Cardinal Ethanol, LLC
Employee Bonus Plan
Amended and Restated for Fiscal Year 2016-17
(Effective 10-1-16)
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, that 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 purposes 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, 2016 to September 30, 2017 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, 2017 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, Individual Safety
Participation, and Audits.

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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Employee Bonus 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 - $19,999,999 = 7½%payout
-    Payout Level 3 ……………………$ 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 - Maximize corn oil yield per bushel of corn ground. Measure will
be based on results of rankings through Benchmarking surveys. (Quarterly Payout)
Team Goal #4 - 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 and Bi-Annual Safety Audits. (Quarterly Payout)

•
Goal #1 Lead Rankings for Ethanol Yield based on 12 month rolling average -
(Christianson Benchmarking; All Plants, undenatured, moisture adjusted gallons
per bushel ground based on corn at 15%)(3% max payout)

1)Ranking below the top 40%...............................        0% payout
2)Ranking in the top 40% - 35 %..........................        1% payout
3)Ranking between 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)27,751 or more..................................................         0%
payout
2)27,750 - 26,751.................................................         1%
payout
3)26,750 or less....................................................        2%
payout

•
Goal #3 Improve Corn Oil Yield based on 12 month rolling average - (Christianson
Benchmarking; Pounds of Oil per Bushels Ground)(2% max payout)

1)Ranking below the top 30%...............................         0% payout
2)Ranking between 30% and 20%........................        1% payout
3)Ranking in the top 20%......................................         2% payout

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•
Goal #4 Improve Safety Record - Individual Safety Participation; subject to
verification and approval by management. (3% max payout)

1) Safety Committee Meeting and Employee Participation (1% max payout)
Participate in one (1) Safety Committee meeting and one (1) Employee
Participation
Task from the below menu:
o Employee Participation Menu
Safety Program Area Audit Complete
Non-Routine Task Pre-work Audit Completed
Lead a Toolbox Talk
LOTO/Confined Space Program Review
Contractor Observation, Review and Evaluation
Participate and complete an optional Safety Webinar.
Participate on an Internal Control committee.
2) Near Miss Reporting (complete 2) (1% max payout)
1) Two (2) Near Miss Reports completed (Plant or Internal Control)
3) Improve ERI Audit Score (based on bi-annual Audit scores/ranking)(1% max
payout)
Q1 Payout = Completion of all non-capital deficiencies highlighted and mentioned
in the latest ERI Safety Audit within 90 days of issuance of ERI Safety Audit
Report.
Q2 Payout = A Safety Audit score greater than 93.26%
Q3 Payout = Completion of all non-capital deficiencies highlighted and metioned
in the latest ERI Safety Audit within 90 days of issuance of the ERI Safety
Audit Report
Q4 Payout = A Safety Audit Score greater than the previous ERI Safety Audit
score.

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Personal Incentive (10% additional opportunity available)
Available to the following positions: Production Manager, EHS 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% max payout)
•Ranking below the 2nd Quartile.................................................
    0% payout
•Ranking in the 2nd
Quartile.......................................................     1% payout
•Ranking in the 1st
Quartile........................................................     2% payout
Safety - All non-capital recommendations from ERI Audit satisfactorily completed
within 90 days of notification (1% max payout)
•Have Audit items been completed    NO..................................     0%
payout
•Have Audit items been completed    YES................................     1%
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)
•Ranking below the top
40%.......................................................     0% payout
•Ranking in the top 40% - 35%...................................................
    1% payout
•Ranking in the top 35% - 25%...................................................
    2% payout
•Ranking in the top 25% (Leader)...............................................
    3% payout
Production - Maximize Corn Oil Production (Christianson Benchmarking; All
Plants, undenatured, moisture adjusted to 15%, pounds per bushel ground.)(2% max
payout)
•Ranking below the top 30%......................................................
    0% payout
•Ranking between 30% and 20%...............................................
    1% payout
•Ranking in the top
20%.............................................................     2% payout
Production - Ethanol Throughput, denatured gallons (2% max payout)
•Less than 120.0 M
gallons........................................................     0% payout
•120.0 M to 125.0 M
gallons.......................................................     1% payout
•125.0 M to 130.0 M
gallons.......................................................     1 1/2% payout
•Greater than 130.0 M gallons...................................................
    2% payout

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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% max payout)
•Ranking below the 2nd Quartile.................................................
    0% payout
•Ranking in the 2nd
Quartile.......................................................     1% payout
•Ranking in the 1st
Quartile........................................................     2% payout
Safety - All non-capital recommendations from ERI Audit satisfactorily completed
within 90 days of notification. (1% max payout)
•Have Audit items been completed.................    NO.....................
    0% payout
•Have Audit items been completed.................    YES...................
    1% payout
Maintenance - Reduction of supply cost (Based on Christianson Benchmarking for
“All Plants - Plant Supplies/Repair/Maintenance”) (2% max payout)
•Ranking outside of the top 20 plants.........................................
    0% payout
•Top 20 Benchmarking rank for all plants..................................
    1% payout
•Leader (top 25% ranking for all plants)....................................
    2% payout
Maintenance - Uptime (includes all downtime) (3%)
•Greater than 328 hours downtime............................................
    0% payout
•328 to 280 hours downtime......................................................
    1% payout
•279 to 240 hours downtime......................................................
    2% payout
•Less than 240 hours downtime.................................................
    3% payout
Project Management - (Based on project budget and timeline provided by
management) (2%)
•Capital Projects completed on-time.........................................
    1% payout
•Capital Projects completed on budget......................................
    1% payout
EHS Manager: Personal Goals (annual payout)
Safety - Improve ERI Safety Audit Score (based on last audit score prior to year
end) (3% max payout)
•Ranking below the 2nd Quartile...............................................
    0% payout
•Ranking in the 2nd
Quartile......................................................     2% payout
•Ranking in the 1st
Quartile.......................................................     3% payout
Safety - All non-capital recommendations from ERI Audit satisfactorily completed
within 90 days of notification (1% max payout)
•Have Audit items been completed.................NO....................     0%
payout
•Have Audit items been completed.................YES...................     1%
payout
Environmental Compliance - Maintain Permit Parameters (4%)
•No EHS violations resulting in fines (EPA, OSHA, IDEM, etc.)    3% payout
Food Safety Modernization Act - Compliance (3%)
•Failure to meet compliance due date.........................................
    0% payout
•Fully Compliant by September 17, 2017 due date....................     3%
payout

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Controller: Personal Goals (annual payout)
Financial Planning - Prepare the Annual Budget (with help from the CFO if
necessary) (3%)
(Budget Ready for October 2017 Board Meeting)
•
NO...........................................................................................    0%
payout

•
YES.........................................................................................
    3% payout

Tax/K-1 - Completed K-1s in a timely manner before the date of the annual
meeting (2%)
•Completion on or after the Annual Meeting date....................     0%
payout
•Completion before the Annual Meeting date...........................     1%
payout
•Completion by January 31, 2017.............................................
    2% payout
FY 10-K - Close for timely SEC filing and bank/Investor Obligations (3%)
•Completion after December 13, 2016......................................     0%
payout
•Completion on or before December 13, 2016..........................     1%
payout
•Completion on or before December 1, 2016............................     2%
payout
•Completion on or before Thanksgiving 2016...........................    3%
payout
Accounting - Preparation of Financial Statements (5 day close) (2%)
•
Preliminary Financials ready in 5 days 9 of 12 months.............     1% payout

•
Preliminary Financials ready in 5 days 11 of 12 months...........     2% payout

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. 40% of this
payout will be tied to Production Manager, Maintenance Manager, EHS Manager, and
Controller meeting their individual goals. 60% of this payout will be based on
Production and Capital Management goals.
“Senior Management”: Goals (annual payout) (CEO, CFO, Commodity Manager, Plant
Manager)
1) Leadership/Management/Coaching - Develop and Support Mid-management (4%)
•Average completion score of mid management incentive award times 40% award
value.
2) Production & Capacity Goals (Based on Denatured Production) (3%)
•Fiscal Year End Production > 120,000,000 MG......................     1% payout
•Fiscal Year End Production > 125,000,000 MG......................     2% payout
•Fiscal Year End Production > 130,000,000 MG......................     3% payout
3) Capital Project Management - (3% maximum payout)
•Capital Project Detail Packet Completed.................................    1%
payout
•On-Time & On-Budget Completion.........................................    1%
payout
•Post Project Analysis
Completed..............................................    1% payout