exhibit101.htm


    


    
      

    

    Exhibit 10.1

    


     CARMAX,
INC.

    2002
NON-EMPLOYEE DIRECTORS

     STOCK
INCENTIVE PLAN

     (AS
AMENDED AND RESTATED JUNE 24,
2008)

     

    1.           Purpose. The purpose of this
CarMax, Inc. 2002 Non-Employee Directors Stock Incentive Plan (the “Plan”) is to
encourage ownership in CarMax, Inc. (the “Company”) by non-employee members of
the Board of Directors of the Company, in order to promote long-term shareholder
value and to provide non-employee directors with an incentive to continue as
directors of the Company.

    


    2.           Definitions. As used in the
Plan, the following terms have the meanings indicated:

    


    (a)           “Act”
means the Securities Exchange Act of 1934, as amended.

    


    (b)           “Board”
means the Board of Directors of the Company.

    


    (c)           “Change
of Control” means the occurrence of either of the following events: (i) any
individual, entity or group (as defined in Section 13(d)(3) of the Act) becomes,
or obtains the right to become, the beneficial owner (as defined in Rule
13(d)(3) under the Act) of Company securities having 20% or more of the combined
voting power of the then outstanding securities of the Company that may be cast
for the election of directors to the Board of the Company (other than as a
result of an issuance of securities initiated by the Company in the ordinary
course of business); or (ii) as the result of, or in connection with, any cash
tender or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions, the
persons who were directors of the Company before such transactions shall cease
to constitute a majority of the Board or of the board of directors of any
successor to the Company.

    


    (d)           “Code”
means the Internal Revenue Code of 1986, as amended.

    


    (e)           “Company”
means CarMax, a Virginia corporation.

    


    (f)           “Company
Stock” means shares of CarMax Common Stock subject to the limits of Section 4.
Such shares shall be subject to adjustment as provided in Section
14.

    


    (g)           “Date
of Grant” means the date on which an Incentive Award is granted by the
Board.

    


    (h)           “Disability”
or “Disabled” means a disability as determined by the Board.

    


    (i)           “Fair
Market Value” means, for any given date, the fair market value of the Company
Stock as of such date, as determined by the Board on a basis consistently
applied based on actual transactions in Company Stock on the exchange on which
it generally has the greatest trading volume.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    (j)           “Incentive
Award” means, collectively, the award of an Option, Stock Appreciation Right,
Restricted Stock, or Stock Grants under the Plan.

    


    (k)           “Nonstatutory
Stock Option” means an Option that does not meet the requirements of Code
section 422 or, even if meeting the requirements of Code section 422, is not
intended to be an incentive stock option under Code section 422 and is so
designated.

    


    (l)           “Option”
means a right to purchase Company Stock granted under the Plan, at a price
determined in accordance with the Plan.

    


    (m)           “Participant”
means any non-employee member of the Board who receives an Incentive Award under
the Plan.

    


    (n)           “Restricted
Stock” means Company Stock awarded upon the terms and subject to the
restrictions set forth in Section 6.

    


    (o)           “Restricted
Stock Award” means an award of Restricted Stock granted under the
Plan.

    


    (p)           “Rule
16b-3” means Rule 16b-3 adopted pursuant to section 16(b) of the Act. A
reference in the Plan to Rule 16b-3 shall include a reference to any
corresponding rule (or number redesignation) of any amendments to Rule 16b-3
adopted after the effective date of the Plan’s adoption.

    


    (q)           “Stock
Appreciation Right” means a right to receive amounts from the Company awarded
upon the terms and subject to the restrictions set forth in Section
8.

    


    (r)           “Stock
Grant” means Company Stock awarded without restrictions in accordance with
Section 9.

    


    3.           General. Incentive Awards may
be granted under the Plan in the form of Nonstatutory Stock Options, Stock
Appreciation Rights, Restricted Stock, and Stock Grants.

    


    4.           Stock. Subject to Section 14
of the Plan, there shall be reserved for issuance under the Plan an aggregate of
1,000,000 shares of CarMax Common Stock, which shall be authorized, but unissued
shares.  Shares of CarMax Common Stock that have not been issued and
allocated to options or portions thereof that expire or otherwise terminate
unexercised may be subjected to an Incentive Award under the Plan. Shares of a
series of Company Stock that have not been issued under the Plan and that are
allocable to Incentive Awards or portions thereof that expire or otherwise
terminate unexercised may again be subjected to an Incentive Award under the
Plan relating to shares of the same series of Company Stock. Similarly, if any
shares of Restricted Stock issued pursuant to the Plan are reacquired by the
Company as a result of a forfeiture of such shares pursuant to the Plan, such
shares may again be subjected to an Incentive Award under the Plan relating to
shares of the same series of Company Stock as those reacquired.

    


    
      
        
           


        

        
          2

          
            

          

        

        
           


        

      

    

    


    5.           Eligibility.

    


    (a)           Each
director of the Company who is not a full-time employee of the Company or any
parent or subsidiary of the Company shall be eligible to receive Incentive
Awards under the Plan. The Board shall have the power and complete discretion,
as provided in Section 15, to select which directors shall receive Incentive
Awards and to determine for each such Participant the terms and conditions, the
nature of the award and the number of shares to be allocated to each Participant
as part of each Incentive Award.

    


    (b)           The
grant of an Incentive Award shall not obligate the Company to pay a Participant
any particular amount of remuneration or to make further grants to the
Participant at any time thereafter.

    


    6.           Restricted Stock
Awards.

    


    (a)           Whenever
the Board deems it appropriate to grant a Restricted Stock Award, notice shall
be given to the Participant stating the number of shares of Restricted Stock for
which the Restricted Stock Award is granted and the terms and conditions to
which the Restricted Stock Award is subject. This notice shall become an award
agreement between the Company and the Participant. A Restricted Stock Award may
be made by the Board in its discretion without cash consideration.

    


    (b)           Restricted
Stock issued pursuant to the Plan shall be subject to the following
restrictions:

    


    (i)           None
of such shares may be sold, assigned, transferred, pledged, hypothecated, or
otherwise encumbered or disposed of until the restrictions on such shares shall
have lapsed or shall have been removed pursuant to paragraph (d) or (e)
below.

    


    (ii)           The
restrictions on such shares must remain in effect and may not lapse for a period
of three years beginning on the date of grant, except as provided under
paragraph (d) or (e) in the case of Disability, retirement, death or a Change in
Control.

    


    (iii)           If
a Participant ceases to be a director of the Company, the Participant shall
forfeit to the Company any shares of Restricted Stock, the restrictions on which
shall not have lapsed or shall not have been removed pursuant to paragraph (d)
or (e) below, on the date such Participant shall cease to serve as a member of
the Board.

    


    (iv)           The
Board may establish such other restrictions on such shares that the Board deems
appropriate, including, without limitation, events of forfeiture.

    


    (c)           Upon
the acceptance by a Participant of a Restricted Stock Award, such Participant
shall, subject to the restrictions set forth in paragraph (b) above, have all
the rights of a shareholder with respect to the shares of Restricted Stock
subject to such Restricted Stock Award, including, but not limited to, the right
to vote such shares of Restricted Stock and the right to receive all dividends
and other distributions paid thereon. Certificates representing Restricted Stock
shall bear a legend referring to the restrictions set forth in the Plan and the
Participant’s award

    


    
      
        
           


        

        
          3

          
            

          

        

        
           


        

      

    

    


    agreement.
If shares of Restricted Stock are issued without certificates, notice of the
restrictions set forth in the Plan and the Participant’s Award Agreement must be
given to the shareholder in the manner required by law.

    


    (d)           The
Board shall establish as to each Restricted Stock Award the terms and conditions
upon which the restrictions set forth in paragraph (b) above shall lapse. Such
terms and conditions may include, without limitation, the lapsing of such
restrictions as a result of the Disability, death or retirement of the
Participant or the occurrence of a Change of Control.

    


    (e)           Notwithstanding
the forfeiture provisions of paragraph (b)(iii) above, the Board may at any
time, in its sole discretion, accelerate the time at which any or all
restrictions will lapse or remove any and all such restrictions.

    


    7.           Stock Options.

    


    (a)           Whenever
the Board deems it appropriate to grant Options, notice shall be given to the
eligible non-employee director stating the number of shares for which Options
are granted, the Option price per share, the extent, if any, to which Stock
Appreciation Rights are granted, and the conditions to which the grant and
exercise of the Options are subject. This notice shall become a stock option
agreement between the Company and the eligible non-employee
director.

    


    (b)           The
exercise price of shares of Company Stock covered by a Nonstatutory Stock Option
shall be not less than 100% of the Fair Market Value of such shares on the Date
of Grant.

    


    (c)           Options
may be exercised in whole or in part at such times as may be specified by the
Board in the Participant’s stock option agreement.

    


    (d)           The
Board may, in its discretion, grant Options that by their terms become fully
exercisable upon a Change of Control notwithstanding other conditions on
exercisability in the stock option agreement.

    


    8.           Stock Appreciation
Rights.

    


    (a)           Whenever
the Board deems it appropriate, Stock Appreciation Rights may be granted. The
terms and conditions of the award shall be set forth in a stock appreciation
rights agreement between the Company and the Participant. The following
provisions apply to all Stock Appreciation Rights that are granted:

    


    (i)           Stock
Appreciation Rights shall entitle the Participant, upon the exercise of all or
any part of the Stock Appreciation Rights, to receive from the Company an amount
equal to the excess of (x) the fair market value on the date of exercise of the
Company Stock covered by the Stock Appreciation Rights over (y) the fair market
value on the Date of Grant of the Company Stock covered by the Stock
Appreciation Rights. The Board may limit the amount that the Participant may be
entitled to receive upon exercise of the Stock Appreciation Right.

    


    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

    


    (ii)           Stock
Appreciation Rights shall be exercisable, in whole or in part, at such times as
the Board shall specify in the Participant’s stock appreciation rights
agreement.

    


    (b)           The
manner in which the Company’s obligation arising upon the exercise of a Stock
Appreciation Right shall be paid shall be determined by the Board and shall be
set forth in the Participant’s stock appreciation rights agreement. The Board
may provide for payment in Company Stock or cash, or a fixed combination of
Company Stock or cash, or the Board may reserve the right to determine the
manner of payment at the time the Stock Appreciation Right is exercised. Shares
of Company Stock issued upon the exercise of a Stock Appreciation Right shall be
valued at their Fair Market Value on the date of exercise.

    


    9.           Stock Grants.

    


    (a)           Whenever
the Board deems it appropriate, a Stock Grant may be made to eligible
non-employee directors. The Board shall have complete discretion to make such
Stock Grants and may do so whenever it considers it appropriate.

    


    (b)           Whenever
the Board deems it appropriate, it may permit eligible non-employee directors to
elect to receive a Stock Grant in lieu of retainer, meeting fees or other such
fees to which such directors would otherwise be entitled. The Company Stock to
be issued in connection with such a Stock Grant shall have a Fair Market Value
equal to such fees otherwise payable, determined as of the date on which such
payment of fees would otherwise become payable to such member of the
Board.

    


    10.           Method of Exercise of Options and
Stock Appreciation Rights.

    


    (a)           Options
and Stock Appreciation Rights may be exercised by the Participant giving notice
of the exercise to the Company, stating the number of shares the Participant has
elected to purchase under the Option or the number of Stock Appreciation Rights
he has elected to exercise. In the case of a purchase of shares under an Option,
such notice shall be effective only if accompanied by the exercise price in full
paid in cash; provided that, if the terms of an Option so permit, the
Participant may: (i) deliver shares of Participant-owned Company Stock (valued
at their Fair Market Value on the date of exercise) in satisfaction of all or
any part of the exercise price; or (ii) to the extent permitted under applicable
laws and regulations, deliver a properly executed exercise notice together with
irrevocable instructions to a broker to exercise all or part of the Option, sell
a sufficient number of shares of Company Stock to cover the exercise price and
other costs and expenses associated with such sale and deliver promptly the
amount necessary to pay the exercise price. The Participant shall not be
entitled to make payment of the exercise price other than in cash unless
provisions for an alternative payment method are included in the Participant’s
stock option agreement or are agreed to in writing by the Company with the
approval of the Board prior to exercise of the Option.

    


    (b)           Until
the Participant has made any required payment, and has had issued to him a
certificate for the shares of Company Stock acquired, he shall possess no
shareholder rights with respect to the shares.

    


    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

    


    


    (c)           Notwithstanding
anything herein to the contrary, if the Company is subject to section 16 of the
Act, Options and Stock Appreciation Rights shall always be granted and exercised
in such a manner as to conform to the provisions of Rule 16b-3.

    


    (d)           Any
shares of already owned Company Stock that are delivered by a Participant in
satisfaction of all or any part of the exercise price of an Option shall be of
the same series of Company Stock as the shares of Company Stock to which such
Incentive Award relates.

    


    11.           Transferability of Incentive
Awards. Nonstatutory Stock Options and Stock Appreciation Rights may be
transferable by a Participant and exercisable by a person other than the
Participant, but only to the extent specifically provided in the Incentive
Award; provided, however, that no transfer for value or consideration will be
permitted without the prior approval of the Company’s shareholders.

    


    12.           Effective Date of the Plan and
Transition.

    


    (a)           This
Plan shall be effective as of the date of separation between the Company and
Circuit City Stores, Inc., and shall be submitted to the shareholders of Circuit
City Stores, Inc. for approval prior to the separation. No Option or Stock
Appreciation Right shall be exercisable and no Company Stock shall be issued
under the Plan until (i) the Plan has been approved by the Company’s
shareholders, (ii) shares issuable under the Plan have been registered with the
Securities and Exchange Commission and accepted for listing on the New York
Stock Exchange upon notice of issuance, and (iii) the requirements of any
applicable state securities laws have been met.

    


    (b)           As
of the date of separation between the Company and Circuit City Stores, Inc.,
this Plan shall assume obligations, including outstanding awards, from the
Circuit City Stores, Inc. Amended And Restated 1989 Non-Employee Directors Stock
Option Plan, to the extent provided in an agreement between the Company and
Circuit City Stores, Inc.

    


    13.           Termination, Modification,
Change. If not sooner terminated by the Board, this Plan shall terminate
at the close of business on June 24, 2018.  No Incentive Awards shall
be granted under the Plan after its termination. The Board may terminate the
Plan or may amend the Plan in such respects as it shall deem advisable; provided
that no change shall be made that increases the total number of shares of
Company Stock reserved for issuance pursuant to Incentive Awards granted under
the Plan (except pursuant to Section 14) or permit repricing of options, unless
such change is authorized by the shareholders of the Company. Notwithstanding
the foregoing, the Board may unilaterally amend the Plan and Incentive Awards as
it deems appropriate to ensure compliance with Rule 16b-3. Except as provided in
the preceding sentence, a termination or amendment of the Plan shall not,
without the consent of the Participant, adversely affect a Participant’s rights
under an Incentive Award previously granted to him.

    


    
      
        
           


        

        
          6

          
            

          

        

        
           


        

      

    

    


    14.           Change in Capital
Structure.

    


    (a)           The
number of shares reserved for issuance under the Plan, the terms of Incentive
Awards, and all computations under the Plan shall be appropriately adjusted by
the Board should the Company effect one or more stock dividends, stock splits,
subdivisions or consolidations of shares, or other similar changes in
capitalization, or if the par value of Company Stock is altered; provided,
however, that no adjustment of an outstanding Option or Stock Appreciation Right
may be made that would create a deferral of income or a modification, extension
or renewal of such Option or Stock Appreciation Right under Code Section 409A
except as may be permitted in applicable Treasury Regulations. If the adjustment
would produce fractional shares with respect to any unexercised Option, the
Board may adjust appropriately the number of shares covered by the Option so as
to eliminate the fractional shares.

    


    (b)           If
the Company is a party to a consolidation or merger in which the Company is not
the surviving corporation, a transaction that results in the acquisition of
substantially all of the Company’s outstanding stock by a single person or
entity, or a sale or transfer of substantially all of the Company’s assets, the
Board may take such actions with respect to outstanding Incentive Awards as the
Board deems appropriate.

    


    (c)           Any
determination made or action taken under this Section 14 by the Board shall be
final and conclusive and may be made or taken without the consent of any
Participant.

    


    15.           Administration of the Plan.
The Plan shall be administered by the Board. The Board shall have general
authority to impose any limitation or condition upon an Incentive Award that the
Board deems appropriate to achieve the objectives of the Incentive Award and the
Plan and, without limitation and in addition to powers set forth elsewhere in
the Plan, shall have the following specific authority:

    


    (a)           The
Board shall have the power and complete discretion to determine (i) which
eligible non-employee directors shall receive an Incentive Award and the nature
of the Incentive Award, (ii) the number of shares of Company Stock to be covered
by each Incentive Award, (iii) when, whether and to what extent Stock
Appreciation Rights shall be granted, (iv) the fair market value of Company
Stock, (v) the time or times when an Incentive Award shall be granted, (vi)
whether an Incentive Award shall become vested over a period of time and when it
shall be fully vested, (vii) when Options and Stock Appreciation Rights may be
exercised, (viii) whether a Disability exists, (ix) the manner in which payment
will be made upon the exercise of Options or Stock Appreciation Rights, (x)
conditions relating to the length of time before disposition of Company Stock
received upon the exercise of Options or Stock Appreciation Rights is permitted,
(xi) the terms and conditions applicable to Restricted Stock Awards, (xii) the
terms and conditions on which restrictions upon Restricted Stock shall lapse,
(xiii) whether to accelerate the time at which any or all restrictions with
respect to Restricted Stock will lapse or be removed, (xiv) notice provisions
relating to the sale of Company Stock acquired under the Plan, and (xv) any
additional requirements relating to Incentive Awards that the Board deems
appropriate. The Board shall have the power to amend the terms of previously
granted Incentive Awards so long as the terms as amended are consistent with the
terms of the Plan and provided that the consent of the Participant is obtained
with respect to any amendment that would be detrimental to the

    


    
      
        
           


        

        
          7

          
            

          

        

        
           


        

      

    

    


    participant,
except that such consent will not be required if such amendment is for the
purpose of complying with Rule 16b-3.

    


    (b)           The
Board may adopt rules and regulations for carrying out the Plan. The
interpretation and construction of any provision of the Plan by the Board shall
be final and conclusive. The Board may consult with counsel, who may be counsel
to the Company, and shall not incur any liability for any action taken in good
faith in reliance upon the advice of counsel.

    


    (c)           A
majority of the members of the Board shall constitute a quorum, and all actions
of the Board shall be taken by a majority of the members present. Any action may
be taken by a written instrument signed by all of the members, and any action so
taken shall be fully effective as if it had been taken at a
meeting.

    


    16.           Notice. All notices and other
communications required or permitted to be given under this Plan may be in
writing and shall be deemed to have been duly given if delivered personally or
mailed first class, postage prepaid, as follows: (a) If to the Company—at its
principal business address to the attention of the Secretary; (b) If to any
Participant—at the last address of the Participant known to the sender at the
time the notice or other communication is sent.

    


    17.           Miscellaneous. By accepting
any Incentive Award under the Plan, each Participant, and each person claiming
under or through such person, shall be conclusively deemed to have given his or
her acceptance and ratification of, and consent to, any action taken with
respect thereto by the Company or the Board.

    


    IN
WITNESS HEREOF, this instrument has been executed this 24th day of
June, 2008.

     

    


    
      	 
      	
              CARMAX,
      INC.

            
	 
      	 
      
	 
      	
              By: /s/ Eric
      M. Margolin

            
	 
      	
              Eric
      M. Margolin

            
	 
      	
              Senior
      Vice President,

            
	 
      	
              General
      Counsel and Corporate Secretary

            


    

    


     

     

    
 

    

8