial Officer. The terms of each of those employment agreements are the same
as in Mr. Petersen's agreement summarized above, with the exception of salary
(as set forth in the Summary Compensation Table) and the term of each of those
agreements expire on December 31 of each current year, subject to automatic
renewal on November 1 of each year.

In July 1995, the Compensation Committee authorized the Company to enter
into agreements (the "Severance Agreements") with the Company's President and
its other executive officers, including the officers named in the Summary
Compensation Table, providing for the payment of certain compensation and other
benefits in the event of a covered termination of the executive's employment
within two years following a "change in control" involving the Company. No
compensation is payable to any executive under the Severance Agreements unless
(i) there has been a change in control and (ii) the executive's employment with
the Company shall have been terminated (including a substantial reduction in
duties or compensation, but excluding termination as a result of the death or
permanent disability of the executive or for cause or voluntary retirement). A
"change in control" is generally defined as the occurrence of any of the
following: (i) any person or group becomes the beneficial owner of securities
representing 30% or more of the voting power of the Company's outstanding
capital stock having the right to vote in the election of directors (excluding
any such transaction that is effected at an actual or implied average valuation
of less than $6.75 per share of common stock); (ii) a majority of the members of
the Board shall not for any reason be the individuals who at the beginning of
such period constitute the Board or persons nominated by such members;
(iii) any merger, consolidation or sale of all or substantially all of the
assets of the Company (meaning assets representing 30% or more of the net
tangible assets of the Company or generating 30% or more of the Company's
operating cash flow), excluding a business combination or transaction in which:
(a) the stockholders of the Company prior to such transaction continue to
represent more than 70% of the voting power of the Company immediately after
giving effect to such transaction; (b) no person or group becomes the beneficial
owner of 30% or more of the Company's voting stock; or (c) the purchase price
results in an actual or implied average valuation of less than $6.75 per share
of common stock; (iv) the adoption of any plan or proposal for the liquidation
or dissolution of the Company; or (v) the occurrence of any other event that
would be required to be reported as a change in control in response to Item 6(e)
of Schedule 14A of Regulation 14A of the Exchange Act.

Upon a covered termination, the executive is entitled to receive a lump sum
payment equal to the compensation the executive would have received over a
30-month period, a pro rata portion of any bonus the executive would have
received for the year in which such termination occurs, any stock options
previously granted to the executive will become fully vested, and the executive
will be entitled to the continuation of the insurance and other welfare benefits
then being received by such executive for a 30-month period. The Severance
Agreements contain a covenant not to compete with the Company for a period of
six months following a covered termination, and executives are not required to
mitigate any termination benefits (nor will such benefits be reduced by
compensation received from

other employment). The Severance Agreements terminate upon the earlier of:
(i) five years (subject to automatic one-year extensions unless the Board
otherwise notifies the executive); (ii) the termination of the executive's
employment other than pursuant to a covered termination described above;
(iii) two years from the date of a change in control of the Company if there has
not been a covered termination; and (iv) prior to a change in control upon the
executive's ceasing to be an executive officer of the Company.

STOCK OPTIONS

The following table contains information concerning the grant of stock
options during the fiscal year ended December 31, 2000 to the Named Executives.

OPTION(1) GRANTS IN FISCAL YEAR 2000

POTENTIAL REALIZABLE
AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (3)
------------------------------------------------------ --------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (2) 2000 (%) ($/SH) DATE 5% ($) 10% ($)
- ---- ------------ ------------ ----------- ---------- -------- ---------

Scott C. Petersen................ 50,000 6.0 23.50 2/16/2010 738,951 1,872,647
60,000 7.2 15.84 12/19/2010 597,701 1,514,693
John M. O'Haugherty.............. 24,000 2.9 23.50 2/16/2010 354,697 898,871
30,000 3.6 15.84 12/19/2010 298,851 757,346
David M. Bankers................. 24,000 2.9 23.50 2/16/2010 354,697 898,871
30,000 3.6 15.84 12/19/2010 298,851 757,346
Jeffrey T. Weisner (4)........... 24,000 2.9 23.50 2/16/2010 354,697 898,871

- ------------------------

(1) The Company has no plans pursuant to which stock appreciation rights may be
granted.

(2) The options were granted pursuant to the Plan. The options become
exercisable in four equal annual installments beginning one year after the
date of the grant. Includes options granted in December 2000 as part of the
2001 compensation package as follows: Mr. Petersen, 60,000 options;
Mr. O'Haugherty, 30,000 options; and Mr. Bankers 30,000 options.

(3) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on a variety of
factors, including market conditions and the price performance of the Common
Stock. There can be no assurance that the rates of appreciation presented in
this table can be achieved.

OPTION EXERCISES AND HOLDINGS

The following table provides information with respect to the Named
Executives concerning the exercise of options during the fiscal year ended
December 31, 2000 and unexercised options held by the Named Executives as of
December 31, 2000:

AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2000
AND FISCAL YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES VALUE 12/31/00(#) 12/31/00 ($)(1)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------

Scott C. Petersen.......... 15,000 310,485 335,343 115,000 5,910,420 1,145,625
John M. O'Haugherty........ 10,000 204,809 102,367 86,750 1,804,218 1,105,969
David M. Bankers........... 10,000 204,809 72,381 81,125 1,275,715 1,006,828
Jeffrey T. Weisner......... 40,486 594,384 28,000 46,625 493,500 398,766

- ------------------------

(1) Value of unexercised "in-the-money" options is the difference between the
market price of the Common Stock on December 31, 2000 ($17.625 per share)
and the exercise price of the option, multiplied by the number of shares
subject to the option.

REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors (the "Committee") is
responsible for developing and making recommendations to the Board with respect
to the Company's executive compensation policies. In addition, the Committee,
pursuant to authority delegated by the Board, determines on an annual basis the
compensation to be paid to the Company's chief executive officer and each of the
other executive officers of the Company. The Committee consists exclusively of
disinterested directors. Set forth below is the Report of the Committee
addressing the Company's policies regarding executive compensation for 2000.

COMPENSATION POLICIES APPLICABLE TO EXECUTIVE OFFICERS

THE REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION SHALL NOT
BE INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE
THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), OR UNDER THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT
OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.

COMPENSATION PHILOSOPHY AND OBJECTIVES. The Company's success is dependent
upon its ability to attract and retain highly qualified and motivated
executives. The Company endorses the philosophy that executive compensation
should reflect Company performance and the contribution of such officers to that
performance. The Company's compensation policies are designed by the Committee
to achieve three fundamental objectives: (i) attract and retain qualified
executives, (ii) motivate performance to achieve specific strategic objectives
of the Company, and (iii) align the interests of senior management with the
long-term interests of the Company's shareholders. The three key elements of the
Company's compensation program are base salary, an annual performance-based cash
bonus, and long-term stock options.

The Company's executive officers are also permitted to participate in the
Company's broad based employee benefit plans and receive supplementary payments
to enable such executives to purchase additional insurance coverage and other
benefits. The incremental cost to the Company of the benefits provided under
these plans to the Named Executives averaged approximately 9.8% of their base
salaries in 2000.

BASE SALARIES. The Company's approach to compensating executive officers
has been to pay base salaries which are competitive with the salaries paid to
executives of other companies of comparable size and growth rates in the media
and communications industries, and based upon the Committee's judgment of the
particular individual's experience, performance and potential contributions to
the Company. The Company believes executive compensation levels must be
competitive with those provided to other executives in the media, communications
and Internet connectivity industries in order to attract and retain qualified
executives crucial to the Company's long-term success. The group of companies
considered by the Committee is broader than the group shown in the performance
graph included below because the Company believes that it competes with a
broader group of companies for executive talent.

The Company's Chief Executive Officer, Mr. Petersen, is employed pursuant to
an employment contracts (the "Employment Contract") entered dated July 22, 1998.
The Employment Contract was for an initial term through June 30, 2000, and
automatically extends each year unless either the Company or Mr. Petersen elect
not to extend. In approving the Employment Contract, the Board made a subjective
assessment of management performance relating to the achievement of financial
targets and strategic milestones and considered the salary levels of executive
officers of its competitors and other public companies of comparable size.
Mr. Petersen's base salary of $330,000, represents an increase of $10,000
between 1999 and 2000. With respect to the Company's other Named Executive
officers, based

on the policies and factors described above, including the performance of the
Company and peer group compensation, the Committee approved base salary
adjustments for 2000 averaging 11.5% for such Named Executive officers. The
Company has also entered into employment agreements with such Named Executive
officers, namely: David M. Bankers, John M. O'Haugherty and Jeffrey T. Weisner.
See "EXECUTIVE COMPENSATION--EMPLOYMENT AGREEMENTS."

BONUS COMPENSATION. The Company's officers are eligible to receive annual
cash incentive compensation based on achieving specific goals and objectives
established by the Committee. In December 1999, the Committee established an
executive bonus program for 2000 based on the achievement by the executive of a
combination of target goals relating to earnings before interest, expense,
income taxes, growth in new Guest Pay interactive rooms; and the achievement of
strategic goals, the particular combination of targets and their respective
weighting being dependent upon the nature of the participating executive's areas
of responsibility. Target bonuses under the program assuming budgeted
expectations were met could range from 25% to approximately 60% of base salary
depending upon the executive's position. If results significantly exceeded
budgeted expectations, bonus payments under the program could range from
approximately 35% up to 90% of base salary. The Committee met in February 2001
to evaluate the Company's performance and determine the 2000 bonuses for
executive officers. The Committee considered whether the target goals for 2000
were attained and reviewed strategic events that occurred during the year. In
light of the foregoing, the Committee approved the cash bonus payments to the
Named Executives reflected in the Summary Compensation Table.

LONG-TERM STOCK OPTIONS. The Company believes that stock ownership by
executive officers and key employees aligns their interests with those of
stockholders. Stock options granted to such persons are intended to provide such
employees with an incentive to achieve superior performance that will be
reflected in the appreciation of the Company's common stock. The terms and
conditions of such options are determined and administered by the Committee.
Generally, stock options are granted annually with an exercise price equal to
the prevailing market value of the Company's common stock at the time of grant,
have ten year terms and vest over a four year period. The nature of the
long-term stock option compensation means that participating executives will not
realize compensation unless the value of the Company's common stock increases.
Each executive officer is considered for stock options based on his or her
responsibilities in the Company and existing stock option position, as well as
stock option award levels of comparable media and communications companies.
Option grants made to the Named Executives in 2000 totaled 242,000 shares are
reflected in the Summary Compensation Table, that total includes 120,000 options
granted to the Named Executives in December 2000 as part of the 2001
compensation package.

SEVERANCE AGREEMENTS. The Board believes that it is in the interest of the
Company and its stockholders to reinforce and encourage the continued dedication
of the Company's executive officers without the distractions occasioned by the
possibility of an abrupt change in control of the Company. In July 1995, the
Committee authorized the Company to enter into severance agreements with the
Company's president and its other executive officers, including the Named
Executives, providing for the payment of certain compensation and other benefits
in the event of a covered termination of the executive's employment within two
years following a "change in control" involving the Company. See "EXECUTIVE
COMPENSATION--EMPLOYMENT AGREEMENTS."

IRC SECTION 162(m). Section 162(m) of the Internal Revenue Code disallows
the deductibility by the Company of any compensation over $1 million per year
paid to each of the chief executive officers and the four most highly
compensated executive officers (other than the chief executive officer), unless
certain criteria are satisfied. No officer of the Company receives compensation
in excess of such

amount and, accordingly, in 2000 the Board took no action with respect to
qualifying for any exemption from such limitation.

THE COMPENSATION COMMITTEE

R.F. Leyendecker (Chair)
R. Douglas Bradbury
Lawrence Flinn, Jr.
Richard R. Hylland

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the Compensation Committee has ever served as an officer of the
Company, other than Mr. Leyendecker, who served as the Company's Treasurer from
1988 though 1992. Certain compensation matters were reviewed by the entire Board
of Directors, which includes Mr. Petersen, Chairman of the Board, President and
Chief Executive Officer of the Company. Mr. Leyendecker, a director and member
of the Compensation Committee, is an executive officer of NOR. Mr. Hylland, a
director and member of the Compensation Committee, is a director and executive
officer of NOR. Mr. Bradbury, a director and member of the Compensation
Committee, is a director and executive officer of LVLT.

AUDIT COMMITTEE REPORT

The following report is submitted on behalf of the Audit Committee of the
Board of Directors.

We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended December 31, 2000. We have
discussed with the independent auditors the matters required to be discussed by
Statement on Auditing Standards No. 61, COMMUNICATION WITH AUDIT COMMITTEES, as
amended, by the Auditing Standards Board of the American Institute of Certified
Public Accountants. We have received and discussed with the independent auditors
the matters required by Independence Standards Board Statement No. 1,
INDEPENDENCE DISCUSSIONS WITH AUDIT COMMITTEES, as amended, and have considered
the compatibility of non-audit services with the auditors' independence. Based
on the reviews and discussions referred to above, we recommend to the Board of
Directors that the audited financial statements referred to above be included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2000.
The Audit Committee has recommended, and the Board of Directors has adopted, an
Audit Charter to guide the Audit Committee. The Audit Charter, which is reviewed
at least annually, is attached to this Proxy as Exhibit A. The fees paid to
Arthur Andersen LLP in 2000, by category, were as follows:

Audit Fees.................................................. $ 88,000
Financial Information Systems Design and Implementation
Fees...................................................... $ 0
All Other Fees.............................................. $144,000

THE AUDIT COMMITTEE

Richard R. Hylland, Chair
R. Douglas Bradbury
Lawrence Flinn, Jr.
R.F. Leyendecker

CERTAIN TRANSACTIONS WITH MANAGEMENT AND OTHERS

In October 2000, the Board of Directors reauthorized a loan to Tim C. Flynn
in an amount not to exceed $1.5 million, secured by various assets including
LodgeNet common stock. Interest on the loan accrues at a rate commensurate with
the current interest rate of the revolving credit facility. As of the date of
this document, Mr. Flynn's outstanding loan balance was approximately
$1,200,000. The loan is currently due and payable on August 15, 2001 or upon
earlier demand by the Company. Except for that loan, none of the directors or
executive officers of the Company or any subsidiary thereof, or any associates
or affiliates of any of them, is or has been indebted to the Company at any time
since the beginning of the last completed fiscal year in excess of $60,000. None
of the directors or executive officers of the Company or any associate or
affiliate of such person, had any material financial interest, direct or
indirect, in any transaction or any proposed transaction with the Company during
the past fiscal year.

PERFORMANCE GRAPH

The following graph compares the percentage change in the Company's
cumulative total shareholder return on its common stock with (i) the cumulative
total return of the NASDAQ Market Index and (ii) the cumulative total return of
all companies (the "Peer Group") with the same four-digit standard industrial
code (SIC) as the Company (SIC Code 4841--Cable and Other Pay Television
Services) over the period from December 31, 1995 through December 31, 2000. The
graph assumes an initial investment of $100 in each of the Company, the NASDAQ
Market Index and the Peer Group and reinvestment of dividends. The Company did
not declare or pay any dividends in 2000. The graph is not necessarily
indicative of future price performance. THIS GRAPH SHALL NOT BE DEEMED
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE
THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OR UNDER THE
EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES
THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER
SUCH ACTS.

COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, NASDAQ MARKET INDEX AND PEER GROUP*

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

1995 1996 1997 1998 1999 2000

LodgeNet Entertainment 100 186.84 115.79 72.37 261.84 185.53
Cable, Other Pay TV Services 100 81.29 136.15 262.08 469.09 312.58
NASDAQ Market Index 100 124.27 152 214.39 378.12 237.66

DECEMBER 31
---------------------------------------------------------------
1995 1996 1997 1998 1999 2000
-------- -------- -------- -------- -------- --------

LodgeNet Entertainment....................... $100.00 $186.84 $115.79 $ 72.37 $261.84 $185.53
Cable, Other Pay TV Services................. 100.00 81.29 136.15 262.08 469.09 312.58
NASDAQ Market Index.......................... 100.00 124.27 152.00 214.39 378.12 237.66

- ------------------------

* Source: Media General Financial Services, Inc.

AMENDMENT OF THE COMPANY'S 1993 STOCK OPTION PLAN

The Company's 1993 Stock Option Plan was adopted by action of the Board of
Directors and stockholders effective as of August 16, 1993 and was amended in
each of 1994, 1995, 1996, 1998 and 2000 (as amended, the "Plan"). The 1996
amendment and restatement of the Plan incorporated amendments adopted in 1995
and 1996 as well as amendments that conformed the Plan to revisions in
Rule 16b-3 promulgated under the Exchange Act and to permit Non-Employee
Directors to elect to receive their fees in nonqualified stock options ("NSOs")
and/or shares of Common Stock.

The purpose of the Plan is to advance the interests of the Company and its
stockholders by enabling the Company and its subsidiaries to attract and retain
qualified management and to provide added incentive to officers, directors,
consultants and other key employees of the Company and its affiliates for high
levels of performance and to encourage stock ownership in the Company.
Currently, the Plan provides for the issuance of a maximum 2,550,000 shares. As
of March 23, 2001, approximately 396,000 shares were available for grant under
the Plan.

The Board believes that the number of shares presently available for grant
under the Plan is insufficient to enable the Company to retain or attract high
caliber individuals in today's competitive market. Therefore, the Board has
adopted, subject to stockholder approval, an amendment to Section 4 of the Plan
to authorize up to an additional 500,000 shares (for a total of 3,050,000)
reserved for issuance under the Plan (the "Plan Amendment"). Any such options
granted in the future will be subject to the same terms and provisions as
provided in the Plan or as otherwise determined by the Compensation Committee
pursuant to discretionary authority granted under the Plan.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE APPROVAL OF THE PLAN AMENDMENT

A general description of the basic features of the Plan is set forth below.
This summary is qualified in its entirety by the actual text of the Plan, a copy
of which may be obtained from the Company.

GENERAL. The purpose of the Plan is to enable the Company and its
subsidiaries to attract, retain and reward key managerial employees ("Key
Employees") and non-employee directors ("Non-Employee Directors") of the Company
by offering them the opportunity to have a greater proprietary interest in and
closer identity with the Company and its financial success. Shares of common
stock subject to Options which expire or are terminated or canceled may be
re-added to the remaining number of shares of common stock available for grant.

ADMINISTRATION. The Plan is administered by the Committee. The Committee
may interpret the Plan, prescribe, amend and rescind rules and regulations
relating to it, determine the terms and provisions of Options granted under the
Plan, including the number of option grants, exercise price, duration and method
of exercise as set forth in the Plan, and make such other determinations as it
deems necessary or advisable for the administration of the Plan.

TYPE OF OPTIONS GRANTED. An option granted under the Plan to a Key Employee
to purchase shares of the Company's common stock may be an incentive stock
option ("ISO"), as defined in Section 422 of the Internal Revenue Code of 1986
(the "Code"), or a nonqualified stock option ("NSO") (collectively, the
"Options"). Under the provision, each individual who becomes a Non-Employee
Director automatically is granted an NSO to purchase 12,000 shares of common
stock upon initial election to the Company's Board of Directors and an
additional grant of 12,000 options on each anniversary of such election during
the term of service. The per share exercise price of each NSO granted to a
Non-Employee Director must be 100% of the fair market value of a share of Common
Stock on the date of grant. Subject to the provisions regarding termination of
service, if applicable, each such NSO may be exercised in whole or in part not
earlier than six months after the date of grant and shall expire on the date ten
years after the date of grant.

REQUIRED TERMS AND CONDITIONS OF OPTIONS. Each ISO granted to a Key
Employee shall be in such form and subject to such restrictions and conditions
and other terms as the Committee may determine at the time of grant, consistent
with the requirements of the Code and subject to the general provisions of the
Plan and the following specific rules. Except as otherwise provided, the per
share exercise price of each ISO shall be at least 100% of the fair market value
of the common stock at the time of grant, provided that in the case of an ISO
granted to a Key Employee who at the time of grant owns (as defined in
Section 424(d) of the Code) stock of the Company or its parent or subsidiaries
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, the exercise price shall be at least 110% of the fair
market value of the common stock at the time of grant and the ISO by its terms
shall not be exercisable after the expiration of five years from the date of
grant. Subject to earlier termination, each ISO shall expire on the date
determined in the applicable Option Agreement at the time the ISO is granted,
provided that such date shall not be more than 10 years from the date of grant,
except as otherwise provided above. The terms and conditions applicable to the
NSOs granted to Key Employees and Non-Employee Directors pursuant to the Plan
(which need not be identical) and the Option Agreements relating thereto are
determined by the Committee and the Committee may make such other determinations
as it deems necessary or advisable for the administration of NSOs granted under
the Plan.

TERMINATION OF EMPLOYMENT OR SERVICE. Except as set forth below or
otherwise determined by the Committee, each Option granted to a Key Employee
shall expire on the expiration date or dates set forth in the applicable Option
Agreement. Unless the Committee determines to extend the option exercise period
for a period of up to ninety days and/or permits the Key Employee to exercise an
Option that becomes exercisable during that 90-day period, an Option granted to
a Key Employee shall expire on the first to occur of (i) the applicable date or
dates determined by the Option Agreement or (ii) the date that the employment of
the Key Employee with the Company or its subsidiaries terminates for any reason
other than death or disability, retirement, or upon the occurrence of specified
events. In no event, however, may the Committee permit such Key Employee to
exercise an Option under this section after the expiration date or dates set
forth in the applicable Option Agreement. If the employment of a Key Employee
with the Company and its subsidiaries terminates by reason of disability (as
determined by the Committee) or death, his unexpired Options or portions
thereof, if any, held on the date of disability or death that would expire
pursuant to the terms of her Option Agreement during the twelve-month period
commencing on the date of disability or death, shall expire on the last day of
such twelve-month period. During such twelve-month period, any such Option or
portion thereof referred to in the preceding sentence may be exercised by such
Key Employee or the appropriate beneficiary. If the employment of a Key Employee
with the Company and its subsidiaries terminates due to retirement under any
qualified retirement plan maintained by the Company and/or any of its
subsidiaries, his Option shall expire on the earlier to occur of (i) the
applicable expiration date or dates set forth in the applicable Option
Agreement(s) or (ii) the third anniversary of the date of such termination of
employment. If a Key Employee who has so retired dies prior to exercising in
full an Option that has not expired pursuant to the preceding sentence, then
notwithstanding the preceding sentence, such Option shall expire on the first
anniversary of the date of the Key Employee's death.

TERMINATION UPON OCCURRENCE OF SPECIFIED EVENTS. If, within two years after
the occurrence of any event described in the paragraph below on adjustments, the
employment of a Key Employee with the Company and its subsidiaries terminates
voluntarily for good reason, or involuntarily for any reason other than for
cause, or due to the death, disability or retirement of a Key Employee, and if
such event does not have the prior written approval of a majority of the
Continuing Directors (as defined in the Plan), the dates upon which his
outstanding Options may be exercised shall be advanced to the date of
termination. In such event, not later than 90 days following the date of his
termination, the Key Employee may elect to exercise in whole or in part any or
all of his Options notwithstanding any restrictions and conditions that may be
contained in his Option Agreement.

ADJUSTMENTS. In the event that: (i) any person (as such term is used in
Section 13 of the Exchange Act and the rules and regulations thereunder and
including any Affiliate or Associate of such person, as defined in Rule 12b-2
under the Exchange Act, and any person acting in concert with such person)
directly or indirectly acquires or otherwise becomes entitled to vote more than
50% of the voting power entitled to be cast at elections for directors ("Voting
Power") of the Company; or (ii) there occurs any merger or consolidation of the
Company, or any sale, lease or exchange of all or any substantial part of the
consolidated assets of the Company and its subsidiaries to any other person and
(A) in the case of a merger or consolidation, the holders of outstanding stock
of the Company entitled to vote in elections of directors immediately before
such merger or consolidation (excluding for this purpose any person (including
any Affiliate or Associate) that directly or indirectly owns or is entitled to
vote 20% or more of the Voting Power of the Company) hold less than 80% of the
Voting Power of the survivor of such merger or consolidation or its parent; or
(B) in the case of any such sale, lease or exchange, the Company does not own at
least 50% of the Voting Power of the other person; or (iii) one or more new
directors of the Company are elected and at such time five or more directors
(or, if less, a majority of the directors) then holding office were not
nominated as candidates by a majority of the Continuing Directors; the Committee
may, in its discretion, revise, alter, amend or modify any Option Agreement with
a Key Employee and any then outstanding and unexercised Option granted to a Key
Employee in any manner that it deems appropriate, including, but not limited to,
any of the following respects: (A) the Option may be deemed to pertain to and
apply to the securities to which a holder of the number of shares of Common
Stock subject to the unexercised portion of the Option would be entitled if he
actually owned such shares immediately prior to the record date or other time
any such event became effective; and (B) the dates upon which outstanding and
unexercised Options may be exercised may be advanced (without regard to
installment exercise limitations, if any). If the Committee believes that any
such event is reasonably likely to occur, the Committee may so revise, alter,
amend or modify as set forth above at any time before and contingent upon the
consummation of such an event.

TERMINATION AND AMENDMENT OF THE PLAN. No ISOs shall be granted under the
Plan more than ten years after the first to occur of (i) the date the Plan was
adopted by the Board or (ii) the date the Plan was approved by the stockholders
of the Company. The Board may at any time terminate, suspend or modify the Plan
without authorization of stockholders to the extent allowed by applicable law,
regulation or rule. No termination, suspension, or modification of the Plan may
adversely affect any right acquired by any participant under an Option granted
before the date of such termination, suspension or modification, unless such
participant shall consent. Any member of the Board who is an officer or employee
of the Company may not vote on any proposed amendment to the Plan, or on any
other matter which might affect that member's individual interest under the
Plan.

FEDERAL INCOME TAX CONSEQUENCES. The following discussion is only a summary
of the principal federal income tax consequences of the options to be granted
under the Plan, and is based on existing federal law (including administrative
regulations and rulings) which is subject to change, in some cases
retroactively. This discussion is also qualified by the particular circumstances
of individual optionees, which may substantially alter or modify the federal
income tax consequences herein discussed.

INCENTIVE STOCK OPTIONS. Generally under present law, when an option
qualifies as an ISO under Section 422 of the Code: (i) an optionee will not
realize taxable income either upon the grant or the exercise of the option,
(ii) any gain or loss upon a qualifying disposition of the shares acquired by
the exercise of the option will be treated as capital gain or loss, and
(iii) no deduction will be allowed to the Company for federal income tax
purposes in connection with the grant or exercise of an ISO or a qualifying
disposition of the shares. A disposition by an optionee of stock acquired upon
exercise of an ISO will constitute a qualifying disposition if it occurs more
than two years after the grant of the option, and one year after the transfer of
the shares to the optionee. If such stock is disposed of by the optionee before
the expiration of those time limits, the transfer would be a "disqualifying
disposition"

and the optionee, in general, will recognize ordinary income equal to the lesser
of (i) the aggregate fair market value of the shares as of the date of exercise
less the option price, or (ii) the amount realized on the disqualifying
disposition less the option price. The Company would become entitled to a
corresponding deduction. Ordinary income from a disqualifying disposition will
constitute ordinary compensation income. Any gain in addition to the amount
reportable as ordinary income on a "disqualifying disposition" generally will be
capital gain. Upon the exercise of an ISO, the difference between the fair
market value of stock on the date of exercise and the option price generally is
treated as an adjustment to taxable income in that taxable year for alternative
minimum tax purposes, as are a number of other items specified by the Code. Such
adjustments (along with tax preference items) form the basis for the alternative
minimum tax (presently at a graduated rate for individuals), which may apply
depending on the amount of the computed "regular tax" of the employee for that
year. The Company does not obtain a deduction as a result of an optionee
incurring the alternative minimum tax.

NON-QUALIFIED STOCK OPTIONS. In the case of NSOs, no income generally is
recognized by the optionee at the time of grant. Under present law the optionee
generally will recognize ordinary income at the time the NSO is exercised equal
to the aggregate fair market value of the shares acquired less the option price.
Ordinary income from an NSO will constitute compensation for services. Subject
to special rules applicable when an optionee uses stock of the Company to
exercise an option, shares acquired upon exercise of an NSO will have a tax
basis equal to their fair market value on the exercise date or other relevant
date on which ordinary income is recognized and the holding period for the
shares generally will begin on the date of exercise or such other relevant date.
Upon subsequent disposition of the shares, the optionee generally will recognize
capital gain or loss. Provided the shares are held by the optionee for more than
one year prior to disposition, such gain or loss will be long-term capital gain
or loss. The Company will generally be entitled to a deduction equal to the
ordinary income (i.e., compensation) recognized by the optionee in connection
with the exercise of an NSO provided the Company complies with any withholding
requirements of federal and state law.

RESTRICTIONS ON DEDUCTIONS. Not every amount paid as compensation for
services is currently deductible. For example, depending upon the services
rendered, some compensation payments must be capitalized or added to inventory
costs. Two other restrictions under the Code potentially applicable to
deductions for executive compensation payments are the restriction on the
deduction of so-called "excess parachute payments" (and the imposition of a 20%
excise tax on the recipient thereof) and the deduction limit of $1,000,000 per
year for certain executive compensation. Whether any such restrictions will
apply to specific payments of compensation by the Company cannot be predicted at
this time.

EFFECT OF AMENDMENT. The Plan Amendment will have no effect upon the tax
consequences to Key Employees or the Company.

PLAN BENEFITS. The benefits and amounts that will be received by each of
the Named Executives, the executive officers as a group and all other key
management employees under the Plan are not presently determinable. 242,000
stock options were granted to the Named Executives during 2000 and are reflected
in the Summary Compensation Table, that total includes 120,000 options granted
to the Named Executives in December 2000 as part of the 2001 compensation
package.

AMENDMENT OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION

The Company's Restated Certificate of Incorporation authorizes the Company
to issue 20,000,000 shares of common stock, par value $0.01 per share, and
5,000,000 shares of preferred stock, par value $0.01 per share. The Board deems
it to be in the best interest of the Corporation to increase the number of
shares of common stock of the Corporation and to amend the Corporation's
Restated Certificate of Incorporation to increase the number of authorized
shares of the Corporation's common stock to 50,000,000, par value $0.01. The
amount of preferred stock will remain at 5,000,000 shares, par value $0.01.

The Board believes that the amount of common stock presently authorized is
insufficient to enable the Company to have the flexibility to take advantage of
business or financing opportunities that may arise. The Board believes the
ability of the Company to provide warrants was an important component in the
recent Master Services Agreement between the Company and Hilton Hotels
Corporation, which positioned the Company for continued future growth on
favorable financial terms. Additional authorized common stock will also allow
the Board to declare appropriate stock splits and to take other actions as the
Board deems in the best interest of the stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
APPROVAL OF THE AMENDMENT

RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

Arthur Andersen LLP has served as independent public accountants for the
Company and its predecessors since 1991. Services provided by Arthur Andersen
LLP consist of the examination of the consolidated financial statements of the
Company and its affiliates, limited assistance and consultation in connection
with filings with the SEC, and certain other non-audit professional services.

It is anticipated that representatives of Arthur Andersen LLP will be
present at the Meeting to respond to appropriate questions and to comment on the
Company's consolidated financial statements.

The Board of Directors has appointed Arthur Andersen LLP as the Company's
independent public accountants for the current fiscal year and the stockholders
are being asked to ratify such appointment. The affirmative vote of the holders
of at least a majority of the outstanding shares of the Company's Common Stock
represented and voting at the Meeting will be required for passage of this
proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPOINTMENT OF ARTHUR
ANDERSEN LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2001.

ANNUAL REPORT

The Company's Annual Report for the fiscal year ended December 31, 2000
accompanies this Proxy Statement. The Annual Report contains consolidated
financial statements of the Company and its subsidiaries and the report thereon
of Arthur Andersen LLP, the Company's independent public accountants.
Stockholders may obtain without charge a copy of the Company's annual report on
Form 10-K including financial statements required to be filed with the SEC
pursuant to the Exchange Act for the fiscal year ended December 31, 2000 by
writing to the Company at 3900 West Innovation Street, Sioux Falls, South Dakota
57107, Attention: Stockholder Relations.

PROPOSALS OF STOCKHOLDERS

Under certain circumstances, stockholders are entitled to present proposals
at stockholder meetings. The 2002 Annual Meeting of Stockholders will be held on
or about May 8, 2002. Proposals of stockholders intended to be included in the
proxy materials for the 2001 Annual Meeting of Stockholders must be received by
the Secretary of the Company, 3900 West Innovation Street, Sioux Falls, South
Dakota 57107, by December 6, 2001, in a form that complies with the Company's
Bylaws and applicable requirements.

OTHER BUSINESS

The Board of Directors knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Meeting. If,
however, other matters are properly brought before the Meeting, it is the
intention of the Proxyholders to vote the shares represented thereby on such
matters in accordance with the recommendations of the Board of Directors and
authority to do so is included in the Proxy.

DATED: April 16, 2001

By Order of the Board of Directors,

/s/ Daniel P. Johnson

Daniel P. Johnson
SECRETARY

EXHIBIT A
LODGENET ENTERTAINMENT CORPORATION
AUDIT COMMITTEE CHARTER

ROLE

The Audit Committee (the "Committee") of the LodgeNet Entertainment
Corporation ("LodgeNet" or the "Company") Board of Directors (the "Board")
assists the full Board in fulfilling the Board's responsibility for overseeing
the integrity and quality of the Company's accounting and reporting practices.

The Committee shall serve as an independent and objective monitor of the
Company's financial reporting policies and processes and of the Company's
systems of internal control. In that regard, the Committee shall maintain open,
objective communications among and between the Committee, the independent
accountants, financial and senior management, and the Board. In particular, the
Committee shall have the responsibility to review, assess and direct the
activities of the Company's independent accountants and to maintain open, direct
communications therewith.

The Committee is empowered to investigate any matter brought to its
attention, with full power and authority to retain and engage independent
counsel or other experts as necessary for the proper discharge of this
responsibility.

COMPOSITION AND INDEPENDENCE

The Committee shall be comprised of three or more directors, as determined
by the Board, each of whom shall be independent directors, free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of the independent judgment of the Committee member. All members shall
have familiarity with basic finance and accounting practices, and at least one
member shall have relevant financial and/or accounting management expertise.

Members of the Committee shall be appointed by the Board in accordance with
the By-laws of the Company. Unless a Chair is elected by the Board, the
Committee shall designate a Chair by majority vote of the full Committee
membership.

MEETINGS

The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. At least once annually, the Committee shall meet in
separate sessions with each of financial management, senior management and the
independent accountants so as to permit each such group the opportunity to
address matters that should be discussed privately. The Committee, or at least
its Chair, shall meet with financial management quarterly to review the
Company's financial results, financial reporting thereof and other accounting
and reporting matters.

RESPONSIBILITIES (not in priority order):

1. Obtain approval of the Charter by the Board and review this Charter
annually or as deemed necessary and revise as considered appropriate.

2. Review the Company's quarterly and annual financial statements.

3. Review stock exchange certifications, proxy statement disclosures and
other filings related to the Committee or its activities.

4. Ensure that quarterly and annual financial reports are reviewed by the
independent accountants.

A-1

5. Review any and all reports to management by the independent accountants,
including management responses thereto, if any.

6. Assess, evaluate and make recommendations to the Board as to the
selection and engagement of the independent accountants, including
approval of the scope and rigor of the audit process and approval of fees
and compensation.

7. At least annually, request and obtain a written statement from the
independent accountants which delineates all relationships between the
independent accountants and the Company which may affect objectivity and
independence and confirms that the independent accountants are ultimately
responsible to the Board and the Committee. Ensure that any relevant
matters relating to the independent auditors objectivity and independence
is discussed, and recommendations to the full Board regarding appropriate
action to address the auditor's independence.

8. Periodically consult with the independent accountants, out of the
presence of management, as to the integrity of the Company's internal
controls, the access to information and cooperation provided by
management to the independent accountants, and the quality and integrity
of the Company's accounting and reporting practices including compliance
with Staff Accounting Bulletin 99.

9. Review with management and the independent accountants the extent to
which changes or improvements in financial or accounting practices, as
requested or approved by the Committee, have been implemented.

10. Review with management and the independent accountants any significant
risks and exposures of the Company and management's steps to minimize
them.

11. Review with management and/or counsel and assess related party
transactions for conflicts of interest.

12. Periodically review the status, with management and/or counsel, of
pending litigation, taxation matters, regulatory requirements and
compliance, compliance with corporate policies and other areas of legal
and compliance oversight.

13. Perform any other activities consistent with this Charter, the Company's
By-laws, and Delaware Corporation Law as the Committee or the Board deem
appropriate.

14. Report on Committee activities to the full Board at each meeting of the
full Board.

A-2

PROXY PROXY

LODGENET ENTERTAINMENT CORPORATION

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD MAY 9, 2001

The undersigned hereby appoints Mr. Scott C. Petersen and Mr. John M.
O'Haugherty, and each of them, the attorneys, agents and proxies of the
undersigned, with full powers of substitution to each (the "Proxies"), to
attend and act as proxy or proxies of the undersigned at the Annual Meeting
of Stockholders (the "Annual Meeting") of LodgeNet Entertainment Corporation
(the "Company") to be held at the Company's Headquarters and Distribution
Center, 3900 W. Innovation Street, Sioux Falls, South Dakota 57107 on
Wednesday, May 9, 2001 at 9:00 a.m. Central Daylight Time or any adjournment
thereof, and to vote as specified herein the number of shares which the
undersigned, if personally present, would be entitled to vote.

This Proxy when properly executed will be voted as specified. If no
instruction is specified with respect to a matter to be acted upon, the
shares represented by the Proxy will be voted "FOR" the election of Mr.
Lawrence Flinn, Jr. and Mr. Scott C. Petersen; "FOR" approval of the
Amendment to the Company's 1993 Stock Option Plan (the "Plan"); "FOR"
approval of the Amendment to the Company's Restated Certificate of
Incorporation; and "FOR" the ratification of Arthur Andersen LLP as the
Company's independent public accountants for the fiscal year ending December
31, 2001. If any other business is presented at the Annual Meeting, this
Proxy confers authority to and shall be voted in accordance with the
recommendation of the Board of Directors. This Proxy is solicited on behalf
of the Board of Directors and may be revoked prior to its exercise by filing
with the Corporate Secretary of the Company a duly executed proxy bearing a
later date or an instrument revoking this Proxy, or by attending and electing
to vote in person.

PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)

LODGENET ENTERTAINMENT CORPORATION

PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY /X/

For all (Except
For Withheld Nominees written below) For Against Abstain
1. ELECTION OF DIRECTORS FOR A TERM / / / / / / 2. To approve the Plan Amendment. / / / / / /
OF 3 YEARS--
NOMINEES: 01 Lawrence Flinn, Jr., For Against Abstain
02 Scott C. Petersen 3. To approve the Amendment to the / / / / / /
Company's Restated Certificate
of Incorporation.
For Against Abstain

4. To ratify the appointment of / / / / / /
Arthur Andersen LLP as the
Company's Independent public
accountants for the fiscal
year ending December 31, 2001.

In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the Annual
Meeting and any and all adjournments thereof. The Board of
Directors at present knows of no other business to be presented
by or on behalf of the Company or the Board of Directors at the
Annual Meeting.

Dated_______________________, 2001

Signature(s)________________________________

Signature(s)________________________________
Please sign exactly as name appears hereon.
Joint owners should each sign. Where
applicable, indicate official position or
representative capacity.
________________________________________________________________________________________________________________________________
^ FOLD AND DETACH HERE ^

PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE