Exhibit








	
																							
	Highwater Ethanol Incentive Program

	Fiscal 2017

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	Eligible
	Salary
	Net Income Incentive
	EBITDA
	Debt Service
	Share Value
	Yield/Project
	Compliance
	Total Percent Incentive
	Total Incentive

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Brian
	Kletscher
	Yes
	$
	173,040.00
	

	15
	%
	5
	%
	5
	%
	2
	%
	3
	%
	5
	%
	35
	%
	$
	60,564.00
	


	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	Eligible
	Salary
	Net Income Incentive
	EBITDA
	Debt Service
	Share Value
	Financial Reports
	Audit/SEC Compliance
	Total Percent Incentive
	Total Incentive

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Lucas
	Schneider
	Yes
	 $       132,483.75 
	

	15.00%
	

	5.00%
	

	5.00%
	

	2.00%
	

	2.00%
	

	3.00%
	

	32.00%
	

	 $         42,394.80 
	


	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 $       102,958.80 
	


	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	CEO Executive Bonus
	 
	 
	 
	 
	           CFO Executive Bonus
	 
	 
	 
	 
	 

	Base Salary
	Percent
	 $       173,040.00 
	

	 
	 
	Base Salary
	 
	Percent
	 $       132,483.75 
	

	 
	 

	Bonus potential 
	35%
	 
	 
	 
	Bonus Potential
	 
	32%
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	1. EBITDA
	5%
	 
	 
	 
	1. EBITDA
	 
	5%
	 
	 
	 

	Budgeted 
	2%
	 $           3,460.80 
	 
	 
	Budgeted
	 
	2%
	$2,649.68 
	 
	 

	plus 10%
	2%
	 $           3,460.80 
	 
	 
	plus 10%
	 
	2%
	$2,649.68 
	 
	 

	plus 15%
	1%
	 $           1,730.40 
	 
	 
	plus 15%
	 
	1%
	$1,324.84 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	2. Debt Service
	5%
	 
	 
	 
	2. Debt Service
	 
	5%
	 
	 
	 

	Budget plus 5%
	2%
	 $           3,460.80 
	 
	 
	Budget plus 5%
	 
	2%
	$2,649.68 
	 
	 

	plus 10%
	2%
	 $           3,460.80 
	 
	 
	plus 10%
	 
	2%
	$2,649.68 
	 
	 

	plus 15%
	1%
	 $           1,730.40 
	 
	 
	plus 15%
	 
	1%
	$1,324.84 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	3. Compliance
	5%
	 
	 
	 
	3. Compliance
	 
	3%
	 
	 
	 

	MPCA/DNR Permits Water 
	1%
	 $           1,730.40 
	 
	 
	SEC Reporting
	 
	2%
	$2,649.68 
	 
	 















	
																							
	MPCA Air Permits
	1%
	 $           1,730.40 
	 
	 
	Audit
	 
	1%
	$1,324.84 
	 
	 

	Federal Rail/State Rail/OSHA
	1%
	 $           1,730.40 
	 
	 
	 
	 
	 
	 
	 
	 

	SEC Reporting
	2%
	 $           3,460.80 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	4. Operations/Yield 
	2%
	 
	 
	 
	4. Financial Reports 
	2%
	 
	 
	 

	 
	2.88
	1%
	 $           1,730.40 
	 
	 
	 
	Monthly On Time
	1%
	$1,324.84 
	 
	 

	 
	2.89
	1%
	 $           1,730.40 
	 
	 
	 
	Quarterly 
	1%
	$1,324.84 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	5. Increase Share Value/Distribution
	1%
	 $           1,730.40 
	3%
	

	 
	5. Increase Share Value/Distribution
	1%
	$1,324.84 
	3%
	

	 

	 
	 
	1%
	 $           1,730.40 
	6%
	

	 
	 
	 
	1%
	$1,324.84 
	6%
	

	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	6. New Technology Reviewed
	1%
	 $           1,730.40 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	6. Income
	 
	 
	 
	 
	6. Income
	 
	 
	 
	 
	 

	Net Income Portion 
	Profitability
	 
	 
	Net Income Portion 
	Profitability
	 
	 
	 

	Net Income {Book}
	Percent 15%
	 
	 
	Net Income {Book}
	Percent 15%
	 
	 
	 

	$3.0 - $3.5 MM
	1%
	 $           1,730.40 
	

	 
	 
	$3.0 - $3.5 MM
	 
	1%
	$1,324.84 
	 
	 

	$3.5 - $4.0 MM
	1%
	 $           1,730.40 
	

	 
	 
	$3.5 - $4.0 MM
	 
	1%
	$1,324.84 
	 
	 

	$4.0- $4.5 MM
	1%
	 $           1,730.40 
	

	 
	 
	$4.0- $4.5 MM
	 
	1%
	$1,324.84 
	 
	 

	$4.5 - $5.0 MM
	1%
	 $           1,730.40 
	

	 
	 
	$4.5 - $5.0 MM
	 
	1%
	$1,324.84 
	 
	 

	$5.0 - $5.5 MM
	1%
	 $           1,730.40 
	

	 
	 
	$5.0 - $5.5 MM
	 
	1%
	$1,324.84 
	 
	 

	$5.5 - $6.0 MM
	1%
	 $           1,730.40 
	

	 
	 
	$5.5 - $6.0 MM
	 
	1%
	$1,324.84 
	 
	 

	$6.0 - $6.5 MM
	1%
	 $           1,730.40 
	

	 
	 
	$6.0 - $6.5 MM
	 
	1%
	$1,324.84 
	 
	 

	$6.5 - $7.0 MM
	1%
	 $           1,730.40 
	

	 
	 
	$6.5 - $7.0 MM
	 
	1%
	$1,324.84 
	 
	 

	$7.0 - $ 7.5 MM
	1%
	 $           1,730.40 
	

	 
	 
	$7.0 - $ 7.5 MM
	 
	1%
	$1,324.84 
	 
	 

	$7.5 - $8.0 MM
	1%
	 $           1,730.40 
	

	 
	 
	$7.5 - $8.0 MM
	 
	1%
	$1,324.84 
	 
	 

	$8.0 - $8.5 MM
	1%
	 $           1,730.40 
	

	 
	 
	$8.0 - $8.5 MM
	 
	1%
	$1,324.84 
	 
	 

	$8.5 - $9.0 MM
	1%
	 $           1,730.40 
	

	 
	 
	$8.5 - $9.0 MM
	 
	1%
	$1,324.84 
	 
	 

	$9.0 - $9.5 MM
	1%
	 $           1,730.40 
	

	 
	 
	$9.0 - $9.5 MM
	 
	1%
	$1,324.84 
	 
	 

	$9.5 - $10.0 MM
	1%
	 $           1,730.40 
	

	 
	 
	$9.5 - $10.0 MM
	 
	1%
	$1,324.84 
	 
	 

	$10.0 - $10.5 MM
	1%
	 $           1,730.40 
	

	 
	 
	$10.0 - $10.5 MM
	 
	1%
	$1,324.84 
	 
	 

	 
	 
	 
	 $         60,564.00 
	

	 
	 
	 
	 
	 
	$42,394.80