Indeck Energy Services, Inc., and Subsidiaries - Page 39




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               Their dispute first went to arbitration, in a proceeding               
          initiated by Mr. Polsky in September 1990.  Mr. Polsky contended,           
          inter alia, that because his termination had been wrongful, he              
          was entitled to the value of his shares as of the June 1, 1993,             
          expiration of his employment term under the Employment                      
          Agreement,15 at which time the shares would have appreciated to             
          $56.3 million, in present value terms, he claimed.                          
          Alternatively, Mr. Polsky claimed that the $501,000 per share               
          PowerLink offer set a floor, but not a ceiling, on the value of             
          his shares.  In response, Indeck took the position that the                 
          arbitrator lacked jurisdiction to consider the value or sale of             
          Mr. Polsky’s shares.  Then, by letter dated October 1, 1991,                
          Indeck took the position that since no bona fide offers for its             
          stock had been received within the year following Mr. Polsky’s              
          termination, the price for his shares should be set under the net           

               15 Mr. Polsky’s position was far from frivolous, as Indeck’s           
          own counsel advised its board of directors in February 1991 that            
          if Mr. Polsky’s termination were found to be wrongful, he had no            
          obligation to sell his shares to Indeck until the June 1, 1993,             
          expiration of his term of employment under the Employment                   
          Agreement.                                                                  
               Mr. Polsky’s position, and the advice given by Indeck’s                
          attorney, were apparently based on the fact that the                        
          Shareholders’ Agreement’s provisions governing Indeck’s purchase            
          of Mr. Polsky’s shares in the event of his involuntary                      
          termination presupposed a termination effected in accordance with           
          the provisions of the Employment Agreement.  Mr. Polsky contended           
          that his termination violated the Employment Agreement, and the             
          arbitrator subsequently agreed.  The portion of the arbitration             
          award covering damages for wrongful termination was confirmed and           
          not appealed by Indeck.                                                     





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