<PAGE>

                       LODGENET ENTERTAINMENT CORPORATION

                                STOCK OPTION PLAN

                            (As Amended and Restated
                           Effective August 15, 1996)


<PAGE>

                               TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
1.   Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.   Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

3.   Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

4.   Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

5.   Grants to Non-Employee Directors. . . . . . . . . . . . . . . . . . . . . 3
     (a)  Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
     (b)  NSOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
     (c)  Termination of Service . . . . . . . . . . . . . . . . . . . . . . . 3
     (d)  Payment of Director's Fees in Securities . . . . . . . . . . . . . . 3

6.   Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

7.   Required Terms and Conditions of ISOs . . . . . . . . . . . . . . . . . . 4
     (a)  Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
     (b)  Maximum Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
     (c)  Time of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . 5
     (d)  Value of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
     (e)  Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

8.   Required Terms and Conditions of NSOs . . . . . . . . . . . . . . . . . . 6

9.   Expiration of Options Granted to Key Employees; Termination of
     Employment, Disability, Death, Retirement, or Occurrence of Specified
     Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
     (a)  General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
     (b)  Expiration Upon Termination of Employment. . . . . . . . . . . . . . 6
     (c)  Expiration Upon Disability or Death. . . . . . . . . . . . . . . . . 7
     (d)  Expiration Upon Retirement . . . . . . . . . . . . . . . . . . . . . 7
     (e)  Expiration Upon Occurrence of Specified Events . . . . . . . . . . . 8

10.  Method of Exercise of Options . . . . . . . . . . . . . . . . . . . . . . 9

11.  Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10

12.  Terms and Conditions of Options . . . . . . . . . . . . . . . . . . . .  12

13.  Non-Transferability . . . . . . . . . . . . . . . . . . . . . . . . . .  13

14.  Indemnification of the Committee. . . . . . . . . . . . . . . . . . . .  13

15.  No Contract of Employment . . . . . . . . . . . . . . . . . . . . . . .  14

16.  Termination and Amendment of the Plan . . . . . . . . . . . . . . . . .  14

17.  Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

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18.  Leaves of Absence . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

19.  Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

20.  Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

21.  Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

22.  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16































                                       -ii- 
<PAGE>

                       LODGENET ENTERTAINMENT CORPORATION
                                STOCK OPTION PLAN
                            (As Amended and Restated
                           Effective August 15, 1996)

1.   Purpose

     LodgeNet Entertainment Corporation, a Delaware corporation (the
     "Corporation"), adopted the LodgeNet Entertainment Corporation Stock Option
     Plan, effective as of August 16, 1993.

     The purpose of the LodgeNet Entertainment Corporation Stock Option Plan
     (the "Plan") is to enable the Corporation and its subsidiaries to attract,
     retain, and reward key managerial employees ("Key Employees") and certain
     non-employee members of the board of directors ("Board") of the Corporation
     ("Non-Employee Director") by offering them an opportunity to have a greater
     proprietary interest in and closer identity with the Corporation and with
     its financial success.  An option granted under the Plan to a Key Employee
     to purchase shares of the Corporation's common stock, $0.01 par value
     ("Common Stock"), may be an incentive stock option ("ISO") as defined in
     Section 422 of the Internal Revenue Code of 1986 as heretofore or hereafter
     amended ("Code") or a nonqualified stock option ("NSO") (collectively
     referred to as "Options").  An Option that is not an ISO shall be an NSO. 
     Proceeds received by the Corporation from the sale of shares of Common
     Stock pursuant to Options granted under the Plan shall be used for general
     corporate purposes.  This amendment and restatement of the Plan
     incorporates amendments adopted in 1995 and 1996 as well as amendments that
     bring the Plan into compliance with Rule 16b-3 and permit Non-Employee
     Directors to elect to receive their fees in NSOs and/or shares of Common
     Stock.

2.   Administration

     The Plan shall be administered by the Compensation Committee of the Board
     ("Committee") that shall satisfy the requirements of Rule 16b-3 with
     respect to grants to executive officers and members of the Board.  Subject
     to the express provisions of the Plan, the Committee may interpret the
     Plan, prescribe, amend and rescind rules and regulations relating to it,
     determine the terms and provisions of the respective Option Agreements
     (which need not be identical) and make such other determinations as it
     deems necessary or advisable for the administration of the Plan.  The
     Committee may delegate decisions with respect to Options to Key Employees
     who are not executive officers or members of the Board to such executive
     officer or officers of the Corporation as the Committee determines.  The
     decisions of the Committee and its delegatee(s) under the 

                                       -1- 
<PAGE>

     Plan shall be conclusive and binding.  No member of the Board or the 
     Committee or any of its delegatee(s) shall be liable for any action taken 
     or determination made in good faith.

3.   Eligibility

     Key Employees who have been selected by the Committee to receive an Option
     shall participate in the Plan.  Certain Non-Employee Directors shall
     participate in the Plan through grants of NSOs and shares of Common Stock
     pursuant to Section 5 hereof and discretionary grants of NSOs pursuant to
     Section 8 hereof.  (Key Employees and Non-Employee Directors who
     participate in the Plan shall be collectively referred to as
     "Participants").  The Committee shall determine, within the limits of the
     express provisions of the Plan, those Participants to whom, and the time or
     times at which, Options shall be granted.  The Committee shall also
     determine, with respect to Options to Participants, the number of shares of
     Common Stock to be subject to each such Option: the type of Options (ISO or
     NSO); the duration of each Option; the exercise price under each Option;
     the time or times within which (during the term of the Option) all or
     portions of each Option may be exercised; whether cash.  Common Stock 
     Options or other property may be accepted in full or partial payment upon
     exercise of an Option; and any other terms and conditions of such Options. 
     In making such determinations, the Committee may take into account the
     nature of the services rendered by the Participant, his present and
     potential contributions to the Corporation's success and such other factors
     as the Committee in its discretion shall deem relevant.

4.   Common Stock

     The total number of shares of Common Stock that may be subject to Options
     (including ISOs) under the Plan shall be 1,000,000 shares.  Such total
     number of shares shall be adjusted in accordance with the provisions of
     Section 11 hereof, and a share of Common Stock subject to an Option shall
     only be counted once.  Such shares may be either authorized but unissued
     shares or reacquired shares.  In the event that any Option granted under
     the Plan expires unexercised or is terminated, surrendered or cancelled
     without being exercised in whole or in part, for any reason, then the
     number of shares of Common Stock theretofore subject to such Option, or the
     unexercised, terminated, surrendered, or canceled portion thereof, shall be
     added to the remaining number of shares of Common Stock that may be made
     subject to Options under the Plan.

                                       -2- 
<PAGE>

5.   Grants to Non-Employee Directors

     (a)  Grants

          Each individual who becomes a Non-Employee Director of the Company
          shall automatically be granted an Option on the date of his or her
          initial election or appointment to the Board of Directors consisting
          of an NSO to purchase 6,000 shares of Common Stock, and an automatic
          grant of an NSO to purchase an additional 6,000 shares of Common Stock
          on each anniversary of such election or appointment during the term of
          service.

     (b)  NSOs

          The per share exercise price of each NSO granted to a Non-Employee
          Director shall be 100 percent of the Fair Market Value (hereinafter
          defined) of a share of Common Stock on the date of grant.  Subject to
          the provisions of subsection (c) of this Section, 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.  Payment of the exercise price of each such
          NSO shall be made (i) in cash or (ii) in Common Stock valued at its
          Fair Market Value on the date of exercise or by a combination of (i)
          and (ii), as determined by the Non-Employee Director to whom the NSO
          is granted at the time of exercise.

     (c)  Termination of Service

          If the service of a Non-Employee Director as a member of the Board
          terminates for any reason other than (i) due to disability (as
          determined by the Committee), retirement on or after age sixty-five,
          or death, or (ii) following an event described in subsection 11(b),
          all unexercised NSOs granted to him at any time prior to such
          termination shall expire ninety days after the date of such
          termination.

     (d)  Payment of Director's Fees in Securities

          Effective May 8, 1996, a Non-Employee Director may elect to receive
          his or her annual retainer payments and meeting fees from the
          Corporation in the form of cash, NSOs, shares of Common Stock, or a
          combination thereof.  Such NSOs and shares of Common Stock shall be
          issued under the Plan.  An election under this Section 5(d) shall be
          filed with the Corporation in the prescribed manner and by the
          deadline established by the Committee.  The election shall apply only
          to 

                                       -3- 
<PAGE>

          annual retainers and meeting fees payable after such form has been
          received by the Corporation.

     The number of NSOs and/or shares of Common Stock to be granted to Outside
     Directors in lieu of annual retainers and meeting fees that would otherwise
     be paid in cash shall be calculated in a manner determined by the Board. 
     The terms of such NSOs shall also be determined by the Board.

6.   Options

     The following provisions shall apply to each Option granted to a Key
     Employee:

     (a)  Options may be granted to Key Employees at any time and from time to
          time as shall be determined by the Committee.  The Committee shall
          have complete discretion in determining the number of shares of Common
          Stock subject to Options granted to each Key Employee.  The Committee
          may grant any type of Option to purchase Common Stock that is
          permitted by law at the time of the grant, including ISOs.

     (b)  Each Option shall be evidenced by a written agreement specifying the
          type of Option granted, the Option exercise price, the terms for
          payment of the exercise price, the duration of the Option and the
          number of shares of Common Stock to which the Option pertains (the
          "Option Agreement").  An Option Agreement may also contain a vesting
          schedule, a non-competition agreement, a confidentiality provision,
          provisions for forfeiture in the event of termination of the Key
          Employee's employment by the Corporation for Cause (hereinafter
          defined) or termination of the Key Employee's employment by the Key
          Employee without Good Reason (hereinafter defined), and such
          restrictions and conditions and other terms as the Committee shall
          determine.  Option Agreements need not be identical.

     (c)  The Committee, in its discretion, shall have the power to accelerate
          the dates for exercise of any or all Options, or any part thereof,
          granted to a Key Employee under the Plan.

7.   Required Terms and Conditions of ISOs

     The provisions of each ISO granted to a Key Employee under this Section 7
     shall be interpreted in a manner consistent with Section 422 of the Code
     and with all regulations issued thereunder.  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, subject to the general provisions of 

                                       -4- 
<PAGE>

     the Plan, Section 422 of the Code, the applicable Option Agreement and the
     following specific rules:

     (a)  Exercise Price

          Except as otherwise provided, the per share exercise price of each ISO
          shall be at least 100 percent of the Fair Market Value of the Common
          Stock at the time such ISO is granted, 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 Corporation or its
          parent or subsidiaries possessing more than 10 percent of the total
          combined voting power of all classes of stock of any such corporation,
          the exercise price shall be at least 110 percent of the Fair Market
          Value of the Common Stock subject to the ISO at the time such ISO is
          granted and the ISO by its terms shall not be exercisable after the
          expiration of five years from the date the ISO is granted.  In no
          event may the exercise price be less than the par value of the Common
          Stock subject to such ISO.

     (b)  Maximum Term

          Subject to earlier termination as provided in Section 9, each ISO
          shall expire on the date determined in the applicable Option Agreement
          at the time the ISO is granted, provided that no ISO shall be
          exercisable after the expiration of ten years from the date it is
          granted, except as otherwise provided in subsection (a) next above.

     (c)  Time of Exercise

          The Committee shall specify in the Option Agreement at the time each
          ISO is granted, the duration of each ISO and the time or times within
          which (during the term of the ISO) all or portions of each ISO may be
          exercised, except to the extent that other terms of exercise are
          specifically provided by other provisions of the Plan.

     (d)  Value of Shares

          The aggregate Fair Market Value (determined at the time of grant) of
          Common Stock with respect to which ISOs are exercisable for the first
          time by a Key Employee during any calendar year (under all option
          plans of the Corporation or of a corporation which, at the time such
          ISO was granted, is a parent or subsidiary of the Corporation, or is a
          predecessor corporation of any such corporation) shall not exceed
          $100,000.  If the aggregate Fair Market Value (determined at the time
          of grant) of the stock subject 

                                       -5- 
<PAGE>

          to an Option, which first becomes exercisable in any calendar year 
          exceeds the limitation of this subsection, so much of the Option that
          does not exceed the applicable dollar limit shall be an ISO and the 
          remainder shall be an NSO; but in all other respects, the original 
          Option Agreement shall remain in full force and effect.

     (e)  Conversion

          The Committee may, in its sole discretion, cause the Corporation to
          convert an ISO to an NSO upon such terms and conditions and in such
          manner as the Committee deems equitable.

8.   Required Terms and Conditions of NSOs

     Notwithstanding anything to the contrary in the Plan, the terms and
     conditions applicable to NSOs granted to Participant's (including Non-
     Employee Directors, other than grants pursuant to Section 5(a)) pursuant to
     the Plan (which need not be identical) and the Option Agreements relating
     thereto shall be determined by the Committee and the Committee shall make
     such other determinations as it deems necessary or advisable for the
     administration of NSOs granted under the Plan, including prescribing,
     amending and rescinding rules and regulations relating to NSOs and
     converting NSOs granted outside the Plan into NSOs under the Plan with the
     consent of the holder of any such Option.

9.   Expiration of Options Granted to Key Employees; Termination of Employment,
     Disability, Death, Retirement, or Occurrence of Specified Events

     (a)  General Rule

          Except with respect to Options expiring pursuant to subsection 9(b),
          (c) or (d) below, each Option granted to a Key Employee shall, unless
          sooner expired pursuant to subsection 9(e) below, expire on the
          expiration date or dates set forth in the applicable Option Agreement.
          Each Option expiring pursuant to subsection 9(b), (c) or (d) below
          shall expire on the date set forth in subsection 9(b), (c) or (d)
          notwithstanding any restrictions and conditions that may be contained
          in a Key Employee's Option Agreement.

     (b)  Expiration Upon Termination of Employment

          An Option granted to a Key Employee shall expire on the first to occur
          of (i) the applicable date or dates determined pursuant to subsection
          9(a) or (ii) the date that the employment of the Key Employee with the
          Corporation or its subsidiaries terminates for any 

                                       -6- 
<PAGE>

          reason other than death or disability pursuant to subsection 9(c), 
          retirement pursuant to subsection 9(d), or pursuant to subsection 
          9(e).  Notwithstanding the preceding provisions of this subsection
          9(b), the Committee, in its sole discretion, may permit a Key 
          Employee (i) to exercise an Option that is exercisable immediately 
          prior to the termination of employment, notwithstanding any 
          restrictions and conditions that may be contained in his Option 
          Agreement, during a period not to exceed ninety days following his 
          termination of employment, and/or (ii) to exercise an Option that 
          becomes exercisable after termination of employment and prior to the 
          termination of such ninety-day period, during such period.  In no 
          event, however, may the Committee permit such Key Employee to exercise
          all Option under this subsection 9(b) after the expiration date or 
          dates set forth in the applicable Option Agreement.

     (c)  Expiration Upon Disability or Death

          If the employment of a Key Employee with the Corporation 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 his 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
          person specified in Section 10, with respect to the same number of
          shares and in the same manner and to the same extent as if the Key
          Employee had continued as a full-time employee of the Corporation or
          its subsidiaries during such twelve-month period.  Any unexpired
          Option or portion thereof held by the Key Employee on the date of
          disability or death, that would expire pursuant to the terms of his
          Option Agreement on a date more than twelve months after the date of
          disability or death, shall expire unexercised on the date of
          disability on the date of disability or death.

     (d)  Expiration Upon Retirement

          If the employment of a Key Employee with the Corporation and its
          subsidiaries terminates due to retirement under any qualified
          retirement plan maintained by the Corporation and/or any of its
          subsidiaries, his Option shall expire on the earlier to occur of
          (i) the applicable expiration date or 

                                       -7- 
<PAGE>

          dates set forth in the applicable Option Agreement(s) or (ii) the 
          third anniversary of the date of such termination of employment.  It
          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.  During
          the period commencing on the date of retirement or death, as the case 
          may be, and ending on the applicable later expiration date, the 
          Options may be exercised by such Key Employee, or the person specified
          in Section 10, with respect to the same number of shares and in the 
          same manner and to the same extent as if the Key Employee had 
          continued as a full-time employee of the Corporation or its 
          subsidiaries during such period.

     (e)  Expiration Upon Occurrence of Specified Events

          If, within two years after the occurrence of any event described in
          subsection 11(b), the employment of a Key Employee with the
          Corporation and its subsidiaries terminates voluntarily for Good
          Reason, or involuntarily for any reason other than for Cause, or due
          to the death, disability (as determined by the Committee) or
          retirement (as defined in subsection (d)) of a Key Employee, and if
          such event described in subsection 11(b) does not have the prior
          written approval of a majority of the Continuing Directors, the dates
          upon which his outstanding Options may be exercised shall be advanced
          to the date of termination.  In such event, not later than ninety 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 in accordance
          with the terms of Section 10, notwithstanding any restrictions and
          conditions that may be contained in his Option Agreement.  For
          purposes of the preceding sentence an event described in subsection
          11(b) shall not have the prior written approval of a majority of the
          Continuing Directors unless, in the case of an event described in
          subsection 11(b)(i) or (iii), such approval occurs before the time of
          such event, and, in the case of an event described in subsection
          11(b)(ii), such approval occurs before the time that any person
          (including any Affiliate or Associate) directly or indirectly acquires
          or becomes entitled to vote 20 percent or more of the Voting Power of
          the Corporation.  Notwithstanding any of the provisions of this
          subsection 9(e), if the employment of a Key Employee with the
          Corporation or its subsidiaries terminates under conditions which meet
          the requirements of either subsection 9(c) (as to death or disability)
          or (d) (as to retirement) and this subsection 9(e), then such Key


                                       -8- 
<PAGE>

          Employee, or the person specified in Section 10, within thirty days
          following the date of his termination, may elect, by giving written
          notice to the Secretary of the Corporation, to have the provisions of
          either subsection 9(c) (as to death or disability) or (d) (as to
          retirement) or this subsection (e) apply to his Options.  For purposes
          of the Plan:  (i) termination for "Cause" shall mean termination of
          his employment by the Corporation or any subsidiary because of (A) the
          Key Employee's dishonesty, fraud or breach of trust or substantial
          nonperformance of, his duties, (B) any act or omission by the Key
          Employee that is a substantial cause for a regulatory body with
          jurisdiction over the Corporation or any of its subsidiaries to
          request or recommend the suspension or removal of the Key Employee or
          to impose sanctions upon the Corporation or the Key Employee, or (C) a
          material breach by the Key Employee of any applicable employment
          agreement between him and the Corporation or any of its subsidiaries,
          (ii) termination with "Good Reason" shall mean termination of his
          employment by a Key Employee because, without his express written
          consent, (A) the Corporation or any subsidiary materially breaches any
          of the terms of an employment agreement between the Corporation or any
          of its subsidiaries and the Key Employee, (B) the Key Employee is
          assigned duties materially inconsistent with his position, duties, and
          status as of the date immediately preceding the date of termination,
          or (C) the Corporation or any subsidiary substantially reduces the Key
          Employee's fixed annual salary or his benefits under the Corporation's
          or a subsidiary's qualified retirement or welfare plans so that, when
          considered m the aggregate and with any substitute plan or plans, his
          aggregate compensation is at a lower level than at the commencement of
          the term of employment, and (iii) "Continuing Director" shall mean a
          person who was a member of the Board elected by the stockholders prior
          to the occurrence of any event described in subsection 11(b).

10.  Method of Exercise of Options

     Any Option granted under the Plan may be exercised by the Participant, by a
     legatee or legatees of such Option under the Participant's last will, by
     his executors, personal representatives or distributees, or by his assignee
     or assignees as provided in Section 13 below, by delivering to the
     Secretary of the Corporation written notice of the number of shares of
     Common Stock with respect to which the Option is being exercised,
     accompanied by full payment to the Corporation of the exercise price of the
     shares being purchased under the Option, and by satisfying, all other

                                       -9- 
<PAGE>

     conditions provided for in the Plan Except as otherwise provided in the
     Plan or in any Option Agreement, the exercise price of Common Stock upon
     exercise of any Option by a Key Employee shall be paid in full (i) in cash,
     (ii) in Common Stock valued at its Fair Market Value on the date of
     exercise, (iii) in cash by a broker-dealer to whom the holder of the Option
     has submitted an exercise notice consisting of a fully endorsed Option,
     (iv) by agreeing to surrender Options then exercisable by him valued at the
     excess of the aggregate Fair Market Value of the Common Stock subject to
     such Options on the date of exercise over the aggregate option price of
     such Common Stock, (v) by directing the Corporation to withhold such number
     of shares of Common Stock otherwise issuable upon exercise of such Option
     having an aggregate Fair Market Value on the date of exercise equal to the
     exercise price of the Option or (vi) by such other medium of payment as the
     Committee, in its discretion, shall authorize or by any combination of (i),
     (ii), (iii), (iv) and (v), at the discretion of the Committee or in any
     manner provided in the Option Agreement.  The Corporation shall issue, in
     the name of the Participant (or, if applicable, the legatee(s),
     executor(s), personal representative(s), or distributee(s) of a deceased
     Participant, or the assignee(s) as provided in Section 13), stock
     certificates representing the total number of shares of Common Stock
     issuable pursuant to the exercise of any Option as soon as reasonably
     practicable after such exercise, provided that any Common Stock purchased
     by a Key Employee through a broker-dealer pursuant to clause (iii) above
     shall be delivered to such broker-dealer in accordance with 12 C.F R. Sec.
     220.3(e)(4).

11.  Adjustments

     (a)  Appropriate adjustment in the maximum number of shares of Common Stock
          issuable pursuant to the Plan, the number of shares subject to Options
          under the Plan and the exercise price with respect to Options shall be
          made to give effect to any increase or decrease in the number of
          shares of issued Common Stock resulting from a subdivision or
          consolidation of shares whether through reorganization,
          recapitalization, stock split, reverse stock split, spin-off, split-
          off, spin-out, or other distribution of assets to stockholders, stock
          distributions or combination of shares, assumption and conversion of
          outstanding Options due to an acquisition by the Corporation of the
          stock or assets of any other corporation, payment of stock dividends,
          other increase or decrease in the number of such shares outstanding
          effected, without receipt of consideration by the Corporation, or any
          other occurrence for which the Committee determines an adjustment is
          appropriate; provided, however, that no 

                                       -10- 
<PAGE>

          adjustment in the number of shares with respect to which Options 
          may be granted under the Plan, or in the number of shares subject to
          outstanding Options shall be made except in the event, and then only
          to the extent that such adjustment together with all respective prior
          adjustments which were not made as a result of this provision, involve
          a net change of more then ten percent (i) from the number of shares of
          Common Stock with respect to which Options may be granted under the 
          Plan, or (ii) with respect to each outstanding Option, from the 
          respective number of shares of Common Stock subject thereto on the 
          date of grant thereof.  The decision of the Committee as to the amount
          and timing of any such adjustments shall be conclusive.

     (b)  In the event that:

          (i)  any person (as such term is used in Section 13 of the Securities
               Exchange Act of 1934 and the rules and regulations thereunder and
               including any Affiliate or Associate of such person, as defined
               in Rule 12b-2 under said Act, and any person acting in concert
               with such person) directly or indirectly acquires or otherwise
               becomes entitled to vote more than 50 percent of the voting power
               entitled to be cast at elections for directors ("Voting Power")
               of the Corporation; or

          (ii) there occurs any merger or consolidation of the Corporation, or
               any sale, lease or exchange of all or any substantial part of the
               consolidated assets of the Corporation and its subsidiaries to
               any other person and (A) in the case of a merger or
               consolidation, the holders of outstanding stock of the
               Corporation 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
               percent or more of the Voting Power of the Corporation) hold less
               than 80 percent 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 Corporation does not own at
               least 50 percent of the Voting Power of the other person; or

        (iii)  one or more new directors of the Corporation 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;

                                       -11- 
<PAGE>

          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)  subject to subsection 7(d), 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.

     (c)  In the case of dissolution of the Corporation, every Option granted to
          a Key Employee outstanding hereunder shall terminate notwithstanding
          any restrictions and conditions that may be contained in his Option
          Agreement Each such Option holder shall have thirty days prior written
          notice of such event, during which time he shall have a right, subject
          to subsection 7(d), to exercise his partly or wholly unexercised
          Option (without regard to installment exercise limitations, if any).

     (d)  On the basis of information known to the Corporation, the Committee
          shall make all determinations relating to the applicability and
          interpretation of this Section 11, and all such determinations shall
          be conclusive and binding.

12.  Terms and Conditions of Options

     (a)  Each Key Employee shall agree to such restrictions and conditions and
          other terms in connection with the exercise of an Option, including
          restrictions and conditions on the disposition of the Common Stock
          acquired upon the exercise thereof, as the Committee may deem
          appropriate.  The certificates delivered to a Participant evidencing
          the shares of Common Stock 

                                       -12- 
<PAGE>

          acquired upon exercise of an Option may bear a legend referring to 
          the restrictions and conditions and other terms contained in the 
          respective Option Agreement and the Plan, and the Corporation may 
          place a stop transfer order with its transfer agent against the 
          transfer of such shares.  If requested to do so by the Committee at 
          the time of exercise of an Option, each Participant shall execute a 
          written instrument stating that he is purchasing the Common Stock for
          investment and not with any present intention to sell the same.

     (b)  The obligation of the Corporation to sell and deliver Common Stock
          under the Plan shall be subject to all applicable laws, regulations,
          rules and approvals, including, but not by way of limitation, the
          effectiveness of a registration statement under the Securities Act of
          1933, if deemed necessary or appropriate by the Committee, of the
          Common Stock, Options, and other securities reserved for issuance or
          that may be offered under the Plan.  A Participant shall have no
          rights as a stockholder with respect to any shares covered by an
          Option granted to, or exercised by, him until the date of delivery of
          a stock certificate to him for such shares.  No adjustment other than
          pursuant to Section 11(a) hereof shall be made for dividends or other
          rights for which the record date is prior to the date such stock
          certificate is delivered.

13.  Non-Transferability

     Except as provided in the applicable Option Agreement, Options granted
     under the Plan and any rights and privileges pertaining thereto, may not be
     transferred assigned, pledged or hypothecated in any manner, by operation
     of law or otherwise, other than by will or by the laws of descent and
     distribution and shall not be subject to execution, attachment or similar
     process.  The granting of an Option shall impose no obligation upon the
     applicable Participant to exercise such Option.

14.  Indemnification of the Committee

     In addition to such other rights of indemnification as they may have as
     members of the Board, or as members of the Committee, or as its delegatees,
     the members of the Committee and its delegatees shall be indemnified by the
     Corporation against (a) the reasonable expenses (as such expenses are
     incurred), including attorney' fees actually and necessarily incurred in
     connection with the defense of any action, suit or proceeding (or in
     connection with any appeal therein), to which they or any of them may be a
     party by reason of any action taken or failure to act under or in
     connection with the Plan or any Option granted 

                                       -13- 
<PAGE>

     hereunder; and (b) against all amounts paid by them in settlement thereof
     (provided such settlement is approved by independent legal counsel 
     selected by the Corporation) or paid by them in satisfaction of a judgment
     in any such action, suit or proceeding, except in relation to matters as to
     which it shall be adjudged in such action, suit or proceeding that such 
     Committee member or delegatee is liable for gross negligence or misconduct
     in the performance of his duties; provided that within sixty days after 
     institution of any such action suit or proceeding a Committee member or 
     delegatee shall in writing offer the Corporation the opportunity, at its 
     own expense, to handle and defend the same.

15.  No Contract of Employment

     Neither the adoption of the Plan nor the grant of any Option shall bc
     deemed to obligate the Corporation or any subsidiary to continue the
     employment of any Key Employee for any particular period, nor shall the
     granting of an Option Constitute a request or consent to postpone the
     retirement date of any Key Employee.

16.  Termination and Amendment of the Plan

     (a)  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
          Corporation.  The Board may at any time terminate, suspend or modify
          the Plan without the authorization of stockholders to the extent
          allowed by applicable law, regulation or rule.

     (b)  No termination, suspension or modification of the Plan shall 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; but it shall be conclusively
          presumed that any adjustment for changes in capitalization as provided
          for herein does not adversely affect any such right.  Any member of
          the Board who is an officer or employee of the Corporation shall be
          without vote on any proposed amendment to the Plan, or on any other
          matter which might affect that member's individual interest under the
          Plan.

17.  Withholding Taxes

     Whenever the Corporation proposes or is required to issue or transfer
     shares of Common Stock to a Participant under the Plan, the Corporation
     shall have the right to require the Participant to remit to the Corporation
     an amount sufficient to satisfy all federal, state and local 

                                       -14- 
<PAGE>

     withholding tax requirements prior to the delivery of any certificate or 
     certificates for such shares.  If such certificates have been delivered 
     prior to the time a withholding obligation arises, the Corporation shall
     have the right to require the Participant to remit to the Corporation an
     amount sufficient to satisfy all federal, state or local withholding tax
     requirements at the time such obligation arises and to withhold from other
     amounts payable to the Participant, as compensation or otherwise, as 
     necessary.  A Participant may elect to satisfy his tax withholding 
     obligation incurred with respect to the Taxable Date of an Option by (a)
     directing the Corporation to withhold a portion of the shares of Common 
     Stock otherwise distributable to the Participant, or (b) by transferring 
     to the Corporation a certain number of shares of previously owned Common 
     Stock, such shares being valued at the Fair Market Value thereof on the 
     Taxable Date.

18.  Leaves of Absence

     The Committee shall be entitled to make such rules, regulations and
     determinations as it deems appropriate under the Plan regarding any leave
     of absence taken by a Key Employee who is the recipient of any Option. 
     Without limiting the generality of the foregoing, the Committee shall be
     entitled to determine (a) whether or not any such leave of absence shall
     constitute a termination of employment within the meaning of the Plan, and
     (b) the impact, if any, of any such leave of absence on Options under the
     Plan theretofore made to any Key Employee who takes such leave of absence.

19.  Governing Law

     The Plan, and all agreements hereunder, shall be construed in accordance
     with and governed by the laws of the State of Delaware and, in the case of
     ISOs, Section 422 of the Code and regulations issued thereunder.

20.  Fair Market Value

     "Fair Market Value" as of a given date for all purposes of the Plan and any
     Option Agreement means (a) if the Common Stock is listed on a national
     security exchange, the average of the closing prices of the Common Stock on
     the Composite Tape for the ten consecutive trading days immediately
     preceding such given date; (b) if the Common Stock is traded on an exchange
     or market in which prices are reported on a bid and asked price, the
     average of the mean between the bid and the asked price for the Common
     Stock at the close of trading for the ten consecutive trading days
     immediately preceding such given date; and (c) if the Common Stock is not
     listed on a national securities exchange nor traded on the over-the-counter

                                       -15- 
<PAGE>

     market, such value as the Committee, in good faith, shall determine. 
     Notwithstanding any provision of the Plan to the contrary, no determination
     made with respect to the Fair Market Value of Common Stock subject to an
     ISO shall be inconsistent with Section 422 of the Code or regulations
     issued thereunder

21.  Successors

     In the event of a sale of substantially all of the assets of the
     Corporation, or a merger, consolidation or share exchange involving the
     Corporation, all obligations of the Corporation under the Plan with respect
     to Options granted hereunder shall be binding on the successor to the
     transaction.  Employment of a Key Employee with such a successor shall be
     considered employment of the Key Employee with the Corporation for purposes
     of the Plan.

22.  Notices

     Notices given pursuant to the Plan shall be in writing and shall be deemed
     received when personally delivered or five days after mailed by United
     States registered or certified mail, return receipt requested, addressee
     only, postage prepaid.  Notice to the Corporation shall be directed to:

               Corporate Secretary
               LodgeNet Entertainment Corporation
               808 West Avenue North
               Sioux Falls, South Dakota 57104

     Notices to or with respect to a Participant shall be directed to the
     Participant, or the executors, personal representatives or distributees of
     a deceased Participant, at the Participant's home address on the records of
     the Corporation.
















                                       -16-