Communication With the Board of Directors

Any stockholder or interested party who wishes to communicate with the Board of Directors, or specific individual directors, including the non-management directors as a group, may do so by directing a written request addressed to such directors or director in care of the Chairman of the Nominating and Corporate Governance Committee, Mueller Industries, Inc., 8285 Tournament Drive, Suite 150, Memphis, Tennessee 38125. Communication(s) directed to members of

- 21 -

Table of Contents

the Board who are not non-management directors will be relayed to the intended Board member(s) except to the extent that it is deemed unnecessary or inappropriate to do so pursuant to the procedures established by a majority of the independent directors. Communications directed to non-management directors will be relayed to the intended Board member(s) except to the extent that doing so would be contrary to the instructions of the non-management directors. Any communication so withheld will nevertheless be made available to any non-management director who wishes to review it.

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

This Compensation Discussion and Analysis provides an overview of how our named executive officers were compensated in 2013,2014, as well as how this compensation furthers our established compensation philosophy and objectives.

We believe in a pay for performance philosophy, such that a material portion of a named executive officer’s compensation is dependent upon both the short-term and long-term strategic and financial performance of the Company, considered in light of general economic and specific Company, industry, and competitive conditions. For 2013,2014, we continued to reward named executive officers in a manner consistent with this philosophy by setting annual incentive targets based on the Company’s achievement of a certain level of operating income. For the long-term component of compensation, we continued to grant equity awards, such that any long-term compensation opportunity will be directly tied to our stock performance.

New housing starts and commercial construction are important determinants of the Company’s sales and income. Residential construction activity improved in 20122014 and the2013 has shown improvement, continued in 2013, but is stillremains at levels below long-term historical averages. Per the U.S. Census Bureau, actual housing starts in the U.S. were 1.0 million in 2014, which compares with 925 thousand in 2013. The private nonresidential construction sector, which

- 20 -

includes offices, industrial, health care and retail projects, began showingshowed modest improvement in 2012 after declining each year from 20092014 and 2013. According to 2011. However, the paceU.S. Census Bureau, at December 2014, the seasonally adjusted annual rate of the improvement appearsprivate nonresidential value of construction put in place was $349.0 billion compared to have slowed through the end of$331.4 billion at December 2013. The Company has continuedactual private nonresidential value of construction put in place was $337.0 billion in 2014 and $304.9 billion in 2013. For 2014, the Company’s

- 22 -

Table of Contents

operating income, excluding certain one-time items, increased from $131.4 million in 2013 to be solidly profitable despite the recent downturns$155.0 million in many sectors of the economy.2014, or approximately 18%. In 2013,2014, operating income exceeded incentive targets for most of our businesses. Accordingly, as compared to 2012,2013, non-equity incentive compensation increased for our named executive officers in 2013.2014.

Compensation Policies and Objectives

In light of our pay for performance philosophy, we have designed our compensation programs for our executive officers to (i) motivate our executive officers to achieve certain strategic and financial goals and reward them for achieving such goals, (ii) align the long-term financial interests of our executive officers with those of our stockholders, (iii) encourage our executive officers to continue their service with the Company, and (iv) provide a means to attract additional talented executive officers when necessary.

Determination of Compensation

For 2013,2014, compensation for our Chief Executive Officer was determined by our Compensation Committee. For 2013,2014, compensation decisions for our other named executive officers were made by our Compensation Committee after consideration of the recommendations of our Chief Executive Officer. Our Compensation Committee meets at least annually to determine all elements of our named executive officers’ compensation, including base salary, annual incentive compensation, and long-term equity awards. Each element of compensation plays an important role in our compensation program, and we make compensation decisions regarding each element in the context of total compensation with a view to the aggregate value and effect of all other elements.

In determining the levels of compensation, including the amount of base salary increases from year to year, if any, the target levels of the annual cash incentives and the amounts payable thereby at the end of each year, and the number and type of equity awards to be awarded, we generally do not rely on formulaic guidelines but rather maintain a flexible compensation program that allows us to adapt components and levels of compensation to motivate and reward individual executives within the context of our desire to attain certain strategic and financial

- 21 -

goals and control cost. This requires that we consider subjective factors including (i) an executive officer’s performance against corporate objectives in recent years,

- 23 -

Table of Contents

(ii) the value of the executive officer’s skills and capabilities in supporting the long-term performance of the Company, (iii) performance of each executive officer’s specific management responsibilities, (iv) each executive officer’s contribution as a member of the executive management team, and (v) whether each executive officer’s total compensation potential and structure is sufficient to ensure the retention of the executive officer when considering the compensation potential that may be available elsewhere. As such, we make reasoned subjective determinations about compensation levels.

In 2013,2014, Mr. Christopher’s compensation was determined based on his successful management of the day-to-day activities of the Company and its subsidiaries, including but not limited to cost containment, manufacturing, purchasing, sales, marketing, distribution, finance, legal, and trade association activities. His incentive compensation was determined by the Company meeting specific adjusted operating income targets, as discussed below under the heading “Annual Incentive Compensation.”

In 2013,2014, Mr. Martin’s compensation was determined based on his day-todayday-to-day management of corporate accounting, finance, credit, tax, shared services and investor relations. His incentive compensation was determined by the Company meeting specific adjusted operating income targets, as discussed below under the heading “Annual Incentive Compensation.”

In 2013,2014, Mr. Moss’s compensation was determined based on his successful management of our retail products business, including, but not limited to his expansion of product line offerings, favorable negotiation of supply chain agreements, and sales and marketing activities. His incentive compensation was determined by the Company meeting specific adjusted operating income targets, as discussed below under the heading “Annual Incentive Compensation.”

In 2013,2014, Mr. Murdock’s compensation was determined based on his successful management of Engineered and HVACR Products, including, but not limited to sales, marketing, manufacturing, engineering, new product development, supply chain, and industry association activities. His incentive compensation was determined by the Company meeting specific adjusted operating income targets, as discussed below under heading “Annual Incentive Compensation.”

- 2224 -

Table of Contents

In 2013,2014, Mr. Sigloch’s compensation was determined based on his strategic leadership of the Company’s core activities in brass rod and copper tube manufacturing, and specifically the modernization of the Company’s core businesses which requires unique industry-specific know-how and his management of these businesses including but not limited to sales, marketing, manufacturing, purchasing and trade association activities. His incentive compensation was determined by the Company meeting specific adjusted operating income targets, as discussed below under the heading “Annual Incentive Compensation.”

In making compensation decisions, our Compensation Committee relies on the members’ general knowledge of our industry, supplemented by advice from our Chief Executive Officer based on his knowledge of our industry in markets in which we participate. From time to time, we conduct informal analyses of compensation practices and our Compensation Committee may review broad-based third-party surveys to obtain a general understanding of current compensation practices. For 2014, the Compensation Committee established the performance criteria for the year on February 3, 2014 and was presented with Cook & Co.’s report in November 2014 when the report was completed. As such, the Compensation Committee utilized the report solely to obtain a general understanding of compensation practices within the industry and did not base any of its compensation decisions on recommendations contained in this report, nor did it otherwise utilize this report to benchmark executive compensation (or any component thereof) against any particular peer group.

At our 20132014 Annual Meeting, we held our thirdfourth annual non-binding stockholder advisory vote on executive compensation. As reported in the Company’s Form 8-K, filed on May 2, 2013,2014, over 97%94% of shares voted (excluding abstentions and broker non-votes) were in favor of the compensation of our named executive officers as disclosed in the proxy statement for the 20132014 Annual Meeting. The Compensation Committee believes that the vote confirms its view that the Company’s compensation programs are centered on a pay for performance philosophy and are appropriate and effective in creating value. Accordingly, the Compensation Committee made no direct changes to the Company’s executive compensation program as a result of the vote. Our Compensation Committee will consider the outcome of this year’s stockholder advisory vote on executive compensation as it makes future compensation decisions.

- 25 -

Table of Contents

Elements of Compensation

Our compensation program for our named executive officers is composed of six elements: (i) base salary, (ii) traditional benefits, (iii) annual incentive compensation, (iv) long-term equity incentive compensation, (v) perquisites, and (vi) for our Chief Executive Officer, post-employment and change-in-control compensation. Each element of compensation plays an important part in our overall compensation policies and objectives.

- 23 -

Base Salary and Traditional Benefits

We provide base salary and traditional benefits such as group health, disability, and life insurance benefits, as well as matching contributions to our 401(k) plan, as a means of providing a base level of compensation for services performed, to encourage the continued service of our executive officers and to attract additional talented executive officers when necessary. Salaries paid to our named executive officers are set forth in the Summary Compensation Table for 2013.2014. Base salary adjustments are determined by making reasoned subjective determinations about current economic conditions such as general wage inflation as well as the executive’s qualifications, experience, responsibilities, and past performance. For 2013,2014, base salary increases ranged from 1.5%0.0% to 22.4%7.6% for our named executive officers. These adjustments, if any, were effective as of March 25, 2013, for Messrs. Moss, Murdock and Sigloch, and November 4, 2013 for Messrs. Christopher, Martin and Sigloch.24, 2014. The Compensation Committee granted these increases in base salary resulting from the officers’ positive impact on the Company’s performance.

Annual Incentive Compensation

Each of our named executive officers received annual incentive compensation in 2013,2014, based upon the Company’s actual performance for the period relative to the pre-establishedadjusted operating income targets (as described below) based upon adjusted operating income performance criteria.established by the Compensation Committee on February 3, 2014. The Compensation Committee’s intent was for the incentive compensation payable to Messrs. Christopher, Moss, Murdock and Sigloch to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code, with awards being made under the Company’s 2011 Annual Bonus Plan.

For 2013,2014, the Compensation Committee established the performance criteria for the year in January 2013. Specifically, based upon the recommendation ofconsultation with Mr. Christopher, the Compensation Committee established an operating income target for our named executive officers of $124$135.0 million (subject to certain adjustments) as the consolidated Company

- 26 -

Table of Contents

performance target, which appliedtarget. Following adjustment for certain extraordinary events, for 2014 adjusted operating income exceeded the maximum performance threshold established by the Compensation Committee in February 2014 and resulted in the application of a 200% performance factor. To ensure an alignment between pay and performance, no bonus would have been paid had the adjusted operating income for 2014 been less than 75% of the targeted operating income.

The amount payable to Messrs. Christopher, Martin, Moss Murdock and Sigloch. We calculated the awards foreach of our named executive officers was determined by multiplying each(i) such named executive officer’s actual base salary paid during the year, by(ii) the named executive officer’s incentive grade level factor (as described below), which in turn, was multiplied by aand (iii) the above performance factor which was determined based on the level of achievement of the applicable performance criteria in 2013. The performance factor was set at 50% for 80% achievement of the applicablefactor.

- 24 -

performance criteria, 100% for 100% achievement of the applicable performance criteria and was capped at 200% for Mr. Christopher for 125% achievement of the applicable performance criteria, and capped at 150% for the other named executive officers for 115% achievement of the applicable performance criteria. In the event that performance falls in between achievement levels, the performance factor associated with the lower achievement level would apply. For 2013,2014, the incentive grade level factors for the named executive officers were established at 125% for Mr. Christopher, 75% for Mr. Martin, and 86.25%90% for Messrs. Moss, Murdock, and Mr. Sigloch. The incentive grade level factor of 86.25% for Messrs. Moss, Murdock, and Mr. Sigloch reflects a blended rate, as each of their incentive grade level factors was increased from 75% to 90% on March 25, 2013. The Compensation Committee approved increases in the incentive grade level factors for each of the named executive officers from 2012 based upon merit and to afford the named executive officers the opportunity to earn annual incentive payments comparable to levels earned prior to the economic recession. As a result of 20132014 performance, the annual incentive payments for the named executive officers, which are set forth in the Summary Compensation Table for 2013,2014, equal the following percentages of each named executive officer’s actual base salary paid during 2013:2014: 250% for Mr. Christopher (125% grade level factor times 200% performance factor), 113%150% for Mr. Martin (75% grade level factor times 150%200% performance factor), and 129%180% for the other named executive officers (86.25%(90% grade level factor times 150%200% performance factor).

Long-Term Equity Incentive ProgramCompensation

Our long-term equity incentive compensation rewards our named executive officers for achievement of our long-term financial success as measured by our stock price. As such, it aligns the financial interests of our named executive officers with our stockholders and rewards our named executive officers for increased stockholder value. Historically, we have granted restricted stock to our named executive officers, as discussed below. Generally, our equity incentive awards have been granted subject to three- or five-year vesting schedules, which we believe rewards outstanding service by our named executive officers and provides us with an effective mechanism to incentivize our named executive officers to achieve long-term financial success for the Company, to provide a strong retention incentive, and to align the interests of our named executive officers with the long-term interest of our shareholders.

- 2527 -

Table of Contents

Long-term equity incentive awards to our named executive officers, other than our Chief Executive Officer, are typically granted annually by our Compensation Committee based on the recommendations of our Chief Executive Officer. Long-term equity incentive awards to our Chief Executive Officer are granted annually based on the determinations of our Compensation Committee. In recent years, it has been the Company’s practice to issue long-term equity incentive awards to certain executives and other employees in late July following release of the Company’s second quarter and six-month operating results. In 2013,2014, consistent with our historical practices, the named executive officers received annual grants in July 2013. In addition to the annual grants, the Compensation Committee determined to grant special restricted stock awards to Messrs. Martin, Moss, Murdock, and Sigloch in November 2013, in recognition of each recipient’s successful completion of their duties and responsibilities and their outstanding service, leadership and commitment to the well-being of the Company.2014. In view of our stock’s performance during the economic recession, the Compensation Committee concluded that restricted stock provided a better method to retain and reward our executives. In determining which named executive officers should receive restricted stock awards during 2013,2014, and the size of these awards, our Compensation Committee made reasoned subjective determinations based upon the performance of the named executive officers, the importance of retaining their services, and their role in helping us attain our long-term goals. There was no set formula for the granting of annual restricted stock awards to individual named executive officers, and the special restricted stock awards for each recipient were granted with respect to a number of shares of restricted stock having a value on the grant date equal to 50% of the recipient’s target annual incentive payment for 2013.officers. In 2013,2014, we granted shares of restricted stock to our named executive officers covering an aggregate of 80,055 shares (on a pre-Stock Split basis).151,000 shares. Shares of restricted stock granted to Mr. Christopher in 20132014 will vest 20% per year on each of the first five anniversaries of the date of grant, subject to earlier vesting in connection with a change in control or a termination of employment due to death, disability, by us without cause or by Mr. Christopher for good reason. Shares of restricted stock granted to our named executive officers (other than Mr. Christopher) in July 20132014 will vest (i) with respect to a portion of the awards (50%(53% for Mr. Martin, 75%100% for Mr. Moss, 73%64% for Mr. Murdock and 73%64% for Mr. Sigloch), 20% per year on each of the first five anniversaries of the date of grant, and (ii) with respect to a portion of the awards (50%(47% for Mr. Martin, 25%0% for Mr. Moss, 27%36% for Mr. Murdock and 27%36% for Mr. Sigloch), 100% on

- 26 -

December 31, 2018,2020, subject in each case to earlier vesting in connection with a change in control or a termination of employment due to death, disability. Shares of restricted stock granted to our named executive officers (other than Mr. Christopher) in November 2013 will vest 100% on December 31, 2018, subject to earlier vesting in connection with a change in control or a termination of employment due to death, disability. The Compensation Committee elected to use a long-term vesting schedule with respect to certain of the awards granted to the named executive officers in 20132014 to promote retention. In addition, given the importance of long-term equity incentive awards in our compensation program, the Compensation Committee believed that it was appropriate to provide for accelerated vesting to compensate our executive officers for their contributions to the Company and to

- 28 -

Table of Contents

provide them with assurance that they will not be disadvantaged with respect to their equity awards in the event of a change in control or an involuntary termination of employment.

Perquisites

We offer certain perquisites to our named executive officers, which we view as an added element of our executive compensation program designed to attract, retain and reward our named executive officers. The perquisites we provided in fiscal 20132014 were as follows: estate and tax planning, certain club memberships, Company incentive trips, personal use of our Company airplane, spousal travel reimbursements, executive physicals and reimbursement of the income tax liabilities associated with certain perquisites. Estate and tax planning is provided to certain named executive officers to complement our various compensation elements for the purpose of ensuring the named executive officers understand the complexity of the long-term equity incentives and are thereby able to maximize the value of such benefits. We provide certain club memberships in part to facilitate networking with and entertainment of our business clients. Because of the nature of such memberships, our named executive officers gain some personal benefits. We offer Company incentive trips to reward top achievers in our organization. We maintain a Company-owned airplane primarily to provide efficient transportation to certain employees and customers for business travel. From time to time, when our plane is not being used for business purposes, we allow certain named executive officers to use the plane for personal travel.

- 27 -

Post-Employment and Change-in-Control Compensation

We are party to an employment agreement with Mr. Christopher. When entered into, this agreement was thought to be in line with market practice and enabled us to be competitive and retain top talent. As discussed below under the heading “Narrative Disclosure to Summary Compensation Table and Grant of Plan Based Awards Table - Employment Agreement,” the agreement provides that our Chief Executive Officer will be entitled to receive certain severance payments and benefits upon a resignation for “good reason,” a termination without “cause” (as each is defined in the employment agreement), or upon a resignation in connection with a “change in control” (as defined in the employment agreement). We provide this ability to resign following a change in control as an added incentive and reward for Mr. Christopher to remain employed through the consummation of the change

- 29 -

Table of Contents

in control and to ensure the completion of such event which should ultimately deliver value to our stockholders. Mr. Christopher’s employment agreement had previously provided for a gross-up payment to cover excise taxes imposed by the “golden parachute” regulations under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, however, on February 14, 2013, the Company and Mr. Christopher executed an amendment to Mr. Christopher’s employment agreement, at the request of Mr. Christopher and without any additional consideration, which eliminated the gross-up provisions from his employment agreement. Our employment agreement with Mr. Christopher also provides us with a certain level of protection against competition and solicitation of customers and employees if his employment is terminated. These restrictive covenants exist to protect our business, as Mr. Christopher has longstanding relationships with a number of our customers.

Tax Considerations

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation in excess of $1,000,000 paid to each of the chief executive officer and the three other highest-paid executive officers (other than the chief financial officer) employed at the end of that company’s fiscal year. Qualifying “performance-based compensation” is not subject to this deduction limitation if certain requirements are met. In May 2011, our stockholders at our Annual Meeting approved the Mueller Industries, Inc. 2011 Annual Bonus Plan, and in May 2009, our stockholders at our Annual Meeting approved the 2009 Stock Incentive Plan, and in May 2014, our stockholders at our Annual Meeting approved the 2014 Incentive Plan. Compensation paid under these plans will qualify as performance-based compensation and thus will be fully deductible by us. We periodically

- 28 -

review the potential consequences of Section 162(m) with respect to compensatory elements. In the future, we may authorize other compensation payments to our named executive officers that do not comply with the exemptions in Section 162(m) if we judge that such payments are appropriate and in the best interests of the stockholders, after taking into consideration changing business conditions and/or any specific executive’s particular circumstances. This is consistent with our general compensation policy to remain flexible in order to address business and/or financial challenges as they present themselves.

- 30 -

Table of Contents

Compensation Risk Management

In establishing compensation programs for the Company’s executive officers and non-executive employees, the Compensation Committee and senior management of the Company, respectively, consider the potential effect(s) of such programs on the Company, as well as whether such programs create appropriate incentives. The only component of employee compensation that might pose a risk of having an adverse effect is annual cash incentive compensation, which is intended to incentivize our employees to achieve short-term financial performance objectives, and ties a portion of an employee’s compensation to the achievement of such objectives. While annual cash incentive compensation encourages risk taking on the part of the Company’s employees in their efforts to achieve these objectives, the Company believes that the risk is well managed and the level of risk is acceptable. Moreover, certain senior management members have a substantial portion of their compensation in the form of equity awards that are long-term in nature. We believe this counter balances any motivation to unduly favor excessive short-term risk taking. We also believe that the applicable performance objectives create appropriate incentives for our employees from year-to-year. Risk is further reduced by the fact that annual cash incentives are awarded on a discretionary basis; any known excessive risk taking could result in a reduction or elimination of the annual payment. Furthermore, our Chief Executive Officer and Chief Financial Officer are subject to clawback provisions under the Sarbanes-Oxley Act of 2002.

For these reasons we believe that our compensation policies and practices are not likely to have a material adverse effect on the Company.

- 2931 -

Table of Contents

SUMMARY COMPENSATION TABLE FOR 20132014

The following table shows compensation of our principal executive officer, our principal financial officer, our former principal financial officer and other named executive officers for the 2014, 2013, 2012, and 20112012 fiscal years, as applicable.

- 30 -

- 32 -

Table of Contents

- 3133 -

2013Table of Contents

2014 GRANTS OF PLAN BASED AWARDS TABLE

The following table sets forth summary information regarding all grants of plan-based awards made to our named executive officers for the fiscal year ended December 28, 2013.27, 2014.

- 32 -

- 34 -

Table of Contents

Narrative Disclosure to Summary Compensation Table and Grant of Plan Based Awards Table

Employment Agreement with Mr. Christopher

We are party to an amended and restated employment agreement with Gregory L. Christopher, our Chief Executive Officer, dated October 30, 2008, as amended on February 14, 2013. The agreement contains a rolling three-year term, which is automatically extended so that the unexpired term on any date is always three years, unless either party gives written notice of his or its intention not to extend the term. The agreement entitles Mr. Christopher to an annual base salary of $600,000 (to be adjusted upward annually at a rate commensurate with increases granted to other key executives) and discretionary cash incentive compensation in an amount consistent with the executive incentive compensation program which the Company establishes for other key executives. In addition, Mr. Christopher is entitled to receive reimbursement for reasonable business and travel expenses incurred in the performance of his duties and will participate in all bonus, incentive, stock option, pension, disability and health plans and programs and all fringe benefit plans maintained by the Company in which senior executives participate. Mr. Christopher’s employment may be terminated by the Company without cause or by Mr. Christopher for good reason upon appropriate written notice. In either such event, Mr. Christopher will continue to receive his then-current base salary as if his employment had continued for the remainder of the then-current term and annual incentive compensation for the remainder of the then-current term equal to the average incentive compensation for the three calendar years immediately preceding the written notice of termination. In addition, all outstanding unvested

- 33 -

Company stock options then held by Mr. Christopher will immediately vest and become exercisable and Mr. Christopher will continue to participate in our health plans and programs at his expense until he reaches age 65. In addition, we will pay Mr. Christopher an amount equal to the monthly cost of continuation coverage under COBRA until he reaches age 65.

Mr. Christopher’s employment may be terminated by the Company for cause or by Mr. Christopher without good reason upon appropriate written notice.

In either such event, Mr. Christopher will only be entitled to receive accrued but unpaid base salary and, only if Mr. Christopher resigns and at the Company’s discretion, a bonus or incentive compensation for the calendar year in which his

- 35 -

Table of Contents

resignation occurs, and any other compensation and benefits to which Mr.ChristopherMr. Christopher would otherwise be entitled under the agreement will be forfeited as of the date of termination. Mr. Christopher may resign his employment for any reason following a change in control. In such event, the Company will pay to Mr. Christopher a lump sum amount equal to (i) his then-current base salary multiplied by the number of full and partial years remaining in the term of employment and (ii) his average annual incentive compensation for the three calendar years immediately preceding the date of termination multiplied by the number of full and partial years remaining in the term of employment. In addition, we will pay Mr. Christopher an amount equal to the monthly cost of continuation coverage under COBRA until he reaches age 65, and all outstanding unvested stock options then held by Mr. Christopher shall become immediately exercisable.

Mr. Christopher’s employment agreement also subjects him to non-competition and non-solicitation covenants during the term of employment and ending on the 12-month anniversary following any termination of employment. Generally, the non-competition covenant prevents Mr. Christopher from engaging in activities that are competitive with the business of the Company in any geographic area in which the Company does business and the non-solicitation covenant prevents Mr. Christopher from soliciting or hiring any person who was a full-time employee of the Company during the 24-month period preceding the termination of his employment. Mr. Christopher’s employment agreement also contains standard confidentiality provisions.

- 34 -

2011 Annual Bonus Plan

We maintain the 2011 Annual Bonus Plan, which was approved by our stockholders at our Annual Meeting in May 2011. The 2011 Annual Bonus Plan is designed to comply with the performance-based compensation exemption from Section 162(m) of the Code by providing certain employees of the Company with incentive compensation based upon achievement of pre-established performance goals. Our Compensation Committee administers the 2011 Annual Bonus Plan and is empowered to set performance goals and select participants that will be eligible to earn a bonus of incentive compensation based on the attainment of these pre-established performance goals.

- 36 -