Document:

Exhibit 10.4

 Exhibit 10.4 
  
 TREX COMPANY, INC. 
  
 AMENDED AND RESTATED 
 1999 INCENTIVE
PLAN FOR OUTSIDE DIRECTORS 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	 1.
	  	 DEFINITIONS
	  	1
	 2.
	  	 PURPOSE
	  	3
	 3.
	  	 SHARES SUBJECT TO THE PLAN
	  	3
	 4.
	  	 ANNUAL DIRECTOR AND COMMITTEE FEES
	  	3
	 4.1.
	  	 Annual Director Fee
	  	3
	 4.1.1
	  	 Cash Portion of Annual Director Fee
	  	3
	 4.1.2
	  	 Option Portion of Annual Director Fee
	  	3
	 4.2.
	  	 Annual Committee Fee
	  	3
	 4.3.
	  	 Election
	  	4
	 4.4.
	  	 Proration
	  	4
	 5.
	  	 GRANT DATE
	  	4
	 6.
	  	 OPTION PRICE
	  	4
	 7.
	  	 TERM OF OPTIONS
	  	4
	 8.
	  	 VESTING OF OPTIONS
	  	4
	 9.
	  	 SERVICE TERMINATION
	  	5
	 10.
	  	 ELECTION TO RECEIVE ADDITIONAL OPTIONS
	  	5
	 10.1.
	  	 Election Form
	  	5
	 10.2.
	  	 Time for Filing Election Form
	  	5
	 10.3.
	  	 Modification of the Election Form
	  	6
	 11.
	  	 ADMINISTRATION
	  	6
	 11.1.
	  	 Committee
	  	6
	 11.2.
	  	 Rules for Administration
	  	6
	 11.3.
	  	 Committee Action
	  	6
	 11.4.
	  	 Delegation
	  	6
	 11.5.
	  	 Services
	  	6
	 11.6.
	  	 Indemnification
	  	7
	 12.
	  	 AMENDMENT AND TERMINATION
	  	7
	 13.
	  	 GENERAL PROVISIONS
	  	7
	 13.1.
	  	 Limitation of Rights
	  	7
	 13.2.
	  	 No Rights as Stockholders
	  	7
	 13.3.
	  	 Rights as a Non-Employee Director
	  	7
	 13.4.
	  	 Assignment, Pledge or Encumbrance
	  	7
	 13.5.
	  	 Binding Provisions
	  	7
	 13.6.
	  	 Notices
	  	8
	 13.7.
	  	 Governing Law
	  	8
	 13.8.
	  	 Withholding
	  	8
	 13.9.
	  	 Effective Date
	  	8

  

 - i - 

	1.	DEFINITIONS 

  
 To the extent any capitalized words used in this Plan are not defined, they shall have the definitions stated for them in the Trex Company, Inc. Amended
and Restated 1999 Stock Option and Incentive Plan. 
  
 1.1
“Annual Director Fee” means an annual fee earned by an Eligible Director for service on the Board of Directors. 
  
 1.2 “Annual Committee Fee” means an annual fee earned by an Eligible Director for service on various committees of the Board of
Directors. 
  
 1.3 “Board of Directors” or
“Board” means the Board of Directors of the Company. 
  
 1.4 “Cash Portion of the Annual Director Fee” means the portion of the Annual Director Fee to be received in cash, or if elected by the Eligible Director, in Options, as provided in Sections 4.1.1 and 4.3 hereof.

  
 1.5 “Committee” means the Administrative
Committee which administers the Plan. 
  
 1.6 “Common
Stock” means the common stock, par value $0.01 per share, of the Company. 
  
 1.7 “Company” means Trex Company, Inc., a Delaware corporation, or any successor thereto. 
  
 1.8 “Election Form” means the form used by an Eligible Director to elect to receive all or a portion of the Cash Portion of the Annual
Director Fee and the Annual Committee Fee for a Plan Year in the form of Options. 
  
 1.9 “Eligible Director” for each Plan Year means a member of the Board of Directors who is not an employee of the Company or any Subsidiary. 
  
 1.10 “Fair Market Value” means the closing price of a share
of Common Stock reported on the New York Stock Exchange (the “NYSE”) on the date Fair Market Value is being determined, provided that if there is no closing price reported on such date, the Fair Market Value of a share of Common Stock on
such date shall be deemed equal to the closing price as reported by the NYSE for the last preceding date on which sales of shares of Common Stock were reported. Notwithstanding the foregoing, in the event that the shares of Common Stock are listed
upon more than one established stock exchange, “Fair Market Value” means the closing price of the shares of Common Stock reported on the exchange that trades the largest volume of 

  

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shares of Common Stock on the date Fair Market Value is being determined. If the Common Stock is not at the time listed or admitted to trading on a stock
exchange, Fair Market Value means the mean between the lowest reported bid price and highest reported asked price of the Common Stock on the date in question in the over-the-counter market, as such prices are reported in a publication of general
circulation selected by the Board and regularly reporting the market price of Common Stock in such market. If the Common Stock is not listed or admitted to trading on any stock exchange or traded in the over-the-counter market, Fair Market Value
shall be as determined in good faith by the Board. 
  
 1.11
“Grant Date” has the meaning set forth in Section 5 hereof. 
  
 1.12 “Option” means a non-qualified Option granted pursuant to the Trex Company, Inc. 1999 Stock Option and Incentive Plan. 
  
 1.13 “Option Agreement” means the written agreement between the Company and the Participant that evidences
and sets out the terms and conditions of the Option. 
  
 1.14
“Option Portion of the Annual Director Fee” means the portion of the Annual Director Fee to be received in Options, as provided in Section 4.1.2 hereof. 
  
 1.15 “Option Price” means the purchase price for each share of Common Stock subject to an Option.

  
 1.16 “Participant” for any Plan Year means
an Eligible Director who participates in the Plan for that Plan Year in accordance with Section 10.1 hereof. 
  
 1.17 “Plan” means the Trex Company, Inc. Amended and Restated 1999 Incentive Plan for Outside Directors as set forth herein and as
amended from time to time. 
  
 1.18 “Plan Year”
means the twelve-month period beginning on July 1 and ending on June 30. 
  
 1.19 “Subsidiary” means any “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Internal Revenue Code of 1986, as amended. 
  

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	2.	PURPOSE 

  
 The purpose of the Plan is to compensate Eligible Directors for service on the Board of Directors and various committees of the Board, and to provide an
incentive for Eligible Directors to increase their equity holdings in the Company so that the financial interests of the Eligible Directors shall be more closely aligned with the financial interests of the Company’s stockholders. 
  

	3.	SHARES SUBJECT TO THE PLAN 

  
 The shares of Common Stock issuable under the Plan shall be issued pursuant to the Trex Company, Inc. Amended and Restated 1999 Stock Option and Incentive
Plan. 
  

	4.	ANNUAL DIRECTOR AND COMMITTEE FEES 

  

	 	4.1	Annual Director Fee 

  
 Each Eligible Director shall be entitled to an Annual Director Fee, which may be adjusted by the Board from time to time, as follows: 
  
 4.1.1 Cash Portion of the Annual Director Fee. Each Eligible Director shall
receive the amount of twenty thousand dollars ($20,000) (the “Cash Portion of the Annual Director Fee”). The Cash Portion of the Annual Director Fee (after reduction pursuant to Section 4.3 hereof, if any) shall be paid to an Eligible
Director in four equal quarterly installments in arrears on the first business day following the end of each quarter of the Plan Year in which the Eligible Director provided services to the Company. 
  
 4.1.2 Option Portion of the Annual Director Fee. Each Eligible
Director shall receive one thousand five hundred (1,500) Options (the “Option Portion of the Annual Director Fee”). The Option Portion of the Annual Director Fee shall be paid in arrears as provided in Section 5 below. 
  

	 	4.2	Annual Committee Fee 

  
 Each Eligible Director shall be entitled to an Annual Committee Fee, which may be adjusted by the Board from time to time, as follows (a) $10,000 for the
Audit Committee Chairman, (b) $5,000 for each Audit Committee member (other than the Chairman), (c) $5,000 for the Nominating/Corporate Governance Committee Chairman and the Compensation Committee Chairman, and (d) $2,500 for each
Nominating/Corporate Governance Committee member and Compensation Committee member (other than the Chairmen). The Annual Committee Fee shall be paid to an Eligible Director in four equal quarterly installments in arrears on 

  

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the first business day following each quarter of the Plan Year in which the Eligible Director served on the applicable committee(s). 
  

	 	4.3	Election 

  
 Pursuant to Section 10 hereof, an Eligible Director may elect to receive all or a portion of the Cash Portion of the Annual Director Fee and the Annual
Committee Fee in the form of Options of equal value. In such event, the value of such Options shall be determined pursuant to the methodology then in use by the Company’s Finance Department to value stock options granted pursuant to the Trex
Company, Inc. 1999 Stock Option and Incentive Plan. 
  

	 	4.4	Proration 

  
 The Cash Portion of the Annual Director Fee, the Option Portion of the Annual Director Fee and the Annual Committee Fee shall be prorated for any partial
periods served. 
  

	5.	GRANT DATE 

  
 The date of grant for the Option Portion of the Annual Director Fee shall be the date of the first regularly scheduled Board of Directors’ Meeting
following the end of each Plan Year in which the Eligible Director provided services to the Company, and the date of grant for Options issued in lieu of the Cash Portion of the Annual Director Fee and the Annual Committee Fee, as provided in Section
10 hereof, shall be the date such Fees would otherwise be due (each of such dates being referred to as the “Grant Date”). 
  

	6.	OPTION PRICE 

  
 The Option Price of Common Stock covered by each Option granted under the Plan shall be the Fair Market Value of such Common Stock on the Grant Date.

  

	7.	TERM OF OPTIONS 

  
 Each Option granted under the Plan shall terminate, and all rights to purchase shares of Common Stock thereunder shall cease, upon the expiration of ten
years from the date such Option is granted. 
  

	8.	VESTING OF OPTIONS 

  
 On the first anniversary of the Grant Date, the Option shall be exercisable in respect of 100 percent (100%) of the number of shares covered by the grant.
Any limitation on the exercise of an Option contained in any Option 

  

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Agreement may be rescinded, modified or waived by the Committee, in its sole discretion, at any time and from time to time after the date of grant of such
Option. The Option shall be exercisable, in whole or in part, at any time and from time to time, after becoming exercisable and prior to the termination of the Option; provided, that no single exercise of the Option shall be for less than 100
shares, unless the number of shares purchased is the total number at the time available for purchase under the Option. 
  

	9.	SERVICE TERMINATION 

  
 Except as otherwise provided in the Option Agreement, upon the termination of service (a “Service Termination”) of the Participant as a director
of the Company for any reason, any Option granted to a Participant pursuant to the Plan shall become vested, and the Participant shall have the right, at any time within five years after the date of such Participant’s Service Termination and
prior to termination of the Option pursuant to Section 7 hereof, to exercise any Option held by such Participant at the date of such Participant’s Service Termination. After the termination of the Option, the Participant shall have no further
right to purchase shares of Common Stock pursuant to such Option. 
  

	10.	ELECTION TO RECEIVE ADDITIONAL OPTIONS 

  

	 	10.1	Election Form 

  
 A Participant who wishes to receive all or any portion of the Cash Portion of the Annual Director Fee and the Annual Committee Fee in the form of Options
shall file an Election Form with the Company, in the form and manner prescribed by the Committee. Filing of a completed Election Form will authorize the Company to issue Options to the Participant in lieu of all or any portion of the Cash Portion of
the Annual Director Fee and the Annual Committee Fee, in accordance with the Participant’s instructions on the Election Form. Options issued pursuant to an election made under this Section 10 shall vest in accordance with the schedule set forth
in Section 8 hereof. 
  

	 	10.2	Time for Filing Election Form 

  
 An Election Form shall be completed and filed by each newly elected Eligible Director within thirty (30) days after the Participant’s election to the
Board, and elections under the Plan made by a newly elected Eligible Director shall apply to the Participant’s Annual Director Fee and Annual Committee Fee for the remainder of the Plan Year. Such elections shall remain in effect for subsequent
Plan Years unless and until a new Election Form is submitted by an Eligible Director to the Corporate Secretary. Notwithstanding the foregoing, a new Election 

  

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Form may be submitted by each Eligible Director no more than once each Plan Year. 
  

	11.	ADMINISTRATION 

  

	 	11.1	Committee 

  
 The general administration of the Plan and the responsibility for carrying out its provisions shall be placed in an Administrative Committee. The
Committee shall consist of at least two members appointed from time to time by the Board of Directors to serve at the pleasure thereof. The initial Administrative Committee shall consist of the President and the Chief Financial Officer of the
Company. Any member of the Committee may resign by delivering a written resignation to the Company, and may be removed at any time by action of the Board of Directors. 
  

	 	11.2	Rules for Administration 

  
 Subject to the limitations of the Plan, the Committee may from time to time establish such rules and procedures for the administration and interpretation
of the Plan and the transaction of its business as the Committee may deem necessary or appropriate. The determination of the Committee as to any disputed question relating to the administration and interpretation of the Plan shall be conclusive.

  

	 	11.3	Committee Action 

  
 Any act which the Plan authorizes or requires the Committee to do may be done by a majority of its members. The action of such majority, expressed from
time to time by a vote at a meeting (i) in person, (ii) by telephone or other means by which all members can hear one another or (iii) in writing without a meeting shall constitute the action of the Committee and shall have the same effect for all
purposes as if assented to by all members of the Committee at the time in office. 
  

	 	11.4	Delegation 

  
 The members of the Committee may authorize one or more of their number to execute or deliver any instrument, make any payment or perform any other act
which the Plan authorizes or requires the Committee to do. 
  

	 	11.5	Services 

  
 The Committee may employ or retain agents to perform such clerical, accounting and other services as it may require in carrying out the provisions of the
Plan. 
  

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	 	11.6	Indemnification 

  
 The Company shall indemnify and save harmless each member of the Committee against all expenses and liabilities arising out of membership on the
Committee, other than expenses and liabilities arising from the such member’s own gross negligence or willful misconduct, as determined by the Board of Directors. 
  

	12.	AMENDMENT AND TERMINATION 

  
 The Company, by action of the Board of Directors or the Administrative Committee, may at any time or from time to time modify or amend any or all of the
provisions of the Plan, or may at any time terminate the Plan. No such action shall adversely affect the accrued rights of any Participant hereunder without the Participant’s consent thereto. 
  

	13.	GENERAL PROVISIONS 

  

	 	13.1	Limitation of Rights 

  
 No Participant shall have any right to any payment or benefit hereunder except to the extent provided in the Plan. 
  

	 	13.2	No Rights as Stockholders 

  
 Nothing contained in this Plan shall be construed as giving any Participant rights as a stockholder of the Company. 
  

	 	13.3	Rights as a Non-Employee Director 

  
 Nothing contained in this Plan shall be construed as giving any Participant a right to be retained as a non-employee director of the Company. 

 

	 	13.4	Assignment, Pledge or Encumbrance 

  
 No assignment, pledge or other encumbrance of any payments or benefits under the Plan shall be permitted or recognized and, to the extent permitted by
law, no such payments or benefits shall be subject to legal process or attachment for the payment of any claim of any person entitled to receive the same, except to the extent such assignment, pledge or other encumbrance is in favor of the Company
to secure a loan or other extension of credit from the Company to the Participant. 
  

	 	13.5	Binding Provisions 

  
 The provisions of this Plan shall be binding upon each Participant as a consequence of the Participant’s election to participate in the Plan, upon
the 

  

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Company, upon the Participant’s heirs, executors and administrators and upon the successors and assigns of the Participant and the Company. 

 

	 	13.6	Notices 

  
 Any election made or notice given by a Participant pursuant to the Plan shall be in writing to the Committee or to such representative thereof as may be
designated by the Committee for such purpose and shall be deemed to have been made or given on the date received by the Committee or its representative. 
  

	 	13.7	Governing Law 

  
 The validity and interpretation of the Plan and of any of its provisions shall be construed under the laws of the State of Delaware without giving effect
to the choice of law provisions thereof. 
  

	 	13.8	Withholding 

  
 The Company shall have the right to deduct from the amounts distributable hereunder any federal, state or local taxes required by law to be withheld with
respect to such distributions, and such additional amounts of withholding as are reasonably requested by the Participant. 
  

	 	13.9	Effective Date 

  
 This Plan shall be effective as of March 12, 1999. The Plan was amended and restated effective May 14, 2002 and October 24, 2003. 
  

 8Exhibit 10.5

 Exhibit 10.5 
  
 Officers and Employee Directors 
  
 TREX COMPANY, INC. 
 Amended
and Restated 
 1999 Stock Option and Incentive Plan 
 Non-Incentive Stock Option Agreement 
  

					
	 Grant Date:
	 	Stock Option Exercise Price:	 	 
	 Last Date to Exercise:
                     1/
	 	 	 	 

  
 Number of Shares of Common Stock

 Covered by Grant of Options: 
  
 We are pleased to inform you that the Board of Directors has granted you an option (the “Option”) to purchase Trex Company, Inc. common stock. Your grant has
been made under the Company’s Amended and Restated 1999 Stock Option and Incentive Plan (the “Plan”), which, together with the terms contained in this Agreement, sets forth the terms and conditions of your grant and is incorporated
herein by reference. If any provisions of the Agreement should appear to be inconsistent with the Plan, the Plan will control. 
  

	
	This stock option grant has been executed and delivered as of                      on
behalf of Trex Company, Inc.
	
	 
	

	 Robert G. Matheny
 President

  

	
	 ACCEPTED AND AGREED TO:

	
	  
	

	 Employee Name

  
 This is not a stock
certificate or a negotiable instrument. Transferable only pursuant to Section 11.2 of the Plan. 
  

	1	Certain events can cause an earlier termination of the Option. See “Effects of Changes in Capitalization” in the Plan. 

  

 1. Vesting: 
  
 Subject to the terms of the Plan, the Option becomes vested as to 25% of the shares of Stock purchasable pursuant to the Option on the first anniversary of the date of
grant of the Option, if you have been providing services to the Company or a Subsidiary continuously from the Option’s date of grant to the first anniversary of the date of grant (the “Anniversary Date”) and, so long as continuous
provision of services has not been interrupted, the Option becomes vested as to an additional 25% of the shares of Stock subject to the Option on each of the next three (3) Anniversary Dates. Notwithstanding the foregoing, if you should incur an
Involuntary Termination within a one year period following a Change in Control, the Option shall become 100% vested at the time of your termination. “Change in Control” means the dissolution or liquidation of the Company or a merger,
consolidation, or reorganization of the Company with one or more other entities in which the Company is not the surviving entity, (ii) a sale of substantially all of the assets of the Company to another person or entity, or (iii) any transaction
(including without limitation a merger or reorganization in which the Company is the surviving entity) which results in any person or entity (other than persons who are shareholders or Affiliates immediately prior to the transaction) owning 50% or
more of the combined voting power of all classes of stock of the Company. “Involuntary Termination” means a termination of employment by the Company for a reason other than Cause or by you if the Company takes any action which results in a
diminution in any material respect with your position (including status, offices, titles and reporting requirements), compensation authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by you. 
  
 2. Exercise: 
  
 You may exercise this Option, in whole or in part, to purchase a whole number of vested shares at any time of not less than 100 shares, unless the number of shares purchased is the total number available for purchase
under the Option, by following the exercise procedures as set forth in the Plan. All exercises must take place before the Last Date to Exercise (shown on the cover sheet), or such earlier date following your death, disability, retirement, or your
ceasing to provide services as described below under “Service Requirements.” The number of shares you may purchase as of any date cannot exceed the total number of shares vested by that date, less any shares you have previously acquired by
exercising this Option. 
  
 3. Service Requirements and Termination of Option:

  
 If your service terminates, except as provided in Section 1 above and
this Section 3, all further vesting of shares under this Option stops and all unvested shares are canceled. 
  
 If your service terminates for a reason other than: (i) for Cause or (ii) because of your death, permanent and total disability or retirement, you will have ninety (90) days after your provision of services ceases to
exercise your vested Option shares, but in no event may the Option be exercised after the Last Date to Exercise. After the 90 days have elapsed, your Option will terminate. 
  
 If your service terminates because of your death, permanent and total disability, or retirement, you or your estate will have a period of
five years to exercise any Options, whether or not the Options were otherwise exercisable at the time of your death, permanent and total disability, or retirement, but in no event may the Options be exercised after the Last Date to Exercise. After
the five year period has elapsed, your Options will terminate. 
  
 Your Option
will terminate immediately upon termination of your services for Cause. “Cause” means, as determined by the Board, (i) gross negligence or willful misconduct in connection with the performance of duties; (ii) conviction of a felony or of a
crime involving moral turpitude; or (iii) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements. 
  
 4. Taxes and Withholding: 
  
 This Option shall not constitute an incentive stock option within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of shares arising from this grant, the
Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company, a Subsidiary or an Affiliate. 
  

 1 

 5. Transferability: 
  
 The Option may be transferred in a manner consistent with Section 11.2 of the Plan. 
  
 * * * * * 
  

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