<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
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[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 if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
[ ] Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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, 1997
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 8, 1997 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 8, 1997
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 8, 1997 at 9:00 a.m. for the following purposes:
I. To elect two Class II directors for terms to expire at the 2000 Annual
Meeting of Shareholders;
II. To ratify the appointment of Ernst & Young LLP as independent auditors
for fiscal year 1997;
III. To amend the 1992 Stock Option Plan;
IV. 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 10, 1997 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, 1997 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 8, 1997 ("1997 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 1996 Annual
Report to Shareholders are being mailed to shareholders beginning on or about
April 10, 1997. 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 10, 1997 as the record
date for the 1997 Annual Meeting. Only shareholders of record on that date
will be entitled to vote at the meeting in person or by proxy.
PROXIES
The proxy named on the enclosed proxy card was 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 proxy 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 1997 Annual Meeting.
VOTING SHARES
On the record date, there were 19,504,473 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 1997 Annual Meeting.
<PAGE>
PROPOSAL I. ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL I.
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
1997 Annual Meeting of Shareholders whose members' terms will expire at the
2000 Annual Meeting of Shareholders, two in the class whose members' terms
will expire at the 1998 Annual Meeting of Shareholders, and two in the class
whose members' terms will expire at the 1999 Annual Meeting of Shareholders.
It is intended that the shares represented by the accompanying proxy will be
voted at the 1997 Annual Meeting for the election of nominees Arthur J.
Fritz, Jr. and John H. Morris as the two directors in the class of
directorships whose members' terms will expire in 2000, 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. Fritz and/or Morris will not
be available for election at the time of the 1997 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.
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 1997 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 1997 Annual
Meeting.
Name Age Business Experience
CLASS II -- Term Expires May 1997
Arthur J. Fritz, Jr. 56 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 53 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 +
<PAGE>
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. In February 1997,
Merchant's Transportation & Logistics Company,
and its subsidiaries, filed petitions under
Chapter 11 of the federal bankruptcy laws. Mr.
Morris served as a Director of such entities
through January 1997 and briefly served as the
President of such entities for about a two-week
period in November 1995 before these entities
became operating companies.
CLASS III -- Term Expires May 1998
Frank Edelstein 71 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., and IHOP
Corp.
Robert A. Young III 56 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.
CLASS I -- Term Expires May 1999
William A. Marquard 77 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
Corporation in February 1989 until March 31,
1992, when he was named Chairman Emeritus. Mr.
<PAGE>
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 61 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 Boyle Leasing, 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.
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 four times during 1996. During 1996, 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 1996
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 three times during 1996.
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 one time during 1996.
<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 1996.
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 2, 1996, for 7,500 shares of the Company's Common Stock at a
fair market value exercise price of $8.12 per share. Messrs. Marquard and
Morris, non-employee Directors, each received stock options under the
Company's 1992 Stock Option Plan on January 30, 1996 for 7,500 shares of the
Company's Common Stock at a fair market value of $6.375 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 10, 1997, 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
(i) Name / Address
<S> <C> <C>
MacKay-Shields Financial Corporation (1) 2,051,685 10.5
9 West 57th Street
New York, NY 10019
State of Wisconsin Investment Board (2) 1,912,500 9.8
P. O. Box 7842
Madison, WI 53707
Dimensional Fund Advisors, Inc. (3) 1,175,900 6.03
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Wellington Management Company, LLP (4) 1,118,200 5.73
75 State Street
Boston, MA 02109
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(ii) Name Position
<S> <C> <C> <C>
Robert A. Young III (5)(6)(7) Director, President,
Chief Executive Officer 2,109,828 10.8
William A. Marquard (5)(8) Director 174,548 *
John H. Morris (5)(9) Director 122,515 *
Arthur J. Fritz, Jr. (5)(10) Director 56,471 *
Frank Edelstein (5)(11) Director 18,323 *
Alan J. Zakon (5) Director 18,500 *
Lary R. Scott (5) (6) Executive Vice President 16,000 *
David E. Stubblefield (5)(6)(12) President-CEO, ABF 108,759 *
Donald L. Neal (5)(6)(13) Senior Vice President 70,869 *
David Loeffler (5)(6) Vice President-Treasurer 9,100 *
(iii) All Directors and Executive Officers as a Group (13 total) 2,754,620 14.1
*Less than 1%
<FN>
<F1>
(1) According to the most recent Schedule 13G it has provided to the
Company, MacKay-Shields Financial Corporation beneficially owns
2,051,685 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.
<F2>
(2) According to the most recent Schedule 13G it has provided to the
Company, the State of Wisconsin Investment Board beneficially owns
1,912,500 shares of the Company's Common Stock and 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.
<F3>
(3) According to the most recent Schedule 13G it has provided to the
Company, Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 1,175,900
shares of the Company's Common Stock as of December 31, 1996, all of
which shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group
Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund
Advisors, Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
<F4>
(4) According to the most recent Schedule 13G it has provided to the
Company, Wellington Management Company beneficially owns 1,118,200
shares of the Company's Common Stock and has the following voting and
investment powers with respect to such shares: (a) sole voting power,
not applicable; (b) shared voting power, 616,100; (c) sole investment
power, not applicable; (d) shared investment power, 1,118,200.
<F5>
(5) Includes stock option shares of Common Stock which are vested and
will vest within 60 days of the record date as follows: Messrs. Young,
<PAGE>
52,760; Marquard, 13,500 total, 12,000 are vested and 1,500 will vest
within 60 days; Morris, 13,500 total, 12,000 are vested and 1,500 will
vest within 60 days; Fritz, 13,500 total, 12,000 are vested and 1,500
will vest within 60 days; Edelstein, 13,500 total, 12,000 are vested and
1,500 will vest within 60 days; Zakon, 13,500 total, 12,000 are vested
and 1,500 will vest within 60 days; Scott, 6,000 vested; Stubblefield,
24,000 vested; Neal, 20,400 vested; and Loeffler, 3,600 vested.
<F6>
(6) Includes shares allocated through March 13, 1996, to Investment
Plan accounts as follows: Messrs. Young, 1,429; Scott, -0-;
Stubblefield, 849; Neal, 844; and Loeffler, -0-, each of whom disclaims
beneficial ownership of such shares.
<F7>
(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).
<F8>
(8) Mr. Marquard directly owns 10,000 shares (less than 1%) of
Treadco's outstanding common stock.
<F9>
(9) Mr. Morris indirectly owns 109,015 shares as co-trustee of the John
H. Morris and Sharon L. Morris Family Trust.
<F10>
(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.
<F11>
(11) Mr. Edelstein indirectly owns 4,823 shares as joint trustee of the
Edelstein Living Trust.
<F12>
(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.
<F13>
(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 1997 Annual
Meeting.
</FN>
</TABLE>
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.
<PAGE>
<TABLE>
<CAPTION>
Name Age Business Experience
<S> <C> <C>
Robert A. Young III 56 See previous description.
President-Chief
Executive Officer
Lary R. Scott 60 Mr. Scott was appointed the Company's
Executive Vice Executive Vice President in December
President 1995. 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 the board of directors of The
Clorox Company.
David E. Stubblefield 59 Mr. Stubblefield has been President and
ABF President- Chief Executive Officer of ABF Freight
Chief Executive System, Inc. ("ABF"), the Company's
Officer 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.
Donald L. Neal 66 Mr. Neal has been Senior Vice President
Senior Vice President- of the Company since 1979 and Chief
Chief Financial Financial Officer since 1984. Prior to
Officer 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.
David E. Loeffler 50 Mr. Loeffler was appointed the Company's
Vice President- Vice President-Treasurer in December
Treasurer 1995. 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.
<PAGE>
Richard F. Cooper 45 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 54 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.
</TABLE>
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 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Other Restricted
and Annual Stock Options/ LTIP All Other
Principal Salary Bonus Comp. Award(s) SARs ayouts Compensation
Position Year ($) ($)(2) ($) ($) (#)(3) ($) ($)(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R. A. Young III 1996 $375,000 $ - - - 45,400 - $89,977
President Chief 1995 375,000 - - - - - 89,977
Executive Officer 1994 362,500 33,079 - - - - 89,977
Lary R. Scott 1996 250,000 - - - 30,000 - 1,250
Executive Vice
President 1995 96,660 - - - - - 849,161
1994 - - - - - - -
David E. Stubblefield 1996 250,000 - - - 18,000 - 48,391
ABF President-Chief 1995 250,000 - - - 10,000 - 48,391
Executive Officer 1994 169,167 33,079 - - - - 48,391
Donald L. Neal 1996 182,000 - - - 20,000 - 1,500
Senior Vice President- 1995 180,250 - - - - 134,574
Chief Financial
Officer 1994 169,167 33,079 - - - - 150,962
<PAGE>
David E. Loeffler 1996 150,000 - - - 18,000 - 13,875
Vice President-
Treasurer 1995 12,500 - - - - - -
1994 - - - - - -
<FN>
<F1>
(1) Reflects base salary paid Mr. Scott in 1995 subsequent to the Company's
purchase of WorldWay Corporation in August 1995.
<F2>
(2) Reflects bonus earned during the fiscal year. Bonuses are normally paid
during the next fiscal year.
<F3>
(3) Options to acquire shares of Common Stock.
<F4>
(4) "All Other Compensation" includes the following for Messrs. Young,
Scott, Stubblefield, Neal, and Loeffler, (i) Company matching of
contributions to the Company's Employees' Investment Plan of $1,500;
$1,250; $1,500; $1,500; and $1,375 for each named executive,
respectively; (ii) amounts accrued under the Company's Supplemental
Benefit Plan of $57,770; $-0-; $24,105; $-0-; and $-0- for each named
executive, respectively; and (iii) amounts accrued under Deferred Salary
Agreements of $30,707; $-0-; $22,786; $-0-; and $-0- for each named
executive, respectively. The Deferred Salary Agreements are not
performance-based incentive plans. For Mr. Scott, 1995 includes a one-
time payment of amounts in settlement of his stock option, employment
and severance agreements, resulting from the Company's purchase of
WorldWay Corporation in August 1995.
</FN>
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTIONS/SAR VALUES
The following table provides information related to options exercised by the
named executive officers during the 1996 fiscal year and the number and value
of options held at fiscal year end. The Company does not have any outstanding
stock appreciation rights.
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Options/ In-the-Money Options/SARs
Acquired Value SARs at Fiscal Year-End (#) at Fiscal Year-End ($)(1)
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Robert A. Young III - - 43,680 56,320 - -
Lary R. Scott - - - 30,000 - -
David E. Stubblefield - - 18,400 30,100 - -
Donald L. Neal - - 16,400 24,100 - -
David E. Loeffler - - - 18,000 - -
<PAGE>
<FN>
<F1>
(1) The closing price for the Company's Common Stock as reported by the NASDAQ
Stock Market on December 31, 1996 was $4.375. Value is calculated on the
basis of the difference between the option exercise price and $4.375
multiplied by the number of shares of Common Stock underlying the option.
At December 31, 1996, the closing stock price was less than the option
exercise prices.
</FN>
</TABLE>
OPTIONS/SAR GRANTS TABLE
The following table provides information related to options granted to the named
executive officers during 1996.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rate of Stock
Price Appreciation
Individual Grants for Option Term (1)
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options/SARs Exercise
Options/SARs Granted to or Base
Granted Employees in Price Expiration
Name (#)(2)(3)(4) Fiscal Year ($/sh)(5) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Robert A. Young III 45,400 4.3% $7.010 1/31/06 $152,998 $432,662
Lary R. Scott 30,000 2.8% $6.375 1/31/06 120,300 304,800
David E. Stubblefield 18,000 1.7% $6.375 1/31/06 72,180 182,880
Donald L. Neal 20,000 1.9% $6.375 1/31/06 80,200 203,200
David E. Loeffler 18,000 1.7% $6.375 1/31/06 72,180 182,880
<FN>
<F1>
(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.
<F2>
(2) Options granted in 1996 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.
<F3>
(3) The options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment.
<F4>
(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.
<PAGE>
<F4>
(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>
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 for 1996 was 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 1996 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
<PAGE>
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.
(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 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
"EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN
CONTROL ARRANGEMENTS" 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
Fiscal Year Ending
- - -----------------------------------------------------------------------------
Company 1991 1992 1993 1994 1995 1996
- - -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arkansas Best Corp. 100 108.21 112.20 87.34 56.93 31.69
Peer Group 100 91.15 89.00 86.42 76.53 47.04
Broad Market 100 107.89 129.42 135.88 176.24 219.01
</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 a diversified transportation holding company
with an emphasis on 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 diversified transportation
companies with similar operations. Therefore, companies in the peer group are
as follows: Caliber Systems, Inc., Consolidated Freightways, Inc., and
Yellow Corp. of Delaware.
<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, 32 years; Lary R.
Scott, 1 year; David E. Stubblefield, 37 years; Donald L. Neal, 38 years; and
David E. Loeffler, 1 year. 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, if applicable, 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
and without regard to any Code limitations, or the current Retirement Plan
<PAGE>
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).
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE IN CONTROL ARRANGEMENTS
The Company does not have any Employment Contracts with the Chief Executive
Officer or any of the named executive officers.
The Company's Stock Option Agreements provide that in the event of a change
in control of the Company, as defined in the Agreement, all non-vested
options immediately vest.
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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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.
<PAGE>
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.
PROPOSAL II. RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL II.
The firm of Ernst & Young LLP served as independent auditors for the Company
for the fiscal year ended December 31, 1996. Pursuant to the recommendation
of the Audit Committee, the Board has appointed that firm to continue in that
capacity for the fiscal year 1997, and recommends that a resolution be
presented to shareholders at the 1997 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 1997 Annual Meeting.
They will have the opportunity to make a statement and respond to appropriate
questions from shareholders.
PROPOSAL III. AMENDMENT TO THE 1992 STOCK OPTION PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL III.
The Board of Directors has approved, and has recommended that the
shareholders approve, an amendment (the "1997 Amendment") to the Company's
1992 Stock Option Plan as previously amended. The 1997 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) increases the number of option shares the members of the Stock Option
Committee ("Committee") automatically receive each year from 7,500 to 10,000
and sets the date of the automatic option grant to coincide with the
Company's regular January Board of Directors' meeting in January of each
year.
Description of 1992 Plan
The 1992 Plan provides that up to 2,000,000 shares of Common Stock are
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 10, 1997, 304,400
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 2,000,000
shares of Common Stock (subject to certain anti-dilution provisions) may be
subject to options under the 1992 Plan. As of March 10, 1997, options for
1,676,500 shares of Common Stock were outstanding and options for 19,100
shares had been exercised. On March 10, 1997, the last reported sale price of
the Common Stock was $5.25.
<PAGE>
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 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 70 Company and subsidiary
employees who have 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.
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
<PAGE>
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.
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 will generally be entitled to a
corresponding federal income tax deduction.
Description of 1997 Amendment
The following is a summary of the provisions of the 1997 Amendment.
As of March 10, 1997, 304,400 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.
Currently, the 1992 Plan provides that the members of the Committee
automatically receive a NQSO option grant of 7,500 shares on the first
trading day following January 1 of each year. This automatic grant to the
Committee members is one of the requirements for the 1992 Plan to comply with
Rule 16b-3. The 1997 Amendment would increase the number of NQSO option
shares automatically granted annually to the Committee members from 7,500 to
10,000 and set the date for the grant to coincide with the Company's regular
meeting of the Board of Directors in January of each year. The 1997 Amendment
will also comply with Rule 16b-3.
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 under the
1992 Plan if the 1997 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>
<PAGE>
AMENDED PLAN BENEFITS
1992 Stock Option Plan
(As Amended by the 1997 Amendment)
Name and Position Number of Units
<S> <C>
Robert A. Young III, Director and President -
Chief Executive Officer (1)(2)
Donald L. Neal, Senior Vice President -
Chief Financial Officer (1)(2)
Lary R. Scott, Executive Vice President (1)(2)
David E. Stubblefield, ABF President - CEO (1)(2)
David E. Loeffler, Vice President - Treasurer (1)(2)
John H. Morris, Director Nominee (1)(3)
Arthur J. Fritz, Director Nominee 12,500 (3)
Non-Executive Director Group (1)(3)
Executive Group (1)(2)
Non-Executive Officer Employee Group (1)(4)
<FN>
<F1>
(1) Except for Committee members, the number of, and recipients of, options
to be granted under the 1992 Plan are at the Committee's discretion and
therefore are not determinable. Except for the Committee members, none
of these individuals would automatically receive option grants as a
result of the 1997 Amendment.
<F2>
(2) Since July 1992, the Executive Group has been granted an aggregate of
237,000 option shares, at per share exercise prices ranging from $6.375
to $12.75. None of this Group would automatically receive option grants
as a result of the 1997 Amendment.
<F3>
(3) Three members of the Non-Executive Director Group, Messrs. Edelstein,
Fritz and Zakon, are Committee members and would each receive an
additional 2,500 option shares of the Company's Common Stock in January
of 1998 through 2002 under the 1997 Amendment. Two members of this
group, Messrs. Marquard and Morris, are not Committee members and would
not receive any automatic grants as a result of the 1997 Amendment.
Since May 1993, Messrs. Marquard and Morris have each received an
aggregate of 37,500 option shares under the 1992 Plan at per share
exercise prices ranging from $4.625 to $12.25. Since May 1994, Messrs.
Edelstein, Fritz and Zakon have each received an aggregate of 30,000
option shares under the 1992 Plan at per share exercise prices ranging
from $4.44 to $12.75. Messrs. Edelstein, Fritz and Zakon each received
in May 1993 an option of 7,500 shares at an exercise price of $9.50 per
share under a separate stock option that was discontinued in 1994.
<F4>
(4) Since July 1992, the 70 members of this group have been granted an
aggregate of 1,676,500 option shares, at per share exercise prices
ranging from $6.375 to $13.875.
</FN>
</TABLE>
The Board of Directors believes that the 1997 Amendment is in the best
interest of the Company and its shareholders and is necessary to enable it to
attract and retain qualified outside directors and key employees of the
<PAGE>
Company and subsidiaries. The affirmative vote of a majority of the shares
entitled to vote at the 1997 Annual Meeting is necessary for approval of the
1997 Amendment.
OTHER MATTERS
The Board does not know of any matters that will be presented for action at
the 1997 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 1997 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 1997 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, 1997 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, 1996, 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, 1997 Secretary
<PAGE>
<PAGE>
ARKANSAS BEST CORPORATION
Proxy Solicited by the Board of Directors for the
Annual Meeting of Shareholders -- May 8, 1997
Richard F. Cooper, with the power of substitution and revocation, is 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 8, 1997, 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. []
WITHHELD
FOR all from all FOR all nominees,
except vote withheld
nominees nominees from the following
nominee(s):
1. Nominees: Arthur J. Fritz, Jr.
and John H. Morris. [] [] []
________________________________
FOR AGAINST ABSTAIN
2. To ratify the appointment of Ernst &
Young LLP as the Company's independent
certified public accountants. __ __ __
3. Amendment to the Arkansas Best
Corporation 1992 Stock Option Plan __ __ __
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.
<PAGE>
<PAGE>
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.
<PAGE>
3. Shares Subject to the Plan
--------------------------
The aggregate amount of Common Stock for which options may be granted
under this Plan shall not exceed 2,000,000 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. Beginning with the Company's regular Board of Directors' meeting
in January, 1998, and at each regular Board of Directors' January meeting
thereafter, each Disinterested Director serving as a Committee member shall
automatically be granted nonqualified options to purchase 10,000 shares of
<PAGE>
the Company's Common Stock. In the event that the Company does not have a
regular Board of Directors' meeting in January of any year, then the
automatic grant shall be made as of the last trading day of that January.
The exercise price per share shall be equal to the closing price of the
Common Stock on the date of such automatic grant. 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 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. 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.
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
<PAGE>
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
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
----------------------------------
<PAGE>
(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.
(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
<PAGE>
(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.
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.
<PAGE>
<PAGE>
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 "2,000,000" with
the number "3,000,000" in the first sentence of Section 3.
2. The Plan is hereby amended by replacing the second sentence in
Section 5 in its entirety with the following:
"Beginning with the Company's regular Board of Directors' meeting
in January, 1998, and at each regular Board of Directors' January
meeting thereafter, each Disinterested Director serving as a Committee
member shall automatically be granted nonqualified options to purchase
10,000 shares of the Company's Common Stock. In the event that the
Company does not have a regular Board of Directors' meeting in January
of any year, then the automatic grant shall be made as of the last
trading day of that January. The exercise price per share shall be
equal to the closing price of the Common Stock on the date of such
automatic grant."
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 on the _ _ _ day of May, 1997.
ARKANSAS BEST CORPORATION
By:
-------------------------------------
Robert A. Young III
President and Chief Executive Officer
<PAGE>
