Exhibit 10.8

 

Trex Company, Inc.

 

Description of Annual Executive Incentive Compensation Plan

 

Trex Company, Inc. (the “Company”) maintains an annual executive incentive
compensation plan (the “Plan”) for the benefit of its executive officers, other
officers, managers and certain other key employees of the Company. Awards under
the Plan are made by the Compensation Committee of the Company’s Board of
Directors.

 

Under the Plan, the Company pays annual cash bonuses based upon the achievement
of specified performance objectives, as described below. For each fiscal year,
each participant in the Plan is assigned a “target bonus,” which is expressed as
a percentage of the participant’s annual base salary or salary range midpoint
for such fiscal year, depending on grade level. Cash bonuses may be awarded at a
lesser or greater percentage than the target bonus percentage, depending on the
extent to which the performance objectives are achieved. The bonus percentage
levels for each fiscal year and the performance objectives are annually approved
by the Compensation Committee. The Compensation Committee has the discretion to
award a bonus, which exceeds the otherwise applicable maximum bonus percentage,
except that the value of the bonus may not exceed $2,000,000 for any fiscal year
for any employee.

 

The bonus amount payable to the chief executive officer, the executive vice
presidents and the senior vice presidents generally is based upon the
achievement of an earnings per share objective, although for such officers other
than the chief executive officer, other factors may be considered. The bonus
amount payable to other officers, managers and certain other key employees of
the Company is based 50% on the same company performance target of earnings per
share and 50% on individual performance based upon individual objectives
established by management.

 

Bonus payments are conditional upon the participant’s continued employment by
the Company through the date of grant, and are pro rated for employees who have
served for less than a full year.