| | CarMax, Inc. Amended and Restated 2002 Employee Stock Purchase Plan On June 20, 2006, at the 2006 Annual Meeting of Shareholders of CarMax, Inc. (the “Company”), the Company’s shareholders, upon recommendation of the Board of Directors (the “Board”), approved two amendments to the CarMax, Inc. Amended and Restated 2002 Employee Stock Purchase Plan (the “ESPP”). The first amendment extended eligibility for participation in the ESPP to all employees of the Company. The second amendment increased the number of shares of Company common stock reserved for issuance under the ESPP from 1,000,000 shares to 2,000,000 shares. The ESPP, as amended and restated effective July 1, 2006, is attached as Exhibit 10.1, and is hereby incorporated by reference into this Item 1.01. Fiscal Year 2007 Non-Management Director Compensation On June 19, 2006, each of the Board and the Compensation and Personnel Committee of the Board reviewed the Company’s compensation practices related to the Board’s non-management directors (the “Directors”). The Board approved the following compensation package for Directors for fiscal year 2007, effective March 1, 2006. The annual retainer for service as a Director shall be $50,000 and Directors shall be paid $1,500 for each Board meeting attended. The annual retainer for Chairpersons of the Compensation and Personnel Committee and the Nominating and Governance Committee shall be $10,000 and the annual retainer for the Chairperson of the Audit Committee shall be $15,000. Directors serving on the Audit, Compensation and Personnel, and Nominating and Governance Committees shall be paid $1,500 for each committee meeting attended. Directors shall receive an annual equity award valued at $80,000, comprised of a grant of Company common stock valued at $30,000 (the “Stock Grant”) and a grant of non-qualified options to purchase shares of Company common stock valued at $50,000 (as valued using the Black-Scholes option-pricing model) (the “Option Grant”). Each of the Stock Grant and the Option Grant shall be made pursuant to the terms of the CarMax, Inc. 2002 Non-Employee Directors Stock Incentive Plan, as amended and restated (the “Plan”). The Stock Grant shall be fully vested at the time of grant. The Option Grant shall vest with respect to one-third of the options on each of the first three anniversaries of the date of grant and will expire seven years from the date of grant. The options granted pursuant to the Option Grant shall have an exercise price equal to the fair market value of the Company common stock on the date of grant as determined under the terms of the Plan. |
