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:

Financial Goal:

Team Goals:

-    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 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)

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

1)27,751 or more..................................................         0% payout

2)27,750 - 26,751.................................................         1% payout

3)26,750 or less....................................................        2% 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

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.

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.

Safety - Improve ERI Safety Audit Score (based on last audit score prior to yearend) (2% max payout)

•Ranking below the 2^nd Quartile.................................................     0% payout

•Ranking in the 2^nd Quartile.......................................................     1% payout

•Ranking in the 1^st 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

Safety - Improve ERI Safety Audit Score (based on last audit score prior to yearend) (2% max payout)

•Ranking below the 2^nd Quartile.................................................     0% payout

•Ranking in the 2^nd Quartile.......................................................     1% payout

•Ranking in the 1^st 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

Safety - Improve ERI Safety Audit Score (based on last audit score prior to year end) (3% max payout)

•Ranking below the 2^nd Quartile...............................................     0% payout

•Ranking in the 2^nd Quartile......................................................     2% payout

•Ranking in the 1^st 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

Financial Planning - Prepare the Annual Budget (with help from the CFO if necessary) (3%)

(Budget Ready for October 2017 Board Meeting)

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%)

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.

•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