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<SEC-DOCUMENT>0000061004-01-500015.txt : 20010828
<SEC-HEADER>0000061004-01-500015.hdr.sgml : 20010828
ACCESSION NUMBER:		0000061004-01-500015
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20010817
ITEM INFORMATION:		Other events
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20010827

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LYNCH CORP
		CENTRAL INDEX KEY:			0000061004
		STANDARD INDUSTRIAL CLASSIFICATION:	TRUCKING (NO LOCAL) [4213]
		IRS NUMBER:				381799862
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-00106
		FILM NUMBER:		1724038

	BUSINESS ADDRESS:	
		STREET 1:		401 THEODORE FREMD AVENUE
		CITY:			RYE
		STATE:			NY
		ZIP:			10580
		BUSINESS PHONE:		9149217601

	MAIL ADDRESS:	
		STREET 1:		401 THEODORE FREMD AVENUE
		STREET 2:		SUITE 290
		CITY:			RYE
		STATE:			NY
		ZIP:			10580
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>lgl8k.txt
<DESCRIPTION>LYNCH CORPORATION FORM 8-K
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION


                             WASHINGTON, D.C. 20549


                                    FORM 8-K
                                    --------

                 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES AND EXCHANGE ACT OF 1934


Date of Report (Date of Earliest Event Reported) August 17, 2001
                                                 ---------------


                                LYNCH CORPORATION
                                -----------------

             (Exact Name of Registrant as Specified in its Charter)



    Indiana                          1-106                38-1799862
    -------                          -----                ----------
(State of other               (Commission File          (IRS Employer
Jurisdiction of                   Number)               Identification)
Incorporation)




50 Kennedy Plaza, Suite 1250, Providence, RI                     02903
- --------------------------------------------                     -----
(Address of Principal Executive Offices                         Zip Code



Registrant's Telephone Number, Including Area Code:   401-453-2000
- ---------------------------------------------------   ------------


<PAGE>



Item 5.  Other Events
- -------  ------------

On August 17, 2001,  Ralph R. Papitto  replaced Mario J. Gabelli as Chairman and
Chief Executive Officer of Lynch Corporation (the "Company") and Mr. Gabelli was
appointed Vice Chairman. In connection with Mr. Papitto's appointment, the Board
of Directors  approved,  subject to  shareholder  ratification,  the grant of an
option to Mr. Papitto to purchase up to 374,471  shares of the Company's  Common
Stock at an exercise price of $30 per share (subject to customary  anti-dilution
adjustments) (the "Option").

Also on August 17, 2001, Anthony T. Castor, III, and Robert E. Dolan resigned as
directors.  There are now three vacancies on the Board (Louis A. Guzzetti,  Jr.,
resigned on July 31) and it is  contemplated  that three new  directors  who are
acceptable to Mr. Papitto and the remaining Board will fill such vacancies.

Attached as Exhibit 10(w) is a copy of the agreement (the "Agreement") among the
Company,  Mr. Papitto and Mr. Gabelli pursuant to which, among other things, the
Company  has  agreed to grant Mr.  Papitto  the  Option.  Also  pursuant  to the
Agreement,  Mr.  Gabelli has agreed to vote all shares of Common  Stock owned by
him personally in favor of the Option.  The Agreement is incorporated  herein by
reference in its entirety.

Attached  as Exhibit  99.1 is a copy of the press  release  issued on August 17,
2001  announcing  Mr.  Papitto's  appointment  as Chairman  and Chief  Executive
Officer, which press release is incorporated herein by reference.

Item 7.  Financial Statements and Exhibits
- -------  ---------------------------------

      Exhibits

         (a)      Not applicable
         (b)      Not applicable
         (c)      Exhibits

                  10(w)    Agreement dated August 17, 2001 among Lynch
                           Corporation, Ralph R. Papitto and Mario J. Gabelli

                  99.1     Press Release dated August 17, 2001


<PAGE>




                                   Signatures

Pursuant  to the  requirement  of the  Securities  Exchange  Act  of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereto duly authorized.

                                                     Lynch Corporation


                             By:  /s/Ralph R. Papitto
                             ------------------------
                                     Ralph R. Papitto
                                     Chief Executive Officer


Date: August 24, 2001
- ---------------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex10w.txt
<DESCRIPTION>AGREEMENT DATED AS OF AUGUST 17, 2001
<TEXT>
                                                                Exhibit 10(w)



     Agreement  dated  as of  August  17,  2001  among  Lynch  Corporation  (the
"Company"), Ralph R. Papitto ("Papitto") and Mario J. Gabelli ("Gabelli").

     WHEREAS,  the Board of Directors (the "Board") of the Company has appointed
Papitto Chief Executive Officer of the Company; and

     WHEREAS, the Board currently consists of Messrs. Gabelli, Papitto, Gray and
Cerutti,  with  three  vacancies  resulting  from the  resignations  of  Messrs.
Guzzetti, Dolan and Castor; and

     WHEREAS,  it is contemplated  that Papitto will designate three nominees to
fill such  vacancies;  and, if such  nominees are  reasonably  acceptable to the
Company, the Company will recommend that the Board elect such nominees.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the parties agree as follows:

1.   Papitto  agrees  to serve as the  Company's  Chief  Executive  Officer  and
     Chairman  of the Board.  Gabelli  agrees to serve as Vice  Chairman  of the
     Board.

2.   Subject to approval by the shareholders of the Company,  the Company hereby
     grants  Papitto  a  nontransferable   option  (the  "Option")  to  purchase
     374,471shares  of Common  Stock,  par value  $.01 per  share  (the  "Common
     Stock")  (representing 20% on a fully-diluted basis of the shares of Common
     Stock outstanding on the date hereof),  at an initial exercise price of $30
     per share and having the other terms and  conditions set forth in Exhibit A
     hereto.

3.   The  base  salary,  bonus  and  benefits  payable  to  Papitto  shall be as
     determined from time to time by the Board in relation to the size and scale
     of the Company's  operations.  The Company shall not compensate  Papitto in
     respect of any tax  consequences  of the grant,  holding or exercise of the
     Option.

4.   The  Company  will  move  its  executive  offices  from  Rye,  New  York to
     Providence, Rhode Island at such time as may be determined by Papitto.

5.   Subject to  approval  by the  shareholders  of the  Company of the  Option,
     Papitto  agrees  that  he  will  present  to the  Company  all  acquisition
     opportunities  presented  to or  secured  by him  or any of his  affiliated
     companies  prior to the date hereof and that neither he nor his  affiliated
     companies will after the date hereof acquire direct or indirect  control of
     any company  (other than through  acquisition  by the Company)  without the
     prior approval of a majority of the Board (excluding  Papitto and any other
     director  who is an officer of the  Company or is or has been an officer of
     any other company managed by Papitto).  The Company will reimburse  Papitto
     for documented  out-of -pocket costs incurred by Papitto in connection with
     acquisition  opportunities  secured  by him prior to the date  hereof  that
     following the date hereof are pursued by the Company.

6.   The  Company  will call a special  meeting  of  shareholders  to be held as
     promptly as practicable  and will use its  reasonable  efforts to hold such
     meeting  prior to October 31, 2001,  at which  meeting  shareholders  shall
     consider  approval of the option attached as Exhibit A hereto.  The Company
     hereby agrees to use all reasonable efforts to obtain shareholder  approval
     of the foregoing.

7.   Gabelli hereby agrees to vote all shares of Common Stock  personally  owned
     by him in favor of the Option.

8.

     (a)  This  Agreement  may be amended,  altered or modified  only by written
          instrument executed by each of the parties.

     (b)  This   Agreement  and  the  Exhibit   hereto   constitute  the  entire
          understanding  and  agreement of the parties,  and supersede all prior
          agreements and understandings, written and oral, among the parties, on
          the other hand, with respect to the subject matter hereof.

     (c)  Any  term  or  provision  of  this  Agreement   which  is  invalid  or
          unenforceable in any jurisdiction  shall, as to that jurisdiction,  be
          ineffective  to the  extent  of such  invalidity  or  unenforceability
          without  rendering  invalid or  unenforceable  the remaining terms and
          provisions  of  this  Agreement  in  any  other  jurisdiction.  If any
          provision of this  Agreement is so broad as to be  unenforceable,  the
          provision shall be interpreted to be only so broad as is enforceable.

     (d)  All notices and other communications hereunder shall be in writing and
          shall be deemed given if (i) delivered in person,  (ii) transmitted by
          telecopy (with confirmation),  (iii) mailed by certified or registered
          mail (return  receipt  requested and obtained) or (iv) delivered by an
          express  courier (with  confirmation)  to the parties at the following
          addresses  (or at such other address for a party as shall be specified
          by like notice):


<PAGE>




                  If to the Company:

                           Lynch Corporation
                           401 Theodore Fremd Avenue
                           Rye, NY 10580

                           Telecopy:  914-921-6410
                           Attention:  Chairman of the Board of Directors

                  and

                  If to Papitto:

                           Ralph R. Papitto
                           c/o AFC Cable Systems
                           50 Kennedy Plaza
                           Suite 1250
                           Providence, RI 02903

                           Telecopy:  401-453-2009

                  and

                  If to Gabelli:

                           Mario J. Gabelli
                           c/o Gabelli Group Capital Partners Inc.
                           One Corporate Center
                           Rye, New York 10580-1434

                           Telecopy:  914-921-5384

     (e)  This  Agreement  shall inure to the benefit of and be binding upon the
          parties  hereto  and  the  respective  successors,  heirs,  executors,
          representatives and permitted assigns of the parties.  Nothing in this
          Agreement  is intended or shall be construed to confer upon any entity
          or  person  other  than  the  parties  hereto  and  their   respective
          successors and permitted  assigns any right,  remedy or claim under or
          by reason of this  Agreement  or any part  hereof.  Without  the prior
          written  consent of each of the other parties  hereto,  this Agreement
          and the rights  hereunder  may not be  assigned  by any of the parties
          hereto.

     (f)  This  Agreement may be executed in two or more  counterparts,  each of
          which shall be deemed an  original,  but all of which  taken  together
          shall constitute one and the same agreement,  it being understood that
          all of the parties need not sign the same counterpart.

     (g)  THIS  AGREEMENT,  THE LEGAL  RELATIONS  BETWEEN  THE  PARTIES  AND THE
          ADJUDICATION  AND THE  ENFORCEMENT  THEREOF,  SHALL BE GOVERNED BY AND
          INTERPRETED AND CONSTRUED IN ACCORDANCE  WITH THE SUBSTANTIVE  LAWS OF
          THE STATE OF NEW YORK,  WITHOUT  REGARD TO THE PRINCIPLES OF CONFLICTS
          OF LAW THEREOF.

     (h)  All  actions  arising  under or relating  to this  Agreement  shall be
          brought  exclusively  in the Federal  District  Court for the Southern
          District  of New York or in any New York  State  Court  sitting in the
          County of New York and having  subject matter  jurisdiction  over such
          matters,  and  each of the  parties  hereto  consents  and  agrees  to
          personal  jurisdiction,  and waives any objection as to the venue,  of
          such courts for purposes of such action. The parties to this Agreement
          agree to waive any right to a jury  trial as to all  disputes  and any
          right to seek punitive or consequential damages.




<PAGE>



     IN WITNESS  WHEREOF,  the undersigned have duly executed and delivered this
Agreement as of the date appearing in the opening paragraph hereof.

                                                     LYNCH CORPORATION


                                                     By: /s/ Roger J. Dexter
                                                     Name: Roger J. Dexter
                                                     Title: Chief Financial
                                                                  Officer


                                                     /s/Ralph R. Papitto
                                                        Ralph R. Papitto


                                                     /s/Mario J. Gabelli
                                                        Mario J. Gabelli


<PAGE>



Exhibit A
                         FORM OF STOCK OPTION AGREEMENT


THIS  OPTION  AGREEMENT  AND ANY SHARES  ACQUIRED  UPON  EXERCISE OF ANY OPTIONS
PURSUANT HERETO HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES   ACT"),  AND  MAY  NOT  BE  OFFERED,   SOLD,   ASSIGNED,   PLEDGED,
HYPOTHECATED,  TRANSFERRED OR OTHERWISE  DISPOSED OF UNLESS AND UNTIL REGISTERED
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS,  IN
THE OPINION OF COUNSEL TO THE  ISSUER,  SUCH OFFER,  SALE,  ASSIGNMENT,  PLEDGE,
HYPOTHECATION,  TRANSFER OR OTHER  DISPOSITION IS EXEMPT FROM REGISTRATION OR IS
OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT AND SUCH LAWS.

THIS OPTION  AGREEMENT AND ANY OPTIONS  HEREUNDER ARE SUBJECT TO RESTRICTIONS ON
OFFER,  SALE,  ASSIGNMENT,  PLEDGE,  HYPOTHECATION,   GIFT,  TRANSFER  OR  OTHER
DISPOSITION, AS SPECIFIED HEREIN.

     Stock Option Agreement, dated as of ______, 2001, between Lynch Corporation
and Ralph R. Papitto ("Papitto").

     WHEREAS,  Papitto  has agreed to serve as the Chief  Executive  Officer and
Chairman of the Board of Directors of the Company,  and the Company desires that
he remain in such  employ  and that he  increase  his  equity  ownership  in the
Company in order to increase his incentive and personal  interest in the welfare
of the Company and its subsidiaries;

     NOW, THEREFORE,  the parties hereby, subject to the terms and conditions of
this Agreement as set forth herein, agree as follows:

     1.   The  Company  grants to Papitto an option (the  "Option")  to purchase
          from the Company all or any part of an aggregate of 374,471 shares (as
          adjusted,  the "Optioned  Shares") of common stock, par value $.01 per
          share  (the  "Common  Stock").  The  Option is not  intended  to be an
          incentive  stock  option  within the  meaning  of Section  422A of the
          Internal Revenue Code of 1986, as amended, and this Agreement shall be
          construed and interpreted in accordance with such intention.

     2.   Subject to adjustment as provided herein,  the purchase price upon any
          exercise of the Option shall be $30.00 per share (the "Option Price").

     3.   The Option shall not be assignable or  transferable  by Papitto except
          by will or intestacy to the executors or  administrators  of Papitto's
          estate and,  during the life of Papitto,  the Option may be  exercised
          only by him or his legal  representative (any such person, the "Option
          Holder").

     4.   The Option shall expire on and no longer be  exercisable to any extent
          whatsoever after the earlier of (a) the tenth  anniversary of the date
          of this  Agreement or (b) the fifth  anniversary  of the date on which
          Papitto ceases for any reason to serve as the Chief Executive  Officer
          of the  Company.  Any exercise of the Option may be either in whole or
          in part at any time and from time to time.

     5.   Neither  Papitto nor Papitto's  legal  representative  or executors or
          administrators  shall be or be deemed  to be the  holder of any of the
          Optioned  Shares  unless and until a certificate  or other  authorized
          evidence for such shares  shall have been issued.  Upon payment of the
          Option Price  thereof,  each share issued upon  exercise of the Option
          shall be fully paid and nonassessable.

     6.   In order to exercise the Option,  the Option Holder shall give written
          notice of intent to exercise the Option to the Chief Financial Officer
          of the Company or his designee,  specifying the number of the Optioned
          Shares  with  respect  to which  the  Option is being  exercised,  and
          accompanied  by  payment  to the  Company  of the amount of the Option
          Price for the number of the Optioned Shares so specified.

     7.   Unless the shares to be issued upon the  exercise of the Option  shall
          be registered  prior to the issuance  thereof under the Securities Act
          of 1933,  the Option  Holder  shall,  as a condition of the  Company's
          obligation to issue such shares, give a representation in writing that
          he is acquiring  such shares for his own account as an investment  and
          not with a view to, or for sale in connection  with, the  distribution
          of any thereof.  In the event of the death of Papitto,  an  additional
          condition  of  exercising  the  Option  shall be the  delivery  to the
          Company of such tax waivers and other  documents as the Company  shall
          determine.

     8.   Upon any  exercise of the Option,  the Company may, in lieu of issuing
          the Optioned  Shares covered by such exercise,  cancel such portion of
          the Option in exchange for a cash  payment to the Option  Holder of an
          amount equal to the product of (a) the excess of the Closing Price (as
          defined  below) of the Common  Stock on the date the Company  receives
          notice  of  such  exercise  over  the  Option  Price  then  in  effect
          multiplied  times (b) the number of  Optioned  Shares  covered by such
          exercise, less applicable withholding taxes.

     9.   The Company shall at all times reserve and keep  available,  free from
          preemptive  rights out of its  authorized  but unissued  Common Stock,
          solely for the purpose of effecting  exercises of the Option, the full
          number of shares of Common Stock that would then be  deliverable  upon
          the exercise of the entire then unexercised  portion of the Option. If
          the Common Stock is quoted on the American Stock Exchange or any other
          U.S.  national  securities  exchange and such shares shall have become
          freely  transferable by the Option Holder under the federal securities
          laws,  the Company will,  if permitted by the rules of such  exchange,
          list and  keep  listed  on such  exchange,  upon  official  notice  of
          issuance, all such shares of Common Stock.

     10.

          (a)  In case  the  Company  shall  pay or  make a  dividend  or  other
               distribution on any class of capital stock of the Company payable
               in Common  Stock,  the Option  Price in effect at the  opening of
               business   on  the  day   following   the  date   fixed  for  the
               determination  of stockholders  entitled to receive such dividend
               or other distribution shall be reduced by multiplying such Option
               Price by a fraction of which the numerator shall be the number of
               shares of Common  Stock  outstanding  at the close of business on
               the date fixed for such  determination  and the denominator shall
               be the sum of such  number  of  shares  and the  total  number of
               shares  constituting  such dividend or other  distribution,  such
               reduction to become  effective  immediately  after the opening of
               business   on  the  day   following   the  date  fixed  for  such
               determination.  (For purposes of  determining  adjustments to the
               Option Price as set forth herein, shares of capital stock held in
               the  treasury  of the  Company  or any of its  subsidiaries,  and
               distributions   or  issuances  in  respect   thereof,   shall  be
               disregarded.)

          (b)  In case the  Company  shall  issue  rights or  warrants to all or
               substantially all holders of its Common Stock entitling them, for
               a period of not more than 45 days,  to subscribe  for or purchase
               shares of Common Stock at a price per share less than the Current
               Market Price (as  hereinafter  defined) on the date fixed for the
               determination of stockholders  entitled to receive such rights or
               warrants,  the Option  Price in effect at the opening of business
               on the day  following  the date  fixed  for  termination  of such
               subscription  or purchase  period shall be reduced by multiplying
               such Option Price by a fraction of which the  numerator  shall be
               the number of shares of Common Stock  outstanding at the close of
               business on the date fixed for such determination plus the number
               of shares of Common  Stock which the  aggregate  of the  offering
               price of the total  number of  shares  of Common  Stock  actually
               purchased upon exercise of such rights or warrants have purchased
               at such  Current  Market Price and the  denominator  shall be the
               number  of shares of  Common  Stock  outstanding  at the close of
               business on the date fixed for such determination plus the number
               of shares of Common Stock  actually  purchased  upon  exercise of
               such  rights or  warrants,  such  reduction  to become  effective
               immediately  after the opening of  business on the day  following
               the date fixed for such termination.

          (c)  In  case  the  outstanding   shares  of  Common  Stock  shall  be
               subdivided  into a greater number of shares of Common Stock,  the
               Option  Price in effect at the  opening  of  business  on the day
               following the day upon which such subdivision  becomes  effective
               shall be  proportionately  reduced,  and conversely,  in case the
               outstanding  shares  of Common  Stock  shall be  combined  into a
               smaller  number of shares of Common  Stock,  the Option  Price in
               effect at the opening of business  on the day  following  the day
               upon  which  such   combination   becomes   effective   shall  be
               proportionately  increased,  such  reduction or increase,  as the
               case may be, to become effective immediately after the opening of
               business on the day following the day upon which such subdivision
               or combination becomes effective.

          (d)  In case the Company shall,  by dividend or otherwise,  distribute
               to all or substantially all holders of its Common Stock evidences
               of indebtedness,  shares of capital stock of any class or series,
               other securities, cash or assets (other than Common Stock, rights
               or  warrants  referred  to in clause (b) of this  Section 10 or a
               dividend or distribution payable exclusively in cash), the Option
               Price in effect immediately prior to the close of business on the
               date fixed for the payment of such distribution  shall be reduced
               by  multiplying  such  Option  Price by a  fraction  of which the
               numerator shall be the Current Market Price on the date fixed for
               such payment less the then fair market  value (as  determined  in
               good faith by the Board of Directors  of the Company,  whose good
               faith  determination  shall  be  conclusive  and  described  in a
               resolution  of the Board of  Directors)  of the  portion  of such
               evidences  of  indebtedness,   shares  of  capital  stock,  other
               securities, cash and assets distributed per share of Common Stock
               and the  denominator  shall be such Current  Market  Price,  such
               reduction to become effective immediately prior to the opening of
               business on the day following the date fixed for such payment.

          (e)  In case the  Company  shall,  by dividend  or  otherwise,  make a
               distribution  to all or  substantially  all holders of its Common
               Stock payable  exclusively  in cash in an aggregate  amount that,
               when combined  with the  aggregate  amount paid in respect of all
               other  distributions to all or  substantially  all holders of its
               Common  Stock  paid  exclusively  in cash  within  the 12  months
               preceding the date fixed for the payment of such  distribution to
               the extent such amount has not  already  been  applied in a prior
               adjustment pursuant to this paragraph, exceeds 10% of the product
               of the Current  Market  Price on the date fixed for such  payment
               times  the  number  of  shares  of  Common  Stock on  which  such
               distribution  is paid,  the  Option  Price in effect  immediately
               prior to the close of business on the date fixed for such payment
               shall be reduced by  multiplying  such Option Price by a fraction
               of which the numerator  shall be the Current  Market Price on the
               date  fixed  for such  payment  less the Per  Share  Distribution
               Amount (as hereinafter defined) paid in such distribution and the
               denominator shall be such Current Market Price, such reduction to
               become effective  immediately prior to the opening of business on
               the day following the date fixed for such payment.

          (f)  In case the Company or any of its Subsidiaries shall consummate a
               tender or  exchange  offer for all or any  portion  of the Common
               Stock, the Option Price in effect  immediately prior to the close
               of business on the date of  expiration of such tender or exchange
               offer  shall be  reduced  or  increased,  as the case may be,  by
               multiplying  such  Option  Price  by  a  fraction  of  which  the
               numerator   shall  be  the  number  of  shares  of  Common  Stock
               outstanding  at the close of business on such date of  expiration
               less the number of shares of Common Stock  actually  purchased in
               such offer and the  denominator  shall be the number of shares of
               Common Stock outstanding at the close of business on such date of
               expiration  less the  number of  shares  Common  Stock  which the
               aggregate of the purchase price for the total number of shares of
               Common  Stock  actually   purchased  in  such  offer  would  have
               purchased  at  such  Current  Market  Price,  such  reduction  or
               increase,  as the case may be,  to become  effective  immediately
               prior to the opening of business on the day  following  such date
               of expiration.

          (g)  The  Company  may not engage in any  transaction  if, as a result
               thereof, the Option Price would be reduced to below the par value
               per share of the Common Stock.

          (h)  No adjustment  in the Option Price shall be required  unless such
               adjustment  would  require an increase or decrease of at least 1%
               in the Option  Price;  provided,  however,  that any  adjustments
               which by reason of this  paragraph  are not  required  to be made
               shall be carried forward and taken into account in any subsequent
               adjustment.

          (i)  Whenever the Option Price is adjusted  pursuant to Section 10(a),
               (b) or (c),  the number of Optioned  Shares  then  subject to the
               Option  shall,  in the case of a reduction  in Option  Price,  be
               increased  proportionately  and,  in the case of an  increase  in
               Option Price, be decreased proportionately.

          (j)  Whenever  the Option  Price is adjusted as herein  provided,  the
               Company  shall  compute the  adjusted  Option Price and number of
               Optioned  Shares and shall  prepare a  certificate  signed by the
               Chief Financial Officer of the Company setting forth the adjusted
               Option  Price and  number  of  Optioned  Shares  and  showing  in
               reasonable  detail the facts upon which such adjustment is based,
               and such certificate  shall be given by the Company to the Option
               Holder.

          (k)  The  following  definitions  shall  apply to  terms  used in this
               Section 10.

          "Closing Price" of any Common Stock on any day means the last reported
     per share sale price,  regular way, of the Common stock on such day, or, in
     case no such sale takes  place on such day,  the  average  of the  reported
     closing per share bid and asked prices, regular way, of the Common Stock on
     such day, in each case on the  American  Stock  Exchange  or, if the Common
     Stock is not listed or admitted to trading on the American Stock  Exchange,
     on the principal national  securities exchange or quotation system on which
     the Common  Stock is listed or  admitted  to trading or quoted,  or, if the
     Common Stock is not listed or admitted to trading or quoted on any national
     securities  exchange or  quotation  system,  the average of the closing per
     share  bid  and  asked  prices  of the  Common  Stock  on  such  day in the
     over-the-counter  market  as  reported  by a  generally  accepted  national
     quotation  service or, if not so available in such manner,  as furnished by
     any American Stock  Exchange  member firm selected from time to time by the
     Board of  Directors of the Company for that purpose or, if not so available
     in such  manner,  as  otherwise  determined  in good  faith by the Board of
     Directors (whose good faith determination shall be conclusive and described
     in a resolution of the Board of Directors).

          "Common Stock" shall mean the Common Stock, or, subject to Section 11,
     any shares of any class or  classes  resulting  from any  reclassifications
     thereof and which have no  preference in respect of dividends or of amounts
     payable  in  the  event  of  any  voluntary  or  involuntary   liquidation,
     dissolution  or  winding  up of the  Company  and which are not  subject to
     redemption  by the Company;  provided,  however,  that if at any time there
     shall be more than one such resulting  class, the shares of each such class
     then so issuable shall be  substantially  in the proportion which the total
     number of shares of such class resulting from such  reclassification  bears
     to the total number of shares of all such classes  resulting  from all such
     reclassifications.

          "Current Market Price" on any date in question means,  with respect to
     any  adjustment  in Option  Price as set forth  herein,  the average of the
     daily Closing Prices for the Common Stock for the five consecutive  Trading
     Days selected by the Board of Directors commencing not more than 20 Trading
     Days before, and ending not later than, the earlier of the date in question
     and the day before the Ex Date with  respect to the  transaction  requiring
     such  adjustment;  provided,  however,  that (i) if any  other  transaction
     occurs requiring a prior adjustment to the Option Price and the Ex Date for
     such  other  transaction  falls  after  the  first of the five  consecutive
     Trading Days so selected by the Board of  Directors,  the Closing Price for
     each  such  Trading  Day  falling  prior  to the Ex  Date  for  such  other
     transaction shall be adjusted by multiplying such Closing Price by the same
     fraction  by which the Option  Price is so  required  to be  adjusted  as a
     result of such other transaction and (ii) if any other  transaction  occurs
     requiring a subsequent  adjustment  to the Option Price and the Ex Date for
     such other  transaction falls on or before the last of the five consecutive
     Trading Days so selected by the Board of  Directors,  the Closing Price for
     each  such  Trading  Day  falling  on or after  the Ex Date for such  other
     transaction  shall be adjusted by dividing  such Closing  Price by the same
     fraction  by which the Option  Price is so  required  to be  adjusted  as a
     result of such other transaction.

          "Ex  Date"  means  (i)  when  used  with  respect  to  any   dividend,
     distribution  or issuance,  the first date on which the Common Stock trades
     regular way on the relevant  exchange or in the relevant  market from which
     the Closing Price is obtained  without the right to receive such  dividend,
     distribution or issuance, (ii) when used with respect to any subdivision or
     combination  of shares of Common Stock,  the first date on which the Common
     Stock trades  regular way on such exchange or in such market after the time
     at which such subdivision or combination becomes effective, (iii) when used
     with respect to any tender or exchange  offer,  the first date on which the
     Common  Stock trades  regular way on such  exchange or in such market after
     such tender or exchange  offer  expires and (iv) when used with  respect to
     any other transaction, the date of consummation of such transaction.

          "Per  Share   Distribution   Amount"   means,   with  respect  to  any
     distribution,  (i) the cash paid in such  distribution  divided by (ii) the
     number of shares of Common Stock on which such distribution is paid.

          "Trading  Day"  means a day on  which  securities  are  traded  on the
     national securities exchange or quotation system or in the over-the-counter
     market used to determine Closing Prices for the Common Stock.

     11.  In the event of any  consolidation  of the Company  with, or merger of
          the Company into, any other person,  any merger of another person into
          the  Company  (other  than a  merger  which  does  not  result  in any
          reclassification,  conversion, exchange or cancellation of outstanding
          shares  of  the  Common  Stock)  or any  sale  or  transfer  of all or
          substantially all of the assets the Company, the person formed by such
          consolidation  or resulting  from such merger or which  acquires  such
          assets,  as the case may be, shall enter into a written agreement with
          the Option  Holder,  providing  that the Option  Holder shall have the
          right  thereafter,  during  the  period in which the  Option  shall be
          exercisable,  to  exercise  the Option only for the kind and amount of
          securities,   cash   and   other   property   receivable   upon   such
          consolidation,  merger,  sale or transfer by a holder of the number of
          shares of Common Stock for which the Option might have been  exercised
          immediately  prior to such  consolidation,  merger,  sale or transfer,
          assuming the Option  Holder (i) is not a person with which the Company
          consolidated or into which the Company merged or which merged into the
          Company or to which such sale or  transfer  was made,  as the case may
          be, (a "Constituent  Person") or an Affiliate of a Constituent  Person
          and (ii) failed to exercise his or her rights of election,  if any, as
          to  the  kind  or  amount  of  securities,  cash  and  other  property
          receivable  upon  such   consolidation,   merger,  sale  or  transfer;
          provided,  however, that if the kind or amount of securities, cash and
          other property  receivable upon such  consolidation,  merger,  sale or
          transfer  is not  the  same  for  each  share  of  Common  Stock  held
          immediately prior to such  consolidation,  merger, sale or transfer by
          persons other than a Constituent Person or an Affiliate thereof and in
          respect of which such rights of election shall not have been exercised
          (each, a "Non-Electing  Share"),  then for purposes of this Section 11
          the kind and amount of securities,  cash and other property receivable
          upon such consolidation, merger, sale or transfer by each Non-Electing
          Share  shall be deemed to be the kind and  amount  so  receivable  per
          share  by  a  plurality  of  the  Non-Electing  Shares.  Such  written
          agreement shall provide for adjustments  which, for events  subsequent
          to the effective date of such agreement, shall be as nearly equivalent
          as may be practicable to the  adjustments  provided for in Section 10.
          The provisions of this Section 11 shall  similarly apply to successive
          consolidations, mergers, sales or transfers. If the exercise rights of
          the Option Holder shall be adjusted  pursuant to this Section 11, then
          the  Company  shall  cause to be given to the  Option  Holder a notice
          describing such adjustment in appropriate detail.

     12.  The  existence  of the Option shall not affect in any way the right or
          power of the Company or its  stockholders  to make or authorize any or
          all adjustments,  recapitalizations,  reorganizations or other changes
          in the Company's capital  structure or its business,  or any merger or
          consolidation  of the  Company,  or any  issue of  bonds,  debentures,
          preferred or prior  preference  stock ahead of or affecting the Common
          Stock or the rights  thereof,  or  dissolution  or  liquidation of the
          Company,  or any sale or  transfer of all or any part of its assets or
          business,  or any  other  corporate  act or  proceeding  whether  of a
          similar character or otherwise.

     13.  As a condition  of the  granting of the Option,  Papitto  agrees,  for
          himself,  his personal  representatives  and his estate and executors,
          that any dispute or disagreement  which may arise under or as a result
          of or pursuant to this  Agreement  shall be determined by the Board of
          Directors  of the  Company,  in its  sole  discretion,  and  that  any
          interpretations  by the Board of Directors of the Company of the terms
          of this Agreement shall be final, binding and conclusive.

     14.  As a condition of exercising  the Option,  the Option Holder agrees to
          make such  arrangements  with the Company  with  respect to income tax
          withholding as the Company shall determine.

     15.  Nothing  herein  contained  shall be deemed to confer upon Papitto any
          right to continue in the employ of the  Company,  nor to  interfere in
          any way with the right of the Company to terminate  the  employment of
          Papitto at any time for any reason or without reason.

     16.  This Agreement  constitutes the entire  agreement  between the Company
          and Papitto with respect to the matters  covered hereby and may not be
          modified except by a written  instrument signed by or on behalf of the
          Company and the Option Holder.

     17.  THIS  AGREEMENT,  THE LEGAL  RELATIONS  BETWEEN  THE  PARTIES  AND THE
          ADJUDICATION   AND  ENFORCEMENT   HEREOF  SHALL  BE  GOVERNED  BY  AND
          INTERPRETED  AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
          NEW  YORK,  WITHOUT  REGARD  TO THE  PRINCIPLES  OF  CONFLICTS  OF LAW
          THEREOF.



<PAGE>



     IN WITNESS  WHEREOF,  the Company has caused this instrument to be executed
by a duly authorized  officer and Papitto has hereto affixed his hand, as of the
day and year first above written.


                                               LYNCH CORPORATION


                                               By: __________________
                                                    Name:
                                                    Title:



ACCEPTED AND AGREED TO:



- ------------------------------
Ralph R. Papitto


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>ex99.txt
<DESCRIPTION>PRESS RELEASE DATED AUGUST 17, 2001
<TEXT>
                                                                Exhibit 99.1


                                                         Press Release
                                                         For Immediate Release




                             LYNCH CORPORATION NAMES
                          RALPH R. PAPITTO AS CHAIRMAN
                           AND CHIEF EXECUTIVE OFFICER


     Rye, New York,  August 17, 2001 - Lynch  Corporation  (ASE:  LGL) announced
today that Ralph R. Papitto, a long-standing  director of the Company,  has been
named the Chairman and Chief Executive Officer of Lynch.  Mario J. Gabelli,  who
was Chairman and Chief  Executive  Officer of Lynch since 1985,  will stay on as
Vice Chairman. In connection with the appointment, the Board granted (subject to
shareholder  approval) Mr.  Papitto an option to purchase  374,471 shares of the
Company's common stock at an exercise price of $30 per share.

     Mr. Papitto brings with him 30 years of experience in the industry.  He was
Chairman and Chief Executive Officer of AFC Cable Systems,  Inc., a manufacturer
and supplier of electrical  distribution  products for six years and before that
he founded Nortek, Inc., a $2 billion manufacturer of home builders products.

     Mr.  Gabelli  commented  that,  "There are  numerous  opportunities  in the
industrial  world and the selection of Ralph Papitto as Chairman and CEO will be
a catalyst to accelerate Lynch's ability to capitalize on these opportunities."

     Lynch  Corporation,  through its operating  subsidiaries,  is a diversified
manufacturing company that actively seeks acquisitions,  principally in existing
business areas. Lynch Corporation is listed on the American Stock Exchange under
the   symbol    LGL.    The    Company's    World   Wide   Web    address    is:
http://www.lynchcorp.com.


Contact: Ralph R. Papitto
                  Chairman
                  (401) 453-2000

Release: 01-06

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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