CarMax 2010 Annual Report Download - page 78

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68
STOCK-SETTLED RESTRICTED STOCK UNIT ACTIVITY
(Shares in thousands)
Outs tanding as of M arch 1, 2009 ― ―$
Stock units granted 406 16.34$
Stock units vested and converted (6) 16.34$
Stock units cancelled (5) 16.34$
Outs tanding as of February 28, 2010 395 16.34$
Number of
Shares
Weighted
Average
Grant Date
Fair Value
The fixed fair value per share for MSUs granted in fiscal 2010 was determined to be $16.34 at the grant date using a
Monte-Carlo simulation and was based on the expected market price of our common stock on the vesting date and
the expected number of converted common shares. The unrecognized compensation costs related to these nonvested
MSUs totaled $3.8 million as of February 28, 2010. These costs are expected to be recognized over a weighted
average period of 2.1 years.
Cash-Settled Restricted Stock Units. The initial fair market value per share for the liability-classified RSUs granted
in fiscal 2010 was $11.43 at the grant date. As of February 28, 2010, we expect the total cash settlement upon
vesting to range between $7.0 million to $18.6 million.
(D) Employee Stock Purchase Plan
We sponsor an employee stock purchase plan for all associates meeting certain eligibility criteria. Associate
contributions are limited to 10% of eligible compensation, up to a maximum of $7,500 per year. For each $1.00
contributed to the plan by associates, we match $0.15. We have authorized up to 8,000,000 shares of common stock
for the employee stock purchase plan. Shares are acquired through open-market purchases.
As of February 28, 2010, a total of 4,727,259 shares remained available under the plan. Shares purchased on the
open market on behalf of associates totaled 452,936 during fiscal 2010; 677,944 during fiscal 2009; and 409,004
during fiscal 2008. The average price per share for purchases under the plan was $16.71 in fiscal 2010, $12.22 in
fiscal 2009 and $22.24 in fiscal 2008. The total costs for matching contributions are included in share-based
compensation expense.
12. NET EARNINGS PER SHARE
On March 1, 2009, the company adopted the accounting pronouncement related to participating securities, with
retrospective application, which was subsequently integrated into the FASB Accounting Standards Codification
(“FASB ASC”) Topic 260, “Earnings Per Share.” This pronouncement addresses whether instruments granted in
share-based payment transactions are “participating securities” prior to vesting, and therefore need to be included in
the earnings allocation in computing earnings per share under the two-class method, as described in this
pronouncement. Nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and should be included in the computation of
earnings per share pursuant to the two-class method. Our restricted stock awards are considered participating
securities because they contain nonforfeitable rights to dividends. Nonvested MSUs and RSUs granted after
February 28, 2009, do not receive nonforfeitable dividend equivalent rights and are therefore not considered
participating securities. The adoption had no impact on previously reported basic net EPS for fiscal 2009 or 2008.
The adoption had no impact on previously reported diluted net EPS for the fiscal year ended February 28, 2009, and
it decreased the previously reported diluted net EPS for the fiscal year ended February 29, 2008, by $0.01.