Document:

Draft Cap

		
	 
	

	
	                                              

		
	ATTN: 

	J.P. Morgan Mortgage Acquisition Trust 2007-HE1 by: DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its individual capacity but solely as Supplemental Interest Trust Trustee on behalf of the J.P. Morgan Mortgage Acquisition Trust 2007-HE1 supplemental interest trust

		
	 
	Michael Boyle

Deutsche Bank National Trust Company

Fax: (714) 656-2629

Pentalpha Surveillance LLC

Attn: Trust Oversight Manager JPMAC 2007-HE1

 

Via Fax: (716) 204-5902

		
	FROM: 

	Carmine Pilla

	 
	JPMorgan Chase Bank, N.A.

		
	RE: 

	Interest Rate Cap Confirmation

		
	YOUR REF: 

	 

	OUR REF: 

	# 2000005093143 / 2000005093142

		
	DATE SENT: 

	 

		
	 
	

Interest Rate Cap Transaction

The purpose of this letter agreement is to confirm the terms and conditions of the Transaction entered into between:

JPMORGAN CHASE BANK, N.A.

("JPMorgan")

and

J.P. Morgan Mortgage Acquisition Trust 2007-HE1 by DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its individual capacity but solely as Supplemental Interest Trust Trustee on behalf of the J.P. Morgan Mortgage Acquisition Trust 2007-HE1 supplemental interest trust

 (the "Counterparty")

on the Trade Date and identified by the JPMorgan Deal Number specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the Master Agreement specified below, and supersedes any previous confirmation or other writing with respect to the transaction described below.

The definitions and provisions contained in the 2000 ISDA Definitions (the "Definitions"), as published by the International Swaps and Derivatives Association, Inc. are incorporated into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement dated as of 14 June 2007, as amended and supplemented from time to time (the "Agreement"), between JPMORGAN CHASE BANK, N.A. ("JPMorgan") and J.P. Morgan Mortgage Acquisition Trust 2007-HE1 by DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its individual capacity but solely as Supplemental Interest Trust Trustee on behalf of the J.P. Morgan Mortgage Acquisition Trust 2007-HE1 supplemental interest trust (the "Counterparty"). All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

		
	 
	

	
	 

	The terms of the particular Interest Rate Cap Transaction to which this Confirmation relates are as follows:

		
	 
	 

	A. TRANSACTION DETAILS

	 

		
	 
	 

	JPMorgan Deal Number(s):

	# 2000005093143 / 2000005093142

		
	Notional Amount:

	 Per attached schedule in Exhibit A

	 
	 

		
	Trade Date:

	07 June 2007

		
	Effective Date:

	25 June 2007 subject to adjustment in accordance with the Modified Following Business Day Convention 

		
	Termination Date:

	25 February 2009 subject to adjustment in accordance with the Modified Following Business Day Convention

	 
	 

 

		
	 
	 

	Fixed Amounts: 

	 

	 
	 

	Fixed Rate Payer:

	Counterparty

		
	Premium Amount:

	USD 1,500.00

		
	Fixed Rate Payer Payment Date:

	14 June 2007

 

		
	

Floating Amounts:

	 

	 
	 

	Floating Rate Payer:

	JPMorgan

	 
	 

	Cap Rate:

	Per attached schedule in Exhibit A

Floating Rate Payer Period End Dates:

The 25th of each month in each year commencing with 25 June 2007 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention

		
	Floating Rate Payer Payment Amount:

	In respect of any Calculation Period, an amount equal to the product of (a) the applicable Notional Amount times (b) the Floating Rate Day Count Fraction times (c) the greater of zero and the remainder of (i) the lesser of the applicable Floating Rate or 9.90% less (ii) the applicable CAP Strike A

		
	

Floating Rate for initial Calculation Period:

Floating Rate Payer Payment Dates:

Floating Rate Option: 

	

To be determined

Two (2) Business days preceding each Floating Rate Payer Period End Date.

USD-LIBOR-BBA

		
	Designated Maturity:

	1 Month

		
	Spread:

	None

		
	Floating Rate Day Count Fraction:

	Actual/360

		
	Reset Dates:

	The first day of each Calculation Period.

		
	Compounding:

	Inapplicable

		
	Business Days:

	New York, London, Los Angeles

 

		
	Calculation Agent:

	JPMorgan, unless otherwise stated in the Agreement.

 

		
	B. ACCOUNT DETAILS

	 

	Payments to JPMorgan in USD:

	JPMORGAN CHASE BANK NA

	 
	JPMORGAN CHASE BANK NA

	 
	BIC: CHASUS33XXX

	 
	ABA:  021000021

	 
	AC No: 099997979

	 
	Ref: # 2000005093143 / 2000005093142, JPMAC 2007-HE1

	

Payments to Counterparty in USD:

	

                Deutsche Bank National Trust Company  

                New York, NY  10006

                ABA Number: 021-001-033

                Account Number: 014-19-663

                Name NYLTD Funds Control-Stars West 

Re: JPMAC 2007-HE1

		
	C. OFFICES

	 

		
	JPMorgan:

	NEW YORK

		
	Counterparty:

	               SANTA ANA

	
	D. RELATIONSHIP BETWEEN PARTIES

Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):

(a) Non-Reliance. JPMorgan is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction.  

(b) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is capable of assuming, and assumes the risks of that Transaction.

(c) Status of Parties. The other party is not acting as a fiduciary for or an adviser to it in respect of that Transaction.

E. SUPPLEMENTAL INTEREST TRUST TRUSTEE CAPACITY

It is expressly understood and agreed by the parties hereto that insofar as this Confirmation is executed by Deutsche Bank National Trust Company (“DBNTC”) (i) this Confirmation is executed and delivered by DBNTC, not in its individual capacity but solely as Supplemental Interest Trust Trustee under the Pooling and Servicing Agreement, dated as of May 1, 2007 (the “Pooling and Servicing Agreement”), among J.P. Morgan Acceptance Corporation I, as depositor, J.P. Morgan Mortgage Acquisition Corp., as seller, DBNTC, as trustee, JPMorgan Chase Bank National Association as servicer, in the exercise of the powers and authority conferred and vested in it thereunder, (ii) under no circumstances shall DNBTC in its individual capacity be personally liable for the payment of any indebtedness or expenses or be personally liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken under this Confirmation, the Pooling and Servicing Agreement or any related document,(iii) each of the representations, undertakings and agreements herein made on behalf of the Counterparty is made and intended not as personal representations, undertakings and agreements of the Counterparty but for the purpose of binding only J.P. Morgan Mortgage Acquisition Trust 2007-CH2 and (iv) nothing herein contained shall be construed as creating any liability for DBNTC, individually or personally, to perform any covenant (either express or implied) contained herein, and all such liability, if any, is hereby expressly waived by the parties hereto, and such waiver shall bind any third party making a claim by or through one the parties hereto.

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation and returning it to us or by sending to us a letter, telex or facsimile substantially similar to this letter, which letter, telex or facsimile sets forth the material terms of the Transaction to which this Confirmation relates and indicates agreement to those terms. When referring to this Confirmation, please indicate: JPMorgan Deal Number(s): # 2000005093143 / 2000005093142

		
	JPMorgan Chase Bank, N.A.

	 

	
	 

	
	/s/ Edward R. Robinson

		
	Name:

	Edward R. Robinson

		
	Title:

	Associate

	
	Accepted and confirmed as of the date first written:

	J.P. Morgan Mortgage Acquisition Trust 2007-HE1 by:

DEUTSCHE BANK NATIONAL TRUST COMPANY, not in its individual capacity but solely as Supplemental Interest Trust Trustee on behalf of the J.P. Morgan Mortgage Acquisition Trust 2007-HE1 supplemental interest trust

	
	/s/ Mei Nghia

		
	Name:

	Mei Nghia

		
	Title:

	Authorized Signer   

		
	Your reference number:

	 

		
	 
	

Exhibit A

				
	start period

	end period

	       Notional

	Cap Strike A

	6/25/2007

	7/25/2007

	       46,075,000 

	7.410

	7/25/2007

	8/25/2007

	       44,369,000 

	7.160

	8/25/2007

	9/25/2007

	       42,385,000 

	7.160

	9/25/2007

	10/25/2007

	       40,137,000 

	7.400

	10/25/2007

	11/25/2007

	       37,634,000 

	7.160

	11/25/2007

	12/25/2007

	       34,893,000 

	7.400

	12/25/2007

	1/25/2008

	       32,106,000 

	7.160

	1/25/2008

	2/25/2008

	       29,379,000 

	7.160

	2/25/2008

	3/25/2008

	       26,712,000 

	7.660

	3/25/2008

	4/25/2008

	       24,103,000 

	7.160

	4/25/2008

	5/25/2008

	       21,551,000 

	7.400

	5/25/2008

	6/25/2008

	       19,056,000 

	7.160

	6/25/2008

	7/25/2008

	       16,615,000 

	7.400

	7/25/2008

	8/25/2008

	       14,228,000 

	7.160

	8/25/2008

	9/25/2008

	       11,894,000 

	7.160

	9/25/2008

	10/25/2008

	         9,611,000 

	7.400

	10/25/2008

	11/25/2008

	         7,378,000 

	7.160

	11/25/2008

	12/25/2008

	         5,194,000 

	7.400

	12/25/2008

	1/25/2009

	         3,058,000 

	7.160

	1/25/2009

	2/25/2009

	            969,000 

	7.160

 

		
	 
	

Client Service Group

	
	All queries regarding confirmations should be sent to:

	
	JPMorgan Chase Bank, N.A.

				
	Contacts

	JPMorgan Contact

	Telephone Number

	 

			
	Client Service Group

	(001 ) 3026344960

	 

		
	Group E-mail address:

	 

	Facsimile:

	(001 ) 8888033606

	Telex:

	 

	Cable:

	 

	
	Please quote the JPMorgan deal number(s): # 2000005093143 / 2000005093142exhibit101.htm

     
      
        

      

    

     

    Exhibit
      10.1

    CARMAX,
      INC.

    ANNUAL
      PERFORMANCE-BASED BONUS PLAN

    (as
      amended and restated, effective June 26, 2007)

    

    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
                Schedule” means
                a schedule established by the Committee setting forth the
                terms and
                conditions applicable to an Award.

            

    

    

    
      	
              (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
                Securities Exchange Act of 1934, as amended, 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
                Schedule.

            

    

    

    
      	
              (g)  

            	
              “Committee”
                means the committee appointed by the Board as described under Section
                5.

            

    

    

    
      	
              (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
                of the
                Company and/or its Subsidiaries for a Plan Year from among one or
                more of
                the following: pre-tax income; net income; basic or diluted
                earnings per share; net revenues; market share; gross profit; profit
                margin; cash flow; expense ratios; return on assets; return on invested
                capital; return on equity; stock price; market capitalization; and
                total
                shareholder return; each as determined in accordance with generally
                accepted accounting principles, where applicable, as consistently
                applied
                by the Company and, if set forth in an Award Schedule, adjusted to
                the
                extent permitted under Section 162(m) of the Code, to omit the effects
                of
                extraordinary items, the gain or loss on the disposal of a business
                segment, unusual or infrequently occurring events and transactions,
                accruals for awards under the Plan and cumulative effects of changes
                in
                accounting principles.

            

    

    

    
      	
              (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 any business entity (including, but not limited to,
                a
                corporation, partnership or limited liability company) of which a
                company
                directly or indirectly owns one hundred percent (100%) of the voting
                interests of the entity unless the Committee determines that the
                entity
                should not be considered a Subsidiary for purposes of the
                Plan.  If a company owns less than one hundred percent (100%) of
                the voting interests of the entity, the entity will be considered
                a
                Subsidiary for purposes of the Plan only if the Committee determines
                that
                the entity should be so
                considered.

            

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      	
              (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 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)  

            	
              Awards
                shall be established by an Award Schedule setting forth the Performance
                Goals for each Performance Criteria, 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.  The
                Target Bonus for each Executive Employee may be set forth either
                in the
                Award Schedule or a separate written agreement between such Executive
                Employee and the Company or a Subsidiary of the
                Company.  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.

            

    

    

    
      	
              (b)  

            	
              The
                Committee shall establish the Performance Goals for 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, however,
                that
                no Awards shall be paid except to the extent that the Committee has
                certified in

            

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    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) the terms and conditions applicable
                  to
                  Awards, and (v) 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.

              

      

      

      
        	
                (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

              

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

      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 5(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 Schedule, 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.  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 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 Schedule 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

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    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
      Schedule.  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 Schedule (or in any other documents related to this Plan
      or
      to any Award or Award Schedule) 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 Schedules and all actions taken hereunder
      or thereunder shall be governed by, and construed in accordance with, the laws
      of the Commonwealth of Virginia without regard to the conflict of law principles
      thereof.

    

    12.  Effective
      Date of
      the Plan.
      This amended and
      restated Plan shall be effective only upon the approval by the shareholders
      of
      the Company and shall be effective for the Company’s fiscal year ending February
      29, 2008 and each of the next four succeeding fiscal years of the Company unless
      sooner terminated by the Board in accordance with Section 8.  For the
      fifth succeeding fiscal year, the Plan shall remain in effect in accordance
      with
      its terms unless amended or terminated by the Board, and the Committee shall
      make the determinations required by Section 4 for such year, but the Plan shall
      be submitted for re-approval by the shareholders of the Company at the annual
      meeting of shareholders held during such fifth year and payment of all Awards
      under the Plan for such fiscal year and any future periods shall be contingent
      upon such approval.  Notwithstanding the foregoing, the Plan may be
      submitted for re-approval by the shareholders at an earlier date.

     

    

      	 	 CARMAX,
              INC.
	 	 
	 	 
	 	 
	 	
              By:
                /s/ Keith D. Browning

            
	 	
              Keith
                D. Browning

            
	 	
              Executive
                Vice President &

            
	 	
              Chief
                Financial Officer

            

     

    
6

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