Cardinal Ethanol, LLC
Employee Bonus Plan
Fiscal Year 2013-2014
(Issued 10-1-13)

The purpose in developing and continuing an Employee Bonus Plan is to reward the
employees for their contributions that directly impact the financial results of
the Company, reflect a positive safety culture, and to promote teamwork needed
to complete desired goals. This year's Plan is again made up of financial and
team goals relating to the Company's financial success, safety, and production
efficiency.

For the purpose of the Plan, wages are defined as the amount paid during the
defined period and limited to regular pay, overtime, holiday, and paid time off
(PTO).

Rules of the Plan:
a)
All plan payouts must be approved by the Board of Directors.

b)
Employee must be employed on the day that the Board approves the payout to be
eligible for any bonus payout.

c)
Employee must be working from October 1, 2013 to September 30, 2014 to be
eligible for the full bonus.

Financial Goal:
a)
Eligibility for the Financial Goal payout portion of the plan begins at
$7,500,000 net income. There will be NO payout under the financial goal section
if the Company does not meet this minimum income threshold.

b)
The Financial Goal section is eligible to all employees that meet the
eligibility requirements.

c)
Payout for the Financial Goal will be made prior to December 31, 2014 once the
fiscal year end results are calculated and approved.

Team Goals:
a)
Team Goals are not subject to a minimum net income requirement.

b)
Payout for the Team Goals will be made quarterly and based on company
“Operational Statistics”, Christianson Benchmarking Results and Individual
Safety Participation.

c)
Employee must be employed on the last day of the quarter and on the day the
Board approves the payout to receive any payout from the Team Goals.

d)
Employee does not need to have worked the full quarter to be eligible. Payout
will be made once final results are known and have been approved by the Board of
Directors.

e)
Team Goal payout is applicable to all employees that meet the eligibility
requirements.

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FY 2013-14 Employee Incentive Plan

Financial Goal - Max Payout 10% of eligible wage.
Minimum required net profit needed for payout $7.5M (Annual Payout)
- Payout Level
1............................................................................
$7,500,000 - $11,999,999 = 5% payout
- Payout Level
2............................................................................
$12,000,000 - $19,999,999 = 7.5% payout
- Payout Level
3............................................................................
$20,000,000 and above = 10% payout

Team Goals - Max Payout 10% of eligible wage.

Team Goal #1 - Improved efficiency and production through increased ethanol
yield per bushel ground as compared to industry; based on rankings through
Benchmarking surveys (Quarterly Payout)

Team Goal #2 - Optimize natural gas usage by reducing BTU/gallon. Achieved
Natural Gas Usage number will be based on "Operation Statistics" work papers.
(Quarterly Payout)

Team Goal #3 - Improve Safety performance. Increase awareness and maintain
safety performance. Near misses will be based on individual reports submitted on
time to the EHS Manager. Other Safety criteria are based on individual
participation. (Quarterly Payout)

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Goal #1  Lead Rankings for Ethanol Yield (Christianson Benchmarking; All Plants,
undenatured, moisture adjusted gallons per bushel ground based on corn at 15%)
(3% max payout)
1) Ranking outside of the top
40%........................................................
0% payout
2) Ranking in the top 40% -
35%..........................................................
1% payout
3) Ranking in the top 35% -
25%..........................................................
2% payout
4) Ranking in the top 25% (Leader)
.....................................................
3% payout
 
 
Goal #2 Optimize Natural Gas Usage (BTU per Anhydrous Ethanol gallon) (2% max
payout)
1) 28,216 or more ............................................................
0% payout
2) 28,215 - 28,001.............................................................
1% payout
3) 28,000 - 27,501.............................................................
1.5% payout
4) 27,500 or
less................................................................
2% payout
 
 
Goal #3 Improve Corn Oil Yield (Pounds of Oil per Bushels Ground)(2% max payout)
 
1) Less than 0.600 pounds .............................................
0% payout
2) 0.601 - 0.654 pounds ..............................................
1% payout
3) 0.655 - 0.700 pounds ..............................................
1.5% payout
4) Greater than 0.700 pounds ......................................
2% payout
 
 
Goal #4 Improve Safety Record - Individual Safety Participation; subject to
verification and approval by management. (3% max payout)
Safety Committee Meeting PArticipation (complete 1) (1%)
 
1) One Safety Committee meeting attended and participation
 
 
 
Employee Participation Menu (complete 2) (1%)
 
1) Safety Program Area Audit Complete
 
2) Non-Routine Task Pre-work Audit Completed
 
3) Lead a Toolbox Talk
 
4) LOTO/Confined Space Program Review
 
5) Contractor Observation, Review and Evaluation
 
6) Participate and complete an optional Safety Webinar.
 
 
 
Near Miss Reporting (complete 3) (1%)
 
1) Three Near Miss Reports completed
 

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Personal Incentive (10% additional opportunity available)

Available to the following positions: Production Manager, ESH Manager,
Maintenance Manager, and Controller.

These positions will be eligible for an additional 10% payout if they meet
certain personal goals. These individual goals will be ones the positioned
employee will have a direct impact in achieving the best return to the business.

Personal Incentive (10% additional opportunity available)

Production Manager: Personal Goals (annual payout)
Safety - Improve ERI Safety Audit Score (based on last audit score prior to
yearend) (2%)
 
Ÿ Final Results "Improvement Required"
0% payout
Ÿ Final Results "Acceptable Area"
1% payout
Ÿ Final Results "Exceptional"
2% payout
Production - Improve Ranking of Ethanol Yield (Christianson Benchmarking; All
Plants, undenatured, moisture adjusted gallons per bushel ground based on corn
at 15% (3% max payout)
Ÿ Ranking below the top 40%
0% payout
Ÿ Ranking in the top 40% - 35%
1% payout
Ÿ Ranking in the top 35% - 25%
2% payout
Ÿ Ranking in the top 25% (Leader)
3% payout
Production - Maximize Corn Oil Production (3%)
 
Ÿ Less than 0.60 pounds per bushel ground
0% payout
Ÿ 0.601 - 0.654 pounds per bushel ground
1% payout
Ÿ 0.655 - 0.700 pounds per bushel ground
2% payout
Ÿ Greater than 0.700 pounds per bushel ground.
3% payout
Production - Ethanol Throughput, anhydrous gallons (2%)
 
Ÿ Less than 111.5 M gallons
0% payout
Ÿ 111.5 M to 113.4 M gallons
1% payout
Ÿ 113.5 M to 115.4 M gallons
1.5%payout
Ÿ Greater than 115.5 M gallons
2% payout
 
 
EHS Manager: Personal Goals (annual payout)
 
Safety - Improve ERI Safety Audit Scores (based on last audit score prior to
yearend) (6%)
 
Ÿ Final Results "Improvement Required"
0% payout
Ÿ Final Results "Acceptable Area"
3% payout
Ÿ Final Results "Exceptional"
6% payout
Environmental Compliance - Maintain Permit Parameters (4%)
 
Ÿ 100% Completion of EHS Compliance Calendar
1% payout
 - Including additions and updates.
 
Ÿ No ESH violations resulting in fines
1% payout
 - EPA, IDEM, OSHA, etc.
 
Ÿ Training and PSM in Compliance
1% payout
Ÿ Written Monthly EHS Review
1% payout
 - To include Company policy violations, observation summary, recommended
actions, etc.

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Maintenance Manager: Personal Goals (annual payout)
 
Safety - Improve ERI Safety Audit Score (based on last audit score prior to
yearend) (2%)
 
Ÿ Final Results "Improvement Required"
0% payout
Ÿ Final Results "Acceptable Area"
1% payout
Ÿ Final Results "Exceptional"
2% payout
Maintenance - Reduction of supply cost (Based on Christianson Benchmarking for
"All Plants - Plant Supplies/Repair/Maintenance") (3%)
Ÿ Ranking outside of the top 20 plants
0% payout
Ÿ Top 20 Benchmarking rank for all plants
1% payout
Ÿ Leader (top 25% ranking for all plants)
3% payout
Maintenance - Uptime (Includes all downtime) (3%)
 
Ÿ Greater than 336 hours downtime
0% payout
Ÿ 336 to 313 hours downtime
1% payout
Ÿ 312 to 288 hours downtime
2% payout
Ÿ Less than 288 hours downtime
3% payout
Maintenance - Inventory Accuracy and Count Frequency, Spare Parts (Accuracy
based on adjustments per count/inventory units per count with total inventory
counted quarterly) (2%)
Ÿ Greater than a 2% accuracy error
0% payout
Ÿ 1% to 2% accuracy error (min. of 6 counts/quarter)
1% payout
Ÿ Less than 1% accuracy error (min. of 9 counts/quarter)
2% payout
 
 
Controller: Personal Goals (annual payout)
 
Accounting - Close out monthly financials. Close EOM, including CFO's review and
correction of any notes made by CFO, within 5 business days after the last day
of the month (3%)
Ÿ Less than 7 successful closes
0% payout
Ÿ 7 - 8 successful closes
1% payout
Ÿ 9 - 10 successful closes
2% payout
Ÿ Over 10 successful closes
3% payout
Tax/K-1 - Completed K-1s in a timely manner before the date of the annual
meeting (2%)
 
Ÿ Completion after February 1, 2014
0% payout
Ÿ Completion by February 1, 2014
1% payout
Ÿ Completion by January 27, 2014
2% payout
FY 10-K close for timely SEC filing and bank/Investor Obligations (2%)
 
Ÿ Completion after December 9, 2013
0% payout
Ÿ Completion on or before December 9, 2013
1% payout
Ÿ Completion on or before November 30, 2013
2% payout
Develop and Implement Risk Assessments/Mitigation Opportunities (3%)
Ÿ Initial Ris Assessments not complete
0% payout
Ÿ Identify Risk Assessment with scales and draft of results completed by
March31, 2014
1% payout
Ÿ Develop plans for mitigating 'most serious risk' areas (min. 5)
1% payout
Ÿ Write flow charts, procedures and/or policies to mitigate the 'most serious
risk' identified above
1% payout

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Personal Incentive (10% additional opportunity available)

Available to the following positions: CEO, CFO, Commodity Manager, and Plant
Manager.

These positions will be eligible for an additional 10% payout. 60% of this
payout will be tied to the Managers mentioned under item #1 meeting their goals.
40% of this payout will be based on COGS as a percentage of Sales.

"Senior Management" : Goals (annual payout) (CEO, CFO, Commodity Manager, Plant
Manager)
Leadership/Management/Coaching - Develop and Support Mid-management (6%)
•Average completion score of mid management incentive award times 60% award
value.
Financial - Target COGS as a % of Sales (COGS + unrealized losses - unrealized
gains/Revenues) (4%)
ž > 96.3%
0% payout
ž 96.29% - 95.0%
1% payout
ž 94.99% - 93.00%
2% payout
ž < 92.99%
4% payout