-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QO8WtUHu9gDi6lGLvPU8NMw2MlluH5Dyx1XdZcHaLieHcqCgfPPDJZUqF5hAEcud sOQYN7LLBBi024QUA4Zcvg== 0000061004-01-500011.txt : 20010702 0000061004-01-500011.hdr.sgml : 20010702 ACCESSION NUMBER: 0000061004-01-500011 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010629 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: 11-K SEC ACT: SEC FILE NUMBER: 001-00106 FILM NUMBER: 1672426 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 11-K 1 lynch11k-2.txt LYNCH CORPORATION 401(K) PLAN SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 11-K [X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission File Number 1-106 A. Full title of Plan: 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS B. Name of issuer of the securities held pursuant to the Plan and address of its principal executive officer: Lynch Corporation 401 Theodore Fremd Avenue Rye, New York 10580 AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS Years ended December 31, 2000 and 1999 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS Audited Financial Statements and Supplemental Schedule Years ended December 31, 2000 and 1999 Contents Report of Independent Auditors...............................................1 Audited Financial Statements Statements of Net Assets Available for Benefits..............................2 Statements of Changes in Net Assets Available for Benefits...................3 Notes to Financial Statements................................................4 Supplemental Schedule Schedule H, Line 4(i) Schedule of Assets Held for Investment Purposes at End of Year....................................................9 Supplemental Schedule Report of Independent Auditors Board of Directors Lynch Corporation We have audited the accompanying statements of net assets available for benefits of the 401(k) Savings Plan of Lynch Corporation and Participating Employers (formerly the Lynch Corporation 401(k) Savings Plan) as of December 31, 2000 and 1999, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2000 and 1999, and the changes in its net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes at end of year as of December 31, 2000, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. This supplemental schedule has been subjected to auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ERNST & YOUNG LLP Stamford, Connecticut June 15, 2001 1 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS Statements of Net Assets Available for Benefits
December 31 2000 1999 ------------------------- Assets Investments .................................... $4,562,386 $4,100,781 Contribution receivable from employer .......... -- 4,807 ---------- ---------- Total assets ................................... $4,562,386 4,105,588 Liabilities Other liabilities .............................. -- 369 ---------- ---------- Total liabilities .............................. -- 369 Net assets available for benefits .............. $4,562,386 $4,105,219 ========== ========== See accompanying notes.
2 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS Statements of Changes in Net Assets Available for Benefits
Years Ended December 31 2000 1999 -------------------------- Additions: Investment income: Net appreciation (depreciation) in fair value of investments: Employer stock funds ................................... $ 15,668 $ 510,654 Mutual funds ........................................... (91,096) 71,501 ----------- ----------- (75,428) 582,155 Interest and dividends ................................... 393,792 216,316 ----------- ----------- 318,364 798,471 Contributions: Participants ............................................... 255,262 357,374 Employer ................................................... 20,290 19,210 Transfer from Lynch Interactive Corporation 401(k) Plan ...... 1,337,354 -- ----------- ----------- Total additions .............................................. 1,931,270 1,175,055 Deductions: Benefits paid directly to participants ....................... (314,532) (224,643) Excess contributions and related investment income distributed to participants ........................................... (9,689) -- Other ........................................................ (1,233) (1,296) Transfer to Lynch Interactive Corporation 401(k) Plan ........ (1,148,649) -- ----------- ----------- (1,474,103) (225,939) Net increase ................................................. 457,167 949,116 Net assets available for benefits at beginning of year ....... 4,105,219 3,156,103 ----------- ----------- Net assets available for benefits at end of year ............. $ 4,562,386 $ 4,105,219 =========== =========== See accompanying notes.
3 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS Notes to Financial Statements Years ended December 31, 2000 and 1999 1. Description of Plan Effective May 15, 2000, the name of the Plan was changed to the 401(k) Savings Plan of Lynch Corporation (the "Company") and Participating Employers (the "Plan"). The following description of the Plan provides only general information. For a more complete description of the Plan's provisions, participants should refer to the Plan Agreement, which is available from the Company. General The Plan is a defined contribution plan covering substantially all non-union employees of the Company and the employees of certain of its subsidiaries who are at least 18 years of age and who have completed 1,000 hours of service during a consecutive twelve-month period. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). On September 1, 1999, Lynch Corporation spun-off Lynch Interactive Corporation and substantially all existing employees of Lynch Corporation became employees of Lynch Interactive Corporation. Lynch Interactive corporate employees and the employees of Bretton Woods Telephone Company, a subsidiary of the Lynch Interactive Corporation, who participated in the Plan during 1999, ceased contributing to the Plan as of the spin-off date. During 2000, Lynch Interactive corporate employees transferred their fund balances of ($1,148,649) to the Lynch Interactive Corporation 401(k) Plan, which was established at the time of the spin-off. Additionally, Bretton Woods' employees transferred their fund balances to its own plan. On May 15, 2000, the Lynch Interactive Corporation 401(k) Plan merged into the Plan and accordingly, assets of $1,337,354 were transferred into the plan. During 1999, for each share of the Company's common stock held in the Lynch Corporation stock fund, a stock distribution was made equal to one share of Lynch Interactive Corporation common stock. The distribution to the Lynch Corporation stock fund was 5,965 common shares of Lynch Interactive Corporation common stock. Contributions Participants may elect to contribute, on a pre-tax basis, between 1% and 15% of their total annual compensation to the Plan up to the maximum allowed under the Internal Revenue Code ($10,500 in 2000 and $10,000 in 1999). 4 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS Notes to Financial Statements (continued) Years ended December 31, 2000 and 1999 1. Description of Plan (Continued) Contributions (Continued) An annual mandatory employer matching contribution is made to each participant's account equal to 25% of the first $800 of the participant's contribution, as defined in the Plan agreement, generally on or about the closing date of the Plan year. In addition, the Company may make a discretionary matching contribution equal to a percentage of the first $800 of the participant's contribution. No such discretionary contribution was made in 2000 or 1999. Participants' Accounts Each participant's account is credited with the participant's contributions and Plan earnings. Allocations are based on participant earnings or account balances, as defined in the Plan agreement. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. Vesting Participants are vested immediately in all contributions to their accounts, including the Company's matching contributions (mandatory and discretionary, if any) and investment earnings. Payment of Benefits Participant benefits are paid as soon as practicable following termination of employment, permanent disability, retirement, death or upon termination of the Plan in accordance with the terms of the Plan agreement. All benefit payments are made in lump sum payments for an amount equal to the fair value of the participants' vested account balance. Investment Options All of the Plan's investment options are fully participant directed. Upon enrollment in the Plan, a participant may direct employer and participant contributions in 1% increments into any of the Plan's investment options. Participants may change their investment options daily. 5 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS Notes to Financial Statements (continued) Years ended December 31, 2000 and 1999 1. Description of Plan (Continued) Investment Options (Continued) During 1999, East/West Communications Inc. (which became an affiliate of the Company upon a spin off to its shareholders, its common stock interest in East/West) offered, at no cost to the shareholders of its Class A common stock, a non-transferable right to purchase one additional share of its Class A common stock. The right entitled shareholders to purchase one additional share of Class A common stock for every four shares of Class A common stock held at $1.50 per share. Participants in the Plan had the option to participate in this rights offering. Participant Loans Participants may borrow from their fund accounts a minimum of $1,000 or up to 50% of their account balance (not to exceed $50,000). All loans must, by their terms, require repayment over a period not to exceed five years, unless for the purchase of the participant's primary residence for which the term shall be determined by the Company. The loans are secured by 50% of the balance in the participant's account and bear interest at a reasonable rate as determined by the Plan administrator. Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. Expenses All of the Plan's administrative expenses are paid by the Company. 2. Summary of Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 6 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS Notes to Financial Statements (continued) Years ended December 31, 2000 and 1999 2. Summary of Accounting Policies (Continued) Investment Valuation Except for the unallocated guaranteed investment contracts in 1999, the Plan's investments are stated at fair value. The shares of registered investment companies (i.e., mutual funds) are valued at quoted market prices, which represent the net asset values of shares held by the Plan at year-end. Lynch Corporation, Lynch Interactive Corporation and East/West Communications Inc. Class A common stock are valued at the last reported sales price on the last business day of the year. The participant loans are valued at their outstanding principal balances, which approximate fair value. The unallocated guaranteed investment contracts were valued at contract value which approximated fair value as estimated by the John Hancock Mutual Life Insurance Company ("Hancock"). Contract value represented contributions made under the contract, plus interest at the contract rate, less funds used to pay retirement benefits and certain administrative expenses. Purchases and sales of securities are recorded on a trade-date basis. Historical cost of the Plan's investments are determined by the weighed average method. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. 3. Investments Individual investments for each respective year that represent 5% or more of the Plan's net assets available for benefits are as follows:
December 31 2000 1999 ----------------------- Fleet Stable Asset Fund ................... $1,132,535 $1,184,811 Mutual Qualified Fund ..................... 1,486,258 1,213,772 Mutual Discovery Fund ..................... 458,760 332,127 Galaxy U.S. Treasury Fund ................. 296,312 449,204 Lynch Corporation Common Stock ............ 550,142 -- Lynch Interactive Corporation Common Stock. 475,542 565,094
7 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS Notes to Financial Statements (continued) Years ended December 31, 2000 and 1999 4. Contracts with Insurance Company During 1999, the Plan held unallocated guaranteed investment contracts with maturities in 1999 with Hancock. Contributions from the Plan were accepted by Hancock throughout the first year of each contract and interest was earned over the contract lives at guaranteed annual rates ranging from 5.39% to 6.56%. The underlying assets within the contract were restricted solely for administrative expenses and benefit payments made by the Plan. 5. Income Tax Status The Plan has not applied for a determination letter from the Internal Revenue Service stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code"). The Plan administrator has indicated that they will take the necessary steps, if any, to maintain the Plan's qualified status. 8 401(k) SAVINGS PLAN OF LYNCH CORPORATION AND PARTICIPATING EMPLOYERS EIN-38-17909862 Plan-004 Schedule H, Line 4(i) - Schedule of Assets Held for Investment Purposes at End of Year December 31, 2000
Identity of Issuer, Borrower Lessor Description of Investment, Including Maturity Date, Rate of Current or Similar Party Interest, Par or Maturity Value Value - -------------------------------------- -------------------------------------------------------------- --------------- *Fleet National Bank Fleet Stable Asset Fund, 113,254 shares $1,132,535 Galaxy U.S. Treasury Fund 296,312 shares 296,312 Mutual Qualified Fund, 89,480 shares 1,486,258 Mutual Discovery fund, 24,235 shares 458,760 Short-term investment, 53,386 shares 53,386 *Lynch Corporation Lynch Corporation Common Stock, 12,794 shares 550,142 *Lynch Interactive Lynch Interactive Corporation Common Stock, Corporation 10,932 shares 475,542 *Participant loans Loans bears interest between 7.75% and 8.5% with varying maturity dates 109,451 --------------- $4,562,386 =============== *Indicates party-in-interest to the Plan. The cost column is not applicable as all of the Plan's investment programs are fully participant directed.
9 SIGNATURE The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the 401(k) Savings Plan of Lynch Corporation and Participating Employers has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. LYNCH CORPORATION 401(k) SAVINGS PLAN By: Robert E. Dolan ------------------------------------- Robert E. Dolan Member of the 401(k) Plan Committee Dated: June 29, 2001 -------------- 10 EX-23 2 exhibit23.txt CONSENT OF EXPERTS Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-46953) pertaining to the 401(k) Savings Plan of Lynch Corporation and Participating Employers of our report dated June 15, 2001, with respect to the financial statements and schedule of the 401(k) Savings Plan of Lynch Corporation and Participating Employers included in this Annual Report (Form 11-K) for the year ended December 31, 2000. /s/ Ernst & Young LLP Stamford, Connecticut June 26, 2001 -----END PRIVACY-ENHANCED MESSAGE-----