Document:

Form of Incentive Award Agreement

 Exhibit 10.17 
  
 <Date> 
  
 <Name> 
 <Address> 
 <City, State, Zip> 
  
 Dear <First Name>: 
  
 The Board of
Directors of CarMax, Inc. wants to provide you with an opportunity to share in the success of our Company. 
  
 Accordingly, I am pleased to inform you that, as of                     ,
200     (the “Grant Date”), the Compensation Committee of the Company’s Board of Directors exercised its authority pursuant to the Amended and Restated 2002 Stock Incentive Plan (the “Plan”) and
granted you non-statutory options to purchase shares of the Common Stock of CarMax, Inc. (“CarMax Options”) as set forth herein. These options are not qualified for Incentive Stock Option tax treatment. Limited stock
appreciation rights (“SARs”), described below, were also granted in connection with these options. 
  

			
	Number of Shares Subject to Option:	  	<NUMBER>
	Option Price Per Share:	  	<$>

  
 Vesting of Options

  
 Your date for measuring vesting (“Vesting Date”) is
                    , 200    . The ability to acquire CarMax Options will vest according to the following
schedule: one-fourth on                     , 200    , one-fourth on
                    , 200    , one-fourth on
                    , 200    , and one-fourth on
                    , 200    . In other words, on
                    , 200_, and on each of the three succeeding anniversaries of that date, you shall become entitled to exercise
cumulatively a total of 25%, 50%, 75% and 100%, respectively, of the option shares. Notwithstanding any other provision contained in this agreement, no portion of the CarMax Options may vest until a minimum of six months from the date of issuance,
including options that would otherwise immediately vest following your death, disability, or retirement. 
  
 Termination of Options 
  
 The
CarMax Options shall terminate upon the earliest to occur of the following conditions: 
  

	 	1.	Expiration. The CarMax Options will expire on                     ,
200     (the “Expiration Date”). 

  

	 	2.	By Death, Disability, or Retirement; Immediate Vesting. If your employment by the Company terminates because you die, become disabled or retire (in accordance with retirement
eligibility provisions of the Company’s retirement plan), all of your CarMax Options covered by this agreement will become immediately vested, effective as of the date of your termination. For termination by reason of death or disability, you,
your personal representative, distributees, or legatees, as applicable, must exercise your vested CarMax Options within one (1) year of your termination date or they will expire. For termination by reason of retirement, you must exercise your vested
CarMax Options within three (3) months of your termination date or they will expire. 

	 	3.	Termination For Cause. Upon termination of your employment with CarMax for cause as defined in your Executive Employment Agreement dated
                    , 200     (termination for “Cause”), your CarMax Options will terminate
immediately. 

  

	 	4.	Termination Without Cause; Resignation. In the event that your employment with CarMax is terminated without cause as defined in your Executive Employment Agreement dated
                    , 200     (“Termination Without Cause”), or in the event that you resign from
CarMax, you must exercise your vested CarMax Options within three (3) months of your termination date or they will expire. Options that have not vested by your termination date will expire on your termination date. Employees on authorized leave will
not be considered as having terminated merely by reason of the leave and will continue to be eligible to exercise and sell their CarMax Options during the period of the leave. 

  
 Exercise of Options  
  
 When the CarMax Options are exercisable, you may purchase CarMax shares under your option
grant by: 
  

	 	1.	Giving written notice to CarMax, signed by you, stating the number of shares you have elected to purchase. 

  

	 	2.	Remitting payment of the purchase price in full. You may deliver previously owned shares of CarMax, Inc. stock in satisfaction of all or any part of the purchase price or make other
arrangements satisfactory to CarMax regarding payment of the purchase price. 

  

	 	3.	Remitting payment to satisfy the income tax withholding requirements for non-statutory options. 

  
 Change of Control; SARs 
  
 Notwithstanding anything to the contrary herein, if a Change of Control as defined in the Plan occurs, all unexpired and unvested CarMax Options granted hereunder shall
immediately vest and you shall have the right during the period beginning on the date of the Change of Control and ending on the Expiration Date to exercise any and all such CarMax Options in accordance with the provisions contained herein. The
vested portion of the CarMax Options may be exercised at any time during the period beginning with the vesting date and ending on
                    , 200     (the “Expiration Date”). 
  
 Also, following a Change of Control, you may choose to exercise the SARs granted hereunder in
lieu of exercising those CarMax Options which have immediately vested. Doing so will relieve you of the obligation to pay for the exercise of your CarMax Options as described above and, instead, will allow you to receive a cash payment of the net
value of your SARs as calculated below without having to remit any payment to the Company. The SARs granted in connection with the options are limited SARs and may be exercised in accordance with the Plan and the terms hereof as follows: 

 

	 	1.	The SARs shall only be exercisable if a Change of Control occurs. In such event, they will be exercisable at any time during a period of 90 days beginning on the date the Change of
Control occurs unless such date is before                     , 200    , in which case the 90 days
will begin on                     , 200    . To the extent that the SARs or their underlying options are not
exercised during an exercise period, the SARs will become unexercisable again until such time as another Change of Control occurs or
                    , 200    , when they expire. 

	 	2.	When the SARs become exercisable, you may purchase CarMax shares under your option grant by giving written notice to CarMax, signed by you, stating the number of SARs that you are
exercising. 

  

	 	3.	Upon exercise of the SARs, you shall receive in exchange from the Company an amount equal to the excess of (x) the fair market value of the Company’s Common Stock on the date
of exercise, over (y) the option price of the Common Stock covered by the underlying option. The fair market value of the Company’s Common Stock on the date of exercise shall be deemed to be the greater of: 

  
 a) The closing price of the Company’s Common Stock on the exchange on
which it is then traded on the date immediately preceding the date of exercise; or 
  
 b) The highest closing price of the Company’s Common Stock on the exchange on which it is then traded, during the 90 days immediately preceding the Change of Control. 
  

	 	4.	The Company’s obligation arising upon exercise of the SARs shall be paid in cash. 

  

	 	5.	To the extent a SAR is exercised, the underlying CarMax Option must be surrendered. The underlying CarMax Option, to the extent surrendered, shall no longer be exercisable.

  
 Stock Splits 
  
 If the number of outstanding shares of CarMax’s Common Stock is increased or decreased
as a result of a stock dividend, stock split, subdivision or consolidation of shares, or other similar change in capitalization, the number of CarMax shares for which you have unexercised CarMax Options and the option price will automatically be
adjusted (i) so as to preserve the ratio that existed immediately before the change between the number of such shares and the total number of shares of CarMax stock previously outstanding, and (ii) so that your aggregate option price remains the
same; provided, however, that CarMax will not be required to issue any fractional shares upon exercise of your options as a result of such adjustment. 
  
 Stock Certificates 
  
 CarMax may place on any certificate representing CarMax stock issued upon the exercise of a CarMax Option any legend deemed desirable by its counsel to comply with
Federal or state securities laws (or may take equivalent action with respect to any uncertificated shares of CarMax stock), and may require from you a customary written indication of your investment intent. Until you have made any required payment,
including any withholding taxes, and have had issued to you a certificate (or other written confirmation of ownership in the uncertificated shares) for the shares of CarMax stock acquired, you shall possess no shareholder rights with respect to the
shares. 
  
 Non-Transferability; Legal Fees 
  
 The CarMax Options are not transferable by you otherwise than by will or by the laws of
descent and distribution and are exercisable during your lifetime only by you. The grant of these CarMax Options does not obligate CarMax to continue your employment after the grant. If there is any litigation involving CarMax Options, each party
will bear its own expenses, including all legal fees, except that in the event of an action brought by you under this Agreement following a Change in Control, then insofar as such action is not deemed to be frivolous by the arbitrator, the Company
shall bear all expenses related to the arbitration, including all legal fees incurred by you. The Compensation Committee of the Company’s Board of Directors shall have the authority to interpret and administer this agreement. 

 Please indicate your acceptance of the terms and conditions pertaining to the stock options granted herein by signing
your name in the space provided below and returning one copy to the attention of Keith Browning, Executive Vice President & Chief Financial Officer. When signed by you, this letter will become a Stock Option Agreement between you and CarMax.
This letter will not be effective as a Stock Option Agreement unless it is signed and returned to Keith Browning at the CarMax Corporate Headquarters (4900 Cox Road, Glen Allen, VA 23060), as soon as possible, but in no event later than
                    , 200    . Such acceptance places no obligation or commitment on you to exercise the
options. 
  
 Please return this agreement in a separate envelope via intercompany
mail. Do not use overnight mail to return the agreement. 
  
 Sincerely, 
  
 Austin Ligon 
 President & Chief Executive Officer 
  

					
	ACCEPTED:	 	 	 	 
	
	  

	Signature	 	 	 	 
			
	  

	 	 	 	

	Printed Name	 	 	 	Social Security Number
			
	  

	 	 	 	 
	DateForm of Incentive Award Agreement

 Exhibit 10.18 
  
 <Date> 
  
 <Name> 
 <Address> 
 <City, State, Zip> 
  
 Dear <First Name>: 
  
 You have been
granted a non-statutory stock option to purchase shares of the common stock of CarMax, Inc. (“the Company”) as explained below. This grant is made pursuant to the Amended and Restated 2002 Non-Employee Directors Stock Incentive Plan (the
“Plan”). 
  
 The Plan contains certain general terms applicable to all
grants made under the Plan, which are not repeated in this agreement. However, such terms are incorporated herein by reference. In the case of any conflict between the Plan and this letter, the terms of the Plan will control. Copies of the
Company’s annual report to shareholders, Form 10-K for Fiscal 200_, as well as copies of the Plan are available from
                                     at our Corporate
office, by calling (804)             -             extension
                        .  
  

Option 
  
 You have been granted a non-statutory option (the “Option”) to purchase from the Company the following shares of common stock: 
  

			
	Shares of CarMax, Inc. Common Stock:	  	<Number>
	Option Price Per Share:	  	<$>
	Date Fully Vested:	  	<Date>

  
 Vesting of Option 

 
 The shares covered by the Option shall vest, and shall be exercisable, on the earliest of
the following dates: 
  

	 	1.	The business day immediately preceding the date of
                    , 200    , with respect to 1/3 of the shares covered by the Option.

  

	 	2.	The business date immediately preceding the date of
                    , 200    , with respect to 2/3 of the shares covered by the Option.

  

	 	3.	The business day immediately preceding the date of
                    , 200    , with respect to all of the shares covered by the Option.

  

	 	4.	The date on which you cease to be a Director of the Company on account of your death. 

  

	 	5.	The date on which your service as a Director of the Company ends, if you have completed six years of service as a Director. 

  

	 	6.	The date of a Change of Control, as defined in the Plan. 

  
 The Option may be exercised in whole or in part, from the dates described immediately above until the Option terminates, as described below. 
  
 Termination of Option 
  
 The Option shall terminate under the following conditions: 
  

	 	1.	By Death. If you die while serving as a Director of the Company, your personal representatives, distributes, or legatees may purchase any or all of the vested shares under the
Option, but only during the one-year period immediately following your death. 

	 	2.	By Disability. If you resign your position as a Director of the Company on account of a disability (as defined in the Plan), you may purchase any or all of the vested shares under
the Option, but only during the one-year period immediately following your resignation. 

  

	 	3.	Cessation of Service. If you cease serving as a Director of the Company for reasons other than death or disability, you may purchase any or all of the vested shares under the
Option, but only during the period of time immediately following your resignation equal to the number of years you served as a Director of the Company, divided by five (5) (rounded down to the next full integer), plus one (1) year.

  

	 	4.	Expiration. The Option will expire on the day after the eighth anniversary of the date of this letter. Notwithstanding the provisions of paragraphs 1, 2 and 3 immediately above, the
Option may not be exercised after this date. 

  
 Exercise of
Option 
  
 You may exercise the Option in whole or in part, but only with
respect to whole shares of stock. You may purchase shares covered under the Option by: 
  

	 	1.	Giving written notice to the Company, signed by you, stating the number of shares and series of Company stock you have elected to purchase. 

  

	 	2.	Remitting payment of the purchase price in full. You may deliver previously owned shares of Company stock in satisfaction of all or any part of the purchase price, provided such
shares are of the same series of Company stock as the shares you are purchasing. 

  
 Transferability of Option 
  
 Except as
provided below, the Option is not transferable by you other than by will or by the laws of descent and distribution and is exercisable during your lifetime only by you. You may transfer your rights under the Option during your lifetime subject to
the following limitations: 
  

	 	1.	Transfers are allowed only to the following transferees: 

  

	 	a)	Your children, step-children, grandchildren, step-grandchildren or other lineal descendants (including relationships arising from legal adoptions). Such individuals are hereinafter
referred to as “Immediate Family Members”. 

  

	 	b)	Trust(s) for the exclusive benefit of any one or more of your Immediate Family Members (your spouse may also be a beneficiary). 

  

	 	c)	Partnership(s), limited liability company(ies) or other entity(ies), the only partners, members or interest holder of which are among your Immediate Family Members (your spouse may
also hold an interest). 

  

	 	2.	You may not receive any consideration in connection with the transfer. 

  

	 	3.	Transferees may not subsequently transfer their rights under the Option except by will or by the laws of descent or distribution. 

  

	 	4.	Following the transfer, the Option will continue to be subject to the same terms and conditions as were applicable immediately prior to transfer (except that the transferee may
deliver the Option exercise notice and payment of the exercise price). 

  

	 	5.	You must give written notice of the transfer to the Company. 

 Adjustments 
  
 If the number of outstanding shares of the Company’s common stock is increased or decreased as a result of a subdivision or consolidation of shares, the payment of a
stock dividend, stock split, or any other similar changes in capitalization, or if the par value of the Company’s common stock is altered, the number of shares with respect to which you have an unexercised Option and the Option price will
automatically be increased or decreased (i) so as to preserve the ratio that existed immediately before the change between the number of such shares and the total number of shares of the Company’s common stock previously outstanding, and (ii)
so that your aggregated Option price remains the same; provided, however, that the Company shall not be required to issue any fractional shares upon exercise of your Option as a result of such adjustment. 
  
 Acceptance of Option 
  
 Please indicate your acceptance of the terms and conditions pertaining to the Option granted herein by signing your name in the space
provided below and returning one copy of this letter to my attention at the following address: 
  
 CarMax, Inc. 
 4900 Cox Road 
 Glen Allen, Virginia 23060 
  
 When signed by you,
this letter will become the Company’s Stock Option Agreement with you. All other terms of this letter notwithstanding, unless the Company otherwise agrees in writing, this letter will not be effective as a Stock Option Agreement if such copy is
not so signed and returned to me as soon as possible, but in no event later than                     ,
200    . Such acceptance places no obligation or commitment on you to exercise the Option. 
  
 Sincerely, 
  
 Keith D. Browning 
 Executive Vice President and Chief Financial Officer 
  
 Accepted this      day of
                    , 200     
  

	
	  
  

	Signature
	  

	Printed Name

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