Family and Medical Leave Act (FMLA) Policy Revised

Family and Medical Leave Act (FMLA) Policy Revised 01-19-09 The Family and Medical Leave Act is a federal law that provides up to 12 weeks (or up to 26 weeks in the event of military care giving) of unpaid time-off for associates who meet certain requirements. In addition to this policy, the associate handbook, the Family Medical Leave Notice, and the FMLA poster at the associate s work location address FMLA rights. Some states have leave laws that differ from the FMLA. When state law differs from the FMLA, the company will abide by both laws and provide the benefits, pay, leave, and protections most favorable to the associate under the applicable laws. Eligibility (Note: State leave laws may have different eligibility criteria) Associate must: Complete one cumulative year of service with the company (including periods reinstated upon reemployment) within the past 7 years (unless due to National Guard or Reserve Military Leave); and Have worked 1,250 hours with the company during the 12-month period prior to the FMLA Leave begin date The following are examples of acceptable reasons for requesting FMLA Leave: Associate s own serious health condition, or to care for a seriously ill spouse, child or parent, or birth of a child or to care for a newborn, or placement of a child with the associate for adoption or foster care; or to care for a spouse, child, or parent who is a member of the Armed Forces and who incurred a serious injury or illness during active duty; or a qualifying exigency related to a spouse, child or parent s active duty. Note: Misrepresentation by an associate to obtain any form of leave may be grounds for disciplinary action up to and including termination of employment. Duration Generally, eligible associates are entitled to a total of 12 weeks of FMLA Leave during any rolling 12-month period, counted backwards from the date the leave starts. In the event FMLA is necessary for military care giving, eligible associates are entitled to a total of 26 weeks of FMLA leave in a single 12-month period. This 12-month period begins on the first day an eligible associate takes FMLA Leave to care for a covered servicemember and ends 12 months later. This leave entitlement is applied on a per-covered servicemember and per-injury basis, except that no more than 26 weeks of leave may be taken in a single 12-month period. If an associate is eligible for FMLA Leave, such leave will run concurrent with Sick Time and Medical Leave. In other words, FMLA Leave also counts as Sick Time and Medical Leave, when applicable. Associate Responsibilities when Requesting FMLA Leave When the need for the leave is foreseeable (such as when the leave is for an expected birth or placement for adoption or for planned, non-emergency, medical treatment, deployment, or other planned military duties), the associate must inform his/her manager of the need for FMLA Leave at least 30 days prior to the start of the leave. Failure to give the proper 30 days advance notice of the need for foreseeable FMLA Leave may result in denial of the leave until 30 days after such notice is provided. When planning non-emergency and non-critical medical treatment, the associate should attempt to schedule the treatment so as to minimize the impact of the Associate s absence on the company s operations. FMLA Policy Revised 1/19/09 1 of 5 L.P. - HR/J.B. - Benefits

In situations where the need for leave cannot be anticipated 30 days in advance, the associate must inform his/her manager of the need for FMLA Leave as soon as practicable after the associate learns of the need for leave. The same day that the associate informs his/her manager of the need for FMLA Leave, the associate must call the Leaves Administrator at (888) 695-6947, option 3 to report the associate s need for FMLA Leave. The Leaves Administrator will then mail the appropriate paperwork directly to the associate. Within 15 calendar days from the date of the associate s request for FMLA Leave, the associate must fax certain required documentation to the Leaves Administrator at (515) 875-1783. Such documentation includes: For FMLA Leave related to an associate s own serious health condition or to care for the associate s seriously ill spouse, child or parent, the U.S. Department of Labor Certification of Health Care Provider Form (for Employee s Serious Health Condition or for Family Member s Serious Health Condition, as applicable) and an Authorization to Release Protected Health Information form (Medical Release Form). (The Certification of Health Care Provider Form can also be obtained from the Leaves Administrator or the U.S. Department of Labor web site www.dol.gov). For a leave to care for a newborn, the newborn s birth certificate or appropriate hospital records reflecting the birth. For a leave related to the placement of a child with the associate for adoption or foster care, appropriate adoption/court papers. For leave to care for a covered service member with a serious injury or illness incurred in the line of duty, an Invitational Travel Order or Authorization or, in the absence of such a document, the U.S. Department of Labor Certification for Serious Injury or Illness of Covered Servicemember for Military Family Leave form and Medical Release Form. For leave related to a qualifying military exigency, the U.S. Department of Labor Certification of Qualifying Exigency for Military Family Leave. If the associate does not provide the required documentation to the Leaves Administrator within the 15 day period, the Company may deny the associate s leave request or deny continuation of leave which might result in the company taking action against the associate appropriate for an unauthorized absence(s). If the company has reason to question the validity of a Medical Certification provided by an associate s health care provider, the company might require the associate to obtain a second opinion, at the company s expense, from a health care provider designated by the company. In the event the second opinion differs from the first, the company might require the associate to obtain a third and final opinion, again at the company s expense, from a health care provider jointly approved by the company and the associate. If the associate has any questions or concerns regarding FMLA Leave, the associate should call the CarMax Benefits Service Center at 1-888-My-KMX HR (1-888-695-6947), option 3. Associate Responsibilities while on FMLA Leave The associate may have to provide medical re-certification every 30 days, whenever the associate requests an extension of leave, when circumstances described in the original certification have changed significantly, or when the company receives information which casts doubt on the continuing validity of the certification. If the associate is enrolled in any benefit plans at the commencement of the FMLA Leave that will continue during the leave, the associate remains responsible for paying any required premiums. The associate should keep both his/her manager and the CarMax Benefits Service Center informed concerning his/her status during the leave and his/her intent to return to work. For instance, if the associate is unable to return from FMLA Leave on the date originally reported to his/her manager, the associate must notify both the manager and the CarMax Benefits Service Center as soon as possible. If the associate s FMLA Leave expires and additional time-off from work is needed, the associate may request a Personal Leave from his/her manager. Associate eligibility for such leave will be based on the applicable policy. CarMax Benefits Service Center phone number - 1-888-My-KMX HR (1-888-695-6947). FMLA Policy Revised 1/19/09 2 of 5 L.P. - HR/J.B. - Benefits

Associate Compensation while on FMLA Leave Associate Pay FMLA Leave is unpaid. Hourly and commissioned associates may elect to use any accrued, but unused paid Sick Time or Vacation Time during their FMLA Leave. Associate Benefits while on FMLA Leave Medical, Dental and Vision Insurance If an associate is enrolled in any or all of these plans prior to the start of the FMLA Leave, coverage may continue while on approved FMLA Leave. The associate is responsible for paying any required premiums while on FMLA Leave. If the associate is receiving pay or benefits under the Short-Term Disability Pay Policy or through the use of paid vacation or sick time, deductions will be taken from such pay for the associate s share of the applicable premium payments. If the associate is not receiving pay or Short-Term Disability Pay from the company, the CarMax Benefits Service Center will mail the associate information including instructions on how to make premium payments. If an associate on FMLA Leave fails to make a premium payment within 30 days of the date the premium payment is due, the associate will be notified that coverage may be cancelled. If the associate still has overdue premiums at the time of his/her return to work, those overdue premium payments will be taken from the associate s future paychecks for the coverage period prior to the date of cancellation. Life Insurance Coverage If an associate is enrolled in any components of the Life Plan prior to the start of the FMLA Leave, coverage may continue while on leave, except for Accidental Death and Dismemberment insurance. The associate is responsible for paying any required premiums while on leave. If the associate is receiving pay under the Short-Term Disability Pay Policy or through the use of paid Sick or Vacation time, deductions will be taken from those checks for the applicable premium payments. If the associate is not receiving pay or Short-Term Disability Pay from the company, the CarMax Benefits Service Center will mail the associate information including instructions on how to make premium payments. If premium payments become more than 30 days overdue, coverage may be cancelled effective the first of the month following the date of the first missed payment. If the associate still has overdue premiums at the time of his/her return to work, those overdue premium payments will be taken from the associate s future paychecks for the coverage period prior to the date of cancellation. If the associate would like to drop coverage, s/he may do so at any time by completing such election online at mykmxhr.com under "My Benefits - Update Life/LTD Insurance." Coverage will terminate effective the end of the month following the date you submit your election. If the associate wants to re-enroll following the return to work, he or she may do so, but is subject to the Late Enrollment requirements as explained in the Life Plan Summary Plan Description. Accidental Death and Dismemberment Coverage If an associate is enrolled in this plan prior to the start of his/her FMLA Leave, coverage will automatically terminate on the last day worked and resume the first of the month following the return from leave. Long Term Disability Coverage If an associate is enrolled in this plan prior to the start of the FMLA Leave, coverage will automatically terminate on the last day worked (except as provided for individuals who are eligible for Medical Leave). Coverage will automatically resume on the first day of the month following the return to work. Employee Stock Purchase Plan (ESPP), Tuition Assistance Program, and the Associate Discount Program Participation in these benefit programs will continue while the associate is on FMLA Leave. Associates will not be able to make up missed ESPP deductions. FMLA Policy Revised 1/19/09 3 of 5 L.P. - HR/J.B. - Benefits

Day Care Savings Account (DCSA) and Health Care Flexible Spending Account (HCFSA) Day Care Savings Account. You are not eligible to receive reimbursements for expenses incurred during your period of Leave under the Day Care Savings Plan. You may elect to suspend participation during your Leave. If you do not suspend participation, you are responsible for continuing to make the required contributions. (They may be applied toward future eligible day care expenses.) Health Care Flexible Spending Account. You may elect to suspend participation in the Health Care Flexible Spending Account during your Leave. If you do suspend participation, you may not submit expenses incurred during your leave for reimbursement. If you do not suspend participation, you are responsible for continuing to make the required contributions. If you remain a participant in either program during your leave, if you are not receiving pay from the Company and your DCSA and/or HCFSA deductions are not being withheld, missed contributions will be withheld from future paychecks upon your return to work. The Benefits Service Center will also mail you information regarding how to make payments. Retirement Savings Plan - (401(k) and Retirement Contribution Programs) Participation in this plan will continue while the associate is on Leave. If the associate is receiving pay from the Company, 401(k) deductions will be taken from those checks. If the associate has an outstanding 401(k) loan, loan deductions will be taken from any pay received from the Company while he/she is on leave. If the associate is not receiving pay, loan payments must be made directly to T. Rowe Price. The associate should call T. Rowe Price at 1-800-922-9945 for instructions. Once the associate returns to work, he/she is responsible for making up any missed loan payments. This will be done through payroll deductions and the loan repayment period will not be extended. The associate must call the Benefits Service Center at (888) 695-6947 and press 0 to speak with a Service Center Representative for instructions. Vacation and Sick Time Accruals Vacation and Sick Time accruals will continue during FMLA Leave. Associates may not borrow against future vacation accruals while on this type of leave. Short-Term Disability Eligibility for Short-Term Disability Pay while on FMLA Leave is explained in the Short-Term Disability Pay Policy. Returning to Work after FMLA Leave At least two weeks prior to the scheduled return from leave date the associate should contact his/her manager to confirm the date of return. On the day the associate returns to work, he/she must contact his/her manager and the Management Assistant at the location where he/she works. On the day the associate returns to work, he/she must provide a release from the doctor, ending the leave of absence and approving the return to work Upon return from FMLA Leave, most associates will be returned to the same position held before the leave or to an equivalent position with equivalent pay and benefits. An employee who fails to return to work from an FMLA Leave may be required to reimburse the company for the company s cost of maintaining group health insurance coverage for the associate and the associate s dependents during the FMLA Leave. The associate, however, will not be required to reimburse the company for such costs if the associate did not return to work for reasons beyond the associate s control, such as the continuation, recurrence or onset of a serious health condition of the associate or the associate s spouse, parent, or child, or a serious injury or illness of a covered servicemember or other circumstances beyond the associate s control. FMLA Policy Revised 1/19/09 4 of 5 L.P. - HR/J.B. - Benefits

Manager Responsibilities Instruct the Associate to report the FMLA Leave request to the CarMax Benefits Service Center by calling (888) 695-6947, option 3. If you do not receive confirmation of the associate s leave from the CarMax Benefits Service Center within three business days via e-mail or telephone, follow up with the CarMax Benefits Service Center to find out the status of the associate s leave. Request from the associate a note from his/her doctor when the associate is able to return to work. The associate cannot be allowed to return to work without providing this note. If the note has any restrictions, partner with your Human Resources representative to evaluate the restrictions before permitting the associate to return to work. If the associate does not return to work on the date s/he is supposed to, contact your Human Resources representative to determine what actions should be taken. On the date the associate returns to work, contact the Management Assistant at your facility to ensure the associate is returned from Leave in the system. Manager should administer any postponed APR or Merit Review meetings. FMLA Policy Revised 1/19/09 5 of 5 L.P. - HR/J.B. - Benefits