shares remained available under the purchase plan

  
Other Share-Based Incentives  
Stock-Settled Performance Stock Units.  Also referred to as performance stock units, or PSUs, these are restricted stock unit awards with performance conditions granted to eligible key associates that are converted into between zero and two shares of common stock for each unit granted. Conversion generally occurs at the end of a three-year vesting period.  
For the fiscal 2020 grants, the conversion ratio is based on the company reaching certain performance target levels set by the board at the beginning of each one-year period, with the resulting quotients subject to meeting a minimum 25% threshold and capped at 200%. These quotients are then multiplied by the number of PSUs granted to yield the number of shares awarded. For the first-year period, these targets were based on annual pretax diluted earnings per share excluding any unrealized gains or losses on equity investments in private companies. The board certified a performance adjustment factor of 117% for the first-year period. In fiscal 2022, the board certified a performance adjustment factor of 100% for the second-year period based on successfully increasing market share, maintaining compliance with financial covenants and other factors during the COVID-19 crisis in fiscal 2021. In addition, the performance target for the third-year period was set based on annual pretax diluted earnings per share excluding any unrealized gains or losses on equity investments in private companies. No PSUs were awarded in fiscal 2021.   
For the fiscal 2022 grants, the first-year period targets were based on annual pretax diluted earnings per share excluding any unrealized gains or losses on equity investments in private companies. For the second- and third-year periods, the remaining awarded 25,397 PSUs do not qualify as grants under ASC 718 as mutual understanding of the target performance levels are either not fully set or have not been set. PSUs do not have voting rights. The grant date fair values are based on the closing prices of our common stock on the grant dates. As of February 28, 2022, 75,845 units were outstanding at a weighted average grant date fair value per share of $118.72.  
Stock-Settled Deferred Stock Units.  Also referred to as deferred stock units, or DSUs, these are restricted stock unit awards granted to non-employee members of our board of directors that are converted into one share of common stock for each unit granted. Conversion occurs at the end of the one-year vesting period unless the director has exercised the option to defer conversion until separation of service to the company. The grant date fair values are based on the volume-weighted average prices or closing prices of our common stock on the grant dates. DSUs have no voting rights. As of February 28, 2022, 69,288 units were outstanding at a weighted average grant date fair value of $92.82. Restricted Stock Awards.  Restricted stock awards, or RSAs, are awards of our common stock that are subject to specified restrictions that generally lapse after a one- to three-year period from the date of the grant.  The grant date fair values are based on the volume-weighted average prices or closing prices of our common stock on the grant dates. Participants holding restricted stock are entitled to vote on matters submitted to holders of our common stock for a vote. As of February 28, 2022, there were 24,171 shares outstanding at a weighted average grant date fair value of $119.96.  
Employee Stock Purchase Plan.  We sponsor an employee stock purchase plan for all associates meeting certain eligibility criteria. We have authorized up to 8,000,000 shares of common stock with a total of 2,265,843 shares remaining available for issuance under the plan as of February 28, 2022. Associate contributions are limited to 10% of eligible compensation, up to a maximum of $10,000 per year. For each $1.00 contributed to the plan by associates, we match $0.15. Shares are acquired through open-market purchases. We purchased 160,093 shares at an average price per share of $125.22 during fiscal 2022, 202,085 shares at an average price per share of $87.41 during fiscal 2021 and 174,325 shares at an average price per share of $85.64 during fiscal 2020. (D)Share-Based Compensation  
Composition of Share-Based Compensation Expense

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | Years Ended February 28 or 29 |
| (In thousands) | 2022 |  | 2021 |  | 2020 |
| Cost of sales | $ | 4,924  |  |  | $ | 6,805  |  |  | $ | 6,382  |  |
| CarMax Auto Finance income | 5,043  |  |  | 5,657  |  |  | 4,940  |  |
| Selling, general and administrative expenses | 101,966  |  |  | 111,749  |  |  | 99,435  |  |
| Share-based compensation expense, before income taxes | $ | 111,933  |  |  | $ | 124,211  |  |  | $ | 110,757  |  |

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