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, additional Share Units shall be granted to Grantees equal
to the dividends that would be payable on the Share Units (if they
were shares of Common Stock) divided by the closing price of the
Common Stock on the AMEX on the date of payment of the cash
dividends (or if there was no trade on such date, the closing price
on the last preceding date on which the stock traded).  Such
additional Share Units shall be deemed granted for vesting and
other purposes as of date of grant of the related Share Units.

5.   Exercise of Share Units:  At any time and from time to time
after the Share Units vest and become exercisable and prior to the
earlier of (i) the fifth anniversary of the date of grant or (ii)
30 days after the Grantee is no longer either an officer or
employee of the Corporation (notwithstanding the reason that
Grantee is no longer an officer or employee), a Grantee may
exercise the Share Units by giving written notice thereof to the
Corporation.  Within 30 days after receipt of the written notice
of exercise, the Corporation 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 multiplied by the number
of Share Units exercised.  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 Exercise Price.

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. 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.