Document:

Prepared by R.R. Donnelley Financial -- Form of Annual Performance-Based Bonus Plan

 Exhibit 10.9 
  
 FORM OF
CARMAX, INC. 
 ANNUAL PERFORMANCE-BASED BONUS PLAN 
  
 1.    Purpose.    The purpose of the CarMax, Inc. Annual Performance-Based Bonus Plan (the “Plan”) is to provide an annual performance based incentive for executive officers
who are in a position to contribute materially to the success of the Company and its Subsidiaries. 
  
 2.    Definitions. 
  
 (a)  “Award” means an award
made pursuant to the Plan. 
  
 (b)  “Award Agreement” means the agreement entered into
between the Company and a Participant, setting forth the terms and conditions applicable to an Award granted to the Participant. 
  
 (c)  “Board” means the Board of Directors of the Company. 
  
 (d)  “Change of Control” means the occurrence of either of the following events: (i) a third person, including a “group” as defined in Section 13(d)(3) of the Act, becomes, or obtains the right to become, the
beneficial owner 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. 

 
 (e)  “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (f)  “Code Section 162(m) Award” means an Award intended to satisfy the requirements of Code Section 162(m) and
designated as such in an Award Agreement. 
  
 (g)  “Committee” means the committee appointed
by the Board as described under Section 4. 
  
 (h)  “Company” means CarMax, Inc., a Virginia
corporation. 

  
 (i)  “Covered Employee” means a covered employee within
the meaning of Code Section 162(m)(3). 
  
 (j)  “Executive Employee” means all executive
officers (as defined in Rule 3b-7 under the Securities Exchange Act of 1934, as amended) of the Company (or any Parent or Subsidiary of the Company, whether now existing or hereafter created or acquired). 
  
 (k)  “Parent” means, with respect to any corporation, a parent of that corporation within the meaning of Code
Section 424(e). 
  
 (l)  “Participant” means an Executive Employee selected from time to time
by the Committee to participate in the Plan. 
  
 (m)  “Performance Adjustment” means the
percentage(s), as set forth in an award schedule, that will, when multiplied by a Participant’s Target Bonus, determine the amount of a Participant’s Award. 
  
 (n)  “Performance Criteria” means the criteria selected by the Committee to measure performance for a Plan Year from among one or more of the
following: (i) Pre-tax earnings, as shown in the Company’s annual report to shareholders, calculated in accordance with generally accepted accounting principles consistently applied by the Company; and (ii) Earnings per share, as shown in the
Company’s annual report to shareholders, calculated in accordance with generally accepted accounting principles consistently applied by the Company. 
  
 (o)  “Performance Goal” means one or more levels of performance as to each Performance Criteria, as established by the Committee, that will result
in the Performance Adjustment that is established by the Committee for each such level of performance. 
  
 (p)  “Plan Year” means the fiscal year of the Company. 
  
 (q)  “Retirement” means, with respect to a Participant, the earliest date on which the Participant is eligible to retire under any qualified Code Section 401(a) plan of the Company, or, if there is no such plan, age 65.

  
 (r)  “Subsidiary” means, with respect to any corporation, a subsidiary of that
corporation within the meaning of Code Section 424(f). 
  
 (s)  “Target Bonus” means the
bonus payable to a Participant if there is a 100-percent Performance Adjustment for each Performance Criteria. 
  
 3.    Eligibility.    All present and future Executive Employees shall be eligible to receive Awards under the Plan. The Committee shall have the power and complete 
 

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 discretion to select eligible Executive Employees to receive Awards and to determine for each Participant the terms and conditions and
the amount of each Award. 
  
 4.    Awards. 
  

(a)  Each Award shall be evidenced by an Award Agreement setting forth the Performance Goals for each Performance Criteria, the Target Bonus, the maximum
bonus payable and such other terms and conditions applicable to the Award, as determined by the Committee, not inconsistent with the terms of the Plan. Anything else in this Plan to the contrary notwithstanding, the aggregate maximum amount payable
under the Plan to any Participant in any Plan Year shall be the lesser of 200 percent of the Participant’s base salary or $2,000,000. In the event of any conflict between an Award Agreement and the Plan, the terms of the Plan shall govern.

  
 (b)  The Committee shall establish the Performance Goals for the Company and/or its Subsidiaries
each Plan Year. The Committee shall also determine the extent to which each Performance Criteria shall be weighted in determining Awards. The Committee may vary the Performance Criteria, Performance Goals and weightings from Participant to
Participant, Award to Award and Plan Year to Plan Year. The Committee may increase, but not decrease, any Performance Goal during a Plan Year. 
  
 (c)  The Committee shall establish for each Award the percentage of the Target Bonus for such Participant payable at specified levels of performance, based on
the Performance Goal for each Performance Criteria and the weighting established for such criteria. The Award payable to any Participant may range from zero (0) to two hundred percent of the Participant’s Target Bonus, depending upon whether,
or the extent to which, the Performance Goals have been achieved. All such determinations regarding the achievement of any Performance Goals will be made by the Committee; provided, however, that the Committee may not increase during a Plan Year the
amount of the Award that would otherwise be payable upon achievement of the Performance Goal or Goals. 
  
 (d)  The actual Award for a Participant will be calculated by multiplying the Participant’s Target Bonus by the Performance Adjustments in accordance with the Award. All calculations of actual Awards shall be made by the
Committee. 
  
 (e)  Awards will be paid, in a lump sum cash payment, as soon as practicable after the
close of the Plan Year for which they are earned; provided, 
 

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 however, that no Awards shall be paid except to the extent that the Committee has certified in writing that the Performance Goals have
been met. Notwithstanding the foregoing provisions of this Section 4(e), the Committee shall have the right to allow Participants to elect to defer the payment of Awards subject to such terms and conditions as the Committee may determine.

  
 (f)  Whenever payments under the Plan are to be made, the Company and/or the Subsidiary will
withhold therefrom an amount sufficient to satisfy any applicable governmental withholding tax requirements related thereto. 
  
 (g)  Nothing contained in the Plan will be deemed in any way to limit or restrict the Company, its Subsidiaries, or the Committee from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect. 
  
 5.    Administration.    The Plan shall be administered by a Committee, which shall be appointed by the Board, consisting of not less than two members of the Board. Subject to paragraph
(d) below, the Committee shall be the Compensation and Personnel Committee unless the Board shall appoint another Committee to administer the Plan. The Committee shall have general authority to impose any limitation or condition upon an Award the
Committee deems appropriate to achieve the objectives of the Award and the Plan and, in addition, and without limitation and in addition to powers set forth elsewhere in the Plan, shall have the following specific authority: 
  
 (a)  The Committee shall have the power and complete discretion to determine (i) which Executive Employees shall receive an
Award and the nature of the Award, (ii) the amount of each Award, (iii) the time or times when an Award shall be granted, (iv) whether a disability exists, (v) the terms and conditions applicable to Awards, and (vi) any additional requirements
relating to Awards that the Committee deems appropriate. 
  
 (b)  The Committee may adopt rules and
regulations for carrying out the Plan. The interpretation and construction of any provision of the Plan by the Committee shall be final and conclusive. The Committee 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 Committee shall constitute a quorum, and all actions of the Committee 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. 
 

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 (d)  All members of the Committee must be “outside
directors” as described in Code Section 162(m). 
  
 (e)  The Board from time to time may appoint
members previously appointed and may fill vacancies, however caused, in the Committee. 
  
 (f)  As to
any Code Section 162(m) Awards, it is the intent of the Company that this Plan and any Code Section 162(m) Awards hereunder satisfy, and be interpreted in a manner that satisfy, the applicable requirements of Code Section 162(m). If any provision of
this Plan or if any Code Section 162(m) Award would otherwise conflict with the intent expressed in this Section 4(f), that provision to the extent possible shall be interpreted so as to avoid such conflict. To the extent of any remaining
irreconcilable conflict with such intent, such provision shall be deemed void as applicable to Covered Employees. Nothing herein shall be interpreted to preclude a Participant who is or may be a Covered Employee from receiving an Award that is not a
Code Section 162(m) Award. 
  
 (g)  The Committee’s determinations under the Plan need not be
uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. Without limiting the generality of the foregoing, the Committee will be
entitled, among other things, to make non-uniform and selective determinations and to establish non-uniform and selective Performance Criteria, Performance Goals, the weightings thereof, and Target Bonuses. 
  
 6.    Change of Control.    In the event of a Change of Control of the Company, in addition to any
action required or authorized by the terms of an Award Agreement, the Committee may, in its sole discretion, take any of the following actions as a result, or in anticipation, of any such event to assure fair and equitable treatment of Participants:
(a) accelerate time periods for purposes of vesting in, or receiving any payment with regard to, any outstanding Award, or (b) make adjustments or modifications to outstanding Awards as the Committee deems appropriate to maintain and protect the
rights and interests of Participants following such Change of Control. Any such action approved by the Committee shall be conclusive and binding on the Company and all Participants. 
  
 7.    Nontransferability of Awards.    An Award shall not be assignable or transferable by the Participant except by will or by the
laws of descent and distribution. 
  
 8.    Termination, Modification,
Change.    If not sooner terminated by the Board, this Plan shall terminate at the close of business on February 29, 2004. No 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, if and to the extent required by the Code, no change shall be made 
 

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 that changes the Performance Criteria, or materially increases the maximum potential benefits for Participants under the Plan, unless such change is authorized
by the shareholders of the Company. Notwithstanding the foregoing, the Board may unilaterally amend the Plan and Awards as it deems appropriate to cause Awards to meet the requirements of Code Section 162(m), and regulations thereunder. 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 Award previously granted to him. 
  
 9.    Unfunded Plan.    The Plan shall be unfunded. No provision of the Plan or any Award
Agreement will require the Company or its Subsidiaries, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any
assets, nor will the Company or its Subsidiaries maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants will have no rights
under the Plan other than as unsecured general creditors of the Company and its Subsidiaries, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they will have the same rights as
other employees under generally applicable law. 
  
 10.    Liability of
Company.    Any liability of the Company or a Subsidiary to any Participant with respect to an Award shall be based solely upon contractual obligations created by the Plan and the Award Agreement. Neither the Company nor
a Subsidiary, nor any member of the Board or of the Committee, nor any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to
any party for any action taken or not taken in good faith under the Plan. Status as an eligible Executive Employee shall not be construed as a commitment that any Award will be made under this Plan to such eligible Executive Employee or to eligible
Executive Employees generally. Nothing contained in this Plan or in any Award Agreement (or in any other documents related to this Plan or to any Award or Award Agreement) shall confer upon any Executive Employee or Participant any right to continue
in the employ or other service of the Company or a Subsidiary or constitute any contract or limit in any way the right of the Company or a Subsidiary to change such person’s compensation or other benefits. 
  
 11.    Interpretation.    If any term or provision contained herein will to any extent be invalid
or unenforceable, such term or provision will be reformed so that it is valid, and such invalidity or unenforceability will not affect any other provision or part hereof. The Plan, the Award Agreements and all actions taken hereunder or thereunder
shall be governed by, and construed in accordance with, the laws of 
 

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 the Commonwealth of Virginia without regard to the conflict of law principles thereof. 
  
 12.    Effective Date of the Plan. 
  
 (a)  The Plan shall be effective as of date the Company is separated from Circuit City Stores, Inc. and shall be submitted to the shareholders of Circuit City Stores, Inc. for approval prior to the
separation. No Award shall be payable to a Covered Employee until the Plan has been approved by the shareholders. 
  
 (b) As of the date of separation between the Company and Circuit City Stores, Inc., this Plan shall assume obligations, including outstanding awards for the current Fiscal Year, from the Circuit City Stores, Inc. Annual Performance-Based
Bonus Plan, to the extent provided in an agreement between the Company and Circuit City Stores, Inc. 
 

 7Prepared by R.R. Donnelley Financial -- FORM OF CONFIDENTIALITY AGREEMENT

  
 Exhibit 10.10 
  
 FORM OF CONFIDENTIALITY AGREEMENT 
  
 This Confidentiality Agreement (“Agreement”)
is made as of the              day of             ,              by
and among Circuit City Stores, Inc., (“Circuit City”) a Virginia corporation and CarMax, Inc., a Virginia corporation (“CarMax”), either Circuit City or CarMax as a “Party” or collectively, as the “Parties”.

  
 INTRODUCTION 
  
 A.    Circuit City and CarMax have executed a Separation Agreement dated as of (the “Separation Agreement”), pursuant to which CarMax and the CarMax Subsidiaries separated from Circuit City and the Circuit City
Subsidiaries (the “Spin-off”). For purposes of this Agreement, Circuit City and the Circuit City Subsidiaries collectively, or CarMax and the CarMax Subsidiaries collectively, shall each be referred to as a “Party”. 

 
 B.    Prior to the Spin-off, CarMax existed as part of Circuit City, resulting in the sharing and consolidation of
Confidential Information (as defined below). 
  
 C.    As a result of the historical co-mingling of Circuit
City and CarMax information prior to the Spin-off, there are paper records, localized electronic records (stored on individual PC’s or discs) or information stored in other media containing Confidential Information of the other Party.

  
 D.    Further, pursuant to the Separation Agreement, Circuit City will provide certain transition services
to CarMax following the Spin-off pursuant to Transition Services Agreement between Circuit City and CarMax. As a result, certain Circuit City employees will have access to CarMax’s Confidential Information. 
  
 E.    The Parties agree that full segregation of all co-mingled Confidential Information that pre-dates the Spin-off is not
practical and that the disclosure of Confidential Information during the provision of services pursuant to the Transition Services Agreement or other Ancillary Agreements may be unavoidable. 
  
 NOW, THEREFORE, in consideration of the joint nature of the disclosure and the business relationship between the parties, it is hereby agreed as follows: 
  
 1.    Definition.    For purposes of this Agreement, the term “Confidential Information”
shall mean proprietary and confidential business information obtained by either Party at any time including, without limitation, the following: 
 

 (a) Any trade secret, know-how, invention, software program, application, documentation, schematic, procedure,
contract, information, knowledge, data, process, technique, design, drawing, program, formula or test data, work in progress, engineering, manufacturing, marketing, financial, sales, supplier, customer, employee, investor, or business information,
whether in oral, written, graphic or electronic form; 
  
 (b) Any non-public business information, including,
without limitation, personnel data; correspondence with governmental agencies; historical customer information and data; historical cost information such as budgets and operating expenses and capital costs; and projected capital additions and
operating cost information; 
  
 (c) Any document, diagram, photograph, drawing, computer program or other
communication that is either conspicuously marked “confidential”, or is known or reasonably should have been known by the Party in possession to be confidential; and 
  
 (d) Any advice, information, exhibits, documentation or any other information that a Party reasonably expects would be protected by attorney-client privilege or work
product doctrine or other applicable privileges. 
  
 2.    Prohibition of
Use.    Circuit City acknowledges that it is authorized to access and use the Confidential Information of CarMax for the sole purpose of performing the services it is contractually bound to provide to such parties,
specifically with respect to carrying out its obligations under the Transition Services Agreement and other agreements related to the Separation Agreement. Otherwise, each of the Parties agrees that, with respect to the Confidential Information of
the other Party, it will not (i) take any affirmative action to access such Confidential Information; (ii) directly or indirectly utilize any such Confidential Information in its business; (ii) manufacture and/or sell any product or provide any
service that is based in whole or in part on such Confidential Information; (iii) copy or modify such Confidential Information, or any copy or portion thereof; or (iv) disclose such Confidential Information to any third party. 

 
 3.    Prior Disclosures.    Prior to the Separation Agreement, Circuit City and CarMax
may have exchanged information within their consolidated corporate structure without restriction. Such information supplied to one Party by the other prior to the execution of this Agreement shall nonetheless be considered Confidential Information
(except as specifically excluded pursuant to Section 5 below) for the purposes of this Agreement and shall be subject to the terms and conditions hereof. 
  
 4.    Specific Restriction Regarding Waiver of Attorney-Client Privilege or Work Product Doctrine.    Prior to any action by the either Party that could reasonably
be expected to lead to or that would constitute waiver of attorney-client privilege or work product doctrine, the Party disclosing the information must give prior notice to the other Party as soon as possible. 
 

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 5.    Nonprotected Information.    The
Parties agree that their mutual covenants with respect to each other’s Confidential Information shall not apply to any information, data or other materials imparted to the extent that any of the following conditions apply: 

 
 (a) The information is, or any time hereafter becomes, available to the public or contained in a filing to a government
agency without breach of this Agreement by the receiving Party; 
  
 (b) The information is obtained by the
recipient from any other person, firm or company having no obligation to or relationship with the disclosing Party; 
  
 (c) The information is developed by or for recipient independently of information received from one or more of the Parties hereto; or 
  
 (d) The information is more than ten (10) years old. 
  
 6.    Court-Ordered Disclosure.    No Party hereto shall be liable for disclosure of Confidential Information of the other Party if made in response to a valid order of a court or
authorized agency of government; provided, however that five (5) days’ notice first be given to the other Party so a protective order, if appropriate, and may be sought by such Party with the cooperation of the other Party. 

 
 7.    Disclosure of Confidentiality Agreement Terms.    Notwithstanding any other
provisions hereof, the terms of this Agreement shall not be deemed to be the Confidential Information of any Party hereto, and each Party shall have the right to disclose the terms hereof to third parties in its own discretion. 

 
 8.    No Conveyance or License.    Nothing in this Agreement shall be construed to
convey to the recipient of Confidential Information any right, title, interest or copyright in any Confidential Information, or any license to use, sell, exploit, copy or further develop any such Confidential Information. This Agreement does not in
any way bind the Parties to enter into a business relationship of any type with each other. 
  
 9.    Injunctive Relief.    The Parties agree that a breach by either Party of this Agreement with respect to the Confidential Information of the other Party to this Agreement will cause
irreparable damages to the other Party (the “Non-Breaching Party”) for which recovery of money damages would be inadequate, and that the Non-Breaching Party shall, therefore, be entitled to obtain timely injunctive relief to protect its
rights under this Agreement in addition to any and all remedies available at law without the need to post a bond or other undertaking. 
 

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 10.    Governing Law and Choice of
Forum.    This Agreement has been made under and shall be governed by, interpreted and enforced in accordance with the laws of the Commonwealth of Virginia without regard to the conflict of laws rules
thereof. All disputes hereunder shall be resolved in the applicable state or Federal courts of Virginia. The parties consent to the jurisdiction of such courts, agree to accept service of process by mail, and waive any jurisdictional or venue
defenses otherwise available. 
  
 11.    Agreement Binding on
Successors.    This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, and their heirs, administrators, successors and assigns. 
  
 12.    Waiver.    The failure of either Party at any time or times to demand strict performance by
the other Party of the terms, covenants, or conditions set forth in this Agreement shall not be construed as a continuing waiver or relinquishment thereof, and either Party may at any time demand strict and complete performance of such terms,
covenants, and conditions. 
  
 13.    Assignability.    This Agreement is
personal to both Parties and may not be assigned by any act of either Party or by operation of law unless in connection with a transfer of substantially all the assets of such Party as a transfer to its affiliate. 
  
 14.    Severability.    If any provision hereof is held invalid or unenforceable by a court of
competent jurisdiction, such invalidity shall not affect the validity or operation of any other provision, and such invalid provision shall be deemed to be severed from the Agreement. 
  
 15.    Significance of Headings.    Paragraph headings contained herein are solely for the purpose of aiding in speedy location of
subject matter and are not in any sense to be used in the construction of this Agreement. Accordingly, in case of any questions with respect to the construction of this Agreement, it is to be construed as though paragraph headings had been omitted.

  
 16.    Integration.    This Agreement constitutes the final, exclusive,
and complete expression of the agreement of the Parties hereto, and it embodies all of the terms and conditions of the Agreement between the Parties with respect to the subject matter hereof. This Agreement is expressly intended to replace and
supersede all prior and contemporaneous agreements, proposals, negotiations, representations, and warranties, if any, between the Parties whether oral or written with respect to the subject matter hereof. There are no agreements, representations, or
warranties that have not been included in this Agreement with respect to the subject matter hereof. It represents the result of arms length negotiation between the Parties and shall be interpreted and construed without regard to any presumption or
other rule requiring construction against either Party. 
 

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 17.    Amendments.    This Agreement shall not be modified or amended except in
writing signed by the parties hereto and specifically referring to this Agreement. 
  
 18.    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same
instrument. 
  
 *            *            *            *  
          * 
  
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 IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the
latest date set forth below. 
  

	Circuit City Stores, Inc. 
 	CarMax Inc. 
 

 

	By:                                      
               
 	By: 
 

 

	Title:                                     
            
 	Title: 
 

 

	Date:                                     
            
 	Date: 
 

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