CARMAX, INC. NOTICE OF RESTRICTED STOCK UNIT GRANT
EXHIBIT
10.3
CARMAX,
INC.
NOTICE OF
RESTRICTED STOCK UNIT GRANT
[Date]
______________________________
______________________________
______________________________
Dear
_____________________:
The Board
of Directors of CarMax, Inc. (the “Company”) wants to provide you with an
opportunity to share in the success of our Company. Accordingly, I am
pleased to inform you that, as of _________________ (the “Grant Date”), the
Compensation and Personnel Committee of the Board of Directors of the Company
(the “Committee”) exercised its authority pursuant to the CarMax, Inc. 2002
Stock Incentive Plan, as amended and restated (the “Plan”) and granted you
Restricted Stock Units of the Company (the “Restricted Stock Units”) as set
forth herein.
The
Restricted Stock Units are subject to the provisions of the Plan. The
Committee administers the Plan. The terms of the Plan are
incorporated into this Notice of Restricted Stock Unit Grant (the “Notice of
Grant”), and in the case of any conflict between the Plan and this Notice of
Grant, the terms of the Plan shall control. All capitalized terms not
defined herein shall have the meaning given to them in the
Plan. Please refer to the Plan for certain conditions not set forth
in this Notice of Grant. Additionally, a copy of a Prospectus for the
Plan, which describes material terms of the Plan, can be found on The CarMax
Way. Copies of the Prospectus, the Plan and the Company’s annual
report to shareholders on Form 10-K for fiscal year 20__ are available from the
Company’s corporate secretary at (000) 000-0000.
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Number
of Restricted Stock Units:
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Grant
Date Fair Market Value:
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Vesting of Restricted Stock
Units
Except as
otherwise provided in this Notice of Grant, the Restricted Stock Units will vest
and become nonforfeitable on [THREE YEAR ANNIVERSARY DATE] or such earlier date
as may be provided in this Notice of Grant or the Plan (the “Vesting Date”)
provided you continue to be employed by the Company from the Grant Date until
the Vesting Date. Prior to the Vesting Date, the Restricted Stock
Units are not transferable by you by means of sale, assignment, exchange, pledge
or otherwise.
Payment for Restricted Stock
Units
The value
of each Restricted Stock Unit on the Vesting Date shall equal the Fair Market
Value of a share of Company Stock, with certain exceptions as noted in the
paragraph below. Payment for your Restricted Stock Units shall be
made in a single lump sum cash payment as soon as practicable following the
Vesting Date, but in no event later than the last day such payment may be made
while still qualifying for the short–term deferral exception from Internal
Revenue Code Section 409A.
The value
on the Vesting Date of each Restricted Stock Unit shall not exceed two times,
and shall not be less than .75 times, the Grant Date Fair Market Value of one
share of Company Stock. Accordingly, on the Vesting Date, the
Company’s payment obligations shall not exceed $____ [Insert 2 x Grant Date FMV]
per Restricted Stock Unit, and shall not be less than $____ [Insert .75 x Grant
Date FMV] per Restricted Stock Unit.
Shareholder
Rights
The
Restricted Stock Units shall not represent an equity security of the Company and
shall not carry any voting or dividend rights, except the right to receive
payments equivalent to dividends as set forth herein.
Dividend Equivalent
Rights
You shall
accumulate dividend equivalent rights on all Restricted Stock Units in an amount
equal to the dividends paid, if any, with respect to a share of Company Stock on
each date that a dividend is paid on the Company Stock prior to the Vesting
Date. The dividend equivalent rights shall be converted into
additional Restricted Stock Units based on the Fair Market Value of a share of
Company Stock on the date the dividend is paid and shall accumulate and be paid
in cash when the payment for the corresponding Restricted Stock Units is
made. Such additional Restricted Stock Units shall be subject to the
same forfeiture restrictions and value limitations as apply to the Restricted
Stock Units to which they relate.
Tax
Withholding
On the
Vesting Date, you will have taxable income equal to the value of the Restricted
Stock Units on that date. You will be required to reimburse the
Company for the amount of taxes required by any government to be withheld or
otherwise deducted and paid with respect to the vesting of the Restricted Stock
Units (“Tax Withholdings”). The Company has the right to retain and
withhold from any payment under this Agreement any required Tax
Withholdings. At its discretion, the Company may require you to
reimburse it for any Withholding Taxes and withhold any payments, in whole or in
part, until the Company is so reimbursed. The Company shall also have
the unrestricted right to withhold from any other cash amounts due (or to become
due) from the Company to you, including from your wages or commissions, an
amount equal to any Tax Withholdings.
2
Forfeiture of Restricted
Stock Units
Your
Restricted Stock Units shall be forfeited upon the earliest to occur prior to
the Vesting Date of the following:
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1.
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Termination
of Employment by the Company. Except as otherwise provided in
the “Age and Service Vesting” section set forth below, upon termination of
your employment with the Company by the Company for any reason, other than
death or disability, your unvested Restricted Stock Units will be
immediately forfeited.
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2.
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Resignation. In
the event that you resign your employment with the Company, any Restricted
Stock Units that have not vested by your resignation date will be
forfeited on your resignation date, except as otherwise provided in the
“Age and Service Vesting” section set forth
below.
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Death
or Disability
If your
employment by the Company terminates because you die or become disabled, all
Restricted Stock Units covered by this Notice of Grant will become immediately
vested and nonforfeitable, effective as of the date of the termination of your
employment.
Age and Service
Vesting
If your
employment with the Company terminates, such termination is not for cause and as
of the date if the termination you have:
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1.
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Attained
55 years of age and completed ten years or more of continuous employment
with the Company;
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2.
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Attained
62 years of age and completed seven years or more of continuous employment
with the Company; or
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3.
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Attained
65 years of age and completed five years or more of continuous employment
with the Company;
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then all
Restricted Stock Units covered by this Notice of Grant will become immediately
vested and nonforfeitable, effective as of the date of the termination of your
employment.
Change of
Control
Notwithstanding
anything to the contrary herein, in the event of a Change of Control, all
Restricted Stock Units covered by this Notice of Grant shall vest in accordance
with the following:
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·
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50%
of your Restricted Stock Units shall vest effective upon the date of the
Change of Control.
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·
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50%
of your Restricted Stock Units shall vest effective upon the one-year
anniversary of the date of the Change of
Control.
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3
Notwithstanding
the foregoing, in the event that any of your Restricted Stock Units would have
vested sooner than the one-year anniversary of the date of the Change of Control
(based upon the vesting schedule set forth in the “Vesting of Restricted Stock
Units” section hereof or any other terms or conditions affecting vesting rights
contained herein), such sooner vesting date shall apply to such Restricted Stock
Units.
Change of Capital
Structure
If the
number of outstanding shares of the Company Stock is increased or decreased as a
result of a stock dividend, stock split, subdivision or consolidation of shares,
or other similar change in capitalization, the number of Restricted Stock Units
covered by this Notice of Grant and the Grant Date Fair Market Value will
automatically be adjusted, as provided in the Plan and as the Committee shall
determine to be equitably required so as to preserve the value of the Restricted
Stock Units that existed immediately before the change.
By
accepting this grant on-line, this Notice of Grant, together with the Plan, will
become an agreement between you and the Company that is governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Virginia. By accepting this online agreement, you agree that you are
in compliance with, and will abide by, the Company’s “Policy Against Xxxxxxx
Xxxxxxx – Associates” which can be found on The CarMax Way.
Sincerely,
[Name,
Title]
ACCEPTED:
Signature
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Printed
Name
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Employee
ID
Number
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