Chief Industries, Inc. and Subsidiaries - Page 7

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          directives of the ESOP committee, and that such actions were a              
          reasonable exercise of its discretion in its capacity as the                
          ESOP’s trustee.  At that time, 32.27 percent of the outstanding             
          shares in petitioner were held by the ESOP.                                 
               V. Eihusen counterclaimed in the ESOP litigation, alleging             
          conflict of interest and self-dealing on the part of the ESOP               
          committee.  He sought a ruling that the ESOP’s trustee was                  
          required to allow passthrough voting of the ESOP’s shares in                
          petitioner in accordance with the direction of the participants.            
          In September 1995, the District Court ruled that petitioner could           
          direct the ESOP’s trustee on the voting of the ESOP’s shares in             
          petitioner.  V. Eihusen’s counterclaims were not included in this           
          ruling, and they remained pending.                                          
               V. Eihusen had in his answer also cross-claimed against the            
          ESOP committee, alleging a breach of fiduciary duty, conversion,            
          and civil conspiracy.  He sought through these cross-claims both            
          equitable relief and compensatory damages.  The District Court              
          found these cross-claims to be preempted by Federal law and                 
          dismissed them on October 10, 1995.                                         
          4.   Intermodal Litigation                                                  
               On or about May 15, 1995, petitioner and Mid-Am Intermodal             
          Sales Co. (Mid-Am) entered into a plan of reorganization (Mid-Am            
          purchase agreement).  The Mid-Am purchase agreement was                     
          negotiated and executed without the knowledge of V. Eihusen, who            






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