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We also are pleased to furnish proxy materials to shareholders primarily over the Internet.internet. On or about May 7, 2015,4, 2018, we mailed our shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statement and annual report and to vote online. Internet distribution of our proxy materials expedites receipt by shareholders, lowers the cost of the annual shareholders meeting, and conserves natural resources. However, if you would prefer to receive paper copies of our proxy materials, please follow the instructions included in the Notice of Internet Availability.
Availability of Proxy Materials.
William R. Tiefel
Chairman
| When: | ||||
| Where: | ||||
Hilton Richmond Hotel, Short Pump 12042 West Broad Street Richmond, VA 23233 | ||||
| Items of Business: | (1) | |||
| To elect the eleven directors named in the proxy statement to our Board of Directors. | ||||
| (2) | To ratify the appointment of KPMG LLP as our independent registered public accounting firm. | |||
| (3) | To vote on an advisory resolution to approve the compensation of our named executive officers. | |||
| (4) | To vote on the shareholder proposal for a report on political contributions, if properly presented at the meeting. | |||
| To transact any other business that may properly come before the annual shareholders meeting or any postponements or adjournments thereof. | ||||
| Who May Vote: | ||||
You may vote if you owned CarMax common stock at the close of business on April | ||||
Senior
TABLE OF CONTENTS |
| COMPENSATION TABLES | ||
PROXY SUMMARY |
2018.
We achieved record revenues and net earnings in fiscal 2015. Annual highlights included the following:
| Market Share Growth | We estimate that our share of the 0- to 10-year old used vehicle market increased almost 7% in our television markets in calendar 2017. |
| Store Growth | We opened |
Revenues/Earnings | We achieved top and bottom-line growth. Net sales and operating revenues increased |
| Units | Total used unit sales increased |
CarMax Auto Finance | CarMax Auto Finance (“CAF”) finished the year with income of |
Share Repurchases | We continued |
Fourteenth Year on Fortune “Best Companies” List | We were named by Fortune magazine as one of its “100 Best Companies to Work For” for the |
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l Majority voting for directors | ||
l Substantial majority of director nominees are independent (9 of 11) | l Proxy access adopted in 2015 | |
l Five new independent directors since 2015 | l Annual “say on pay” vote | |
l Shareholder rights plan expired in 2012 and was not renewed | ||
Where Who May Attend Available at investors.carmax.com Agenda Item Board Recommendation Page of Proxy Statement Election of Eleven Directors FOR each Director nominee Ratification of Auditors Advisory Approval of Executive Compensation Nominee well as all long-term equity grants to Mr. Nash during fiscal 2017. Mr. Nash’s actual total direct compensation for fiscal 2017 equaled $6,344,501. Next Year’s Annual Shareholders Meeting June January CarMax uses a majority vote standard for the election of directors. This means that to be elected in uncontested elections, each nominee must be approved by the affirmative vote of a majority of the votes cast. Annual Meeting of ShareholdersWhenMonday,When Tuesday, June 22, 2015,26, 2018, at 1:00 p.m., Eastern TimeHilton Richmond Hotel, Short Pump12042 West Broad StreetRichmond, VA 23233All shareholders as of the record date may attend the meeting. Record DateApril 17, 201520, 2018Live Audio Webcast Voting Matters and Board Recommendations 1. 6 2. FOR 20 3. FOR 23 Agenda ItemBoard Recommendation Page of Proxy Statement 1. Election of Eleven Directors FOR each Director nominee 6 2. Ratification of Auditors FOR 22 3. Advisory Approval of Executive Compensation FOR 25 4. Shareholder Proposal for a Report on Political Contributions AGAINST 57 2Proposal One:Election of DirectorsWe are asking you to vote “FOR” the following candidates for election to our Board of Directors.Age Director
SinceIndependent Principal Occupation Committee Membership Ronald E. Blaylock 55 2007 Yes Founder and Managing Partner of GenNx360 Capital Partners, a private-equity buyout fund Compensation and Personnel Thomas J. Folliard 50 2006 No President and Chief Executive Officer
of CarMax, Inc.N/A Rakesh Gangwal 61 2011 Yes Former Chief Executive Officer of US Airways Group, Inc. and Worldspan Technologies, Inc., a provider of information technology services to the travel industry Nominating and
Governance2Table of ContentsNominee Age Director
Since Independent Principal Occupation Expected Committee Membership Peter J. Bensen 55 2018 Yes Retired Chief Administrative Officer and Corporate Executive Vice President and Chief Financial Officer of McDonald's Corporation Audit Ronald E. Blaylock 58 2007 Yes Founder and Managing Partner of GenNx360 Capital Partners, a private-equity buyout fund Compensation and Personnel Sona Chawla 50 2017 Yes Chief Operating Officer and President-Elect of Kohl's Corporation Compensation and Personnel Thomas J. Folliard 53 2006 No Non-Executive Chair of the Board, CarMax, Inc. and Retired President and Chief Executive Officer of CarMax, Inc. N/A Shira Goodman 57 2007 Yes Retired Chief Executive Officer of Staples, Inc. Nominating and Governance Robert J. Hombach 52 2018 Yes Retired Executive Vice President, Chief Financial Officer and Chief Operations Officer of Baxalta Incorporated, a biopharmaceutical company Audit David W. McCreight 55 2018 Yes Retired President of Urban Outfitters, Inc., an international consumer products retailer and wholesaler, and Chief Executive Officer of its Anthropologie Group Audit William D. Nash 49 2016 No President and Chief Executive Officer of CarMax, Inc. N/A Marcella Shinder 51 2015 Yes Global Head of Marketing at WeWork Companies Inc., a technologically driven global provider of shared working spaces Nominating and Governance Mitchell D. Steenrod 51 2011 Yes Senior Vice President and Chief Financial Officer of Pilot Travel Centers LLC, the nation’s largest operator of travel centers and truck stops Audit William R. Tiefel 84 2002 Yes Lead Independent Director of CarMax, Inc., retired Vice Chairman of Marriott International, Inc. and Chairman Emeritus of The Ritz-Carlton Hotel Company, LLC Compensation and Personnel Jeffrey E. Garten 68 2002 Yes Juan Trippe Professor in the Practice of International Trade, Finance and Business at the Yale School of Management and Chairman of Garten Rothkopf, an international consulting firm Nominating and
Governance Shira Goodman 54 2007 Yes President, North American Commercial of Staples, Inc. Compensation and Personnel W. Robert Grafton 74 2003 Yes Retired Managing Partner-Chief Executive, Andersen Worldwide S.C. Audit Edgar H. Grubb 75 2007 Yes Retired Executive Vice President and Chief Financial Officer of Transamerica Corporation, a leading insurance and financial services company Nominating and
Governance Marcella Shinder 48 2015 Yes Chief Marketing Officer of Nielsen N.V., a leading global performance management company Audit Mitchell D. Steenrod 48 2011 Yes Senior Vice President and Chief Financial Officer of Pilot Travel Centers LLC, the nation’s largest operator of travel centers and truck stops Audit Thomas G. Stemberg 66 2003 Yes Managing General Partner of the Highland Consumer Fund at Highland Capital Partners; Founder and Chairman Emeritus of the Board of Staples, Inc. Compensation and Personnel William R. Tiefel 81 2002 Yes Chairman of the Board of CarMax, Inc., retired Vice Chairman of Marriott International, Inc. and Chairman Emeritus of The Ritz-Carlton Hotel Company, LLC Audit 3Proposal Two:Ratification of AuditorsWe are asking you to ratify the appointment by the Audit Committee of KPMG LLP (“KPMG”) as our independent auditors for fiscal 2016.2019. The following table summarizes the fees billed by KPMG for fiscal 20152018 and 2014. Audit Fees Audit-Related
FeesTax Fees Other Fees Total Fees Fiscal 2015 $1,459,600 $387,000 $346,900 $465,000 $2,658,500 Fiscal 2014 $1,034,500 $437,800 $109,000 - $1,581,300
2017.3Audit Fees Audit-Related Fees Tax Fees Total Fees Fiscal 2018 $1,969,125 $547,000 $130,002 $2,646,127 Fiscal 2017 $1,726,450 $440,000 $155,350 $2,321,800 Proposal Three:Executive CompensationWe are asking you to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. At our last two annual shareholders meetings, a significant majority of our shareholders supported our executive compensation program, with more than 91%87% and 92%96% of votes cast in 20142017 and 2013,2016, respectively, voting in favor of our program.We strivedesign our compensation plans to tie pay to performance. The following chart illustrates the relationship over the last three fiscal years between our net earnings and the total direct compensation (base salary, annual incentive bonus and long-term equity grants) paid to our Chief Executive Officer (“CEO”),. The total direct compensation shown below for fiscal 2016 is the total direct compensation paid to our former CEO, Mr. Folliard. For purposes of this comparison, the fiscal 2017 compensation below represents the annual base salary and target annual incentive bonus approved for Mr. Nash on his promotion in September 2016, as reported in our proxy statements.Net Earnings and CEO Total Direct Compensation
We also strive to align the interests of our executives with the interests of our shareholders. The following charts illustrate how most of our CEO’s total direct compensation paid in fiscal 2015 was composed of our annual incentive bonus and long-term equity and how most of that performance-based compensation was tied to our long-term performance.CEO Total Direct CompensationCEO Performance-Based Compensation
You will find additional information on our executive compensation program beginning on page 24. This information includes26.4Proposal Four:Shareholder Proposal for a chartReport on page 25 describing changes we madePolitical ContributionsThe Board recommends a vote against this proposal, which would require that CarMax make certain political contribution disclosures. CarMax’s political contributions, while purposeful, are limited in amount; subject to the compensationCarMax Corporate Political Contribution Policy and Board oversight; and already disclosed as required under state contribution disclosure laws. Shareholders did not approve almost identical proposals at the 2016 and 2017 annual shareholders meetings. The Board continues to believe that adoption of our named executive officersthe shareholder proposal is both unnecessary and not in fiscal 2015.
the best interest of shareholders.4Expected Date of 20162019 Annual Shareholders Meeting28, 2016Deadline for Shareholder Proposals8, 201654, 20195PROPOSAL ONE: ELECTION OF DIRECTORSWe are asking you to vote for the election of the eleven director nominees listed on the following pages. Our Board has nominated these individuals at the recommendation of our independent Nominating and Governance Committee. The Committee based its recommendation on, among other things, the results of an annual Board and peer evaluation process. Allprocess, as well as the integrity, experience and skills of each nominee.This year the Board focused on the refreshment and composition of its membership. Of the eleven nominees, eight are current directors who were elected at our 2017 annual shareholders meeting. Three nominees are being voted on by shareholders at our 2014 annual meeting, except Ms. Shinder, whofor the first time. Messrs. Bensen and Hombach joined the Board in April 2015.2018 and Mr. McCreight will join the Board in June 2018 if elected at the annual shareholders meeting.We appointed Messrs. Bensen and Hombach to the Board after conducting an extensive search for directors with, among other qualities, financial expertise and executive experience. Mr. McCreight is nominated for election following an extensive search for a director nominee with, among other qualities, executive retail experience. Each search was led by our Nominating and Governance Committee with the assistance of an outside search firm.In addition to the three new nominees, five directors who were elected at the 2017 annual shareholders meeting are not standing for election at the 2018 annual shareholders meeting. Messrs. Grafton and Grubb, directors since 2003 and 2007, respectively, were not re-nominated to the Board under the terms of our director retirement policy. Mr. Garten, a director since 2002, has decided not to stand for re-election. Mr. Colberg, a director since 2015, was not nominated for re-election in anticipation of a proposed merger between Assurant, Inc., where he is chief executive officer, and The Warranty Group, a current CarMax service provider. John Standley, a director since 2016, retired from the board in January 2018.To ensure a smooth transition for the Board and our new directors, the Board waived the application of our director retirement policy to William Tiefel for one year, as permitted by CarMax’s Corporate Governance Guidelines. If elected to another term at the 2018 annual shareholders meeting, Mr. Tiefel will also continue to serve as the Board’s lead independent director.Our Board is declassified. Accordingly, each director nominee is standing for election to hold office until our 2019 annual meeting of shareholders.Our Board is declassified. This means that each director stands for election for a one-year term every year.We appointed Ms. Shinder to the Board after conducting an extensive search for a director with, among other qualities, digital expertise. The search was led by our Nominating and Governance Committee with the assistance of an outside search firm, which first brought Ms. Shinder to the Committee’s attention.Our Board is declassified. Accordingly, each of our directors is standing for election to hold office until our 2016 annual meeting of shareholders.Each nominee must receive a majority of the votes cast. Each nominee has consented to being named in this proxy statement and to serve if elected. If any nominee is not available to serve—for reasons such as death or disability—your proxy will be voted for a substitute nominee if the Board nominates one.The following pages include information about the nominees. This information includes a summary of the specific experience, qualifications, attributes or skills that led to the conclusion that each person should serve as a CarMax director.The Board recommends a voteFOR each of the nominees.66
PETER J. BENSENMr. Bensen retired from McDonald’s Corporation, following a 20-year career, in 2016. He served as McDonald’s Chief Administrative Officer from 2015 to 2016. Before that he served as McDonald’s Corporate Executive Vice President and Chief Financial Officer from 2008 to 2014, when he was promoted to Corporate Senior Executive Vice President and Chief Financial Officer, a position he held until 2015. Before joining McDonald’s in 1996, Mr. Bensen was a senior manager at Ernst & Young LLP.Director since: 2018Age: 55IndependentOther Current DirectorshipsLamb Weston Holdings, Inc.Other Directorships within Past 5 YearsCatamaran Corporation (2011-2015)QualificationsMr. Bensen’s long-standing service as the chief financial officer, and in other administrative, financial and accounting roles, at a global, iconic company qualify him to serve on our Board. He brings to our Board extensive management experience and financial expertise, as well as his background as a key executive helping to shape McDonald’s strategic response to a changing market environment.
Ronald E. BlaylockDirector since: 2007Age: 55Independent 
Thomas J. FolliardDirector since: 2006Age: 50MR.
RONALD E. BLAYLOCKMr. Blaylock is the founder and Managing Partner of GenNx360 Capital Partners, a private-equity buyout fund focused on industrial business-to-business companies. Prior to founding GenNx360 in 2006, Mr. Blaylock was chief executive officerChief Executive Officer of Blaylock & Company, a full-service investment banking firm that he founded in 1993. Previously, Mr. Blaylock held senior management positions with PaineWebber and Citigroup.MR. FOLLIARDhas been the President and Chief Executive Officer of CarMax since 2006. He joined CarMax in 1993 as senior buyer and became director of purchasing in 1994. Mr. Folliard was promoted to vice president of merchandising in 1996, senior vice president of store operations in 2000, executive vice president of store operations in 2001 and president and chief executive officer in 2006.Director since: 2007Age: 58IndependentOther Current DirectorshipsOther Current DirectorshipsRadioPfizer Inc., Urban One, Inc. and W. R. Berkley Corporation.PulteGroup, Inc.Other Directorships within Past 5 YearsOther Directorships within Past 5 YearsNone.None.None.QualificationsQualificationsMr. Blaylock’s experience managing two successful investment enterprises, as well as his considerable finance experience, qualify him to serve on our Board. Mr. Blaylock’s years of relevant experience growing companies and serving on other public company boards enable him to provide additional insight to our Board.7
SONA CHAWLAMs. Chawla is the Chief Operating Officer and President-Elect of Kohl's Corporation, a position she has held since September 2017. Kohl’s has announced that Ms. Chawla will become its President at the conclusion of its annual shareholder meeting on May 16, 2018. Ms. Chawla joined Kohl’s in November 2015, serving as Chief Operating Officer until September 2017. Before joining Kohl’s, Ms. Chawla served at Walgreens as its President of Digital and Chief Marketing Officer from February 2014 to November 2015 and as its President, E-commerce from January 2011 to February 2014. Ms. Chawla has 17 years of experience in digital and retail.Director since: 2017Age: 50IndependentOther Current DirectorshipsNone.Other Directorships within Past 5 YearsExpress, Inc. (2012-2015)QualificationsMs. Chawla’s executive, strategic, operational and digital expertise qualify her to serve on our Board. Her background and operating experience in retail, including e-commerce, omni-channel strategy, store operations, logistics, information and digital technology strengthen the business and strategic insight of our Board.THOMAS J. FOLLIARDMr. Folliard has been the Non-Executive Chair of the Board of CarMax since August 2016. He joined CarMax in 1993 as senior buyer and became Director of Purchasing in 1994. He was promoted to Vice President of Merchandising in 1996, Senior Vice President of Store Operations in 2000 and Executive Vice President of Store Operations in 2001. Mr. Folliard served as President and Chief Executive Officer of CarMax from 2006 to February 2016 and retired as Chief Executive Officer in August 2016.Director since: 2006Age: 53Non-Executive Chair ofthe BoardOther Current DirectorshipsPulteGroup, Inc.Other Directorships within Past 5 YearsDAVIDsTEA, Inc. (2014-2017)QualificationsDuring his ten years as CEO, Mr. Folliard successfully led CarMax through the company’s establishment as a national brand and a time of significant growth, during which its store base and total revenues more than doubled and its net income quadrupled. With his long tenure at CarMax, Mr. Folliard brings to the board significant executive experience and in-depth knowledge of our company and the auto retail industry.��8 
SHIRA GOODMANMs. Goodman is the retired Chief Executive Officer of Staples, Inc. Ms. Goodman joined Staples in 1992 and held a variety of positions of increasing responsibility in general management, marketing and human resources, including serving as Executive Vice President, Marketing from 2001 to 2009, Executive Vice President, Human Resources from 2009 to 2012, Executive Vice President, Global Growth from 2012 to 2014, President, North American Commercial from 2014 to 2016, President, North American Operations from February to June 2016, Interim Chief Executive Officer from June to September 2016, and Chief Executive Officer from September 2016 to January 2018. From 1986 to 1992, Ms. Goodman worked at Bain & Company in project design, client relationships and case team management and helped develop the initial business plan for the Staples B2B delivery service.Director since: 2007Age: 57IndependentOther Current DirectorshipsNominated to serve as a director of Henry Schein, Inc. if approved by shareholders at their annual meeting on May 31, 2018.Other Directorships within Past 5 YearsStaples, Inc.QualificationsMs. Goodman has proven business acumen, having served as the chief executive and in various other leadership positions at an internationally renowned retailer. Ms. Goodman’s experiences in operations, retail marketing, sales force management, human resources, and business growth at Staples all qualify her to serve on our Board.
ROBERT J. HOMBACHMr. Hombach is the retired Executive Vice President, Chief Financial Officer and Chief Operations Officer of Baxalta, a biopharmaceutical company, a position he held from 2015 until the acquisition of Baxalta by Shire PLC in 2016. Baxalta was spun off from its parent, Baxter, in 2015, where Mr. Hombach served as Vice President and Chief Financial Officer from 2010 until the Baxalta spin off. Mr. Hombach began his career at Baxter, a global healthcare company, in 1989 and served in a number of roles there, including as Vice President of Finance EMEA from 2004 to 2007 and Treasurer from 2007 to 2010.Director since: 2018Age: 52IndependentOther Current DirectorshipsBioMarin Pharmaceutical Inc.Other Directorships within Past 5 YearsNone.QualificationsMr. Hombach’s considerable executive and financial experience qualify him to serve on our Board. His background as an executive at large, multi-national corporations undertaking complex strategic and transactional transitions, in addition to his operational and financial expertise, strengthen the business and strategic insight of our Board.9
DAVID W. MCCREIGHTMr. McCreight is the retired President of Urban Outfitters, Inc., an international consumer products retailer and wholesaler, and Chief Executive Officer of its Anthropologie Group. Mr. McCreight served as Chief Executive Officer of Anthropologie from 2011 to 2018 and as President of Urban Outfitters from 2016 to 2018. Previously, Mr. McCreight served as President of Under Armour from 2008 until 2010 and he was President, from 2005 to 2008, and Senior Vice President, from 2003 to 2005, of Lands’ End.Director nomineeAge: 55IndependentOther Current DirectorshipsNone.Other Directorships within Past 5 YearsDAVIDsTEA, Inc. (2014-2018)QualificationsMr. McCreight’s extensive experience as a retail executive qualifies him to serve on our Board. His background as a leader at high profile retail brands executing omni-channel strategies in a fast-evolving market environment will allow him to contribute key strategic insights to our Board.
WILLIAM D. NASHMr. Nash has been the President and Chief Executive Officer of CarMax since September 2016. He was promoted to President in February 2016. In 2012, he assumed the role of Executive Vice President, Human Resources and Administrative Services, where he oversaw human resources, information technology, procurement, loss prevention, employee health & safety and construction & facilities. In 2011, Mr. Nash was promoted to Senior Vice President, Human Resources and Administrative Services. Previously, he served as Vice President and Senior Vice President of Merchandising, after serving as Vice President of Auction Services. Mr. Nash joined CarMax in 1997 as auction manager.Director since: 2016Age: 49President and ChiefExecutive OfficerOther Current DirectorshipsNone.Other Directorships within Past 5 YearsNone.QualificationsAs the chief executive officer of CarMax, Mr. FolliardNash leads the Company’s day-to-day operations and is responsible for establishing and executing the Company’s strategic plans. His significant experience in the auto retail industry, his tenure with CarMax and his motivational leadership of more than 22,00025,000 CarMax associates qualify him to serve on our Board.7
Rakesh GangwalDirector since: 2011Age: 61Independent
Jeffrey E. GartenDirector since: 2002Age: 68IndependentMR. GANGWAL is the former Chief Executive Officer of US Airways Group, Inc. and Worldspan Technologies, Inc. From 2003 to 2007, Mr. Gangwal served as chairman, president and chief executive officer of Worldspan Technologies, Inc., a provider of travel and information technology services to the travel and transportation industry. From 2002 to 2003, he was involved in various personal business endeavors, including private equity and consulting projects. From 1998 until his resignation in 2001, Mr. Gangwal served as president and chief executive officer of US Airways Group, Inc. and US Airways, Inc. and from 1996 to 1998, he was the president and chief operating officer of US Airways Group. He is a co-founder of IndiGo, India’s largest low-fare airline.MR. GARTENhas been the Juan Trippe Professor in the Practice of International Trade, Finance and Business at the Yale School of Management since 2005 and chairman of Garten Rothkopf, an international consulting firm, since 2005. He was the Dean of the Yale School of Management from 1995 to 2005. He was the United States Undersecretary of Commerce for International Trade from 1993 to 1995 and previously spent 13 years in investment banking with Lehman Brothers and Blackstone Group. He is a member of the board of overseers of the International Rescue Committee.Other Current DirectorshipsOther Current DirectorshipsOffice Depot, Inc.Aetna Inc. and certain mutual funds of Credit Suisse Asset Management.Other Directorships within Past 5 YearsOther Directorships within Past 5 YearsPetSmart, Inc. (2005-2015) and OfficeMax Incorporated (1998-2013).Served on the board of managers of Standard & Poor’s LLC, a division of The McGraw-Hill Companies (2012-2015).QualificationsQualificationsMr. Gangwal’s experience as a chief executive officer, as well as his extensive background in corporate strategy, operations and technology management, qualify him to serve on our Board. Mr. Gangwal’s service as a board member of publicly traded retail companies further qualifies him to serve on our Board.Mr. Garten’s record as a distinguished business scholar and teacher, as well as his years of government service, investment banking work and service to other significant boards of directors, qualify him to serve on our Board. His appreciation of corporate governance, as well as his tenure as a CarMax Board member, provide wisdom, continuity and value to our Board.810
Shira GoodmanDirector since: 2007Age: 54Independent
W. Robert GraftonDirector since: 2003Age: 74Independent MS. GOODMANhas been the President, North American Commercial of Staples, Inc., the world’s leading online, delivery and retail seller of business products, since February 2014. In her current position, she leads Staples’ U.S. and Canadian business units that sell and deliver office products and services directly to businesses. 
MARCELLA SHINDERMs. Goodman joined Staples in 1992 and has held a variety of positions of increasing responsibility in general management, marketing and human resources, including serving as executive vice president, marketing from 2001 to 2009, executive vice president, human resources from 2009 to 2012, and executive vice president, global growth from 2012 to 2014. From 1986 to 1992, Ms. Goodman worked at Bain & Company in project design, client relationships and case team management.MR. GRAFTON is the retired Managing Partner-Chief Executive, Andersen Worldwide S.C. Andersen Worldwide provided global professional auditing and consulting services through its two service entities, Arthur Andersen and Andersen Consulting. He is a retired certified public accountant and joined Arthur Andersen in 1963. He was elected a member of the Board of Partners, Andersen Worldwide in 1991 and chairman of the Board of Partners in 1994. He served as Managing Partner-Chief Executive from 1997 through 2000.Other Current DirectorshipsOther Current DirectorshipsNone.DiamondRock Hospitality Company (where Mr. Grafton is currently lead director).Other Directorships within Past 5 YearsOther Directorships within Past 5 YearsNone.SRA International, Inc. (2010-2011).QualificationsQualificationsMs. Goodman has proven business acumen, having served in various leadership positions at an internationally renowned retailer. Ms. Goodman’s experiences in retail marketing, sales force management, human resources, and business growth at the world’s largest office products company all qualify her to serve on our Board. In her current position, Ms. Goodman is responsible for leading Staples’ commercial business unit that reported more than $8 billion in sales in its most recent fiscal year.Mr. Grafton’s extensive accounting experience, as well as his roleShinder serves as the chief executiveGlobal Head of an international audit and consulting firm with more than 100,000 employees, qualify himMarketing at WeWork Companies Inc., a technologically driven global provider of shared working spaces. Prior to serve on our Board. His designation as an “audit committee financial expert” and his years of service as our Audit Committee chairman provide significant and consistent leadership.9
Edgar H. GrubbDirector since: 2007Age: 75Independent
Marcellajoining WeWork, Ms. ShinderDirector since: 2015Age: 48IndependentMR. GRUBB is the retired Executive Vice President and was Chief FinancialMarketing Officer of Transamerica Corporation,at WorkMarket, a leading insurance and financial services company. He joined Transamerica in 1989, became executive vice president in 1993 and retired in 1999. From 1986 to 1989, heprovider of advanced labor automation technology, from May 2016 until March 2018. Before that, Ms. Shinder was the senior vice president and chief financial officer of Lucky Stores, Inc.MS. SHINDERis the Chief Marketing Officer of Nielsen N.V., aHoldings plc, the world’s leading global performance management company.consumer data and information company from 2011 to 2016. Prior to joining Nielsen, N.V. in 2011, Ms. Shinder was with American Express, serving in a variety of executive roles including head of global marketing, head of brandspanning general management and social media, and general manager, small business charge cards,marketing including, most recently, as General Manager of the American Express OPEN. Director since: 2015Age: 51IndependentOther Current DirectorshipsOther Current DirectorshipsNone.CSAA Insurance Group, an AAA affiliate providing auto and property coverage to AAA members in 23 states (where Mr. Grubb is a former chairman of the board) and Auto Club Partners, Inc., an affiliation of ten AAA clubs in the United States.None.Other Directorships within Past 5 YearsOther Directorships within Past 5 YearsNone.None.None.QualificationsQualificationsWith extensive experienceMs. Shinder’s experiences as the chief financial officer of a public company, Mr. Grubb provides CarMax with his comprehensive understanding of the complex financial and operational issues that public companies confront. His financial acumen, as well as his demonstrated leadership capabilities, qualify him to serve on our Board.Ms. Shinder’s experience as the chieflead marketing officer of innovative venture capital backed technology companies, as a senior executive at a leading performanceinformation management company, and at a large consumer financial services organization focused on consumer analytics qualifieslending, qualify her to serve on our Board. Further, Ms. Shinder’s deep experience with big data and analytics, machine learning and advanced technologies, cybersecurity, social media, digital marketing and branding enable her to provide additional insight to our Board and its committees.10
Mitchell D. SteenrodDirector since: 2011Age: 48Independent
Thomas G. StembergDirector since: 2003Age: 66Independent MR.
MITCHELL D. STEENRODMr. Steenrod has been the Senior Vice President and Chief Financial Officer of Pilot Travel Centers LLC, the nation’s largest operator of travel centers and truck stops, since 2004. Mr. Steenrod joined Pilot Travel Centers in 2001 as controllerController and treasurer.Treasurer. In 2004, he was promoted to senior vice presidentSenior Vice President and chief financial officer.Chief Financial Officer. Previously, he spent 12 years with Marathon Oil Company and Marathon Ashland Petroleum LLC in a variety of positions of increasing responsibility in accounting, general management and marketing.MR. STEMBERGis the Managing General Partner of the Highland Consumer Fund at Highland Capital Partners, a venture capital firm. From 2005 to 2007, he acted as the Venture Partner of Highland Capital Partners. Mr. Stemberg is the founder and Chairman Emeritus of the Board of Staples, Inc., the world’s largest office products company and second largest internet retailer. He pioneered the office superstore industry and was chief executive officer of Staples from 1986 to 2002. From 2002 to 2004, Mr. Stemberg served as an executive officer at Staples with the title of Chairman.Director since: 2011Age: 51IndependentOther Current DirectorshipsOther Current DirectorshipsNone.None.Guitar Center, Inc. and lululemon athletica inc. Other Directorships within Past 5 YearsOther Directorships within Past 5 YearsNone.None.PetSmart, Inc. (1988-2015).QualificationsQualificationsMr. Steenrod’s extensive retail industry and operational experience as well as his experience implementing successful growth strategies, including growing Pilot Travel Centers from more than 200 travel centers to over 500650 branded locations over a span of 1016 years, qualify him to serve on our Board. Additionally, Mr. Steenrod’s extensive financial and accounting experience, including his years of experience as a chief financial officer, strengthens our Board through his understanding of accounting principles, financial reporting rules and regulations, and internal controls.Mr. Stemberg’s creation and development of the world’s leading office products company, a “big-box” retailer that experienced significant growth and profitability under Mr. Stemberg’s leadership, provides meaningful insight and knowledge to CarMax. His prior chief executive experience, his board service with various growth retailers, and his current retail-focused venture capital work provide a deep understanding of the retail industry and qualify him to serve on our Board.
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 | WILLIAM R. TIEFEL Mr. Tiefel is Lead Independent Director of CarMax and served as Chair of the Board |
Director since: 2002 Age: 84 Lead Independent Director | |
Other Current Directorships None. | |
Other Directorships within Past 5 Years None. | |
Qualifications | |
Mr. Tiefel’s vast leadership experience with a customer-focused, service-oriented lodging and hospitality enterprise | |
CORPORATE GOVERNANCE |
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| Five of our 9 independent director nominees have | the chair. As part of its commitment to | |
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| Bylaws | Our bylaws regulate the corporate affairs of CarMax. They include provisions relating to shareholder meetings, voting, |
Corporate Governance Guidelines | Our |
Code of Business Conduct | Our code of business conduct is Any amendment to, or waiver from, a provision of this code for our directors or executive officers will be promptly disclosed under the “Corporate Governance” link at investors.carmax.com. |
| ▪ | Ms. Goodman |
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| ▪ | Mr. Garten |
| Our Board periodically reviews this structure and |
Our Board recognizes that, depending on the circumstances, a different leadership model might be appropriate. The Board has no fixed policy on whether the roles of chairmanchair and CEO should be separate or combined, which maintains flexibility based on CarMax’s needs and the Board’s assessment of the Company’s leadership. Our corporate governance guidelines do provide that the Board appoint a lead independent director in the event the CEO is elected chairman,chair or the Board will appoint a lead independent director to serve in accordance with the Company’s Lead Independent Director Charter.
chair otherwise does not qualify as independent.
| Each committee is composed solely of independent directors. | In addition, all members of the Compensation and Personnel Committee qualify as “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code and “non-employee directors” as defined by Rule 16b-3 under the Securities Exchange Act of 1934. Each committee has a charter that describes the committee’s responsibilities. These charters are available under the “Corporate Governance” link at investors.carmax.com or upon written request to our Corporate |
| |||||
| Committee | Current Members | Expected Members After the Annual Shareholders Meeting | Responsibilities | ||
| Audit | Mitchell D. Steenrod
(Chair) Peter J. Bensen Sona Chawla Robert J. Hombach Marcella Shinder | Mitchell D. Steenrod (Chair) Peter J. Bensen Robert J. Hombach David W. McCreight | The Audit Committee assists in the Board’s oversight of: § the integrity of our financial statements; § our compliance with legal and regulatory requirements; § the independent auditors’ qualifications, performance and independence; and § the performance of our internal audit function. The Audit Committee retains and approves all fees paid to the independent auditors, who report directly to the Committee. Each member of the Audit Committee is financially literate, with The Audit Committee’s report to shareholders can be found on page | ||
Compensation and Personnel |
Ronald E. Blaylock (Chair) W. Robert Grafton Shira Goodman William R. Tiefel | Ronald E. Blaylock (Chair) Sona Chawla William R. Tiefel | The Compensation and Personnel Committee assists in the Board’s oversight of: § our executive compensation philosophy; § our executive and director compensation programs, including related risks; § salaries, short- and long-term incentives and other benefits and perquisites for our CEO and other executive officers, including any severance agreements; and § the administration of our incentive compensation plans and all equity-based plans. The Compensation and Personnel Committee has sole authority to retain and terminate its independent compensation consultant, as well as to approve the consultant’s fees. The Compensation and Personnel Committee’s report to shareholders can be found on page | ||
Nominating and Governance | Alan B. Colberg (Chair) Edgar H. Grubb
Jeffrey E. Garten | Shira Goodman (Chair) Marcella Shinder | The Nominating and Governance Committee assists in the Board’s oversight of: § Board organization and membership, including by identifying individuals qualified to become members of the Board, considering director nominees submitted by shareholders, and recommending director nominees to the Board; § management succession planning, including for our CEO; and | ||
§ our corporate governance guidelines. |
In addition, our non-management directors meet in executive session, also without management present, at least once during each regularly scheduled Board meeting. As chair, Mr. Folliard presides over these executive sessions. Shareholders may send their recommendations for director candidates to the attention of our Corporate Secretary at CarMax, Inc., 12800 Tuckahoe Creek Parkway, Richmond, Virginia 23238. 66. the recently added directors and the new director nominee are independent and highly qualified to serve on the Board. Other Processes that Support The Board oversees other processes that are not intended primarily to support enterprise risk management, but that assist the Company in identifying and controlling risk. These processes include our compliance and ethics program, our internal audit function, pre-filing review of SEC filings by our management-level disclosure committee, and the work of our independent auditors. 2018. In this context, the Audit Committee has met and held discussions with management, KPMG and the Company’s internal auditors, meeting Board and Committee MeetingsDuring fiscal 2015,2018, our Board met sevenfour times and our Board committees met a combined 2422 times. Each incumbent director attended 85%90% or more of the total number of meetings of the Board and the committees on which he or she served. The average attendance of all of our incumbent directors in fiscal 20152018 was 97%99%. We expect our directors to attend the annual meeting of shareholders and all of our incumbent directors who were directors at the time of the 2014 annual meeting of shareholders did so.16Our independent directors meet in executive session, without management present, at least once during each regularly scheduled Board meeting. As lead independent chairman,director, Mr. Tiefel presides over these executive sessions.The table below lists the number of Board and committee meetings in fiscal 20152018 and discloses each director’s attendance.Director(a) Board Audit Compensation
and PersonnelNominating
and GovernanceRonald E. Blaylock 7 – 5 – Thomas J. Folliard 7 – – – Rakesh Gangwal 6 – – 5 Jeffrey E. Garten 7 – – 5 Shira Goodman 7 – 5 – W. Robert Grafton 7 14* – – Edgar H. Grubb 7 – – 5* Mitchell D. Steenrod 7 14 – – Thomas G. Stemberg 6 – 5* – Beth A. Stewart(b) 2 3 – – William R. Tiefel 6* 13 – – TOTAL MEETINGS 7 14 5 5 Director(a)Board Audit Compensation
and Personnel Nominating
and GovernanceRonald E. Blaylock(b)4 — 6* — Sona Chawla(c)4 10 — — Alan B. Colberg(d)4 2 — 4* Thomas J. Folliard 4* — — — Jeffrey E. Garten(e)4 — — 4 Shira Goodman 4 — 5 — W. Robert Grafton(e)4 — 6* — Edgar H. Grubb(e)4 — — 4* William D. Nash 4 — — — Marcella Shinder 4 12 — — John T. Standley(f)3 10 — — Mitchell D. Steenrod 4 12* — — William R. Tiefel(g)4 — 6 — TOTAL MEETINGS 4 12 6 4 * ChairmanChair(a) Ms. Shinder isMessrs. Bensen, Hombach, and McCreight were not listed in this table because she wasnominated to the Board until after the end of fiscal 2018 and therefore did not a Board member inattend any meetings during fiscal 2015.2018. Rakesh Gangwal did not stand for re-election at our 2017 annual shareholders meeting and did not attend any meetings during fiscal 2018.(b) Mr. Blaylock was named chair of the Compensation and Personnel Committee on October 1, 2017. (c) Ms. Stewart resignedChawla was elected to the Board and appointed to the Audit Committee on April 24, 2017.(d) Mr. Colberg was appointed to the Nominating and Governance Committee on April 24, 2017 and concurrently stepped down from the Audit Committee. He was named chair of the Nominating and Governance Committee on October 1, 2017. Mr. Colberg is not standing for re-election at the 2018 annual shareholders meeting. (e) Mr. Garten, Mr. Grafton, and Mr. Grubb are not standing for re-election at the 2018 annual shareholders meeting. (f) Mr. Standley retired from the Board effective April 15, 2014.on January 29, 2018 and therefore is not standing for re-election at the 2018 annual shareholders meeting.(g) Mr. Tiefel is lead independent director of the Board. Selection of DirectorsCRITERIAThe Board and the Nominating and Governance Committee believe that the Board should include directors with diverse backgrounds and that directors should have, at a minimum, high integrity, sound judgment and significant experience or skills that will benefit the Company.We believe our Board should include directors with diverse backgrounds. have, at a minimum, high integrity, sound judgment and significant experience or skills that will benefit the Company. In addition, the Committee takes into account a number of factors in assessing director nominees, including the current size of the Board, the particular challenges facing CarMax, the Board’s need for specific skills or perspectives, and the nominee’s character, reputation, experience, independence from management and ability to devote the requisite time.Although we do not have a written policy with respect to the consideration of diversity in identifying director nominees, we consider and value diversity in our director selection process. Our code of business conduct defines diversity as the celebration17of all people and their individual talents and the embracing of new ideas and new ways of thinking to maximize the potential of the overall organization. Through its consideration of the factors listed above, the Nominating and Governance Committee seeks directors with diverse backgrounds to maximize the potential of the Board. We believe that the diverse backgrounds and experiences of our current directors demonstrate the Committee’s success.16PROCESSThe Nominating and Governance Committee screens and recommends candidates for nomination by the Board. The Committee may consider input from several sources, including Board members, shareholders, outside search firms, and management. The Committee evaluates candidates in the same manner regardless of the source of the recommendation, using the criteria summarized above.Our bylaws include proxy access provisions, which enable eligible CarMax shareholders to have their own director nominee included in the Company’s proxy materials along with candidates nominated by our Board. Our proxy access right permits an eligible shareholder, or a group of up to 20 shareholders, to nominate and include in CarMax’s proxy materials directors constituting up to 20% of the Board of Directors. To be eligible, the shareholder or shareholder group must have owned 3% or more of our outstanding capital stock continuously for at least three years and satisfy certain notice and other requirements set forth in our bylaws. Shareholders who wish to include director nominations in our proxy statement or nominate directors directly at an annual shareholders meeting must follow the instructions under “Shareholder Proposal Information” on page 59.EVALUATION AND REFRESHMENTIn connection with the annual election of directors and at other times throughout the year, the Nominating and Governance Committee considers whether our Board has the right mix of skills and experience to meet the challenges facing CarMax. One of the processes that assists the Committee in its consideration is our Board’s annual evaluation process. The Board and each of its committees conducts a self-evaluation. In addition, the Chairmanchair, lead independent director and the Committee preside over a peer evaluation process in which each individual director evaluates each other director. The results of these evaluations assist the Committee in determining both whether to nominate incumbent directors for reelection and whether to search for additional directors.As part of its consideration, the Committee reviews both the age and tenure of incumbent directors. TheFollowing the annual meeting, assuming all our director nominees are elected, the average age of our directors is 62will be 56, and their average tenure on our Board is 8.4will be 5.7 years. In fiscal 2015, the Committee recommended, and the Board adopted a mandatory director retirement policy providing that directors may not stand for reelectionre-election after reaching age 76. The Board may waive this limitation in appropriate circumstancescircumstances.Under our retirement policy, Mr. Grafton and there is a limited grandfather periodMr. Grubb were not nominated for re-election at the 2018 annual shareholders meeting. Mr. Colberg and Mr. Garten are also not standing for re-election. Accordingly, the Board has recently added three directors, serving priorMr. Bensen, Ms. Chawla, and Mr. Hombach, and has nominated Mr. McCreight for election to the adoptionBoard. Each of this policy.To ensure a smooth transition for the Board and our new directors, the Board waived the application of the director retirement policy to Mr. Tiefel for one year so he could continue on the Board and as lead independent director.The fresh perspectives and diversity of skills of our new directors, coupled with the institutional knowledge of the continuing independent directors, will provide the Board with ample experience and leadership.18Board’s Role in Succession PlanningThe Board oversees the recruitment, development and retention of executive talent. As part of its oversight, the Board regularly reviews short- and long-term succession plans for the Chief Executive Officer and other senior management positions. In assessing possible CEO candidates, the independent directors identify the skills, experience and other attributes they believe are required to be an effective CEO in light of CarMax’s business strategies, opportunities and challenges.The Board also considers its own succession. In doing so, the Nominating and Governance Committee and the Board take into account, among other things, the needs of the Board and the Company in light of the overall composition of the Board with a view to achieving a balance of skills, experience and attributes that would be beneficial to the Board’s oversight role.Board’s Role in Strategic PlanningWhile the formulation and implementation of CarMax’s strategic plan is primarily the responsibility of management, the Board plays an active role with respect to the Company’s strategy. This includes not only monitoring progress made in executing the strategic plan, but also regularly evaluating the strategy in light of evolving operating and economic conditions. The Board carries out its role primarily through regular reviews of the Company’s strategic plan and discussions with management, which include both broad-based presentations and more in-depth analyses and discussions of specific areas of focus. In addition, regular Board meetings throughout the year include presentations and discussions with management on significant initiatives implementing the strategic plan; developments affecting an area of the Company’s business; and on trends, competition, and emerging challenges and opportunities. The Board also reviews the strategic plan, including actions taken and planned to implement the strategy, as part of its review and approval of the annual budget.The Board’s oversight of risk management enhances the directors’ understanding of the risks associated with the Company’s strategic plan and its ability to provide guidance to and oversight of senior management in executing the Company’s strategy.Board’s Role in Risk OversightOur Board dischargesundertakes its responsibility to oversee risks to CarMax through a risk governance framework designed to:§▪ identify critical risks; §▪ allocate responsibilities for overseeing those risks to the Board and its committees; and §▪ evaluate the Company’s risk management processes. The Board does not view risk in isolation. Rather, it considers risks in virtually everyits business decisiondecisions and as part of CarMax’s business strategy. This consideration occurs in the ordinary course of the Board’s business and is not tied to any of the formal processes described below, although it is enhanced by those processes.19The following table describes the components of CarMax’s risk governance framework.17Assignment of Risk Categoriesto Board and its CommitteesThe Board has assigned oversight of certain key risk categories to either the full Board or one of its committees. For each category, management reports regularly to the Board or the assigned committee, as appropriate, describing CarMax’s strategies for monitoring, managing and mitigating risks that fall within that category.Examples of the risk categories assigned to each committee and the full Board are described below. This list is not comprehensive and is subject to change: § Audit Committee: oversees risks related to financial reporting, compliance and ethics, information technology and cybersecurity, and legal and regulatory issues. § Compensation and PersonnelCommittee: Committee: oversees risks related to human resources and compensation practices. § Nominating and GovernanceCommittee: Committee: oversees risks related to government affairs and CarMax’s reputation. § Board: oversees risks related to the economy, competition, finance and strategy. Enterprise Risk Management Risk Committee: We have a management-level Risk Committee, which is chaired by Thomas W. Reedy, our Executive Vice President and Chief Financial Officer (“CFO”), and includes as members more than ten other associates from across CarMax. The Risk Committee meets periodically to identify and discuss the risks facing CarMax. Board Reporting: The Risk Committee delivers biannual reports to the Board identifying the most significant risks facing the Company. Board Oversight: On an annual basis, Mr. Reedy, on behalf of the Risk Committee, discusses our procedures for identifying significant risks with the Audit Committee.
Risk Oversight and Management We believe that our Board leadership structure, discussed in detail beginning on page 14,15, supports the Board’s risk oversight function. Our chair, lead independent chairmandirector and committee chairs set their respective agendas and lead their respective meetings to ensure strong risk oversight, while our CEO and his management team are charged with managing risk.Related Person TransactionsOur Board has adopted a written Related Person Transactions Policy that applies to any transaction in which:§CarMax or one of its affiliates is a participant;§the amount involved exceeds $120,000; and§the related person involved in the transaction (whether a director, executive officer, owner of more than 5% of our common stock, or an immediate family member of any such person) has a direct or indirect material interest.18
CarMax or one of its affiliates is a participant;Table of Contentsthe amount involved exceeds $120,000; andthe related person involved in the transaction (whether a director, executive officer, owner of more than 5% of our common stock, or an immediate family member of any such person) has a direct or indirect material interest.A copy of our policy is available under the “Corporate Governance” link at investors.carmax.com. The Audit Committee is responsible for applyingoverseeing the Company’s policy and reviewing any related person transaction that is required to be disclosed pursuant to SEC rules.We did not have any related person transactions in fiscal 2015.2018.In reviewing related person transactions, the Audit Committee considers, among other things:§• the related person’s relationship to CarMax;§• the facts and circumstances of the proposed transaction;§the aggregate dollar amount involved in the transaction;§the related person’s interest in the transaction, including his or her position or relationship with, or ownership in, an entity that is a party to, or has an interest in, the transaction; and§the benefits to CarMax of the proposed transaction and, if applicable, the terms and availability of comparable products and services from unrelated third parties.the aggregate dollar amount involved in the transaction;the related person’s interest in the transaction, including his or her position or relationship with, or ownership in, an entity that is a party to, or has an interest in, the transaction; and20the benefits to CarMax of the proposed transaction and, if applicable, the terms and availability of comparable products and services from unrelated third parties.The Audit Committee will approve or ratify a related person transaction only if it determines that: (i) the transaction serves the best interests of CarMax and its shareholders; or (ii) the transaction is on terms reasonably comparable to those that could be obtained in arm’s length dealings with an unrelated third party.We did not have any related person transactions in fiscal 2015.Shareholder Communication with DirectorsShareholders or other interested parties wishing to contact the Board or any individual director may send correspondence to CarMax, Inc., c/o Corporate Secretary, 12800 Tuckahoe Creek Parkway, Richmond, Virginia 23238, or may send an e-mail to chairman@carmax.com,chair@carmax.com, which is monitored by Eric M. Margolin, our Corporate Secretary. Mr. Margolin will forward to the Board or appropriate Board member any correspondence that deals with the functions of the Board or its committees or any other matter that would be of interest to the Board. If the correspondence is unrelated to Board or shareholder matters, it will be forwarded to the appropriate department within the Company for further handling.1921PROPOSAL TWO: RATIFICATION OF THE APPOINTMENT OFTHE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe are asking you to ratify the Audit Committee’s appointment of KPMG LLP (“KPMG”) as CarMax’s independent registered public accounting firm for fiscal 2019. KPMG has served as our independent registered public accounting firm continuously since our separation from Circuit City Stores, Inc. (“Circuit City”) in fiscal 2003, and also served as Circuit City’s independent registered public accounting firm from the incorporation of CarMax, Inc. in 1996 through the separation. KPMG has been appointed by the Audit Committee to continue as CarMax’s independent registered public accounting firm for fiscal 2019. The members of the Audit Committee and the Board believe that the continued retention of KPMG to serve as CarMax’s independent registered public accounting firm is in the best interests of CarMax and its shareholders.The Audit Committee is directly responsible for the appointment, compensation, retention, evaluation, and oversight of the independent registered public accounting firm retained to audit CarMax’s financial statements. The Audit Committee is also responsible for the audit fee negotiations associated with CarMax’s retention of KPMG. In accordance with the SEC-mandated rotation of the audit firm’s lead engagement partner, the Audit Committee and its chairperson are directly involved in the selection of KPMG’s lead engagement partner and were directly involved in the selection of KPMG’s current lead engagement partner, whose period of service began in fiscal 2016. Furthermore, in order to ensure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent registered public accounting firm.Although we are not required to seek shareholder ratification, we are doing so as a matter of good corporate governance. If the shareholders do not ratify the appointment of KPMG, the Audit Committee will reconsider its decision. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that a change would be in the best interests of CarMax and its shareholders. KPMG has served as our independent registered public accounting firm since fiscal 2003.We expect that representatives of KPMG will attend the Annual Meeting.annual shareholders meeting. They will be given the opportunity to make a statement if they desire to do so and to respond to appropriate questions.The Board recommends a voteFOR Proposal Two.2220AUDIT COMMITTEE REPORTAUDIT COMMITTEE REPORTThe Audit Committee reports to and acts on behalf of CarMax’s Board of Directors by providing oversight of the integrity of the Company’s financial statements, the Company’s independent and internal auditors, and the Company’s compliance with legal and regulatory requirements. The Audit Committee operates under a written charter adopted by the Board, which is reviewed annually and is available under the “Corporate Governance” link at investors.carmax.com. The members of the Audit Committee meet the independence and financial literacy requirements of the NYSE and the SEC.Management is responsible for the preparation, presentation and integrity of the Company’s financial statements and the establishment of effective internal controlscontrol over financial reporting. KPMG, LLP, the Company’s independent registered public accounting firm, is responsible for auditing those financial statements in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and expressing an opinion on the conformity of CarMax’s audited financial statements with generally accepted accounting principles and on the effectiveness of CarMax’s internal controls over financial reporting.1412 times in fiscal 2015. These meetings have included regular private sessions with each of KPMG and the Company’s head of internal audit, as well as regular private sessions with each of the Company’s Chief Financial Officer, Controller, and General Counsel and Chief Compliance Officer. 2018.Management represented to the Committee that the Company’s fiscal 20152018 consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Committee reviewed and discussed the fiscal 20152018 consolidated financial statements with management and KPMG.The Committee has discussed with KPMG the matters required to be discussed by applicable auditing standards, including significant accounting policies and the quality, not just the acceptability, of the accounting principles utilized. The Committee has also received from KPMG the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee regarding independence, and the Audit Committee has discussed with KPMG the firm’s independence. The Audit Committee concluded that KPMG is independent from the Company and management.In reliance on these reviews and discussions, the Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2015,2018, for filing with the SEC.AUDIT COMMITTEEW. Robert Grafton,ChairmanMarcella ShinderMitchell D. Steenrod,William R. TiefelSona ChawlaMarcella Shinder2321AUDITOR FEESAND PRE-APPROVAL POLICYAUDITOR FEES AND PRE-APPROVAL POLICYAuditor Fees and ServicesThe following table sets forth fees billed by KPMG for fiscal 20152018 and 2014. Years Ended February 28 Type of Fee 2015 2014 Audit Fees(a) $ 1,459,600 $ 1,034,500 Audit-Related Fees(b) 387,000 437,800 Tax Fees(c) 346,900 109,000 All Other Fees(d) 465,000 – TOTAL FEES $ 2,658,500 $ 1,581,300 Years Ended February 28 Type of Fee 2018 2017 Audit Fees(a)$ 1,969,125 $ 1,726,450 Audit-Related Fees(b)547,000 440,000 Tax Fees(c)130,002 155,350 TOTAL FEES $ 2,646,127 $ 2,321,800 (a) This category includes fees associated with the annual audit of CarMax’s consolidated financial statements and the audit of CarMax’s internal control over financial reporting. It also includes fees associated with quarterly reviews of CarMax’s unaudited consolidated financial statements. (b) This category includes fees associated with agreed-upon procedures and attestation services related to our asset-backed securitizations. It also includes fees associated with audits of the financial statements of our benefit plans.securitization program.(c) This category includes fees associated with tax compliance, consultation and planning services. (d)This category includes reimbursement of professional and administrative costs associated with a completed informal regulatory inquiry.Approval of Auditor Fees and ServicesThe Audit Committee’s charter provides for pre-approval of audit and non-audit services to be performed by the independent auditors. The Committee typically pre-approves specific types of audit, audit-related and tax services, together with related fee estimates, on an annual basis. The Committee pre-approves all other services on an individual basis throughout the year as the need arises. The Committee has delegated to its chairmanchair the authority to pre-approve independent auditor engagements in an amount not to exceed $50,000 per engagement. Any such pre-approvals are reported to and ratified by the entire Committee at its next regular meeting.All audit, audit-related and tax services in fiscal 20152018 were pre-approved by the Audit Committee or pre-approved by the Chairmanchair pursuant to his delegated authority and subsequently ratified by the Audit Committee. In all cases, the Audit Committee concluded that the provision of such services by KPMG was compatible with the maintenance of KPMG’s independence.2224PROPOSAL THREE: ADVISORY RESOLUTION TOAPPROVE EXECUTIVE COMPENSATION
54.
2019.
COMPENSATION DISCUSSION AND ANALYSIS |
| William D. Nash | President and Chief Executive Officer. |
| |
| Thomas W. Reedy | Executive Vice President and Chief Financial Officer. Mr. Reedy joined CarMax in 2003 and was promoted to his current position in 2012. |
| William C. Wood | Executive Vice President |
| Edwin J. Hill |
|
| |
Fiscal 2015 was a record year for CarMax. Highlights of the year include the following:
| Market Share Growth | We estimate that our share of the 0- to 10-year old used vehicle market increased almost 7% in our television markets in calendar 2017. |
| Store Growth | We opened |
| We achieved top and bottom-line |
| Units |
| CarMax Auto Finance |
| We continued |
Fourteenth Year on Fortune “Best Companies” List | We were named by Fortune magazine as one of its “100 Best Companies to Work For” for the |
The following chart summarizes the changes we made to the compensation of our named executive officers in fiscal 2015.
| ||
Compensation Category | Changes We Made
| Why We Made These Changes |
Base Salary |
|
|
| named executive officers. |
| Same increase given to salaried associates throughout the Company in recognition of successful performance. The Committee determined that the performance of our named executive officers warranted this increase. See pages |
Annual Incentive Bonus |
109.7% payout versus an Adjusted pre-tax income used as the bonus performance measure. | Based on Company performance measured against the pre-determined |
|
|
The Committee changed the bonus performance measure to better align bonus performance with factors within the control of our NEOs. See page 32 for more detail. |
Long-Term Equity Award | No change in the annual awards to our named executive officers. Diluted earnings per share, adjusted to exclude income tax, used as the performance measure for performance stock unit (“PSU”) grants. |
The annual awards to our named executive officers were maintained at prior year levels, which the Committee believed continued to provide competitive pay opportunities for The Committee changed the PSU performance measure to better align PSU performance with factors within the control of our NEOs. See |
Performance drives pay
page 35.
The Committee has approved the introduction of performance stock unit awards (“PSUs”) for fiscal year 2016. Depending on the Company’s achievement of performance goals over a three-year period, PSUs will represent the right to receive between 0% and 200% of a targeted number of shares of our common stock. The performance goals will be based on earnings before interest and taxes, or EBIT, targets. For our CEO and executive and senior vice presidents, the PSUs will replace the stock-settled restricted stock units, which we refer to as market stock units (“MSUs”), that were tied to the Company’s stock price and that we previously granted to these executives. The PSUs are otherwise identical in all material respects to the MSUs, which are discussed in more detail on page 31.
We believe our new PSU award will further strengthen the link between pay and the performance of our senior executives by directly
tying equity payments to a meaningful and appropriate measure of earnings growth.
Compensation Philosophy and Objectives
| ▪ | Align the interests of executive officers with the financial interests of our shareholders. |
| ▪ | Encourage the achievement of our key strategic, operational and financial goals. |
| ▪ | Link incentive compensation to Company and stock price performance, which the Committee believes promotes a unified vision for senior management and creates common motivation among our executives. |
| ▪ | Attract, retain and motivate executives with the talent necessary to drive our long-term success. |
| ▪ | Provide the Committee the flexibility to respond to the continually changing environment in which we operate. |
30.
The Committee has engaged Frederic W. Cook & Co., Inc. (“FWC”),engages a compensation consultant, which it uses to obtain access to independent compensation data, analysis and advice. PursuantThe Committee retained Frederic W. Cook & Co., Inc. (“FWC”) to assist it while making decisions regarding the compensation of our executive officers for fiscal 2018. In May 2017, the Committee engaged Semler Brossy Consulting Group, LLC (“SBCG”) as its compensation consultant, replacing FWC. Under its charter, the Committee has the sole authority to hire, oversee and terminate FWC,compensation consultants, as well as to approve FWC’scompensation consultant fees and any other
| The Committee has retained an independent compensation consultant. |
Committee members have direct access to The Committee assesses its compensation consultant’s independence annually. It assessed FWC’s independence in April | |
| ▪ | whether |
| ▪ | the amount of fees paid by CarMax to |
| ▪ |
| ▪ | any business or personal relationship between the individuals advising the Committee and any Committee member; |
| ▪ | any CarMax stock owned by the individuals advising the Committee; and |
| ▪ | any business or personal relationship between the individuals advising the Committee, or |
FWC
2018, including analysis related to the composition of our peer group and non-employee director pay.
judgment.
|
|
PEER GROUP
| Advance Auto Parts, Inc. | |
| AutoNation, Inc. | |
| AutoZone, Inc. | |
| Avis Budget Group, Inc. | |
| Dick’s Sporting Goods, Inc. | Ross Stores, Inc. |
| Dollar General Corporation | The Sherwin-Williams Company |
| eBay Inc. | Southwest Airlines Co. |
| Staples, Inc. | |
| Genuine Parts Company | Tractor Supply Company |
| Base Salary | + | Annual Incentive Bonus | + | Long-Term Equity Awards | = | Total Direct Compensation |
2018.
| Name | Prior Base Salary ($) | Fiscal 2015 Base Salary ($) | Percentage Increase (%) |
Thomas J. Folliard | 1,138,446 | 1,195,446 | 5.0 |
William D. Nash | 498,021 | 550,000 | 10.4 |
Thomas W. Reedy | 575,646 | 595,794 | 3.5 |
William C. Wood | 575,646 | 595,794 | 3.5 |
Edwin J. Hill | 487,896 | 504,972 | 3.5 |
Angela S. Chattin | 411,483 | 425,885 | 3.5 |
The Committee increased Mr. Folliard’s base salary by 5% based on a review of his individual performance in fiscal 2014 and to align his base salary more closely with the 50th percentile of the CEO base salary blended peer/survey data described above under the heading “Peer Group.”
| Name | Prior Base Salary ($) | Fiscal 2018 Base Salary ($) | Percentage Increase (%) | |||||
William D. Nash(a) | 1,000,000 | 1,032,500 | 3.25 | |||||
| Thomas W. Reedy | 700,000 | 722,750 | 3.25 | |||||
| William C. Wood | 700,000 | 722,750 | 3.25 | |||||
| Edwin J. Hill | 600,000 | 619,500 | 3.25 | |||||
| Eric M. Margolin | 575,000 | 593,688 | 3.25 | |||||
| (a) | Mr. Nash’s prior base salary represents the base salary set by the Committee at the time of his promotion to CEO on September 1, 2016. For the portion of fiscal 2017 prior to his promotion to CEO, his base salary was $800,000. |
The Committee also approved Mr. Folliard’sNash’s recommendation to increase the base salaries for each of the other named executive officers by 3.5%3.25%. These increases were based on the individual contributions that each named executive officer made to CarMax’s performance in fiscal 2014. These increases of 3.5%2017 and were consistent with the base salary increases awarded generally to our salaried associates.
| Base Salary | x | Target Percentage of Base Salary | x | Performance Adjustment Factor | = | Annual Incentive Bonus |
32.
Step One: Select Performance Measure | The Committee determined in April |
| The Committee then established the following |
| The Committee then established the following performance adjustment factors for fiscal | ||
| 2018: § | 25% if the threshold goal of | ||
§ | 100% if the target goal of |
| § | 150% if the premium goal of | ||
§ | 200% if the maximum goal of | ||
If the threshold performance goal was not achieved, no incentive bonus would be paid. The performance adjustment factors are | |||
Step Four: Assess Performance Against Targets and Determine Payouts | For fiscal 2018, the | ||
| Company achieved $1,134.4 million in adjusted pre-tax income, which represents $664.1 million in net earnings less the effect of the $399.5 million income tax provision and $70.7 million in interest expense. The Committee certified CarMax’s adjusted pre-tax income amount in April |
| Name | Base Salary ($) | Incentive Target Percentage (%) | Target Incentive Amount ($) | Actual Fiscal 2015 Incentive ($) | Maximum Incentive Amount ($) |
| Thomas J. Folliard | 1,195,446 | 150 | 1,793,169 | 3,216,945 | 3,586,338 |
| William D. Nash | 550,000 | 75 | 412,500 | 740,025 | 825,000 |
| Thomas W. Reedy | 595,794 | 75 | 446,846 | 801,640 | 893,692 |
| William C. Wood | 595,794 | 75 | 446,846 | 801,640 | 893,692 |
| Edwin J. Hill | 504,972 | 50 | 252,486 | 452,960 | 504,972 |
| Angela S. Chattin(a) | 425,885 | 50 | 212,943 | 382,019 | 425,886 |
| Name | Base Salary ($) | Incentive Target Percentage (%) | Target Incentive Amount ($) | Actual Fiscal 2018 Incentive Bonus | Maximum Incentive Amount ($) | |||||||||
| William D. Nash | 1,032,500 | 130 | 1,342,250 | 1,472,448 | 2,684,500 | |||||||||
| Thomas W. Reedy | 722,750 | 75 | 542,063 | 594,643 | 1,084,126 | |||||||||
| William C. Wood | 722,750 | 75 | 542,063 | 594,643 | 1,084,126 | |||||||||
| Edwin J. Hill | 619,500 | 75 | 464,625 | 509,694 | 929,250 | |||||||||
| Eric M. Margolin | 593,688 | 75 | 445,266 | 488,457 | 890,532 | |||||||||
amounts for achievement against the targets established by the Committee.
$2,684,500.
| Name | One-Time Bonus ($) | |
| William D. Nash | 96,239 | |
| Thomas W. Reedy | 38,866 | |
| William C. Wood | 38,866 | |
| Edwin J. Hill | 33,314 | |
| Eric M. Margolin | 31,926 | |
The Committee believes this mix
Our long-term equity awards historically contained a modified single-trigger feature under which 50% of the award, vested automatically upon a change-in-control and the remaining 50% vested automatically upon the one-year anniversary of the change in control. In January 2014, the Committee eliminated this single-trigger feature and replaced it with a double-trigger feature under which a change-in-control does not, on its own, trigger accelerated vesting of long-term equity awards granted after January 2014. All long-term equity awards granted in fiscal 2015 featured a double-trigger.
In January 2015considered the Committee approved the introduction of PSUs for fiscal year 2016. The PSUs will replace MSU awards fornamed executive officer’s role at CarMax; benchmarking data; our CEO and executive and senior vice presidents. The Committee believes the new PSU award will further strengthen the link between pay andrecent financial performance; the performance of our executives. PSUs are discussed in more detail on page 25.
common stock; the fair market value, expense and dilutive effect of any potential award; succession planning; and the importance of retaining the officer’s services. The Committee solicits the advice of its independent compensation consultant and the opinion of the Company’s CEO
except with respect to the awards to the CEO. The CEO generally gives the Committee an initial recommendation for annual long-term equity awards for the other named executive officers. The Committee reviews this recommendation and makes its own independent determination.Market
MSUswill be paid. PSUs generally vest on the three-year anniversary of the grant date. Limited circumstances may trigger early vesting.
| Threshold | Actual | Target | Maximum | ||||
FY16-FY18 Adjusted Pre-Tax Income (in thousands)(a) | $3,163,901 | $3,243,500 | $3,451,404 | $3,755,911 | |||
| Performance Multiplier | 25 | % | 46 | % | 100 | % | 200% |
| (a) | Adjusted pre-tax income is equal to net earnings less the provision for income tax and interest expense. For fiscal 2016 through fiscal 2018, in the aggregate, $3,243.5 million in adjusted pre-tax income represented $1,914.5 million in net earnings less an income tax provision of $1,165.4 million and $163.5 million in interest expense. |
Fiscal 20152018 Long-Term Equity Awards
| Options and MSUs Granted in Fiscal 2015 | Options and MSUs Granted in Fiscal 2014 | |||||
| Name | Number of Stock Options(a) | Number of MSUs | Total Grant Date Fair Value ($) | Number of Stock Options(a) | Number of MSUs | Total Grant Date Fair Value ($) |
| Thomas J. Folliard | 369,039 | 29,348 | 6,500,004 | 265,273 | 26,467 | 5,499,956 |
| William D. Nash | 98,858 | 7,862 | 1,741,233 | 84,258 | 8,296 | 1,741,189 |
| Thomas W. Reedy | 98,858 | 7,862 | 1,741,233 | 84,258 | 8,296 | 1,741,189 |
| William C. Wood | 98,858 | 7,862 | 1,741,233 | 84,258 | 8,296 | 1,741,189 |
| Edwin J. Hill | 81,959 | 6,518 | 1,443,580 | 69,815 | 6,889 | 1,443,507 |
| Angela S. Chattin(b) | 67,765 | 5,389 | 1,193,565 | 57,757 | 5,686 | 1,193,509 |
| Options and PSUs Granted in Fiscal 2018 | Options and PSUs Granted in Fiscal 2017 | ||||||||||||||||
| Name | Grant Date Fair Value of Stock Options ($)(a) | Grant Date Fair Value of PSUs ($) | Total Grant Date Fair Value ($) | Grant Date Fair Value of Stock Options ($)(a) | Grant Date Fair Value of PSUs ($) | Total Grant Date Fair Value ($) | |||||||||||
| William D. Nash | 3,750,005 | 1,249,974 | 4,999,979 | 4,249,983 | 749,977 | 4,999,960 | |||||||||||
| Thomas W. Reedy | 1,455,925 | 485,313 | 1,941,238 | 1,455,917 | 485,322 | 1,941,239 | |||||||||||
| William C. Wood | 1,455,925 | 485,313 | 1,941,238 | 1,455,917 | 485,322 | 1,941,239 | |||||||||||
| Edwin J. Hill | 1,305,925 | 435,281 | 1,741,206 | 1,305,921 | 435,293 | 1,741,214 | |||||||||||
| Eric M. Margolin | 1,305,925 | 435,281 | 1,741,206 | 1,380,365 | 360,894 | 1,741,259 | |||||||||||
| (a) | We grant limited stock appreciation rights (“SARs”) in tandem with each option. The SARs may be exercised only in the event of a change-in-control of the Company. Upon the exercise of the SAR and the surrender of the related option, the officer is entitled to receive an amount equal to the difference between the value of our common stock on the date of exercise and the exercise price of the underlying stock option. No free-standing SARs have been granted. |
With the exception of Mr. Folliard, the grant date fair value of the annual long-term equity awards provided to all of our named executive officers in fiscal 2015 remained essentially unchanged in fiscal 2018, meaning that approximately the same target economic value was delivered in fiscal 20152018 as was delivered in fiscal 2014.2017. The Committee determined based on benchmarkingthe blended peer/survey data and its own independent judgment that maintaining equity awards at prior year levels continued to provide competitive pay for theseour named executive officers. AlthoughThe Committee adjusted the relative proportion of options to PSUs granted to Messrs. Nash and Margolin in fiscal 2018 without changing the target economic value of these awards remained flat, the number ofdelivered. The resulting allocation, 75% options and MSUs awarded in25% PSUs, aligns their fiscal 2015 differ from fiscal 2014 due2018 grant allocation with that granted to changes in our stock price andthe other factors that impacted award valuation at the time of grant. The exercise price of the annual option awards granted in April 2014 and April 2013 was $44.96 and $42.68, respectively.
Our Employee Equity Grant Policy requires us to grant our annual long-term equity awards three business days after we release the prior fiscal year’s year-end earnings information. The Committee complied with this requirement in fiscal 2015, granting the awards listed above on April 9, 2014. The awards were priced at the volume-weighted average price of our common stock on the grant date, in accordance with our Stock Incentive Plan and our Employee Equity Grant Policy.
named executive officers.
 |  |
Percentage of Total Direct Compensation | Percentage of Performance- Based Compensation | |||
Performance- Based | Fixed | Annual | Long- Term | |
| Thomas J. Folliard | 89 | 11 | 33 | 67 |
| William D. Nash | 82 | 18 | 30 | 70 |
| Thomas W. Reedy | 81 | 19 | 32 | 68 |
| William C. Wood | 81 | 19 | 32 | 68 |
| Edwin J. Hill | 79 | 21 | 24 | 76 |
| Angela S. Chattin(a) | 92 | 8 | 8 | 92 |
| Percentage of Target Total Direct Compensation | Percentage of Target Performance-Based Compensation | ||||||
| Performance- Based | Fixed | Annual | Long- Term | ||||
| William D. Nash | 86% | 14% | 21% | 79% | |||
| Thomas W. Reedy | 77% | 23% | 22% | 78% | |||
| William C. Wood | 77% | 23% | 22% | 78% | |||
| Edwin J. Hill | 78% | 22% | 21% | 79% | |||
| Eric M. Margolin | 79% | 21% | 20% | 80% | |||
48.
46.
Our severance agreements do not provide for a guaranteed term of employment or tax gross-ups. | Under the terms of the severance agreements, the Committee establishes and approves each named executive officer’s annual base salary, which cannot be less than the minimum base salary set forth in each agreement unless across-the-board reductions in salary are implemented for all of our senior officers. Additionally, the Committee approves the performance measures and payment amounts that determine each named executive officer’s annual incentive bonus under the Bonus Plan. | |
49. 2018.Clawback and Forfeiture ProvisionsThe severance agreements contain a clawback provision. If any named executive officer engages in conduct for which he could be terminated for cause, with certain limitations, and the conduct directly results in the filing of a restatement of any financial statement that was previously filed with the SEC, the named executive officer shall, upon demand by the Company, repay with interest all compensation that was expressly conditioned on the achievement of certain financial results if the restated financial statements would have resulted in a lesser amount being paid.In addition, at our 2012 annual shareholders meeting, we asked our shareholders to approve amendments to add clawback provisions to both our Bonus Plan and Stock Incentive Plan. Our shareholders approved these provisions, which provide that any award that is subject to recovery under any law, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, will be subject to a clawback as required by such law or any CarMax policy adopted pursuant to such law.In addition to the clawback provisions discussed above, our equity award agreements contain a forfeiture provision. If a named executive officer is terminated for cause, the officer’s unexercised vested and unvested options, unvested MSUs and unvested MSUsPSUs will be forfeited.37Change-in-Control and Severance BenefitsEach severance agreement provides for payments and other benefits in certain circumstances involving a termination of employment, including a termination of employment in connection with a change-in-control. Payments in connection with a change-in-control are subject to a “double trigger”;double trigger; that is, the executive is not entitled to payment unless there is both a change-in-control and the executive is subsequently terminated without cause (or resigns for good reason). within a two-year period following the change-in-control. Our executives are not entitled to any severance payments as a result of voluntary termination (outside of the retirement context) or if they are terminated for cause. Detailed information with respect to these payments and benefits can be found under the heading “Potential Payments Upon Termination or Change-in-Control” beginning on page 46.The Committee believes that these severance benefits encourage the commitment of our named executive officers and ensure that they will be able to devote their full attention and energy to our affairs in the face of potentially disruptive and distracting circumstances. In the event of a potential change-in-control, our named executive officers will be able to analyze and evaluate proposals objectively with a view to the best interests of CarMax and its shareholders and to act as the Board may direct without fear of retribution if a change-in-control occurs. The Committee recognizes that the severance benefits may have the effect of discouraging takeovers and protecting our officers from removal because the severance benefits increase the cost that would be incurred by an acquiring company seeking to replace current management. The Committee believes, however, that the benefit to CarMax and its shareholders outweighs this concern.Ms. Chattin’s RetirementMs. Chattin retired from CarMax on January 9, 2015, after twenty-three years with CarMax, having served since 1997 as the senior officer of CarMax Auto Finance. Under her leadership, auto loan receivables managed by CAF increased from approximately $250 million to more than $8 billion. In connection with her retirement, and in light of her service, Ms. Chattin entered into an arrangement with the Company, approved by the Committee, to provide consulting services until August 31, 2015, at a fee rate equal to her then current base salary rate, subject to certain non-competition restrictions. The Committee also approved the acceleration of her unvested options and payment of her full, rather than pro-rated, fiscal 2015 annual incentive bonus.Payments and benefits to Ms. Chattin in connection with her retirement are quantified in the Potential Payments upon Termination or Change of Control section below.RISK AND COMPENSATION POLICIES AND PRACTICESThe Compensation and Personnel Committee assesses CarMax’s compensation policies and practices each year to ensure that they do not create risks that are reasonably likely to have a material adverse effect on the Company. In fiscal 2015,2018, management reviewed the compensation policies and practices for all CarMax associates (including store associates, store management, regional leadership teams, home office and CarMax Auto Finance associates, and executive officers). Management then presented a summary of its review at the Committee’s January 20152018 meeting. The summary listed each compensation policy or practice applicable to the various groups of CarMax associates, including base salaries, annual incentive bonuses, long-term equity awards, sales bonuses, sales commissions and hourly pay. The summary also listed the potential risks associated with those policies or practices and the tools we employ to mitigate those risks, including the following:35§▪ Annual Incentive Bonuses: payments made to senior management are: (i) subject to a clawback provision; (ii) capped at 200% of the target incentive bonus amount or at the $5 million plan maximum, whichever is lower; and (iii) only paid when CarMax satisfies the objective metrics determined at the beginning of the year by an independent committee of non-employee directors.§▪ Long-Term Equity Awards: equity awards: (i) are approved by an independent committee of non-employee directors; (ii) contain three and four-year vesting provisions; and (iii) for senior management, must be held in compliance with CarMax’s executive stock ownership guidelines.§▪ Sales Bonuses: sales bonuses are monitored to ensure that associates are not overpaid based on inflated sales figures. Monitoring tools include: (i) centralized assignment of sales targets; (ii) centralized and non-negotiable vehicle pricing; (iii) electronic reporting of sales from each store to the home office; and (iv) performance of a daily vehicle inventory at each store.§▪ Hourly Pay: hourly pay is tracked and managed through a centralized time management and reporting system.Following discussion and a review of the summary noted above, the Committee determined that none of our compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.STOCK OWNERSHIP GUIDELINESTo further align the long-term financial interests of our executives and our shareholders, the Committee has established the following stock ownership guidelines:Subject Officers Required to Own the Lesser of: Chief Executive Officer 6 x Base Salary or 300,000 shares Executive Vice President 3 x Base Salary or 100,000 shares Senior Vice President 2 x Base Salary or 50,000 shares 38Executives have five years from the date they first become subject to a particular level of stock ownership to meet the corresponding requirement. The Committee measures compliance on an annual basis at the end of each fiscal year. Acceptable forms of ownership include shares owned outright (by the executive or an immediate family member), vested stock options, PSUs and MSUs. Our stock ownership guidelines are available under the “Corporate Governance” link at investors.carmax.com.As of February 28, 2015,2018, all of our current named executive officers satisfied the ownership guidelines set forth above.PROHIBITION ON HEDGING AND PLEDGINGWe have a policy prohibiting all CarMax associates from engaging in any hedging or pledging transactions involving CarMax stock. This prohibition applies to both our named executive officers and our non-employee directors.TAX AND ACCOUNTING CONSIDERATIONSHistorically, Section 162(m) of the Internal Revenue Code generally disallowsdisallowed a tax deduction for compensation over $1 million paid in any fiscal year to the CEO or any of the three other highest paid executive officers (other than the CFO) unless that compensation iswas performance-based. Compensation under our Bonus PlanAs a result of the new tax legislation that went into effect on December 22, 2017, the exception for performance-based compensation will not be available for taxable years beginning after December 31, 2017, unless such compensation qualifies for certain transition relief.The Committee and stock options and PSUsthe Company have taken appropriate actions, to the extent feasible, in an effort to preserve the deductibility of awards previously granted pursuant to our Stock Incentive Plan mayexecutive officers that were designed and intended to be covered by Section 162(m). Despite these actions, certain compensation originally designed to qualify as performance-based under Section 162(m). may not be deductible.Although the Committee generally seekswill continue to preserveanalyze the deductibilityimpact that Section 162(m) and the potential lack of deduction associated with amounts paid in excess of the deduction limitation may have on the Company, the Committee continues to retain the flexibility to make decisions with respect to the Company’s compensation paid to our executive officers, theprograms that are based on factors other than Section 162(m) and related tax consequences. The primary function of our executive compensation program is to drive the creation of long-term shareholder value.Section 409A of the Internal Revenue Code imposes certain requirements on non-qualified deferred compensation, which can include long-term equity awards and severance. CarMax’s executive compensation programs generally are designed to comply with, or be exempt from, the requirements of that section so as to avoid potential adverse tax consequences that may result from non-compliance.In developing CarMax’s executive compensation programs, the Committee also considers the accounting treatment of, and the expenses associated with, the Company’s long-term equity compensation practices.
3936COMPENSATION AND PERSONNEL COMMITTEE REPORTThe Compensation and Personnel Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on this review and discussion, the Committee recommended to the CarMax, Inc. Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into CarMax’s Annual Report on Form 10-K for the fiscal year ended February 28, 2015.THE COMPENSATION AND PERSONNEL COMMITTEEThomas G. Stemberg,ChairmanRonald E. Blaylock,ChairShira GoodmanW. Robert GraftonWilliam R. Tiefel4037COMPENSATION TABLESCOMPENSATION TABLES
for Fiscal 2018
Name and Principal Position | Fiscal Year | Salary ($) | Stock Awards(b)(c) ($) | Option Awards(b)(c) ($) | Non-Equity Incentive Plan Comp- ensation (d) ($) | Change in Pension Value and Nonqualified Deferred Comp- ensation Earnings (e) ($) | All Other Compen- sation (f) ($) | Total ($) | |
| Thomas J. Folliard | 2015 | 1,191,062 | 1,624,999 | 4,875,005 | 3,216,945 | 384,705 | 403,382 | 11,696,098 | |
| President and Chief Executive Officer | 2014 | 1,129,175 | 1,374,961 | 4,124,995 | 2,059,449 | 0 | 354,754 | 9,043,334 | |
| 2013 | 1,086,154 | 1,152,682 | 3,458,082 | 1,203,088 | 222,701 | 283,140 | 7,405,847 | ||
| William D. Nash | 2015 | 546,002 | 435,319 | 1,305,914 | 740,025 | 67,206 | 88,688 | 3,183,154 | |
| Executive VP, HR and | 2014 | 492,806 | 430,977 | 1,310,212 | 450,460 | 0 | 87,155 | 2,771,610 | |
| Admin. Services | 2013 | 471,154 | 431,004 | 1,310,220 | 251,655 | 37,894 | 76,355 | 2,578,282 | |
| Thomas W. Reedy | 2015 | 594,244 | 435,319 | 1,305,914 | 801,640 | 57,764 | 103,926 | 3,298,807 | |
| Executive VP and | 2014 | 570,230 | 430,977 | 1,310,212 | 520,672 | 0 | 92,808 | 2,924,899 | |
| Chief Financial Officer | 2013 | 546,154 | 431,004 | 1,310,220 | 291,390 | 33,702 | 73,791 | 2,686,261 | |
| William C. Wood | 2015 | 594,244 | 435,319 | 1,305,914 | 801,640 | 142,232 | 115,065 | 3,394,414 | |
| Executive VP, Stores | 2014 | 570,229 | 430,977 | 1,310,212 | 520,672 | 0 | 88,662 | 2,920,752 | |
| 2013 | 546,154 | 431,004 | 1,310,220 | 291,390 | 81,810 | 112,100 | 2,772,678 | ||
| Edwin J. Hill | 2015 | 503,659 | 360,902 | 1,082,678 | 452,960 | 108,017 | 74,420 | 2,582,636 | |
| Senior VP, Strategy and Business Transformation | |||||||||
| Angela S. Chattin(a) | 2015 | 383,826 | 298,389 | 4,054,981 | 382,019 | 135,351 | 141,913 | 5,396,479 | |
| Former Senior VP, CarMax Auto Finance |
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus(a) ($) | Stock Awards(b) ($) | Option Awards(b) ($) | Non-Equity Incentive Plan Comp- ensation(c) ($) | Change in Pension Value and Nonqualified Deferred Comp- ensation Earnings(d) ($) | All Other Compen- sation(e) ($) | Total ($) | ||||||||
| William D. Nash | 2018 | 1,031,721 | 96,239 | 1,249,974 | 3,750,005 | 1,472,448 | 24,797 | 190,068 | 7,815,252 | ||||||||
| President and Chief Executive Officer | 2017 | 902,308 | — | 749,977 | 4,249,983 | 442,233 | 30,536 | 163,355 | 6,538,392 | ||||||||
| 2016 | 660,769 | — | 485,270 | 1,455,911 | 348,181 | — | 122,926 | 3,073,057 | |||||||||
| Thomas W. Reedy | 2018 | 722,205 | 38,866 | 485,313 | 1,455,925 | 594,643 | 22,219 | 132,390 | 3,451,561 | ||||||||
| Executive VP and Chief Financial Officer | 2017 | 699,039 | — | 485,322 | 1,455,917 | 221,550 | 26,964 | 123,664 | 3,012,456 | ||||||||
| 2016 | 650,415 | — | 485,270 | 1,455,911 | 330,525 | — | 135,173 | 3,057,294 | |||||||||
| William C. Wood | 2018 | 722,205 | 38,866 | 485,313 | 1,455,925 | 594,643 | 53,697 | 155,853 | 3,506,502 | ||||||||
| Executive VP and Chief Operating Officer | 2017 | 699,039 | — | 1,485,343 | 2,455,919 | 221,550 | 65,617 | 121,334 | 5,048,802 | ||||||||
| 2016 | 650,415 | — | 485,270 | 1,455,911 | 330,525 | — | 149,269 | 3,071,390 | |||||||||
| Edwin J. Hill | 2018 | 619,033 | 33,314 | 435,281 | 1,305,925 | 509,694 | 44,019 | 98,719 | 3,045,985 | ||||||||
| Executive VP, Strategy and Business Transformation | 2017 | 597,209 | — | 435,293 | 1,305,921 | 189,900 | 52,405 | 75,237 | 2,655,965 | ||||||||
| 2016 | 531,289 | — | 360,868 | 1,082,685 | 179,745 | — | 87,806 | 2,242,393 | |||||||||
| Eric M. Margolin | 2018 | 590,240 | 31,926 | 435,281 | 1,305,925 | 488,457 | 3,511 | 77,436 | 2,932,776 | ||||||||
| Executive VP, General Counsel and Corporate Secretary | 2017 | 572,801 | — | 360,894 | 1,380,365 | 181,988 | 4,026 | 67,958 | 2,568,032 | ||||||||
| (a) |
| (b) | Represents the aggregate grant date fair value of the awards made in each fiscal year as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”). These amounts do not correspond to the actual value that may be realized by each |
the stock option awards that were accelerated on her January 9, 2015, retirement. The incremental fair values of the accelerated stock options were computed in accordance with ASC Topic 718 and the assumptions used in determining these incremental fair values are disclosed in Note 12 to our consolidated financial statements, which are included in our Annual Report on Form 10-K for the fiscal year ended February 28, 2015. The MSUs awarded to Ms. Chattin in fiscal 2015, which are reported in the Stock Awards column, terminated on the date of her retirement pursuant to their terms.
| (c) | Represents the annual incentive bonus earned under our Bonus Plan. |
| (d) | Represents the aggregate increase in the actuarial value of accumulated benefits under our frozen Pension Plan and frozen Benefit Restoration Plan accrued during the relevant fiscal year. The “Pension Benefits in Fiscal |
| (e) | Further details are included in the “All Other Compensation in Fiscal |
| Name | Personal Use ($) | Personal Use of Company Automobile (b) ($) | Retirement ($) | Deferred Account ($) | Other (e) ($) | Total ($) |
| Thomas J. Folliard | 161,410 | 5,244 | 17,119 | 193,938 | 25,671 | 403,382 |
| William D. Nash | 16,259 | 390 | 11,890 | 32,791 | 27,358 | 88,688 |
| Thomas W. Reedy | – | 6,633 | 16,978 | 55,368 | 24,947 | 103,926 |
| William C. Wood | 16,231 | – | 16,978 | 55,368 | 26,488 | 115,065 |
| Edwin J. Hill | – | 6,774 | 16,966 | 34,790 | 15,890 | 74,420 |
| Angela S. Chattin | – | 5,599 | 15,932 | 26,695 | 93,687 | 141,913 |
(a) The compensation associated with the personal use of the Company plane is based on the aggregate incremental cost to CarMax of operating the plane. The cost is calculated based on the average variable costs of operating the plane, which include fuel, maintenance, travel expenses for the flight crews and other miscellaneous expenses. We divided the total annual variable costs by the total number of miles our plane flew in fiscal 2015 to determine an average variable cost per mile. The average variable cost per mile is multiplied by the miles flown for personal use to derive the incremental cost. This methodology excludes fixed costs that do not change based on usage, such as salaries and benefits for the flight crews, monthly service contracts, hangar rental fees, taxes, rent, depreciation and insurance. The costs associated with deadhead flights (i.e., flights that travel to a destination with no passengers as a result of an executive’s personal use) and incremental plane charters (i.e., plane charters, if any, that we pay for because our plane was not available for business use due to an executive’s personal use) are included in the incremental cost calculations for each executive. The personal use of the Company plane is treated as income to the executive. The related income taxes are calculated using Standard Industry Fare Level rates and are paid by the executive.
(b) The value of the personal use of a Company automobile is determined based on the annual lease value method and excludes any expenses such as maintenance and insurance.
| Name | Personal Use of Company Plane(a) ($) | Personal Use of Company Automobile(b) ($) | Retirement Savings Plan Contribution(c) ($) | Deferred Compensation Account Contributions(d) ($) | Other(e) ($) | Total ($) | |||||
| William D. Nash | 68,546 | — | 16,454 | 71,609 | 33,459 | 190,068 | |||||
| Thomas W. Reedy | 25,699 | 3,117 | 21,810 | 53,314 | 28,450 | 132,390 | |||||
| William C. Wood | 51,931 | — | 21,810 | 53,314 | 28,798 | 155,853 | |||||
| Edwin J. Hill | — | 8,046 | 21,780 | 42,612 | 26,281 | 98,719 | |||||
| Eric M. Margolin | — | 6,207 | 16,373 | 29,952 | 24,904 | 77,436 | |||||
| (a) | The compensation associated with the personal use of the Company plane is based on the aggregate incremental cost to CarMax of operating the plane. The cost is calculated based on the average variable costs of operating the plane, which include fuel, maintenance, travel expenses for the flight crews and other miscellaneous expenses. We divided the total annual variable costs by the total number of miles our plane flew in fiscal 2018 to determine an average variable cost per mile. The average variable cost per mile is multiplied by the miles flown for personal use to derive the incremental cost. This methodology excludes fixed costs that do not change based on usage, such as salaries and benefits for the flight crews, monthly service contracts, hangar rental fees, taxes, rent, depreciation and insurance. The costs associated with deadhead flights (i.e., flights that travel to a destination with no passengers as a result of an executive’s personal use) and incremental plane charters (i.e., plane charters, if any, that we pay for because our plane was not available for business use due to an executive’s personal use) are included in the incremental cost calculations for each executive. The personal use of the Company plane is treated as income to the executive. The related income taxes are calculated using Standard Industry Fare Level rates and are paid by the executive. |
| (b) | The value of the personal use of a Company automobile is determined based on the annual lease value method and excludes any expenses such as maintenance and insurance. |
| (c) | Includes the Company matching portion of each executive’s Retirement Savings Plan (“RSP”) contributions. Also includes a |
| (d) | Includes the Company matching portion of each executive’s Retirement Restoration Plan (“RRP”) and Executive Deferred Compensation Plan (“EDCP”) contributions. Also includes a |
contributions under the RSP and RRP due to a reduction in the executive’s eligible compensation under the RSP and RRP resulting from deferrals into the Executive Deferred Compensation Plan.
| (e) | Represents the total amount of other benefits provided. |
2018
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(a) | All Other Stock Awards: Number of Shares of Stock | All Other Option Awards: Number of Securities | Exercise or Base Price of | Grant Date | Grant Date Fair Value of Stock and | |||||
| Name | Approval Date | Grant Date | Thres- hold ($) | Target ($) | Maximum ($) | or Units (b) (#) | Underlying Options(c) (#) | Option Awards (d) ($/Sh) | Closing Price ($/Sh) | Option Awards (e) ($) |
| Thomas J. Folliard | 448,292 | 1,793,169 | 3,586,338 | |||||||
| 3/21/14 | 4/9/14 | 29,348 | 1,624,999 | |||||||
| 3/21/14 | 4/9/14 | 369,039 | 44.96 | 45.04 | 4,875,005 | |||||
| William D. Nash | 103,125 | 412,500 | 825,000 | |||||||
| 3/21/14 | 4/9/14 | 7,862 | 435,319 | |||||||
| 3/21/14 | 4/9/14 | 98,858 | 44.96 | 45.04 | 1,305,914 | |||||
| Thomas W. Reedy | 111,711 | 446,846 | 893,692 | |||||||
| 3/21/14 | 4/9/14 | 7,862 | 435,319 | |||||||
| 3/21/14 | 4/9/14 | 98,858 | 44.96 | 45.04 | 1,305,914 | |||||
| William C. Wood | 111,711 | 446,846 | 893,692 | |||||||
| 3/21/14 | 4/9/14 | 7,862 | 435,319 | |||||||
| 3/21/14 | 4/9/14 | 98,858 | 44.96 | 45.04 | 1,305,914 | |||||
| Edwin J. Hill | 63,122 | 252,486 | 504,972 | |||||||
| 3/21/14 | 4/9/14 | 6,518 | 360,902 | |||||||
| 3/21/14 | 4/9/14 | 81,959 | 44.96 | 45.04 | 1,082,678 | |||||
| Angela S. Chattin | 53,236 | 212,943 | 425,886 | |||||||
| 3/21/14 | 4/9/14 | 5,389 | 298,389 | |||||||
| 3/21/14 | 4/9/14 | 67,765 | 44.96 | 45.04 | 895,176 | |||||
| 12/9/14 | 12/9/14 | 16,223 | 32.69 | 59.45 | 435,912(f) | |||||
| 12/9/14 | 12/9/14 | 35,248 | 31.76 | 59.45 | 979,894(f) | |||||
| 12/9/14 | 12/9/14 | 43,317 | 42.68 | 59.45 | 737,689(f) | |||||
| 12/9/14 | 12/9/14 | 67,765 | 44.96 | 59.45 | 1,006,310(f) | |||||
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (a) | Estimated Future Payouts Under Equity Incentive Plan Awards (b) | All Other Option Awards: Number of Securities Under-lying Options(c) (#) | Exercise or Base Price of Option Awards(d)($/Sh) | Grant Date Closing Price ($/Sh) | Grant Date Fair Value of Stock and Option Awards(e) ($) | |||||||||||||||||||||
| Name | Approval Date | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||
| William D. Nash | 335,563 | 1,342,250 | 2,684,500 | |||||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 5,353 | 21,411 | 42,822 | 1,249,974 | |||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 232,775 | 58.38 | 58.15 | 3,750,005 | |||||||||||||||||||||
| Thomas W. Reedy | 135,516 | 542,063 | 1,084,125 | |||||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 2,078 | 8,313 | 16,626 | 485,313 | |||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 90,374 | 58.38 | 58.15 | 1,455,925 | |||||||||||||||||||||
| William C. Wood | 135,516 | 542,063 | 1,084,125 | |||||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 2,078 | 8,313 | 16,626 | 485,313 | |||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 90,374 | 58.38 | 58.15 | 1,455,925 | |||||||||||||||||||||
| Edwin J. Hill | 116,156 | 464,625 | 929,250 | |||||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 1,864 | 7,456 | 14,912 | 435,281 | |||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 81,063 | 58.38 | 58.15 | 1,305,925 | |||||||||||||||||||||
| Eric M Margolin | 111,317 | 445,266 | 890,532 | |||||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 1,864 | 7,456 | 14,912 | 435,281 | |||||||||||||||||||||
| 3/24/2017 | 5/1/2017 | 81,063 | 58.38 | 58.15 | 1,305,925 | |||||||||||||||||||||
| (a) | Represents threshold, target and maximum payout levels under our Bonus Plan for fiscal |
Compensation” column in the “Summary Compensation Table” on page 38. Additional information regarding the design of our Bonus Plan is included on pages 29 and 30.
| (b) | Represents stock-settled |
| (c) | Option awards generally vest in 25% increments annually over a four-year period. Additional information regarding stock options is included on page |
| (d) | All fiscal |
| (e) | Represents the grant date fair value of the award as determined in accordance with ASC Topic 718. |
| Option Awards(a) | Stock Awards(b) | ||||||
| Name | Grant Date | Number of (#) | Number of (#) | Option Exercise Price ($/Sh) | Option Expiration Date | Number (#) | Market ($) |
| Thomas J. Folliard | 4/5/2011 | 157,464 | 52,487 | 32.69 | 4/5/18 | ||
| 4/10/2012 | 135,718 | 135,717 | 31.76 | 4/10/19 | |||
| 4/10/2012 | 28,560 | 3,833,323 | |||||
| 4/15/2013 | 66,319 | 198,954 | 42.68 | 4/15/20 | |||
| 4/15/2013 | 26,467 | 2,792,896 | |||||
| 4/9/2014 | – | 369,039 | 44.96 | 4/9/21 | |||
| 4/9/2014 | 29,348 | 2,939,860 | |||||
| William D. Nash | 4/6/2010 | 34,894 | – | 25.39 | 4/6/17 | ||
| 4/5/2011 | 48,671 | 16,223 | 32.69 | 4/5/18 | |||
| 12/27/2011 | 11,214 | 3,738 | 30.24 | 12/27/18 | |||
| 4/10/2012 | 51,422 | 51,421 | 31.76 | 4/10/19 | |||
| 4/10/2012 | 10,679 | 1,433,335 | |||||
| 4/15/2013 | 21,065 | 63,193 | 42.68 | 4/15/20 | |||
| 4/15/2013 | 8,296 | 875,425 | |||||
| 4/9/2014 | – | 98,858 | 44.96 | 4/9/21 | |||
| 4/9/2014 | 7,862 | 787,556 | |||||
| Option Awards(a) | Stock Awards(b) | ||||||
| Name | Grant Date | Number of (#) | Number of (#) | Option Exercise Price ($/Sh) | Option Expiration Date | Number (#) | Market ($) |
| Thomas W. Reedy | 12/27/2010 | 13,756 | – | 32.05 | 12/27/17 | ||
| 4/5/2011 | 48,671 | 16,223 | 32.69 | 4/5/18 | |||
| 12/27/2011 | 11,214 | 3,738 | 30.24 | 12/27/18 | |||
| 4/10/2012 | 51,422 | 51,421 | 31.76 | 4/10/19 | |||
| 4/10/2012 | 10,679 | 1,433,335 | |||||
| 4/15/2013 | 21,065 | 63,193 | 42.68 | 4/15/20 | |||
| 4/15/2013 | 8,296 | 875,425 | |||||
| 4/9/2014 | – | 98,858 | 44.96 | 4/9/21 | |||
| 4/9/2014 | 7,862 | 787,556 | |||||
| William C. Wood | 4/5/2011 | 48,671 | 16,223 | 32.69 | 4/5/18 | ||
| 12/27/2011 | 11,214 | 3,738 | 30.24 | 12/27/18 | |||
| 4/10/2012 | 51,422 | 51,421 | 31.76 | 4/10/19 | |||
| 4/10/2012 | 10,679 | 1,433,335 | |||||
| 4/15/2013 | 21,065 | 63,193 | 42.68 | 4/15/20 | |||
| 4/15/2013 | 8,296 | 875,425 | |||||
| 4/9/2014 | – | 98,858 | 44.96 | 4/9/21 | |||
| 4/9/2014 | 7,862 | 787,556 | |||||
| Edwin J. Hill | 4/5/2011 | 48,671 | 16,223 | 32.69 | 4/5/18 | ||
| 12/27/2011 | 11,214 | 3,738 | 30.24 | 12/27/18 | |||
| 4/10/2012 | 35,249 | 35,248 | 31.76 | 4/10/19 | |||
| 4/10/2012 | 7,320 | 982,490 | |||||
| 4/15/2013 | 17,454 | 52,361 | 42.68 | 4/15/20 | |||
| 4/15/2013 | 6,889 | 726,953 | |||||
| 4/9/2014 | – | 81,959 | 44.96 | 4/9/21 | |||
| 4/9/2014 | 6,518 | 652,924 | |||||
| Angela S. Chattin | – | – | – | – | – | – | – |
Option Awards (a) | Stock Awards (b)(c) | |||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($/Sh) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||
| William D. | 4/15/2013 | 84,258 | — | 42.68 | 4/15/2020 | |||||||||||||||||||
| Nash | 4/9/2014 | 74,144 | 24,714 | 44.96 | 4/9/2021 | |||||||||||||||||||
| 4/8/2015 | 35,321 | 35,320 | 73.76 | 4/8/2022 | ||||||||||||||||||||
| 4/15/2015 | 6,686 | 413,997 | ||||||||||||||||||||||
| 4/12/2016 | 39,669 | 119,005 | 51.63 | 4/12/2023 | ||||||||||||||||||||
| 4/12/2016 | 14,526 | 899,450 | ||||||||||||||||||||||
| 9/26/2016 | 35,162 | 105,484 | 53.62 | 9/26/2023 | ||||||||||||||||||||
| 5/1/2017 | — | 232,775 | 58.38 | 5/1/2024 | ||||||||||||||||||||
| 5/1/2017 | 21,411 | 1,325,769 | ||||||||||||||||||||||
| Thomas W. | 4/9/2014 | 74,144 | 24,714 | 44.96 | 4/9/2021 | |||||||||||||||||||
| Reedy | 4/8/2015 | 35,321 | 35,320 | 73.76 | 4/8/2022 | |||||||||||||||||||
| 4/15/2015 | 6,686 | 413,997 | ||||||||||||||||||||||
| 4/12/2016 | 25,669 | 77,005 | 51.63 | 4/12/2023 | ||||||||||||||||||||
| 4/12/2016 | 9,400 | 582,048 | ||||||||||||||||||||||
| 5/1/2017 | — | 90,374 | 58.38 | 5/1/2024 | ||||||||||||||||||||
| 5/1/2017 | 8,313 | 514,741 | ||||||||||||||||||||||
| William C. | 4/9/2014 | — | 24,714 | 44.96 | 4/9/2021 | |||||||||||||||||||
| Wood | 4/8/2015 | 35,321 | 35,320 | 73.76 | 4/8/2022 | |||||||||||||||||||
| 4/15/2015 | 6,686 | 413,997 | ||||||||||||||||||||||
| 4/12/2016 | 19,369 | 1,199,328 | ||||||||||||||||||||||
| 4/12/2016 | — | 129,897 | 51.63 | 4/12/2023 | ||||||||||||||||||||
| 4/12/2016 | 9,400 | 582,048 | ||||||||||||||||||||||
| 5/1/2017 | — | 90,374 | 58.38 | 5/1/2024 | ||||||||||||||||||||
| 5/1/2017 | 8,313 | 514,741 | ||||||||||||||||||||||
| Edwin J. | 4/15/2013 | 44,815 | — | 42.68 | 4/15/2020 | |||||||||||||||||||
| Hill | 4/9/2014 | 61,470 | 20,489 | 44.96 | 4/9/2021 | |||||||||||||||||||
| 4/8/2015 | 26,266 | 26,266 | 73.76 | 4/8/2022 | ||||||||||||||||||||
| 4/15/2015 | 4,972 | 307,866 | ||||||||||||||||||||||
| 4/12/2016 | 23,024 | 69,072 | 51.63 | 4/12/2023 | ||||||||||||||||||||
| 4/12/2016 | 8,431 | 522,048 | ||||||||||||||||||||||
| 5/1/2017 | — | 81,063 | 58.38 | 5/1/2024 | ||||||||||||||||||||
| 5/1/2017 | 7,456 | 461,676 | ||||||||||||||||||||||
| Eric M | 4/9/2014 | 30,824 | 16,941 | 44.96 | 4/9/2021 | |||||||||||||||||||
| Margolin | 4/8/2015 | 26,266 | 26,266 | 73.76 | 4/8/2022 | |||||||||||||||||||
| 4/15/2015 | 4,972 | 307,866 | ||||||||||||||||||||||
| 4/12/2016 | 19,088 | 57,264 | 51.63 | 4/12/2023 | ||||||||||||||||||||
| 4/27/2016 | 4,900 | 14,698 | 55.19 | 4/27/2023 | ||||||||||||||||||||
| 4/12/2016 | 6,990 | 432,821 | ||||||||||||||||||||||
| 5/1/2017 | — | 81,063 | 58.38 | 5/1/2024 | ||||||||||||||||||||
| 5/1/2017 | 7,456 | 461,676 | ||||||||||||||||||||||
| (a) | Option awards generally vest in 25% increments annually over a four-year period. Additional information regarding stock options is included on page |
| (b) |
| (c) | Represents restricted common stock, which we refer to as “restricted stock” or “RSAs.” Mr. Wood’s RSAs, granted as part of a retention award, vest on April 12, 2019, the |
2018
| Option Awards | Stock Awards | |||
| Name | Number of Shares (#) | Value Realized on ($) | Number of Shares Acquired on Vesting(c) (#) | Value Realized on Vesting(d) ($) |
| Thomas J. Folliard | 569,300 | 22,768,389 | 30,512 | 1,390,127 |
| William D. Nash | 107,656 | 3,948,408 | 12,399 | 630,365 |
| Thomas W. Reedy | 102,136 | 4,104,876 | 12,399 | 630,365 |
| William C. Wood | 114,550 | 4,668,267 | 12,399 | 630,365 |
| Edwin J. Hill | 192,550 | 7,481,084 | 12,399 | 630,365 |
| Angela S. Chattin(e) | 339,127 | 9,369,275 | 9,430 | 429,631 |
| Option Awards | Stock Awards | ||||||||||
| Name | Number of Shares Acquired on Exercise(a) (#) | Value Realized on Exercise(b) ($) | Number of Shares Acquired on Vesting(c) (#) | Value Realized on Vesting(d) ($) | |||||||
| William D. Nash | 117,795 | 4,950,092 | 11,007 | 621,896 | |||||||
| Thomas W. Reedy | 84,258 | 2,543,390 | 11,007 | 621,896 | |||||||
| William C. Wood | 201,701 | 5,678,004 | 11,007 | 621,896 | |||||||
| Edwin J. Hill | 95,497 | 3,198,754 | 9,125 | 515,563 | |||||||
| Eric M. Margolin | 123,254 | 3,857,753 | 7,545 | 426,293 | |||||||
| (a) | Represents the number of shares of common stock underlying stock options exercised during fiscal |
| (b) | Amounts were calculated based on difference between (i) the closing price of the Company’s common stock on the exercise date and (ii) the exercise price of the stock options. |
| (c) | Represents the number of shares of common stock acquired on vesting of the underlying MSUs during fiscal |
| (d) | Amounts were calculated by multiplying the closing price of the Company’s common stock on the vesting date by the number of shares acquired on vesting. |
2018
| Name | Plan Name | Number of (#) | Present Value of ($) | Payments ($) |
| Thomas J. Folliard | Pension Plan | 16 | 331,854 | – |
| Benefit Restoration Plan | 16 | 1,547,609 | – | |
| William D. Nash | Pension Plan | 15 | 248,835 | – |
| Benefit Restoration Plan | 15 | 46,062 | – | |
| Thomas W. Reedy | Pension Plan | 6 | 128,253 | – |
| Benefit Restoration Plan | 6 | 160,485 | – | |
| William C. Wood | Pension Plan | 19 | 372,581 | – |
| Benefit Restoration Plan | 19 | 298,155 | – | |
| Edwin J. Hill | Pension Plan | 14 | 361,222 | – |
| Benefit Restoration Plan | 14 | 266,116 | – | |
| Angela S. Chattin | Pension Plan | 18 | 349,743 | – |
| Benefit Restoration Plan | 18 | 260,828 | – |
| Name | Plan Name | Number of Years Credited Service (a) (#) | Present Value of Accumulated Benefit (b) ($) | Payments During Last Fiscal Year ($) | |||||
| William D. Nash | Pension Plan | 15 | 272,549 | — | |||||
| Benefit Restoration Plan | 15 | 50,452 | — | ||||||
| Thomas W. Reedy | Pension Plan | 6 | 141,130 | — | |||||
| Benefit Restoration Plan | 6 | 176,598 | — | ||||||
| William C. Wood | Pension Plan | 19 | 409,164 | — | |||||
| Benefit Restoration Plan | 19 | 327,430 | — | ||||||
| Edwin J. Hill | Pension Plan | 14 | 399,228 | — | |||||
| Benefit Restoration Plan | 14 | 294,115 | — | ||||||
| Eric M. Margolin | Pension Plan | 1 | 39,866 | — | |||||
| Benefit Restoration Plan | 1 | 24,412 | — | ||||||
| (a) | We have not granted any of our named executive officers extra years of service under either the Pension Plan or the Benefit Restoration Plan. |
| (b) | Determined assuming retirement at age 65. The discount rate |
in Fiscal 2018 Executive ($) Registrant ($) Aggregate ($) Aggregate Distributions ($) Aggregate End(d) “Change-in-Control.” Name Type of Term. Resignation Early or Death or CIC CIC Followed by Cause or Other Benefits: Other Payments: Other Benefits: Other Benefits: Name Type of Term. Resignation Early or Death or CIC Cause or Good Reason CIC Without Other Benefits: Other Benefits: Other Benefits: $20,000 for the Audit Committee 2018. 2018 Fees Earned or Paid in Cash(a) ($) Stock Awards(b)(c) ($) All Other Compensation(d) ($) Total ($) Fees Earned or Paid in Cash(a) ($) Stock Awards(b)(c) ($) All Other Compensation(d) ($) Total ($) believes that adoption of the shareholder proposal is both unnecessary and not in the best interests of shareholders. CarMax Shares that May Be Acquired Within 60 Days after March 31, 2015 Shares of CarMax Common Stock Beneficially Owned as of March 31, 2015(b) our stock on March 29, 2018 (which was $61.94). Name and Address of Beneficial Owner(s) T. Rowe Price Associates, Inc.(a) 100 E. Pratt Street Baltimore, MD 21202 The Vanguard Group, Inc.(b) 100 Vanguard Boulevard Malvern, PA 19355 PRIMECAP Management Company (c) 225 South Lake Avenue, #400 Pasadena, CA 91101 Davis Selected Advisors, L.P.(d) 2949 East Elvira Road, #101 Tuscon, AZ 85756 BlackRock, Inc.(e) 55 East 52nd Street New York, NY 10022 Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column) If you owned CarMax common stock at the close of business on April How to Vote 25, 2018. Changing Your Vote Proposals One (election of directors), Two (ratification of KPMG) Representatives from American Stock Transfer & Trust Company, LLC, our transfer agent, will tabulate the votes and act as inspector of election at the annual shareholders meeting. CarMax pays the cost of soliciting proxies. We will solicit proxies from our shareholders, and, after the initial solicitation, some of our associates or agents may contact shareholders by telephone, by email or in person. We have retained Georgeson, Inc. to solicit proxies for a fee of $7,500 plus reasonable expenses. We will also reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for their reasonable expenses in sending proxy materials to the beneficial owners of our common stock. Other Matters We are not aware of any matters that may come before the annual shareholders meeting other than the We plan to hold our bylaws. bylaws.46PENSION PLANWe froze our Pension Plan, a tax-qualified defined benefit plan, effective December 31, 2008. Prior to that date, this plan was generally available to all full-time associates upon completion of one year of service.No additional benefits have accrued under the Pension Plan since it was frozen. Previously accrued benefits are determined under a formula that defines an annual annuity amount payable at termination or retirement. The benefit formula is the sum of (1) 0.85% times highest average earnings times years of service up to 35 years and (2) 0.65% times the excess of highest average earnings over Social Security Covered Compensationcovered compensation times years of service up to 35 years. Earnings are defined as total earnings including base pay, bonuses, overtime pay and commissions, but may not exceed the compensation limit imposed by the Internal Revenue Code. In the final year of benefit accruals, that compensation limit was $230,000. Highest average earnings are based on the highest five consecutive calendar years of earnings during the ten consecutive years before termination or December 31, 2008, if earlier. All participants are vested after five years of service. Benefits are payable at age 65 as a lifetime annuity or actuarially equivalent optional annuity. Actuarially reduced benefits are available to participants retiring after age 55 with at least ten years of service, or after age 62 with at least seven years of service.BENEFIT RESTORATION PLANWe froze our Benefit Restoration Plan, a non-qualified defined benefit plan, effective December 31, 2008. Prior to that date, this plan provided an alternate means of paying benefits to participants in the Pension Plan, including our named executive officers, who were prohibited from receiving additional benefits under the Pension Plan because of the Internal Revenue Code’s compensation limit.No additional benefits have accrued under the Benefit Restoration Plan since it was frozen. Previously accrued benefits are generally determined and payable under the same terms and conditions as the Pension Plan without regard to Internal Revenue Code limitations on amounts of includable earnings and maximum benefits. Benefits paid are reduced by benefits payable under the Pension Plan. Participants must have 15 years of service to be eligible to receive benefits under the Benefit Restoration Plan, or upon termination meet the early retirement or normal retirement requirements of our Pension Plan.EARLY RETIREMENT BENEFITSAs of February 28, 2015,2018, Mr. Hill was eligibleand Mr. Margolin were both eligible to retire with actuarially reduced benefits from the Pension Plan and the Benefit Restoration Plan because he is over age 55 and has at least ten years of service, and therefore hasthey each met the requirements for early retirement under our Pension Plan.4447Nonqualified Deferred CompensationThe following table lists fiscal 20152018 contributions to each named executive officer’s Retirement Restoration Plan (“RRP”) and Executive Deferred Compensation Plan (“EDCP”) accounts. The table also lists the aggregate earnings, withdrawals and distributions, and balances for each account. Name Plan
Name
Contributions
in Last Fiscal
Year(a)
Contributions
in Last Fiscal
Year(b)
Earnings
in Last
Fiscal
Year(c)
Withdrawals/
Balance
at Last
Fiscal
Year
($)Thomas J. Folliard RRP 149,337 193,938 187,247 – 1,704,555 EDCP – – – – – William D. Nash RRP 30,574 27,516 11,279 – 188,360 EDCP 117,392 5,275 17,842 – 309,238 Thomas W. Reedy RRP 30,876 40,138 22,872 – 341,907 EDCP 234,302 15,230 17,572 – 267,104 William C. Wood RRP 42,591 55,368 34,493 – 425,718 EDCP – – 140 – 2,004 Edwin J. Hill RRP 20,877 27,141 13,732 – 223,292 EDCP 117,681 7,649 8,604 – 133,934 Angela S. Chattin RRP 20,534 26,695 8,706 – 198,565 EDCP – – – – – Name Plan
Name Executive
Contributions
in Last Fiscal
Year (a)($) Registrant
Contributions
in Last Fiscal
Year (b)($) Aggregate
Earnings
in Last
Fiscal
Year (c)($) Aggregate
Withdrawals/
Distributions
($) Aggregate
Balance
at Last
Fiscal
Year
End (d)
($)William D. Nash RRP 71,609 71,609 59,845 — 586,907 EDCP — — 66,122 — 720,927 Thomas W. Reedy RRP 39,986 53,314 92,410 — 772,631 EDCP — — 44,895 79,288 378,125 William C. Wood RRP 59,978 53,314 106,145 — 928,448 EDCP — — 285 — 2,470 Edwin J. Hill RRP 27,401 36,535 30,701 — 455,523 EDCP 75,960 6,077 41,177 — 548,055 Eric M. Margolin RRP 74,881 29,952 61,538 — 478,790 EDCP — — 188,254 — 1,248,854 (a) These amounts represent payroll deductions and are therefore included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns of the “Summary Compensation Table” on page 38.41.(b) Company contributions are included in the “All Other Compensation” column of the “Summary Compensation Table” on page 3841 and were credited to each executive’s account after the close of the fiscal year.(c) We do not pay above-market interest or preferential dividends on investments in the RRP or the EDCP. Earnings are determined by the performance of the mutual funds or other investment vehicles selected by each executive. (d) For each of Messrs. Folliard, Nash, Reedy, Wood, Hill and Chattin,Margolin the following amounts were reported as compensation to each person in the “Summary Compensation Table” in priorfor the fiscal 2016 and fiscal 2017 years, respectively: $822,971; $187,468; $192,611; $243,716; $0; $0.$467,132; $434,985; $221,513; $384,091; and $217,282.RETIREMENT RESTORATION PLANOur executives are eligible to participate in the RRP. The RRP is a nonqualified defined contribution plan that supplements the Retirement Savings Plan we offer to all of our associates. The RRP allows individuals whose benefits under the Retirement Savings Plan are limited due to the compensation limits imposed by Section 401(a)(17) of the Internal Revenue Code ($265,000275,000 for 2015)2018) to continue to defer portions of their compensation for retirement savings. Eligible associates may defer up to 5%75% of their combined salary and annual incentive bonus. As we do in our broadly available Retirement Savings Plan, we provide RRP participants with matching contribution and an additional Company-funded contribution to those participants meeting certain age and service requirements. RRP accounts are paid in a single lump sum payment at separation from service, subject to the requirements of Section 409A of the Internal Revenue Code.EXECUTIVE DEFERRED COMPENSATION PLANOur executives are also eligible to participate in the EDCP. The EDCP is an additional nonqualified deferred compensation plan that permits eligible associates to elect to defer portions of their compensation to save for retirement or other life events. Eligible associates may defer up to 75% of their salary and up to 90% of their annual incentive bonus. We do not match funds deferred through45this plan. The EDCP merely provides a mechanism for eligible associates to defer the taxation of income and related investment gains until the compensation is actually received at a later date. WeWhile the Company does not directly match funds deferred through this plan,we do however, provide a restorative contribution designed to compensate associates for any loss of Company contributions under the Retirement Savings Plan and RRP due to a reduction in eligible compensation, as defined under those plans, resulting from deferrals into the EDCP. EDCP accounts are paid based on the participant’s election at the time of the deferral, subject to the requirements of Section 409A of the Internal Revenue Code, and may be paid in a lump sum, a series of annual installments or48a partial lump sum followed by a series of annual installments. Participants may elect to receive these distributions upon separation from service or upon the occurrence of one or more specified dates.All RRP and EDCP accounts are considered unfunded general contractual obligations and are subject to the claims of our general, unsecured creditors.Potential Payments Upon Termination or Change-in-ControlAs discussed on pages 3437 and 35,38, we have agreed to provide payments or other benefits to our named executive officers under various scenarios related to a termination of employment. This section describes those payments and benefits and the events that trigger them. For ease of reference, this section uses anthe abbreviation “CIC” for the term “Change-in-Control” (“CIC”).Our payment obligations under each employment or severance agreement are contingent upon the NEO satisfying the following obligations:§▪ During his employment and for two years following his termination, the NEO must comply with the provisions of a covenant not to compete. §▪ During his employment and for two years following his termination, the NEO may not solicit or induce our associates to leave us or hire any of our associates. §▪ During his employment and at all times subsequent to the last day of his employment, the NEO must hold in strict confidence and safeguard any and all protected information, including our trade secrets. §▪ The NEO must return our property and must execute an agreement releasing us from any claims. TERMINATION SCENARIOS THAT CAN TRIGGER PAYMENTS AND BENEFITSThere are four categories of events related to a termination of employment that can trigger payments or other benefits under the agreements we have with our NEOs: (i) retirement; (ii) death and disability; (iii) involuntary termination; and
(iv) voluntary termination. The following chart describes each category.CategorySpecific EventRequirementsCategory Specific Event Requirements Retirement Early Retirement Termination due to early retirement occurs when an NEO voluntarily terminates his employment at a time when he is eligible for “early retirement” as this term is defined in our Pension Plan (generally, an NEO is eligible for early retirement after age 55 with at least ten years of service or after age 62 with at least seven years of service). The effective date of termination due to early retirement is the date set forth in a notice from the NEO to us, which must be given at least 90 days in advance. Mr. Hill is currently our only NEO eligible for early retirement. Normal Retirement Termination due to normal retirement occurs when an NEO voluntarily terminates his employment at a time when he is eligible for “normal retirement” as this term is defined in our Pension Plan (generally, an NEO is eligible for normal retirement after age 65 with at least five years of service). The effective date of termination is the date set forth in a notice from the NEO to us, which must be given at least 90 days in advance. None ofMr. Margolin is currently our NEOs are currentlyonly NEO eligible for normal retirement.Death or Disability Death The effective date of termination is the date of death. Disability Termination due to disability occurs when we notify the NEO that we have decided to terminate him because he has a physical or mental illness that causes him: (i) to be considered “disabled” for the purpose of eligibility to receive benefits under our long-term disability plan if he is a participant; or (ii) if he does not participate in this plan, to be unable to substantially perform the 46duties of his position for a total of 180 days during any period of 12 consecutive months and a physician selected by us has furnished to us a certification that the return of the NEO to his normal duties is impossible or improbable. The effective date of termination is the date set forth in a notice from us to the NEO, which must be given to the NEO at least 30 days in advance.advance of the termination date.49Involuntary Termination For Cause Termination for cause occurs when we decide to terminate an NEO based on our good faith determination that one of certain events have occurred. These events generally consist of, or relate to, the NEO’s material breach of his severance agreement, the NEO’s willful failure to perform his duties or the NEO’s conviction of a felony or a crime involving dishonesty or moral turpitude. We will not owe any payments to an NEO as a result of a termination for cause. The effective date of termination is the date of the termination. Without Cause Termination by us without cause occurs when we terminate the NEO’s employment for any reason other than for cause as described above, or for disability. The effective date of termination is the date of the notice from us to the NEO.Voluntary Termination WithFor Good ReasonTermination by the NEO for good reason occurs when the NEO terminates his employment with us for one of the following events, which we do not cure: (i) a reduction in the NEO’s base salary (which was not part of an across-the-board reduction) or target bonus rate; (ii) a material reduction in the NEO’s duties or authority; (iii) a required relocation to a new principal place of employment more than 35 miles from our home office, excluding a relocation of our home office; or (iv) our failure to obtain an agreement from any successor to substantially all of our assets or our business to assume and agree to perform the employment or severance agreement within 15 days after a merger, consolidation, sale or similar transaction. The effective date of termination is the date set forth in a notice from the NEO to us, which notice must be given to us at least 45 days prior to the effective date of termination.Without Good Reason Termination by the NEO without good reason occurs when the NEO terminates his employment for any reason other than good reason, as described above. The effective date of termination is the date set forth in a notice from the NEO to us, which notice must be given to us at least 45 days prior to the effective date of termination. We will not owe any payments to an NEO as a result of a termination without good reason. The benefits paid in connection with each of these categories may change if the termination event occurs during the two years following a CIC or an asset sale. Each agreement defines a CIC as the acquisition by a third party of beneficial ownership of 20% or more of the voting power of our securities or, in connection with a tender or exchange offer, merger or other business transaction, the directors serving immediately prior to the transaction no longer constitute a majority of our Board following the transaction. Each agreement defines an asset sale as a sale of all or substantially all of CarMax’s assets in a single transaction or a series of related transactions.TABLE OF POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROLThe following table shows the estimated payments and benefits that we would provide to each NEO under various scenarios related to a termination of employment or a CIC. The table assumes that each termination event occurred on February 28, 2015.2018. Accordingly, we made certain calculations using a common stock value of $67.11$61.92 per share, which was the closing market price on February 27, 2015,28, 2018, the last trading day of our fiscal year. The footnotes to the table explain how these amounts are calculated and how they are paid (that is, in a lump sum or over an extended period). The payments described below would be made by CarMax. Section 409A of the Internal Revenue Code imposes a six-month delay on payments related to a termination of employment in certain circumstances. Accordingly, the payment (or first payment) of any amount listed below may be delayed by six months.The following table does not include amounts payable to each NEO under our Pension Plan, Benefit Restoration Plan, Retirement Restoration Plan or Executive Deferred Compensation Plan, the details of which can be found in the sections titled “Pension Benefits in Fiscal 2015”2018” on pages 4346 and 4447 and “Nonqualified Deferred Compensation” on pages 4548 and 46.49. None of the termination events discussed below enhances any payments to be made under these plans.47 TYPE OF TERMINATION EVENT
Payment
Without
Cause
($)
for Good
Reason
($)
Normal
Retirement
($)
Disability
($)
Followed by
Term. for
Cause or
Resignation
Without
Good
Reason
($)
Term.
Without
Resignation
With Good
Reason
($)Thomas J. Folliard Severance Payment(a) 6,509,790 6,509,790 - - - - Annual Incentive Bonus(b) 3,216,945 - - 1,793,169 - 1,793,169 Long-Term Equity Award(c) 29,204,938 29,204,938 - 29,204,938 9,045,432 29,204,938 Other Payments: Good Reason(d) - 1,793,169 - - - - CIC(e) - - - - - 13,193,050 Health(f) 15,546 15,546 - - - 15,546 Financial Services(g) 14,925 14,925 - 14,925 - 14,925 Outplacement(h) 50,000 50,000 - - - 50,000 TOTAL 39,012,144 37,588,368 - 31,013,032 9,045,432 44,271,628 William D. Nash Severance Payment(a) 2,000,920 2,000,920 - - - - Annual Incentive Bonus(b) 740,025 - - 412,500 - 412,500 Long-Term Equity Award(c) 9,343,773 9,343,773 - 9,343,773 3,183,257 9,343,773 Good Reason(d) - 412,500 - - - - CIC(e) - - - - - 3,857,175 Health(f) 15,546 15,546 - - - 15,546 Financial Services(g) 14,925 14,925 - 14,925 - 14,925 Outplacement(h) 25,000 25,000 - - - 25,000 TOTAL 12,140,189 11,812,664 - 9,771,198 3,183,257 13,668,919 Thomas W. Reedy Severance Payment(a) 2,232,932 2,232,932 - - - - Annual Incentive Bonus(b) 801,640 - - 446,846 - 446,846 Long-Term Equity Award(c) 9,343,773 9,343,773 - 9,343,773 3,183,257 9,343,773 Other Payments: Good Reason(d) - 446,846 - - - - CIC(e) - - - - - 4,178,330 Health(f) 15,546 15,546 - - - 15,546 Financial Services(g) 14,925 14,925 - 14,925 - 14,925 Outplacement(h) 25,000 25,000 - - - 25,000 TOTAL 12,433,816 12,079,022 - 9,805,544 3,183,257 14,024,420 48 TYPE OF TERMINATION EVENT
Payment
Without
Cause
($)
for Good
Reason
($)
Normal
Retirement
($)
Disability
($)
Followed by
Term. for
Resignation
Without
($)
Followed by
Term.
Cause or
Resignation
With Good
Reason
($)William C. Wood Severance Payment(a) 2,232,932 2,232,932 - - - - Annual Incentive Bonus(b) 801,640 - - 446,846 - 446,846 Long-Term Equity Award(c) 9,343,773 9,343,773 - 9,343,773 3,183,257 9,343,773 Other Payments: Good Reason(d) - 446,846 - - - - CIC(e) - - - - - 4,178,330 Health(f) 15,559 15,559 - - - 15,559 Financial Services(g) 14,925 14,925 - 14,925 - 14,925 Outplacement(h) 25,000 25,000 - - - 25,000 TOTAL 12,433,829 12,079,035 - 9,805,544 3,183,257 14,024,433 Edwin J. Hill Severance Payment(a) 1,598,346 1,598,346 - - - - Annual Incentive Bonus(b) 452,960 - 452,960 252,486 - 252,486 Long-Term Equity Award(c) 7,399,171 7,399,171 7,399,171 7,399,171 2,465,428 7,399,171 Other Payments: Good Reason(d) - 252,486 - - - - CIC(e) - - - - - 2,864,216 Health(f) 15,559 15,559 - - - 15,559 Financial Services(g) 14,925 14,925 14,925 14,925 - 14,925 Outplacement(h) 25,000 25,000 - - - 25,000 TOTAL 9,505,961 9,305,487 7,867,056 7,666,582 2,465,428 10,571,357 Angela S. Chattin(i) Severance Payment - - - - - - Annual Incentive Bonus - - 382,019 - - - Long-Term Equity Award - - 4,054,981 - - - Other Payments: Good Reason - - - - - - CIC - - - - - - Health - - - - - - Financial Services - - - - - - Outplacement - - - - - - TOTAL - - 4,437,000 - - - 50TYPE OF TERMINATION EVENT Name Type of
Payment Term.
Without
Cause
($) Resignation
for Good
Reason
($) Early or
Normal
Retirement
($) Death or
Disability
($) CIC
Followed by
Term.
Without
Cause or
Resignation
for Good
Reason
($)William D. Nash Severance Payment(a) 2,949,466 2,949,466 — — — Annual Incentive Bonus(b) 1,472,448 — — 1,342,250 1,342,250 Long-Term Equity Award(c) 994,964 994,964 — 5,982,468 994,964 Other Payments: Good Reason(d) — 1,342,250 — — — CIC(e) — — — — 7,489,795 Other Benefits: Health(f) 15,963 15,963 — — 15,963 Financial Services(g) 14,000 14,000 — 14,000 14,000 Outplacement(h) 50,000 50,000 — — 50,000 TOTAL 5,496,841 5,366,643 — 7,338,718 9,906,972 Thomas W. Reedy Severance Payment(a) 1,888,600 1,888,600 — — — Annual Incentive Bonus(b) 594,643 — — 542,063 542,063 Long-Term Equity Award(c) 889,164 889,164 — 3,042,241 889,164 Other Payments: Good Reason(d) — 542,063 — — — CIC(e) — — — — 3,939,005 Other Benefits: Health(f) 15,963 15,963 — — 15,963 Financial Services(g) 14,000 14,000 — 14,000 14,000 Outplacement(h) 25,000 25,000 — — 25,000 TOTAL 3,427,370 3,374,790 — 3,598,304 5,425,195 William C. Wood Severance Payment(a) 1,888,600 1,888,600 — — — Annual Incentive Bonus(b) 594,643 — — 542,063 542,063 Long-Term Equity Award(c) 1,288,940 1,288,940 — 4,785,828 1,288,940 Other Payments: Good Reason(d) — 542,063 — — — CIC(e) — — — — 3,939,005 Other Benefits: Health(f) 15,977 15,977 — — 15,977 Financial Services(g) 14,000 14,000 — 14,000 14,000 Outplacement(h) 25,000 25,000 — — 25,000 TOTAL 3,827,160 3,774,580 — 5,341,891 5,824,985 51TYPE OF TERMINATION EVENT Name Type ofPayment Term.WithoutCause($) Resignationfor GoodReason($) Early orNormalRetirement($) Death orDisability($) CICFollowed byTerm.WithoutCause orResignationfor GoodReason($) Edwin J. Hill Severance Payment(a) 1,618,800 1,618,800 — — — Annual Incentive Bonus(b) 509,694 — 509,694 464,625 464,625 Long-Term Equity Award(c) 1,724,467 1,724,467 2,636,797 2,636,797 1,724,467 Other Payments: Good Reason(d) — 464,625 — — — CIC(e) — — — — 3,376,290 Other Benefits: Health(f) 15,977 15,977 — — 15,977 Financial Services(g) 14,000 14,000 14,000 14,000 14,000 Outplacement(h) 25,000 25,000 — — 25,000 TOTAL 3,907,938 3,862,869 3,160,491 3,115,422 5,620,359 Eric M. Margolin Severance Payment(a) 1,551,352 1,551,352 — — — Annual Incentive Bonus(b) 488,457 — 488,457 445,266 445,266 Long-Term Equity Award(c) 1,611,964 1,611,964 2,464,809 2,464,809 1,611,964 Other Payments: Good Reason(d) — 445,266 — — — CIC(e) — — — — 3,235,614 Other Benefits: Health(f) 15,977 15,977 — — 15,977 Financial Services(g) 14,000 14,000 14,000 14,000 14,000 Outplacement(h) 25,000 25,000 — — 25,000 TOTAL 3,706,750 3,663,559 2,967,266 2,924,075 5,347,821 (a) We calculate severance payments using the following formula: 2 x (Base Salary + (Last Annual Bonus as determined by the Compensation and Personnel Committee)). This amount is paid in equal monthly installments over the 24-month period following the date of termination. AtAs of February 28, 2015,2018, the last annual bonus as determined by the Compensation and Personnel Committee for each of the NEOs was the fiscal 20142017 bonus, which is set forth for the NEOs other than Mr. Hill in the “Summary Compensation Table” on page 38. Mr. Hill’s fiscal 2014 bonus was $294,201.41.(b) The Annual Incentive Bonus is the bonus paid pursuant to our Bonus Plan. In a termination scenario, this bonus is calculated in two different ways depending on the nature of the termination. If an NEO is terminated without cause or retires, we pay a pro rata actual bonus, which is the pro rata share of the NEO’s annual bonus based on actual performance for the fiscal year in which the termination occurs. The pro rata actual bonus is paid to the NEO in a lump sum when annual bonuses are paid to other senior officers for the relevant fiscal year. Because the termination event is assumed to occur on February 28, 2015, our fiscal year end, the pro rata actual bonus is equal to the NEO’s actual bonus for fiscal 2015. In contrast, if an NEO is terminated without cause—or leaves the Company for good reason—following a CIC, or if the NEO dies or becomes disabled, we pay a pro rata target bonus. The pro rata target bonus is the pro rata share of the NEO’s annual bonus at his target bonus rate for the fiscal year in which the date of termination occurs. The pro rata target bonus is paid to the NEO in a lump sum within ten days after the date of termination. Because the termination event is assumed to occur on February 28, 2015, our fiscal year end, the pro rata target bonus is equal to the NEO’s target bonus amount.49(b) The Annual Incentive Bonus is the bonus paid pursuant to our Bonus Plan. In a termination scenario, this bonus is calculated in two different ways depending on the nature of the termination. If an NEO is terminated without cause or retires, we pay a pro rata actual bonus, which is the pro rata share of the NEO’s annual bonus based on actual performance for the fiscal year in which the termination occurs. The pro rata actual bonus is paid to the NEO in a lump sum when annual bonuses are paid to other senior officers for the relevant fiscal year. Because the termination event is assumed to occur on February 28, 2018, our fiscal year end, the pro rata actual bonus is equal to the NEO’s actual bonus for fiscal 2018. In contrast, if an NEO is terminated without cause—or leaves the Company for good reason—following a CIC, or if the NEO dies or becomes disabled, we pay a pro rata target bonus. The pro rata target bonus is the pro rata share of the NEO’s annual bonus at his target bonus rate for the fiscal year in which the date of termination occurs. The pro rata target bonus is paid to the NEO in a lump sum within ten days after the date of termination. Because the termination event is assumed to occur on February 28, 2018, our fiscal year end, the pro rata target bonus is equal to the NEO’s target bonus amount. (c) Following certain termination events, all or a portion of the equity awards made to the NEO during the course of his employment will vest and become exercisable in accordance with the terms and conditions of our Stock Incentive Plan and the individual award agreement. For additional information regarding each NEO’s outstanding equity awards, see the “Outstanding Equity Awards at Fiscal 20152018 Year End” table on pages 4144 and 42.45. The value of the vested but unexercised portion of each option has not been included in the amounts reported above because their receipt is not accelerated by termination events. For long-term equity awards issued before fiscal 2015, fifty percent of unvested options and unvested MSUs vest immediately upon a CIC. The remaining fifty percent vest on the first anniversary of the CIC. For long-term equity awards issued in fiscal 2015, this modified single-trigger feature was replaced with a double-trigger feature under which a change-in-control no longer triggers accelerated vesting of our long-term equity awards.(d) The Good Reason Payment is a one-time payment made to the NEO following his termination for Good Reason. It is equal to the NEO’s base salary on the date of termination multiplied by a certain percentage, which percentage is generally the same as the NEO’s target bonus percentage. The Good Reason Payment is paid in a lump sum cash payment within ten days after the date of termination.52the NEO’s target bonus percentage. The Good Reason Payment is paid in a lump sum cash payment within ten days after the date of termination.(e) The Change-in-Control Payment is equal to 2.99 times the NEO’s final compensation, which consists of the sum of the NEO’s base salary at the date of termination and the higher of the annual bonus paid or earned but not yet paid to the NEO for the two most recently completed fiscal years. AtAs of February 28, 2015,2018, the higher annual bonus for each NEO isour NEO’s was the fiscal 20152018 annual bonus. The Change-in-Control Payment will be paid to the NEO in equal monthly installments over the 24-month period following the date of termination, unless the payment is related to an Internal Revenue Code Section 409A CIC event, as that term is defined in each NEO’s agreement, in which case the Change-in-Control Payment will be paid in a lump sum cash payment on the forty-fifth day after the date of termination.(f) If the NEO elects to continue coverage under our health, dental or vision plans following the date of termination pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the NEO will be responsible for remitting to us the appropriate COBRA premium. We will reimburse the NEO for a portion of the COBRA premium equal to the sum of: (i) the amount that we would have otherwise paid for the coverage if he had remained an active associate; and (ii) the COBRA administration fee. This partial COBRA reimbursement will be paid in equal monthly installments for up to an 18-month period. For purposes of the table on pages 48 and 49, we have assumed that each officer elected to continue his coverage on February 28, 2015, for the full 18-month period.(g) We provide a tax and financial planning benefit to our NEOs for the one-year period following retirement, termination without cause (including death, disability or a termination for good reason) and a CIC. The annual cost of this service is $14,925.(f) If the NEO elects to continue coverage under our health, dental or vision plans following the date of termination pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the NEO will be responsible for remitting to us the appropriate COBRA premium. We will reimburse the NEO for a portion of the COBRA premium equal to the sum of: (i) the amount that we would have otherwise paid for the coverage if he had remained an active associate; and (ii) the COBRA administration fee. This partial COBRA reimbursement will be paid in equal monthly installments for up to an 18-month period. For purposes of the table on pages 51 and 52, we have assumed that each officer elected to continue his coverage on February 28, 2018, for the full 18-month period. (g) We provide a tax and financial planning benefit to our NEOs for the one-year period following retirement, termination without cause (including death, disability or a termination for good reason) and a CIC. The annual cost of this service is $14,000. (h) Outplacement services are available to each NEO in an amount not to exceed $50,000 for Mr. FolliardNash and $25,000 for the other NEOs. The table on pages 4851 and 4952 assumes that the maximum outplacement benefit is paid to each NEO.53CEO Pay RatioThe following information about the relationship between the compensation of our employees and the compensation of Mr. Nash, our President and Chief Executive Officer, is provided in compliance with the requirements of Item 402(u) of Regulation S-K of the Securities Exchange Act of 1934 (“Item 402(u)”). In fiscal 2018, the estimated median of the annual total compensation of our employees, excluding Mr. Nash, was $36,488. Mr. Nash’s total compensation for fiscal 2018, as reported in the Summary Compensation Table on page 41 of this proxy statement, was $7,815,252. The resulting estimated ratio of the annual total compensation of Mr. Nash to the median of the annual total compensation of all employees was 214 to 1.We took the following steps in identifying the median of the annual total compensation of all our employees. We determined that, as of January 1, 2018, our employee population was equal to 24,837 individuals, all located in the United States. This number includes all the individuals determined to be employees for federal tax purposes, whether full-time, part-time, or temporary, as of that date. We chose January 1, which is within the last three months of our fiscal year as required by Item 402(u), because it aligned with calendar year payroll procedures.We next identified the employee receiving the median amount of compensation in our employee population. To do this we compared the amount of wages and other compensation received by each employee, other than Mr. Nash, as reflected in our payroll records and reported to the Internal Revenue Service on Form W-2 for the calendar year ended December 31, 2017. This compensation measure was annualized for permanent employees who were employed on the measuring date but who did not work for the full calendar year. The compensation measure was consistently applied to all our employees.As required by Item 402(u), once we identified our median employee we measured that employee’s annual total compensation for the 2018 fiscal year by adding together the same elements of compensation that are included in Mr. Nash’s total fiscal 2018 compensation reported in the Summary Compensation Table on page 41.The resulting pay ratio was calculated in a manner consistent with Item 402(u) and we believe it constitutes a reasonable estimate. However, as contemplated by Item 402(u), we relied on methods and assumptions that we determined to be appropriate for calculating the pay ratio at CarMax. Other public companies will use methods and assumptions that differ from the ones we chose but are appropriate for their circumstances. It may therefore be difficult, for this and other reasons, to compare our reported pay ratio to pay ratios reported by other companies.54(i)Ms. Chattin retired from CarMax on January 9, 2015. In connection with her retirement, she entered into an arrangement with CarMax, approved by the Compensation and Personnel Committee, to provide consulting services to the Company until August 31, 2015, to accelerate her unvested options and to pay her full, rather than pro-rated, fiscal 2015 annual incentive bonus. The arrangement is described in more detail on page 35. This table discloses only the payments she actually received or was entitled to receive as of February 28, 2015, as a result of this arrangement.50DIRECTOR COMPENSATIONDIRECTOR COMPENSATIONOur non-employee directors are compensated for their services as described below. Mr. FolliardNash does not receive any compensation for serving as a director.Director Compensation ProgramThe following table describes the components of our non-employee director compensation program for fiscal 2015.2018. The Compensation and Personnel Committee periodically reviews this program and recommends changes to the Board as appropriate. Compensation Element Director Compensation Program(a)Annual Cash Retainer $75,000 Annual Equity Retainer $130,000150,000(b)Board Chair Fee $100,000 Lead Independent Director Fee $100,000 Committee Chair Fee
$15,000 for the Compensation and Personnel Committee
$10,00015,000 for the Nominating and Governance CommitteeAudit Committee Fee $5,000 Board Meeting Fee None(c)Committee Meeting Fee $1,500 per in-person meeting and $750 per telephonic meeting (a) In addition to the compensation elements disclosed above, we reimburse our directors for travel and other necessary business expenses incurred in the performance of their services to us. Each non-employee director whose term in office began before June 2014 is eligible for coverage under our health, dental and vision plans at the same rates at which coverage is offered to our associates. Non-employee directors may not use our plane for personal travel. (b) Beginning in fiscal 2015, theThe annual equity retainer consists of shares of restricted common stock vesting on the earlier of the one-year anniversary of the grant date and the date of the next annual shareholders meeting. Previously, the equity retainer consisted of a combination of stock options and unrestricted common stock. The restricted commondate. Restricted stock granted to our non-employee directors in fiscal 20152018 will vest on June 22, 2015, the date of the 2015 annual shareholders meeting.29, 2018.(c) We do not pay directors a fee for attending a board meeting unless there are more than eight board meetings during a fiscal year. Generally, we do not hold more than eight board meetings during a fiscal year, but if there were more than eight meetings we would pay, for each additional meeting, directors fees of $1,500 per in-person meeting and $750 per telephonic meeting. Our corporate governance guidelines include director stock ownership guidelines. These guidelines require non-employee directors to own common stock or other forms of equity with a value equivalent to five times the annual cash retainer within five years of joining the Board. Each of our non-employee directors met this guideline as of February 28, 2015.55Non-Employee Director Compensation in Fiscal 2015The following table provides each element of non-employee director compensation for fiscal 2015. Name Ronald E. Blaylock 81,750 129,997 10,000 221,747 Rakesh Gangwal 81,750 129,997 - 211,747 Jeffrey E. Garten 81,750 129,997 10,000 221,747
2018.51Table of ContentsName Shira Goodman 81,750 129,997 12,500 224,247 W. Robert Grafton 113,500 129,997 - 243,497 Edgar H. Grubb 91,750 129,997 - 221,747 Mitchell D. Steenrod 93,500 129,997 10,000 233,497 Thomas G. Stemberg 96,750 129,997 10,000 236,747 Beth A. Stewart(e) 22,000 - 10,000 32,000 William R. Tiefel 192,333 129,997 - 322,330 Name Fees Earned
or Paid in
Cash(a)($) Stock
Awards(b)(c)($) All Other
Compensation(d)($) Total
($)Ronald E. Blaylock 88,750 150,014 10,147 248,911 Sona Chawla(e)83,833 150,014 — 233,847 Alan B. Colberg 89,583 150,014 — 239,597 Thomas J. Folliard 175,000 150,014 19,723 344,737 Rakesh Gangwal(f)25,000 — 2,426 27,426 Jeffrey E. Garten 81,000 150,014 10,000 241,014 Shira D. Goodman 81,000 150,014 — 231,014 W. Robert Grafton 91,250 150,014 4,915 246,179 Edgar H. Grubb 89,750 150,014 2,000 241,764 Marcella Shinder 92,000 150,014 — 242,014 John T. Standley(g)83,833 150,014 — 233,847 Mitchell D. Steenrod 112,000 150,014 10,000 272,014 William R. Tiefel 182,500 150,014 36,112 368,626 (a) Represents the cash compensation earned in fiscal 20152018 for Board, Committee, and Board and Committee chairmanchair service. (b) (b) Represents the aggregate grant date fair value of the stock awards made in fiscal 2018 as determined in accordance with ASC Topic 718. In June 2017, we granted 2,406 shares of restricted common stock to each non-employee director then in office. (c) The following table provides information on the number of shares of unvested restricted common stock and the aggregate option awards held by each of our non-employee directors as of February 28, 2018. All options held by our non-employee directors were fully vested as of February 28, 2018 except for those held by Mr. Folliard, of which 715,699 were vested and 358,464 were unvested: Name Restricted Common Stock (#) Outstanding Option Awards (#) Ronald E. Blaylock 2,406 — Sona Chawla 2,406 — Alan B. Colberg 2,406 — Thomas J. Folliard 2,406 1,074,163 Rakesh Gangwal — 11,388 Jeffrey E. Garten 2,406 2,870 Shira D. Goodman 2,406 11,388 W. Robert Grafton 2,406 7,767 Edgar H. Grubb 2,406 — Marcella Shinder 2,406 — John T. Standley — — Mitchell D. Steenrod 2,406 — William R. Tiefel 2,406 11,388 (d) Represents matching charitable gifts made by The CarMax Foundation as part of its matching gifts program and the cost to CarMax for participation in its health, dental and vision plans (both the matching gifts program and the plans are broadly available to all CarMax associates). None of the benefits individually exceeded the greater of $25,000 or 10% of the total amount of these benefits for the non-executive director. (e) Ms. Chawla was elected to the Board on April 24, 2017 (f) Mr. Gangwal did not stand for re-election at the June 26, 2017 meeting. (g) Mr. Standley resigned from the Board on January 29, 2018. 56PROPOSAL FOUR: SHAREHOLDER PROPOSAL FOR A REPORT ON POLITICAL CONTRIBUTIONSIn accordance with SEC regulations, the shareholder proposal and supporting statement presented below were submitted by a shareholder and are quoted verbatim. We disclaim all responsibility for the content of the stock awards madeproposal and the supporting statement, including sources referenced in the supporting statement.The International Brotherhood of Teamsters General Fund, located at 25 Louisiana Avenue, NW, Washington, DC 20001, has advised CarMax that it intends to present the following shareholder proposal at the annual shareholders meeting. The proponent owns 80 shares of CarMax common stock.Shareholder ProposalRESOLVED: That the shareholders of CarMax Inc. (“CarMax” or “Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:1. Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum. 2. Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including: a. The identity of the recipient as well as the amount paid to each; and b. The title(s) of the person(s) in the Company responsible for decision-making. The report shall be presented to the board of directors or relevant board committee and posted on the Company's website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.Supporting Statement:As long-term shareholders of CarMax, we support transparency and accountability in corporate political spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates. Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision: "[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages."Publicly available records show CarMax has contributed at least $140,350 in corporate funds since the 2010 election cycle. (CQ: http://moneyline.cq.com and National Institute on Money in State Politics: http://www.followthemoney.org).However, relying on publicly available data does not provide a complete picture of the Company's political spending. For example, the Company's payments to trade associations that may be used for election-related activities are undisclosed and unknown. This proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax-exempt organizations, which may be used for political purposes. This would bring our Company in line with a growing number of leading companies, including Best Buy and Amazon.com, which present this information on their websites.The Company's board and shareholders need comprehensive disclosure to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.57The Board’s Statement in OppositionThe Board has carefully considered the foregoing shareholder proposal and concluded that it is not in the best interests of CarMax or its shareholders and recommends that shareholders vote against the proposal. This position was supported by our shareholders at the 2017 annual meeting, when over 70% of the shares voted were cast against an almost identical shareholder proposal. Our reasons are described below.CarMax is committed to adhering to the highest ethical standards when engaging in any political activitiesReflecting this commitment, the Nominating and Governance Committee has adopted the CarMax Corporate Political Contribution Policy (“Political Contribution Policy”), a formal written policy setting forth our policies and procedures on political contributions and political activity. The policy is available under the “Corporate Governance” link on our website at investors.carmax.com. As described in the Political Contribution Policy, CarMax makes decisions regarding corporate political contributions and political activity based on many factors, including, but not limited to: a candidate’s support for maintaining a competitive business environment; a candidate’s support for issues important to CarMax; and a candidate’s service or potential service in leadership or on key committees. Contribution decisions are not based on the personal preferences of senior management or directors. Senior management annually approves the CarMax political contribution budget and all corporate political contributions over $1,000 must be specifically approved by CarMax’s General Counsel. The General Counsel receives quarterly reports of all other contributions and CarMax’s Government Affairs activities are reported to the Nominating and Governance Committee annually.Responsible participation in the political process, including through legal political contributions, is important for CarMax’s businessCarMax is in a highly regulated industry, and the Company’s operations are significantly affected by the actions of elected officials. It is important that CarMax responsibly participate in industry trade associations and the electoral and legislative process in order to protect our customers and your interests as shareholders.CarMax’s corporate political contributions are financially insignificant and adequate information already is availableWhile our corporate political contributions serve an important corporate purpose, such contributions represent only a small fraction of our total annual expenses (less than 0.002% in fiscal 2015 as determined2018). In addition, those contributions are made to state political candidates in accordance with ASC Topic 718. In June 2014,state law and our Political Contribution Policy and are required to be disclosed either by the recipient or the donor in accordance with applicable laws.U.S. federal law currently prohibits companies from making corporate contributions or providing anything of value to any political candidate, campaign committee or other organization in connection with any federal election; thus, we granted 2,540 sharesdo not make such contributions. While a company may not make these contributions, it can form a Political Action Committee (“PAC”), which is permitted to direct contributions to candidates for federal office, national party committees, or candidates in states where only PAC contributions are permitted. CarMax chooses not to operate a PAC and therefore does not and may not make any such contributions.Moreover, although permitted to do so by federal law, CarMax has a long-standing practice against, and our Political Contribution Policy prohibits, using corporate resources for the direct funding of restricted common stockindependent political expenditures expressly advocating for or against candidates in elections for public office.The Board believes that additional disclosure is not necessary to each non-employee director.(c) The following table providesprovide shareholders visibility into our limited political contributions and, thus, spending further corporate funds to generate the report requested by the shareholder proposal would not be a productive use of corporate resources.CarMax’s trade association memberships serve multiple objectivesCarMax participates in various trade associations to keep abreast of business and technical issues as well as emerging standards within the automotive retail industry. We do not join trade associations to advance political purposes, and our membership in a58particular trade association does not represent our agreement with all of the association’s positions or views. Thus, disclosure of our association dues would not provide our shareholders with a greater understanding of our business strategies, initiatives or values. Because our payments to trade associations do not necessarily reflect our views on every action a trade association may take, and because we support trade associations for reasons unrelated to any of their political activities, we do not believe reporting our trade association dues would provide meaningful information onto investors.Given the number of shares of restricted common stockpolicies and procedures set forth in our Political Contribution Policy and the aggregate option awards held by eachpurposeful, yet limited, nature of our non-employee directors as of February 28, 2015. All options held by our non-employee directors were fully vested as of February 28, 2015. Name Restricted Common Stock (#) Outstanding Option Awards (#) Ronald E. Blaylock 2,540 4,077 Rakesh Gangwal 2,540 11,388 Jeffrey E. Garten 2,540 24,785 Shira Goodman 2,540 24,785 W. Robert Grafton 2,540 17,175 Edgar H. Grubb 2,540 24,785 Mitchell D. Steenrod 2,540 11,388 Thomas G. Stemberg 2,540 24,785 Beth A. Stewart - 24,785 William R. Tiefel 2,540 24,785 (d) Represents matching charitable gifts made by The CarMax Foundation as part of its matching gifts program (whichCarMax’s political contributions and expenditures, about which adequate information already is broadlypublicly available, to all CarMax associates).(e) Ms. Stewart retired from the Board effective April 15, 2014.The Board recommends a vote AGAINST Proposal Four.5952CARMAX SHARE OWNERSHIPCARMAX SHARE OWNERSHIPShare Ownership of Directors and Executive OfficersThe following table includes information about our common stock beneficially owned as of March 31, 2015,29, 2018, by:§▪ Our CEO and the other named executive officers. §▪ Each director or nominee for director. §▪ All of our directors and executive officers as a group. Unless otherwise noted, each shareholder has sole voting power and investment power with respect to securities shown in the table below.Named Executive Officers Percent of Class Thomas J. Folliard(a) 695,545 1,232,235 * William D. Nash 276,338 300,264 * Thomas W. Reedy 255,200 294,722 * William C. Wood 241,444 273,148 * Edwin J. Hill 199,019 206,888 * Angela S. Chattin - 12,063 * Directors/Director Nominees Ronald E. Blaylock 4,077 16,308 * Rakesh Gangwal 11,388 68,499 * Jeffrey E. Garten 24,785 47,920 * Shira Goodman 24,785 37,031 * W. Robert Grafton 17,175 47,386 * Edgar H. Grubb 24,785 50,676 * Marcella Shinder - - * Mitchell D. Steenrod 11,388 21,999 * Thomas G. Stemberg 24,785 55,023 (c) * William R. Tiefel 24,785 191,924 * All directors and executive officers as a group (19 persons) 2,197,923 3,240,445 1.56% Named Executive Officers CarMax Shares
that May Be
Acquired Within
60 Days after
March 29, 2018 Shares of CarMax
Common
Stock Beneficially
Owned as of
March 29, 2018(b) Percent of Class William D. Nash(a)411,867 476,091 * Thomas W. Reedy 228,847 290,786 * William C. Wood 146,664 209,123 * Edwin J. Hill 234,774 239,566 * Eric M. Margolin 157,693 178,744 * Directors/Director Nominees Peter J. Bensen — 165 * Ronald E. Blaylock — 20,815 * Sona Chawla — 2,406 * Alan B. Colberg — 6,845 * Thomas J. Folliard 929,012 1,336,584 * Jeffrey E. Garten 2,870 26,828 * Shira Goodman 11,388 24,101 * W. Robert Grafton 7,767 45,136 * Edgar H. Grubb — 40,892 * Robert J. Hombach — 27 * David W. McCreight — — Marcella Shinder — 7,123 * Mitchell D. Steenrod — 17,734 * William R. Tiefel 11,388 163,048 * All directors and executive officers as a group (25 persons) 2,558,494 3,518,807 1.97% * Represents beneficial ownership of less than one percent of the207,930,356 178,676,159 shares of CarMax common stock outstanding on March 31, 2015.29, 2018.(a) Mr. Folliard is also a director of CarMax.(a) Mr. Nash is also a director of CarMax. (b) Includes (i) shares of CarMax common stock that could be acquired through the exercise of stock options within 60 days after March 31, 2015,29, 2018, (ii) shares of CarMax common stock that will be acquired upon the April 10, 20158, 2018 settlement of the MSUsmarket stock units (“MSUs”) granted to each officercertain officers on April 10, 2012,8, 2015, (iii) shares of CarMax common stock that will be acquired upon the April 15, 2018 settlement of the PSUs granted to certain officers on April 15, 2015, and (iii)(iv) shares of restricted common stock over which executive officers and non-employee directors had voting (but not dispositive) power as of March 31, 2015.2018. Each of the MSUs has been converted to shares of CarMax common stock based upon the applicable conversion formula and our assumption that the average closing price of60our stock during the final 40 trading days of the MSU’s three-year vesting period was equal to the closing price of our stock on March 31, 2015 (which was $69.01).53(c) Includes 20,367 shares of CarMax common stock indirectly beneficially owned by Mr. Stemberg through a grantor retained annuity trust. Also includes 295 shares of CarMax common stock held by Mr. Stemberg’s son pursuant to the Uniform Transfers to Minors Act (“UTMA”). Mr. Stemberg disclaims beneficial ownershipclosing price of the 295 shares held pursuant to the UTMA.Share Ownership of Certain Beneficial OwnersThe following table includes, as of March 31, 2015,29, 2018, information about shareholders that reported to the SEC that they beneficially owned more than 5% of our common stock. We are not aware of any other owners of more than 5% of our common stock.Number of Shares Owned Percent of Class 31,065,243 14.94% 16,045,670 7.72% 13,236,551 6.37% 11,726,913 5.64% 11,325,971 5.45% Name and Address of
Beneficial Owner(s)Number of Shares Owned Percent of Class The Vanguard Group, Inc.(a)100 Vanguard Boulevard
Malvern, PA 1935518,231,551 10.20 % PRIMECAP Management Company(b)177 E. Colorado Blvd., 11th Floor
Pasadena, CA 9110514,049,575 7.86 % BlackRock, Inc.(c)55 East 52nd Street
New York, NY 1005511,271,436 6.31 % (a) Information concerning the CarMax common stock beneficially owned as of December 31, 2014,2017, was obtained from a Schedule 13G/A filed February 13, 2015. According to the Schedule 13G/A, T. Rowe Price Associates, Inc. has the sole power to vote 9,761,513 shares and the sole power to dispose of 31,065,243 shares of CarMax common stock.(b) Information concerning the CarMax common stock beneficially owned as of December 31, 2014, was obtained from a Schedule 13G/A filed February 10, 2015.8, 2018. According to the Schedule 13G/A, The Vanguard Group, Inc. has the sole power to vote 379,139260,725 shares, the sole power to dispose of 15,688,58517,941,013 shares, the shared power to vote 37,047 shares and the shared power to dispose of 357,085290,538 shares of CarMax common stock.(c) (b) Information concerning the CarMax common stock beneficially owned as of December 31, 2014,2017, was obtained from a Schedule 13G/A filed February 13, 2015.27, 2018. According to the Schedule 13G/A, PRIMECAP Management Company has the sole power to vote 4,427,7417,012,193 shares and the sole power to dispose of 13,236,55114,049,575 shares of CarMax common stock.(d) (c) Information concerning the CarMax common stock beneficially owned as of December 31, 2014,2017, was obtained from a Schedule 13G/A filed February 11, 2015.8, 2018. According to the Schedule 13G/A, Davis Selected Advisors, L.P.Blackrock, Inc. has the sole power to vote 10,969,0189,716,971 shares and the sole power to dispose of 11,726,91311,271,436 shares of CarMax common stock.(e) Information concerning the CarMax common stock beneficially owned as of December 31, 2014, was obtained from a Schedule 13G filed February 6, 2015. According to the Schedule 13G, Blackrock, Inc. has the sole power to vote 9,531,623 shares and the sole power to dispose of 11,325,971 shares of CarMax common stock.Section 16(a)16(a) Beneficial Ownership Reporting ComplianceOur executive officers, directors, and persons who beneficially own more than 10% of our common stock are required to report any transactions in our common stock to the SEC and to share those reports with us. As a matter of practice, we assist our executive officers and directors in preparing and filing these reports. Based solely on a review of these reports or written representations that no other reports were required, we believe that all officers, directors and beneficial owners of more than 10% of our common stock complied with applicable filing requirements during fiscal 20152018 with the exception of one report relating to a single transaction filed late for each of Tom Folliard and prior fiscal years, except for two Forms 4 covering six transactions of common stock indirectly beneficially owned by Thomas G. Stemberg, a board member, and directly owned through trusts by relatives of Mr. Stemberg, that were not timely reported.
Jon Daniels.5461Equity Compensation Plan InformationThe following table provides information as of February 28, 2015,2018, with respect to our three equity-based compensation plans under which shares of our common stock have been authorized for issuance: (i) our Stock Incentive Plan; (ii) our Non-Employee Directors Stock Incentive Plan; and (iii) our Employee Stock Purchase Plan (“ESPP”).Plan Category Equity compensation plans approved by security holders: Stock Incentive Plan 7,432,621 35.88 8,320,193 (a) Non-Employee Directors Stock Incentive Plan 212,453 25.76 74,408 (a) Employee Stock Purchase Plan – – 3,540,285(b) Equity compensation plans not approved by security holders – – – Total 7,645,074 35.59 11,934,886 Plan Category Number of Securities
To Be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights Weighted
Average Exercise
Price of Outstanding
Options, Warrants
and Rights
($) Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in the
First Column)Equity compensation plans approved by security holders: Stock Incentive Plan 7,709,515 54.73 6,994,416(a) Non-Employee Directors Stock Incentive Plan 52,568 33.82 74,408(a) Employee Stock Purchase Plan — — 2,988,202(b)Equity compensation plans not approved by security holders — — – Total 7,762,083 54.59 10,057,026 (a) The remaining common stock available for future issuance under the Stock Incentive Plan may be issued as options, common stock, restricted stock, restricted stock units, performance compensation awards, or SARs. The remaining common stock available for future issuance under the Non-Employee Directors Stock Incentive Plan may be issued as options, common stock, restricted stock, restricted stock units, or SARs.(b) The ESPP authorizes the issuance of 8,000,000 shares of common stock. As of February 28, 2015, 4,459,7172018, 5,011,798 shares have been purchased on the open market and 3,540,2832,988,202 shares remain available for issuance. Under the ESPP, full- and part-time associates who have been employed for one year are eligible to participate. Executive officers may not participate in the ESPP. A participating associate may authorize payroll deductions between 2% and 10% of compensation, up to an annual maximum of $7,500. Each month, the payroll deductions are used to purchase CarMax common stock. Shares are purchased on the open market and the purchase price is the average cost of all shares purchased for a particular month. To encourage participation in the ESPP, we match 15% of the associate’s contribution. An eligible associate may change, cease or restart contributions for any payroll period without penalty. We pay all administrative costs of the ESPP. There are no outstanding options, warrants, or rights under the ESPP.6255GENERAL INFORMATIONGENERAL INFORMATIONVoting InformationVoting InformationShareholders
Entitled to Vote17, 2015,20, 2018, you can vote at the annual shareholders meeting. Each share of common stock is entitled to one vote.
To conduct the annual shareholders meeting, a majority of our outstanding shares of common stock as of April 17, 2015,20, 2018, must be present in person or by proxy. This is referred to as a quorum. Abstentions and shares held by banks, brokers or nominees that are voted on any matter are included in determining whether a quorum exists. There were 209,228,698178,069,837 shares of CarMax common stock outstanding on April 17, 2015.How to Vote
(Record Owners)Shareholders of record (that is, shareholders who hold their shares in their own name) may vote in any of the following ways:§● By Internet. You may vote online by accessing www.carmaxproxy.com and following the on-screen instructions. You will need the Control Number included on the Notice of Internet Availability of Proxy Materials (the “Notice”) or on your proxy card, as applicable. You may vote online 24 hours a day. If you vote online, you do not need to return a proxy card.§● By Telephone. If you are located in the U.S., you may vote by calling toll free 1-800-PROXIES (1-800-776-9437) and following the instructions. If you are located outside the U.S., call 1-718-921-8500. You will need the Control Number included on the Notice or on your proxy card, as applicable. You may vote by telephone 24 hours a day. If you vote by telephone, you do not need to return a proxy card.§● By Mail. If you requested printed copies of the proxy materials, you will receive a proxy card, and you may vote by signing, dating and mailing the proxy card in the envelope provided.§● In Person. You may vote in person at the annual shareholders meeting by requesting a ballot from the inspector of election at the meeting.Participants in our ESPP may vote in any of the ways listed above.56
(Beneficial Owners)If your shares are held in “street name” (that is, in the name of a bank, broker, or other holder of record), you may vote in any of the following ways:§● By Internet. You may vote online by following the instructions provided in the Notice. You will need the Control Number included on the Notice or on your voting instruction form, as applicable. You may vote online 24 hours a day. If you vote online, you do not need to return a voting instruction form.§● By Telephone. You may vote by telephone by following the instructions provided in the Notice. You will need the Control Number included on the Notice or on your voting instruction form, as applicable. You may vote by telephone 24 hours a day. If you vote by telephone, you do not need to return a voting instruction form.§● By Mail. If you requested printed copies of the proxy materials, you will receive a voting instruction form, and you may vote by signing, dating and mailing it in the envelope provided.§● In Person. You must obtain a legal proxy from the organization that holds your shares in order to vote your shares in person at the annual shareholders meeting. Follow the instructions on the Notice to obtain this legal proxy.63 Deadline for Voting For both shareholders of record and beneficial owners of shares held in street name (other than ESPP participants), online and telephone voting is available through 11:59 p.m. ET on Sunday,Monday, June 21, 2015.
For shares held by ESPP participants in an ESPP account, online and telephone voting is available through 11:59 p.m. ET on Wednesday,Thursday, June 17, 2015.You may revoke your proxy at any time before it is exercised by submitting a subsequent vote using any of the methods described above. Effect of Not Voting Shareholders of Record.Record. If you are a shareholder of record and you:§ ● Do not vote via the Internet,internet, by telephone or by mail, your shares will not be voted unless you attend the annual shareholders meeting to vote them in person.§ ● Sign and return a proxy card without giving specific voting instructions, then your shares will be voted in the manner recommended by the Board on all matters presented in this proxy statement and as the proxy holders may determine in their discretion on any other matters properly presented for a vote.Beneficial Owners of Shares Held in Street Name or Participants in the ESPP. ESPP. If you are a beneficial owner of shares held in street name or a participant in the ESPP and you do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares generally may vote your shares on routine matters but cannot vote your shares on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization will not have the authority to vote your shares on this matter. This is generally referred to as a “broker non-vote.” Voting Standards and, Three (advisory vote on executive compensation), and Four (shareholder proposal for a report on political contributions) must be approved by the affirmative vote of a majority of the votes cast. Abstentions and broker non-votes will not be counted in determining the number of votes cast for any of these proposals.57Routine and
Non-Routine ProposalsRoutine andProposals.Non-Routine ProposalsRoutine Proposals. Proposal Two (ratification of KPMG) is considered a routine matter. A broker or other nominee generally may vote on routine matters, and therefore we expect no broker non-votes in connection with Proposal Two.
Non-routine Proposals. Proposals.Proposals One (election of directors) and, Three (advisory vote on executive compensation) and Four (shareholder proposal for a report on political contributions) are considered non-routine matters. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore there may be broker non-votes on these proposals.Counting the Votes Proxy Information64Proxy Information Electronic Access toProxy Materials andAnnual ReportWe are providing access to our proxy materials primarily over the Internetinternet rather than mailing paper copies of those materials to each shareholder. On or about May 7, 2015,4, 2018, we will mail the Notice to our shareholders. This Notice will provide website and other information for the purpose of accessing proxy materials. The Notice tells you how to:§● View our proxy materials for the annual shareholders meeting on the Internet.§internet.● Instruct us to send proxy materials to you by mail or email.Choosing to receive proxy materials by email will save us the cost of printing and mailing documents and will reduce the impact of our annual shareholders meeting on the environment. If you choose to receive future proxy materials by email, you will receive an email message next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by email will remain in effect unless and until you rescind it.Proxy Solicitation Annual Shareholders Meeting Information Annual Meeting InformationAttendance at the
Annual Shareholders MeetingThe annual shareholders meeting is open to all holders of CarMax common stock as of April 17, 2015.20, 2018. Shareholders who plan to attend the annual shareholders meeting may be asked to present valid picture identification, such as a driver’s license or passport. If you are a beneficial shareholder,owner, you must bring a copy of a brokerage statement indicating ownership of CarMax shares as of April 17, 2015.20, 2018. If you are an authorized proxy or if you want to vote in person the shares that you hold in street name, you must present the proper documentation from your bank or broker. Cameras, recording devices and other electronic devices will not be permitted at the annual shareholders meeting.58threefour proposals disclosed in this proxy statement. If other matters do come before the annual shareholders meeting, the named proxies will vote in accordance with their best judgment.Next Year’s Meeting 20162019 annual shareholders meeting on or about June 28, 2016.65Shareholder Proposal Information Advance Notice of Director Nominations, Shareholder Proposalsand Other Items of BusinessDirector Nominations.● Our proxy access right permits an eligible shareholder, or a group of up to 20 shareholders, to nominate and include in CarMax’s proxy materials directors constituting up to 20% of the Board of Directors. To be eligible, the shareholder or shareholder group must have owned 3% or more of our outstanding capital stock continuously for at least three years and satisfy certain notice and other requirements set forth in Sections 2.3 and 2.3A of our bylaws. Notice of proxy access director nominees must be received no earlier than December 5, 2018, and no later than January 4, 2019.● Director nominations that a shareholder intends to present at the 2019 annual shareholders meeting, but does not intend to have included in CarMax’s proxy materials, must be received no earlier than December 5, 2018, and no later than January 4, 2019. The notice must satisfy the requirements set forth in Section 2.3 of our bylaws.Shareholder Proposals and Other Items of Business.A shareholder proposal will be acted upon at the 20162019 annual shareholders meeting only if it is included in our proxy statement or submitted under Section 1.3 of our Bylaws.To be considered for inclusion in our 20162019 proxy statement, a shareholder proposal must be received by our Corporate Secretary no later than January 8, 2016,4, 2019, and must comply with Rule 14a-8 under the Securities Exchange Act of 1934.To bring a matter for consideration before the 20162019 annual shareholders meeting that is not included in the 20162019 proxy statement, you must notify our Corporate Secretary no earlier than the close of business on December 9, 2015,5, 2018, and no later than the close of business on January 8, 2016,4, 2019, and must comply with Section 1.3 of our Bylaws.All director nominations and proposals must be submitted in writing to our Corporate Secretary at CarMax, Inc., 12800 Tuckahoe Creek Parkway, Richmond, Virginia 23238.59CARMAX, INC.12800 Tuckahoe Creek ParkwayRichmond, Virginia 23238(804) 747-0422www.carmax.com66CARMAX, INC.12800 Tuckahoe Creek ParkwayRichmond, Virginia 23238(804) 747-0422www.carmax.comANNUAL MEETING OF SHAREHOLDERS OF CARMAX, INC. June 22, 2015,26, 2018, at 1:00 p.m. ETPROXY VOTING INSTRUCTIONS INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have this proxy card available when you access the web page. 
COMPANY NUMBER TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have this proxy card available when you call. Vote online/phone until 11:59 PM ET the day before the meeting.MAIL - Sign, date and mail this proxy card in the envelope provided as soon as possible. ACCOUNT NUMBER CONTROL NUMBER MAIL - Sign, date and mail this proxy card in the envelope provided as soon as possible.IN PERSON - You may vote your shares in person by attending the Annual Meeting. GO GREEN -e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS:The Notice of 20152018 Annual Meeting of Shareholders and Proxy Statement
and the Annual Report on Form 10-K are available at - www.carmaxproxy.com
00003333333333333000 3062215THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”“FOR” ALL NOMINEES FOR THE ELECTION OF DIRECTORS;“FOR” PROPOSAL 2; “FOR” PROPOSAL 3; AND “FOR”“AGAINST” PROPOSAL 3.
4.PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE xFOR AGAINST ABSTAIN 1. Election of Directors for a one-year term expiring at the 2019 Annual Shareholders’ Meeting: William D. Nash o o o FOR AGAINST ABSTAIN Marcella Shinder o o o Peter J. Bensen o o o Mitchell D. Steenrod o o o Ronald E. Blaylock o o o William R. Tiefel o o o Sona Chawla o o o 2. To ratify the appointment of KPMG LLP as independent registered public accounting firm. o o o Thomas J. Folliard o o o 3. To approve, in an advisory (non-binding) vote, the compensation of our named executive officers. o o o Shira Goodman o o o 4. To vote on a shareholder proposal for a report on political contributions, if properly presented at the meeting. o o o Robert J. Hombach o o o 5. To transact any other business that may properly come before the Annual Meeting or any postponements or adjournments thereof. David W. McCreight o o o In their discretion, the named proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. This proxy, when properly executed, will be voted as directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR all nominees in Proposal 1; FOR Proposal 2; and FOR Proposal 3.1.Election of Directors for a one-year term expiring at the 2016 Annual Shareholders’ Meeting:3; and AGAINST Proposal 4.FORAGAINSTABSTAINRonald E. Blaylockooo Thomas J. Folliardooo Rakesh GangwaloooJeffrey E. GartenoooShira GoodmanoooW. Robert GraftonoooEdgar H. GrubboooMarcella ShinderoooMitchell D. SteenrodoooThomas G. StembergoooWilliam R. Tiefelooo2.To ratify the appointment of KPMG LLP as independent registered public accounting firm.ooo3.To approve, in an advisory (non-binding) vote, the compensation of our named executive officers.oooTo change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. o 4.To transact any other business that may properly come before the Annual Meeting or any postponements or adjournments thereof. Signature of Shareholder Date: Signature of Shareholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. oCARMAX, INC. Proxy for Annual Meeting of Shareholders on June 22, 201526, 2018 Solicited on Behalf of the Board of Directors As an alternative to completing this form, you may enter your vote instruction by telephoneat 1-800-PROXIES, or via the Internet at WWW.VOTEPROXY.COM and follow the simpleinstructions. Use the Control Number shown on your proxy card. The undersigned hereby appoints Tom Reedy and Eric Margolin (the “named proxies”), and each of them, with full power of substitution and power to act alone, as proxies to vote all the shares of CarMax, Inc. Common Stock, which the undersigned would be entitled to vote if personally present and acting at the Annual Meeting of Shareholders of CarMax, Inc., to be held at 1:00 p.m. ET June 22, 2015,26, 2018, at the Hilton Richmond Hotel, Short Pump, 12042 West Broad Street, Richmond, Virginia 23233, and at any postponements or adjournments thereof, as follows: (Continued and to be signed on the reverse side.) 1.114475 
