Exhibit 10.3

AMENDED AND RESTATED SEVERANCE AGREEMENT

This Amended and Restated Severance Agreement is entered into as of February 21,
2020, by and between Bryan H. Fairbanks, an individual (“Executive”) and Trex
Company, Inc., a Delaware corporation (the “Company”).

Executive and the Company entered into a Severance Agreement dated as of
July 24, 2019 setting forth their agreement pursuant to which Executive will
receive certain benefits upon severance from the Company under certain
circumstances. The parties now desire to amend Severance Agreement. The
Severance Agreement, as amended and restated, is as follows:

Recitals

Executive is an officer of the Company. The Company and Executive desire to set
forth their agreement pursuant to which Executive will receive certain benefits
upon severance from the Company under certain circumstances.

Agreement

Now, therefore, in consideration of the mutual covenants contained herein, the
parties hereby agree as follows:

1.    Term. The term of this Agreement (the “Term”) shall begin on April 29,
2020, and shall end on August 3, 2023, unless this Agreement is extended by
mutual agreement of the parties.

2.    Termination of Employment.

(a)    Termination by the Company for Cause or at the Election of Executive
Without Good Reason. In the event Executive’s employment is terminated for
Cause, as defined in Section 3(a), or at the election of Executive for any
reason other than Good Reason, as defined in Section 3(b), the Company shall pay
to Executive the compensation and benefits otherwise due and payable to him in a
lump sum payment in cash, payable within 10 days after termination of
employment, equal to the sum of (1) Executive’s then annual base salary (“Base
Salary”) and any accrued vacation pay through the date of termination of
employment, and (2) Executive’s annual bonus earned for the fiscal year
immediately preceding the fiscal year in which the date of termination of
employment occurs if such bonus has not been paid as of the date of termination
of employment.

 

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(b)    Termination for Death or Disability. If Executive’s employment is
terminated by death or because of Disability, as defined in Section 3(c), the
Company shall pay to the estate of Executive or to Executive, as the case may
be, a lump sum payment in cash, payable within 10 days after termination of
employment, equal to the sum of (1) Executive’s accrued Base Salary and any
accrued vacation pay through the date of termination of employment, and
(2) Executive’s annual bonus earned for the fiscal year immediately preceding
the fiscal year in which the date of termination of employment occurs if such
bonus has not been paid as of the date of termination of employment.

(c)    Termination by the Company Without Cause or By Executive for Good Reason.
If Executive’s employment is terminated by the Company without Cause, or is
terminated by Executive for Good Reason, at any time during the Term (including
extensions thereof), except during the Change in Control Protection Period (as
defined in Executive’s Change In Control Severance Agreement) (“Change in
Control Severance Agreement”), Executive will be entitled to the following
payments and benefits outlined in this Section 2(c):

(1)    Payment of Accrued Obligations. The Company shall pay to Executive a lump
sum payment in cash, no later than 10 days after the date of termination of
employment, equal to the sum of (1) Executive’s accrued Base Salary and any
accrued vacation pay through the date of termination of employment, and
(2) Executive’s annual bonus earned for the fiscal year immediately preceding
the fiscal year in which the date of termination of employment occurs if such
bonus has not been paid as of the date of termination of employment.

(2)    Payment of Severance. The Company shall pay to Executive a lump sum cash
payment, no later than 10 days after such termination, equal to two (2) times
Executive’s Final Pay as defined in Section 3(d). In the event Executive
materially breaches any non-compete or confidentiality agreement then in effect
with the Company, Executive agrees to return to the Company all amounts received
under this Section 2(c)(2).

(3)    Equity. Outstanding equity shall vest as follows: (1) The unexercised
portions of all Options and SARs (as defined in the Trex Company, Inc. 2014
Stock Incentive Plan or a successor plan (“Incentive Plan”) granted to Executive
under the Incentive Plan that have not expired or been forfeited pursuant to
their terms shall automatically accelerate and become fully exercisable, (2) the
restrictions and conditions on all outstanding Restricted Stock and Restricted
Stock Units (as defined in the Incentive Plan) granted to the Executive that
have not expired or been forfeited pursuant to their terms shall immediately
lapse and such Restricted Stock and Restricted Stock Units shall vest, and
(3) all outstanding Restricted Stock Units and Restricted Stock (as defined in
the Incentive Plan) granted to the Executive that are based upon performance of
the Company over a certain period of time shall become payable

 

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at the Executive’s target payment for the relevant performance period
(regardless of the amount of the relevant performance period that precedes the
termination of employment).

(4)    Benefit Continuation. Commencing on the date immediately following
Executive’s date of termination of employment and continuing for 12 months (or
such lesser time as required to avoid the imposition of additional taxes under
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)) (the
“Welfare Benefit Continuation Period”), the Company shall cover Executive under
the same type of Company-sponsored group health plan and dental plan (e.g.,
individual or family coverage) in which he was covered immediately prior to
termination of employment. The Executive shall receive such continued coverage
under the same terms and conditions (e.g., any requirement that employees pay
all or any portion of the cost of such coverage) that would apply if Executive
had continued to be an employee of the Company during the Welfare Benefit
Continuation Period.

(5)    For each month during the Welfare Benefit Continuation Period in which
Executive’s continued coverage under an insured plan is not possible, the
Company shall, in lieu of providing the coverage described in the preceding
paragraph, make a monthly cash payment to Executive equal to the monthly premium
the Company would be charged for coverage of a similarly-situated employee. The
Company shall not be obligated to “gross up” or otherwise compensate Executive
for any taxes due on amounts paid pursuant to the preceding sentence.

(6)    Notwithstanding any other provision of this Section 2(c), the Company’s
obligation to provide continued coverage (or, in lieu thereof, make a cash
payment) pursuant to this Section 2(c) shall expire on the date Executive
becomes covered under one or more plans sponsored by a new employer (other than
a successor to the Company) that, at the sole discretion of the Administrator,
as defined in Section 3(e), are determined to provide coverage at least
equivalent in the aggregate to the benefits continued under Section 2(c)(4). The
coverage period for purposes of the group health continuation requirements of
Section 4980B of the Code shall commence at the expiration of the Welfare
Benefit Continuation Period.

(7)    Release. The Executive shall not be eligible to receive any payments or
benefits provided in Section 2(c) (other than payments under Section 2(c)(1))
unless he first executes a written release and agreement provided by the Company
and does not revoke such release and agreement within the time permitted therein
for such revocation.

(8)    Restriction on Timing of Distribution. Anything in this Agreement to the
contrary notwithstanding, if (1) on Executive’s date of termination of
employment, any of the Company’s stock is publicly traded on an

 

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established securities market or otherwise (within the meaning of
Section 409A(a)(2)(B)(i) of the Code) and (2) as a result of such termination,
Executive would receive any payment that, absent the application of this
Section 2(c)(8), would be subject to interest and additional tax imposed
pursuant to Section 409A(a) of the Code as a result of the application of
Section 409A(a)(1)(B) of the Code, then no such payment shall be payable prior
to the date that is the earliest of (x) six months after Executive’s date of
termination of employment, (y) Executive’s death or (z) such other date as will
cause such payment not to be subject to such interest and additional tax. For
the avoidance of doubt, upon the Executive’s involuntary separation from service
(as defined in Treas. Regs. §1.409A-1(n)), the preceding sentence shall not
prevent payment to the Executive during such six-month period of an aggregate
amount not exceeding the lesser of (a) two (2) times the sum of the Executive’s
annualized compensation based upon the annual rate of pay for his taxable year
preceding the taxable year of the separation from service, or (b) two (2) times
the maximum amount that may be taken into account under a qualified plan
pursuant to Section 401(a)(17) of the Code for the year in which the Executive
has a separation from service, as permitted pursuant to Treas. Regs.
§1.409A-1(b)(9)(iii).

(d)    Termination During a Change in Control Protection Period. If Executive’s
employment is terminated during a Change in Control Protection Period (as that
term is defined in Executive’s Change in Control Severance Agreement), Executive
shall be entitled to receive such severance payments and benefits as are set
forth in Executive’s Change in Control Severance Agreement, and shall not be
entitled to any benefits under this Section 2.

3.    Definitions.

(a)    “Cause” means one of the following reasons for which the Executive’s
employment with the Company is terminated: (1) Executive’s willful or grossly
negligent misconduct that is materially injurious to the Company;
(2) Executive’s embezzlement or misappropriation of funds or property of the
Company; (3) Executive’s conviction of a felony or the entrance of a plea of
guilty or nolo contendere to a felony; (4) Executive’s conviction of any crime
involving fraud, dishonesty, moral turpitude or breach of trust or the entrance
of a plea of guilty or nolo contendere to such a crime; or (5) Executive’s
willful failure or refusal by Executive to devote his full business time (other
than on account of disability or approved leave) and attention to the
performance of his duties and responsibilities if such breach has not been cured
within 15 days after written notice thereof is given to the Executive by the
Board.

(b)    For the purposes of this Agreement, “Good Reason” shall exist upon: (1) a
material and adverse change in Executive’s status or position(s) as an officer
or management employee of the Company, including, without limitation, any
adverse change in his status or position as an employee of the Company as a
result of a material diminution in his duties or responsibilities

 

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(other than, if applicable, any such change directly attributable to the fact
that the Company is no longer publicly owned) or the assignment to him of any
duties or responsibilities which are materially inconsistent with such status or
position(s) (other than any isolated and inadvertent failure by the Company that
is cured promptly upon his giving notice), or any removal of Executive from or
any failure to reappoint or reelect him to such position(s) (except in
connection with Executive’s termination other than for Good Reason); (2) a 10%
or greater reduction in Executive’s aggregate Base Salary and targeted bonus,
other than any such reduction proportionately consistent with a general
reduction of pay across the executive staff as a group, as an economic or
strategic measure due to poor financial performance by the Company;
(3) Company’s requiring Executive to be based at an office that is both more
than 50 miles from where his office is located and further from his then current
residence; or (4) a material breach by the Company of this Agreement; provided,
however, that if any of the conditions in this Section 3(b) exists, Executive
must provide notice to the Company no more than ninety (90) calendar days
following the initial existence of the condition and his intention to terminate
his employment for Good Reason. Upon such notice, the Company shall have a
period of thirty (30) calendar days during which it may remedy the condition.

(c)    For the purposes of this Agreement, the term “Disability” shall have the
meaning given that term under the Trex Company, Inc. disability plan carrier, as
in effect at the time a determination of Disability is to be made.

(d)    For the purposes of this Agreement, the term “Final Pay” shall be defined
as the sum of (1) Executive’s Base Salary in effect at the time employment
terminates (without taking into consideration a reduction in Base Salary which
constitutes “Good Reason” as provided in Section 3(b)(2) above), and (2) the
greater of (A) Executive’s targeted cash bonus for the year immediately prior to
the year in which employment terminates or (B) the actual cash bonus earned by
the Executive for the year immediately prior to the year in which employment
terminates.

(e)    For the purposes of this Agreement, the term “Administrator” means the
Compensation Committee of the Board of Directors or such other person or persons
appointed from time to time by the Committee.

4.     Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when hand delivered, sent by overnight courier,
or mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by telegram, telecopy, or telex,
addressed, in the case of Executive, to Executive’s address as shown on the
Company’s records and, in the case of the Company, to the Company’s principal
office, to the attention of the General Counsel, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

 

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5.     Entire Agreement. This Agreement, together with the Executive’s Change In
Control Severance Agreement, any stock appreciation rights agreement, restricted
stock agreement and/or any other equity agreement issued pursuant to the Trex
Company, Inc. 2014 Stock Incentive Plan (or a predecessor or successor plan),
any Director/Officer Indemnification Agreement, and any restrictive covenant
agreement, constitute the entire agreement between the parties and supersede all
prior agreements and understandings, whether written or oral, relating to the
subject matter of this Agreement.

6.     Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and Executive.

7.     Governing Law. This Agreement shall be construed, interpreted and
enforced as a sealed instrument under and in accordance with the laws of the
Commonwealth of Virginia, without reference to the conflicts of laws provisions
thereof. Any action, suit or other legal proceeding which is commenced to
resolve any matter arising under or relating to any provision of this Agreement
shall be commenced only in a court of the Commonwealth of Virginia (or, if
appropriate, a federal court located within Virginia), and the Company and
Executive each consents to the jurisdiction of such a court.

8.     Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company may be merged or
which may succeed to its assets or business, provided, however, that the
obligations of Executive are personal and shall not be assigned by him.
Notwithstanding the foregoing, in the event of Executive’s death, any payments
that Executive was otherwise entitled to under this Agreement shall be made to
his estate.

9.     Acknowledgment. Executive states and represents that he has had an
opportunity to fully discuss and review the terms of this Agreement with an
attorney. The Executive further states and represents that he has carefully read
this Agreement, understands the contents herein, freely and voluntarily assents
to all of the terms and conditions hereof, and signs his name of his own free
act. The Company represents that it has obtained all necessary consents and
approvals to execute this Agreement.

 

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10.     Miscellaneous.

(a)    No delay or omission by the Company in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.

(b)    The captions of the sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance of
any section of this Agreement.

(c)    Termination of employment under this Agreement shall mean a separation
from service under Section 409A of the Code.

(d)    In case any provision of this Agreement shall be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above.

 

Trex Company, Inc. By:  

/s/ William R. Gupp

Title:   Senior Vice President, General Counsel & Secretary Executive:

/s/ Bryan H. Fairbanks

Name: Bryan H. Fairbanks

 

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