<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.
<PAGE>
[ ] 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, 1996
To the Shareholders of Arkansas Best Corporation:
You are cordially invited to attend the Annual Meeting of Shareholders of
Arkansas Best Corporation on Thursday, May 9, 1996 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, 1996
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 Thursday, May 9, 1996 at 9:00 a.m. for the following purposes:
I. To elect two Class I directors for terms to expire at the 1999
Annual Meeting of Shareholders;
II. To ratify the appointment of Ernst & Young LLP as independent
auditors for fiscal year 1996;
III. 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 11, 1996 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, 1996 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, 1996 ("1996 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 1995 Annual
Report to Shareholders are being mailed to shareholders beginning on or about
April 10, 1996. 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 11, 1996 as the record
date for the 1996 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 1996 Annual Meeting.
VOTING SHARES
On the record date, there were 19,515,758 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 1996 Annual Meeting.
<PAGE>
PROPOSAL I. 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
1996 Annual Meeting of Shareholders whose members' terms will expire at the
1999 Annual Meeting of Shareholders, two in the class whose members' terms
will expire at the 1997 Annual Meeting of Shareholders, and two in the class
whose members' terms will expire at the 1998 Annual Meeting of Shareholders.
It is intended that the shares represented by the accompanying proxy will be
voted at the 1996 Annual Meeting for the election of nominees William A.
Marquard and Alan J. Zakon, Ph.D. as the two directors in the class of
directorships whose members' terms will expire in 1999, 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. Marquard and/or Zakon will
not be available for election at the time of the 1996 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 1996 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 1996 Annual
Meeting.
Name Age Business Experience
CLASS I -- Term Expires May 1996
William A. Marquard 76 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 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
<PAGE>
Corporation in February 1989 until March 31,
1992, when he was named Chairman Emeritus.
Mr. Marquard is Chairman of the Board of Mosler,
Inc., and a Director of Americold Corporation,
Earle M. Jorgensen Co., and EarthShell Container
Corporation.
Alan J. Zakon, Ph.D 60 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, Hechinger
Corporation, and Vice Chairman of the Board of
Autotote 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. 55 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.
John H. Morris 52 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.
CLASS III -- Term Expires May 1998
Frank Edelstein 70 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
<PAGE>
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., and IHOP
Corp.
Robert A. Young III 55 Mr. Young has been a Director of the
Company since 1970 and 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 a Director
of Treadco, Inc. since June 1991. Mr. Young also
is a Director of Mosler, Inc.
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 during 1995. During 1995, 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.
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 1995
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; and 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. Messrs. Edelstein, Fritz,
Morris, and Zakon currently are members of the Audit Committee. The Audit
Committee met twice during 1995.
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 twice during 1995.
<PAGE>
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 twice during 1995.
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 other non-employee directors
receive a $25,000 annual retainer. Each non-employee director receives $1,000
for each Board meeting attended and for each meeting of a committee of the
Board attended, if the committee meeting is held other than in conjunction
with a Board meeting.
Messrs. Edelstein, Fritz and Zakon, as members of the Stock Option Committee,
each received automatic stock options under the Company's 1992 Stock Option
Plan on January 3, 1995, for 7,500 shares of the Company's Common Stock at a
fair market value exercise price of $12.75 per share. Messrs. Marquard and
Morris, non-employee Directors, each received stock options under the
Company's 1992 Stock Option Plan on January 31, 1995 for 7,500 shares of the
Company's Common Stock at a fair market value of $12.25 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 11, 1996, 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
State of Wisconsin Investment Board (1) 1,912,500 9.8
P. O. Box 7842
Madison, WI 53707
MacKay-Shields Financial Corporation (2) 1,794,572 9.2
9 West 57th Street
New York, NY 10019
Sound Shore Management, Inc. (3) 1,689,500 8.7
8 Sound Shore Drive
Greenwich, CT 06836
<PAGE>
<CAPTION>
Shares Percentage
Beneficially of Shares
Owned Outstanding
<S> <C> <C> <C>
(ii) Name Position
Robert A. Young III (4)(5)(6)(7) Director, President,
Chief Executive Officer 2,069,828 10.6
William A. Marquard (5)(8) Director 167,048 *
John H. Morris (5)(9) Director 115,015 *
Arthur J. Fritz, Jr. (5)(10) Director 48,971 *
Frank Edelstein (5)(11) Director 10,823 *
Alan J. Zakon (5) Director 11,000 *
Donald L. Neal (5)(6)(13) Senior Vice President 69,084 *
David E. Stubblefield (5)(6)(12) President-CEO, ABF 99,059 *
Lary R. Scott Executive Vice President 10,000 *
Richard F. Cooper (5)(6) Vice President 13,999 *
R. David Slack (5)(6) Vice President 13,428 *
(iii) All Directors and Executive Officers as a Group (12 total) 2,630,755 13.5
*Less than 1%
<FN>
<FN1>
(1) 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, 1,912,500; (b) shared voting power, not applicable; (c)
sole investment power, 1,912,500; (d) shared investment power, not
applicable.
<FN2>
(2) According to the most recent Schedule 13G it has provided to the
Company, MacKay-Shields Financial Corporation beneficially owns
1,694,000 shares of the Company's Common Stock and could acquire 100,572
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, 1,794,572; (c) sole investment power, not
applicable; (d) shared investment power, 1,794,572.
<FN3>
(3) 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,
1,518,000; (b) shared voting power, not applicable; (c) sole investment
power, 1,689,500; (d) shared investment power, not applicable.
<FN4>
(4) The business address for such person is c/o Arkansas Best
Corporation, 3801 Old Greenwood Road, Fort Smith, Arkansas 72903.
<FN5>
(5) Includes vested stock option shares of Common Stock, purchasable
within sixty (60) days, as follows: Messrs. Young, 32,760; Marquard,
6,000; Morris, 6,000; Fritz, 6,000; Edelstein, 6,000; Zakon, 6,000;
Neal, 12,300; Stubblefield, 14,300; Cooper, 9,420; and Slack, 9,420.
<PAGE>
<FN6>
(6) Includes shares allocated through March 13, 1996, to Investment
Plan accounts as follows: Messrs. Young, 1,429; Neal, 844;
Stubblefield, 849; Cooper, 753; and Slack, 711, each of whom disclaims
beneficial ownership of such shares.
<FN7>
(7) 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 45.7% of the total number of
shares outstanding).
<FN8>
(8) Mr. Marquard directly owns 10,000 shares (less than 1%) of
Treadco's outstanding common stock.
<FN9>
(9) Mr. Morris indirectly owns 109,015 shares as co-trustee of the John
H. Morris and Sharon L. Morris Family Trust.
<FN10>
(10) Includes 11,993 shares held by Trayjen, L.P., which are indirectly
owned by Mr. Fritz by virtue of his status as general partner.
<FN11>
(11) Mr. Edelstein indirectly owns 4,823 shares as joint trustee of the
Edelstein Living Trust.
<FN12>
(12) 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.
<FN13>
(13) Excludes 4,000 shares of the Company's Series A Preferred Stock
owned by Mr. Neal that are not entitled to be voted at the 1996 Annual
Meeting.
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.
Name Age Business Experience
Robert A. Young III 55 See previous description.
President-Chief
Executive Officer
<PAGE>
Lary R. Scott 59 Mr. Scott was appointed the Company's
Executive Vice Executive Vice President in December 1995.
President He has also been Chairman of the Board of
WorldWay Corporation since May 1994 and
Vice Chairman and Chief Executive Officer
of WorldWay since 1993. WorldWay has been a
wholly owned subsidiary of the Company
since August 1995; prior to that, it was a
publicly traded company. For approximately
two years prior to joining WorldWay,
Mr. Scott served as a transportation
consultant. Prior to that time, he was
President and Chief Executive Officer of
Consolidated Freightways, Inc. Mr. Scott
serves on boards of directors of Mayflower
Group, Inc. and The Clorox Company.
Donald L. Neal 65 Mr. Neal has been Senior Vice President of
Senior Vice President- the Company since 1979 and Chief Financial
Chief Financial Officer since 1984. Prior to 1984, Mr. Neal
Officer 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.
David E. Loeffler 49 Mr. Loeffler was appointed the Company's
Vice President- Vice President-Treasurer in December 1995.
Treasurer Mr. Loeffler was appointed Treasurer of
Treadco in December 1995. From 1992 to 1995
Mr. Loeffler was a private investor and in
investment management. From 1983 to 1992 he
was Senior Vice President - Finance and
Administration and Chief Financial Officer
for Yellow Freight System, Inc.
David E. Stubblefield 58 Mr. Stubblefield has been President and
ABF President- Chief Executive Officer of ABF Freight
Chief Executive System, Inc. ("ABF"), the Company's largest
Officer 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 44 Mr. Cooper has been Vice President-
Vice President- Administration since 1995, Vice President-
Administration Risk Management of the Company from April
General Counsel and 1991 to 1995 and Vice President-General
Secretary Counsel since 1986. Mr. Cooper has been
Secretary since 1987. Mr. Cooper also has
been Secretary of Treadco since June 1991.
R. David Slack 53 Mr. Slack has been Vice President-
Vice President- Comptroller of the Company since January
Comptroller 1990. From January 1989 to January 1990,
Mr. Slack was Comptroller. Prior to 1989,
Mr. Slack was a director in the Accounting
Department.
<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 four other most highly
compensated executive officers, based on salary and bonus earned during 1995.
</TABLE>
<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 ($) ($)(2) ($) ($) (#)(3) ($) ($(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert A. Young III 1995 $375,000 $ - - - - - $ 89,977
President and Chief 1994 362,500 33,079 - - - - 89,977
Executive Officer 1993 330,000 - - - - - 77,215
Lary R. Scott 1995 96,660(1) - - - - - 849,161
Executive Vice 1994 - - - - - - -
President 1993 - - - - - - -
Donald L. Neal 1995 180,250 - - - - - 134,574
Senior Vice President- 1994 169,167 33,079 - - - - 150,962
Chief Financial 1993 159,000 - - - - - 101,409
Officer
David E. Stubblefield 1995 250,000 - - - 10,000 - 48,391
ABF President-Chief 1994 169,167 33,079 - - - - 48,391
Executive Officer 1993 159,000 - - - - - 34,177
Richard F. Cooper 1995 133,750 - - - - - 12,462
Vice President- 1994 125,667 18,001 - - - - 12,219
Administration, 1993 121,900 - - - - - 8,167
General Counsel
and Secretary
R. David Slack 1995 133,750 - - - - - 23,321
Vice President- 1994 125,667 18,001 - - - - 23,078
Comptroller 1993 121,900 - - - - - 13,106
<PAGE>
<FN>
<FN1>
(1)Reflects base salary paid Mr. Scott since the Company's purchase of
WorldWay Corporation in August 1995.
<FN2>
(2)Reflects bonus earned during the fiscal year. Bonuses are normally paid
during the next fiscal year.
<FN3>
(3) Options to acquire shares of Common Stock.
<FN4>
(4)"All Other Compensation" includes the following for Messrs. Young, Neal,
Stubblefield, Cooper and Slack, (i) Company matching of contributions to
the Company's Employees Investment Plan of $1,500; $1,500; $1,500;
$1,500; and $1,500 for each named executive, respectively; (ii) amounts
accrued under the Company's Supplemental Benefit Plan of $57,770;
$62,179; $24,105; $5,846; and $10,053 for each named executive,
respectively; and (iii) amounts accrued under Deferred Salary Agreements
of $30,707; $70,895; $22,786; $5,116; and $11,768 for each named
executive, respectively. The Deferred Salary Agreements are not
performance-based incentive plans. For Mr. Scott, it includes a one-time
payment of amounts in settlement of his stock option, employment and
severance agreements, resulting from the Company's purchase of WorldWay
Corporation in August 1995.
</FN>
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTIONS/SAR VALUES
The following table provides information related to options exercised by the
named executive officers during the 1995 fiscal year and the number and value
of options held at fiscal year end. The Company does not have any outstanding
stock appreciation rights.
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Options/ In-the-Money Options/SARs
Acquired Value SARs at Fiscal Year-End (#) at Fiscal Year-End ($)(1)
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C>
Robert A. Young III 32,760 21,840
Donald L. Neal 12,300 8,200
David E. Stubblefield 12,300 18,200
Richard F. Cooper 9,420 6,280
R. David Slack 9,420 6,280
<FN>
<FN1>
(1) The closing price for the Company's Common Stock as reported by the NASDAQ
Stock Market on December 29, 1995 was $7.875. Value is calculated on the
basis of the difference between the option exercise price and $7.875
multiplied by the number of shares of Common Stock underlying the option.
</FN>
</TABLE>
<PAGE>
OPTIONS/SAR GRANTS TABLE
The following table provides information related to options granted to the named
executive officers during 1995.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rate of Stock
Price Appreciation
Individual Grants for Option Term (1)
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options/SARs Exercise
Options/SARs Granted to or Base
Granted Employees in Price Expiration
Name (#)(2)(3)(4) Fiscal Year ($/sh)(5) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
David E. Stubblefield 10,000 100.0% $12.750 1/2/05 $80,198 $203,235
<FN>
<FN1>
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately prior
to the expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the term of the options.
These numbers do not take into account provisions of certain options
providing for termination of the options following termination of
employment, nontransferability or vesting over periods of up to five years.
<FN2>
(2) Options granted in 1995 are exercisable starting 12 months after the grant
date, with 20% of the shares covered thereby becoming exercisable at that
time and with an additional 20% of the option shares becoming exercisable
on each successive anniversary date, with full vesting occurring on the
fifth anniversary date.
<FN3>
(3) The options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment.
<FN4>
(4) In the event of a change in control, the Option Plan permits the Committee
to accelerate vesting and to enable an employee to "put" the excess of the
fair market value over the exercise price of the options to the Company.
<FN5>
(5) The Option Plan permits the exercise of options by delivery of shares of
Common Stock owned by the optionee in lieu of or in addition to cash or by
financing made available by the Company.
</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.
(ii) Incentive Plan. The Company's Incentive Plan sets a specific
annual goal which, if met, results in a bonus being paid to each
member of the executive management team. The 1995 Incentive Plan was
based on achieving budgeted annual pre-tax profit for the Company. If
the goal is met, then each participant, including the named executive
group, would earn an incentive payment equal to the following
percentages of their base salary: President, 60%; Senior Vice
President, 50%; Vice Presidents, 45%; and Department Directors, 25%.
Additional incentive pay would be earned by multiplying incentive
earned when budgeted pre-tax profit was met by the percentage that
actual pre-tax profit exceeded the budgeted goals. Incentive Plan
bonuses were not paid for 1995 (see "SUMMARY COMPENSATION TABLE").
(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
<PAGE>
optionee is equal to 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 an independent consultant 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 25 years of employment
with it or its subsidiaries or in the transportation industry 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>
COMPARISON OF CUMULATIVE TOTAL RETURN
Among Arkansas Best Corporation, Nasdaq Market Index & Peer Group
<CAPTION>
Base
Return Return Return Return Return
May
1992 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C>
Arkansas Best Corporation 100.00 108.21 112.20 87.34 56.93
Peer Group 100.00 91.15 89.00 86.42 76.53
Nasdaq Market Index 100.00 107.89 129.42 135.88 176.24
</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.
During 1995, the Company considered itself primarily a long-haul less-than-
truckload ("LTL") motor carrier of general commodities. Accordingly, the
Company believes it is important that its performance be compared to that of
other long-haul LTL motor carriers. Therefore, companies in the peer group
are as follows: Caliber Systems, Inc. (formerly Roadway Services, Inc.);
Consolidated Freightways, Inc.; and Yellow Corporation of Delaware.
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, 31 years; Lary R.
Scott, 0 years; Donald L. Neal, 37 years; David E. Stubblefield, 36 years;
Richard F. Cooper, 12 years; and R. David Slack, 26 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.
<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
<PAGE>
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.
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 which are 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, except
Mr. Marquard, who reported on February 9, 1996 the public market purchase of
10,000 shares of the Company's Common Stock on December 21, 1995.
<PAGE>
PROPOSAL II. 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, 1995. Pursuant to the recommendation
of the Audit Committee, the Board has appointed that firm to continue in that
capacity for the fiscal year 1996, and recommends that a resolution be
presented to shareholders at the 1996 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 1996 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 1996 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 1996 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.
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, 1996 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.
<PAGE>
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, 1995, 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, 1996 Secretary
<PAGE>
ARKANSAS BEST CORPORATION
Proxy Solicited by the Board of Directors for the
Annual Meeting of Shareholders -- May 9, 1996
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
Thursday, May 9, 1996, 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 **
<PAGE>
ARKANSAS BEST CORPORATION
<TABLE>
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. []
<CAPTION>
WITHHELD
FOR all from all FOR all nominees, except vote withheld
nominees nominees from the following nominee(s):
<S> <C> <C> <C>
1. Nominees: William A. Marquard
and Alan J. Zakon [] [] []________________________________
FOR AGAINST ABSTAIN
2. 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.
</TABLE>
<PAGE>
