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                                                                   EXHIBIT 10.31

                         AMERICAN CRYSTAL SUGAR COMPANY
                          1999 LONG TERM INCENTIVE PLAN


American Crystal Sugar Company, a Minnesota corporation, established the
American Crystal Sugar Company Long Term Incentive Plan (the "Plan") in order to
provide deferred compensation to certain key employees of American Crystal Sugar
Company effective June 23, 1999. American Crystal Sugar Company determined that
it is in its interest to provide certain key employees with financial incentives
to reward the employees for their performance and to encourage long term
commitment to employment with the Company. These financial incentive awards
shall be determined under the terms of this Plan.

                                   ARTICLE 1
                                   DEFINITIONS

         Section 1.1 DEFINITIONS. When used in this document with initial
capital letters, the following terms have the meanings indicated unless a
different meaning is plainly required by the context:

         "Board of Directors" or "Board" means the Board of Directors of
American Crystal Sugar Company, and any committee of the Board of Directors to
which the Board delegates authority under this Plan.

         "Company" means the American Crystal Sugar Company.

         "Disability" means a medically determinable physical or mental
condition which is expected to result in death or to be of long continued and
indefinite duration and which renders a Participant unable to engage in any
employment or occupation for remuneration for which the Participant is
reasonably qualified by reason of the Participant's training, education and
experience. The existence or nonexistence of such Disability shall be
established by the certificate of a medical doctor selected by or satisfactory
to the Company.

         "Incentive Award" means a financial award made by the Board to a
Participant under this Plan as described in Sections 3.4 and 3.5.

         "Participant" means any employee or individual described in
Section 2.1.

         "Participant's Beneficiary" has the meaning set forth in Section 8.3.

         "Phantom Stock" means the unit of measurement used to value deferred
compensation described in the Plan. The value of a share of Phantom Stock shall
be equal to the value of a share of the Preferred Stock of the Company as
determined in Section 7.1.

         "Plan" means the American Crystal Sugar Company Long Term Incentive
Plan, as set forth herein, including any amendments hereto, which is maintained
by the Company primarily for the purpose of providing financial incentives for
certain key employees.

         "Plan Year" means the given fiscal year of the Company for which
Incentive Awards are available. Specific Plan Years shall be designated by the
specific fiscal year in question.



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         "Retirement" means termination of employment on or after the date that
will enable the Participant to be eligible to receive an early or normal
retirement benefit under the Company's Retirement Plan A.

         "SERP" means the American Crystal Sugar Company Supplemental Executive
Retirement Plan, including any amendments thereto, which is maintained by the
Company primarily for the purpose of providing deferred compensation for certain
key employees.

         "Trust" means the Rabbi Trust established by the Company and into which
funds allocated under the SERP are paid.

                                   ARTICLE 2
                                  PARTICIPATION

         Section 2.1 ELIGIBILITY. The employees of the Company who are eligible
to become Participants in the Plan are the Chief Executive Officer of the
Company, officers of the Company who have attained the level of a Vice President
or above and any other employees of the Company who are determined by the Board
to be eligible to become Participants in the Plan. Participants must be
employees of the Company for the entire Plan Year to be eligible to receive an
Incentive Award for that Plan Year; provided, however the Board shall have the
discretion to award Incentive Awards on a pro rata basis to Participants who
become eligible during a Plan Year.

                                   ARTICLE 3
                        DETERMINATION OF INCENTIVE AWARDS

         Section 3.1 APPROVAL OF LONG TERM OBJECTIVES; WEIGHTING. Prior to the
end of the first quarter of each fiscal year, the Board shall review and approve
the goals and long term objectives for the Participants (the "Long Term
Objectives") and each such Long Term Objective shall be assigned a percentage
weighting that indicates the relative importance the Board places on such Long
Term Objective (the "Weighting"). The total cumulative Weighting for all Long
Term Objectives shall equal 100%. The Long Term Objectives and the specific
Weighting applied to each, shall be used by the Board to determine any Incentive
Awards that may be awarded to the Participants for that Plan Year. Each Long
Term Objective and the Weighting assigned to it shall be in effect for the
entire Plan Year, unless otherwise modified by the Board.

         Section 3.2 TARGET AWARD OPPORTUNITY PERCENTAGE. The amount of each
Participant's total potential Incentive Award shall be based on: (a) the
collective performance level of the Participants for that Plan Year as
determined by the Board and (b) a percentage of his or her base compensation at
the end of a Plan Year. The percentage of base compensation intended to be
available as an Incentive Award under the Plan shall range from 0% to 40% for
Vice Presidents and other Participants, and 0% to 80% for the Chief Executive
Officer. At "target" performance levels, the Incentive Award shall be 20% of
base compensation for Vice Presidents and other Participants, and 40% of base
compensation for the Chief Executive Officer (the "Target Award Opportunity
Percentage").

         Section 3.3 COLLECTIVE RATING FOR EACH LONG TERM OBJECTIVE. Within
90 days of the conclusion of a Plan Year, the Board shall determine the
collective performance of the Participants relative to each Long Term Objective
for the previous Plan Year (the "Performance Rating"). The Board shall establish
the Performance Rating for the Plan Year based on the collective performance of
all of the Participants (all of the Participants as a single group) for each
Long Term Objective on a sliding scale consistent with the following ratings:

                                       2

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<TABLE>
<S>                                       <C>         <C>
                  Unacceptable             =           0
                  Threshold                =           1
                  Target                   =           2
                  Outstanding              =           3
</TABLE>

The Board may establish its Performance Rating at any point between the range of
zero to three (for example, the rating may be 2.25). The Performance Rating for
each Long Term Objective shall be multiplied by the Weighting for that objective
to determine a weighted performance rating for each Long Term Objective. An
overall weighted performance rating for the Participants shall then be
determined by adding the weighted performance rating for each of the Long Term
Objectives (the "Overall Weighted Performance Rating"). The Overall Weighted
Performance Rating shall be used for calculating the Incentive Award as provided
in Section 3.4 of the Plan.

         Section 3.4 AWARD VALUE FORMULA. The value of the Incentive Award for
each Participant shall be based on the following formula (the "Award Value
Formula"):

                        (P-1) x T x BC = Incentive Award

The above referenced letters are defined as follows:

<TABLE>
       <S>       <C>     <C>

        P         =       Overall Weighted Performance Rating
        T         =       Target Award Opportunity Percentage
                          (20% for Vice Presidents and 40% for CEO)
        BC        =       Base Compensation at end of Plan Year
</TABLE>

An example of an Incentive Award for a Vice President with base compensation at
the end of the Plan Year of $150,000, a Target Award Opportunity Percentage of
20%, and an Overall Weighted Performance Rating of 2.25 will be:

                      (2.25 -1) x 20% x $150,000 = $37,500

         Section 3.5 FORM OF INCENTIVE AWARDS. The Incentive Awards for the
Participants for a Plan Year may be granted, at the Board's discretion, as
follows:

               (a) An amount equal to the value of the Incentive Award may be
         allocated to the SERP, and paid to the Trust, for the benefit of the
         Participant;

               (b) Phantom Stock may be allocated to the Participant in an
         amount equal to the value of the Incentive Award; or

               (c) A combination of payments under the SERP and Phantom Stock
         allocations may be made to the Participant in an amount equal to the
         value of the Incentive Award.

The form of the grant of the Incentive Award for a given Plan Year shall be
determined by the Board and shall be in the same form for each Participant.

                                   ARTICLE 4
                              CASH PAYMENTS TO SERP

As provided in Section 3.5, the Board shall have the authority to grant
Incentive Awards to the Participants by allocating the value of the Incentive
Awards to the SERP and paying such amount to the Trust for the benefit of each
Participant ("SERP Payments"). The SERP Payment


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for each Participant for a Plan Year shall vest over a three-year period, with
one-third (1/3) of the SERP Payment vesting at the end of the first fiscal year
following the Plan Year to which the Incentive Award relates, one-third (1/3)
vesting at the end of the second fiscal year following the Plan Year to which
the Incentive Award relates, and the final one-third (1/3) vesting at the end of
the third fiscal year following the Plan Year to which the Incentive Award
relates. Notwithstanding the foregoing, in the event a Participant's employment
with the Company is terminated prior to full vesting of SERP payments, the
following special rules shall apply:

               (a) If employment is terminated as a result of the death of a
         Participant, any unvested SERP Payments shall immediately vest and
         shall be distributed as provided in the SERP;

               (b) If employment is terminated as a result of Disability or
         Retirement of a Participant, any unvested SERP Payments shall continue
         to vest on the three-year schedule set forth in this Article 4; and

               (c) If employment is terminated for any reason other than death,
         Disability or Retirement, any unvested SERP Payments shall be
         forfeited and the Participant shall have no further claim with respect
         to such forfeited SERP Payments.

SERP Payments that are vested shall be distributed to the Participants pursuant
to the terms and conditions of the SERP. SERP Payments made under this Plan
shall be made and maintained in accordance with applicable law. SERP Payments
shall be subject to such terms and conditions, in addition to the terms and
conditions set forth in this Plan, as the Board shall determine. Any SERP
Payments that are forfeited as provide in clause (c) above shall be used to (i)
reduce the payments that the Company would otherwise make to the Trust under
this Plan, or (ii) reduce the payments that the Company would otherwise make to
the Trust under the SERP.

                                   ARTICLE 5
                                  PHANTOM STOCK

As provided in Section 3.5, the Board shall have the authority to grant
Incentive Awards to Participants in the form of shares of Phantom Stock, with
such shares of Phantom Stock having a value equal to the Incentive Award at the
time it is granted to the Participant. The shares of Phantom Stock shall be
valued pursuant to Article 7 of this Plan as of the end of the Plan Year to
which the Incentive Award relates. Such shares of Phantom Stock shall be subject
to the terms and conditions set forth in this Plan and any other terms and
conditions that the Board shall determine. The Board may award fractional shares
of Phantom Stock. The shares of Phantom Stock granted to a Participant for a
Plan Year shall vest over a three-year period, with one-third (1/3) of the
shares of Phantom Stock vesting at the end of the first fiscal year following
the Plan Year to which the Incentive Award relates, one-third (1/3) vesting at
the end of the second fiscal year following the Plan Year to which the Incentive
Award relates, and the final one-third (1/3) vesting at the end of the third
fiscal year following the Plan Year to which the Incentive Award relates.
Notwithstanding the foregoing, in the event a Participant's employment with the
Company is terminated prior to full vesting of shares of Phantom Stock, the
following special rules shall apply:

               (a) If employment is terminated as a result of the death of a
         Participant, any unvested shares of Phantom Stock shall immediately
         vest and shall be distributed as provided in Section 6.3 of this Plan;

               (b) If employment is terminated as a result of Disability or
         Retirement of a Participant, any unvested shares of Phantom Stock shall
         continue to vest on the three-year schedule set forth in this
         Article 5; and


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               (c) If employment is terminated for any reason other than death,
         Disability or Retirement, any unvested shares of Phantom Stock shall be
         forfeited and the Participant shall have no further claim with respect
         to such forfeited shares of Phantom Stock.

Such shares of Phantom Stock shall be subject to such terms and conditions, in
addition to the terms and conditions set forth in this Plan, as the Board shall
determine.

                                   ARTICLE 6
                          DISTRIBUTION OF PHANTOM STOCK

         Section 6.1 DISTRIBUTION OF PHANTOM STOCK VALUE. A Participant may,
at any time following the vesting of any or all of his or her shares of
Phantom Stock, make a written request to the Company for a distribution of
the value of all or a portion of the Participant's vested shares of Phantom
Stock. The value of the shares of Phantom Stock at the time of distribution
shall be determined in the manner described in Article 7 of the Plan.

         Section 6.2 TERMINATION OF EMPLOYMENT. In the event a Participant's
employment with the Company is terminated for any reason, except death,
Disability, or Retirement, the Participant shall cease to be a Participant in
the Plan as of the date of such termination and the entire value of any
vested shares of Phantom Stock shall be distributed to the Participant. The
value of the shares of Phantom Stock at the time of distribution shall be
determined in the manner described in Article 7 of the Plan. Any nonvested
shares of Phantom Stock shall be forfeited as provided in Article 5 of the
Plan.

         Section 6.3 DEATH OF PARTICIPANT. In the event of a Participant's
termination of employment is on account of the Participant's death, the
Participant's Beneficiary may, at any time after the Participant's death but
not later than the date on which occurs the fifth anniversary of the date of
the Participant's death, make a written request to the Company for a
distribution of the entire value of the Participant's shares of Phantom
Stock. The value of the shares of Phantom Stock at the time of distribution
shall be determined in the manner described in Article 7 of the Plan.
Distribution of the value of such shares of Phantom Stock shall be made to
the Participant's Beneficiary as soon as administratively feasible after such
request. If the Participant's Beneficiary has not requested a distribution
within the five-year period following the Participant's death, the value of
the Phantom Shares shall be determined by the Company pursuant to Article 7
as of the fifth anniversary of the Participant's death, and such value shall
be paid to Participant's Beneficiary as soon as administratively feasible
thereafter.

         Section 6.4 DISABILITY OR RETIREMENT OF PARTICIPANT. In the event
that a Participant's termination of employment is on account of the
Participant's Disability or Retirement, the Participant may, at any time
after such Retirement or determination of a Disability, but no later than the
date on which occurs the fifth anniversary of the date of the Participant's
termination, make a written request to the Company for a distribution of all
or a portion of the Participant's vested shares of Phantom Stock. The value
of the shares of Phantom Stock at the time of distribution shall be
determined in the manner described in Article 7 of the Plan. If the
Participant has not requested a distribution within the five-year period
following the Participant's Disability or Retirement, the value of the
Phantom Shares shall be determined by the Company pursuant to Article 7 as of
the fifth anniversary of the Participant's Disability or Retirement, and such
value shall be distributed as provided herein.

         Section 6.5   DISTRIBUTION REQUIREMENTS.

               (a) Payment to or on behalf of a Participant of any amount
         payable under this Article 6 shall be made in a lump sum payment of
         cash. Upon payment, the Participant


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         shall have no further interest in the Phantom Stock that has been
         distributed, and the Participant shall have no further right to any
         increase in the value of the Phantom Stock.

               (b) The Company shall have the right to deduct from all Incentive
         Awards made pursuant to the Plan any federal or state taxes required by
         law to be withheld with respect to such payments.

               (c) The value of the Phantom Shares shall be distributed to the
         Participant as soon as administratively feasible after a request for a
         distribution, unless the Participant has made an election to defer such
         distribution under this Plan. If such an election has been made, no
         payment shall be made directly to the Participant, but the amount
         otherwise payable to the Participant shall be allocated to the SERP and
         paid to the Trust for the benefit of the Participant. A Participant's
         election under this subsection shall not be effective until one year
         after the election. Further, in no event will any such election be
         effective if it precedes the Participant's termination of employment
         with the Company by less than one year.

               (d) Notwithstanding any other provision of the Plan to the
         contrary, if, at any time, a court or the Internal Revenue Service
         determines that an amount awarded under the Plan, but not yet
         distributed to a Participant, is includable in the gross income of a
         Participant and subject to tax, the Board may, in its sole discretion,
         permit a lump sum cash distribution of an amount equal to the amount
         determined to be includable in the Participant's gross income.

         Section 6.6 PROFIT PAYMENTS. Each Participant shall be eligible to
receive an annual profit payment, determined in accordance with this Section
6.6, for each vested share of Phantom Stock held by the Participant under the
Plan. The annual profit payments payable to or on behalf of a Participant shall
be paid by the Company to the Participant, or the Participant's Beneficiary, at
the end of each fiscal year unless the Participant has made an election to defer
the payments on forms provided by the Company. If such an election has been
made, no profit payments shall be paid directly to the Participant or the
Participant's Beneficiary under this Section 6.6, but shall be allocated to the
SERP and paid to the Trust for the benefit of the Participant. The amount of
each profit payment per share of Phantom Stock shall be equal to the difference
between the average gross beet payment per acre net of unit retains and the
average cost of production (as established by the Board and based upon reputable
cost surveys) for the most recent year for which data is available. Profit
payments shall be made on the same schedule and with the same adjustments and
partial payouts as beet payments are made to the Company's Shareholders.

         Section 6.7 UNIT RETAIN PAYMENTS. Each Participant shall be eligible to
receive an annual unit retain payment as determined by the Company and subject
to this Section 6.7. The annual unit retain payment payable to or on behalf of a
Participant shall be paid by the Company to the Participant, or the
Participant's Beneficiary, unless the Participant has made an election to defer
the payments on forms provided by the Company. If such an election has been
made, no unit retain payment shall be paid to the Participant or the
Participant's Beneficiary under this Section 6.7, but shall be allocated to the
SERP and paid to the Trust. The amount of each unit retain payment shall be
equal to the amount subtracted from the gross beet payment per acre for unit
retains used in the calculation of the profit payments in Section 6.6. Each such
unit retain payment shall be determined during the fiscal year of the Company as
may correspond to the revolvement cycle, if any, for the Company's preferred
shareholders; it being the intention that the amount of unit retains payment to
be paid to Participants will be paid on the same schedule as unit retains are
revolved to the Company's preferred shareholders. The Company's current unit
retain revolvement cycle is seven years, but is subject to change at the
discretion of the Company.



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                                   ARTICLE 7
                          VALUATION OF PHANTOM STOCK

         Section 7.1 VALUATION OF PHANTOM STOCK. The value of a share of Phantom
Stock shall be equal to the prevailing market value of the Company's Preferred
Stock, as determined by the Board based upon available information from third
party sources. The Board shall determine the value of a share of Phantom Stock
at the end of each Plan Year for purposes of valuing the Incentive Awards to
Participants for that Plan Year. The Board shall also determine the value of a
share of Phantom Stock as of the date of any distribution under the Plan for
purposes of making the distribution.

                                   ARTICLE 8
                               NON-TRANSFERABILITY

         Section 8.1 ANTI-ALIENATION OF PHANTOM STOCK. SERP Payments and shares
of Phantom Stock granted to a Participant, and any rights and privileges
pertaining thereto, may not be anticipated, alienated, sold, transferred,
assigned, pledged, encumbered, or subjected to any charge or legal process; and
no interest or right to receive a benefit may be taken, either voluntarily or
involuntarily, for the satisfaction of the debts of, or other obligations or
claims against, such person or entity, including claims for alimony, support,
separate maintenance and claims in bankruptcy proceedings.

         Section 8.2 INCOMPETENT PARTICIPANTS. If any person entitled to an
Incentive Award under the Plan has been declared incompetent and a conservator
or other person legally charged with the care of such person or of his or her
estate has been appointed, any distribution under the Plan to which the person
is entitled shall be paid to such conservator or other person legally charged
with the care of the person or his or her estate. Except as provided above, when
the Company has determined that such person is unable to manage his or her
affairs, the Company may provide for such distribution or any part thereof to be
made to any other person or institution then contributing toward or providing
for the care and maintenance of such person. Any such distribution shall be a
payment for the account of such person and a complete discharge of any liability
of the Company and the Plan therefor.

         Section 8.3 DESIGNATED BENEFICIARY. In the event of a Participant's
death prior to the distribution of any amounts payable under the Plan, the
payment of any amounts on behalf of the Participant under the Plan shall be made
to the Participant's Beneficiary designated on a form provided to the
Participant by the Company (the "Participant's Beneficiary"). If no such
beneficiary has been designated, payments shall be made to the duly appointed
and qualified executor or other personal representative of the Participant to be
distributed in accordance with the Participant's will or applicable intestacy
law; or in the event that there shall be no such representative duly appointed
and qualified within six (6) months after the date of death of such deceased
Participant, then to such persons as, at the date of the Participant's death,
would be entitled to share in the distribution of such deceased Participant's
personal estate under the provisions of the applicable statute then in force
governing the descent of intestate property, in the proportions specified in
such statute.

                                   ARTICLE 9
                           ADMINISTRATION OF THE PLAN

         Section 9.1 ADMINISTRATOR. The administrator and named fiduciary of the
Plan shall be the Company.

         Section 9.2 AUTHORITY OF ADMINISTRATOR. The Company shall have
authority, duty and power to interpret and construe the provisions of the Plan
as it deems appropriate, to temporarily


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suspend the Plan, to adopt, establish and revise rules, procedures and
regulations relating to the Plan, to determine the conditions subject to which
the value of any Incentive Awards that may be made or payable, and to make any
other determinations which it believes necessary or advisable for the
administration of the Plan. The Company shall have the duty and responsibility
of maintaining records, making the requisite calculations and dispersing
payments hereunder. The Company's determinations, interpretations, regulations
and calculations shall be final and binding on all persons and parties
concerned. The Chief Executive Officer of the Company shall be the agent of the
Plan for the service of legal process in accordance with Section 502 of the
Employee Retirement Income Security Act of 1974, as amended.

         Section 9.3 OPERATION OF PLAN AND CLAIMS PROCEDURES. The Company shall
be responsible for the general operation and administration of the Plan and for
carrying out the provisions thereof. The Company shall be responsible for the
expenses incurred in the administration of the Plan. The Company shall also be
responsible for determining eligibility for payments and the amounts payable
pursuant to the Plan. The Company shall be entitled to rely conclusively upon
all tables, valuations, certificates, opinions and reports furnished by any
actuary, accountant, controller, counsel or other person employed or engaged by
the Company with respect to the Plan. The procedures for filing claims for
payments under the Plan are described below. For claims procedures purposes, the
"Claims Manager" shall be the Company.

               (a) It is the intent of the Company to make Incentive Awards
         under the Plan without the Participant having to complete or submit
         any claims forms. However, a Participant who believes he or she is
         entitled to a payment under the Plan may submit a claim for such
         payment in writing to the Company. Any claim must be made by the
         Participant or his or her beneficiary in writing and state the
         claimant's name and the nature of the payment to be made under the
         Plan on a form acceptable to the Company. If for any reason a claim
         under this Plan is denied by the Company, the Claims Manager shall
         deliver to the claimant a written explanation setting forth the
         specific reasons for the denial, specific references to the pertinent
         provisions under the Plan on which the denial is based, a description
         of any additional material or information necessary for the claimant
         to perfect the claim and an explanation of why such material or
         information is necessary, and information on the procedures to be
         followed by the claimant in obtaining a review of his or her claim,
         all written in a manner calculated to be understood by the claimant.
         For this purpose: (i) the claimant's claim shall be deemed to be filed
         when presented orally or in writing to the Claims Manager and (ii) the
         Claims Manager's explanation shall be in writing delivered to the
         claimant within 90 days of the date the claim is filed.

               (b) The claimant shall have 60 days following his or her receipt
         of the denial of the claim to file with the Claims Manager a written
         request for review of the denial. For such review, the claimant or the
         claimant's representative may review pertinent documents and submit
         written issues and comments.

               (c) The Claims Manager shall decide the issue on review and
         furnish the claimant with a copy within 60 days of receipt of the
         claimant's request for review of the claimant's claim. The decision on
         review shall be in writing and shall include specific reasons for the
         decision, written in a manner calculated to be understood by the
         claimant, as well as specific references to the pertinent provisions
         in the Plan on which the decision is based. If a copy of the decision
         is not so furnished to the claimant within such 60 days, the claim
         shall be deemed denied on review. In no event may a claimant commence
         legal action for benefits the claimant believes are due the claimant
         until the claimant has exhausted all of the remedies and procedures
         afforded the claimant by this Section 9.3.


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<PAGE>

         Section 9.4 PARTICIPANT'S ADDRESS. Each Participant shall keep the
Company informed of his or her current address and the current address of his or
her beneficiary. The Company shall not be obligated to search for any person. If
the location of a Participant is not made known to the Company within three (3)
years after the date on which payment of the Participant's benefits payable
under this Plan may be made, payment may be made as though the Participant had
died at the end of the three-year period. If, within one (1) additional year
after such three-year period has elapsed, or, within three (3) years after the
actual death of a Participant, the Company is unable to locate any designated
beneficiary of the Participant, then the Company shall have no further
obligation to pay any benefit hereunder to such Participant or designated
beneficiary and such benefits shall be irrevocably forfeited.

         Section 9.5 LIABILITY. Notwithstanding any of the provisions of the
Plan to the contrary, neither the Company nor any individual acting as an
employee or agent of the Company shall be liable to any Participant or any other
person for any claim, loss, liability or expense incurred in connection with the
Plan, unless attributable to fraud or willful misconduct on the part of the
Company or any such employee or agent of the Company.

                                   ARTICLE 10
                            MISCELLANEOUS PROVISIONS

         Section 10.1 NO EMPLOYMENT RIGHTS. Neither the Plan nor any action
taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company.

         Section 10.2 NO STOCK RIGHTS. Except for payments under Sections 6.6
and 6.7, no Participant shall be entitled to any voting rights, to receive any
dividends or other distribution, with respect to the Phantom Stock.

         Section 10.3 UNFUNDED AND UNSECURED. The Plan shall at all times be
considered entirely unfunded both for tax purposes and for purposes of Title I
of the Employee Retirement Income Security Act of 1974, as amended, and no
provision shall at any time be made with respect to segregating assets of the
Company for payment of any amounts hereunder. Any funds with respect to payment
to be made hereunder shall continue for all purposes to be part of the general
assets of the Company and available to the general creditors of the Company in
the event of the Company's bankruptcy (when the Company is involved in a pending
proceeding under the Federal Bankruptcy Code) or insolvency (when the Company is
unable to pay its debts as they mature). No Participant or any other person
shall have any interests in any particular assets of the Company by reason of
the right to receive a benefit under the Plan and to the extent the Participant
or any other person acquires a right to receive benefits under this Plan, such
right shall be no greater than the right of any general unsecured creditor of
the Company. The Plan constitutes a mere promise by the Company to make payments
to the Participants in the future. Nothing contained in the Plan shall
constitute a guaranty by the Company or any other person or entity that any
funds in any trust or the assets of the Company will be sufficient to pay any
benefit hereunder. Furthermore, no Participant shall have any right to a benefit
under the Plan except in accordance with the terms of the Plan.

         Section 10.4 PLAN PROVISIONS. Except when otherwise required by the
context, any singular terminology shall include the plural.

         Section 10.5 SEVERABILITY. If a provision of the Plan shall be held to
be illegal or invalid, the illegality or invalidity shall not affect the
remaining parts of the Plan and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.


                                       9
<PAGE>

         Section 10.6 APPLICABLE LAW. To the extent not preempted by the laws
of the United States, the laws of the State of Minnesota shall apply with
respect to this Plan.

         Section 10.7 SUCCESSOR TO COMPANY. In the event there is a successor
or assignee to or of the Company, whether direct or indirect, by purchase,
merger, consolidation or otherwise, to all or substantially all (at least 85% of
the assets or the common stock) of the Company, the Company, in its sole
discretion, may either cash out or require such successor or assignee to assume
and agree to perform the Company's obligations under the Plan, in the same
manner and to the same extent that the Company would be required to perform if
no such succession or assignment had occurred or terminate the Plan pursuant to
the provisions of Article 12. If a successor or assignee assumes the Plan
pursuant to this Section 10.7, the term "Company," as used in the Plan, shall
mean the Company as hereinbefore defined and any successor or assignee to the
Company which by reason hereof becomes bound by the terms and provisions of the
Plan.

         Section 10.8 AUTHORITY OF CEO. Except in cases where the
responsibilities are reserved to the Board under this Plan, the Chief Executive
Officer of the Company (or his designee) may act on behalf of the Company under
this Plan.

                                   ARTICLE 11
                                    AMENDMENT

The Company reserves the power to alter, amend or wholly revise or terminate the
Plan at any time and from time to time by the action of the Board and the
interest of each Participant is subject to the powers so reserved. An amendment
shall be authorized by the Board and shall be stated in an instrument in writing
signed in the name of the Company by a person or persons authorized by the
Board. After the instrument has been so executed, the Plan shall be deemed to
have been amended in the manner therein set forth, and all parties interested
herein shall be bound thereby. No amendment to the Plan may alter, impair, or
reduce the benefits of a Participant that are vested under the Plan prior to the
effective date of such amendment without the written consent of the affected
Participant.

                                   ARTICLE 12
                               TERMINATION OF PLAN

The Company may at any time terminate the Plan by action of the Board. No
further Incentive Awards will be granted after the date of termination of the
Plan. The Termination of the Plan shall not alter, impair, or reduce the
benefits of a Participant that are awarded prior to the effective date of such
termination, without the written consent of the affected Participant.



Dated as of the 23rd day of June 1999

                                      AMERICAN CRYSTAL SUGAR COMPANY



                                      By: /s/ Wayne Langen
                                          ------------------------
                                      Title: Chairman of the Board



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