Exhibit A As Amended
LYNCH CORPORATION
PHANTOM STOCK PLAN
1. Participants: Any officer or employee of the Lynch Corporation (the
"Corporation") designated by a committee (the "Committee") appointed by the
Board of Directors of the Corporation (the "Board of Directors").
2. Share Unit/Grant Price: The Committee may, from time to time, grant to any
officer or employee of the Corporation (a "Grantee") such number of "Share
Units" as it in its discretion deems appropriate. Each Share Unit shall,
for purposes of the Plan, be deemed to be the equivalent of one share of
Common Stock of the Corporation ("Common Stock"). The Grant Price shall be
average closing price of the Common Stock on the American Stock Exchange
("AMEX") for the 30 trading days prior to the date of grant (or, at the
option of the Committee or the Board of Directors, January 1 of the year in
which the grant is made) (whether or not the stock traded on said day).
3. Vesting: Share Units shall vest and become exercisable on the first
anniversary of the date of grant if the Grantee is on such first
anniversary an officer or employee of the Corporation (and notwithstanding
the reason that Grantee is no longer an officer or employee); provided,
however, that if the Grantee ceases to be either an officer or employee of
the Corporation prior to such first anniversary by reason of death or
permanent disability, the Share Units shall vest and become exercisable
proportionally over the portion of first year after the date of grant that
the Grantee is an officer or employee.
4. Cash Dividends: If cash dividends are declared on the Common Stock, the per
share amount thereof shall reduce the Grant Price.
5. Exercisability:
(a) Subject to Section 5(b) below, at any time and from time to time after
the Share Units vest and prior to the fifth anniversary of the date of
grant a Grantee may exercise the Share Units by giving written notice
thereof to the Corporation.
(b) Share Units will become exercisable only if, at anytime during the
five year period beginning from the date of the grant, the price of
the Common Stock, in trading on the American Stock Exchange (or any
other trading market) exceeds two times the Grant Price (as it may be
reduced pursuant to the Plan) of the Share Unit.
(c) If the Share Units become first exercisable within four weeks of their
expiration date, the expiration will be extended so that the share
units remaining are exercisable for a full four weeks.
(d) If the Grantee is an employee or officer of the Corporation or its
subsidiaries (or successors thereto) on the date of exercise, the
Corporation, within 30 days after receipt of the written notice of
exercise, shall pay to the Grantee an amount equal to the closing
price of the Common Stock on the AMEX on the date of exercise (or if
there was no trade on such date, the closing price on the last
preceding date on which the stock traded) ("Exercise Price") less the
Grant Price (as it may be reduced pursuant to the Plan) multiplied by
the number of Share Units exercised.
(e) If the Grantee is no longer an employee or officer of the Corporation
or its subsidiaries (or successors thereto), for any reason, on the
date that the condition in Subsection 5(b) is satisfied, the Grantee
shall be deemed to have exercised his Share Units as of such date. The
Corporation shall, within 30 days after receipt of the written notice
of exercise, pay to the Grantee an amount equal to the closing price
of the Common Stock on the AMEX on the date that Grantee ceased to be
such an employee or officer (or if there was no trade on such date,
the closing price on the last preceding date on which the stock
traded) less the Grant Price (as it may be reduced pursuant to the
Plan) multiplied by the number of Share Units exercised.
(f) At its option, the Corporation may pay up to 50% of the value of the
Share Units exercised in shares of Common Stock, valued at the
Exercise Price in the case of Subsection 5(d) above and valued at the
closing price of a share of Common Stock on the AMEX on the date that
the condition in Section 5(b) is satisfied in the case of Subsection
5(e) above.
6. Adjustments Upon Changes in Capitalization: The number of Share Units
and/or the Grant Price shall be adjusted by the Committee for stock splits,
stock or other non-cash dividends, spinoffs, recapitalizations,
combinations or exchanges of shares, merger, consolidation or liquidation,
or the like.
7. Taxes: The Corporation may withhold cash from any payment to satisfy
Federal, state or local withholding or similar taxes.
8. No Transfer: Unless the Committee determines otherwise, Share Units granted
pursuant to the Plan shall not be transferable by the Grantee other than by
will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986,
as amended, 26 V.S.C. ss.1 et seq or Title I of the Employee Retirement
Security Act or the rules thereunder. A designation of a beneficiary by a
Grantee shall not constitute a transfer.
9. Plan Termination: No grants under the Plan shall be made after December 31,
2000, unless extended by action of the Board of Directors of the
Corporation.
10. Share Units Not Stock: Grantees shall not have any rights (including the
right to vote) of a shareholder of stock in respect of Share Units.
11. No Right to Employment: Nothing contained herein shall give any Grantee any
right to remain as an officer or in the employ of the Corporation or any of
its subsidiaries or shall limit the right of the Corporation or any of its
subsidiaries to terminate, with or without cause, a Grantee's employment or
officer status.
12. Lynch Stock: Any shares of Common Stock issued to a Grantee upon exercise
of Share Units shall be held by the Grantee for investment and without a
view to sale or distribution. Such shares may only be transferred or sold
(i) in compliance with the Securities Act of 1933, as amended (the
"Securities Act") and any state securities laws and (ii) if in the opinion
of counsel satisfactory to the Corporation, the transfer or sale complies
with clause (i). The Corporation has no obligation to register any shares
issued to any Grantee. Certificates for shares issued to Grantees shall
contain such legend to the foregoing effect as the Committee shall
determine.
13. Plan Agreement: The Committee may require Grantees, as a condition of the
grant, to execute such agreement with the Corporation (which agreements
need not be the same) relating to Share Units granted to such Grantee as
the Committee shall determine.
14. Amendment/Discontinuance of Plan: The Plan may be amended in any respect or
discontinued at any time by action of the Board of Directors; provided,
however, that any such action shall not affect any Share Units previously
granted without the consent of the Grantee of such Units.
15. Administration/Interpretation: The Plan shall be administered by the
Committee. The Committee may (but need not be) be an existing committee of
the Board of Directors. Subject to the express provisions of the Plan, the
Committee is authorized to interpret the Plan and to make such
determinations as it deems necessary or advisable for the administration of
the Plan. Neither the members of the Committee nor any other director,
officer or employee of the Corporation shall have any liability to any
party for any action taken or not taken, in good faith, under the Plan or
based on or arising out of a determination of any question under the Plan,
made in good faith.
16. Effective Date: The Plan shall be effective as of February 29, 1996.
17. Non-Exclusive: Adoption of the Plan shall not be construed as creating any
limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, either generally or applicable only
in specific cases.
18. Governing Law: The Plan shall be governed by the laws of the State of
Indiana.