LGL GROUP INC — Regulatory Filings 2005

Dec 29, 2005

S-8 1 forms803725_12232005.htm sec document As filed with the Securities and Exchange Commission on December 29, 2005 Registration No. 333-____ ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 --------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 LYNCH CORPORATION -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) INDIANA 38-1799862 ------- ---------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 140 GREENWICH AVENUE, 4TH FLOOR GREENWICH, CONNECTICUT 06830 ---------------------- ----- (Address of principal executive offices) (Zip Code) 2001 EQUITY INCENTIVE PLAN -------------------------------------------------------------------------------- (Full Title of Plan) JOHN C. FERRARA PRESIDENT AND CHIEF EXECUTIVE OFFICER LYNCH CORPORATION 140 GREENWICH AVENUE, 4TH FLOOR GREENWICH, CONNECTICUT 06830 ---------------------------- (Name and Address of Agent for Service) (203) 622-1150 -------------------------------------------------------------------------------- (Telephone Number, Including Area Code, of Agent For Service) COPY TO: David J. Adler, Esq. Olshan Grundman Frome Rosenzweig & Wolosky LLP Park Avenue Tower 65 East 55th Street New York, New York 10022 (212) 451-2300 ================================================================================ CALCULATION OF REGISTRATION FEE ======================= ================== ======================= ======================== ======================== TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF SECURITIES TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE FEE ----------------------- ------------------ ----------------------- ------------------------ ------------------------ Common Shares, $.01 300,000 $8.05 $2,415,000 $258.41 par value per share common shares ----------------------- ------------------ ----------------------- ------------------------ ------------------------ (1) Pursuant to Rule 416 of the Securities Act of 1933, as amended (the "Securities Act"), this Registration Statement also registers such indeterminate number of additional common shares that may be offered or issued pursuant to the anti-dilution provisions set forth in the 2001 Equity Incentive Plan. (2) No options relating to the 300,000 common shares that are being registered in this Registration Statement have been granted or issued, as the case may be. Pursuant to Rule 457(h) promulgated under the Securities Act, the offering price per share, solely for the purpose of calculating the registration fee, is based on $8.05, the average of the high and low prices of the common shares as reported by the American Stock Exchange ("AMEX") on December 28, 2005. EXPLANATORY NOTE On June 26, 2002, Lynch Corporation (the "Company") filed with the Securities Exchange Commission a Registration Statement on Form S-8 (File No. 333-91192) covering the registration of 300,000 shares of common stock authorized for issuance under our 2001 Equity Incentive Plan (the "Plan"). On May 26, 2005, the Company's stockholders approved a proposal to increase the number of shares available under the Plan to 600,000. This Registration Statement registers the additional 300,000 shares of the same class of Common Stock authorized for issuance under the Plan. Pursuant to General Instruction E to Form S-8, the contents of the prior registration statements set forth above relating to the Plan, and all periodic reports that the Company filed after such registration statements to maintain current information about the Company, are incorporated herein by reference. This Form S-8 includes a Reoffer Prospectus prepared in accordance with Part I of Form S-3 under the Securities Act. The Reoffer Prospectus may be utilized for reoffering and resales of up to 95,000 shares acquired pursuant to the Plan by selling shareholders, each of which may be deemed an "affiliate" (as such term is defined in Rule 405 under the Securities Act) of the Company. PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS The Company will provide documents containing the information specified in Part 1 of Form S-8 to employees as specified by Rule 428(b)(1) under the Securities Act. Pursuant to the instructions to Form S-8, the Company is not required to file these documents either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act. PROSPECTUS 95,000 COMMON SHARES LYNCH CORPORATION COMMON SHARES, $0.01 PAR VALUE PER SHARE This Prospectus relates to the reoffer and resale by certain selling shareholders of our common shares that we may issue to the selling shareholders through the issuance of shares or upon the exercise of stock options issued or granted under our 2001 Equity Incentive Plan, referred to as the Plan in this Prospectus. This Prospectus also relates to certain of our common shares or common shares underlying options that have not been issued or granted as the case may be under the Plan as of this date. If and when such shares are issued or options are granted to persons required to use the Prospectus to reoffer and resell the common shares, we will distribute a Prospectus supplement. The shares are being reoffered and resold for the account of the selling shareholders, and we will not receive any of the proceeds from the resale of the shares. The selling shareholders have advised us that the resale of their shares may be effected from time to time in one or more transactions on the American Stock Exchange, in negotiated transactions or otherwise, at market prices prevailing at the time of the sale or at prices otherwise negotiated. See "Plan of Distribution." We will bear all expenses in connection with the preparation of this Prospectus. Our common shares are listed on the American Stock Exchange under the symbol "LGL." The last reported sale price on the American Stock Exchange for our common shares on December 28, 2005 was $8.10 per share. Our principal executive offices are located at 140 Greenwich Avenue, 4th Floor, Greenwich, Connecticut 06830. Our telephone number is (203) 622-1150. ------------------------------------------------------------------------------- THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING AT PAGE 3. ------------------------------------------------------------------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is December 29, 2005 TABLE OF CONTENTS INCORPORATION BY REFERENCE.......................................................................................1 ABOUT THIS PROSPECTUS............................................................................................1 THE COMPANY......................................................................................................3 RISK FACTORS.....................................................................................................3 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS...............................................................13 USE OF PROCEEDS.................................................................................................14 SELLING SHAREHOLDERS............................................................................................14 PLAN OF DISTRIBUTION............................................................................................16 LEGAL MATTERS...................................................................................................17 EXPERTS.........................................................................................................18 WHERE YOU CAN FIND MORE INFORMATION.............................................................................18 INCORPORATION BY REFERENCE The Securities and Exchange Commission (the SEC") allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information we incorporate by reference is considered to be a part of this Prospectus and information that we file later with the SEC will automatically update and replace this information. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"): 1 Our Annual Report on Form 10-K for the fiscal year ended December 31, 2004; 2. Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2005; 3. Our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2005; 4. Our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005; 5. Our Current Report on Form 8-K/A filed on January 3, 2005; 6. Our Current Report on Form 8-K filed on January 4, 2005; 7. Our Current Report on Form 8-K filed on April 29, 2005; 8. Our Current Report on Form 8-K filed on May 16, 2005; 9. Our Current Report on Form 8-K filed on July 6, 2005; 10. Our Current Report on Form 8-K filed on August 30, 2005; 11. Our Current Report on Form 8-K filed on September 9, 2005; 12. Our Current Report on Form 8-K filed on October 4, 2005; 13. Our Current Report on Form 8-K filed on October 11, 2005; 14. Our Current Report on Form 8-K filed on October 26, 2005; 15. Our Current Report on Form 8-K filed on November 10, 2005; 16. Our Current Report on Form 8-K filed on December 9, 2005; 17. Our Current Report on Form 8-K filed on December 19, 2005; and 18. The description of the common shares contained in our Registration Statement under the Exchange Act with respect to such common shares filed with the Securities and Exchange Commission, including any amendments or reports filed for the purpose of updating such description. You may request a copy of these filings (excluding the exhibits to such filings that we have not specifically incorporated by reference in such filings) at no cost, by writing or telephoning us at the following address: Lynch Corporation 140 Greenwich Avenue, 4th Floor Greenwich, Connecticut 06830 Attention: Eugene Hynes (203) 622-1150 ABOUT THIS PROSPECTUS This Prospectus is part of a Registration Statement we filed with the SEC. You should rely only on the information provided or incorporated by reference in this Prospectus or any related supplement. We have not authorized anyone else to provide you with different information. The selling shareholders will not make 1 an offer of these shares in any state where the offer is not permitted. You should not assume that the information in this Prospectus or any supplement is accurate as of any other date than the date on the front of those documents. 2 THE COMPANY We are a diversified holding company with subsidiaries engaged in manufacturing. Our business development strategy is to expand our existing operations through internal growth and acquisitions. We may also, from time to time, consider the acquisition of other assets or businesses that are not related to our present businesses and the strategic disposition of certain assets. M-TRON INDUSTRIES, INC./PIEZO TECHNOLOGY, INC. Mtron designs, manufactures and markets custom designed electronic components used primarily to control the frequency or timing of electronic signals in communications equipment. Its devices, which are commonly called frequency control devices, crystals or oscillators, support fixed and mobile wireless, copper wire, coaxial cable, wide area networks, local area networks and fiber optic systems. It sells its products to original equipment manufacturers, contract manufacturers and to distributors. On October 15, 2004, Mtron completed its acquisition of all the issued and outstanding common shares of Piezo. Piezo is a wholly-owned subsidiary of Mtron that designs, manufactures and markets frequency control devices, crystal resonators, crystal oscillators, timing devices, filters, crystal filters, liquid crystal filters and related products and technologies. The combined operations of Mtron and PTI are referred to herein as "MtronPTI." LYNCH SYSTEMS, INC. Lynch Systems designs, develops, manufactures and markets a broad range of manufacturing equipment for the electronic display and consumer glass industries. Lynch Systems also produces replacement parts for various types of packaging and glass container-making machines, which Lynch Systems does not manufacture. RISK FACTORS AN INVESTMENT IN OUR COMMON SHARES INVOLVES A HIGH DEGREE OF RISK. THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, INCLUDING THE INFORMATION UNDER "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS," BEFORE MAKING AN INVESTMENT IN OUR COMMON SHARES. WE HAVE INCURRED OPERATING LOSSES FOR THE PAST THREE YEARS AND FACE UNCERTAINTY IN OUR ABILITY TO ACHIEVE OPERATING PROFITS IN THE FUTURE. We have incurred substantial operating losses for the past three years. Without giving effect to gains realized from the deconsolidation in 2002 of one of our holdings, we suffered operating losses of $2.9 million, $832,000 and $3.3 million in 2004, 2003 and 2002, respectively. We are uncertain whether we will be able to achieve or sustain operating profits in the future. 3 IF WE ARE UNABLE TO SECURE NECESSARY FINANCING, WE MAY NOT BE ABLE TO FUND OUR OPERATIONS OR STRATEGIC GROWTH. In order to achieve our strategic business objectives, we will be required to seek additional financing. Effective October 6, 2005, Lynch Systems entered into a one-year loan agreement with Branch Banking and Trust Company, the proceeds of which were used to pay off Lynch Systems' working capital revolving loan from SunTrust Bank. Lynch Systems' remaining credit facility with SunTrust Bank, which was to have expired on September 30, 2005, has been extended to December 31, 2005. Lynch Systems intends to refinance this facility with another lender, however, there can be no assurance that such financing will be available. On September 30, 2005, MtronPTI entered into a five-year loan agreement with RBC Centura Bank, the proceeds of which were used to pay off MtronPTI's bridge loan from First National Bank of Omaha. MtronPTI's revolving credit facility from First National Bank of Omaha is scheduled to mature on May 31, 2006. On December 22, 2005, the Company paid off its loan with Venator Merchant Fund, L.P. Under certain of our existing credit facilities, we are required to obtain the lenders' consent for most additional debt financing and to comply with other covenants, including specific financial ratios. For example, we may require further capital to continue to develop our technology and infrastructure and for working capital purposes. In addition, future acquisitions would likely require additional equity and/or debt financing. Our failure to secure additional financing could have a material adverse effect on our continued development or growth. AS A HOLDING COMPANY, WE DEPEND ON THE OPERATIONS OF OUR SUBSIDIARIES TO MEET OUR OBLIGATIONS. We are a holding company that transacts all of our business through operating subsidiaries. Our primary assets are the common shares of our operating subsidiaries. Our ability to meet our operating requirements and to make other payments depends on the surplus and earnings of our subsidiaries and their ability to pay dividends or to advance or repay funds. Payments of dividends and advances and repayments of inter-company debt by our subsidiaries are restricted by our credit agreements. WE MAY MAKE ACQUISITIONS THAT ARE NOT SUCCESSFUL OR FAIL TO PROPERLY INTEGRATE ACQUIRED BUSINESSES INTO OUR OPERATIONS. We intend to explore opportunities to buy other businesses or technologies that could complement, enhance or expand our current business or product lines or that might otherwise offer us growth opportunities. We may have difficulty finding such opportunities or, if we do identify such opportunities, we may not be able to complete such transactions for reasons including a failure to secure necessary financing. Any transactions that we are able to identify and complete may involve a number of risks, including: 4 o the diversion of our management's attention from our existing business to integrate the operations and personnel of the acquired or combined business or joint venture; o possible adverse effects on our operating results during the integration process; o substantial acquisition related expenses, which would reduce our net income in future years; o the loss of key employees and customers as a result of changes in management; and o our possible inability to achieve the intended objectives of the transaction. In addition, we may not be able to successfully or profitably integrate, operate, maintain and manage our newly acquired operations or employees. We may not be able to maintain uniform standards, controls, procedures and policies, and this may lead to operational inefficiencies. PROVISIONS IN OUR CHARTER DOCUMENTS AND UNDER INDIANA LAW MAY PREVENT OR DELAY A CHANGE OF CONTROL OF US AND COULD ALSO LIMIT THE MARKET PRICE OF OUR COMMON SHARES. Provisions of our certificate of incorporation and bylaws, as well as provisions of Indiana corporate law, may discourage, delay or prevent a merger, acquisition or other change in control of our company, even if such a change in control would be beneficial to our shareholders. These provisions may also prevent or frustrate attempts by our shareholders to replace or remove our management. These provisions include those: o prohibiting our shareholders from fixing the number of our directors; o requiring advance notice for shareholder proposals and nominations; and o prohibiting shareholders from acting by written consent, unless unanimous. We are subject to certain provisions of the Indiana Business Corporation Law, or IBCL, that limit business combination transactions with 10% shareholders during the first five years of their ownership, absent approval of our board of directors. The IBCL also contains control share acquisition provisions that limit the ability of certain shareholders to vote their common shares unless their control share acquisition was approved in advance by shareholders. These provisions and other similar provisions make it more difficult for shareholders or potential acquirers to acquire us without negotiation and could limit the price that investors are willing to pay in the future for our common shares. COMPLIANCE WITH CHANGING REGULATION OF CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE WILL REQUIRE US EITHER TO INCUR ADDITIONAL EXPENSES OR CEASE TO BE A REPORTING COMPANY. Keeping abreast of, and in compliance with, changing laws, regulations and standards relating to corporate governance and public disclosure, including the 5 Sarbanes-Oxley Act of 2002, new SEC regulations and American Stock Exchange rules, will require an increased amount of management attention and external resources. We would be required to invest additional resources to comply with evolving standards, which would result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Our Board of Directors may determine that it is in the best interests of shareholders to eliminate or reduce such expense by ceasing to be a reporting company for purposes of the Securities Exchange Act of 1934, as amended. One commonly used method, subject to shareholder approval, is to effect a reverse share split to reduce the number of shareholders to fewer than 300, permitting termination of registration. Under this method, shareholders who own less than one whole common share following the reverse split would cease to be shareholders and would receive a cash payment for their fractional shares. After a reverse split, there might be no established trading market for our common shares, although we expect that our common shares may then be quoted on the "pink sheets." WE MAY BE EXPOSED TO LIABILITY AS A RESULT OF BEING NAMED AS A DEFENDANT IN A LAWSUIT BROUGHT UNDER THE SO-CALLED "QUI TAM" PROVISIONS OF THE FEDERAL FALSE CLAIMS ACT. The Company, Lynch Interactive Corporation, which was formed via a tax-free spin-off from Lynch Corporation on September 1, 1999 ("Lynch Interactive"), and various other parties are defendants in a lawsuit brought under the so-called "qui tam" provisions of the federal False Claims Act in the United States District Court for the District of Columbia. The main allegation in the case is that the defendants participated in the creation of "sham" bidding entities that allegedly defrauded the U.S. Treasury Department by improperly participating in Federal Communications Commission spectrum auctions restricted to small businesses, and obtained bidding credits in other spectrum auctions allocated to "small" and "very small" businesses. While the lawsuit seeks to recover an unspecified amount of damages, which would be subject to mandatory trebling under the statute, a report prepared for the relator (a private individual who filed the action on behalf of the United States) in 2005 alleges damages of approximately $91 million in respect of bidding credits, approximately $70 million in respect of government loans and approximately $206 million in respect of subsequent resales of licenses, in each case prior to trebling. Although Lynch Interactive is contractually bound to indemnify us for any losses or damages we may incur as a result of this lawsuit, Lynch Interactive may lack the capital resources to do so. As a result, we could be held liable and forced to pay a significant amount of damages without recourse. WE DO NOT ANTICIPATE PAYING CASH DIVIDENDS ON OUR COMMON SHARES IN THE FORESEEABLE FUTURE. We anticipate that all of our earnings will be retained for the development of our business. The Board of Directors has adopted a policy of not paying cash dividends on our common shares. We do not anticipate paying cash dividends on our common shares in the foreseeable future. 6 THERE IS A LIMITED MARKET FOR OUR COMMON SHARES. OUR COMMON SHARE PRICE IS LIKELY TO BE HIGHLY VOLATILE AND COULD DROP UNEXPECTEDLY. There is a limited public market for our common shares, and we cannot assure you that an active trading market will develop. As a result of low trading volume in our common shares, the purchase or sale of a relatively small number of common shares could result in significant share price fluctuations. Our share price may fluctuate significantly in response to a number of factors, including the following, several of which are beyond our control: o changes in financial estimates or investment recommendations by securities analysts relating to our common shares; o loss of a major customer; o announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; and o changes in key personnel. In the past, securities class action litigation has often been brought against a company following periods of volatility in the market price of its securities. We could be the target of similar litigation in the future. Securities litigation, regardless of merit or ultimate outcome, would likely cause us to incur substantial costs, divert management's attention and resources, harm our reputation in the industry and the securities markets and reduce our profitability. SECURITIES ANALYSTS MAY NOT INITIATE COVERAGE OF OUR COMMON SHARES OR MAY ISSUE NEGATIVE REPORTS, AND THIS MAY HAVE A NEGATIVE IMPACT ON THE MARKET PRICE OF OUR COMMON SHARES. We cannot assure you that securities analysts will initiate coverage and publish research reports on us. It is difficult for companies with smaller market capitalizations, such as us, to attract independent financial analysts who will cover our common shares. If securities analysts do not, this lack of research coverage may adversely affect the market price of our common shares. IF WE ARE UNABLE TO INTRODUCE INNOVATIVE PRODUCTS, DEMAND FOR OUR PRODUCTS MAY DECREASE. Our future operating results are dependent on our ability to continually develop, introduce and market innovative products, to modify existing products, to respond to technological change and to customize some of our products to meet customer requirements. There are numerous risks inherent in this process, including the risks that we will be unable to anticipate the direction of technological change or that we will be unable to develop and market new products and applications in a timely or cost-effective manner to satisfy customer demand. OUR OPERATING RESULTS AND FINANCIAL CONDITION COULD BE MATERIALLY ADVERSELY AFFECTED BY ECONOMIC, POLITICAL, HEALTH, REGULATORY AND OTHER FACTORS EXISTING IN FOREIGN COUNTRIES IN WHICH WE OPERATE. As we have significant international operations, our operating results and financial condition could be materially adversely affected by economic, 7 political, health, regulatory and other factors existing in foreign countries in which we operate. Our international operations are subject to inherent risks, which may materially adversely affect us, including: o political and economic instability in countries in which our products are manufactured and sold; o expropriation or the imposition of government controls; o sanctions or restrictions on trade imposed by the United States government; o export license requirements; o trade restrictions; o currency controls or fluctuations in exchange rates; o high levels of inflation or deflation; o greater difficulty in collecting our accounts receivable and longer payment cycles; o changes in labor conditions and difficulties in staffing and managing our international operations; and o limitations on insurance coverage against geopolitical risks, natural disasters and business operations. In addition, these same factors may also place us at a competitive disadvantage when compared to some of our foreign competitors. In response to competitive pressures and customer requirements, we may further expand internationally at lower cost locations. If we expand into these locations, we will be required to incur additional capital expenditures. OUR BUSINESSES ARE CYCLICAL. THE RECENT DECLINE IN DEMAND IN THE ELECTRONIC COMPONENT AND GLASS COMPONENT INDUSTRIES MAY CONTINUE, RESULTING IN ADDITIONAL ORDER CANCELLATIONS AND DEFERRALS AND LOWER AVERAGE SELLING PRICES FOR OUR PRODUCTS. Our subsidiaries sell to industries that are subject to cyclical economic changes. The electronic component and glass component industries in general, and specifically the Company, have for the past several years experienced a decline in product demand on a global basis, resulting in order cancellations and deferrals and lower average selling prices. This decline is primarily attributable to a slowing of growth in the demand for components used by telecommunications infrastructure manufacturers and newer technologies introduced in the glass display industry. We cannot assure you that any expected or perceived improvements in the economy and the electronic component and glass component industry will occur. The slowdown may continue and may become more pronounced. A slowdown in demand, as well as recessionary trends in the global economy, make it more difficult for us to predict our future sales, which also makes it more difficult to manage our operations. 8 OUR MARKETS ARE HIGHLY COMPETITIVE, AND WE MAY LOSE BUSINESS TO LARGER AND BETTER-FINANCED COMPETITORS. Our markets are highly competitive worldwide, with low transportation costs and few import barriers. We compete principally on the basis of product quality and reliability, availability, customer service, technological innovation, timely delivery and price. All of the industries in which we compete have become increasingly concentrated and globalized in recent years. Our major competitors, some of which are larger than us, and potential competitors have substantially greater financial resources and more extensive engineering, manufacturing, marketing and customer support capabilities than we have. OUR SUCCESS DEPENDS ON OUR ABILITY TO RETAIN OUR KEY MANAGEMENT AND TECHNICAL PERSONNEL AND ATTRACTING, RETAINING, AND TRAINING NEW TECHNICAL PERSONNEL. Our future growth and success will depend in large part upon our ability to retain our existing management and technical team and to recruit and retain highly skilled technical personnel, including engineers. The labor markets in which we operate are highly competitive and most of our operations are not located in highly populated areas. As a result, we may not be able to retain and recruit key personnel. Our failure to hire, retain or adequately train key personnel could have a negative impact on our performance. WE MAY NOT REALIZE THE SYNERGIES OR ACHIEVE THE INTENDED OBJECTIVES SOUGHT FROM MTRON'S ACQUISITION OF PTI. Effective September 30, 2004, Mtron completed its acquisition of PTI. The value of this acquisition is largely based on the synergies that we believe will be created by the integration of these two companies. This process involves a number of risks, including the diversion of our management's attention from our existing business to integrate PTI's operations and personnel, and possible adverse effects on our operating results during the integration process. In addition, we may be unable to integrate, operate, maintain and manage PTI's operations or employees. We also may not be able to maintain uniform standards, controls, procedures and policies, and this may lead to operational inefficiencies. MTRONPTI'S BACKLOG MAY NOT BE INDICATIVE OF FUTURE SALES AND MAY ADVERSELY AFFECT OUR BUSINESS. MtronPTI's backlog comprises orders that are subject to specific production release orders under written contracts, oral and written orders from customers with which MtronPTI has had long-standing relationships and written purchase orders from sales representatives. MtronPTI's customers may order components from multiple sources to ensure timely delivery when backlog is particularly long and may cancel or defer orders without significant penalty. They often cancel orders when business is weak and inventories are excessive, a phenomenon that MtronPTI has experienced in the recent economic slowdown. As a result, MtronPTI's backlog as of any particular date may not be representative of actual net sales for any succeeding period. 9 MTRONPTI RELIES UPON ONE CONTRACT MANUFACTURER FOR A SIGNIFICANT PORTION OF ITS FINISHED PRODUCTS, AND A DISRUPTION IN ITS RELATIONSHIP COULD HAVE A NEGATIVE IMPACT ON MTRONPTI'S SALES. In 2004, approximately 12% of MtronPTI's net sales was attributable to finished products that were manufactured by an independent contract manufacturer located in both Korea and China. We expect this manufacturer to account for a smaller but substantial portion of MtronPTI's net sales in 2005 and a material portion of MtronPTI's sales for the next several years. MtronPTI does not have a written, long-term supply contract with this manufacturer. If this manufacturer becomes unable to provide products in the quantities needed, or at acceptable prices, MtronPTI would have to identify and qualify acceptable replacement manufacturers or manufacture the products internally. Due to specific product knowledge and process capability, MtronPTI could encounter difficulties in locating, qualifying and entering into arrangements with replacement manufacturers. As a result, a reduction in the production capability or financial viability of this manufacturer, or a termination of, or significant interruption in, MtronPTI's relationship with this manufacturer, may adversely affect MtronPTI's results of operations and our financial condition. CONTINUED MARKET ACCEPTANCE OF MTRONPTI'S PACKAGED QUARTZ CRYSTALS, OSCILLATOR MODULES AND ELECTRONIC FILTERS IS CRITICAL TO OUR SUCCESS, BECAUSE FREQUENCY CONTROL DEVICES ACCOUNT FOR NEARLY ALL OF MTRONPTI'S SALES. Virtually all of MtronPTI's 2003 and 2004 net sales came from sales of frequency control devices, which consist of packaged quartz crystals, oscillator modules and electronic filters. We expect that this product line will continue to account for substantially all of MtronPTI's net sales for the foreseeable future. Any decline in demand for this product line or failure to achieve continued market acceptance of existing and new versions of this product line may harm MtronPTI's business and our financial condition. MTRONPTI'S FUTURE RATE OF GROWTH IS HIGHLY DEPENDENT ON THE DEVELOPMENT AND GROWTH OF THE MARKET FOR COMMUNICATIONS AND NETWORK EQUIPMENT. MtronPTI's business depends heavily upon capital expenditures by the providers of communications and network services. In 2004, the majority of MtronPTI's net sales were to manufacturers of communications and network infrastructure equipment, including indirect sales through distributors and contract manufacturers. In 2005, MtronPTI expects a smaller but significant portion of its net sales to be to manufacturers of communications and network infrastructure equipment. MtronPTI intends to increase its sales to communications and network infrastructure equipment manufacturers in the future. Communications and network service providers have experienced periods of capacity shortage and periods of excess capacity. In periods of excess capacity, communications systems and network operators cut purchases of capital equipment, including equipment that incorporates MtronPTI's products. A slowdown in the manufacture and purchase of communications and network infrastructure equipment could substantially reduce MtronPTI's net sales and operating results and adversely affect our financial condition. Moreover, if the market for communications or network infrastructure equipment fails to grow as expected, MtronPTI may be unable to sustain its growth. In addition, MtronPTI's growth depends upon the acceptance of its products by communications and network 10 infrastructure equipment manufacturers. If, for any reason, these manufacturers do not find MtronPTI's products to be appropriate for their use, our future growth will be adversely affected. COMMUNICATIONS AND NETWORK INFRASTRUCTURE EQUIPMENT MANUFACTURERS INCREASINGLY RELY UPON CONTRACT MANUFACTURERS, THEREBY DIMINISHING MTRONPTI'S ABILITY TO SELL ITS PRODUCTS DIRECTLY TO THOSE EQUIPMENT MANUFACTURERS. There is a growing trend among communications and network infrastructure equipment manufacturers to outsource the manufacturing of their equipment or components. As a result, MtronPTI's ability to persuade these original equipment manufacturers to specify our products has been reduced and, in the absence of a manufacturer's specification of MtronPTI's products, the prices that MtronPTI can charge for them may be subject to greater competition. MTRONPTI'S GOVERNMENT CONTRACTS CONTAIN PROVISIONS THAT ARE UNFAVORABLE TO IT AND HAVE A NUMBER OF SPECIFIC RISKS THAT MAY RESULT IN LOST ORDERS AND PROFITS. Many of MtronPTI's contracts with government agencies contain provisions that give the governments rights and remedies not typically found in private commercial contracts, including provisions enabling the government to: o terminate or cancel existing contracts without good reason or penalty; o suspend MtronPTI from doing business with a foreign government or prevent MtronPTI from selling its products in certain countries; o audit and object to MtronPTI's contract-related costs and expenses, including allocated indirect costs; and o change specific terms and conditions in MtronPTI's contracts, including changes that would reduce the value of the contract to MtronPTI. MtronPTI's business generated from government contracts could be materially and adversely affected if: o MtronPTI's reputation or relationship with government agencies were impaired; o MtronPTI were suspended or otherwise prohibited from contracting with a domestic or foreign government; o any of MtronPTI's products were to fail to meet the requirements of certain applicable specified military standards; o levels of government spending were to decrease; o MtronPTI were barred from entering into new government contracts or extending existing government contracts based on violations or suspected violations of laws or regulations; or 11 o MtronPTI were not granted security clearances required to provide its services and solutions to governments, or such security clearances were revoked. FUTURE CHANGES IN MTRONPTI'S ENVIRONMENTAL LIABILITY AND COMPLIANCE OBLIGATIONS MAY INCREASE COSTS AND DECREASE PROFITABILITY. MtronPTI's manufacturing operations, products and/or product packaging are subject to environmental laws and regulations governing air emissions, wastewater discharges, and the handling, disposal and remediation of hazardous substances, wastes and other chemicals. In addition, more stringent environmental regulations may be enacted in the future, and we cannot presently determine the modifications, if any, in MtronPTI's operations that any future regulations might require, or the cost of compliance that would be associated with these regulations. MTRONPTI MAY BE UNABLE TO MODIFY ITS PRODUCTS OR MAY INCUR INCREASED COSTS TO MEET THE REQUIREMENTS OF THE EUROPEAN UNION'S RESTRICTION ON HAZARDOUS SUBSTANCES DIRECTIVE. MtronPTI may be unable to modify its products or may incur increased costs to meet the requirements of the European Union's Restriction on Hazardous Substances Directive. If MtronPTI is unable to comply with these regulations, it may not be permitted to ship its products to the European Union. LYNCH SYSTEMS' REVENUE IS LARGELY DEPENDENT ON DEMAND FOR ITS TELEVISIONS AND COMPUTER MONITORS BASED ON CATHODE-RAY TUBE TECHNOLOGY. THIS TECHNOLOGY WILL EVENTUALLY BE REPLACED BY PLASMA AND LIQUID CRYSTAL DISPLAYS. Lynch Systems generates a significant portion of its revenue from sales to glass producers that supply television and computer monitor displays that are based on cathode-ray tube technology. This market is being rapidly penetrated by thinner, lighter weight plasma displays and liquid crystal displays. Although cathode-ray tube televisions and computer monitors currently retain advantages in image quality and price, glass producers are investing billions of dollars to improve the quality and lower the unit price of plasma, liquid crystal and other display types. We believe that market penetration by plasma and liquid crystal display producers will continue and eventually render obsolete cathode-ray tube technology and this Lynch Systems product line. LYNCH SYSTEMS' DEPENDENCE ON A FEW SIGNIFICANT CUSTOMERS EXPOSES IT TO OPERATING RISKS. Lynch Systems' sales to its ten largest customers accounted for approximately 80% of its net sales in 2004, 2003 and 2002. Lynch Systems' sales to its largest customer accounted for approximately 36%, 42% and 27% of its net sales in 2004, 2003 and 2002. If a significant customer reduces, delays or cancels its orders for any reason, the business and results of operations of Lynch Systems would be negatively affected. 12 AN ORDER TO BUILD MULTIPLE MACHINES IN THE FUTURE WITH A SIGNIFICANT CUSTOMER IN THE TABLEWARE MARKET IS CONTINGENT UPON THE SUCCESSFUL INSTALLATION AND OPERATION OF THE MACHINES CURRENTLY IN PRODUCTION. Lynch Systems has a significant order for glass manufacturing machines that are scheduled to be shipped and installed in the customer's factories in 2006. Many of these machines utilize new processes and require customer training. The ability of the customer's personnel and resources to operate these machines successfully is critical. If the customer does not realize the full benefit from these machines, new orders from this customer may be canceled. THE RESULTS OF LYNCH SYSTEMS' OPERATIONS ARE SUBJECT TO FLUCTUATIONS IN THE AVAILABILITY AND COST OF STEEL USED TO MANUFACTURE GLASS-FORMING EQUIPMENT. Lynch Systems uses large amounts of steel to manufacture its glass forming equipment. The price of steel has risen substantially and demand for steel is very high. Lynch Systems has only been able to pass some of the increased costs to its customers. As a result, Lynch Systems' profit margins on glass forming equipment have decreased. If the price of and demand for steel continues to rise, our profit margins will continue to decrease. LYNCH SYSTEMS MAY BE UNABLE TO PROTECT ITS INTELLECTUAL PROPERTY. The success of Lynch Systems' business depends, in part, upon its ability to protect trade secrets, designs, drawings and patents, obtain or license patents and operate without infringing on the intellectual property rights of others. Lynch Systems relies on a combination of trade secrets, designs, drawings, patents, nondisclosure agreements and technical measures to protect its proprietary rights in its products and technology. The steps taken by Lynch Systems in this regard may not be adequate to prevent misappropriation of its technology. In addition, the laws of some foreign countries in which Lynch Systems operates do not protect its proprietary rights to the same extent as do the laws of the United States. Although Lynch Systems continues to evaluate and implement protective measures, we cannot assure you that these efforts will be successful. Lynch Systems' inability to protect its intellectual property rights could diminish or eliminate the competitive advantages that it derives from its technology, cause Lynch Systems to lose sales or otherwise harm its business. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Prospectus and documents incorporated by reference into this Prospectus contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not historical facts, but rather are based on current expectations, estimates and projections about our business and industry, our beliefs and assumptions. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are based on our current plans and expectations and involve risks and uncertainties over which we have no control, that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and operating results to differ include fluctuating demand for capital goods such as large glass presses, delay in the recovery of 13 demand for components used by telecommunications infrastructure manufacturers and exposure to foreign economies. Important information regarding risks and uncertainties is also set forth elsewhere in this document, including in those described in "Risk Factors" beginning on page 3, as well as elsewhere in this Prospectus and in documents incorporated by reference into this Prospectus. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our management's view only as of the date of this Prospectus or as of the date of any document incorporated by reference into this Prospectus. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to update these statements or publicly release the results of any revisions to the forward-looking statements that we may make to reflect events or circumstances after the date of this Prospectus or the date of any document incorporated into this Prospectus or to reflect the occurrence of unanticipated events. You are also urged to carefully review and consider the various disclosures made by us in this document, as well as in our prior periodic reports on Forms 10-K, 10-Q and 8-K, filed with the Securities and Exchange Commission and listed under the caption "Incorporation by Reference" on 2 of this Prospectus. We make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, if any. We also make this information available on our website at WWW.LYNCHCORP.COM. USE OF PROCEEDS The common shares offered hereby are being registered for the account of the selling shareholders identified in this Prospectus. See "Selling Shareholders." All net proceeds from the sale of the common shares will go to the shareholders who offer and sell their shares. We will not receive any part of the proceeds from such sales of common shares. We will, however, receive the exercise price of the options at the time of their exercise. Such proceeds will be used for general corporate purposes, working capital and to make acquisitions, although the Company has not identified any specific acquisitions at this time. SELLING SHAREHOLDERS This Prospectus relates to the reoffer and resale of shares issued or that may be issued to the selling shareholders under our 2001 Equity Incentive Plan. This Prospectus also relates to such indeterminate number of additional common shares that may be acquired by the selling shareholders as a result of the antidilution provisions of the Plan. We will provide additional information regarding the identity of the selling shareholders and certain other information relating to the selling shareholders in a supplement to this Prospectus if we are required by law to do so. The following table sets forth (i) the number of common shares owned by each selling shareholder as of December 22, 2005, (ii) the number of common shares to be offered for resale by each selling shareholder (i.e., the total number of common shares underlying options held by each selling shareholder irrespective of whether such options are presently exercisable within 60 days after December 14 22, 2005) and (iii) the number and percentage of common shares that each selling shareholder will beneficially own after completion of the offering, assuming that all shares that may be offered for resale are sold and no other shares beneficially owned by the selling shareholders are also sold. NUMBER OF COMMON NUMBER OF COMMON NUMBER OF COMMON PERCENTAGE OF CLASS SHARES SHARES SHARES AFTER TO BE OWNED AFTER OWNED AT TO BE OFFERED COMPLETION OF THE COMPLETION OF THE NAME DECEMBER 22, 2005(1) FOR RESALE(2) OFFERING(3) OFFERING ---- -------------------- ------------- ----------------- ------------------- Marc Gabelli 470,512(4) 20,000 450,512 20.9% John C. Ferrara 75,552(5) 75,000 552 * ----------------- * Less than 1%. (1) Unless otherwise indicated, we believe that all people named in the above table have sole voting and investment power with respect to all common shares beneficially owned by them. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days after December 22, 2005 upon the exercise of options, warrants or convertible securities. Each beneficial owner's percentage ownership is determined by assuming that options, warrants and convertible securities held by such person (but not those held by any other person) and which are exercisable or convertible within 60 days have been exercised or converted. (2) Consists of common shares issuable upon exercise of options currently exercisable. (3) Beneficial ownership of shares held by each selling shareholder after this offering assumes that each selling shareholder sold all of the shares it is offering in this Prospectus but actually will depend on the number of shares sold by such selling shareholder in this offering. (4) Consists of (i) 1,334 common shares owned directly by Marc Gabelli, (ii) 449,178 common shares beneficially owned by Venator Merchant Fund, L.P. ("Venator Fund") and Venator Global, LLC ("Venator LLC") and (iii) 20,000 common shares issuable upon exercise of currently exercisable options granted to Mr. Gabelli pursuant to the Plan. Venator LLC, which is the sole general partner of Venator Fund, is deemed to have beneficial ownership of the securities owned beneficially by Venator Fund. Marc Gabelli is the President of Venator Fund. (5) Includes 75,000 common shares issuable upon exercise of currently exercisable options granted pursuant to the Plan. Mr. Ferrara has been President and Chief Executive Officer of the Company from October 2004 to the present. We cannot assure you that the selling shareholders will exercise their options to purchase our common shares. 15 The shares covered by this Prospectus may be sold from time to time so long as this Prospectus remains in effect; provided, however, that the selling shareholders first contact our Corporate Secretary to confirm that this Prospectus is in effect. We intend to distribute to each selling shareholder a letter describing the procedures that the selling shareholder may follow in order to use this Prospectus to sell the shares and under what conditions the Prospectus may not be used. The selling shareholders expect to sell the shares at prices then attainable, less ordinary brokers' commissions and dealers' discounts as applicable. PLAN OF DISTRIBUTION This offering is self-underwritten; neither we nor the selling shareholders have employed an underwriter for the sale of common shares by the selling shareholders. We will bear all expenses in connection with the preparation of this Prospectus. The selling shareholders will bear all expenses associated with the sale of the common shares. The selling shareholders may offer their common shares directly or through pledgees, donees, transferees or other successors in interest in one or more of the following transactions: o On any stock exchange on which the common shares may be listed at the time of sale; o In negotiated transactions; o In the over-the-counter market; and o In a combination of any of the above transactions. The selling shareholders may offer their common shares at any of the following prices: o Fixed prices that may be changed; o Market prices prevailing at the time of sale; o Prices related to such prevailing market prices; and o At negotiated prices. The selling shareholders may effect such transactions by selling shares to or through broker-dealers, and all such broker-dealers may receive compensation in the form of discounts, concessions, or commissions from the selling shareholders and/or the purchasers of common shares for whom such broker-dealers may act as agents or to whom they sell as principals, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). Any broker-dealer acquiring common shares from the selling shareholders may sell the shares either directly, in its normal market-making activities, through or to other brokers on a principal or agency basis or to its customers. Any such sales may be at prices then prevailing on AMEX or at prices related to such prevailing market prices or at negotiated prices to its customers or a 16 combination of such methods. The selling shareholders and any broker-dealers that act in connection with the sale of the common shares hereunder might be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act; any commissions received by them and any profit on the resale of shares as principal might be deemed to be underwriting discounts and commissions under the Securities Act. Any such commissions, as well as other expenses incurred by the selling shareholders and applicable transfer taxes, are payable by the selling shareholders. The selling shareholders reserve the right to accept, and together with any agent of the selling shareholder, to reject in whole or in part any proposed purchase of the common shares. The selling shareholders will pay any sales commissions or other seller's compensation applicable to such transactions. We have not registered or qualified offers and sales of common shares under the laws of any country other than the United States. To comply with certain states' securities laws, if applicable, the selling shareholders will offer and sell their common shares in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the selling shareholders may not offer or sell common shares unless we have registered or qualified such shares for sale in such states or we have complied with an available exemption from registration or qualification. The selling shareholders have represented to us that any purchase or sale of common shares by them will comply with Regulation M promulgated under the Exchange Act. In general, Rule 102 under Regulation M prohibits any person connected with a distribution of our common shares (a "Distribution") from directly or indirectly bidding for, or purchasing for any account in which he or she has a beneficial interest, any of our common shares or any right to purchase our common shares, for a period of one business day before and after completion of his or her participation in the Distribution (we refer to that time period as the "Distribution Period"). During the Distribution Period, Rule 104 under Regulation M prohibits the selling shareholders and any other persons engaged in the Distribution from engaging in any stabilizing bid or purchasing our common shares except for the purpose of preventing or retarding a decline in the open market price of our common shares. No such person may effect any stabilizing transaction to facilitate any offering at the market. Inasmuch as the selling shareholders will be reoffering and reselling our common shares at the market, Rule 104 prohibits them from effecting any stabilizing transaction in contravention of Rule 104 with respect to our common shares. There can be no assurance that the selling shareholders will sell any or all of the shares offered by them hereunder or otherwise. LEGAL MATTERS Certain legal matters in connection with the issuance of the common shares offered hereby have been passed upon for us by Olshan Grundman Frome Rosenzweig & Wolosky LLP, New York, New York. 17 EXPERTS Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements and schedules included in our Annual Report on Form 10-K for the year ended December 31, 2004, as set forth in their report, which is incorporated by reference in this Registration Statement. Our financial statements and schedules are incorporated by reference in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION We have filed a Registration Statement on Form S-8 with the SEC for our common shares offered in this offering. This Prospectus does not contain all the information set forth in the Registration Statement. You should refer to the Registration Statement and its exhibits for additional information. Whenever we make references in this Prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the Registration Statement for the copies of the actual contract, agreement or other document. The SEC maintains an Internet site at WWW.SEC.GOV that contains reports, proxy and information statements, and other information regarding us. You may also read and copy any document we file with the SEC at its Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our common shares are listed on the American Stock Exchange and our reports and other information about us may also be inspected at the offices of the American Stock Exchange at 86 Trinity Place, New York, New York 10006. Additional information about us is available over the Internet at our web site at WWW.LYNCHCORP.COM. 18 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. The following documents filed by Lynch Corporation (the "Company") with the Securities and Exchange Commission (the "SEC") are incorporated herein by reference and made a part hereof: 1. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2004; 2. Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2005; 3. Our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2005; 4. Our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005; 5. Our Current Report on Form 8-K/A filed on January 3, 2005; 6. Our Current Report on Form 8-K filed on January 4, 2005; 7. Our Current Report on Form 8-K filed on April 29, 2005; 8. Our Current Report on Form 8-K filed on May 16, 2005; 9. Our Current Report on Form 8-K filed on July 6, 2005; 10. Our Current Report on Form 8-K filed on August 30, 2005; 11. Our Current Report on Form 8-K filed on September 9, 2005; 12. Our Current Report on Form 8-K filed on October 4, 2005; 13. Our Current Report on Form 8-K filed on October 11, 2005; 14. Our Current Report on Form 8-K filed on October 26, 2005; 15. Our Current Report on Form 8-K filed on November 10, 2005; 16. Our Current Report on Form 8-K filed on December 9, 2005; 17. Our Current Report on Form 8-K filed on December 19, 2005; and 18. The description of the common shares contained in our Registration Statement under the Securities Exchange Act of 1934 with respect to such common shares filed with the Securities and Exchange Commission, including any amendments or reports filed for the purpose of updating such description. All reports and other documents subsequently filed by the Company pursuant to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of a post-effective amendment that indicates that all securities offered hereby have been sold or that de-registers all securities remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of the filing of such reports and documents. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL. Not applicable. II-1 ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS. Except as hereinafter set forth, there is no statute, charter provision, by-law, contract or other arrangement under which any controlling person, director or officer of the Company is insured or indemnified in any manner against liability which he may incur in his capacity as such. Article VI, Section 6.2 of Registrant's Restated Articles of Incorporation provides that to the extent not inconsistent with applicable law, every director and officer shall be indemnified by Registrant against all liability and reasonable expense that may be incurred by such director or officer in connection with or resulting from any claim, (i) if such director or officer is wholly successful with respect to the claim, or (ii) if not wholly successful, then if such director or officer is determined to have acted in good faith, in what the director or officer reasonably believed to be the best interests of Registrant or at least not opposed to its best interest and, in addition, with respect to any criminal claim is determined to have had reasonable cause to believe that his conduct was lawful or had no reasonable cause to believe that his conduct was unlawful. The termination of any claim, by judgment, order, settlement (whether with or without court approval), or conviction or upon a plea of guilty or of nolo contendere, or its equivalent, shall not create a presumption that a director or officer did not meet the standards of conduct set forth in clause (ii) hereof. For a more detailed description, reference is made to Article VI, Section 6.2 of the Registrant's Restated Articles of Incorporation filed as Exhibit 3(a) hereto which contains certain indemnification provisions pursuant to authority contained in the Indiana Business Corporation Law. Registrant's directors and officers are also covered under Registrant's directors and officers insurance policy up to a maximum of $10 million. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable. The following sections of Chapter 37 of the Indiana Business Corporation Law provide as follows: Section 23-1-37-8 Permissive Indemnification (a) A corporation may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if: (1) the individual's conduct was in good faith; and (2) the individual reasonably believed: (A) in the case of conduct in the individual's official capacity with the corporation, that the individual's conduct was in its best interests; and (B) in all other cases, that the individual's conduct was at II-2 least not opposed to its best interests; and (3) in the case of any criminal proceeding, the individual either: (A) had reasonable cause to believe the individual's conduct was lawful; or (B) had no reasonable cause to believe the individual's conduct was unlawful. (b) A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection (a)(2)(B). (c) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section. Section 23-1-37-9 Mandatory Indemnification Unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because the director is or was a director of the corporation against reasonable expenses incurred by the director in connection with the proceeding. Section 23-1-37-10 Advance Indemnification (a) A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: (1) the director furnishes the corporation a written affirmation of the director's good faith belief that the director has met the standard of conduct described in section 8 of this chapter; (2) the director furnishes the corporation a written undertaking, executed personally or on the director's behalf, to repay the advance if it is ultimately determined that the director did not meet the standard of conduct; and (3) a determination is made that the facts then known to those making the determination would not preclude indemnification under this chapter. (b) The undertaking required by subsection (a)(2) must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment. (c) Determinations and authorizations of payments under this section shall be made in the manner specified in section 12 of this chapter. II-3 Section 23-1-37-11 Application for Indemnification Unless a corporation's articles of incorporation provide otherwise, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification if it determines: (1) the director is entitled to mandatory indemnification under section 9 of this chapter, in which case the court shall also order the corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; or (2) the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in section 8 of this chapter. Section 23-1-37-12 Procedure for Determining Indemnification (a) A corporation may not indemnify a director under section 8 of this chapter unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in section 8 of this chapter. (b) The determination shall be made by any one (1) of the following procedures: (1) By the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding. (2) If a quorum cannot be obtained under subdivision (1), by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate), consisting solely of two (2) or more directors not at the time parties to the proceeding. (3) By special legal counsel: (A) selected by the board of directors or its committee in the manner prescribed in subdivision (1) or (2); or (B) if a quorum of the board of directors cannot be obtained under subdivision (1) and a committee cannot be designated under subdivision (2), selected by majority vote of the full board of directors (in which selection directors who are parties may participate). (4) By the shareholders, but common shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination. (c) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by II-4 special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subsection (b)(3) to select counsel. Section 23-1-37-13 Indemnification of Officers, Agents and Employees Unless a corporation's articles of incorporation provide otherwise: (1) an officer of the corporation, whether or not a director, is entitled to mandatory indemnification under section 9 of this chapter, and is entitled to apply for court-ordered indemnification under section 11 of this chapter, in each case to the same extent as a director; (2) the corporation may indemnify and advance expenses under this chapter to an officer, employee, or agent of the corporation, whether or not a director, to the same extent as to a director; and (3) a corporation may also indemnify and advance expenses to an officer, employee, or agent, whether or not a director, to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, general or specific action of its board of directors, or contract. Section 23-1-37-14 Insurance A corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, member, manager, trustee, employee, or agent of another foreign or domestic corporation, partnership, limited liability company, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by the individual in that capacity or arising from the individual's status as a director, officer, member, manager, employee, or agent, whether or not the corporation would have power to indemnify the individual against the same liability under section 8 or 9 of this chapter. The: (1) corporation may purchase insurance under this section from; and (2) insurance purchased under this section may be reinsured in whole or in part by; an insurer that is owned by or otherwise affiliated with the corporation whether the insurer does or does not do business with other persons. Section 23-1-37-15 Indemnification Under Chapter Not Exclusive (a) The indemnification and advance for expenses provided for or authorized by this chapter does not exclude any other rights to indemnification and advance for expenses that a person may have under: (1) a corporation's articles of incorporation or bylaws; (2) a resolution of the board of directors or of the shareholders; or II-5 (3) any other authorization, whenever adopted, after notice, by a majority vote of all the voting common shares then issued and outstanding. (b) If the articles of incorporation, bylaws, resolutions of the board of directors or of the shareholders, or other duly adopted authorization of indemnification or advance for expenses limit indemnification or advance for expenses, indemnification and advance for expenses are valid only to the extent consistent with the articles, bylaws, resolution of the board of directors or of the shareholders, or other duly adopted authorization of indemnification or advance for expenses. (c) This chapter does not limit a corporation's power to pay or reimburse expenses incurred by a director, officer, employee, or agent in connection with the person's appearance as a witness in a proceeding at a time when the person has not been made a named defendant or respondent to the proceeding. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. 4 Amended and Restated 2001 Equity Incentive Plan. 5 Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP. 23(a) Consent of Independent Registered Public Accounting Firm - Ernst & Young LLP. 23(b) Consent of Olshan Grundman Frome Rosenzweig & Wolosky LLP (included in its opinion filed herewith as Exhibit 5). 24 Powers of Attorney (included on the signature page to this Registration Statement). ITEM 9. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the II-6 information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; PROVIDED, HOWEVER, that: (A) Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8 (ss.239.16b of this chapter), and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) that are incorporated, by reference in the registration statement; and (B) Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 (ss.239.13 of this chapter) or Form F-3 (ss.239.33 of this chapter) and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b)(ss.230.424(b) of this chapter) that is part of the registration statement. (C) PROVIDED FURTHER, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is for an offering of asset-backed securities on Form S-1 (ss. 239.11 of this chapter) or Form S-3 (ss. 239.13 of this chapter), and the information required to be included in a post-effective amendment is provided pursuant to Item 1100(c) of Regulation AB (ss. 229.1100(c)). (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) If the registrant is a foreign private issuer, to file a II-7 post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any, delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need, not be furnished, PROVIDED, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus isat least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. (5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: (i) If the registrant is relying on Rule 430B (ss.230.430B of this chapter): (A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) (ss.230.424(b)(3) of this chapter) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and (B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) (ss.230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) (ss.230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date.such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or (ii) If the registrant is subject to Rule 430C (ss.230.43OC of this chapter). each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than II-8 registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (ss.230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement, or made in any such document immediately prior to such date of first use. (6) That; for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant willbe a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) Any preliminary prospectus or prospectus of the undersigned registrant' re ating to th offering required to be filed pursuant to Rule 424 (ss.230.424 of this chapter); (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and (iv) Any other communication that is an offer n the offering made by the undersigned registrant to the purchaser. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (h) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, II-9 unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-10 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Greenwich, State of Connecticut on the 29th day of December, 2005. LYNCH CORPORATION By: /s/ John C. Ferrara ----------------------- John C. Ferrara Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John C. Ferrara and Eugene Hynes as his true and lawful attorney-in-fact, each acting alone, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments to this Registration Statement, and any related registration statement filed pursuant to Rule 462(b) of the Act and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact or their substitutes, each acting along, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. SIGNATURE TITLE DATE --------- ----- ---- /s/ John C. Ferrara ------------------------ Chief Executive Officer and Director December 29, 2005 John C. Ferrara (Principal Executive Officer) /s/ Eugene Hynes ------------------------ Vice President, Treasurer and Secretary December 29, 2005 Eugene Hynes (Principal Financial and Accounting Officer) ------------------------ Chairman of the Board of Directors December 29, 2005 Marc Gabelli ------------------------ Director December 29, 2005 E. Val Cerutti /s/ Avrum Gray ------------------------ Director December 29, 2005 Avrum Gray /s/ Anthony R. Pustorino ------------------------ Director December 29, 2005 Anthony R. Pustorino