Exhibit 10.4

 

TREX COMPANY, INC.

1999 STOCK OPTION AND INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT

 

Trex Company, Inc., a Delaware corporation (the “Company”), hereby grants shares
of its common stock, $.01 par value (the “Stock”), to the Grantee named below,
subject to the vesting conditions set forth in the attachment. Additional terms
and conditions of the grant are set forth in this cover sheet, in the attachment
and in the Company’s 1999 Stock Option and Incentive Plan (the “Plan”).

 

Grant Date:

 

Name of Grantee:

 

Number of Shares of Stock Covered by Grant:

 

Purchase Price per Share of Stock: $.01

 

By signing this cover sheet, you agree to all of the terms and conditions
described in the attached Agreement and in the Plan, a copy of which is
available from the Company upon request. You acknowledge that you have carefully
reviewed the Plan, and agree that the Plan will control in the event any
provision of this Agreement should appear to be inconsistent.

 

Grantee:  

 

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    (Signature) Company:  

 

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    Robert G. Matheny     President

 

Attachment

 

Keep this copy for your records.

 

This is not a stock certificate or a negotiable instrument.

 

 

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TREX COMPANY, INC.

1999 STOCK OPTION AND INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT

 

Restricted Stock/ Nontransferability    This grant is an award of Stock in the
number of shares set forth on the cover sheet, at the purchase price set forth
on the cover sheet, and subject to the vesting conditions described below (the
“Restricted Stock”). To the extent not yet vested, your Restricted Stock may not
be transferred, assigned, pledged or hypothecated, whether by operation of law
or otherwise, nor may the Restricted Stock be made subject to execution,
attachment or similar process. Issuance and Vesting   

The Company will issue your Restricted Stock in your name as of the Grant Date.

 

Your right to the Stock under this Restricted Stock grant will vest as to one
third (1/3) of the total number of shares covered by this grant, as shown on the
cover sheet, on                     ,                     , and
                    ; provided, that, you continue to provide services to the
Company or a Subsidiary as an employee or a Service Provider (“Services”) on
each such vesting date. The resulting aggregate number of vested shares of Stock
will be rounded to the nearest whole number, and you may not vest in more than
the number of shares covered by this grant.

 

No additional shares of Stock will vest after you have ceased to provide
Services for any reason.

 

Upon the vesting of the shares of Restricted Stock hereunder, the Company will
issue you a share certificate for such shares, free of the legend set forth on
page 5 hereof. The Purchase Price for the Restricted Stock shall be deemed to be
paid at that time by your services to the Company.

Service Termination   

Upon the termination of your Services, other than by reason of your death or
permanent and total disability (within the meaning of Section 22(e)(3) of the
Code), any shares of Stock that have not vested hereunder shall immediately be
deemed forfeited.

 

In the event of the termination of your Services because of your death or
permanent and total disability (within the meaning of Section 22(e)(3) of the
Code), any shares of Stock that have not vested hereunder shall immediately
become fully vested.

Escrow    The certificates for the Restricted Stock shall be deposited in escrow
with the Secretary of the Company to be held in accordance with the provisions
of this paragraph. In the alternative, the Company may use the book-entry method
of

 

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share recordation to indicate your share ownership and the restrictions imposed
by this Agreement. If share certificates are issued, each deposited certificate
shall be accompanied by a duly executed Assignment Separate from Certificate in
the form attached hereto as Exhibit A. The deposited certificates shall remain
in escrow until such time or times as the certificates are to be released or
otherwise surrendered for cancellation as discussed below. Upon delivery of the
certificates to the Company, you shall be issued an instrument of deposit
acknowledging the number of shares of Stock delivered in escrow to the Secretary
of the Company.

 

All regular cash dividends on the Stock (or other securities at the time held in
escrow) shall be paid directly to you and shall not be held in escrow. However,
in the event of any stock dividend, stock split, recapitalization or other
change affecting the Stock as a class effected without receipt of consideration,
or in the event of a stock split, a stock dividend or a similar change in the
Stock, any new, substituted or additional securities or other property which is
by reason of such transaction distributed with respect to the Stock shall be
immediately delivered to the Secretary of the Company to be held in escrow
hereunder, but only to the extent the Stock is at the time subject to the escrow
requirements hereof.

 

The shares of Stock held in escrow hereunder shall be subject to the following
terms and conditions relating to their release from escrow or their surrender to
the Company for cancellation:

 

•      As your interest in the shares vests as described above, the certificates
for such vested shares shall be released from escrow and delivered to you, at
your request.

Withholding Taxes    You agree, as a condition of this grant, that you will make
acceptable arrangements to pay any withholding or other taxes that may be due as
a result of the vesting of Stock acquired under this grant. In the event that
the Company determines that any federal, state, local or foreign tax or
withholding payment is required relating to the vesting of shares arising from
this grant, the Company shall have the right to require such payments from you,
withhold shares that would otherwise have been issued to you under this
Agreement or withhold such amounts from other payments due to you from the
Company or any Affiliate. Section 83(b) Election    Under Section 83 of the
Internal Revenue Code of 1986, as amended (the “Code”), the difference between
the purchase price paid for the shares of Stock and their fair market value on
the date any forfeiture restrictions applicable to such shares lapse

 

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     will be reportable as ordinary income at that time. For this purpose,
“forfeiture restrictions” include the Company’s Repurchase Right as to unvested
Stock described above. You may elect to be taxed at the time the shares are
acquired rather than when such shares cease to be subject to such forfeiture
restrictions by filing an election under Section 83(b) of the Code with the
Internal Revenue Service within thirty (30) days after the Grant Date. You will
have to make a tax payment to the extent the purchase price is less than the
fair market value of the shares on the Grant Date. No tax payment will have to
be made to the extent the purchase price is at least equal to the fair market
value of the shares on the Grant Date. The form for making this election is
attached as Exhibit B hereto. Failure to make this filing within the thirty (30)
day period will result in the recognition of ordinary income by you (in the
event the fair market value of the shares increases after the date of purchase)
as the forfeiture restrictions lapse.      YOU ACKNOWLEDGE THAT IT IS YOUR SOLE
RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION
83(b), EVEN IF YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS
FILING ON YOUR BEHALF. YOU ARE RELYING SOLELY ON YOUR OWN ADVISORS WITH RESPECT
TO THE DECISION AS TO WHETHER OR NOT TO FILE ANY 83(b) ELECTION. Retention
Rights    This Agreement does not give you the right to be retained by the
Company in any capacity. The Company reserves the right to terminate your
service with the Company at any time and for any reason. Shareholder Rights   
You shall have the right to vote the Restricted Stock and, subject to the
provisions of this Agreement, to receive any dividends declared or paid on such
stock. Any distributions you receive as a result of any stock split, stock
dividend, combination of shares or other similar transaction shall be deemed to
be a part of the Restricted Stock and subject to the same conditions and
restrictions applicable thereto. The Company may in its sole discretion require
any dividends paid on the Restricted Stock to be reinvested in shares of Stock,
which the Company may in its sole discretion deem to be a part of the shares of
Restricted Stock and subject to the same conditions and restrictions applicable
thereto. Except as described in the Plan, no adjustments are made for dividends
or other rights if the applicable record date occurs before your stock
certificate is issued.

 

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Adjustments    In the event of a stock split, a stock dividend or a similar
change in the Stock, the number of shares covered by this grant may be adjusted
(and rounded down to the nearest whole number) pursuant to the Plan. Your
Restricted Stock shall be subject to the terms of the agreement of merger,
liquidation or reorganization in the event the Company is subject to such
corporate activity. Legends   

All certificates representing the Stock issued in connection with this grant
shall, where applicable, and if issued prior to vesting, have endorsed thereon
the following legend:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT
BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR THE HOLDER’S PREDECESSOR IN
INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

 

Applicable Law    This Agreement will be interpreted and enforced under the laws
of the State of Delaware, other than any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of this
Agreement to the substantive law of another jurisdiction. The Plan   

The text of the Plan is incorporated in this Agreement by reference. Certain
capitalized terms used in this Agreement are defined in the Plan, and have the
meaning set forth in the Plan.

 

This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this grant of Restricted Stock. Any prior agreements,
commitments or negotiations concerning this grant are superseded.

Consent to Electronic Delivery    The Company may choose to deliver certain
statutory materials relating to the Plan in electronic form. By accepting this
grant you agree that the Company may deliver the Plan prospectus and the
Company’s annual report to you in an electronic format. If at any time you would
prefer to receive paper copies of these documents, as you are entitled to
receive, the Company would be pleased to provide copies. Please contact the
Director of Human Resources to request paper copies of these documents.

 

By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan.

 

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EXHIBIT A

 

ASSIGNMENT SEPARATE FROM CERTIFICATE

 

FOR VALUE RECEIVED,                      hereby sells, assigns and transfers
unto Trex Company, Inc., a Delaware corporation (the “Company”),
                     (                    ) shares of common stock of the
Company represented by Certificate No.      herewith and does hereby irrevocable
constitute and appoint                      Attorney to transfer the said stock
on the books of the Company with full power of substitution in the premises.

 

Dated:                     , 200    

 

 

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Print Name

 

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Signature

 

Spouse Consent (if applicable)

 

                                     (Purchaser’s spouse) indicates by the
execution of this Assignment his or her consent to be bound by the terms herein
as to his or her interests, whether as community property or otherwise, if any,
in the shares of common stock of the Company.

 

 

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Signature

 

INSTRUCTIONS: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE.
THE PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY TO EXERCISE ITS
“REPURCHASE OPTION” SET FORTH IN THE AGREEMENT WITHOUT REQUIRING ADDITIONAL
SIGNATURES ON THE PART OF PURCHASER.

 

 

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EXHIBIT B

 

ELECTION UNDER SECTION 83(b) OF

THE INTERNAL REVENUE CODE

 

The undersigned hereby makes an election pursuant to Section 83(b) of the
Internal Revenue Code with respect to the property described below and supplies
the following information in accordance with the regulations promulgated
thereunder:

 

1. The name, address and social security number of the undersigned:

 

Name:                                         
                                                                             

 

Address:                                         
                                                                        

 

                                        
                                        
                                                 

 

Social Security No. :                                         
                                                     

 

2. Description of property with respect to which the election is being made:

 

                         shares of common stock, par value $.01 per share, of
Trex Company, Inc., a Delaware corporation (the “Company”).

 

3. The date on which the property was transferred is                          ,
2005.

 

4. The taxable year to which this election relates is calendar year 2005.

 

5. Nature of restrictions to which the property is subject:

 

The shares of stock are subject to the provisions of a Restricted Stock
Agreement between the undersigned and the Company. The shares of stock are
subject to forfeiture under the terms of the Agreement.

 

6. The fair market value of the property at the time of transfer (determined
without regard to any lapse restriction) was $                     per share,
for a total of $                    .

 

7. The amount paid by taxpayer for the property was $                    .

 

8. A copy of this statement has been furnished to the Company.

 

Dated:                     , 2005

 

 

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Taxpayer’s Signature

 

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Taxpayer’s Printed Name

 

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PROCEDURES FOR MAKING ELECTION

UNDER INTERNAL REVENUE CODE SECTION 83(b)

 

The following procedures must be followed with respect to the attached form for
making an election under Internal Revenue Code section 83(b) in order for the
election to be effective: 1

 

1. You must file one copy of the completed election form with the IRS Service
Center where you file your federal income tax returns within thirty (30) days
after the Grant Date of your Restricted Stock.

 

2. At the same time you file the election form with the IRS, you must also give
a copy of the election form to the Secretary of the Company.

 

3. You must file another copy of the election form with your federal income tax
return (generally, Form 1040) for the taxable year in which the stock is
transferred to you.

 

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1 Whether or not to make the election is your decision and may create tax
consequences for you. You are advised to consult your tax advisor if you are
unsure whether or not to make the election.

 

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