<PAGE>

                                                                    EXHIBIT 10.5

                              EMPLOYMENT AGREEMENT

         This agreement, made as of this 1st day of January, 1998, by and
between M-tron Industries, Inc., a South Dakota corporation, having its
principal place of business in Yankton, South Dakota, hereinafter referred to as
the "Employer", and Robert Jenks, of Yankton, South Dakota, hereinafter referred
to as "Employee."

         WHEREAS, the parties hereto have negotiated a mutually satisfactory
arrangement for the continued employment of the Employee by the Employer; NOW
THEREFORE, in consideration of the mutual covenants hereinafter set forth, the
parties hereto agree as follows:

1.       EMPLOYMENT. The Employer hereby employs the Employee to act as a Senior
         Vice President of the Employer with primary responsibility for
         manufacturing, operations and engineering of Employer and such other
         duties consistent with his position as may be determined and assigned
         to him by the President of the Employer. Employee hereby accepts such
         employment and agrees to devote all of his time and efforts to the
         performance of his duties as a Senior Vice President and to the
         performance of such other duties consistent with his position as are
         assigned to him from time to time by the President of the Employer.
         Employee shall perform all duties

                                       -1-

<PAGE>


         assigned to him in a satisfactory manner and employment hereunder shall
         continue only so long as the performance of such duties is and remains
         satisfactory. Employee shall obey all rules, regulations and policies
         of Employer including, without limitation, those set out in the
         Salaried Employees Handbook which Employee acknowledges having read.


2.       TERM. The term of this agreement shall be 3 years commencing on the
         date first above written. Employer may terminate this agreement at any
         time by giving thirty (30) days written notice to the Employee. If such
         termination by Employer is not for "Just Cause", death, or disability,
         Employer will continue to pay Employee's then current salary and
         medical insurance payments for a period of six months. In this
         agreement, the term "Just Cause" shall include: (i) willful or gross
         neglect of the duties for which Employee has been engaged and retained;
         (ii) the continued failure of Employee to devote his time and attention
         to the Employer; (iii) the commission by Employee of a misappropriation
         or embezzlement in the performance of his duties for the Employer; (iv)
         the commission by Employee of a felony or crime involving moral
         turpitude; or (v) the breach by Employee of any of the covenants and
         obligations contained in this agreement or any other agreement or
         instrument applicable to Employee.

3.       COMPENSATION. As compensation for the services rendered by


                                      -2-

<PAGE>


         the Employee, the Employer agrees to pay the Employee a base salary to
         be established from time to time by the Employer's Board of Directors
         or President at an annual rate of not less than $120,000 until the
         termination of this agreement, such basic salary to be paid to the
         Employee in equal semi-monthly installments.

                  Nothing contained in this agreement shall prevent the Employer
         from at any time paying the Employee additional compensation in the
         form of bonuses in the event the President of the Employer shall deem
         it advisable so to do in order fully to compensate the Employee for his
         services to the Employer, but nothing herein contained shall obligate
         the Employer to pay such additional compensation.

4.       EMPLOYER STOCK.

         (a)(i)   Effective as of January 1, 1998, Employee shall purchase from
                  Lynch Manufacturing Corporation 10 shares (the "Shares") of
                  Employer's Common Stock (which constitutes 2% of the currently
                  outstanding) for the book value per share at December 31, 1997
                  (estimated to be approximately $8,000 per share);

         (a)(ii)  Employer will loan Employee 100% of the purchase price of the
                  Shares to be represented by a Promissory Note and Security
                  Agreement in the form attached hereto as Exhibit 1, which is
                  secured by a

                                      -3-


<PAGE>

                  pledge of the Shares.

         (b)      If Employee's employment shall be terminated with
                  Employer for any reason, whether for Just Cause or not,
                  then in that event, Employee shall be entitled to sell to
                  Employer at Employee's election made by written notice to
                  Employer given within thirty (30) days following said
                  termination, all, but not less than all, of the Shares at
                  a purchase price equal to the then current book value of
                  the Shares determined as of the last day of the month
                  preceding said termination; provided, however, that (i)
                  the purchase price shall not be less than the purchase
                  price per share paid by Employee pursuant to Subparagraph
                  4(a) above, and (ii) if Employee's employment shall
                  terminate prior to January 1, 2001, the purchase price
                  per share shall not exceed the purchase price per share paid
                  by Employee pursuant to Subparagraph 4(a). Said purchase price
                  shall be payable in three (3) equal installments payable on
                  the first, second and third anniversary dates from said
                  purchase and such deferred payments shall bear interest on the
                  outstanding principal amount at an annual rate equal to ten
                  percent (10%), which interest shall be payable in arrears on
                  each of said anniversary dates.

         (c)      Concurrent with Employee's right to sell the Shares to


                                      -4-


<PAGE>

                  Employer, Employer shall be entitled to purchase from
                  Employee all of the Shares, such exercise of Employer's
                  right shall take place within the sixty (60) day period
                  following any termination for any reason of Employee's
                  employment, whether for Just Cause or not, and shall be
                  at the same purchase price and on the same terms as
                  provided for in Subparagraph (b) above (including without
                  limitation the minimum and maximum purchase price set
                  forth in the proviso).

         (d)      In the event that neither Employee nor Employer exercises
                  their respective rights of sell and purchase as provided
                  for in Subparagraph (b) and (c) above and thereafter
                  Employee receives a bona fide third-party offer for the
                  purchase of the Shares (or any rights or interests therein),
                  which Employee wishes to accept, Employee agrees to give
                  written notice of such offer to Employer. The notice must set
                  forth the name of the proposed transferee, the price per
                  share, and all other terms and conditions of the proposed
                  transfer. On receipt of the notice with respect to such offer,
                  Employer shall have the right and option, exercisable at any
                  time during a period of thirty (30) days from the receipt of
                  the notice, to purchase the Shares pursuant to this
                  Subparagraph (d). The total purchase price for the

                                      -5-


<PAGE>

                  Shares shall be the total purchase price set forth in the bona
                  fide third-party offer.

         (e)      The Shares may not be encumbered, assigned, pledged, subject
                  to any security interest or lien, transferred or otherwise
                  disposed of without the express written consent of Employer.

5.       STOCK OPTIONS. If Employer (or its immediate parent) shall make a
         public offering of common stock, it is intended by Employer that
         Employee would be granted stock options in the public company.

6.       DUTIES.  The Employee shall devote himself diligently and full
         time to the promotion of the Employer's interests.

7.       WORKING FACILITIES.  The Employer shall furnish the Employee
         with an office, technical and secretarial assistance and other
         facilities and services suitable to his position and adequate
         for the performance of his duties.

8.       BENEFITS.  The Employee shall be entitled to all salaried
         employee benefits as set forth in the M-tron Salaried Employee
         Handbook as amended from time to time, which Employee
         acknowledges having read. Employee shall also be entitled to
         participate in a productivity bonus if and to the extent
         adopted by Employer for Employee.

9.       PERSONAL CONTRACT.  The obligations and duties of the Employee
         hereunder are personal and not assignable or delegable by him

                                      -6-

<PAGE>

         in any manner whatsoever.

10.      CONFIDENTIALITY. Employee covenants and agrees with the Employer that
         he will not either during the term of his employment, or at any time
         thereafter, directly or indirectly, divulge, communicate or disclose to
         anyone any information concerning the business or affairs of the
         Employer without regard to whether the information would be deemed
         confidential, material or important. In this regard, Employee also
         acknowledges having read and signed simultaneous with this agreement a
         document entitled "Lynch Corporation and Subsidiaries Policy Statement
         on Business Conduct and Conflicts of Interest," the terms of which are
         adopted as part of this agreement by reference thereto.

11.      NON-COMPETE. Employer and Employee mutually acknowledge that Employer's
         operations are global in nature and it has customers/suppliers
         world-wide. During the term of his employment and for a period of two
         years immediately after termination of employment, Employee will not,
         either directly or indirectly, make known or divulge to anyone the
         names or addresses of any of the customers/suppliers of Employer who
         were customers/suppliers during his employment. Furthermore, Employee
         will not, during the term of his employment and for a period of two
         years immediately after termination of employment, directly or
         indirectly, (i) act as a director,


                                      -7-
<PAGE>

         officer or executive or managerial employee of, consultant to, or own
         more than 1% of any class of stock of, any person or entity that
         competes with Employer as to any products or services manufactured,
         distributed, marketed, sold or offered for sale during the term of his
         employment or (ii) either for himself or any other person, firm or
         corporation, call upon, solicit, divert or take away or attempt to
         solicit, divert, call upon or take away any of the customers/suppliers
         of Employer who were customers/suppliers during his employment.

12.      NOTICES.  Any notice required to be given by this agreement
         shall be deemed to have been given if such notice is addressed
         and mailed by certified mail to the following appropriate
         address:

                           Employer:     M-tron Industries, Inc.
                                         100 Douglas Avenue
                                         Yankton, SD 57078

                           Employee:     Robert Jenks
                                         909 West 14th Street
                                         Yankton, SD 57078

13.      WAIVER.  The waiver by either party of a breach of any
         provision of this agreement shall not operate or be construed
         as a waiver of any subsequent breach of this agreement.

14.      SEVERABILITY.  If any provision of this agreement is held by
         a court of competent jurisdiction to be invalid or
         unenforceable, the remainder of the agreement shall remain in
         full force and shall in no way be impaired.

                                      -8-


<PAGE>

15.      ENTIRE AGREEMENT.  This agreement supersedes any and all prior
         written or oral agreements between the Employer and the
         Employee and this agreement may not be changed, modified, amended,
         extended or discharged except in writing executed by each party hereto.
         This agreement is executed and delivered in the State of South Dakota
         and shall be construed and enforced in accordance with the laws and
         decisions of the State of South Dakota. In the event of any litigation
         at any time arising hereunder, it is specifically agreed between the
         parties that the venue of such litigation shall be the State of South
         Dakota and such venue shall be exclusive in all events unless otherwise
         agreed by the parties.


                                       -9-

<PAGE>


         IN WITNESS WHEREOF, the parties have executed this agreement the day
and year first above written.

                                           M-TRON INDUSTRIES, INC.
                                                     Employer

                                           By:
                                               --------------------------
                                           Its:
                                               --------------------------

                                           ------------------------------
                                           Robert Jenks
                                           Senior Vice President

STATE OF SOUTH DAKOTA   )
                        ) SS:
COUNTY OF YANKTON       )

         On this the       day of          , 199 , before me, the
                     -----        ---------     -
undersigned officer, personally appeared                  , who
                                         -----------------
acknowledged himself to be the                   of M-tron
                               -----------------
Industries, Inc., a South Dakota corporation, and that he as such
                , being authorized so to do, executed the foregoing
----------------
instrument for the purposes therein contained, by signing the name
of the corporation by himself as such                      .
                                      ---------------------
         In witness whereof I hereunto set my hand and official seal.

                                                           --------------------
                                                           Notary Public
My Commission Expires:
(SEAL)

STATE OF SOUTH DAKOTA   )
                        ) SS:
COUNTY OF YANKTON       )

         On this the day of , 199 , before me, the undersigned officer,
personally appeared ROBERT JENKS, known to me or satisfactorily proven to be the
person whose name is subscribed


                                      -10-

<PAGE>


to the within instrument and acknowledged that he executed the same for the
purposes therein contained.

         In witness whereof, I hereunto set my hand and official seal.

                                                            -------------------
                                                            Notary Public
My Commission Expires:
(SEAL)

                                      -11-



<PAGE>


                                    EXHIBIT 1
                     PROMISSORY NOTE AND SECURITY AGREEMENT

$                                                              January 1, 1998
 ----------
         FOR VALUE RECEIVED, Robert Jenks, an individual residing at 909
West 14th Street, Yankton, SD 57078 ("Maker") hereby promises to pay to the
order of M-tron Industries, Inc. a South Dakota corporation having its principal
offices at 100 Douglas Avenue, Yankton, SD 57078 ("Payee"), or its registered
assigns, the principal sum of $ ("Principal Balance") and to pay interest on the
Principal balance at the rate as set forth in this Note.

         1.  PAYMENT TERMS.
             -------------

                  (a) INTEREST. This Note shall bear interest, (computed on the
basis of a 360-day year of twelve 30-day months), at an annual rate equal to six
(6%) percent, commencing the date hereof. Interest shall be compounded
semi-annually and be payable at maturity (whether at stated maturity, by
acceleration or otherwise).

                  (b) MATURITY.  The entire Principal Balance and all
accrued but unpaid interest, shall be due and payable on December 31, 2000.

                  (c) All past due interest and principal shall bear
additional interest after the due date at the annual rate of fifteen
(15%) percent.

                                      -12-


<PAGE>

         1.       PREPAYMENTS.
                  -----------

                  (a) OPTIONAL PREPAYMENTS.  The Maker may make prepayments
at any time in Maker's sole discretion, without penalty.

                  (b) DIVIDEND PREPAYMENTS. 100% of any cash dividends paid to
Maker in respect of the Shares (as defined in the Employment Agreement between
Maker and Payee dated as of January 1, 1998 - the "Employment Agreement") shall
be mandatorily applied to the prepayment of this Note.

                  (c)  APPLICATION OF PREPAYMENTS.  Prepayments shall first
be applied to interest owing hereunder and then to the Principal
Balance.

         3.  SECURITY.
             --------

                  (a) PLEDGE OF SHARES. In order to secure payment of this Note,
Maker hereby grants to Payee a security interest in the Shares pursuant to a
pledge thereof to Employer, as represented by Certificate No. , and delivered
simultaneously herewith into the possession of the Payee, accompanied by a stock
power duly endorsed in blank. The Maker shall return such shares to the Company
to hold as security.

                  (b) DIVIDENDS/VOTING RIGHTS.  During the term of this
pledge, and so long as Maker is employed by Payee and not in default in the
performance of any of the terms of this Note and Security Agreement or the
Employment Agreement, (i) all dividends and other amounts received by Maker as a
result of Maker's record ownership


                                      -13-


<PAGE>

of the Shares shall, except as provided in Section 2(b) hereof, belong to Maker
and (ii) Maker shall have the right to vote the Shares on all corporate
questions requiring shareholder approval, provided, however, that Maker shall
not vote the Shares in a manner that Payee believes is not in the best interests
of the Payee.

                  (c) REPRESENTATIONS. Maker warrants and represents that there
are no restrictions upon the making of this Note and Security Agreement or
pledge of the Shares and that Maker has the right to make this Note and pledge
the Shares without obtaining the consents of any individual or entity.

                  (d) ADJUSTMENTS. In the event that, during the term of this
pledge, any share, dividend, reclassification, readjustment, or other change is
declared or made in the capital structure of M-tron Industries, Inc., all new,
substituted, or additional shares, or other securities, issued by reason of any
such change shall be held by Payee under the terms of this Agreement in the same
manner as the Shares. In the event that during the term of this pledge,
subscription warrants or any other rights or options shall be issued in
connection with the Shares, and if exercised by Maker all new shares or other
securities so acquired by Maker shall be immediately assigned to Payee to be
held under the terms of this Agreement in the same manner as the Shares.

         4.  EVENTS OF DEFAULT; REMEDIES.
             ---------------------------


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<PAGE>

         (a) Any of the following shall constitute a default hereunder: (i) the
failure by Maker to pay when due the Principal Balance of this Note; (ii) the
failure to pay when due any interest on this Note; (iii) the failure by Maker to
perform any of its obligations with respect to this Note and Security Agreement;
or (iv) the Maker sells and/or pledges the Shares and/or any interest or right
to said Shares and/or permits any lien or other encumbrance of any kind to
attach to the Shares. Whenever there is a default under this Note, and such
default is not cured within ten (10) days after receipt by Maker of a written
notice advising of same, the Payee, or other holder of this Note (the "Holder"),
may at its option declare the amounts due under this Note immediately due and
payable and exercise any and all rights and remedies available to it hereunder
or under applicable law. If at any time prior to maturity Maker defaults
hereunder, (i) Payee shall have the right to retain all or a portion of the
Shares for its own account, in which case Maker's debt represented by the
Principal Balance related to those Shares which were retained shall be
discharged in total and (ii) Maker waives any right to have Payee sell any of
the Shares.

         (b) Maker shall have a one time right to "put" all of the Shares to
Payee in exchange for cancellation of this Note prior to maturity.

         In the event of voluntary or involuntary termination of Maker's
employment, whether for "just cause" or without "just cause" as

                                      -15-


<PAGE>

defined in the Employment Agreement, Maker shall pay the Principal Balance (plus
accrued interest) within thirty (30) days of the date of termination. The "put"
right in the preceding paragraph shall cease on the 30th day after termination.

         In the event of death or disability of Maker, Maker or its respective
successors and assigns shall pay the Principal Balance (plus accrued interest)
within one hundred eighty (180) days of the date of death or disability. The
"put" right in the second preceding paragraph shall cease on the 180th day after
the date of death or disability.

         5.  ASSIGNABILITY.  The Payee may assign its rights hereunder
to any other person, provided that any such assignment shall comply
with all applicable state and federal rules and regulations
governing the transfer of securities.

         6.  PLACE AND MANNER OF PAYMENT; NOTICES.
             ------------------------------------

                  (a) PLACE AND MANNER OF PAYMENT. All payments on this Note
shall be paid by check at the address of the Payee set forth for notices in
subsection (b), or such other place as may be specified by the Payee or Holder
from time to time.

                  (b) NOTICES. Any notices or other communications given
hereunder shall be in writing, and shall be delivered to the parties at the
addresses set forth below (or to such other party or entity or address as either
party may specify by due notice to the other party) and shall be deemed to have
been duly given if delivered by


                                      -16-
<PAGE>

mailed, first class postage prepaid.

                          1.      If to the Maker:

                                  Robert Jenks
                                  909 West 14th Street
                                  Yankton, SD 57078

                          2.      President
                                  M-tron Industries, Inc.
                                  100 Douglas Avenue
                                  Yankton, SD 57078

         8. MISCELLANEOUS. Each right, power and remedy of the Payee/Holder
under this Note and Security Interest or under applicable laws shall be
cumulative and concurrent, and the exercise by the Payee/Holder of any or all
such other rights, powers or remedies. No failure or delay by the Payee/Holder
to insist upon the strict performance of anyone or more provisions of this Note
and Security Interest or to exercise any right, power or remedy consequent upon
a breach thereof or default hereunder shall constitute a waiver thereof, or
preclude the Payee/Holder from exercising any such right, power or remedy. No
modifications, chance, waiver or amendment of this Note shall be deemed to be
made unless in writing signed by the party to be charged. If it becomes
necessary to employ counsel to collect this obligation including without
limitation breaches by Maker of the terms of this Note and Security Agreement
and foreclosure with respect to the Shares, the Maker agrees to pay reasonable
attorneys' fees for legal services involved. The Maker hereby waives demand,
presentment for payment protest, notice of dishonor and notice of protest. This
Note and


                                      -17-


<PAGE>

Security Agreement shall inure to the benefit of and be binding upon the parties
and their respective successors and assigns. The invalidity, illegality or
unenforceability of any provision of this Note shall note affect or impair the
validity, legality or enforceability of any other provision. This Note and
Security Agreement shall be deemed to be made in, and shall be governed by the
laws of, the State of South Dakota, and such other applicable laws, rules and
regulations governing the transfer of securities.


         9. COMPLIANCE & APPROVAL. This Note and Security Agreement
is subject to compliance with SEC Rules and Regulations and has been approved by
the shareholder of Payee.

WITNESS



------------------------------         -------------------------------
                                       Robert Jenks



                                      -18-