**EXHIBIT 10.14**

 

**EMPLOYMENT AGREEMENT**

 

This Employment Agreement is effective the 1st day ofFebruary, 2004, between South Dakota Soybean Processors, LLC, a South Dakotalimited liability company, and Rodney G. Christianson (“Employee”).

 

THE PARTIES AGREE AS FOLLOWS:

 

1.                                       Definitions.The following terms shall have these meanings:

 

a.                                       “Affiliate” or“Affiliates” shall mean any Person who controls, is controlled by, or is undercommon control with, either directly or indirectly, or through one or moreintermediaries, the Employer. For purposes of this Agreement, the termAffiliate shall include Urethane Soy Systems Co. and Minnesota SoybeanProcessors Coop.

 

b.                                      “Base Salary”shall mean Employee’s annual compensation as set forth in paragraph 6 of thisAgreement.

 

c.                                       “ConfidentialInformation” shall mean any and all information disclosed by Employer orAffiliate to Employee, whether prior to or during the term of this Agreement,relating to those matters not generally known to the public or the industry inwhich Employer and/or an Affiliate is or may become engaged and which pertainto the operations, processes, methods, and accumulated experience incidental tothe manufacture, processing, sale, and distribution of Employer’s and/or anAffiliate’s Products, regardless of whether Employer and/or an Affiliateprovides such information to Employee in tangible form or the information isretained in the memory of Employee. Confidential Information includes, forexample, and without limitation: (i) sales records, pricing manuals, trainingmanuals, selling and pricing procedures, and financing methods, (ii) tradesecrets and other know-how regarding businesses, products and services, (iii)personnel and salary information, including wages, bonuses, commissions, andfringe benefits, (iv) production and processing procedures, formulae andsystems, (v) vendor and supplier information, (vi) Customer lists andProspective Customer Lists including, without limitation, names of contacts,products and services purchased, quantities purchased, credit histories, timingof purchases, payment histories, special demands of particular Customers, andcurrent and anticipated requirements of Customers generally for products orservices, (vii) marketing information, including without limitation, research,development, testing and customer surveys, and any specifications of any newproducts or services under development, and (viii) business projections,strategic plans, marketing systems and procedures, and inventory procedures andsystems.

 

d.                                      “Control,”“Controlled by” and “under common control with” shall mean the power, directlyor indirectly, to direct or cause the direction of the management and policiesof a Person whether through the ownership of voting securities or by contractor otherwise.

 

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e.                                       “Customer” shallmean an individual, business or entity with which Employer or an Affiliate didbusiness during the two (2) year period preceding the termination of Employee’semployment as provided in this Agreement.

 

f.                                         “IncentiveCompensation” shall mean compensation paid to Employee as set forth inparagraph 7 of this Agreement.

 

g.                                      “Person” means anindividual, partnership, limited partnership, limited liability company, trust,estate, corporation, cooperative, custodian, trustee, executor, administrator,nominee or entity in a representative capacity.

 

h.                                      “Products” shallmean all products manufactured and/or sold by Employer or an Affiliate,including polyurethane, plastics, resins, soybeans, soybean meal, soybean oiland other soybean products.

 

i.                                          “ProspectiveCustomer” shall mean a potential customer of Employer or an Affiliate, whichhas been contacted by Employer or an Affiliate and for which Employer or anAffiliate has made a financial investment, such as time, travel, equipment ormaterial during the two (2) year period preceding the termination of Employee’semployment as provided in this Agreement.

 

2.                                       Employment.  Employer agrees to employ Employee andEmployee accepts employment upon the terms and conditions set forth in this Agreement.

 

3.                                       Dutiesand Review. Employee shall be engaged in full-time employment by Employeras its Chief Executive Officer and shall devote sufficient time and attentionto the business of Employer, including general management and oversight ofAffiliates, as shall be necessary to complete Employee’s obligations. Employer,through its Board of Managers, shall have the power to determine the specificduties to be performed by Employee and the time of performance. Employee shallundergo performance reviews from time to time during the term of this Agreementat the request of Employer’s Board of Managers.

 

4.                                       OtherActivities. Employee shall devote substantially all of his working time andefforts during Employer’s normal business hours to the business of Employer,including the general management and oversight of Affiliates. Employee shall befree to invest his assets in a manner that will not require any substantialservices by Employee in the conduct of the business of the entities or in themanagement of the properties in which he invests.

 

5.                                       Term.This Agreement is for a term of four (4) years commencing on the 1stday of February, 2004, and terminating on the 31st day of January,2008, unless sooner terminated pursuant to the provisions of this Agreement.

 

6.                                       BaseSalary. For all services to be rendered by Employee pursuant to thisAgreement, Employer agrees to pay Employee compensation at an annual rate ofTwo Hundred Fifty Thousand and No/100 Dollars ($250,000.00) untilAugust 31, 2005, and at an annual rate of Three Hundred Thousand andNo/100 Dollars ($300,000.00) for the remaining term of this Agreement. ThisBase Salary shall be paid in periodic installments in accordance with theEmployer’s regular payroll practices. Each installment shall be reduced bydeductions for the

 

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withholding of federal income tax, FICA contributions, and all otherdeductions required by law or agreed to by Employee.

 

7.                                       IncentiveCompensation. In addition to the Base Salary, Employee shall be paid abonus equal to one-half (1/2) of one percent (1%) of Employer’s net incomebefore taxes and member distributions on net income up to $5,000,000.00, or ifthe net income exceeds $5,000,000.00, Employee shall be paid a bonus equal toone percent (1%) of Employer’s net income. Examples: $4,386,000.0 net income x..5% = $21,930.00; or $6,500,000.00 net income x 1% = $65,000.00. This incentivebonus may be paid directly or deferred at Employee’s option. The calculation ofEmployer’s net income shall include the net income of all of Employer’ssubsidiaries for which combined and audited financial statements must beprepared for GAAP (“Generally Accepted Accounting Principles”) purposes. Netincome shall be calculated under the GAAP method of accounting utilized byEmployer for its audited financial statements and shall exclude any items ofincome or expense that would be considered to be extraordinary and not arisingin the ordinary course of business. Such items could include but are notlimited to the following:

 

i.                                          Capital gainsor losses from the sale of marketable securities or other investments ofEmployer.

 

ii.                                       Gains or losseson the sales or dispositions of fixed assets.

 

iii.                                    Insurance proceedsreceived by Employer for the loss of property, capital assets, or other assetsof Employer.

 

iv.                                   Investment incomefrom securities held by Employer, e.g., interest income, dividend income, etc.

 

v.                                      Payment of alegal settlement, or receipt of monies relating to Employer’s involvement in litigationor other disputes.

 

Such items shall be determined by Employer’s Financial Audit Committeeand subsequently adjusted out of net income for purposes of the calculation ofthis incentive bonus. The incentive bonus shall be paid in full within thirty(30) days following completion of Employer’s audited financial statements inthe year following the year for which the net income is calculated.

 

8.                                       Holidaysand Vacations. Employee shall be entitled to seven (7) paid holidays: NewYear’s Day, Easter, Memorial Day, Fourth of July, Labor Day, Thanksgiving andChristmas. Employee shah be entitled to twenty (20) days paid vacation duringeach fiscal year of employment. Employee shall take his vacation at such timeor times as shall be approved by Employer’s Board of Managers. Vacation timeshall not be cumulative. Employee shall not be entitled to payment for anyunused vacation at year end or upon termination of this Agreement.

 

9.                                       Benefits.Employee shall receive the benefits, including participation in insurancebenefits and retirement plans, that are provided to Employer’s employees,provided Employee meets the qualification provisions of each plan.

 

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10.                                 LifeInsurance. Employer may, in its discretion, purchase or renew insurance onthe life of Employee. Employee agrees to submit to reasonable medicalexaminations and otherwise reasonably cooperate with Employer in connectionwith obtaining such insurance.

 

11.                                 Expenses.During the term of this Agreement, Employee shall be entitled to promptreimbursement by Employer of all reasonable travel, entertainment, and otherexpenses incurred by Employee in accordance with the policies and proceduresestablished by Employer’s Board of Managers and in the performance of hisduties and responsibilities under this Agreement; provided, that Employee shallproperly account for such expenses and present receipts as required by IRSguidelines.

 

12.                                 Vehicle.During the term of this Agreement, Employee shall be provided a vehicle for usefor company business. The type and cost of the vehicle as well as itsreplacement date will be determined by Employer’s Board of Managers.

 

13.                                 Terminationand Severance Pay.

 

a.                                       Termination.This Agreement shall terminate immediately: (i) upon Employee’s death, (ii)upon Employee becoming disabled, which determination shall be made byEmployer’s Board of Managers on the basis of medical evidence satisfactory toit, in its sole discretion, that Employee is so mentally or physically disabledas to be unable to fulfill Employee’s duties and responsibilities and that suchdisability is likely to be permanent; (iii) upon written notice from Employerthat Employee’s employment is being terminated for “Cause” as defined inparagraph 13(c) below; (iv) upon written notice from Employer that Employee’semployment is being terminated without “Cause” as defined in paragraph 13(c)below; or (v) upon Employee’s resignation of employment. In the event ofEmployee’s termination under this paragraph 13(a), he or his estate shall beentitled to receive the Base Salary and other benefits to which he is entitledunder this Agreement up to the date of termination. Employee or his estateshall have no rights pursuant to this Agreement to any benefits or compensationfor any period after the date of termination.

 

b.                                      Severance Pay.If Employer terminates the employment of Employee for any reason other than asprovided below in this subparagraph b, Employer shall pay Employee a sum equalto 1.5 times Employee’s Base Salary (at the annual rate then existing underparagraph 6) calculated for a one year period. Payment shall be made ineighteen (18) equal monthly installments or as otherwise mutually agreed by theparties beginning on the first day of the month following termination ofemployment. For example, if Employer terminates Employee’s employment without“Cause” on August 1, 2005, Employee shall be entitled to severance pay of$375,000.00 ($250,000.00 x 1.5) to be paid in 18 equal monthly installments of$20,833.33 each. For example, if Employer terminates Employee’s employmentwithout “Cause” on September 1, 2007, Employee shall be entitled toseverance pay of $450,000.00 ($300,000.00 x 1.5) to be paid in 18 equal monthlyinstallments of $25,000.00 each. Despite anything in this Agreement to thecontrary, Employee shall not be eligible to receive the severance pay describedin this paragraph 13(b) if: (i) Employee’s employment is terminated due toEmployee’s death; (ii) Employee’s employment is terminated due to Employee’sdisability; (iii) Employee’s

 

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employment is terminated for “Cause”; (iv) Employee voluntarily resignshis employment with Employer, (v) Employee’s employment is terminated becauseEmployer has ceased all business activities, become insolvent and/or has fileda voluntary petition in bankruptcy, or has had filed against it an involuntarypetition in bankruptcy; (vi) Employee is employed in a similar position by asuccessor company that has purchased substantially all of the assets ofEmployer, or (vii) Employer is merged into another company and Employee isretained by the surviving company in a similar position.

 

c.                                       For “Cause”Termination. Justifications for the Employer to terminate Employee’s employmentfor “Cause” shall include: (i) Employee’s confession or conviction of theft,fraud, embezzlement, or any other crime involving dishonesty with respect toEmployer, or any Affiliate, (ii) Employee’s excessive absenteeism (other thanby reason of physical injury, disease, or mental illness) without reasonablecause, (iii) Employee’s act or omission constituting a material breach of anyprovision of this Agreement or any non-compliance with Employee’s obligationsunder paragraphs 14, 17 and 18 of this Agreement, (iv) habitual and materialnegligence by Employee in the performance of his duties under this Agreement,(v) abusing, misusing or destroying Employer’s property or the property ofCustomers or other employees, (vi) making or publishing false, vicious ormalicious statements concerning Employer, its operations, employees or membersof the Board of Managers, (vii) habitually reporting for work under theinfluence of intoxicants or drugs, or (viii) Employee’s intentional violationof any law directly impacting Employer’s business, including any lawprohibiting discriminatory conduct, or the direction of another employee toviolate any such law. The preceding list is not intended to be exhaustive;other conduct of similar nature may result in termination of Employee. However,the results of Employer’s or Affiliates’ operations or any business judgmentmade in good faith by Employee shall not constitute an independent basis fortermination of Employee’s employment for Cause under this Agreement.

 

14.                                 Limitationof Competitive Activities. During the term of Employee’s employment withEmployer and for a period of two (2) years after termination of Employee’semployment, with or without cause, Employee will not, alone or with others,directly or indirectly, own or have an interest in another company (except foran ownership interest not to exceed 2% of the outstanding securities of acompany that is required to report to the United States Securities and ExchangeCommission under the Securities Exchange Act of 1934), work in, plan, or engagein any employment, consulting, or other business activity, whether or not forcompensation, that is competitive with Employer or its Affiliates within a fivehundred (500) mile radius from Volga, South Dakota. Employee will not engage inany other activity that conflicts with Employee’s obligations to Employerduring the term of this Agreement. The provisions of this paragraph 14 shallsurvive the termination of Employee’s employment under this Agreement for anyreason whatsoever.

 

15.                                 OtherSolicitation and Interference Limitations. For a period of two (2) yearsafter termination of Employee’s employment, with or without cause, Employeeshall not directly or indirectly solicit or aid in the solicitation of anyCustomers or Prospective Customers, and shall not interfere with therelationship between Employer and its Affiliates, or any of their respective

 

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employees, vendors, or suppliers. Employee agrees not to solicit orassist others in soliciting any Customers or Prospective Customers, employees,vendors, or suppliers of Employer and/or its Affiliates, directly orindirectly, even if participating in a business outside of the five hundred(500) mile radius from Volga, South Dakota. The provisions of this paragraph 15shall survive the termination of Employee’s employment under this Agreement forany reason whatsoever.

 

16.                                 Ownershipof Confidential Information. Employee acknowledges and agrees that allConfidential Information disclosed to Employee is and remains the exclusiveproperty of Employer and/or its Affiliates. Employee acknowledges that theConfidential Information was and will continue to be developed and acquired byEmployer and/or its Affiliates at great effort and expense, is valuable to theowner thereof and constitutes trade secrets unique to the owner thereof.

 

17.                                 Non-Disclosureof Confidential Information. Employee shall treat Confidential Informationin a secret and confidential manner. Employee shall comply with Employer’s andits Affiliates’ procedures for maintaining the confidentiality of ConfidentialInformation and agrees not to make use of or disclose Confidential Informationwithout the owner’s written consent, directly or indirectly, for any purpose whatsoever,to any person or entity outside of the owner’s business, either during the termof Employee’s employment or after termination of Employee’s employment, whetherwith or without cause. The provisions of this paragraph 17 shall survive thetermination of Employee’s employment under this Agreement for any reasonwhatsoever.

 

18.                                 Deliveryof Confidential Information and Employer Property. Upon request of Employerand/or an Affiliate and in any event upon termination of Employee’s employment,with or without cause, Employee shall promptly deliver to the Employer or anyAffiliate all Confidential Information, including, without limitation, alloriginals, copies, summaries or extracts of books, catalogues, sale brochures,Customer lists, Prospective Customer lists, price lists, employee manuals,notes, photographs, tape recordings, specifications, operations manuals and allother documents or tangible materials reflecting or referencing ConfidentialInformation, as well as all other materials furnished to or acquired byEmployee as a result of or during the course of Employee’s employment. Theprovisions of this paragraph 18 shall survive the termination of Employee’semployment under this Agreement for any reason whatsoever.

 

19.                                 Reasonablenessof Restrictions and Enforcement. Employee acknowledges that he hascarefully read and considered the provisions of this Agreement and, having doneso, agrees that the restrictions and limitations in this Agreement arereasonable as to geographic scope and duration and are necessary to protectEmployer’s and its Affiliates’ proprietary interests in their respectiveConfidential Information and to preserve for Employer and its Affiliates thecompetitive advantages necessary for their success.

 

20.                                 Remedies.Employee acknowledges and agrees that it is impossible to measure in money thedamages which will accrue to Employer and/or its Affiliates if Employee shouldbreach or is in default of any of Employee’s covenants or representations setforth in this Agreement, and that Employer and/or its Affiliates would beirreparably damaged by such breach or default by Employee. Accordingly, if anyaction or proceeding is instituted by or on behalf of any of the foregoing toenforce any term of this Agreement, Employee waives any claim or defense thatEmployer and/or its Affiliates have an adequate remedy at law or that

 

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Employer and/or its Affiliates have not been, or are not being,irreparably injured. The rights and remedies of Employer and/or its Affiliatespursuant to this paragraph are cumulative and shall not be deemed to excludeany other right or remedy which Employer and/or its Affiliates may havepursuant to this Agreement or otherwise, at law or in equity.

 

21.                                 Indemnification.Employee shall indemnify and hold harmless Employer, its Affiliates, and theftrespective owners, officers, managers, directors, other employees, agents, andassigns from any and all claims, damages, liabilities, attorneys’ fees andexpenses arising out of Employee’s violation of any of the terms and conditionsof this Agreement.

 

22.                                 Expensesof Enforcement. If Employee breaches or threatens to breach any of thecovenants described in this Agreement, then, in addition to any of the rightsand remedies which Employer and/or its Affiliates may have against Employee,Employee will be liable to pay Employer’s court costs and reasonable attorneys’fees incurred in enforcing this Agreement.

 

23.                                 Terminationof Prior Agreements and Modification. Employee acknowledges that any prioragreement with Employer as to employment was rightfully terminated atEmployer’s discretion prior to execution of this Agreement. This Agreementconstitutes the entire Agreement between Employer and Employee. It isindependent of and supplants all oral or written agreements entered prior to orcontemporaneously with this Agreement, except for the First Amended andRestated Deferred Compensation Plan made effective February 1, 2004. ThisAgreement may not be modified except by written agreement dated subsequent tothe date of this Agreement and signed by both Employer and Employee.

 

24.                                 Severability.If any provision of this Agreement shall be held by a court of competentjurisdiction to be unenforceable or invalid, the remaining provisions willremain in full force and effect. In the event that any of the restrictions orlimitations contained in paragraphs 14 and 15 of this Agreement are held toexceed the time or geographic limitations permitted by applicable law, thensuch restrictions or limitations shall be deemed to be reformed to the maximumtime and geographic limitations permitted bylaw. If any other provision of thisAgreement is held to be overbroad as written, the provision shall be deemedamended to narrow its application to the extent necessary to make itenforceable to the fullest extent allowable.

 

25.                                 Successorsand Assigns. This Agreement is personal to Employee and is not assignablein whole or in part by Employee without the express written consent ofEmployer. Any purported assignment by Employee without Employer’s consent willconstitute a breach for which Employer has the right to terminate thisAgreement.

 

26.                                 Presumptions.In construing the terms of this Agreement, no presumption shall operate ineither party’s favor as a result of counsel’s role in drafting the Agreement’sterms or provisions.

 

27.                                 Waiverof Breach. The waiver by Employer of breach of any covenant of thisAgreement or the failure of Employer to take action against any other employeefor similar breaches on their part, shall not operate or be construed as awaiver of any subsequent or later breach by Employee. No waiver by Employershall be effective unless in writing.

 

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28.                                 TextControls. The headings of paragraphs and sections are included solely forconvenience. If a conflict exists between any heading and the text of thisAgreement, the text shall control.

 

29.                                 GoverningLaw. All rights and obligations arising out of or relating to this Agreementshall be governed by and construed in accordance with the laws of the State ofSouth Dakota.

 

30.                                 DisputeResolution. All disputes between Employer and Employee arising out of orrelating to this Agreement and/or Employee’s employment shall be exclusivelyand finally resolved through the dispute resolution process set forth inExhibit A.

 

**IN WITNESS WHEREOF**,the parties have executed this Agreement as of the date first above written.

 

 
|   | SOUTH DAKOTA SOYBEAN |
|--------|----------------------|
|   | PROCESSORS, LLC      |
|   |                 |
|   |                 |
|   | By                   | /s/ Paul Casper |   |
|   |                 | Its President |
|   |                 |   |
|   |                 |   |
|   |                 | /s/ Rodney G. Christianson |   |
|   |                 | Rodney G. Christianson |

 

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**EXHIBIT A**

 

**DISPUTE RESOLUTION PROCESS**

 

1.                                       Arbitration.All disputes between Employer and Employee arising out of or relating to thisAgreement and/or Employee’s employment shall be exclusively and finallyresolved through binding arbitration by a single arbitrator. The arbitratorshall also exclusively and finally resolve all issues relating to the operationof this Process, including but not limited to all disputes relating to thevalidity or enforceability of this Process, the timeliness of an arbitrationdemand made pursuant to subparagraph 1.a.ii, the applicability of thisparagraph to a dispute between Employer and Employee, and the exclusion ofother remedies pursuant to paragraph 3.

 

a.                                       Demand forArbitration. Either party to this Agreement may initiate arbitrationpursuant to this paragraph by delivering, by certified mail, a written demandfor arbitration to the other party at such party’s current business address.

 

i.                                          Contentsof Demand. The demand for arbitration shall bear a current date and shallstate the name of the initiating party, a brief description of the mattersought to be arbitrated, and the amount of damages or other relief sought bythe initiating party.

 

ii.                                       Time forDemand. A demand for arbitration relating to any claim by Employee orEmployer shall be made within the time within which commencement of legal orequitable proceedings based on such claim could be made under the South Dakotastatute of limitations or repose applicable to such claim. Any claim notinitiated by a demand for arbitration within the times provided in thisparagraph 1.a.ii shall be deemed waived and forever barred.

 

b.                                      Qualificationsand Appointment of Arbitrator. Unless otherwise agreed by the parties, thearbitrator shall be an attorney licensed to practice law in the State of SouthDakota and shall have experience in resolving or litigating the type of claim,dispute or matter at issue in the arbitration. The parties shall mutually agreeupon an arbitrator. If the parties are unable to so agree, each party shalldesignate an attorney licensed to practice law in the State of South Dakota andthat is unaffiliated with Employer, Employee, and their respective attorneys,and such third party attorneys shall mutually agree upon an arbitrator.

 

c.                                       CashUndertaking. Within ten (10) days following the appointment of anarbitrator by the parties or their representatives, each party asserting aclaim or counterclaim in the arbitration shall deposit with the arbitrator acash undertaking in the amount of $5,000.00, which undertaking shall be appliedto any costs, fees or expenses awarded against the party pursuant tosubparagraph 1.g.

 

d.                                      Governing Law.The arbitrator shall resolve all claims solely on the basis of South Dakotalaw. The arbitrator shall also resolve all issues relating to the operation ofthis Process solely on the basis of South Dakota law, including but not limitedto all disputes identified in paragraph 1 above. The parties shall be permittedto conduct

 

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discovery pursuant to SDCL §§ 15-6-26 through 15-6-37; alldiscovery disputes shall be resolved by the arbitrator pursuant to theseprovisions and applicable case law. The arbitrator shall conduct allarbitration proceedings pursuant to the South Dakota Rules of Evidence,codified at SDCL Chapters 19-9 through 19-18, and applicable case law.

 

e.                                       Location.All arbitration proceedings shall take place in Brookings, South Dakota, unlessotherwise agreed by the parties.

 

f.                                         Form ofAward: No Appeal: Entry of Award. The arbitrator shall issue a writtenaward setting forth the arbitrator’s findings of fact, conclusions of law, decisionand monetary award. Except as otherwise permitted by SDCL Chapter 21-25A, noparty shall appeal to any court an award of an arbitrator issued under thisparagraph l.f, and the decision of the arbitrator shall be the final, bindingand conclusive resolution of the dispute. Any party to the arbitration mayapply to a court of competent jurisdiction for entry or confirmation of thearbitration award. Notwithstanding the foregoing, the issuance of an awardpursuant to this subparagraph 1.f shall not preclude a party from applying tothe arbitrator for costs, fees and expenses as provided in subparagraph 1.g,nor shall it preclude the arbitrator from modifying the award to provide forthe recovery of such costs, fees and expenses. Any application for costs, feesand expenses shall be delivered to the arbitrator within thirty (30) days ofthe date of the arbitration award.

 

g.                                      Allocation ofCosts, Fees and Expenses. The arbitrator shall award to the prevailingparty, as determined by the arbitrator pursuant to this subparagraph 1.g, allcosts, fees and expenses relating to the arbitration, including reasonableexpert witness and attorneys’ fees, unless the arbitrator finds a substantialreason for not doing so, which reason shall be explained in writing by thearbitrator. As used in this subparagraph, a party that is seeking anaffirmative damage award shall constitute a “prevailing party” only if suchparty is awarded damages, exclusive of costs, fees and expenses relating to thearbitration (including reasonable expert witness and attorneys’ fees), inexcess of the last written settlement demand made by such party. A partyagainst whom damages are sought shall constitute a “prevailing party” only ifsuch party is ordered to pay damages, exclusive of costs, fees and expensesrelating to the arbitration (including reasonable expert witness and attorneys’fees), in an amount less than the last written settlement offer made by suchparty. If no party constitutes a prevailing party pursuant to the preceding twosentences, the arbitrator may award costs, fees and expenses relating to thearbitration, including reasonable expert witness and attorneys’ fees, in thearbitrator’s discretion. Where parties are asserting affirmative claims againstone another, any separate written settlement demands or offers made on suchclaims shall be combined for purposes of this subparagraph. No written demandor offer made less than ten (10) days prior to the arbitration hearing shall beconsidered for purposes of this subparagraph. All settlement demands or offersshall be kept confidential and shall not be disclosed to the arbitrator, exceptin connection with an application for costs, fees and expenses made pursuant tothis subparagraph and subparagraph 1.f.

 

2.                                       Mediation.At any time after a demand for arbitration has been made pursuant to paragraph1.a, any party to the arbitration may request mediation. A mediation shall beconducted only if all parties to the arbitration consent to mediation.

 

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a.                                       Request forMediation. The request for mediation shall be in writing and shall bedelivered by certified mail to the current business address of eachunrepresented party to the arbitration and to counsel of each represented partyto the arbitration. The request shall bear a current date and shall state thename of the requesting party and a brief description of the matter sought to bemediated.

 

b.                                      Qualificationsand Appointment of Mediator. Unless otherwise agreed by the parties, themediator shall be an attorney licensed to practice law in the State of SouthDakota and shall have experience in resolving or litigating the type of claim,dispute or matter at issue in the mediation. The parties shall mutually agreeupon a mediator. If the parties are unable to so agree, each party shalldesignate an attorney licensed to practice law in the State of South Dakota andthat is unaffiliated with Employer, Employee, and their respective attorneys,and such third party attorneys shall mutually agree upon a mediator. Themediator of any dispute submitted to mediation under this paragraph 2 shall notbe the same person serving as arbitrator of such dispute, unless otherwiseagreed by the parties.

 

c.                                       Location.The mediation shall take place in Brookings, South Dakota, unless otherwiseagreed by the parties.

 

d.                                      Allocation ofMediation Costs. Costs of the mediation shall be borne equally by theparties, unless otherwise agreed by the parties.

 

3.                                       ExclusiveRemedy. This Exhibit A contains and shall constitute the sole and exclusiveremedy of the parties with respect to any and all disputes, claims or othermatters arising out of or relating to this Agreement and/or Employee’semployment. The parties hereby waive any and all other remedial rights with respectto such disputes, claims or other matters, whether in law or in equity.

 

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