<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. ______)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
ARKANSAS BEST CORPORATION
-----------------------------------------------
(Name of Registrant as Specified In Its Charter)
Richard F. Cooper
Secretary
3801 Old Greenwood Road
Fort Smith, AR 72903
-----------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
4) Proposed maximum aggregate value of transaction:
*Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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:
<PAGE>
ARKANSAS BEST CORPORATION
April 10, 1995
To the Shareholders of Arkansas Best Corporation:
You are cordially invited to attend the Annual Meeting of Shareholders of
Arkansas Best Corporation on Tuesday, May 9, 1995 at 9:00 a.m. at 3801 Old
Greenwood Road, Fort Smith, Arkansas 72903. A notice of the meeting, a proxy
card and a proxy statement containing information about the matters to be
acted upon are enclosed. It is important that your shares be represented at
the meeting. We look forward to the Annual Meeting of Shareholders and we
hope you will attend the meeting or be represented by proxy.
WE URGE YOU TO SIGN AND DATE YOUR ENCLOSED PROXY CARD AND PROMPTLY RETURN IT
IN THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID ENVELOPE EVEN IF YOU ARE PLANNING
TO ATTEND THE MEETING.
William A. Marquard Robert A. Young III
Chairman of the Board President-Chief Executive Officer
ARKANSAS BEST CORPORATION, POST OFFICE BOX 10048
FORT SMITH, ARKANSAS 72917-0048
<PAGE>
ARKANSAS BEST CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 9, 1995
To the Shareholders:
The Annual Meeting of Shareholders of Arkansas Best Corporation, a Delaware
corporation, will be held at 3801 Old Greenwood Road, Fort Smith, Arkansas
72903 on Tuesday, May 9, 1995 at 9:00 a.m. for the following purposes:
1. To elect two Class III directors for terms to expire at the 1998 Annual
Meeting of Shareholders;
2. To approve an amendment to the Arkansas Best Corporation 1992 Stock
Option Plan;
3. To ratify the appointment of Ernst & Young LLP as independent auditors
for fiscal year 1995;
4. To act upon such other matters as may properly be brought before the
meeting affecting the business and affairs of the Company.
Only shareholders of record at the close of business on March 13, 1995 will
be entitled to notice of and to vote at the meeting or any adjournment
thereof.
PLEASE COMPLETE, SIGN AND DATE YOUR ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors,
Fort Smith, Arkansas Richard F. Cooper
April 10, 1995 Secretary
<PAGE>
ARKANSAS BEST CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of Arkansas Best
Corporation ("ABC" or the "Company"), in connection with the solicitation of
proxies on behalf of the ABC Board of Directors (the "Board") to be voted at
the Annual Meeting of Shareholders on May 9, 1995 ("1995 Annual Meeting") for
the purposes set forth in the accompanying Notice of Meeting. This Proxy
Statement and Notice of Meeting, the related proxy card and the 1994 Annual
Report to Shareholders are being mailed to shareholders beginning on or about
April 10, 1995. ABC's principal place of business is 3801 Old Greenwood Road,
Fort Smith, Arkansas 72903, and its telephone number is 501/785-6000.
RECORD DATE
The Board has fixed the close of business on March 13, 1995 as the record
date for the 1995 Annual Meeting. Only shareholders of record on that date
will be entitled to vote at the meeting in person or by proxy.
PROXIES
The proxies named on the enclosed proxy card were appointed by the Board to
vote the shares represented by the proxy card. Upon receipt by the Company of
a properly signed and dated proxy card, the shares represented thereby will
be voted in accordance with the instructions on the proxy card. If a
shareholder does not return a signed proxy card, his or her shares cannot be
voted by proxy. Shareholders are urged to mark the ovals on the proxy card to
show how their shares are to be voted. If a shareholder returns a signed
proxy card without marking the ovals, the shares represented by the proxy
card will be voted as recommended by the Board herein and in the proxy card.
The proxy card also confers discretionary authority to the proxies to vote on
any other matter not presently known to management that may properly come
before the meeting. Any proxy delivered pursuant to this solicitation is
revocable at the option of the person(s) executing the same (i) upon receipt
by the Company before the proxy is voted of a duly executed proxy bearing a
later date, (ii) by written notice of revocation to the Secretary of the
Company received before the proxy is voted or (iii) by such person(s) voting
in person at the 1995 Annual Meeting.
VOTING SHARES
On the record date, there were 19,513,708 shares of common stock outstanding
and entitled to vote ("Common Stock"). Each share of Common Stock is entitled
to one vote. The holders in person or by proxy of a majority of the total
number of the shares of Common Stock shall constitute a quorum for purposes
of the 1995 Annual Meeting.
<PAGE>
1. ELECTION OF DIRECTORS
The Board is divided into three classes of directorships, with directors in
each class serving staggered three-year terms. At each annual meeting of
shareholders, the terms of directors in one of the three classes expire. At
that annual meeting of shareholders, directors are elected in a class to
succeed the directors whose terms expire, the terms of the directors so
elected to expire at the third annual meeting of shareholders thereafter.
Pursuant to the Company's Certificate of Incorporation, the Board has fixed
the number of directorships at six: two in the class to be elected at the
1995 Annual Meeting of Shareholders whose members' terms will expire at the
1998 Annual Meeting of Shareholders, two in the class whose members' terms
will expire at the 1996 Annual Meeting of Shareholders, and two in the class
whose members' terms will expire at the 1997 Annual Meeting of Shareholders.
It is intended that the shares represented by the accompanying proxy will be
voted at the 1995 Annual Meeting for the election of nominees Frank Edelstein
and Robert A. Young III as the two directors in the class of directorships
whose members' terms will expire in 1998, unless the proxy specifies
otherwise. Each nominee has indicated his willingness to serve as a member of
the Board, if elected.
If, for any reason not presently known, Messrs. Edelstein and/or Young will
not be available for election at the time of the 1995 Annual Meeting, the
shares represented by the accompanying proxy may be voted for the election in
his/their stead of substitute nominee(s) designated by the Board or a
committee thereof, unless the proxy withholds authority to vote for all
nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
Assuming the presence of a quorum, to be elected a nominee must receive the
affirmative vote of the holders of a majority of the Common Stock present, in
person or by proxy, at the 1995 Annual Meeting.
DIRECTORS OF THE COMPANY
The following information relates to the nominees named above and to the
other persons whose terms as directors will continue after the 1995 Annual
Meeting.
Name Age Business Experience
CLASS III -- Term Expires May 1995
Frank Edelstein 69 Mr. Edelstein has been a Director of the
Company since November 1988. Mr. Edelstein
currently provides consulting services to Kelso
& Company, Inc. and to The Gordon + Morris
Group. Mr. Edelstein served as a Vice President
of Kelso & Company, Inc. from 1986 to March
1992. Prior to 1986, he served as Chairman and
President of International Central Bank & Trust
Company and CPI Pension Services, Inc., as well
as Senior Vice President, Financial Services
Group, at Continental Insurance Corporation. He
also has held positions as Corporate Vice
President, Automatic Data Processing, Inc. and
Executive Vice President of Olivetti Corporation
of America. Mr. Edelstein also is a Director of
Americold Corporation, Ceradyne, Inc., IHOP
Corp., and DMI, Inc.
<PAGE>
Robert A. Young III 54 Mr. Young has been Chief Executive Officer
of the Company since August 1988, President
since 1973 and was Chief Operating Officer from
1973 to 1988. Mr. Young also has been Chief
Executive Officer of Treadco, Inc. since June
1991. Mr. Young has been a Director of the
Company since 1970 and a Director of Treadco,
Inc. since June 1991. Mr. Young also is a
Director of Mosler, Inc.
CLASS I -- Term Expires May 1996
William A. Marquard 75 Mr. Marquard has been Chairman of the Board
and a Director of the Company since November
1988 and a Director of Treadco, Inc. since June
1991. In April 1992, Mr. Marquard was elected as
a Director and Vice Chairman of the Board of
Kelso & Company, Inc. From 1971 to 1983,
Mr. Marquard was President and Chief Executive
Officer of American Standard Inc. and from 1979
to 1985, he was Chairman of the Board of
American Standard Inc. Mr. Marquard resumed his
position as Chairman of the Board of American
Standard Inc. in February 1989 until March 31,
1992 when he was named Chairman Emeritus.
Mr. Marquard also became Chairman of the Board
of ASI Holding Corporation in February 1989
until March 31, 1992, when he was named Chairman
Emeritus. Mr. Marquard is a Director of Mosler,
Inc., Americold Corporation, Earle M. Jorgensen
Co., and EarthShell Container Corporation.
Name Age Business Experience
Alan J. Zakon, Ph.D 59 Dr. Zakon has been a Director of the
Company since February 1993. Dr. Zakon was a
Managing Director of Bankers Trust Company
through March, 1995, for which he previously
served as Chairman, Strategic Policy Committee
from 1989 to 1990. From 1980 to 1986, Dr. Zakon
was President of Boston Consulting Group before
being named its Chairman in 1986, having
previously served as Consultant from 1967 to
1969 and Vice President from 1969 to 1980.
Dr. Zakon is currently serving as a member of
the Board of Directors of several companies,
including Augat Corporation, Autotote
Corporation, Hechinger Corporation, and
Laurentian Capital Corporation, and is a former
member of the Advisory Committee to the Stanford
University Graduate School of Business.
CLASS II -- Term Expires May 1997
Arthur J. Fritz, Jr. 54 Mr. Fritz has been a Director of the
Company since April 1989. From 1971 to 1986,
Mr. Fritz was President of Fritz Companies, Inc.
and its Chairman from 1986 to 1988. Mr. Fritz
has served as Chairman of JABAR Enterprises
since October 1988 and is a Director of
Intercargo Corporation and Landstar Systems,
Inc. Mr. Fritz is former President and Chairman
of the National Association of Customs Brokers
and Freight Forwarders of America.
<PAGE>
John H. Morris 51 Mr. Morris has been a Director of the
Company since July 1988 and a Director of
Treadco, Inc. since June 1991. Mr. Morris
currently serves as President of The Gordon +
Morris Group. Mr. Morris served as a Managing
Director of Kelso & Company, Inc. from March
1989 to March 1992, was a General Partner from
1987 to March 1989, and prior to 1987 was a Vice
President. Prior to 1985, Mr. Morris was
President of LBO Capital Corp.
BOARD OF DIRECTORS AND COMMITTEES
The business of the Company is managed under the direction of the Board of
Directors. The Board meets on a regularly scheduled basis four times a year
to review significant developments affecting the Company and to act on
matters requiring Board approval. It also holds special meetings when an
important matter requires Board action between scheduled meetings. The Board
met five times and acted by unanimous written consent eight times during
1994. During 1994, each member of the Board participated in at least 75% of
all Board and applicable committee meetings held during the period for which
he was a director, except Mr. Fritz, who missed two meetings.
The Board has established Audit, Executive Compensation and Development, and
Stock Option committees to devote attention to specific subjects and to
assist it in the discharge of its responsibilities. The functions of those
committees, their current members and the number of meetings held during 1994
are described below. The Board does not have a committee for nomination of
directors. The Board nominates candidates for director.
Audit Committee. The Audit Committee recommends to the Board the appointment
of the firm selected to be independent public accountants for the Company and
monitors the performance of such firm; reviews and approves the scope of the
annual audit and quarterly reviews and evaluates with the independent public
accountants the Company's annual audit and annual consolidated financial
statements; reviews with management the status of internal accounting
controls; evaluates problem areas having a potential financial impact on the
Company which may be brought to its attention by management, the independent
public accountants or the Board; and evaluates all public financial reporting
documents of the Company. Messrs. Edelstein, Fritz, Morris, and Zakon
currently are members of the Audit Committee. The Audit Committee met once
during 1994.
Executive Compensation and Development Committee. The Executive Compensation
and Development Committee is responsible for reviewing executive management's
performance and for determining appropriate compensation. Messrs. Marquard,
Morris and Young currently are members of the Executive Compensation and
Development Committee. The Executive Compensation and Development Committee
met once during 1994.
Stock Option Committee. The Stock Option Committee administers the Company's
Incentive Stock Option Plan ("Stock Option Plan"). The Stock Option Committee
has the power to determine from time to time the individuals to whom options
shall be granted, the number of shares to be covered by each option, and the
time or times at which options shall be granted. Messrs. Fritz, Edelstein,
and Zakon currently are members of the Stock Option Committee. The Stock
Option Committee met once during 1994.
Director Compensation. Mr. Young, as an officer of the Company, receives no
compensation for services as a director or committee member. Mr. Marquard, as
Chairman, receives a $62,500 annual retainer and $1,000 for each Board
meeting attended and for each meeting of a committee of the Board attended.
Other non-employee directors receive a $25,000 annual retainer and $1,000 for
each Board meeting attended and for each meeting of a committee of the Board
attended.
<PAGE>
Non-employee directors each received stock options on May 12, 1994, for 7,500
shares of the Company's Common Stock at a fair market value exercise price of
$12.125 per share. On each anniversary date of the grant, 20% of the options
vest and thereafter can be exercised through the tenth year after the grant
date.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth certain information concerning beneficial
ownership of the Company's Common Stock as of March 13, 1995, by (i) each
person who is known by the Company to own beneficially more than five percent
(5%) of the outstanding shares of Common Stock, (ii) each director and named
executive officer of the Company and (iii) all directors and executive
officers as a group.
<TABLE>
<CAPTION>
Shares Percentage
Beneficially of Shares
Owned Outstanding
<S> <C> <C>
(i) Name / Address
FMR Corp. (1) 2,813,305 14.65
82 Devonshire Street
Boston, MA 02109
State of Wisconsin Investment Board (2) 1,813,000 9.44
P. O. Box 7842
Madison, WI 53707
MacKay-Shields Financial Corporation (3) 2,051,685 10.50
9 West 57th Street
New York, NY 10019
Neuberger & Berman (4) 958,300 5.03
605 Third Avenue
New York, NY 10158
Sound Shore Management, Inc. (5) 1,101,000 5.06
8 Sound Shore Drive
Greenwich, CT 06836
<S> <C> <C> <C>
(ii) Name Position
Robert A. Young III (6)(7)(8)(9) Director, President,
Chief Executive Officer 2,028,582 10.4
William A. Marquard (7)(10) Director 142,548 *
John H. Morris (7)(11) Director 110,515 *
Arthur J. Fritz, Jr. (7)(12) Director 34,471 *
Frank Edelstein (7)(13) Director 6,323 *
Alan J. Zakon (7) Director 6,500 *
Donald L. Neal (7)(8) Senior Vice President 64,791 *
David E. Stubblefield (7)(8)(14) President-CEO, ABF 92,765 *
Jerry A. Yarbrough (7)(8)(15) Senior Vice President, ABF 92,877 *
John R. Meyers (7)(8) Vice President 27,839 *
E. George Myers (7)(8) Vice President 13,815 *
Richard F. Cooper (7)(8) Vice President 10,907 *
R. David Slack (7)(8) Vice President 10,125 *
(iii) All Directors and Executive Officers as a Group (16) 2,642,058 13.5
*Less than 1%
<PAGE>
<FN>
<F1>
(1) According to the most recent Schedule 13G it has provided to the
Company, FMR Corp. has, through certain subsidiaries or other entities
it controls, the following voting and investment powers with respect to
such shares: (a) sole voting power, 404,905; (b) shared voting power,
none; (c) sole investment power, 2,813,305; (d) shared investment power,
none. One wholly-owned subsidiary, Fidelity Management & Research
Company, is the beneficial owner of 2,408,400 shares or 12.54% of the
Company's Common Stock.
<F2>
(2) According to the most recent Schedule 13G it has provided to the
Company, the State of Wisconsin Investment Board has the following
voting and investment powers with respect to such shares: (a) sole
voting power, 1,813,000; (b) shared voting power, not applicable; (c)
sole investment power, 1,813,000; (d) shared investment power, not
applicable.
<F3>
(3) According to the most recent Schedule 13G it has provided to the
Company, MacKay-Shields Financial Corporation beneficially owns
1,892,700 shares of the Company's Common Stock and could acquire 158,985
shares of the Company's Common Stock upon conversion of the Company's
Preferred Stock, and has the following voting and investment powers with
respect to such shares: (a) sole voting power, not applicable; (b)
shared voting power, 2,051,685; (c) sole investment power, not
applicable; (d) shared investment power, 2,051,685.
<F4>
(4) According to the most recent Schedule 13G it has provided to the
Company, Neuberger & Berman has the following voting and investment
powers with respect to such shares: (a) sole voting power, 801,300; (b)
shared voting power, 130,000; (c) sole investment power, none; (d)
shared investment power, 958,300.
<F5>
(5) According to the most recent Schedule 13G it has provided to the
Company, Sound Shore Management, Inc. has the following voting and
investment powers with respect to such shares: (a) sole voting power,
1,022,300; (b) shared voting power, not applicable; (c) sole investment
power, 1,101,000; (d) shared investment power, not applicable.
<F6>
(6) The business address for such person is c/o Arkansas Best
Corporation, 3801 Old Greenwood Road, Fort Smith, Arkansas 72903.
<F7>
(7) Includes vested stock option shares of Common Stock, purchasable
within sixty (60) days, as follows: Messrs. Young, 21,840; Marquard,
1,500; Morris, 1,500; Fritz, 1,500; Edelstein, 1,500; Zakon, 1,500;
Neal, 8,200; Stubblefield, 8,200; Yarbrough, 8,200; Meyers, 6,280;
Myers, 6,280; Cooper, 6,280; and Slack, 6,280.
<F8>
(8) Includes shares allocated through March 13, 1995, to Investment
Plan accounts as follows: Messrs. Young, 1,103; Neal, 651;
Stubblefield, 655; Yarbrough, 767; Meyers, 581; Myers, 542; Cooper, 581;
and Slack, 548, each of whom disclaims beneficial ownership of such
shares.
<F9>
(9) Mr. Young directly owns 10,000 shares (less than 1%) of Treadco,
Inc.'s ("Treadco") outstanding common stock. Because Mr. Young is a
director and greater than 10% stockholder of the Company, Mr. Young may
be deemed to be the indirect beneficial owner of all shares of Treadco
owned by the Company (2,319,700 shares or 46.4% of the total number of
shares outstanding).
<F10>
(10) Mr. Marquard directly owns 10,000 shares (less than 1%) of Treadco's
outstanding common stock.
<PAGE>
<F11>
(11) Mr. Morris indirectly owns 109,015 shares as co-trustee of the John
H. Morris and Sharon L. Morris Family Trust.
<F12>
(12) Includes 11,993 shares held by Trayjen, L.P., which are indirectly
owned by Mr. Fritz by virtue of his status as general partner.
<F13>
(13) Mr. Edelstein indirectly owns 4,823 shares as joint trustee of the
Edelstein Living Trust.
<F14>
(14) Mr. Stubblefield has been President and Chief Executive Officer of
ABF Freight System, Inc. ("ABF"), a subsidiary of the Company, since
January 1, 1995. From 1979 through 1994, Mr. Stubblefield was Senior
Vice President - Marketing of ABF.
<F15>
(15) Effective January 1, 1995, Mr. Yarbrough resigned from ABF and was
appointed Chairman and Chief Executive Officer of Integrated
Distribution, Inc., another subsidiary of the Company.
<F16>
(16) All directors and executive officers of the Company as a group may
be deemed to beneficially own, directly or indirectly, approximately
2,340,700 shares of Treadco common stock.
</FN>
</TABLE>
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, age, principal occupation and
business experience during the last five years of each of the current
executive officers of the Company and its largest subsidiary. The executive
officers serve at the pleasure of the Board. For information regarding
ownership of the Common Stock by the executive officers of the Company, see
"PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP." There are no family
relationships among directors and executive officers of the Company or its
subsidiaries.
<TABLE>
<CAPTION>
Years
at the
Name Age Business Experience Company*
<S> <C> <C> <C>
Robert A. Young III 54 See previous description. 30
President-Chief
Executive Officer
Donald L. Neal 64 Mr. Neal has been Senior Vice President ofthe 36
Senior Vice President- Company since 1979 and Chief Financial Officer
Chief Financial Officer since 1984. Prior to 1984, Mr. Neal was Senior
Vice President-Comptroller. Mr. Neal has been
Vice President-Chief Financial officer of
Treadco, Inc. ("Treadco"), a subsidiary of
the Company, since June 1991.
John R. Meyers 47 Mr. Meyers has been Vice President-Treasurer 22
Vice President-Treasurer of the Company since 1979. Mr. Meyers also has
been Treasurer of Treadco since June 1991.
David E. Stubblefield 57 Mr. Stubblefield has been President and Chief 35
ABF President- Executive Officer of ABF Freight System, Inc.
Chief Executive Officer ("ABF"), the Company's largest subsidiary,
since January 1, 1995, and a Director of ABF
since 1985. From 1979 through 1994,
Mr. Stubblefield was Senior Vice President-
Marketing of ABF.
Richard F. Cooper 43 Mr. Cooper has been Vice President-Risk 11
Vice President-Risk Management of the Company since April 1991 and
Management, General Vice President-General Counsel since 1986.
Counsel and Secretary Mr. Cooper has been Secretary since 1987.
Mr. Cooper also has been Secretary of Treadco
since June 1991.
R. David Slack 52 Mr. Slack has been Vice President-Comptroller 25
Vice President-Comptroller of the Company since January 1990. From January
1989 to January 1990, Mr. Slack was Comptroller.
Prior to 1989, Mr. Slack was a director in the
Accounting Department.
E. George Myers 58 Mr. Myers has been Vice President-Human 36
Vice President- Resources of the Company since November 1990.
Human Resources Prior to November 1990, Mr. Myers was a
Regional Vice President-Operations of ABF.
<FN>
<F1>
* Includes years at subsidiaries.
</FN>
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation paid during
each of the Company's last three fiscal years to the Company's Chief
Executive Officer and each of the Company's other most highly compensated
executive officers, based on salary and bonus earned during 1994.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Name Other Restricted Underlying
and Annual Stock Options/ LTIP All Other
Principal Salary Bonus Compensation Award(s) SARs Payouts Compensation
Position Year ($) ($)(1) ($) ($) (#)(2) ($) ($)(3)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert A. Young III 1994 $362,500 $33,079 - - - - $89,977
President and Chief 1993 330,000 - - - - - 77,215
Executive Officer 1992 300,000 53,261 - - 54,600 - 98,094
Donald L. Neal 1994 169,167 33,079 - - - - 150,962
Senior Vice President- 1993 159,000 - - - - - 101,409
Chief Financial Officer 1992 145,000 53,261 - - 20,500 - 60,971
David E. Stubblefield 1994 169,167 33,079 - - - - 48,391
Senior Vice President-Marketing 1993 159,000 - - - - - 34,177
and Director of ABF 1992 145,000 53,261 - - 20,500 - 34,422
Jerry A. Yarbrough (4) 1994 169,167 33,079 - - - - 41,163
Senior Vice President-Operations 1993 159,000 - - - - - 29,780
and Director of ABF 1992 145,000 53,261 - - 20,500 - 28,413
John R. Meyers 1994 125,667 18,001 - - - - 14,584
Vice President-Treasurer 1993 121,900 - - - - - 8,834
1992 111,667 32,367 - - 15,700 - 10,258
Richard F. Cooper 1994 125,667 18,001 - - - - 12,219
Vice President-Risk Management, 1993 121,900 - - - - - 8,167
General Counsel and Secretary 1992 111,667 32,367 - - 15,700 - 8,815
R. David Slack 1994 125,667 18,001 - - - - 23,078
Vice President-Comptroller 1993 121,900 - - - - - 13,106
1992 111,667 32,367 - - 15,700 - 15,074
E. George Myers 1994 125,667 18,001 - - - - 38,137
Vice President-Human Resources 1993 121,900 - - - - - 16,994
1992 111,667 32,367 - - 15,700 - 16,471
<FN>
<F1>
(1) Reflects bonus earned during the fiscal year. Bonuses are normally paid
during the next fiscal year.
<F2>
(2) Options to acquire shares of Common Stock.
<PAGE>
<F3>
(3) "All Other Compensation" includes the following for Messrs. Young, Neal,
Stubblefield, Yarbrough, Meyers, Cooper, Slack and Myers, (i) Company
matching of contributions to the Company's Employees Investment Plan of
$1,500; $1,500; $1,500; $1,500; $1,257; $1,257; $1,257 and $1,257 for each
named executive, respectively; (ii) amounts accrued under the Company's
Supplemental Benefit Plan of $57,770; $67,832; $24,105; $20,801; $6,375;
$5,846; $10,053 and $12,802 for each named executive, respectively; and
(iii) amounts accrued under Deferred Salary Agreements of $30,707; $81,630;
$22,786; $18,862; $7,222; $5,116; $11,768; and $24,078 for each named
executive, respectively. The Deferred Salary Agreements are not
performance-based incentive plans.
<F4>
(4) Effective January 1, 1995, Mr. Yarbrough resigned from ABF and was
appointed Chairman and Chief Executive Officer of Integrated Distribution,
Inc., another subsidiary of the Company.
</FN>
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTIONS/SAR VALUES
The following table provides information related to options exercised by the
named executive officers during the 1994 fiscal year and the number and value
of options held at fiscal year end. The Company does not have any outstanding
stock appreciation rights.
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Options/ In-the-Money Options/SARs
Acquired Value SARs at Fiscal Year-End (#) at Fiscal Year-End ($)(1)
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Robert A. Young III - - 21,840 32,760 $27,300 $40,950
Donald L. Neal - - 8,200 12,300 10,250 15,375
David E. Stubblefield - - 8,200 12,300 10,250 15,375
Jerry A. Yarbrough - - 8,200 12,300 10,250 15,375
John R. Meyers - - 6,280 9,420 7,850 11,775
Richard F. Cooper - - 6,280 9,420 7,850 11,775
R. David Slack - - 6,280 9,420 7,850 11,775
E. George Myers - - 6,280 9,420 7,850 11,775
<FN>
<F1>
(1) The closing price for the Company's Common Stock as reported by the NASDAQ
Stock Market on December 30, 1994 was $12.125. Value is calculated on the
basis of the difference between the option exercise price and $12.125
multiplied by the number of shares of Common Stock underlying the option.
</FN>
</TABLE>
<PAGE>
REPORT ON EXECUTIVE COMPENSATION BY THE EXECUTIVE
COMPENSATION AND DEVELOPMENT COMMITTEE
AND STOCK OPTION COMMITTEE
The Company is engaged in the highly competitive and evolving freight
transportation industry. To be able to continue its past growth and succeed
in the future, the Company believes it must be able to retain its executive
management team and to attract additional qualified executives when needed.
The Company's philosophy that compensation of the executive management team
should be materially linked to both operating and stock price performance
with the goal of enhancing the value of the Company is administered by its
Executive Compensation and Development Committee ("Compensation Committee")
and its Stock Option Committee.
The Compensation Committee is comprised of Messrs. Marquard, Morris, and
Young and the Stock Option Committee is comprised of Messrs. Edelstein,
Fritz, and Zakon. All Committee Members are non-employee directors except Mr.
Young, who is the Company's President-Chief Executive Officer. The
Compensation Committee, at its discretion, reviews and grants all forms of
executive compensation except stock options. The Stock Option Committee, at
its discretion, grants stock options to the executive group pursuant to the
Company's stock option plan which was previously approved by the Company's
Board of Directors and shareholders.
In furtherance of the Company's philosophy, the executive management team's
compensation is primarily composed of the following blend of short-term and
long-term items, all designed to motivate daily, annual and multi-year
executive performance that results in increased value of the Company for its
shareholders:
(i) Base Salary. The Compensation Committee reviews and sets the base
salaries of the Company's executive officers, normally on an annual
basis. In setting salary levels, the Compensation Committee considers
a variety of subjective and objective criteria such as: variety of
experience and years of service with the Company; special expertise
and talents of the individual; recent and historical operating results
of the Company; industry and general economic conditions which may
affect the Company's performance; and the Compensation Committee
members' knowledge and experience in determining appropriate salary
levels and total compensation programs for executives. Based on
publicly available information, the Compensation Committee believes
the executives' base salaries to be at about 75 percentile of its Peer
Group, as defined in the "STOCK PERFORMANCE GRAPH" section.
(ii) Incentive Plan. The Company's Incentive Plan, variations of which
have been in place for over 20 years, sets a specific annual goal
which, if met, results in a bonus being paid to each member of the
executive management team. The 1994 Incentive Plan was based on
achieving budgeted annual operating income for ABF Freight System,
Inc. ("ABF"), the Company's primary operating subsidiary. If the goal
is met, then each participant, including the named executive group,
shares in the bonus pool based on the percentage of each person's base
salary to the aggregate of all participants' base salaries. Incentive
Plan bonuses were paid for 1994 (see "SUMMARY COMPENSATION TABLE").
<PAGE>
(iii) Stock Option Plan. The Stock Option Committee is responsible for the
granting of stock options to the executive group under the Company's
1992 Stock Option Plan ("1992 Plan"). Under current stock option
agreements with the named executives, the grant's value to the
optionee is directly based on the public trading price of the
Company's stock. The optionee vests in 20% of the total shares granted
on each of the five subsequent anniversary dates of the grant, and has
up to 10 years from the date of the grant to exercise part or all of
his grant. The Company believes that this combination of 20% annual
vesting with a 10-year exercise period blends its desire to tie the
optionee's motivation under the stock option grant to both short-term
and long-term performance of the Company's stock.
Under the 1992 Plan, the Stock Option Committee generally has
discretion regarding size, recipients and other non-exercise-price
terms and conditions of grants. Such discretion allows, but does not
require, the Stock Option Committee to consider prior stock option
grants to executives when considering new grants.
Stock option grants made to the executive group have been based
on advice from a consultant from Ernst & Young and on the judgement of
the Stock Option Committee members.
(iv) Deferred Salary Agreements. The Company has Deferred Salary
Agreements with certain Company and subsidiaries' executives. The
Company believes these Deferred Salary Agreements have aided it in
retaining these individuals who average over 26 years of employment
with it or its subsidiaries and have acquired experience, knowledge
and contacts of considerable value to it. See "TERMINATION OF
EMPLOYMENT AGREEMENTS" section for additional information.
The Company believes that the Chief Executive Officer ("CEO") is the leader
of the executive management team, and therefore the Compensation Committee
and Stock Option Committee apply the same philosophy as discussed above to
the CEO's compensation package.
The members of the executive management team have, throughout their tenure,
acquired substantial individual stock ownership in the Company. The Company
believes its philosophy has built an experienced, motivated executive
management team whose compensation package and stock ownership, both personal
and through stock option grants, are closely linked to the interest of the
Company's shareholders.
EXECUTIVE COMPENSATION AND
DEVELOPMENT COMMITTEE STOCK OPTION COMMITTEE
William A. Marquard Arthur J. Fritz, Jr.
John H. Morris Frank Edelstein
Robert A. Young III Alan J. Zakon
This Report will not be deemed to be incorporated by reference in any filing
by the Company under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent that the Company specifically incorporates
this Report by reference.
<PAGE>
EXECUTIVE COMPENSATION AND DEVELOPMENT COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
Robert A. Young III, a member of the Company's Executive Compensation and
Development Committee, is the Company's President-CEO.
Pursuant to the terms of a Stockholders' Agreement, the Company has agreed
that it will offer Mr. Young the right to include shares of the Company's
Common Stock he owns in certain registration statements filed by the Company
(the "Piggy-back Rights"). The Company will indemnify Mr. Young for
securities law liabilities in connection with any such offering, other than
liabilities resulting from information furnished in writing by Mr. Young. The
Company is obligated to pay all expenses incurred in connection with the
registration of shares of Company Common Stock in connection with the Piggy-
back Rights, excluding underwriters' discounts and commissions.
STOCK PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total return for the
Company, the Nasdaq Market Index, and an index of peer companies selected by
the Company.
<TABLE>
<CAPTION>
COMPARISON OF CUMULATIVE TOTAL RETURN
Among Arkansas Best Corporation, Nasdaq Market Index & Peer Group
Base
May Return Return Return
1992 1992 1993 1994
<S> <C> <C> <C> <C>
Arkansas Best Corporation 100.00 108.21 112.20 87.34
Peer Group 100.00 91.20 88.85 85.88
Nasdaq Market Index 100.00 107.89 129.42 135.88
</TABLE>
The above comparisons assume $100 was invested on May 13, 1992 in the
Company's Common Stock and each of the foregoing indices and assumes
reinvestment of dividends. Following the Company's initial public offering,
its Common Stock commenced trading on the Nasdaq Stock Market on May 13,
1992; therefore, five-year data are unavailable. All calculations have been
prepared by Media General Financial Services. The shareholder return shown on
the graph above is not necessarily indicative of future performance.
The Company considers itself primarily in the business of providing and
arranging long-haul less-than-truckload ("LTL") transportation of general
commodities. Accordingly, the Company believes it is important that its
performance be compared to that of other long-haul LTL transporters of
general commodities. Therefore, companies in the peer group are as follows:
Roadway Services, Inc.; Consolidated Freightways, Inc.; Yellow Corporation;
and Carolina Freight Corp.
The Performance Graph will not be deemed to be incorporated by reference in
any filing by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates the graph by reference.
<PAGE>
RETIREMENT AND SAVINGS PLANS
Non-union employees of the Company who fulfill a minimum age and service
requirement are eligible to participate in the Company's Retirement Plan
which generally provides fixed benefits payable in annuity form upon
retirement at age 65. Benefits also may be paid in the form of a lump sum at
the participant's election. Credited years of service for each of the
individuals named in the EXECUTIVE COMPENSATION - SUMMARY COMPENSATION TABLE
("Executive Compensation Table") are: Robert A. Young III, 30 years; Donald
L. Neal, 36 years; John R. Meyers, 22 years; David E. Stubblefield, 35 years;
Jerry A. Yarbrough, 26 years; E. George Myers, 36 years; Richard F. Cooper,
11 years; and R. David Slack, 25 years. Benefits are based upon a
participant's years of service with the Company and average total monthly
earnings (exclusive of extraordinary remuneration and expense allowances and
subject to the annual Code limitation after 1988 of $150,000 as adjusted to
reflect cost of living increases) during any five consecutive calendar years
during the participant's employment with the Company since 1980 which will
give the participant the highest average monthly earnings. Benefits also are
subject to certain other limitations in the Code.
The following table illustrates the total estimated annual benefits payable
from the Retirement Plan and the Company's Supplemental Benefit Plan (see
below) upon retirement at age 65, in the form of a single life annuity, to
persons in the specified compensation and years-of-service classifications.
Benefits listed in the table are not subject to any deductions for Social
Security or other offset amounts. Participants also are entitled to receive
income from employee contributions, if any, plus 7 1/2% interest in addition
to the amounts shown.
<TABLE>
<CAPTION>
Highest
Five Years
Average Years of Service
Compensation 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 17,187 $ 23,437 $ 23,800 $ 28,560 $ 33,320
100,000 35,937 48,437 48,800 58,560 68,320
150,000 54,687 73,437 73,800 88,560 103,320
200,000 73,437 98,437 98,800 118,560 138,320
500,000 185,937 248,437 248,800 298,560 348,320
</TABLE>
In December 1987, the Company also established the Arkansas Best Corporation
Supplemental Benefit Plan for the purpose of supplementing benefits under the
Company's Retirement Plan. The Code places limits on the amount of income
participants may receive under the Company's Retirement Plan. In order to
compensate for those limitations and for reductions in the rate of benefit
accruals from the 1985 formula under the Company's Retirement Plan, the
Supplemental Benefit Plan will pay sums in addition to amounts payable under
the Retirement Plan to eligible participants. Participation in the
Supplemental Benefit Plan is limited to employees of the Company who are
participants in the Company's Retirement Plan and who are also either
officers at or above the rank of vice president of the Company or are
designated as participants in the Supplemental Benefit Plan by the Company's
Board. The amount due to each participant in the Supplemental Benefit Plan is
the actuarial equivalent of the excess of (1) the payment due under the
Company's Retirement Plan as in effect on January 1, 1985, as amended, but
without regard to any amendments that decrease the rate of benefit accruals
and without regard to any Code limitations, or the current Retirement Plan
without regard to any Code limitations if more; over (2) the actual benefit
received from the Retirement Plan. This payment will be made in a single cash
sum within 30 days following the participant's termination of employment.
Amounts attributable to the Supplemental Benefit Plan are included in the
pension table set forth above.
<PAGE>
The Company has agreed to provide reimbursement for otherwise unreimbursed
medical expenses to certain employees of the Company and its subsidiaries,
including the individuals named in the Executive Compensation Table. These
benefits are presently covered by an insurance program and commence at
retirement and continue for the life of the employee (and spouse or other
eligible dependents).
TERMINATION OF EMPLOYMENT AGREEMENTS
The Company has deferred salary agreements with certain management employees
of the Company and its subsidiaries, including the named executives, due to
their tenure, experience, knowledge and contacts of considerable value to the
Company. The amounts of deferred salary vary according to the individual and
according to age at retirement or other termination of employment and are to
be paid in 120 equal monthly installments after termination of the
individual's employment. The amounts payable under the deferred salary
agreements are not vested and are subject to forfeiture under certain
circumstances. The Company has purchased life insurance on each of the
individuals which will substantially reimburse it for the cost of the
agreements. The Executive Compensation Table includes the amount accrued
annually for each named executive under these agreements.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
Stockholders' Agreement. Pursuant to the terms of a Stockholders' Agreement,
the Company has agreed that it will offer Robert A. Young III the right to
include shares of the Company's Common Stock he owns in certain registration
statements filed by the Company (the "Piggy-back Rights").
The Company will indemnify Mr. Young for securities law liabilities in
connection with any such offering, other than liabilities resulting from
information furnished in writing by Mr. Young. The Company is obligated to
pay all expenses incurred in connection with the registration of shares of
Company Common Stock in connection with the Piggy-back Rights, excluding
underwriters' discounts and commissions.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
The Company's executive officers, directors, and persons who own more than
10% of a registered class of the Company's equity securities are required to
file, under the Securities Exchange Act of 1934, reports of ownership and
changes of ownership with the Securities and Exchange Commission.
Based solely on information provided to the Company, the Company believes
that during the preceding year its executive officers, directors, and 10%
shareholders have complied with all applicable filing requirements.
2. AMENDMENT TO THE 1992 STOCK OPTION PLAN
The Board of Directors has approved, and recommends that the shareholders
approve, an amendment (the "Option Plan Amendment") to the Company's 1992
Stock Option Plan (the "1992 Plan"). This amendment (i) provides an
additional one million shares of the Company's authorized but unissued Common
Stock to be available for issuance under the 1992 Plan, and (ii) ensures the
1992 Plan's qualification as a "performance based" plan under Section 162(m)
of the Internal Revenue Service Code ("IRS Code"), as described below under
"Description of Option Plan Amendment."
<PAGE>
Description of 1992 Plan
The 1992 Plan, which was adopted by the Board of Directors on March 13, 1992,
provided that up to 1,000,000 shares of Common Stock were available for
awards of incentive and nonqualified stock options to directors and key
employees of the Company and subsidiaries. Any shares subject to unexercised
portions of options granted under the 1992 Plan that have terminated may be
regranted under new options. As of March 13, 1995, 335,160 shares of Common
Stock were available to be granted under the 1992 Plan.
The following is a summary of certain provisions of the 1992 Plan.
General. Options granted under the 1992 Plan may be either "incentive stock
options" ("ISOs") that meet the qualifications of Section 422 of the Internal
Revenue Code of 1986, as amended, or nonqualified stock options ("NQSOs")
that do not meet the qualifications of Section 422. A maximum of 1,000,000
shares of Common Stock (subject to certain anti-dilution provisions) may be
subject to options under the 1992 Plan. As of March 13, 1995, options for
661,400 shares of Common Stock are outstanding and options for 3,440 shares
have been exercised. On March 13, 1995 the last reported sale price of the
Common Stock was $12.125.
Administration. To the extent necessary to comply with the requirements of
Rule 16b-3 of the Securities Exchange Act of 1934 ("Rule 16b-3"), the 1992
Plan may be administered by the Board of Directors, or, at the option of the
Board of Directors, by a committee of two or more qualifying, non-employee
directors. The 1992 Plan is currently administered by a committee (the
"Committee") consisting of Messrs. Edelstein, Fritz, and Zakon. To the extent
permitted under Rule 16b-3, the Committee has complete authority to construe,
interpret and administer the provisions of the 1992 Plan, to determine which
persons are to be granted options and the terms and conditions of such option
grants, and to make all other determinations necessary or deemed advisable in
the administration of the 1992 Plan.
Eligibility. Eligibility to participate in the 1992 Plan is limited to
employees and directors of the Company and its subsidiaries as determined by
the Committee. The Company has six directors and 39 Company and subsidiary
employees who have received grants under the 1992 Plan. Directors who serve
on the Committee are not eligible for discretionary grants under the 1992
Plan, but are automatically granted NQSOs of 7,500 shares in each calendar
year.
Terms of Options; Limitations on Exercise Right. The exercise price of
options will be set by the Committee but must be at least the fair market
value of the Common Stock on the date of grant (and not less than 110% of the
fair market value in the case of an ISO granted to an optionee owning 10% or
more of the Common Stock of the Company). Generally, options are not
exercisable after the expiration of ten years from the date of grant (or five
years in the case of ISOs granted to an optionee owning 10% or more of the
Common Stock of the Company).
The exercise price for the options may be paid by the delivery of cash, a
certified cashier's check, or, at the Company's option, by the delivery of
shares of Common Stock having a fair market value (on the date preceding
exercise) equal to the exercise price. The Company may make financing
available to the optionee on such terms as the Committee shall specify.
An option may not be exercised except by the optionee or by a person who has
obtained the optionee's rights under the option by will or under the laws of
descent and distribution or pursuant to a qualified domestic relations order.
Except with respect to Committee members, the 1992 Plan permits the Board of
Directors or the Committee to accelerate vesting upon a change of control and
enables an option holder to "put" the excess of the then fair market value
over the exercise price of the options to the Company.
<PAGE>
Termination of Employment. The Committee will determine at the time an
option is granted what conditions will apply to the exercise of the option in
the event the holder ceases to be an employee of the Company or any of its
subsidiaries for any reason. In the event of the death of an option holder
while employed by or serving as a director of the Company or any of its
subsidiaries, the option will be exercisable within the year next succeeding
the date of death or such other period as may be specified in the option
agreement, but in no case later than the expiration date of the option.
Amendment and Termination. The Board of Directors may amend, abandon,
suspend or terminate the 1992 Plan or any portion thereof at any time;
provided, however, that, to the extent required by Rule 16b-3 and the
Securities and Exchange Commission's interpretations and releases under Rule
16b-3, no amendment can be made without stockholder approval that would
materially (i) increase the benefits accruing to participants under the 1992
Plan, (ii) increase the number of securities that may be issued under the
1992 Plan (other than pursuant to the anti-dilution provisions), or (iii)
modify the requirements regarding eligibility for participation in the 1992
Plan.
Certain Federal Income Tax Considerations. An optionee receiving ISOs will
not realize any taxable income, and the Company will not be entitled to a
federal income tax deduction, at the time of the option grant. Moreover,
generally speaking, no taxable income will be realized and the Company will
not be entitled to a federal income tax deduction at the time the ISO is
exercised. However, there may be certain alternative minimum tax consequences
to the optionee resulting from the exercise of an ISO. Upon a sale of the
Common Stock acquired upon exercise of an ISO, the optionee generally will
realize a capital gain or capital loss, and the Company will receive no
deduction, so long as the sale does not occur within two years of the date of
the grant of the ISO or within one year from the date the shares were
transferred to the optionee upon the exercise of the ISO.
An optionee receiving NQSOs will not realize any taxable income, and the
Company will not be entitled to any federal income tax deduction, at the time
of the option grant. At the time the NQSO is exercised, the optionee
generally will realize ordinary income in an amount equal to the excess of
the fair market value of the Common Stock on the date of exercise over the
option exercise price paid. The Company generally will be entitled to a
corresponding federal income tax deduction.
Description of Option Plan Amendment
The following is a summary of the provisions of the Option Plan Amendment.
As of March 13, 1995, 335,160 shares of Common Stock were available for grant
under the 1992 Plan. The Option Plan Amendment would make an additional one
million shares of the Company's authorized but unissued shares of Common
Stock available for grant under the 1992 Plan.
IRS Code Section 162(m) generally limits the corporate deductibility of
executive compensation to less than $1 million. An exception to this $1
million deductibility limit is compensation derived from "performance based"
stock option plans. The Company's 1992 Plan was established prior to the
effective date of Section 162(m), and, therefore, certain language needs to
be added to the 1992 Plan to ensure that it meets the technical requirements
of the "performance based" exception to the Section 162(m) limitations. It
should be noted that to date all grants under the 1992 Plan to employees have
been "incentive stock options" (ISO's) which are not affected by Section
162(m)'s deductibility limitation. See "Certain Federal Income Tax
Considerations" above.
<PAGE>
The proposed Option Plan Amendment would comply with Section 162(m)'s
requirement that the 1992 Plan specify the "maximum number of shares with
respect to which options or rights may be granted during a specified period
to any employee," by amending Section 5 of the 1992 Plan to provide that in
connection with the granting of any options under the 1992 Plan, the
aggregate number of shares to be granted to any single employee shall not
exceed the number of shares subject to the 1992 Plan.
Summary of 1992 Plan (as proposed to be amended). The following table sets
forth, to the extent determinable, the number of options that will be
received by certain individuals and groups during 1995 under the 1992 Plan if
the Option Plan Amendment is approved, and options previously granted under
the 1992 Plan. The dollar value of options to be awarded under the 1992 Plan
is not determinable; the exercise price of the options will be at least 100%
of the fair market value of the Common Stock on the date of grant. For
certain information concerning the potential realizable value of options
outstanding under the 1992 Plan, see "EXECUTIVE COMPENSATION - AGGREGATED
OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTIONS/SAR
VALUES."
<TABLE>
<CAPTION>
1992 STOCK OPTION PLAN BENEFITS
Name and Position Number of Units
<S> <C>
Robert A. Young III, Director Nominee
and President - Chief Executive Officer (2)(3)
Donald L. Neal, Senior Vice President -
Chief Financial Officer (2)(3)
David E. Stubblefield, ABF President - CEO (2)(3)
Jerry A. Yarbrough, ABF Senior Vice President (1)(2)(3)
Richard F. Cooper, Vice President -
Risk Management, General Counsel (2)(3)
John R. Meyers, Vice President - Treasurer (2)(3)
E. George Myers, Vice President - Human Resources (2)(3)
R. David Slack, Vice President - Comptroller (2)(3)
Frank Edelstein, Director Nominee (2)(4)
Non-Executive Director Group (2)(4)
Executive Group (2)(3)
Non-Executive Officer Employee Group (2)(5)
<FN>
<F1>
(1) Effective January 1, 1995, Mr. Yarbrough resigned from ABF and was
appointed Chairman and Chief Executive Officer of Integrated
Distribution, Inc., another subsidiary of the Company.
<F2>
(2) Number of, and recipients of, options to be granted under the 1992 Plan
are at the Committee's discretion and therefore are not determinable.
None of these individuals would automatically receive option grants as a
result of the Option Plan Amendment.
<F3>
(3) For information concerning the number of options previously granted to
each named executive officer under the 1992 Plan, see "EXECUTIVE
COMPENSATION - AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTIONS/SAR VALUES."
<F4>
(4) For information concerning the number of options previously granted to
individual Non-Executive Directors under the 1992 Plan, see "BOARD OF
DIRECTORS AND COMMITTEES - Director Compensation."
<PAGE>
<F5>
(5) Under the 1992 Plan, thirty-seven members of this group received a total
of 372,700 option shares on July 22, 1992 at a fair market value
exercise price of $10.875 per share, and two members of this group
received a total of 17,200 option shares on January 26, 1994 at a fair
market value exercise price of $13.875 per share. None of this group
would automatically receive option grants as a result of the Option Plan
Amendment.
</FN>
</TABLE>
The Board of Directors believes that the Option Plan Amendment to the 1992
Plan is in the best interest of the Company and its shareholders and is
necessary to enable it to attract and retain qualified directors and key
employees of the Company and subsidiaries. The affirmative vote of a majority
of the shares entitled to vote at the 1995 Annual Meeting is necessary for
approval of the Option Plan Amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The firm of Ernst & Young LLP served as independent auditors for the Company
for the fiscal year ended December 31, 1994. Pursuant to the recommendation
of the Audit Committee, the Board has appointed that firm to continue in that
capacity for the fiscal year 1995, and recommends that a resolution be
presented to shareholders at the 1995 Annual Meeting to ratify that
appointment.
In the event the shareholders fail to ratify the appointment of Ernst & Young
LLP, the Board will appoint other independent public accountants as auditors.
Representatives of Ernst & Young LLP will attend the 1995 Annual Meeting.
They will have the opportunity to make a statement and respond to appropriate
questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
OTHER MATTERS
The Board does not know of any matters that will be presented for action at
the 1995 Annual Meeting other than those described above and matters incident
to the conduct of the meeting. If, however, any other matters not presently
known to management should come before the 1995 Annual Meeting, it is
intended that the shares represented by the accompanying proxy will be voted
on such matters in accordance with the discretion of the holders of such
proxy.
COST OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. Proxies may be
solicited by directors, officers, or regular employees of the Company in
person, by telephone, telegram, or other means. The Company has retained
Corporate Investor Communications, Inc. to assist in the solicitation and
sending of proxy material. The Company will pay approximately $1,000 for
these services.
<PAGE>
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Pursuant to Securities and Exchange Commission regulations, shareholder
proposals submitted for next year's proxy statement must be received by the
Company no later than the close of business on December 11, 1995 to be
considered. Proposals should be addressed to Richard F. Cooper, Secretary,
Arkansas Best Corporation, 3801 Old Greenwood Road, Fort Smith, AR 72903. In
order to prevent controversy about the date of receipt of a proposal, the
Company strongly recommends that any shareholder wishing to present a
proposal submit the proposal by certified mail, return receipt requested.
GENERAL
Upon written request, the Company will provide shareholders with a copy of
its Annual Report on Form 10-K to the Securities and Exchange Commission
(including financial statements and schedules thereto) for the fiscal year
ended December 31, 1994, without charge. Direct written requests to: Randall
M. Loyd, Director, Financial Reporting, Arkansas Best Corporation, 3801 Old
Greenwood Road, Fort Smith, AR 72903.
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY
Fort Smith, Arkansas RICHARD F. COOPER
Date: April 10, 1995 Secretary
<PAGE>
ARKANSAS BEST COPRORATION
LIST OF EXHIBITS
Exhibit
No. Page
99.1 Arkansas Best Corporation Proxy Card
99.2 Arkansas Best Corporation Stock Option Plan
99.3 Admendment to the Arkansas Best Corporation
Stock Option Plan
<PAGE>
ARKANSAS BEST CORPORATION
Proxy Solicited by the Board of Directors for the
Annual Meeting of Shareholders -- May 9, 1995
Donald L. Neal and Richard F. Cooper, jointly and severally, each with the
power of substitution and revocation, are hereby authorized to represent the
undersigned, with all powers which the undersigned would possess if
personally present, to vote all shares the undersigned is entitled to vote at
the Annual Meeting of Shareholders of Arkansas Best Corporation to be held at
3801 Old Greenwood Road, Fort Smith, Arkansas 72903, at 9:00 A.M. CDT on
Tuesday, May 9, 1995, and at any postponements or adjournments of that
meeting, as set forth below, and in their discretion upon any other business
that may properly come before the meeting.
This proxy will be voted as specified or, if no choice is specified, will be
voted FOR the election of the nominees named and FOR each of the other
proposals specified herein.
** CONTINUED AND TO BE SIGNED ON REVERSE SIDE **
ARKANSAS BEST CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. []
FOR all
nominees,
except vote
WITHHELD withjeld from
FOR all from all the following
nominees nominees nominee(s):
1. Nominees: Frank Edelstein .
and Robert A. Young III [] [] []
FOR AGAINST ABSTAIN
2. Amendment to Arkansas Best
Corporation 1992 Stock Option Plan [] [] []
FOR AGAINST ABSTAIN
3. To ratify the appointment of Ernst &
Young LLP as the Company's independent
certified public accountants. [] [] []
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHERE
APPLICABLE, INDICATE OFFICIAL POSITION OR REPRESENTATIVE CAPACITY.
Date: ___________________________
___________________________________
SIGNATURE
___________________________________
SIGNATURE
PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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ARKANSAS BEST CORPORATION
STOCK OPTION PLAN
1. Purpose
The purpose of the Arkansas Best Corporation Stock Option Plan
(hereinafter called the "Plan") is to advance the interests of Arkansas Best
Corporation (hereinafter called the "Company") by strengthening the ability
of the Company to attract and retain key personnel of high caliber through
encouraging a sense of proprietorship by means of stock ownership.
Certain options granted under this Plan are intended to qualify as
"incentive stock options" pursuant to Section 422 of the Internal Revenue
Code of 1986 (the "Code"), while certain other options granted under the Plan
will constitute nonqualified options.
2. Definitions
As used in this Plan, and in any Option Agreement, as hereinafter
defined, the following terms shall have the following meanings, unless the
context otherwise requires:
(a) "Common Stock" shall mean the Common Stock of the Company, par
value $.01 per share.
(b) "Date of Grant" shall mean the date on which a stock option is
granted pursuant to this Plan.
(c) "Disinterested Director" shall mean a director who is not, during
the one year prior to service as an administrator of the Plan, granted or
awarded an option pursuant to the Plan or any other plan of the Company or
any of its affiliates (except as provided in Section 4(b) of this Plan and as
may be permitted by the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules promulgated thereunder).
(d) "Fair Market Value" shall mean the closing sale price (or average
of the quoted closing bid and asked prices if there is no closing sale price
reported) of the Common Stock on the date specified as reported by NASDAQ
National Market System or by the principal national stock exchange on which
the Common Stock is then listed. If there is no reported price information
for such date, the Fair Market Value will be determined by the reported price
information for the Common Stock on the day nearest preceding such date.
(e) "Optionee" shall mean the person to whom an option is granted under
the Plan or who has obtained the right to exercise an option in accordance
with the provisions of the Plan.
(f) "Plan Adoption Date" means the date on which the Plan is adopted by
the Board of Directors of the Company.
(g) "Subsidiary" shall mean any now existing or hereafter organized or
acquired corporation of which more than fifty percent (50%) of the issued and
outstanding voting stock is owned or controlled directly or indirectly by the
Company or through one or more Subsidiaries of the Company.
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3. Shares Subject to the Plan
The aggregate amount of Common Stock for which options may be granted
under this Plan shall not exceed 1,000,000 shares of Common Stock. Such
shares may be authorized and previously unissued shares or previously issued
shares that have been reacquired by the Company. Any shares subject to
unexercised portions of options granted under this Plan which shall have
terminated, been cancelled or expired may again be subject to options under
this Plan.
4. Administration
(a) Notwithstanding anything to the contrary, to the extent necessary
to comply with the requirements of Rule 16b-3 under the Exchange Act (or any
successor thereto), the Plan shall be administered by the Board of Directors,
if each member is a Disinterested Director, or, at the option of the Board of
Directors, a committee of two or more Disinterested Directors appointed by
the Board of Directors of the Company (the group responsible for
administering the Plan is referred to herein as the "Committee"). Options
may be granted under this Section 4(a) only by the unanimous agreement of the
members of the Committee. Stock Option Agreements ("Option Agreements"), in
the form as approved by the Committee, and containing such terms and
conditions not inconsistent with the provisions of this Plan as shall have
been determined by the Committee, may be executed on behalf of the Company by
the Chairman of the Board, the President or any Vice President of the
Company. Except with respect to Section 4(b) of this Plan, the Committee
shall have complete authority to construe, interpret and administer the
provisions of the Plan and the provisions of the Option Agreements relating
to options granted hereunder; to prescribe, amend and rescind rules and
regulations pertaining to the Plan; and to make all other determinations
necessary or deemed advisable in the administration of the Plan. The
determinations, interpretations and constructions made by the Committee shall
be final and conclusive.
(b) Members of the Committee shall be specified by the Board of
Directors, and shall consist solely of Disinterested Directors and as such
shall not be eligible to receive options to purchase Common Stock pursuant to
Section 4(a) of the Plan. On May 12, 1994, and on the first trading day after
(i) January 1, 1995, and (ii) each January 1st thereafter, each Disinterested
Director serving as a Committee Member shall automatically be granted
nonqualified options to purchase 7,500 shares of the Company's Common Stock
at an exercise price per share equal to the closing price of the Common Stock
on the date of such automatic grant. This Section 4(b) shall not be amended
more than once every six months, other than to comport with changes in the
Code or the rules promulgated thereunder.
5. Eligibility
Incentive stock options to purchase Common Stock may be granted under
Section 4(a) of the Plan to such key employees of the Company or its
Subsidiaries (including any director who is also a key employee of the
Company or one or more of its Subsidiaries) as shall be determined by the
Committee. Nonqualified stock options to purchase Common Stock may be
granted under Section 4(a) of the Plan to such key employees or directors of
the Company or its Subsidiaries as shall be determined by the Committee. The
Committee shall determine which persons are to be granted options under
Section 4(a) of the Plan, the number of options, the number of shares subject
to each option, the exercise price or prices of each option, the vesting and
exercise period of each option, whether an option may be exercised as to less
than all of the Common Stock subject thereto, and such other terms and
conditions of each option, if any, as are not inconsistent with the
provisions of this Plan. In addition, the Committee may, in its sole
discretion, provide for vesting of stock options to accelerate upon a change
in control of the Company and enable an employee to "put" the excess of the
fair market value over the exercise price of the options to the Company in
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the event of a change in control in conformity with the rules and regulations
promulgated under the Exchange Act. In connection with the granting of
incentive stock options, the aggregate Fair Market Value (determined at the
Date of Grant of an incentive stock option) of the shares with respect to
which incentive stock options are exercisable for the first time by an
Optionee during any calendar year (under all such plans of the Optionee's
employer corporation and its parent and subsidiary corporations as defined in
Section 424 of the Code) shall not exceed $100,000 or such other amount as
from time to time provided in Section 422(d) of the Code or any successor
provision.
6. Exercise Price
The purchase price or prices for Common Stock subject to an option (the
"Exercise Price") granted pursuant to Section 4(a) of the Plan shall be
determined by the Committee at the Date of Grant; provided, however, that (a)
the Exercise Price for any option shall not be less than 100% of the Fair
Market Value of the Common Stock at the Date of Grant, and (b) if the
Optionee owns more than 10 percent of the total combined voting power of all
classes of stock of the Company or its parent or any of its subsidiaries, as
more fully described in Section 422(b)(6) of the Code or any successor
provision (such stockholder is referred to herein as a "10-Percent
Stockholder"), the Exercise Price for any incentive stock option granted to
such Optionee shall not be less than 110% of the Fair Market Value of the
Common Stock at the Date of Grant.
7. Term of Stock Options and Limitations on Right to Exercise
No incentive stock option granted pursuant to Section 4(a) of this Plan
shall be exercisable (a) more than five years after the Date of Grant with
respect to a 10-Percent Stockholder, and (b) more than ten years after the
Date of Grant with respect to all persons other than 10-Percent Stockholders.
No nonqualified stock option granted pursuant to Section 4(a) of this Plan
shall be exercisable more than ten years after the Date of Grant. Subject to
the conditions set forth in Section 4(b) of this Plan, nonqualified stock
options granted to members of the Committee pursuant to Section 4(b) of this
Plan shall be exercisable for ten years, except that in the event of death or
termination of such member as a director of the Company or a Subsidiary, such
nonqualified stock options shall only be exercisable for one year following
the date of such member's death or termination (or if shorter, the remaining
term of the option). The Company shall not be required to issue any
fractional shares upon the exercise of any options granted under this Plan.
No Optionee nor his legal representatives, legatees or distributees, as the
case may be, will be, or will be deemed to be, a holder of any shares subject
to an option unless and until said option has been exercised and the purchase
price of the shares in respect of which the option has been exercised has
been paid. An option shall not be exercisable except by the Optionee or by a
person who has obtained the Optionee's rights under the option by will or
under the laws of descent and distribution.
8. Termination of Employment
The Committee shall determine at the Date of Grant what conditions shall
apply to the exercise of an option granted under Section 4(a) in the event an
Optionee shall cease to be employed by the Company or a Subsidiary for any
reason. In the event of the death of an Optionee while in the employ or
while serving as a director of the Company or a Subsidiary, the option
theretofore granted to him shall be exercisable by the executor or
administrator of the Optionee's estate, or if the Optionee's estate is not in
administration, by the person or persons to whom the Optionee's rights shall
have passed under the Optionee's will or under the laws of descent and
distribution, within the year next succeeding the date of death or such other
period as may be specified in the Option Agreement, but in no case later than
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the expiration date of such option, and then only to the extent that the
Optionee was entitled to exercise such option at the date of his death.
Neither this Plan nor any option granted hereunder is intended to confer upon
any Optionee any rights with respect to continuance of employment or other
utilization of his services by the Company or by a Subsidiary, nor to
interfere in any way with his right or that of his employer to terminate his
employment or other services at any time (subject to the terms of any
applicable contract).
9. Dilution or Other Adjustments
In the event that there is any change in the Common Stock subject to
this Plan or subject to options granted hereunder as the result of any stock
dividend on, dividend of or stock split or stock combination of, or any like
change in, stock of the same class or in the event of any change in the
capital structure of the Company, the Board of Directors or the Committee
shall make such adjustments with respect to options, or any provisions of the
Plan, as it deems appropriate to prevent dilution or enlargement of option
rights.
10. Expiration and Termination of the Plan
Options may be granted at any time under Section 4(a) of the Plan and as
specified under Section 4(b) of the Plan prior to December 31, 2001, as long
as the total number of shares which may be issued pursuant to options granted
under this Plan does not (except as provided in Section 9 above) exceed the
limitations of Section 3 above. This Plan may be abandoned, suspended or
terminated at any time by the Board of Directors of the Company except with
respect to any options then outstanding under the Plan.
11. Restrictions on Issuance of Shares
(a) The Company shall not be obligated to sell or issue any shares upon
the exercise of any option granted under this Plan unless:
(i) the shares with respect to which such option is being
exercised have been registered under applicable federal
securities laws or are exempt from such registration;
(ii) the prior approval of such sale or issuance has been
obtained from any state regulatory body having jurisdiction;
and
(iii) in the event the Common Stock has been listed on any
exchange, the shares with respect to which such option is
being exercised have been duly listed on such exchange in
accordance with the procedure specified therefor.
If the shares to be issued upon the exercise of any option granted under the
Plan are intended to be issued by the Company in reliance upon the exemptions
from the registration requirements of applicable federal securities laws, the
Optionee, if so requested by the Company, shall furnish to the Company such
evidence and representations, including an opinion of counsel, satisfactory
to it, as the Company may reasonably request.
(b) No option granted pursuant to the Plan shall be transferable by the
Optionee other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the rules
thereunder.
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(c) Any Common Stock issued to an officer or director of the Company
pursuant to the exercise of an option granted pursuant to the Plan shall not
be transferred until at least six months have elapsed from the date of grant
of such option to the date of disposition of the Common Stock underlying such
option.
(d) The Board of Directors or Committee may impose such other
restrictions on the ownership and transfer of shares issued pursuant to this
Plan as it deems desirable; any such restrictions shall be set forth in any
Option Agreement entered into hereunder.
12. Proceeds
The proceeds to be received by the Company upon exercise of any option
granted under this Plan may be used for any proper purposes.
13. Amendment of the Plan
Except as provided in Section 4(b) of the Plan, the Board of Directors
may amend the Plan from time to time in such respects as it may deem
advisable in its sole discretion or in order that the options granted
hereunder shall conform to any change in applicable laws, including tax laws,
or in regulations or rulings of administrative agencies or in order that
options granted or stock acquired upon exercise of such options may qualify
for simplified registration under applicable securities or other laws;
provided, however, that no amendment may be made without the consent of
stockholders which would materially (a) increase the benefits accruing to
participants under the Plan, (b) increase the number of securities which may
be issued under the Plan, other than in accordance with Section 9 hereof, or
(c) modify the requirements as to eligibility for participation in the Plan.
14. Payment Upon Exercise
Upon the exercise of any option granted under the Plan, the Company may
make financing available to the Optionee for the purchase of the Common Stock
that may be acquired pursuant to the exercise of such option on such terms as
the Committee shall specify. An Optionee may pay the Exercise Price of the
shares of Common Stock as to which an option is being exercised by the
delivery of cash, a certified or cashier's check or by the delivery of shares
of Common Stock having a Fair Market Value on the date of exercise at least
equal to the Exercise Price.
Any option granted under the Plan may be exercised by a broker-dealer
acting on behalf of an Optionee if (a) the broker-dealer has received from
the Optionee or the Company a fully- and duly-endorsed agreement evidencing
such option, together with instructions signed by the Optionee requesting the
Company to deliver the shares of Common Stock subject to such option to the
broker-dealer on behalf of the Optionee and specifying the account into which
such shares should be deposited, (b) adequate provision has been made with
respect to the payment of any withholding taxes due upon such exercise, and
(c) the broker-dealer and the Optionee have otherwise complied with
Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any successor
provision.
15. Stockholders' Approval
The Plan has been approved by a majority of the stockholders of the
Company.
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16. Liability of the Company
Neither the Company, its directors, officers or employees, nor any of
the Company's Subsidiaries which are in existence or hereafter come into
existence, shall be liable to any Optionee or other person if it is
determined for any reason by the Internal Revenue Service or any court having
jurisdiction that any incentive stock options granted hereunder do not
qualify for tax treatment as incentive stock options under Section 422 of the
Code.
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AMENDMENT
TO THE
ARKANSAS BEST CORPORATION
STOCK OPTION PLAN
The Arkansas Best Corporation Stock Option Plan (the "Plan") is hereby
amended as follows:
1. The Plan is hereby amended by replacing the number "1,000,000" with the
number "2,000,000" in the first sentence of Section 3.
2. The Plan is hereby amended by adding the following to the end of
Section 5:
"In connection with the granting of options under this Plan, the
aggregate number of shares of Common Stock issuable to any single
Optionee shall not exceed the number of shares subject to the Plan
referred to in Section 3."
IN WITNESS WHEREOF, Arkansas Best Corporation, acting by and through its
officers hereunto duly authorized, has executed this Amendment to the Plan,
to be effective the 9th day of May, 1995.
ARKANSAS BEST CORPORATION
By: _____________________________________
Robert A. Young III
President and Chief Executive Officer
