sec document
As filed with the Securities and Exchange Commission on December 28, 2004
Registration No. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LYNCH CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Indiana 38-1799862
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
140 Greenwich Avenue, 4th Floor
Greenwich, Connecticut 06830
(203) 622-1150
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
---------------------------
John C. Ferrara
President and Chief Executive Officer
Lynch Corporation
140 Greenwich Avenue, 4th Floor
Greenwich, Connecticut 06830
(203) 622-1150
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service of Process)
-----------------------------
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
-----------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[ ]_________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]__________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Proposed Maximum Proposed Maximum
Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered Registered (1) Share (2) Price Registration Fee
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Common Share, $0.01 136,643 shares $14.75 $2,015,484.20 $237.22
par value per share
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(1) In the event of a share split, share dividend or similar transaction
involving the common shares, the shares registered hereby will
automatically be increased pursuant to Rule 416 of the Securities Act of
1933, as amended, to cover the additional common shares required to prevent
dilution.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act and based upon the average
of the high and low prices of the Registrant's common shares on the
American Stock Exchange on December 21, 2004.
-----------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
-----------------------------------
The information in this prospectus is not complete and may be changed. The
selling shareholder may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
Subject to Completion, dated December 28, 2004
PROSPECTUS
LYNCH CORPORATION
136,643 COMMON SHARES
The selling shareholder listed in this prospectus and its pledgees, donees,
transferees and other successors-in-interest may offer and sell from time to
time up to 136,643 common shares. We will not receive any of the proceeds from
such sale.
Our common shares are listed on The American Stock Exchange under the
symbol "LGL." The last reported sale price for our common shares on December 21,
2004 was $15.00 per share.
The selling shareholder may sell the common shares from time to time on any
stock exchange or automated interdealer quotation system on which the securities
are listed, in the over-the-counter market, in privately negotiated transactions
or otherwise, at fixed prices that may be changed, at market prices prevailing
at the time of sale, at prices related to prevailing market prices or at prices
otherwise negotiated.
Our principal executive offices are located at 140 Greenwich Avenue, 4th
Floor, Greenwich, Connecticut 06830. Our telephone number is (203) 622-1150.
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INVESTING IN OUR COMMON SHARES INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 2.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is _____________, 2005.
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY.............................................................1
RISK FACTORS...................................................................2
WHERE YOU CAN FIND MORE INFORMATION...........................................11
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.............................11
INCORPORATION BY REFERENCE....................................................12
USE OF PROCEEDS...............................................................13
SELLING SHAREHOLDER...........................................................13
PLAN OF DISTRIBUTION..........................................................14
LEGAL MATTERS.................................................................15
EXPERTS.......................................................................15
You should rely only on the information and representations 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 shareholder will not make an offer to sell 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 date other than the date
on the front of those documents.
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PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS IMPORTANT FEATURES OF THIS OFFERING AND THE
INFORMATION INCLUDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. THIS
SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER BEFORE
INVESTING IN OUR COMMON SHARES. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY,
ESPECIALLY THE RISKS OF INVESTING IN OUR COMMON SHARES DISCUSSED UNDER "RISK
FACTORS."
Unless the context otherwise requires, all references to "Lynch," "we,"
"us," or "our" in this prospectus refer collectively to Lynch Corporation, an
Indiana corporation, and its subsidiaries.
The selling shareholder listed in this prospectus and its pledgees, donees,
transferees and other successors-in-interest may offer and sell from time to
time up to 136,643 common shares purchased directly from us in a private
placement on October 15, 2004. We agreed to register with the Securities and
Exchange Commission the resale of the common shares purchased by the selling
shareholder.
THE COMPANY
We are a diversified holding company with subsidiaries engaged in
manufacturing. We have three wholly-owned subsidiaries, M-tron Industries, Inc.,
Lynch Systems, Inc. and Piezo Technology, Inc. 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.
M-TRON INDUSTRIES, INC./PIEZO TECHNOLOGY, INC.
M-tron 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, M-tron completed its acquisition of all the issued and
outstanding shares of Piezo. Piezo is a wholly-owned subsidiary of M-tron 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. Unless the context otherwise
requires, all references to "M-tron" in this prospectus refer collectively to
M-tron and Piezo.
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 2001 and
2002 of one of our holdings, we suffered operating losses of $832,000, $3.3
million and $46.7 million in 2003, 2002 and 2001, respectively. We are uncertain
whether we will be able to achieve or sustain operating profits in the future.
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 may be
required to seek additional financing. We may be unable to renew our existing
credit facilities or obtain new financing on acceptable terms, or at all. Under
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 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 intercompany 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:
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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 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 RESULT IN ADDITIONAL EXPENSES.
Keeping abreast of, and in compliance with, changing laws, regulations and
standards relating to corporate governance and public disclosure, including the
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 intend to invest all reasonably necessary resources to comply with
evolving standards, which will result in increased general and administrative
expenses and a diversion of management time and attention from
revenue-generating activities to compliance activities.
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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.
Lynch, Lynch Interactive Corporation 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. The lawsuit seeks to recover an unspecified amount of damages, which
amount would be automatically tripled under the statute. 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 and do not anticipate paying cash dividends on our common
shares in the foreseeable future.
THERE IS A LIMITED MARKET FOR OUR COMMON SHARES. OUR 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 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 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. If securities analysts do not, this lack of
research coverage may adversely affect the market price of our common shares.
Recently adopted rules mandated by the Sarbanes-Oxley Act of 2002, and a global
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settlement reached among the Securities and Exchange Commission, other
regulatory agencies and a number of investment banks in April 2003 has led to a
number of fundamental changes in how analysts are reviewed and compensated. In
particular, many investment banking firms are now required to contract with
independent financial analysts for their stock research. It may be difficult for
companies with smaller market capitalizations, such as us, to attract
independent financial analysts who will cover our common shares, which could
have a negative effect on our market price.
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.
WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY.
The success of our business depends, in part, upon our ability to protect
trade secrets, designs, drawings, copyrights and patents, obtain or license
patents and operate without infringing on the intellectual property rights of
others. We rely on a combination of trade secrets, designs, drawings,
copyrights, patents, nondisclosure agreements and technical measures to protect
our proprietary rights in our products and technology. The steps taken by us in
this regard may not be adequate to prevent misappropriation of our technology.
In addition, the laws of some foreign countries in which we operate do not
protect our proprietary rights to the same extent as do the laws of the United
States. Although we continue to evaluate and implement protective measures, we
cannot assure you that these efforts will be successful. Our inability to
protect our intellectual property rights could diminish or eliminate the
competitive advantages that we derive from our technology, cause us to lose
sales or otherwise harm our business.
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,
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;
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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 Lynch, 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.
THE RESULTS OF OUR OPERATIONS ARE SUBJECT TO FLUCTUATIONS IN THE AVAILABILITY,
QUALITY AND COST OF THE RAW MATERIALS AND COMPONENTS NEEDED FOR OUR PRODUCTS.
Many of our products require the use of raw materials and components that
are produced in only a limited number of regions around the world or are
available from only a limited number of suppliers. We may have difficulty
obtaining these raw materials or components, the quality of available raw
materials or components may deteriorate or there may be significant price
increases for these raw materials or components. For periods in which the prices
of these raw materials or components are rising, we may be unable to pass on the
increased cost to our customers, which would result in decreased margins for the
products in which they are used. For periods in which the prices are declining,
we may be required to write down our inventory carrying cost of these raw
materials or components, as we record our inventory at the lower of cost or
market. Depending on the extent of the difference between market price and our
carrying cost, this write-down could have an adverse effect on our financial
results and results of operations.
From time to time, we have experienced short-term market shortages of raw
materials or components that have resulted in higher costs to us. Future market
shortages could affect our ability to meet our production requirements during
periods of growing demand for our products.
OUR MARKETS ARE HIGHLY COMPETITIVE, AND WE MAY LOSE BUSINESS TO LARGER AND
BETTER-FINANCED COMPETITORS.
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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
M-TRON'S ACQUISITION OF PIEZO.
On October 15, 2004, M-tron completed its acquisition of Piezo. 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 Piezo'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 Piezo'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.
M-TRON'S BACKLOG MAY NOT BE INDICATIVE OF FUTURE SALES AND MAY ADVERSELY AFFECT
OUR BUSINESS.
M-tron's backlog comprises orders that are subject to specific production
release orders under written contracts, oral and written orders from customers
with which M-tron has had long-standing relationships and written purchase
orders from sales representatives. M-tron'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 M-tron
has experienced in the recent economic slowdown. As a result, we do not believe
that M-tron's backlog as of any particular date is necessarily representative of
actual net sales for any succeeding period.
M-TRON 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 M-TRON'S SALES.
In 2003, approximately 30% of M-tron's net sales were 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 M'tron's net sales in 2004 and a material
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portion of M-tron's sales for the next several years. M-tron 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, M-tron would have to identify and qualify acceptable replacement
manufacturers or manufacture the products internally. Due to specific product
knowledge and process capability, M-tron 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, M-tron's relationship with this manufacturer, may adversely
affect M-tron's results of operations and our financial condition.
CONTINUED MARKET ACCEPTANCE OF M-TRON'S PACKAGED QUARTZ CRYSTALS, OSCILLATOR
MODULES AND ELECTRONIC FILTERS IS CRITICAL TO OUR SUCCESS, BECAUSE FREQUENCY
CONTROL DEVICES ACCOUNT FOR NEARLY ALL OF M-TRON'S SALES.
Virtually all of M-tron'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 M-tron'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 M-tron's business and our financial condition.
M-TRON'S FUTURE RATE OF GROWTH IS HIGHLY DEPENDENT ON THE DEVELOPMENT AND GROWTH
OF THE MARKET FOR COMMUNICATIONS AND NETWORK EQUIPMENT.
M-tron's business depends heavily upon capital expenditures by the
providers of communications and network services. In 2003, the majority of
M-tron's net sales were to manufacturers of communications and network
infrastructure equipment, including indirect sales through distributors and
contract manufacturers. In 2004, M-tron expects a smaller but significant
portion of its net sales to be to manufacturers of communications and network
infrastructure equipment. M-tron 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 M-tron's products. A slowdown in the manufacture and
purchase of communications and network infrastructure equipment could
substantially reduce M-tron'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, M-tron may be unable
to sustain its growth. In addition, M-tron's growth depends upon the acceptance
of its products by communications and network infrastructure equipment
manufacturers. If, for any reason, these manufacturers do not find M-tron'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 M-TRON'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, M-tron's ability to persuade these original equipment
manufacturers to specify our products has been reduced and, in the absence of a
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manufacturer's specification of M-tron's products, the prices that M-tron can
charge for them may be subject to greater competition.
M-TRON'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 M-tron'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 M-tron from doing business with a foreign government or prevent
M-tron from selling its products in certain countries;
o audit and object to M-tron's contract-related costs and expenses, including
allocated indirect costs; and
o change specific terms and conditions in M-tron's contracts, including
changes that would reduce the value of the contract to M-tron.
M-tron's business generated from government contracts could be materially
and adversely affected if:
o M-tron's reputation or relationship with government agencies were impaired;
o M-tron were suspended or otherwise prohibited from contracting with a
domestic or foreign government;
o any of M-tron's products were to fail to meet the requirements of certain
applicable specified military standards;
o levels of government spending were to decrease;
o M-tron were barred from entering into new government contracts or extending
existing government contracts based on violations or suspected violations
of laws or regulations; or
o M-tron were not granted security clearances required to provide its
services and solutions to governments, or such security clearances were
revoked.
FUTURE CHANGES IN M-TRON'S ENVIRONMENTAL LIABILITY AND COMPLIANCE OBLIGATIONS
MAY INCREASE COSTS AND DECREASE PROFITABILITY.
M-tron'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 M-tron's operations that any future
regulations might require, or the cost of compliance that would be associated
with these regulations.
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
9
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 10 largest customers accounted for
approximately 84% of its net sales in 2003, 2002 and 2001 and 72% in 2004. Lynch
Systems' sales to its largest customer accounted for approximately 20% of its
net sales in 2003, 2002 and 2001. 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.
A MULTIPLE MACHINE ORDER AND FUTURE ORDERS WITH A SIGNIFICANT CUSTOMER IN THE
TABLEWARE MARKET ARE CONTINGENT UPON THE SUCCESSFUL INSTALLATION AND OPERATION
OF THE MACHINES.
Lynch Systems has a significant order for glass manufacturing machines that
are scheduled to be shipped and installed in the customer's factories in 2005.
We expect that this contract will represent approximately 33% of Lynch Systems'
revenues in 2005. Payment terms and conditions under this contract are based on
the successful operation of these machines during a trial operating period. 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 to Lynch Systems' ability to realize full payment. If
the customer cannot realize the full benefit of these machines, some of the
payments may be forfeited and future orders from this customer may be canceled.
10
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 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 http://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.
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 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 2, 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.
11
You are also urged to carefully review and consider the various disclosures
made by us in this document, as well as in our periodic reports on Forms 10-K,
10-Q and 8-K, filed with the Securities and Exchange Commission.
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.
INCORPORATION BY REFERENCE
The following documents filed by us with the SEC are incorporated by
reference in this prospectus:
(1) Our Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 2004;
(2) Our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2004;
(3) Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2004;
(4) Our Annual Report on Form 10-K for the fiscal year ended December 31, 2003;
(5) Our Current Report on Form 8-K filed on November 18, 2004;
(6) Our Current Report on Form 8-K filed on October 20, 2004;
(7) Our Current Report on Form 8-K filed on October 8, 2004;
(8) Our Current Report on Form 8-K filed on September 23, 2004;
(9) Our Current Report on Form 8-K filed on September 14, 2004;
(10) Our Current Report on Form 8-K filed on September 8, 2004;
(11) Our Current Report on Form 8-K filed on December 22, 2004; and
(12) 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 documents subsequently filed with the SEC by us pursuant to Sections
13(a), 13(c), 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 herein have been sold or that deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be part hereof from the respective dates of filing of such documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof or of the related prospectus to the extent that a statement
contained herein or in any other subsequently filed document that is also
incorporated or deemed to be incorporated herein modifies or supersedes such
statement.
12
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this registration statement.
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: Secretary
(203) 622-1150
USE OF PROCEEDS
The common shares offered hereby are being registered for the account of
the selling shareholder identified in this prospectus. All net proceeds from the
sale of the common shares will go to the selling shareholder. Accordingly, we
will not receive any part of the proceeds from such sales.
SELLING SHAREHOLDER
The following table sets forth information relating to the selling
shareholder and is as of the effective date of this prospectus. It includes the
number of common shares beneficially owned by the selling shareholder, the
maximum number of common shares to be sold in this offering by the selling
shareholder and the number of common shares to be beneficially owned by the
selling shareholder after this offering (assuming sale of such maximum number of
shares). The selling shareholder, Venator Merchant Fund, L.P., has not been an
officer, director or employee of the Company for the past three years. Venator
is an investment limited partnership controlled by our Chairman of the Board,
Marc Gabelli. Mr. Gabelli became Chairman of the Board on September 20, 2004.
The common shares offered hereby were acquired on October 15, 2004. Mr. Gabelli
is the chief executive officer of the sole general partner of Venator and has
sole dispositive and voting power over these shares. Except as set forth in this
paragraph, Venator has not had any material relationship with us in the past
three years. As of December 23, 2004, we have 1,632,126 common shares issued and
outstanding.
For purposes of the table below, beneficial ownership is determined in
accordance with the rules of the SEC, and includes voting or investment power
with respect to shares. The inclusion of any shares in this table does not
constitute an admission of beneficial ownership for the selling shareholder
named below.
13
Shares Percent Maximum
Beneficially Beneficially Number of Shares to be Percent to be
Owned Prior Owned Prior Shares to be Beneficially Beneficially
Name and Address of to this to this Offered for Owned after Owned after
Selling Shareholder(1) Offering Offering Resale this Offering this Offering
-----------------------------------------------------------------------------------------------------------------------
Venator Merchant Fund, L.P. 336,884 20.64% 136,643 200,241 12.27%
-----------------------------------------------------------------------------------------------------------------------
(1) The address of the selling shareholder is One Corporate Center, Rye, New
York 10580.
Our registration of the shares included in this prospectus does not
necessarily mean that Venator will opt to sell any of the shares offered hereby.
The shares covered by this prospectus may be sold from time to time by the
selling shareholder so long as this prospectus remains in effect.
PLAN OF DISTRIBUTION
The selling shareholder, which as used herein includes donees, pledgees,
transferees or other successors-in-interest of the selling shareholder, selling
common shares or interests in common shares received after the date of this
prospectus from the selling shareholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or
otherwise dispose of any or all of their common shares or interests in common
shares on any stock exchange, market or trading facility on which the shares are
traded or in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.
The selling shareholder may, from time to time, pledge or grant a security
interest in some or all of the common shares owned by it and, if it defaults in
the performance of its secured obligations, the pledgees or secured parties may
offer and sell the common shares, from time to time, under this prospectus, or
under an amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act amending the list of selling shareholders to
include the pledgee, transferee or other successors in interest as selling
shareholders under this prospectus. The selling shareholder also may transfer
the common shares in other circumstances, in which case the transferees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.
The selling shareholder and any underwriters, broker-dealers or agents that
participate in the sale of the common shares or interests therein may be
"underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act.
The selling shareholder is an "underwriter" within the meaning of Section 2(11)
of the Securities Act and is subject to the prospectus delivery requirements of
the Securities Act.
14
LEGAL MATTERS
The validity of the common shares offered hereby has been passed upon by
Olshan Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue Tower, 65 East 55th
Street, New York, New York 10022.
EXPERTS
The financial statements and schedule audited by Ernst & Young LLP have
been incorporated by reference to our Annual Report on Form 10-K for the fiscal
year ended December 31, 2003 in reliance on their report given on their
authority as experts in auditing and accounting.
15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses that will be paid by us
in connection with the securities being registered. With the exception of the
Securities and Exchange Commission ("SEC") registration fee and the American
Stock Exchange ("AMEX") listing fee, all amounts shown are estimates.
SEC registration fee................................................. $237.22
AMEX listing fee..................................................... $2,732.86
Legal fees and expenses (including Blue Sky fees) ................... $27,000
Accounting Fees and Expenses......................................... $5,000
Miscellaneous ..................................................... $5,000
---------
Total ................................................. $39,970.08
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
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
II-1
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 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;
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(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.
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
II-3
(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 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.
(d) 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
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.
II-4
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
(3) any other authorization, whenever adopted, after notice, by a majority
vote of all the voting 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 16. EXHIBITS.
------- --------
Exhibit No. Description
----------- -----------------------------------------------------
*3(a) Restated Articles of Incorporation of Registrant.
(b) Amended and Restated By-laws of the Registrant
(incorporated by reference to Exhibit 3.1 of the
Registrant's Current Report on Form 8-K filed on
December 22, 2004).
*4 Specimen Certificate for Common Shares, $0.01 par
value per share, of Lynch Corporation.
*5 Opinion of Olshan Grundman Frome Rosenzweig & Wolosky
LLP.
*23(a) Consent of Ernst & Young LLP.
*23(b) Consent of Olshan Grundman Frome Rosenzweig & Wolosky
LLP, included in Exhibit 5 to this Registration
Statement.
*24 Powers of Attorney, included on the signature page to
this Registration Statement.
---------------
* Filed herewith.
II-5
ITEM 17. 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 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;
(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.
(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 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act, as amended 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, 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 an 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.
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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-3 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 28th day of
December, 2004.
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 December 28, 2004
------------------------------------------------
John C. Ferrara Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Eugene Hynes December 28, 2004
------------------------------------------------
Eugene Hynes Vice President, Treasurer and Secretary
(Principal Financial and Accounting Officer)
/s/ Marc Gabelli December 28, 2004
------------------------------------------------
Marc Gabelli Chairman of the Board of Directors
/s/ E. Val Cerutti December 21, 2004
------------------------------------------------
E. Val Cerutti Director
/s/ Avrum Gray December 28, 2004
------------------------------------------------
Avrum Gray Director
/s/ Anthony R. Pustorino December 18, 2004
------------------------------------------------
Anthony R. Pustorino Director
II-7
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
*3(a) Restated Articles of Incorporation of Registrant.
(b) Amended and Restated By-laws of the Registrant
(incorporated by reference to Exhibit 3.1 of the
Registrant's Current Report on Form 8-K filed on
December 22, 2004).
*4 Specimen Certificate for Common Shares, $0.01 par
value per share, of Lynch Corporation.
*5 Opinion of Olshan Grundman Frome Rosenzweig & Wolosky
LLP.
*23(a) Consent of Ernst & Young LLP.
*23(b) Consent of Olshan Grundman Frome Rosenzweig & Wolosky
LLP, included in Exhibit 5 to this Registration
Statement.
*24 Powers of Attorney, included on the signature page to
this Registration Statement.
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* Filed herewith.