Effective December 14, 2007, the Compensation Committee of the Board of Directors of Ready Mix, Inc. (the "Company") established and approved the annual salaries and the formula by which non-equity cash incentives will be paid to executive management in 2008 for performance achieved in 2007.
The Compensation Committee evaluated executive compensation for 2008 in accordance with the compensation objectives and philosophy as disclosed in the Compensation Discussion and Analysis section of the Company's definitive proxy statement filed with the Securities and Exchange Commission on April 27, 2007.
In its evaluation of executive compensation, the Compensation Committee commissioned a compensation analysis and review with FMI, an outside management consulting firm. FMI evaluated and compared the Company's non-equity cash incentive plan and the amounts of each compensation component of each individual in executive management with a cross section of the Company's peer group. Annual Salaries
The annual salaries for the following named executives have changed according to the amounts indicated in the table below.

                                                          2006             2007             2008
           Name and Principal Position                   Salary           Salary           Salary
Robert R. Morris, President                               150,000          150,000          165,000
Clint Tryon, Chief Financial Officer, Secretary
and Treasurer                                             140,000          140,000          150,000
(Principal Accounting Officer)
Robert A. De Ruiter, Vice-President                       126,000          126,000          132,300

Non-Equity Cash Incentive Plan
Previously, the amount of cash incentive executive management could earn was derived from a formula principally based upon the Company's income before income taxes. For the 2007 fiscal year, the amount of executive management cash incentive payable in 2008 will be derived from a formula principally based upon the Company's return on net assets.
The Compensation Committee established a minimum return on net assets of 7.4% in order for non-equity incentive compensation to be paid in 2008. The Compensation Committee adopted 7.4% as a minimum return on net assets based upon the results of the compensation review and analysis performed by FMI and the Company's own analysis of its weighted average cost of capital, industry comparisons, growth rates and market conditions the Company is experiencing.
Four profit centers ("Area") of Meadow Valley Corporation, our parent company, are eligible for non-equity cash incentive. Ready Mix, Inc. represents two of the four profit centers. The measurement of the return on net assets for each of the Areas is the adjusted income from operations for the Area divided by one fourth of Meadow Valley Corporation's net assets. Meadow Valley Corporation's net assets are its total assets less current liabilities, long-term debt and deferred income taxes.
Income from operations from each Area is determined and then Meadow Valley Corporation's corporate general and administrative expenses are allocated to all Areas. The resulting adjusted Area operating income is subtracted from the calculated minimum adjusted Area operating income derived from the minimum return of 7.4%. The resulting difference, if any, is aggregated into a combined total and 30% of this excess adjusted Area operating income, net of corporate general and administrative expenses, is determined for possible bonus payout. The 30% allocation of this excess combined adjusted Area operating income to create an incentive bonus pool was established and approved by the Compensation Committee.

Of the amount allocated to the bonus pool, the Compensation Committee established that 60% be allocated to Area incentive bonus, 30% be allocated to Meadow Valley Corporation's corporate bonus and the remaining 10% be allocated for a discretionary pool.
Amounts in the Area pool and Meadow Valley Corporation's corporate pool are distributed pro-rata by each individual's annual salary within the respective pools to participants until amounts in the respective pools are exhausted or until amounts distributed individually reach the participant's maximum cap determined by a percent of the participant's annual salary. These maximum allocations of annual salary vary by position and are reviewed and approved annually by the Compensation Committee.
The Compensation Committee reviews all amounts of calculated non-equity incentive compensation prior to payment and approves all payments made under this plan, including all amounts paid from the 10% discretionary pool.
Maximum non-equity incentive compensation amounts for the following named executives are expressed as a percentage of their respective annual salaries.

                                                                   Maximum of
                                                                 Non-Equity Cash
                                                                    Incentive
                                                                 as a Percent of
                 Name and Principal Position                      Annual Salary
Robert R. Morris, President                                                   110 %
Clint Tryon, Chief Financial Officer, Secretary and Treasurer                  70 %
(Principal Accounting Officer)
Robert A. DeRuiter, Vice-President                                             65 %