Document:

exhibit101.htm

    

      
        

      
Exhibit 10.1

      CARMAX,
INC.

      NOTICE OF
STOCK OPTION GRANT

      

      

      

      %%FIRST_NAME%-%
%%LAST_NAME%-%

      %%ADDRESS_LINE_1%-%

      %%ADDRESS_LINE_2%-%

      %%CITY%-%
, %%STATE%-%  %%ZIPCODE%-%

      

      

      Dear
%%FIRST_NAME%-% %%LAST_NAME%-%

      

      The Board
of Directors of CarMax, Inc. (the “Company”) 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 %%OPTION_DATE%_% the Compensation and
Personnel Committee of the Board of Directors of the Company (the “Committee”)
exercised its authority pursuant to the CarMax, Inc. 2002 Stock Incentive Plan,
as amended and restated (the “Plan”) and granted you non-statutory options
to purchase shares of the common stock of CarMax, Inc. (the “Options”) as set
forth herein.  The 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.

      

      The
Options and SARs are subject to the provisions of the Plan.  The
Committee administers the Plan.  The terms of the Plan are
incorporated into this notice of Stock Option Grant (the “Notice of Grant”) and
in the case of any conflict between the Plan and this Notice of Grant, the terms
of the Plan shall control.  All capitalized terms not defined herein
shall have the meaning given to them in the Plan.  Please refer to the
Plan for certain conditions not set forth in this Notice of
Grant.  Additionally, a copy of a Prospectus for the Plan, which
describes material terms of the Plan, can be found on The CarMax
Way.  Copies of the Prospectus, the Plan and the Company’s annual
report to shareholders on Form 10-K for fiscal year 20__ are available from the
Company’s corporate secretary at (804) 747-0422.

      

      Number
of Shares Subject to
Option:                                          %%TOTAL_SHARES_GRANTED%-%

      Option
Price Per
Share:                                                                %%OPTION_PRICE%-%

      

      

      Vesting of
Options

      

      Except as
otherwise provided in this Notice of Grant, the Options will vest and become
exercisable according to the following schedule:  one-fourth on
%%VEST_DATE_PERIOD1%-% , one-fourth on %%VEST_DATE_PERIOD2%-% , one-fourth on
%%VEST_DATE_PERIOD3%-% , and one-fourth on %%VEST_DATE_PERIOD4%-% provided you
continue to be employed by the Company on such dates.

      

      Termination of
Options

      

      The
unexercised Options shall terminate upon the earliest to occur of the following
conditions:

      

      
        	
                1.  

              	
                Expiration.  The
      Options will expire on %%EXPIRE_DATE_PERIOD1%-% (the “Expiration
      Date”).

              

      

      

      
        	
                2.  

              	
                Termination
      Without Cause or for Good Reason; Immediate Vesting.  If the
      Company terminates your employment with the Company for any reason other
      than Cause (as defined in your employment or severance agreement with the
      Company), including for “Involuntary Termination Without Cause” or
      “Termination Without Cause”, as applicable, as defined in your employment
      or severance agreement with the Company, or you terminate your employment
      for “Good Reason”, if applicable, as defined in your employment or
      severance agreement with the Company, all of your Options will become
      immediately vested and exercisable, effective as of the date of the
      termination of your employment. Except as otherwise provided in the “Age
      and Service Vesting” section set forth below, you, your personal
      representative, distributees, or legatees, must exercise your Options
      within three (3) months of the effective date of such
      termination.

              

      

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      
        	
                3.  

              	
                Termination
      For Cause. Upon termination of your employment with the Company for
      “Cause” as defined in your employment or severance agreement with the
      Company, your unexercised vested and unvested Options will terminate
      immediately.

              

      

      

      
        	
                4.  

              	
                Change
      in Full-Time Employment Status.  In the event that your
      employment with the Company changes from full-time to part-time for any
      reason, and notwithstanding the terms of the “Age and Service Vesting”
      section set forth below, your unvested Options will expire on the date of
      the change.  Your vested Options will be unaffected and remain
      subject to the terms of this Notice of
Grant.

              

      

      

      
        	
                5.  

              	
                Resignation;
      Leave.  Except as otherwise provided in the “Age and Service
      Vesting” section set forth below, in the event that you resign your
      employment with the Company, you must exercise your vested Options within
      three (3) months of your resignation date or they will
      expire.  Options that have not vested by your resignation date
      will expire on your resignation date.  Employees on authorized
      leave (as determined under the Company’s authorized leave policy) will not
      be considered as having terminated merely by reason of the leave and will
      continue to be eligible to exercise and sell their Options during the
      period of the leave.

              

      

      

      Exercise of
Options

      

      When the
Options are exercisable, you may purchase shares of Company common stock under
your Option by:

      

      
        	
                1.  

              	
                Giving
      written notice to the Company, signed by you, stating the number of shares
      you have elected to purchase; and

              

      

      

      
        	
                2.  

              	
                Remitting
      payment of the purchase price in full (You may deliver Mature Shares of
      Company common stock that you own in satisfaction of all or any part of
      the purchase price or make other arrangements satisfactory to the Company
      and permitted by the Plan regarding payment of the purchase price);
      and

              

      

      

      
        	
                3.  

              	
                Remitting
      payment to satisfy the income tax withholding requirements for
      non-statutory options or making other arrangements to satisfy such
      withholding that are satisfactory to the Company and permitted by the
      Plan.

              

      

      

      Death or
Disability

      

      If your
employment by the Company terminates because you die or become disabled, all of
your Options covered by this Notice of Grant will become immediately vested and
exercisable, effective as of the date of the termination of your employment, and
you, your personal representative, distributees, or legatees, as applicable, may
exercise your vested Options at any time before the Expiration
Date.

      

      Age and Service
Vesting

      

      If your
employment with the Company is terminated and such termination is not for
“Cause” as defined in your employment or severance agreement with the Company,
and, as of the date if the termination you have:

      

      1.  Attained 55 years of age
and completed ten years of continuous employment with the Company;

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      2.  Attained 62 years of age
and completed seven years of continuous employment with the Company;
or

      

      3.  Attained 65 years of age
and completed five years of continuous employment with the Company;

      

      then, all
of your Options covered by this Notice of Grant will become immediately vested
and exercisable, effective as of the date of the termination of your employment,
and you, your personal representative, distributees, or legatees, as applicable,
may exercise your vested Options at any time before the Expiration
Date.

      

      Transferability of
Options

      

      Except as
provided below, the Options are 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
      spouse, 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.

              

      

      
        	
                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.

              

      

      
        	
                d)  

              	
                Pursuant
      to a court issued divorce decree or Domestic Relations Order (as defined
      in the Code or Title I of the Employee Retirement Income Security Act (or
      rules thereunder)).

              

      

      

      
        	
                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 and the Company
      may require that any transfer is conditioned upon the transferee executing
      any document or agreement requested by the
  Company.

              

      

      

      Any
Option transferred in accordance with the terms hereof shall be accompanied by
the associated SAR.

      

      Change of Control;
SARs

      

      Notwithstanding
the vesting schedule set forth in the “Vesting of Options” section hereof, in
the event of a Change of Control, all unvested Options granted hereunder shall
vest in accordance with the following:

      
        	
                · 50%
      of your unvested Options shall vest upon the date of the Change of
      Control; and

              
	
                · 50%
      of your unvested Options shall vest upon the one year anniversary of the
      date of the Change of Control.  Notwithstanding the foregoing,
      in the event that any of your unvested Options would have vested sooner
      than the one year anniversary of the date of the Change of Control (based
      upon the vesting schedule set forth in the “Vesting of Options” section
      hereof or any other terms or conditions affecting vesting rights contained
      herein), such sooner vesting date shall apply to such unvested
      Options.

              

      

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      You shall
have the right during the period beginning on the applicable vesting date set
forth above and ending on the Expiration Date to exercise any and all vested
Options in accordance with the provisions of this Notice of Grant.

      

      Pursuant
to this Notice of Grant, you have been granted one (1) SAR for every Option
granted to you hereunder.  Following a Change of Control, you may
choose to exercise the SARs granted hereunder in lieu of exercising your vested
Options.  Doing so will relieve you of the obligation to pay for the
exercise of your 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, the SARs will be exercisable at any time
      during a period of 90 days beginning on the date the Change of Control
      occurs.  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
      %%EXPIRE_DATE_PERIOD1%-% , when they
expire.

              

      

      

      
        	
                2.  

              	
                When
      the SARs become exercisable, you may exercise the SARs by giving written
      notice to the Company, 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 value of the Company’s common stock
      on the date of exercise, over (y) the exercise price of the underlying
      Option.  For purposes of this paragraph, the value of the
      Company’s common stock shall be the Fair Market Value of the Company’s
      common stock on the date of exercise; provided, however, if the net after
      tax benefit to you, after considering all applicable taxes, interest and
      penalties, including taxes, interest and penalties imposed under Code
      section 409A, would be greater if the value was determined based on 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, the value of the Company’s common stock shall be such
      higher amount.  The determination of the net after tax benefit
      to you shall be made by the Company in its reasonable
      discretion.

              

      

       

      
        	
                4.  

              	
                      
                  The
      Company’s obligation arising upon exercise of the SARs shall be paid in
      cash and shall be subject to required income tax
      withholdings.

                

              

      

       

      
        	
                5.  

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

                

              

      

      

      Change in Capital
Structure

      

      If the
number of outstanding shares of the Company’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 Company shares for which you have unexercised Options and the exercise price
will automatically be adjusted, as provided in the Plan, (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 Company stock previously outstanding,
and (ii) so that your aggregate Option price remains the same; provided,
however, that the Company will not be required to issue any fractional shares
upon exercise of your Options as a result of such adjustment.

      

      Legal
Fees

      

      The grant
of these Options does not obligate the Company to continue your
employment.  If there is any litigation involving 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 Notice of Grant following a Change of
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 Committee shall have
the authority to interpret and administer this Notice of Grant.

       

      
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      By
accepting this grant on-line, this Notice of Grant, together with the Plan, will
become a Stock Option Agreement between you and the Company which is governed by
and construed and enforced in accordance with the laws of the Commonwealth of
Virginia.  Further, by accepting this grant online, you agree that you
are in compliance with, and will abide by, the Company’s “Policy Against Insider
Trading – Management” which can be found on The CarMax Way.  Further,
by accepting this Notice of Grant, you agree that if you have not yet achieved
the Company stock ownership levels required for your position, as applicable, as
set forth in the Company’s Stock Ownership Guidelines for Certain Executive
Officers, then upon exercise of any Options you will retain at least 50% of the
underlying shares remaining after satisfaction of the option exercise cost and
applicable tax liability.

      

      Sincerely,

      

      

      

      [Name,
Title]

      

      

      ACCEPTED:

      

      Signature

      

      _____________________________

      

      _____________________________                                                   
_______________________

      Printed
Name                                                                                                Employee
ID Number

      

      

      

      

      

      Effective
as of January 1, 2009exhibit102.htm

    
      

    

    Exhibit 10.2

     

    

      CARMAX,
INC.

      NOTICE OF
RESTRICTED STOCK GRANT

      

      [Date]

      

      %%FIRST_NAME%-%
%%LAST_NAME%-%

      %%ADDRESS_LINE_1%-%

      %%ADDRESS_LINE_2%-%

      %%CITY%-%
, %%STATE%-%  %%ZIPCODE%-%

      

      Dear
%%FIRST_NAME%-% %%LAST_NAME%-%

      The Board
of Directors of CarMax, Inc. (the “Company”) 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 %%OPTION_DATE%_% (the “Grant Date”), the
Compensation and Personnel Committee of the Board of Directors of the Company
(the “Committee”) exercised its authority pursuant to the CarMax, Inc. 2002
Stock Incentive Plan, as amended and restated (the “Plan”) and granted you
shares of the common stock of CarMax, Inc. (the “Restricted Shares”) as set
forth herein.

      

      The
Restricted Shares are subject to the provisions of the Plan.  The
Committee administers the Plan.  The terms of the Plan are
incorporated into this Notice of Restricted Stock Grant (the “Notice of Grant”)
and in the case of any conflict between the Plan and this Notice of Grant, the
terms of the Plan shall control.  All capitalized terms not defined
herein shall have the meaning given to them in the Plan.  Please refer
to the Plan for certain conditions not set forth in this Notice of
Grant.  Additionally, a copy of a Prospectus for the Plan, which
describes material terms of the Plan, can be found on The CarMax
Way.  Copies of the Prospectus, the Plan and the Company’s annual
report to shareholders on Form 10-K for fiscal year 20__ are available from the
Company’s corporate secretary at (804) 747-0422.

      

      Number
of Restricted
Shares:       %%TOTAL_SHARES_GRANTED%-%

      

      

      Vesting of Restricted
Shares

      

      Except as
otherwise provided in this Notice of Grant, the Restricted Shares will vest and
become nonforfeitable on %%VEST_DATE_PERIOD1%-% (the “Vesting Date”) provided
you continue to be employed by the Company from the Grant Date until the Vesting
Date.

      

      Restrictions on
Transferability of Restricted Shares

      

      Prior to
the Vesting Date, the Restricted Shares that are not yet vested are not
transferable by you by means of sale, assignment, exchange, pledge or
otherwise.  The Restricted Shares shall be registered on the Company’s
books in your name as of the date hereof.  In the event stock
certificates are issued, custody of such stock certificates shall be retained by
the Company so long as the Restricted Shares are not vested.  As soon
as practicable after the Restricted Shares become vested, the Company will
deliver to you the stock certificate for such shares.  Upon receipt of
such stock certificate you will be free to hold or dispose of the shares
represented by such certificate subject to (1) the general conditions and
procedures provided in the Plan and this Notice of Grant and (2) the applicable
restrictions and procedures of federal and state securities laws.

      

      This
Notice of Grant grants the Company a power of attorney, coupled with an
interest, to administer the Restricted Shares in accordance with the terms
herein.  If requested by the Company, you shall deliver to the Company
a separate stock power, endorsed in blank, with respect to the Restricted
Shares.  By accepting this grant of Restricted Shares you agree that
the Company may use such power of attorney to cancel any Restricted Shares that
do not become vested.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      Shareholder
Rights

      

      Prior to
the Vesting Date, you shall, subject to the restrictions of the Plan and this
Notice of Grant, have all rights of a shareholder with respect to the Restricted
Shares awarded hereunder, including the right to receive dividends, if any,
warrants and rights and to vote the shares.

      

      Tax
Withholding

      

      On the
Vesting Date you will have taxable income equal to the market value of the
shares on that date.  You will be required to reimburse the Company
for the amount of taxes required by any government to be withheld or otherwise
deducted and paid with respect to the vesting of the Restricted Shares (“Tax
Withholdings”).  You must satisfy this obligation by remitting a cash
payment to the Company or by making other arrangements satisfactory to the
Company and permitted by the Plan. In order to reimburse the Company for any Tax
Withholdings, the Company shall have the right to retain and withhold from any
award of the Restricted Shares, the number of Restricted Shares, having a market
value not less than the amount of such taxes, and cancel in whole or in part any
such shares so withheld. The Company shall also have the unrestricted right to
withhold, from any other cash amounts due (or to become due) from the Company to
you, including from your wages or commissions, an amount equal to any Tax
Withholdings.

      

      Forfeiture of Restricted
Shares

      

      Your
Restricted Shares shall be forfeited upon the earliest to occur prior to the
Vesting Date of the following:

      

      
        	
                1.  

              	
                Termination
      of Employment by the Company. Except as otherwise provided in the “Age and
      Service Vesting” section set forth below, upon termination of your
      employment with the Company by the Company for any reason, other than
      death or disability, your unvested Restricted Shares will be immediately
      forfeited.

              

      

      

      
        	
                2.  

              	
                Resignation;
      Leave.  In the event that you resign your employment with the
      Company, any Restricted Shares that have not vested by your resignation
      date will be forfeited on your resignation date, except as otherwise
      provided in the “Age and Service Vesting” section set forth
      below.  Employees on authorized leave will not be considered as
      having terminated merely by reason of the leave; however, in the event you
      are on leave on the Vesting Date, your Restricted Shares shall not vest
      until you return to full-time
employment.

              

      

      

      Death or
Disability

      

      If your
employment by the Company terminates because you die or become disabled, all
Restricted Shares covered by this Notice of Grant will become immediately vested
and nonforfeitable, effective as of the date of the termination of your
employment.

      

      Age and Service
Vesting

      

      If you
terminate your employment with the Company and such termination is not for
cause, and, as of the date if the termination you have:

      

      1.  Attained 55 years of age
and completed ten years of continuous employment with the Company;

      

      2.  Attained 62 years of age
and completed seven years of continuous employment with the Company;
or

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      3.  Attained 65 years of age
and completed five years of continuous employment with the Company;

      

      then, all
Restricted Shares covered by this Notice of Grant will become immediately vested
and nonforfeitable, effective as of the date of the termination of your
employment.

      

      Change of
Control

      

      Notwithstanding
anything to the contrary herein, in the event of a Change of Control, all
unvested Restricted Shares granted hereunder shall immediately
vest.

      

      Change of Capital
Structure

      

      If the
number of outstanding shares of the Company’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 Restricted Shares covered by this Notice of Grant will automatically be
adjusted, as provided in the Plan and as the Committee shall determine to be
equitably required so as to preserve the value of the Restricted Shares that
existed immediately before the change; provided, however, that the Company will
not be required to issue any fractional shares as a result of such
adjustment.

      

      By
accepting this grant on-line, this Notice of Grant, together with the Plan, will
become an agreement between you and the Company that is governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Virginia.  By accepting this online agreement, you agree that you are
in compliance with, and will abide by, the Company’s “Policy Against Insider
Trading – Associates” which can be found on The CarMax Way.

      

      

      Sincerely,

      

      

      

      [Name,
Title]

      

      

      

      ACCEPTED:

      

      Signature

      

      _____________________________

      

      _____________________________                                                    _______________________

      Printed
Name                                                                                                Employee
ID Number

      

      

      

      Effective
as of January 1, 2009

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