DEF 14A 1 a2017proxystatement.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
 
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __ )
 
Filed by the Registrant ý              Filed by a Party other than the Registrant o
 
Check the appropriate box:
 
o
 
Preliminary Proxy Statement
 
o
 
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
 
ý
 
Definitive Proxy Statement
 
o
 
Definitive Additional Materials
 
o
 
Soliciting Material Pursuant to §240.14a-12
 
CarMax, Inc.
(Name of Registrant as Specified In Its Charter)
 
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
ý
 
No fee required.
 
o
 
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.



 
(1)
 
Title of each class of securities to which the transaction applies:
 
 
 
 
 
(2)
 
Aggregate number of securities to which the transaction applies:
 
 
 
 
 
(3)
 
Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 
 
 
 
 
(4)
 
Proposed maximum aggregate value of the transaction:
 
 
 
 
 
(5)
 
Total fee paid:
 
 
 
 
o
 
Fee paid previously with preliminary materials.
o
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
 
Amount Previously Paid:
 
 
 
 
 
(2)
 
Form, Schedule or Registration Statement No.:
 
 
 
 
 
(3)
 
Filing Party:
 
 
 
 
 
(4)
 
Date Filed:
 
 
 
 
 





carmax2017proxycover42417.jpg




kmxlogoa01.jpg

folliard.jpg

Dear Fellow CarMax Shareholders:
 
I am pleased to invite you to attend the 2017 annual meeting of CarMax, Inc. shareholders, which will be held on Monday, June 26, 2017, in Richmond, Virginia. The attached notice of annual meeting and proxy statement are your guides to the meeting.

This year we underwent an important leadership transition. As part of our announced management succession plan, I retired as chief executive officer of CarMax and Bill Nash was named CarMax’s new chief executive officer. Following my retirement I became non-executive chair of the board of directors and our previous chair, Bill Tiefel, was named lead independent director. We believe this leadership structure best positions CarMax to execute our strategic goals, while maintaining strong independent leadership in the boardroom.

Another important step we’ve taken is to add two new independent directors, John T. Standley and Sona Chawla. Their experiences will bring valuable insights to our business and support our strong commitment to growth and the CarMax customer experience. Our proxy statement includes more information about Mr. Standley, Ms. Chawla and our continuing directors nominated for election at the 2017 annual meeting.
We are once again providing live audio coverage of the annual meeting from the CarMax investor relations website at investors.carmax.com. A replay of the annual meeting will be available on this website after the meeting. We also are pleased to furnish proxy materials to shareholders primarily over the internet. On or about May 5, 2017, 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 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 of Proxy Materials.
 
Whether or not you will be attending the annual meeting, your vote is very important to us. I encourage you to cast your ballot by internet, by telephone, by mail (if you request a paper copy) or in person at the annual meeting.
 
On behalf of the Board of Directors, I would like to thank you for your continued trust in CarMax. I look forward to seeing you at the annual meeting.
 
Sincerely,

image0a02.jpg 
 
Thomas J. Folliard
Chair of the Board of Directors
May 5, 2017



NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS
 
 
 
 
 
 
When:
 
Monday, June 26, 2017, at 1:00 p.m. Eastern Time
Where:
 
Hilton Richmond Hotel, Short Pump
12042 West Broad Street
Richmond, VA 23233
Items of Business:
 
(1)
 
To elect the thirteen 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 an advisory basis, on the frequency of future advisory resolutions to approve the compensation of our named executive officers.
 
 
(5)
 
To approve the CarMax, Inc. Annual Performance-Based Bonus Plan, as amended and restated.
 
 
(6)
 
To vote on the shareholder proposal for a report on political contributions, if properly presented at the meeting.
 
 
(7)
 
To transact any other business that may properly come before the annual 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 21, 2017.
 
 
 
By order of the Board of Directors,

sig2a01.jpg 
 
Eric M. Margolin
Executive Vice President,
General Counsel and Corporate Secretary
May 5, 2017
 




TABLE OF CONTENTS








PROXY SUMMARY

 
This summary highlights information contained elsewhere in this proxy statement. For more complete information, please review this entire proxy statement and CarMax’s Annual Report on Form 10-K for the year ended February 28, 2017.

Fiscal 2017 Results
 
We again grew revenue and earnings for our fiscal year. Annual highlights included the following:
Store Growth
We opened 15 stores in fiscal 2017. We currently plan to open 15 stores in fiscal 2018 and between 13 and 16 stores in fiscal 2019.

Revenues/Earnings
We achieved top and bottom-line growth. Net sales and operating revenues increased 4.8% to $15.88 billion, while net earnings rose 0.6% to $627.0 million and net earnings per diluted share increased 7.6% to $3.26.
Units
Total used unit sales increased 8.3% and comparable store used unit sales increased 4.3%. Total wholesale unit sales declined 0.7%.
CarMax Auto Finance
CarMax Auto Finance (“CAF”) finished the year with income of $369.0 million, a decrease of 5.9% over the prior year.
Share Repurchases
We continued our share repurchase program in fiscal 2017, buying back 10.3 million shares with a market value of $557.7 million.
Thirteenth Year on Fortune
“Best Companies” List
We were named by Fortune magazine as one of its “100 Best Companies to Work For” for the thirteenth year in a row.

Corporate Governance Highlights

MANAGEMENT AND BOARD TRANSITION

In 2016, as the culmination of a multi-year succession plan overseen by the Board, William D. Nash replaced Thomas J. Folliard as our Chief Executive Officer on Mr. Folliard’s retirement. Mr. Nash was also named to our Board of Directors. Mr. Folliard was named non-executive chair of the Board while our previous independent chair, William R. Tiefel, was named lead independent director. Additional information about our board leadership structure can be found on page 15.

KEY GOVERNANCE POLICIES

 
 
l Annual election of all directors 
l Majority voting for directors
l Substantial majority of directors are independent (12 of 14)
l Proxy access adopted in 2015
l Four new independent directors since 2015
l Annual “say on pay” vote
l Shareholder rights plan expired in 2012 and was not renewed

l Board oversight of risk management program


logoa01.jpg
1


Annual Meeting of Shareholders
When
Monday, June 26, 2017, at 1:00 p.m., Eastern Time
Where
Hilton Richmond Hotel, Short Pump
12042 West Broad Street
Richmond, VA 23233
Who May Attend
All shareholders as of the record date may attend the meeting.
Record Date
 
April 21, 2017
Live Audio Webcast
Available at investors.carmax.com
 
 
Voting Matters and Board Recommendations

Agenda Item

Board Recommendation
Page of Proxy Statement
 
 
 
1.
Election of Thirteen Directors
FOR each Director nominee
6
2.
Ratification of Auditors
FOR
22
3.
Advisory Approval of Executive Compensation
FOR
25
4.
Advisory Approval of Frequency of Future Executive Compensation Advisory Approvals
ANNUAL advisory votes
60
5.
Approval of Amended and Restated Annual Performance-Based Bonus Plan
FOR
61
6.
Shareholder Proposal for a Report on Political Contributions
 
AGAINST
64
 
 
Proposal One:
Election of Directors

We are asking you to vote “FOR” the following candidates for election to our Board of Directors.
Nominee

Age

Director
Since

Independent

Principal Occupation

Committee Membership
Ronald E. Blaylock

57

2007

Yes

Founder and Managing Partner of GenNx360 Capital Partners, a private-equity buyout fund

Compensation and Personnel
Sona Chawla

49

2017

Yes

Chief Operating Officer of Kohl's Corporation

Audit
Alan B. Colberg

55

2015

Yes

President and Chief Executive Officer
of Assurant, Inc., a provider of diverse insurance products and related services

Nominating and Governance


2


Thomas J. Folliard

52

2006

No

Non-Executive Chair of the Board, CarMax, Inc. and Retired President and Chief Executive Officer of CarMax, Inc.

N/A
Jeffrey E. Garten

70

2002

Yes

Dean Emeritus, Yale School of Management

Nominating and
Governance
Shira Goodman

56

2007

Yes

President and Chief Executive Officer of Staples, Inc.

Compensation and Personnel
W. Robert Grafton

76

2003

Yes

Retired Managing Partner-Chief Executive, Andersen Worldwide S.C.

Compensation and Personnel
Edgar H. Grubb

77

2007

Yes

Retired Executive Vice President and Chief Financial Officer of Transamerica Corporation, a leading insurance and financial services company

Nominating and
Governance
William D. Nash

48

2016

No

President and Chief Executive Officer of CarMax, Inc.

N/A
Marcella Shinder

50

2015

Yes

Chief Marketing Officer, Work Market Inc., a leading provider of advanced labor automation technology

Audit
John T. Standley

54

2016

Yes

Chairman and Chief Executive Officer of Rite Aid Corporation

Audit
Mitchell D. Steenrod

50

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

83

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
 
Proposal Two:
Ratification of Auditors
 
We are asking you to ratify the appointment by the Audit Committee of KPMG LLP (“KPMG”) as our independent auditors for fiscal 2018. The following table summarizes the fees billed by KPMG for fiscal 2017 and 2016.


Audit Fees

Audit-Related Fees

Tax Fees

Total Fees
Fiscal 2017

$1,726,450

$440,000

$155,350

$2,321,800
Fiscal 2016

$1,591,134

$417,000

$266,822

$2,274,956

logoa01.jpg
3


Proposal Three:
Executive Compensation
 
We 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 meetings, a significant majority of our shareholders supported our executive compensation program, with more than 96% and 97% of votes cast in 2016 and 2015, respectively, voting in favor of our program.
 
We design 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 2015 and 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 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.
 
Net Earnings and CEO Total Direct Compensation
a2016proxy_chart-43493a01.jpg

You will find additional information on our executive compensation program beginning on page 26.

Proposal Four:
Frequency of Future Executive Compensation Advisory Approvals
 
We have held advisory votes on our executive compensation each year since our 2011 annual meeting, and are asking you to approve, on an advisory basis, continuing to hold executive compensation advisory votes annually. This non-binding vote is commonly referred to as a “Say-on-Frequency” vote and you may vote to hold future advisory votes on our executive compensation every one, two or three years.

You will find additional information regarding this proposal on page 60.


4


Proposal Five:
Approval of Amended and Restated Annual Performance-Based Bonus Plan
 
We are asking that you vote on the CarMax, Inc. Annual Performance-Based Bonus Plan, as amended and restated (the “Bonus Plan”) to approve amendments to the performance criteria available under the Bonus Plan and to preserve CarMax’s ability to take federal income tax deductions for performance awards made under the Bonus Plan under Section 162(m) of the Internal Revenue Code.

You will find additional information regarding the Bonus Plan and the proposed amendments beginning on page 61.
Proposal Six:
Shareholder Proposal for a Report on Political Contributions
 
The 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 CarMax Corporate Political Contribution Policy and Board committee oversight; and already disclosed as required under state contribution disclosure laws. Shareholders did not approve an almost identical proposal at the 2016 annual shareholders meeting. The Board continues to believe that adoption of the shareholder proposal is both unnecessary and not in the best interest of shareholders.
Next Year’s Annual Meeting
 
 
Expected Date of 2018 Annual Meeting
 
June 26, 2018
 
Deadline for Shareholder Proposals
 
January 5, 2018

logoa01.jpg
5



PROPOSAL ONE: ELECTION OF DIRECTORS

 
We are asking you to vote for the election of the thirteen 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, as well as the integrity, experience and skills of each nominee. All of the nominees are current directors who were elected by shareholders at our 2016 annual meeting, except Mr. Standley, who joined the Board in August 2016, Mr. Nash, who joined the Board in September 2016, and Ms. Chawla, who joined the Board in April 2017. Rakesh Gangwal, a director since 2011, has decided not to stand for re-election.

We appointed Mr. Standley to the Board after conducting an extensive search for a director with, among other qualities, chief executive and financial experience. We appointed Ms. Chawla to the Board after conducting an extensive search for a director with, among other qualities, executive, operational and digital experience. Each search was led by our Nominating and Governance Committee with the assistance of outside search firms, which first brought Mr. Standley and Ms. Chawla to the Committee’s attention.
Our Board is declassified. This means that each director stands for election for a one-year term every year.
We appointed Mr. Nash to the Board on his promotion to Chief Executive Officer as part of the Company’s multi-year management succession plan.

Our Board is declassified. Accordingly, each director nominee is standing for election to hold office until our 2018 annual meeting of shareholders.
Each nominee must receive a majority of the votes cast.
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.
 
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 vote FOR each of the nominees.
 


6


blaylock.jpg
Ronald E. Blaylock
 
Director since: 2007
Age: 57
 
Independent
 
chawla.jpg
Sona Chawla
 
Director since: 2017
Age: 49

Independent
MR. 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 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.
 
MS. CHAWLA is the Chief Operating Officer of Kohl’s Corporation, a position she has held since November 2015. 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 16 years of experience in digital and retail.
Other Current Directorships
 
Other Current Directorships
Pfizer Inc., Radio One, Inc. and W. R. Berkley Corporation.
 
None.
Other Directorships within Past 5 Years
 
Other Directorships within Past 5 Years
None.
 
Express, Inc. (2012-2015)
Qualifications
 
Qualifications
Mr. 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.
 
Ms. 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.
 


logoa01.jpg
7


     alancolbergpicturea02.jpg
Alan B. Colberg
 
Director since: 2015
Age: 55

Independent
 
folliard.jpg
Thomas J. Folliard
 
Director since: 2006
Age: 52


MR. COLBERG has been the President, Chief Executive Officer and Director of Assurant, Inc., a provider of diverse insurance products and related services, since 2015.  Mr. Colberg joined Assurant as Executive Vice President of Marketing and Business Development in March 2011. He was named Assurant’s President in 2014. Previously, Mr. Colberg worked for Bain & Company, Inc. for 22 years, founding Bain’s Atlanta office in 1996 and heading it until 2010. He also served as Bain’s global practice leader for financial services. 
 
MR. 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.
Other Current Directorships
 
Other Current Directorships
Assurant, Inc.
 
PulteGroup, Inc. and DAVIDsTEA, Inc.
Other Directorships within Past 5 Years
 
Other Directorships within Past 5 Years
None.
 
None.
Qualifications
 
Qualifications
Mr. Colberg’s chief executive experience at Assurant and senior leadership experience in the financial services, insurance and consulting industries qualify him to serve on our Board. Further, Mr. Colberg’s extensive background in corporate strategy and finance enables him to provide additional insight to our Board and its committees.
 
During 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


gartena06.jpg
Jeffrey E. Garten
 
Director since: 2002
Age: 70
 
Independent
 
 goodman.jpg
Shira Goodman
 
Director since: 2007
Age: 56
 
Independent
MR. GARTEN is Dean Emeritus of the Yale School of Management. He served as chairman of Garten Rothkopf, an international consulting firm, from 2005 to 2016. Mr. Garten was the Juan Trippe Professor in the Practice of International Trade, Finance and Business at the Yale School of Management from 2005 to 2015 and 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.
 
MS. GOODMAN has been Chief Executive Officer and director of Staples, Inc., the world’s leading online, delivery and retail seller of business products, since September 2016. Ms. 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, 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, and interim chief executive officer from June to September 2016. From 1986 to 1992, Ms. Goodman worked at Bain & Company in project design, client relationships and case team management.
Other Current Directorships
 
Other Current Directorships
Aetna Inc. and certain mutual funds of Credit Suisse Asset Management.
 
Staples, Inc.
Other Directorships within Past 5 Years
 
Other Directorships within Past 5 Years
Served on the board of managers of Standard & Poor’s LLC, a division of The McGraw-Hill Companies (2012-2015).
 
None.
Qualifications
 
Qualifications
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.
 
Ms. 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.
 

logoa01.jpg
9


grafton.jpg
W. Robert Grafton
 
Director since: 2003
Age: 76
 
Independent
 
grubb.jpg
Edgar H. Grubb
 
Director since: 2007
Age: 77
 
Independent
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.
 
MR. GRUBB is the retired Executive Vice President and Chief Financial Officer of Transamerica Corporation, 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, he was the senior vice president and chief financial officer of Lucky Stores, Inc.
Other Current Directorships
 
Other Current Directorships
None.
 
None.
Other Directorships within Past 5 Years
 
Other Directorships within Past 5 Years
DiamondRock Hospitality Company (2004-2016)
 
Mr. Grubb served as a director of the 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 five AAA clubs representing over 12 million members in the United States, through 2016.
Qualifications
 
Qualifications
Mr. Grafton’s role as the chief executive of an international audit and consulting firm with more than 100,000 employees, as well as his extensive accounting experience, qualify him to serve on our Board. His years of service as chair of our Compensation and Personnel Committee and, previously, of our Audit Committee represent significant and consistent leadership on our Board.
 
With extensive experience 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.


10


nasha03.jpg
William D. Nash
 
Director since: 2016
Age: 48
 

 
shindera01.jpg
Marcella Shinder
 
Director since: 2015
Age: 50
 
Independent
MR. 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.
 
MS. SHINDER serves as Chief Marketing Officer at the Fred Wilson (Union Square Ventures) portfolio company Work Market, a leading provider of advanced labor automation technology. For the prior five years, Ms. Shinder was Chief Marketing Officer of Nielsen Holdings plc, the world’s leading consumer data and information company. Prior to joining Nielsen in 2011, Ms. Shinder was with American Express, serving in a variety of executive roles spanning general management and marketing including, most recently, as General Manager of the American Express OPEN Charge Card portfolio. 
Other Current Directorships
 
Other Current Directorships
None.
 
None.
Other Directorships within Past 5 Years
 
Other Directorships within Past 5 Years
None.
 
None.
Qualifications
 
Qualifications
As the chief executive officer of CarMax, Mr. Nash 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 24,000 CarMax associates qualify him to serve on our Board.

 
Ms. Shinder’s experiences as chief marketing officer of an innovative venture capital backed technology company, as a senior executive at a leading information management company, and at a large consumer financial services organization focused on consumer lending, 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. 

 

logoa01.jpg
11


standleya01.jpg
John T. Standley
 
Director since: 2016
Age: 54
 
Independent
 
steenroda01.jpg
Mitchell D. Steenrod
 
Director since: 2011
Age: 50
 
Independent
MR. STANDLEY is the Chairman and Chief Executive Officer of Rite Aid Corporation. Mr. Standley became Chief Executive Officer of Rite Aid in 2010 and Chairman of the Board of Rite Aid in 2012. He has been a director of Rite Aid since June 2009. Mr. Standley served as Rite Aid’s President from 2008 until 2013 and as its Chief Operating Officer from 2008 until 2010. He previously served as CEO and a member of the Board of Directors of Pathmark Stores, a regional supermarket chain, from 2005 to 2007. Mr. Standley first joined Rite Aid in December 1999, serving as Chief Financial Officer, Chief Administrative Officer and Senior Executive Vice President during his original tenure.
 
MR. 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 controller and treasurer. In 2004, he was promoted to senior vice president and 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.
Other Current Directorships
 
Other Current Directorships
Rite Aid Corporation
 
None.
Other Directorships within Past 5 Years
 
Other Directorships within Past 5 Years
SuperValu, Inc. (2013-2015)
 
None.
Qualifications
 
Qualifications
Mr. Standley’s extensive executive, retail and finance expertise qualifies him to serve on our Board. His experience as Chairman and CEO of Rite Aid, CEO and Board member of Pathmark, as well as his background as an operating and finance executive, enable him to provide additional insight to our Board and its committees.
 
Mr. 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 650 branded locations over a span of 16 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.
 


12


tiefel.jpg
William R. Tiefel
 
Director since: 2002
Age: 83
 
Independent
MR. TIEFEL is Lead Independent Director of CarMax and served as Chair of the Board from 2007 to 2016. He is also the retired Vice Chairman of Marriott International, Inc. and Chairman Emeritus of The Ritz-Carlton Hotel Company, LLC since 2002. He joined Marriott Corporation in 1961. He was named president of Marriott Hotels and Resorts in 1989, president of Marriott Lodging in 1992 and vice chairman of Marriott International and chairman of The Ritz-Carlton Hotel Company in 1998.
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 qualifies him to serve on our Board. His considerable management roles have been valuable to the Board not only as a director, but also as the Board’s chair and lead independent director. His steady leadership and his tenure as a director, chair of the Board and lead independent director, provide continuity and value to our Board.
 
 

logoa01.jpg
13



CORPORATE GOVERNANCE

 
CarMax is committed to good corporate governance. In this section of the proxy statement we describe our governance policies and practices and the role our Board plays in shaping them.
 
Overview
 
Our business and affairs are managed under the direction of the Board in accordance with the Virginia Stock Corporation Act, our articles of incorporation and our bylaws. The standing committees of the Board are the Audit Committee, the Compensation and Personnel Committee, and the Nominating and Governance Committee.
 
The Board and its committees direct our governance practices. The Board has made significant changes to those practices in recent years in response to shareholder feedback and based on evolving practices and the Board’s independent judgment. Demonstrating its continued interest in adopting meaningful shareholder focused changes, since 2011 the Board has:
approved a majority vote standard for the election of directors,
allowed CarMax’s shareholder rights plan to expire without renewal,
established annual elections for all directors,
adopted a mandatory director retirement policy providing that directors, with limited exceptions, may not stand for reelection after reaching age 76, and
adopted a proxy access right for eligible CarMax shareholders.

These changes supplement longstanding good governance practices, such as maintaining a largely independent Board (12 of 14 directors) and appointing a lead independent director to lead meetings of the independent directors and work alongside the chair.
Four of our 12 independent directors have joined the Board since April 2015.
As part of its commitment to board refreshment and seeking diverse perspectives and skills in new directors, in recent years the Board has added four independent directors (Ms. Shinder and Mr. Colberg in 2015, Mr. Standley in 2016 and Ms. Chawla in 2017). In addition to the skills and experiences our new directors bring to the Board, they
have allowed us to reduce the average age (from 62 to 60) and average tenure (from 8.1 years to 7.4 years) of our directors since 2014, while preserving continuity with our continuing directors.

Additional information concerning the Board’s director selection process and refreshment can beginning on page 18.

The Board has approved documents that memorialize our governance standards and practices. These documents include our bylaws, our corporate governance guidelines and a code of business conduct. These documents, each of which is described below, are available under the “Corporate Governance” link at investors.carmax.com.


14


Bylaws
Our bylaws regulate the corporate affairs of CarMax. They include provisions relating to shareholder meetings, voting, the nomination of directors and the proxy access right.
Corporate Governance Guidelines
Our corporate governance guidelines set forth the Board’s practices with respect to its responsibilities, qualifications, performance, access to management and independent advisors, compensation, continuing education, and management evaluation and succession. The guidelines also include director stock ownership requirements.
Code of Business Conduct
Our code of business conduct is a cornerstone of our compliance and ethics program. It applies to all CarMax associates and Board members. It includes provisions relating to honest and ethical conduct, compliance with laws, the handling of confidential information and diversity. It explains how to use our associate help line and related website, both of which allow associates to report misconduct anonymously. It also describes our zero-tolerance policy on retaliation for making such reports.
 
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.
 
We will send you a printed copy of any of these documents, without charge, upon written request to our Corporate Secretary at CarMax, Inc., 12800 Tuckahoe Creek Parkway, Richmond, Virginia 23238.
 
Independence
 
Our Board, in consultation with the Nominating and Governance Committee, evaluates the independence of our directors at least annually. The most recent evaluation took place in April 2017. During this evaluation, the Board considered transactions between the directors (and their immediate family members) and the Company and its affiliates. The Board determined that all of our non-employee directors (Mses. Chawla, Goodman and Shinder and Messrs. Blaylock, Colberg, Gangwal, Garten, Grafton, Grubb, Standley, Steenrod and Tiefel) are independent under the listing standards of the New York Stock Exchange (“NYSE”). Mr. Folliard is not independent because he was an executive officer of CarMax until 2016, and Mr. Nash is not independent because he is currently an executive officer of CarMax.
 
In assessing independence, the Board considered transactions not just between CarMax and the individual directors themselves (and their immediate family members), but also between CarMax and entities associated with the directors or their immediate family members. The Board’s review included the following transactions:

Ms. Goodman is an officer and a director of Staples, Inc. CarMax purchased goods and services from Staples, Inc. in the ordinary course of business in fiscal 2017. The amount that CarMax paid to Staples, Inc. in each of the last three fiscal years did not exceed the greater of $1 million or 2% of the total revenue of Staples, Inc. in each year.

Each of Messrs. Blaylock, Gangwal and Garten are non-employee directors of companies that did business with CarMax in fiscal 2017. These companies are, respectively, RadioOne, Inc., Office Depot, Inc. and Aetna Inc. In addition, Mr. Gangwal was formerly a non-employee director of OfficeMax Incorporated, which did business with CarMax in fiscal 2017. All of these business relationships involved the supply of goods or services to CarMax in the ordinary course of business.

The Board determined that none of the relationships it considered impaired the independence of the non-employee directors.
 
Board Leadership Structure
 
The Board gave significant consideration to our leadership structure in the context of Mr. Folliard’s retirement as Chief Executive Officer in 2016. 

CarMax has historically split the roles of CEO and Board chair. Mr. Folliard was our CEO from 2006 until his retirement in 2016, at which time the Board appointed Mr. Nash as CEO and Mr. Folliard as non-executive chair. In light of Mr. Folliard’s retirement as CEO and Mr. Nash’s subsequent appointment, the Board believes that it is in the best interests of the Company to have Mr. Folliard serve as chair and work closely with Mr. Nash to ensure a successful transition of the CEO role. The Board

logoa01.jpg
15


determined that Mr. Folliard’s long history of leading the Company uniquely positions him to serve as chair during this period of transition.

As non-executive chair of our Board, Mr. Folliard is responsible for chairing Board meetings and meetings of shareholders, attending meetings of the Board’s committees with the approval of the respective committee, and assisting management in representing CarMax to external groups as needed and as determined by the Board. The Board elects its chair annually.

Mr. Nash oversees the day-to-day affairs of CarMax and directs the formulation and implementation of our strategic plans. We believe that this leadership structure is currently the most appropriate for CarMax because it allows our CEO to focus primarily on our business strategy and operations while leveraging the experience of our chair to direct the business of the Board.

Mr. Tiefel, a director since 2002, served as the independent chair of the Board from 2007 until 2016, when he was appointed lead independent director. As lead independent director, Mr. Tiefel serves as the principal liaison between the independent, non-management directors and the CEO, and is responsible for setting the agendas for Board meetings, presiding over executive sessions of the independent directors, coordinating feedback from directors in connection with the evaluations of the CEO and each director, and acting as chair of any Board meeting when the non-executive chair is not present. The Board elects its lead independent director annually.

Our Board periodically reviews this structure and recognizes that, depending on the circumstances, a different leadership model might be appropriate. The Board has no fixed policy on whether the roles of chair 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 chair or the chair otherwise does not qualify as independent.

Board Committees
 
The Board has three standing committees: Audit, Compensation and Personnel, and Nominating and Governance. Each committee is composed solely of independent directors as that term is defined in applicable rules of the U.S. Securities and Exchange Commission (“SEC”) and the NYSE.
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
Secretary at CarMax, Inc., 12800 Tuckahoe Creek Parkway, Richmond, Virginia 23238.




16


The table below summarizes the responsibilities of the three committees.
Committee
Current Members
Responsibilities
Audit
Mitchell D. Steenrod (Chair)
Sona Chawla
Marcella Shinder
John T. Standley

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 Messrs. Standley and Steenrod considered audit committee financial experts under the standards of the NYSE and the SEC.
 
The Audit Committee’s report to shareholders can be found on page 23.
Compensation
and Personnel
W. Robert Grafton (Chair)
Ronald E. Blaylock
Shira Goodman
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 42.
Nominating
and Governance
Edgar H. Grubb (Chair)
Alan B. Colberg
Rakesh Gangwal
Jeffrey E. Garten
 
 
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.
 
 
Board and Committee Meetings
 
During fiscal 2017, our Board met four times and our Board committees met a combined 22 times. Each director attended 78% 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 directors in fiscal 2017 was 97%. We expect our directors to attend the annual meeting of shareholders and all but two of our directors at the time of the 2016 annual meeting of shareholders did so.
 
Our independent directors meet in executive session, without management present, at least once during each regularly scheduled Board meeting. As lead independent director, Mr. Tiefel presides over these executive sessions. 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.
 

logoa01.jpg
17


The table below lists the number of Board and committee meetings in fiscal 2017 and discloses each director’s attendance.
Director(a)
Board

Audit

Compensation
and Personnel

Nominating
and Governance
Ronald E. Blaylock
4


5

Alan B. Colberg(b)
4

12


Thomas J. Folliard(c)
4*



Rakesh Gangwal(d)
4



4
Jeffrey E. Garten
4



5
Shira Goodman
4


4

W. Robert Grafton
3


4*

Edgar H. Grubb
4



5*
William D. Nash(e)
2



Marcella Shinder
4

12


John T. Standley(f)
2

6


Mitchell D. Steenrod
4

12*


William R. Tiefel(g)
4


1

TOTAL MEETINGS
4

12

5

5
* Chair
(a)
Ms. Chawla was not elected to the Board until after the end of fiscal 2017 and therefore did not attend any meetings during fiscal 2017.
(b)
Mr. Colberg was appointed to the Nominating and Governance Committee after the end of the fiscal year and concurrently stepped down from the Audit Committee.
(c)
Mr. Folliard was appointed non-executive chair of the Board on September 1, 2016.
(d)
Mr. Gangwal is not standing for re-election at the 2017 annual meeting.
(e)
Mr. Nash was elected to the Board on September 1, 2016.
(f)
Mr. Standley was elected to the Board and appointed to the Audit Committee on August 1, 2016.
(g)
Mr. Tiefel served as chair of the Board until September 1, 2016, when he was named lead independent director of the Board. Mr. Tiefel was appointed to the Compensation and Personnel Committee on October 18, 2016.

Selection of Directors
 
CRITERIA
 
The 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. 
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 celebration of 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.
 


18


PROCESS
 
The 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. 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.
 
In 2015, our board of directors adopted proxy access amendments to our bylaws, enabling 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 meeting must follow the instructions under “Shareholder Proposal Information” on page 73.

EVALUATION AND REFRESHMENT
 
In 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 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. The average age of our directors is 60 and their average tenure on our Board is 7.4 years. In fiscal 2015, the Board adopted a mandatory director retirement policy providing that directors may not stand for reelection after reaching age 76. The Board may waive this limitation in appropriate circumstances and there is a limited grandfather period for directors serving prior to the adoption of this policy.

As required by the director retirement policy, Mr. Tiefel, Mr. Grafton and Mr. Grubb plan to retire from the Board in 2018. Accordingly, the Nominating and Governance Committee has recently added four highly qualified, independent directors to the Board in Ms. Shinder, Mr. Colberg, Mr. Standley and Ms. Chawla. The fresh perspectives and diversity of skills of these directors, coupled with the institutional knowledge of the continuing independent directors, will provide the Board with ample experience and leadership through these upcoming retirements.
 
Board’s Role in Succession Planning
 
The 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.

On August 31, 2016, as the culmination of a multi-year management succession plan overseen by the Board, Mr. Folliard retired as Chief Executive Officer. Subsequently, the Board promoted Mr. Nash, formerly president of the Company, as Chief Executive Officer and elected him to the Board.
 
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 Risk Oversight
 
Our Board undertakes its responsibility to oversee risks to CarMax through a risk governance framework designed to:

logoa01.jpg
19


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 its business decisions 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.
 
The following table describes the components of CarMax’s risk governance framework.
Assignment of Risk Categories
to Board and its Committees
The 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 Personnel Committee: oversees risks related to human resources and compensation practices.
 
§
Nominating and Governance 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.
Other Processes that Support
Risk Oversight and Management 
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.
 
We believe that our Board leadership structure, discussed in detail beginning on page 15, supports the Board’s risk oversight function. Our chair, lead independent director and committee chairs set agendas and lead meetings to ensure strong risk oversight, while our CEO and his management team are charged with managing risk.
 
Related Person Transactions
 
Our 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.
 
A copy of our policy is available under the “Corporate Governance” link at investors.carmax.com. The Audit Committee is responsible for overseeing the Company’s policy and reviewing any related person transaction that is required to be disclosed pursuant to SEC rules.


20


We did not have any related person transactions in fiscal 2017.
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 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 2017.
 
Shareholder Communication with Directors
 
Shareholders 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 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.
 


logoa01.jpg
21



PROPOSAL TWO: RATIFICATION OF THE APPOINTMENT OF
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 
We are asking you to ratify the Audit Committee’s appointment of KPMG LLP (“KPMG”) as CarMax’s independent registered public accounting firm for fiscal 2018. KPMG has served as our independent registered public accounting firm continuously since fiscal 2003 and has been appointed by the Audit Committee to continue as CarMax’s independent registered public accounting firm for fiscal 2018. 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, 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.
 
We expect that representatives of KPMG will attend the annual 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 vote FOR Proposal Two.
 



22



AUDIT COMMITTEE REPORT

 
The 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 control over financial reporting. KPMG, 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.
 
In this context, the Committee has met and held discussions with management, KPMG and the Company’s internal auditors, meeting 12 times in fiscal 2017. 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. Management represented to the Committee that the Company’s fiscal 2017 consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Committee reviewed and discussed the fiscal 2017 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, 2017, for filing with the SEC.
 
AUDIT COMMITTEE
 
Mitchell D. Steenrod, Chair
Alan B. Colberg
Marcella Shinder
John T. Standley


 


logoa01.jpg
23



AUDITOR FEES
AND PRE-APPROVAL POLICY

 
Auditor Fees and Services
 
The following table sets forth fees billed by KPMG for fiscal 2017 and 2016.

Years Ended February 28 and 29
Type of Fee
2017

2016
Audit Fees(a)
$
1,726,450


$
1,591,134

Audit-Related Fees(b)
440,000


417,000

Tax Fees(c)
155,350


266,822

TOTAL FEES
$
2,321,800


$
2,274,956

(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 securitization program.
(c)
This category includes fees associated with tax compliance, consultation and planning services.


Approval of Auditor Fees and Services
 
The 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 chair 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 2017 were pre-approved by the Audit Committee or pre-approved by the Chair 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.




24



PROPOSAL THREE: ADVISORY RESOLUTION TO
APPROVE EXECUTIVE COMPENSATION

 
We are asking you to approve an advisory resolution approving the compensation of our named executive officers as disclosed in this proxy statement. This vote is commonly referred to as a “Say on Pay” vote and is required by Section 14A of the Securities Exchange Act of 1934. Although this resolution is not binding, we value your opinion and our Compensation and Personnel Committee will consider the outcome of this vote when making future decisions.
 
We believe our executive compensation program promotes the achievement of positive results for our shareholders, aligns pay and performance, and allows us to attract and retain the talented executives that drive our long-term financial success. We urge you to read the “Compensation Discussion and Analysis” section of this proxy statement beginning on page 26, which describes in more detail how our executive compensation program operates and how it is designed to achieve our compensation objectives. We also encourage you to review the “Summary Compensation Table” and other compensation tables and narratives, found on pages 43 through 57.
 
We currently have a policy providing annual “Say on Pay” votes and, in Proposal Four (advisory vote on the frequency of future executive compensation advisory approvals), the Board recommends that shareholders approve an advisory resolution supporting continued annual “Say on Pay” votes. Accordingly, we anticipate that the next advisory vote on the compensation of our named executive officers will occur in 2018.
 
Our Board recommends that, on an advisory basis, shareholders vote in favor of the following resolution:
 
RESOLVED, that the compensation of the named executive officers of CarMax, Inc. (the “Company”), as disclosed in the Company’s 2017 Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and the narrative discussion that accompanies the compensation tables, is hereby APPROVED.
 
The Board recommends a vote FOR Proposal Three.
 


logoa01.jpg
25



COMPENSATION DISCUSSION AND ANALYSIS

 
Overview
 
The Compensation and Personnel Committee oversees an executive compensation program that is intended to drive the creation of long-term shareholder value. This section describes that program and details the compensation earned by our CEO and CFO, our three other most highly compensated executive officers and our former CEO. We refer to these six individuals, listed below, as our “named executive officers” or “NEOs”:
William D. Nash
President and Chief Executive Officer. Mr. Nash joined CarMax in 1997 and was promoted to his current position in September 2016. Mr. Nash is also a member of our Board.
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 and Chief Operating Officer. Mr. Wood joined CarMax in 1993 and was promoted to his current position in February 2016.
Edwin J. Hill
Executive Vice President, Strategy and Business Transformation. Mr. Hill joined CarMax in 1995 and was promoted to his current position in March 2016.
Eric M. Margolin
Executive Vice President, General Counsel and Corporate Secretary. Mr. Margolin joined CarMax in 2007 and was promoted to his current position in April 2016.
Thomas J. Folliard
Non-Executive Chair of the Board of Directors. Mr. Folliard joined CarMax in 1993 and served as Chief Executive Officer from 2006 to August 2016. On his retirement he was appointed to his current role.
 

Executive Summary
 
FISCAL 2017 RESULTS

CarMax continued to deliver growth and performance in fiscal 2017. Highlights of the year include the following:

We opened 15 stores in fiscal 2017. We currently plan to open 15 stores in fiscal 2018 and between 13 and 16 stores in fiscal 2019.
We achieved top and bottom-line growth. Net sales and operating revenues increased 4.8% to $15.88 billion, while net earnings rose 0.6% to $627.0 million and net earnings per diluted share increased 7.6% to $3.26.
Total used unit sales increased 8.3% and comparable store used unit sales increased 4.3%. Total wholesale unit sales declined 0.7%.
CAF finished the year with income of $369.0 million, a decrease of 5.9% over the prior year.
We continued our share repurchase program in fiscal 2017, buying back 10.3 million shares with a market value of $557.7 million.
We were named by Fortune magazine as one of its “100 Best Companies to Work For” for the thirteenth year in a row.



26


MANAGEMENT SUCCESSION AND CEO COMPENSATION CHANGES

As the culmination of a multi-year management succession plan, Mr. Nash became our President and Chief Executive Officer on September 1, 2016. At the time of his promotion, the Committee approved adjustments to Mr. Nash’s compensation to provide a compensation opportunity commensurate with his responsibilities, as follows:

Base salary of $1,000,000;
Target annual incentive bonus equal to 130% of his base salary; and
A one-time promotion award of stock options valued at $2,000,000 and vesting in four equal annual installments.

The Committee also took certain actions in connection with Mr. Folliard’s retirement as CEO and appointment as non-executive chair of the Board. Since Mr. Folliard was expected to retire before the end of calendar 2016, the Committee reduced the value of his fiscal 2017 equity grant, from approximately $7.0 million in fiscal 2016 to approximately $3.5 million in fiscal 2017, while removing continued employment as a vesting condition to the fiscal 2017 awards.

The Committee also provided him some of the benefits that would have been available had Mr. Folliard been age 55 and therefore eligible for retirement treatment under his existing equity awards and severance agreement. Specifically, the Committee modified Mr. Folliard’s equity awards granted prior to fiscal 2017 to remove provisions that otherwise would have resulted in the forfeiture of the awards on his retirement and limited his time to exercise certain vested awards. However, the Committee decided that the awards should continue to vest on their original vesting dates rather than accelerate, as is the case for other retirees. This decision promotes Mr. Folliard’s ongoing alignment with shareholder interests and company performance following his retirement and in his role as non-executive chair of the Board.

Although, for purposes of reporting Mr. Folliard’s compensation in this proxy statement, we are required to include the incremental fair value of the modified awards in the Summary Compensation Table on page 43 and Grants of Plan Based Awards Table on page 46, these are not new awards. These awards have already been reported in prior proxy statements in their year of grant.

Beyond these modifications to existing awards, the Committee did not grant Mr. Folliard any new equity or otherwise alter his equity compensation upon his retirement. The Committee also provided that Mr. Folliard would receive his annual incentive bonus, pro-rated for the portion of the year he served as CEO.

In addition to these compensation modifications, Mr. Folliard’s severance agreement with CarMax was amended to, among other changes, extend the term of certain restrictive covenants, including non-competition and non-solicitation covenants, to the later of 24 months following Mr. Folliard’s service on the Board or August 31, 2020.

As non-executive chair of the Board, Mr. Folliard received director fees and an award of restricted common stock, both as required by our director compensation program and both pro-rated for the portion of the year after his retirement when he served as non-executive chair and a non-management director of the Board.

SUMMARY OF COMPENSATION CHANGES FOR OTHER NAMED EXECUTIVE OFFICERS

In addition to our CEO succession, three of our NEOs received promotions immediately before or during fiscal 2017. Mr. Wood was named our Chief Operating Officer in February 2016, while Mr. Hill and Mr. Margolin were promoted to Executive Vice President after the start of the fiscal year. These events impacted the Committee’s compensation decisions for fiscal 2017. The following chart summarizes the key changes made to the compensation of named executive officers other than our current or retiring CEO in fiscal 2017. 
Compensation
Category
Changes We Made
in Fiscal 2017
Why We Made
These Changes
Base Salary
7.7% increase for Mr. Reedy and Mr. Wood.

13.2% increase for Mr. Hill and 11.7% increase for Mr. Margolin.
Mr. Reedy and Mr. Wood received increases based on individual performance in fiscal 2016. Mr. Hill and Mr. Margolin each received an increase following promotion to executive vice president. See pages 31 to 32 for more detail.

logoa01.jpg
27


Annual Incentive Bonus
42.2% payout versus an 67.8% payout in fiscal 2016.
Based on Company performance measured against the pre-determined net income target set at the beginning of fiscal 2017. See pages 32 to 33 for more detail.
Long-Term Equity Award
No change in the annual award to Messrs. Reedy or Wood.

A one-time special award to Mr. Wood.

20.6% increase for Mr. Hill and for Mr. Margolin.
The annual awards to Messrs. Reedy and Wood were maintained at prior year levels, which the Committee believed continued to provide competitive pay opportunities for them.

Mr. Wood received a one-time retention award of approximately $2 million, split equally between stock options and restricted stock.

The awards to Messrs. Hill and Margolin were increased for their respective promotions. See pages 34 to 36 for more detail.
 
CarMax believes strongly in its pay-for-performance philosophy. In fiscal 2017, an average of 81% of the target total direct compensation of our non-CEO named executive officers was performance-based. Compensation mix is discussed in more detail on page 37.
 
How We Make Compensation Decisions
 
The Compensation and Personnel Committee oversees our executive and director compensation programs and determines all executive officer and director compensation.
 
COMPENSATION PHILOSOPHY AND OBJECTIVES
 
CarMax has a pay-for-performance philosophy. The Committee believes that the best way to implement this philosophy is by tying a significant portion of our executives’ total direct compensation to the attainment of both annual financial goals and multi-year stock price appreciation.
 
The Committee has established the following objectives for our executive compensation program:
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.
 
The key elements of our executive compensation program are base salaries, annual incentive bonuses and long-term equity awards. The Committee generally makes determinations regarding long-term equity awards, base salaries and annual incentive bonuses at its March and April meetings. In fiscal 2017, the Committee also made certain compensation determinations concerning Mr. Nash’s promotion and Mr. Folliard’s retirement contemporaneously with those events. The Committee makes decisions regarding each element of pay to further the objectives described above. The specific ways in which each element of compensation supports these objectives are described beginning on page 31.
 
The Committee recognizes the impact that an adjustment to one element of compensation may have on other elements. For example, an increase in an officer’s base salary will result in a larger target annual incentive amount since that amount is determined as a percentage of base salary. Although the Committee considers these relationships between the various elements of compensation - and also considers each executive officer’s total compensation - decisions regarding any one element of compensation are not determinative of decisions regarding other elements.
 


28


The Committee generally considers the value of stock-based compensation as an element of our executive compensation program at the time of grant of an equity award, not at the time of exercise or vesting. Accordingly, the Committee does not consider the realized value of long-term equity compensation when designing and evaluating our executive compensation program.
 
COMPENSATION CONSULTANT
  
The Committee engages Frederic W. Cook & Co., Inc. (“FWC”), a compensation consultant, to obtain access to independent compensation data, analysis and advice. Under its charter, the Committee has the sole authority to hire, oversee and terminate FWC, as well as to approve FWC’s fees and any other terms of the engagement.
The Committee has retained an independent compensation consultant.
Committee members have direct access to FWC without going through management. FWC provides no services to CarMax other than those it provides to the Committee.
 
The Committee assesses FWC’s independence annually, including April 2016 and 2017, under SEC and NYSE standards and concluded that FWC was independent.

The Committee considers, among other factors:
whether FWC provided other services to CarMax;
the amount of fees paid by CarMax to FWC as a percentage of FWC’s total revenue;
FWC’s policies and procedures designed to prevent conflicts of interest;
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 itself, and an executive officer of CarMax.
 
FWC frequently attends Committee meetings and provides analysis and recommendations that inform the Committee’s decisions. FWC assisted the Committee in fiscal 2017 by analyzing and providing recommendations with regard to total direct compensation for the Company’s CEO, President and executive and senior vice presidents. FWC also advised the Committee in setting Mr. Nash’s compensation on his promotion to CEO, evaluating arrangements made in connection with Mr. Folliard’s retirement, and determining the compensation to be paid to Messrs. Wood, Hill and Margolin as a result of their respective promotions. FWC provided general compensation advice throughout fiscal 2017, including analysis related to long-term equity awards, our internal pay equity (that is, the relationship between the compensation of our CEO and our other named executive officers), the composition of our peer group and the appropriate performance criteria for the fiscal 2017 annual incentive bonus.
 
MANAGEMENT’S ROLE
 
Although management does not have any decision-making authority regarding executive compensation, management assists the Committee by recommending base salary levels, annual incentive bonus objectives and targets, and individual long-term equity awards for executives other than the CEO and, in fiscal 2017, the President. Management also assists the Committee with the preparation of meeting agendas and prepares materials for those meetings as directed by the Committee.
 
The Committee has not delegated any authority with respect to the compensation of our executive officers and directors. The Committee, however, has delegated limited authority to our CEO and CFO to grant long-term equity awards to our non-executive officers between regularly scheduled Committee meetings in an amount not to exceed 75,000 shares or units. These awards are subject to our Employee Equity Grant Policy, which is available under the “Corporate Governance” link at investors.carmax.com. The Committee’s practice is to review and ratify any such grant at its next regularly scheduled meeting.
 
Notwithstanding the Committee’s use of outside advisers and management’s participation in the executive compensation process, the Committee makes all executive compensation decisions using its own independent judgment.
 

logoa01.jpg
29


CONSIDERATION OF THE MOST RECENT ADVISORY “SAY-ON-PAY” VOTE
 
At our 2016 annual meeting, a significant majority of our shareholders approved our executive compensation program, with more than 96% of the votes cast in favor of the program.

More than 96% of the votes cast on last year’s say-on-pay proposal approved CarMax’s executive compensation. 

The Committee was pleased with this response, which followed a similar strong result at the 2015 annual meeting, at which more than 97% of the votes cast were in favor of the program.

Based on these results and the Committee’s independent judgment, the Committee made no material changes to the structure of our executive compensation program for fiscal 2016.
 
PEER GROUP

Each year, the Committee reviews market compensation data provided by its independent consultant to determine whether the compensation opportunities of the named executive officers are appropriate and competitive.
 
The Committee used the following peer group of companies to benchmark the fiscal 2017 compensation disclosed in this proxy statement. The Committee selected this peer group in June 2015 based on an analysis by FWC and the Committee’s independent judgment. These peers fell within a reasonable range (both above and below CarMax) of comparative factors such as revenue, market capitalization, net income, assets and one- and three-year total shareholder return. These peers are generally “big box” retailers, specialty auto retailers or direct competitors.
Advance Auto Parts, Inc.
Hertz Global Holdings, Inc.
AutoNation, Inc.
Kohl’s Corporation
AutoZone, Inc.
Lowe’s Companies, Inc.
Avis Budget Group, Inc.
Macy’s, Inc.
Dick’s Sporting Goods, Inc.
Ross Stores, Inc.
Dollar General Corporation
The Sherwin-Williams Company
eBay Inc.
Southwest Airlines Co.
Family Dollar Stores, Inc.
Staples, Inc.
The Gap, Inc.
Tractor Supply Company
Genuine Parts Company
 
 
In preparation for fiscal 2018 compensation decisions, the Committee re-evaluated this peer group in June 2016 based on an analysis by FWC and the Committee’s independent judgment. The Committee determined that the peer group remained appropriate, with the peers continuing to fall within a reasonable range (both above and below CarMax) of comparative factors such as revenue, market capitalization, net income, assets and one- and three-year total shareholder return. The Committee removed Family Dollar Stores, Inc. from the peer group following Family Dollar’s acquisition. The Committee also determined that it would continue to include eBay Inc. following the spin off of PayPal Holdings as eBay remains an appropriate peer based on the comparative factors referenced above and business comparability. PayPal Holdings was not added to the peer group due to differences in market capitalization and business focus. The Committee will use this revised peer group to benchmark compensation practices for fiscal year 2018.

In addition to the peer group, the Committee uses broader survey data to benchmark compensation practices. In fiscal 2017, the Committee considered three national surveys produced by Equilar, Towers Watson and Mercer with a focus on executives within the retail/wholesale and automotive industries.
 
The Committee considers a blend of peer group data and broader survey data in benchmarking compensation. The Committee believes that this mix of data provides the most comprehensive view of executive compensation practices at companies against whom we compete for talent and allows the Committee to ensure that CarMax continues to provide appropriate and competitive compensation. This mix of data also allows the Committee to obtain broader market context with regard to certain positions that may not exist in a comparable form at every company in our peer group or that may not be classified as a named executive officer at every company in our peer group.
 


30


The Committee generally uses the 50th percentile of the blended peer/survey data as a reference in setting the base salaries and target annual incentive bonus opportunities of our named executive officers. The Committee uses long-term equity awards that are tied to objective performance metrics to further reward executive officers when CarMax performs well. If the Company delivers sustained performance gains, these long-term equity awards are targeted to provide an opportunity for total direct compensation beyond the median of the blended peer/survey data.

The Committee uses peer group and broader survey data as one of many factors in making compensation decisions. Other factors include individual performance, Company performance, tenure, internal pay equity and succession planning.
 
What We Pay and Why: Elements of Compensation
 
The key elements of compensation for our named executive officers are base salary, an annual incentive bonus and long-term equity awards. Together, these elements make up total direct compensation.
Base Salary
+
Annual Incentive
Bonus
+
Long-Term Equity Awards
=
Total Direct Compensation
 
This section describes these elements and details the amounts of each earned by our named executive officers in fiscal 2017.
 
BASE SALARY
 
We pay competitive base salaries to retain key officers and attract the new talent necessary for our long-term success. An executive officer’s base salary generally reflects the officer’s responsibilities, tenure and job performance, as well as the market for the officer’s services. The Committee reviews officer base salaries every year, generally in March or April. When the Committee reviews base salaries, it considers the reports and advice provided by FWC, its independent compensation consultant, and the peer group and survey data described above, as well as the recommendations provided by our CEO and our President (except when setting the CEO’s and the President’s base salary).
 
At the beginning of fiscal 2017, the Committee approved the following base salary adjustments.
Name
Prior Base Salary
($)

Fiscal 2017 Base Salary
($)

Percentage Increase
(%)
William D. Nash
800,000


800,000



Thomas W. Reedy
650,000


700,000


7.7

William C. Wood
650,000


700,000


7.7

Edwin J. Hill
530,221


600,000


13.2

Eric M. Margolin
514,642


575,000


11.7

Thomas J. Folliard(a)
1,255,218


1,255,218



(a)
Mr. Folliard retired on August 31, 2016. This amount reflects the base salary rate in effect at the time of his retirement.

The Committee did not increase Mr. Nash’s base salary at the beginning of fiscal 2017, as it had been set shortly before the beginning of the fiscal year on his promotion to President in February 2016. The Committee approved Mr. Folliard and Mr. Nash’s recommendation to increase the base salaries of Mr. Reedy and Mr. Wood based on their respective fiscal 2016 performance and sustained contributions as officers, to align their salaries as CFO and COO, and to better align Mr. Reedy and Mr. Wood’s salaries with the 50th percentile of the blended peer/survey data described above under the heading “Peer Group.” The Committee also approved Mr. Folliard and Mr. Nash’s recommendation to increase Mr. Hill’s base salary by 13.2% and Mr. Margolin’s by 11.7% in recognition of their respective promotions to Executive Vice President and based on the individual contribution they each made to CarMax’s performance in fiscal 2016. The Committee did not increase Mr. Folliard’s base salary, determining that no increase was appropriate in anticipation of his retirement during calendar 2016.

On his promotion to CEO, effective September 1, 2016, the Committee increased Mr. Nash’s base salary to $1,000,000.


logoa01.jpg
31


Name
Fiscal 2017 Base Salary as President
($)
 
Fiscal 2017 Base Salary as CEO
($)
 
Percentage Increase
(%)
William D. Nash
800,000

 
1,000,000

 
25.0
%

The Committee made this determination in recognition of Mr. Nash’s responsibilities as CEO and in consultation with FWC, who analyzed the base salaries of new CEOs at comparable companies. Consistent with our focus on performance-based pay, Mr. Nash’s new base salary is below the median of the peer group and other benchmark data provided by FWC, which the Committee believed was appropriate in his first year as CEO.
 
 
ANNUAL INCENTIVE BONUS

We pay annual incentive bonuses to drive the achievement of CarMax’s financial goals. The amount of the incentive bonus depends on our performance as measured against objective performance goals established by the Committee at the beginning of each fiscal year. Bonuses are not guaranteed.
 
We calculate bonuses using the following formula:
Base Salary
x
Target Percentage of
Base Salary
x
Performance Adjustment
Factor
=
Annual Incentive Bonus
 
Base salaries, which are the first component of this formula, are discussed above. The “target percentage of base salary” is an individual’s incentive bonus target expressed as a percentage of base salary. This percentage differs among our named executive officers depending on their level of responsibility and is set forth in a written agreement between each officer and the Company. Each named executive officer’s target percentage is listed in the table on page 33.
 
The last component of the bonus formula – the “performance adjustment factor” – is a percentage representing the Company’s success in meeting the performance goals set by the Committee at the beginning of each fiscal year.
 
The following chart describes how the Committee applied this formula in fiscal 2017.
Step One: Select
Performance Measure
The Committee determined in April 2016 that the performance goals for fiscal 2017 would be based on our fiscal 2017 net income, determined in conformity with U.S. generally accepted accounting principles. The Committee believes that tying performance goals to net income aligns management and shareholder interests.
Step Two: Select
Performance Targets
The Committee then established the following net income targets for fiscal 2017: $623.4 million as the threshold goal; $639.0 million as the target goal; $682.6 million as the premium goal; and $700.0 million as the maximum goal.
Step Three: Select
Performance Adjustment
Factors
The Committee then established the following performance adjustment factors for fiscal 2017:
§ 25% if the threshold goal of $623.4 million was achieved
§ 100% if the target goal of $639.0 million was achieved
§ 150% if the premium goal of $682.6 million was achieved
§ 200% if the maximum goal of $700.0 million was achieved

If the threshold performance goal was not achieved, no incentive bonus would be paid. The performance adjustment factors are determined using straight-line interpolation when our actual performance falls between two performance goals.

Step Four: Assess
Performance Against Targets and Determine Payouts
 
The Committee certified in April 2017 that CarMax had achieved net income for fiscal 2017 of $627.0 million, yielding a performance adjustment factor of 42.2%. The Committee multiplied this percentage by each named executive officer’s target incentive amount to determine each executive officer’s fiscal 2017 bonus payout.
 
 
The following table shows each named executive officer’s base salary, incentive target percentage of base salary, and target and maximum bonus amounts. The table also shows each officer’s actual fiscal 2017 bonus.


32


Name
Base Salary ($)

Incentive Target Percentage (%)

Target Incentive Amount ($)

Actual Fiscal 2017 Incentive Bonus

Maximum Incentive Amount ($)
William D. Nash(a)
800,000/1,000,000


100/130


1,047,945


442,233


2,095,890

Thomas W. Reedy
700,000


75


525,000


221,550


1,050,000

William C. Wood
700,000


75


525,000


221,550


1,050,000

Edwin J. Hill
600,000


75


450,000


189,900


900,000

Eric M. Margolin
575,000


75


431,250


181,988


862,500

Thomas J. Folliard(b)
1,255,218


150


949,151


400,542


1,898,302

(a)
For the first six months of fiscal 2017, Mr. Nash was eligible to receive a bonus calculated using a base salary of $800,000 and incentive target percentage of 100%. For the portion of his incentive bonus attributable to the second half of fiscal 2017, he was eligible to receive a bonus using his new base salary of $1,000,000 and incentive target percentage of 130%.
(b)
The target, actual and maximum bonus amounts for Mr. Folliard are prorated for fiscal 2017 as he was only eligible to receive a bonus for that portion of the year before his retirement on August 31, 2016.
 
The Committee sets robust performance targets for our annual incentive plan to drive achievement of CarMax’s financial goals. In fiscal 2017, despite strong performance, including increases in net sales, operating revenues and net income, the performance adjustment factor was 42.2%, meaning bonus payments were below target. For the last five fiscal years, our average performance adjustment factor has been 99.7% (42.2%, 67.8%, 179.4%, 120.6% and 88.3% for fiscal 2017, 2016, 2015, 2014 and 2013), so that, on average for the past five years, we have paid our named executive officers an annual incentive bonus of 99.7% of their respective target incentive amounts for achievement against the targets established by the Committee.

At the beginning of fiscal 2017, the Committee made no change to the 100% incentive target percentage it set for Mr. Nash on his February 2016 promotion to President. The Committee then increased his incentive target percentage to 130% at the time of his promotion to CEO in recognition of the responsibilities he assumed on his appointment. The Committee kept Mr. Nash’s incentive target percentage below Mr. Folliard’s incentive target percentage of 150% to reflect his status as a newly appointed CEO.
 
At Mr. Folliard’s retirement, the Committee acted to make him eligible for an annual incentive payment similar to what he would have received if he were 55 and therefore eligible for retirement treatment. The Committee approved an incentive award for that portion of the fiscal year he served as CEO, to be paid at the time and on the terms applicable to our other named executive officers.

In addition, to maintain parity among our executive vice presidents, the Committee increased Mr. Hill and Mr. Margolin’s respective incentive target percentages to 75% in connection with their promotions to executive vice president.

The Committee determines all incentive bonuses in accordance with the CarMax, Inc. Annual Performance-Based Bonus Plan (“Bonus Plan”). We adopted the Bonus Plan as a mechanism to provide annual incentive compensation and it is intended to preserve the deductibility of this compensation in accordance with Section 162(m) of the Internal Revenue Code. The Bonus Plan provides that the maximum amount payable to any one individual in any one fiscal year is $5 million. In fiscal 2017, however, the Committee limited the maximum performance adjustment factor to 200%, ensuring that Mr. Nash’s bonus could not exceed $2,095,890 and that no other individual bonus could exceed $1,898,302.
 
The Bonus Plan authorizes the Committee to reduce the amount of any bonus paid to a named executive officer below the amount that otherwise would be payable. The Committee may also decide not to pay a bonus even when performance goals have been satisfied. Under no circumstances, however, may the Committee increase the amount of any bonus payable under the Bonus Plan above the amount that would be payable to an executive upon application of the relevant performance adjustment factor.

If Proposal Five is approved, as recommended by the Board, the performance criteria available under the Bonus Plan will be amended as described in Proposal Five and CarMax’s ability to take federal income tax deductions for performance awards made under the Bonus Plan will be preserved.
 

logoa01.jpg
33


LONG-TERM EQUITY AWARDS
 
We grant long-term equity awards to tie our executives’ long-term compensation directly to CarMax’s stock price and to drive the achievement of our strategic goals. We also believe that long-term equity awards are an important retention tool.
 
In fiscal 2017, we granted our named executive officers three kinds of long-term equity awards: stock options, performance stock units (“PSUs”) and restricted stock. The grant of restricted stock was limited to the retention award to Mr. Wood, which is described in more detail below, and an award made to Mr. Folliard, following his retirement, as non-executive chair of the Board under our director compensation policies and consistent with all other non-management directors. All of our long-term equity grants were made pursuant to the CarMax, Inc. 2002 Stock Incentive Plan (“Stock Incentive Plan”).

The Committee introduced PSUs for fiscal year 2016, replacing market stock unit (“MSU”) awards for our CEO and executive and senior vice presidents. The MSUs were tied solely to the performance of our stock while the PSUs are tied to CarMax performance goals, which the Committee believes allows us to further strengthen the link between pay and the performance of our executives.
 
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. The Committee has 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. All long-term equity awards granted in fiscal 2016 and fiscal 2017 contain a double-trigger feature.

In determining the number of options and PSUs to award, the Committee considered the named executive officer’s role at CarMax; benchmarking data; our recent financial performance; the performance of our 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, and its President in fiscal 2017, except with respect to the awards to the President and CEO. The CEO generally gives the Committee an initial recommendation, a recommendation our President joined in fiscal 2017, for annual long-term equity awards for the other named executive officers. The Committee reviews this recommendation and makes its own independent determination.
 
Stock Options
 
Each option represents the right to purchase one share of our common stock at the exercise, or “strike,” price. The strike price is equal to the volume-weighted average price of our common stock on the grant date. The Committee believes that the use of the volume-weighted average price, as opposed to the closing price, is more representative of the value of the common stock on the grant date because it incorporates all trades made on the grant date.
 
Our option awards generally vest in 25% increments over four years; that is, one quarter of the options granted vests on the first anniversary of the grant, another quarter vests on the second anniversary, and so forth. The awards expire on the seventh anniversary of the grant date.
 
We believe that granting stock options supports our pay-for-performance philosophy by aligning management and shareholder interests. If our stock price does not rise, the options have no value. In addition to promoting alignment of management and shareholder interests, the four-year vesting schedule and seven-year exercise term of our options ensures that our executives are appropriately focused on CarMax’s long-term strategic goals. This vesting schedule also operates as a retention tool.
 
Performance Stock Units
 
Depending on the Company’s achievement of performance goals over a three-year period, PSUs represent the right to receive between 0% and 200% of a targeted number of shares of our common stock. For the fiscal 2017 PSUs, the Committee used adjusted pre-tax income, which is pre-tax income adjusted to exclude interest expense, as the PSU performance measure. The number of shares delivered to each PSU holder will be determined based upon actual three-year cumulative adjusted pre-tax income performance compared to pre-determined three-year adjusted pre-tax income goals. Specifically, each PSU is multiplied by a percentage that represents the Company’s success in meeting the adjusted pre-tax income goals set by the Committee. If the threshold adjusted pre-tax income goal is met, each PSU is multiplied by 25%. The target multiplier is 100% and the maximum multiplier is 200%. The multiplier is determined using straight-line interpolation for adjusted pre-tax income


34


performance that falls between the threshold and the target or between the target and the maximum. If the threshold performance goal is not achieved, no shares will be paid.

PSUs generally vest on the three-year anniversary of the grant date.
 
The Committee considered PSUs to be a key component of our pay-for-performance philosophy in fiscal 2017 because the PSUs directly tie equity payments to a measure of CarMax’s earnings growth that the Committee believes to be an appropriate reflection of the Company’s performance. In addition, similar to our stock options, a PSU’s multi-year vesting schedule operates as a retention tool and ensures that our executives are appropriately focused on CarMax’s long-term strategic and financial goals.

Fiscal 2017 Long-Term Equity Awards
 
Annual and Promotion Awards

In fiscal 2017, as noted below, the Committee approved stock option and PSU awards to our named executive officers as part of our annual long-term equity award process and in connection with officer promotions.

Options and PSUs Granted in Fiscal 2017

Options and PSUs Granted in Fiscal 2016
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(b)
4,249,983


749,977


4,999,960


1,455,911


485,270


1,941,181

Thomas W. Reedy
1,455,917


485,322


1,941,239


1,455,911


485,270


1,941,181

William C. Wood(c)
1,455,917


485,322


1,941,239


1,455,911


485,270


1,941,181

Edwin J. Hill
1,305,921


435,293


1,741,214


1,082,685


360,868


1,443,553

Eric M. Margolin
1,380,365


360,894


1,741,259


1,082,685


360,868


1,443,553

Thomas J. Folliard(d)
2,625,002


875,025


3,500,027


5,250,006


1,749,976


6,999,982

(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.
(b)
Mr. Nash’s fiscal 2017 awards include both his annual equity award, made in April 2016, and his award on promotion to CEO in September 2016.
(c)
This amount does not include Mr. Wood’s retention award, which is discussed below.
(d)
Mr. Folliard’s fiscal 2017 awards referenced in this table do not include the impact of the equity award modifications made at the time of his retirement, which are discussed below, or a restricted stock grant valued at $69,961 made to Mr. Folliard pursuant to our director compensation policies after he was no longer an employee of CarMax.

For Mr. Nash’s annual long-term equity award for fiscal 2017, made in April 2016, the Committee approved stock options and PSUs with an aggregate grant date fair value of $2,999,974, a 54.5% increase in value compared to his long-term equity awards in fiscal 2016. This decision was made in recognition of the Company’s and his individual performance in fiscal 2016, his increased responsibilities as President and the level of his compensation relative to Mr. Folliard and other officers.

At the time of Mr. Nash’s promotion to Chief Executive Officer, the Committee approved an additional award of stock options with a grant date fair value of $1,999,986, bringing the total grant date fair value of Mr. Nash’s fiscal 2017 long-term equity to $4,999,960. The Committee made this determination in recognition of Mr. Nash’s new responsibilities as CEO and in consultation with FWC, who provided information on the relationship between prospective CEO and outgoing CEO long-term equity compensation. The Committee intended to keep the total value of Mr. Nash’s long-term incentives below median CEO long-term equity according to the blended peer/survey data to reflect his status as a new CEO.
 
The grant date fair value of the annual long-term equity awards provided to Messrs. Reedy and Wood remained essentially unchanged in fiscal 2017, meaning that approximately the same target economic value was delivered in fiscal 2017 as was delivered in fiscal 2016. The Committee determined based on the blended peer/survey data and its own independent judgment that maintaining equity awards at prior year levels continued to provide competitive pay for these named executive officers.


logoa01.jpg
35


The grant date fair value of the annual long-term equity awards provided to each of Messrs. Hill and Margolin was increased by 20.6%. The Committee made these adjustments, after reference to the blended peer/survey data provided by FWC, in light of their strong individual performance and their respective promotions to executive vice president.

Retention Award

In addition to his annual long-term equity award, in April 2016 the Committee gave Mr. Wood a one time retention award with a grant date fair value of $2,000,023, split evenly between stock options and restricted common stock. The restricted common stock will vest on the third anniversary of the grant date, and will be non-transferable and subject to forfeiture under certain circumstances until that time. The terms of the stock options are the same as those otherwise awarded to our named executive officers. Mr. Wood has been with CarMax since 1993, holding a series of positions with increasing responsibilities until he became senior vice president, stores, in 2011, followed by promotions to executive vice president in 2012 and COO in 2016. The Committee recognized the importance of Mr. Wood’s longstanding leadership of our stores and decided to give him this award in recognition of the importance that his retention and continued engagement play in ensuring a smooth CEO transition.

Modifications on Mr. Folliard’s Retirement

At the time of his retirement, Mr. Folliard held long-term equity granted in previous years in the form of stock options, PSUs and MSUs. Under the terms of these awards, despite 23 years of service with CarMax and 10 years of service as CEO, his retirement before reaching the age of 55 would have resulted in the forfeiture of unvested awards and a requirement that he exercise his vested stock options within three months.

Mr. Folliard joined CarMax in 1993 and was promoted to president and CEO in May 2006. During his ten years as CEO, he 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. The Committee decided that, in light of Mr. Folliard’s prior service to CarMax, his ongoing service as the non-executive chair of the Board, and his agreement to extend the term of his non-competition and non-solicitation covenants, it would modify this existing long-term equity to remove the terms that would have required forfeiture, or early exercise, on his retirement. The modification did not accelerate the vesting schedule of the awards, which will remain unvested until their original vesting dates, and no changes were made to the full-term expiration dates or the strike prices of the awards. Beyond these modifications to existing awards, the Committee did not grant Mr. Folliard any new equity or otherwise alter his equity compensation upon his retirement.

All of the long-term equity covered by the Committee’s decision was granted in previous fiscal years, and therefore disclosed as compensation to Mr. Folliard in previous proxy statements. However, the incremental fair value of the awards that would have been terminated is required to be reported in this proxy statement as if the awards were made for the first time in fiscal 2017. As a result, the amount recognized for this modification in the Summary Compensation Table on page 43 is $23,280,200.

Cumulative Fair Value of Fiscal 2017 Long-Term Equity Awards and Modifications

As discussed above, in fiscal 2017 the Committee approved long-term equity awards for annual, promotion and retention purposes, as well as modifying Mr. Folliard’s pre-existing awards on his retirement. The following table shows the cumulative fair value of all of these long-term equity decisions.
Name
Grant Date Fair Value of Long-Term Equity Granted or Modified in Fiscal 2017
William D. Nash
4,999,960

Thomas W. Reedy
1,941,239

William C. Wood
3,941,262

Edwin J. Hill
1,741,214

Eric M. Margolin
1,741,259

Thomas J. Folliard
26,780,227


 


36


COMPENSATION MIX
 
As our executives assume more responsibility, we generally increase the percentage of their compensation that is performance-based. We do not have a pre-established policy or target for allocation between specific compensation components. The following charts, however, show that the majority of target annual total direct compensation for both our CEO and our other named executive officers as a group is determined by our performance. The following charts and tables reflect the target total direct compensation (base salary, target annual incentive bonus and long-term equity grants) set by the Committee and Mr. Folliard has been excluded as he is no longer an executive officer of the Company.

 
a2016proxy_chart-43262a01.jpga2016proxy_chart-44278a01.jpg
The table below illustrates how the target total direct compensation set by the Committee for each of our continuing named executive officers was allocated between performance-based and fixed compensation for fiscal 2017, as well as the breakdown of performance-based compensation that was based on annual and long-term Company performance.

Percentage of Target Total Direct
Compensation
 
Percentage of Target Performance-Based Compensation

Performance-
Based

Fixed

Annual

Long-
Term
William D. Nash
87%

13%

17%

83%
Thomas W. Reedy
78%

22%

21%

79%
William C. Wood
86%

14%

12%

88%
Edwin J. Hill
79%

21%

21%

79%
Eric M. Margolin
79%

21%

20%

80%

ADDITIONAL ELEMENTS OF COMPENSATION
 
We provide our executive officers the benefits available to CarMax associates generally. We also provide the limited perquisites described below. These benefits and perquisites are intended to be part of a competitive compensation package.
 
Benefits Available to CarMax Associates Generally
 
Our executives and our full-time associates generally are eligible for health insurance coverage, life insurance, short- and long-term disability insurance, matching gifts to qualified charitable organizations, and a defined contribution, or 401(k), plan that we refer to as our Retirement Savings Plan. Mr. Folliard, while no longer an executive, is also eligible for and receives health insurance coverage as he was a member of the Board before June 2014, see “Director Compensation Program” on page 58.


logoa01.jpg
37


In addition, executives and CarMax associates who satisfied certain criteria as of December 31, 2008, may be eligible for benefits under our frozen Pension Plan. Additional details regarding these frozen benefits can be found in the “Pension Benefits in Fiscal 2017” table on page 50.
 
Non-Qualified Retirement Plans
 
Our executives and other highly-compensated associates are eligible to participate in two non-qualified retirement plans: the Retirement Restoration Plan (“RRP”) and the Executive Deferred Compensation Plan (“EDCP”). A description of these plans can be found in the narrative discussion following the “Nonqualified Deferred Compensation” table on pages 52 and 53. Details regarding the fiscal 2017 contributions to each named executive officer’s RRP and EDCP accounts, as well as the earnings and aggregate balances for those accounts, can be found in the “Nonqualified Deferred Compensation” table on page 52.
 
In addition to the RRP and the EDCP, executives and other highly compensated CarMax associates who satisfied certain criteria as of December 31, 2008, may be eligible for benefits under our frozen Benefit Restoration Plan. Additional details regarding these frozen benefits can be found in the “Pension Benefits in Fiscal 2017” table on page 50.
 
Company Transportation
 
We provide the use of a CarMax-owned vehicle to each of our named executive officers and to certain other eligible associates. For all associates using CarMax-owned vehicles, we bear the maintenance and insurance costs. We treat the personal use of a Company-owned vehicle as income to the associate. The associate pays the related income taxes.
 
We encourage our executive officers to use our plane for business travel. Our plane is also available for personal use by Messrs. Nash, Reedy and Wood. Mr. Nash is required to reimburse CarMax for the incremental costs associated with his personal use to the extent that those costs exceed $125,000 in any fiscal year. Messrs. Reedy and Wood are required to reimburse CarMax for the incremental costs associated with their respective personal uses of the plane to the extent that those costs exceed $70,000 in any fiscal year. Mr. Folliard was also permitted to use our plane for personal travel before his retirement as CEO, and was required to reimburse CarMax for incremental costs associated with his personal use to the extent that those costs exceeded $175,000 in any fiscal year. Our executives bear all income taxes associated with their personal use of the plane.
 
We do not provide tax gross-ups on any of these transportation benefits.
 
Tax and Financial Planning Services
 
We provide a tax and financial planning benefit to our named executive officers. This benefit was valued at $13,280 for fiscal 2017. Officers who forego this benefit may engage their own tax professional at the Company’s expense in an amount up to $10,000 per year. The Committee approved this benefit to reduce the amount of time and attention that our executive officers must spend on personal tax and financial planning, which permits them to focus on their responsibilities to CarMax, and to maximize the financial reward of the compensation that CarMax provides. Officers bear all income taxes associated with these tax and financial planning benefits. We do not provide tax gross-ups on these benefits.
 
Additional Information
 
SEVERANCE AGREEMENTS
 
We have severance agreements with each of our named executive officers. The Committee has determined that these agreements are beneficial to us because they contain restrictive covenants relating to confidential information, non-competition and non-solicitation of our associates. The Committee also believes that these agreements serve as a recruiting tool and better enable our current executives to focus on CarMax’s strategic and operating goals. The agreements provide for severance payments under certain circumstances, which are discussed in more detail under “Potential Payments Upon Termination or Change-in-Control” beginning on page 53. None of the severance agreements provide a guaranteed term of employment, nor do they provide tax gross-ups on any compensation or perquisite.


38



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.
 
The agreements provide further that each named executive officer is eligible to participate in our Stock Incentive Plan and to participate in all other incentive, compensation, benefit and similar plans available to our other executive officers.

Folliard Severance Agreement Amendments

At the time of his retirement, the terms in Mr. Folliard’s severance agreement were equivalent to those in the severance agreements with our other named executive officers. In connection with the actions taken by the Committee on his retirement, Mr. Folliard agreed to amendments to his severance agreement that extended the term of certain restrictive covenants, including non-competition and non-solicitation covenants, from 24 months following his employment to the later of 24 months following the end of his service on the Board or August 31, 2020.
 
Clawback and Forfeiture Provisions
 
The 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 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 PSUs will be forfeited.
 
Change-in-Control and Severance Benefits
 
Each 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; 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 53.
 
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.
 

logoa01.jpg
39


RISK AND COMPENSATION POLICIES AND PRACTICES
 
The 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 2017, 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 2017 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:
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 GUIDELINES
 
To 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
 
Executives 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, 2017, all of our current named executive officers satisfied the ownership guidelines set forth above.
 
PROHIBITION ON HEDGING AND PLEDGING
 
We 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.
 


40


TAX AND ACCOUNTING CONSIDERATIONS
 
Section 162(m) of the Internal Revenue Code generally disallows 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 is performance-based. Compensation under our Bonus Plan and stock options and PSUs granted pursuant to our Stock Incentive Plan may qualify as performance-based under Section 162(m). Although the Committee generally seeks to preserve the deductibility of compensation paid to our executive officers, 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.



logoa01.jpg
41



COMPENSATION AND PERSONNEL COMMITTEE REPORT

 
The 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, 2017.
 
THE COMPENSATION AND PERSONNEL COMMITTEE
W. Robert Grafton, Chair
Ronald E. Blaylock
Shira Goodman
William R. Tiefel


42



COMPENSATION TABLES

 
Summary Compensation Table for Fiscal 2017

The table below shows the compensation paid to or earned by our named executive officers in fiscal 2017, 2016 and 2015.
Name and Principal
Position
Fiscal
Year
 
Salary
($)
 
Stock
Awards
(a)(f)
($)
 
Option
Awards
(a)(f)
($)
 
Non-Equity
Incentive
Plan Comp-
ensation
(b)
($)
 
Change in
Pension
Value and
Nonqualified
Deferred
Comp-
ensation
Earnings
(c)
($)
 
All Other
Compen-
sation
(d)
($)
 
Total
($)
William D. Nash
2017
 
902,308
 
749,977
 
4,249,983
 
442,233
 
30,536
 
163,355
 
6,538,392
President and Chief Executive Officer
2016
 
660,769
 
485,270
 
1,455,911
 
348,181
 
 
122,926
 
3,073,057
2015
 
546,002
 
435,319
 
1,305,914
 
740,025
 
67,206
 
88,688
 
3,183,154
Thomas W. Reedy
2017
 
699,039
 
485,322
 
1,455,917
 
221,550
 
26,964
 
123,664
 
3,012,456
Executive VP and Chief Financial Officer
2016
 
650,415
 
485,270
 
1,455,911
 
330,525
 
 
135,173
 
3,057,294
2015
 
594,244
 
435,319
 
1,305,914
 
801,640
 
57,764
 
103,926
 
3,298,807
William C. Wood
2017
 
699,039
 
1,485,343
 
2,455,919
 
221,550
 
65,617
 
121,334
 
5,048,802
Executive VP and Chief Operating Officer
2016
 
650,415
 
485,270
 
1,455,911
 
330,525
 
 
149,269
 
3,071,390
2015
 
594,244
 
435,319
 
1,305,914
 
801,640
 
142,232
 
115,065
 
3,394,414
Edwin J. Hill
2017
 
597,209
 
435,293
 
1,305,921
 
189,900
 
52,405
 
75,237
 
2,655,965
Executive VP, Strategy and Business Transformation
2016
 
531,289
 
360,868
 
1,082,685
 
179,745
 
 
87,806
 
2,242,393
2015
 
503,659
 
360,902
 
1,082,678
 
452,960
 
108,017
 
74,420
 
2,582,636
Eric M. Margolin
Executive VP, General Counsel, and Corporate Secretary
2017
 
572,801
 
360,894
 
1,380,365
 
181,988
 
4,026
 
67,958
 
2,568,032
Thomas J. Folliard(e)
2017
 
637,265
 
4,694,487
 
22,085,740
 
400,542
 
178,462
 
416,254
 
28,412,750
Former Chief Executive Officer
2016
 
1,257,747
 
1,749,976
 
5,250,006
 
1,276,557
 
 
487,794
 
10,022,080
2015
 
1,191,062
 
1,624,999
 
4,875,005
 
3,216,945
 
384,705
 
403,382
 
11,696,098
(a)
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 named executive officer. Additional information regarding outstanding awards, including exercise prices and expiration dates, can be found in the “Outstanding Equity Awards at Fiscal 2017 Year End” table on pages 48 and 49. The assumptions used in determining the grant date fair values of the awards 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, 2017.
(b)
Represents the annual incentive bonus earned under our Bonus Plan.
(c)
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 2017” table and its accompanying narrative on pages 50 and 51 contain additional details with respect to these amounts.
(d)
Further details are included in the “All Other Compensation in Fiscal 2017” table below.
(e)
Mr. Folliard retired as our Chief Executive Officer on August 31, 2016.

logoa01.jpg
43


(f)
Effective on his August 31, 2016 retirement from CarMax, all of Mr. Folliard’s existing long-term equity, except that awarded in fiscal 2017, was modified to remove the terms that would have required forfeiture, or early exercise, on his retirement. The modification did not accelerate the vesting schedule of the long-term equity awards and no changes were made to the full-term expiration dates or the strike prices of the awards. The amount shown in the Stock Awards column for Mr. Folliard includes $875,025 constituting the grant date fair value of his April 12, 2016 PSU award, as described above, as well as $3,819,462 reflecting the incremental fair value of the MSU and PSU awards that were modified on his August 31, 2016 retirement.  The amount shown in the Option Awards column for Mr. Folliard includes $2,625,002 constituting the grant date fair value of his April 12, 2016 stock option award, as described above, as well as $19,460,738 reflecting the incremental fair value of the stock option awards that were modified on his August 31, 2016 retirement. The incremental fair values of the modified MSUs, PSUs and 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, 2017.


44


All Other Compensation in Fiscal 2017
 
Name
Personal Use
of Company
Plane
(a)
($)
 
Personal Use
of Company
Automobile
(b)
($)
 
Retirement
Savings Plan
Contribution
(c)($)
 
Deferred
Compensation
Account
Contributions
(d)($)
 
Board of Directors(e)
($)
 
Other(f)
($)
 
Total
($)
William D. Nash
78,359


18,259

41,497


25,240

163,355
Thomas W. Reedy
23,981

8,747

20,917

48,884


21,135

123,664
William C. Wood
26,524


20,917

48,884


25,009

121,334
Edwin J. Hill

7,631

20,724

32,237


14,645

75,237
Eric M. Margolin

6,457

15,649

20,674


25,178

67,958
Thomas J. Folliard
175,000

7,272

1,797

47,014

160,536

24,635

416,254
(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 2017 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 Company-funded contribution made regardless of an executive’s participation in the RSP, as well as an additional Company-funded contribution to those executives who met certain age and service requirements as of December 31, 2008, the date that our Pension Plan was frozen. These RSP benefits are offered on the same terms to all CarMax associates.
(d)
Includes the Company matching portion of each executive’s Retirement Restoration Plan (“RRP”) and Executive Deferred Compensation Plan (“EDCP”) contributions. Also includes a Company-funded contribution regardless of each executive’s participation in the RRP, as well as an additional Company-funded contribution to those executives who met certain age and service requirements as of December 31, 2008, the date that our Pension Plan was frozen. These RRP benefits are offered on the same terms to all CarMax associates whose salary exceeds the compensation limits imposed by Section 401(a)(17) of the Internal Revenue Code ($270,000 in 2017). Also includes a restorative contribution designed to compensate executives for any loss of Company 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)
Following his retirement on August 31, 2016, Mr. Folliard became a non-management director and was named non-executive chair of the Board. Under our director compensation program he was eligible for, and received, director fees equal to $87,500, which included his cash retainer and board chair fee for the portion of the year beginning September 1, 2016. He also received a restricted stock award, pro-rated for the same portion of the year, with a fair market value of $69,961 on the date of grant and a vest date on the first anniversary of grant. Mr. Folliard was also eligible for and received health insurance coverage with a value of $3,075, as he was a member of the Board before June 2014. Additional information regarding our director compensation program is included in the “Director Compensation Program” section on page 58.
(f)
Represents the total amount of other benefits provided. None of the benefits individually exceeded the greater of $25,000 or 10% of the total amount of these benefits for the named executive officer. These other benefits include tax and financial planning services, which are described on page 38, and matching charitable gifts made by The CarMax Foundation as part of its matching gifts program (which is available to all CarMax associates).

logoa01.jpg
45


Grants of Plan-Based Awards in Fiscal 2017

The following table lists grants of plan-based awards to each of our named executive officers during fiscal 2017.
 
 
 
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (a)
Estimated Future Payouts Under Equity Incentive Plan Awards (b)
All Other Stock Awards: Number of Shares of Stock or Units(c) 
(#)
All Other Option Awards: Number of Securities Under-lying
Options
(d) 
(#)
Exercise or Base Price of Option
Awards
(e)($/Sh)
Grant Date Closing
Price
($/Sh)
Grant Date Fair Value of Stock and Option
Awards
(f)
($)
Name
Approval
Date
Grant
Date
Threshold
($)
 
Target
($)
 
Maximum
($)
Threshold
(#)
 
Target
(#)
 
Maximum
(#)
William D. Nash


261,986


1,047,945


2,095,890




















3/24/2016
4/12/2016





3,632


14,526


29,052





749,977


3/24/2016
4/12/2016











158,674

51.63

51.59

2,249,997


8/31/2016
9/26/2016






 






 


140,646

53.62

53.59

1,999,986

Thomas W. Reedy


131,250


525,000


1,050,000















3/24/2016
4/12/2016





2,350


9,400


18,800







485,322


3/24/2016
4/12/2016


















102,674

51.63

51.59

1,455,917

William C. Wood


131,250


525,000


1,050,000















3/24/2016
4/12/2016










19,369






1,000,021


3/24/2016
4/12/2016








2,350


9,400


18,800








485,322


3/24/2016
4/12/2016











173,196

51.63

51.59

2,455,919

Edwin J. Hill


112,500


450,000


900,000




















3/24/2016
4/12/2016






 
2,108


8,431


16,862








435,293


3/24/2016
4/12/2016











92,096

51.63

51.59

1,305,921

Eric M Margolin


107,813


431,250


862,500
















3/24/2016
4/12/2016





1,748


6,990


13,980








360,894


3/24/2016
4/12/2016











76,352

51.63

51.59

1,082,671


4/19/2016
4/27/2016











19,598

55.19

55.13

297,694

Thomas J. Folliard


237,288


949,151


1,898,302
















3/24/2016
4/12/2016





4,237


16,948


33,896








875,025


3/24/2016
4/12/2016











185,120

51.63

51.59

2,625,002


8/31/2016
8/31/2016





7,337


29,348


58,696








2,401,253(g)


8/31/2016
8/31/2016





6,028


24,111


48,222








1,418,209(h)


8/31/2016
8/31/2016











265,273

42.68

58.95

5,143,643(i)


8/31/2016
8/31/2016











198,955

42.68

58.95

600,844(j)


8/31/2016
8/31/2016











369,039

44.96

58.95

7,794,104(i)


8/31/2016
8/31/2016











184,520

44.96

58.95

1,287,950(j)


8/31/2016
8/31/2016











254,731

73.76

58.95

3,731,809(i)


8/31/2016
8/31/2016











63,683

73.76

58.95

902,388(j)


10/19/2016
12/23/2016










1,094







69,961


(a)
Represents threshold, target and maximum payout levels under our Bonus Plan for fiscal 2017 performance. The actual amount of each named executive officer’s annual incentive bonus in fiscal 2017 is reported under the “Non-Equity Incentive Plan Compensation” column in the “Summary Compensation Table” on page 43. Additional information regarding the design of our Bonus Plan is included on pages 32 and 33. Mr. Folliard’s threshold, target, and maximum payout levels under our Bonus Plan for fiscal 2017 performance are prorated for that portion


46


of fiscal 2017 before his retirement on August 31, 2016 as he was only made eligible to receive a bonus for that portion of the year.
(b)
Represents stock-settled performance stock units, which we refer to as “performance stock units” or “PSUs,” granted under our Stock Incentive Plan, PSUs generally vest on the third anniversary of the grant date. Additional information regarding PSUs, including the formula used to convert PSUs to shares of our common stock upon vesting and settlement, is included on pages 34 and 35.
(c)
Represents restricted common stock, which we refer to as “restricted stock” or “RSAs,” granted under our Stock Incentive Plan. This year RSAs were granted to Mr. Wood, as part of a retention award, and Mr. Folliard, as a non-employee director following his retirement. Mr. Wood’s RSAs will vest on the third anniversary of the grant date and further information regarding his RSAs can be found on page 36. Consistent with our director equity compensation program, Mr. Folliard’s RSAs will vest on the first anniversary of the grant date.
(d)
Option awards generally vest in 25% increments annually over a four-year period. Additional information regarding stock options is included on page 34. We granted limited stock appreciation rights, or “SARs,” in tandem with each option award. The SARs may be exercised only in the event of a change-in-control. To the extent a SAR is exercised, the related option must be surrendered. 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, multiplied by the number of shares of common stock underlying such SAR.
(e)
All fiscal 2017 stock options were issued with an exercise price equal to the volume-weighted average price of our common stock on the grant date. Additional information regarding our use of the volume-weighted average price is included on page 34.
(f)
Represents the grant date fair value of the award as determined in accordance with ASC Topic 718. The grant date fair value of each PSU is based on target level achievement of the performance goals set by the Committee. The PSUs granted in April 2016, if earned based on target level achievement of the pre-established performance goals, vest 100% in April 2019. The actual value a named executive officer realizes from the awards of PSUs will be determined based upon actual three-year cumulative adjusted pre-tax income performance compared to pre-determined three-year adjusted pre-tax income goals. Further information regarding payment on vesting of the PSUs can be found on pages 34 and 35.
(g)
Reflects modifications made during fiscal 2017 to MSUs granted to Mr. Folliard in fiscal 2015 to remove the terms that would have required forfeiture on his retirement. The Compensation and Personnel Committee approved the modification to these MSUs effective August 31, 2016. The amount in the Grant Date Fair Value column was determined in accordance with ASC Topic 718 and reflects the incremental fair value associated with the modification to these awards.
(h)
Reflects modifications made during fiscal 2017 to PSUs granted to Mr. Folliard in fiscal 2016 to remove the terms that would have required forfeiture on his retirement. The Compensation and Personnel Committee approved the modification to these PSUs effective August 31, 2016. The amount in the Grant Date Fair Value column was determined in accordance with ASC Topic 718 and reflects the incremental fair value associated with the modification to these awards.
(i)
Reflects modifications made during fiscal 2017 to options granted to Mr. Folliard in fiscal 2016 and prior years to remove the terms that would have required forfeiture on his retirement. The Compensation and Personnel Committee approved the modification to these options effective August 31, 2016. The amount in the Grant Date Fair Value column was determined in accordance with ASC Topic 718 and reflects the incremental fair value associated with the modification to these awards.
(j)
Reflects modifications made during fiscal 2017 to options granted to Mr. Folliard in fiscal 2016 and prior years to remove the terms that would have required exercise within three months of his retirement. The Compensation and Personnel Committee approved the modification to these options effective August 31, 2016. The amount in the Grant Date Fair Value column was determined in accordance with ASC Topic 718 and reflects the incremental fair value associated with the modification to these awards.

logoa01.jpg
47


Outstanding Equity Awards at Fiscal 2017 Year End
 
The following table lists outstanding equity awards previously granted to our named executive officers as of February 28, 2017.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
12/27/2011
 
14,952

 

 
30.24

 
12/27/2018
 
 
 
 
 
 
 
 
Nash
4/10/2012
 
102,843

 

 
31.76

 
4/10/2019
 
 
 
 
 
 
 
 
 
4/15/2013
 
63,194

 
21,064

 
42.68

 
4/15/2020
 
 
 
 
 
 
 
 
 
4/9/2014
 
49,430

 
49,428

 
44.96

 
4/9/2021
 
 
 
 
 
 
 
 
 
4/9/2014
 
 
 
 
 
 
 
 
 
 
 
 
 
7,862

 
728,391

 
4/8/2015
 
17,661

 
52,980

 
73.76

 
4/8/2022
 
 
 
 
 
 
 
 
 
4/15/2015
 
 
 
 
 
 
 
 
 
 
 
 
 
6,686

 
185,551

 
4/12/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
14,526

 
937,508

 
4/12/2016
 

 
158,674

 
51.63

 
4/12/2023
 
 
 
 
 
 
 
 
 
9/26/2016
 

 
140,646

 
53.62

 
9/26/2023
 
 
 
 
 
 
 
 
Thomas W.
4/15/2013
 
63,194

 
21,064

 
42.68

 
4/15/2020
 
 
 
 
 
 
 
 
Reedy
4/9/2014
 
49,430

 
49,428

 
44.96

 
4/9/2021
 
 
 
 
 
 
 
 
 
4/9/2014
 
 
 
 
 
 
 
 
 
 
 
 
 
7,862

 
728,391

 
4/8/2015
 
17,661

 
52,980

 
73.76

 
4/8/2022
 
 
 
 
 
 
 
 
 
4/15/2015
 
 
 
 
 
 
 
 
 
 
 
 
 
6,686

 
185,551

 
4/12/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
9,400

 
606,676

 
4/12/2016
 

 
102,674

 
51.63

 
4/12/2023
 
 
 
 
 
 
 
 
William C.
4/15/2013
 
63,194

 
21,064

 
42.68

 
4/15/2020
 
 
 
 
 
 
 
 
Wood
4/9/2014
 
49,430

 
49,428

 
44.96

 
4/9/2021
 
 
 
 
 
 
 
 
 
4/9/2014
 
 
 
 
 
 
 
 
 
 
 
 
 
7,862

 
728,391

 
4/8/2015
 
17,661

 
52,980

 
73.76

 
4/8/2022
 
 
 
 
 
 
 
 
 
4/15/2015
 
 
 
 
 
 
 
 
 
 
 
 
 
6,686

 
185,551

 
4/12/2016
 
 
 
 
 
 
 
 
 
19,369

 
1,250,075(d)
 
 
 
 
 
4/12/2016
 
 
 
 
 
 
 
 
 
 
 
 
 
9,400

 
606,676

 
4/12/2016